Despite the latest Sino-American phase one deal to ease tensions over trade, one former top
US official is now calling for a decoupling between both economies, reported the
South China Morning Post (SCMP).
Former US ambassador to India Ashley Tellis explains in a new book titled Strategic Asia
2020: US-China Competition for Global Influence -- that the world's two largest economies have
entered a new period of sustained competition.
Tellis said Washington had developed a view that "China is today and will be for the
foreseeable future the principal challenger to the US."
"The US quest for a partnership with China was fated to fail once China's growth in economic
capabilities was gradually matched by its rising military power," he said.
Tellis said Washington must resume its ability to support the liberal international order
established by the US more than a half-century ago, and "provide the global public goods that
bestow legitimacy upon its primacy and strengthen its power-projection capabilities to protect
its allies and friends."
He said this approach would require more strategic cooperation with allies such as
Australia, Japan, and South Korea.
"The US should use coordinated action with allies to confront China's trade malpractices
should pursue targeted decoupling of the US and Chinese economies, mainly in order to protect
its defense capabilities rather than seeking a comprehensive rupture."
The latest phase one deal between both countries is a temporary trade truce -- likely to be
broken as a strategic rivalry encompasses trade, technology, investment, currency, and
geopolitical concerns will continue to strain relations in the early 2020s.
A much greater decoupling could be dead ahead and likely to intensify over time, as it's
already occurring in the technology sector.
Tellis said President Trump labeling China as a strategic
competitor was one of "the most important changes in US-China relations."
The decoupling has already started as Washington races to safeguard the country's
cutting-edge technologies, including 5G, automation, artificial intelligence, autonomous
vehicle, hypersonics, and robotics, from getting into the hands of Chinese firms.
A perfect example of this is blacklisting Huawei and other Chinese technology firms from
buying US semiconductor components.
Liu Weidong, a US affairs specialist from the Chinese Academy of Social Sciences, told SCMP
that increased protectionism among Washington lawmakers suggests the decoupling trend between
both countries is far from over.
The broader shift at play is that decoupling will result in de-globalization ,
economic and financial fragmentation, and disruption of complex supply chains.
Editor's Note: Last month, Foreign Policy ran an article, "Open Borders Are a
Trillion-Dollar Idea," which advocated for Open Borders. So for all those who say, "Oh, no
one supports Open Borders," here it is in writing! Every point made by author Bryan Caplan,
an economics professor, is refutable, and, while the piece is long, we believe it's important
"for the record" to counter all of his points.
As I first read Bryan Caplan's "Open Borders Are a Trillion-Dollar Idea" in Foreign
Policy, besides disbelief, my thoughts were that this person must not get out much or must
not read much. A quote from writer Upton Sinclair came to mind as well: "It is difficult to
get a man to understand something, when his salary depends on his not understanding it." https://progressivesforimmigrationreform.org/open-borders-trillion-dollar-mistake/
Earlier this week, the Observer reported on a spat that had broken out between a
division of the giant Samsung empire and the American hedge fund Elliott Management. The
most newsworthy feature of the dispute involved a series of articles on Korean business
sites that pointedly criticized Elliott's CEO Paul Singer and directly attacked him for
being Jewish, noting that "Jewish money has long been known to be ruthless and merciless"
and claiming "It is a well-known fact that the US government is swayed by Jewish
capital."
"Do the Jews Really Control America?" asked one Chinese newsweekly headline in 2009. The
factoids doled out in such articles and in books about Jews in China -- for example: "The
world's wealth is in Americans' pockets; Americans are in Jews' pockets" -- would rightly
be seen to be alarming in other contexts. But in China, where Jews are widely perceived as
clever and accomplished, they are meant as compliments. Scan the shelves in any bookstore
in China and you are likely to find best-selling self-help books based on Jewish knowledge.
Most focus on how to make cash. Titles range from 101 Money Earning Secrets From Jews'
Notebooks to Learn To Make Money With the Jews.
"... Where is AOC in all this? She was th e prime mover on impeachment, specifically impeachment over a phone call rather than concentration camps and genocide. And now with impeachment she gave Pelosi cover to sell the country out again. I was wondering why many libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized something? ..."
Interesting, to me at least, that the rocket docket timetable of the House impeachment
coincided with the deadline to pass a budget to avoid a(nother) govt shutdown. While all msm
eyes were transfixed by the hyperventilating spectacle, behind the scenes the budget passed
through the Dem House was filled with more tax breaks for the corporations and the .001%,
more money than the admin asked for the MIC, and killed a bill that would end medical
'surprise billing' (another gift to medical PE investors and giant hospital corporations),
basically a whole neolib wish list.
Interesting the two events coincided, and, that Nancy decided not to sent on the articles
to the Senate at this time. What gives? Is she hold on to them for a future time when she'll
need to use them as another distraction for the msm to report on? (no, that could not be the
reason. ;) )
Pointed this out a couple of days ago (Slate and Buzzfeed). Happy that it is not just the
online press pointing out it was Democrats killing this measure, Democrats in leadership
positions. I also like that few, if any, of our media is falling for the kabuki used by Neal
to stick the shiv in. Everyone gets that the 'competing plan' was there strictly to derail a
law that end the hugely profitable but fraudulent price gauging of healthcare by private
equity.
If he keeps this up, walking POS Schumer might make me miss Al D'Amato nah Al and Chuck
are just two different colors of tulle, adding illusion to the political process.
..and they could have just passed it for the good PR and then de-fanged it
administratively, but it looks like they wanted to press the point:
"No, Proles, we're not gonna let you breathe, not a bit."
Where is AOC in all this? She was th e prime mover on impeachment, specifically
impeachment over a phone call rather than concentration camps and genocide. And now with
impeachment she gave Pelosi cover to sell the country out again. I was wondering why many
libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized
something?
BEIJING, Dec. 21 (Xinhua) -- The
phase-one economic and trade deal between China and the United States benefits both sides and
the whole world, Chinese President Xi Jinping said Friday.
In a phone conversation with his U.S. counterpart, Donald Trump, Xi noted that the two
countries have reached the phase-one agreement on the basis of the principle of equality and
mutual respect.
Against the backdrop of an extremely complicated international environment, the agreement
benefits China, the United States, as well as peace and prosperity of the whole world, Xi
said.
For his part, Trump said that the phase-one economic and trade agreement reached between
China and the United States is good for the two countries and the whole world.
Noting that both countries' markets and the world have responded very positively to the
agreement, Trump said that the United States is willing to maintain close communication with
China and strive for the signing and implementation of the agreement at an early date.
Xi stressed that the economic and trade cooperation between China and the United States has
made significant contributions to the stability and development of China-U.S. relations and the
advancement of the world economy.
Modern economy and modern technologies have integrated the world as a whole, thus making the
interests of China and the United States more intertwined with each other, Xi said, adding that
the two sides will experience some differences in cooperation.
As long as both sides keep holding the mainstream of China-U.S. economic and trade
cooperation featuring mutual benefits and win-win outcomes, and always respect each other's
national dignity, sovereignty and core interests, they will overcome difficulties on the way of
progress, and push forward their economic and trade relations under the new historical
conditions, so as to benefit the two countries and peoples, Xi said.
China expresses serious concerns over the U.S. side's recent negative words and actions on
issues related to China's Taiwan, Hong Kong, Xinjiang and Tibet, Xi said.
He noted that the U.S. behaviors have interfered in China's internal affairs and harmed
China's interests, which is detrimental to the mutual trust and bilateral cooperation.
China hopes that the United States will seriously implement the important consensuses
reached by the two leaders over various meetings and phone conversations, pay high attention
and attach great importance to China's concerns, and prevent bilateral relations and important
agendas from being disturbed, Xi said.
Trump said he is looking forward to maintaining regular communication with Xi by various
means, adding he is confident that both countries can properly handle differences, and
U.S.-China relations can maintain smooth development.
Xi said he is willing to maintain contacts with Trump by various means, exchange views over
bilateral relations and international affairs, and jointly promote China-U.S. relations on the
basis of coordination, cooperation and stability.
The two heads of state also exchanged views on the situation of the Korean Peninsula. Xi
stressed that it is imperative to stick to the general direction of a political settlement,
saying all parties should meet each other halfway, and maintain dialogue and momentum for the
mitigation of the situation, which is in the common interests of all.
@Colin
Wright Intelligence and bias for co-operation may lead some groups to far greater
achievements, in scams as well as in everything else.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
I meet them daily, in whatever activity, and none of them is Jewish. Also their shops,
businesses, and so on are always the ones that prosper more: people love being scammed, and
people love the show of power implicit in making you pay some extra for the service you
requested, and still keeping plenty of customers with you.
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your readers
will pretend the same, that it's a Jewish-specific something.
Because if you were to say: everyone does this, everywhere, but when Jews do it it's just on
a larger scale, then you'd be shining light on the fact that what changes with Jews is just
skills, and that they are intelligent enough to co-operate more than the others.
Like when Mac Donald speaks of Jewish self-deception.
I feel I am swimming in self-deception everytime I talk with people (more so with women), and
they aren't Jewish. Do people do anything, but self-deceive?
So?
Elliott Management is perhaps most notorious for its 15-year battle with the government
of Argentina, whose bonds were owned by the hedge fund. When Argentine president Cristina
Kirchner attempted to restructure the debt, Elliott -- unlike most of the bonds' owners --
refused to accept a large loss on its investment. It successfully sued in US courts, and in
pursuit of Argentine assets, convinced a court in Ghana to detain an Argentine naval
training vessel, then docked outside Accra with a crew of 22o. After a change of its
government, Argentina eventually settled and Singer's fund received $2.4 billion, almost
four times its initial investment. Kirchner, meanwhile, has been indicted for
corruption.
This massive transfer of the American tech industry has largely been the work of one
leading Republican donor -- billionaire hedge fund manager Paul Singer, who also funds the
neoconservative think tank American Enterprise Institute (AEI), the Islamophobic and
hawkish think tank Foundation for Defense of Democracies (FDD), the Republican Jewish
Coalition (RJC), and also funded the now-defunct Foreign Policy Initiative (FPI).
Singer's project to bolster Israel's tech economy at the U.S.' expense is known as
Start-Up Nation Central, which he founded in response to the global Boycott, Divest and
Sanctions (BDS) movement that seeks to use nonviolent means to pressure Israel to comply
with international law in relation to its treatment of Palestinians.
@Lot
You give partial information which seem misleading and use arguments which are also weak and
not enlightening.
1- Even if its natural that unsafe bonds are sold, this doesn't justify the practices and
methods of those vulture fonds which buy those fonds which are socially damaging. I'm not
certain of the details because it's an old case and people should seek more information. Very
broadly, in the case of Argentina most funds accepted to make an agreement with the country
and reduce their demands. Investors have to accept risks and losses. Paul Singer bought some
financial papers for nothing at that time and forced Argentina to pay the whole price. For
years Argentina refused to pay, but with the help of New York courts and the new Argentinian
president they were forced to pay Singer. This was not conservative capitalism but
imperialism. You can only act like Singer if you have the backing of courts, of a government
which you control and of an army like the US army. A fast internet search for titles of
articles: "Hedge fund billionaire Paul Singer's ruthless strategies include bullying CEOs,
suing governments and seizing their navy's ships". "How one hedge fund made $2 billion from
Argentina's economic colapse".
Andrew Sayer, professor in an English university, says in his book "Why we can't afford
the rich" that finances as they are practiced now may cost more than bring any value to a
society. It's a problem if some sectors of finances make outsized profits and use methods
which are more than questionable.
2- You say that if borrowers become more protected "lenders become more conservative,
investment declines, and worthy businesses can't get investments." I doubt this is true. In
the first place, risk investments by vulture fonds probably don't create any social value.
The original lenders who sold their bonds to such vulture fonds have anyway big or near total
losses in some cases and in spite of that they keep doing business. Why should we support
vulture fonds, what for? What positive function they play in society? In Germany, capitalism
was much more social in old days before a neoliberal wave forced Germany to change Rhine
capitalism. Local banks lended money to local business which they knew and which they had an
interest that they prosper. Larger banks lended money to big firms. Speculation like in
neoliberal capitalism wasn't needed.
3- The point which you didn't grasp is that there is a component of those business which
isn't publicly clear, the fact that they funcion along ethnic lines.
4- It would be easy to fix excesses of capitalism. The problem is that the people who
profit the most from the system also have the power to prevent any change.
The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of
bondholders, probably the majority, cannot hold distressed or defaulted debt. Insurance
companies often can't by law. Bond mutual funds set out in their prospectuses they don't
invest in anything rated lower than A, AA, or whatever. Even those allowed to hold
distressed debt don't want the extra costs involved with doing so, such as carefully
following bankruptcy proceedings and dealing with delayed and irregular payments.
The author is not a finance expert but he correctly spotlights flaws of so-called
'predatory capitalism' which is disproportionately Jewish.
Private equity is rife with vices like asset-stripping and looting e.g Eddie Lampert
('Jewishness' member) plus El Trumpo appointee Steven Mnuchin at Sears.
Vulture funds often load all sorts of costs, even frivolous ones, and extra interest
charges on the original debt to maximize profit.
Some countries have the Duplum rule which limits the amount you are liable to a creditor
when you default on a debt.
I generally like Tucker but thought his piece on Singer was way off base and a silly hit job.
As others above have commented, if you think it's wrong to buy or try to collect on defaulted
debt, what is the alternative set of laws and behavior you are recommending? If debts can
simply be repudiated at will, capitalism cannot function. (Also, while it would take too much
time and space to debate the Puerto Rico situation here, it bears noting that the entire PR
public debt burden of ~$75 billion comes to around $25,000 per resident -- about a third of
the comparable burden of public sector debt per person in the United States, which itself
ignores tens of trillions of "off balance" sheet liabilities for underfunded social security,
Medicare, Medicaid and public sector pension obligations. The source of PR's problems lies
pretty clearly at the feet of PR's long corrupt politicians -- not the incidental holders of
its bonds who would simply like to be repaid or have the debt reasonably restructured.)
Other minor points worth noting:
Joyce names a few Jews associated with Baupost but misleadingly omits its president, the
guy who is running the show: Jim Mooney, a proud graduate of Holy Cross and big supporter of
Catholic and Jesuit causes. If memory serves, Jim was also the guy behind some of Baupost's
biggest and most successeful distressed debt (or "vulture" to use Joyce's pejorative term)
trades. The firm's Jewish founder (Seth Klarman) has also donated tons of money to secular
causes, including something like $60 million for a huge facility at Cornell.
Speaking of donations and Jews, I believe Bloomberg (not technically a "vulture"
capitalist but clearly just as bad -- I.e., Jewish -- on the Joyce scale) gave $1.5 billion
to his alma mater, Johns Hopkins. If memory serves, that may have been the largest donation
to any university ever. Maybe Carnegie's donations were greater in "real" dollars, but
Bloomberg's donation is still pretty significant -- with likely more to come.
@sally
Sally, please, knock it off. If you worked on Wall Street you'd know this article is just the
tip of the iceberg of Jewish financial criminality. Years ago Jim Cramer of CNBC fame, who
used to appear with Goldman Sachs' former and current PR man Larry Kudlow, also headed Wall
Street's top hedge fund at the time, Cramer Berkowitz. A former employee and Jewish at that
wrote an expose, Trading With the Enemy letting non-Jews in the reading public in on
what's really going on. Of course there's a Jewish pipeline giving them the news before it's
news, which is what it means to be a Wall Street insider. Or so says Jim Cramer, and the book
establishes this with solid evidence and not speculation.
For example, one of the Jewish anchors on CNBC would routinely call Cramer, which the
author overheard at the trading desk, and tip Cramer off about a market moving news story
about to be aired so Cramer could front run the market, fanatically divvying the orders out
to avoid scrutiny. His most important client was Norman Podoretz of socialist fame, who put
up the seed money for Cramer, who'd be on the phone to Cramer throughout the day checking on
his investments when not pushing socialism on the stupid goys. That's what socialism means in
America. The big names among Jewish stock and bond analysts at the big houses would also be
on the line with Cramer right before market making analysis was about to be released.
It's also the case that no economy and society can survive the sort of FIRE parasitism
this country's now burdened with, which as Spengler put it a century ago, amounts to tricking
a profit off every penny of goyisher labor. A dog can handle a number of ticks and fleas
sucking its blood, but will die soon enough when the ticks and fleas are consuming a quarter
or more of its blood. As Dr Joyce points out in yet another brilliant article, DJT is
demonstrably a puppet of the Jewish billionaires mentioned, who're in a rage to destroy the
families and everything the fools attending his rallies hold dear.
@J
Adelman Yes, the Jews have always stood up for the underdog (except when they were slave
traders) and promoted social harmony (except for cultural Marxism) and "Jewish influence" is
purely a figment of your imagination (except WWI and the Communist revolution .and and ). And
they definitely have nothing to do with the financial industry or banks (it is all a
conspiracy the protocols ya know).
Do you really believe your own poopaganda? A little introspection goes a long way. Why
have you been persecuted or kicked out of every country you have ever lived in? You never,
ever do anything wrong?
No one is demonizing you. You do it to yourself. People like Epstein and Weinstein are
your standard bearers. Events like 9/11 are your trophies. Your infiltration of the body
politic and malign influence in society is once again becoming visible to everyone and it is
making you afraid.
You have done it again. You never, ever learn. You play the perpetual victim .everyone
hates me without a reason. My sin is greater than I can bear (Cain) everyone who comes across
me will kill me. I spend my time wandering the earth (boo ho). And despite slaying your
brother you are accorded divine protection.
Jesus said (paraphrasing here) that if the unclean spirit is cast out of a man and is not
replaced with something wholesome he takes "seven other spirits" into himself and becomes
totally insane. You did this to yourself and you will realize that your problem is no longer
with man but with God himself. Jacob the deceiver has wrestled all his life against his
fellow man and triumphed but now he will confront God himself. Get ready to meet your Maker
and see how far your excuses will get you with the Almighty.
Jewish financists are no longer Jewish, much like a socialist who became minister is no
longer a socialist minister. Unregulated finance promotes a set of destructive behaviors which
has nothing to do with nationality or ethnicity.
Of course that Joyce is peddling his own obsessions, but I have to admit that Singer &
comp. are detestable. I know that what they’re doing is not illegal, but it should be (in
my opinion), and those who are involved in such affairs are somehow odious. The same goes for
Icahn, Soros etc. Still Ethnic angle is evident, too: how come Singer works exclusively with his
co-ethnics in this multi-ethnic USA? Non-Jewish & most Jewish entrepreneurs don’t
behave that way.
It was very gratifying to see Tucker Carlson's
recent attack on the activities of Paul Singer's vulture fund, Elliot Associates, a group I
first
profiled four years ago. In many respects, it is truly remarkable that vulture funds like
Singer's escaped major media attention prior to this, especially when one considers how
extraordinarily harmful and exploitative they are. Many countries are now in very significant
debt to groups like Elliot Associates and, as Tucker's segment very starkly illustrated, their
reach has now extended into the very heart of small-town America. Shining a spotlight on the
spread of this virus is definitely welcome. I strongly believe, however, that the problem
presented by these cabals of exploitative financiers will only be solved if their true nature
is fully discerned. Thus far, the descriptive terminology employed in discussing their
activities has revolved only around the scavenging and parasitic nature of their activities.
Elliot Associates have therefore been described as a quintessential example of a "vulture fund"
practicing "vulture capitalism." But these funds aren't run by carrion birds. They are operated
almost exclusively by Jews. In the following essay, I want us to examine the largest and most
influential "vulture funds," to assess their leadership, ethos, financial practices, and how
they disseminate their dubiously acquired wealth. I want us to set aside colorful metaphors. I
want us to strike through the mask.
It is commonly agreed that the most significant global vulture funds are Elliot Management,
Cerberus, FG Hemisphere, Autonomy Capital, Baupost Group, Canyon Capital Advisors, Monarch
Alternative Capital, GoldenTree Asset Management, Aurelius Capital Management, OakTree Capital,
Fundamental Advisors, and Tilden Park Investment Master Fund LP. The names of these groups are
very interesting, being either blankly nondescript or evoking vague inklings of Anglo-Saxon or
rural/pastoral origins (note the prevalence of oak, trees, parks, canyons, monarchs, or the use
of names like Aurelius and Elliot). This is the same tactic employed by the Jew Jordan Belfort,
the "Wolf of Wall Street," who operated multiple major frauds under the business name Stratton
Oakmont.
These names are masks. They are designed to cultivate trust and obscure the real background
of the various groupings of financiers. None of these groups have Anglo-Saxon or venerable
origins. None are based in rural idylls. All of the vulture funds named above were founded by,
and continue to be operated by, ethnocentric, globalist, urban-dwelling Jews. A quick review of
each of their websites reveals their founders and central figures to be:
Elliot Management
-- Paul Singer, Zion Shohet, Jesse Cohn, Stephen Taub, Elliot Greenberg and Richard Zabel
Cerberus -- Stephen Feinberg, Lee Millstein, Jeffrey Lomasky, Seth Plattus, Joshua Weintraub,
Daniel Wolf, David Teitelbaum FG Hemisphere -- Peter Grossman Autonomy Capital -- Derek Goodman
Baupost Group -- Seth Klarman, Jordan Baruch, Isaac Auerbach Canyon Capital Advisors -- Joshua
Friedman, Mitchell Julis Monarch Alternative Capital -- Andrew Herenstein, Michael Weinstock
GoldenTree Asset Management -- Steven Tananbaum, Steven Shapiro Aurelius Capital Management --
Mark Brodsky, Samuel Rubin, Eleazer Klein, Jason Kaplan OakTree Capital -- Howard Marks, Bruce
Karsh, Jay Wintrob, John Frank, Sheldon Stone Fundamental Advisors -- Laurence Gottlieb,
Jonathan Stern Tilden Park Investment Master Fund LP -- Josh Birnbaum, Sam Alcoff
The fact that all of these vulture funds, widely acknowledged as the most influential and
predatory, are owned and operated by Jews is remarkable in itself, especially in a contemporary
context in which we are constantly bombarded with the suggestion that Jews don't have a special
relationship with money or usury, and that any such idea is an example of ignorant prejudice.
Equally remarkable, however, is the fact that Jewish representation saturates the board level
of these companies also, suggesting that their beginnings and methods of internal promotion and
operation rely heavily on ethnic-communal origins, and religious and social cohesion more
generally. As such, these Jewish funds provide an excellent opportunity to examine their
financial and political activities as expressions of Jewishness, and can thus be placed in the
broader framework of the Jewish group evolutionary strategy and the long historical trajectory
of Jewish-European relations.
How They Feed
In May 2018, Puerto Rico declared a form of municipal bankruptcy after falling into more
than
$74.8 billion in debt, of which more than $34 billion is interest and fees. The debt was
owed to
all of the Jewish capitalists named above, with the exception of Stephen Feinberg's
Cerberus group. In order to commence payments, the government had instituted a policy of fiscal
austerity, closing schools and raising utility bills, but when Hurricane Maria hit the island
in September 2017, Puerto Rico was forced to stop transfers to their Jewish creditors. This
provoked an aggressive attempt by the Jewish funds to seize assets from an island suffering
from an 80% power outage, with the addition of further interest and fees. Protests broke out in
several US cities calling for the debt to be forgiven. After a quick stop in Puerto Rico in
late 2018, Donald Trump pandered to this sentiment when he told Fox News, "They owe a lot of
money to your friends on Wall Street, and we're going to have to wipe that out." But Trump's
statement, like all of Trump's statements, had no substance. The following day, the director of
the White House budget office, Mick Mulvaney, told reporters: "I think what you heard the
president say is that Puerto Rico is going to have to figure out a way to solve its debt
problem." In other words, Puerto Rico is going to have to figure out a way to pay its Jews.
Trump's reversal is hardly surprising, given that the President is considered extremely
friendly to Jewish financial power. When he referred to "your friends on Wall Street" he really
meant his friends on Wall Street. One of his closest allies is Stephen Feinberg, founder
and CEO of Cerberus, a war-profiteering vulture fund that has now accumulated
more than $1.5 billion in Irish debt , leaving the country prone to a "
wave of home repossessions " on a scale not seen since the Jewish mortgage traders behind
Quicken Loans (Daniel Gilbert) and Ameriquest (Roland Arnall)
made thousands of Americans homeless . Feinberg has also been associated with mass
evictions in Spain, causing a collective of Barcelona anarchists to
label him a "Jewish mega parasite" in charge of the "world's vilest vulture fund." In May
2018, Trump made Feinberg
chair of his Intelligence Advisory Board , and one of the reasons for Trump's sluggish
retreat from Afghanistan has been the fact Feinberg's DynCorp has enjoyed years of lucrative government
defense contracts training Afghan police and providing ancillary services to the military.
But Trump's association with Jewish vultures goes far beyond Feinberg. A recent piece
in the New York Post declared "Orthodox Jews are opening up their wallets for Trump in
2020." This is a predictable outcome of the period 2016 to 2020, an era that could be neatly
characterised as How Jews learned to stop worrying and love the Don. Jewish financiers
are opening their wallets for Trump because it is now clear he utterly failed to fulfil
promises on mass immigration to White America, while pledging his commitment to Zionism and to
socially destructive Jewish side projects like the promotion of homosexuality. These actions,
coupled with his commuting
of Hasidic meatpacking boss Sholom Rubashkin 's 27-year-sentence for bank fraud and money
laundering in 2017, have sent a message to Jewish finance that Trump is someone they can do
business with. Since these globalist exploiters are essentially politically amorphous, knowing
no loyalty but that to their own tribe and its interests, there is significant drift of Jewish
mega-money between the Democratic and Republican parties. The New York Post reports, for
example, that when Trump attended a $25,000-per-couple luncheon in November at a Midtown hotel,
where 400 moneyed Jews raised at least $4 million for the America First [!] SuperPAC, the
luncheon organiser Kelly Sadler, told reporters, "We screened all of the people in attendance,
and we were surprised to see how many have given before to Democrats, but never a Republican.
People were standing up on their chairs chanting eight more years." The reality, of course, is
that these people are not Democrats or Republicans, but Jews, willing to push their money in
whatever direction the wind of Jewish interests is blowing.
The collapse of Puerto Rico under Jewish debt and elite courting of Jewish financial
predators is certainly nothing new. Congo , Zambia , Liberia ,
Argentina , Peru ,
Panama , Ecuador ,
Vietnam , Poland , and
Ireland are just some of the countries that have slipped fatefully into the hands of the
Jews listed above, and these same people are now closely watching
Greece and
India . The methodology used to acquire such leverage is as simple as it is ruthless. On
its most basic level, "vulture capitalism" is really just a combination of the
continued intense relationship between Jews and usury and Jewish involvement in medieval
tax farming. On the older practice, Salo Baron writes in Economic History of the Jews
that Jewish speculators would pay a lump sum to the treasury before mercilessly turning on the
peasantry to obtain "considerable surpluses if need be, by ruthless methods." [1] S. Baron
(ed) Economic History of the Jews (New York, 1976), 46-7. The activities of the
Jewish vulture funds are essentially the same speculation in debt, except here the trade in
usury is carried out on a global scale with the feudal peasants of old now replaced with entire
nations. Wealthy Jews pool resources, purchase debts, add astronomical fees and interests, and
when the inevitable default occurs they engage in aggressive legal activity to seize assets,
bringing waves of jobs losses and home repossessions.
This type of predation is so pernicious and morally perverse that both the
Belgian and
UK governments have taken steps to ban these Jewish firms from using their court systems to
sue for distressed debt owed by poor nations. Tucker Carlson, commenting on Paul Singer's
predation and the ruin of the town of Sidney, Nebraska, has said:
It couldn't be uglier or more destructive. So why is it still allowed in the United
States? The short answer: Because people like Paul Singer have tremendous influence over our
political process. Singer himself was the second largest donor to the Republican Party in
2016. He's given millions to a super-PAC that supports Republican senators. You may never
have heard of Paul Singer -- which tells you a lot in itself -- but in Washington, he's
rock-star famous. And that is why he is almost certainly paying a lower effective tax rate
than your average fireman, just in case you were still wondering if our system is rigged. Oh
yeah, it is.
Aside from direct political donations, these Jewish financiers also escape scrutiny by
hiding behind a mask of simplistic anti-socialist rhetoric that is common in the American
Right, especially the older, Christian, and pro-Zionist demographic. Rod Dreher, in a
commentary on Carlson's
piece at the American Conservative , points out that Singer gave a speech in May
2019 attacking the "rising threat of socialism within the Democratic Party." Singer continued,
"They call it socialism, but it is more accurately described as left-wing statism lubricated by
showers of free stuff promised by politicians who believe that money comes from a printing
press rather than the productive efforts of businesspeople and workers." Dreher comments: "The
productive efforts of businesspeople and workers"? The gall of that man, after what he did to
the people of Sidney."
What Singer and the other Jewish vultures engage in is not productive, and isn't even any
recognisable form of work or business. It is greed-motivated parasitism carried out on a
perversely extravagant and highly nepotistic scale. In truth, it is Singer and his co-ethnics
who believe that money can be printed on the backs of productive workers, and who ultimately
believe they have a right to be "showered by free stuff promised by politicians." Singer places
himself in an infantile paradigm meant to entertain the goyim, that of Free Enterprise vs
Socialism, but, as Carlson points out, "this is not the free enterprise that we all learned
about." That's because it's Jewish enterprise -- exploitative, inorganic, and attached to
socio-political goals that have nothing to do with individual freedom and private property.
This might not be the free enterprise Carlson learned about, but it's clearly the free
enterprise Jews learn about -- as illustrated in their extraordinary
over-representation in all forms of financial exploitation and white collar crime. The
Talmud, whether actively studied or culturally absorbed, is their code of ethics and their
curriculum in regards to fraud, fraudulent bankruptcy, embezzlement, usury, and financial
exploitation. Vulture capitalism is Jewish capitalism.
Whom They Feed
Singer's duplicity is a perfect example of the way in which Jewish finance postures as
conservative while conserving nothing. Indeed, Jewish capitalism may be regarded as the root
cause of the rise of Conservative Inc., a form or shadow of right wing politics reduced solely
to fiscal concerns that are ultimately, in themselves, harmful to the interests of the majority
of those who stupidly support them. The spirit of Jewish capitalism, ultimately, can be
discerned not in insincere bleating about socialism and business, intended merely to entertain
semi-educated Zio-patriots, but in the manner in which the Jewish vulture funds disseminate the
proceeds of their parasitism. Real vultures are weak, so will gorge at a carcass and
regurgitate food to feed their young. So then, who sits in the nests of the vulture funds,
awaiting the regurgitated remains of troubled nations?
Boston-based Seth Klarman (net worth $1.5 billion), who like Paul Singer has
declared "free enterprise has been good for me," is a rapacious debt exploiter who was
integral to the financial collapse of Puerto Rico, where he hid much of activities behind a
series of shell companies. Investigative journalists eventually discovered that Klarman's
Baupost group was behind much of the aggressive legal action intended to squeeze the decimated
island for bond payments. It's clear that the Jews involved in these companies are very much
aware that what they are doing is wrong, and they are careful to avoid too much reputational
damage, whether to themselves individually or to their ethnic group. Puerto Rican journalists,
investigating the debt trail to Klarman, recall trying to follow one of the shell companies
(Decagon) to Baupost via a shell company lawyer (and yet another Jew) named Jeffrey Katz:
Returning to the Ropes & Gray thread, we identified several attorneys who had worked
with the Baupost Group, and one, Jeffrey Katz, who – in addition to having worked
directly
with Baupost – seemed to describe a particularly close and longstanding relationship
with a firm fitting Baupost's profile on his experience page. I called
Katz and he picked up, to my surprise. I identified myself, as well as my affiliation with
the Public Accountability Initiative, and asked if he was the right person to talk to about
Decagon Holdings and Baupost. He paused, started to respond, and then evidently thought
better of it and said that he was actually in a meeting, and that I would need to call back
(apparently, this high-powered lawyer picks up calls from strange numbers when he is in
important meetings). As he was telling me to call back, I asked him again if he was the right
person to talk to about Decagon, and that I wouldn't call back if he wasn't, and he seemed to
get even more flustered. At that point he started talking too much, about how he was a lawyer
and has clients, how I must think I'm onto some kind of big scoop, and how there was a person
standing right in front of him – literally, standing right in front of him –
while I rudely insisted on keeping him on the line.
One of the reasons for such secrecy is the intensive Jewish philanthropy engaged in by
Klarman under his Klarman Family
Foundation . While Puerto Rican schools are being closed, and pensions and health
provisions slashed, Klarman is regurgitating the proceeds of massive debt speculation to his "
areas of
focus " which prominently includes " Supporting the global Jewish community
and Israel ." While plundering the treasuries of the crippled nations of the goyim, Klarman
and his co-ethnic associates have committed themselves to "improving the quality of life and
access to opportunities for all Israeli citizens so that they may benefit from the country's
prosperity." Among those in Klarman's nest, their beaks agape for Puerto Rican debt interest,
are the American Jewish Committee, Boston's Combined Jewish Philanthropies, the Holocaust
Memorial Museum, the Honeymoon Israel Foundation, Israel-America Academic Exchange, and the
Israel Project. Klarman, like Singer, has also been an enthusiastic proponent of liberalising
attitudes to homosexuality, donating $1 million to a Republican super PAC aimed at supporting
pro-gay marriage GOP candidates in 2014 (Singer donated $1.75 million). Klarman, who also
contributes to candidates
who support immigration reform, including a path to citizenship for undocumented immigrants,
has said "The right to gay marriage is the largest remaining civil rights issue of our time. I
work one-on-one with individual Republicans to try to get them to realize they are being
Neanderthals on this issue."
Steven Tananbaum's GoldenTree Asset Management has also fed well on Puerto Rico, owning $2.5
billion of the island's debt. The Centre for Economic and Policy Research has
commented :
Steven Tananbaum, GoldenTree's chief investment officer, told a business conference in
September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto
Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA
bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing
an unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its
massive debt load, these vulture funds are relying on their ability to convince politicians
and the courts to make them whole. The COFINA bondholder group has spent
$610,000 to lobby Congress over the last two years, while GoldenTree itself
made $64,000 in political contributions to federal candidates in the 2016 cycle. For
vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for
exorbitant profits.
Whom does Tananbaum feed with these profits? A brief glance at the spending of the
Lisa and Steven Tananbaum Charitable Trust reveals a relatively short list of beneficiaries
including United Jewish Appeal Foundation, American Friends of Israel Museum, Jewish Community
Center, to be among the most generously funded, with sizeable donations also going to museums
specialising in the display of degenerate and demoralising art.
Following the collapse in Irish asset values in 2008, Jewish vulture funds including OakTree
Capital swooped on mortgagee debt to seize tens of thousands of Irish homes, shopping malls,
and utilities (Steve Feinberg's Cerberus took control of public waste disposal). In 2011,
Ireland emerged as a hotspot for distressed property assets, after its bad banks began selling
loans that had once been held by struggling financial institutions. These loans were quickly
purchased at knockdown prices by Jewish fund managers, who then aggressively sought the
eviction of residents in order to sell them for a fast profit. Michael Byrne, a researcher at
the School of Social Policy at University College Dublin, Ireland's largest university,
comments : "The
aggressive strategies used by vulture funds lead to human tragedies." One homeowner, Anna Flynn
recalls how her mortgage fell into the hands of Mars Capital, an affiliate of Oaktree Capital,
owned and operated by the Los Angeles-based Jews Howard Marks and Bruce Karsh. They were "very,
very difficult to deal with," said Flynn, a mother of four. "All [Mars] wanted was for me to
leave the house; they didn't want a solution [to ensure I could retain my home]."
When Bruce Karsh isn't making Irish people homeless, whom does he feed with his profits? A
brief glance at the spending of the
Karsh Family Foundation reveals millions of dollars of donations to the Jewish Federation,
Jewish Community Center, and the United Jewish Fund.
Paul Singer, his son Gordin, and their Elliot Associates colleagues Zion Shohet, Jesse Cohn,
Stephen Taub, Elliot Greenberg and Richard Zabel, have a foothold in almost every country, and
have a stake in every company you're likely to be familiar with, from book stores to dollar
stores. With the profits of exploitation, they
fund campaigns for homosexuality and mass migration , boost Zionist politics,
invest millions in security for Jews , and promote wars for Israel. Singer is a Republican,
and is on the Board of the Republican Jewish Coalition. He is a former board member of the
Jewish Institute for National Security Affairs, has funded neoconservative research groups like
the Middle East Media Research Institute and the Center for Security Policy, and is among the
largest funders of the neoconservative Foundation for Defense of Democracies. He was also
connected to the pro-Iraq War advocacy group Freedom's Watch. Another key Singer project was
the Foreign Policy Initiative (FPI), a Washington D.C.-based advocacy group that was founded in
2009 by several high-profile Jewish neoconservative figures to promote militaristic U.S.
policies in the Middle East on behalf of Israel and which received its seed money from
Singer.
Although Singer was initially anti-Trump, and although Trump once
attacked Singer for his pro-immigration politics ("Paul Singer represents amnesty and he
represents illegal immigration pouring into the country"), Trump is now essentially funded by
three Jews -- Singer, Bernard Marcus, and Sheldon Adelson, together accounting for over $250
million in pro-Trump political money . In return, they want war with Iran. Employees of
Elliott Management were one of the main sources of funding for the 2014 candidacy of the
Senate's most outspoken Iran hawk, Sen. Tom Cotton (R-AR), who urged Trump to conduct a
"retaliatory strike" against Iran for purportedly attacking two commercial tankers. These
exploitative Jewish financiers have been clear that they expect a war with Iran, and they are
lobbying hard and preparing to call in their pound of flesh. As one political commentator put
it, "These donors have made their policy preferences on Iran plainly known. They surely expect
a return on their investment in Trump's GOP."
The same pattern is witnessed again and again, illustrating the stark reality that the
prosperity and influence of Zionist globalism rests to an overwhelming degree on the predations
of the most successful and ruthless Jewish financial parasites. This is not conjecture,
exaggeration, or hyperbole. This is simply a matter of striking through the mask, looking at
the heads of the world's most predatory financial funds, and following the direction of
regurgitated profits.
Make no mistake, these cabals are everywhere and growing. They could be ignored when they
preyed on distant small nations, but their intention was always to come for you too. They are
now on your doorstep. The working people of Sidney, Nebraska probably had no idea what a
vulture fund was until their factories closed and their homes were taken. These funds will move
onto the next town. And the next. And another after that. They won't be stopped through blunt
support of "free enterprise," and they won't be stopped by simply calling them "vulture
capitalists."
Strike through the mask!
Notes
[1] S.
Baron (ed) Economic History of the Jews (New York, 1976), 46-7.
To what extent is Jewish success a product of Jewish intellect and industry versus being a
result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
An application of "chutzpah" to business, if you will – the gall to break social
conventions to get what you want, while making other people feel uncomfortable; to wheedle
your way in at the joints of social norms and conventions – not illegal, but selfish
and rude.
Krav Maga applies the same concept to the martial arts: You're taught to go after the
things that every other martial art forbids you to target: the eyes, the testicles, etc. In
other sports this is considered "low" and "cheap." In Krav Maga, as perhaps a metaphor for
Jewish behavior in general, nothing is too low because it's all about winning .
There's a rather good article on the New Yorker discussing the Sacklers and the
Oxycontin epidemic. It focusses on the dichotomy between the family's ruthless promotion of
the drug and their lavish philanthropy. 'Leave the world a better place for your presence'
and similar pieties and Oxycontin.
The article lightly touches on the extent of their giving to Hebrew University of
Jerusalem -- but in general, treads lightly when it comes to their Judaism.
understandably. The New Yorker isn't exactly alt-right country, after all. But can
Joyce or anyone else provide a more exact breakdown on the Sacklers' giving? Are they genuine
philanthropists, or is it mostly for the Cause?
@anon'To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit? '
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
I won't defend high finance because I don't like it either. But this is a retarded and highly
uninformed attack on it.
1. The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of bondholders,
probably the majority, cannot hold distressed or defaulted debt. Insurance companies often
can't by law. Bond mutual funds set out in their prospectuses they don't invest in anything
rated lower than A, AA, or whatever. Even those allowed to hold distressed debt don't want
the extra costs involved with doing so, such as carefully following bankruptcy proceedings
and dealing with delayed and irregular payments.
As a result, it is natural that normal investors sell off such debt at a discount to funds
that specialize in it.
2. Joyce defends large borrowers that default on their debt. Maybe the laws protecting
bankrupts and insolvents should be stronger. But you do that, and lenders become more
conservative, investment declines, and worthy businesses can't get investments. I think
myself the laws in the US are too favorable to lenders, but there's definitely a tradeoff,
and the question is where the happy middle ground is. In Florida a creditor can't force the
sale of a primary residence, even if it is worth $20 million. That's going too far in the
other direction.
3. " either blankly nondescript or evoking vague inklings of Anglo-Saxon or rural/pastoral
origins "
More retardation. Cerberus is a greek dog monster guarding the gates of hell. Aurelius is
from the Latin word for gold. "Hemisphere" isn't an Anglosaxon word nor does in invoke rural
origins.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
4. The final and most general point: it's trivially easy to attack particular excesses of
capitalism. Fixing the excesses without creating bigger problem is the hard part. Two ideas I
favor are usury laws and Tobin taxes.
Jewishness aside, maximizing shareholder is the holy grail of all capitalist enterprises. The
capitalist rush to abandon the American working class when tariff barriers evaporated is just
another case of vulturism. Tax corporations based on the domestic content of their products
and ban usury and vulturism will evaporate.
Someone with the username kikz posted a link to this article in the occidental observer. I
read it and thought it was a great article. I'm glad it's featured here.
The article goes straight for the jugular and pulls no punches. It hits hard. I like
that:
1. It shines a light on the some of the scummiest of the scummiest Wall Street
players.
2. It names names. From the actual vulture funds to the rollcall of Jewish actors running
each. It's astounding how ethnically uniform it is.
3. It proves Trump's ties with the most successful Vulture kingpin, Singer.
4. It shows how money flows from the fund owners to Zionist and Jewish causes.
This thing reads like a court indictment. It puts real world examples to many of the
theories that are represents on this site. Excellent article.
Andrew Carnegie left behind institutions like Carnegie Hall, Carnegie-Mellon University,
and over 2500 Free Libraries from coast to coast, in a time when very little was done to
help what we now call the “underprivileged”.
And he funded the building of the Peace Palace (“Vredespaleis”) in The Hague,
presently the seat of the International Court of Justice, an institution not held in high
esteem in the home country of the generous donor.
