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    Wednesday
    Dec172014

    The Long View: The Black Sun

    Raiders of the Lost ArkThe idea that the Nazis were into the occult has become a widely popular idea. When Indiana Jones battles Nazis for the Ark of the Covenant or the Holy Grail, no one needs any backstory to make this plausible. We just all accept it and move on.

    What is perhaps more interesting is how the ideas that animated the Nazis have evolved. In the last seventy years, fascism and the occult have merged to produce something that potentially will again have popular appeal.

    In this review, John was surprised to discover a Satanic-Nazi strand in heavy metal and Industrial music. I'm not surprised, but then John was a lot older than me and probably never listened to that kind of music. Perhaps he had better taste than me.

    Something that did come as a bit of a surprise to me is the relationship between fascism and the German counter-culture. Nazism flourished in the same circles that were fond of nudism and vegetariansim, people who entertained what we would today call New Age beliefs, but in their time included a signifcant nationalist element.

    I usually assume that any American espousing New Age beliefs is on the Left, but this isn't necessarily so. You need to be an American in the early twenty-first century to assume that nationalism is a right-wing phenomenon.

    This is particularly important because most Americans probably view fascists, occultists, and occult fascists as losers on the wrong side of history, and therefore not worth our attention. Fascists in popular culture are perceived as objects of parody.

    When I think of Nazis, this scene from the Blues Brothers is what I see in my head:

    All of this might have gone nowhere, except that neo-fascists have been willing to openly state the widely felt anxieties occasioned by demographic change. Ths has propelled them to a fame that vastly exceeds their numbers. However, it worth noting that this kind of neo-fascist does not represent the kind of right of center party that actually wins elections in Europe, even if some of their concerns are the same, their motivations are entirely different.

    What makes the occult fascists interesting is that they are natural allies of the anti-globalization, anti-capitalism, and anti-Western movements. Right now, this is prevented by the Right/Left dichotomy. We can only hope that this prejudice prevails.

    Black Sun:
    Aryan Cults, Esoteric Nazism and the Politics of Identity
    By Nicholas Goodrick-Clarke
    New York University Press, 2002
    371 Pages, US$24.97
    ISBN 0-8147-3124-4

     

     

    Nazi Germany has become Atlantis. The historical Nazi regime was peculiar enough, of course. In some ways, it was more like a cult in power than a state controlled by a totalitarian party. After it was over, however, the regime was increasingly portrayed as an empire of dark magic. The belief spread that its rise and fall were not just uncanny but historically inexplicable. Its end was sudden and complete, so complete that the shards of evidence on the surface seemed less significant than the excavation of the occult underground. In some circles, the mythology has progressed even further: Nazi Germany became not just a vanished civilization, but also an ideal civilization, destined to rise again.

    Nicholas Goodrick-Clarke is perhaps the foremost serious scholar of the relationship between the Third Reich and the occult. (The Occult Roots of Nazism, which he published in 1985, is not the only good book on the subject, but it is still a good place to start.) In Black Sun, he is chiefly concerned with the development of postwar esoteric fascism, which includes but is not limited to novel forms of magical Nazism. He is particularly concerned with its inflection into both terrorist politics and the mainstream New Age movement since the 1970s. He also argues that the social changes in Middle Europe that helped to plant the underground seeds of Nazi Germany 100 years ago now obtain to a greater or lesser degree throughout the West and Russia. The author draws dark inferences about what today's underground could produce by 2030.

    Most of the information in Black Sun has appeared elsewhere, but even people familiar with the literature will get a few surprises. I had never heard of the pro-Nazi science fiction of Wilhelm Landig, for instance. For that matter, I had been only vaguely aware that there was a Satanic-Nazi strand in heavy metal and Industrial Music. Also, though the author had to take the principals at their word, the book has the first coherent account I have seen of the origins of the Order of the Nine Angles.

    As for the rest, it is very useful to have something like the whole story between two covers. There are the key figures of the immediate postwar period, the American renegade Francis Parker Yockey, and Baron Julius Evola, who helped transform Nazi racism into a kind of aristocratic snobbery. There are the people who deified Hitler, or at least turned him into a Messianic figure, notably Savitri Devi and the former Chilean diplomat, Miguel Serrano. There are the early American neo-Nazis, such as James Madole, who combined Nazism and Theosophy to create a vision of America as the New Atlantis. There are the greater and lesser Satanists, whose ideas have tended to become more political and metahistorical with the passage of time. There is also a review of the Christian Identity movement, a largely independent phenomenon that nonetheless parallels esoteric fascism in its ontological rejection of the Jews and its expectation of a racial apocalypse in the future.

