Soros’ “Open Society Foundations” Top Man in Macedonia Revealed as a Collaborator of the Communist Party Secret Police

Bess Levin's article Does George Soros Really Want The Ex-Girlfriend Who He Promised An Apartment To Go Away? inspired me to republish an article I wrote and originally published on kotle.ca on August 10, 2011. The really interesting part is that one of persons who benefit the most from the obstructions to the Lustration Law described in my article, former Minister of Police Ljubomir D Frčkoski, was found guilty for assaulting a woman on a parking lot.

The Republic of Macedonia is a country from the former Communist bloc, and a one-time member state of the federation of Yugoslavia. For the past twenty years, since its independence from Yugoslavia, Macedonia has struggled to do away with the last vestiges of the ostensibly abandoned totalitarian Regime. In 2009, under pressure from the European Union, Macedonia’s Parliament adopted a law commonly known as Lustration. This act was envisioned as a means of cleansing the public of the Communist Party Secret Police (CPSP), former officials from the ostensibly abandoned Communist system and the current Oligarchy, by opening the files of the CPSP—which include severe violations of human rights and infringements into private citizens’ lives. Further, lustration envisioned removing all proven collaborators of the CPSP from public posts and positions of influence. Shortly after the law’s adaption, the Macedonian branch of the Soros funded OSF challenged the constitutionality of the most meaningful articles of the Law and managed to block all of them. 

Presently, the breaking news from Macedonia is that the OSF-Macedonia head, Vladimir Milčin (photo below) has been revealed as a collaborator of the CPSP. He is only the third public figure to have been outed by virtue of the castrated Lutstration Law. Of the other two, one is the man who was President of the Constitutional Court when OSF-Macedonia, lead by Milčin struck down the most meaningful parts of the Law.

There is something awfully illogical, irrational, and suspicious in the notion of the rich socialist. Friedrich Engels—Karl Marx’s partner in the greatest crime the world has yet to see: the rationalization of Socialism in the invention of Communism—was the heir of a wealthy multi-national shoe company. “Filthy rich”, self-made “rotten capitalists” who espouse and work to promote socialist ideals are not uncommon in our Western society. The early Twentieth Century saw Communist supporter and exile from Tsarist Russia, Armand Hammer of “Arm and Hammer” baking soda fame, make his wild fortune while he and his father traded with Lenin’s Bolshevik Government. There are the Kennedy’s of course, as well as the likes of Michael Moore. Presently, no one stands equal to the man formerly known as György Schwartz—now George Soros. The American public is familiar with this billionaire as a philanthropist and frequent donor to the Democratic Party. Despite fact that the origin of his formidable wealth is mostly a mystery, being a Holocaust survivor, Soros is a man with a remarkable rags-to-riches life story. He has often publicly stated that his philanthropic efforts are driven from his experience as a Jew in Hungary during WWII: he wishes no person go through the tortures of a senseless, inhumane, totalitarian regime like that of Hitler’s National-socialists. In practice, however, the George Soros funded and controlled “Open Society Foundations” has proven itself a tireless, peerless guard of the last vestiges of that other senseless, inhumane, totalitarian regime of Europe: Communism.

