By Jay B Gaskill

First read CONTAGOUS JIHAD { }; then consider the daunting but necessary revolution in approach on the ground level that will be necessary.

First we address the inflexibilities and institutional idiocy.

Bureaucracies represent the mechanization of official personal relations.  Algorithms are the mechanization of thinking.  Neither of these inventions is particularly flexible or adaptive in real time.  But terrorist threats operate in real time; are they not particularly hampered by bureaucratic paralysis or dumb algorithms.  Hence, the task ahead….



“CIA, FBI Flagged Him for Concern, Raising New Questions About Missed Opportunities to Prevent Fatal Boston Attack

“Russian officials contacted the Federal Bureau of Investigation in March 2011, then reached out to the Central Intelligence Agency in September of that year, citing concerns Mr. Tsarnaev might have been associating with extremists, according to U.S. officials.

“The FBI has said it interviewed Mr. Tsarnaev and conducted a threat assessment, but found nothing ‘derogatory’ that could prompt further investigation. A U.S. law-enforcement official said the case was closed after three months, after the FBI asked Russian counterparts for additional information, but received none.

“U.S. officials said Wednesday that at the request of the CIA, Mr. Tsarnaev was added to a broad database called Terrorist Identities Datamart Environment, which holds hundreds of thousands of names flagged by multiple U.S. security agencies.”


If I need to explain the problem further, we are in more trouble than I thought. In my referenced earlier article, I proposed Protective Preemptive Profiling, Adding that,  “The problem to be confronted and solved is this: Superficial appearances are almost worthless.  We need to get to the otherwise private level to uncover revealing communications, attitudes and other tells.  No one advocates arrests or detentions for acts not done based only on a profile.

But there is a powerful deterrent effect by interviewing each target, explaining why he is “a person of interest and concern” and warning him that he is being closely followed.” This technique has been used by organized crime, and our people, with civilized restraint, should be allowed to use a bit of intimidation as well.

This is not a check-the-box-and-move-on exercise.

Contrast the mindless bureaucratic TSA approach that US travelers experience with every flight with the experience of someone who travels on Israel’s airline, El Al.  If you are even remotely suspicious, you are treated to an in-depth conversation with a savvy human being with the insight and the power to keep you off the aircraft.  The Protective Preemptive Profiling model must employ such people and empower them to protect us.  We have more than enough operatives who could accomplish what needs to be done, with efficiency and the necessary finesse.

My last point in the earlier piece, A Matter of Will, not Capability, bears reemphasis:

“Prevention and deterrence, accomplished through proactive, intelligent and individuated profiling, is a bargain, both in the civil liberties calculus, the human damage calculus and the national security calculus.  The missing elements are not talent and resources. It is purpose, coordination and the iron will to pursue this course against all obstacles for one simple and compelling reason.  It is how we will win.”


First published on The Policy Think Site { }and hosted blogs.

Copyright © 2013 by Jay B Gaskill, Attorney at Law

Author contact < >

The new age of Entrepreneurial Terrorists

Contagious Jihad – The new age of Entrepreneurial Terrorists


The San Francisco Chronicle has opined:

“What we know right now is that the suspects are ethnic Chechens who moved to the United States with their family in 2002. Former classmates have described Dzhokhar Tsarnaev as “quiet,” “sweet” and “normal.” The elder brother, Tamerlan, seems to have had more problems adjusting: He once said that he had no American friends, and that he didn’t “understand” Americans.

“There’s little evidence that their parents held radical beliefs, but the brothers left a trail of clues on social media about their interest in Islam and Chechnya’s long struggle with Russia. Still, it’s far too early to say what their motive might have been.”

It’s far too early to say? The Chronicle’s recent editorial peroration was an exercise in politically-correct fantasy. The jihad motivation of the Brothers Tsarnaev was blatantly clear from the contours of the bombing event itself, even before these two jihad warriors were brought to ground. This was a cause-motivated killing, aimed at symbols of American accomplishment and patriotism, coordinated and designed for maximum horror and highest publicity. There is no other ideological motivation afoot at the moment that could come close to explaining the behavior of the Boston Massacre bombers. The jihadist signature was so clear that one retired CIA expert told media outlets that the perpetrators were either al Qaeda or faithfully copying the al Qaeda playbook. Please take note: the enemy of liberal Western civilization is not just the damaged organization called al Qaeda, but the larger jihadist ideology that links to a whole range of terrorist attacks on our homeland, diplomats, friends and allies.