Jimmy1969 says: December
19, 2019 at 2:12 pm GMT 200 Words Golden Tree Asset Management bought up Post Media in
Canada at a fire sale years ago from the bankrupt Asper family. Post Media is a conglomerate
that controls dozens and dozens of media outlets in all of Canada including 95% of all the
major Newspapers in every large city. Therefore Canadian news is de facto controlled by an
American New York Jewish hedge fund. That fact has been known for years and is joked about on
all of the bar stools in Canada where reporters hang out .but not in the Press. No one writes
about it none of the Nationalistic Professors, Journalists, Members of Parliament no one. One
fact is certain you will never ever see a single bad word in any of their papers critical of
Israel, or any actions of Israelis. Any comment critical of Israel or Zionist power, no matter
how objective or moderate is immediately deleted. And sadly this is no joke. The world should
take note of how Canada is strangled. Read More Replies: @bike-anarkist
Replies: @the
grand wazoo , @eah
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@silviosilver
Paying what you owe is perfectly fine and moral. Paying double of what you owe on account of
inflated fees and interest is blood sucking. Doing this to developing nations is downright
cruel.
Let's say Congo owes $10 billion. A finance firm buys that debt for $8 billion, collects
the full $10 billion (which already includes interest) and make a $2 billion profit. That's
not too terrible.
But to buy the debt for $8 billion and then force Congo to pay $60 billion is Jewish.
Playing the victim while accusing Congo of financial mismanagement and forcing them to close
their schools and hospitals – very Jewish. Evading the ethical implications of one's
actions and seeking cover behind legalism like a coward –> Jew level –
Godlike
Jews see themselves as the ingroup, and the "goyim" as the outgroup. Since Whites are the
"outgroup" it's not just acceptable, but praiseworthy, to exploit them. To "beat" them at
war.
The problem is that Whites wrongly do not see Jews as an outgroup – something that
Jews themselves take great pains to discourage via their various front groups like the
ADL.
There is no "technical" fix, there is no objective "system" that can change this dynamic.
There is no "level playing field."
Whites need to ostracize Jews at all levels. Boycott, Divest and Sanction – not just
their apartheid regime of Jew bigotry in Zionist-occupied Palestine, but at every level of
society, business, civil institutions, etc.
Jews are destroying the world. Everywhere they go, they leave behind nations in ruins.
Look at Europe, Africa and the Americas, Jews have left their ugly footprints. Corruption,
prostitution, drugs and human trafficking are their trade.
Reading the (obvious) Jews commenting here on their various financial swindle-systems is a
lot like reading zionists defending Israel. The basic tactics are always the same:
1.) Focus on some small aspects or most recent events and make a comparison to Gentiles or
other events with similar micro-narratives. "See? Everyone else does it! Why single out us
poor, persecuted Jews?"
2.) Use these minute distractions to drown out the overall issues, underlying concepts,
long history or guiding ideology in noise and minutiae.
3.) Never start at the beginning of the story and follow the trajectory though; always
start in the middle and focus on some trivial detail, use it to defend the (never stated)
sicko ideology that started the problem in the first place. Completely ignore any timelines
or larger perspectives.
David Icke calls it (or used to call it -- - back when his backbone was healthy) the
Reptilian Brain. The ability to manipulate trivial minutiae while never addressing underlying
concepts or timelines.
It is hard to feel sorry for WASPs, they struck a deal with the Jews centuries ago
Catholic political powers have been "striking deals with Jews" for two thousand years.
There is a synagogue in Rome right next to the Vatican which has been legally privileged
since the days of Christ. As E. Michael Jones detailed in his book, Jewish Revolutionary
Spirit , the Catholic Church itself defended Jews from the angry mobs time and time again
throughout their history, to the point bishops and priests would harbor Jews in the
cathedrals and lock the doors before the peasants could arrest them.
Indeed, the infighting among Whites promoted by the likes of Jones is yet again another
assist from Catholic powers to their partners, the Jews.
The popular "neo-reactionary/NRx" movement, started by the Ashkenazi Curtis Yarvin, is yet
another "right-wing" fad that blames Calvinists for all the problems in the world.
Jews are blameless, yet again another White ethnicity/religion is at fault.
No wonder Jews get away with what they do. Whites are too busy infighting over false
history demonizing various rival cults.
So, the "vultures" flew out to the West after devouring the Russian empire and now with the
help of the likes of the homeboy or more like a two bit whore, Ben Sasse, they've descended
on America and have started gutting it out.
Where will they fly next? White Christians don't want them and black/brown Muslims can't
stand them but perhaps China is their next destination being that they have shipped most of
the jobs out there and the whole lot of them are marrying "Chinese-American" women in droves
for good measure.
In the coming battle of the titans, the one who's name can't be pronounced, viz. Yahweh,
hopefully has better guns than Jehovah and Allah, for it sure is gonna need it when the
latter two gang up on it maybe Buddha will give it a helping hand being that they're
practically in-laws now!
My question is how do entities like Puerto Rico get so far in debt in the first
place?
For the same reason individuals get into debt, financial incompetence and sometimes a bit
of bad luck.
I've personally never understood how people can take out loans from companies like Wonga
or QuickQuid (both Jewish owned incidentally) seeing as they quite clearly advertise their
exorbitant interest rates.
Look up income by ethnic group in the UK and US, you will find that Indians and Chinese
(South Asians) are the richest in both countries (except for Jews of course).
What I have found is that these two groups come from a debt-averse culture, their kids
actually live with their parents until they have saved enough money for a house and other
such things required to start a family.
Whites meanwhile are WAY to trusting of these faceless financial institutions, they get
into debt very easily and thus become slaves, if you have kids, the first thing you should
educate them about is finance and debt, don't throw them out to the dogs either, it's tragic
to see some getting into debt and then having other problems like drugs and alcohol
addictions.
I came out of that book with the utmost admiration for Bill Browder.
You don't seem to be serious, if I understood what you want to say. Even Der Spiegel has
published a critical article in English about Browder, Browder is the one who pushed for
sanctions against Russia because of the case Magnitsky:
Questions Cloud Story Behind U.S. Sanctions
The story of Sergei Magnitsky has come to symbolize the brutal persecution of
whistleblowers in Russia. Ten years after his death, inconsistencies in Magnitsky's story
suggest he may not have been the hero many people -- and Western governments -- believed him
to be.
@Anonymous
Sure, but you're talking utopia. The reality is that public entities issue bonds to finance
special projects or even their operations. Somebody then buys the bonds and expects to be
paid back.
@Realist
There is something especially deficient with Whites when it comes to money matter, how can
such a large number of Whites take short-term loans from companies like Wonga and QuickQuid,
when the nature of their business (usury) is very clearly advertised. I was around 10 years
old when I was astounded at the 5000% APR loans advertised on TV, and wondered if I
understood interest right.
Parents, especially White ones, really need to educate their children on personal finance
and debt, it seems a lot of Whites these days do not actually own anything and all their
flashy gadgets and whatnot are being loaned out (buying Iphone on contract for example),
these people are the hardest hit as they can't scrape together even a couple of hundred
pounds/dollars/euros when hard times come. Its farcical albeit tragic.
Wow what a confused mess. Here's a summary: Vulture capitalism is bad for no particular
reason but only an evil anti-Semite (like you) would dare criticize capitalism.
And they want the island of Puerto Rico for themselves, save a few thousand able bodies to
serve as maids and gardeners. But what about the triple-raced residents of the island itself?
Well, that's easy! Dump them in states like Florida and New York and let the suckers pay for
it. After all, it's not like they are going to vote for the other side we get to eat the cake
and keep it too!
An article that appeared in Goebbels newspaper, Der Angriff (The Attack) titled
"The Jew", a short excerpt that is relevant to your comment;
The Jew is immunized against all dangers: one may call him a scoundrel, parasite,
swindler, profiteer, it all runs off him like water off a raincoat. But call him a Jew and
you will be astonished at how he recoils, how injured he is, how he suddenly shrinks back:
"I've been found out."
I think the term "vulture capitalism" is calumnious to vultures, who, as carrion birds,
perform a useful and purifying function in nature.
The Jews as a collective, i.e., the Jews who identify as such, concur in the death
sentence of Christ handed down by their Sanhedrin and espouse the Talmudic mitzvah of killing
the best of the gentiles (which naturally implies elevating the worst of the gentiles to
power and prominence) are more to be likened to plague bearing rodents. Unlike vultures, rats
feast on corruption and putrescence, spread disease and also kill the living.
We embrace the finance capitalist worldview at our peril. In its essence, it is nothing
but the worship of money making and profiteering as the supreme aspiration of life,
irregardless of its horrible effects on our compatriots and fellow humans. In doing so, we
become Jews at heart.
There is nothing wrong with industry and the profit motive per se. Predatory finance
contributes nothing to the well being of a nation and the needs of the physical economy- it
is supremely toxic and corrosive of both. It must be expunged and its champions expropriated
and exiled. People like the odious Peter Singer have no place in a moral world; they ought to
be first expropriated, then exiled as far away from their host societies as possible.
I was personally wounded by the anti gay rhetoric peppered across this article. I can't help
making the association that Paul singer's son came out as gay and that this must be the
source of the author's animus against him and the others. Shakespeare, who was also
homosexual, described this state of mind as "a green eyed monster," i.e. jealousy. I'm
mortified that other members of the commentariat have not taken issue with this. Maybe we
would be more compassionate to the denizens of middle America if they allowed our most basic
civil rights.
@J
Adelman Oh those kind jews have always been for the working class? But there is a white
working class and jews want them extinct from the face of the earth. Read 'Abolishing
whiteness has never been more urgent.' By Mark Levine
@silviosilver
You make several good points but you don't address the issue of capitalists manipulating the
politicians with campaign contributions. If a fund gets paid off by public money due to
politicians putting the fund owners ahead of the taxpayers, that's corrupt. What happened to
the 'creative destruction' principle by which large IBs like Goldman would have been allowed
to collapse and their principals carried off in leg-irons in 2008? Oh -- they are "too big to
fail and too big to jail." So much for the free market myth.
Moreover, most Jews support endless free money for "victim groups" to be forcibly
extracted from the middle-class. Never mind if Mr. Jones has a lengthy criminal record, let's
pay for him to go to college, let's pay his rent, let's pay his medical bills, etc. Why then
take such a hard line on people who foolishly get into debt?
Moreover, the economic downturn that caused many mortgagors to default was CAUSED BY the
big Wall Street firms' irresponsible behavior.
Also, most people do tend to temper economic contracts with a degree of compassion.
Gentile capitalism does not exist in a vacuum.
I recall reading about a young female environmentalist who was refusing to leave a
venerable redwood tree that was scheduled to be cut down. The WASP businessman who owned the
tree was extremely patient with the girl, tried to win her over, threw her food and drinks,
and so on. The land with the tree was then sold to some Jewish firm. At that point the
article left off. The tree was cut down with no further negotiation.
The greatest jewish vulture fund is the zionist privately owned feral reserve aka the FED ,
is creates money out of thin air and feeds this money to the otherwise bankrupt zionist banks
and not just here in the ZUS but in Europe, and the BIS is the vulture fund of vulture funds
owned by the zionists, the biggest scam in the history of the world.
By the way, Tucker Carlson said that 911 truthers were nuts, that says it all about
him.
Mass immigration for cheap labor, the weaponization of the grievance industry against
white majority/European nations and the use for the production of anti-white race baiting
media.
Much great work!! Very impressed. Would recommend to Moses himself.
@Colin
Wright I remember seeing a clip where Jared Taylor was on some talk show. He was calmly
citing statistics on how blacks are over represented among violent criminals. A sassy black
women broken in with "Jeffrey Dahmer Ted Bundy they were all white!" Not her exact words but
something to that effect. Naxalt, in other words.
I don't think Joyce is suggesting that all unscrupulous capitalists are Jews, or vice
versa. It is true that gentiles can be scumbags (the Enron boys.)
Now most Muslims are not terrorists, and many terrorists are not Muslims.
And yet it seems like there are many people who will notice patterns among other groups,
rightfully roll their eyes when they hear PC arguments in favor of those groups, and then
pull out the naxalt and what-about-isms when you notice patterns in Jewish behavior.
@Dutch
Boy Your statement: "maximizing shareholder is the holy grail of all capitalist
enterprises" statement is spot on.
I've been saying that for decades.
Labor is never given value, but is a commodity-a "necessary evil" according to the Wall
Street types and is to be minimized and marginalized at all costs.
Adolph Hitler's Germany monetized labor and gave it value. THAT is the reason that the
jews went after Germany. Post WW1 Germany was successful in its economy due to throwing off
the shackles (and shekels) of the internationalist banksters.
Henry Ford CREATED a market which had not existed when he paid his employees $5.00 per day
when the average wage of the day was around $1.25 per day. His premise was not entirely
altruistic as assembly line work was monotonous; a way had to be found to retain employees as
well.
Of course, the wall street types and the banksters howled that Ford's wage rates would
destroy capitalism (as they knew it-those at the top reap all of the benefits while the
proles are forced to live on a bare subsistence wage, due to the machinations of those at the
top).
Guess what??
The OPPOSITE happened. Henry Ford knew one of the basic tenets of a truly free,
capitalistic society, that a well-paid work force would be able to participate and contribute
to a strong economy, unlike what is taught in business schools today-that wages must be kept
to a bare minimum and that the stockholder is king.
Our "free trade" politicians have assisted the greedy wall street types and banksters in
depressing wages on the promise of cheap foreign labor and products.
A good example of this is the negative criticism that Costco receives for paying its
employees well above market wages. These same wall street types praise Wal-Mart for paying
its employees barely subsistence wages while assisting them in filling out their public
assistance (welfare) forms.
Any sane person KNOWS that in order for capitalism to work, employees need to make an
adequate wage. Unfortunately, this premise does not exist in today's business climate.
Henry Ford openly criticized those of the "tribe" for manipulating wall street and
banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out
the TRUTH.
Catholic priest, Father Coughlin did the same thing and was punished by the Catholic
church, despite his popularity and exposing the TRUTH of the American economy and the
outsider internationalists that ran it . . . and STILL run it.
Our race to the bottom will not be without consequences. A great realignment is necessary
(and is coming) . .
@lavoisier
I'm not sure I'd put Buffett in that category. For example, in one of the companies he
bought, he kept a factory with declining profits open as long as he could to avoid throwing a
large chunk of people out of work overnight. He has mostly made his money by avoiding dopey
fads and a disciplined buy-and-hold approach to stocks.
@J
Adelman' Jewish people have always stood against tyranny against the working class,
the poor and other people of color." '
Right. I'd say Jews actually collaborated extensively in the imposition of tyranny
on the working class in Eastern Europe from 1917 to 1991. That'd be one counter-example.
Should we explore others? The role of Jews in the medieval slave trade? After all,
somebody had to castrate all those Christian boys who were to serve as harem
guards.
No reason to dredge up ancient history -- except here you are, making a blatantly false
claim about it. 'Always stood against ', my ass.
They are gunning for India now who do you think that brought in the Turks who ruled as the
Moguls to exploit the Hindu wealth and later on who did in the Muslims?
Disraeli and his ilk always knew that India was poor but their temples were rich with gold
and it's that they are after one can't build one's own "Third Temple" without it.
Why are the black cohens being promoted (South Brahmins the most pliable ones) at Google,
Microsoft and Pepsi etc.? Because the waterboys, and girls, will help rope in what's left of
the Indian carcass for thirty pieces of silver!
@secondElijah
You are probably the most antisemitic troll I have ever met online.
So, when did Epstein and Weinstein become the standard bearers of the Jewish community?
It is your jealousy of the Jewish people that makes you spew such vile hatred here.
Smug, obnoxious white people like you who have always considered this country their private
preserve are an endangered species. The demographic trends cannot be denied.
In less than 25 years white folks will become a minority in this country. So enjoy it while
you can, Bubba, your days of driving the bus are numbered.
You and other whites here are like the bad guys in every horror movie ever made, who gets
shot five times, or stabbed ten, or blown up twice, and who will eventually pass -- even if
it takes four sequels to make it happen -- but who in the meantime keeps coming back around,
grabbing at our ankles as we walk by, we having been mistakenly convinced that you were
finally dead this time. Fair enough, and have at it. But remember how this movie ends. Our
ankles survive.
YOU DO NOT.
@Saguaro
The soup has boiled over, the horse has bolted and the barn has burnt down and yet you
Yankees haven't woken up.Your politicians are whores who cannot function without funding from
the jews. And Jeffery got them all for Mossad. Enjoy
@Vaterland
The "standing up for People of Color" schtick is particularly disingenous, as all the Jews
have really done isuse their disproportionate control of the media to peddle false narratives
and distort history. One good example of this is the case of then president of the Atlanda
chapter of B'nai B'rith, Leo Frank. Frank had raped and murdered 13 year-old Mary Phagan and
when he was found out, he used his connection with New York Jews to get lots of money and
hire the best defence lawyers, his lawyer then launched vicious racial attacks on a Black
semi-literate janitor who worked in the factory that Frank was in charge of (and where Phagan
worked) to try and convict him of the horrible crime.
Jews will be friends of POC when it suits them. The funny thing about the Frank case is
that the Jewish media has made it out that Frank was innocent and wrongly lynched (only after
his death sentence had been commuted by a judge who was suspected to have been bribed by
powerful New York Jews), and that the Black janitor was the guilty one. This is absurd seeing
as the racist Southern jury would never favour a "White" man over a Black man (anti-semtism
wasn't that big in the South, and especially so considering this was before the Bolsheviks
took control of Russia), and that if Frank had truly been White, this case would be a
landmark case in which the evil rich White man was tried and the Black man was given
justice.
"Gentlemen! I too have been a close observer of the doings of the Bank of the United States.
I have had men watching you for a long time, and am convinced that you have used the funds of
the bank to speculate in the breadstuffs of the country. When you won, you divided the
profits amongst you, and when you lost, you charged it to the bank. You tell me that if I
take the deposits from the bank and annul its charter I shall ruin ten thousand families.
That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin
fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I
have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I
will rout you out!"
Islam stands in their way of usury-ripping of mankind of their
resources and defrauding mankind via bank thefts.
Bring on the Shariah Law. I would much rather live under Shariah, God's Constitution than
under Euoropean/Western diabolic, satanic, fraudulent monies, homosexual, thievery, false
flag hoaxes, WMD's, bogus wars, Unprovoked oppression, tel-LIE-vision, Santa Claus lies,
Disney hocus pocus , hollywood, illuminati, free mason, monarchy, oligarchy, millitary
industrial complex, life time congressman/senators, upto the eye balls taxation, IRS
thievery, Fraudulent federal reserve, Rothchild/Rockerfeller/Queens and Kings city of London
satanic cabal, opec petro$$$ thievery, ISISraHELL's, al-CIA-da hoaxes, Communist, Atheist,
Idol worshippers, Fear Monger's, Drugged and Drunken's oxy crystal coccaine meth psychopath,
child pedeophilia, gambler's, Pathological and diabolical liars, Hypocrites, sodomites ..I
can't think of any right now, because my mind is exploding with rage because of these
troubling central banker's satanic hegemony!
Quran Chapter 30
39. The usury you practice, seeking thereby to multiply people's wealth, will not multiply
with God. But what you give in charity, desiring God's approval -- these are the
multipliers.
40. God is He who created you, then provides for you, then makes you die, then brings you
back to life. Can any of your idols do any of that? Glorified is He, and Exalted above what
they associate.
41. Corruption has appeared on land and sea, because of what people's hands have earned, in
order to make them taste some of what they have done, so that they might return.
@Really
No Shit Jews are doing to White countries what Whites and Jews did to India, no honour
amongst thieves, the ones with the higher verbal IQ wins.
Also it is important to note that the reason India came under the sway of Anglo-Zionist
banking cartels so easily was because how divided it was, I reckon that is why they are
promoting mass immigration. Import lots of different groups, then run lots of race-baiting
stories to distract the plebs from their financial machinations.
This is why Jews are well represented in non-antisemitic White Nationalist organisations
like Jared Taylor's AmRen, they are great at playing both sides.
And he funded the building of the Peace Palace ("Vredespaleis") in The Hague, presently
the seat of the International Court of Justice, an institution not held in high esteem in
the home country of the generous donor.
@Wally
You can act confused all you want, you know exactly what I am talking about, the fact of the
matter is Whites like you and Joyce would be laughing it up at countries/territories like
Puerto Rico, Congo, Vietnam etc etc being carved up and financially enslaved if Whites were
also allowed a piece of the pie along with Jews (as was the case in the days of the British
Empire when WASP's and Jews worked together), but now that the low-IQ countries have been
looted, the Jews have turned on the Whites and the latter are now crying that their criminal
comrades have now betrayed them.
You quite clearly have a clue, you are just terrified and trying to divert because I am
right, the Jews will do to the White nations what the White nations and Jews did to the
non-White nations. All I can say is that you WASPs should have kept to youselves like Eastern
Europeans and Eastern Asians, they didn't really engage in lofty ambitons to dominate the
world and as such are intact at the moment and seem like they will remain that way for a long
time, they are the true conservatives, WASPs have always had a Jewish streak within their
corrupt souls and are now paying the price for engaging with a criminal race.
Why do you think Epstein has all these Gentiles in his pocket? You think do-gooding
gentiles just randomly decided to get into bed with Epstein and Co.? How many East Asians and
Eastern Euros do you see terrified of being outed as paedophiles.
Don't deceive yourselves, all debts are paid in the end, especially when the creditors are
Jews.
@Adrian
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
It is the very same kangaroo court as the IMT or Tokio show trials.
In the book "Heaven is for real" a 4 year old boy who supposedly is dead for a short period,
but actually visits heaven; when he returns, is asked : what is the meaning, the purpose of
life on earth?
His response is so simple, that it could only be true. And it could only come from
knowing
Don't deceive yourselves, all debts are paid in the end, especially when the creditors
are Jews.
It is a mathematical impossibility due to interest. The FED probably goes negative
interest like ECB mafia.
Chances are higher they do a reset and start anew with an electronic ponzi scheme.
No one seriously plans to pay these "debts", they can't be paid, and are actually a nothing
burger, pure fiction.
" it is truly remarkable that vulture funds like Singer's escaped major media attention prior
to this ."
Not really. The Jew's grip is starting to slip now, though. More and more people are
becoming aware that they are virulent parasites and always have been.
@Mulegino1
Real capitalism is the competition of ideas, innovation, efficient manufacturing and quality
products made and produced by honest companies. That competition can, in theory at least,
make people (and companies) "try harder". But only when a company's success is determined by
the strength of its products, not by the "deals" it cuts with Jewish financial, advertising,
"marketing" and swindling rackets, designed to line the pockets of the Jew while destroying
honest competition by Gentiles who struggle to play fair and innovate.
Jewish vulture "capitalism" contributes NOTHING of value to any company or any culture. It
never has and never will.
You and other whites here are like the bad guys in every horror movie ever made, who
gets shot five times, or stabbed ten, or blown up twice, and who will eventually pass --
even if it takes four sequels to make it happen -- but who in the meantime keeps coming
back around, grabbing at our ankles as we walk by, we having been mistakenly convinced that
you were finally dead this time. Fair enough, and have at it. But remember how this movie
ends. Our ankles survive.
YOU DO NOT.
Talk about deflection. Any nation, empire, culture or civilization wherein the Jewish
collective gains critical mass and ultimately absolute power turns into a real horror,
not a movie. The Jews may be said to be the true prototype of the "bad guys in every horror
movie", since they can only be gotten rid of by very rigorous means taken in the healthiest
and most vigorous cultures and societies. Indeed, antisemitism itself is the healthy
immunological reaction of a flourishing culture, and its lack thereof the pathology of a
moribund one.
Woke Christians of European provenance have nothing to envy the Jew (the archetypal Jew)
over. We realize that the true measure of success is not primarily monetary or the
fulfillment of cheap ambitions, but a spiritual and cultural one. On the contrary, the Jewish
hatred against Christian Europe and the civilization that it constructed is engendered out of
sheer envy and malice, because Jewry understands that is would never be capable of
constructing anything similar, and never has. In all of the arts, Jewry has produced nothing
of note.
This is not to say that individual Jews have not made contributions to the arts and sciences,
but they have done so only by participation in gentile culture, not qua Jews. Jewry only
tears down and deconstructs; it is not creative in the sense of high art, and can thrive only
in the swamp of gentile decadence and moral putrefaction. Whatever Jewry touches, it turns to
merde.
European Jewish IQ has only gone 1/2 a standard deviation above the white norm in the last
100 years. Interesting to know why, but the belief Jews have always been more intelligent is
just lack of data.
bias for co-operation
Nazis did this too – they worked reaaally well with each other. The issue was how
they thought of and treated others.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
Your 1 data point aside, are you saying all humans act in identical ways, regardless of
how the ideologies they embrace ask them to act?
Take the ideology of Islam – it does not allow for aggressive war, surprise attacks,
the killing of women or children (unless they take up arms)..
Judaism allows for aggressive war, surprise attack, and demands the killing of all
when a state of war is declared.
Do you believe these declarations lead to identical actions by their practitioners? (in
other words – people act how they would wish to act, and don't really engage in any
belief systems beyond what pulls their own selves?)
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your
readers will pretend the same, that it's a Jewish-specific something.
Yes, correct – no ideology is perfect at taming human action, and corruption is a
human action, not a Jewish action. But we could still engage in comparative ideology, and
this is what Joyce (and not only Joyce, of course) engage in.
Saying 'well, all peoples engage in force and deceit, so is there any actual difference
between them and their beliefs?' is absurdism. In such a world, I will build a nation of
priests, fashioned along the lines of the Aztek priesthood. Give me your children so I can
rip out their hearts and make it rain – after all 'we are all the same'!!
The argument is that, for the proportion of the population, the fraction of monopoly power
in Western economies that is taken up by Jewish power is much disproportional to other
nations/belief systems.
It is fair to ask whether people who engage in other belief systems have the same level of
desire for monopoly, just less skill to get it due to their belief systems.. I would say yes,
they have the same level of desire (we are all human after all (not that if you read chapter
1 of the Tanya, you will be offered that point of view)) – but that their belief
systems specifically push them away from materialism and desire for money and power, even at
the expense of others. That is the exact point of religion (self-improvement) btw, so
the next question is – is the Jewish religion effective?
At which point, the Jewish ideology becomes the wolf in the hen house – because it
fails to tame the human away from such materialistic desire (as it btw claims it does
best).
Should the hens be allowed to point out what they see as a wolf? Yes.
That the supposed wolf then obfuscates and justifies their actions by pointing to others,
mostly, betrays that it is, in fact, a wolf.
I have become totally disenchanted with the SEC. Stupid, Evil, Crazy! It would not surprise
me if they are the ones that have been terrorizing me, with stupid, evil, crazy chants
through appliances after illegallly implaced RFIDs, microchips, or sensors illegally
implanted in my ears and nose that started after my first phone was hacked in 2017! Can't
expect stupid people not to be stupid, evil people not to be evil, and crazy people not to be
crazy! They were just born that way!
@J
Adleman brookings.edu : "The US will become minority white in 2045 Census projects "
:
"During that year [2045] whites will comprise 49.7 per cent of the population in contrast to
24.6 per cent for Hispanics , 13.1 per cent for Blacks , 7.9 per cent for Asians and 3.8 per
cent for multi-racial populations " Are these projections good or bad for the "Jewish people
" ?
Nov 22, 2013 Thomas DiLorenzo – The Revolution Of 1913
From the Tom Woods show Loyola economics professor Thomas DiLorenzo discusses three events
from 1913 that greatly escalated the transmogrification of America from the founder's vision
(limited government) to its current state (unlimited government).
@silviosilver
Yes, and just because you can doesn't mean you should. And if there's a predilection among
jewish men to engage in predatory lending and collecting tactics that is disproportionate to
their of the population, there's something about their genes or their culture that shapes
them to be this way.
Also, notice how you left out the part where they jack up the interest rates and debtor's
fees to grossly inflate their income. Is there a reason to do this other than as a quick way
to make money off already impoverished people? It's kind of like opening up a rent to own
place in a low income place. The people who do that shit know exactly why they should set up
among poor people; low wealth and bad decision making abound.
And yes, it does seem to be particularly jewish given how many jews are involved in its
practice and given that it used to be frowned upon in Christian Europe. Hell, God himself (as
Jesus) went and beat the shit out of a bunch of jews for their money lending in the temple.
That's the best part of the Bible, frankly. God gets so sick of the his own chosen people
that he sends himself to chastise and whip them for their greed and hubris. No lesson was
learned.
And then they killed him. And they lost their homeland for 2000 years. And then were
kicked out of a hundred plus kingdoms, cities and countries. And then a miserable liberal
shows how vile and stupid their children are:
You know, maybe instead of making excuses, you can just acknowledge the wrongdoing and
acknowledge that some jews are particularly malicious. Cuz eventually, people are
gonna get sick of the shit jews pull and see jewish (or gentile zionist) people defending
their obvious misdeeds and get pissed at them as well. Remember, the well is open to
everyone.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
Telling that you go with hyperbole here: the only two options must be Albion
Whyteman Capital or Foreskin-Chewing Pornographers Incorporated!
There are two interesting things about the onomastics of the prepuce-free business world.
One is that far fewer sons of Abraham name their businesses after themselves (I'm sure this
will insincerely be attributed to some fear of native kulaks' repressed urge-to-pogrom, even
in Finland or Japan.) The other is an observation made by an associate of a famous Austrian
landscapist: even merely remarking on their origins causes these guys mental distress.
Here in the melting pot, the difference couldn't be any starker. You can make small talk
with any flavor of goy based on it: that's a Polish name, isn't it? Yeah, how did you
know! Try this one with Levy or Nussbaum down at The Smith Group or The Jones Foundation
and watch them plotz.
Jews have always weaponized usury. Long before Christianity, Jews operated the East/West
mechanism on donkey caravan trade routes. Silver would drain from the West, and Gold would
drain from the east, while Jewish caravaneers would take usury on exchange rate differences.
This operated for thousands of years.
Haibaru donkey bones have been discovered outside of Sumer. The Aiparu/Haibaru (Hebrew)
tribes were formed as merchants operating between city states. In those days, psychopaths and
criminals would be excommunicated from civilized city states, and would take up with the
wandering merchant tribe.
Why do you think the Jew is always interested in owing the money power? Why do you think
the Jew perpetually stands outside the walls of the city state, plotting its destruction?
History tells us things, and we had better listen. That is – real history, not what
you learned in (((public skool))). There are two ways to deal with the Jew: 1) Remove him
from your country. 2) Limit him.
Limiting was done by Byzantium under Justinian. The Jew was limited FROM money
counting/banking; limited from participation in government; limited from access to pervert
young minds – especially as school teachers and professors.
It takes a King or Tsar who cares about his population, and is willing to eject or filter
out toxins from the body politic. (((Democracy))) is a failed form of government, whereby
monied Oligarchs control the polity by compromat and pulling strings.
You are not going to be able to vote your way out of the Jew problem.
@Colin
Wright Echoing words once supposedly used by Hermann Goering: whenever I here the word
'philanthropist' these days, I instinctively reach for my revolver!
Take the ideology of Islam – it does not allow for aggressive war, surprise
attacks, the killing of women or children (unless they take up arms)..
Ilya,
There is deception in Islam. Sorry. You cannot make claims about Islam not allowing for
aggressive war and surprise attacks.
These concepts even have names and doctrine that support them. Wahabbi/Salafist Islam is
exactly in alignment with Islamic teachings, especially when using abrogation techniques.
Taqiyya is lying with intent to deceive. The analog in Judaism is the Kol-Niedre, which
allows one pre-forgiveness for lying, cheating, even murder of Goyim.
Hudnas is are used to lay in wait, build up strength, to then attack the enemy.
Islam has derogatory terms to demean e.g. Kaffirs, which is similar to Goyim.
There is also deception in Christianity, but this deception is OUT OF ALIGNMENT WITH
DOCTRINE. The doctrine of super-session means the old testament is superseded, completed, a
historical record.
In Islam the doctrine of Abrogation means that the more pacific Meccan verses are
abrogated (made less relevant) that post Medina. Ergo, Wahabbi Islam and the Takfiri's are
doctrinaly correct, while Judaizer Christians (those that worship the old testament) are out
of alignment and heretics.
Judaism is actually a new religion that came into being after 73 AD, when the verbal
tradition (Caballa) became written down into Talmud.
Our Jewish friends have always been practicing usury, going back to since forever.
Our Jewish friends, I count as worse that Islamics. However two wrongs don't make a right.
Islam badly needs reform or to be expunged. Talmudic Judaism is by far the worst religion on
the planet, and its adherents must malfunction by definition.
o ..kill all the Jewish, er, "vulture capitalists" , right? Or should we go "easy" on
them all and merely ship them all off to special "re-education" camps? Or am I missing
something here ?
You are missing something because you are unwilling to adapt and learn with new
information. This makes you an ideologue.
Lolbertarianism IS A JEWISH CONSTRUCT.
There are no such things as free markets. Money's true nature is law, not gold. Money
didn't come into being with barter and other nonsense lolbertarians believe.
Most of the luminaries that came up with "libertarian" economics are Jews, and it is a
doctrine of deception. The idea is to confuse the goyim with thoughts and ideas that make
them easy pickings.
A determined in-group of predators operating in unison, will take down an "individual"
every-time.
Don't expect anything to improve with Jay Clayton as SEC Chair, and his wife and her father
Gretchen Butler Clayton who was CEO of CSC and mysterious WMB Holdings which share the same
address in addition to many Goldman Sachs divisions. Gretchen was employed by Goldman Sachs
as an attorney from 1999-2017. Many companies affiliated with the Panama Papers share the
same address as well.
Jewish people have treated me better than my own White Euro family.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Jews, along with Asians and at least some Africans, believe in not just climbing the
ladder, but in actually helping others – at least family – up it also. Whites
believe in climbing the ladder and then pulling it up after them.
I was explaining to a friend recently: My (relative) has proven that if I showed up at
their door, starving, they'd not give me a cheese sandwich, while in my experience, strangers
have been overall a fairly kind lot and a stranger, 50/50, might. Therefore, while I find the
idea of robbing or burning down the house of a stranger abhorrent, I don't mind the idea so
much when it involves a person who's proven to be cold and evil.
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family. There was a ray of hope. The Irish
kids, at least, would have been fed, steered into decent schooling, etc. But foolishly they
went back to Ireland, to be treated like utter dogshit by their fellow White family and
"people".
Most of the predation going on in the US and worldwide is being done by WASPS who are
using Jews as a convenient scapegoat.
@tono
bungay Feel free to offer us some counter-examples, tono. How many such funds to you know
of that aren't disproportionately Jewish? We're all ears!
@Robjil
This is an example of what I was saying. Less Euro whites in the world is not going to be a
good world for Big Js. Non-Euros believe in freedom of speech.
Jewish Bigwigs can't get control of businesses in East Asia. They have been trying. Paul
Singer tried and failed. In Argentina he got lots of "success". Why? Lots of descendants of
Europeans there went along with "decisions" laid out by New York Jews.
Little Paulie tried to get control of Samsung. No such luck for him in Korea. In Korea
there are many family monopolies, chaebols. A Korean chaebol stopped him. Jewish Daniel Loeb
tried to get a board seat on Sony. He was rebuffed.
I was moved to reflect on the universality of this theme recently when surveying media
coverage on Korean and Argentinian responses to the activities of Paul Singer and his
co-ethnic shareholders at Elliott Associates, an arm of Singer's Elliott Management hedge
fund. The Korean story has its origins in the efforts of Samsung's holding company, Cheil
Industries, to buy Samsung C&T, the engineering and construction arm of the wider
Samsung family of businesses. The move can be seen as part of an effort to reinforce
control of the conglomerate by the founding Lee family and its heir apparent, Lee Jae-yong.
Trouble emerged when Singer's company, which holds a 7.12% stake in Samsung C&T and is
itself attempting to expand its influence and control over Far East tech companies,
objected to the move. The story is fairly typical of Jewish difficulties in penetrating
business cultures in the Far East, where impenetrable family monopolies, known in Korea as
chaebols, are common. This new story reminded me very strongly of last year's efforts by
Jewish financier Daniel Loeb to obtain a board seat at Sony. Loeb was repeatedly rebuffed
by COO Kazuo Hirai, eventually selling his stake in Sony Corp. in frustration.
Here is how the Koreans fought off Paul Singer.
The predominantly Jewish-owned and operated Elliott Associates has a wealth of
self-interest in preventing the Lee family from consolidating its control over the Samsung
conglomerate. As racial outsiders, however, Singer's firm were forced into several tactical
measures in their 52-day attempt to thwart the merger. First came lawsuits. When those
failed, Singer and his associates then postured themselves as defending Korean interests,
starting a Korean-language website and arguing that their position was really just in aid
of helping domestic Korean shareholders. This variation on the familiar theme of Jewish
crypsis was quite unsuccessful. The Lee family went on the offensive immediately and,
unlike many Westerners, were not shy in drawing attention to the Jewish nature of Singer's
interference and the sordid and intensely parasitic nature of his fund's other
ventures.
Cartoons were drawn of Singer being a vulture.
Other cartoons appearing at the same time represented Elliott, literally, as humanoid
vultures, with captions referring to the well-known history of the fund. In the above
cartoon, the vulture offers assistance to a needy and destitute figure, but conceals an axe
with which to later bludgeon the unsuspecting pauper.
ADL got all worked about this. The Koreans did not care. It is reality. Freedom of speech
works on these vultures. The west should try some real freedom of speech.
After the cartoons appeared, Singer and other influential Jews, including Abraham
Foxman, cried anti-Semitism. This was despite the fact the cartoons contain no reference
whatsoever to Judaism – unless of course one defines savage economic predation as a
Jewish trait. Samsung denied the cartoons were anti-Semitic and took them off the website,
but the uproar over the cartoons only seemed to spur on even more discussion about Jewish
influence in South Korea than was previously the case. In a piece published a fortnight
ago, Media Pen columnist Kim Ji-ho claimed "Jewish money has long been known to be ruthless
and merciless." Last week, the former South Korean ambassador to Morocco, Park Jae-seon,
expressed his concern about the influence of Jews in finance when he said, "The scary thing
about Jews is they are grabbing the currency markets and financial investment companies.
Their network is tight-knit beyond one's imagination." The next day, cable news channel YTN
aired similar comments by local journalist Park Seong-ho, who stated on air that "it is a
fact that Jews use financial networks and have influence wherever they are born." It goes
without saying that comments like these are unambiguously similar to complaints about
Jewish economic practices in Europe over the course of centuries. The only common
denominator between the context of fourteenth-century France and the context of
twenty-first-century South Korea is, you guessed it, Jewish economic practices.
The Koreans won. Paulie lost. Good win for humanity. The Argentines were not so lucky.
They don't have freedom speech like the Koreans and East Asians have.
In the end, the Lee strategy, based on drawing attention to the alien and exploitative
nature of Elliott Associates, was overwhelmingly effective. Before a crucial shareholder
vote on the Lee's planned merger, Samsung Securities CEO Yoon Yong-am said: "We should
score a victory by a big margin in the first battle, in order to take the upper hand in a
looming war against Elliott, and keep other speculative hedge funds from taking short-term
gains in the domestic market." When the vote finally took place a few days ago, a
conclusive 69.5% of Samsung shareholders voted in favor of the Lee proposal, leaving
Elliott licking its wounds and complaining about the "patriotic marketing" of those behind
the merger.
@jack
daniels Now that I think about it, it was unfair to make an anecdotal judgment that
Jewish lenders are less forgiving. There are plenty of examples, I'm sure, of compassionate
Jews and flinty gentiles.
Finally! An intelligent criticism of Trump for a change. So tired of the brainless
Democrat/MSM impeachment circus. They make me feel like a reflexive MAGAtard just for
defending the constitution, logic, etc., from their never-ending stream of inanities.
Meanwhile, the real problem with Trump is not that he's Hitler; it's that he's not Hitler
enough!
I am also so tired of Zionist-loving cucks bleeting on about the evils of the CRA without
ever considering the role played by the (((profiteers))) who lobbied such policies into law
in the first place. Realize that what Paul Singer does for a living used to be illegal in
this country up until recently. That's right: US bankruptcy law used to forbid investors from
buying up debt second-hand at a discount and then trying to reclaim the entire face
value from the debtor. But I see all kinds of people even on this thread blaming the victim
instead -- 'Damn goyishe deadbeats!' Whatever
What Singer and the other Jewish vultures engage in is not productive, and isn't even
any recognisable form of work or business. It is greed-motivated parasitism carried out on
a perversely extravagant and highly nepotistic scale. In truth, it is Singer and his
co-ethnics who believe that money can be printed on the backs of productive workers, and
who ultimately believe they have a right to be "showered by free stuff promised by
politicians."
To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
The last Gentleman on WS was not a Jew. Bring back the WASP. You can maintain your honor,
and manners and still succeed. Jews take the easy low road of deception and cheating. WASP
take the higher road of harder work and ethical business practice.
[MORE]
The courtly Mr. Jenrette, who has been dubbed "the last gentleman on Wall Street" earned this
sobriquet largely for his reputation of being particularly sensitive to the human dimension
in an industry where such matters often get sidestepped. Nonetheless, despite Mr. Jenrette's
modest demeanor, he's risen to the top in an often cutthroat business. He remained with
Donaldson Lufkin through good times and bad, guiding it after its two other founding partners
departed for other ventures and, next month, he will step down as the chairman of the
Securities Industry Association, the brokerage trade group.
"Dick has been the one who carried the firm from its original promise through to closure,"
said Samuel Hayes 3d, an investment banking professor at the Harvard Business School.
"Dick's more in tune with human values and that's not frequently found on Wall Street."
Richard Jenrette, 89, Wall Street power, Raleigh native, dies https://www.wral.com ›
richard-jenrette-89-wall-street-power-and-preserva
Apr 23, 2018 – A courtly, soft-spoken North Carolina native whom The New York Times
once called the "last gentleman on Wall Street," Jenrette (pronounced
Wall Street's 'last gentleman' left behind these 24 lessons about life and success: At the
time of his death late last month due to complications from lymphoma, these couple dozen
rules to live by were left on his desk.
Stay in the game. That's often all you need to do -- don't quit. Stick around! Don't be a
quitter!
•Don't burn bridges (behind you)
•Remember -- Life has no blessing like a good friend!
•You can't get enough of them
•Don't leave old friends behind -- you may need them
•Try to be nice and say "thank you" a lot!
•Stay informed/KEEP LEARNING!
•Study -- Stay Educated. Do Your Home Work!! Keep learning!
•Cultivate friends of all ages -- especially younger
•Run Scared -- over-prepare
•Be proud -- no Uriah Heep for you! But not conceited. Know your own worth.
•Plan ahead but be prepared to allow when opportunity presents itself.
•Turn Problems into Opportunities. Very often it can be done. Problems create
opportunities for change -- people willing to consider change when there are problems.
•Present yourself well. Clean, clean-shaven, dress "classically" to age. Beware style,
trends. Look for charm. Good grammar. Don't swear so much -- it's not cute.
•But be open to change -- don't be stuck in mud. Be willing to consider what's new but
don't blindly follow it. USE YOUR HEAD -- COMMON SENSE.
