Source: The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure

Watch: Brutal Nikki Haley Tells America-Hating Nations the Gravy Train Has Ended

President Donald Trump famously promised to “make America great again” — and one of the planks in that platform was putting the nation first instead of bowing to international groups like the United Nations.

Since day one, UN Ambassador Nikki Haley has been a key part of the promise. The no-nonsense former governor has become known for her tough rhetoric when dealing with international relations … and that reputation just got another boost.

On Wednesday, Haley appeared on Fox News to talk about foreign policy. In a statement that seemed to draw a line between the Trump administration and his predecessors, the ambassador declared that there would be no more blank checks from America to other countries.

“We are no longer going to give money to people who are against the U.S. or say ‘death to America,’ or do anything that would be anti-U.S.,” Haley explained to Fox’s Bret Baier.

TRENDING: Reporter Called Out for ‘Fake News’ After Florence Live Report Goes Very Wrong

“We are now going to strategically start to work with our friends and we are no longer going to be handouts for those that go against us,” she continued, echoing the general premise of Trump’s “America first” policy.

In response to critics who have attacked the president’s fairly unique approach to international relations, the top diplomat listed the administration’s recent successes.

“I think [President Trump] has actually done a lot in foreign policy, but in different ways,” she pointed out.

The historic progress on the Korean situation, including a previously unprecedented meeting with Kim Jong Un, was the obvious example.

“If you look at what he’s done with North Korea, I mean it’s really led the international community to isolate North Korea to where they decide, you know, they have a decision to make,” she said.

Haley didn’t stop there. “He led on the fact that he pulled out of the Iran deal. It’s forcing the entire world to admit the fact that Iran was not behaving properly. He’s led in Syria to make sure that chemical weapons aren’t being used and he’s warned against them being used again.”

As with the United Nations, the U.S. is taking an approach around the world that doesn’t placate opponents of Western values … and that message was hammered home by Haley.

“I think if you look at the Western Hemisphere, which we’ve spent the last two weeks focused on, whether it is Venezuela or Nicaragua, the messages are being sent that we’re not going to support dictators,” she declared.

That view no doubt drives the left crazy, but it’s exactly what the American people voted for when they elected Trump.

RELATED: NYT Forced To Issue Correction After Cheap Shot Against Nikki Haley Blows Up in Its Face

It’s too early to tell, but Trump’s legacy could be remembered as being a voice of the people versus the elitist, globalist establishment.

Places like the United Nations are where those globalists thrive, but the duo of Haley and Trump has sent a clear message: There’s a new sheriff in town, and the back-everyone-but-America gravy train is finally being derailed.

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

My “Free” Advice for Sears Holding CEO Eddie Lampert

by Wolf Richter • Sep 14, 2018 • 91 Comments

“Don’t write any more blog posts to blame pensioners for the collapse of Sears Holding after you wasted $5.8 billion on share buybacks.”

I don’t give “free” advice to hedge fund managers. But if I were to give free advice to Sears Holding CEO and hedge-fund manager Eddie Lampert, it would sound like this:

“Don’t write any more blog posts in which you explain who all is at fault for the decade-long collapse and coming bankruptcy of Sears Holding without doing some serious soul-searching and navel-gazing first.”

And I would add: “Because…”

• You bought the place — Kmart in 2003 and Sears in 2005 to form Sears Holdings in an $11.5 billion deal – and knew what you were getting into.
• You ran the place.
• You refused to listen to your customers and failed to value your customers as the most precious asset the company had, and thought it would be more profitable to run them off.
• You were focused on slashing inventories and expenses, including promotions and advertising, to increase short-term profits and cash flows and inflate the stock price.
• With this focus on cutting, cutting, cutting, you ruined the customer experience and customer service along with the brand – suicide in retail.
• It seems you were too focused on stripping out real estate assets, but not for the benefit of Sears Holding shareholders but for other entities you control.
• And most importantly: You blew, wasted, and destroyed $5.8 billion on share buybacks between 2005 and 2010 to manipulate up the share price, paying as much as $170 a share. Now they’re trading at $1.26.

To humor me, let me just add this: If you had invested that $5.8 billion in creating a vibrant customer-focused online presence, Sears would be in much better shape today. 2005 through 2010 would have been the perfect time to do this. But no. Your hedge-fund mentality doesn’t believe in investing in a company and its customers.

So, you killed the place. And that’s OK in American capitalism. As long as you follow the rules of the law and make money doing it, great. To heck with shareholders and other stakeholders. That’s what we’re all about.

But given this background, as a smart CEO, you should never-ever write another idiotic blog post, as you just did, trying to defend your record by blaming others, including retired employees and their pension fund.

