THE JOURNAL URGES US TO FIGHT ON BOTH SIDES IN SYRIA: BELLUM GRATIA BELLI?

9/17/14

In its lead editorial this (Wednesday, 9/17/14, page A14) morning, the Wall Street Journal urges the Obama Administration to lift the siege on Aleppo by bombing Syrian President Bashar Assad’s airfields.  This would put the United States, explicitly, on both sides of the Syrian conflict and clearly on one side of the larger Sunni/Shiite conflict in the Middle East.  Who but someone who urges us to fight a war for the sake of fighting a war would urge such an insane policy?

Even dedicated non-interventionists like yours truly can see some merit in a bombing campaign against ISIS, ISIL, the Islamic State, or whatever it is being called today, especially after this especially cold-blooded group of terrorists has beheaded two Americans and one Brit.   We don’t like our country putting its considerable proboscis where it doesn’t belong, but we also can’t see our country standing idly by while its citizens are tortured, killed, and otherwise abused.  

But I have also urged caution, reminding members of the War Party, and its most stentorian voice at the Wall Street Journal, that only a few months ago, they were urging the United States to bomb Syria in support of the Syrian rebels, the most salient group of which was, and is, ISIS.  (See, for example, THE WALL STREET JOURNAL ON THE ISLAMIC STATE:  “I WAS FOR IT UNTIL I WAS AGAINST IT”?,  8/21/14, MORE ENLIGHTENED THINKING FROM WASHINGTON: LET’S FIGHT IN BOTH IRAQ AND SYRIA!, 6/25/14)  A military campaign against ISIS, however, would put us on the side of Mr. Assad, a guy that the Journal and its fellow neocons were urging us to oppose only a few months ago.   Fighting ISIS thus would have the implicit effect of our fighting on both sides of the Syrian Civil War.  Only the geniuses at the State Department and other bastions of deep thinking foreign policy formulation in Washington would put us on both sides of a war.

Now the Journal, by urging the Obama Administration to bomb Syrian airfields and take other steps to lift the siege of Aleppo, is advocating explicitly placing us on both sides of the Syrian Civil War, fighting both the Assad regime and its most powerful and visible opponent, ISIS.

The rationale the Journal provides for getting us on both sides of the Syrian conflict is that

Sunnis will not support the campaign against Islamic State if they think our air strikes are intended to help the regime in Damascus and its Shiite allies in Beirut and Tehran.

This might indeed be the case, though we could, by the intensity and targeting of our air campaign, show the world that our objective, and only objective, is to rid the world, to the extent we can, of a group of extremists who have committed what ought to be the worst of sins on the international stage, i.e., the cold-blooded killing of American citizens.  But I digress.

More to the point, though, is that while the Sunnis may misinterpret an effort solely directed against ISIS as our taking the sides of the Shiites in Syria and in the larger Middle East, what will be the reaction of the Shiites if they see us fighting explicitly on the side of the Sunnis in Syria?  Perhaps they will take solace in that we are supporting the Shiite dominated government in Iraq, but I wouldn’t bet on it.  

The larger point is that it’s easy to see how byzantine the politics of the Middle East are and the best policy is to stay as far away from such intrigue as we can, limiting our involvement to making it clear that killing and torturing American citizens will not go unanswered.

One suspects, though, that the neocons, their manifesto writers at the Wall Street Journal, and the rest of the War Party in Washington care little for either the complexities of the Middle East or the rationalizations they provide for military action there.  Their sole, or at least their paramount, goal in urging us to bomb both the Assad regime and the Islamic State that opposes it is to get us involved in a war, any war…doing so is good for the “defense” contractors who keep War Party members comfortably ensconced in their Washington, D.C. sinecures.  And what could be more important than that?

RICK PERRY BASHES RAND PAUL: IGNORANCE OR MERETRICIOUSNESS?

