September 9, 2016

Today’s top stories:

  • Libertarians cringe as Gary Johnson asks, “What is Aleppo?” in cable news interview
  • Uproar about NBC’s presidential forum
  • Another sign of fragile financial markets as ECB announces no incremental stimulus


Libertarians cringe as Gary Johnson asks, “What is Aleppo?” in cable news interview

It’s already a rough election season for libertarians, and yesterday, it got a bit worse. In an interview on MSNBC, Libertarian Party Presidential Nominee Gary Johnson asked “What is Aleppo?” in response to a specific question about the Syrian conflict.

If you’re not sure what Aleppo is either, there’s no need to be ashamed. Even the New York Times didn’t appear too certain, when it tried (and failed, twice) to get the facts right in its own coverage of the story. Aleppo is (or at least, was) the largest city in Syria by population, even though Damascus is the capital. And now, it’s also one of the key fault lines in the Syrian conflict, as government forces battle rebel factions in the area. Notably, those rebel factions are dominated by the most radical elements, including the recently, but unconvincingly, rebranded Al Qaeda affiliate. This is a bit outside ISIS’s reach, so the US is on the rebels’ side in this particular conflict in Syria.

Given the city’s importance in the Syrian conflict, and the US government’s insistence on being involved in the war, it’s something a presidential candidate should know. This is especially true for a libertarian candidate who opposes US intervention. Broadly speaking, the US media and both mainstream parties basically endorse US military intervention, in some form or other, at this point in time. Thus, anyone who questions this narrative, as Gary does, needs to have a firm grasp of the details to debunk the case for war effectively. Otherwise, the entire critique can be dismissed as a product of ignorance–something like “Gary just opposes the war because he doesn’t know anything about Syria.” That isn’t true in reality, but unfortunately, that is likely to be how this episode will go down politically.

Fortunately, there is a kind of silver lining in this story. As the first presidential debate draws near, it seems increasingly unlikely that Johnson will meet the 15% support threshold required to make the stage. His unfortunate propensity to make headline-grabbing gaffes like this one suggests this might be for the best.

For more on this, we recommend TJ Brown’s piece at the Foundation for Economic Education. In it, Brown explains why Johnson’s approach to Syria would be far better than Trump’s or Clinton’s and suggests Syria and Aleppo might well be better off if US leaders knew less about them.

Uproar at NBC’s Commander-in-Chief Forum

Another furor in the media this week relates to Matt Lauer’s moderation of the NBC Commander-in-Chief Forum. The forum featured both Donald Trump and Hillary Clinton, in separate 30-minute segments.

Most of the outrage suggests that Lauer was too soft on Donald Trump and overly harsh on Hillary Clinton. In reality, however, it seems to have just followed the usual style of mainstream presidential debates and forums. Candidates get asked less about policy and more about whatever personal scandal is in the headlines of late. And when the candidates attempt to rewrite the facts in their answer, as they inevitably will, they don’t get corrected. The Intercept offers a solid analysis of the candidates’ and moderator’s missteps on the evening if you’re interested. And The Intercept is a reliable source on the matter, as they seem to despise both candidates with roughly equal fervor–which is exactly how it should be.

The real problem of the matter is less about the moderator, and more about the format. This week’s forum was a unique format, but it suffers from the same key flaw as the debates. In particular, the candidates aren’t routinely asked to answer the same questions. This is problematic because it prevents viewers from comparing the candidates directly, and it also opens the event up to questions of bias.

A much better solution would be to establish questions in advance and allow each candidate to answer them in a given amount of time. This enables side-by-side comparisons, and will tend to focus the discussion on actual policy–since policy questions are most likely to be applicable to both candidates. It also prevents the existence and appearance of any bias. If the moderator’s job was restricted to keeping time and reading questions, their own knowledge and political preferences no longer matter. And if the candidates need fact-checking–why not let rely on them fact-checking each other? It seems to me that is the point of a debate…

If you’re interested in seeing what this might look like, look no further than the Libertarian Party debate in Orlando earlier this year. That affair could have been run a bit more smoothly, but the quality of the exchange was still a cut above what we’re used to in regular presidential debates.

Another sign of fragile financial markets

The European Central Bank held interest rates at historic lows and announced no changes to its current stimulus program on Thursday. On the face, this would seem like good news for the market. After all, the ECB’s existing program involves creating some $1.74 trillion euros (1.96 trillion USD) in total and injecting it directly into financial markets by purchasing bonds. This major increase in demand pushes up bond prices, which also tends to increase stock prices.

So naturally, if you hold assets in the financial markets, you stand to benefit from this program. It hasn’t had much effect on the actual economy–which is its stated purpose–but one would think it could, at least, keep propping up the asset bubble.

The market wasn’t so sure, however, as stocks on the DAX index and bonds in Europe fell. All three stock indices in the US were also down on the day.

Of course, it’s only one day, but it is another sign that we are facing a financial asset bubble. In short, it is no longer enough for the central bank to simply continue a massive stimulus program to keep up investor spirits. No, now they must be accelerating the money creation process as well. In a healthy market, this behavior makes no sense. But in the current asset bubble, deep down everyone knows that prices would not be this high without manipulation by central banks. In this environment, the slightest hint that said manipulation might eventually end, even months down the road, is cause for concern.

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