A wacky argument re economic theory

... if ever there was one!

-- David M Gordon / The Deipnosophist

How do you spell economic recovery?

Macro, micro; Austrian School, Keynesianism; supply-side, demand-side. Many methodologies, too many interpretations.

I know nothing of economics, which does not stop me from employing my own analytical process and interpretations. I merely watch for whether people spend. Easy as that. If people spend, new goods must take the place of the items purchased, which requires new orders from vendors to suppliers, up and down the food chain. Fairly simplistic, I know, but it works.

I visited London 12 1/2 months ago, and witnessed an obvious reluctance to spend; fewer people than typical were out and about, and those few did not spend. Even the tourists kept a tight fist on their wallets... In Fortnum&Mason (a high-end retailer, if ever there was one), a few hardy people (mostly tourists) shopped, but did not buy; the few who bought, purchased only an item or two.

And then my return visit to London last week. Teeming crowds of people jostled for space all up and down Regent and Oxford Streets. And elsewhere. Fortnum&Mason was elbow room-only with tourists and locals, and they spent. Oh, how they spent!

So the news that Britain's GDP grew 0.8% in Q3, twice as fast as economists had expected, is no surprise to me. Really, it is just more of the same.

Perhaps this recovery is all vapor, blown away by the mere exhalation of some fellow purportedly in the know. Then, again, perhaps not. This seems to be the nature of economic recoveries these days: vaporously thin, suddenly hyper-extended. Leave it to the know-it-alls who attempt to guide, if not manage, the economy... but who, really, know nothing at all.

Else why the surprise?
-- David M Gordon / The Deipnosophist

Christmas gifts - 2010 model

-- David M Gordon / The Deipnosophist

On holiday

Back in a few weeks. See you then!
-- David M Gordon / The Deipnosophist

Terrorism, Vigilance, and the Limits of the War on Terror

I am about to depart for a holiday in Europe, so of course my ears perked up when the alarum sounded on Sunday. Stratfor's essay below helps make sense of it all.
-- David M Gordon / The Deipnosophist



Terrorism, Vigilance, and the Limits of the War on Terror
By George Friedman

The U.S. government issued a warning Oct. 3 advising Americans traveling to Europe to be “vigilant.” U.S. intelligence apparently has acquired information indicating that al Qaeda is planning to carry out attacks in European cities similar to those carried out in Mumbai, India, in November 2008. In Mumbai, attackers armed with firearms, grenades and small, timed explosive devices targeted hotels frequented by Western tourists and other buildings in an attack that took three days to put down.

European security forces are far better trained and prepared than their Indian counterparts, and such an attack would be unlikely to last for hours, much less days, in a European country. Still, armed assaults conducted by suicide operatives could be expected to cause many casualties and certainly create a dramatic disruption to economic and social life.

The first question to ask about the Oct. 3 warning, which lacked specific and actionable intelligence, is how someone can be vigilant against such an attack. There are some specific steps that people can and should take to practice good situational awareness, as well as some common-sense travel-security precautions. But if you find yourself sleeping in a hotel room, as gunmen attack the building, rush to your floor and start entering rooms, a government warning simply to be vigilant would have very little meaning.

The world is awash in intelligence about terrorism. Most of it is meaningless speculation, a conversation intercepted between two Arabs about how they’d love to blow up London Bridge. The problem, of course, is how to distinguish between idle chatter and actual attack planning. There is no science involved in this, but there are obvious guidelines. Are the people known to be associated with radical Islamists? Do they have the intent and capability to conduct such an attack? Were any specific details mentioned in the conversation that can be vetted? Is there other intelligence to support the plot discussed in the conversation?

The problem is that what appears quite obvious in the telling is much more ambiguous in reality. At any given point, the government could reasonably raise the alert level if it wished. That it doesn’t raise it more frequently is tied to three things. First, the intelligence is frequently too ambiguous to act on. Second, raising the alert level warns people without really giving them any sense of what to do about it. Third, it can compromise the sources of its intelligence.

The current warning is a perfect example of the problem. We do not know what intelligence the U.S. government received that prompted the warning, and I suspect that the public descriptions of the intelligence do not reveal everything that the government knows. We do know that a German citizen was arrested in Afghanistan in July and has allegedly provided information regarding this threat, but there are likely other sources contributing to the warning, since the U.S. government considered the intelligence sufficient to cause concern. The Obama administration leaked on Saturday that it might issue the warning, and indeed it did.

The government did not recommend that Americans not travel to Europe. That would have affected the economy and infuriated Europeans. Leaving tourism aside, since tourism season is largely over, a lot of business is transacted by Americans in Europe. The government simply suggested vigilance. Short of barring travel, there was nothing effective the government could do. So it shifted the burden to travelers. If no attack occurs, nothing is lost. If an attack occurs, the government can point to the warning and the advice. Those hurt or killed would not have been vigilant.

I do not mean to belittle the U.S. government on this. Having picked up the intelligence it can warn the public or not. The public has a right to know, and the government is bound by law and executive order to provide threat information. But the reason that its advice is so vague is that there is no better advice to give. The government is not so much washing its hands of the situation as acknowledging that there is not much that anyone can do aside from the security measures travelers should already be practicing.