7/14/14

On Face the Nation this weekend, Texas Governor Rick Perry took his limited air time to bash fellow Republican, Kentucky Senator Rand Paul.  Governor Perry accused Mr. Paul of being an “isolationist,” and wanting to draw a “red line around the United States” because Mr. Paul urges us to stay out of the religious battles and internecine conflicts that now characterize much of the Middle East.  Governor Perry accused Mr. Paul of having his head in the sand because the Islamic State is a dangerous terrorist group that will not be satisfied in establishing a caliphate in large swaths of Iraq and Syria but also doubtless wants to inflict great harm on the United States itself.  How, Mr. Perry asked, can Mr. Paul ignore this threat?

Mr. Perry apparently made all these accusations with a straight face.   That he was able to do so is remarkable given that it was Mr. Perry and those of his ilk who were, just a few short months ago, urging us to join the conflict in Syria on the side of what is now called the Islamic State, the very terror group he (in all likelihood correctly) accuses of wanting to inflict great harm on the U.S. homeland.   It was Mr. Perry (and John McCain, Lindsey Graham, and all the other usual suspects) who was urging us to bomb Bashar Assad’s forces, which are fighting the forces of the Islamic State.   Messrs. Perry, McCain, and Graham deny that they wanted to help out the Islamic State…no sir, they wanted to help the “moderates” in Syria.   That defense for their militaristic impulse is laughable.  Even assuming that these “moderates” are genuine and are not, as are so many of our “friends” in the Middle East, merely striking a pose in order to get access to American money and start numbered offshore bank accounts, the real force behind the opposition to Bashar Assad is provided by the most radical elements of his opposition, most saliently the Islamic State.  Any action against Mr. Assad is de facto support for the Islamic State that Mr. Perry and his pals purport to oppose.

We can draw one of two conclusions about the inherent contradictions behind the Perry/McCain/Graham approach to the Islamic State, professing to be so opposed to the State while urging action to fight its battles for it.

First, Messrs. McCain, Perry and Graham are completely ignorant of the Middle East and/or are completely delusional about the array of forces in the area.  They are either complete dullards and/or they simply cannot fathom a Syria or Iraq in which the U.S. has no visible support among anyone who is not on its payroll.   These pols seem to think that there are legions of people in the Middle East who are absolutely delighted that we have inflicted massive casualties on them and their families in Iraq and Afghanistan and thus have been rendered “moderate” and “pro-Western,” ready to vanquish dictators and establish Arab versions of Jeffersonian democracy at our mere request.

Second, Messrs. McCain, Perry, and Graham are no fools and are completely aware that we have few friends in the Middle East.  Further, they know that they are being completely self-contradictory in urging action against both the Islamic State and its most salient enemy, the regime of Bashar Assad.   But Messrs. McCain, Perry, and Graham simply don’t care.  They want American involvement in every conflict in which such involvement is possible.   They have to make good IOUs to the “defense contractors” who finance their positions of power and prestige, who enable them to remain in jobs in which their most urgent and constant task is to have their hindquarters smooched.   So if going to war anywhere with anyone will make the “defense” contractors happy, the money flowing, and thus the likes of Messrs. McCain, Perry, and Graham comfortably ensconced in the lifelong sinecures they call careers, going to war anywhere with anyone must be a very good thing.

Which one is it, Messrs. Perry, McCain, and Graham?   Are you ignorant or merely servicing the people who keep you in your cushy jobs that would make a Middle Eastern suzerain envious?

OBAMA’S EXCELLENT SYRIAN ADVENTURE: THE NOBEL PEACE PRIZE WINNER GETS BY WITH A LITTLE HELP FROM HIS ENEMIES?

9/2/13

President Obama has finally done the right thing regarding the ghastly situation in Syria.