In the Boston case, there may or may not ever be any solid trail of money, direction and support that our anti-terrorist experts can ever trace back to some central network, whether al Qaeda or other jihad group. Yes, the older brother Tsarnaev probably received some terror training from radical Chechnyans when he was in Russia.  But whether that was the case, we can be confident that there was a common jihad-source of ideological inspiration, instigation and ‘religious’ validation for the planned bombings.

the new threat category

We face a new trend in terrorist attacks on the US: the outsourcing of jihad mayhem operations to inspired/activated amateurs/volunteers operating with minimal or no foreign support outside of the spread of a toxic ideological package.

The toxicity and persuasive power of the jihad recruitment model poses an entirely new threat category.  We need to adjust our thinking at a fundamental level. The therapeutic mindset that seethes through the soft humanitarians who write editorials like the one I’ve just quoted cannot be allowed to affect policy makers. The stakes are too high.

We should not worry too much about “hasty” condemnations of aberrant religious beliefs, or to shy away from too “aggressive” inquiries, investigations and deep vetting of “victim” categories that are also potential threat categories. If we do, our humanitarian hesitations will just get more innocent people killed.

We need to adapt our responses to the new threat profile very quickly. The US has been on notice since 2010.  The jihad support trail in the notorious Fort Hood murders by Sgt. Hasan effectively began and ended at the web address of a bloody-minded mullah named Awlaki, who – in the minds of some apologists – was just exercising free speech

“In an interview published on Al Jazeera’s Web site, radical Muslim  cleric Anwar al says that Maj. Nidal Hasan, charged with killing 13 in last month’s Fort Hood massacre , asked for guidance about killing American military personnel in his very first e-mail.” ABC News

To his credit, President Obama put placed al-Awlaki on the CIA kill list in April of 2010. The American drone attack in Yemen on September 30, 2011 silenced Awlaki for good. Meantime, Maj. Nidal Hasan is facing the death penalty in a military court.

Hasan was an entrepreneurial jihad murderer who – as far as we know – got no material support from terrorist leaders. He was self-recruited in the sense that the impulse to do mayhem for the cause gestated in his own experience before it was nurtured, fanned and validated by a radical Muslim cleric.

The anti-terrorist measures initiated by the former Bush administration, starting with the Patriot Act and carried forward by President Obama, especially the banking restrictions, have effectively dried up funding and logistics support for major terrorist attacks like those on September 11th, 2001. Our enemies since have adapted by adopting the entrepreneurial model, and we need to adapt accordingly.

But that requires a discussion the current media mavens and leadership elites are very reluctant to have. And time is running out.  Do we have to endure another mass killing before we “get it”?

the discussion minefield

Ideas have consequences, and bad ideas sometimes have fatal ones. This insight has never been more relevant, but rarely has it been more marginalized.  Why?  Urgently needed discussion about new security measures that address bad ideas is being curtailed.

Consider the politically correct emphasis on individual moral autonomy and the resulting hypersensitivity to criticism of other cultures. Aren’t all cultures equal? How dare we in the privileged West think otherwise! These sensitivities operate as a censor of any open and honest discussions of certain ‘hot’ topics, such as the existence of specific toxic religious elements in radical Islam. As result we a politically correct paralysis in security policy. This is an unacceptably high price to pay for cultural sensitivity, especially when a new mutation in terror had emerged that can get around our defenses.

Here is an irony for you: An atheist like the late Christopher Hitchens can fire a broadside against all religion (God is Not Great) without a whimper, but heaven help those who single out dangerous aspects of radical Islam in the public square. Leaders can issue fog-ball statements about how radical jihadists have hijacked a major religion let them dare to take it to the next step – concretely useful discussions and they are quickly shut down. Questions like, “What civil rights do you propose to destroy?” are given weight among the “use a bomb and get psychiatric help” school.