Maybe Sears and Kmart would have gone out of business anyway if you hadn’t acquired them, but that’s a hypothetical consideration whose train has left the station a long time ago.

In your blog post, you specifically blame Sears’ slow-motion demise on two main things:

The “very difficult retail environment” where customers are shifting to online purchases of just about all the goods Sears and Kmart are trying to sell. OK, that’s correct. I have come to call this the “brick-and-mortar meltdown.” But you should blame yourself. This has been going on for 20 years, and many retailers have succeeded in building a thriving online presence.

Pension fund obligations. Here is what you said:

Sears has also been significantly impacted by its long-term pension obligations. In the last five years, we contributed almost $2 billion, and since 2005 we have contributed over $4.5 billion, to fund our Pension Plans.

OK, let me interject here: You blew $5.8 billion on share buybacks over this period, even as you knew that these pension obligations would have to be dealt with. This is money that is owed. Did you think you could just walk away from these pensions – and let the Pension Benefit Guaranty Corporation pick up the tab, even as the older folks that had worked for Sears all their lives, would suddenly see their benefits get cut? Were you nuts, or something?

These funding levels have been significantly higher than they otherwise would have been because of the historically low interest rates driven by Federal Reserve policy since the 2008 financial crisis, increases in Pension Benefit Guaranty Corporation fees, and required changes in mortality assumptions.

Here you’re correct for once: The monetary policies of the Fed (QE and zero-interest-rate policy) will cause a painful reckoning among all pension funds, and has already done so for a decade for retirees living off their savings. But your hedge fund also benefited hugely from low interest rates, cheap leverage, and the Everything Bubble these policies have created. And on you go (I added the bold):

Had the Company been able to employ those billions of dollars in its operations, we would have been in a better position to compete with other large retail companies, many of which don’t have large pension plans, and thus have not been required to allocate billions of dollars to these liabilities.

Let me fix that paragraph for you: “Had the Company been able to employ in its operations those $5.8 billion we wasted on share-buybacks, we would have been in a better position to compete with other large retail companies….”

Yup, you got it. No one to blame but yourself.

But let me assure you that I hope it works out for you, your hedge fund entities, Seritage (which extracted some of the best real estate, and of which you’re chairman), and all the other beneficiaries of your strategy. That’s the American way. But for crying out loud, don’t put this stuff into blog posts. It looks terrible and gives hedge-fund-manager-CEOs a bad name.

And to stay on topic, here I explain how, despite all your claims that you’re trying to turn around the company, both revenues and store count will hit zero by the end of 2020, just using basic math. In reality, it won’t take that long – defying my dictum that nothing goes to hell in a straight line. Read… Dead Meat Walking: Sears Revenue & Store Count to Hit Zero by 2020

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https://www.bitchute.com/video/RbUGej05bLA/

Politicians picking winners and losers

https://www.bitchute.com/video/qyZJ5GCBGxU/

Good humor.

Source: Snowing in Africa – Wow | Armstrong Economics

Mercenaries: A “Privatized” Army Is Still an Army

Erik Prince, the owner of a series of mercenary firms originally known as Blackwater, wants to “privatize” the war in Afghanistan. And he wants you to pay him to do it.

According to to the Military Times, “Prince … believes a small footprint of private military contractors and even smaller footprint of U.S. special operators may be able to accomplish what hundreds of thousands of U.S. troops and NATO forces over the last 17 years could not. … Prince also thinks that, ultimately, cost savings might convince the president to try something new. Prince said his plan would cost $5 billion a year, a fraction of what it currently costs the U.S. to operate in Afghanistan.”

Ultimately, of course, whether or not Prince’s plan accomplishes the government’s objectives in Afghanistan — objectives that remain murky and ever-changing to this day — it’s a win-win for Prince. He’ll get billions in revenue out of the deal no matter what.

From an economic perspective, is this a good idea? If the plan really did reduce spending in Afghanistan to $5 billion, that would certainly be a good thing. This would require, however, that the Prince plan replace the current plan, which costs taxpayers $45 billion per year. $780 million of that goes to economic aid, and $13 billion is spent on US forces in Afghanistan.

But, even if the US only cut back the $13 billion spent on military forces, the Prince plan would still be a savings.

“Privatization” Rarely Means Market Prices or Market Exchanges

Of course, when we use the word “privatize” in this context, we don’t really mean anything of the sort. Prince’s plan would be “privatization” in the same way that a city government might privatize road building. The government hires a private firm to perform the services — but it’s all paid for with taxpayer money.