He may have looked more indecisive than the Dane himself in doing so.   Further, he may be doing so for the wrong reasons; a lot of people think the President is seeking Congressional approval of military action against Bashar Assad only as a ruse for changing his mind once again.   All this doesn’t matter.  We can’t count on people’s good motives; Francis of Assisi long ago vacated this mortal coil and there are few decent replacements.  We can only count on people’s actions.   And, regardless of his motivations, the President has finally done the right thing and gone the Constitutional route in asking Congressional approval before sending American blood and treasure on yet another foreign adventure with dubious, yet frightful, potential consequences.  In so doing, Mr. Obama has reversed the approach of every post-War president, with the possible and ironic exception of Richard Nixon, in committing American firepower, money, and troops to combat, which has been, effectively, I am the State.

This circuitous, stumbling in the dark path to righteousness has come at some cost to American credibility.   In his alternating red lines, expressions of outrage, and admonitions to caution, Mr. Obama has displayed more flip-flops than will be seen on the Jersey Shore this Labor Day weekend.   As Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies at Bar-Ilan University put it, the President

“…is becoming a laughingstock in the eyes of friends and foe alike.”

While it is hard in the Middle East, or anywhere, for that matter, to distinguish friend from foe (Was it Kissinger, Metternich, or Richelieu who said “Countries don’t have permanent friends; they only have permanent interests?), Mr. Inbar has a point.  Mr. Obama could have saved himself, and this country, a lot of humiliation by saying early on, and unequivocally, that the U.S. has no interests in Syria sufficiently salient to commit American resources and kids to the conflict.   (See 8/27/13’s  SYRIA:  “WE (WILL) GET FOOLED AGAIN!” for only my latest expostulation on why getting involved in yet another Middle Eastern centuries old irresolvable sectarian conflict would be ruinous, or worse, for the United States and the world.)   But the President, as is his wont, blew that opportunity.  

More importantly, if it took an embarrassing to the point of pain Hamlet act on the international stage on the part of the President to finally get him to do what no president since Roosevelt has done, i.e., abide by the Constitution in committing American troops to conflict, that is a small price to pay.

Will the President be able to persuade the Congress to go along with this latest Bushite adventure for who knows what reason in the Middle East?   Or will he suffer the type of heaven sent humiliation that the clear-headed British Parliament sent to the starry-eyed David Cameron?

First, while things can change rapidly and political predictions are thus always perilous, the odds are not good that the Congress will give the President the nod he ostensibly seeks.   Mr. Obama must persuade not only those Congresspersons with the good sense to stay as far away from Syria as one does from a rabid dog; he also must also mollify the likes of Senators John McCain and his mini-me, Senator Lindsey Graham, who seem to have visions of mushroom clouds, and generous payment of IOUs to the “defense” industry, once again dancing in their febrile brains.   One can only hope that the Republican impulse to oppose anything that Mr. Obama proposes will override the GOP reflexive equation of militarism with patriotism and that they will thus join the Democrats, and the libertarian oriented corners of the GOP, to slap Mr. Obama’s hand and save us from another quagmire in the cradle of civilization.

Second, one does get the impression that the President is secretly hoping that Congress will not go along with the Bushite militarism that has led Mr. Obama and his team to ostensibly flak for another folly in the Middle East.   This will enable the President to avoid conflict, blame it on Congress, and breathe a heavy sigh of relief.   The nation ought to join him in that sigh should that be the outcome of this entire fiasco.

SYRIA AND THE WAR PARTY: “AFTER YOU GET WHAT YOU WANT YOU DON’T WANT IT…”

6/17/13

President Barack “W” Obama has decided it’s a good idea to take sides in the Sunni/Shia civil war in Syria (See my 5/24/13 post THE SYRIAN CIVIL WAR:  A FRIGHTENING HISTORICAL ANALOGY for a not surprisingly amazingly prescient piece on this aspect of the war for which Mr. Obama now has such enthusiasm.) and has authorized sending arms to the Sunnis radicals to fight the Alawite/Shia radicals; see my 6/15/13 piece SYRIA:   HOW LONG BEFORE WE’RE CALLING OUR STOOGES “BRUTAL DICTATORS”?, only my latest piece on this impending next disaster for U.S. foreign policy.