    The role that the occult played in the foundation and policies of the Nazi regime is a matter of continuing research. Certainly the party grew out of völkish circles, people who entertained what we would today call New Age beliefs, but with a nationalist tilt. Important influences included the "Ariosophy" of the Viennese mystics Guido von List and Jörg Lanz von Liebenfels, whose notions about the need for a knightly "Order" to advance pan-Germanism clearly affected Heinrich Himmler's model for the SS. The Nazi Party used ideas and symbols long familiar in occult circles, notably the swastika itself. Alfred Rosenberg's Myth of the 20th Century, which was at least nominally the party's ideological guide, invoked the familiar esoteric idea that the Aryan race originated in Atlantis. This essentially Theosophical model of history saw the past as a progression of ages that each had own master race, and that each age was separated by a transitional disaster. Generically, that is also the way that some of the Nazi leadership looked at the 20th century. However, this does not mean that the occult is necessarily the key to the study of the Nazi phenomenon.

    As Goodrick-Clarke points out, the evidence that any of the Nazi leaders ever performed black magic is quite thin. Himmler did subsidize research into occult subjects. This included at least one SS man, an Otto Rahn, who hunted across Europe for information about the Holy Grail. I might note that Rahn does seem to have been a Satanist, in the sense of sympathizing with Lucifer and agreeing with the Cathar rejection of the God of the Old Testament. Still, even he was probably engaged in folkloric research rather than looking for an actual artifact. In Mein Kampf, Hitler himself made fun of völkish groups, with their rune-magic and their attempts to revive Nordic paganism. Hitler in some ways was intensely superstitious. He was arguably a millenarian of sorts. However, there is no reason to think he was playing out a specific esoteric agenda.

    Esoteric agendas did exist, especially in the SS. The problem was that there was more than one. Should the Nazi regime simply promote German power, or should it seek to unify all Aryans everywhere, including in Russia? What attitude should the Nazi government take to anti-colonial movements, particularly in India and the Middle East? Was the future to be secular or religious? Was Christianity compatible with fascism? The German leadership deferred deciding these issues right up to the point when the working language in Hitler's bunker changed from German to Russian. After 1945, however, fascist ideology was freed of the compromises necessary for government. Black Sun describes the trajectory it took thereafter.

    Postwar esoteric fascism falls into two periods, joined by a phase of startling mutation in the 1970s. The first period was backward looking, essentially a salvage operation from the wreck of the Reich. The pan-European orientation of the Waffen-SS finally won out over that of the German-chauvinist Black SS, if for no other reason than that Germans were a distinct minority in the early postwar networks. Oswald Spengler's model of history was adopted in various hermetic forms, often involving the identification of the terminal crisis of modernity with the Kali Yuga. There was an increasing tendency to call in the Russians to counterbalance America, now wholly identified with the Jews. Hitler was literally deified in some circles, thus carrying to its logical conclusion a line of speculation started by C.G. Jung himself. The fascists whispered about Hitler's survival, in this world or another. They also traded stories about secret Nazi bases surviving in the Arctic and Antarctic, where wonder-weapons were still under development. They quickly seized on the advent of flying-saucer reports in the late 1940s as confirmation of their hopes.

    Though political fascism in the1950s and '60s could still display a lethal edge, particularly in Italy, in most places it was a sad affair. American neo-Nazis marched in Nazi finery and invited attack from passersby, in the mistaken belief that this would excite public sympathy. Nothing was behind such "movements" but perverse historical nostalgia.

    Two trends were underway by the 1970s that would make esoteric fascism relevant. The first was the New Age Movement and the concurrent general increase in mysticism. Books began to appear in great numbers that depicted the Second World War as essentially a war of wizards. Jean-Michel Angebert's Morning of the Magicians got the trend fairly underway in 1960. The genre peaked in the '70s; the best-known book of this type is probably Trevor Ravenscroft's Spear of Destiny (1973). Some of the information that continues to circulate in this literature is wholly spurious, some of it relies on sensationalist accounts from the 1930s, and some of it is strange but true. The effect of the new mythology was to give the evil of the Nazi regime a metaphysical dimension.

    It was this spiritualization of Nazi wickedness that attracted the attention of Satanist groups, which were starting to expand at just that time. Modern Satanism usually means the rejection of Christianity and the idea of natural order, rather than the worship of a literal Satan. Still, the budding diabolists were intrigued by the notion that there had been a "Satanic" government in Europe in the first half of the 20th century, in the sense of a regime that was the adversary of everything that had traditionally been thought good. For followers of the Left Hand Path, people who choose to pursue liberation through nihilism, it made sense to adopt the real or imagined rituals of the Third Reich, and to make its memorials places of pilgrimage. Additionally, many of the postwar esoteric fascists were also noted writers on Tantra, Jungian depth psychology, or ritual magic. Essentially magical techniques thus became central to some new forms of Nazism.

