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What We Now Know |
Week of 9/4/07
FAREWELL EDITION: Best of WWNK
A Note from the Editors
Can the U.S. Win in Iraq?
The Right to Private Property
Creator with Meatballs
Reader Feedback
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And now, here’s What We Now Know…
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A Note from the Editors
For everything, there’s a season (turn, turn, turn)… and so it has been with What We Now Know, too.
We fondly remember the many things we shared with our ten thousands of readers over the years, and the many things you shared with us – praise, constructive criticism, righteous anger and worry.
But now the time has come to put the combined efforts of the Casey Research team to a more practical use.
The unfolding crisis – as predicted by Doug Casey – has started to take its toll on the U.S. economy.
Foreclosures rose 93% in June year-over-year… more than 50 mortgage lenders have gone out of business… hedge funds and even one money-market account have closed their doors… the stock market is stumbling this way and that way, like a blind man caught in a hailstorm… and financial pundits as well as government officials, like former Treasury Secretary Larry Summers last week, openly say that the United States may be heading into a recession.
This might be the beginning of the Big One, dear readers. And we owe it to the many investors among you – people we’ve been guiding through the markets for the last 27 years – to focus on what’s coming… how to protect your assets and actually profit from this crisis in the making.
If you haven’t done so, please check out our brand-new daily e-letter, the DAILY RESOURCE PLUS. It’s free, and provides you with the latest news on the natural resource sector – gold, silver, oil, gas, uranium, and more – as well as the most interesting story of the day by our contributor-at-large Ed Steer. (Click here to learn more.)
And here’s a note from WWNK editor Doug Hornig. Over to you, Doug:
As I move on to other duties with Casey Research, I want to thank all those who have been committed readers of What We Now Know over the years, and especially those who have taken the time to share their thoughts about what I've written. It's been a pleasure. Anyone with further interest in my work will find my latest book, “The Old Adelphi Rolling Grist Mill”, available online at either Amazon.com or Barnesandnoble.com. If you do read it, and would like to comment, you can still reach me at dhornig@caseyresearch.com.
Doug Hornig
Thanks, Doug.
So we’re saying goodbye to What We Now Know with one laughing and one crying eye, as the Germans say. It was a great experience… thanks to all of you who made it possible.
Shannara Johnson
Managing Editor
What We Now Know
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We certainly don’t claim to be clairvoyant, but sometimes we just can’t resist the old “I told you so.” Here’s an article from the very first edition of What We Now Know, week of 11/17/2003.
Can the U.S. Win in Iraq?
By David Galland
Dissecting the U.S. deployment of 133,000 troops on the ground in Iraq, Edward Luttwak of the Center for Strategic and International Studies recently calculated that only 28,000 are actually in the field at any given time.
To put that number in perspective, Luttwak points out that the New York City Police force has 37,000 police officers – yet U.S. coalition forces are being asked to keep control over a nation of 28 million, including the urban hotspots of Baghdad with its 6 million inhabitants, Mosul with 1.7 million, Kirkuk with 800,000 and Fallujah, a Sunni stronghold with a population of 250,000.
That's just 28,000 soldiers to interdict insurgents and jihadists coming over the borders with Syria and Iran, to patrol all the cities, protect all the oil fields, pipelines, banks and utility infrastructure... and to provide cover for the U.S. military bases, airfields and convoys.
It gets worse: the latest plan proposed by the administration cuts U.S. forces to just 104,000 troops, with an increasing share being National Guard and Army Reservists who, rather than playing their usual supporting role, are this time headed for the front line – because when it comes to Iraq, it's pretty much all front line.
To give you some sense of the danger, small arms are so abundant that $10 will buy you, retail from a street vendor, an AK-47 machine gun and all the ammunition you can carry.
Which brings us to the question addressed in this special WWNK feature, can the U.S. win in Iraq?
We ask the question for a couple of reasons, not the least of which is that it is very likely that, as the war in Iraq goes, so will the 2004 presidential election. For another, it is our tens of billions of hard-earned tax dollars being appropriated in the attempt to recast Iraq in our own image. Any chance of success? This feature will be longer than usual for this publication, because the issue at hand warrants it.
First, a Historical Benchmark
Every day now the news from Iraq tells of another 1, 2 or 17 U.S. soldiers killed, increasingly leading the media to make comparisons to the U.S. war against Vietnam. We think a better comparison is the Soviet invasion of Afghanistan: while the Vietnam War started as a fight against guerrillas, it ended with set piece battles against the North Vietnamese army. In the case of the Soviet involvement with Afghanistan, other than some very limited initial engagements, it was all guerrillas, all the time.