Suddenly, though, the bipartisan War Party, of which, apparently, “W” Obama is now seeking to become the most salient member, is not satisfied with the small arms it was demanding we send to the Al Qaeda affiliates in Syria.   Prominent War Party mouthpiece Senator Bob Menendez (D., but really War Party, NJ) says

“You can’t simply send a pea shooter against a blunderbuss.”

Senator Saxby Chambliss (R., but really War Party, Ga.) talks of sending more powerful weapons to the “moderates” he is confident we have found in Syria and of enforcing no-fly zones.   Penultimate War Party leader Lindsey Graham (R., but really War Party, SC, pictured with the Dr. Frankenstein to whom he plays Igor, John McCain) says that the rebels can’t bring Bashar Assad down with small arms; they need something stronger.

The old expression regarding giving people inches only to have them demand yards immediately comes to mind.

Senator Mark Udall (D., but really War Party, Colo.) whimpers that he is afraid of a slippery slope but, lest he fall out of favor with the “defense” contractors who keep War Party members well larded and comfortably ensconced in Washington, says

“But I think we ought to be listening to the president, we ought to be listening to the military leadership.”

What Mr. Udall doesn’t understand, or understands but delights in, is that we are already on a slippery slope.  First it’s non-lethal aid, then it’s small arms, next it’s a no-fly zone, then it’s American “trainers” (what the Kennedy and Johnson administrations used to call “advisers,” only the “advisers” knew that they were really “troops,” but I digress.), then it’s….well, you know the logical conclusion of this game.  

Among all this craziness, the voice of reason comes from, of all people, Russian President Vladimir Putin, who asked the West, referring to the Al Qaeda dominated Syrian rebels,

“You want to support these people?  You want to supply arms to these people?  This bears little relation to the humanitarian values that countries all across Europe have been propagating for hundreds of years.” 

It’s not as if Mr. Putin’s horse in this race, Bashar Assad, has his feet firmly planted in the soil from which sprang the Magna Carta, either.   Mr. Putin is backing his thug not only out of a degree of affinity but also out of self-interest; not only is Syria Russia’s sole friend in the Arab world  (See my 5/17/13 post, AMERICAN ASSURANCES IN SYRIA:  A RUSSIAN GUANTANAMO IN AL QAEDA’S COURT?), but if the rebels win in Syria and it either descends into an ungovernable dystopia or becomes a radical Sunni dominated state (the only two options, despite the War Party’s disingenuous reassurances to the contrary), Russia’s terrorist problem, which makes ours look quite mild by comparison, will become virtually uncontrollable.   Mr. Putin is understandably bewildered that the West is so gung-ho about supporting people who mean the West, and Russia, so much harm.   This makes absolutely no sense to him, and understandably so.   For all his faults, the Russian president has something that most western leaders, and certainly the two U.S. presidents he has had to suffer through, lack…a sense of strategic perspective and, well, common sense.  Mr. Putin must be baffled as the United States and its allies sink further into the miasma of another deadly, expensive, and unwinnable conflict in a place we have no business being.

Somewhere, however, LBJ is smiling.  But not nearly as broadly as John McCain, the War Party’s leader, and the arms merchants who support the lifelong ego trip he and his fellow War Party members call careers.

SYRIA: HOW LONG BEFORE WE’RE CALLING OUR STOOGES “BRUTAL DICTATORS”?

6/15/15

British Prime Minister David Cameron, a normally sensible fellow, in attempting to justify western aid to the group of thugs he favors in Syria in their fight against the group of thugs he doesn’t favor, argued yesterday that Syrian President Bashar Assad is

“…a brutal dictator who is using chemical weapons under our nose.”

Mr. Cameron, his French counterpart, and, presumably, our formerly cautious President Barack Obama prefer General Salim Idris, the latest third world fraud parading around calling himself a “moderate” in order to access western cash and a place to defect to if things don’t go his way.