    There had been some fantasy literature during the Nazi years about the life of the Aryans in Hyperborea and Atlantis. (As a matter of fact, I might note that there was quite a lot of it in English, from writers like Robert Howard.) In the 1970s, a form of pro-Nazi science fiction began to appear. This chronicled the adventures of Germans who escaped the downfall of the Third Reich by fleeing to secret bases in the Arctic or Antarctic. (The names to remember for the Arctic are Point 103, the Blue Island, and Midnight Mountain; for Antarctica, the venue was usually Neuschwabenland, an actual territory explored by Germany before the war.) As part of a secret international society engaged in defending the world against Jewish domination, the refugees abandoned the swastika and conventional German insignia. The symbol of the society was the Black Sun.

    The Black Sun design can consist of a black or deep-violet disk with a lightening bolt striking it, or a disk alone. This symbol perhaps came originally from the alchemical shorthand for the lowest point the Great Work. It had some currency in Germany in the 1930s; Himmler had may have had it worked into the floor of the SS castle at Wewelsberg, though it is not certain that is what the design there is supposed to mean. The Black Sun is also related to the Theosophical notion of the Invisible Sun around which the universe is supposed to revolve. This seems to have been what Himmler's wizard, Karl Maria Wiligut, had in mind when he described an extinguished star that had once shone on Hyperborea, and whose rays still energized the Aryan soul. In any case, this symbol of the low point of history has become the preferred symbol for esoteric Nazism.

    All of this imaginative fiction and pseudo-history might have done little harm, had it not appeared at just the point when demographic changes were giving ideas like this some popular traction. Low birthrates and massive immigration began to manifest themselves throughout the West in the 1970s. The author asserts that the situation in German-speaking Europe in the late 19th century was similar, when an influx of Slavs and Jews from eastern Europe occasioned resentment and anxiety, particularly in Austria.

    In previous books, Goodrick-Clarke has made a good case for the argument that this immigration sparked the mystical racism that resulted in the Nazi Party a generation later. One may, of course, question how strongly the analogy holds for 21st century Europe, much less for the United States. Demographic changes are not sufficient to explain the outbreak of violent extremism. In the US, for instance, there was a severe agricultural depression in the Midwest in the 1980s that spread alienation and populist radicalization.

    Nonetheless, large-scale immigration is always disruptive, especially in societies that have no experience of dealing with it. Certainly the conviction has spread in many nations that the homeland is becoming unrecognizable, and that the elites are complicit in the process. Black Sun summarizes the violent reaction that appeared almost everywhere in the '80s and '90s, from the incipient guerilla war of the Order in the United States to the arson campaign against Norwegian churches by neo-pagans. In these events, there was usually some connection with the new fascism, whether by ideology or organization. There is in fact a Nazi international today.

    Reading about these events in retrospect, one cannot help but be struck by the small numbers of activists actually involved. Were there ever more than a few thousand British skinheads? The Oklahoma City bombing seems to have been carried out by just two or three people. Organizations that seemed powerfully ominous online turn out to have had no more than a few dozen members. One might also note that this brand of neo-fascism is unrelated to the right-of-center parties in Europe that actually receive measurable numbers of votes in elections. It has nothing at all to do with American conservatism, which somehow manages to be simultaneously evangelical Christian, libertarian, and pro-Israel.

    Still, Goodrick-Clarke is probably onto something when he notes that esoteric racism is essentially a multicultural phenomenon. In a world in which one's ethnic group can determine what benefits one is eligible for, people tend to find an ethnic identity and cling to it for dear life. Today, people in pursuit of ancient wisdom are more likely to hunt for it among their own ancestors than in the habits and beliefs of distant or alien peoples. The past is a different culture, particularly when it is imaginary. Some neo-pagan groups, notably those associated with the Nordic cult of Ásatrú, have replicated almost exactly the mixture of beliefs entertained by the proto-Nazi völkish groups that appeared before the First World War.

    Beyond this, though, is the "perfect storm" that coalesced after September 11, 2001, against the liberal West. The continuing attacks on Israel and the United States must be counted as a success for postwar fascist underground, which began aiding radical Muslim interests even before the Second World War ended. The anti-globalization movement constitutes just the sort of international anti-capitalist and anti-Western alliance of which some leading Nazis dreamed. Environmentalists who think of themselves as good liberals have in fact adopted the biological mysticism that was a notable feature of the Nazi regime. Almost unnoticed, eugenics has progressed from an aspiration to a roaring success: few children with genetic abnormalities are allowed to come to term in advanced countries.

