Tuesday, October 7, 2014

World Economies

Less we forget, while the headlines keep our minds and behavior focused on ebola and ISIS, the rest of the world continues.  Christine Lagarde, managing director for the International Monetary Fund (IMF), announced a cut to their projections citing "uneven recovery" of the financial markets.

Ukraine hasn't found any resolution to their conflict since the world has been worrying about ISIS and viruses.  Pro-Russian separatists and the Ukraine government aren't any closer to signing an agreement and this keeps financial markets worried a war could still erupt there.

The US has try to turn Russia into a pariah and levied economic sanctions against them.  While it has done nothing to improve the situation in Ukraine, it has made the Russian economy weaker.  Russia is depending more on China and less on Europe as a result.  What Obama has forgotten though is Europe's dependence on Russian natural gas.  The result has been a weakening German economy (which drives the economy of continental Europe) as investors grow nervous over Russian exports to Europe.

ISIS and Khorosan have replaced our attention but over the summer the US was all worried about Boko Haram, the Nigerian based group that kidnapped 200 school girls.  Those girls still have not been released (at least not that has been announced in the news).  As of Sep 20th, CNN was reporting negotiations for their release were still on-going.  Boko Haram was another group ignored by the Obama administration until their actions could no longer be ignored.  The US response to this crisis was especially anemic.

According to CNBC, "Standing at the new total of $510 billion, Nigeria's economic output exceeds that of South Africa, making it Africa's largest economy with approximately a fifth of the continent's entire GDP."  With Boko Haram remaining unchecked, the economy of Nigeria is at risk as well.

We already know of the conflicts in Syria and Iraq.  Those airstrikes that Obama has authorized is not going anything to help markets feel better about that part of the world.  Don't forget, the violence in Gaza has only stopped after nearly seven weeks of violence.

China and Japan continue to squabble over the Senkaku (Japan)/Daiyo (China) islands.  The increased aggression of the Chinese economy and increased military spending, along with increased aggression towards US ally Japan, was the reason for the "pivot towards Asia" doctrine that all but a footnote now.

The protests for universal suffrage in Hong Kong continues for a second week without any signs of an end in sight.  Business and tourism in Hong Kong have begun to suffer and older residents fear civil unrest if the protests continue.  Retail sales plunged during the protests.

The ongoing protests, even if they end shortly, are likely to have a more visible impact on the city’s fourth-quarter growth, especially on retail and tourism,” Mole Hau, an economist with BNP Paribas SA, wrote in a note to investors. (Bloomberg)

The news has already forgotten about the political unrest in Egypt caused by first the overthrow of Mubarak.  Investors are still wary of Egypt's economy.

Brazil, Argentina and Venezuela all are undergoing recessions.  Cash injections by the Federal Reserve between 2009-13 have been halted. The effect has been to induce recessions.  Argentina defaulted on its loans back in July.  Argentine President Kirchner tried export levies on beef to protect consumers from higher prices.  It hasn't worked and only managed to take Argentine beef off the market.

Is it any wonder that we would rather be focused on a possible outbreak or dropping bombs on a renamed al-Qaeda group than trying to focus on much larger problems?

Monday, October 6, 2014

Information Drives Behavior

In the course of reading a variety of articles over the last few weeks, I kept running into the name "Edward Barnays".  What was unusual is that I was not doing any research on Barnays nor any topics directly related to his work, yet things are not always what they seem.  I soon discovered that my reason for encountering his name and work was because I was pursuing a line of thought that today's headlines are driving our perceptions and behaviors regarding Islam, terrorists, infectious diseases, immigration and the Middle East.

First, a little about Edward Barnays.  You may not have heard of him but you and I encounter his work on a daily basis.  Barnays was 'the father of public relations" (the quote is from his own obituary) and also the nephew of Sigmund Freud.  His work during World War I on the Committee for Public focused on "bringing democracy all over Europe" and lead him to conclude that propaganda could be used to sway the public during peacetime.