The name of George Soros became known to the Macedonian public during the early years of the dissolution of Yugoslavia. This man was introduced as something of a “rich uncle from America”, donating packages of dry food and school utensils to low income families through the freshly established “Open Society Foundations” (OSF) branch in Skopje [skɔpjɛ]. Before long, the OSF became an influential player in Macedonian politics. OSF-Macedonia, which has an estimated annual budget of $5 million in a country where the annual salary was at best $2,000 in the 1990’s, $5,000 presently—and unemployment rates rage at an official 34%—paid for a whole generation of young journalists, dubbed the “Yugo-nostalgics”, because of their preference of communism over free-enterprise capitalism. This generation of quasi-journalists is currently responsible for the general misguidedness of the Macedonian citizenry of the world that surrounds them; as well as of the misinformation of the world at large about the state of affairs in the Republic of Macedonia. However, the crowning achievement on the OSF-Macedonia’s resume has to be its’ 2010 successful effort in blocking the most meaningful articles of the law commonly known as Lustration for the time period past 1991 in the highest court of the country, the Constitutional Court. Namely, in 2009, under pressure from the European Union, Macedonia’s Parliament adopted a law commonly known as Lustration. The act of Lustration was envisioned as a means of cleansing the public of the Communist Party Secret Police, as well as from former officials from the ostensibly abandoned Communist system and the current Oligarchy, by opening the files of the Communist Party Police; and removing all proven collaborators of the Secret Police from public posts. Additionally, implementation of Lustration is one of the conditions set by the European Union as a prerequisite to membership of the former Communist countries, such as the Republic of Macedonia; thus carrying out Lustration would bring the Republic of Macedonia in compliance with the European Council's Resolution 1.481 to condemn the wrongdoings of the Communist regimes. Again, just like in the case of the “rich socialist”, something is awfully suspicious, irrational, and illogical when an organization that nominally stands for transparency, liberty, and democracy vehemently opposes the only piece of legislation in 20 years that attempts to accomplish just that!

At the same time, if one were to take a closer look at the top brass of the Open Society Foundations in Macedonia, as well as its’ headquarters in New York City, the seemingly illogical behavior of the Skopje branch starts to make a lot of sense. Namely, one Vladimir Milčin (Milchin) heads the Macedonian arm of the OSF since its foundation in the early 1990’s until present day. Mr. Milčin is a long time professor and onetime Dean of the school of drama at the State University in Macedonia—a post granted to him by the Communist Union of Macedonia—as well as long time member of the Central Committee of the Social-democratic Union of Macedonia, the renamed, legal heir to the Communist Union of Macedonia. He came to prominence in 1968, during the Student Protests in Belgrade, when a portion of the Marxist indoctrinated Yugoslavian youth became disenfranchised with Tito’s apparent departure from the core of communism by allowing the theoretical possibility of private enterprise. That is right; Soros’ top man in Macedonia is a Stalinist for whom one of the worlds’ most malignant communist dictators was not enough of a hardcore communist! As a means of remedying their dissatisfaction, rather than sending the dissidents in the concentration camps as he had done during the “Informbiro (Cominform) period” of 1948, cunningly Tito rewarded the Student Protests’ leadership with various illustrious posts, such as university professorships and deanships, awarded them careers as actors, writers and directors. Thusly, Tito gave the protesters what they really wanted—fortune and fame—and hooked them in the Chain of Corruption, thereby making them loyal lapdogs and guardians of the Regime.

Furthermore, when one glances at the names of Milčin’s superiors in the OSF, it is all too plain to see that Milčin is no accidental choice. Beka Vučo, the head of OSF for the Balkans, as well as Sonya Liht the head of OSF Serbia, both are Milčin’s comrades from the 1968 Student Protests. While Milčin was fighting Lustration at the Constitutional Court in Macedonia, my father, Jordan Petrovski—a victim of the abuses of the Secret Police, and an “owner” of a dossier; a political exile from Macedonia and President of the Committee for the Democratization of the Republic of Macedonia—believing that Milčin was acting on his own accord pleaded with Mrs. Vučo to stop the OSF’s action in Macedonia. My father’s letter to Mrs. Beka Vučo made her fully aware of what Milčin’s Constitutional Court action meant: the emasculation of the Lustration Law, whereby no living collaborator of the Secret Police will be revealed to the public, nor can their ill begotten careers be jeopardized. The blockade of Lustration past 1991 would make the entire process meaningless. Vučo’s answer was that OSF headquarters were fully aware of what Milčin was doing, that they were also fully aware of the consequences of his actions and most importantly that they stood firmly behind their man. Because the OSF has played a role in the preventing justice, the victims of the Communist Regime in Yugoslavia/Macedonia living in the US and Canada are actively seeking legal counsel who would assist them in taking the OSF to court in New York state.