•Have some fun -- but not all the time!
•Be on the side of the Angels. Wear the White Hat.
•Have a fall-back position. Heir and the spare. Don't leave all your money in one
place.
•Learn a foreign language.
•Travel a lot -- around the world, if possible.
•Don't criticize someone in front of others.
•Don't forget to praise a job well done (but don't praise a poor job)
•I don't like to lose -- but don't be a poor loser if you do.
•It helps to have someone to love who loves you (not just sex).
•Keep your standards high in all you do.
•Look for the big picture but don't forget the small details.
"Permit me to issue and control the money of a nation and I" care not who makes its laws"
That is what Mayer Amschel Rothchild said in the 1750s. Now, is it a stretch of my
imagination to believe the Central Banks of the West, all Jewish controlled, would unfairly
favor their 'own' when issueing or disbursing the money they are permitted to create.
We are not allowed to audit the Federal Reserve, so we know not what they do with it beyond
what they tell us. In 2016 it was discovered that between the year 1999 and 2016 well over
$23 trillions had been stolen from just 2 departments of our government, the DoD and HUD.
(Someone should look at NASA). Is it possible the seed money, for not only Venture
capitalists schemes but also buying governments and law makers, has been diverted, shoveled
out of the back door of these corrupt central banks and into the hands of their fellow
jews?
Anyway, the more exposure articles like this get the closer we get to ending their reign.
As I noted in my previous examination of contemporary Jewish usury, Jews have been at
the forefront of innovation in debt for many centuries, and remain its most adroit auteurs.
Although obviously rooted in centuries of Jewish financial practice, Singer and his
co-ethnics (all four equity partners of Elliott are Jewish, and its COO is the
charmingly-named Zion Shohet) pioneered the finer points of the vulture-fund concept. The
firm was born in 1977 when Singer pooled $1.3 million from family and friends,
His firm's first big "win" was the pillage of Panama in 1995.
but it only really took off in October 1995, when Elliott Associates L.P. purchased
$28.7 million of Panamanian sovereign debt for the discounted price of $17.5 million. The
banks holding those bonds, a group that included heavy hitters like Citi and Credit Suisse,
had given up on repayment from Panama. To cut their losses, they sold their holdings to
Elliott which, like a medieval tax farmer, went in with a heavy hand. When Panama's
government asked for a restructuring of its foreign debt in 1995, the vast majority of its
bondholders agreed – apart from Elliott. In July 1996, Elliott Associates,
represented by one of the world's most high-profile securities law firms, filed a lawsuit
against Panama in a New York district court, seeking full repayment of the original $28.7
million – plus interest and fees. The case made its way from a district court in
Manhattan to the New York State Supreme Court, which sided with Elliott. In the end,
Panama's government had to pay the Jewish group over $57 million, with an additional $14
million going to other creditors. Overnight, Singer's group made $40 million, and the
people of Panama found their original sovereign debt had more than doubled.
@Mefobills
If you could point to a verse in the Quran that allows for aggressive war, it would help me
learn – when I read it I saw an explosive self defence at any infringment on the Ummah,
but not much beyond that.
Of course the origination story of the faith is one of fighting, and without any wise men
to guide the laypeople, the faith has an issue in that it is easy for people to not follow
what it teaches.
Islam has been assaulted for a millennium, and so the self defence aspect of its faith has
become more active than the rest.. it needs reform I agree (and not in the direction the
Salafists have taken it), but more so there is a need for the Ummah to have a few generations
of non-aggression from the outside world.. without it the pressure will only be towards
violence – for any nation or faith!
Judaism has monopolized for millennia though, and still acts as a victim. Different kettle
of fish.
Also, you can debate the positives and negatives of Islam with a Muslim (not as a rabid
ignoramus of course – you must be polite, and have learnt something, as well as be open
to learning more). Almost every debate with a Jew about Judaism has started with, continued
with, and ended with name calling for me however.
Judaism fails as a religion because it does not encourage the practitioner to look at
themselves when confronted with error, Islam still does imo.
Does anyone here remember how John Leibowitz aka John Stewart spent months ripping Mitt
Romney to shreds? Remember? Evil white man vulture capitalism at Bain? Remember? Romney was
Adolf Hitler, and look he put his golden retriever on the roof once?
Say. How come that Mr Leibowitz never talked about the Jews who basically destroyed yes
the entire Rust belt by acquisition and outsource?
That Mr Johnny Leibovitz sure did hate the goy a lot and all. He never talked about his
own people. What a fair fellow Mr Johnny Leibovitz was. He even changed his name. Why change
the name?
Remember. Bain Capital and that kind of merger pump and dumps is all done by Mormons
goyim.
@Colin
Wright Your statement: "Jews actually collaborated extensively in the imposition of
tyranny on the working class in Eastern Europe from 1917 to 1991" not only applies to Europe,
but the united States of America as well.
It's the JEWS it's always the JEWS
[MORE]
Our present situation and the devolving into the morass of "multiculturalism" and "diversity"
is no accident. The jewish talmud and that jewish invention-communism has "rules" for the
debasement of (white) civil society.
The following statements are a result of personal experiences–your mileage may
vary
I came of age during the first so-called "civil-rights" movement and saw for myself the
underhanded dealings, the demonization of decent, law-abiding whites, and in general, the
deterioration of civil society.
Almost all of the "civil-rights" workers and demonstration "handlers" were of one
persuasion–New York based leftist communist jews. They cared not one wit about true
"civil rights", but were there to create hate and discontent among their black charges (who
were too stupid or naive to see that they were being used to suborn and destroy legitimate
government and society–a favorite communist tactic).
These New York-based "carpetbaggers" fomented their hate and discontent, only to become
future "civil-rights" attorneys, race-hustlers, and America-hating leftist communists and the
ADL and $PLC being invented.
Those of us whites who were in the middle of this "civil-rights" revolution had a saying:
" Behind every negro, there is a jew ". No truer words were spoken.
Let's not forget their infestation of the nation's education and entertainment systems,
(which continues to the present day), in which they can spread their jewish supremacist
poison.
The so-called "non-violent civil-rights demonstrations" were anything but "non-violent".
Robberies, rapes, and other criminal acts were common, but never reported, as even the
"mainstream media" was "in on the game" and conveniently turned off their cameras during the
acts of violence. You see, even then,"creating crises" was a part of the agenda.
The "beginning of the end" of America was the use of federal troops against white
Americans, which, in itself was a violation of "posse comitatus"–the prohibition on the
use of federal troops for domestic "law enforcement" purposes. As most whites were (and still
are) law-abiding, they (we) were "steamrollered" by the use of federal troops to crush honest
dissent. We never recovered from those unconstitutional actions. It was all downhill from
there
The next step may be "civil-war" in which us whites will have to take back our birthright
by force.
"Foreign Policy described the court's decision as "a groundbreaking moment in the modern
history of finance." By taking the case to a New York district court, Elliott broke with
long-standing international law and custom, according to which sovereign governments are not
sued in regular courts meant to deal with questions internal to a nation state. Further, the
presiding judge accepted the case – another break with custom. It set the stage for two
decades of similar parasitism on struggling countries by Elliott Associates, a practice that
has reaped billions for Jewish financiers. "
A year later after the ground breaking decision. Paulie tries this scam on another nation,
Peru.
Just one year after the Panama decision, Singer spent about $11 million on
government-backed Peruvian bank debt in 1996. After Singer took Peru to court in the U.S.,
U.K., Luxembourg, Belgium, Germany, and Canada, the struggling nation finally agreed in
2000 to pay him $58 million. That meant he got better than a 400 percent return.
In 2001, the victim was Argentina.
In 2001, Elliott Associates purchased an Argentinian default for $48 million; the face
value of that debt today is $630 million. The fund wants repayment for the full value of
the debt to all of Argentina's creditors, as it did in 1995 with Panama. This amounts to
$1.5 billion, which could rise to $3 billion including, again, that all-important interest
and fees.
Another victim was the Congo in 2002-03.
..specific activities of Elliott Associates in Congo, where it originally bought $32.6
million in sovereign debt incurred by that country for the knockdown price of under $20
million. In 2002 and 2003, a British court (tactically chosen) forced the Congolese
government to settle for an estimated $90 million, which included that all-important
interest and fees. Elliott Associates rapidly became known as the quintessential "vulture
fund."
1. Re Sidney, Nebraska: Maybe I'm missing something but wasn't it Cabela's owners, for
example co-founder and chairman Jim Cabela, who sold Cabela, not Elliot Management (Singer et
al)? I gather Elliot Management owned only 11% of the company. Was that enough to force them
to sell?
2. The article confuses honest straightforward loans with tax farming and government
corruption. Loans can be very useful, e.g. for a car to get to a job, or for a house so you
build up equity instead of paying rent.
@Hapalong
Cassidy Bain's not much of an exception to Joyce's pattern: although Mitt, like the other
three founders, was a goy, there were plenty of Chosen Ones associated with the company right
from the start:
In addition to the three founding partners, the early team included Fraser Bullock,
Robert F. White, Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert Early investors
included Boston real estate mogul Mortimer Zuckerman and Robert Kraft, the owner of the New
England Patriots football team.
@BannedHipster
According to the Talmud, we goyim are not the descendants of Adam and Eve, like the
Jews. No, we are the bastard progeny of Adam's first wife, Lilleth, who eloped with the demon
Samael. So we goyim are really all half-demons and therefore we are an abomination in the
sight of Jew-hova, and we get what we deserve at the hands of his 'chosen people'.
improving the quality of life and access to opportunities for all Israeli citizens so that
they may benefit from the country's prosperity
Read 'all Jewish Israeli citizens'. I doubt they're going to do any life-enhancing
or make opportunities available to any of the grunting subhuman goyim .
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
Andrew Carnegie built something that made life better for people. Making steel is a
beneficial thing.
These evil vulture Jews build nothing – they make people poorer. They suck the
wealth out of people who have little. They know 100% what they are doing.
Jesus expressed anger against the money changers on the temple steps.
It is OK for you to have natural human feelings and be angry at these Jew bastards.
@Anon
Romney is a Mormon, one of the church officials. The Mormons are closer to the Jews pattern
of worshiping money and using charity donation for business investments.
Mormons arent considered Protestants .
"Although the church has not released church-wide financial statements since 1959, in
1997, Time magazine called it one of the world's wealthiest churches per capita.[147] In a
June 2011 cover story, Newsweek stated that the LDS Church "resembles a sanctified
multinational corporation -- the General Electric of American religion, with global ambitions
and an estimated net worth of $30 billion." A whistle blower within the church reported them
to the IRS for using their status as a non taxable religious groups to invest in business
ventures instead of charities.
@anon
Maybe I can answer your question.
I studied and befriended many jews as a student (Imperial College, London etc) – none
were above average intelligent, and although they were very geeky, they only got average
grades.
When I moved to LA – most of my friends were jews and again, none were very bright
(even though a few were famous). Most of these LA jewish friends were probably psychopaths
– thinking back – very manipulative, exploitative and they lied a lot.
I think it's mostly through their cultural nepotism – they work on their own unity
(they help promote each other) while at the same time they work on destroying unity in their
host and everyone else.
Many have changed their Eastern European names.
And they go out of the way to help other jews (only) – a Serbian friend in Toronto
looks very jewish (but is not religious) told me several times here in Toronto, other Jews
(his boss etc) just offered to help him for no reason ("Is there anything I can do for you?"
etc). He did not understand why they did that – then I realized he actually looks like
a Jewish stereotype (as does his twin brother). So he thought he was helping his own
tribe.
When I went to Cuba with a Jewish 'friend' from LA – he was actively looking for
anything jewish (and nothign else – he did not want to see anything famous like a
beautiful cemetery in Havana etc) – only synagogs etc – where he gave some money
to jews he never even met. I was there with him and saw it. He was even angry if I suggested
we see something nice , historical and not-jewish. We met a NY jew there and we gave his a
ride in the car we rented – they immediately teamed up against me – for no reason
– I regretted going with him on this trip. It was an awful experience –
consistent with all the books I read on psychopaths and also that book Jewish History, Jewish
Religion, the weight of 3000 years
Another very wealthy American mother of a friend asked her South African friends (also jews)
to help her book trips in South Africa (and they of course recommended only their Jewish
friends) – it's their son who told me this.
So a lot of backstabbing, cultural nepotism and actively (but in a hidden way as most
psychopaths like to do) they do at wakening and isolating their host. That's their only
advantage – not intelligence (at least in my experience )
I recently learned that from about 1790 to 1967 the USState department refused to issue US
passports to people who held foreign passports. State also didn't hire any dual citizens for
any job from cafeteria dishwasher to ambassador.
Then in the mid sixties, an Israeli immigrant who became a US citizen applied for a US
passport. State refused to issue the US passport. So the Israeli immigrant practiced lawfare.
In 1967 the Supreme Court issued one of its usual detrimental and dangerous rulings. State
was ordered to start issuing US passports to dual citizens.
Soon there were numerous applications to State depot jobs from Israeli citizens residing
in the US. Knowing lawsuits loomed, State caved.
And that children is how and why State, commerce, DOJ CIA treasury, top security civilian
departments in the Pentagon and other federal agencies became flooded with dual American
Israeli citizens who divert money to Israel. Plus they work for Israel instead of the US.
Mysterious how the only Whites who manage to make it past affirmative action barriers are
jews.
Maybe there's a special affirmative action quota for Israelis residing in America.
@J
Adelman Adelman, be careful what you wish for, as in a debate you will be drowned.
Being labeled an ANTISEMITE is the new badge of honor and courage.
Central banks and their fiat fractional reserve banking system is slowly collapsing, as more
and more nations avoid using the BIS. Joyce's article fully explains why Russia is being
promoted as some type of arch-enemy.
@DaveE
I don't even know what capitalism means anymore. It doesn't seem like it's an actual free
market system. Seems like it is slavery for the little guy, and parasitism for the rich.
Maybe we should ditch the word capitalism for usuryism.
"'It was very gratifying to see Tucker Carlson's recent attack on the activities of Paul
Singer's vulture fund, Elliot Associates '"
I am going to avoid the Jew is bad mantra here. I read that article. But it was not an
expose' of hedgefunds, at least not at the level i was expecting. They merged two companies
and sold off or closed that which was least profitable.
In that article there was no clear discussion – about what could have prevented the
closure. So it was hard to respond positively in favor of not closing. I am advocate of
keeping work in the US, but I don't think it is unreasonable that companies be sustainable. I
would have liked that exposure, that the hedge had no intention of exploring possible profit
making alternatives.
And that is where Mr. Carlson lost me. He did not link the companies as you have. Nor
provide the examples you bring to the fore.
What distresses me about Islam is that the pacific practitioners, e.g. Suffi's, many Shias
and Sunnis are out of alignment, and hence are subject to violence from their coreligionists.
I happen to believe there are many wonderful people within the religion what I am saying is
that there is an elephant in the room, and it has a name: abrogation.
I'm going to use a smoke there is fire analogy using data.
If a religion launches repeated attacks against civilizations, then there is something
"in" the religion that is used for justification of said aggression. I'm of the opinion that
data matters, and you have to adjust your position to come into accord with real world
data.
Between 632 and 1922, Islam launched 548 offensive battles against classical
civilization
These attacks were often brutal, especially with rapes being used to "convert women"
rapidly.
In Islam (as in other religions as well) the Imam can turn knobs and get an output. This
means that abrogation is used to pick and choose verses depending on situation, to maneuver
the sheeple in the direction Imam's or political authority want them to go – including
offensive war. I used the term political authority on purpose, because Islam is more than
just a religion, it is a political-theocratic construct that is all-encompassing.
There may not be a specific verse allowing aggressive violence, but there is something
going on based on the data. (I admit to being a lay-man and not an expert on minutia of
Islam. I don't want to go there based on what I already know to be true.)
In Christianity, if there are calls for aggressive violence it is OUT OF ALIGNMENT because
of super-session. Christian adherents who do this are Judaizers, and have to use the old
testament for justification.
@Digital
Samizdat Who the heck is Lillith? Where did she come from? Adam's apple? At least Samael
is a step up from a talking snake. Talk about rewrite. Almost on par to the silly ones on the
daytime soaps. Oh wait . probably same writers.
@Rebel0007
"This won't end well."
-- They cannot help themselves. Two components make it impossible for the tribe to behave in
a preservation mode:
1. the victimhood complex, despite all the recently displayed data about Jewish murderous
ways in the host countries
2. the disproportionate number of psychopaths who are approved by tribal epos and mentality
Perhaps the only solution is to make the aggressive Jews become confined to their Jewish
country. Like an infectious disease that needs to be quarantined. Otherwise, the Jewish
psychopaths will continue leaching and destroying.
Not only the vulture bankers but a complete set of ziocons-infested stink-tanks should be
relocated (with their immediate families) to the Jewish State and prohibited from crossing
the Jewish State borders. Plus the limitations on their involvement in international commerce
and banking. Let the Jews be finally in Jerusalem today, not "next year." Let them enjoy the
company of other Jews.
Jew billionaire globalizer money-grubber Paul Singer has bought and paid for politician
puppet whore Marco Rubio.
JEWS ORGANIZED GLOBALLY(JOG) -- of which Paul Singer is a shady participant -- have plans
for after Trump and they involve the US Senators Marco Rubio and Josh Hawley and Tom Cotton
and others.
Paul Singer pushes mass legal immigration and mass illegal immigration. Paul Singer wants
to continue to use mass legal immigration and mass illegal immigration as demographic weapons
to attack and destroy the historic American nation.
Paul Singer wants to continue to use the US military as muscle to fight endless wars on
behalf of Israel.
I wrote this in February of 2019:
I just got reminded that Marco Rubio won a lot of the GOP billionaire Jew donor money away
from Jebby Bush in the 2016 GOP presidential primary because the Jew billionaires -- Paul
Singer in particular -- were not too thrilled with Jebby Bush's connection to James Baker.
James Baker was a factor in the Jew billionaire decision to back Marco Rubio.
George W Bush had dragged the American Empire into a war in Iraq on behalf of Israel and
the GOP Jew billionaire donors were still not convinced of Jebby Bush's slavish devotion to
Israel.
Marco Rubio signalled his willing whoredom to the ISRAEL FIRST foreign policy of endless
war on behalf of Israel in a way that left nothing to chance for the GOP Jew billionaire
donors.
Marco Rubio is nothing more than a filthy politician whore for the GOP Jew billionaire
donors who want to continue to use the US military as muscle to fight wars on behalf of
Israel.
New York Times article:
Mr. Rubio has aggressively embraced the cause of wealthy pro-Israel donors like Mr.
[Sheldon] Adelson, whom the senator is said to call frequently, and Mr. Singer, who both
serve on the board of the Republican Jewish Coalition, an umbrella group for Republican
Jewish donors and officials. Mr. Bush has been less attentive, in the view of some of these
donors: Last spring, he refused to freeze out his longtime family friend James A. Baker
III, the former secretary of state, after Mr. Baker spoke at the conference of a liberal
Jewish group.
The lobbying of Mr. Singer intensified in recent weeks as Mr. Bush's debate stumbles and
declining poll numbers drove many donors to consider Mr. Rubio anew. Last week, Mr. Bush's
campaign manager, Danny Diaz, and senior adviser, Sally Bradshaw, flew to New York to make
personal appeals on Mr. Bush's behalf, in the hopes of heading off an endorsement of Mr.
Rubio, according to two people close to the former governor's campaign.
This is a timely article for me as I have been pondering the relationship between Jews and
neoliberalism for some time now.
At university I studied under a brilliant Neo-Marxist professor who showed me some theory
and arguments that went a long way towards explaining how to make sense of the global power
structure. (Just a quick not for those who recoil at the mere mention of Neo-Marxist: the
academics that use a marxist lens as a tool to criticize the powerful are not all the cuckold
communist SJW types – some of these individuals are extremely intelligent and they make
very powerful arguments backed by loads of data.) One of the theories I was introduced to was
the notion of the Transnational Capitalist Class in this article called Towards A Global
Ruling Class? Globalization and the Transnational Capitalist Class:
http://media.library.ku.edu.tr/reserve/respring18/Intl313_ZOnis/3_Historical_Structuralism.pdf
The authors write the following:
Sklair's work goes the furthest in conceiving of the capitalist class as no longer
tied to territoriality
Inherent in the international concept is a system of nation-states that mediates relations
between classes and groups, including the notion of national capitals and national
bourgeoisi. Transnational, by contrast, denotes economic and related social, political, and
cultural processes – including class formation that supersede nation-states
What distinguishes the TCC from national or local capitalists is that it is involved
in globalized production and manages globalized circuits of accumulation that give it an
objective class existence and identity spatially and politically in the global system above
any local territories and polities.
Since reading your (Dr Joyce) work on the JQ I began to see the connection between age old
complaints of Jews, and what Ford referred to as "The International Jew". In fact, replace
the term "transnational capitalist class" from my passages quoted above (and many others) and
what you have is perfect mirror image of the argument.
This question has come up often lately, synchronistically (or maybe not). I'm somewhat new
to the JQ, having consumed many hours of work (including much of your own) after being sent
down the rabbit hole by the ongoing Epstein case. I was pondering that perhaps, Jews take the
blame for what the predatory capitalists are doing. Not even a week later you addressed this
precise question in your piece about Slavoj Ziszek and now with "vulture capitalism" it is
coming up yet again in Carlson's segment followed by the article right here. It also came up
on the "other side" in the blog I follow of a professor of globalization in this article:
https://zeroanthropology.net/2019/11/27/global-giants-american-empire-and-transnational-capital/
The link above is a review of the book Giants: The Global Power Elite . The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that control
more than one trillion dollars in capital. As these firms invest in each other, and many
smaller firms, the interlocked capital that they manage surpasses $41 trillion (which amounts
to about 16% of the world's total wealth). The 17 global financial giants are led by 199
directors. This chapter details how these financial giants have pushed for global
privatization of virtually everything, in order to stimulate growth to absorb excess capital.
The financial giants are supported by a wide array of institutions: "governments,
intelligence services, policymakers, universities, police forces, militaries, and corporate
media all work in support of their vital interests" (p. 60).
Chapter 3, "Managers: The Global Power Elite of the Financial Giants," largely consists of
the detailed profiles of the 199 financial managers just mentioned.
This caught my eye because I immediately wondered how many of those 199 directors are
Jewish. It also pertains directly to this exact article because I am confident that the
vulture capitalists you targeted here are profiled in the book, probably with many
others.
Now, I am not in the business of writing about the JQ, so I wanted to suggest to anyone
out there that is that if they were to obtain a copy of this book and determine how many of
the 199 directors are jews. What this could accomplish is a marriage of the major two
theories of the "anti-semites" (for lack of a better word) and the "Neo-Marxists". I would
argue that perhaps both sides would learn they are coming at the same thing from two
different angles. Most would ignore it, but maybe a few leftist thinkers would receive a much
needed electric shock if they were to see the JQ framed in marxist terms. Perhaps some
alliances could be forged across the cultural divide in this struggle. Personally I believe
that both angles are perfectly valid, and that understanding one without the other will
leaves far too much to be desired when studying the powerful.
@the
grand wazoo Reagan relaxed the laws on takeovers and as a result what Galbraith called the technostructure (modern
corporation in which the business was run by not with an eye on shareholder value but in the
interests of everyone involved) was ripped apart.
However the technostructure had come about in the 30s when the Depression led to mass lay
offs, which had began to cause social unrest. The Chinese are have already cutting a swath
through Western productive capacity, and now they are coming for the rest to the extent that
the European Union is tightening the limits of foreign direct investment and takeovers. Trump
is calling for negative interest rates, which were not adopted even during the 1930s when
one-quarter of the labor force was idle.
Prospects for severe economic pain being imposed on ordinary working people and the
consequent (eventual) establishment of a new technostructure are excellent. I hate to sound
like an accelerationist, but Jews like Singer are bringing that day closer.
@Ghali
'Everywhere they go, they leave behind nations in ruins. "
-- They always find the willing local collaborators ready to make a big profit. Who can
forget Dick Cheney, the Enemy of Humanity? The same kind of unrestricted criminality and
amorality lives on in Tony Blair the Pious. The fact that this Catholic weasel and major
criminal Tony Blair is still not excommunicated tells all we need to know about the
Vatican.
Assange is rotting in a prison, while Tony Blair and Ghislaine Maxwell are roaming free. The
Jewish connections pay off.
I know some Torah Jews who are angry that Mischlings have no right of return to Israel,
and apparently now aren't part of the ruling American Jewish nation, or American, or have
anywhere to go now. They're also angry at what they see as a repeat of the cycle of
international Jewish action and inevitable reaction they will have to bear the brunt of.
They referred me to this website: The Institute for Historical Review where they
apparently contribute.
" Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27. )"
So that was the context of who owned capital in Russia, what was the effect?
" According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era ."
But how is that possible? Swashbuckling international capitalists like Bill Browder were
bringing their Ivy League MBA's to more efficiently manage all those assets. And he said how
much he wanted to save the Polish Train-yards.
What happened? A Putin arose. He took the capital from the Jews, and the Jews were
dispatched to the United States. Putin also aligned himself with a different Jewish faction
less virulently dismissive of the needs of the people they ruled.
What do they do in the United States? Something similar as the economy careens towards
another financial crisis and living standards, mortality rates, and the middle class
plummet.
"Jewish power in Russia, Galushin continues, has resulted in millions of homeless
children, widespread tuberculosis and cholera, a shortage of medicines, cheating retirees of
their pensions, suicide in the armed forces, and the death of science. What do the Gusinskys,
the Berezovskys, the Chubais, the Nemtsovs, the Kiriyenkos, the Smolenskys, the Livshits, and
the Gaidars say about this? Millions of Russians have perished under their rule. Are the
Russian people ready to judge these scoundrels for their crimes, Galushin ask",
Robert Maxwell was a Chezch Jew – he also robbed hundreds of millions worth of
pensions. How is it possible that all these Jewish capitalists can be linked to readily to
Jeffrey Epstein?
How did Robert Maxwell get his seed money?
Here is a letter sent to Boris Berezovsky nee Abramovich.
"In sharp contrast to the intense feelings expressed by such Russian writers over the
catastrophic situation in their country today is the seeming indifference of American and
German taxpayers who have unwittingly channeled billions of dollars and marks to the
oligarchs -- who in turn have transferred this largesse to secret Swiss accounts. Who
monitors the distribution of these billions through the World Bank, the IMF, the financial
houses, and various banks? Who is responsible for this terrible injustice?"
That's really strange, because isn't that what the Russians accused Browder of doing? They
say that he channelled billions of dollars out of Russia into the United States. Then we had
the great Russian menace that is still ongoing in the media, and failing.
But Browder said that the Russian collusion story that was created by Fusion GPS, and then
the FISA court warrants issued on the basis of the fabricated Steele 'pissgate' dossier and
media stories was 100% true.
And Steele worked for the Russia desk of British Intelligence, and was being paid by the
Democrats.
Even the proto-Shabbos goys at the National Review had to distance themselves from it.
They showed that the date the FBI and Justice said it was verified it couldn't possibly have
been verified.
So why did so many Jewish capitalists like Browder support it?
And why aren't the Russians being permitted to trace Russian monies into Cyprus if Bill
Browder and now Jewish captialist ever has every done a thing that is wrong?
Because literally to the letter what is said about Donald Trump, the Democrats were
actually doing.
"" It got almost no attention, but in May [2018], CNN reported that Sens. Robert
Menendez (D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to
Ukraine's prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four
investigations they said were critical to the Mueller probe. In the letter, they implied that
their support for U.S. assistance to Ukraine was at stake. Describing themselves as "strong
advocates for a robust and close relationship with Ukraine," the Democratic senators
declared, "We have supported [the] capacity-building process and are disappointed that some
in Kyiv appear to have cast aside these [democratic] principles to avoid the ire of President
Trump," before demanding Lutsenko "reverse course and halt any efforts to impede cooperation
with this important investigation ."
And yet Trump pulls the Jews ever closer. A ruling race of ubermenschen now.
'No reason'.
Can you imagine what American Blacks and savage Hispanics let alone whites are going to do
if the US economy craters like the Russian economy, and everything is transferred to the
banks?
@Old
and grumpy Yeah . fine idea. I've always maintained there are two uses of the word
"capitalism" industrial capitalism or competition of ideas vs. financial capitalism, the
Darwinian struggle for the most ruthless bankster to rig the "markets" most efficiently.
Whether we give it new terminology I don't care much . but I sure wish people would
understand the difference, one way of another !
Trump and the Republican Party puppets are nothing more than nasty politician whores for
billionaire Jews such as Seth Klarman and Paul Singer and Shelly Adelson and Les Wexner and
Bernie Marcus and many other money-grubber Jew donors.
The Republican Party Jew donors want to continue to flood the USA with mass legal
immigration and mass illegal immigration and the Jew donors want to continue to use the US
military as muscle to fight unnecessary wars and endless wars on behalf of Israel.
The Republican Party Jew donors also want to have all their shady money-grubber scams
protected by the Republican Party politician whores.
I wrote this in October of 2017 about Seth Klarman and Puerto Rican government debt:
Puerto Rico must be allowed to go belly up. The bond owners who own Puerto Rican debt must
go tits up. The US government must not bail out the investors who purchased Puerto Rican
government debt, or any debt whatsoever connected to Puerto Rico. Seth Klarman has been
revealed as a person who has bought Puerto Rican bonds in hopes of cashing out big.
SETH KLARMAN must be given a salt shaker to sprinkle salt on his worthless Puerto Rican
bonds before he eats them. Klarman must lose 100 cents on the dollar for his greedy purchase
of Puerto Rican debt. Klarman has loads of loot, and the Puerto Rican government debt was
purchased for one of his funds. I am sure his investors won't mind getting soaked by Seth for
a bit of money -- it is not even a whole billion dollars, only close to it.
David Dayen says:
Klarman, who has been described as the Oracle of Boston, has a history of buying
unpopular or distressed assets on the cheap in hopes of a payday. Baupost manages over $30
billion in assets. He is known as the top campaign contributor in New England and has been
a major donor in Republican politics in Massachusetts, including largely secret support for
2016's Question 2, an ultimately unsuccessful effort to lift a state cap on charter
schools. Klarman supported Hillary Clinton in 2016, calling Donald Trump "completely
unqualified for the highest office in the land."
Klarman's involvement in Puerto Rican debt will surely come as a surprise to activists
in Massachusetts and Puerto Rico, who have never mentioned him among the "vultures" who are
causing undue pain for the island's U.S. citizens.
Jewish people have treated me better than my own White Euro family.
White Euro people are/were evolved for small tribes. They were hunter gatherers, and
evolved concurrently with dogs. In my opinion the pathological altrusim of whites has to do
with the close relations to dogs, pets and later livestock. The whole "good shepherd" is more
of a Western Construct of Cro-Magnon white people, than the insular goat-herding types of the
middle east.
For example, in Scandinavia and most white countries, a 'baby sitter' can be a neighbor,
while in middle eastern cultures, a baby sitter can only be from a family member.
In other words, white people extend trust to one another, while middle-eastern ethos is
more familal then tribal. Ice age evolution, especially the fourth ice ages, selected for
pathological altruism is whites; which is why whites extend their grace to foreigners, brown
people, and are easily duped by Jews.
All you can do is try to rise above your own families failings. White people have to think
it through intellectually, as it does not come naturally.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Yes, but what is being debated here is how Jews use their ethnocentrism and in-group
methods to practice usury against out-groups. Euro-whites are a perfect host for the
parasite. The parasitical methods EVOLVED over millenia to operate the usury mechanism, to
take rents and unearned income. This is why they have been kicked out of 109 countries,
because what they do is seen as immoral and against the common good. (Euro whites eventually
smarten up and it always takes a King to eject the Jews.)
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family.
Let's not get cause and effect reversed. The potato famine in Ireland was devastating
because high-value crops were being exported to England to pay for wait for it . usury on
debts the Irish owed the English. The English in turn were operating the state sponsored
usury system of the Bank of England, which came into being in 1694. The BOE in turn was
JEWISH in construct, being maneuvered into place by Sephardic Jews from Amsterdam.
The Irish, being trusting souls, fell into the usury trap and could not keep up with the
exponential debts.
A general statement: White people can build high trust civilizations that benefit all of
their people, but are easily subverted when the wrong type of predators infiltrate. If your
family was extended, and had aunts and uncles and cousins, who lived in the general area for
centuries, then there would be a network to fall back on.
See slaughter of the cities by Jones:
And yes, the FIRE sector and impetus behind the destruction of your extended family was
JEWISH. The breakdown of neighborhoods and ethnics was on purpose.
The Jew is anti-logos, and whatever he touches he destroys. (There are exceptions of
course – but these people no longer possess a negative Jewish spirit.)
Sorry your family was destroyed. When whites become un-moored they don't know how to
act.
@J
Adleman Quite bizarre post. First,he makes a half ass defense of Jew
character.(Weinstein,Epstein don't represent jews! Well,they kind of do. Any jew who is
called to accounts for his crimes automatically does not represent jews!
You are a used condom. Do you represent the jews? Id day yes.)
Your diatribe sounds like an alt righter's view of jews. Are you real?
if you think it's wrong to buy or try to collect on defaulted debt, what is the
alternative set of laws and behavior you are recommending? If debts can simply be
repudiated at will, capitalism cannot function.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well allocated.
Otherwise it's not capitalism.
These insane Boomers seem to think that there is a Jewish coup underway to remove Trump
because of all the things that Jews are saying in Jewish publications and every single person
involved being Jewish and stuff.
@Germanicus
About the Carnegie donated "Peace Palace" in The Hague, presently the seat of the In
ternational Court of Justice:
Germanicus claims:
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
Such as this ruling for instance:
Guardian 3 Oct.2018:
International court of justice orders US to lift new Iran sanctions
Mike Pompeo indicates US will ignore ruling, after judges in The Hague find unanimously in
favour of Iran
@silviosilver
"What Joyce regards as a defect of "vulture" funds, others might regard as an benefit. "
-- Of course. I hope you did not miss the fact that the Jewish vulture funds -- ruthless,
unethical, and leaching on goyim -- contribute to the Jewish Holocaust Museum.
Is not it touching that the same bloody destroyers of nations demand from the same nations a
very special reverence -- out of ethical considerations, of course -- towards the Jewish
victims of WWII? But only Jewish victims. All others were not victims but casualties. See
Iraq, Syria, Libya, and Ukraine. See the unlimited hatred of ziocons towards Russia.
@Anonymous" but maybe a few leftist thinkers would receive a much needed electric shock if they were
to see the JQ framed in marxist terms " – I would not count on the effect of the
electric shock on the leftist thinkers. The role of Jewish Bolsheviks in the Cheka, NKVD,
GULAGs, genocides by famine has been known from the very beginning and yet it left no impact
on the leftist thinkers.
"According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era."
"Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27.)"
It's interesting how the appeal of Eduard Topol to Jews in Russia is now starting to echo
Jewish calls in the United States for Jews to stop the path they are currently on.
Here is the complete text of Topol's extraordinary "Open Letter to Berezovksy,
Gusinsky, Smolensky, Khodorkovsky and other Oligarchs," translated for the Journal by Daniel
Michaels from the text published in the respected Moscow paper Argumenty i Fakty ("Arguments
and Facts"), No. 38, September 1998:
Magnitsky and Bill Browder is also really interesting.
It turns out that a large measure of the Russiagate story arose because Russian lawyer
Natalia Veselnitskaya, who traveled to America to challenge Browder's account, arranged a
meeting with Donald Trump Jr. and other Trump campaign advisers in June 2016 to present this
other side of the story.
Then we had Democrats actually literally word for word doing what they accuse Trump of
doing in Ukraine.
"It got almost no attention, but in May [2018], CNN reported that Sens. Robert Menendez
(D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to Ukraine's
prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four investigations
they said were critical to the Mueller probe. In the letter, they implied that their support
for U.S. assistance to Ukraine was at stake. Describing themselves as "strong advocates for a
robust and close relationship with Ukraine," the Democratic senators declared, "We have
supported [the] capacity-building process and are disappointed that some in Kyiv appear to
have cast aside these [democratic] principles to avoid the ire of President Trump," before
demanding Lutsenko "reverse course and halt any efforts to impede cooperation with this
important investigation."
What's the first rule of Communist and Satanist Saul Alinsky? Always accuse your opponents
of what you are doing.
Imagine having a Grandfather as the literal Chairman of the American Communist Party, and
all the amazing lessons you would learn about political maneuvering and ideology.
And it's amazing.
Browder's story is that Russian officials stole his companies seals and then fraudulently
formulated a tax avoidance scheme with a complete paper trail that they fabricated against
him in totem. Precisely matching the amount of money he was trying to remove from their
country, like those other Jewish Oligarchs who imposed conditions that were multiples worse
then even the American depression.
When under oath it turns out that Magnitsky wasn't even a lawyer at all, and didn't go to
law school. Why did the media owned by Mormons of course keep saying that Magnitsky was
Browder's lawyer?
Why did the Russians fraudulently fabricate a paper-trail for another Jewish Oligarch to
steal money out of Russia? Just like they colluded with Trump when a Russian lawyer sought to
explain what happened. Because that totally happened.
Maybe the problem isn't Capitalism. Maybe, when even the ur-Shabbos goys at National
Review are shaking their head and washing their hands like Pilate, maybe it's a different
problem.
Yet Trump holds these people ever close to his beating heart.
And then there are all these connections to Jeffrey Epstein that are like an explosion
linking all these people.
Poor old Russia. Even Putin isn't worse then what came before.
The link above is a review of the book Giants: The Global Power Elite. The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that
control more than one trillion dollars in capital.
From the review .
"Robinson's claim that nation-states have become, "little more than population containment
zones," while "the real power lies with the decision makers who control global capital" (p.
26). Both propositions are unconvincing: first, populations are clearly not being
contained; second, if states matter so little, and the real decision-makers are global
capitalists, then why do the latter need states
That is such stupid reasoning it blows the mind. He is trying to shift the global problem
to institutions .. instead of the people who head those institutions
Institutions, agencies , financial firms, etc .are ALL run by PEOPLE .who make the
policies,laws, take the actions.
Why does the 'transnational capitalist class' need states? well duh because
people/labor/consumers are indeed "contained' in states subject to the states laws and
system. The transnational capitalist class created the institutions he speaks of 'from
within' those states thru their control of its system and their same goal partners who do the
same from within their respective states.
That the capitalist class is not tied to any territory has been observable since 1960.
I don't have time now to look up how many of 199 directors are Jews . but I know enough of
the economic history of various countries to know that Jews were the first business and
finance globe trotters,,,,.from Spain to Amsterdam, France to Africa , etc.etc. Jew were
first hired as reps and facilitators by the gentile business owners especially because of
their breather tribal contacts in many countries ..that was their stepping stone to becoming
transnational capitalist themselves.
Understanding our global capitalist ruling elite and who they are is not rocket
science
Buy your loans from another lender,
change the terms (add fees, penalties, underhanded stuff),
reposses your collatteral.
Outta be illegal.
White Gentiles, you must infiltrate and take over big business and big finance to help
protect your people from predation .and to give all peoples principled, fair financial
services. To help our society, and even others. Paul Singer doesnt seem to care about most of
his fellow men. We could do better, and help the world be a better place.
Yet more evidence is piling up that Donald J Trump is the Great Betrayer.
A man who had the biggest mandate in post war history to clean up the Swamp that is D.C.,
reform Immigration to save America and reform the economy for American workers.
He has squandered all of it while pandering to Jews.
When the Donald is revealed as the Great Betrayer where will Jews run? Yes, they have
several back up plans. Patagonia, Ukraine and Israel.
Imagine that. They have their own country and 2 back up plans. It is really tough being a
hated, oppressed minority.
@Anonymous
Thanks for your comment. You've come to the right place. Unz is an ideal hangout for
left/right fusionists who don't fit in perfectly with either side, but are interested in
hearing from both. In addition, if you're looking for other good right-wing sites that aren't
libertarian, Zionist or overly Christian, I can also heartily recommend Dr. Kevin MacDonald's
Occidental Observer ,
where Dr. Joyce himself usually posts.
What this could accomplish is a marriage of the major two theories of the "anti-semites"
(for lack of a better word) and the "Neo-Marxists". I would argue that perhaps both sides
would learn they are coming at the same thing from two different angles. Most would ignore
it, but maybe a few leftist thinkers would receive a much needed electric shock if they
were to see the JQ framed in marxist terms.
Or, more correctly, it would be a re -marriage of anti-Semitism and Marxism. If you
have a background in Marxism yourself, maybe you recall reading or hearing about Karl Marx's
pre-Kapital classic, On the Jewish Question , where he basically identifies
finance-capitalism as a Jewish phenomenon in essence and origin. Money quote
:
"Let us consider the actual, worldly Jew – not the Sabbath Jew but the everyday
Jew. Let us not look for the secret of the Jew in his religion, but let us look for the
secret of his religion in the real Jew. What is the secular basis of Judaism? Practical
need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his
worldly God? Money. Money is the jealous god of Israel, in face of which no other god may
exist. Money degrades all the gods of man – and turns them into commodities . The
bill of exchange is the real god of the Jew. His god is only an illusory bill of exchange .
The chimerical nationality of the Jew is the nationality of the merchant, of the man of
money in general.[ ] The Jew has emancipated himself in a Jewish manner, not only because
he has acquired financial power, but also because, through him and also apart from him,
money has become a world power and the practical Jewish spirit has become the practical
spirit of the Christian nations. The Jews have emancipated themselves insofar as the
Christians have become Jews. [ ] In the final analysis, the emancipation of the Jews is the
emancipation of mankind from Judaism."
Marx himself, of course, came from a family of rich conversos, so he knew whereof he
spoke.
Perhaps some alliances could be forged across the cultural divide in this struggle.
Personally I believe that both angles are perfectly valid, and that understanding one
without the other will leaves far too much to be desired when studying the powerful.
As a third-way national socialist, I hope so, too. Libertarianism/capitalism and mainline
socialism are dead-ends, having both been thoroughly co-opted (founded?) by the Jews. Both
fail to address the pink elephant in the corner; both put some hopelessly abstract ideology
before the welfare of my people–while benefiting another. And so, as the original NS
used to say: 'Neither godless Bolshevism nor soulless capitalism!'
Reality: Contrary to popular mythology, not all serial killers are white. Serial killers
span all racial and ethnic groups in the U.S. The racial diversity of serial killers
generally mirrors that of the overall U.S. population. There are well documented cases of
African-American, Latino and Asian-American serial killers. African-Americans comprise the
largest racial minority group among serial killers, representing approximately 20 percent of
the total. Significantly, however, only white, and normally male, serial killers such as
Ted Bundy become popular culture icons.
@Lot
Your defense of bond holders do not hold water. They agreed to take the risk at the given
price. If the debtor can't pay back, they have the eat the losses, period. Usury law needs to
be put in place to outlaw these vulture funds. Then the bond funds will adjust by demanding
better terms that truly reflects the risk from the get go, and the debtors will adjust by
being much more cautious in their borrowing since the borrowing cost is so high.
