In his forty-two years in power, Muammar Qaddafi has presented himself as many things to many people: as a self-styled socialist liberator, as North Africa’s ultimate Bedouin seer; even as the flamboyant, berobed would-be king of Africa. To many, at home and around the world, Qaddafi is a savant and a buffoon, his long rule and global meddling made possible by oil money and a brutish gang of paid-for enforcers. There is some truth in all of these assessments. But more than anything else, Qaddafi is first and foremost a devilishly cunning survivor who, when bribery and co-option have not been possible, has consistently outsmarted his enemies using deceit and treachery. These are his most distinctive trademarks on the battlefield, and they have been present during these last months of warfare.

In mid-March, after two weeks of rapid battlefield gains toward the rebel’s provisional capital of Benghazi, and on the very eve of threatened military action by NATO forces, Qaddafi declared a unilateral cessation of military activity. He appeared on Libyan TV to say how much he loved the people of Benghazi and wanted to do things for them; how, essentially, all he wanted was peace and love. At that same moment, as it turned out, he was moving his armored columns rapidly under cover of darkness to attack Benghazi. By dawn the next morning they had penetrated its western edges, taking the rebels entirely by surprise, and a bloody but fortunately short-lived battle ensued. Qaddafi’s forces were beaten back, and NATO’s planes and missiles finally kicked into action, saving Benghazi, its rebels, and, ultimately, the Libyan revolt, at the eleventh hour-and-counting. But his tactics illustrate the next rule.

3. Confusion Is Qaddafi’s Ideal Milieu

The way the rebels poured into Tripoli the other day, gleeful at the lack of armed opposition, was characteristically amateurish behavior. In March and April, as the armed conflict got under way, the rebels consistently overshot themselves, charging into Libya’s eastern towns and apparently “chasing off” Qaddafi’s forces, who retreated, only to be eventually stopped in their tracks and bloodied by government troops who invariably appeared—as they seem to have done in Tripoli—“out of nowhere.” And yet the rebels’ seemingly complete heedlessness, at this fateful juncture, was nevertheless astonishing, and underscored serious continuing leadership and command deficiencies that NATO’s remote-control aerial war and its handful of covert special-forces teams (French, British, and Qatari, supposedly) on the ground have clearly not been able to overcome. On the battlefield, knowledge of one’s enemy is key, and Qaddafi knows well the hearts and minds of the Libyan people, and their temperament, too, and has shown himself consistently able to exploit this knowledge to take advantage of the opportunities provided by the fecklessness of the rebels to sow further confusion into their ranks. He may well still lose, but right now, in Tripoli, it is confusion that reigns, and that gives Qaddafi, not NATO (its warplanes cannot easily bomb in a crowded city) or the rebels, a key advantage.

4. Let Chaos Theory Be Your Guide

If harnessing chaos is one of Qaddafi’s great strengths, chaos is also, seemingly, an unerring aspect of life in Libya; it can be relied upon to make an appearance, and, ultimately, to shape the environment of Libya’s battlefield. It is, in Rumsfeldian terms, a Known Unknown. Put in more practical terms, chaos can be relied upon to kick in whenever, for instance, the rebels seem to gain something on the battlefield. They will inevitably start shooting their weapons into the air, and dancing and singing, regardless of the possibility that their enemy may be waiting just out of sight, ready to open fire and counterattack. In this guise, their response belongs to a Libyan tradition of performance as a key part of war; it harks back to the time in which Bedouin warriors, armed with only swords or perhaps muskets, would charge their enemies across a desert plain, scatter them, and then declare “victory” on the spot.

5. The Rebels Have Yet to Learn How to Write Their Own Rules

They are still responding to Qaddafi’s game. The lack of leadership among the rebels is in many ways a problem—there is no truly charismatic figure on their side. Whenever there was, Qaddafi found a way to undermine him—as with Fatah Younis, his former interior minister, who defected and was ultimately murdered by other rebels. (Qaddafi sowed confusion by running undated footage of the two of them on television, for example.) Even if they manage, as appears likely, to take control of Libya with NATO’s help, whether they will manage to assemble a unified government for this damaged country should give one pause, whatever one’s hopes. Qaddafi has not only shaped the battlefield: he has shaped the human landscape of Libya for forty years.

Photograph by Imed Lamloum/AFP/Getty Images.

via newyorker.com

Bottom line: Don’t be so optimistic that you borrow more than you can afford to pay back. “Live within your means” ought to have been the mantra, not, “if you don’t have the money, not to worry, we’ll lend it to you”!  Article follows…

Americans love the idea of a house and a white picket fence. The government encourages ownership through housing subsidies, believing that it stabilizes communities. Owners see their homes as their share of the American dream, and their best way to save money.

But according to the Congressional Joint Committee on Taxation, these tax breaks add up to $700 billion in lost government revenue over the five-year period through 2014. As the government struggles to come up with spending cuts and revenue sources, housing subsidies are an obvious place to look.

Until recently, support for home ownership was untouchable because the programs were popular with voters and because of unrelenting lobbying efforts. The political right sold them as part of its “ownership society,” whereas the left used them to fight rising income inequality. But the policies have turned into a major disappointment for both sides.

According to data collected by Alex J. Pollock of the American Enterprise Institute, a comparison of homeownership among economically advanced countries shows that the United States is in the middle of the pack, which suggests that subsidizing housing with tax breaks is neither a necessary nor a sufficient condition for a flourishing housing market. Rather, these subsidies enabled people to borrow more than they could afford so they could buy houses bigger than they needed, leading to a house price bubble. The policies encouraged homeowners to make highly leveraged bets on real estate that turned sour and wiped out nearly $8 trillion in household net worth.

Moreover, homeownership policies and mortgage subsidies in the United States benefit the rich a lot more than the poor. For example, the economists James Poterba and Todd Sinai recently estimated that the benefits from the mortgage interest deduction for the average homeowning household that earns between $40,000 and $75,000 were about 10 times smaller than the benefits that accrue to the average household earning more than $250,000. These policies increase income inequality instead of reducing it.

A better policy would be to gradually wind down Freddie Mac and Fannie Mae and to scale back homeownership subsidies. We favor a long-term focus on rental assistance programs for the poor that are on budget and housed in the Federal Housing Administration, and whose costs are transparent to taxpayers.

That said, weaning housing finance off the government cannot happen overnight. We liken this to the way one would treat a patient with a drug addiction. One would not double the dose (which is arguably what we have been doing), but neither would one go cold turkey. Existing subsidies would be honored. And to minimize the system-wide shock of closing Fannie and Freddie and removing government support, we envision a decade-long transition from where we are today to where we need to be.

This new housing policy will lead to a different economy. As subsidies to the housing sector are removed, American households will take on less debt and there will be less overconsumption of housing. The private sector will shift its investments from the housing sector to areas of the economy that offer higher rates of return, like human capital, infrastructure projects and capital business projects in other industries. The long-term impact will be tectonic in nature, leading to higher economic growth and a more stable financial system.

Why is this relevant now? The budgetary problems of the United States are dire. Economic growth is anemic. Reforming the American housing finance system will improve the budget and stimulate growth and will make a real contribution to our future prosperity.

Viral V. Acharya, Matthew P. Richardson, Stijn Van Nieuwerburgh and Lawrence J. White are professors at the New York University Stern School of Business and the authors of “Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance.”

via nytimes.com