So, how did the Soviets make out? Over the ten-year conflict approximately 15,000 Soviet soldiers were killed – an average of about 4 soldiers KIA per day. Subtract casualties related to illness, a very high number due to poor sanitation, and you come up with about 39,000 wounded in combat and sundry injuries (equipment crashes, etc.) or about 10.75 per day.
How does the U.S. involvement in Iraq compare so far?
As we write, the U.S. troops KIA in Iraq is at 417, an average of about 2 per day since the start of the war. So, we compare favorably by about half to the Soviets. However, when you look at the largely underreported wounded in combat and other non-illness-related injuries, we are already at 4,451, or about 19 per day – a rate nearly twice that of the Soviets. Why is our KIA ratio so much better and our wounded ratio so much worse? Credit it to the high quality of personal protective gear (flak jackets and helmets) worn by the U.S. soldiers – otherwise our fatal and non-fatal casualties in Iraq would likely parallel those suffered by the Soviets. Not to put too fine a point on it, the war is not going well.
Is the sacrifice worth it? Put another way, is there a reasonable chance for a military or political success in Iraq – whatever that might mean?
Winning Against Insurgents
For help with the answer, we turn to a useful list of the conditions which must be present in order for an occupying army to succeed against an insurgency such as we are faced with in Iraq. The list was assembled for the Center for Aerospace Doctrine, Research and Education by General (Ret) Mohammad Yahya Nawroz, Army of Afghanistan and LTC (Ret) Lester W. Grau, U.S. Army. In the interest of space, we excerpt the list here, and include some commentary.
"A guerrilla war is not a war of technology versus peasantry. Rather, it is a contest of endurance and national will. The side with the greatest moral commitment (ideological, religious or patriotic) will hold the ground at the end of the conflict."
WWNK: In a recent survey of Iraq's population by Zogby International, some 50% of those surveyed thought the U.S. would hurt more than help their country over the next five years, and some 43% had either a favorable or very favorable opinion of Osama bin Laden. Embedded in this segment of the population is a sizable minority who think the U.S. should go and, as witnessed by the suicide bombings, believe in their point quite strongly.
Because of the gross underdeployment of coalition forces and the constant attacks against those forces – up to 35 a day – U.S. soldiers are understandably reluctant to mingle with the population, which is generally sullen and uncooperative anyway. So winning hearts and minds is out of the question.
On the question of morale, while the insurgents and their philosophical allies are visibly cheered by each successful attack, U.S. morale is beginning to flag badly. Ask yourself the question, "If I, or a member of my family, was a U.S. soldier, whose stay in Iraq has likely been extended far beyond what was originally promised, how willing would I be to trade an arm, leg or even a life for victory in a war the purpose of which is now unclear?"
How would you answer that question when members of the Administration are beginning to waffle on the evening news about the duration of our commitment? Clearly, the morale, will power and commitment factors favor the insurgents.
"Secure logistics and secure lines of communication are essential for the guerrilla and non-guerrilla force. Security missions, however, can tie up most of a conventional force."
WWNK: With 28,000 soldiers in the field at any time, U.S. coalition forces are hard pressed to protect themselves, let alone protect anything else. Point to the insurgents.
"Weapons systems, field gear, communications equipment and transport which are designed for conventional war will often work less effectively or fail completely on rugged terrain."
WWNK: The U.S. force has the world's best military equipment, bar none. But all of the smart bombs in the world will not do you any good against a lone Iraqi sneaking through the night with a Rocket-Propelled Grenade (RPG). Put another way, unless you are pursuing total war, which is something we are simply not prepared to do, nor should we be, all that high-tech weaponry is pretty much useless against guerrillas, as opposed to a conventional army. And fighting against well-coordinated pockets of insurgents embedded in urban terrain is rugged terrain indeed. Again, point to the insurgents.
"Tactics for conventional war will not work against guerrillas. Forces need to be reequipped, restructured and retrained for fighting guerrillas or for fighting as guerrillas."
WWNK: In the opening stages of the Vietnam War, U.S. search and destroy squads were actually quite effective against the irregular Viet Cong, effectively defeating them as a fighting force before the entrance of the North Vietnamese regular army – coupled with political restrictions on the limits of our combat – ultimately lost the war there. In the case of Iraq, search-and-destroy missions by small and ruthless groups of anti-insurgents may be the only way to win this war militarily, but each incursion into the slums of Baghdad or other cities risks turning more of the population against us. That's not hard to do considering, according to the Zogby poll, 30% of Iraq's citizens said they had lost a family member, neighbor or friend in the U.S. attack. Of course, they lost a lot more to Saddam's thugs – the poll says 50% -- but the memories from the U.S. war are still fresh.
