2015 August 29 Saturday
68% Of Californians Favor Incentive For Faster Robot Development

While a Washington state court rules in favor of faster robot deployment at SeaTac a much more impactful way to speed up robot development is taking shape in California. This is great because Californians have a ballot initiative system that gives them a very effective way to act on their preference:

Sixty-eight percent of California voters said they support the idea of a $15 minimum wage, according to a Field Poll released Thursday.

That's great news for robot start-ups. Venture capitalists hear the call! You can fund companies that can supply the big coming increase in demand for robots as food prep workers, janitors, security guards, and as workers in many other occupations.

The resulting mass unemployment (especially among the least skilled and least bright) will drive migration that will fall heavily on Republican states governed by cuckservatives who refuse to raise the minimum wage. Those states won't stay Republican of course.

On the bright side, quality of food at fast food places will improve because the robots will be able to do more complex and precise food prep. Also, the influx of low skilled immigrants will stop, at least in the states with $15 per hour minimum wage. The big drop in demand for low skilled workers will see to that.

The 21st century is going to be a very different place than the 20th century. Celebrate the upsides of what's in store.

Update: The national Democratic Party has come out for the biggest incentive for robotics development so far: $15 national minimum wage as a plank in their platform. Wow, that'd be great news for robot developers and software developers in general. Way more money would flow into autonomous vehicles, warehouse automation, fast food restaurant complete automation, security robots, retail store automation, automated delivery UAVs, automated hair cutters, automated nail polishers. What am I leaving out? Much better automated vacuums and floor cleaners. Automated home cooking machines. Autonomous lawn mowers and hedge clippers. What else?

We live in exciting times. The Democrats are bold in their efforts to speed up technological development and cut low skilled immigration. The Republicans (with the exception of Donald Trump) are total wimps in comparison.

By Randall Parker 2015 August 29 09:39 AM 
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2015 August 19 Wednesday
Big Shake-Out Coming: Most Colleges Have Operating Losses

Most colleges are running at a loss.

Moody’s found that expenses are outpacing revenue at 60 percent of the schools it tracks even as many try to slash their way to balanced budgets, according to Fitzgerald.

The shift to online education will cut into smaller colleges especially.

What I'd do if I was operating a small college: Use online courses for lectures and allow students to take a large number of courses and give them tests and credit in the small college. Offer more classes and even more degrees by leaning on online resources to support an expansion of offerings.

A small college that sees itself as more of a tutoring, testing, and credentialing center could enable students to move thru courses at an accelerated pace and to fill in gaps between traditional semesters and trimesters with useful learning toward credits and degrees.

Some small colleges could group together to enable specialized faculty to teach courses to students at all of their campuses. Make a virtual university as a way to offer more of the advantages of the big U while retaining the advantages of a small college.

Update: Mind you, most small colleges are toast. Road kill. The walking dead at this point. But some could avoid that fate by embracing online and video recorded lectures, automated testing systems, and arranged tutoring sessions. A good college would have administrators skilled at organizing small fast paced courses, impromptu tutoring sessions, and fast paths thru for people who want to focus and get some skills in a hurry.

By Randall Parker 2015 August 19 08:30 PM 
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2015 August 18 Tuesday
Anatoly Karlin: Procrastinators Should Not Trust Future Selves

Anyone irresponsible enough to procrastinate today can't be trusted to get it together in the future.

When you are procrastinating, you are essentially trusting your future self to do the work that your present self does not want to. But if you make a habit of procrastination, of being unreliable, would it then be rational of your present self to depend on your (presumably equally fallible and unreliable) future self to do that what your present self is too lazy and slothful to do today? It’s grossly irrational and irresponsible!

What do you think of this argument? To put it another way: what's your rationalization for why you can procrastinate and dismiss Karlin's argument?

One of the ways I make myself more effective is to deny myself things I want until I make some milestone. This can be a small milestone and a small reward. It helps.

By Randall Parker 2015 August 18 08:17 PM 
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2015 August 15 Saturday
ISIS Sex Slaves In 2015

The highest slave prices in Islamic State territory are for kids aged 1 to 9. I was expecting a later price peak. What's with that? I would expect the Jihadists would most want teen girls to rape. Am I missing something?