Privatization may have some advantages. In the case of road building, privatization means the government no longer has to maintain and store its own equipment. Of course, whatever fees a government pays for the roads will have to cover the firm’s costs of storing and maintaining its own equipment.

Whether or not this actually saves the taxpayer any money is never a given. It might, or it might not, depending on the situation.

At least in the case of road building it’s fairly easy to see if services have been performed. Even then, it’s hard to know how long, or how well, the road will last. Determining whether or not services have been competently rendered in Afghanistan is something far harder to evaluate.

This brings us to the second way in which “privatization” has nothing to do with a truly private sector.

[RELATED: “Taxpayer-Funded Mercenaries Are Not the ‘Private Sector‘” by Ryan McMaken]

With Erik Prince and his “private” military, there are no market prices and no way of determining if the firm is operating “efficiently.”

In a truly private market transaction, purchases are paid for voluntarily by the customer at market prices.

A “privatized” war by the US government is still paid by taxpayers under pain of fine or imprisonment. This is no market transaction. Firm efficiency then just becomes a matter of delivering services in a way that will please elected officials while convincing them to approve yet another budget line item for “services rendered.”

All else being equal, it’s potentially the case, that the plan could decrease government spending. Unfortunately, there are numerous complicating factors that must also be considered.

A Trend of Decreasing Troop Numbers — And Increasing Mercenary Numbers

In the United States, overall troop totals have gone into steep decline since the end of conscription and the Cold War.

 

Source: US Department of Defense, US Census Bureau1

As of 2013, there were 43 active-duty personnel per 10,000 US residents. That was down considerably from the 82 per 10,000 that existed in the direct wake of the Cold War. Numbers had been much higher during the Cold War, when, in the midst of the Vietnam War in 1970, there were 150 active duty personnel per 10,000 US residents.2

Even with these steep drops, of course, the US still has a much larger permanent federal military than would ever have been tolerated prior to the Civil War. Given the tiny troop totals funded by the US government in that period, historian Marcus Cunliffe concludes that, as late as the 1840s, “Americans in many areas had no idea what a regular officer looked like.” By “regular” Cunliffe means a professional soldier employed by the federal government. Many Americans were familiar with the militias at the time.3 But federal soldiers were a rare oddity.

This changed significantly in the twentieth century as conscription became commonplace, and as the US remained in a state of near-constant military buildup after the Second World War.

Once the US switched to an all-volunteer military after 1973, though, troop numbers began to decline. They continued to decline with the end of the Cold War.

Military, spending, however, did not decline. When adjusted for inflation, military spending since 2004 has been above or near Cold-War-Reagan-Era levels . If spending on veterans and “Homeland Security” is included — as it should be — then spending levels are now well above what they were during the Cold War.

 

But if troop levels are falling, where is all that money going?

Replacing Troops with Machinery and Military Contractors

Part of the money, of course, is used to fund what might be called “labor-saving devices” in a military context. That is, capital and cash can be used to design, purchase, and deploy vehicles, weapons, and devices that can deliver the same amount of destructive power equal to what once required a sizable number of soldiers. In other words — as with many other endeavors — machinery can be substituted for personnel.

But this can’t always be done, and that’s where the paid mercenary “contractors” come in.

As Micah Zenko reported in Foreign Policy in 2016, military contractors have become a growing part of US military operations:

As noted previously, there are roughly three contractors (28,626) for every U.S. troops [sic] (9,800) in Afghanistan, far above the contractor per uniformed military personnel average of America’s previous wars. In Iraq today, 7,773 contractors support U.S. government operations — and 4,087 U.S. troops. These numbers do not include contractors supporting CIA or other intelligence community activities, either abroad or in the United States. On April 5, Adm. Michael Rogers, commander of the U.S. Cyber Command, declared during a Senate hearing that contractors made up 25 percent of his workforce.

Numbers like these, however, are not easy to come by. Zenko continues:

“The first thing you learn when studying the role contractors play in U.S. military operations is there’s no easy way to do so. The U.S. government offers no practical overview, especially for the decade after 9/11. U.S. Central Command (CENTCOM) began to release data on contractors only in the second half of 2007 — no other geographic combatant command provides such data for their area of operations. … DOD still does not have a system that reliably tracks killed and wounded contractor personnel.” Just last month [April 2016], an especially exasperated John McCain, chairman of the Senate Armed Services Committee, told acting Secretary of the Army Patrick Murphy, “We look forward to the day you can tell us how many contractors are employed by [the Department of Defense].”

This lack of transparency in mercenary troop levels serves a political purpose.

