Iraq is Rocking; Do we have options? Uber and the taxis. High Speed Trading

View 829, Monday, June 16, 2014

“Transparency and the rule of law will be the touchstones of this presidency.”

President Barack Obama, January 31, 2009

If a foreign government had imposed this system of education on the United States, we would rightfully consider it an act of war.

Glenn T. Seaborg, National Commission on Education, 1983

If you like your health plan, you can keep your health plan. Period.

Barrack Obama, famously.


Niven will be here presently and we will attempt the hill; I hope to make it to the top this time. I’ve had to turn back about ¾ of the way before, but we had others with us, and that always slows me down as I try to keep up with younger hikers. Niven and I know how to pace each other well, and he’ll be the only one here today. So I hope to make it.

I’ll try writing a bit before he gets here, but probably not much will happen, so I’ll post this stub and be back later this evening.

We haven’t reached the end of history. There is no evidence that liberal democracy – even of the EU variety that was such a vogue not long ago – is sweeping the world inexorably, bound to prevail. It isn’t even sweeping the United States, which is becoming more and more bureaucratic and political, with centralization of power and suppression of contrary thought. The President’s speech over the weekend left it clear that you have to be stupid and nearly criminally selfish not to believe in not only the theory of manmade global warming, but that the United States can unilaterally do something about it: we can bankrupt ourselves converting into sustainable energy and that will somehow induce China and India not to continue pouring out CO2 from coal and oil; we can abandon nuclear power, which does produce energy without producing CO2, for other schemes, and still be able to compete in a world economy. And if you don’t believe that, it’s because you are selfish and think the moon is made of cheese.

This is known as rational political debate in this age of reason, this last stage of history.

Meanwhile in Iraq the ISIS is shooting down its prisoners. This has far reaching implications.

The Kurds are being sucked into the war, even if they have not already been by the fall of Mosul to their enemies: the Kurds reluctantly allowed the central Iraq government – Maliki’s Shiites who have busily purged the Iraqi army of all the US trained Sunni and all the former Saddam officers – to take control of Mosul, which the Kurds believe is actually theirs. Now the Kurdish militia, which is better trained than the Iraqi army and has taken better care of its weapons, is free to counterattack and take Mosul as its own. Good luck to Maliki on getting it back.

One result of this Iraqi civil war will probably be the expansion of Iraqi Kurds in the entire northern region. This begins to sound a bit like Saladin’s consolidation of the Kurds prior to his conquest of the Christian Crusader Kingdom of Jerusalem in the era of Richard Coeur de Lion. Perhaps not the end of history after all.

And I see that Bremer – Bremer!! – has a Wall Street Journal editorial piece on what we ought to do about Iraq now. Here is the most incompetent proconsul since Roman times telling us what strategy we ought to have.

Iraqi Kurds maneuver between Maliki and Mosul

The swift attack on Mosul by the Islamic State of Iraq and al-Sham (ISIS) and relatively bloodless withdrawal of US-trained Iraqi security forces has further weakened Baghdad’s influence over northern territories. The political vacuum has enabled the Kurds to expand their land claims and leverage Iraqi Prime Minister Nouri al-Maliki for concessions on their oil exports. Yet, the role of radical Baathist military officials in the Mosul coup and their links to ISIS also exposes the Kurdistan Regional Government (KRG) to important security and political challenges. The KRG will not only have to secure greater territories and populations from extremist groups on its borders, but also maneuver its nationalist agenda through radicalized Sunni Arab populations that may be even more resistant than Maliki and Shiite groups.

In some ways, the Mosul attack is a coup for the Kurds. It occurred just as the KRG was locked in another battle with Maliki over oil exports and revenues, and as its Turkish energy partner was subjected to international litigation. The ISIS attack shifted media attention, at least temporarily, from an embarrassing situation of a wandering ship unable to offload contentious Kurdish crude to a scenario of KRG strength; assisting refugees, securing borders, and taking Kirkuk in the midst of a serious political crisis.

The attack has also gained the KRG time in its energy gamble with Baghdad. The instability caused by the Mosul attack has prevented the Iraqi government from moving forward with planned repairs on the Iraqi-Turkish Pipeline (ITP) on the Mosul side. This delay technically enables the KRG to continue exporting its crude through the part of the line it has taken over since January 2014. Although Kurdish pipeline exports are still small-scale and subject to international litigation if sold, local and Turkish buyers of trucked Kurdish crude can at least benefit from a rise in international oil prices — now at about $106 per barrel — that followed the Mosul crisis.

Read more:

Only America Can Prevent a Disaster in Iraq

Without U.S. help, the civil war may spiral into a regional conflict as other countries, including Iran, intervene.


L. Paul Bremer

June 15, 2014 6:04 p.m. ET

Of course there wouldn’t be any such disaster if Bremer hadn’t disbanded the Iraqi army as one of his first acts of building a liberal democracy in Iraq.

ISIS ‘execute’ 1,700 Iraqi soldiers, post gruesome pictures

Radical Sunni militants who have been capturing cities in northwest Iraq claimed on Twitter that they executed 1,700 Iraqi soldiers. The radicals posted graphic photos as evidence.