Instead, this current arrangement basically uses bond funds to put up a false front,
telling a debtor they can borrow at 2% when the real rate should be at 20% given the known
risks, then the debtor goes crazy borrowing because it's so cheap to borrow, and when they
can't pay back, the bond gets sold to the vultures who come collecting at 20% or they seize
assets. This is no different than the subprime mortgage crap, except now that is regulated so
they go after sovereign debt and corporate debt instead. These vultures need to go die
period.
Trump is now essentially funded by three Jews -- Singer, Bernard Marcus, and Sheldon
Adelson, together accounting for over $250 million in pro-Trump political money. In return,
they want war with Iran.
Hmm -- The day after Trump in inaugurated for his second term -- will Iran be in his
crosshairs?
@Jimmy1969
This is a great, concise overview of Canadian media influence by the "silent" Jewish
overlords via Golden Tree.
I tried copy/paste of your comment on CBC, but it did NOT last 2minutes before being
suspended!!
I am sorry to have used your comment without your permission, but I am going to "misspell"
some words to defeat the algorithm to get your message across.
@Lot
For points 1 and 2, I think that you would learn a lot from reading his previous article (
https://www.theoccidentalobserver.net/2015/08/01/paul-singer-and-universality-of-anti-semitism/
) on vulture capitalism. It is not just that they are recovering assets from defaults. These
vulture groups will use the courts to increase the size of the debts and sue for extra "fees"
on top, even when all other lenders are against it. They typically manage to get US courts in
NYC to try these cases, which also is apparently abnormal (apparently it would be more normal
to use international courts). This is what Joyce refers to here:
"This type of predation is so pernicious and morally perverse that both the Belgian and UK
governments have taken steps to ban these Jewish firms from using their court systems to sue
for distressed debt owed by poor nations. "
These funds do not do something that normal investors do, especially not to the bonds of
governments of struggling third-world countries.
As for 3, you are misunderstanding. Joyce never demanded that they name their charities
anything in particular, but it is obviously the case that your typical normie thinks that
"white males," presumably golf-playing Episcopalians or something, are the ones running
finance, and these golfy-sounding names (Elliot, Monarch, GoldTree, OakTree, Canyon, Tilden
Park) fit the perception. We whites receive the society's hate for the wealth disparities
created by high finance.
4. No, it is not difficult to do finance differently. Every other investor has higher
patience for poor countries in Central America and Africa, and they all look at Elliot with
confused scorn.
And, things would probably run fine without hyper-aggressive multi-billionaires in pushing
the courts to f- over those who default on debts they owe to the maximum degree. Japan and
Norway do quite fine with businesses that are run by gentle and humble goys who feel ashamed
at the thought of getting "too rich."
@J
Adleman You will be thrown out.
You will have to choose between Israel, Ukraine and Patagonia. No one else will take you.
You have destroyed our politics, media and economy.
You are not respected.
You buy compliance with money.
You have bankrupted the U.S. dollar with debt pursuing Israel's enemies.
Do any of you goys remember when the Jewish funded Democrats through the US State
department gave Russia one third of the US strategic uranium reserve and also funnelled
military tech to Russia's Skolkovo Valley? At a time when they were working on the Hypersonic
ballistic missile engine?
It's almost like there was this plan for people to move back into Russia, just like China,
but for some reason the Russians and Chinese didn't cooperate.
Remember when David Spengler wrote about this a few years back hence?
Do you think disloyal Jews had anything to do with 18 American CIA assets getting captured
and murdered by the Chinese Intelligence services through 2010 to 2012?
Could it be that there were loyal Americans who were interfering with Chinese pay for play
with the Jewish nation in the United States? Or might have come upon it?
Imagine being an American military service member knowing that your Jewish commanders and
Jewish senior officers have got your back.
It's amazing isn't it.
Clinton was receiving tens of millions of dollars from Skolkovo Valley Syndicate owners in
Russia, and in exchange all she gave them were military secrets that may have given Russia
for example it's lead in hypersonic military technology.
And then we're told China had a duplicate version of her emails in China, in exchange for
what?
US Taxpayer money funded the Russian weapons program.
How much China tech was also funded by US taxpayers?
And then these people accused Trump of collusion with Russia, because the Russians were
telling the Trump family that the Magnitsky Act was unjust because the Russians were trying
to secure their assets against the kind of predatory practices that lowered Russian mortality
to where it's headed in the Midwest. Right now. For the same reasons.
Yeah – this trend is absolutely going to be permitted to continue.
The American nation forewarned and forearmed is simply going to allow itself to go the way
of the Russian Slav under a century of Jewish and proto-Jewish (the man who was made to call
himself Stalin) leadership.
Maybe, just maybe, an American President might consider a Magnitsky Act the subjects of
which were different. Maybe Trump is the last civic-nationalist President, maybe.
Look at how loyal the ruling nation in the United States is to their fellow Americans.
There aren't enough hours in the day to trace the labyrinthine set of Jewish betrayals and
asset transferrals – remember the Panama Papers? Remember the Samson Option?
Why won't Browder let the Russians investigate Cyprus?
Maybe good old fashioned local corruption with noblesse oblige is preferable to this
international corruption.
The Jews got out-leveraged by the Russians, and now, finally, the Empire might be able to
take back Korriban from the Jewdi.
Of course that's impossible. You have to trade one for the other. Just one set for the
other set.
If you want to find a list of these capitalists – you just look at who attends the
World Jewish Congress Galas.
" Ira Rennert (net worth $3 billion, previously, $6 billion, investor, known as a "junk
bond billionaire," found guilty of corruption in 2015, placed a mill in Baltimore's outer
harbor into bankruptcy, causing more than 2,000 workers to lose their jobs, owes Baltimore $8
million in unpaid city water bills, allegedly used money he looted from his business to build
a 29-room mansion & compound – a garage holds 100 cars)
Dick Parsons (former Time Warner CEO, CBS chair, & Citibank chair; in 2012 shareholders
filed a lawsuit against Parsons and some other executives for "stuffing their pockets while
running the bank into the ground")
Ben Ashkenazy (net worth $4 billion, Israeli American real estate tycoon, a benefactor of the
2015 AIPAC Real Estate Luncheon at New York's Grand Hyatt Hotel)
Jack Chehebar (real estate mogul, sued for alleged breach of contract, accused of beating his
son)
Ray Kelly (longest serving commissioner in the history of the New York City Police
Department, for a period was an Interpol vice president, charged by Muslim groups of
discrimination: "The commissioner oversaw a spying program that targeted Muslims based solely
on their religion, showed poor judgment by participating in a virulently anti-Islamic film,
and approved a report on terrorism that equated innocuous behavior such as quitting smoking
with signs of radicalization."
What did God say once?
In Genesis 18:32 He said he would spare Sodom and Gamorrah if Abraham could find just 10
honourable men. He couldn't find them. Only the family of Lot.
There isn't much time left. It might simply be the case that the rot goes too deep and too
dark.
Valhalla is a worthy place. I think there might be some Russians there, along with the
souls of those 18 Americans who were tortured and murdered in China for reasons unknown.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well
allocated. Otherwise it's not capitalism.
There are different kinds of capitalism. It is part of today's hypnotism that people don't
know the different types.
For example, there is finance capitalism, industrial capitalism, and what Andrew Joyce
calls vulture capitalism.
Vulture capitalism is a subset of finance capitalism.
Industrial capitalism was invented in the American colonies, especially Massachusetts bay.
The American system of economy (industrial capitalism with mixed economy and sovereign money)
has since been lost to America, as it imported Jewish/British finance capitalism as the
operating construct after 1913.
You can separate risks in lending. That is more hypnosis that you have been imbibing on.
The entire corpus of Classical economics goes about trying to separate unearned from earned
income, how to tax properly, what is site value, and it also is able to separate risk
types.
The fact that you do not know these things is not surprising, as most of western man is
living inside of a Jewish inverted reality bubble. The agents of mammon won, and classical
economics is not even taught in university.
Homosexuality is present in our society, but doesn't register much in demographics and as
such, I am happy to call gays as homosexuals. Tackling animus towards homosexuals requires
NOT trying to enforce new nomenclature of gender etc., otherwise an unexpected nasty backlash
can occur. Within your "ingroup", you can say what you like, but do not try and force ingroup
dynamics on the majority that are not interested.
Otherwise, you are behaving by identity politics, just like the Jews force their identity
upon the majority.
@sally
" Time after time I have asked my Jewish friends are you are Zionist, and most say they do
not really know what Zionism is? "
Zionism is a name which is more well known as an identifier by the critical (among the
Goy), carrying by now negative connotations. Broadly it is not an ism which is well known to
the man in the street. It could well be that among Jews, the name Zionism is only handled by
certain groups.
The question should have been rephrased asking what position these Jewish friends take with
regard to Israel. It comes down roughly to the same thing.
To not know of Zionism might be strategically a good thing, it refers to convergent
interests, actually a power block, you don't want to throw around such things, it could make
people aware Keep it diluted, diversity, obfuscation.
Ben Franklin and the American revolution was almost put in a similar pinch by the Amsterdam
banker Jean DeNeufville. In a letter to John Adams, 14 December 1781*, Franklin explained
that DeNeufville wanted as security for a loan "all the lands, cities, territories, and
possessions of the said Thirteen States, which they may have or possess at present, and which
they may have or possess in the future, with all their income, revenue, and produce, until
the entire payment of this loan and the interests due thereon."
Franklin considered that "extravagant" but Newhouse rejoined, "this was usual in all loans
and that the money could not otherwise be obtained". Franklin retold in this lengthy letter,
"Besides this, I was led to understand that it would be very agreeable to these gentlemen if,
in acknowledgment of their zeal for our cause and great services in procuring this loan, they
would be made by some law of Congress the general consignee of America, to receive and sell
upon commission, by themselves and correspondents in the different ports and nations, all the
produce of America that should be sent by our merchants to Europe."
Talk about shooting the moon
While Wikipedia says DeNeufville was Mennonite, Franklin concluded with this colorful --
and bitter -- remark , "By this time, I fancy, your Excellency is satisfied that I was wrong
in supposing John de Neufville as much a Jew as any in Jerusalem, since Jacob was not content
with any per cents, but took the whole of his brother Esau's birthright, and his posterity
did the same by the Canaanites, and cut their throats into the bargain; which, in my
conscience, I do not think Mr. John de Neufville has the least inclination to do by us while
he can get any thing by our being alive. I am, with the greatest esteem, etc., ✪ B.
Franklin."
Perhaps it was just an expression based on an earlier stereotype?
*Bigelow, 1904. The Works of Benjamin Franklin, Vol. 9 Letters and Misc. Writings
What our Jewish friends have done to Argentina, through maneuvering the elections, killing
dissidents, and marking territory, is a cautionary tale to anybody woke enough to see with
their own eyes.
Zion had the opportunity to go to Uganda and Ugandans were willing, but NO Zion had to
have Palestine, and they got it through war, deception, and murder. It was funded by usury,
as stolen purchasing power from the Goyim.
The fake country of Israel, is not the biblical Israel, and it came into being by
maneuverings of satanic men determined to get their way no matter what, and is supported by
continuous deception. Even today's Hebrew is resurrected from a dead language, and is fake.
Many fake Jews (who have no blood lineage to Abraham), a fake country, and fake language.
These fakers, usurers, and thieves do indeed have their eyes set on Patagonia, what they call
the practical country.
Unz is an ideal hangout for left/right fusionists who don't fit in perfectly with either
side, but are interested in hearing from both
You just described me to a tee. I defy categorization, especially ideological ones
(although I half jokingly refer to myself as a free-thinkist), and I feel this makes me
weird.
I've been to TOO. However I can't bring myself to start commenting on a white nationalist
website. I will admit I am unable to articulate this discomfort presently.
As to your point about Marx – I actually forgot about his work on the JQ. The Saker,
who is a columnist on this site, referenced Marx's essay on the JQ some time ago. I must have
not read the whole thing or I'd have remembered it. I didn't know that Marxism originated
with anti-Semitism, but that is fascinating. I have encountered some Marxists in my time and
they focus exclusively (predictably) on the cis-white-male patriarchy, or whatever occupies
their brainwashed minds after an Introduction to Gender Studies class.
@Anon
"If debts can simply be repudiated at will, capitalism cannot function."
Is this children's capitalist theory class time? throwing around some simple slogans for a
susceptible congregation of future believers?
Should be quite obvious that people, groups of people, if not whole nations , can be
forced and or seduced into depths by means of certain practices. There are a thousand ways of
such trickery and thievery, these are not in the theory books though. In these books things
all match and work out wonderfully rationally
Then capitalism cannot function? Unfortunately it has become already dysfunctional, if not
a big rotten cancer.
Isaiah 1:4 4 Alas, sinful nation, A people laden with iniquity, A brood of evildoers,
Children who are corrupters! They have forsaken the LORD, They have provoked to anger The
Holy One of Israel, They have turned away backward.
Ezekiel 21:25 25 'Now to you, O profane, wicked prince of Israel, whose day has come, whose
iniquity shall end
Jeremiah 5:9 Shall I not punish them for these things?" says the LORD. "And shall I not
avenge Myself on such a nation as this?
As Jesus said which of the prophets have you not killed or persecuted? The truth hurts. As
for me I do not hate Jews ..I feel terribly sad for a people that are capable of greatness
and squandered the gifts given to them by God. Are you a holy nation? Don't make me laugh.
Repent. Your time is coming. No more running and hiding. Deception will no longer save you
only acceptance of the Messiah.
Hey! Don't mention anything a Jew ever did, especially usury, or else the entire cult will go
up in a holocaustal mushroom cloud of emo nasal whining. In Judaism you've got a fanatical
sect that systematically selects and brainwashes its members to inculcate extreme values of
two Big Five personality axes: high neuroticism and low intellect (where intellect means
open-mindedness.) Note the existential crisis triggered by a straightforward lecture from The
Society for the Study of Unbelievably Obvious Shit.
Of course Israel is holocausting the Palestinians. This is what happens when the founding
myth of a nation is, We wiped em all out and then they wiped us almost all out so now we
gotta wipe em all out etc., etc., etc.
Well, the only difference between a narcissist and a psychopath is that the former need
people to like them whereas psychopaths genuinely could not care less (although they learn
early that acting as if they do can be very helpful , as can always trying to elicit sympathy
etc).
As I noticed while reading a few books on psychopathy (I was inspired to after reading Steve
Job's biography) – their whole 'culture' is structured as a (collective )
PSYCHOPATH.
It seems that (collectively) they cannot care about others even if they wanted to. Due to
their sickness
I am not saying they are all that way – but overall their 'culture' seems to be that
way
@Digital
Samizdat Indeed I cannot agree more. I quote from a 1923 interview of Hitler:
"Why," I asked Hitler, "do you call yourself a National Socialist, since your party
programme is the very antithesis of that commonly accredited to socialism?"
"Socialism," he retorted, putting down his cup of tea, pugnaciously, "is the science of
dealing with the common weal. Communism is not Socialism. Marxism is not Socialism. The
Marxians have stolen the term and confused its meaning. I shall take Socialism away from
the Socialists.
"Socialism is an ancient Aryan, Germanic institution. Our German ancestors held certain
lands in common. They cultivated the idea of the common weal. Marxism has no right to
disguise itself as socialism. Socialism, unlike Marxism, does not repudiate private
property. Unlike Marxism, it involves no negation of personality, and unlike Marxism, it is
patriotic.
@Colin
Wright The Sacklers occupy a hoity-toity rung in the philanthropy universe, as they have
given enough $$$ to Harvard for H to paste their name on its museum housing I believe its
whole Asian art collection. Students have now protested Harvard's high-profile gift of
probity and cultural status to the Sacklers via, literally, an "Aushangerschild" on a major
university museum. Harvard protests back: Jeez, if we don't take the Sacklers' dough we might
be obliged to stop taking the dough from Exxon, etc.
@Anon
you are right about repaying the loan
but Banksters have managed over decades I think starting with Clinton to remove protection
laws (which were stating how much interest was the maximum a bankster could charge his pray
etc). They also removed the rules of how much was the maximum they could lend (according to
how much their victim makes a year etc).
So even though you are right that loans should be repaid – it is immoral to allow a
well connected mafia to change all the laws and remove protections while pushing up prices of
everything because it suits the lender (who has a licence to print).
They basically lend money that does not exist and get interest for that. So the more sheeple
are tricked into borrowing the better for them, but the worse for everyone else
They should not be allowed to bribe politicians to remove all the protection that was there
since 1920s I think.
It's a marriage from hell: easy to bribe Anglosheep meets the masters of predatory bribing
who own the printing press
That stupid cuck Trump just got impeached by the House. Thats a good lesson to everybody
how much good Jew-ass kissing does for you .you get stabbed in the back anyway lol
Couldn't have happened to a more deserving and treacherous scumbag!
But he should have been impeached for his treachery to the constitution and to the
American people for his slavish devotion to all things Jewish!
@Digital
Samizdat True, but irrelevant. The Jews that matter don't read the Talmud or believe in
"Adam and Eve."
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
Frankly, it's these traditional religious notions of "anti-semitism" that get in the way
of understanding what is, at the core, an ethnic issue. It's Sheldon Adelson, the Zionist
entity in Palestine, and the ADL that are the problem, not some looney-tunes rabbi living in
Brooklyn.
The other side of the expalnation is the laking of reaction of the victim,the american
people.
The least that the people that loot the world trough and with the USA power should do, is ,at
least ,let us,the american people, a free ride.
Not illegal in the Talmud either but most certainly illegal in all of the countries that
DynCorp was caught profiting from this type of business. For some reason they never seem to
suffer for their exposure suggesting that they may be wielding the same influence that
Epstein had over our elected officials.
We dont have to get back to the Singer of this world but to our own politicians ,that allowed
them to do this to us,and to the world.In this kind of abusive realtionship the 2 sides are
to blame.
@Just
passing through "Look up income by ethnic group in the UK and US, you will find that
Indians and Chinese (South Asians) are the richest in both countries (except for Jews of
course)."
And why is that? Think about it. These are members of the Indian and Chinese elite who the
multinational corporations are doing business with.
In order to do business in China, the Chinese stipulated that the western corporations had
to give one of the members of the Chinese elite half ownership in the company. They were also
required to turn over the western technology to the China-based company. Western technology,
western money, cheap Chinese slave labor, ability to pollute to your heart's content. For
both sides, it was a win-win. The Chinese elite got filthy rich and then moved over to the
West with their newfound gains, buying up properties, forcing prices up for the natives. The
western corporations not only wanted cheap products to export back to the U.S., but they were
also developing a whole new market – Chinese consumers who would buy their products as
well. Double plus good!
And once in the West, the Chinese and the Indians stick to their groups. They hire their
own, promote their own, do business together. A lot of corruption, money laundering,
cheating, taking advantage of and bending laws. Rule of law? Code of ethics? Morals? Do unto
others? They never learned it. Opportunistic dual citizens.
I would not count on the effect of the electric shock on the leftist thinkers. The role
of Jewish Bolsheviks in the Cheka, NKVD, GULAGs, genocides by famine has been known from
the very beginning and yet it left no impact on the leftist thinkers.
It unfortunately has not had much of an effect on a lot of people in the West, who remain
ignorant or in denial of the role played by Jewish Bolsheviks in historic mass murders and
totalitarian repression.
Waiting for the Hollywood movie to tell the story.
This is an expensive, weighty, and important book, which will take some time to
digest.
Classical economists re-learn the science of money, starting with Prodhoun and even Marx
in Das Kapital volume 3. (Leftists are often correct about money, but wrong on social
issues.)
The jew Marx does do some deception in volume 3 with a sneaky equation that does not
compound interest, but otherwise he is pretty accurate. Marx was probably beholden to his
finance masters.
This is why you need to start with Zarlinga, as there is no BS to lead you astray. Hudson
tends to drill the bulls-eye too. There is so much deception in the field of money and
economy, that it is easy to get caught up in false narratives, like one-born free
libertarianism. Usury flows fund the deception, even to the point of leaving out critical
passages in translations, such as in Aristotle's works. Or, important works are bought up and
burned.
Michael Hudson is the leading economist resurrecting Classical Economics. Reading all of
Hudson and Zarlinga will take some time and effort, but it is good to take a first step.
@Anon
I respectfully disagree that "Kenya was given up [by Great Britain] before there was even an
anti-colonial movement in Kenya ."
According to Wikipedia : " The armed rebellion of the Mau Mau was the culminating response to
Colonial rule . Although there had been previous instances of violent resistance to
colonialism , the Mau Mau revolt was the most prolonged and violent anti-colonial warfare in
the British Colonial colony. From the start the land was the primary British interest in
Kenya ."
Just as the Kenyans suffered the consequences of British colonialism , the "Palestinians will
suffer
the consequences of Zionist colonialism until Israel's original sin is boldly confronted and
justly remedied " foreignpolicyjournal.com
@anon
A particular distinction of Jewish investors versus gentile investors – on average, of
course – is their use of bribery to get the force of government behind them. Rather
than taking a bet about some group being able to pay back some bonds and letting the chips
fall where they may, Jews start bribing or influencing politicians to force that group to pay
back the bonds.
Buy some bonds, charge outrageous fees, bribe officials in some form or other, get govt to
force the payment of bonds and outrageous fees. Rinse and repeat. Jews have been doing this
in some form aor another for 1500 years. It's why the peasants get a tad angry at both the
Jews and their bribed politicians/nobility.
@lavoisier
"But he should have been impeached for his treachery to the constitution and to the American
people for his slavish devotion to all things Jewish!"
A purely political impeachment, right down party lines. I hear Schiff has got his hands
full of Ukrainian-Jewish oligarchic money. Dear me, wait until that comes out.
Trump is in league with the Jews? Yeah, who isn't? Obama's lips are still sore from
kissing Jewish Wall Street bankers' asses (notice that none of them went to jail). Same with
the Clinton's.
You can get politicians to pass all sorts of laws in your favor if you've got enough dirt
on them. After all, your side owns the media, Hollywood, academia, the courts, the banks.
If dirt doesn't work, you can always threaten to impeach them in order to get what you
want.
But Trump is also revealing every last dirty one of them (accidentally or on purpose).
People see them now.
@J
Adelman J Adelman comes out swinging. He's such a tough guy. But does he make sense? Does
he care if he makes sense? The writer is talking about those Jews who are vulture
capitalists. He's not talking about every Jew. Isn't it a little odd that nearly all of these
funds are run by Jews? Can your corrupt mind accept that fact and address the question? Or
are you going to bore us with your religion and by that I mean your obsession with
anti-semitism, which is your religion.
@PCA
Stop splitting hairs. Is this the best you can do? Are you one of Lot's cronies? I don't
normally address petty matters of this kind but Joyce is describing a multitude of sins and
misconduct orchestrated by various Jewish financiers around the globe. It is not merely one
phenomenon; thus, 'phenomena' fits. Go troll someone else.
Lobelog ran some articles in Singer, Argentina, Iran Israel and the attorney from Argentina
who died mysteriously . Singer is a loan shark. Argentinian paid dearly .
Google search –
NYT's Argentina Op-Ed Fails to Disclose Authors – LobeLog
https://lobelog.com/tag/paul-singer/
Paul Singer NYT's Argentina Op-Ed Fails to Disclose Authors' Financial Conflict of Interest
by Eli Clifton On Tuesday, Mark Dubowitz and Toby Dershowitz, two executives at the hawkish
Foundation for Defense of Democracies (FDD), took
The Right-Wing Americans Who Made a Doc About Argentina
https://lobelog.com/the-right-wing-americans-who-made-a-doc-about-argentina/
Oct 7, 2015 One might wonder why a movie about Argentina, in Spanish and . of Nisman's and
thought highly of the prosecutor's work, told LobeLog, FDD, for its part, has been an
outspoken critic of Kirchner but has From 2008 to 2011, Paul Singer was the group's
second-largest donor, contributing $3.6 million.
NYT Failed to Note Op-Ed Authors' Funder Has $2 Billion
@mark
green Mark green the queen of self rightousness.
There are many non jews runny vulture funds worldwide with at least 100 in china
alone.
The list joyce provided is selective and politically motivated.There are many more non
jews who are guilty of financial crimes.The jails are full of them.
The vulture funds are a product of a system that punishes failure.Do not blame the
funds,blame the system.
This story and like many that appear here is designed to pressure israel to change
politically.Israels future lies in the hands of God not some mutt with a serious case of
mutters.
@Lot
venture capital funds are only made necessary because we have a federal reserve.. which is a
private bank and private banks want to earn interest.
consider the difference between when a private lender makes loans to the USA
(treasury)
on the books of the feds is the following
due from the USA $11,000
new cash printed and given to dumb clucks at the USA $10,000
profit on the loan $ 1,000
what happened here is the fed printed $10,000 in new bills.
Assume the loan made at 10% interest and it is due in 1 year.
Ok so what is the loan on the USA books
cash $10,000
amount payable to the Federal Reserve $11,000
loss on the deal $ 1,000
this loan becomes the loan on the local bank books
the government gives the bank its loan and its obligation to repay the principal plus
interest
If there were no interest (that is the government printed its own money and made
venture loans to entrepreneurs at 0% interest the entries would look like this )
Amount due in one year from venture borrower $10,000
new cash printed and loaned to venture $10,000
so if the venture guy spent the $10,000 and then went broke the treasury would still gets
its money back in taxes from those who earned profit the money the venture paid.. no one has
to beat somebody to pay the interest (the economy does not have the extra $1000 dollars in
interest so somebody has to lose)
When interest must be paid its like musical chairs.. each time the music stops there are
not enough chairs to go around, someone is left standing ( its like that in money lending,
the debtors dance until the music stops, but because the private bank only put the principal
amount $10,000 in circulation the guy needs $11,000 to pay the loan back where does he get
the extra $1,000? <=If ten $10,000 loans are made, and 1 guy goes broke, there will be
enough cash in the system for the 9 others to pay the interest they each owe and enough for
the local private bank and lawyers to get paid for handling the bankruptcy. . <= we
started with 10 loans, one loan went broke the 9 remaining borrowers each pay $11,000 to
retire the debt , there are 9 loans "$99,000 to repay them and $1000 to pay debt service
costs and legal fees.
if there were no interest on the loans, the bankruptcy would not matter.
What makes the venture capitalist have a business at all is the Federal reserve is a
private profit making bank. Lending printed money from the Federal reserve requires interest
to be paid, and that requirement of interest makes the economy horde its capital and the
economic players playing king of the mountain to get the extra money they need to pay the
interest . ..
Zionism brought private banking to the USA and the USA wrote a tax law to collect the
money from the Americans it governs to pay the interest on the debt.
this is a really simplistic description of what is happening to our economy so don't rely
on it but instead use its simplistic idea to model the impact of having interest on the
national debt is having each year. If our government reversed what it privatized to the
Federal Reserve, we could make the economy run more or less as we please. \we could eliminate
the national debt and with it income tax es.
Typical Jew baiting article. Mitt Romney isn't a "Jew" Ashish Masih isn't. Many more examples
of gentiles taking advantage of their brothers. May as well consider the Walton family of
Wal-Mart to be vultures as well since they benefit the most from this system, they're so
called Christians, not Jews. The problem is capitalism. Author seems to suggest that a moral
economic system has been corrupted. The system was designed in an era of widespread slavery
folks. Its an immoral system that requires theft, slavery, war, immigration, all the things
you hate, to survive. The system is working exactly as it is designed to work. Exploit
workers, the environment and resources, shift all the profits from workers to the owners of
capital, period. Welcome to the late stage, it eats and destroys itself
From the days of the colonists slaughtering the Injuns and stealing their land. The days
of importing African slaves, and indentured servants. The days of child labor and factory
owners hiring Pinkertons to gun down workers who protested shitty wages and working
conditions. The good ol days of the gilded age. Now the age of offshoring to China or some
other lower wage nation. Overthrowing leaders not willing to let their resources and people
be plundered and enslaved, driving refugees to our borders fleeing violence and poverty.
Importing H1B workers to drive down wages. It was always a corrupt system of
exploitation/theft/slavery. This is nothing new and doesn't require "Jews" to be immoral.
And all these so called "Christians" like Pastor Pence approve. Usury and capitalism run
amok. I'm sure Jesus is smiling down on all these Bible toting demons who allow their fellow
man to be exploited by the parasites. Sad!
Good for Tucker. He has his moments I'd watch his show if he wasn't a partisan hack. But
that will never happen working for Fox or any other corporate media.
@Colin
Wright I doubt Trump promised to go to war with Iran before he was elected. In his
Inauguration Speech, Trump said he wanted to bring the troops home and stop the wars. He
didn't have to say these things, he had already won the election, but he said them anyway.
One of the few times the media has laid off Trump was when he sent some missiles into
Syria (after he gave them hours of warning ahead of time that the missiles were coming). If
Hillary had been elected, Syria would have been leveled by now and flying an Israeli
flag.
Obama brought us the destruction of Libya and the murder of Gaddafi, the coup in Ukraine,
and through ISIS, which the U.S. armed, trained and paid for, tried to destroy Syria.
I don't really blame Obama or Bush Jr. or Clinton. They were all puppets who did as they
were told. If they hadn't, in the words of Chuckie Schemer, there would have been "six ways
from Sunday of getting back at them".
If you don't do what they want, you're impeached, some of your dirty laundry is aired, or
they purposely crash the stock market on you. If you still don't get the message, maybe
you're just assassinated.
Trump loves his daughter and she is married to a Jew. If they're not getting their way, I
could see them telling Trump: "Sad what happened at the Pittsburgh synagogue, isn't it? Sure
hope nothing like that happens to your daughter."
I don't envy Trump. He not only is up against the Democrats, but he is also fighting the
globalist neocons in his own party. Both parties want open borders and more war, something
Trump does not believe in. As far as I can see, he's throwing them bones in order to shut
them up. If he gets elected again, which I think he will, we might see a different Trump. Who
knows.
@Jimmy1969
I think this deal has already taken place. Israel has given away to China for 99 years the
hall commercial incomming This deal has taken place 2 or 3 years ago
Don't blame it on the Talmud. These Jews act in accordance to their Torah: "If Yahweh your
God blesses you as he has promised, you will be creditors to many nations but debtors to
none; you will rule over many nations, and be ruled by none" (Deuteronomy 15:6). "feeding on
the wealth of the nations" (Isaiah 61:5) is Israel's destiny according to Yahweh.
@mcohen
I took a squint at both your own and Mark Green's comment history. Your comment history
cannot even begin to compare in value, but I should have already guessed that from the
name-calling in the first line of your comment. Just weak, extremely weak.
Rather amusing to read our resident Jewish apologists carrying on about the absolute sanctity
of the necessity of collecting debts to the functioning of the capitalistic system. These
nations and corporate entities that are now in thrall of the Wall Street Jews , were herded
into debt by that other faction of the capitalist system, the dealers in easy money.
Snookering the rubes into lifelong debt, telling them that money is on the tap, promoting
unsustainable spending habits and then let the guillotine come down, for the vultures to feed
on. They are two sides of the same coin.
Its damned funny that the rich Jews nowadays are absolutely addicted to usury, rentier
activities, and debt collection, when the Bible itself condemns such activities. But they are
our elder brothers in faith according to some.
@Colin
Wright Carnegie was a Protestant. The Protestant cancer serves it's Jewish masters. Read
'The Jewish Revolutionary Spirit' by E. Michael Jones. There is definitely a revolutionary
nature to the international Jew just as there is to their Protestant dupes. Jewish nature is
to subvert the natural order and the west was built by the guidance of LOGOS. The Catholic
Faith created by God guided the creation of the west. These Jewish exploits are a result of
the Wests rejection of its nature and its enslavement
1. rich or poor, creditor or debtor, in the final analysis, ultimately, all will become equal
in the grave. the filthy rich might decide to lay their corpses in coffins made of gold, but
it will be in vain. the sorrows and the joys of this fleeting world shall quickly pass like
the shadow.
2. talmudics feel the need to accumulate money in order to have sense of security since they
were stateless for two millennia. paradoxically, amount of wealth is indirectly proportional
to a sense of security, provoking backlash from aggrieved host people.
3. establishment of State of Israel did not reduce the need for the accumulation but has only
heightened it since now talmudics feel the need to support it so that she could maintain
military superiority over neighbouring threats.
4. as long as Palestinians are not free and Israel does not make peace, talmudics will
continue to meddle in American politics. if you don't want to save the Palestinians for the
sake of humanity and truth or justice, at least you should do it for your own sake.
5. loan sharking, vulture whatever, etc., is the ugliness of big capitalism with capital C,
what is beyond sickening is the promotion of sodomy. if one becomes poor or homeless, it's a
pity. to go against nature is an abomination.
6. by using such words as "homosexual" you have accepted the paradigm of the social engineers
and corruptors, and are therefore collaborating with them. words have consequences since that
is how we convey ideas unless you own Hollywood and can produce your own moving pictures
too.
7. talmudics is a better word than as a great American scholar says, since people who promote
sodomy are absolutely opposed to the Torah (O.T.). those who still struggle to follow it
couldn't care less what happens to benighted goyim, only becoming reinforced in pride of
their own purity as opposed to disgraced nations. thus, practically, they too are talmudics,
alien to the spirit of the ancient holy fathers and prophets of Israel. the word "Orthodox"
has been stolen and now has lost all meaning or it means the exact opposite of what it
originally meant.
8. Blessed are the meek, for they shall inherit the earth. Matthew 5:5
@Colin
Wright Well there's nothing wrong in principle about specialists in valuing distressed
debt and managing it nuying such debt and using the previously established mechanisms for
getting value out of their investment. So the problem is how they go about enforcing their
rights and the lack of regulation to mitigate hardship in hard cases.
Still it is notable that it should, overwhelmingly be a Jewish business and such a
powerful medium for enriching Jewish causes and communities at the expense of poor
Americans.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of two
lessers' choice they are offered -- even voting for Trump got them little/nothing.
@Colin
Wright George Bush needed Tony Blair's support to attack Iraq , Donald Trump now has the
support of Boris Johnson to attack Iran : "Boris Johnson refuses to rule out military
intervention on Iran ." metro.co.uk
It is said that the "deep state " removed Theresa May from office as she was "too soft" on
Iran . As you suggest the attack will not happen until Trump's second term unless, in the
meantime , there is a false flag attack like 9/11 which can be blamed on the Iranians .
East Asians have freedom of speech. That is all that is needed to end Jewish Mafia vulture
capitalism. If it was Italian Mafia vulture capitalism, the west would end it a few seconds.
When one is in a "no see, no say, no hear" tribal group one can get away with everything.
East Asians don't believe in hiding reality.
Here is more on how Samsung fought back against little Paulie.
Samsung published controversial sketches in response to row over merger
Jewish U.S. hedge fund boss Paul Singer was trying to stop a Samsung business deal
In response the firm released cartoons on its website depicting Singer as a vulture
A row has broken out in South Korea with media there describing Jews as 'ruthless' with
money
Merger between Samsung C&T and Cheil Industries was approved today
This is how Paulie's row with Samsung started.
These are the extraordinary cartoons Samsung posted on its website which reportedly
depict a Jewish hedge fund boss as a money-grabbing vulture.
The row between Samsung and one of its major shareholders, Paul Singer, has sparked an
anti-Semitism row in South Korea.
Harvard-educated Mr Singer, 70, whose hedge fund Elliott Management owns a seven per
cent stake in Samsung C&T fell out with the company after he objected to a merger
deal.
Cartoons shown what Paul's company did to the Congo, just one of many nations he
pillaged.
In response Samsung posted a number of inflammatory cartoons on its website showing Mr
Singer as a long-beaked vulture, which have since been taken down.
In one of the sketches a poor-looking man goes, cap in hand, to the vulture who has an
axe hidden behind his back.
The caption reads: 'Elliott Management's representative method of earning money is,
first of all, to buy the national debt of a struggling country cheaply, then insist on
taking control as an investor and start a legal suit'
In another people appear to be dying in the desert from dehydration. Underneath is the
caption: 'Because of it, Congo suffered even more hardship'.
This is believed to refer to Elliott Management's business dealings in the Congo.
Samsung wanted to keep their company in the Lee family. They did not want a Jewish Mafia
tribal group take over.
The bitter fall out came because Samsung Group's founding family wanted to complete a
merger with its holding company Cheil Industries and Samsung C&T to shore up its
control of the firm as its chairman, Lee Kun-hee's health is in decline.
In the End, Samsung won. Paul lost.
The Lee family, who control Samsung, owns 43 per cent of Cheil Industries. The
controversial merger was finally approved today.
South Koreans are not shy to express reality as it is. The west has to learn the value of
freedom of speech before it too late for the west.
But the row has sparked an outpouring of anti-Semitism in South Korea.
One columnist described Jewish money as 'ruthless and merciless'.
And on Tuesday the former South Korean ambassador to Morocco Park Jae-seon expressed his
concern about the influence of Jews in finance.
In an extraordianry outburst he said: 'The scary thing about Jews is they are grabbing
the currency markets and financial investment companies.
'Their network is tight-knit beyond one's imagination,' Park added.
The next day, cable news channel YTN aired similar comments by local journalist Park
Seong-ho.
'It is a fact that Jews use financial networks and have influence wherever they are
born,' he said.
Neither Park Jae-seon and Park Seong-ho were available for comment.
In a piece published a fortnight ago, Media Pen columnist Kim Ji-ho claimed 'Jewish
money has long been known to be ruthless and merciless'.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of
two lessers' choice they are offered -- even voting for Trump got them little/nothing.
I said nothing of an electoral solution to America's problems the problems will not be
solved that way.
@Art
That scary thought has crossed my mind, too, Art. I've even started wondering if this whole
impeachment circus is really part of an elaborate plot to guarantee Trump's re-election. I
mean, would Pelosi's insane actions make the slightest sense otherwise? And everyone has
noted how this is such a 'Jew coup,' haven't they? It all looks so suspicious
What our Jewish friends have done to Argentina, through maneuvering the elections,
killing dissidents, and marking territory, is a cautionary tale to anybody woke enough to
see with their own eyes.
True, but irrelevant. The Jews that matter don't read the Talmud or believe in "Adam and
Eve."
Whether they believe it or not, they act as though they do. That shows it is an ancient
and essential part of their ethnic subculture. Who knows? Maybe Kevin MacDonald is right and
it's actually genetic .
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
The holo-hoax is just their modern version of 'chosenness'. Pretending to be the
biggest victims evah! is just another way of making themselves appear collectively as
morally superior to the rest of mankind–even the darkies:
But whether it's being wielded by the Zionists or the lefty Social Jewish Warriors, it's
really just a power play down deep. It's really just another way of reminding us
goyim–white and colored–that we are all just half-demons (so to speak) compared
to The Chosen.
@Wally
It is rather entertaining watching you kvetch, Jewish colonialism over WASP nations will be
glorious.
Vietnam & Congo can choose as they wish, it is they who vote for their leaders.
In fact, Congo was better off with colonialism.
America voted for Zion Don, he is now receving hundreds of millions of dollars from Jews
to do their bidding. It is hilarious that you can't see the irony of your comments.
In fact, it is even more funny what the Jews will do to WASP nations, enjoy your future of
transexualism and fast food, WASPs totally deserve everything that is coming at them.
Then you change the subject to Epstein. Pathetic.
If you had an IQ above room temperature, you would realise my segue into the Epstein
affair was a response to your question of "What deal was supposedly struck".
You killed Lumumba," she roared at the Belgian officials on the platform, before being
escorted away by the police. The music and speeches resumed.
She was right: they did. Belgium was heavily implicated in the 1961 killing of the
radical, first prime minister of an independent Congo, now the war-torn Democratic Republic
of Congo. In 1975 a US inquiry also pointed conclusively to CIA involvement in the
execution carried out by a Katangan police unit under a Belgian officer.
Paul Singer, a Jewish Mafia vulture capitalist did some "work" on the Congo too.
He also bought some of Congo's debt for $10m and sued for $127m. The Congolese
government was found to be corrupt and under US racketeering law, Singer may be able to
claim triple damages, reaping as much as $400m.
On March 9, 2016, Department of Justice (DOJ) oversight personnel learned that the FBI
had been employing outside contractors who had access to raw Section 702 Foreign Intelligence
Surveillance Act (FISA) data, and retained that access after their work for the FBI was
completed.
This information was disclosed in a 99-page FISA court ruling on April 26, 2017, that was
declassified by Director of National Intelligence Dan Coats.
That wasn't an isolated incident and the improper access granted to outside contractors
"seems to have been the result of deliberate decisionmaking" (footnote – page 87).
The FISA court noted the "FBI's apparent disregard of minimization rules" and questioned
"whether the FBI may be engaging in similar disclosures of raw Section 702 information that
have not been reported."
"This is bigger than Watergate + 9/11 + the Bay of Pigs + almost every other conspiracy
theory you can name combined. It is also why you're seeing definite signs of panic and
desperation everywhere from the House of Representatives to the mainstream media to the
boardrooms of the Fortune 500. This reaches from the heart of the Swamp in Washington DC to
Silicon Valley and Seattle, Washington. In East Germany, it came out after the Wall fell that
one-fifth of the population was involved in the surveillance of the other four-fifths of the
population; now keep in mind that due to the mathematical reach of the FISA warrants, the 825
million surveillance orders issued actually exceeds the 320 million population of the
USA.
Now we know how and why Google and Amazon and Facebook got so big, so fast. They were the
corporate arm of the surveillance state."
You disloyal Jews used government resources and private contractors to surveil the entire
country.
I wonder what's going to happen next?
Also why haven't you responded to any of the comments about what the Jews did in
Russia?
@RealistI said nothing of an electoral solution to America's problems
And I said nothing about an "electoral solution", or any other kind of "solution", to
"America's problems" -- I said/implied that blaming Whites, or the way they vote, more or
less exclusively, as you did, for the way things are, was not exactly a genius take -- there
is literally no one for a race conscious white person, eg a WN, to vote (affirmatively)
for at the moment -- and it is hard to imagine anyone emerging in the near future.
For the record: I (also) do not think just voting, especially in the current
one two party system with the usual 'evil of two lessers' choices offered,
will do anything for Whites.
What We abrogate (of) a sign or [We] cause it to be forgotten, We bring better than it
or similar (to) it. Do not you know that Allah over every thing (is) All-Powerful?
2:106
The verses on abrogation read as to only allow Allah to abrogate, so any human action on
this is stepping over the line imo.. maybe other than when 100% of the Ummah agree on
something, I read that could remove a surah of the Quran, like a voice of God. That rhymes
nicely imo.
Of course how to judge which ruling to use? I agree, it brings in a casuistry into the
faith that generally helps to confuse.. I don't know much about it though yet.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
venture capital funds are only made necessary because we have a federal reserve.. which
is a private bank and private banks want to earn interest.
