The Strait and Victory

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There is a two week cease fire more or less in progress in the US-Iran portion of the US/Israeli war against Iran, one that is subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz. Iran has not done so.

On Wednesday [after the cease fire nominally went into effect], Iran told mediators that it would limit the number of ships crossing the Strait of Hormuz to around a dozen a day and charge tolls. The Iranian navy also told ships anchored nearby that they still needed Iran’s permission to cross the strait. “If any vessel tries to transit without permission, [it] will be destroyed,” according to a recording reviewed by The Wall Street Journal.

The White House is insisting that what the Iranian personnel say in public is radically different from what they’re saying in private. Either way, though, those are just words. Actions matter, and so far those actions include a lack of tanker and cargo ship movement through the strait beyond a few that have paid as much as $2 million in protection money to the Iranians. That’s not a COMPLETE, IMMEDIATE, and SAFE OPENING.

Meanwhile, Iran is attempting after the fact to alter the terms of the cease fire to include Lebanon and Israel’s campaign against the Iranian terrorist surrogate Hezbollah. That that’s a separate matter is unimportant to Iran as its personnel, once again, welch on an agreement, tap things along, and stall, stall, stall.

That Iran’s military capacity has been devastated is true enough.

…strikes destroyed roughly 80% of Iran’s air defenses, more than 1,500 targets, as well as more than 450 ballistic missile storage facilities and 800 one-way attack drone storage facilities. The operation has also decimated Iran’s defense industrial base, Caine said, including shattering more than 80% of its missile factories.

But those numbers are just the modern body count, and they’re just as meaningless without context. How do those losses compare with what Iran started with? How many of those missiles, rockets, drones, and launch systems does it have left? How many of those small boats? How much of its industrial base is left?

The current situation seems similar to that of the Rome-Carthage wars, particularly the second one. From Adrian Goldsworthy’s The Fall of Carthage:

Despite their appalling losses, the string of humiliating defeats, the defections of some Italian allies, and the continuing malevolent presence of Hannibal’s army in Italy, the Romans simply refused to come to terms with the Carthaginians…. They were then able to beat the enemy on every other front and force the undefeated Hannibal to evacuate Italy…. The Carthaginians expected a war to end in a negotiated peace. The Romans expected a war to end in total victory or their own annihilation, something which no contemporary state had the resources to achieve.

We’re not dead yet, say the Iranian negotiators, so we haven’t lost.

It’s time for them to die.

Big Brother’s Nanny Sister

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President Donald Trump (R) wants to let businesses allow private equity investments be included in their 401(k) Plans so employees can invest in them with their retirement savings. After all, unions, those voting bloc and funders for the Progressive-Democratic Party do, with enthusiasm.

Nope, say those same Progressive-Democratic Party politicians. We get to do it. You others don’t. Just look at those collapsing private equity funds now. Besides, the Labor Department is only letting those 401(k)s have risky investments that could include Trump meme coins.

Labor says otherwise.

The Labor Department is proposing to clarify that employers don’t violate their fiduciary duty merely by incorporating private equity, real estate and other “alternative” investments in 401(k) fund options.

Nothing else.

I agree that private equity is a terrible, horrible, no good, very bad investment. However, that’s a matter for the individual investor to decide. It should not be a matter for Nanny Statists like Party politicians to actively bar, nor should it be a matter for Republicans of any stripe to passively bar by not permitting.

Caveat emptor, and caveat collocator.

Bah—Who Needs National Defense?

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A letter writer in The Wall Street Journal‘s Tuesday Letters section was unhappy with the spending proposal for and attendant priority given to defense spending. He didn’t seem to see any need for spending there.

I read with some alarm the enthusiastic commentary in your editorial regarding the proposed $1.5 trillion defense budget….
… Diverting expenditures to military weapons and away from social needs—housing, food and medical care—isn’t sensible nor is it possible, given current domestic needs.

What isn’t sensible is not funding our ability to defend ourselves in a world of many powerful enemy nations, at least one of which has sworn to surpass and dominate us.

Any free nation needs to be able to defend itself, or it won’t be free for long, and all the social needs—housing, food, and medical care—it gets, such as they might be, will be dictated by that nation’s conqueror. National defense must be that nation’s government’s first priority.

I decline to live under a People’s Republic of China tyranny. Or to see my nation simply destroyed by a nuclear armed Iran that has no other goal aside from visiting the same extermination on Israel.