Major media outlets are still using a tip-toe approach to the deadly reality confronting us. I was struck by a piece in the New York Times, under the heading – “Investigators Dig for Roots of Bomb Suspects’ Radicalization:

“As scrutiny increased on how the brothers had been radicalized… [it was learned that] Agents had questioned [the older brother] in 2011 in response to a request from the Russian government, a year before he traveled to Chechnya and Dagestan, predominantly Muslim republics in the North Caucasus region of Russia. Both have been ‘hotbeds of militant separatists’.”

“Tensions also escalated Sunday over how to handle the case of the surviving suspect. …[T]he administration has said terrorism suspects arrested inside the United States should be handled exclusively in the criminal justice system, and gave no sign it intends to do otherwise in Mr. Tsarnaev’s case. Moreover, there is no evidence suggesting that he is part of Al Qaeda; the United States is engaged in an armed conflict with Al Qaeda, not all Muslim extremists.”

April 21, 2013, in the New York Times

One might have written, “scrutiny increased on how the brothers became active jihadists” adding that the older brother had spent time among militant Chechnya and Dagestan jihadists” Among  the tells in this article were the use of the term “radicalization”, the blithe assertion that “ the United States is engaged in an armed conflict with Al Qaeda, not all Muslim extremists,” and the mincing reference to Chechnya and Dagestan as “‘hotbeds of militant separatists”.  It seems that even in the face of compelling evidence of a jihadi attack on Americans, maiming, killing and wounding innocent people in ways so terrible that the media felt compelled to hide the graphic pictures, the New York Times was not still willing or able to call out the enemy.

Our “enemy” is at war with Western Civilization in general and the USA in particular. The questions of the day are whether we understand that is in fact the case and whether we are prepared to act accordingly.

Like the Hydra monster of Greek myth the enemy has many heads, each one of which was formed by contact with a dangerously toxic mutation of Islam.

If we do not fully recognize that we are actually at war, pretending that we are coping with a series of violent crimes; if we seem unwilling to openly identify the nature and source of threat that is attacking us and killing our citizens; if we allow ourselves to appear timorous, like the intimidated characters in Harry Potter who were afraid to name Voldemort, then we might as well put a banner across Old Glory: WE CAN BE INTIMIDATED: KEEP IT UP; IT IS WORKING.

Any country and any leadership set that remains unwilling and even afraid, in face of compelling evidence, to identify and condemn the concerted and repeated attacks against the homeland for what they really are – an evil perversion of Islam – will never quite be able to stop those attacks.

The gravamen of the quasi-religious ideology that drives this bloody jihad, no matter where its immediate geographical origin, is the same: murderous envy.

This is an envy of truly epic proportions: envy of our material successes; envy made worse by shame at the comparative material failure of the Islamic societies; envy made insufferable because the successes of Americans were accomplished by decadent infidels. This is envy that cries out for a leveling war, a just war (for the jihadi fanatics), because a just God would surely never allow such an unfair success as America to survive unpunished.

We are being attacked by the fervent followers of a deeply perverse ideology, wrapped in religious jargon and trappings, sold to susceptible minds.  The ideology is based on a lie, the false promise of eternal glory for those warriors who martyr themselves by killing and maiming men, women and children engaged in peaceful pursuits in places and at times where, as fellow Americans and our law-abiding guests, they have the right to peace and security. The jihad exists to deny Americans the right to peace and security. No amount of appeasement or cultural sensitivity will change that.

But just to have this conversation in the public square, let alone to work out its concrete policy implications, is like walking over a minefield of politically correct sensibilities.  We are crippled by the moral ambivalence of our leaders and our media, a generation-in-power that could well have lost WWII.