    In the Chancellery bunker in 1945, Propaganda Minister Joseph Göbbels exhorted his colleagues to make a courageous end. He asked them to imagine a color motion picture, made in the year 2050, about what they said and did in the final days of the Reich. The question they each had to answer, he told them, was whether they wanted to appear as a hero or a villain in that film. Even today, I think we can be pretty sure that the identities of the good guys and the bad guys will not have changed much from the Allied point of view in 1945. Still, Black Sun is a useful reminder that some people have different ideas for the scenario.


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    Who was John J. Reilly?

    All of John's posts here

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    Monday
    Dec152014

    The Long View 2002-07-25: An Unexpected Abyss

    Baron Julius Evola

    This is where you will find John's real view of the Global War on Terror. It wasn't, and isn't, possible for any of the various counter-insurgencies, civil wars, and bush wars currently raging in the world to bring down the United States of America. To think so is to fundamentally misunderstand the nature of power in general, and America's power in particular.

    The alternatives currently on offer simply cannot fill the mental space that America currently occupies in the world. None of our declared enemies have the ability to bridge that gap, let alone dislodge us from our position. This is not to say that America deserves to be on top because it is better, or that our enemies merit failure because they are wicked.

    The argument is simply that civilizations exhibit something very much like a lifecycle, and not all things are possible at all times and all places. This argument at least has the benefit of empirical evidence, although the sample size is small.

    However, there is a viable alternative. It is simply not a visible alternative. And that is all part of the plan.

    I used to find John's discussions of Tradition rather mysterious. What exactly is this Tradition thing? It is not the people you usually find called traditional, or traditionalists. John often referred to René Guénon and Baron Julius Evola, but they just seemed marginal figures of European history. Who exactly is it that subscribes to the one twentieth century ideology that never had a state? Then I met a man who did.

    I couldn't exactly figure what unsettled me about this man until I re-read what John wrote here:

    While there are groups that promote one or more aspects of the Politica Hermetica, there is no great conspiracy behind it. René Guénon called it "Tradition," which comes close enough, though even that exaggerates its coherence. In any case, it is a mode of thought that political science tends to overlook. It is characterized by self-appointed elites who represent a cause rather than human constituents. This implicit devotion to hierarchy, however, coexists with a tactical anarchism. This is the world of "direct action" anarchists, but it is not confined to them. No doubt we have all met "conservatives" who would not leave one stone of the modern world standing on another. Their loyalty is not to this world, but to a transcendent realm. If they are conventionally religious, they adhere to some ineffable orthodoxy that excludes most of their nominal co-religionists. To some extent, this is just a matter of personality type. Still, when we find such people, I suspect we will often find some direct ideological influence from writers associated with Tradition or the Conservative Revolution.

    Ah. That described him perfectly, and explained why I felt so odd about him. I had read this twelve years ago, and while my memory isn't what it used to be, I doubtless retained at least some faint memory of it. That memory served as a Gestalt, even as faint as it was. This was a man who would destroy everything; he would not leave one stone stacked upon another.

    Sometimes you hear that the left-right political spectrum is not a line, but a circle. Tradition is where the two lines meet.

    An Unexpected Abyss

     

    I don't believe that we are experiencing a crisis of capitalism, or that we could be defeated in the current Jihad. I think this way because I believe that capitalism and liberal democracy are strong. However, many people seem to think that the success of liberal capitalist democracy is assured simply because there is no alternative. The worst outcome they can imagine is a spate of "chaos" until the liberal order is restored. I increasingly appreciate that this is not the case. The outcome might not be chaos, but a quite different order.

    Francis Fukuyama was largely correct in The End of History: communism, and even socialism, have been permanently discredited. The events of 1989 really did constitute the end of the line of ideological evolution that began in the Enlightenment. Communism today is not an alternative. However, one might argue that it was not a likely alternative even in the 1930s, which was the last time the real alternative surfaced. It's too simple to call the alternative "fascism." The fascist states of the first half of the 20th century still had mass political cultures; to some extent, they remained parodies of democracies. At their hearts, however, there was the esoteric alternative. For lack of a better term, we will call it the Politica Hermetica (which should in not be equated with the journal of that name and the annual symposium that deals with the subject). It antedates the Enlightenment, though of course it has undergone development over the last two-and-a-half centuries. Nonetheless, it has a content that is not merely reactionary.

    I mention this now because bits of the Politica Hermetica keep turning up in the news. There is the esoteric Islamic connection, which had a long history even before the postwar fascist-Muslim links. There is the reunification of Europe, which might seem like a good idea on the merits. There are the increasingly successful attempts to remove the Catholic Church as a public voice. In some ways, the most alarming development is the attacks on capitalism and the market. Though some commentators don't seem to appreciate the fact, the Politica Hermetica has always appeared on the left as well as the right, among Greens as well as Black Metal fans.