The potential to rape infidel women is a powerful recruiting tool for ISIS. See: ISIS Enshrines A Theology Of Rape. This one is disgusting too: Hellish ordeal of the 11-year-old ISIS sex slave used as a human shield: Terrified girl is strapped to bonnet of Humvee and driven into battle to protect her captor from gunfire. ISIS has collected together a bunch of soldiers who deserve to die.

Islamic State leader Abu Bakr al-Baghdadi kept American aid worker Kayla Mueller as a sex slave and raped her repeatedly. Was he thrilled to be raping an American in particular?

If the US government hadn't worked to destabilize the Middle East (supposedly in the name of democracy and freedom) the Middle East would have far fewer slaves and far more living Kurds, Yezidis, Christians and others. US intervention in the Middle East has been a disaster. To reduce the damage our foreign policy has caused I would heavily arm the Yezidis, Kurds, Christians and some other minority factions. They are going to continue to get shafted as long as they do not have enough military power.

We need much more realism about human nature when setting foreign policy just like we need much more realism about human nature when setting domestic policy.

By Randall Parker 2015 August 15 10:39 AM 
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2015 August 06 Thursday
Next Recession To Cause Chain Of Sovereign Defaults?

Jeremy Grantham thinks a big market downturn in 2016 could trigger a chain of defaults on sovereign debt.

I've made similar comments recently:

Check out this chart of sovereign debt levels of OECD countries from 2008 to 2015. Note the 2008 and 2015 amounts. Add a new crisis. Those countries will enter the next recession starting with much worse debt level, slower GDP growth rates, even more aged populations. A lot of Euro zone countries would default if we had a repeat of 2008. Add 20-30-40% of GDP to each country's sovereign debt load. Even a normal recession will push Italy, Portugal, and Ireland close to the Greece zone.

The European countries are at most risk of default because they gave up their own currencies, have rapidly aging populations, anemic economies, and social welfare states. They are also importing bigger lower classes. The European social welfare state is failing.

Going into the last recession it was possible to drop interest rates to provide some economic stimulus. Central banks can't do that next time around because interest rates are already low. I hope we can avoid the next financial panic for several years because governments are financially in bad shape.

By Randall Parker 2015 August 06 07:13 PM 
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2015 August 03 Monday
CalTech 3 Std Dev Students Win Nobel Prize Contest

Kids out at the 3rd standard deviation in IQ go on to do great things.

He reports that the school with the most Nobel + Fields + Turing prizes, normalized to size of (undergraduate) alumni population, is Caltech, which leads both Harvard and MIT (the next highest ranked schools) by a factor of 3 or 4. Caltech beats Michigan by a factor of ~50, and Ohio State (typical of good public flagships) by a factor of ~500!

This result illustrates why offspring genetic engineering will have such a huge impact on human society. If even a tenth of the people who would otherwise have 120-130 IQ kids can instead have 150 IQ kids our ranks of geniuses will grow by multiples.

By Randall Parker 2015 August 03 09:10 PM 
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2015 August 02 Sunday
Grade School Teachers Discriminate Against Boys

Boys get lower grades for the same level of proficiency. They have to work harder and make more money as adults to compensate.

Separate schools for boys and girls would help. The boys would only get rated against each other. This is the sort of thing you have to do to compensate for systematic sexism.

By Randall Parker 2015 August 02 01:48 PM 
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Social Security Trust Fund Depletion Rate Has Sped Up

In 2009 the Social Security Trust Fund estimated it would have to cut benefits by 2041. In 2014 the estimated date for benefit cut was pulled in to 2033 with benefits being cut almost a quarter. Since the US economy continues to have slow growth I think even 2033 is optimistic.

I think slow economic growth is going to continue. This is why the trust fund exhaustion date is getting pulled in. James Pethokoukis reports: Lost Decade? The US is about to have its first 10-year period since World War II without at least one year of 3% growth.