Because of the underdeployment and the nature of the terrain, the odds of the U.S. using small groups of soldiers fighting guerrilla-style to successfully track down a significant number of insurgents are long indeed. That leaves us in more or less fixed positions, vulnerable to continued attacks at the time and choosing of the insurgents.
"Tanks have a limited utility for the counter-guerrilla force, but can serve as an effective reserve on the right terrain. Infantry fighting vehicles and helicopters can play an important role in mobility and fire support."
WWNK: In the case of Iraq, because U.S. forces are so widely dispersed, the helicopter is especially important. Unfortunately, in the words of a professor of military history at Washington's National Defense University, "Choppers are very vulnerable. They fly low and slow and they're excellent targets. They can be brought down by Stingers, RPGs and small arms fire." The Iraqi resistance obviously knows how to take out helicopters – and their success on that front to date limits the usefulness of this critical battlefield support component.
"Journalists and television cameramen are key players in guerrilla warfare. The successful struggle can be effectively aided when championed by a significant portion of the world's press."
WWNK: The world's press and increasingly our own, is almost entirely unified against the Iraq operation.
"Domination of the air is irrelevant unless airpower can be precisely targeted. Seizure of terrain can be advantageous, but is usually only of temporary value. Control of the cities can be a plus, but can also prove a detriment. Support of the population is essential for the winning side."
WWNK: Historically, success by occupying forces against insurgents occurs only if the insurgents can be geographically and/or politically isolated, and then systematically eliminated. Because the Iraqi insurgents are embedded in the cities, geographic isolation is unlikely, leaving political isolation the only hope.
The only way that is going to occur is if we publicly ally with the Shiite majority against the more troublesome Sunni minority – the feeding stock for the insurgency. This strategy would, in effect, call for deliberately creating a vicious religious war, the end result of which will almost certainly be an Iranian-style theocracy that will not thank the U.S. for its help, should it succeed. We would rate the odds of such strange bedfellows as Bush and the Ayatollahs to be slim to none and Slim just left town.
The bottom line: On virtually every point, the battle goes to the insurgents. Consequently, the signals now coming out of Washington that we are preparing to cut and run, painful as it may be from the perspective of national pride, makes sense. This is a war we cannot win.
As for the Iraqis and their smoldering cities – their future will be up to them. If the U.S. invasion has provided them with nothing else, it has provided the country with a break from its totalitarian past and in so doing, an opportunity to take a new path. They can collectively choose to reconstruct a polite society from the ruins, or squander their future by rolling over for the next hard man that comes along, maybe even welcome back Saddam. They might also opt for a good old-fashioned religious civil war. The reality is that Iraq was a human rights mess before the war, and its citizens can use the U.S. intervention to do better. Or, they can revert to oppression and hopelessness. That would be a damn shame, but not our damn shame.
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Doug Hornig’s article on private property from 2/8/2005 won a Casey Research “Brilliance Award” for excellence in writing. Doug says it’s also one of his favorite articles, so here it is for you…
The Right to Private Property
By Doug Hornig
In his landmark 2000 book, The Mystery of Capital, Peruvian economist Hernando De Soto tackles the vexing question posed by his subtitle: Why Capitalism Triumphs in the West and Fails Everywhere Else. The answer, De Soto maintains in a carefully constructed argument, lies not with a scarcity of natural resources, nor the legacy of colonialism, nor some innate inferiority, nor even type of government. It is that the entrepreneurial spirit flourishes in places where private property is strongly protected by law, and languishes where it is not.
Although De Soto buttresses his conclusion in a very modern way, with lots of charts and graphs, it would have come as no surprise to the founders of the American republic. So keen were they on the individual's right to private property that they wrote specific protections into the Bill of Rights, not once but three times (Amendments 3, 4 and 5), then for good measure threw in the open-ended Amendments 9 and 10, which essentially guarantee our right to live our lives as we please, subject only to a few reasonable restrictions.
It's a good thing the founders can't see us now. The past seventy-five years have seen the growth of government from a relatively small entity charged with defending the borders, adjudicating disputes, and delivering the mail, to a bloated nightmare creature whose tentacles reach into every corner of our existence. Liberal administrations and Congresses have come and gone, as have conservative ones. It has made no difference. Everyone in government, it would appear, is primarily dedicated to making it bigger.