    While there are groups that promote one or more aspects of the Politica Hermetica, there is no great conspiracy behind it. René Guénon called it "Tradition," which comes close enough, though even that exaggerates its coherence. In any case, it is a mode of thought that political science tends to overlook. It is characterized by self-appointed elites who represent a cause rather than human constituents. This implicit devotion to hierarchy, however, coexists with a tactical anarchism. This is the world of "direct action" anarchists, but it is not confined to them. No doubt we have all met "conservatives" who would not leave one stone of the modern world standing on another. Their loyalty is not to this world, but to a transcendent realm. If they are conventionally religious, they adhere to some ineffable orthodoxy that excludes most of their nominal co-religionists. To some extent, this is just a matter of personality type. Still, when we find such people, I suspect we will often find some direct ideological influence from writers associated with Tradition or the Conservative Revolution.

    My own problem with the Politica Hermetica is that I find parts of it intrinsically attractive. The Perennial Philosophy, as explained by Aldous Huxley's book of that name, is a sunny doctrine. It is more or less explicit in the work of writers I admire, such as Robertson Davies. As for its political implications, I think it is one of those "self-evident" truths that government requires some transcendent basis; even democracy is not self-legitimizing. For that matter, I am also one of those people who keep referring to the impending "end of modernity." The Politica Hermetica makes similar assumptions, but then takes them to places where no sane person would want to follow.

    What happened in the 1920s and 1930s was that many did follow, because they did not know that there were such places. In those days, when people despaired of democracy and capitalism, they thought the alternative was some familiar form of authoritarian government. Even those who supported "socialism" did not understand what a break with the past it would mean. At the international level, the respectable great powers laid aside their informal policing roles in order to deal with their internal problems. They thought that the worst that could happen would be distant disorders, of little interest in a world of diminished global trade. The scope of the disaster was made possible by a failure of imagination.

    There is no great wave of political hermeticism poised to overwhelm Western civilization, but then neither was there one 75 years ago. My point is that, when the system imploded, the result was not Bolshevism, or chaos, or a return to the virtuous past. Rather, an alternative way of organizing the world seemed to appear out of nowhere. In fact, it had been there before. It's still there now.


    Why post old articles?

    Who was John J. Reilly?

    All of John's posts here

    An archive of John's site

    Friday
    Dec122014

    The Long View 2002-07-18: Morose Delectation

    I had been a reader of First Things before I knew John wrote some articles for the magazine in its heyday, when Fr. Richard John Neuhaus was editor. Thirteen years later, I am still a subscriber, probably one of the more unusual ones, since it is primarily a journal for clerics and professional philosophers. Presumably, the average age of subscribers is also older than me, since many of the advertisements are for Catholic colleges. I am in the market for that kind of thing, but not for a long time.

    John's prediction about the Federal budget deficit seems to have been correct. This also illustrates one of his consistent complaints about the Republican party: they have consistently advocated cutting taxes no matter what the consequence will be for the actual amount of money we will spend. He had a name for this: capital gains zombies. Gainsss! Gainsss!

    John also believed that American evangelical Christians had an unseemly attraction to gum up the works Constitutional amendments, on the theory that government is a necessary evil. As a Catholic, John, and I, have no time for this kind of thing. This has informed my own views of the Tea Party movement. They are true believers that government is a necessary evil. This view simply has no place in Catholic political thinking.

    Morose Delectation

    Many thanks to Fr. Neuhaus of First Things for finding an English equivalent for "Schadenfreude." The term "morose delectation" was apparently used in some older guides to spiritual life to refer to the sin of taking pleasure in the misfortune of others. Fr. Neuhaus mentioned the term in "The Public Square" section of the August/September issue of First Things. He assures us that this is not what he felt about the disgrace of the hurriedly retired Archbishop Rembert Weakland of Milwaukee. No, not one bit.

    I actually share the lack of the sentiment. Rembert Weakland was a nitwit who deserved public repremand for undermining orthodoxy in the Benedictine Order and the Archdiocese of Milwaukee these many years. No point of principle was vindicated when he was discovered to have used hundreds of thousands of dollars of diocesan money to buy silence from a boyfriend. His personal failings were largely irrelevant to the harm he had done. One may be tempted to take satisfaction from the death of a suicide bomber who blows himself up prematurely in his basement, but not when he blows himself up in a crowd. That is pretty much what the archbishop did to the reputation of the American episcopate.

     

    * * *

    The New York City commission charged with deciding what to do with the old World Trade Center site has issued some tentative proposals. The disdain that met them was polite enough, considering the emotional sensitivity of the project and the natural contrariness of New Yorkers. Most people thought that the architecture in the six proposals was too timid. This was understandable, since the proposals really did not have much to say about architecture, but were mostly about where any new construction should be. The commission first wants to settle the street grid and the matter of the memorial. There is some sentiment that at least the holes where the Trade Center Towers used to be should be preserved. There are some people who want the whole 16 acres turned into a memorial park. The commission has tried to compromise.