Sentiments are correct and you are hovering over the target, but some details are
needed.
The federal reserve is the tail on the dog, not the dog. The Fed was created as a part of
the corporate banking money trust. Before Fed the reserve loops of banks were not tied
together, and they had to use treasuries (T bills or Lincoln Green-backs) to balance their
ledgers.
Banksters wanted to extend their money power beyond their region. In the days before
federal reserve bank money power would fall off the further you got away from the bank. Banks
hypothecate new bank credit, and the credit has to swim home to the debt instrument. This
"swimming home" is done easily when the ledgers are all connected through reserve loops (also
called the overnight market).
After Federal Reserve (1913) and before Wright Pattman, the Federal Reserve was recycling
its profits made on public debt back to its stock owners and member banks. The member banks
especially, were guaranteed profits no matter how the economy did. After Wright Pattman (mid
60's) Fed has to rebate to treasury they couldn't face up to the allegations they were
stealing from the commons, which they were.
Today, the FED rebates interest on TBills and public debt back to Treasury. The private
banks within the system continue to hypothecate new money at interest, as that is their
business model. This business model does not include morality, nor does it work in the public
interest. It works to enrich finance at the expense of the working/laboring economy.
So, central banks are not profit centers, but instead they ensure profit lower down
– within the private banking system. Central banks are backstops to prevent instability
within the already unstable debt money system.
Recent Example: The Repo Crises, whereby FED is monetizing repurchase agreements. Non bank
actors such as hedge funds, REIT's and others have been given access to the overnight market
(where reserves are supposed to be traded). The FED now swaps new keyboard dollars for
various finance paper to keep the non bank actors in the repo market liquid.
This action is artificial and props up the finance sector at the expense of the normal
working economy, and hence it is usurious.
Usury is a word that has been normed out of our language. Why? Because our (((friends)))
are agents of mammon, and they cannot help themselves. It may be genetic.
Usury is a power relation, where you steal from others because you can. Laws are changed
to enable the thefts.
In the case of the FED it was taking 6 percent from the people on public debts. Public
debts were funded by taxpayers. This money was then funneling backwards from FED into their
crony banks and paid off sycophants.
We don't know what the FED is doing today because the bad guys won't allow an audit. The
general statement is that private corporate banking is usurious, and was born in iniquity,
and that is where your eye should gaze, not necessarily at the FED or any central bank.
The debt money system and finance capitalism is state sponsored usury, and is a Jewish
construct.
Vulture capitalism is simply vultures buying up or creating distressed assets and then
changing the law, or using force to then collect face value of the debt instrument or other
so called asset. Vultures will use hook or crook to force down what they are buying, and hook
or crook to force up what they are selling. God's special people can do this because when
they look in the mirror, they are god, and are sanctioned to do so.
Maybe the vulture should replace the bald eagle as America's favorite bird since our dear
shabbos goy President Trump and cohorts are undermining the First Amendment and trying to
make it a crime to criticize Jews and/or Israel. Oh and don't think I am promoting the other
Zionist and their shabbos goy on the demshevik side. The Jew CONTROLS both sides and "our"
two party system has become Jew vs. Jew, not republican vs. democrat. Lenin said that the
best way to control the opposition was to lead it and (((they))) are at it AGAIN.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
The line of good and evil runs down the middle of each person's heart, and they have to
decide.
My line of attack on Judaism, Islam, Christianity, or whatever, has to answer the
question: "Is it good narrative for high civilization." Does the narrative make people
malfunction?
There are branches of Islam that are good narrative – where people choose the better
side of Islam.
The point is that these good branches, say the Suffi's, have to keep the crazy aunt in the
basement.
Abrogation allows what comes later, to gain power over what comes earlier. And what comes
earlier is the best part of Islam.
Christianity has the same problem, it does not do a good job of policing its crazies, who
twist scripture. Judaism, especially Talmudic Judaism is Kabala and utterances of the sages,
and it morphs and changes over time. For example, after Sabatai Sevi, the Kol-Neidre was
weaponized, and this construct is used by today's Zionists to wreak havoc. Before Sabatai,
there was Hillel, who weaponized usury.
Yes, I agree about Christianity changing quite a bit. In the first 300 years it was much
different than today, especially after the Arien controversy was settled by Constantine's
maneuvering of Bishops at council of Nicea. For example, before; reincarnation was part of
Christian doctrine, and after; reincarnation was excluded.
Trump should be impeached and convicted. But not for the reasons in the two Articles passes
by the House.
He should be for
Violating the Symington and Glenn amended 1961 Foreign Assistance Act to ban any aid to
clandestine nuclear powers that were not NPT signatories. Trump increased aid to Israel.
Moving the US Embassy to Jerusalem in violation of numerous UN Security Council and
General Assembly resolutions.
The abuse of Office via Nepotism in having totally unqualified Jared and Ivanka Kushner
serve as US Government respresentatives.
Executive Order classifying Jews as a Nationality protected from Free Speech criticism of
them, in violation of the First Amendment.
Of course those in Congress, that facilitated and cheered on the Israeli centric Trump
acts, should all be voted out forever.
I have long maintained that libertarianism/capitalism is really like a kind of Calvinism
for atheists. Calvinists used to assume that, since whatever happened was God's will and
God's will was invariable good, then whatever happened was good. Likewise, many modern cucks
seem to have just substituted The Market for God. Morally speaking, it all lets man off the
hook for anything that results–especially when those men happen to be Jewish
financiers!
No, boys and girls, The Market is not inherently good. It requires that a moral system be
superimposed on top of it in order to make it moral.
@Anon
After reading the book of this MI6 asset (and potential killer) who tried to fleece Russia,
you probably can benefit from watching a movie by Nekrasov about him. See references in:
It looks like it was Browder who killed Magnitsky, so that he can't spill the beans. And
then in an act of ultimate chutzpah played the victim and promoted Magnitsky act.
If true this china capitulation. Or some shrewd tactical maneuver, as the next year it is
China who hold trump cards -- it can derail Trump re-election with ease.
I have my doubts about Trump being the Grand Dealmaker he calls himself. Looking at seven
bankruptcies as a proof of that ... mythical skill I don't find much. I recall Trump suing the
Deutsche Bank after the bank wanted a credit back. His lawyers in court referred to the bank
crisis, called the Deutsche Bank as a bank responsible for that and said that thus they don't
deserve repayment. that was Chutzpah in the First Degree, For very obvious reasons Trump lost
that case and did pay back.
When Trunmp recently went on searching lawyers to work and sue for him he didn't find any. A
big corp lawyer anonymously briefly explained why: "Doesn't pay. Doesn't listen.'
A US-China trade deal was announced to chaotic fanfare late Friday Asian time – and we
are sceptical. First, we still don't have details other than that December tariffs were
postponed by both sides, the 15% US tariffs imposed on 1 September are to be reduced to 7.5% as
a sign of goodwill, and the 25% tariffs on USD250bn stay in place . Second, we aren't going to
get a signing ceremony between the US and Chinese leaders, which does not send an encouraging
signal. And third, what we see is close to the terms we previously criticized for being
unrealistic in reports such as 'A Great Deal of Nonsense" and "LOL-A-PLAZA".
The US Trade Representative (USTR) says the final text of the phase one
agreement is still being finalised, and he will sign it early next year for a likely incept
date of end-January 2020. The areas covered include: Intellectual Property (IP); Technology
Transfer; Agriculture; Financial Services; Currency; Expanding Trade; and Dispute Resolution.
Each of these promises much and yet potentially delivers little.
China has pledged to address issues of geographical indications, trademarks, and enforcement
against pirated and counterfeit goods. That's just after a Chinese court ruled that Japanese
retailer Muji doesn't own its own name in China and a local rival started years afterwards
does. Enforcement matters, not promises: more on that in a moment.
China has agreed to end forcing or pressuring foreign companies to transfer their tech as a
condition for obtaining market access or administrative approvals. Again, enforcement is all
that matters here. China also " commits to refrain from directing or supporting outbound
investments aimed at acquiring foreign technology pursuant to industrial plans that create
distortion. " That is China's reason for outbound investment! For example, Sweden's Defence
Research Agency just released a detailed survey of Chinese corporate acquisitions in their
country showing at least half are correlated with the "Made in China 20205" plan.
China will " support a dramatic expansion of US food, agriculture and seafood product
exports " , with the USTR stating the target is to jump to USD40bn in 2020, a USD16bn increase
over the pre-trade war level of USD24bn, and to aim for USD50bn. Part of that reflects China's
decimated pork herd, so is hardly a concession. Yet it is hard to conceive of how the total
figure can be achieved without China using the US to displace agri imports from other nations,
e.g., Argentinean and Brazilian soy, and perhaps Aussie and Kiwi farm goods. That also
increases China's economic exposure to the US at a time of rising geopolitical tensions between
the two (see news of the US' secret expulsion of two Chinese diplomats), and US' farmers
exposure to China in kind. For its part, the Chinese press are not mentioning these US hard
targets, and are talking about WTO trading terms, which bodes poorly.
The financial services chapter pledges China to an opening up already underway as it
searches for new sources of USD inflows, so again is not a concession. Interestingly, it also
says US ratings agencies will get access – which will be fun given the evident credit
stresses emerging in China just as US banks will be trying to sell China as an investment
destination. .
On currency the US is requiring "high-standard commitments" to refrain from competitive
devaluations and targeting of exchange rates. Everyone knows the CNY is not freely-traded
– but also that China is doing its best to prop it up, not to try to push it lower. The
key message is CNY is not going to be allowed to do what it ought to be doing, i.e., weakening,
as China is pledging new fiscal stimulus in 2020 that will decrease its external surplus. That
runs counter to market forces, and smacks of a kind of Plaza Accord. Of course, as long as this
US-China agreement holds that might be sustainable due to the promised higher capital
inflows...
Eexcept the expanding trade chapter implies the opposite. The USTR says China is pledging to
boost its 2020 imports of US goods and services by USD100bn over the level in 2017, and by
USD100bn again in 2021, for a total increase of USD200bn . Given 2017 was pre-trade war and US
exports to China dropped off a cliff in 2019, this means around a 110% y/y increase in
purchases in 2020 – and agri is only a portion of that. The problems should be obvious.
How can a slowing Chinese economy (imports are down y/y from most sources), see this kind of
increase without substituting US for world exports or local goods? How can a China with a USD
liquidity shortage serious enough to be driving said lowered import bill, and
'1USD-in/1USD-out' de facto capital controls, cope with the net reduction on the trade side? As
of November, the 12-month rolling Chinese global trade surplus with the US it was USD330bn and
globally was USD440bn. We are talking about reducing that US figure by 2/3 and the global total
by 1/2!
Which brings us to the last chapter: Dispute Resolution. Getting China to comply is far
harder than getting it to sign. The USTR notes the agreement " establishes strong procedures
for addressing disputes related to the agreement and allows each party to take proportionate
responsive actions that it deems appropriate ." In other words, each side can unilaterally do
what they want when they want! So much for the unilateral US control of the process.
So how to see this in summary? The reduction in tariffs from 15% to 7.5% is a positive,
albeit far less than the Wall Street Journal had promised. (NB, the USTR took the
extraordinary step of publicly chastising the WSJ journalists who wrote that story –
regular readers may recall I have also called them out more than once in the past.) Indeed, if
China really has agreed to all that is stated here then further incremental tariff rollbacks
can be seen – though the USTR has said the 25% tariffs will stay as collateral for a
phase two deal that nobody really expects to happen. Yet the terms of this phase one still seem
to be A Great Deal of Nonsense. How can China stop buying foreign tech? How can it buy as much
US stuff as pledged? How can it do so and not undermine the WTO? How can it do so and not
weaken CNY? And how can it do so with a strong CNY without increasing its USD debts, its
strategic reliance on the USD, and to US goods? In short, if China does as the USTR claims, the
US is a huge winner here (and there are lots of losers); if China does not comply with what
look an impossible import targets, then the US can frame China as the bad guy and the tariffs
can go back up again. Arguably, the question is not if that will happen, but when.
The most important thing about the "phase one" trade agreement announced Friday by U.S. and
Chinese officials is what won't happen: The two countries won't impose additional tariffs on
Sunday that would have further escalated the trade war.
There will also be a bit of de-escalation. In September, Trump imposed 15 percent
tariffs on $110 billion worth of Chinese consumer goods, such as clothing; those tariffs will
be cut in half, to 7.5 percent. But the largest piece of Trump's China tariffs -- a 25 percent
tariff on $250 billion in goods mostly sold to businesses rather than consumers -- will stay
unchanged, for now.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
This year's winner is Branko Milanovic's
Capitalism, Alone: The Future of the System That Rules the World . (This is the second
Globie for Milanovic, who won it in 2016 for Global Inequality .) The book is based on
the premise that capitalism has become the universal form of economic organization. This type
of system is characterized by "production organized for profit using legally free wage labor
and mostly privately owned capital, with decentralized coordination." However, there exist two
different types of capitalism: the liberal meritocratic form that developed in the West, and
state-led political capitalism, which exists primarily in Asia but also parts of Europe and
Africa.
The two models are competitors, in part because of their adoption in different parts of the
world and also because they arose in different circumstances. The liberal meritocratic system
arose from the class capitalism of the late 19th century, which in turn evolved out of
feudalism. Communism, Milanovic writes, took the place of bourgeoise development. Communist
parties in countries such as China and Vietnam overthrew the domestic landlord class as well as
foreign domination. These countries now seek to re-establish their place in the global
distribution of economic power.
Milanovic highlights one characteristic that the two forms of capitalism share: inequality.
Inequality in today's liberal meritocratic capitalism differs from that of classical capitalism
in several features. Capital-rich individuals are also labor-rich, which reinforces the
inequality. Assortative mating leads to more marriages within income classes. The upper classes
use their money to control the political process to maintain their position of privilege.
Because of limited data on income distribution in many of the countries with political
capitalism, Milanovic focuses on inequality in China. He attributes its rise to the gap between
growth in the urban areas versus the rural, as well the difference in growth between the
maritime provinces and those in the western portion of the country. There is also a rising
share of income from capital , as well as a high concentration of capital income. In addition,
corruption has become systemic, as it was before the communist revolution.
The mobility of labor and capital allows capitalism to operate on a global basis.
Migrants from developing economies benefit when they move to advanced economies. But residents
in those countries often fear migration because of its potentially disruptive effect on
cultural norms, despite the positive spillover effects on the domestic economy. Milanovic
proposes granting migrants limited rights, such as a finite term of stay, in order to
facilitate their acceptance. He points out, however, the potential downside of the creation of
an underclass.
Multinational firms have organized global supply chains that give the parent units in their
home countries the ability to coordinate production in different subsidiary units and their
suppliers in their host nations. Consequently, the governments of home countries seek to limit
the transfer of technology to the periphery nations to avoid losing innovation rents. The host
countries, on the other hand, hope to use technology to jump ahead in the development
process.
The Trump administration clearly shares these concerns about the impact of globalization.
President Trump has urged multinational firms to relocate production facilities within the U.S.
Government officials are planning to limit the
export of certain technologies while carefully scrutinizing foreign acquisitions of
domestic firms in tech-related areas. New
restrictions on legal immigration have been enacted that would give priority to a
merit-based system. Moreover, the
concerns over migration are not unique to the U.S.
Milanovic ends with some provocative thoughts about the future of capitalism. One path would
be to a "people's capitalism," in which everyone has an approximately equal share of both
capital and labor income. This would require tax advantages for the middle class combined with
increased taxes on the rich, improvements in the quality of public education, and public
funding of political campaigns. But it is also feasible that there will be a move of liberal
capitalism toward a form of political capitalism based on the rise of the new elite, who wish
to retain their position within society.
Milanovic's book offers a wide-ranging review of many of the features of contemporary
capitalism. He is particularly insightful about the role of corruption in both liberal and
political capitalism. Whether or not it is feasible to reform capitalism in order to serve a
wider range of interests is one of the most important issues of our time.
==quote==
The Trump administration clearly shares these concerns about the impact of globalization.
President Trump has urged multinational firms to relocate production facilities within
the U.S. Government officials are planning to limit the export of certain technologies
while carefully scrutinizing foreign acquisitions of domestic firms in tech-related
areas. New restrictions on legal immigration have been enacted that would give priority
to a merit-based system. Moreover, the concerns over migration are not unique to the
U.S.
== end ==
In plain language that means the collapse of neoliberal globalization.
The take away quotes
"
...... the FT reports that Beijing has ordered all government offices and public institutions
to remove foreign computer equipment and software within three years.
..........
The take home message here is that US PC and software giants are about to lose billions in
sale to Chinese customers, a move that will infuriate Trump who will, correctly, see such
attempts to isolate the Chinese PC market from US vendors.
"
This is going to be difficult for China but they have a domestic OS, the Kylin OS, that is
Unix/Linux based, so much Open Source software is available to replace the Microsoft/Apple
software they currently use until they develop their own.
This speaks to Trump saying he can wait for a trade deal until after the (s)election but
it seems obvious that his negotiating position is going to get weaker by the day.
-------------------------------
Another aspect of the tech war that is financial also is that I am reading the China is on
the cusp of releasing a digital fiat RMD currency. This will have serious disintermediation
effects on the BIS, City of London Corp and others doing currency exchange if any can do such
on their phones. I am reading about digital currencies needing a blockchain underpinning but
if the US dollar can exist without one currently then what are the show stoppers except the
private finance dead weight in the middle?
As the Chicago revolution took hold, Bork's views crept into the judiciary. Eventually in a
fit of activism, the courts did away with the prohibition on predatory pricing. In its 1993
decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation , the United
States Supreme Court completely re-imagined the Robinson-Patman Act.
The case originally involved the tobacco oligopoly controlled by six firms. Liggett had
introduced a cheap generic cigarette and gained market share. When Brown & Williamson saw
that generics were undercutting their shares, it undercut Liggett and sold cigarettes at a
loss. Liggett sued, alleging that the predatory behavior was designed to pressure it to raise
prices on its generics, thus enabling Brown & Williamson to maintain high profits on
branded cigarettes.
In its decision, the Court held that in order for there to be a violation of the Clayton Act
and the Robinson-Patman Act, a plaintiff must show not only that the alleged predator priced
the product below the cost of its production but also that the predator would be likely to
recoup the losses in the future. The recoupment test dealt a death blow to predatory pricing
lawsuits because it is, of course, impossible to prove a future event.
The Supreme Court parroted Bork, noting that "predatory pricing
schemes are rarely tried, and even more rarely successful ." The Court also argued that it was
best not to pursue predatory pricing cases because doing so would "chill the very conduct the
antitrust laws are designed to protect."
The result has been severe. After 1993, no plaintiff alleging predatory pricing has
prevailed at the federal level, and most cases are thrown out in summary judgement. The DOJ and
FTC have completely ignored the law and ceased enforcing it.
Through judicial activism and executive neglect, the laws regarding antitrust and predatory
pricing have become odd relics, like those on greased pigs and cannibalism.
Predatory pricing is symptomatic of the broader problems when it comes to antitrust. Today,
except in extreme circumstances such as outright monopoly, courts are unlikely to block mergers
over an increase in market concentration. The Supreme Court has now tilted so far the other way
that it prefers to allow too much concentration rather than too little. It made this clear in
its Verizon Communications Inc. v. Law Offices of Curtis V. Trinko LLP decision, where
it stated its preference for minimizing incorrect merger challenges rather than preventing
excessive concentration.
In the Trinko case, for example, Justice Scalia suggested that those who enforce
antitrust laws ought to be deferential to firms with monopoly power, which are "an important
element of a free market system."
Scalia continued: "Against the slight benefits of antitrust intervention here, we must weigh
a realistic assessment of its costs ." The opportunity to acquire monopoly power and charge
monopoly prices is "what attracts 'business acumen' in the first place," he said, and "induces
risk taking that produces innovation and economic growth." He wrote that the "mere possession
of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful;
it is an important element of the free-market system."
The result of all this has been an increase of monopolies. Professor John Kwoka reviewed
decades of merger cases and concluded that "recent merger control has not been sufficiently
aggressive in challenging mergers." The overall effect has been "approval of significantly more
mergers that prove to be anticompetitive."
The Sherman Act and the Robinson-Patman Act may be deeply misguided; perhaps they should
even be repealed. But they haven't been. Passing new legislation is the proper way to change
laws one disagrees with. Getting rid of them in practice via judicial activism or an an
unwilling executive is not democratic.
The death of antitrust and predatory pricing reflects not only a failure of jurisprudence
but of economics. For all the claims of up-to-the-minute economic sophistication that activist
judges have used in the field of antitrust, the scholarship on predatory pricing is wildly out
of date. Brooke made Robinson-Patman irrelevant by citing "modern" economic
scholarship, yet the research the Supreme Court relied on goes back to studies by John McGee
and Roland Koller, published in 1958 and 1969 respectively.
Predatory pricing has only become more rational in a world where winner-take-all platforms
are happy to sustain short-term losses for the sake of long-term market share gains. What they
lose on one side with free shipping or below cost products, they make up for in other parts of
their business.
The rationality of predatory pricing is not some new economic finding. Almost 20 years ago,
Patrick
Bolton , a professor at Columbia Business School, wrote that "several sophisticated
empirical case studies have confirmed the use of predatory pricing strategies. But the courts
have failed to incorporate the modern writing into judicial decisions, relying instead on
earlier theory no longer generally accepted."
According to Bork, predatory pricing didn't work in theory, but does it work in practice?
Antitrust experts remember the Brooke case, but none seem to recall what actually
happened to the companies involved in the lawsuit.
After the Supreme Court decision left it without any legal remedy, Liggett succumbed to
pressure from Brown & Williamson and raised its prices. The entire industry raised prices
too. In the end, Liggett was not able to attract enough market share and ended up selling most
of its brands to Phillip Morris a few years later. Ever since, the tobacco oligopoly has raised
prices in lockstep twice a year with no competition. No company is foolish enough to lower
prices for fear of predatory pricing.
The losers from the judicial activism of Brooke are consumers and the rule of law.
The winners are the oligopolies and monopolies who protect their markets.
When it comes to enforcing antitrust, it's worth remembering the words of Robert Bork. As he
wrote in 1971 in his seminal piece " Neutral
Principles and Some First Amendment Problems ," "If the judiciary really is supreme, able
to rule when and as it sees fit, the society is not democratic."
The Supremes have been the Federal legislature since 1803. Recommending restraint is the
same thing as ordering one party in a legislature to surrender to the opposite party
regardless of majorities.
Monopolization is the core of Free Market economics. Free, literally, means free to become
a monopoly, free to practice vulture capitalism, free to use superior capitalization to
destroy competition, free to move your factory to China.
Free Market is a buzz phrase among bankers and other well-to-do to increase their income
at your expense instead of through superior production, design, and advertising methods. If
you want to know why we live in such a dysfunctional economy, its because we've abandoned
competitive capitalism for a free market economy.
Adam Smith (yes, that Adam Smith) noted in Wealth of Nations that if you put
two competing businessmen in a room together, not only do they get along just fine, their
conversation quickly turns to the subject of how they can work work together to rig markets
and screw the consumer for moar profitt.
Adam Smith was a much more interesting and sophisticated thinker than the B-school
Cliffs Notes version.
I think we could us more purist views of capitalism in conversations about capitalism. The
kinds of behaviors engaged designed to put others out of business described in the article
is not exemplary of capitalism.
The purpose of capitalism is not explicated with models of destroying competition. And
it certainly does not have mechanisms in which the government acts as an arm of business.
The notion that the business of "America" (the US) is business is misleading. Because when
it comes the government of the US her role is to ensure fair play. And power dynamics used
to destroy the ability of another to tap into the available market share is not a
capitalist principle. When one reads about the level and kinds of antics that corporate
boards and CEO's play to damage competition, to include the use of campaign funds to "buy"
or influence unique favors at cost to consumers - then we are talking about kind of faux
"law of the jungle". Bailing out business but not the defrauded customers of those same
businesses -- mercantilism not capitalism.
And it is these types of behaviors guised as capitalism, that fuels liberal demands for
a system of governance that is more akin to communism and socialism. They note the abuses,
but apply the wrong remedy.
I would agree that predatory pricing actually undercuts better pricing, improved
products or innovation (product creativity).
Conservatives are outraged, still, that Democrats refused to confirm Bork to the Supreme
Court.
Never mind the fact the Democrats were fully within their rights not to confirm, advise
and consent does not mean rubber stamp, Bork was the guy who actually carried out Nixon's
Saturday Night Massacre. Why would conservatives want a corrupt and unethical person like
this in the Supreme Court in the first place?
Conservatives' outraged is very ironic considering Reagan still got to nominate another
candidate, which the Dems confirmed. Meanwhile in a completely unprecedented and vindictive
move, Republicans denied a Democratic president outright his right to a Supreme Court
appointment. There is no comparison between these two episodes.
I have long thought that paul singer is representative of the worst people in the world
(argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he
ever ventures out of mordor undisguised. For all the money he has, a truly worthless pos, as
the closing comment made so clear. Good for Carlson, though, almost seems like actual
journalism. Kudos.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in
doing so he also called out the Republican Party, specifically Sen. Ben Sasse from Nebraska.
It will be interesting to see if Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered
regular bat-poo crazy Republicans by his "never Trump" blather, then angered Nebraska
Democrats (both of us) by voting Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a
classic empty suit. Closer to a straight Republican Mayor Pete than any thing else –
over-credentialed, over-ambitious and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent
candidates and preponderance of Clinton/Obama/HRC leftovers running the state party. Will be
knocking on doors for Bernie come 2020 but state races are iffy at best.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and
it's a nasty fight. Singer is at the end of a 30 year stint of dispossessing other people.
Being vicious really isn't enough to keep the federal government at bay. Nor are his bribes.
There has been an unspoken policy of dispossessing poor and middle class people. Why? Is the
United States actually looking at a specific future? That wouldn't align with the free market
– tsk tsk. Or would it? Live free, die free. Somebody needs to define the word "free".
Did TPTB decide to deindustrialize this country that long ago? That's when they attacked the
unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has
been hosed out by these guys we won't be pushing the old capitalist economy at all. We will
be pushing a globally connected, sustainable economy. Paul Singer is just a dung beetle. And
our government didn't want to discuss it because they would have had to create a safety net.
If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress. -Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help
the Chinese middle class than the American middle class over the last 30 years. Co-locating
our industrial base with the CCP on communist soil should be looked upon as the most radical
policy in our history but is not. Imagine if at the height of the Cold War we had told
Kruschev hey..how about you make all the stuff we need and we'll pay you $20 or $30T in trade
surplus over a number of years in hard currency which you can then parlay into geopolitical
power in Africa, South America, the ME and else where. What would the America of the fifties
think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old
capitalist economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson Tears into Vulture Capitalist Paul Singer for Strip Mining American Towns
Posted on
December 5, 2019
by
Yves Smith
In a bit of synchronicity, Lambert gave a mini-speech tonight that dovetails with an important Tucker
Carlson segment about how hedge funds are destroying flyover. As UserFriendly lamented, "It is beyond sad
that Tucker Carlson is doing better journalism than just about anywhere else." That goes double given that
Carlson has only short segments and TV isn't well suited to complicated arguments.
Lambert fondly recalled the America he grew up in in Indiana, before his parents moved to Maine, where
most people were comfortable or at least not in perilous shape, where blue collar labor, like working in a
factory or repairing cars, was viewed with respect, and where cities and towns were economic and social
communities, with their own businesses and local notables, and national chain operations were few. Yes,
there was an underbelly to this era of broadly shared economic prosperity, such as gays needing to be
closeted and women having to get married if they wanted a decent lifestyle.
I'm not doing his remarks justice, but among other things, the greater sense of stability contributed to
more people being able to be legitimately optimistic. If you found a decent job, you weren't exposed to
MBA-induced downsizings or merger-induced closures. Even in the transitional 1970s, Lambert got his first
job in a mill! He liked his work and was able to support himself, rent an apartment, and enjoy some modest
luxuries. Contrast that with the economic status of a Walmart clerk or an Amazon warehouse worker. And even
now, the small towns that remain cling to activities that bring people together, as Lambert highlighted in
Water Cooler earlier this week:
Please watch this clip in full. Carlson begins with an unvarnished description of the wreckage that
America's heartlands have become as financial predators have sucked local businesses dry, leaving shrunken
communities, poverty and drug addiction in their wake.
Readers may wonder why Carlson singles out hedge funds rather than private equity, but he has
courageously singled out one of the biggest political forces in DC, the notorious vulture capitalist Paul
Singer, best known for his pitched battles with Peru and Argentina after he bought their debt at
knocked-down prices. Carlson describes some US examples from his
rapacious
playbook, zeroing on Delphi, where Singer got crisis bailout money and then shuttered most US
operation, and Cabela's, where a Singer-pressured takeover wrecked one of the few remaining prosperous
American small towns, Sidney, Nebraska. Not only are former employees still afraid of Singer, but even
Carlson was warned against taking on the famously vindictive Singer.
Kev said; "It will also slit your throat tomorrow."
This, aggressive mergers and acquisitions, has been going on for a very long time and everybody
always says that but I have yet to see any wealthy person suffer more than a small loss of a point or
2.
The fact is thats where we are at with capitalism. Money MUST become more money. There are no
outside considerations not even human life.
We all talk about robots going rogue and killing off humanity. Well money is already doing that.
Sound of the Suburbs, your comment suggests that this is the way things are and that there is nothing
to do about it, but that is wrong. It's not inherent to markets or to nature. In fact, "it's not even
hard" because we have agreed to it as part of the social contract, and created policies that enable it.
We can reverse the calculation by changing the tax rules, accounting rules, and legal liability rules and
this calculation reverses. TLDR; vote Bernie.
Which "we" are you talking about? You assume an entity with agency, when there is no such thing.
How do YOU suggest "WE" rewrite the non-existent "social contract?" Or change the tax rules, the
accounting rules, the Delaware corporations law, the Federal Codes of Civil and Criminal Procedure,
the current contents of the Code of Federal Regulations, the United States Code and all the other
trappings of legitimacy that give "us" the looting we suffer and remove any access to 'agency" to
re-fix things? I hope Bernie wins/is allowed to win, but he would need the skills of a Machiavelli and
Richelieu and Bismarck to "drain the swamp" of all the horrible creatures and muck that swirls there.
Not to say it's not worth trying "our" mope-level damndest to make it happen.
That said – it doesn't seem to me that Cabelas was 'forced' to sell. Singer owned less than 12% of the
stock. Is he to blame for either managerial greed, or lack of cojones? I'm not praising Singer, just saying
ISTM that he had couldn't have succeeded there without the greed or cowardice of management. I could be
wrong.
Carlson said this behavior is banned in the UK, how does that work?
Tthis is standard operating procedure for takeovers and greenmail in the US. First, 11% is going to be
way way above average trading volumes. Second, unless management owns a lot of shares or has large blocks
in the hands of loyal friends, many investors will follow the money and align with a greenmailer.
When a hostile player is forced to announce that he has a stake >5% by the SEC's 13-D filing
requirement, managements start sweating bullets. "Activist" hedge funds regularly make tons of trouble
with 10% to 15% stakes. CalPERS was a very effective activist investor in its glory years (not even
hostile but pushing hard for governance changes) with much smaller stakes.
The New York Post, which is very strong on covering hedge funds, confirms Carlson's take. From a 2016
article:
Hedgie Paul Singer hit another bull's-eye with his Cabela's investment.
Singer's Elliott Management bought an 11 percent stake in the hunting supply chain last October and
pressed the Springfield, Mo., chain to pursue strategic alternatives -- including a sale.
On Monday, his suggestion was heeded as the 55-year-old company said it agreed to a $5.5 billion,
$65.50-per-share takeover offer from rival Bass Pro Shops.
For Singer, who purchased much of his Cabela's stake at between $36 and $40 a share, Monday's news
means that the fund gained roughly 72 percent on its investment.
The same story depicts Singer as able to exert pressure with even smaller interests:
The hedge fund had an 8.8 percent stake in the company and was expected to net $58 million in
profits, The Post reported.
Elliott, which in June announced a 4.7 stake in PulteGroup, named three board members to the
Atlanta-based homebuilding company.
Last Thursday, it readied a new target, taking an 8.1 percent stake in Mentor Graphics, a
Wilsonville, Ore.-based developer of electronic design automation software.
Since then, shares of the company have risen 6 percent, to $26.24.
Mentor represents a "classic" Elliott investment, a source close to the matter told The Post,
adding that it is a "perfect time" for the company to sell itself.
You have a gift for explaining these things to people with a lot of education but not in finance. I
was confused by this, too, until I read your comment.
"CalPERS was a very effective activist investor in its glory years (not even hostile but pushing
hard for governance changes) with much smaller stakes."
Does that mean they pulled the same parasitical stripping of companies to raise money to help pay
pensions?
But, since it represents public employees and their paymasters, the taxpayers, couldn't CALPERS be
forced to only effect deals that create the most employment, ideally in California, rather than
destroy it? i.e. a ban on job destroying deals.
That would be a long term investment in California, rather than a short term means to raise cash,
no?
Tucker Carlson has taken remarkably courageous positions on a number of issues, including Syria,
Ukraine, Russia, etc.
Matt Stoller tweets praise of Carlson's report on Singer:
"There is a real debate on the right.
@TuckerCarlson just guts billionaire Paul Singer over the destruction of a Nebraska town through
financial predation. And Carlson is merciless towards Senator @BenSasse for taking $$$ and remaining
silent."
I have noticed a considerable uptick in comments across a whole range of sites about things "going to
get biblical".
When the next downturn happens there seems to be every indication that it's going to be on an
unprecedented scale.
Traditionally that's always seem to be time to have a good war, you can get the country to focus on an
external common enemy, you can ramp up industrial production providing full employment and you can use
national security to clamp down on dissent. Nuclear weapons seems to have put paid to that idea unless
our leaders convince themselves that they can survive and flourish in their bunkers (while simultaneously
relieving themselves of a large surplus of global population)
The populations willing embrace of the security state through all our electronic devices will be a large
hurdle for revolutionary elements as well as the crushing of dissent via institutions like the FBI and
the mainstream media.
The French and the Russians succeeded in the past. I doubt if I will either live long enough to see it
(being old) or even less likely to live through it.
Biblical in the OT sense. In the NT going biblical was a sacrifice.
I'm not fond of the phrase as it is a euphemism for violence or war. Under that definition, the US,
through declared and undeclared wars, has been going biblical for most of my life.
In the Jimmy Dore show this is almost a running joke now: He shows a clip with Tucker Carlson, where
Tucker is doing what you would expect the "liberal" media to do, like going against the deep state,
criticizing regime change wars (a few times with Tusi as his guest), or something like this great piece
against Singer and the hedge funds. Jimmy Dore then, each time, shakes his head in disbelief and asks, "Why
the hell is Tucker Carlson the only one who is allowed to say things like this? Its a mystery! I dont get
it!"
-- indeed: Why, and why on Fox News?
Because it sells. Can't let RT steal all the money with anti-war voices, Watching the Hawks, Jesse
Ventura, On Contact with Chris Hedges, these shows have viewership, and the Fox news owners know it.
Perhaps they'll have to make Tucker Carlson FOX, the TCFOX news channel. An anti-establishment,
pro-capitalism libertarianesque program experience, where they can decry all the pro-war democrats, and
RINO's, while making a case that capitalism isn't working cause of "big government".
Of course "private property" requiires state enforcement, which, when you remind libertarians that
they are "statists", they don't like that too much
It sells, but also doesn't pose a real threat to the powers that be. He creates very accurate,
specific, personally moving, well-produced, diagnoses of problems (he even names names!)
Then he and his ilk imply that the only solution is to magically create a government free white
Christian ethnostate where the good non-corrupt capitalists (like, as he states in this video, the
rockefellers and carnegies apparently were) will bring us back to the good ol days.
I strongly recommend sitting down for a good long policy discussion with a Tucker Carlson fan. In
my experience they will, without exception, go to great lengths to convince you that a vote for Bernie
will, undoubtedly, make all the problems Tucker describes worse, cuz gubmint bad and racist dog
whistles.
I suspect absent Carlson and his ilk, Bernie would actually have an easier time making inroads into
the republican base.
I heard no Carlson mention of "magically create a government free white Christian ethnostate
where the good non-corrupt capitalists (like, as he states in this video, the rockefellers and
carnegies apparently were) will bring us back to the good ol days."
Carlson seemed to suggest that prior US capitalists "felt some obligation" while, to me,
implying that current US capitalist versions do not feel this obligation.
Bernie could show he will listen to good ideas from all sides, even when the ideas surface on
Fox.
Carlson did mention some "countries have banned this kind of behavior, including the United
Kingdom" which suggests legislative changes are possible.
If Bernie were to pitch a legislative fix, he might pick up some Tucker Carlson fans.
Maybe Bernie might get mentioned favorably by Carlson.
Carnegie built hundreds of public libraries, Rockefeller donated thousands of acres of land,
Sears founder
Julius Rosenwald funded the beginnings of the NAACP.
Well, we can agree to disagree on whether or not Carlson's regularly invoked vision of
deserving Americans is racist or ethnocentric, and I'll admit his view of the role of
government can seem a bit schizophrenic at times – as far as I can tell he has strongly
libertarian sensibilities but in recent years figured out that "free" markets do, in fact,
require government regulations.
But I do strongly recommend reading a few social/economic histories of the US from the
industrial revolution through the beginning of the great depression.
I promise those fellows you mention were not quite so swell as Tucker makes out, and that
the relationship between philanthropy and capital hasn't changed as much as you seem to
think.
I'll just say this, if I were playing for the other team so to speak, and I were a GOP strategist
trying to secure a future for the party, the easy move would be to adopt a degree of populist rhetoric
and at least make some gestures towards easing the pain of towns which have been rendered post-industrial
wastelands by people like Singer and acknowledge what's been done. It would be almost comically easy to
paint the Democrats as the political party of globalized capitalism (because they are), even more so
because most of the places that are key liberal constituencies are also centers of the financial industry
(Manhattan and San Fransisco, for example). It wouldn't take much to graft the loathing of "urban elites"
in these communities onto PE and hedge funds. This, combined with toning down the nationalist rhetoric,
cutting back on the racism and homophobia (hell, even just keeping your mouth shut about it) would pretty
much build an unstoppable electoral majority.
Back in the days when I was more optimistic about the Democrats, I always tried to warn people that if
the Democrats (and other center left parties) waited too long and let the GOP be the first ones to the
lifeboats when neoliberalism started to sink, they'd get stuck holding the bag even if the GOP had more
to do with those policies historically. But pursuing this strategy would imply that the GOP is somehow
less beholden to its donors than the Democrats, which it isn't, but maybe Tucker Carlson is the canary in
the coal mine. Even people on the right realize the jig is up, and that they better start trying to cut
some kind of deal with the rising populist currents in US politics if they want to stay in power.
Tucker Carlson on Fox is making sense, while MSNBC and CNN peddle nonsense. What better reason to cancel
your cable and say adios to the fakery and programming.
In other unrelated news, Paul Singer has announced that he is providing funding to the Manhattan
Institute for Policy Research to try and understand why so many "flyover" Americans give their votes to
Trump. "It's a mystery. I have no idea why they would not vote for a good Republican candidate instead –
like my boy Mitt Romney" he stated. "Why would they do that? Maybe I should run for President like my buddy
Mike. Then they could all vote for me. Or else!"
Reading his Wikipedia page, I notice that he only donates money to things that effect him personally. He
went to Harvard so he gives to Harvard. He lives in New York so he gives money to the Food bank and the
Police – which both serve to keep the place calm. He is Jewish so he gives a ton to money to pro-Israel
causes. He votes Republican so he helps fund Republicans that will defend wealthy people like him. One son
comes out as gay so he gives to same-sex marriage & LGBTQ causes. He provides money to organizations that
fight taxes being imposed on wealthy people like himself. It is a very narrow circle of concerns that he
has. And the vast bulk of Americans are outside this circle I note.
But of all people to call him on his part in destroying the real economy of the United States. That which
actually makes stuff and does stuff instead of financial bs. Of all the people to do so it is
Tucker-goddamnn-Carlson. And on Fox News to boot. The same person that "liberal" protesters were
demonstrating outside his home with his family inside because they did not like his beliefs. It is kinda
funny when you think about it. A right wing commentator is attacking the Left. But from their left.
It is kinda funny when you think about it. A right wing commentator is attacking the Left. But from
their left.
What better proof that there is no Left left in the Left any more? Today's Left is to the right of
what used to be the Centre, Liberals are what used to be Conservative and Conservatives have moved into
"here there be dragons" territory. .
This is nonsense, the DSA for example is to the right of what used to be the Center? They aren't
left enough for some, including some of their members I suspect but .. But the left period has little
actual power is the thing. And it's all about taking power.
Like I've mentioned previously – politically .. our society has gone through a phase-shift. Mr.
Carlson is but just one example. So are those of us who held our noses, after seeing how transparently
conniving the DNC et al were, and voted for the Julius de Orange !
"the crushing of dissent via institutions like the FBI and the mainstream media"
This will be unnecessary. Recent research indicates that when people feel like they are being
watched, they self-censor.
The growing number of activist special interest groups with a myriad of hot topics and disparate
worldviews and interests just about guarantees that anything you say other than parroting the current
majority opinion will offend someone.
Couple that with murky legal powers, the unpredictability of the Twitter/Instagram mob, doxing, and
the expansion, both in extent and number of players, of ubiquitous surveillance, and significant
dissent becomes more and more a thing of the past.
I wonder if this has anything to do with the growing unreliability of political polls?
There is a populist Left. Its figurehead is Bernie but there are growing local/state organizations
like the DSA that may become relevant nationally in the not-too-distant future. AOC is a
current/future leader for this faction.
There is a populist Right. Its figurehead is Trump. From what I can tell, they're primarily online
but are also gaining strength in traditional conservative institutions like churches, community orgs,
etc.. Tucker appeals to this group. Josh Hawley is a Senator from MO with presidential ambitions who I
expect will lead this faction after Trump is gone. He is the slick-but-folksy and deadly serious
neo-Fascist type many on this board worry/warn about taking power if a real Left does not arise to
counter it/him.
Then there is the establishment elites (or ruling class, or deep state, whatever), which are
primarily Neoliberal (domestic policy) and Neoconservative (foreign policy). There have long been
these types in both parties, differing only by degree, but Trump has forced most of the "liberal"
Republicans into the D party. This group controls the money and most of the key institutions,
particularly the major media, tech, energy, and financial corporations, but their grip is slipping and
the mask is falling off. Some will side with the populist Left, but most will welcome the new Fascism,
i.e. the DNC apparatchiks who would rather lose to Trump than win with Bernie.
Mitt Romney, Bain Capital, another species of parasite, sucking some of the last marrow out of the
bones of America. Beware of billionaires who demonstrate that they are aliens to our society.