Let’s assume for a moment that General Idris wins this conflict with generous help, including who knows what at this stage, from the west and becomes the latest western stooge to occupy the seat of power in a Middle Eastern ethnic jigsaw puzzle of a “country.”  Should that be the outcome in Syria, one wonders how long it will take Messrs. Cameron, Obama, Hollande and others who are seemingly so anxious to create another dystopic terrorist breeding ground in Syria to call General Idris

“…a brutal dictator who is using chemical weapons under our nose.”

As I have said on numerous occasions in the past (Only my latest post on Syria is 5/29/13’s RUSSIAN ARMS TO SYRIA:   THANK YOU, COMRADE?; please read it and the posts to which it will direct you.), we have no friends in Syria and there are no moderates, whatever that means, in Syria.   We are left with a choice between the devil we know and the devil we don’t.   We do, however, have a promising course of action, to wit, stay the hell out and tell the winner we are willing to do business with him to the extent it is in our interest to do so.  Mr. Obama, though, has just announced his intention to back, with American arms, trainers, and air cover (but only for a “no fly zone” over the areas in Jordan in which we will “train” the Al Qaeda members and wannabes we will be backing), the devil we don’t.  Despite his rhetoric to the contrary, Mr. Obama apparently shares the George Bush view that we indeed can and should save the world and make it over in our image.  Terrific.

We never do learn anything in this country, do we?

THE SYRIAN CIVIL WAR: A FRIGHTENING HISTORICAL ANALOGY

5/24/13

How about a scary historical analogy to put the Syrian Civil War in perspective?

 (See my many posts on that conflict, mostly written from the perspective of U.S. policy, the most recent of which is WHAT IF BASHAR ASSAD WINS IN SYRIA?, 5/21/13)

The Assad family is of the Alawite branch of Islam, which is closely related to the Shiite branch of Islam.   One might go so far as to say that the Alawites are a branch of the Shiites, but experts in these matters might consider that too simplistic.  The Assads are backed in this civil war by Shiite led Iran and it clients in Lebanon, including Hezbollah, and its clients in Iraq, a majority Shiite country once run by the Sunni Saddam Hussein until the American occupation, which at least temporarily resulted in the Shiites regaining shaky control of that country which itself is riven by what is not yet, but soon will be, called a civil war.

The opposition to Mr. Assad is composed of Sunnis, largely Al Qaeda related groups and Al Qaeda wannabes, and is backed by Sunni dominated regimes, primarily in the Persian Gulf, the most salient of which in the Syrian endeavor is Qatar.  

So what we have in Syria is a civil war, but also much more.   Syria appears to be a smaller theater in which the larger, cooler Sunni-Shiite conflict, which spans at least the greater Middle East, is manifesting itself in much hotter form.

Think back to the late 1930s and the Spanish Civil War.  In that conflict, the Nationalists, most of whom were genuine nationalists but many of whom, including their leader, Francisco Franco, also had Fascist tendencies, were backed by Nazi Germany and Fascist Italy.  The Republicans, many of whom were genuine republicans but many of whom had Communist tendencies, were backed by the Soviet Union.   The Nationalists eventually prevailed and Franco remained in power until his death in 1975.

The Spanish Civil War is largely seen by historians as something of a trial run, or a dress rehearsal, if you will, for the larger European conflict to follow, or perhaps even a first round in the fighting on the eastern front of the European theater in World War II.  The Fascists and the Communists, it is speculated, were just readying their weaponry for the big one to follow.

Could we be seeing the same thing in Syria?   Could we be seeing the Shiite powers, led by Iran, and the Sunni powers, led by the Gulf States, just testing their weaponry, their influence, and their wealth for the big one to follow?

To say we hope not is to understate the case.

WHAT IF BASHAR ASSAD WINS IN SYRIA?

5/21/13

News of Syrian government forces’ making major strides in the civil war in that troubled “nation” afforded Senator John McCain the opportunity to (what else?) call for deeper military involvement in the latest quagmire that has drawn his attention.