Fortunately that discussion has now begun.  Michael Gerson in the 4-22 edition of the Washington Post has written—

“As the circumstances surrounding the Boston bombings have clarified, some of the reactions have been ideologically reflexive and counterproductive. Portions of the left turned to any artifice, including an attack on ‘white privilege,’ to avoid a serious discussion of radicalism and terrorism. Even the use of the word terrorism is viewed as a threat to multiculturalism or the prelude to a new round of civil rights abuses in the war on terrorism. …. Elements of the right suffer their own form of ideological impairment. Their tendency is to regard terrorism and Islam as interchangeable. … Terrorism is the expression of a violent ideology that has, disturbingly, taken root among some Muslims. …Debates over the meaning of terms such as ‘jihad’ and ‘sharia’ are at least as complex as Christian debates over ‘just war’ and “social justice.’”  {Tied in knots by radical Islam –}

We may yet stumble our way to the necessary clarity.

But the jihad will not wait.


Because of the prevalent moral anonymity prevalent in our hip, postmodern culture, more and more of our character judgments come from surface impressions, a smile, a style, a sense of “normal” activities, the very notion of getting “an education”, any or all of which often are just masks.  We assume that a conventional, peace-loving internal life goes with a conventional exterior life; we assume that formal education imputes formal moral values; we assume that, in effect, we can safely presume that the ‘“nice kid” across the street has absorbed and inculcated the value and moral foundation that supports modern civilized behavior.

But these assumptions are false.  The reality may be – and often is – radically different.  Morality, as it was traditionally understood, is no longer universally taught.  When moral and value lessons are taught they often are not particularly coherent with the great moral traditions that uphold Western civilization.  The values and aspirations that we assume in a casual meeting with someone often sharply diverge from those values and aspirations secretly vented online; and they may diverge still further from someone’s actual behavior.  I can’t count the number of times I’ve seen an interview of a neighbor about the bloody monster who lived next door, “He was such a nice person. I can’t believe he dis this horrible thing.” Translation: I never knew him…really.

We first meet someone and his or her moral character is a question.  Can we trust his “education”?  It would be safer to have an honest conversation with parents and peers.  Check out the actual formal education of someone in any technical field – engineering, information technology, the physical sciences, even the so called behavioral sciences. Something is almost always missing. The great Western philosophical and moral canon from Aristotle and Moses to the Buddha and Jesus, from Athens and Rome through the Enlightenment and the French and American revolutions, all this has been gradually dropped from the general curriculum in favor of diversity and sensitivity training…or in favor of no formal moral education at all

To the undereducated, morally clueless set, the closet jihadists who do mass murder might as well be from Mars.  The jihad warriors from bloody Chechnya and elsewhere are an enigma to the sensitive souls without a formal moral education. For these naïve minds, Evil does not exist.  Surface impressions deceive.  The sensitivity and therapeutic models fail when the real moral questions present themselves. That pierced, green haired kid might be a Gandhi. That smiling, clean cut kid with curly hair and soft eyes might be capable of blowing up a nursery.

In a different context, I have written about the cultural carriers of nihilism, the rejection of all moral restraints, by elements in the popular entertainment culture.  I’ve called these internet and media transmitted images and narratives by the term malogens (malevolent psychological pathogens, expressed in the glorification of death images, and so on), a term developed in the study of a particularly chilling murder case – See Malogens  The general pattern in jihad conversion / recruitment is very similar.

The toxic version of Islam closely tracks traditional forms but with some deadly variations.  What follows is a sketch, designed to be a guide for profilers, not a definitive statement of belief, and certainly not as a guide for followers.

The jihadist’s version of Islam begins with the tradition. The ideal template for the perfect society is achieved through submission to the will of the One Supreme Deity whose words were faithfully captured in the Quran. Those who reject the will of the One are infidels.  The holy struggle to implement the will of the One against the forces of the infidels is a jihad. The 20th and 21st century version of this employs (what I believe to be) a profound theological error as a tool to recruit suicidal and risk-taking soldiers.  The adherents of this variation assume that those faithful who submit to the will of the One will create and live in a successful, materially prosperous society, and assume further that an infidel society will fail.  When this failure did not happen, the outcome was an offense to the One, made worse because the infidels of the Great Satan succeeded by demonically exploiting their faithlessness.

