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The Daily Reckoning | Wednesday, August 8, 2012 Kim Dotcom attempts to get out from underneath the government jackboot... Chilling footage shows just how long the arm of the “state” really is... Plus, Bill Bonner on the US military industrial complex and how it exemplifies the law of declining marginal utility... ------------------------------------------------------ Amazing... But True! Tobacco is being resurrected — making it the profit opportunity of the decade. It turns out that one man’s quest to help people quit smoking has led to what could be the most important “accidental” health discovery since penicillin. And for you — it could be the biggest potential “profit bonanza” since Pfizer accidentally discovered Viagra. Discovered by accident: A chemical compound in tobacco that doctors are now recommending to slow aging! BUT because Wall Street inexplicably thinks the biotech firm that owns the patent — and is already selling this miracle product without a prescription — is a nasty, dirty tobacco company, you still have a little time to load up before the truth is finally revealed! Learn more about this amazing opportunity right now, right here. Quote of the Day... To learn who rules over you, simply learn who you are not allowed to criticise. — Voltaire Dotcom Bites Back Joel Bowman Reckoning today from Paris, France... Imagine you attempt to send an email including, say, some summer vacation photos, to a friend. You attach the files, then wait a few minutes...then a few more...willing that dastardly little loading graphic toward completion. Waiting...waiting...waiting... No luck. Nearing the end (usually somewhere just beyond the point of no return) the application cuts out. A few seconds later, you receive a “MAILER-DAEMON” email alert, informing you that the file size was too large. The email will not send. Bummer. Depending on how enjoyable your vacation was...and how well this mood translates to your pictures...you might try to resize or reformat the images. Or perhaps you undertake the arduous task of splitting the files over multiple emails. But there are many photos and, having better things to do with your time, you soon tire. Eventually, you give up. Of course, the above situation is not such a problem these days. Why? Because of the efforts of innovators like German-Finnish businessman and larger-than-life entrepreneur, Kim Dotcom. A few years back, most of us simply accepted that we couldn’t yet send large files over the Internet. But like all good entrepreneurs, where others saw problems, Mr. Dotcom saw a business opportunity. Explained Mr. Dotcom in a recent interview on New Zealand television: “One day I was sending a file to a friend, via email, and I got a message back saying the file was too large [...] So I thought, you know, what can I come up with, what can I do to solve that? So I basically created a server, where I could upload a file and get a unique link, then I would just email that link to my friend, and he would then get the file. That’s how Megaupload started...just a solution to a problem.” Today we can share files via any number of social media sites. And, for larger files, we can make use of dedicated file-sharing services like DropBox, OneNote, Google Docs or Megaupload. Oh, wait...not Megaupload. What happened? We’ll let the Federal Bureau of Intimidation (FBI) explain. Here’s the notice they posted on Megaupload’s website last year, after they took down the page and froze Megaupload’s assets: Fellow Reckoners who’ve been following the story will remember that the raid occurred mere hours after the widespread global Internet community backlash against the US government’s proposed PIPA and SOPA laws, which threatened to strangle the precious lines of communication opened up to individuals through precisely the kinds of innovation like that of Mr. Dotcom. It was, as Orwell might have said, the image of a government jackboot stamping on a human face. We wrote about the absurd mission creep of the feds at the time, in an article in these pages titled, “Knowing Your Role as an Obedient Citizen.” The four men were arrested in New Zealand with, presumably, the collusion of the New Zealand government. The arm of the Empire is indeed long. So what did these individuals, who face a maximum prison sentence of 55 years each if convicted, do, exactly? They hosted a website, megaupload.com, that allowed for digital file sharing. In other words, they built the ultimate mixed-tape swap meet where individuals — millions of them — could gather to share media files. Now, one might assume that artists would want their music distributed, to have their artwork seen and heard by as many eyes and ears as possible. Correct. In fact, that was exactly what megaupload — a website owned and operated by recording artists — was trying to accomplish. Explained Jeffrey Tucker in the Weekend Edition: “[T]he trendline with Megaupload was clearly toward using the space to launch new artists with new content: not piracy but creativity. As Wired.uk wrote, this crackdown came shortly after Megaupload announced music producer Swizz Beatz — married to Alicia Keys — as their CEO. They had rallied a whole host of musicians including Will.i.am, P Diddy, Kanye West and Jamie Foxx to endorse the cloud locker service. Megaupload was building a legitimate system for artists to make money and fans to get content.” Are you connecting the dots here, Fellow Reckoner? Let’s see...an old, entrenched industry with political clout (and a distinct lack of actual artists) hires the arm of the state to ride roughshod over a new, innovative competitor with a superior distribution model...a model actually endorsed by artists. It’s a classic case of parasites affecting to serve their host. Well, to our unashamed delight, the host appears to be biting back. Among other evidence coming to light in the ongoing trial of Mr. Dotcom is this chilling footage of the raid on his family home...conducted by 30 heavily-armed foot-soldiers of New Zealand’s most “elite” police force, the so-called Special Tactics Group...and supported by the aforementioned thugs at the FBI. We’ll have much more on this story as it unfolds but, for now, we invite you to view —and share — this video with your fellow Internet users. Finally! 