New terror video emerges of ISIS monster lining up and taunting Iraqi soldiers in the desert before appearing to execute them as yet another town falls into jihadists’ hands

Read more:

This should have the effect of making the Sunni militants fight harder in defense of Baghdad, but that isn’t certain. This is Arabs fighting Arabs, and Arab armies seldom stand and fight to the death either historically, when the tactics of the Prophet were to skirmish his Persian enemies to death, or in more modern times in the wars with Israel. The Iraqi regular army has been purged of its officers, who have been replaced by Shiite Maliki supporters; the notion of a national army neither Shiite nor Sunni was abandoned as soon as US troops were withdrawn. The notion of a unified Iraq as a federation of Sunni, Shiite, and Kurd (“Compared to infidels Kurds are Moslem”) states also vanished when the US ceased to insist on it and withdrew the means to enforce that will. So it goes.

One thing about this: If the enemy of your enemy makes war on your enemy, the only people killed are your enemies. Perhaps this was the Obama strategy after all. One hopes there could have been a better strategy, and possibly there was before Bremer. Mine would have been to pay the Iraqi generals to pay their soldiers, and have each keep the peace in his own district. Insubordination would be met by unleashing the Legions. This rule by auxiliaries and client generals and kings has been effective since Roman days, and if we insisted on staying in Iraq was probably the only formula for success; but no one seemed interested in that at the time. By the time Obama came to power we had few options. There were some, but they would have taken considerable skill: the Legions were tired of the war, the administration had no enthusiasm for it, and there were few theories on what could be done about it. There was little sentiment for partition to be enforced by American air power, and a Status of Forces dictated in Washington and signed by the Iraqis as a condition to taking any kind of political office, but that was never an option for the Obama/Biden/Clinton team. They had no one to implement it.


Our options now are rather few, and are shrinking fast. If we had a lot of Warthogs in the region ready to deploy, and a regiment of Marines ready to land from helicopters with A-10 support, a lot could be done toward of goal of a reasonably stable partition, with a pro-American Kurdish faction –

Niven is here and we are about to hike. More later.


We had a very productive hike and lunch, and came up with a number of scenes for our new work.  I feel like a writer again. Continuing today’s news commentaries:


I expect nearly everyone knows about Uber?


Uber is a venture-funded startup and transportation network company based in San Francisco, California, that makes mobile apps that connect passengers with drivers of vehicles for hire and ridesharing services.[1] The company arranges pickups in dozens of cities around the world.[2]

Uber has been accused in several jurisdictions of illegal taxicab operation.

There is an interesting article in today’s Wall Street Journal that tells me something I neither knew nor suspected:


Uber Shocks the Regulators

Digital technology has undermined the old idea that taxis need close government supervision.


L. Gordon Crovitz


. . .

Recent investments put an $18 billion valuation on Uber, which launched in 2010—more than the combined market value of Hertz and Avis. CAR +0.69% That $18 billion can be understood as a market estimate of the waste caused by taxi regulations around the world.

Taxi and limousine commissioners limit new entrants and suppress competition between taxis and car services. They micromanage the manner of hailing rides, the number of licenses issued, and how many cars a company may own. These rules protect existing owners at the cost of better service for consumers and more flexibility for drivers

Uber uses technology to create efficiency by enabling supply to match demand. It’s closing the gap between what taxis and car services have been allowed to provide and what consumers want. Its success undermines the long-held idea that the taxi industry requires close government regulation.

Eighteen Billion Dollars is a lot of money. It may not be true that every dime of that is a result of waste caused by taxi regulations, but surely half of it is?  If taxi regulations made sense instead of being crafted to make as much for the city as possible, Uber would still be valuable, but not $18 billion valuable.  Sensible taxi regulations would include registration, criminal background check, filing picture of the driver with the police as well as issuing a picture ID to be hung in the transporting car, and some scheduled inspection by private companies to insure the proper operability of the auto.  None of this need cost more than a couple of hundred dollars, and much of the problem of in city transport would be solved.  Of course in our liberal democracy that won’t happen because sane taxi regulations are only of use to the people, not a means of income to the bity bureaucrats.  So it goes.

So of course the taxi companies and similar interests are spending like crazy to lobby for the suppression of Uber. So far they have not succeeded, but it’s early times.




High-Frequency Trading Needs One Quick Fix

Change Reg NMS Rule 611 to read ‘best execution’ instead of ‘best price.’

by Andy Kessler

June 15, 2014 5:54 p.m. ET

In the "state your conclusion upfront department," the Senate Permanent Subcommittee on Investigations has scheduled a hearing for June 17 titled "Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets." They join the Securities and Exchange Commission, the FBI, the Justice Department, the Commodity Futures Trading Commission and, inevitably, Eric Schneiderman in uncovering what the New York attorney general calls "this new breed of predatory behavior."

Too bad none of the investigations will figure out that changing one word in a federal regulation can fix all this. Because none of them understands the old Wall Street adage: "On Wall Street, everybody gets paid."


If you don’t understand the problems in “high frequency trading” – and few of us reading this do, nor do the vast majority of the Congresscritters and their staffers – you can’t really be blamed, but this article will at least give you a picture of what the problem is.  His suggestion as to what can be done about it is, in my judgment, naïve, but I quickly admit he knows more about it than I do.  My guess, though, is that the situation exists because it’s in the interests of a number of influential Congresscritters that it exist, and until it is better explained to the public and a legitimate public interest is expressed, nothing will be done. On Wall Street, one way or another, everybody gets paid. I doubt there’s a quick fix for that.






Freedom is not free. Free men are not equal. Equal men are not free.




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