The average skill level of the American workforce is declining. America's very large numbers of lower class immigrants aren't accumulating skills at the levels of old stock Americans, aren't paying as much in taxes, and getting more in welfare benefits. They too will retire but having paid much less in than natives. This does not end well.

By Randall Parker 2015 August 02 01:48 PM 
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Uber Under Regulatory Assault In California

Regulators care less about outcomes than process.

Notably, complaints about Uber typically aren’t coming from customers, and even among the firm’s drivers, crusades like Berwick’s are rare. In fact, what’s striking about the various campaigns against ride-sharing is their reliance on paperwork and credentialing instead of outcomes. The CPUC, for example, doesn’t assert that Uber is harming actual handicapped people, only that the company has failed to produce paperwork that proves the absence of harm. Similarly, the cab companies’ speech-related lawsuit—which focuses on safety claims made in Uber ads—does not claim that traditional taxis are safer than Uber rides. The plaintiffs assert instead that cab drivers are subjected to more paperwork than Uber drivers.

Then cab drivers should be subjected to less paperwork and regulation.

Government puts its requirements above the revealed preferences of customers.

The anti-Uber campaign’s reluctance to assess outcomes is understandable, given the public’s strong revealed preference for the company. Interest groups can complain, but drivers and customers continue to vote for Uber with their time and money. In a free country or a sane state, a clear market decision in favor of a business would be the end of the discussion. But Uber is increasingly under pressure to furnish evidence that its model works in theory as well as in practice.

Will the choking effect of the regulatory Leviathan continue to rise in the United States? I think the forces arrayed against it are weaker than the Leviathan (with very big banks as an obvious exception).

I do not see how to prevent the decline of the West. The continued progress of Moore's Law has allowed productivity increases in many areas. But the Moore's Law boosts in productivity are partially outweighed by the growth in the Leviathan's interference.

Since the Republican Party is in the process of becoming road kill to immigration (with a great deal of help from Republican elites) we can't hope for a conservative backlash against the regulatory state. While Uber is visible and wealthy enough to do battle against its regulator enemies a great many other companies are never founded because regulators make their founding impossible. We lose a great deal of opportunity because of this.

By Randall Parker 2015 August 02 11:30 AM 
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2015 July 23 Thursday
High Min Wage To Help Bring Haute Cuisine To The Masses

University of California is going to require $15 per hour minimum wage for employees and contractors. New York State is going to probably phase in $15 per hour minimum wage for fast food workers.

This all bodes well for robotics companies. I love to see the cities (SF, LA, Seattle), states, companies, and even universities creating an economic environment that will simultaneously cut the demand for low skilled immigrant labor and also speed up the development of robots, autonomous vehicles, and automated ordering and payment systems. Great news. Progessives finally embrace policies that will make the world a better place - at least for those smart enough to still be employed.

But there is a problem with high minimum wage: It gets in the way of fully qualifying for welfare benefits. In Seattle some $15 per hour workers are asking for fewer hours from their bosses in order to keep welfare state benefits. Hey, that's bad. We need to require 50 hour work weeks for those making $15 per hour. Earn enough to cut welfare benefits even further.

I'm really excited by the prospects for totally automated fast food restaurants. In the long run they'll lower costs as robotics technology matures and prices fall. Plus, robots will be able to make a larger assortment of better tasting food. Robotic chefs will exceed the best human chefs in ability while working for a fraction of the cost and more rapidly to boot. Haute cuisine at your local strip mall. What's not to love?

By Randall Parker 2015 July 23 08:58 PM 
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Progressives Have Made The Past Into The West's Original Sin

Frank Furedi notices something important.

Once upon a time, the historical past was an object of veneration and glorification. A nation’s past was often represented as a heroic age, and public figures used to invoke the Good Old Days. But today, the past, national or otherwise, has come to serve a very different purpose. It is invariably presented as a story shaped by malevolence, oppression, exploitation and abuse. It forms a past that demands condemnation, a past of which we are meant to be ashamed. Such sentiments are not confined to a small number of sensation-seeking historians. Popular culture is now dominated by a sense of the past as the Bad Old Days.