“This is a significant and dramatic indicator of the Obama administration’s passivity.  For this administration to sit idly by and watch these events unfold, (sic) is writing a shameful chapter in American history.”

After further ripping the Obama Administration for not racing headlong over this cliff without taking a nanosecond to consider the consequences “optimistic to the point of fantasy,” Mr. McCain then fell back on his standard Cold War rhetoric, pointing out that Russia sees and raises us each time we increase our assistance to the rebels.   What Mr. McCain’s point is in this instance is difficult to fathom, perhaps as much for him as for his listeners, but I digress.

We know what Mr. McCain’s motivation is in urging that American blood and treasure be fulsomely expended in this latest Middle Eastern rabbit hole; he has to look for every opportunity he can to pay back, with your money, the “defense” contractors who have so generously bankrolled the lifelong ego trip he calls a career.   We, as citizens, however, have no debt to repay to the contractors.  Unlike Mr. McCain and his colleagues whose “jobs” consist of having their hindquarters smooched by obsequiants who want a piece of your wallet, we work for our livings, and a good portion of what we make goes to support the likes of Mr. McCain and his fellow barnacles on the ship of state. Before we follow Mr. McCain’s advice to repeat what he considers the stunning successes of Iraq and Afghanistan, we are duty bound to examine the three major assumptions behind the argument that we should get more involved in Syria.

The first assumption is that we can influence the outcome in Syria.  Take a look at Iraq, Afghanistan, and Vietnam before you accept the idea that we can guide outcomes of civil wars born of centuries of antagonism halfway around the world.  (See my 5/17/13 piece AMERICAN ASSURANCES IN SYRIA:  A RUSSIAN GUANTANAMO IN AL QAEDA’S COURT?)  At least in the case of Vietnam, the civil war was brewing before we got there.   We rekindled a largely dormant civil war in Afghanistan and started the now rampaging civil war in Iraq.  In none of those cases was the outcome good for America.  Well, ultimately things may have worked out for us in Vietnam, but only because our side lost.

The second assumption behind Mr. McCain’s and his bipartisan War Party’s enthusiasm for intervention in Syria is that it would be a good thing if the Assad dynasty was overthrown. 

There is not doubt that Bashar Assad is a thug, as was his father before him.  Neither shows, or showed, any compunction about slaughtering his own people to keep himself in power.   But what is the alternative?  Thugs were overthrown in Libya and, to a lesser extent, in Egypt.  They were replaced with a brutal stew of chaos and dueling thugs striving for power, only the new thugs like us even less, or hate us even more, than the old thugs. 

Furthermore, in Libya and Egypt, Mr. McCain (and Mr. Obama and the entire Western media and foreign policy establishments) seemed to have been surprised that the revolutionaries they backed did not turn out to be the Jeffersonian democrats they had supposed them to be.   In Syria, the War Party can’t even pretend that it is on the side of the angels; there is no doubt (except perhaps in Mr. McCain’s febrile brain) that the Syrian opposition is dominated by Al Qaeda and others who us ill.  As I said in my 4/28/13 piece OBAMA AND SYRIA:  “…AND A MAN IN MY POSITION CANNOT AFFORD TO LOOK RIDICULOUS!”

We have little to no influence on the parties fighting in Syria and, despite elements of our foreign policy apparatus again having fallen for the usual song and dance about “moderate, pro-Western elements,” we have no friends on either side of the Syrian conflict.   We have plenty of people who will flit around Washington professing friendship with America in order to line their own pockets, but we have no genuine friends in Syria.

The third assumption behind Mr. McCain’s war whoop-whoop is that Al Qaeda and its allies in Syria will win, that Mr. Assad will give up and leave the country.   But given the advances Mr. Assad and his Hezbollah allies have made of late, his defeat is far from a foregone conclusion.  As I said to a friend of mine in the Fall of 2011 (in a White Castle on Cicero Avenue in Alsip), when this conflict was just getting started, Assad could very well win this thing because he is at least as brutal as his father, who killed 30,000, many with chemical weapons, of his own people to maintain power.  