Presently, the breaking news from Macedonia is that Mr. Milčin has been “deconspired” (revealed) as a collaborator of the Communist Party Secret Police—the Yugoslavian/Macedonian equal to the KGB. He is only the third public figure to have been outed by virtue of the castrated Lutstration Law. Of the other two, one is the leader of the political party known as Tito’s Left Forces—a coalition partner of the Social-democratic Union—a man who publically denounced the constitutional order of the Republic of Macedonia. The other was the President of the Constitutional Court when OSF Macedonia, lead by Milčin struck down the most meaningful parts of the Law—conflict of interest, anyone?

If one wonders, then, how it was that Milčin was revealed, one needs only know that Macedonian politics is reminiscent of Orwell’s Oceania from “1948”—its’ main purpose is to keep the populace in a constant state of confusion. Namely, Milčin, a man of the Regime, was fallaciously sacrificed as a decoy for the growing dissatisfaction of the public with the Parliamentary pardon granted to six ethnic Albanian terrorists at the request of one of the Gruevski Government’s coalition partners. Milčin is not even being put through the process of being “lustrated”, only compromising parts his dossier were made available to the public—enough to take the people’s attention from other issues. Nevertheless, the fact remains that Soros’ top man in the Republic of Macedonia is a man who has benefited—and still benefits—from the spoils of the Communist Regime!

The OSF website, www.soros.org, states that George Soros is founder and chairman of the Open Society Foundations. This, along with the fact that OSF spends several tens of Soros’ millions annually, suggests that Mr. Soros is closely involved in the running of the Foundations. One wonders then, how come the organization founded, chaired and funded by a man who has publically vowed to see no person go through the tortures of a senseless, inhumane, totalitarian regime like that of Hitler’s National-socialists is overrun by hardcore communist who have publically stood for Stalinism? Let us not forget that the National-socialist were not just the ideological brothers of the Communists—as two branches of Socialism—but in practice as well. The Communist Party of Yugoslavia murdered, imprisoned, and displaced several million people—far more than the Nazis did while they occupied the same territory!

Where is the logic in all of this? The Republic of Macedonia has been a bottom dweller of Europe in terms of human rights, transparency and quality of life for the better part of the past 20 years. Its’ closest “rivals” are other former Yugoslav republics. These relatively newly formed countries lead Europe in government-sponsored organized crime in arms, drugs, human trafficking and cigarettes; and perhaps not coincidently these are all countries where the Soros’ funded OSF has a substantial presence.

Fractional Reserve Banking Makes Bank Robbing Full Time Job

The same twenty-something St. Catharines woman is suspected to have held up three separate Scotiabank branches in the course of the last month. Local talk radio station 610 CKTB reports that no one was hurt in the first two robberies. Her third attempt got her nabbed by Niagara Regional Police.

It's difficult to believe that anything other than the prolonged economic downturn of the past four years was the young woman's motive for her acts of desperation. As an entrepreneur in the pallet recycling industry I have a unique opportunity to feel the economic pulse at any given time. As such, I have found little consolation in the proclamations that Canada has not been as hard hit by this recession as was the US. Nor do I find any comfort in the fudged "dropping" unemployment figures coming from Washington. My experience tells me that business is still down by at least 25-50% compared to early 2008. This string of bank robberies, however, makes perfect sense.

That said, when I heard of the second, and then third robbery, the first thing that sprung to my mind was: she should have taken a class in ECON 101 first. Over the years, and in particular during recessions the "independent" central banks have kept lowering the percentage of reserves banks have to hold on hand. In turn, this has allowed banks to hold no more than a few hundred dollars in a given branch: talk about making money out of thin air. So, it's not that this lady was greedy, it's far more likely that she has given the world an insight into how much an average branch holds on hand--enough to live off for a couple of weeks. No wonder you don't see security guards in banks anymore.