How better to replace traditions, values, laws, and institutions than to demonize them as part of an evil past.

The heroic view of the past was much more inspiring for me as a kid. Edison, Ford, Lewis & Clark, George Washington, and a great many others made me think of myself as part of a great civilization and gave me something to live up to. That's not what progressives teach today.

By Randall Parker 2015 July 23 08:13 PM 
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2015 July 18 Saturday
Obama Doing Massive Data Collection For Disparate Impact Enforcement

See Paul Sperry's piece: Obama collecting personal data for a secret race database.

Given Obama's views you will not be surprised to learn that the purpose is to more aggressively pursue disparate impact cases. Never mind that disparate impact can hurt those who it is intended to help or that it makes society less meritocratic.

I see this report against a backdrop of decline in self employment and a lower rate of business formation and growth in average company size. If the US government undermines meritocratic hiring then that might give a push in the direction of more people working in smaller companies. But if the economies of scale are growing strongly for other reasons then less meritocratic hiring might just make companies less efficient. They might respond by doing more hiring abroad.

If disparate impact enforcement forces banks to lend more money at lower rates to groups that default more often we can expect higher borrowing costs and maybe a reduction in consumer credit. That might be a net benefit. I think our current levels of consumer debt are unhealthy and the people borrowing a lot are hurting their own prospects. We'd be better off if far fewer had credit cards.

What I wonder: will the tech elite that is now one of the most powerful forces in the Democratic Party get sufficiently incensed at the costs of disparate impact to politically revolt against the doctrine and seek to get courts to restrict its use? They'd need to first change the mix of people working as reporters and commentators to bring about a big shift in reporting on this issue. They could do it. Michael Bloomberg, Jeff Bezos, and other big money figures have control over big pieces of the press.

By Randall Parker 2015 July 18 07:22 PM 
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2015 July 15 Wednesday
Productivity 70% Higher In Germany Than Greece

No need to work long hours when you get a lot done per hour.

Last year, German employees worked fewer hours than all their peers in the OECD’s 34 member states, although productivity as measured by GDP per hour worked was some 70% higher in Germany than in Greece.

Why are they in the same currency union? Here's an argument that German finance minister Dr. Wolfgang Schäuble and his allies intend to boot out some Euro members and shrink the size of the Euro zone to a level that would allow a close federal union of the remaining members. That seems plausible. Why? Because Portugal and Italy both have sovereign debt over 130% of GDP and Barry Eichengreen points out that rarely do governments run sustained large enough budget surpluses to pay down debts that large.

Greece is already in an economic depression on par with the US Great Depression in depth and the new deal with the Eurogroup is going to push the Greek economy deeper into a recession inside this depression (they were flat for a while). Their debt is going to go up. They won't meet the financial goals they have to meet to continue getting bail-out rounds. Grexit is delayed, not avoided.

What's needed: development of software and printing presses that would let Greece, Italy, Portugal, and likely a few other Euro states to go back to their own currency very rapidly. Each of these ejections from the Euro will likely be chaotic. They ought to be organized and fast so that economies can restart and possible grow.

By Randall Parker 2015 July 15 04:28 PM 
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2015 July 14 Tuesday
Split In Democratic Party Between Old School And Tech Democrats

Very insightful article by Greg Ferenstein about the developing split between the highly affluent tech Democrats and the old school union-supporting Democrats.. The tech Democrats are winning a lengthening list of battles and the old school Dems are losers. On some subjects rich Silicon Valley company founders are more libertarian than the average libertarian and yet on other subjects they are more interventionist than the vast majority of Republicans.

So what do tech founders want? They have a unique mix of extreme beliefs in meritocracy, competition, collectivism, and novelty-seeking (Poll)

They have a much greater faith in the power of education than is warranted. They do not appreciate just how much less smart the vast majority of the public is compared to them.

The Republicans are willingly letting themselves get wiped out by immigration. So they are not going to matter much in the future. The tech Democrats are going to become the most powerful force in politics if they aren't already. In recent years all new billionaires have come out of tech. I think Wall Street's power is going to wane though not as severely as union power or Republican rural and suburban power.