I read Tucker Carlsons book "ship of fools". It is all in there: criticism of the war fare state, Wall
Street, TBTF bail outs a.s.o. He spares neither Republicans nor Democrats. Kinda crazy but he voices more or
less exactly what Sanders is saying as well. Except he doesn´t get "Medicare for all" and he is social
conservative. Still you might think that there is enough common ground to work together. Instead we get
crazy idendity politics. I more and more believe that it is indeed so that the people on top have realised
that "identity politics" is the best thing that ever happened to them: divice et impera. Divide and rule as
already the Romans knew
And the biggest threat from Tucker Carlson is that the lower orders will believe that
Carlson-cum-Trump are as much their friend as Sanders. One of the longest-standing Idpol divisions in
US history has been unions vs. scabs. Over the past half-century, the Democratic Party has realigned
its public image in favor of the scabs. The union leadership stayed with the Dems, but the
rank-and-file long ago moved over to the Repubs. Old wine, new bottle.
Unions were weakened and made easier to destroy using IdPol. First by encouraging banning,
sometimes expelling, blacks from the various unions and secondly getting rid of first the
communists, then the socialists, and finally those deemed too liberal (not conservative enough).
Although the efforts by business interests, often helped by government at all levels, to
segregate unions was mainly in the 19th century and the "Better Dead Than Red" campaign was in the
20th especially after 1947, the use of racism and anti-leftism was done in both centuries.
You can see similar successful splintering of the Civil Rights Movements. First separating the
Suffragettes from from the anti-racism efforts. Then later the efforts to unite the Women's Rights
Movement with the successful efforts against racism was the 1960s were thwarted.
Let us just say that reform movement of the past two centuries has been splintered. The earlier
women's rights and the abolitionists, blacks and whites throughout the unions, suffragettes and the
anti lynching efforts, communists from everyone else, anti poverty from equal rights ( MLK did get
lead poisoning when he tried) and so.
So when I see the latest efforts to use IdPol to split poor people from everyone else or blacks
from whites, and see people falling for the same tactics I just lose my mind. Obviously.
You might think but you'd be wrong. St Clair in Counterpunch calls hims Tuckkker Carlson–apparently
because Carlson agrees with Trump on things like immigration. I read Carlson's book too and would say
only about half of it was material I would agree with. But the notion that anyone who doesn't stand up to
IDPol standards is a villain is crushing the left. They obsess over Trump while the wealthy of both
parties wreck the country.
I'd go along sooner with Tucker Carlson than Mr. St Clair, whose CP smeared both Caitlin Johnstone
and CJ Hopkins. St Clair and CP are controlled "oppo", IMO.
The commenter you were replying to had it right: divide et impera is the order of the day;
sometimes from unexpected sources, like the one mentioned above.
Great post! TC has strode out of the Fox News subset of the Overton window a number of times in recent
years.
PS: Yves, some introductory text to the part about Lambert's speech apparently didn't make it into the
post. It would fit between the 1st and 2nd paragraphs.
In my opinion, Tucker Carlson represents a very real and very active right-libertarian view that has been
consistently present within the Republican Party for decades. Anti-war, anti-imperialist, anti-big
business/pro-small business, and of course, anti-big union. Robert Taft comes to mind. I don't share their
"ideologies" but as a self-described socialist, I am deeply attracted to their criticisms. And criticisms
ARE important and necessary, even if the solutions are left wanting. I dearly hope that his popularity is a
sign of the realignment of politics, where issues of class and war become commonplace and issues of "to
impeach or not to impeach" fall by the wayside. I recognize that my hopes may not turn to realities.
But for an employee it makes no difference if they work for a big or small business (only big business
on average is LESS exploitative if anything – if for no other reason but they can afford to be – some of
the worst exploitation out there is employees working for small business owners).
Exactly,
right
libertarian. Within the libertarian spectrum there are real and then
royal libertarians, Tucker is of the latter.
http://geolib.com/essays/sullivan.dan/royallib.html
What are his immigration views? Are people motivated to come here because this global vulture octopus
thing has ruined their home market?
I have long thought that paul singer is representative of the worst people in the world (argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he ever ventures
out of mordor undisguised. For all the money he has, a truly worthless pos, as the closing comment made so
clear. Good for Carlson, though, almost seems like actual journalism. Kudos.
If we assume that good mergers achieve cost savings which ultimately benefit the consumer (they very
often do, assuming a good merger), is it better that a relatively large number of people save money on
goods, or that a relatively smaller number of people keep duplicate, unnecessary jobs?
Can you name such a good merger? Mergers by definition must reduce competition, and by classical
Liberal theory competition is what reduces prices for consumers.
In Neoliberal theory monopoly is the just reward for beating the competition. Sorry consumers! Bad
luck workers!
By what criteria do you deem a job unnecessary? Neoliberal criteria.
Here are some ways a merger can be bad for the US consumer.
If a merger results in employee pensions being transferred to the Pension Benefit Guarantee
Corporation (US government funded) then employee pension costs are being transferred to the US
taxpayer/consumer.
Or consider that a merger might create a monopoly that can raise consumer prices.
How does one determine that a proposed merger will be a good one that will "ultimately benefit the
consumer."?
Good morning Yves.
Tucker Carlson invoke Paul Singer noted ultra vulture as vehicle to transport Yves, others to Fox News
Commentary!
Seems the Good Night and Good Luck segue from Edward R Murro via Keith Olbermann to Tucker Carlson is
complete.
Thank you for this. It is a story that has been repeated countless times across the country, including
the midwestern town where I was born and raised.
As for Carlson being the only source of occasional light in the MSM -- the clarification continues. It has
truly become Bizarro World.
I wonder if the powers at be at Fox News allow Tucker to go on these rants because they know two things:
1.) 99% of bought and paid for Republican politicians will never do anything about this except perhaps some
lip service here and there.
2.) The fact that it's on Fox News will cause the Vichy left to not believe it's real or perhaps a Russian
phy op against American capitalism. Thus outside of the Sanders camp there will be no push/support for any
change.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in doing so he also
called out the Republican Party, specifically Sen. Ben Sasse from Nebraska. It will be interesting to see if
Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered regular bat-poo crazy
Republicans by his "never Trump" blather, then angered Nebraska Democrats (both of us) by voting
Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a classic empty
suit. Closer to a straight Republican Mayor Pete than any thing else – over-credentialed, over-ambitious
and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent candidates and
preponderance of Clinton/Obama/HRC leftovers running the state party. Will be knocking on doors for
Bernie come 2020 but state races are iffy at best.
In a wacky pre apocalyptic world, truth and justice is pined for by many. Conservation is a critical
requirement. I now look at what is true and what is not, I know, very subjective. Those folks that tell us
to do things that harm us are transparent. We follow them at our peril.
I consider Sanders the most conservative option we have for the nation. He intends to 'conserve' our nation
and the people first. Something we have not had for decades, or ever, perhaps. Giving the people with the
most to lose a voice in how things move forward is a critical point of distinction from the rest of the
field.
so vote conservative. Protect that which makes us whole. Stop the looting and take back what has been stolen
to benefit all instead of a small clique of criminals.
But I'm an optimist.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and it's a nasty
fight. Singer is at the end of a 30 year stint of dispossessing other people. Being vicious really isn't
enough to keep the federal government at bay. Nor are his bribes. There has been an unspoken policy of
dispossessing poor and middle class people. Why? Is the United States actually looking at a specific future?
That wouldn't align with the free market – tsk tsk. Or would it? Live free, die free. Somebody needs to
define the word "free". Did TPTB decide to deindustrialize this country that long ago? That's when they
attacked the unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has been hosed out
by these guys we won't be pushing the old capitalist economy at all. We will be pushing a globally
connected, sustainable economy. Paul Singer is just a dung beetle. And our government didn't want to discuss
it because they would have had to create a safety net. If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress.
-Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help the Chinese
middle class than the American middle class over the last 30 years. Co-locating our industrial base with
the CCP on communist soil should be looked upon as the most radical policy in our history but is not.
Imagine if at the height of the Cold War we had told Kruschev hey..how about you make all the stuff we
need and we'll pay you $20 or $30T in trade surplus over a number of years in hard currency which you can
then parlay into geopolitical power in Africa, South America, the ME and else where. What would the
America of the fifties think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old capitalist
economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson has been making comments like this for a long time. And he's not a libertarian. He
believes in regulated capitalism.
What we might be seeing is a the beginning of the two parties flipping from left to right on economic
issues. The social issues just obscure it, as they were designed to do.
the only question then is to what extent social issues DERAIL the economic issues then. If social
issues mean paid family leave must be opposed for example because women oughta be barefoot and pregnant,
then that's derailing of real concrete material benefits period. Of course progressive socially is where
demographics trend.
But of course using the example of paid family leave, we're starting from a country with almost no
safety net to begin with, and there are bigger problems with the labor market as well (people having gig
jobs with NO benefits, they aren't going to be helped by policy changes to job provided benefits period).
Medicare for All is the issue that most incisively cuts through this ruling-class kayfabe. Both the
top-dog Dems and the top-dog Repubs get their jollies having their boots licked by workers in abject fear
for the health and life of their families. It is a neon testosterone line that neither Carlson nor Trump
will cross.
I find a good explanation for many behaviors is the human practice of favoring people in their circle of
acquaintances, friends and families, and showing some degree of contempt to others.
Some phrases
He (She) is not one of us! (Typically in an upper class UK accent)
The Others (Typically in a string ulster accent)
Not on our team (US)
He's a Catholic
He's a peasant
The attitude of "them and us" coupled with Greed, appears to drive many bad Human behaviors.
Indeed! My libertarian friend* is all about helping friends and family, I have seen him do it many
times. I totally agree with him, but I have concluded that his definition of "friends and family" is just
somewhat more restrictive than mine.
* True convo: "What about if listeria in the bologna at the nursing home kills your granny?" "Ah, a
whacking great lawsuit!"
Paul Singer is leading the hedge fund group that is trying to take over PG&E from the existing
stockholders/hedge funds through the bankruptcy process. He even offered more money to PG&E fire victims
($2.5B), that PG&E almost met (they want to pay part of the funds in stock).
Does anyone have an idea how he plans to make money by taking over PG&E? While the stock is very low, its
chance of going back to where it was is very low. Besides, PG&E is under pressure to actually maintain and
fire proof the distribution/transmission system and that won't be cheap.
Here's Jon Stewart roasting Tucker Carlson back in 2006 when he was just a clown with a bow-tie. A rare
and well deserved confrontation.
https://www.youtube.com/watch?v=aFQFB5YpDZE
Since then Tucker has ditched his bow-tie and developed a conscience.
We used to call this "being Dutch uncle."
Tucker has CHANGED his views on lots of things. Like I have. To be able to admit you were wrong is a big
deal. He supported the Iraq War. I didn't. In retrospect, he realized he did this because of group think
cool kids thing. Then he realized that he had been conned, He doesn't like being conned. I thought Obama's
speech was the opposite of John Edwards "2 Americas". Obama was delivering a "con" I.e. "We are all One
America". So now Tucker and I, from different sides, are more skeptical. I started questioning my groupthink
Democratic viewpoint in 2004. Slowly I realized that I too had been conned. So some of those on the "right"
and Some of those on the "left" have sought other ports to dock in as we figure this all out. Naked
Capitalism is one of those docks. So soon we should introduce Tucker to Yves.
As I have frequently pointed out to my once-upon-a-time "liberal" friends, Tucker Carlson is often these
days a worthwhile antidote to the collective yelpings & bleatings of the brain-snatched amen corner on MSNBC
& CNN. In this instance (and others) his observations are rational and clearly articulated. He makes sense!
And he is on the correct (not far right) side of the topic. The continuing Iraq/Syria catastrophe, PutinGate
and the hedge fund hooligan Paul Singer are just three recent examples. His arguments (and his snark) are
well played. Alas, following these sensible segments, he is still a Fox guy and is obliged to revert to Fox
boilerplate for most of the rest of the night. But in our present crackbrained media environment, be
thankful for small mercies such as Tucker's moments.
Thanks for the post. I probably would have missed this without you.
There are a couple things that are interesting to me. First, why does Tucker Carlson call out Ben Sasse
for accepting a maxed out campaign contribution from Paul Singer? The Governor of Nebraska then and now is
Pete Ricketts. His father (Joe – TD Ameritrade, Chicago Cubs) is a "very good friend" of Paul Singer.
Everyone believes Pete Ricketts wants to run for US Senate and the nearest opportunity is Ben Sasse's seat.
More than meets the eye?
Two, a longtime director of Cabela's is Mike McCarthy of McCarthy Capital. [Former Secretary of Defense
Chuck Hagel worked for McCarthy.] ES&S (electronic voting machines) is owned by McCarthy Group, LLC.
"... When you factor in reelection worries, Trump needs to find a mutually agreeable solution to at least pause the trade war. Such a move will surely revive economic growth hurt by sanctions and ensure the smoothest possible path toward a second term. People vote with their wallets, and Trump gets that. ..."
"... Nothing could be worse for Xi than the markets concluding that China is in a recession with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed the next rising superpower, her economic and political obituary could be written. ..."
"... Here is where a so-called Phase One trade deal could help patch up the relationship and give both sides the short-term domestic boost their leaderships are looking for. ..."
"... But there are reasons to worry. A recent report in Axios claims that China is quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the two nations have "stalled." Still, both sides have ample reasons to get a trade deal done. However, if Trump does indeed get reelected and China feels stable domestically once again, the pull of history -- specifically, which nation will dominate geopolitics in the 21st century -- may be too strong to resist. ..."
Consider America's position. President Trump surely has incentives to push for what I would
call a strategic pause in his quest to contain a rising China through tough trade moves. At the
moment, staring down a possible vote on articles of impeachment and a Senate trial, rising
trade tensions, which could reignite fears of a recession, are the last thing the president
needs. When you factor in reelection worries, Trump needs to find a mutually agreeable
solution to at least pause the trade war. Such a move will surely revive economic growth hurt
by sanctions and ensure the smoothest possible path toward a second term. People vote with
their wallets, and Trump gets that.
Chinese president Xi Jinping, meanwhile, has similar concerns. China's 6 percent economic
growth, something Washington can only dream of, is likely a number that exists only on paper,
for Beijing is known to cook their books. With growth more than likely just barely in positive
territory, thanks in large part to U.S. trade tariffs, and the challenges in Hong Kong not
looking as if they will subside anytime soon, Xi needs to deliver what he can claim is a
victory that also revives economic growth, at least for the time being. This will help
stabilize China domestically, plus give Xi time to allow Hong Kong's protests to burn out while
not having to worry about economic troubles at the same time.
Nothing could be worse for Xi than the markets concluding that China is in a recession
with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed
the next rising superpower, her economic and political obituary could be written.
Here is where a so-called Phase One trade deal could help patch up the relationship and
give both sides the short-term domestic boost their leaderships are looking for. A
potential deal could involve China rolling back tariffs on all U.S. goods, agreeing to a large
purchase of American agricultural goods, and providing basic protections on all U.S.
intellectual property involving high-technology goods (think 5G, computers, and robotics). In
turn, America would roll back all tariffs -- something China wants very badly --
including, and most importantly, agreeing not to launch the scheduled new round of massive
tariffs on December 15, which are viewed as potentially the most damaging to date. While such
an interim deal is far from perfect -- China hawks will surely go ballistic, calling the deal
nothing more than appeasement or select your other favorite neocon smear -- Xi and Trump are
pragmatic enough to see that a deal is in both sides' interests.
But there are reasons to worry. A recent report in Axios claims that China is
quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the
two nations have "stalled." Still, both sides have ample reasons to get a trade deal done.
However, if Trump does indeed get reelected and China feels stable domestically once again, the
pull of history -- specifically, which nation will dominate geopolitics in the 21st century --
may be too strong to resist.
Harry J. Kazianis is a senior director at the Center for the National Interest and the
executive editor of The National Interest magazine.
By offering Hong Kong official tools of support, President Trump has broadened the trade
dispute...
Throughout negotiations, the Chinese have been reluctant to get a deal over the line,
walking away from agreed upon terms several times. By supporting Hong Kong, President Trump is
showing the Chinese Communist Party that he will not sit idly by while they jerk trade
negotiations around.
A video from Tucker Carlson. Every once in a while he's allowed to say things the
mainstream media isn't allowed to say.
The video is about Paul Singer (Elliott Management) and his hedge fund buying into
Cabela's which was headquartered in Sydney, Nebraska. Cabela's was merged with Bass Pro Shops
and the town lost 2000 jobs and was hard hit by Singer and his fund but Elliott Management
and Singer made a nice profit.
It shows the people and town left behind after the jobs leave. Watching this was
depressing.
American tech companies are
getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies
Co., but it may be too late: It is now building smartphones without U.S. chips.
Huawei's latest phone,
which it unveiled in September -- the Mate 30 with a curved display and wide-angle
cameras that competes with Apple
Inc.'s iPhone 11 -- contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese
technology lab that took the device apart to inspect its insides.
In May, the Trump administration banned U.S. shipments to Huawei as trade tensions with
Beijing escalated. That move stopped companies like Qualcomm Inc. and Intel Corp. from exporting chips to the company, though
some shipments of parts resumed over the summer after companies determined they weren't
affected by the ban.
Meanwhile, Huawei has made significant strides in shedding its dependence on parts from
U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in
America; many U.S. chip companies make their semiconductors abroad.)
Huawei long relied on suppliers like Qorvo Inc., the North Carolina maker of chips that are used
to connect smartphones with cell towers, and Skyworks Solutions Inc., a Woburn, Mass.-based company that
makes similar chips. It also used parts from Broadcom Inc., the San Jose-based maker of Bluetooth and
Wi-Fi chips, and Cirrus Logic Inc.,
an Austin, Texas-based company that makes chips for producing sound.
Yet Another Trump Trade Win
Trump cut off supplies so China looked elsewhere.
Trump changed his mind.
This is what constitutes a win.
"When Huawei came out with this high-end phone -- and this is its flagship -- with no U.S.
content, that made a pretty big statement," said Christopher Rolland, a semiconductor analyst
at Susquehanna International Group.
Huawei executives told Rolland that the company was moving away from American parts, but it
was still surprising how quickly it happened.
This was likely going to happen anyway, but Trump escalated the speed at which it
happened.
The trade war is the first act in the much larger game of hegemony.
Both sides are disentangling.
Apple finished their Indian plant.
Huawei went ex-US (but almost certainly not US IP)
Europe is already muttering about human rights in Hong Kong and Xiangjang.
We're nearly ready for act 2. That's when Europe joins in on squeezing trade, and the rest
of the democratic world and a few others is bullied and bribed to follow.
Do you know why Russia still sells rocket engines to US after being hit US sanctions?
Don't tell me they need US dollar.
Do you know that China is facing US embargo under the pretext of national security from
1949 until now and things allowed to export to China mostly agriculture produce, gas and oil?
This is the reason they develop their own technologies which the media told me stolen from
the US even that the US doesn't have like 5G, quantum satellite, hypersonic weapons just to
name a few.
russia needs to stop selling those engines to merica and cut them out of space... what a
dumb move... russia always trying to be friends with evil merica
Plainly, China will never buy the same amount of soybeans or chips than before as Russia
will never accumulate US dollars in its Reserve. They have discovered than US is not a
reliable partner.
Those that think that China is only about ripping off US technology are going to be
surprised. Sure that was once China's main method as it was for the early USA to rip off
British textile secrets. Trump trying to take down China's biggest technology company has
been a real wake up call for them. Now, they will own all of the content and will dominate in
Asian markets, the middle east, etc. They already did it in solar panels and much else. They
have a plan. They build infrastructure, we let it ours decay. They invest in education, we
leave out students in debt up to their eyeballs and then give them Starbucks jobs. They have
high speed trains everywhere, we have Amtrak. They are looking outward, we are looking
inward. America first, rah rah. This will end badly - for the USA.
no average american benefits from international trade unless the product is unattainable
state side. if we can grow it, we should. if we can make it, we should. excess can be sold
outside the nation but since everything has been weaponized, we are the ones caught in the
middle who suffer.
tariffs are good and we should use them to protect our industries. the problem is that our
industry was destroyed before implementing tarrifs.. that part doesn't make sense and all of
our major corporations have sold out anyways, further screwing john q public because lets be
real, companies are out for profit and shareholder return, not protecting employees and
consumers. so they could care less where its being made / sold as long as they see their
bottom line increase, no worries.
problem is big business doesn't want to pay it. it has always been that way. when the
money system was put in place, business owners didn't like the idea of increased competition
(less slaves and more company owners) and therefore they were given the ability to claim you
for tax purposes, hence why anytime you take a job they want your SS#. investment in the past
happened because of things that were to come in the future. the future in america from her
current vantage is trans/post humanism with the idea of automation, human/machine integration
and that leaves little room or interest in building $100m slave factories for working class
people to grind away in
chips have been made consistently in Malaysia, Taiwan and Korea for the better part of
almost 25 years, not real sure how any of what you said is relative to current events. just
syncrhonicity and morons like you saying dumb ****.
Wow, the article is really insulting to the Chinese. Like building a smart phone for them
was like landing on the moon or something. They steal everything from everyone anyways, so
who cares what they build.......
This is why they are trying to ban Chinese hardware... not because they fear they are
spying on us but because their govt mandated backdoors aren't installed on Chinese hardware.
The US govt wants to ban their use because they can't spy on them... That is the real
reason.
US is losing the technology race against China. In the first phase China copied the tech,
now it is on par, and in five to ten years the murican chip manufacturers are out of
business.
The point is this: the muricans are lazy bastards, most of the brain power is imported.
They lived too long off the dollar reserve currency status, soon enough nobody will
interested in that toilet paper anymore.
Two years ago, Donald *** Trumptard on behalf of his handler, the US War State/Dark
State/Deep State , launched a world wide war against the Chinky company, Huawei, in order, to
kill it.
But that failed spectacularly. Not only is Huawei not dead, but its revenue actually grown
24% in 2019.
Now, its smart phones, and 5G cell tower equipments are totally free of US components.
WHY IS THE US DARK STATE SO TERRIFIED OF HUAWEI'S 5G WIRELESS TECHNOLOGY?
The US Dark State/War State/Deep State, that is the NSA/CIA/Pentagon/MIC/MSM . . . etc has
forced every western tech companies to install backdoors and malwares on their equipments,
except Huawei. They have tried to force Huawei to install those NSA backdoors and malwares,
in 2014, but the company categorically refused.
"The real issue is that nothing has changed since a 2014 report from The Register that
Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered
intelligence access to the data that crosses their networks.
All our emails, text messages, phone calls, internet searches, web browsing, library
records, . . . etc, are recorded and stored by NSA/CIA's vast servers farms.
Now, Huawei is not only the leading 5G wireless provider, but it is the only one, so far.
The other companies like Nokia and Ericsson are far behind.
5G is going to completely replace 4G and 3G. It is about 200 times faster than 4GLTE, in
download speed.
What this means is that if the world adopts the Huawei equipments and standards, it will
threaten to UNDO the US Dark State's vast global surveillance network.
This is what terrifies the US Dark State. Their vast Global Surveillance Network is the
basis of its power, and tools to enslave mankind.
There is a very good reason, why the American Founding Fathers , enacted every measures,
to protect our rights and privacy, so that we will not be controlled and enslaved by the
tyranny of totalitarian government, which is already upon us, in the form of US Dark
State/War State .
The US Dark State/Deep State/War State does not represent America. It is Un-American. It
is not the American Republic founded by our Founding Fathers, and enshrined in the US
Constitution.
Maybe so, Asoka. I think the Rothschild Clan plays both sides. They are in China. Some
purport the family carrying that lineage is named Li.
The U.S. is slowly but surely being isolated for The Great Fall...when we lose world
currency status. The Banking Cartel will evidently make huge money and gain enormous power
once the U.S. collapses. China already has the massive surveillance state, lack of privacy,
institutionalized social scoring, and workers' living cubes located on factory premises...so
the Rothshilds are in love. Sigh. So much control!! So much degradation!!! They're in
love!!!
"I think the Rothschild Clan plays both sides. They are in China. Some purport the family
carrying that lineage is named Li."
They are trying hard to infiltrate China. But the Chinese banks and financial service
firms are State Owned . They are hard penetrate. That is why they are using Donald *** Trump
to launch the Mother of All Great Trade War , to force the Chinese to open up their financial
sector for infiltration and plundering.
Plus, Chinese and westerner looks distinctively different. And so, they are trying the
inter-marriage trick with the rich and powerful Chinese families.
While Obama organized 2014 coup data that smashed contitutional oder in Ukraine and installed far-right nationalists in power (Nulandgate) Obamam did not suppled arms toUkrains; Trump did
In his foreign policy Trump looks
like a Republican Obama, save Nobel Peace Price. If Obama was/is a CIA-democrat, this guy is a Deep State controlled republican. Why
is the Deep State is attacking him is completely unclear. May be they just do not like unpredictable, impulsive politicians
Despite his surrender "Neocon crazies from the basement" still attack his exactly the same way as they attacked him for
pretty mundane meeting with Putin and other fake "misdeeds" like Ukrainegate
And that means that he lost a considerable part of his electorate: the anti-war republicans
and former Sanders supporters, who voted for him in 2016 to block Hillary election.
And in no way he is an economic nationalist. He is
"national neoliberal" which rejects parts of neoliberal globalization based on treaties and
prefer to bully nations to compliance that favor the US interests instead of treaties. And his "fight" with the Deep state resemble so closely to complete and unconditional
surrender, that you might have difficulties to distinguish between the two. Most of his appointees are rabid neocons. Just look at Pompeo, Bolton, Fiona Hill. That that extends far beyond
those obvious crazies.
Washington
Post stating that he "has gone to extraordinary lengths to conceal details" of his
discussions with Russian President Vladimir Putin - telling Fox News host Jeanine Pirro in a
phone interview that he would be willing to release the details of a private conversation in
Helsinki last summer.
"I would. I don't care," Trump told Pirro, adding: "I'm not keeping anything under wraps. I
couldn't care less."
"I mean, it's so ridiculous, these people making up," Trump said of the WaPo report.
The president referred to his roughly two-hour dialogue with Putin in Helsinki -- at which
only the leaders and their translators were present -- as "a great conversation" that
included discussions about "securing Israel and lots of other things."
"I had a conversation like every president does," Trump said Saturday. "You sit with the
president of various countries. I do it with all countries." -
Politico
In July an attempt by House Democrats to subpoena Trump's Helsinki interpreter was quashed
by Republicans. "The Washington Post is almost as bad, or probably as bad, as the New York Times," Trump
said. When Pirro asked Trump about a Friday night New York Times report that the FBI had opened an
inquiry into whether he was working for Putin, Pirro asked Trump "Are you now or have you ever
worked for Russia, Mr. President?" "I think it's the most insulting thing I've ever been asked," Trump responded. "I think it's
the most insulting article I've ever had written."
Trump went on an
epic tweetstorm Saturday following the Times article, defending his 2017 firing of former
FBI Director James Comey, and tweeting that he has been "FAR tougher on Russia than Obama, Bush
or Clinton. Maybe tougher than any other President. At the same time, & as I have often
said, getting along with Russia is a good thing, not a bad thing. I fully expect that someday
we will have good relations with Russia again!"
"... More generally, I think AI gets far too much of the billing in authoritarian apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the real issue. If the state can track everyone's movements and conversations, then it can build a better Stasi even with crude, simple ai. ..."
The theory behind this is one of strength reinforcing strength – the strengths of
ubiquitous data gathering and analysis reinforcing the strengths of authoritarian repression to
create an unstoppable juggernaut of nearly perfectly efficient oppression. Yet there is another
story to be told – of weakness reinforcing weakness. Authoritarian states were always
particularly prone to the deficiencies identified in James Scott's Seeing Like a State
– the desire to make citizens and their doings legible to the state, by
standardizing and categorizing them, and reorganizing collective life in simplified ways, for
example by remaking cities so that they were not organic structures that emerged from the
doings of their citizens, but instead grand chessboards
with ordered squares and boulevards, reducing all complexities to a
square of planed wood . The grand state bureaucracies that were built to carry out these
operations were responsible for multitudes of horrors, but also for the crumbling of the
Stalinist state into a Brezhnevian desuetude, where everyone pretended to be carrying on as
normal because everyone else was carrying on too. The deficiencies of state action, and its
need to reduce the world into something simpler that it could comprehend and act upon created a
kind of feedback loop, in which imperfections of vision and action repeatedly reinforced each
other.
So what might a similar analysis say about the marriage of authoritarianism and machine
learning? Something like the following, I think. There are two notable problems with machine
learning. One – that while it can do many extraordinary things, it is not nearly as
universally effective as the mythology suggests. The other is that it can serve as a magnifier
for already existing biases in the data. The patterns that it identifies may be the product of
the problematic data that goes in, which is (to the extent that it is accurate) often the
product of biased social processes. When this data is then used to make decisions that may
plausibly reinforce those processes (by singling e.g. particular groups that are regarded as
problematic out for particular police attention, leading them to be more liable to be arrested
and so on), the bias may feed upon itself.
This is a substantial problem in democratic societies, but it is a problem where there are
at least some counteracting tendencies. The great advantage of democracy is its openness to
contrary opinions and divergent perspectives . This opens up democracy to a specific set of
destabilizing attacks but it also means that there are countervailing tendencies to
self-reinforcing biases. When there are groups that are victimized by such biases, they may
mobilize against it (although they will find it harder to mobilize against algorithms than
overt discrimination). When there are obvious inefficiencies or social, political or economic
problems that result from biases, then there will be ways for people to point out these
inefficiencies or problems.
These correction tendencies will be weaker in authoritarian societies; in extreme versions
of authoritarianism, they may barely even exist. Groups that are discriminated against will
have no obvious recourse. Major mistakes may go uncorrected: they may be nearly invisible to a
state whose data is polluted both by the means employed to observe and classify it, and the
policies implemented on the basis of this data. A plausible feedback loop would see bias
leading to error leading to further bias, and no ready ways to correct it. This of course, will
be likely to be reinforced by the ordinary politics of authoritarianism, and the typical
reluctance to correct leaders, even when their policies are leading to disaster. The flawed
ideology of the leader (We must all study Comrade Xi thought to discover the truth!) and of the
algorithm (machine learning is magic!) may reinforce each other in highly unfortunate ways.
In short, there is a very plausible set of mechanisms under which machine learning and
related techniques may turn out to be a disaster for authoritarianism, reinforcing its
weaknesses rather than its strengths, by increasing its tendency to bad decision making, and
reducing further the possibility of negative feedback that could help correct against errors.
This disaster would unfold in two ways. The first will involve enormous human costs:
self-reinforcing bias will likely increase discrimination against out-groups, of the sort that
we are seeing against the Uighur today. The second will involve more ordinary self-ramifying
errors, that may lead to widespread planning disasters, which will differ from those described
in Scott's account of High Modernism in that they are not as immediately visible, but that may
also be more pernicious, and more damaging to the political health and viability of the regime
for just that reason.
So in short, this conjecture would suggest that the conjunction of AI and authoritarianism
(has someone coined the term 'aithoritarianism' yet? I'd really prefer not to take the blame),
will have more or less the opposite effects of what people expect. It will not be Singapore
writ large, and perhaps more brutal. Instead, it will be both more radically monstrous and more
radically unstable.
Like all monotheoretic accounts, you should treat this post with some skepticism –
political reality is always more complex and muddier than any abstraction. There are surely
other effects (another, particularly interesting one for big countries such as China, is to
relax the assumption that the state is a monolith, and to think about the intersection between
machine learning and warring bureaucratic factions within the center, and between the center
and periphery).Yet I think that it is plausible that it at least maps one significant set of
causal relationships, that may push (in combination with, or against, other structural forces)
towards very different outcomes than the conventional wisdom imagines. Comments, elaborations,
qualifications and disagreements welcome.
Ben 11.25.19 at 6:32 pm (no link)
This seems to equivocate between two meanings of bias. Bias might mean a flaw that leads to
empirically incorrect judgements and so to bad decisions, and it's true that that type of
bias could destabilize an authoritarian state. But what we usually worry about with machine
learning is that the system will find very real, but deeply unjust, patterns in the data, and
reinforce those pattern. If there's a particular ethnic group that really does produce a
disproportionate number of dissidents, and an algorithm leads to even-more-excessive
repression of that group -- I'm not sure why an authoritarian state would see a stability
threat in that tendency.
More generally, I think AI gets far too much of the billing in authoritarian
apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the
real issue. If the state can track everyone's movements and conversations, then it can build
a better Stasi even with crude, simple ai.
I'd just like to point out (re: the tweet in the original post) that the "Uighur
face-matching AI" idea is bullshit invented by scaremongers, with no basis in fact and
traceable to a shoddy reddit thread. The Chinese government is not using facial recognition
to identify Uighur, and the facial recognition fears about the Chinese government are vastly
overstated.
Australia's border control facial recognition software is far more advanced than
China's, as is the UK's, and facial recognition is actually pretty common in democracies. See
e.g. the iPhone.
The main areas in which China uses facial recognition are in verifying ID for some high
cost functions (like buying high speed rail tickets), and it's quite easy to avoid these
functions by joining a queue and paying a human. The real intrusiveness of the Chinese
security state is in its constant bag searches and very human-centric abuses of power in
everyday life in connection with "security". Whether you get stopped and searched depends a
lot on very arbitrary and error prone judgments by bored security staff at railway stations,
in public squares, and on buses, not some evil intrusive state technology.
Conversely, the UK is a world leader in installing and using CCTV cameras, and has been
for a long time. Furthermore, these CCTV cameras are a huge boon to law-abiding citizens,
since they act as both excellent forms of crime prevention (I have had this experience
myself) and for finding serious criminals. The people responsible for the death of those 39
Vietnamese labourers in the ice truck were caught because of CCTV; so was the guy who
murdered that woman on the street in Melbourne a few years ago.
Finally to address another point that's already been raised (sadly): China no longer
harvests organs, and the 2019 report that says it does is a sham. The social credit system is
also largely a myth, and nobody from China even seems to know wtf it is.
If you're going to talk about how state's work, and the relative merits of autocratic vs.
democratic states and their interaction with technology, it's a really good idea to get the
basic facts right first.
Nathanael 11.26.19 at 6:10 am (no link)
I'll add that John Quiggin's point that Xi has already lost control of the provinces is
correct -- but it DOES threaten his position as dictator. Once the provincial governors know
they can act with impunity, it is absolutely standard for the next step to be getting rid of
that annoying guy who is pretending to be dictator. It may take a few years but Xi now has
dozens of powerful insiders who know that he's a weakling. They'll bide their time but when
he crosses too many of them they'll take him out. And if China doesn't shut down coal, he's
going to look like a weakling internationally too, in a couple of years. This will create a
new group of ambitious insiders with a different reason to take him out.
Xi broke the "technocratic consensus" which was present after Deng, of central committee
members who strove for competence and fact-based decision-making. That was a surprisingly
effective type of junta government which led to lots of thinkpieces about whether
authoritarian China would beat the democratic west. But it succumbed to the succession
problem, like all authoritarian systems; Xi made himself Premier-for-life and the country is
now exhibiting all the usual failures of authoritarian countries.
Hidari 11.26.19 at 9:08 am (no link)
@11 Yes it's strange that allegations of Chinese use of facial recognition software is
gaining so much traction at a time when the Trump regime is deliberately ratcheting up
tensions with China to pursue nakedly imperial goals, when the objective facts of Israeli use
of similar software, which the Israelis boast about (
https://www.nbcnews.com/news/all/why-did-microsoft-fund-israeli-firm-surveils-west-bank-palestinians-n1072116
) doesn't cause so much interest, at a time when the Trump regime has simple decreed that the
Israeli invasion/colonisation of Palestine is 'legal under international law'.
One of life's little mysteries I guess.
If we must talk about China could we at least bring it back to areas where we are
responsible and where, therefore, we can do something about it?
Nice link. It's often interesting to hear from the source the explanation for why their
actions acceptable and everything will be OK. The financial industry is generally a con game
built on managing perception and after all its all about the money when we strip away the
facade. As the former ZH was so effective in making known - when it gets serious one has to
lie.
I have now read completely the St. Louis Fed report that I linked to in comment #7 and I want
to provide a quote from it and discuss the obfuscation therein.
"
In addition to owing money to "the public," the U.S. government also owes money to
departments within the U.S. government. For example, the Social Security system has run
surpluses for many years (the amount collected through the Social Security tax was greater
than the benefits paid out) and placed the money in a trust fund. These surpluses were used
to purchase U.S. Treasury securities. Forecasts suggest that as the population ages and
demographics change, the amount paid in Social Security benefits will exceed the revenues
collected through the Social Security tax and the money saved in the trust fund will be
needed to fill the gap. In short, some of the $22 trillion in total debt is intergovernmental
holdings -- money the government owes itself. Of the total national debt, $5.8 trillion is
intergovernmental holdings and the remaining $16.2 trillion is debt held by the public.
"
The US Social Security Insurance program use to be a stand alone entity with a huge trust
fund of Treasuries that wasn't debt but in the Reagan/Greenspan era the funds were "stolen"
(turned into debt) and used to fund "Star Wars" etc. while payment for the program became a
budget item along with managing the contribution amounts to keep it viable into the
future....they took it away from the actuarial folk, spent the money and it is now a
political debt football.
"Thomas Bowers, a former Deutsche Bank executive and head of the American
wealth-management division, killed himself in Malibu, California, on Tuesday, November 19th,
according to the Los Angeles county coroner's initial report.
You have to look at the banker suicide index. Banker suicides go up exponentially prior to
a banking collapse. I lost count of banker suicides during the 2008 collapse. Bank troubles =
suicides of high ranking employees is the algorithm.
So in due course the trade war was replaced by the full scale cold war.
Notable quotes:
"... Needless to say, no differences will be "settled amicably" and now China will have no choice but to retaliate, aggressively straining relations with the US, and further complicating Trump's effort to wind down his nearly two-year old trade war with Beijing. ..."
"... The legislation, S. 1838, which was passed virtually unanimously in both chambers, requires annual reviews of Hong Kong's special trade status under American law and will allow Washington to suspend said status in case the city does not retain a sufficient degree of autonomy under the "one country, two systems" framework. The bill also sanctions any officials deemed responsible for human rights abuses or undermining the city's autonomy. ..."
"... The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else suffer bruising fallout from his own party. the GOP. ..."
"... In accordance with the law, the Commerce Department will have 180 days to produce a report examining whether the Chinese government has tried use Hong Kong's special trading status to import advanced "dual use" technologies in violation of US export control laws. Dual use technologies are those that can have commercial and military applications. ..."
"... The new law directs the US secretary of state to "clearly inform the government of the People's Republic of China that the use of media outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong Kong or in other countries is unacceptable." ..."
"... The state department should take any such activity "into consideration when granting visas for travel and work in the United States to journalists from the People's Republic of China who are affiliated with any such media organizations", the law says. ..."
"... Yes I think getting the western financial institutions out of HK is the plan. I'm sure they appreciate the US doing this for them, but of course they could never admit that. ..."
Less than an hour after Trump once again paraded with yet another all-time high in the
S&P...
... and on day 510 of the trade war, it appears the president was confident enough that a
collapse in trade talks won't drag stocks too far lower, and moments after futures reopened at
6pm, the White House said that Trump had signed the Hong Kong bill backing pro-democracy
protesters, defying China and making sure that every trader's Thanksgiving holiday was just
ruined.
In a late Wednesday statement from the White House, Trump said that:
I signed these bills out of respect for President Xi, China, and the people of Hong Kong.
They are being enacted in the hope that Leaders and Representatives of China and Hong Kong
will be able to amicably settle their differences leading to long term peace and prosperity
for all.
Needless to say, no differences will be "settled amicably" and now China will have no
choice but to retaliate, aggressively straining relations with the US, and further complicating
Trump's effort to wind down his nearly two-year old trade war with Beijing.
Trump's signing of the bill comes during a period of unprecedented unrest in Hong Kong,
where anti-government protests sparked by a now-shelved extradition bill proposal have
ballooned into broader calls for democratic reform and police accountability.
"The Hong Kong Human Rights and Democracy Act reaffirms and amends the United States-Hong
Kong Policy Act of 1992, specifies United States policy towards Hong Kong and directs
assessment of the political developments in Hong Kong," the White House said in a statement.
"Certain provisions of the act would interfere with the exercise of the president's
constitutional authority to state the foreign policy of the United States."
The legislation, S. 1838, which was passed virtually unanimously in both chambers,
requires annual reviews of Hong Kong's special trade status under American law and will allow
Washington to suspend said status in case the city does not retain a sufficient degree of
autonomy under the "one country, two systems" framework. The bill also sanctions any officials
deemed responsible for human rights abuses or undermining the city's autonomy.
The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without
opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else
suffer bruising fallout from his own party. the GOP.
Trump also signed into law the PROTECT Hong Kong act, which will prohibit the sale of
US-made munitions such as tear gas and rubber bullets to the city's authorities.
While many members of Congress in both parties have voiced strong support for protesters
demanding more autonomy for the city, Trump had stayed largely silent, even as the
demonstrations have been met by rising police violence.
Until now.
The bill's author, Senator Marco Rubio of Florida, said that with the legislation's
enactment, the US now had "new and meaningful tools to deter further influence and interference
from Beijing into Hong Kong's internal affairs."
In accordance with the law, the Commerce Department will have 180 days to produce a
report examining whether the Chinese government has tried use Hong Kong's special trading
status to import advanced "dual use" technologies in violation of US export control laws. Dual
use technologies are those that can have commercial and military applications.
One other less discussed but notable provision of the Hong Kong Human Rights Act targets
media outlets affiliated with China's government. The new law directs the US secretary of
state to "clearly inform the government of the People's Republic of China that the use of media
outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong
Kong or in other countries is unacceptable."
The state department should take any such activity "into consideration when granting
visas for travel and work in the United States to journalists from the People's Republic of
China who are affiliated with any such media organizations", the law says.
* * *
In the days leading up to Trump's signature, China's foreign ministry had urged Trump to
prevent the legislation from becoming law, warning the Americans not to underestimate China's
determination to defend its "sovereignty, security and development interests."
"If the U.S. insists on going down this wrong path, China will take strong countermeasures,
" said China's foreign ministry spokesman Geng Shuang at a briefing Thursday in Beijing. On
Monday, China's Vice Foreign Minister Zheng Zeguang summoned the U.S. ambassador, Terry
Branstad to express "strong opposition" to what the country's government considers American
interference in the protests, including the legislation, according to statement. The new U.S.
law comes just as Washington and Beijing showed signs of working toward "phase-one" of deal to
ease the trade war. Trump would like the agreement finished in order to ease economic
uncertainty for his re-election campaign in 2020, and has floated the possibility of signing
the deal in a farm state as an acknowledgment of the constituency that's borne the brunt of
retaliatory Chinese tariffs.
Last week China's Vice Premier and chief trade negotiator Liu He said before a speech at the
Bloomberg New Economy Forum in Beijing, that he was "cautiously optimistic" about reaching the
phase one accord. He will now have no choice but to amend his statement.