My Reply To NYT’s Biased Report on Macedonian Lustration

On January 24, 2012 the New York Times online edition published the article “Macedonia Political ‘Cleansing’ Faces Court Test”, authored by a freelance reporter stationed in Istanbul, Turkey, named Matthew Brunwasser. Despite our Committee’s month-long attempts pointing out the one-sided and superficial nature of the content of the article, there have been no tangible efforts by the New York Times to follow up the article with a more in-depth report. In addition, our sources from Macedonia tell not to hope for a change of the situation, since Mr. Brunwasser maintains liaison with Vladimir Milčin, not only an opponent of lustration, but also a man with much to lose from the implementation of this process. We are left with no other resort, but to attempt to give the world the other side of the story, despite out considerable disadvantage. Unfortunately, the truth seems to not be among “all the news fit that's to print!”

Lustration’s Greatest Opponent is the Government

The Republic of Macedonia is not Groundhog Day’s Punxsutawney, although it might as well be. The New Year, same as the old, has brought a new defeat for the Lustration Act at the hands of the country’s Constitutional Court. While this act was still a bill, on January 19, 2011, our Committee’s president wrote:

The newly proposed lustration bill put forth by VMRO-DPMNE is just another effort of the governing party to manipulate the public. The text of the new bill betrays a desperate attempt at buying time, which will be spent, as usual, at accomplishing nothing; since the new bill is practically a carbon-copy of the present Act (which had its most important provisions concerning the post-Yugoslavia period declared unconstitutional by the Court). The adoption of the proposed bill into law by Parliament would mean that the new Act will be met with precisely the same fate that befell its predecessor. (“The Key to What We Call ‘Lustration’” Jordan Petrovski)

The course of the month saw this “prophesy” come true, when the Constitutional Court of the Republic of Macedonia (CCRM) disclosed its opinion on the constitutionality of the act’s provisions regarding the post-Communist era. The Court was asked to opine following a challenge put forth by a group closely affiliated with the Soros funded Open Societies Foundation – Macedonia. The CCRM predictably repeated its opinion regarding the more-or-less same provisions of the same act a half a year prior. The explanation given by the CCRM declared that since the Constitution of the Republic of Macedonia (adopted on November 17, 1991), grants a series of liberal rights and freedoms to the citizens of the country—unlike the Constitutions of the Socialist Republic of Macedonia (SRM) and Socialist Federal Republic of Yugoslavia (SFRY) which governed the land prior to this one and called for political and ideological Singularity of the State—conditions for the persecution of persons for “political or ideological reasons” did not exist. Therefore, thanks to the provisions in the new Constitution, such systematic persecution was impossible. In cases where there may have been abuses of power by certain administrators, the CCRM’s argument goes on, the new Constitution grants the rights to citizens to take those administrators to civil court and demand satisfaction. In other words, the CCRM’s message is that since the Constitution grants certain liberties on paper, those liberties are as good as real, despite extensive evidence to the contrary. The members of Macedonia’s highest court overlook the fact that the rights granted by constitutions are merely expressions of our desires for how our society ought to function; but that substantial and earnest checks on the work of government agencies are necessary for these liberties to escape the world of abstract ideas, and join the realm of what is tangible. If the CCRM’s reasoning was right, and all that was necessary for something to be materialized were to wish it, there would be no want. Alas, deeds are what counts in this world; and since this is so, we are wise to look at the deeds of the Ministry of Internal Affairs of Macedonia (MIAM) since the adoption of the new Constitution.

The CCRM’s disclosed opinion (endorsement is expected for early Spring) indicates that the nine judges who sit on the bench failed to take into consideration some very compelling evidence, such as the two dossiers that have been publically examined in detail by our Committee. For instance, had the judges of the CCRM looked at dossier “PT ‘CRNI,’” (“PT” = Preliminary Treatment) they would have had the chance to see that an agency operating under the governance of the MIAM, known as the Directorate for Security and Counterintelligence (DSC) or alternatively as the State Security Service (SSS), operated under Governing Ordinances which were in accordance with the provisions set out in the Constitutions of SRM and SFRY, such as: “Article 24 of the Foundations of the System of State Security Act ("Official Journal of SFRY" [the Socialist Federal Republic of Yugoslavia] No. 15/84)”[i] and Article 16 of the Internal Affairs Act ("Official Journal of SRM" [the Socialist Republic of Macedonia] No. 37/87)[ii], as well as many similar provisions, until October 31, 1995; when new Governing Ordinances for the Operation of the Agency were adopted, but which, if the deeds of the DSC are anything to judge by, clearly did not abide by the rules of the new Constitution.