    For myself, I will begrudge every yard of open space as Osama's Victory Garden. Something superlative has to be done with the whole site to wrest it back from barbarism. The demand for real estate in the area is secondary; so, frankly, are the opinions of the families of those who died on September 11. Let the dead have a memorial that is among the wonders of the world, but the memorial cannot be a ruin.

    Though I suspect the project needs no further promotion from me, I give my endorsement to Derek Turner's New World Trade Center. It consists of five towers, four at the corners of a square and one in the center. They would be connected by walkways every ten stories. Two garden levels transect all the towers. There would be a glass pyramid on top. Most elevators would be in the center tower, thus solving the familiar high-rise problem of elevator space. Redundant stairs and other escape mechanisms are in each tower. The whole thing would be over 1,700 feet tall, the largest building in the world. The memorial would be in the garden at ground level; each victim would be represented by an specified tree. The dead would not just get plaques. They would get their own forest.

    Turner's plan calls for multiple use: commercial, residential, and retail. Also, the layout is open enough that the area in which the towers sit could become one of the world's great pedestrian malls. Maybe this particular plan is a pipe dream. Nonetheless, it would be a great improvement over not only the official proposals, but also the old World Trade Center itself.

     

    * * *

    Trent Lot was recently kind enough to send me a Republican Party Opinion Survey. The survey comes with a return envelope. The survey suggests, as an afterthought, that I post any spare dollars I might have on me along with the survey form.

    Anyone who has ever done direct mail knows that the you don't tinker with a good package, even if it is full of obsolete information and misspellings. So, I can understand why these "polls" still ask whether I should be allowed to keep more of my hard-earned money, or whether I should pay higher taxes to conduct experiments on embryos. What none has asked recently, however, is whether the federal budget should be balanced, come Hell or high water.

    The Republican claim about the current deficit is true: this year, at least, the deficit was not caused by the recent tax cuts, but by the downturn in the economy. However, that may not be true in later years. It is arguably the case that the cuts lock in a structural deficit for later in this decade.

    The degree of seriousness with which the Republican Party deserves to be taken will turn on how it deals with this problem. If it gets into the habit of raising and lowering taxes in response to the real behavior of the economy, then the party will have a future. However, if it turns to bogus notions, like a constitutional amendment to balance the budget, then we know the party will come to a bad end in this world and the next.


    Why post old articles?

    Who was John J. Reilly?

    All of John's posts here

    An archive of John's site

    Wednesday
    Dec102014

    The Long View 2002-07-02: Innocence is no Excuse

    John's specialty was business law: boring things like securities and the UCC. I can see why he turned to millennialism [kidding!]. In passing, he notes the securities law has a great deal more to do with regulation than legistation per se. This is true in my field as well. For example, 21 CFR 820, which governs current good manufacturing practice for medical device companies, is actually rather terse.

    Later, John mentions one of the persistent, yet unremarked scandals of modern American finance, the 401k. It took me a long time to understand what John was getting at here. Comprehension finally dawned when I was reading about the former physicists turned programmers, known as quants, who make exorbitant amounts of money in Manhattan.

    These physicists create ever more complicated models of asset pricing which are then fed into equally complicated trading programs that watch the market and continuously make trades based on the models. At first, I assumed that the various hedge funds were competing against each other. This seemed bizarre, they were all doing the same thing, and no one seemed to have a competitive advantage, yet they are all making money. Then I realized: they aren't making money off each other, they are making money off you [and me].

    This is why John called the 401k a bubble machine; by privileging this kind of investment accout with tax-deferred status [and perhaps more importantly, legitimizing it as the way middle-class Americans save money], a continual inflow of money to the stock market was ensured. 401k programs get money every two weeks [or whatever pay period you have], and then that money is invested per whatever plan the fund managers set out. I imagine there is a great deal of discretion involved, but to the high-volume traders, this must seem like easy pickings.

    When I realized this, I did the only rational thing: I hired some quants to be my financial gladiators.

    Innocence is No Excuse

    Sometime in the mid-1980s, I was writing an article about a new regulation from the Securities and Exchange Commission having to do with the Glass-Steagall Act, the Depression Era law that separated the businesses of commercial and investment banking. I did not know much about the subject, so I called the SEC for clarification. They were actually very helpful. Toward the end of the conversation, however, I asked for a citation to the Act in the US Code. It was as if I had asked for a citation to the Code of Hammurabi. "We don't have information like that!" the woman at the legal division said in shocked annoyance. She hung up on me.