In anticipation of a stern Chinese rebuke, US equity futures tumbled, wiping out most of the
previous day's gains... Still, the generally modest pullback - the S&P was around 2,940
when Trump announced the Phase 1 deal on Oct 11 - suggests that despite Trump's signature,
markets expect a Chinese deal to still come through. That may be an aggressive and overly
"hopeful" assumption, especially now that China now longer has a carte blanche to do whatever
it wants in Hong Kong, especially in the aftermath of this weekend's
landslide victory for the pro-Democracy camp which won in 17 of the city's 18
districts.
"Following last weekend's historic elections in Hong Kong that included record turnout, this
new law could not be more timely in showing strong US support for Hongkongers' long-cherished
freedoms," said Rubio
This is another attempt by the US to stop BRICS. They care NOTHING about HK, only its
usefulness in the US war on Chinas growing importance in world trade.
but no no no... trading with communists brings jobs to sell cheap crap. oh what was I
thinking.... cheap crap, jobs, and the richest of the rich get richer... my bad.
it ain’t like the commies are going to use the money to build up their military..
Of course the obvious solution is to just let people choose whatever or whomever they want
to associate with and be respected and left alone for their choice.
But no. We all have to live and abide by the wishes of other people bcuz of "unity" and
****.
Eh guys, you still do not understand that all this (not only China and Hong Kong) is a
very big "elite" performance for ordinary people to keep you (the rest of the boobies) in
subjection. It's like in boxing - contractual fights. Do you think world "elites" benefit
from peace and order? You are mistaken - these guys have the world as death (the death of
their Power and their Control). An example from the history of Europe - in the 18-19 and
early 20th century, Europe only did what it fought. But the funny thing is that the monarchs
(the real owners of Europe) were relatives among themselves. The First World War was
popularly called “The War of Three Cousins” (English monarch, German Kaiser and
Russian emperor). But the Europeans paid for the dismantling of relatives. Now the "monarchs"
are bankers and your position has not changed, you changed only the owners after 1918.
Problem with Hong Kong is, it is dependent on China to survive. That is not only true for
the most basic neccessities, but also as a port for international trade. However, in the last
25 years, Shenzhen and Guangzhou have built up their own trade hubs, which has pulled trade
away from being concentrated in Hong Kong, and consequently more dependent on China. Our
ideas of Hong Kong remaining an independent island nation isn't going to work for three
reasons:
1. Without being a doorway to China, there is no other reason for its existence.
2. Hong Kong is indeed Chinese sovereign territory, that was taken away from it to be made
into a trade colony by the British in 1841, under the Treaty of Nanking. The British gave up
Hong Kong in 1997, under the 1984 signed Sino-British Joint Declaration, in which Britain
agreed to return not only the New Territories but also Kowloon and Hong Kong itself. China
promised to implement a "One Country, Two Systems" regime, under which for fifty years Hong
Kong citizens could continue to practice capitalism and political freedoms forbidden on the
mainland. So, when the year 2047 comes around, Hong Kong will be fully absorbed and
integrated in a One Country, One system Chinese regime. In otherwords, Hong Kong's fate was
already sealed in 1984, and there is nothing America can legally do about it.
3. Hong Kong still needs the basic neccessities from China to survive. Don't count on
either the British or the Americans to provide it.
Yes I think getting the western financial institutions out of HK is the plan. I'm sure
they appreciate the US doing this for them, but of course they could never admit
that.
Xi Jinping tells that bullshit little story about China's 5,000 year History, but the truth
is really much more pragmatic: China doesn't aim to be an empire for the simple reason it
learned from America's mistakes.
The CCP already knows that being the sole superpower is unsustainable and, in the medium
term, goes even against its main objective, which is to establish a "moderately prosperous
society" in China until 2030 (they consider the 2000s Belgium as the standard for "moderately
prosperous").
Socialist China has shown, so far, an incredible capacity of learning from other nations'
mistakes:
1) It correctly read the historical conjuncture of the late 1960s, by concluding that the
historical cycle of socialist revolutions was over, and moved on to try to break the Cold War
embargo in order to initiate a cycle of wealth production. They achieved that in 1972. This was
when Mao Zedong was still alive and commanding China with absolute authority, so it's a myth
China "freed itself" only when and because Mao died (1976);
2) It learned from the failed experiment of the Brazilian liberal dictatorship, by doing
exactly the opposite of the Zona Franca de Manaus . The result was the creation of the
Special Economic Zones, which allowed capitalist investment from abroad to come to China but in
quarentene, and with technological transfer.
3) It learned from the trap the USSR fell, and used a peaceful geopolitical strategy. It
avoided an arms race and was able to expand its allied nations portfolio and slowly tightened
its grip over the American economy.
4) It learned from the the failure of Soviet socialism in producing very good quality
consumer goods. It solved this problem by "opening up" for capitalist exploitation the sectors
which produced and distributed consumer goods, without affecting the strategic sectors
(defense, finance, natural resources, etc.).
5) It learned from the failure of the American empire of maintaining its status as the
world's "lonely superpower" by not adopting a war culture in China and by being more tolerant
with its neighbors. But that didn't mean they didn't consolidated position: military spending
continues to go up and the Armed Forces continues to be modernized and under firm CCP control.
The South China Sea is a "corridor of life" for the Chinese, so the CCP quickly, but in a
peaceful manner, took control of it, very aware that it would probably cost the Vietnamese
friendship. But that was the exception that proves the rule, an exceptional situation where the
benefits were greater than the costs.
This isn't the only
article I've read over the past several days suggesting China won't agree to a trade deal
anytime soon. The following are amongst the reasons why:
"China's trade has gradually steadied as the nation moves to explore third markets. 'A
substantial decline in trade and a drastic fall in economic growth which some international
observers were worried about didn't occur, pointing to the potential and resilience of the
Chinese economy,' he went on to say.
"The US, for its part, has seen its current account deficit as a percentage of GDP shoot
up from 2.9 percent to 3.2 percent. This suggests the trade war is failing to address the
issue of the US' current account deficit, stressed Zhu, who is currently the Chairman of the
National Institute of Financial Research at Tsinghua University. He added that, more
worryingly, tariffs mean additional costs are put on US companies and consumers."
Evil Outlaw US Empire planners in their hubristic zeal to decouple from China's economy
erred massively in thinking China would be the one harmed and come begging for a trade deal.
Instead, China's geoeconomic strategy is clearly working and is more potent than what the
Empire can bring to the table--Oops! China can now play Trump.
psychohistorian 63
I see Trump's envoy Kissinger is standing next to Xi. Seems like Trump is trying to cook
something up with Kissinger regularly on the scene when it comes to Russia and China.
Interesting that Kissinger is there . Steve Pieczenik takes the very strong view
that Pompeo is a dead man walking. Worth every second of his five minute discourse . What I like
about Steve and his various takes on people of note is that he assassinates them immediately
and intensely with a quick turn of phrase.
Kissinger was also Nixon's envoy. He engineered the split between China and the Soviet
Union amongst other things. China and Russia's current leadership though may be above
Kissinger's pay grade.
LYNN FRIES : This newsdoc explores the folly of expecting private enterprise to
operate in the service of the public interest on a grand scale, globally, in key fields:
Financing the United Nations 2030 Agenda and Sustainable Development Goals, Climate change,
Health, Digital cooperation, Gender equality and the empowerment of women, Education and
skills. Specifically, it explores the United Nation's Strategic Partnership Agreement with the
World Economic Forum. The agreement was signed by the Office of the UN Secretary-General and
Executives of WEF, the World Economic Forum better known as DAVOS, a leading proponent of
public-private partnerships and a multistakeholder approach to global governance.
The United Nations as the world's intergovernmental multilateral system should always focus
on protecting common goods and providing global public benefits. That's the position of
signatories of an Open Letter sent to the UN Secretary-General by hundreds of civil society
organizations from all regions of the world. The letter states: "This public-private
partnership will permanently associate the UN with transnational corporations, some of whose
essential activities have caused or worsened the social and environmental crises that the
planet faces. This is a form of corporate capture". The letter calls on the Secretary-General
to terminate the Agreement.
I met up with Harris Gleckman to get his take on all this. Harris Gleckman is the author of
"Multistakeholder Governance and Democracy: A Global Challenge" and is currently working on a
handbook on the governance of multistakeholderism. Harris Gleckman is a Senior Fellow at the
Center for Governance and Sustainability, UMass Boston. We go now to our featured clips of that
meeting.
LYNN FRIES : Civil society is calling the World Economic Forum-UN Agreement as a
corporate takeover of the UN.
HARRIS GLECKMAN: The UN Charter starts with the words "We the Peoples". What the
Secretary-General is doing through the Global Compact and now through the partnership with the
World Economic Forum is tossing this out the window. He is saying: I'm going to align the
organization with a particular structural relationship with multinationals, with
multistakeholderism, and set aside attention to all the different peoples of the world in their
particular interests of environment, health, water needs and really talk about how to govern
the world with those who have a particular role in creating problems of wars from natural
resources, of creating problems relating to climate, creating problems relating to food supply
and technologies. That is undermining a core element of what the United Nations has been and
should be for its next 75 years.
LYNN FRIES : It's striking that the Agreement was signed as the UN is celebrating 100
years of multilateralism, the centenary year 1919 to 2019. And next year 2020 will mark the
1945 signing of the UN Charter 75th anniversary.
HARRIS GLECKMAN : Lynn, if I could give you an overview of what I'm concerned about
the aspect of this about multistakeholderism is that the Secretary-General is the leading
public figure for the multilateral system, the intergovernmental system. The World Economic
Forum is the major proponent or one of the major proponents that a multi-stakeholder governance
system should replace or marginalize the multilateral system. So the Secretary-General is
taking steps to just jump on the bandwagon of multistakeholderism without a public debate about
the democratic character of multistakeholderism, about a public debate about whether this is
effectively able to solve problems, without a public debate about how stakeholders are selected
to become global governors or even a public debate about what role the UN should have with any
of these multistakeholder groups.
LYNN FRIES : I noted that the letter that was sent to the UN Secretary-General was
also copied to the President of the General Assembly, the President of the Security Council and
the Chair of the G77 with a request that it be circulated to all Governments as an Official
Document.
HARRIS GLECKMAN : The Secretary-General should have gone to the intergovernmental
process to debate this issue and now civil society is saying to the intergovernmental process:
If the Secretary-General isn't going to tell you about it, we want you to have that debate
anyway.
LYNN FRIES : In addressing the UN Secretary-General the letter by Civil Society
Organizations recognized that the Secretary-General faced serious challenges.
HARRIS GLECKMAN: Yes it is absolutely the case that the Secretary-General is caught
in a very difficult bind. Governments are not able to collect and are not collecting their
taxes from the bulk of international business activities because of movements around tax
havens. Government's say: well we don't have the money, so we cannot underwrite an effort to
have a credible global governance system and this is affecting the operation of the UN. So the
Secretary-General is looking at a challenge. He has the financial challenge: under payment of
current dues and underfunding of the whole organization and an aggressive effort by the Trump
administration to deconstruct all the organizations of the international system in a period
Lynn where as you observed it's the hundredth year of multilateralism and the 75th year of the
United Nations. And here the Secretary-General has two major crises on his hands in terms of
the integrity of the system.
LYNN FRIES: Briefly give us some context on what you see as the motivation of the
World Economic Forum.
HARRIS GLECKMAN : The World Economic Forum's motivation for joining, for perhaps,
even driving forward this idea of a strategic partnership came from their work following the
financial crisis starting n 2008-09. Davos, the common name for the World Economic Forum,
convened 700 people working for a year and a half on a project that they called Global Redesign
Initiative. They created that project because they realized that the whole public view about
globalization as "a good for the world" was crumbling as a result of the financial crisis. And
so they wanted to propose a new method of governing the world. And two of the elements of their
proposal – that's actually a 700 page research paper – were to have a new
relationship with governments in the United Nations system and to advocate that the global
problems of the world should be solved by multistakeholder groups. This new partnership with
the Secretary-General is an implementation of what they laid out in their Global Redesign
Initiative to have a special place in the United Nations system for corporations to influence
the behavior of the international organizations. And also for those corporations to be able to
say to other people: Look we're in partnership with the United Nations so treat us as if we
were neutral friendly bodies.
Let me just share with you a couple of examples that may help convey how serious that is.
The Sustainable Development Goals were negotiated by governments in open sessions and they
determined what the goals should be in 17 areas. Multistakeholder groups have announced that
they are going to implement Goal 8 or Goal 6. And in the process, they declare: Here is how we
will work on health, here's how we will work on education, here's how we will work on the
environment. And rewrite what is the outcome of the Sustainable Development Goals in their own
organizational interest. In some ways, that's not surprising. You bring together a group of
companies, selected governments, selected civil societies, selected academics and they will
have their own internal dynamic of concern. But what they do is they assert that what they are
doing- their rewritten version- actually they are telling the world: Well, we are actually
doing the UN version. But that is not what their text is.
For example, in the energy field, in the energy goal there are five key adjectives that
describe the target about global energy needs. The leading multistakeholder group, Sustainable
Energy for All, their target has four of those adjectives and they drop the one which was
AFFORDABILITY. This is how the process of multistakeholders taking over an area, redefining it
but to the public announcing that they are implementing the intergovernmental goals is an
unhealthy development in global governance.
LYNN FRIES : The Civil Society letter referred to the Agreement as a public-private
partnership as did you in a recent OPED. Explain more about the public interest issue with
public-private partnerships.
HARRIS GLECKMAN : Well let's take a particular effort of a public-private partnership
in providing water in a city. Historically this is a public or a municipal function to make
sure that there is adequate amounts of water. The quality of water is healthy and its safety.
And that it's regularly and reliably available to the residents in the area. When a
public-private partnership comes in, the corporate side may have an interest in some of these
goals but add an additional one. That is they want a return on their investment, they want a
profit from it. So some of the items of those various public functions – access, quality
of material of water, reliability of water, access to all people then gets suddenly changed. So
if there's a manufacturing facility in one part of town more water may be diverted in that
direction. If water purification is a little hard about a particular element: We may get a
little lazy about doing that in the interests of profits. If it's going to take a lot of work
to dig up a street and replace pipes, they'll say: Well, we can wait another five years and use
those pipes which may have lead in them. All because now you add the fact that this
public-private partnership needs to make a return of profit on what should be, what
historically has a public municipal function. So you create this unequal development in terms
of meeting public needs against the now new requirement that if you want a water system, you
have to produce a profit for some of the actors involved.
LYNN FRIES : Food security is a major issue for vast populations. Comment on the
implications for food security.
HARRIS GLECKMAN : If we want to build, recover, create a food secure world, you need
to work with those who are growing, producing foods directly. Not those who are processing,
distributing, marketing, rebranding. We need to start at the very base and create a system of
engagement with small farmers, with small fishing families, with those around the world who are
the actual food producers. Who have been preserving knowledge and building knowledge for
centuries, they received that knowledge from centuries. That's the direction that would change
the way in which we could actually look at the issues of hunger and food security in the world
in a quite different fashion. Going to those who have a profit-centered motive in global
governance will sharply narrow what might be possible to do. That's what the partnership will
tend to do as the Secretary General and WEF have private discussions about how do we address
the issue of food security while not talking very loud about how we make a profit in that
process.
LYNN FRIES : If the UN Secretary-General invited you for a 1:1 what would you
say?
HARRIS GLECKMAN : I think that I would say to the Secretary-General that he needs to
give a major re-examination of the way the United Nations works with all of the peoples of the
world. In order to provide a stronger base for the United Nations, the doors have to be made
wider so that the views of various popular bodies, social movements, communities around the
world have far greater access to the United Nations. I'd also say to him. Mr. Secretary
General, the UN needs an open and clear conflict of interest policy and a conflict of interest
practice. For those multinationals who are causes of problems, who aggravate the global
problems of inequality we need and you as Head of the United Nations need to separate the
United Nations from that process. They should not be invited to attend meetings. They should
not be allowed to make statements. In the climate area, those who are continuing to extract
natural resources from the ground where they should stay we have taken too much of carbon out
of the ground. If we're going to meet the Paris Accord, they should have no role entering the
United Nations. I'd also say to the Secretary General that he needs to establish a much bigger
office to support civil society. At the moment, the UN support for civil society organization
institutional support is about two people. That is absolutely the wrong level of engagement
with the wider elements of civil society. And the last thing I would probably say to the
Secretary-General is that the UN is very proud of having developed a system of internal
governance that protects the weaker countries, the smaller countries, that their views can be
heard in the intergovernmental governance process. The Secretary-General should not engage with
multi stakeholder groups who do not have a rulebook that allows for the protection of smaller
members of the group, that does not have a way to appeal and challenge decisions that does not
require public disclosure of their finances, all of those characteristics of
multistakeholderism. The Secretary General should have and the UN should have no relationship
with those who are not interested in protecting core concepts of democracy
LYNN FRIES : We have to leave it there. Special thanks to our guest contributor,
Harris Gleckman, and thank you for watching and for your interest in this segment of
GPEnewsdocs coming to you from Geneva, Switzerland.
The WEF and its various constituencies try to overtake control of development with their
"public-private partnership" flag but how these, let's say, partnerships, actually work and
interact with local communities and governments is an issue that need to attract more
scrutiny and transparency. If one uses the migratory pressure as a measure, so far,
development in Africa, South America and South Asia is not doing a good job on the part of
local communities. There may be a few success cases, as it seems to be the case that
deforestation in Brazil that while proceeding it's way, has somehow slowed down compared to
the last decade of the XXth century. But when a success story is analysed what you find
behind is simply strong government action as the Brazilian did starting in 2004 when they
begun the monitoring of development in the Amazon basin and expanded in 2006 with a
moratorium in soya culture and beef production. The WEF has a series of initiatives on what
they call sustainable development that sound excellent in their web pages but in reality do
not seem to work so well and the UN should be kept independent and legally above of the WEF
initiatives to monitor development and accountability. This initiative will almost certainly
result in foxes governing henhouses.
As I see it the WEF makes the hell of a good PR job without counterbalancing parties.
Truly scary stuff and why does it remind me of the way public transport was destroyed in
the US: step 1 – starve it of revenue; step 2 – privatize it (while promising
better service); step 3 – let it rot; and step 4 – close it down (responding to
the public, gripping about how bad the service had become). The job accomplished!
One has to wonder what the Sec. General has been smoking lately and where are Russians and
Chinese to push back?
The UN will never accomplish its mission, man is incapable of bringing about world peace.
The UN is here for one reason and one reason only and that is to destroy the false religious
system when the political rulers hand it their power to accomplish just that.
If WEF is looking at doing infrastructure on a global scale that is based on good science,
is sustainable and maintainable, the ultimate power over the "multi-stakeholder groups"
submitting their bids to the UN should be the UN – this means a new UN mandate that
must be ratified yearly by voters, and bureaucrats that must win elections. If this big idea
is going to accomplish what needs to be done the "stakeholders" might want to take a close
look at what happened to the dearly departed ideas of neoliberalism. Neoliberalism was
destroyed from within by the need for ever more profit; by the" rat-race to the bottom" and
by externalizing costs in the form of pollution – by the most obviously unsustainable
practices, both social and environmental. If the goal is clear and comprehensive all these
problems inherent in yesterday's capitalism will have to be addressed at the get-go. It is a
difference of scale whether a city hires a contractor to do new waterlines, or the UN hires
"multi stakeholder groups" to do some continent-wide 50 year project. That means the UN will
need to become answerable to the people for the management of all these big ideas. Because
conflict of interest will be so massive as to be unmanageable otherwise. And one definition
will be imperative – Just what stake or stakes is/are held by "multi-stakeholder
groups"? Because what is at stake is the planet itself. Not money.
The UN problem has always been money. The 200 nation states are dilatory in paying their
dues. This gives the few rich countries power – 'cooperate with us and we'll fund your
activities.' Its not as bare-faced as I state it but you get the picture. To solve this
problem we need the majority of countries to vote to make national dues a precedent claim on
each government. Publish the result of the vote and monthly progress towards the aim. Name
the countries cooperating.
Once the UN administration is confident of its income it can plan its activities better,
make peoples' health and livelihoods a priority and achieve a much higher profile amongst
humanity.
"Mining transnationals find it cheaper to buy water rights than to desalinate seawater and
transport it for tens or hundreds of kilometers. Even more so if they have to use less
polluting but more expensive desalination technologies.
This is an unequal and unjust war where the main victims are the poor population, small
farmers and the sustainable development of our region of Atacama.
We continue to approve and facilitate the approval of mining projects and mega-projects
without making it a condition not to consume water from the basin.
– The population of Copiapó, Caldera, Tierra Amarilla and Chañaral,
particularly the lower income population, suffers the consequences of having to endure
repeated supply cuts, low pressure and a terrible quality of drinking water.
The drinking water crisis in the mentioned cities is a direct consequence of the over
exploitation of the Copiapó river basin by foreign mining companies, of the
purchase-sale and speculation with water rights, as well as of the irrationality and
indolence of the State in not establishing priorities in the use of the vital water" https://www.youtube.com/watch?v=8lGEONBfvTM
Although corporate meddling is not unheard of in the UN system, under the new terms of the
UN-WEF partnership, the UN will be permanently associated with transnational corporations. In
the long-term, this would allow corporate leaders to become 'whisper advisors' to the heads
of UN system departments.
The UN system is already under a significant threat from the US Government and those who
question a democratic multilateral world. Additionally, this ongoing corporatization will
reduce public support for the UN system in the South and the North, leaving the system, as a
whole, even more vulnerable.To prevent a complete downfall, the UN must adopt effective
mechanisms that prevent conflicts of interest consistently. Moreover, it should strengthen
peoples and communities which are the real human rights holders, while at the same time build
a stronger, independent, and democratic international governance system.
There is a strong call to action going on by hundreds of organizations against this
partnership agreement http://bit.ly/33bRQZP
I don't know how well this will retain format but it is the latest from the US Fed on
providing "liquidity" to the private banking system
"
Friday, 11/15/2019- Thursday, 12/12/2019 The Desk plans to conduct overnight repo operations
on each business day as well as a series of term repo operations over the specified period.
OVERNIGHT OPERATIONS DATES AGGREGATE OPERATION LIMIT
Friday, 11/15/2019 - Thursday, 12/12/2019 At least $120 billion
TERM OPERATION DATE MATURITY DATE TERM AGGREGATE OPERATION LIMIT
Tuesday, 11/19/2019 Tuesday, 12/3/2019 14-days At least $35 billion
Thursday, 11/21/2019 Thursday, 12/5/2019 14-days At least $35 billion
Monday, 11/25/2019 Monday, 1/6/2020 42-days At least $25 billion
Tuesday, 11/26/2019 Tuesday, 12/10/2019 14-days At least $35 billion
Wednesday, 11/27/2019 Thursday, 12/12/2019 15-days At least $35 billion
Monday, 12/2/2019 Monday, 1/13/2020 42-days At least $15 billion
Tuesday, 12/3/2019 Tuesday, 12/17/2019 14-days At least $35 billion
Thursday, 12/5/2019 Thursday, 12/19/2019 14-days At least $35 billion
Monday, 12/9/2019 Monday, 1/6/2020 28-days At least $15 billion
Tuesday, 12/10/2019 Monday, 12/23/2019 13-days At least $35 billion
Thursday, 12/12/2019 Thursday, 12/26/2019 14-days At least $35 billion
"
Some take away quotes from various ZH postings
"
In short, the Fed's dual mandate has been replaced by a single mandate of promoting financial
stability (or as some may say, boosting JPMorgan's stock price) similar to that of the
ECB.
Here BofA adds ominously that "by deciding to dynamically assess bank demand for reserves
and reduce the risk of air pockets in repo markets, we believe the Fed has entered
unchartered territory of monetary policy that may stretch beyond its dual mandate." And the
punchline: "By running balance-sheet policy to ensure overnight funding markets remain flush,
the Fed is arguably circumventing the most important brake on excess leverage: the
price."
So if NOT QE is in fact, QE, and if the Fed is once again in the price manipulation
business, what then?
According to BofA's Axel, the most worrying part of the Fed's current asset purchase
program is the realization that an ongoing bank footprint in repo markets is required to
maintain control of policy rates in the new floor system, or as we put it less politely,
banks are now able to hijack the financial system by indicating that they have an overnight
funding problem (as JPMorgan very clearly did) and force the Fed to do their (really
JPMorgan's) bidding.
And this is where BofA's warning hits a crescendo, because while repo is fully
collateralized and therefore contains negligible counterparty credit risk, "there may be a
situation in which banks want to deleverage quickly, for example during a money run or a
liquidation in some market caused by a sudden reassessment of value as in 2008."
Got that? Going forward please refer to any market crash as a "sudden reassessment of
value", something which has become impossible in a world where "value" is whatever the Fed
says it is... Well, the Fed or a bunch of self-serving venture capitalists, who pushed the
"value" of WeWork to $47 billion just weeks before it was revealed that the company is
effectively insolvent the punch bowl of endless free money is taken away.
Therefore, to Bank of America, this new monetary policy regime actually increases systemic
financial risk by making repo markets more vulnerable to bank cycles. This, as the bank
ominously warns, "increases interconnectedness, which is something regulators widely
recognize as making asset bubbles and entity failures more dangerous."
It is, however, BofA's conclusion that we found most alarming: as Axel writes, in his
parting words:
"some have argued, including former NY Fed President William Dudley, that the last
financial crisis was in part fueled by the Fed's reluctance to tighten financial conditions
as housing markets showed early signs of froth. It seems the Fed's abundant-reserve regime
may carry a new set of risks by supporting increased interconnectedness and overly easy
policy (expanding balance sheet during an economic expansion) to maintain funding conditions
that may short-circuit the market's ability to accurately price the supply and demand for
leverage as asset prices rise."
What I didn't include in comment # 137 above but did in the last Weekly Open Thread is the
following about the recent NOT SHORT TERM actions of the US Fed:
The POMO is a Permanent Open Market Operation (purchases from the primary private banks of
Treasuries & MBS) that bought $20 billion between mid-August to mid-September, another
bought $20 billion between mid-September to mid-October and $60 billion between mid-October
to mid-November....totaling $100 billion of US taxpayers money, so far, and is expected to
continue at the $60 billion/month until, supposedly, the middle of next year. (This is the
one that should concern folks the most because the economy has supposedly not crashed yet and
here the Fed is "foaming the runway" of the private banking system on the backs of Americans
already
@ William Gruff # 156 who wrote
"
There is no increase in the domestic US production of anything but bullshit, which America is
cranking out in record quantities, and with delusional fascists leading that productivity
surge.
"
I agree and want to summarize my comments # 137, 138 to add that on top of the manufacturing
recession that you write of and link to that the US has been in a financial recession since
the August/September time frame.
The US Fed has and continues to foam the private banking runway with billions of dollars
to prop up and delay price/value assessment. One reason that I can think of for that is the
coming IPO of Aramco for Saudi Arabia.
Another reason is likely to be a huge game of musical chairs being played where those in
control are arranging a specific set of very few chairs to be available for them when the
music stops. It will all be legal of course since all these financial derivative instruments
that will be in place will have Super-Priority in bankruptcy which gives those creditors of a
bankrupt debtor (America) the right to receive payment before others who would seem to have
superior claims to money or assets. The other losers in this case will be Social Security,
pension funds, state and municipal bonds to say nothing of the savings of the public that
think they are protected with FDIC.
If this event does not incite the pubic to nationalize the private banking system and
imprison many then a super-national cult of folk will own what is left of the Western world
and be defended by xxxx army.
Numbers show joke is on the US, not Huawei US ban lit a fire under Huawei, seen
taking lead in smartphones and awash in cash as bonds trade at a premium
By Umesh Desai
Unlisted Chinese telecommunications giant Huawei Technologies was made an international
pariah by US regulators earlier this year after a ban on buying key parts and on access to
crucial markets.
You think that sounded the death knell for the company? Think again.
This week, Huawei announced a US$286 million
bonuses bonanza to its employees . Its bonds continue to trade above par, and its cash
balances are massive. Hardly the signs of a company struggling under sanctions.
The company has repeatedly denied US allegations that it is a front for the Chinese
government – the justification Washington cited for banning US companies from using
Huawei-manufactured gear.
Huawei is the world's biggest telecom equipment maker and it's the second biggest smartphone
maker.
According to data from International Data Corporation, smartphone shipments in the
July-September quarter rose 18.6% to 66.6 million, just behind global leader Samsung's 78.2
million.
"Huawei has been gaining market share in China and overseas despite US trade war frictions
and may become the leading smartphone maker in the next two quarters," said Nitin Soni,
director of corporate ratings at Fitch Ratings.
He said telcos across emerging markets, which are facing capital expenditure pressures
and limited 5G business viability in the short term, may be willing to buy Huawei's 5G
equipment given it is cheaper and has better technology than European counterparts.
It's not just Soni. Industry leaders also acknowledge Huawei's quality standards
.
Indian telco Bharti Enterprises' chairman Sunil Mittal said recently, for example, "I can
safely say their products in 3G and 4G that we have experienced are significantly superior to
Ericsson and Nokia. I use all three of them. "
Indeed, the bond-market performance of the unrated, unlisted company confirms Huawei's
strength. Its dollar-denominated bonds traded in global markets are changing hands at above
par, indicating bond investors are confident about the company's cash position and liquidity
situation.
Its bonds due 2025, which pay a coupon of 4.125%, are trading at a price of $104 while the
holder would only get $100 at maturity. The premium would be compensated by the annual coupon,
which would reduce the yield. The bonds are currently yielding 3.4% compared with the 4.25%
yield at the time of the issuance. In price terms the bonds have rallied from $99 in 2015 to
$104. Prices move inversely to yields.
The financial highlights also betray no signs of weakness. The company has a cash hoard of
$39 billion and generates $10 billion from operations each year.
So, in fact, the US ban on Huawei may be helping the company.
"A ban on US companies such as Google to supply software to Huawei may lead to faster
innovation by Huawei to develop its own operating system and chips," said Soni.
"... There is no strong evidence of a positive impact of TSR plans on firm performance ..."
"... "Despite the fact that just under 50% of S&P 500 firms have this pay metric as part of their executive compensation plans and that this pay metric is designed to align the interest of shareholders and executives," Enayati told Yahoo Finance, "we find that there's no relationship between the pay metric and top-line business outcomes like 1-, 3-, or 5-year total shareholder return, return on equity, earnings per share growth, or revenue growth." ..."
The analysis, done in conjunction with consultants Pearl Meyer & Partners, examined a decade's
worth of data from every company in the S&P 500 (^GSPC). It compared companies that offer their
top brass a total shareholder return (TSR) plan to those that don't and found the increasingly
popular pay plans haven't significantly boosted any of a number of key metrics.
Total shareholder return is how well an investment in a company has done over a given period.
It's a combination of the stock's price change and dividends paid. With TSR plans, managers are
rewarded with shares, options, or even cash to give them a stake in how well the stock does.
For a growing number of corporate heads, big bonuses based on stock performance is a large
part of their pay.
In 2004, just 17% of S&P 500 companies gave CEOs and top executives some form of a TSR plan. A
decade later, nearly half of the companies in the index offered it.
As for those S&P 500 CEOs that have TSR plans, it represents on average some 29% of their
total direct compensation, though that percentage is a decline from 38% a decade ago. That's
because as more companies adopt TSR plans, they are doing so with less weight than companies who
took on these kinds of bonuses earlier.
The average CEO of an S&P 500 company made $13.8 million – or 204 times their average employee
– in 2014, according to job website Glassdoor.com.
Get the Latest Market Data and News with the Yahoo Finance App
Nonetheless, giving CEOs more for total shareholder return doesn't make a difference,
according to the Cornell study.
"There is no strong evidence of a positive impact of TSR plans on firm performance,"
wrote Hassan Enayati, Kevin Hallock, and Linda Barrington of Cornell University's Institute for
Compensation Studies.
"Despite the fact that just under 50% of S&P 500 firms have this pay metric as part of
their executive compensation plans and that this pay metric is designed to align the interest of
shareholders and executives," Enayati told Yahoo Finance, "we find that there's no relationship
between the pay metric and top-line business outcomes like 1-, 3-, or 5-year total shareholder
return, return on equity, earnings per share growth, or revenue growth."
Interestingly, the researchers discovered that while the number of companies paying top
executives for shareholder return incentives is increasing, the size of those bonuses relative to
total compensation is on the decline.
According to Enayati, part of that has to do with companies decreasing the weight of total
shareholder return compensation plans. "But then also the new adopters are coming in at lower
weights, perhaps just to test the water," he explained.
But Enayati doesn't rule out other performance bonuses. "While there's no evidence that this tool
hits the mark, that isn't to say that other metrics shouldn't be pursued as a solid way to align
those incentives," he said.
The analysis, done in conjunction with consultants Pearl Meyer & Partners, examined a decade's
worth of data from every company in the S&P 500. It compared companies that offer their top brass
a total shareholder return (TSR) plan to those that don't and found the increasingly popular pay
plans haven't significantly boosted any of a number of key metrics. ...
likbez said...
Looks to me like a generic problem of any neoliberal regime that became more acute as secular
stagnation of economics became a "new normal".
High compensation (which is just a part of generic redistribution of wealth up -- the goal
on neoliberalism) drives up ruthless sociopaths making short term stock performance the priority
and displaces engineers who are capable drive the firm into the future.
Short termism and financial machinations to boost the stock price are probably among key reasons
of decline of IBM and HP.
Paradoxically Icahn recently provided us with some interesting insights into bizarre world
of stock buybacks. See video on http://carlicahn.com/
America's misguided war on Chinese technology By Jeffrey D Sachs November 8,
2019
The worst foreign-policy decision by the United States of the last generation – and
perhaps longer – was the "war of choice" that it launched in Iraq in 2003 for the stated
purpose of eliminating weapons of mass destruction that did not, in fact, exist. Understanding
the illogic behind that disastrous decision has never been more relevant, because it is being
used to justify a similarly misguided US policy today.
The decision to invade Iraq followed the illogic of then-US vice-president Richard Cheney,
who declared that even if the risk of WMD falling into terrorist hands was tiny – say, 1%
– we should act as if that scenario would certainly occur.
Such reasoning is guaranteed to lead to wrong decisions more often than not. Yet the US and
some of its allies are now using the Cheney Doctrine to attack
Chinese technology. The US government argues that because we can't know with certainty that
Chinese technologies are safe, we should act as if they are certainly dangerous and bar
them.
Proper decision-making applies probability estimates to alternative actions. A generation
ago, US policymakers should have considered not only the (alleged) 1% risk of WMD falling into
terrorist hands, but also the 99% risk of a war based on flawed premises. By focusing only on
the 1% risk, Cheney (and many others) distracted the public's attention from the much greater
likelihood that the Iraq war lacked justification and that it would gravely destabilize the
Middle East and global politics.
The problem with the Cheney Doctrine is not only that it dictates taking actions predicated
on small risks without considering the potentially very high costs. Politicians are tempted to
whip up fears for ulterior purposes.
That is what US leaders are doing again: creating a panic over Chinese technology companies
by raising, and exaggerating, tiny risks. The most pertinent case (but not the only one) is the
US government attack on the wireless broadband company Huawei. The US is closing its markets to
the company and trying hard to shut down its business around the world. As with Iraq, the US
could end up creating a geopolitical disaster for no reason.
I have followed Huawei's technological advances and work in developing countries, as I
believe that fifth-generation (5G) and other digital technologies offer a huge boost to ending
poverty and other Sustainable Development Goals. I have similarly interacted with other telecom
companies and encouraged the industry to step up actions for the United Nations' SDGs. When I
wrote a short foreword (without compensation) for a
Huawei report on the topic, and was criticized by foes of China, I asked top industry and
government officials for evidence of wayward activities by Huawei. I heard repeatedly that
Huawei behaves no differently than trusted industry leaders.
The US government nonetheless argues that Huawei's 5G equipment could undermine global
security. A "back door" in Huawei's software or hardware, US officials claim, could enable the
Chinese government to engage in surveillance around the world. After all, US officials note,
China's laws require Chinese companies to cooperate with the government for purposes of
national security.
Given the technology's importance for their sustainable development, low-income economies
around the world would be foolhardy to reject an early 5G rollout. Yet despite providing no
evidence of back doors, the US is telling the world to stay away from Huawei
Now, the facts are these. Huawei's 5G equipment is low-cost and high-quality, currently
ahead of many competitors, and already rolling out. Its high performance results from years of
substantial spending on research and development, scale economies, and learning by doing in the
Chinese digital marketplace. Given the technology's importance for their sustainable
development, low-income economies around the world would be foolhardy to reject an early 5G
rollout.
Yet despite providing no evidence of back doors, the US is telling the world to stay away
from Huawei. The US claims are generic. As a US Federal Communications Commissioner
put it , "The country that owns 5G will own innovations and set the standards for the rest
of the world, and that country is currently not likely to be the United States." Other
countries, most notably the United Kingdom, have
found no back doors in Huawei's hardware and software. Even if back doors were discovered
later, they could almost surely be closed at that point.
The debate over Huawei rages in Germany, where the US government threatens to curtail
intelligence cooperation unless the authorities exclude Huawei's 5G technology. Perhaps as a
result of the US pressure, Germany's spy chief recently made a claim
tantamount to the Cheney Doctrine: "Infrastructure is not a suitable area for a group that
cannot be trusted fully." He offered no evidence of specific misdeeds. Chancellor Angela
Merkel, by contrast, is fighting
behind the scenes to leave the market open for Huawei.
Ironically, though predictably, the US complaints partly reflect America's
own surveillance activities at home and abroad. Chinese equipment might make secret
surveillance by the US government more difficult. But unwarranted surveillance by any
government should be ended. Independent UN monitoring to curtail such activities should become
part of the global telecommunications system. In short, we should choose diplomacy and
institutional safeguards, not a technology war.
The threat of US demands to blockade Huawei concerns more than the early rollout of the 5G
network. The risks to the rules-based trading system are profound. Now that the US is no longer
the world's undisputed technology leader, President Donald Trump and his advisers don't want to
compete according to a rules-based system. Their goal is to contain China's technological rise.
Their simultaneous attempt to neutralize the World Trade Organization by
disabling its dispute settlement system shows the same disdain for global rules.
If the Trump administration "succeeds" in dividing the world into separate technology camps,
the risks of future conflicts will multiply. The US championed open trade after World War II
not only to boost global efficiency and expand markets for American technology, but also to
reverse the collapse of international trade in the 1930s. That collapse stemmed in part from
protectionist tariffs imposed by the US under the 1930 Smoot-Hawley Act , which
amplified the Great Depression, in turn contributing to the rise of Adolf Hitler and,
ultimately, the outbreak of World War II.
In international affairs, no less than in other domains, stoking fears and acting on them,
rather than on the evidence, is the path to ruin. Let's stick to rationality, evidence and
rules as the safest course of action. And let us create independent monitors to curtail the
threat of any country using global networks for surveillance of or cyberwarfare on others. That
way, the world can get on with the urgent task of harnessing breakthrough digital technologies
for the global good.
Globalism sounds like such a nice thing for many, it even has a nice ring to it! At least to
the naïve, whom actually believe that if the world could just get together and work out
its problems under one big umbrella, all would be great. I think most people would agree that
true free trade, coupled with safeguards to protect American jobs would be fine. The corrupted
globalism that this world has become nearly immersed in is a mechanism that, in reality, is
intent on creating a one world corporate owned planet operated under a top-down, locked-down,
political and economic management system backed up by coercion. Whew! That is a mouthful I
agree! It will be run by a partnership of the top .001% of wealthiest elites and administered
by the United Nations. International rules and laws for every single decision will nearly all
come under the auspices the United Nations. This plan has been laid out in various United
Nations publications and official policy.
President Trump has vowed to, and succeeded in some ways, to buck these one world
globalists, not to say he hasn't treated them to overly generous tax breaks since he has been
in charge! Not withstanding the prior, these one world globalists include even some of the most
prominent lawmakers in Washington D.C. far too often. The entrenched snake sales people over at
the White House lawmaking division are far too often part of the plan to decimate America
whether they believe it or not. We can only hope that a large part of them are do not realize
what the end-game is of this globalist cabal. Perhaps this is of course why we so often shake
our heads in disbelief when they utter ideas and beliefs that sound so foreign to ears,
anti-American and even scary!
So far, Pres. Trump seems to have accomplished about as much as any one president ever could
accomplish when walking into a room of entrenched den of thieves! Washington is not going to be
a part of solving the problems of globalism, for they and the globalists are in bed together.
Part of the problem remains that the establishment agenda is overrun by statists who walk in
lock-step with their leaders and party platforms even if corrupted. It is just too profitable
for them to ignore. Yet, the truth is that statism has no sense of proportion. These sometimes
well-meaning politicians, once they are put into power, knowingly or unknowingly become slaves
to their corporate owners. This is corporatocracy, and it is unsustainable. The one world
corporate pirates, comprising a collection of the largest 100 or so family dynasties, do in
fact control approximately 90 percent of the wealth of the world, hidden inside a dark web of
very complex multi-structured organizations and corporate nameplates. Such makes it very
difficult, but not impossible to truly figure out who the real owners are behind the maze. This
is perhaps the reason why I contend that President Trump, an outsider with a new direction for
America, may be our last chance. Most of these types hate Trump because he is hitting them
where it hurts on most fronts and is slowing down the globalist agenda!
Corporate socialism IS globalism. It is a growing and controlled oligarchy. As such, it
affords both the supranational capitalists, world's governments and non-elected quasi
governmental agencies to profit together as a baseball team would. Yes, working together with
one unified grand vision for the profit and powers of both. Globalism is the name. We already
see how nearly everything around us is becoming part of the so-called global order. These,
creating quid-pro-quo systems of control over the entire world economies, whom create wars for
profit, create inflation to inadvertently benefit themselves and enact so-called "free-trade
partnerships" that portend to help creates jobs here at home, only succeed occasionally of
creating low wage service jobs in large part in the parts of the world that the globalists
venture with their self-serving con-game. Limiting competition, being on the inside, having
power over others, this is what the global government and one world monopolistic corporations
are all about. The free trade agreements offer all of its members to petition, (and usually
get) allowances to get around many of the safeguards and traditional legal rules that used to
be sacrosanct in world trade. Especially as to food processing. The move toward monopolization
is perhaps the biggest motivator these have for supporting globalist (un)free trade
agreements.
What the true elite globalists (who reside in both political parties in Washington and world
power centers in particular) want is unbridled control over nearly everything in order to unite
us into a global world of subservient slaves unto them. So, what's the answer?
It is easy to witness that the far leftists often do not divulge they are socialists at all.