In The Atlantic, Sean McFate wrote in 2016:

Contractors also encourage mission creep, because contractors don’t count as “boots on the ground.” Congress does not consider them to be troops, and therefore contractors do not count against troop-level caps in places like Iraq. The U.S. government does not track contractor numbers in war zones. As a result, the government can put more people on the ground than it reports to the American people, encouraging mission creep and rendering contractors virtually invisible.

For decades now, the centrality of contracting in American warfare — both on the battlefield and in support of those on the battlefield — has been growing. During World War II, about 10 percent of America’s armed forces were contracted. During the wars in Iraq and Afghanistan, that proportion leapt to 50 percent. … Today, 75 percent of U.S. forces in Afghanistan are contracted. Only about 10 percent of these contractors are armed, but this matters not. The greater point is that America is waging a war largely via contractors, and U.S. combat forces would be impotent without them. If this trend continues, we might see 80 or 90 percent of the force contracted in future wars.

McFate is right. The fact that only 10 percent of contractors are armed does not preclude them from being counted as part of combat operations. After all, only 17 percent of US military personnel are trained in combat specialties. Moreover, more contractors have died in combat in recent years, than have US military personnel. Zenko notes:

Between Jan. 1, 2009, and March 31, 2016, 1,540 contractors were killed in Iraq and Afghanistan (176 in Iraq and 1,364 in Afghanistan). During that period, 1,301 U.S. troops were killed in Afghanistan and Iraq (289 in Iraq and 1,012 in Afghanistan). Last year [2015] was even more skewed toward contractors than the preceding six years; 58 contractors died in Afghanistan or Iraq, while less than half as many U.S. troops did (27) fighting in either country, including Syria.

It’s easy to see how all this makes things easier for American politicians. With a military strategy so reliant on people other than US soldiers, politicians can reward their friends and donors with ever increasing levels of military spending. They can keep any number of splendid little wars going, and the voters will rarely hear about any troop casualties or “boots on the ground.” The lack of American troops on the ground in Syria, or Yemen, or Afghanistan allows politicians to claim that the military operations are being “phased out,” or “wound down.” In reality, the money keeps flowing, and the bombs keep flying.

The lack of American personnel is further highlighted by the fact that American citizens may make up as little as one-third of those employed by contractors. Contractors are often foreigners hired locally in the conflict zone, or are professionals recruited globally.

The political effect has been to make it easier to avoid attracting the attention of voters when military operations are ratcheted up. After all, when contractors do die in combat, their names are rarely mentioned in the news, as is often the case of US soldiers. And many of the dead are foreigners, anyway.

Thus, in determining whether it’s a good idea to double down on the use of military contractors, as Erik Prince would have us do, it needs to be more than a decision about spending levels. Relying more and more on contractors is essentially a political strategy designed to make it easier to hide information about Americans foreign policy from voters.

Another consideration is one of American civil liberties. In the eighteenth and nineteenth centuries, American political ideology inveighed heavily against the existence of a federally-controlled standing army. The fear was that a sizable force of ground troops could be used to violently impose government policy on the US population. This fear of standing armies was the primary motivation behind the Second Amendment and general political opposition to a well-funded military establishment. In two essays here at mises.org devoted to this issue, I pointed out that calling for a large and powerful military was in conflict with the Second Amendment as imagined by the people who wrote it. In response, many commenters in social media and here at the site claimed that the military will never be a threat to US citizens because “they take an oath to uphold the constitution.” This in itself is an extremely naïve statement, of course. But even if it weren’t naïve, would the same claims about a devotion to an oath about the US Constitution apply to combat-experienced soldiers employed as contractors? It seems unlikely. Naturally, it would be illegal for the US government to use such personnel against US residents in the US. But in times of crisis and strife, the fact something is illegal has never been much of a hindrance to the US government. It doesn’t require the world’s most active imagination to imagine an American future in which military contractors are employed to “restore law and order” to a turbulent political situation.

• 1. Active duty totals are compared as a ratio with population totals. Data on troop totals from 1790 to 1990 are found in: “Selected Manpower Statistics, Fiscal Year 1997” (http://www.alternatewars.com/BBOW/Stats/DOD_SelectedStats_FY97.pdf) 2013 actice duty totals: http://download.militaryonesource.mil/12038/MOS/Reports/2013-Demographics-Report.pdf
  Population totals are from the Census Bureau.
• 2. I have excluded the World War II numbers here which are off the charts compared to every other period. In 1945, for example, there were more than 12 million active duty personnel for a total US population of 139 million. That means there were 867 active duty personnel per 10,000 US residents.
• 3. See Soldiers and Civilians: The Martial Spirit in America 1775-1965. Little Brown Publishers, 1968. p. 103.

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.