Propaganda has a negative connotation due its use by the Germans during WWI and later by the Nazis during WWII.  Barnays came up with the term "public relations" which had a positive connotation as well as being nebulous in its meaning.  He used theories of social psychology (such as crowd psychology, how crowds act differently from the individuals in it) combined with his uncle's theories on psychoanalysis to persuade public opinion.  He was the first to realize the power of the press release and used it successfully to change public opinion in favor of his clients.

For example, women smoking was very much a social taboo up until the 1920s.  The cigarette industry realized there market share would be greatly increased if more women smoked but social norm were against it.  Barnays created a campaign showing women smoking not cigarettes but "Torches of Freedom" symbolizing women's new independence through suffrage as being expressed by a cigarette.  It worked.

His other major campaign changed what we eat for breakfast in the United States.  Up until the 1930s, Americans pretty much had with either tea of coffee for breakfast.  Barnays created a campaign showing a large breakfast consisting of bacon and eggs was far more filling and nutritional (on behalf of course of the meat and dairy industry).  He spliced in expert testimony from doctors showing the importance of eating a filling breakfast and the results was to this day, Americans think of breakfast as being a large meal consisting of bacon and eggs.

Bernays used the "Freudian theory" to deal with the public's conception of communism, as he believed that we should not be easing the public's fear of communism, but rather promote that fear and play with the public's emotions of it. This theory was so powerful that it became a weapon of its own during the Cold War. (Wikipedia)

Barnays the man and his work deserver your further reading and research.  I've merely summarized here the points that caused my research to lead to Barnays.

For example, how did ISIS and now the previously unheard of Khorosan Group go from a bunch of Asad opponents to the greatest threat facing the US today?  Shortly before the airstrikes began, the press began sounding the alarm bells of the dangers of ISIS.  Almost on queue, a fired employee (and "recent" convert to Islam) beheaded a former co-worker RIGHT HERE IN THE US!  Oh my but the hawks (both on the right and left) came out for the call to take action now!  The threat was so big even the FBI had to add their seal of approval to the scope of the threat posed by ISIS.

The question all of the headlines fail to answer is how did this ragtag group of of militants (many recruited from outside Syria or Iraq) suddenly have the where with all to become such a major force?  Not only can ISIS attack and occupy land in Syria but they are at the same time able to devote time and resources to attack the US.  It seems unlikely and the news continues to only repeat one another.

Islam and Muslims have become the new Communism and Communists of the 21st Century.  Imagine if we would have seen nearly as much converge of the beheading had the perpetrator been merely suffering a mental health episode rather than a conversing to Islam?  Same crime, same loss of life but one is a major headline, the other is a second page story.

Say CNN breaks a story involving a "radical Islamist" shooting up a school.  All of the other media outlets will follow with the story, not because of a master agenda but because they see their numbers drop.  As the story develops, more and more use of the term "radical Islamist" turns up and viewers become convinced that the shooting is due to the perpetrators belief in Islam.  As the days and weeks go on, the term gets repeated convincing everyone the there is a threat of radical Islam to our schools.  Much later, after the news cycle has moved on to the next crisis, do we learn that while the shooter was Muslim it was due to his termination by the school and not his religious beliefs that led to the school shooting.  Our minds only hear the reverberations of "radicalized Muslim".

That's the power of what Barnays discovered and how ISIS and now Khorosan have become such unbridle threat.  They have no more or less ability than they did a year ago but the constant barrage of reports by the media, "experts", pundits and social media have everyone building the group into 9 foot giants.  And the media has played a huge part in this.

Two things have led to the media becoming an unwitting accomplice (perhaps) to the propaganda, sorry public relations, scheme.  The first was creation of the 24 hour new cycle.  Editors now can't afford to sit on a story until reporters complete their fact-checking.  The deadline is now minutes, not days.  The corollary problem is even when there is time, there simply may not be the staff as news bureaus have shrunk or become almost now existent.  Look at your own daily newspaper, the beat reporters are non-existent except in the largest markets.  One news bureau may produce content for several regional dailies.