I am curious to see how the tech Democrats try to handle rising unemployment in the lower cognitive strata as the problem finally becomes too big to ignore. Mind you, the problem of unemployed less bright folks has already gotten amazingly large without getting accurately described in the mainstream media. The unemployment rate is highly misleading and yet still gets all the attention. But at some point this problem has got to get some recognition. What will the tech Dems decide to do about it?

I'm more curious than worried. I'm not a member of the elites or the tiers right below them who advise and support them. The people who I would consider as my (shrinking) faction matter less and less every day and so do our potential allies. So I see myself increasingly as an outsider in someone else's country.

By Randall Parker 2015 July 14 10:18 PM 
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How Eurogroup Set Up Greece To Fail

This Yanis Varoufakis interview about his negotiations with the Eurogroup finance ministers is very eye-opening.

We felt, the government felt, that we couldn’t discontinue the process. Look, my suggestion from the beginning was this: This is a country that has run aground, that ran aground a long time ago. … Surely we need to reform this country – we are in agreement on this. Because time is of the essence, and because during negotiations the central bank was squeezing liquidity [on Greek banks] in order pressurise us, in order to succumb, my constant proposal to the Troika was very simple: let us agree on three or four important reforms that we agree upon, like the tax system, like VAT, and let’s implement them immediately. And you relax the restrictions on liqiuidity from the ECB. You want a comprehensive agreement – let’s carry on negotiating – and in the meantime let us introduce these reforms in parliament by agreement between us and you.

And they said “No, no, no, this has to be a comprehensive review. Nothing will be implemented if you dare introduce any legislation. It will be considered unilateral action inimical to the process of reaching an agreement.” And then of course a few months later they would leak to the media that we had not reformed the country and that we were wasting time! And so… [chuckles] we were set up, in a sense, in an important sense.

Varoufakis says for months the Eurogroup refused to propose a set of requirements and instead just kept rejecting whatever the Greeks proposed. I think Tsipras was naive about the sorts of people he was dealing with.

The socialists have screwed up Greece and made it more corrupt. On top of that the Euro zone lend it too much money (the money itself strengthening government over the private sector and government-to-government aid almost always does) and then the Germans and their allies used Greece as a tool to teach the rest of the southern Europeans a lesson. Sad tale.

I suspect the Greeks are going to be forced out of the Euro zone sooner or later. They'd be better getting out sooner so that they hit bottom sooner. The longer they wait the deeper the bottom will be.

By Randall Parker 2015 July 14 09:39 PM 
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2015 July 11 Saturday
Greeks Need To Give Up On Euro, Bring Back Drachma

Matt O'Brien of the WaPo Wonkblog has written the best summary I've seen so far about how deluded the Syriza Party's leaders were in thinking they had a strong negotiating hand with Germany and the EU over debts and bailout terms: How Greece went from victory to economy-destroying defeat. As O'Brien points out, Syriza has managed to incur most of the costs of leaving the Euro and most of the costs of staying in the Euro by making incredibly bad decisions. This all comes on top of Greece already being in an economic downturn worse than US Great Depression. Not a good time to have bad government decisions. The banking shut-down has caused Greeks to respond in fear the economic distortions have intensified.

Since the northern European countries did an excellent job of insulating their banks and economies from a Greek economic meltdown, massive default, and exit from the Euro zone the Greeks had an incredibly weak negotiating hand. The long

Now that the Greek people have voted όχι (No) to German demands for much more austerity the Germans and their allies in the EU just left Greece hanging with a cut-off of money from the European Central Bank, closed banks and rapidly crumbling economy. When it became clear the Euros weren't going to soften their position the Greek Parliament caved to European demands.

But this cave-in by the Greeks looks like it is coming too late. German finance minister Wolfgang Schäuble is lobbying for Grexit, supposedly as a 5 year temporary measure. A Finnish parliamentary coalition will bring down its government if Finland supports another bail-out. It does not matter whether the Germans are being fair. It does not matter (though it is very interesting) that the Germans and their allies are being very inconsistent about what they claim EU rules allow. Another op/ed by Yanis Varoufakis, former Greek finance minister (pushed out to placate the EU) will not help at all. Give up the Euro. Move past it.