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We won. And those who come after us will never need do this again. Then came the two mad wars of imperial vanity — Korea and Vietnam. They were bitter for us, not to mention for the so- called enemy. Next we were enrolled in a perpetual war against what seemed to be the enemy-of-the-month club. This war kept major revenues going to military procurement and secret police, while withholding money from us, the taxpayers, with our petty concerns for life, liberty and the pursuit of happiness. He might have added another petty concern: national solvency. And still another: military preparedness. Today, the US has no worthy enemies. Still, it spends $1 trillion a year — fully loaded — to defend itself against them. The ‘terrorists’ and ‘insurgents’ it protects us against have no divisions, no trained officers, no heavy armor, no ships, no aircraft, and no heavy weapons. That is why the news from the front is so boring; the newspapers barely report it. There are no pitched battles. No Napoleonic charges. No breathtaking victories. No Stalingrads. No Gettysburgs. No brilliant strategies. No crushing defeats. Oh, for another battle of Kursk! It was the greatest land battle in history...a tank battle pitting the Germans’ Tigers and Panzers — about 3,000 of them — against the Soviet’s T-34s, of which there were about 5,000 in the area. The Germans’ tanks had greater range. But the Soviets’ tanks were faster...and there were more of them. Wehrmacht forces numbered almost half a million men. For their part, the Soviets had 1.5 million soldiers. The ground was firm. The sky was clear. Both sides fielded experienced, battle-hardened troops. This was a monster slugfest. Too bad both monsters couldn’t lose! It was a battle on a scale the world never saw before...or since. You already know how it ended. The Soviets had many advantages. First, they had the German’s battle plans. They knew where they would strike. So, they built 8 defensive lines...including tank traps and minefields...which slowed the attackers down and wore them out. Second, the Soviets had shorter supply lines. They could rush more troops and equipment to the front much more easily than their enemy. Third, they had a huge superiority in men and machines. Most important, after the defeat at Stalingrad, the gods of war had gone over to the other side. The momentum of the war had quickly turned against the 1,000-year Reich. Christmas fruitcake would last longer. Even if the Germans had won the battle of Kursk, they would have gained little. It would have been an empty victory; there was no way to follow up. They lacked the forces to launch another big offensive into the Soviet heartland. The Germans were on the defensive everywhere. They had already lost North Africa and now they were losing Italy too. A huge invasion of France, though still a year away, was inevitable. If they had been smarter, they would have renounced their agenda of conquest, taken all their troops back to Germany itself — as fast as possible — begging forgiveness and promising never to set foot beyond the Rhine or the Oder ever again. Maybe there they could put up enough of a fight to force an end to the war without being totally annihilated. Instead, Hitler had given orders to hold ground everywhere. The Battle of Kursk was intended to give the Germans time. Time to what? Time to lose on a bigger scale! If only the US had been on the scene; it might have learned something. The US was not involved in that battle. Which is probably a good thing, since its tank crews were inexperienced, and its tanks inferior; US forces probably would have been wiped out, no matter which side they backed. But now, 70 years later, the US is prepared for the battle. It has 2,300 M1 Abrams tanks in service around the world....and another 3,000 just sitting around in the desert awaiting orders. These tanks are super-big, super-heavy, super sophisticated with super firepower...and super expensive. They can turn an entire building into a pile of rubble from 2 and a half miles away. On today’s battlefields, if you can call them that, the M1 Abrams is in a class of its own. None were knocked out of action in the Iraq war by enemy tanks. The main threat to the M1 turned out to be friendly fire and IEDs — homemade explosives. Unlike WWII, when the US had the 16th largest army in the world, smaller than Rumania, this time the US is prepared. But preparedness is like everything else under the sun. It soon reaches the point of declining marginal utility. When you reach that level, the more prepared you get the less prepared you are. That point was probably reached some 110 years ...at least 500 billion dollars... and perhaps 5,000 M1s ago. In the 1890s, Teddy Roosevelt had so much preparedness he used it to wallop 200,000 Filipinos. As for the half a trillion dollars, it’s the part of current ‘security’ spending — grosso modo — which has nothing to do with defense and everything to do with giving offense to civilized people all over the globe, which is what got Gore Vidal worked up. No need to get indignant about it. That’s just the way the gods of war amuse themselves. They encourage dim militarists to spend themselves into bankruptcy, preparing for a war the nation will never again fight. Which is why the M1 story is important. The maker of the M1 Abrams is General Dynamics. When the Pentagon announced that it would like to stop spending money on the M1, the company was justifiably upset. It had spent millions to buy key members of Congress. It expected to get a good return on its investment. For its part, the Pentagon thought it could save a little money by putting off refurbishment of the tanks for a few years. This would save $3 billion, admittedly chicken feed, but it would also give it time to redesign the beast for what it imagines might be future combat. But lobbyists got on the case, apparently timing their campaign donations to correspond with key decision points. Lydia Mulvany reports on what happened next: “After putting the tank money back in the budget then, both the House and Senate Armed Services Committees have authorized it again this year, allotting $181 million in the House and $91 million in the Senate. If the company and its supporters prevail, the Army will refurbish what Army chief of staff Ray Odierno described in a February hearing as “280 tanks that we simply do not need.” Mr. Odiero says the M1 is a relic of an earlier age of warfare. It would have been great — maybe — at Kursk. But when the enemy has no tanks, it is merely an expensive — and vulnerable — pile of metal. Said Mr. Odiero at a February hearing: “We don’t believe we’ll ever see a straight conventional conflict again in the future,” he said. Which is why the M1 is perfect. At least to the Law of Declining Marginal Utility. It allows the military industry to spend billions while actually making itself less able to fight the wars of the future. Regards, Bill Bonner, for The Daily Reckoning --------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com