STUMP » Articles » "This Time's It's Different!" » 14 March 2014, 07:01

Where Stu & MP spout off about everything.

"This Time's It's Different!"  


14 March 2014, 07:01

We often have talk radio playing in the kitchen, and just as often I ignore it. But last night, one person on the John Batchelor Show said something so incredibly stupid, it set me off. This is the approximate phrase:

“Of course, nobody wants war.”


Now, this was out of context. The subject of discussion, as far as I can tell, had to do with Russia in Crimea and then how this affects dealings with Syria. And the speaker may have been referring to specific parties, such as the U.S. or the EU. Yes, I’m sure nobody in the EU apparatus wants war. But if he meant more generally, including Putin…. OH COME ON.

Mind you, I’m not trying to talk about what could or should happen with regards to Crimea, Russia, Ukraine, Syria, or any of that jazz. I know very little about foreign policy – more than most, possibly, but then I’m a news junkie. I thought the Syria angle was interesting on the show, but that idiotic phrase blanked out my mind for the next several minutes that I probably missed some non-stupid stuff. I guess I could listen to a recording of the episode – it was in the 2nd hour I think – but I’m still pissed off.

I really hate to bring up Hitler in this situation so… well, actually I do have to bring up Hitler. Because I cannot call to mind of a situation before the 20th century where leaders just gave up land without war, because “nobody wants war”. Yes, everybody knows that if a power- or land-hungry leader/country gets what they want without war, they’d be very happy. It means they don’t have to spend a bunch of resources to get what they want.

But many are just fine with war if that’s what it takes to get what they want

“Violence, naked force, has settled more issues in history than has any other factor.”

“War is not violence and killing, pure and simple; war is controlled violence, for a purpose. The purpose of war is to support your government’s decisions by force. The purpose is never to kill the enemy just to be killing him . . . but to make him do what you want him to do. Not killing . . . but controlled and purposeful violence.”

― Robert A. Heinlein, Starship Troopers

Those two quotes are from different parts of the book. Part of it when Rico is in a high school class, and part of it when Rico is in bootcamp.

And here is something from Carl von Clausewitz, who certainly knew the purposes of war:

“War therefore is an act of violence to compel our opponent to fulfill our will.”

War Is Merely the Continuation of Policy by Other Means
We see, therefore, that war is not merely an act of policy but a true political instrument, a continuation of political intercourse carried on with other means. What remains peculiar to war is simply the peculiar nature of its means.

My point here is that it’s fatuous to say nobody wants war, because there are generally people, and more specifically leaders, who are willing to go to war to get what they want. That is the nature of power.

This requires no deep insight, only paying attention to how people (and specific groups of people) actually behave. I’m just tired of hearing people proclaiming idiocies as if everything today is so different that we can forget the past.

Example: with regards to public pensions, the way I got started in the argument was that I bitched at a bunch of public pension actuaries about how their valuation standards compared to that of annuities — I thought it insane and gave rise to all sorts of bad incentives. One of the reasons insurers have to hold more than 100% of what we think the annuity promises are worth is that we are trying to protect annuitants against possible insurer insolvency, as well as protect the bondholders and stockholders of insurers. Public pensioners (and the taxpayers and municipal bondholders) need the same sort of surety. Governments could go bankrupt from these promises, bonds defaulted on, pension funds could run dry….

…and their response was: governments don’t go out of business.


Since when? Governments have gone out of business before, especially when they are profligate with funds. Governments have collapsed multiple times, and prior government promises reneged upon, because of all sorts of things. There is nothing different about the present day that changes that.

It’s not just a matter of politics.

Back in the dot-com boom, I bitched at my techie friends to exercise their employee stock options, pay off their debts (some of them had quite large debts) and diversify their investments. What I found is that many of them had gone all-in with regards to the boom. The debt was a sure thing, and putting all their eggs in one basket was very dangerous.

One conversation went like this:

Me: You’ve got to diversify! You’ve got all your stock and options in the company you work for!
Friend: But look at all these stock splits! Look at the price! If I put it in other stocks, nothing else will rise so fast!
Me: And nothing will fall so fast, either.

Needless to say, my friends didn’t listen to me. I did not say “I told you so” months later when, indeed, the stock price fell precipitously and all their stock options were out-of-the-money.

I did say that the losses weren’t real losses, because they were only numbers on paper. Cash in hand was real, I said.

They didn’t like that. Anyway, they’re fine now. But that big dot-com payout never happened for them. They thought “This time it’s different!”

The moment I hear anybody making that kind of statement, I tend to run far, far away. That’s an indication that something really bad is going to happen. I don’t have the guts to short whatever situation (because that requires timing, and capital, too), but the point is not to be exposed in the first place.

I am not saying that things never change.

“This time it’s different! They found a soprano who can really sing the Queen of the Night aria!” Ok, that’s possible.

“This time it’s different! It’s true love!” says the four-time divorcee…. uh, not so much.

Too many of these “This time it’s different!” remarks have at their core an assumption that something about nature or people has changed. No, people haven’t really changed. Some details about how human nature manifests itself can change, but supposing it has changed so much that war will never happen again over something stupid….

…..don’t make me come over there and smack you.

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