So suppose that Mr. Assad does wipe out the rebellion and emerges victorious, a very realistic possibility.  Not only will that expose us to the charges of flaccidity that Mr. McCain, Lindsey Graham, and other bi-partisan War Party members are always hyper-ventilating about, but we would then have to deal with a Syria that owes us nothing but owes the Russians, the Iranians, and, most dangerous of all, Hezbollah big time.   How receptive will a newly entrenched Mr. Assad feel about peace overtures then?  How will he regard Israel, one of our greatest allies whom he regards as little more than a surrogate for Western domination of an area he feels is rightly his?   Yes, Mr. Assad and his father have always despised Israel, but the Assads have kept an uneasy peace, albeit largely out of necessity, with their far more powerful neighbor for the last forty years.   Would that change if Mr. Assad were to defeat the rebels, and their Western backers, with help from Hezbollah and Iran?   Would you like to take the chance that it wouldn’t?

Of course, Mr. McCain and his fellow messenger boys for the “defense” industry will use the growing chance that Assad can win to argue for further U.S. military involvement in Syria; they will use anything to argue for more U.S. military involvement in Syria.  But wouldn’t a saner, and more enlightened, self-interested policy be to stay completely out of this latest Middle Eastern civil war and try to maintain the uneasy peace with the winner?

But who gets rich, or gets his campaign fund generously stocked, with a policy of enlightened non-intervention?

THE AP TWITTER CRASH: THE VALUE OF KEEPING ONE’S COOL

4/24/13

There was much reporting, and handwringing, yesterday and this morning, including a front page article in the Wall Street Journal, regarding yesterday’s “Twitter Crash.”  In the space of about 65 minutes yesterday, the Dow lost and regained 145 points, and the markets lost and regained $200 billion of value, due to a false tweet that there had been an explosion at the White House that had resulted in President Obama’s being injured.  Yours truly was at lunch (Walker’s Charhouse in Naperville…great place.  Check it out.) at the time and missed the whole thing; had I not been a news enthusiast, I would not have noticed that anything had happened.

A group called the Syrian Electronic Army, which is allied with President Bashar Assad and wants to draw attention to what it considers false and one-sided reporting on the conflict in Syria.   (See?   As eclectic as this blog is, there is a connection, albeit often a contorted one, between the topics on which I write.  See, inter alia, my 4/11/13 piece   SYRIA:  GROUNDHOG DAY FOR AMERICAN FOREIGN POLICY.)  The group apparently hacked into AP’s Twitter account and broadcast, if that is the right verb, the offending tweet.

Don’t misunderstand me; I am not saying that this was an innocuous act, that such market manipulations are healthy, or, certainly, that the Syrian Electronic Army and its tactics are at all laudable.   But was there any harm done here to investors?   No, unless those investors were making a rebalancing move, or taking or unwinding a long term position, during that hour in which the markets took their roller coaster ride, and even then there could have been some benefit to such investors.   The whole thing started just after noon Chicago time and was over by just over 1:00 Chicago time, a miniscule window for long term investors. 

The only people who were hurt were traders.   Again, don’t misunderstand me.   Though, as most readers know, my days of trading like a scalded dog are over, I applaud those with the skill, the courage, or, in some cases, the recklessness, to be traders; our markets need them to provide the liquidity that makes the markets function.  (But do see my post, reproduced below, that originally appeared on 8/22/12 on the now defunct Rant Finance.)   However, when one decided to trade, and potentially cash in on the outsized rewards that trading can entail, one assumes the outsized risks of trading.   Among those risks are unexpected events like a group of Assad enthusiasts hacking into the AP Twitter feed.  Indeed, the very definition of risk (with which I admittedly have a problem, but that is grist for another mill) in the finance textbooks is the possibility of unexpected outcomes.