This single theological variation succeeds in motivating violence, because it brilliantly exploits the power of envy and revenge and harnesses the fantasy power lures felt by the powerless and confers moral validation on acts that would otherwise be reprehensible in any culture.

The ideal target is a male who was inculcated with Islam, who is longing for purpose and power.  The appeal to grievance and powerlessness by offering grandiose deeds that are pleasing to the ruler of the universe and will be rewarded postmortem can always gain traction with certain individuals in certain times of their lives under certain circumstances.

Profiles need to start with these individuals, times and circumstances, knowing that there will be false positives. The first task of the profiler is to identify possible targets for jihad conversion, learning through experience, gaining insight and predictive clues form each case.

Because males are the primary recruits, the females in their lives and their putatively private messages to others (electronic and other) are source material for danger signs. Individuals who lead well balanced family lives, who are morally grounded in a Judeo-Christian framework (using the term to include both traditions and their secular iterations) and / or exhibit a well-founded classic secular allegiance to Western civilization, are essentially immune to the jihad conversion appeal.  This puts the profilers in the uncomfortable, but necessary position, of seeming to concentrate on Muslims.  But the target subset is much, much smaller than the Muslim population whose members are living ordinary lives in the West.

The problem to be confronted and solved is this: Superficial appearances are almost worthless.  We need to get to the otherwise private level to uncover revealing communications, attitudes and other tells.  No one advocates arrests or detentions for acts not done based only on a profile.

But there is a powerful deterrent effect by interview each target, explaining why he is “a person of interest and concern” and warning him that he is being closely followed.

A matter of will, not capabilty

When you add up the numbers of law enforcement, paramilitary and homeland security personnel detailed just for the Boston bombing investigation, post disaster, you begin the notice a possible massive misallocation of resources. What if we had stopped this?

Prevention and deterrence, accomplished through proactive, intelligent and individuated profiling, is a bargain, both in the civil liberties calculus, the human damage calculus and the national security calculus.

The missing elements are not talent and resources. It is purpose, coordination and the iron will to pursue this course against all obstacles for one simple and compelling reason.  It is how we will win.

First published on The Policy Think Site { }and hosted blogs.

Copyright © 2013 by Jay B Gaskill, Attorney at Law

Author contact < >



Also posted:

By Jay B Gaskill

9:30 PST Northern California

Boston’s wakeup call is our wakeup call – but US anti-terrorist professionals were already onto the game afoot: “…counterterrorism officials were examining possible links between the Boston bombers and the Islamic Jihad Union of central Asia. Chechnya is predominantly Muslim” (NBC).

Dot…dot…dot.  The Brothers Tsarnaev (26 –dead, 19 – on the lam) were biological brothers, and brothers of the Jihad, bloody-minded warriors in the tradition of the Chechnya terrorists in Russia.  Two incidents come to mind

  1. 1. The “…bomb blast that killed at least forty-one people, including seventeen children, during a military parade in the southwestern town of Kaspiisk in May 2002. Russia blamed the attack on Chechen terrorists.”
  2. “The October 2002 seizure of Moscow’s Dubrovka Theater, where approximately seven hundred people were attending a performance. Russian Special Forces launched a rescue operation, but the opium-derived gas they used to disable the hostage-takers killed more than 120 hostages, as well as many of the terrorists. Basayev took responsibility for organizing the attack, and three Chechen-affiliated groups are thought to have been involved.” (Council on Foreign Relations Report)

The politically correct idiot, writing for Salon, who opined the hope that the terrorists would turn out to be “white guys” was unexpectedly prescient – white jihadists. My two earlier posts about the jihadist signature and motivation were spot on. {See and}

The bigger lesson bears repeating and remembering.  This jihad is a pan national movement with the ultimate aim of weakening western civilization and birthing a major Islamic state, one that can stand as a world power in its own right.

I and others have written extensively on this vital topic, to wit.