The toll on the Constitution has been heavy. Largely because of the misguided War on Drugs, Fourth Amendment prohibitions regarding search and seizure have, essentially, ceased to exist, while asset forfeiture statutes have made a mockery of the Fifth Amendment's due process clause. And the courts have gone along, siding almost always with the government against the individual, allowing the Bill of Rights to be gutted.
Soon, yet another extension of government power is to be tested before the Supreme Court, and its decision will have far-reaching implications for property rights. The case is Susette Kelo v. City of New London, and at issue is the meaning of the final clause of the Fifth Amendment: "nor shall private property be taken for public use without just compensation."
In 2000, Ms. Kelo, along with everyone else in the Fort Trumbull section of New London, CT, suddenly found their entire neighborhood condemned in the name of "economic development." This was not the kind of "blighted" urban landscape that governments routinely seize through eminent domain in order to bulldoze them. It was rather an area of older homes and small businesses that happened to occupy some prime riverfront real estate near a newly constructed Pfizer pharmaceutical plant.
The city – thinking that hotels, expensive offices and more upscale residences would help with job creation and (probably more important) generate greater tax revenues – attempted to help itself to the land, with the intention of transferring control to the private, though non-profit, New London Development Corporation (heavily backed by Pfizer). The NLDC would, in turn, lease back the property at a buck a year to private, for-profit developers.
Affected homeowners, asserting that this governmental action hardly qualifies as taking private property for "public use," filed suit to stop it. The case reached the Connecticut Supreme Court, which ruled 4-3 in favor of the city. Final appeal was made to the U. S. Supreme Court, which agreed to hear arguments during its next session.
The stakes are high. As the Property Rights Foundation of America points out in an amicus curiae brief filed in this case, the Connecticut Court's decision "gives government carte blanche to take private property from one person and transfer it to another person, limited only by the government's willingness or ability to proclaim that its intent is to promote economic development."
Whether the Supreme Court will see fit to overturn the Connecticut ruling remains to be seen. Given its usual bias in favor of government and business, one might think the chances are slim. However, the Justices may take into account recent rulings by both the Michigan and Illinois Supreme Courts that decided similar cases in favor of the plaintiffs. Said the Illinois Court as it invalidated a taking of private land to create additional parking for a racetrack: "To constitute a public use, something more than a mere benefit to the public must flow from the contemplated improvement."
Seems like a sound principle to us.
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Among the hundreds of articles I’ve written since 2004, I picked this one from WWNK 10/4/2005, because it stands out as one of the stories I had the most fun writing. I still chuckle when I read it.
Creator with Meatballs
By Shannara Johnson
"And the Flying Spaghetti Monster saw the light, that it was good: and with His Noodly Appendage divided the light from the darkness."
Thus might read the Book of Genesis in the Pastafarian Bible. Pastafarianism, according to its followers, is a new and entirely plausible theory of the beginning of the world and the history of human beings – at least as plausible, if not more, they say, as the theory of Intelligent Design.
And they are willing to fight for it.
The story of the FSM Church and its battle for official recognition started with an unemployed physics graduate from Oregon State University with too much time on his hands. Inspired by fundamentalist Christians' demand to teach Intelligent Design as another scientific theory side by side with evolution in biology classes, 25-year-old Bobby Henderson addressed an open letter to the Kansas Board of Education (see his website, www.venganza.org).
"I am concerned. . . that students will hear only one theory of Intelligent Design," he wrote. "I and many others around the world are of the strong belief that the universe was created by a Flying Spaghetti Monster. It was He who created all that we see and all that we feel. We feel strongly that the overwhelming scientific evidence pointing towards evolutionary processes is nothing but a coincidence, put in place by Him."
The logical consequence: "It is for this reason that I'm writing you today, to formally request that this alternative theory be taught in your schools, along with the other two theories. . . If the Intelligent Design theory is not based on faith, but instead another scientific theory, as is claimed, then you must also allow our theory to be taught, as it is also based on science, not on faith."
As proof of the scientific correctness of his theory, Henderson explains in detail how the Flying Spaghetti Monster messes with the results of carbon-dating of artifacts to make them look really, really old. He also provides an explanation for the dire situation of planet Earth, complete with chart:
"[It] is disrespectful to teach our beliefs without wearing His chosen outfit, which of course is full pirate regalia. . . You may be interested to know that global warming, earthquakes, hurricanes, and other natural disasters are a direct effect of the shrinking numbers of Pirates since the 1800s."
The accompanying graph, Henderson argues, shows a clear, statistically significant connection between rising global temperature and the waning pirate population within the last 200 years.