So it was not at all a good thing that a bunch of tech savvy miscreants with a political axe to grind could eliminate $200 billion of value for a few minutes and some traders got hurt in the maelstrom.   But traders are big boys and girls, or at least ought to be big boys and girls, and should realize that taking such risk is one of the costs of being in a position to reap big returns.  Genuine investors were not hurt by the market whipsaw; indeed, many, like yours truly, missed the whole thing.

Of course, there is a lesson here for investors.   As I have both intimated and said on numerous occasions both here and in other forums, the best thing to do in times of market panic, or apparent financial panic, is nothing.  Remain cool, stick to your plan, and keep your emotions in check.   See my 4/15/13 post, GOLD:  YES, I’M SCARED…BUT I’M STAYING.

PROMISED 8/22/12 RANT FINANCE POST:

HOW MUCH LIQUIDITY DO WE NEED?

8/22/12

This morning’s (i.e., Wednesday, 8/22, page A12) contained an article by Lillian Lin entitled “China’s Graduates Face Glut.”  In the article, recent college graduate Wu Xiuyan, expressing her understandable disappointment at the job market for grads in China, is quoted

“My classmates and I want to find jobs in banks or foreign trade companies, but the reality is that we can’t find positions that match our education.”

Such problems are, as many of you know from personal experience, worldwide and I sympathize with Ms. Wu and her colleagues.   But that’s not the point of this post.

Ms. Wu’s comments reminded me of something that Jack Bogle, one of the two guys for whom I always turn up the sound on CNBC; the other is Art Cashin.   Most of the time, I turn up the sound for Rick Santelli, but I digress.   Mr. Bogle, the founder of Vanguard and a true titan of the financial world, appearing on CNBC about a week ago was, as is his wont, decrying what he (and I) consider the excessive trading in securities.   As Mr. Bogle says, there is far too much trading and not enough investing going on.   Even though I write for this trading site, I wholeheartedly agree and have adjusted my financial behavior accordingly, but, again, I digress.

When Mr. Bogle made this comment, one of the trading guys who regularly appears on CNBC (It might have been Jon Najarian, but I’m not sure.) countered, reasonably, that that what Mr. Bogle looks askance at as excessive trading provides liquidity to the marketplace and thus serves a vital function.   Mr. Bogle agreed, partially, but then added something to the effect of, and I can’t quote because it was a few weeks ago, how much liquidity do we need?

Mr. Bogle’s comment is, as are most of his comments, profound.   We have put a lot of money and, more importantly, a lot of human capital into the financial industry, broadly defined, in this country.   One of the major roles of the financial industry, and virtually the sole role of the trading segment of that industry, is to provide liquidity to what otherwise would be parched markets.   This is a vital role, but is it so important that the best and brightest minds, or at least a huge portion of the best and brightest minds, go to Wall Street in this country?   Yes, markets need the capital and smart people necessary to keep them liquid and deep; that is one of our competitive edges as a nation.   But do we need as much capital, and as many bright people, committed to trading as we do?

The markets seem to be telling us that we don’t.   Note the reduction in both jobs and compensation on Wall Street in the wake of the latest financial debacle at least partially concocted by the people who have dedicated their lives to providing liquidity to our markets.  One suspects that these reductions are not cyclical, but secular; they are a signal that too much of our financial and human capital has gone into finance and not enough has gone into, say, engineering or medicine.

Now note the observations and the travails of Ms. Wu.  As China has gotten richer, more of China’s best and brightest have decided that “banks or foreign trade companies” (i.e., providing liquidity to the markets) would be a lucrative and otherwise worthwhile place to spend their careers.   But perhaps the market in China is directing these fine minds away from the Chinese equivalent of Wall Street.

There is another point here beyond the argument that too many of our resources are going into keeping our liquid markets overly saturated.  In this case, the market seems to be telling us that we have over invested in trading and under invested somewhere else.   The market works.   One hopes that the likes of Messrs. Obama, Romney, and their fellow “public servants” who deem themselves worthy of telling us all how to conduct our lives would realize that the markets work.   But one also hopes to win the lottery, I suppose.