Before the adoption of the new Governing Ordinances of the DSC, as well as after, the agency employed the same “measures and activities,” such as: “OST Measure Secret Control of a Telephone Number and Other Telecommunication Devices”[iii], without prior obtaining a court warrant—contrary to Articles 17 and 26 of the Constitution[iv]; “application of the measure Tailing When the Subject Travels Within the Country”[v]; “application of the measure Tailing When the Subject Travels Abroad”[vi]—in violation of Articles 25 and 27; “Conduct of an Informative Conversation,” whereby the person being interviewed—a suspect, a collaborator, or a by stander—is not formally invited to the DSC’s offices for questioning, nor do they have an attorney present[vii]—contrary to Article 12; as well as a number of other similar practices. Had the judges inspected “Form No.9” (cover page) of dossier “PT ‘DESTRUKTIVEC’” they would have noticed that persons were entered into Preliminary Treatment based on “political and ideological reasons”—a violation of Articles 16 and 20—as late as may 1996, long after the adoption of the new Constitution and substantially long after the adoption of the new Governing Ordinances of the DSC. While no person has approached our Committee with a more recent dossier, there is no reason to believe that this practice has not resumed. Had the judges examined Operative Memo # 1730, dated December 12, 1995, of dossier “PT ‘CRNI’” they would have gained insight into the mentality of the agents of the DSC when reading that they intend to “select and arrive at one or two other persons which to win over to [their] side for further use toward [the Subject].”

Similarly, if the CCRM, in its consideration of the controversial provisions of the Lustration Act, had studied the “Proposal to Implement the Measure Secret Control of a Telephone Number…” submitted by the Regional Department of the State Security Service to its Skopje headquarters, as well as the returned “Adjudication,” they would have had the chance to perceive the open violation of the principle of presumption of innocence, embedded in Articles 12 and 13 of the Constitution. Namely, in the “Proposal” the Operative Worker justifies the need for an application of the measure because “[t]he findings and information that the State Security Service has at its disposal indicate that Petrovski Jordan is engaged…”[viii] In its reply Headquarters, despite the absence of further proof, decided to drop the word “indicate”, and concluded “[b]ased on the information and Justification presented in Proposal (evidentiary no. 308 from 13.Arpil.1993), approved by the Undersecretary of the SDB [State Security Service], it has been found that the person Petrovski Jordan is engaged in activities…”[ix] The suspects observed by the DSC were never taken to court where they could give their explanation to the “findings and information that the DSC [had] at its disposal” concerning them. Nevertheless “the measure of Preliminary Treatment (PT) [was] administered toward [them] with the purpose of following, documenting, discovering and disrupting [their] extreme and anti-Constitutional activities.”[x] (Emphasis added) Had the judges of the CCRM completed this examination, they would have formed a clear picture of a systematic conduct in violation of the Constitutional order of the Republic of Macedonia.

At the same time there is one more very important issue to take notice of. Namely, Article 53 of the Constitution of the Republic of Macedonia states:

Laws and other regulations are published before they come into force.
Laws and other regulations are published in 'The Official Gazette of the Republic of Macedonia' at most seven days after the day of their adoption.[iv]

However, the Governing Ordinances of the DSC were published in an irregular, confidential, edition of the Gazette, used only for inner-governmental communication, known as “Special Journal.” A close examination of the Constitution of RM demonstrates that Macedonia’s supreme law does not provide for a “special journal” where the government can publish all that it wishes to keep from the public’s eyes. The fact that the government did so, means that the DSC was governed by ordinances whose mere adoption was contrary to the way prescribed by the Constitution. The provision mandating publication of laws and ordinances has at its root the spirit of transparency of government; while from a practical point of view a person cannot be accused, much less found guilty of breaking a law that s/he had no way of knowing existed. The manner in which the DSC conducted itself betrays a key fact about it: the DSC had no intention of bringing suspects to the attention of the Public Prosecutor who would remove these allegedly dangerous individuals from Macedonia’s streets by the means provided by the rule of law; the DSC only had as its purpose the de facto subordination of the civilian population.