    It is notoriously the case that the law dealing with securities has little to do with actual legislation and everything to do with regulation. The whole edifice of insider-trading law was based on a short, cryptic statute prohibiting "fraud." The Congresses that passed the bulk of financial regulation legislation favored broad terminology. The reason was explicit: a precise law would let traders ignore the broader policies of the regulators. It is, by the way, no accident that the Congresses in question are called "Depression Era": federal policy probably extended what would have been a short, sharp slump after 1929 to cover the following decade.

    The chattering classes are in the mood for a replay. Both the president and vice president are hounded in public for acts not normally considered illegal. The vice president, indeed, is being sued by pretty much the same people who made Bill Clinton's life a litigious misery. Reams of legislation are rolling through Congress to criminalize "schemes" and "devices" that defraud investors in no very precise way. There was a moment, during the Congressional panic over the collapse of the savings & loan industry, when some nitwit introduced a bill to mandate life imprisonment for "S&L kingpins." We are approaching that level of inanity now, but the real danger is not more vindictive criminal law.

    The class-action bar wants a piece of this. There was good money to be made during the early '90s in suits brought in the name of shareholders. Corporations were shaken down for hundreds of millions of dollars because their officers made remarks that did not perfectly predict the future behavior of the stock. Some shareholders may have gotten a cut, but the suits were essentially rackets operated by lawyers in search of class-action fees. In a fit of sanity, Congress made it harder to bring such actions. Now there is serious pressure to put things back the way they were, or make them even worse.

    I can only repeat that there is nothing mysterious about what is being called the "accounting scandals." John Kenneth Galbraith once remarked that recessions reveal what the auditors missed. They also reveal what the auditors tried to cover up. When equity prices rise, businessmen are geniuses. When prices fall, businessmen are crooks. The crookedness this time around is that some businessmen used accounting and other devices to prevent their companies' stock from falling.

    There are systemic problems with the financial system, but they are not the ones that people are talking about. Frankly, there is too much money in it. Ordinary people should not be using equities markets as a savings vehicle. Consistent high rates of return are possible when only a small fraction of the people are in the market. When more money is invested, it's worth less. The extreme case is Japan, which is drowning from overinvestment.

    The current "crisis of confidence" in US markets will dissipate in fairly short order. The curse of the 401K will not.


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    Monday
    Dec082014

    Mistborn Book Review

    MistbornMistborn: The Final Empire
    by Brandon Sanderson
    Tor Fantasy 2007
    $7.99; 658 pages
    ISBN 978-0-7653-5038-1

    Sometimes, I worry that I'm not the hero everyone thinks I am.
    The philosophers assure me that this is the time, that the signs have been met. But I still wonder if they have the wrong man. So many people depend on me. They say I will hold the future of the entire world on my arms.
    What would they think if they knew that their champion—the Hero of the Ages, their savior—doubted himself? Perhaps they wouldn't be shocked at all. In a way, this is what worries me most. Maybe, in their hearts, they wonder—just as I do.
    When they see me, do they see a liar?

    The Final Empire is not a happy place. The teeming masses of the Empire, known as skaa, are used to clear the brown fields of the ash that falls from the sky without cease. Their unending toil brings only meager sustenance from the scorched and blighted land. When their labor is done, night falls, and the mists come. Each and every night, the world is wrapped anew in terror and mystery. Even the stout-hearted quail before the creeping tendrils. Few willingly venture outside after dark.

    The life of the skaa is nasty, brutish, and hopefully short. Skaa labor provides what few luxuries the land can provide to the hereditary aristocracy. Despite their relative paucity, the aristocracy find their entertainment inadequate. Bloodsport and sexual exploitation fill the gap.

    The nobility are themselves watched by the obligators, the omnipresent Imperial bureaucrats who must witness all agreements, financial or otherwise, between the nobility. The obligators are in turn watched by the terrifying Steel Inquisitors, creatures of flesh and metal who report directly to the Lord Ruler himself. None dare resist their power. One thousand years after the Hero of Ages traveled to the Well of Ascension to save the world, all is not well. Society shambles on, but it is dead, feigning the symptoms of life.

    It is the time of the final cultural forms, of petrified urban-dominated society (the part of the cycle to which Spengler gave the name “Civilization” as a technical term). There is no theme to the events in the Winter: there is a lot of art and politics, but it is powerdriven, market-driven, fashion-driven. All these events simply toy with traditions and motifs which the culture created when it was alive. Usually something ghastly happens to civilizations which reach this fossil state, but according to Spengler, this something comes from outside.

    -The Perennial Apocalypse, John J. Reilly

    A friend recommended this book to me as something similar to Patrick Rothfuss' The Name of the Wind. I had been waiting for a copy to show up at my local used bookstore, and I finally found one just before Thanksgiving. 

    That is an apt comparison, the books have somewhat similar magic systems, were published about the same time, and they were both a blast to read. Other than that, these books are completely different.