This could just be a cute story if – thanks to the Internet and instant global communication – it hadn't gotten so much public attention, and gleeful endorsements from dozens of angered scientists as well as members of the Kansas Board of Education who want to keep Intelligent Design out of the classroom. Doubtlessly realizing that it's a lot easier (and much more satisfying) to fight for a cause instead of against a problem, U.S. scientists have converted in droves to evangelical Pastafarianism.
"I am firmly convinced that the evidence supporting this depiction of the origins of life, the universe and everything has many of the trappings of science," writes Sebastian Wren, Ph.D., "and I therefore support the inclusion of FSM creation evidence in the Kansas science curriculum and standards."
Professor Douglas Shaw, Ph.D., concedes that "the FSM theory is much more plausible than the non-FSM ID theory, because it is the only one of the two that takes into account all the discrepancies between ID and measurable objective reality."
And Steven D. Unwin, Ph.D., author of The Probability of God, agrees that "if supernaturalism be called for, the pasta family of theologies seems the most plausible, and unquestionably the tastiest with cheese."
Some even offer additional evidence for the existence of the Flying Spaghetti Monster. Brian D. Rabern from the Department of Philosophy at the UC Santa Barbara makes the cosmological argument, including chains of logic like "Gods create humans in their own image. The brains of humans resemble a bowl of spaghetti. Thus, the Flying Spaghetti Monster is the one true god."
Scientist Howard Bond, Ph.D. points out the noodly appearance of certain nebulas photographed by the Hubble Space Telescope; Santiago Perez, Ph.D. finds his evidence in the microcosm, namely our DNA, which bears a striking resemblance to His Noodliness – who, by the way, looks like a bunch of pasta with two meatballs and eyes on stalks. Proof positive that we are made in His image and likeness, says Perez.
But the buck doesn't stop at university staff – the national and international media has gotten wind of Bobby Henderson's new movement as well. FSMism has been featured in prestigious papers like the New York Times, Washington Post, Arizona Daily Star, Seattle Post Intelligencer, St. Petersburg Times, the UK Guardian and Daily Telegraph, the German Der Spiegel and Die Welt, the Italian La Repubblica, the Taipei Times, and on CNN. Even professional skeptic James Randi wrote an article in acclaim of Henderson's new religion.
Silly as it sounds, Pastafarianism is a force to be reckoned with. Henderson's open letter has meanwhile gone out to various other school boards and is being blissfully backed by hundreds, if not thousands of U.S. college students and pro-science activists nationwide. Staunch supporters are willing to take the matter to court and force the tale of the Flying Spaghetti Monster to be told in classrooms around the country.
And the best: It's so much more fun than the other story. Ramen.
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Reader Feedback
Here are some good-byes from our readers:
Thanks for WWNK, and may goodness and fortune smile on the prepared.
(Lawrence)
***
I should have said thank you long ago. I have yet to receive a WWNK that did not contain one or more well-written articles that I have enjoyed and learned from. Please be sure and keep me on your E-list, and here's to your continued success with your new enterprise, which will help me start my day and wake up my mind.
(Denos M.)
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Sorry to hear about the demise of WWNK, I have recommended it to many friends but I’m looking forward to CDRP and hope it’s even 1/2 as good as WWNK.
(Kerry C.)
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I have watched your unbiased WWNK for some time as many others do. You are be congratulated for your poignant, relevant and fair coverage of a myriad of different issues that are pertinent to our social and economic welfare.
I always pass WWNK to many of my friends and business associates and this will continue. They are like minded as well and appreciate honest reporting. Keep up the good work as I wait with bated breath for your [Daily Resource Plus].
(Sel C.)
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I love new good things but I will lament the loss of What We Now Know more than even the writers. A great read while it existed.
(Steve K.)
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End Quote
“What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.”
T. S. Eliot (1888 – 1965), American poet
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The What We Now Know Team
Short bios of this week’s contributors:
David Galland
David Galland is Managing Director of Casey Research, LLC., publishers of Doug Casey’s International Speculator, a monthly newsletter focused on identifying high quality natural resource stocks with the potential for a double or better over the next 12 months. A 3-month risk-free trial to the letter is available for interested investors.
Doug Hornig
Doug Hornig is an editor with Casey Research, the author of the Daily Resource column on KitcoCasey.com, and a regular contributor to What We Now Know. He has authored nine books, and his work has also appeared in Business Week, Playboy, and more. As a veteran journalist, he has been writing on a broad range of subjects for WWNK, including complex issues like the U.S. health care crisis and the Social Security debate.
Shannara Johnson
Shannara Johnson is the Managing Editor of What We Now Know. With over 20 years of writing experience, she spends her time researching and writing about the most fascinating, controversial, and pressing topics of our time for WWNK readers.
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