Once Upon a Time, a Prophet Emerged…


Jay B Gaskill

Attorney at Law

Published May 10, 2011 on the Policy Think Site

Executive Summary

The West faces an Islamic super-state in the throes of gestation and birth.  Given the prospect of loosely hinged martyrs in power, Pakistan’s loose nukes and the prevalent irrationalities loose in the region, a question arises:  Will the Muslims “grow out of” this madness in time?  The situation is grave, and the death of an al-Qaeda mastermind changes nothing of consequence.

So… will “moderate Islam” (whatever that means) come to our rescue?  If not (note the ticking clock), then what are our options?  Is there a theological prong to the defense of the West?  Are there creative solutions?  First: Achieve clarity.  Deadline? Yesterday.

Then we start the heavy lifting.  In this article, I outline a five pronged response: (1) We continue our proactive offense/defense against the terror jihad. (2) We continue with balance of power maneuvers because in the short term we have little choice. (3) We get to bright line clarity on one overriding point:  No nukes for the jihad – and we become as selectively ruthless on the point as we need to. (4) While waiting for a Muslim reformation (and covertly encouraging it) we overtly support civil Islam. (5) We incorporate a stealth theology program into an unprecedented, broadband propaganda war.  Losing this struggle is not an option.

For the entire article (well worth your time) please go to this link:

Copyright © 2013 by Jay B Gaskill, Attorney at Law

Pull quotes, links and forwards are welcome and encouraged.  For everything else, email the author at

‘TRUST ME, TRUST ME NOT’ Obama’s Latest Gun Control Rejection


Obama’s Latest Gun Control Rejection Was a Failure of Trust

A clear majority of the democratically controlled Senate has rejected the president’s gun control package, and by a smaller margin, the GOP version as well.  What gives?

This failure was the inevitable blowback from the breakdown in trust that began in Obama’s first term when Obama-Care was rammed past the normal vetting and congressional hearing processes, driven to a party-line vote, supported by the president’s promises, “this is deficit neutral” and “you won’t lose your current insurance”. When these and other representations proved to be false, more and more people began to ask, “Who is this president? Is he the president who pledged to get past the partisan divide, or is he the campaigner who derided the Americans who ‘cling to their guns and religion?’”

At least 98% + of all firearm owners are law abiding.  And these women and men have legitimate concerns that the creation of a national firearms registry will be a prelude to a later confiscation program that will do a much better job of disarming the innocent than the guilty.

Mr. Obama promised that the background checks in the recently defeated bill did not contemplate such a registry, but the BATF (Bureau of Alcohol, Tobacco and Firearms) revealed that it maintains a record that amounts to the same thing, one that could be augmented by the new background checks in the defeated bill.* Concerns like these (call them paranoid if you insist) were shared by so many democrats that Senate Majority Leader Harry Reid tried hard to avoid a Senate vote on the merits from even taking place, hoping that the GOP would invoke the filibuster threshold of 60 votes. When that ploy failed, the naked emperor was exposed. Even the GOP measure failed to pass, though it had more votes than the administration version.

No one, outside of Obama’s shrinking inner circle, is willing to trust the feds with the power to disarm the civilian population…at least, not now, not with this president.

To paraphrase Bill Clinton’s campaign slogan, “It’s the trust issue, stupid.” All second term presidents are weakened by their dwindling time in office.  But this one is damaged by a string of false representations. Mr. Obama has squandered one of the essential attributes of successful leadership: He is no longer trusted.


I am in favor of gun ownership AND better, faster and more intelligent background checks.  See two articles of mine – Gun, Germs and Stealing –at it’s not gun control; it’s shooting control at Law enforcement at every level, with federal help, is properly tasked to keep all firearms out of the hands of convicted felons and dangerous mental patients. Anything that can be done to speed up background checks, make them more careful, intelligent, thorough, and widely enforced, will be efforts well spent. A recent headline here in California reveals that thousands of firearms are in the hands of known individuals whose possession is unlawful because they have disqualifying criminal records.  Yet I’m not reading about massive sweeps. Instead, I still see the grand gestures, like gun buyback programs from non-criminals. These are a diversion.

Copyright © 2013 by Jay B Gaskill

Author contact:







A recent BBC article on Britain’s sick economy (growth-stalled, employment stagnant, mired in public debt, much as ours is) proposed a number of ‘crazy’ solutions.

