How Sweet It Is

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Recently by Gary North: Facebook, Twitter, and the ArabRevolutions

     

Events in January caught the world’s experts in diplomacy and foreign policy completely flat-footed. They did not forecast the fall of the Tunisian dictator of 23 years. They did not forecast the riots in Egypt.

Tunisia’s revolution began on December 17, when a Tunisian set fire to himself as a political protest. He died on January 4. That toppled the first domino. The dominoes are still falling.

This was made possible by the new technologies of telecommunications. Facebook and Twitter were part of this. I have explained this in detail here.

Also involved was the Middle East’s satellite TV network, Al Jazeera. The images of thousands of people taking to the streets informed others that the time was at long last ripe for public protests. The size of the crowds lured thousands more protesters into the streets.

The speed with which this took place indicates that the Middle East has entered a new political era. The authorities were unable to respond fast enough to this new digital technology. Messages went out so fast, and multiplied through the social networks so fast, that the politicians could not respond fast enough. The genie was out of the bottle.

BLIND MEN IN DAVOS

Meanwhile, the world’s Insiders were meeting at their annual confab in Davos, Switzerland: the World Economic Forum. They were congratulating each other that the economic recovery is on track. Yet. While their meeting was taking place, Arab nations were either in riot phase or were approaching it.

These experts did not see this coming. They were congratulating each other for the results of having successfully looted the West’s taxpayers with bailouts and fiat central bank money expansion, also saving their largest banks and large insurance firms, not to mention the solvency of Greece and Ireland’s governments. Then . . . ka-pow! The Middle East was in simultaneous turmoil on a scale never seen before.

The meeting began on January 25. It ended on January 30. In the 50-page agenda, only on page 46 is there a session listed devoted to Tunisia. That was on Friday the 28th. By then, Egypt was in a full-scale revolution. Tunisia: Tipping Point or Tsunami?

The political upheaval in Tunisia – the most urbanized and educated country in the Maghreb – is widely reported as a harbinger of change for the Middle East and North Africa.

What are the implications of the “Jasmine Revolution” and what will be the broader impact on the region?

It is clear that the Tunisia session was added late in the session-planning process. The experts had to come up with something. So, they put a question in the title. But note the options: tipping point or tsunami. Both imply fundamental change.

The experts who drew up the agenda filled it with the standard control slogans: environmental sustainability, climate change, etc., etc. It was 13 months after the release of purloined documents from global-warming central: the Climatic Research Unit of East Anglia. By late November 2009 decades of propaganda had blown up. Within weeks, public opinion turned against the entire campaign.

Then came the long-planned December Copenhagen UN meeting that was to produce a new treaty on carbon emissions. The meeting was a flop. The major leaders who had been scheduled to speak all had to visit their sick mothers. The few name-brand leaders who showed up spoke briefly, issued some joint platitudes, and headed home. The leaks had sunk the global-warming movement.

But the Insiders who run the Davos meeting will not let go. They still want to control the world’s economies, and centralized bureaucratic controls on emissions by international organizations was the obvious way to do this. They want to reduce oil and coal use – the heart of the modern world’s productivity – one way or another. On page 22, we read this.

16.00–17.00

low-carbon development

Leapfrogging to Low-carbon Growth

How can emerging economies embark on a low-carbon growth path and become low-carbon role models?

The following dimensions will be addressed:

– Meeting and reshaping consumer expectations – Changing industry behaviour – Financing national plans All that in a one-hour session. What geniuses these people think they are!

All the while, the Egyptian government was in riot-control mode.

If these people were as smart as they think they are, they would have seen this coming. But no one saw it coming, which is why it came.

A FLOOD OF LEAKS

The leak of the emails sent by the propagandists at the Climatic Research Unit revealed to the world that the people at the top had misused their positions to suppress rival views. In one shot, they were discredited forever. The light shone in, and the reading public abandoned them. Nobody wanted to be associated with them. The hockey stick rhetorical image that they had used to beat the backsides of their opponents was used now to crush their skulls.

As the chief scientific representatives of the global-warming movement, they had exercised great power over the centralized mainstream media. But that sank the movement within weeks of the day that the emails got posted. What had seemed like a great advantage – centralized control over the spread of official ideas – became a disadvantage as soon as the controlling agency was exposed publicly as just another group of academically scheming self-promoters.

WikiLeaks has taken this to a new level. Now a disgruntled former WikiLeaks’ employee is branching out on his own. He has started a new organization, OpenLeaks. This is the kind of competition I love to see. A Reuters story describes what is about to happen. “All across Europe, from Brussels to the Balkans, a new generation of WikiLeaks-style websites is sprouting.”