    This is a good thing. I really enjoy seeing similar ideas worked out in very different ways, by authors with entirely different styles. The Name of the Wind and it's sequels have a laser like focus on Kvothe; which is appropriate, since these books are the story of his life. Other characters appear, but they are always secondary to Kvothe. This fits, since Kvothe is a narcissist. Everyone else really is secondary. Sanderson, on the other hand, has an ensemble cast who all are fully part of the story, with their own plausible motivations and desires. They are not simply part of the scenery, but rather provide a richness of detail that makes the story seem more real. Sanderson also does a really good job with politics and applied psychology in this book. Deceit, manipulation, and Machiavellian politics are a major part of the story, and I loved it all.

    Actually, there is one other way these books are alike; they are both about the end of the world. I know, there he goes again.

    Mistborn is the tale of the brave and doomed skaa resistance to the reign of the Lord Ruler. Following the introductory apocalypse at the Well of Ascension, the Lord Ruler consolidated his dominion over the entire world. This really is the end of history, for in the Final Empire, nothing every changes, including the immortal Emperor. The Lord Ruler's grasp may grow somewhat weaker as you travel further away from his capital, Luthadel, but there are none who do not acknowledge his sovereignty.

    In typical usage, a millennium is a thousand year period of peace and prosperity after the constraints of the human experience, such as war, death, and poverty, have been overcome.  Sanderson has turned the concept on its head, positing a millennium where the forces of evil have triumphed instead. The Three Horsemen run rampant in the Final Empire [only War has been vanquished; War against the Emperor is inconceivable]. This kind of millennium poses as the end of history, but it is really a pregnant pause.

    A millennium of this kind implies a nameless war to follow, a revolution after the revolution. The Final Empire reaps this in plenitude. In the book of Revelation, the thousand year reign of Christ comes to an end when Satan, who has been bound, but not destroyed, rises again. He will be defeated in a nameless war after the end of the world, after which the cosmos will be consumed. 

    Sanderson fulfills the archetype completely; the paradigm will out, even when you start out to subvert the idea. What Sanderson does maintain, the reason why I enjoyed the book so much, is the identity of good and evil. Good still wins out in the end. What remains the same is that the cosmos is consumed in the resulting conflagration. Only now, a new cosmos needs to be constructed to replace the old. This is the task the protagonists find they have created for themselves. It should prove to be most interesting.

    I enjoyed this book so much that I am eagerly awaiting my next trip to the bookstore to buy the rest of the books in the series. If you have a hankering for more, you are in luck. The other two books in this trilogy are already written, and Sanderson has even greater plans for extending his ideas into a grand overarching story with more than thirty volumes. This is a venerable conceit. Writing stories that fit into the same universe is a mental savings, and fun for your fans as well. I look forward to exploring Sanderson's creations.

     

    My other book reviews

    Sunday
    Dec072014

    CrossFit 2014-12-05

    Bench press 1 RM

    145#

    Thunderclap

    50 double-unders [some 2:1 singles]

    21-15-9

    • Kettlebell swings [53#]
    • Burpees

    50 double-unders [some 2:1 singles]

    Time 10:20

    Thursday
    Dec042014

    CrossFit 2014-12-03

    Sally squats

    Deadlift and abs

    30 seconds on, 30 seconds off, 2 times through

    • L-sit on rings
    • Superman hold
    • Weighted good morning hold [45#]
    • GHD hold
    Thursday
    Dec042014

    CrossFit 2014-12-01

    20 minute EMOTM

    • Minutes 1-5: 2 power snatches [65#]
    • Minutes 6-10: 1 power snatch [75#]
    • Minutes 11-15: 2 snatches [85#]
    • Minutes 16-20: 1 snatch [95#]

    Bench and run

    Close grip bench press

    Accumulate 100 tricep pulldowns with blue band

    Team sprints 3 rounds

    • 200m run
    • 300m run
    • 400m run

    Time 11:57

    Thursday
    Dec042014

    CrossFit 2014-11-24

    Box squats

    • 10 sets of 2 reps 155#

    Pachanga

    Seven 2 minute rounds, rest 1 minute in between

    • 200m run
    • 7 deadlifts [205#]
    • Max reps single unders

    Score 55 single unders

    Thursday
    Dec042014

    CrossFit 2014-11-21

    3 rounds of five clean and jerks, EMOTM

    Kettlebell Hell

    3 minute rounds with 1 minute rest in between. Rest five minutes at the end and repeat. Score is AMRAP reps.

    • 25 kettlebell swings, 15 burpees, AMRAP kettlebell snatches [35#]
    • 25 kettlebell swings, 15 burpees, AMRAP kettlebell clean and jerks [35#]
    • 25 kettlebell swings, 15 burpees, AMRAP kettlebell goblet squats [35#]

    Reps 20, 12