Each proposal is seriously entertained by a clique of economists.  In the end, every one of these schemes amounts to a version of the same solution: aggressive, forced stimulus of the aggregate demand for goods and services by using some mix of debt repudiation, currency debasement, deliberate inflation and the threatened destruction of saved assets.

Collectively these government-forced changes in our economic arrangements would be intended to drive ‘hoarded’ private resources back in to the active investment pool without much concern for whether the investments would actually generate sustainable commerce.

This is a valuable piece, provided you are sane and still retain a bit of critical intelligence.

I will link the full piece below.  But here are some of the gems, starting with this teaser:

“… [C]ould there be a yet-to-be-tried miracle cure for our economic malaise?

At the heart of our malaise is a massive overhang of debt left over from the property boom years, particularly the mortgages taken on by young families, commercial landlords and small businesses. That debt built up in the decades before 2008, reaching five times our yearly economic output, and has not gone away… It has become an albatross around our collective necks. Those with the debts – not least the government – are reining in their spending in order to get their finances back under control. These are the zombie businesses and households who are struggling to stay afloat.”


One option … would mean that if the economy does not grow fast enough, the Bank would be obliged to encourage faster price rises instead. …But promising more inflation is not enough, the promise has to be credible. If people and businesses are to be convinced to go out and spend more, they have to truly believe that the Bank will do what it says on its tin. The problem is that old habits die hard. After the bruising experiences of the 1970s, many central bankers throughout the Western world still fret about losing their straight-laced, inflation-fighting credentials. This … is even stronger in Germany, where the hyper-inflation of the 1920s is linked in …to the rise of Hitler. …[S]o ingrained is the aversion to inflation, that some economists argue that the credibility of central bankers is the problem. The outspoken left-wing economist Paul Krugman has called for the US Federal Reserve to “credibly promise to be irresponsible” – to say that it will continue stoking inflation even after the US economy has already recovered. According to Prof Krugman, that is the only way that the central bank could convince everyone that they really ought to go out and start spending their money right now before prices start rising. Others have gone further, saying the Fed chairman Ben Bernanke should don a Hawaiian shirt and smoke a bong, to make the crazy promise more credible.


“Now that the debts have got out of hand, perhaps it is a good thing that traditional monetary policy has reached its natural limit. The Bank of England could just give money away….[but] in the UK the Bank of England lacks the authority to give money away. That is the Treasury’s prerogative. So the option of “helicopter money” would involve a collaboration between the two. In theory, there is no debt created…helicopter money also has plenty of opponents…The policy is also known as currency debasement, and lay behind the many hyper-inflations in history, including those of Weimar Germany and Zimbabwe….When investors lose confidence in a currency, they can lose it very quickly. The pound had one brief scare in late 2008, when its value plummeted to almost one euro.”


“Just get rid of the debt. For example, the Treasury could write a cheque for, say, £10,000 in newly-minted helicopter money to everyone in the country, on the condition that the cheque must be used to pay off existing debts.”


“Another concern is the precedent that the jubilee would set – the so-called moral hazard risk. If people get it in to their heads that if they run up too much debt, the government will come running to their rescue, what is to stop them running up even more debt in the future? Is it possible that people might unlearn the lesson of the past five years – that we cannot go on borrowing forever?


Whenever the term ‘moral hazard’ creeps into the conversation, the hair on the back of my neck starts to tingle.  I can imagine something like the following exchange taking place early in Hitler’s Germany between two naïve future targets of the regime.

“I heard that they are euthanizing severely retarded children, now.”

“I heard that too.  Very advanced thinking, given our limited resources, but maybe a moral hazard?”

“No so much.”

One uses the term ‘moral hazard’ to conceal the fact that a significant moral boundary has already been crossed, but the issue is being discussed as an engineering problem in containment, as in “that’s a harmless leak in the dam, don’t you think?”  Sort of like one of my former clients, the habitual thief, who would say, on being caught again, “I did one too many yesterday,” or “Maybe I should cut down on my burglaries for a while,” or my personal favorite, “Guess what? Another arrest happened to me last week.”