Those two factors have led to the creation of the impact of first bloggers and now social media.  The information pouring out of Syria or China via Instagram and Twitter are far more voluminous than even the Associated Press or Reuters could produce.  In turn, the mainstream press has learned how to re-package this free information into their by-lines.  Fact-checking?  We don't need no stinking fact-checking.

Social media is a mechanism which Edward Barnays would have loved.  Repeat a certain key message amongst the most influential social media sites and press-to!  You have manipulated public opinion or even changed behavior at a fraction of the cost and time of the old way of doing things.  Marx didn't know what he was talking about when he termed religion "the opiate of the masses".  Information, or more correctly disinformation, has become the new opiate.  Barnays and the Nazi propaganda machine both found that the bigger the lie, the more readily it will be believed by the masses.

Ebola presents us with another case of Barnays principles at work.  How did an African blood borne virus suddenly become the biggest epidemic to face the United States?  Even in Africa, ebola rarely spread beyond its initial flare-up, only to then go dormant.  Yet this disease has now become so virulent that it threatens the US which has state-of-the-art medical and sanitation systems?  Something doesn't add up.

Conflicting information about the virus is keeping it in the headlines and thus causing people to panic at the thought that this disease is going to wipe us out.  To be sure, ebola is a very dangerous organism and our lax approach thus far here in the United Staes makes us susceptible to an outbreak but what does that mean?  A few dozen cases or a hundred thousand?  Is the disease an incurable harbinger of death or is it curable?  Answers to those questions won't be found in the headlines as they race to keep up with the latest case of a patient exhibiting signs of ebola infection.

Our behaviors going into the polls next month will be greatly shaped by how these and other events are being played out in the media.  The one thing that alludes me is the rationale behind Obama's sacking of the Secret Service director and condemnation of his own intelligence agencies while there is a media blitz of beheadings and ebola infections.  His actions do not dissuade the fears being whipped up over terrorism, ebola and immigration and may drive "safety moms" away from Democrat candidates (see the governor race in Texas or Kentucky as examples).  In short, he is not helping his party win more seats in the mid-term elections.

Unless this is all part of a larger strategy to create such paranoia that even the most hardened Libertarians will accept even more intrusive government controls to insure our safety.  Take quarantine for example.

Most people are not familiar with the draconian nature of quarantine laws.  In a reverse to our normal jurisprudence, you are presumed guilty until proven innocent (infected until proven otherwise).  Under quarantine protocols, you can and will be locked up for nothing more that the SUSPICION that you may have come into contact with an infected person.  And you thought the USA PATRIOT Act was Orwellian!  

If ebola or enterovirus becomes widespread, the right to travel wherever you want in the US, along with right to not having to share your travel plans with anyone, will got out the window. Law enforcement and health officials will be able to isolate your family members on the chance they may have been exposed.  And many will go along with this overreaction because of the behavioral changes the headlines have helped to create.  Employers may not hire you if you have travelled to somewhere where there is a known outbreak or your employer may not allow you to return to work until you can prove you aren't infected.

Parents are already starting to pull their children from schools where there has been an outbreak of enterovirus.  The government may become involved for the 'sake of the children' and force the students back to school.  The parents may be fined or arrested as a result.  Don't believe it?  A teacher was arrested for bringing in a plastic, toy sword as part of Pirate Day.  The accepted behavior, after years of headlines about school shootings, is to arrest anyone for bringing a weapon, even a toy on to school grounds.

Our national strategies for terrorism and infectious disease are reactions to PR releases and social media.  Obama and his team swing glacially into action after prolonged bouts of silence.  It would be one thing if this were to craft some grand strategy but too often its as though he is waiting for the story to go away.  When it doesn't, Obama and his team take the quickest action possible without regard to long term consequences.  In other words, they don't seem to realize they reacting to the very same PR mechanism that they should have mastered.