The proliferation of websites to encourage, facilitate and shelter leakers is so anarchic that two aspiring anti-corporate leak sites are both claiming rights to the rubric “GreenLeaks” and muttering about legal consequences if the other side doesn’t back down. As the number of these sites increases, it will become more difficult for governments to contain the leaks. The desire of leakers to become important overnight will grow. “Hey, I can beat that!” Other WikiLeaks copycats, spinoffs and wannabes are germinating: activists say they have learned of recent launches of leak-accepting websites focused on specialized topics or regions – from Russia and the European Union bureaucracy to international trade and the pharmaceutical industry. Will the media cooperate? To refuse is to get left behind. Think of the media as the source of funding of the paparazzi. Major news organizations are also moving to establish web-based mechanisms for receiving leaks directly, such as electronic “drop boxes” which would enable leakers to feed the media outlets directly, cutting out middlemen like Assange. Even the New York Times is thinking about getting involved. The stodgy gray lady does not want to be left out in the cold. She wants to be hip.

Meanwhile, one prominent media outlet which has had a productive, though tempestuous relationship with Assange and the original WikiLeaks, is brainstorming whether it might be possible to cut out the middleman entirely and establish a secure channel for leakers to feed stuff to it directly. The New York Times, which is publishing an e-book on its dealings with WikiLeaks and also has posted a lengthy account by Executive Editor Bill Keller of his turbulent dealings with Assange, is examining whether it could set up its own Internet conduit for secure leaking.

This is going to spread. The digital genie is out of the bottle. Governments will have to spend more on leak control than ever before. The Web is creating demand for these scandals. Scandal sells.

I cannot stop thinking on Wilford Brimley’s lines in Absence of Malice (1981). As a good old boy Assistant U.S. Attorney General, he confronts a local prosecutor who is out of control. He asks: What has been going on? The local prosecutor says that his organization had a leak. Brimley replies:

You had a leak? You call what’s goin’ on around here a leak? Boy, the last time there was a leak like this, Noah built hisself a boat.

CBS News’ 60 Minutes on January 30 ran as its lead report an interview of WikiLeak’s Julian Assange. The interviewer, Steve Kroft, was outgunned from the first question. Assange is a very cool character. He has thought through what he is doing. He handled Kroft with ease. You can read the interview here. The video is even better.

The media are trapped. Individual outlets will either get bypassed by cooperating media all over the world, or else they must become adversaries of the Federal government. They are caught on the horns of a great dilemma.

THE BEST-LAID PLANS

All of the decades of media planning by the Insiders from the post–World War I era until today has been an attempt to create a universe of discourse that stays within the parameters set by the Insiders. They have bought up the media outlets. All of this investment is now unraveling. The Web is gutting it.

The mainstream media will be gone in a decade. They are only marginally profitable today.

The symbol of this train wreck is Warren Buffett. His outfit bought newspapers. It owns a chunk of the Washington Post. He recently resigned from the board of the Post. But he assured people that he will never sell shares of the Post. A columnist on the Motley Fool had some comments on this statement. He quotes Buffett from two years ago. Twenty to 40 years ago, [newspapers] were essential to customers and advertisers. They had pricing power, but [it] essentiality has eroded. Erosion accelerated dramatically, and it won’t end based on anything on the horizon. We do not see anything to reverse it. They are essential to advertisers only as long as they’re essential to readers. Ten years ago, the head of The Buffalo News said that on an economic basis, Berkshire should sell The Buffalo News. We could have sold the business for hundreds of millions. Not so today. The writer went on to say that Buffett has always bought companies on this basis: he will not break them up. He buys to hold. I can see the logic of this. But that logic has trapped him. He owns big chunks of sinking ships made of newsprint.

The strategy of the Insiders has always been to control the flow of information. Because of the cost of entering the various fields, those without a lot of capital could not get in. Mergers and acquisitions went on for 50 years until the Insiders controlled the whole shebang.

Now that strategy is dead in the water. It is self-defeating. The people who are committed ideologically are tied in to their own sources. These sources are free. They are not sitting on top of expensive real estate. They are not unionized. They are lean and mean.

Mainstream media are saddled with debt for real estate. They can sell the real estate to buy time, just as Pan American Airways sold the PanAm building. The company still went bust in an era of de-regulation. It should have sold the airplanes and routes at a loss and kept the real estate.

The Insiders bought the papers and TV networks to control the terms of public debate. They are now faced with competition. It is the most threatening form of competition: competition for people’s trust and allegiance. Both are fading fast for the mainstream media. The social networks are undermining both.

As trust and allegiance continue to fade, people will narrow their focus of trust and allegiance. They will no longer give trust and allegiance to the conglomerates and the government. This means decentralization. Decentralization is the single greatest threat to the Establishment.

CONCLUSION

When you think “Establishment,” think Hosni Mubarak. He held onto power for almost 30 years. Then, in one week, it slipped away. The ex-ruler in Tunisia held on for 23 years. Castro hangs on because there is no Internet in Cuba. But Cuba’s liberation will arrive.

Think of Mohammar Gadaffi. WikiLeaks got him. It posted cables from diplomats about his blonde companion. He also uses Botox. These were minor revelations, but they embarrassed him. Then the tyrant next door was run out. He railed against WikiLeaks and the rebellion, but to no avail. He had a free ride ever since 1969. It looks like the ride will no longer be free.

The spread of digital technology threatens the world’s Establishments. The final week of January 2011 made this clear to Mubarak. He will not be the last to learn this lesson.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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