The destruction of the value of retained, earned assets in the form of savings is already programmed to take place, especially in the case where the stashed money was never banked, because of the front-loaded inflationary pressures of “QE”.  The US version of QE is helicopter money, used to replace debt with fiat (i.e., unearned) money. A trillion here, a trillion year (to paraphrase the late Everett Dirksen[1]), and “pretty soon you are talking real money”.  When policies that sacrifice honestly earned savings in order to coerce investments are called a mere ‘moral hazard’, this means a moral lapse affecting someone else; but when it affects you, it becomes an actionable moral offense.

The operation of the real economy, the one that generates earned money from producing and selling goods and services that people actually want at prices that make the enterprise economically worthwhile for the producers, seems to be a mystery to the political class and their economic advisors of the moment.  A healthy commercial economy depends on transparency, predictability and trust.  The run on the Cypress banks is a perfect example of what takes place when that trust breaks down.  Entire countries have disintegrated over much the same sort of “moral hazard” and their governments were replaced with bumbling, malevolent authoritarian ones.

The private investment money that remains parked just out of reach is not being controlled by some imbecilic pawns beholden to the political class.  Authentic, sustained economic growth requires risk taking by intelligent investors who can reasonably expect to be able to keep the rewards of their efforts if the risk pays off.  And in the larger world economy, these risk takers (call them members on the entrepeneuriate) still have choices of timing, location, legal, financial and political climate…and location.  Threaten them with confiscation and they will disappear along with their resources, ideas, innovations and managers.  In the current era, Atlas does not shrug, Atlas relocates.

The US commercial economy is laboring under a heavy political load of permissions and restrictions, unrelated to basic health and safety concerns, a load that in certain vital economic sectors it seems the businesses might as well be dealing with corrupt third world functionaries.  We do have a rational, effective and workable path out of this: Lift the political load on commerce until the recovery takes hold; then do not re-impose it.

Our recovery d depends on political humility, the realization that the political management of investments or any other aspect of the commercial economy (other than those limited measures needed to provide a stable legal and financial environment that promotes trust and transparency) is outside the competence of the political class.

From conservatives, we hear vague references to deregulation.  From the liberals we hear that business must be made “more socially responsible.”  No one seems to really get it.

Our situation cries out for a frank and open acknowledgment that the political load on the private economy (all those petty permits, permissions, layers of bureaucrats impeding rather than facilitating development, the rules and restrictions that are imposed without any rational relationship to the public good or the needs of the business) are a velvet covered jackboot pressing on the nation’s carotid artery.  You can’t get much blood out of a corpse…or for long.

It is within the legislative and constitutional power of the Congress and the president (working together!) to enact a complete reversal of the growth-impeding network of federal regulations of commerce.   This could be implemented on an emergency basis as a blanket repeal of all federal regulations in place from a given date (say the start of the last federal fiscal year of Bill Clinton’s second term), with a 90 day review period during which a commission would decide to exempt given regulations from repeal for compelling reasons of public health and safety.  Thereafter, no new regulation could be imposed without an “economic growth impact report” in the style of the currently required environmental review.  Any regulatory measure with a possible negative economic impact could not go into effect without congressional approval.  States would be encouraged, but not required to conduct a similar process.

Before you reject this reasonable idea out of hand, consider the nature of the “crazy” alternatives listed by the BBC, including the Helicopter money idea; and Paul Krugman’s startlingly frank advocacy of irresponsibility: That the government “has to say that it will continue stoking inflation even after the US economy has already recovered. According to Prof Krugman, that is the only way that the central bank could convince everyone that they really ought to go out and start spending their money right now before prices start rising.”

No April Fools here.


Copyright © 2013 by Jay B Gaskill, Attorney at Law

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BBC NEWS > 11 March 2013 ‘Budget 2013: Radical options for the UK economy’ By Laurence Knight Business reporter

[1] The legendary Congressman and Senator from Illinois (1896-1969) reportedly quipped on the Johnny Carson television show that, “A billion here, a billion there, pretty soon, you’re talking real money.”