Wednesday, October 1, 2014

Expect the Unexpected, unless you are Obama

"If you do not expect the unexpected you will not find it, for it is not to be reached by search or trail"--Heraclitus, ancient Greek philosopher

From warriors and competitive athletes to scientists and stockbrokers, everyone at some point is admonished to "expect the unexpected".  

Two weeks ago, the Tennessee Titans did not expect a reverse pass to Bengals QB Andy Dalton.  He scored and the Titans went on to lose the game.

The Secret Service did not expect a soldier with PTSD would jump the fence at the White House.  They also did not expect an armed person to ride up on the same elevator as the President of the United States.  NPR just announced the resignation of Secret Service Director Pierson.

A hospital did not expect someone to show up in their ER who had travelled to West Africa.  Despite showing symptoms of having been exposed to ebola he was sent home.  It was only when he came back was he guaranteed.  This happened because only certain people knew what to look for and this person did not get the word of the patient's first visit.  We may now ebola breaking out in Texas.

Of course the most famous case of not expecting the unexpected was the rise of ISIS.  The President was quick to throw all of the intelligence agencies under the bus on 60 Minutes, saying that "they" had underestimated the threat posed by ISIS.  The President of course immediately came under fire for missing 60 percent of the intelligence briefings.

"How often have I said to you that when you have eliminated the impossible, whatever remains, however improbable, must be the truth?"--Sherlock Holmes, The Sign of the Four

It appears President Obama's complacency or smugness that he is so much smarter than everyone caused him to not to expect the unexpected, therefore his staff (including the Secret Service and Secretary of Health) aren't looking for the unexpected either.  Otherwise why did Mr. Obama give the ebola virus 3,000  chances to get over here (as it turns out, it may not have needed his assistance)?

The Secret Service has become lax because their Commander In Chief is lax.  He is too quick to dismiss threats so of course his security detail is likely to follow suit.  When his lax assessment of ISIS came back to bite him, he cobble together a sort of "Rebel Alliance" to strike at ISIS.  Unfortunately when you are forced to react, you tend to overlook things.  In this case, we aren't certain the effectiveness of the airstrikes since there is a dearth of intelligence assets on the ground in Syria.

The airstrikes are supposed to be hitting things like the oil refineries in Syria that are being controlled by ISIS.  So far, reports are that they only refineries being hit are the mobile ones that are easily replaced.

What unexpected, improbable things is Mr. Obama missing?  Ebola is high contagious and has never had the opportunity before to come into contact with lots of healthy, young people who have not been exposed to it before in their entire history.  As a result, it may burn out quickly or may rage like an inferno.  The CDC is just not big enough to handle something like this.  He needs to start acting like this could explode instead of firing his Secret Service director.

Next unexpected, improbable thing he is missing is ISIS and Syria may become united as a result of the airstrikes.  This could become an even larger threat.  Even if that doesn't happen, what happens if the airstrikes are successful and the Iraqi Army defeats ISIS in Iraq?  Do they all head back to Syria and overthrow Asad?  What happens then?

Obama's desire to allow all of the immigrants in without medical screening means now there are over 400,000 undocumented aliens each with the potential to set off a pandemic (flu, tuberculosis, SARS, hepatitis, etc).

There has been one beheading and an attempted second here in the US by recently converted Muslims (although in keeping with ignoring the improbable, these cases are not being referred to as acts of terrorism).  Increased airstrikes will mean more attempts at beheading but of course, these are not acts of terrorism so there is no connection.

How will Obama continue to miss these unexpected, improbable things?  He threw the entire US intelligence service under the bus blaming them for underestimating ISIS.  Congratulations, now no one wants to be the messenger who has to tell the emperor that he isn't wearing any clothes.  They will all be here after Obama leaves office, his final two years will be absolutely miserable.

Unfortunately, this also means troops will be placed into harm's way without any though to long term objectives.  Regular citizens may not be exposed to deadly, contagious diseases.  Or they simply be the victim of a beheading.  ISIS or al-Qaeda may finally get the momentum to launch the next 9/11 and with the intelligence agencies playing ostrich (just like their boss), who is going to say anything?