Not Sure This Is Correct

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James MacIntosh, writing for The Wall Street Journal, is worried about the Fed worrying too much about its last mistake regarding inflation, when it was too slow to respond to rising prices. For instance,

But there’s a fundamental difference between the new oil shock and the postpandemic boom. Inflation today, already visible in rising prices at the pumps, is driven by restricted supply as Iran cuts off oil and other shipping through the Strait of Hormuz. The 2021-22 inflation was driven by soaring demand as stimulus-rich consumers emerged from enforced hibernation during Covid lockdowns.
Central banks know how to deal with too much demand. They should have raised rates much earlier than their eventual 2022 rises to hold back borrowing and spending. Today, they can’t do anything about the hit to supply, because, as the saying goes, you can’t print oil.

The problem with this, though, is in the relationship between inflation—rising prices—and rising—”too much”—demand. Rising prices occurs because demand is rising faster than supply can rise to satisfy it; it does not occur simply from rising demand. If we want more stuff—here oil—and the production of oil exists to satisfy that rising demand, prices don’t rise; there is no inflation.

Inflation is always and only in the relationship between demand and supply; it is never in demand alone or in supply alone. The only way there can be too much demand if there’s too little supply (the other side of this is true, too: the only way there can be too little demand is if there’s too much supply, which results in falling prices—deflation). More demand than supply can satisfy and less supply than can satisfy demand are the same thing.

So, what can/should the Fed do about today’s too little supply of oil relative to the demand for it and the consequent rise in prices? Its mandate, aside from full employment, is price stability: no change in price level, or via its goal, keeping price increases to 2% inflation. The Fed’s tool for this interest rates, which is to say here, reducing demand by raising the cost of the money that is that demand. Thus: raise interest rates when that inflation gets out of hand/rises too far above that 2% in a sustained upward trend. This is wholly independent of both supply and demand individually and responsive only to the relationship between the two.

The problem here is that “out of hand,” “too far above,” and “sustained” are each individually only hazily defined criteria. My own opinion is that with employment, which is a consequence of stable prices as well as its own economic condition, close to full and stable and currently rising prices not yet out of hand or too far above 2% or on a sustained upward trend, the Fed should do nothing more than keep a watchful eye. Trying to time the market with enough precision to preempt inflation without cutting off growth is as much a fool’s errand as an individual investor’s timing with a view to precise top or bottom picking.

This also is consistent with my view that current interest rates are consistent with (if a bit lower than) interest rates that historically are associated with 2%± inflation, so there’s nothing generally that the Fed needs to do.

ACLU Exposes Its Intrinsic Racism

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Janai Nelson, ACLU President, made the organization’s, and her own, racism plain in her Sunday letter to The Wall Street Journal‘s Letters section, a letter in which she accused DoJ’s Assistant AG of its Civil Rights Division, Harmeet Dhillon of

undermin[ing] the rights she was appointed to protect. In a case before the Supreme Court, the department under her leadership filed an amicus brief arguing that Louisiana’s intentional creation of a second majority-minority congressional district violates the Constitution. Her position on this issue would limit voting rights for black Americans by making it incredibly difficult for black voters to elect their candidates of choice.

Nelson is ignoring her BFF’s and favorite Progressive-Democrat ex-President. then-Illinois State Senator, Barack Obama’s statement at Party’s 2004 Convention:

[T]here’s not a liberal America and a conservative America; there’s the United States of America. There’s not a black America and white America and Latino America and Asian America; there’s the United States of America.

Especially that last: There’s not a black America and white America and Latino America and Asian America; there’s the United States of America. Race doesn’t matter in this nation, for all that bigotry (hold up a mirror facing you, Ms Nelson) still exists here. There are only citizens of the United States.

I repeat the relevant clause of the 14th Amendment to our Constitution, even though that’s lost on an entity and its chief for whom our Constitution has no meaning:

No State shall…deny to any person within its jurisdiction the equal protection of the laws.

There’s not a black voter and white voter and Latino voter and Asian voter; there’s the United States of America voters. Gerrymandering by race is racist at its core.

Nelson would have a stronger case were she to argue that that same 14th Amendment clause makes gerrymandering on the basis of political party unconstitutional. It’s instructive, though, that she chose race as the core of her special-treatment-by-gerrymandering argument.