Furthermore, this opinion-to-be-decision of the CCRM unquestionably violates the Court’s Legal Basis, which declare:

The essence of [the] function [of the Constitutional Court] is the essence of the constitutionality and legality and the rule of law, implying that there is no higher constitution that the Constitution and there in no higher law that the law; no one has more power than the one delegated by the Constitution and the laws, no one should tolerate violence upon one’s personality; every person has the right to exercise the widely accepted and recognized freedoms and rights; no one has the right to abuse those freedoms and rights, and every person is obliged to discharge one’s duties and responsibilities.[xi] (Emphasis added)

To be sure, the choice of language found in the above excerpt destroys the proposed defense of the DSC’s agents and their superiors within the Ministry that they were simply following orders. As employees of a taxpayer funded agency assigned to protect the Constitutional order of the country, the DSC’s Operative Workers would have been fully aware of the violations they were committing every time they conducted themselves contrary to the prescriptions outlined by the Constitution. Their duty was to disobey any such order. Furthermore, their duty was to step forward and uncover the systematic civil rights violations being demanded by their superiors—for the purpose of wiping out the political opposition[xii]. However, instead of whistle-blowing, the agents busied themselves by threatening persons whom the DSC was trying to “win over” by “[pointing] out the consequences which would befall [them] in case [they] exposed our interest to [their Subjects].”[xiii] The wording in the Legal Basis and Status of the CCRM leaves no doubt that, apart from the persons that carried out the actions, accountability is to be sought from the persons responsible for the adoption of the policies of the DSC—those staffing the Government when these Ordinances were ap

proved.

It is, therefore, illogical that the CCRM has opined that demanding accountability from persistent violators of the Constitution—in a manner that materially violated innocent individuals’ Constitutional rights—by means of Lustration is unconstitutional. The legal precedent set by the Court suggests that thieves will no longer be sent to prison, since such a punishment could prevent them from enjoying the spoils of their theft!

However, the Constitutional Court of Macedonia is only one violator in this instance: the one that is seen. The ones that are not seen are the other two branches of government: the legislative and executive. While the judicial branch is reputed to be under the influence of the opposition Social-democratic Union, the other two branches are under the firm control of Prime Minister Gruevski’s VMRO-DPMNE. In the lustration charade, this party has been playing the role of its proponent and “blind supporter.” Yet, the bills that it presented which ultimately became law completely missed the sort of justification provided in this article, despite the vastly greater resources it has at disposal. After all, this party should be the champion of lustration because its members and supporters were the targets of the DSC’s persecution for “political and ideological reasons”—that much is clear from even the most superficial examination of any given dossier from the post-1991 era. More so, it is spelled out in plain language in an exchange in dossier “PT ‘CRNI’”. Namely, when an informant retells the rant of a person under the DSC’s observation (Spasovski) she quotes him as saying “I have a person inside the State Security Service who informs me about everything that is planned and everything that is being carried out against us in the VMRO [-DPMNE].” To this, rather than deny conspiracy against VMRO-DPMNE, the Operative Worker replies in his “Operative Commentary” that he instructed his Source “to work on confirming the finding about Spasovski's connection within the [the Department], that informed him about the measures and activities which State Security Service has been taking towards them, and their discovery.”[xiv]

In addition, the Rules of Procedure of the CCRM gave the Government an opportunity to make up for any shortcomings in the text of the Act by defending it during the Court’s deliberations. Article 13 of said Rules explains that “the submitter of the initiative and the legislator of the denied act, are participants in the procedure in front of the Constitutional court.”[xv] (Emphasis added) Yet, it obviously failed to make the proper case. The Legislator also failed to explain to the Court that the office Public Prosecutor, whose mandate demands it commences proceedings upon a submitted Proposal for Criminal Procedure to the office, declined to do so on the occasions when both Jordan Petrovski (PT “Crni”) and Blažo Stojanoski (PT “DESTRUKTIVEC”) submitted such Proposals under the excuse that the statute of limitations had expired. No investigation into the work of the DSC by the Public Prosecutor’s office has ever taken place. Yet, the Government failed to bring any of these notions to the light of the Court and make the case for the necessity of a special commission to deal with the systematic violation of human rights that was conducted by the Ministry of Internal Affairs for the better part of the 1990s.