The alert serves another purpose beyond alerting the public. It communicates to the attackers that their attack has been detected if not penetrated, and that the risks of the attack have pyramided. Since these are most likely suicide attackers not expecting to live through the attack, the danger is not in death. It is that the Americans or the Europeans might have sufficient intelligence available to thwart the attack. From theterrorist point of view, losing attackers to death or capture while failing to inflict damage is the worst of all possible scenarios. Trained operatives are scarce, and like any strategic weapon they must be husbanded and, when used, cause maximum damage. When the attackers do not know what Western intelligence knows, their risk of failure is increased along with the incentive to cancel the attack. A government warning, therefore, can prevent an attack.

In addition, a public warning can set off a hunt for the leak within al Qaeda. Communications might be shut down while the weakness is examined. Members of the organization might be brought under suspicion. The warning can generate intense uncertainty within al Qaeda as to how much Western intelligence knows. The warning, if it correlates with an active plot, indicates a breach of security, and a breach of security can lead to a witch-hunt that can paralyze an organization.

Therefore, the warning might well have served a purpose, but the purpose was not necessarily to empower citizens to protect themselves from terrorists. Indeed, there might have been two purposes. One might have been to disrupt the attack and the attackers. The other might have been to cover the government if an attack came.

In either case, it has to be recognized that this sort of warning breeds cynicism among the public. If the warning is intended to empower citizens, it engenders a sense of helplessness, and if no attack occurs, it can also lead to alert fatigue. What the government is saying to its citizenry is that, in the end, it cannot guarantee that there won’t be an attack and therefore its citizens are on their own. The problem with that statement is not that the government isn’t doing its job but that the job cannot be done. The government can reduce the threat of terrorism. It cannot eliminate it.

This brings us to the strategic point. The defeat of jihadist terror cells cannot be accomplished defensively. Homeland security can mitigate the threat, but it can never eliminate it. The only way to eliminate it is to destroy all jihadist cells and prevent the formation of new cells by other movements or by individuals forming new movements, and this requires not just destroying existing organizations but also the radical ideology that underlies them. To achieve this, the United States and its allies would have to completely penetrate a population of about 1.3 billion people and detect every meeting of four or five people planning to create a terrorist cell. And this impossible task would not even address the problem of lone-wolf terrorists. It is simply impossible to completely dominate and police the entire world, and any effort to do so would undoubtedly induce even more people to turn to terrorism in opposition to the global police state.

Will Rogers was asked what he might do to deal with the German U-boat threat in World War I. He said he would boil away the Atlantic, revealing the location of the U-boats that could then be destroyed. Asked how he would do this, he answered that that was a technical question and he was a policymaker.

The idea of suppressing jihadist terrorism through direct military action in the Islamic world would be an idea Will Rogers would have appreciated. It is a superb plan from a policymaking perspective. It suffers only from the problem of technical implementation. Even native Muslim governments motivated to suppress Islamic terrorism, like those in Egypt, Saudi Arabia, Algeria or Yemen, can’t achieve this goal absolutely. The idea that American troops, outnumbered and not speaking the language or understanding the culture, can do this is simply not grounded in reality.

The United States and Europe are going to be attacked by jihadist terrorists from time to time, and innocent people are going to be killed, perhaps in the thousands again. The United States and its allies can minimize the threat through covert actions and strong defenses, but they cannot eliminate it. The hapless warning to be vigilant that was issued this past weekend is the implicit admission of this fact.

This is not a failure of will or governance. The United States can’t conceivably mount the force needed to occupy the Islamic world, let alone pacify it to the point where it can’t be a base for terrorists. Given that the United States can’t do this in Afghanistan, the idea that it might spread this war throughout the Islamic world is unsupportable.

The United States and Europe are therefore dealing with a threat that cannot be stopped by their actions. The only conceivably effective actions would be those taken by Muslim governments, and even those are unlikely to be effective. There is a deeply embedded element within a small segment of the Islamic world that is prepared to conduct terror attacks, and this element will occasionally be successful.

All people hate to feel helpless, and this trait is particularly strong among Americans. There is a belief that America can do anything and that something can and should be done to eliminate terrorism and not just mitigate it. Some Americans believe sufficiently ruthless military action can do it. Others believe that reaching out in friendship might do it. In the end, the terrorist element will not be moved by either approach, and no amount of vigilance (or new bureaucracies) will stop them.

It would follow then that the West will have to live with the terrorist threat for the foreseeable future. This does not mean that military, intelligence, diplomatic, law-enforcement or financial action should be stopped. Causing most terrorist attempts to end in failure is an obviously desirable end. It not only blocks the particular action but also discourages others. But the West will have to accept that there are no measures that will eliminate the threat entirely. The danger will persist.

Effort must be made to suppress it, but the level of effort has to be proportional not to the moral insult of the terrorist act but to considerations of other interests beyond counterterrorism. The United States has an interest in suppressing terrorism. Beyond a certain level of effort, it will reach a point of diminishing returns. Worse, by becoming narrowly focused on counterterrorism and over-committing resources to it, the United States will leave other situations unattended as it focuses excessively on a situation it cannot improve.

The request that Americans be vigilant in Europe represents the limits of power on the question of terrorism. There is nothing else that can be done and what can be done is being done. It also drives home the fact that the United States and the West in general cannot focus all of its power on solving a problem that is beyond its power to solve. The long war against terrorism will not be the only war fought in the coming years. The threat of jihadism must be put in perspective and the effort aligned with what is effective. The world is a dangerous place, as they say, and jihadism is only one of the dangers.

Terrorism, Vigilance and the Limits of the War on Terror is republished with permission of STRATFOR.

What I did when I was younger...

-- David M Gordon / The Deipnosophist