The Greeks ought to rapidly start preparing to reestablish their own currency. They could use debit cards and a modified Euro printed by their own central bank to make the switch. The Greek economy is shrinking rapidly and there is no time to waste. It is hard for businesses to function and foreign businesses literally have to fly in money to pay their workers.

Move on. Don't look back. Get your own currency back.

By Randall Parker 2015 July 11 04:43 PM 
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2015 July 08 Wednesday
World's Middle Class Make $10 To $20 Per Day

Do you have the earnings power of the world's middle income people?

The world’s middle-income population – people living on $10-20 per day – nearly doubled, increasing by 385 million from 2001 to 2011.

China has been lifting tons of people up into the middle class.

China alone accounted for more than half the additions to the global middle-income population from 2001 to 2011, with 203 million. Countries in South America and in Eastern Europe added 50 million and 39 million to the global middle class, respectively. By contrast, Africa and much of Asia, including India, have lagged behind.

The world's low income populations are increasing faster than the middle income populations.

While the global middle-income population has grown from 2001 to 2011, the largest increase is in the world’s low-income population. The share of people classified as low income ($2-10 per day) increased from 50% of the world’s population in 2001 to 56% in 2011, and the low-income population increased from 2.7 billion to 3.4 billion.

The people labeled as lower income are not the poor. I hear some of you voicing skepticism. Look, someone making $4 per day is making twice as much as the poorest poor person. Those lucky lower income people are making over $2 per day. Some are making up to almost $10 per day. If they can find a way to make more than $10 per day then they'll enjoy that Ozzie and Harriet middle class existence. By contrast, if you can find a way to survive on less than $2 per day you can you get yourself classified as really poor. Anyone making more than $2 per day and believe you are poor? Come on, get over your not-poor self. Are you really luxuriating at $5 or, heck, why not $8 per day? Then you are in fat city.

By Randall Parker 2015 July 08 08:31 PM 
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2015 July 05 Sunday
EU Lacks Asabiyyah And This Does Not End Well

Charts at fivethirtyeight.com attempt to portray Greece as the extreme economic outlier of Europe. Extreme outlier, sure. But what's notable about those charts: Southern Europe in general is in trouble. In the Euro currency zone only Ireland (barely), France, and Germany have surpassed their Q1 2007 GDP (at least of the several listed countries). Italy is still declining, especially south Italy. Scott Sumner has taken a good look at Italy as the soft underbelly of Europe.. GDP 7% below peak with the south 15% below 2007.

I think Europe is being hit by the same "winner take all" changes in the economy which are happening in America. The most skilled and productive make far more. The most affluent are leaving less successful areas making those areas even more dysfunctional. But with Europe when the most skilled go north and abroad the less skilled are left in separate countries. Membership in the EU and Euro Zone are not absolute. There is no national bank deposit insurance agency. The differences between the peoples of the various European countries are greater as are their tendencies toward responsible or irresponsible voting and government policy making. Language is a big barrier, especially for the less intellectually able. So the same economic forces tear at the fabric that holds together Europe much more than those economic forces are tearing at the fabric that holds together America (so our crisis comes much later).

The rising debt as percentage of GDP in several Euro countries (France included) spell big trouble for the Euro zone. Ed West says the EU lacks asabiyya (in Wikipedia Asabiyyah), which Arab writer Ibn Khaldun described in the 14 century as social solidarity or the will to engage in collective action. Ibn Khaldun's term has become quite popular of late in certain intellectual circles of a less ideological bent. Commenter Lady Magdalene hits the nail on the head.

This is a very long-winded way of saying "there is no Euro Demos." There is also "no EU Demos."

The EU has not inspired a European Demos. All it has done is bound together 28 Nation States in a dictatorial treaty organisation. And 19 of those Nation States were foolish enough to sign away their Sovereignty in order to join a flawed currency union.

Immigration is draining Asabiyyah in Europe and the United States. This does not end well.

By Randall Parker 2015 July 05 08:42 PM 
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