One is left with little doubt that the Government has just as little willingness to demand accountability from those responsible for the flagrant violation of Macedonian law. Perhaps the DSC was indeed successful in its effort to “select and arrive at one or two other persons which to win over to [their] side.”

Committee for the Democratization of the Republic of Macedonia

February 18, 2012

St. Catharines, ON

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[i] “PT ‘CRNI’” Operative Memo (“Proposal”) # 325; date April 13, 1993 (p 30)

[ii] “PT ‘CRNI’” Operative Memo (“Proposal”) # 308; date April 13, 1993 (p 23)

[iii] “PT ‘DESTRUKTIVEC’” Operative Memo # 114/7; date February 02, 1997

[iv] http://www.ustavensud.mk EN/Legal Acts/Constitution

[v] “PT ‘DESTRUKTIVEC’” Operative Memo # 102; date February 24, 1997

[vi] “PT ‘CRNI’” Operative Memo (“Outline”) # 309; date April 19, 1993 (p 22)

[vii] “PT ‘CRNI’” Operative Memo # 1746; date December 22, 1995

[viii] “PT ‘CRNI’” Operative Memo (“Proposal”) # 325; date April 13, 1993 (p 30)

[ix]  “PT ‘CRNI’” Operative Memo (“Adjudication”) # 95; date May 26, 1993 (p 31)

[x] “PT ‘DESTRUKTIVEC’” Operative Memo (“Proposal”) # 274; date May 08, 1996

[xi] http://www.ustavensud.mk EN/About Us/Legal basis and status

[xii] “PT ‘CRNI’” Operative Memo # 970; date December 12, 1994

[xiii] “PT ‘CRNI’” Operative Memo # 688; date September 28, 1993

[xiv] “PT ‘CRNI’” Operative Memo # 970; date December 12, 1994

[xv] http://www.ustavensud.mk EN/Legal Acts/Rules of Procedures

Housing Starts and Logic

NPR's Morning Edition program today ran a short segment by their Planet Money team, Zoe Chace and Robert Smith, titled "Housing Starts Have Been Singing The Blues."  The short of the long of it was the somehow irreconcilable facts that, despite the long engrained love for the home steeped into American culture, and despite the improving economy (?!) housing starts are still down relative to the bubble's per-burst era of 2008. Ah, if only they ever bothered to employ reason!

Even if we turn a blind eye to the fictitious claim of an improving economy--since, how can it be improving when in fact more people are dropping out of the search for jobs (click here for a less complicated analysis)--there is an equally large oversight being perpetrated by these folks. Namely, it is a widely known fact that the Western youth has been on a trend of delaying marriage. Since there are reports of this trend dating back to 2007, it is clear that the trend preceded the Great Recession, however, the novelty introduced by the new economic conditions seems to have discouraged youngsters from opting to purchase a home to live in by themselves.

Born and raised in the Mediterranean, I was raised with the notion of living practically. Clearly my North American cohorts are catching up to this reasoning: a house is not a home unless you have someone to share it with! It should, therefore, come as no surprise that the youth of today, which as a result of a number of circumstances has embarked on a trend of delaying the start of a family, also chooses to correct their spending/investment habits, and delay the purchase of their first house.

"Halftime in America" Misses the Point

This year's Super Bowl commercial that is "the talk of the town"--the emphatic, yet implicit rallying call for one of Chrysler Group LLC's major shareholders: the US Government--has at its heart the core of the Keynesian economic thought. Namely, in the The General Theory on Employment, Interest and Money--the bedrock of current mainstream economic teaching--Baron Keynes relegates the laws of economics to "animal spirits" present within people. These "spirits", rather than rationally based judgments, according to the General Theory, prompt us to make optimistic economic decisions (p 161-162). No wonder the general public sees economists as cooks. In the vein of Keynesian Animal Spirits, "Halftime in America" attempts to stir up the "bull inside of us," and put the "bear" into hibernation. It asks us to believe that everything will work out, just because it has in the past. This is like praying for a good crop, without having worked the fields all summer. True enough, people did believe in the power of spirits to provide irrigation, fertilizer and seeds to supply their food for thousands of years. As they grew more informed, from instances of free-marker trial and error, our ancestors realized that "spirits" had very little to do with the plenty-fulness of their crops. Indeed, people learned that certain laws in Nature hold true, and that they were wiser to spend their time obeying those laws, rather than believing in the bounty that is ahead.

 

Unlike John Maynard Keynes, Adam Smith, David Ricardo and the "Austrians", followers of Carl Menger,  tended to seek out the laws of Nature that pertain to economics. As a result they've come to a series of conclusions: goods and services constitute wealth, not money; productive labor creates wealth; government intervention leads to more government intervention; people are not necessarily good or bad in nature, but everything they do is with a self-interested motive to improve their own being; government regulation tends to suppress economic growth, and when the option is available, to drive capital out of the jurisdiction and into one where conditions are more favorable for profit; prohibition gives rise to crime, government corruption, and it does not suppress the intended activity; economic prosperity demands a proper division of labor, in accordance to the needs of the market; bad money drives out good money, and unsound currency inevitably suffers destruction at the hands of the issuing authority due to the abuse of inflating the money supply for short-term political gain; economic equation is very difficult under an unsound monetary regime, and flat out impossible under a socialist regime; and future expectations shape present decisions. Unfortunately, these laws are frequently overlooked when government policies are made.

Belief or spiritualism, have not been found to constitute economic laws. What is necessary for economic prosperity, as a subitem of future expectations, is trust. Before an "economizing person" (as Carl Menger labels participants in the economy) makes the rational decision to engage in economic trade, he needs to trust that his counterpart in the transaction will provide the payment agreed upon and that that payment will not be a "rubber cheque." Further, if an economizing person is to invest a part or all of his wealth in equipment with which to produce merchandise that makes his customers better off, he needs to trust that his investment will be secure from theft or confiscation. This necessity gives rise to the rule of law. Finally, that same economizing person needs to trust the government of his jurisdiction that it will not embark upon policies that will cause the incomes of his potential customers to decline.

To be sure, despite people's tendencies to flock to religion, superstition or sorcery in times of uncertainty, these actions offer a little more than a momentary piece of mind. However, America's current problem is rooted in the lack of trust, and in order to solve it, trust must be restored. Presently, entrepreneurs do not trust the Government when it pleads that America's is a free-market economy. More so, they cannot trust a Government whose head campaigns on an ideological slogan embedded in the belief that entrepreneurs do not "pay their fair share." While Obama and his leftist supporter point to earlier times when the US government confiscated a larger share of individuals' wealth through taxation and the US economy still grew, they forget one very large point: the emerging economies! Until recently no jurisdiction outside of Western Europe, North America, Japan, South Korea and Australia offered security to entrepreneurs to place their investments in. The explicit presence of Communism ensured that the governments of these countries could hold investors hostage. However, jurisdictions like China and India have become trustworthy enough for entrepreneurs to consider them viable alternatives. The inclusion of these two countries in the sphere of potential investment markets has increased the available potential global workforce; and have made the formerly leading countries not as relatively attractive for investment. To any reasonable person, this fact ought to suggest that the interventionist wizardry of the past, simply won't work this time around.

Not all hope is lost. "Halftime in America" could turn out to be true--but if and only if the right policies get instituted. Those policies, doubtless would have to closely adhere to the laws of economics outlined above. Chrysler's shareholder needs to plough the fields, sow the seeds and dig the irrigation channels. Expecting America to become the bustling, rampantly growing economy again by lighting incense to our bull and bear statuettes every night will be only as effective as a rain dance.

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Some really clever guys found a much more entertaining way of criticizing JM Keynes. I hope you enjoy this as much as I did.