In recent years, this is changing, now that millions of young voters have been convinced by
their colleges and mass media outlets that socialism IS the answer. In the past, no candidate
would utter the word socialism for fear of many lost votes. Today, a surprisingly large
percentage of politicians in government are onboard. We can easily spot them if we compare
their voting records. Then compare them to the promises made when running for election! So,
before you get too comfortable with politicians who come off as infectiously kind and
compassionate while often using the words 'fairness', "world community", "social equality",
"open borders", "free trade", "globalism", "social justice" and other such pleasantly
attractive bleeding heart politicians using such catch-phrases, be careful. Although Democrats
will more often than not fall into this category of unsung globalists, many on both sides of
the isle fit the bill as well. Some more than others knowingly use these kind sounding
platforms in order to garner votes from the gullible young in particular. History shows over
and over again how gullible citizens can be duped into voting for someone they thought was a
caring politician, then come to discover they voted for a hidden socialist or communist in
fact. Although we can all agree on the responsibilities of our government as spelled out in the
Constitution, our founding fathers warned the new country that we must beware of politicians
who promise more than that great document promises.
Government / corporate partnerships, whether formal or consensual, create insanely
profitable fortunes for their owners while too often screwing over not only Americans but the
worlds taxpaying citizens and their industrialized countries as well. Who do you think the
prime contractors are who build and supply trillions of dollars of military weapons to the
huge, high testosterone American military machine? These war factories are largely owned by
billion-dollar super elites whose huge goliath corporations very often operate under a
duplicity of names that largely hides the true identities of the owners behind them. These true
owners often use layers of sub-corporations operating under various, differing names and
locations providing legal and illegal tax havens around the world. Apple pays zero US taxes for
example using such a scheme. This is just one case amongst thousands. Often the tax havens are
claimed are justified by the existence of a foreign post office box. Seldom are these caught or
fined by our U.S. authorities. When they do occasionally get caught, the fines are typically
just a miniscule part of the total savings they have accumulated over the past years.
With a little research we can find many of the same board members appearing again and again
on the rosters of the quietly interconnected mega corporations. This creates the long-time
problem of immoral collusions that often allow shifting of profits to other tax havens,
allowing American profits to go untaxed and shifting the responsibility fully onto the American
worker. Does it not make sense that a corporation that makes ridiculous record profits such as
Apple and others do, that they should pay their share? This globalist mindset of the elites
creates record profits at the expense of American workers and their spending powers.
Within our public "screwling system" as I call it, students are increasingly taught that
"globalism" is a new religion of sorts, a "cure-all" for world discourse perhaps! Those with
enough power to create massive changes in culture are behind the politically correct culture,
the green movement and most other leftist power grabs. These are often the very same
supra-national corporations and political kingpins who wish to undermine the America we
remember, its legal system while creating a monopolistic economic and totalitarian one world
state. It is wise to remember the confirmed beliefs and admissions o f the godfathers of the
one world order. Of course I am speaking of the Rockefellers, J.P. Morgan and dozens more of
the wealthiest families of the world whom have for centuries verifiably acted upon and talked
of such plans. Their heirs, as well as the new titans such as Bill Gates, Jeff Bezos (Amazon
fame), Elon Musk (Tesla) and other such billionaire or trillionaire types are nearly all on
board vocally with a one world order system of governance. I will cover this much more further
on.
For over 100 years, much of American education has been stealthily entrenched in
anti-Western "cultural Marxism" propaganda and other damaging indoctrinations (as I document
later). Public schools have long promoted the globalism lie, teaching such as the yellow brick
road towards acceptance of a one world order that delivers utopia. It is hard indeed to find a
young person today in America who still believes strongly in traditional values and ideas of
self-responsibility, detest government interference in their lives, loves the Constitution,
what it stands for and protects. They have been indoctrinated by our schools to the point that
common sense no longer matters, for honest discourse in discussions are heavily discouraged in
many a classroom. I prove further along that most of the liberal ideology being increasingly
touted by the left is borne out of a long dreamt of socialist utopia carried out by a
partnership between the corporate globalists, the U.N. and those elites who desire power over
the world. And I can guarantee to you that these are getting impatient. These, their
cohorts/devotees are those whom desire to make the choices as to everything you buy, eat,
drive, live, your job destiny, how much or how little you make, etc. etc. Most of this agenda
is not so hidden, contained already within the prime vehicle to bring about the one world order
with the United Nations Agenda 21 policies taking place around the world.
Considering that at least 50% of the world's wealth is verifiably controlled by the top 1%
consisting of only 67 of the world's wealthiest individuals (and shrinking), this is pretty
good evidence that we are essentially being controlled by a very small corporate global elite
club designed and run for the few. These stats are verified later. The pace of their
destruction is staggering.
Today, the top 200 corporations are bigger than the combined economies of 182 countries and
have twice the economic influence than 80 per cent of all humanity as I prove!
Globalism has come very far in rendering world with greatly reduced amounts of anything
amounting to a capitalistic system that comes with practical safeguards against abuses that
place too much harm to the hard working stiffs. Increasingly, we witness wage inequalities
worse than in the Great Depression. Truly, the top 10 percent earners have left everyone else
in the dust increasingly over the last 50 years. The top 1 percenters incomes during this time
has gone to the moon at the expense of the masses.
Globalism is the vehicle to achieve the elite globalist goals of a one world order,
separate, nationalistic and independent nations with their own borders must be eliminated,
which shouldn't be too much of a problem to accomplish in much of the world, especially in the
current socialist run countries in and around the European continent and America who largely
embrace socialism. What is ironic is that socialist Briton's have turn their backs on Brexit,
meant to centralize nearly all power to the elite globalists. Little did they realize that you
can't have both, at least in the long run.
The League of Nations was the precursor of the United Nations. From their beginnings, the
primary long-term reason for both of them had always been to be the primary central agency of
the world, an assemblage of the top global power brokers created to steer and carry out the new
world order which has been dreamt of for millennium. Its creation has not been, as it touts,
"to create a harmonious and peaceful world". No, the U.N.'s overarching goal has been to create
a one world government using the ploy of globalism. There are ample records dating back before
its very creation, direct from the U.N.'s own publications and top officers and founders to
support this statement which I document quite fully in order to prove that point. This UN has
with much ambition endorsed and sanctioned one world inspired leaders, corporations, groups,
agencies, NGO's and billionaires from countries all around the globe in a long term unified
vision of this new world order in order to further the one world agenda. The help that the UN
has supplied in the creation of most planned wars, coups and disruptions across the world is
well known by those who have done their homework on that subject. It is this cabal and others
that are the enemies of true freedoms, borders, sovereignty across the globe yet are completely
onboard with creating a one world government. Americanism or any other type of governance
besides their one world order. These are the a major part of the world's Deep State apparatus
who are in fact often hidden forces behind the worlds corporate powered global power
structure.
The global multinational corporatist leaders have pushed their un-free trade treaties, long
creating a horrid record of killing millions of good paying jobs across America and nearly
everywhere they venture. These stealing of good jobs have swelled the bank accounts and powers
of these globalist multinational corporations while boosting their wealth into the top 1%
largely at the expense of the masses who now work for far less. lowered wages.
The globalists new world order plan requires a complete breakdown of the required systems
that have historically allowed nation to prosper on its own merits. Sold by both parties is the
false belief that big government can fix everything. This long-running sales job actually
promotes self-interest above all, using deceptive techniques as I cover. Such a sales job
requires a break away from traditions that bind us with our neighbors and family. It requires a
growth in narcissism, self above God so much so that we can now even witiness the horrid
reality of pedophilia becoming more mainstream! Since President Trump's reign, thousands of
pedophilia people and groups have been arrested as never before! Thousand of killer gang
members have been arrested as never before, especially those inside of the MS-13 ruthless
group. This is just one of many actions by this President that leads to my belief that our new
President is holding up his end of the agreement. Like him or not, he at least is holding up
his promises.
History is replete with all the immense damages that the globalist movement has brought upon
the world. These have sold the lie that globalism is the answer to the inequalities between the
haves and the have nots. While the opposite is the real truth! The truth is now evident when
one looks at the condition of the world they have pushed upon all of us over the last many
years.
The elite new world order operatives have infiltrated all the major nations governmental
agencies, top positions of power. Led by the lure of power, connectedness, money, these are
often not aware that they are actually perpetuating a plan that is deadly for much of the world
if the globalist elites they serve should get their way. Unfortunately for these self serving
minions only are concerned with self promotion often. Yet the fact remains that political
expediency and promotions come with compliance. The heads of nearly every major country are
working together with this huge one world apparatus machine that is enclosed within the UN,
World Bank, IMF, European Union, Trilateral Commission, Council on Foreign Relations, the Royal
Family, the corporation called America, and hundreds of other governmental and non-governmental
centers of power. Many of these hide behind nice sounding, humanitarian nameplates. Nearly all
the crises we see play out are ones they actually create, (of which American hegemony around
the world is a large player). For these, the ends always justify the means.
Continual non-stop conflicts around the world, of which America is often at the forefront of
are exponentially increasing. I will explain why and how America's endless war policies has
been implemented over the last many years, but I cannot divulge my take on who and what is
behind much of the openly visible powers working behind much of the news we hear.
Explained will be real, actual reasons why America has spent over 15 years in Iraq,
Afghanistan and Libya with nothing to show besides disasters and deaths, while earning a bad
reputation around the world as a bully. Be assured that the elites and banking system have made
trillions of dollars from these three examples. And lives mean little. Psychopaths don't care
about anything beyond their own desires and powers, and many of these are psychopaths indeed.
They use false justifications as a passport to sell many of their warring's and destructions.
This is globalism.
I predict that the CIA, (a globalist arm of the U.S. Government and deep state), armed with
an unlimited budget and trillions of dollars derived from their years of secret under the radar
dirty operations, are likely to be an agency to be reviewed, revamped or remodeled within the
not so distant future. The truths behind this clandestine, above the law and corrupted agency
may finally be surfacing as well. Ever since the Trump Russian collusion witch hunt also with
an unlimited budget as well both of these conducted, likely during Pres. Trump's time as
president, we should expect to witness a firestorm of controversy and change more momentous
than anything in American history, hopefully.
President Donald Trump has his work cut out, but his years in office have shown he is no
typical deep state establishment fixture of either political party! What we are now witnessing
is perhaps the most important and fateful elections in America's entire history. The results
will either allow the Republican Party to prove itself to be the party of the people, or become
impotent, simply becoming water boys for the Democrat Party, thereafter having little real
power for decades perhaps. The results of the coming elections leading into 2020, (general and
mid-terms), will in fact be the determining factor for whether America and the world reject
conservativism or falls into the clutches of a highly touted, yet untruthful liberalism that
doesn't even resemble the old party of the people that dems used to own in the far past. So, we
must ask ourselves, how did this all come to such a historic moment as we are living in?
The world's worst negotiating strategy is to give the other side everything they want in
exchange for worthless empty promises, yet this is exactly what Trump and his trade team are doing.
All
the Chinese trade team has to do to get rid of tariffs and other U.S. bargaining chips is mutter
some empty phrase about "agreeing in principle" and the U.S. surrenders all its bargaining chips.
If the other side are such naive chumps that they give you everything you want without
actually committing to anything remotely consequential, why bother with a formal agreement?
Just
play the other side for the chumps they are: if they threaten to reinstate tariffs, just issue
another worthless press release about "progress has been made."
The other guaranteed losing strategy in negotiation is advertise your own fatal
weakness, which in Trump's case is his obsession with pushing the U.S. stock market to new highs.
There
is no greater gift he could hand the Chinese trade team than this monumental weakness, for all they
have to do is talk tough and the U.S. stock market promptly tanks, sending the Trump Team into a
panic of appeasement and empty claims of "progress."
The Chinese team has gotten their way for a year by playing Trump's team as chumps and
patsies, so why stop now?
The Chinese know they can get way without giving anything away
by continuing to play the American patsies and using the president's obsession with keeping U.S.
stocks lofting higher to their advantage: declare the talks stalled, U.S. stocks crater, the
American team panics and rushes to remove anything that might have enforcement teeth, reducing any
"trade deal" to nothing but empty promises.
Given their success at playing America's team, why do a deal at all? Just play the
chumps for another year,
and maybe Trump will be gone and a new set of even more naive
patsies enter the White House.
If we put ourselves in the shoes of the Chinese negotiators, we realize there's no need
to sign a deal at all:
the Trump team has gone out of its way to make it needless for
China to agree to anything remotely enforceable. All the Chinese have to do is issue some stern
talk that crushes U.S. stocks and the Trump Team scurries back, desperate to appease so another
rumor of a "trade deal" can be issued to send U.S. stocks higher.
It would be pathetic if it wasn't so foolish and consequential.
"... Pompeo said the United States had long cherished its friendship with the Chinese people, adding the Communist government was not the same thing as the people of China. ..."
"... We are in a civilization war about the global social contract and whether sovereign public finance gets a chance to be compared against the Western centuries old private finance controlled world. ..."
"... The USA has been successful at bribing foreign leaders, taking them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody. ..."
"... The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon. As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it. ..."
Below is a Reuters posting about Mike Pompeo presenting the public/private finance "dog
whistle" at a Hudson Institute think tank gala dinner....the pot calling the kettle
black.
"
WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo on Wednesday stepped up recent
U.S. rhetoric targeting China's ruling Communist Party, saying Beijing was focused on
international domination and needed to be confronted.
Pompeo made the remarks even as the Trump administration said it still expected to sign
the first phase of deal to end a damaging trade war with China next month, despite Chile's
withdrawal on Wednesday as the host of an APEC summit where U.S. officials had hoped this
would happen.
Pompeo said the United States had long cherished its friendship with the Chinese people,
adding the Communist government was not the same thing as the people of China.
"They are reaching for and using methods that have created challenges for the United
States and for the world and we collectively, all of us, need to confront these challenges
... head on," Pompeo said in an address to a gala dinner in New York of the conservative
Hudson Institute think tank.
"It is no longer realistic to ignore the fundamental differences between our two systems,
and the impact that the differences in those systems have on American national security."
"
I posted the above about 6 hours ago on the Weekly Open thread and now get up to read that
the financial markets are down and Trump is tweeting that it is the Fed's fault for not
lowering rates even further even though there are a couple of ZH postings that refer to
China's response to Pompeo's remarks as offensive and maybe a trade deal won't get
signed...
We are in a civilization war about the global social contract and whether sovereign public
finance gets a chance to be compared against the Western centuries old private finance
controlled world.
Haha. The fight is an old one. Who is to be master and who is to be slave. China was supposed to happily be the world's
cheap manufacturer and not get too big for its britches. The USA has been successful at bribing foreign leaders, taking
them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody.
They think every leader is a budding Lenin Moreno or that they can arrange a coup and force into office another Lenin
Moreno. Russia, China, and India will not allow it.
All have at one time or another (Russia quite recently) been under the heel of Western empire. All have old and proud
civilizations.
The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon.
As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it.
Chinese Patriotism: Huawei Smartphone Sales Jump 66% In China As Apple iPhone Sales Slump
by
Tyler Durden
Wed, 10/30/2019 - 13:50
0
SHARES
We're starting to get first-hand knowledge of what we're coining as the
"
blowback
period
"
in the trade war. This is a point in time when Chinese consumers, downright
furious of President Trump's protectionist policies that targeted Chinese companies over the
summer, have collectively stood up to an aggressor (the US), and have
secretly fired back,
targeting US firms by abandoning their products for domestic ones, all in the name of patriotism.
Honestly, over time, the trade war, if solved next month or next year, or who knows at this point
when it'll be solved, will have devastating consequences for corporate America as their market
share in China will erode as patriotism forces consumers to gravitate towards domestic brands.
A new report from
Canalys
, an
independent research firm focused on technology, has linked patriotism in China for the jump in
Huawei smartphone sales in the third quarter.
Huawei's 3Q19 smartphone sales soared by 66% YoY in China
, compared with a 31%
increase in 2Q19.
Between 2Q-3Q, President Trump escalated the trade war to near full-blown, and also attacked
individual companies with economic sanctions and banned certain ones from doing business in the US.
Chinese consumers responded by
ditching American products, like Apple iPhones
, as
this is some of the first evidence we've seen of the blowback period, likely to worsen in 4Q19
through 1Q20.
As shown in the chart below, the July-September period of 2019 was a devastating quarter for
Huawei's top rivals, including Vivo, Oppo, Xiaomi (other Chinese brands), along with depressing
sales from Apple.
Smartphone shipments overall were 97.8 million, down 3% from 100.6 million for the same period
last year.
Apple's YoY slump gained momentum from -14% in 2Q to -28% for 3Q
.
Chinese patriotism
allowed Huawei's market share in the country to expand from
24.9% to 42.4% over the past year.
Canalys analyst Mo Jia said, "The U.S.-China trade war is also creating new opportunities,"
adding that, "
Huawei's retail partners are rolling out advertisements to link Huawei with
being the patriotic choice, to appeal to a growing demographic of Chinese consumers willing to take
political factors into account when making a purchase decision.
"
The blowback period has begun, and corporate America should be terrified that their market share
in China is about to evaporate.
Oh No! Interest on the Debt Is Half As Large as the 1990s Peak!
By Dean Baker
The Washington Post had a piece * on newly released data on the federal budget deficit.
The piece included the obligatory comments from the always wrong budget "experts" at the
Committee for a Responsible Federal Budget. It also warned readers:
"U.S. debt is considered one of the safest investments in the world and interest rates
remain low, which is why the government has been able to borrow money at cheap rates to
finance the large annual deficits. But the costs are adding up. The government spent about
$380 billion in interest payments on its debt last year, almost as much as the entire federal
government contribution to Medicaid."
"Almost as much as the entire federal government contribution to Medicaid!" Think about
that. Try also thinking about the fact that interest payments were around 1.7 percent of GDP
last year (before deducting money refunded from the Federal Reserve). That compares to a peak
of 3.2 percent of GDP in 1991. Are you scared yet?
It's also not quite right to claim that interest rates in the United States are especially
low, at least not compared to other rich countries. The U.S. pays an interest rate on 10-year
government bonds that is more two full percentage points higher than the interest rate paid
by Germany and the Netherlands. It's even higher than the interest rate paid by Greece.
"As I have stated strongly before, and just to reiterate, if Turkey does anything that
I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy
and obliterate the Economy of Turkey
(I've done before!)
"
Donald J. Trump
"China uses a host of monopolizing strategies to extend its geopolitical and commercial
power, everything from below cost pricing to grab market share, patent trolling,
espionage, mergers, and financial manipulation. In fact, the CCP is best understood as
a giant monopoly that also controls a nation of 1.4 billion people and a large military
apparatus...
China's biggest asset in gaining power was how most people in the West just didn't
realize that the CCP aimed to use it. Now China's cover is blown. The raw exercise of
power to censor a random Houston Rockets basketball executive has made millions of
people take notice. Everyone knows, the Chinese government isn't content to control its
own nation, it must have all bow down to its power and authority.
Matt overstates the headline I think. The empowerment of China may have gone into higher
gear with Bill Clinton perhaps, but has been fully supported by every President, both
parties, and especially the moneyed interests in the US, who place their short term greed
first and foremost.
Follow the money. China is certainly not alone among organizations, and even nations, in
playing on the personal greed, divided loyalties, and lust for power of our political and
financial class.
This in itself is nothing new. But the extent of it, and the fashionable acceptance of it
amongst our society's elites, the industrialization of political corruption and big money
in politics, has been breathtaking.
That looks like vast and generally incorrect exaggeration. While China mode substantial
progress in catching up with the West, the technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size
in semiconductors in one example; it is impossible to shrink it further; smartphones reached
saturation level, and hardware wise their capabilities are far above what a regular user needs or
wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its
ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is
subject to all the ills the neoliberal society tend to bring into the country. Including a very
high level of inequality.
And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ? And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ?
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
"... China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists, Kashmir and India, USA trade pressure, Japan and South Korea are competitors. ..."
It is very popular these days to talk and write about the "trade war" between the United
States and China. But is there really one raging? Or is it, what we are witnessing, simply a
clash of political and ideological systems : one being extremely successful and optimistic, the
other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one
should just look at the map of the globe, between the two world wars), Europe and later the
United States, Canada and Australia, kept plundering all the continents of natural resources,
holding hundreds of millions of human beings in what could be easily described as 'forced
labor', often bordering on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition,
and to toss around huge amounts of cash, for the sole purpose of indoctrinating local and
overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open and hidden),
and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and
that included the 'economic system) used to have absolutely no competition. Systems that were
created to challenge it, were smashed with the most brutal, sadistic methods. One only needs
recall invasions from the West to the young Soviet Union, with the consequent genocide and
famines. Or other genocides in Indochina, which was fighting its wars for independence, first
against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some
Communist, others socialist or even populist, are ready to defend their citizens, and to use
the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using
its well-established propaganda machinery. First, to smear them and then, if they resist, to
directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is
punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity,
only. It was constructed on fear, oppression and brutal force. For centuries, it has clearly
been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to
survive, defending they own cultures, and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a
forward-looking, optimistic and extraordinarily productive society. Its scientific research is
now second to none. Its culture is thriving. Together with its closest ally, Russia, China
excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any
major country, which would set up its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient,
ideologically, politically, economically and intellectually. Where it is not fully
self-sufficient, it can rely on its friends and allies. Those allies are, increasingly, located
outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its
socialist motherland (applying "socialism with the Chinese characteristics" model). It is
trying to construct a global system which has roots in the thousands of years of its history
(BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is
producing, at a higher pace and often at higher quality than the countries in Europe, or the
United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to
a country that creates things for the sake and benefit of its people. For centuries, Asian,
African and Latin American people were ordered what and how to produce, where and for how much
to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its
corporations) desired. It was forcing countries all over the world, to buy its products. If
they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China,
and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly
well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could
sink the US economy, or perhaps the economy of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance
scientific research, and use the gains to improve the lives of ordinary people (they will be no
extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply
better, than those which are reigning in the West and its colonies. And because they are
working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are
horrified that perhaps, soon, the world will wake up and see the reality. Which is actually
already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is
nothing so terrifying to London and Washington as the combination of these words: "Socialism/
Communism, Asian, success". The West invents new and newer 'opposition movements', it then
supports them and finances them, just in order to then point fingers and bark: "China is
fighting back, and it is violating human rights", when it defends itself and its citizens. This
tactic is clear, right now, in both the northwest of the country, and in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes
and fragrances, and the United States, better airplanes. But the progress that China has
registered during the last two decades, is remarkable. Were it to be football, it is China 2:
West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many
fields; catch up, and surpass the West. Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements,
even with the poorest of the poor countries in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing
the world from a clearly fundamentalist view. It cannot help it: it is absolutely, religiously
convinced that it has to give orders to every man and woman, in every corner of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will
testify: what is taking place there is not good, even for the ordinary citizens. Western
governments and corporations are now robbing even their own citizens. The standard of living is
nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society,
although you would never guess so, if you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China
is unfair", that it is "taking advantage" of the West. President Trump is "defending" the
United States against the Chinese 'Commies'. But the more he "defends them", the poorer they
get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting
richer and richer. They are getting more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in
charge, or let's say, 'the only kid on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and
millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US
President or perhaps British Prime Minister, before it makes any essential economic decision?
Should it control the exchange rate of RMB, in accordance with the wishes of the economic tsars
in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist)
China will soon become the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on
purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the
U.S. standoff with Russia during the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it,"
he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with
Russia. He noted that he worked in the Reagan administration: "I remember President Reagan
waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of
the United States. It was an ideological battle, which the United States, unfortunately won,
because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But
China is savvy. It is beginning to understand the game. And it is ready, by all means, to
defend the system which has pulled almost all its citizens out of misery, and which could, one
day soon, do the same for the rest of the world.
US is hemorrhaging around $1.7 trillion dollars(according to the bond king) a year with
the “greatest economy ever” and near zero interest rate. Clearly, this is not
sustainable and can’t last much longer. When the jig is up, whoever has the most
guns(not gold) will prevail. .
China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting
Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists,
Kashmir and India, USA trade pressure, Japan and South Korea are competitors.
China has some bright spots with Pakistan, North Korea and a very open hand negotiated
with the African Union to colonize that continent etc. Russia is neutral but if it is to fall
it will probably be towards Europe not the East.
Vietnam is falling away leaving Myanmar and Cambodia. Thailand might already be a Western
proxy.
You've broken down nothing. China can sell somewhere else, since it makes all the stuff.
The US makes very little and will pay far more Chinese equivalent goods. Further, China's GDP
is now 80% domestically generated; of the remaining 20% export income, the US accounts for
only 30% of it, ie 6%. China can stand a loss of 6% easily. While the Americans, led the
Ape-in-Chief have been thumping their chests, the nimble Chinese have taken markets
everywhere, diversified their manufacturing bases and transportation systems. The US is
shouting at the Moon. Enjoy the tan...
'The war against the Soviet Union was hardly a war for economic survival of the United
States. It was an ideological battle, which the United States, unfortunately won,'
Really !!! have a read of Gulag Archipelago before you come out with anything this
stupid.
The author apparently has never been to China to know what their perspective is. Instead,
he is superimposing what western ideologs think it is. To Americans, it is political and
ideological struggle. To the Chinese, it's basic economics and the welfare of its people. The
Chinese know better than anyone else, what it was like being down in the gutter for almost
200 years, about the time the British showed up with their opium trade in the 1830's. The
Chinese have made great strides in the last 45 years to get their people out of poverty,
modernize, and build an industrialized economy that rivals any other economy in the world.
The truth is, it's a feat that Americans are tacitly envious of, and will do whatever it
takes to cut the Chinese down.
The problem is, America is not the shining example of success and exceptionalism it thinks
it is. It has fallen behind the power curve and isn't competitive any longer. Free trade is
far and away better in China than what you will find in America. Don't believe it? Go there
and see for yourself. Then ask yourself, why did the greater chunk of American manufacturing
left and went to China in the first place, (besides chasing cheap labor), If it wasn't for
free trade?
Many other countries don't share the same ideology or values with Americans either,
particularly when America can't provide for the welfare of its own people, so why would they
want to copy that model of decay?
attractive properties in shenzhen or any tier 1 chinese cities are in the millions or tens
of millions of dollars. not likely to jump higher anytime soon but whole lot of downside
potential. Vancouver is full up. why not seattle, DC or somewhere with "cheap" prices?
They have two alternatives to SWIFT - CIPS & NSPK. Further, both Russia and China are
using their own and local currencies in trade, bypassing not only SWIFT fees and delays, but
the USD exchange rate rip-off.
Frankly ZH readers are about 10 yrs behind the latest developments, hence the rednecks
ranting about their already lost cause. Do some research.
"So far, China has exercised restraint." ...because they don't want the world to see what
a truly monstrous regime runs that country...much like Israhell tries to silence and stifle
criticism of its monstrous racist and supremacist regime.
Meanwhile the West is on meds as it willingly takes the dagger someone is handing it to
enable it to commit suicide..
I wonder who is pulling strings in the background?
Canada and australia most certainly did NOT plunder the world, at anytime. We have all the
resources we will ever need,and we have never sought an empire. Don't try to drag us down
into your pit for company. It is your pit, along with Britain. Let the British keep you
company.
China "is ready to defend the system which has pulled almost all its citizens out of
misery"
China is very late to the game of "printing debt" It has taken the USA 100 years to
bankrupt itself. China with it's 350% of GDP has managed it in 30 years.
That looks like vast and generally incorrect exaggeration. While China mode substantial progress in catching up with the West, the
technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size in semiconductors in one example;
it is impossible to shrink it further; smartphones reached saturation level, and hardware wise their capabilities are far above what
a regular user needs or wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is subject to all the ills the neoliberal
society tend to bring into the country. Including a very high level of inequality.
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
It is very popular these days to talk and write about the "trade war" between the United States and China. But is there really
one raging? Or is it, what we are witnessing, simply a clash of political and ideological systems : one being extremely successful
and optimistic, the other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one should just look at the map of the
globe, between the two world wars), Europe and later the United States, Canada and Australia, kept plundering all the continents
of natural resources, holding hundreds of millions of human beings in what could be easily described as 'forced labor', often bordering
on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition, and to toss around huge amounts of cash,
for the sole purpose of indoctrinating local and overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open
and hidden), and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and that included the 'economic system)
used to have absolutely no competition. Systems that were created to challenge it, were smashed with the most brutal, sadistic methods.
One only needs recall invasions from the West to the young Soviet Union, with the consequent genocide and famines. Or other genocides
in Indochina, which was fighting its wars for independence, first against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some Communist, others socialist or even populist,
are ready to defend their citizens, and to use the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using its well-established propaganda machinery.
First, to smear them and then, if they resist, to directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity, only. It was constructed on fear, oppression
and brutal force. For centuries, it has clearly been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to survive, defending they own cultures,
and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a forward-looking, optimistic and extraordinarily
productive society. Its scientific research is now second to none. Its culture is thriving. Together with its closest ally, Russia,
China excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any major country, which would set up
its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient, ideologically, politically, economically
and intellectually. Where it is not fully self-sufficient, it can rely on its friends and allies. Those allies are, increasingly,
located outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its socialist motherland (applying "socialism
with the Chinese characteristics" model). It is trying to construct a global system which has roots in the thousands of years of
its history (BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is producing, at a higher pace and often at
higher quality than the countries in Europe, or the United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to a country that creates things for
the sake and benefit of its people. For centuries, Asian, African and Latin American people were ordered what and how to produce,
where and for how much to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its corporations) desired. It was forcing countries
all over the world, to buy its products. If they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China, and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could sink the US economy, or perhaps the economy
of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance scientific research, and use the gains to improve
the lives of ordinary people (they will be no extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply better, than those which are reigning
in the West and its colonies. And because they are working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are horrified that perhaps, soon, the world will wake
up and see the reality. Which is actually already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is nothing so terrifying to London and Washington
as the combination of these words: "Socialism/ Communism, Asian, success". The West invents new and newer 'opposition movements',
it then supports them and finances them, just in order to then point fingers and bark: "China is fighting back, and it is violating
human rights", when it defends itself and its citizens. This tactic is clear, right now, in both the northwest of the country, and
in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes and fragrances, and the United States,
better airplanes. But the progress that China has registered during the last two decades, is remarkable. Were it to be football,
it is China 2: West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many fields; catch up, and surpass the West.
Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements, even with the poorest of the poor countries
in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing the world from a clearly fundamentalist
view. It cannot help it: it is absolutely, religiously convinced that it has to give orders to every man and woman, in every corner
of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will testify: what is taking place there is
not good, even for the ordinary citizens. Western governments and corporations are now robbing even their own citizens. The standard
of living is nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society, although you would never guess so, if
you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China is unfair", that it is "taking advantage"
of the West. President Trump is "defending" the United States against the Chinese 'Commies'. But the more he "defends them", the
poorer they get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting richer and richer. They are getting
more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in charge, or let's say, 'the only kid
on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US President or perhaps British Prime Minister,
before it makes any essential economic decision? Should it control the exchange rate of RMB, in accordance with the wishes of the
economic tsars in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist) China will soon become
the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the U.S. standoff with Russia during
the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it," he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with Russia. He noted that he worked
in the Reagan administration: "I remember President Reagan waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological
battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled
almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world.
That said, as
Bloomberg
noted, Liu didn't address specifics about the trade talks in his speech. Instead, the
vice premier said China would expand investments in core technologies to ensure the economic
restructuring of the economy was stable, adding that economic activity in the year ahead is "very
bright."
"We're not worried about short-term economic volatility. We have every confidence in our
ability to meet macroeconomic targets for the year," he said.
As reported on Friday, ahead of the latest round of talks, President Trump's top economic
advisors and industry experts warned him of an economic downturn if a further escalation in the
trade war is seen by 2020. As such, it is likely that a lite trade deal could be on the table next
month.
But as our readers have recently learned, the trade war didn't start the synchronized global
downturn, which has been almost entirely a function of China's clogged up credit impulse...
... so any deal - lite or otherwise - won't result in an immediate acceleration of global
growth; indeed, as some speculate, failure to observe a substantial economic rebound following a
"deal" could well mark the point when central banks and governments finally throw in the towel, as
they finally usher in the final lap in the global race to
debase
destroy fiat currencies and
hyperinflate away the debt: MMT and Helicopter Money.
Trump's pathetic Trade war accomplished nothing. US exports down
18% globally. Farmer destroyed. US markets for all goods harmed.
The world is offloading any and all dependence on US products.
Impulsive stupid jerk. 45% of the world population on US
Sanctions, rising black markets, US supply chain disruptions, US
manufacturing in a recession.
Tariffs are tax deductible so they
do not accumulate any tax benefit to the US Treasury. They are
virtually all rolled over into the national debt. So while the
consumer may not notice a rising CPI, they are getting drown in
Trump Debt, the largest spending deficits in US history, largest
debt to GDP of over 110% and rising. Trump has the fastest
acceleration of US debt of any white house occupancy nearly 4
trillion in 2.7 years. It is obvious Trump is clueless in
virtually everything. Has no capacity to comprehend a thing.
Look at this scatterbrained Turkey Kurds fiasco. Impulsive,
thoughtless and accomplished nothing. US troops now guarding
Syrian oil. Astonishing. Everything this guy touches turned into a
burning crap filled dumpster fire.
'I will be so good at the military, your head will spin'
"When those 'gunds' start shooting they tend to do things"
Then there are no deals from the self-proclaimed "art of the
Deal"... nothing. Look at Iran. He has made negative progress
across the board. Thank to the orange stupid nations across the
globe are circumventing US Dollar Reserve. Each day the US
importance and more importantly reliability is diminished.
Look at Trump in high tech... Merck has developed an Ebola
vaccine in EUROPE not the USA. The USA hasn't even approved it
yet. What is Trump doing... ATTACKING BIG PHARMA. Trumptards love
seeing that. Yet it is the Trumptards that keep screaming to buy
Murica products but if they have to pay more for them, then
suddenly they demonize the US companies. Big Pharma will be the
next sector to joint Semiconductor to leave the USA.
Trump blacklist Big tech. Why? Tech products have a very short
shelf life. If the US doesn't sell tech product what do they have
that others want? COAL? Soy Beans? From smart to stupid. Look at
Intel and Microsoft. Trump band Intel Chip sales to China and
threatens Microsoft operating software. In one year China now has
RISC V chips from Alibaba, all open source and the Chinese
Military has switched to Linux and UNIX GNU. So who loses here?
The US tech businesses. Look at Micron dying on the vine, tossed
from China.
Meanwhile China has 5G and has replaced all US components in
its boards with the help of Hitachi and Panasonic who are doing
the same with all their electronics to avoid Trump Blacklist
compliance. Trump is low tech and dumb as dirt. The US Tech sector
is being carpet bombed under Trump... and without tech, what
products does the US have to sell that world markets want? Not a
god damn thing.
Let's remember that Trump didn't want a partial deal... Now he
will take anything to get him out of his self-made wreckage.
Meanwhile impeachment is coming... Mista no deals is going down in
flames.
Last year 300,000 us farmers grew soy
and had 110 mmt. This year there are 100,000 us Soy farmers
left and they grew 34 mmt... not enough to export.
...
Arbitrary and capricious meddling by US politicians in
commodity contracts renders all contracts voidable under
force majeure. I would have thought with your handle you
would have known this. Those markets will never come back.
They will forever be marginalized and smaller. Trump's
damage to US trade is permanent.
In other words, consolidation among large corp farmers,
decimation of the smaller family farmers? I am truly
asking, but seems to remind me of the trend since the
1980s.
Trump and China claimed "substantial progress" this past spring,
and it all fell apart within a couple months. The same thing will
happen on this "deal"....
Former World Leaders: The Trade War Threatens
the World's Economy https://nyti.ms/2MAFOTC
NYT - Kevin Rudd, Helen Clark and Carl Bildt - October 11
Despite an interim deal, global peace and prosperity
remain at risk if the United States and China do not
fully resolve their conflict.
(The authors are former prime ministers
of Australia, New Zealand and Sweden.)
This piece has been updated to reflect news developments.
The 18-month trade war between the United States and China represents the single greatest
threat to global economic growth.
President Trump announced on Friday a preliminary trade détente with China, saying
that the two countries have a verbal agreement for an initial phase of a deal. The agreement
reportedly includes concessions from China to protect American intellectual property, to
accept guidelines on managing its currency and to buy tens of billions worth of American
agricultural products. Washington, for its part, will not go through next month with placing
more tariffs on Chinese products.
This is an encouraging sign, but a verbal agreement is just a first step. A failure to
bring the trade war to a final conclusion significantly increases the risk of recession next
year in the United States, Europe, Japan and other developed and emerging economies. It would
also seriously undermine China's near-term growth prospects.
That's why, as representatives of a group of 10 former prime ministers and presidents from
center-left and center-right governments that have enjoyed close relations with both the
United States and China, we are writing to urge Presidents Donald Trump and Xi Jinping to
reach a substantive trade agreement by year's end. It's time to bring this source of global
economic uncertainty to a close.
America's and China's prosperity have been built on global free trade. America has
profited immensely from access to global markets since its birth. China, since opening up 40
years ago, has lifted millions of its people out of poverty largely through global trade.
Indeed, much of the prosperity enjoyed by people across the world is anchored in our ability
to sell goods and services freely across national boundaries.
Now, however, we see global growth in trade lagging behind general economic growth for the
first time in decades. In part, this is the product of the expanding trade war between
America and China, the world's two largest economies. In part, it is because of a more
general outbreak of protectionism around the world. Both these factors threaten continued
global prosperity.
We recognize, as former leaders of countries with longstanding economic relationships with
China, the real difficulties regarding a number of Beijing's trade and economic practices. We
understand, for example, the challenges that arise from Chinese policies on intellectual
property and technology transfer, its restrictions on access to its markets, and its
subsidization of private and public companies that are active in the global marketplace. We
believe that these practices need to change in whichever countries may use them. But it is
particularly important in China, because it is the world's second-largest economy.
At the same time, as countries long committed to the principles of free trade, we do not
see the ever-widening tariff war, started by the United States, as an effective way to
resolve trade and economic disputes. Tariffs, by definition, are the enemy of free trade.
Their cumulative impact, particularly combined with the current resurgence of protectionism
worldwide, only depresses economic growth, employment and living standards. Tariffs raise the
cost of living for working families as consumer prices are driven up.
Stock markets rose on Friday with the news of the preliminary deal. The tariff war has
been creating economic uncertainty, depressing international investor confidence, compounding
downward pressure on growth and increasing the risk of recession. The disruption of global
supply chains is already profound, and it may continue until a final deal is reached.
We believe that the World Trade Organization, despite its limitations, is best positioned
to address China's trade practices. We also believe that the W.T.O. is the most appropriate
forum in which to resolve trade disputes. So we urge the United States and China to work with
other member states to strengthen the W.T.O.'s institutional capacity.
Our group of former prime ministers and presidents includes François Fillon of
France, Joe Clark of Canada, Enrico Letta of Italy, Jan Peter Balkenende of the Netherlands,
Felipe Calderón and Ernesto Zedillo of Mexico, and Han Seung-soo of South Korea. Given
our collective experience, we are not naïve about the inherent complexities in
negotiating trade agreements. Many of us have negotiated free-trade pacts with both the
United States and China. We are deeply familiar with the concerns of each country, including
the domestic political constituencies that argue for continued protection.
Many of those domestic concerns have focused on the long-term enforcement of any
agreement. On this point, we argue that it is in China's own long-term economic interest to
ensure the effective implementation of any new trade deal -- whether involving intellectual
property, technology transfer, state subsidies or market access. Such policies would also
need to apply to all of China's trading partners, just as they would need to apply to its
relationship with the United States.
On the question of enforcement, China must be acutely aware that if it fails to comply
with the terms of the agreement, an already damaging trade war is likely to resume. A new
trade agreement should include strong enforcement provisions, along with strengthened W.T.O.
dispute-resolution mechanisms, to give greater confidence to both parties.
For these reasons, and given the gravity of the global economic outlook for 2020, we urge
both countries to exercise every effort to reach a substantive agreement this year. We also
urge the United States to withdraw the punitive tariffs it has imposed -- and that China do
the same with the reciprocal tariffs it has enacted.
Beyond trade, we are anxious about the wider strategic impact of any further decoupling of
the Chinese and the American economies, particularly in technology and finance. Such a
decoupling would present a long-term threat to global peace and security.
It would also effectively constitute the first step in the declaration of a new Cold War.
As with the last Cold War, many nations would be forced to choose between the two powers. And
that is a choice none of us wants to make.
"... Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the Peterson Institute for International Economics shows that since the beginning of 2018, China has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7 percent. China imposed tariffs only on U.S. commodities that can be replaced with imports from other countries at similar prices. It actually lowered duties for those U.S. products that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals. Consequently, China's import prices for the same products have dropped overall, in spite of higher tariffs on U.S. imports. ..."
"... Beijing has proved much more capable than Washington of minimizing the pain to its consumers and economy. ..."
"... The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the practices of U.S. trading partners; they come from the United States' own spending habits. ..."
"... The United States has run a persistent trade deficit since 1975, both overall and with most of its trading partners. Over the past 20 years, U.S. domestic expenditures have always exceeded GDP, resulting in negative net exports, or a trade deficit. ..."
"... Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall U.S. trade deficit. ..."
"... The U.S. economy, on the other hand, has had the longest expansion in history, and the inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped to 2.0 percent from the first quarter's 3.1 percent. ..."
"... If the trade war continues, it will compromise the international trading system, which relies on a global division of labor based on each country's comparative advantage. Once that system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility of trade wars -- countries will start decoupling from one another. ..."
Everyone Loses in the US-Chinese Clash
-- but Especially Americans
... Economists reckon the dead-weight loss arising from the existing tariffs on $200
billion in Chinese imports to be $620 per household, or about $80 billion, annually. This
represents about 0.4 percent of U.S. GDP. If the United States continues to expand its tariff
regime as scheduled, that loss will more than double.
Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the
Peterson Institute for International Economics shows that since the beginning of 2018, China
has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has
lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7
percent. China imposed tariffs only on U.S. commodities that can be replaced with imports
from other countries at similar prices. It actually lowered duties for those U.S. products
that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals.
Consequently, China's import prices for the same products have dropped overall, in spite of
higher tariffs on U.S. imports.
Beijing's nimble calculations are well illustrated by the example of lobsters. China
imposed a 25 percent tariff on U.S. lobsters in July 2018, precipitating a 70 percent drop in
U.S. lobster exports. At the same time, Beijing cut tariffs on Canadian lobsters by three
percent, and as a result, Canadian lobster exports to China doubled. Chinese consumers now
pay less for lobsters imported from essentially the same waters.
THE INESCAPABLE DEFICIT
Beijing has proved much more capable than Washington of minimizing the pain to its
consumers and economy. But the trade war would be more palatable for Washington if its
confrontation with China were accomplishing Trump's goals. The president thinks that China is
"ripping off" the United States. He wants to reduce the United States' overall trade deficit
by changing China's trade practices. But levying tariffs on Chinese imports has had the
paradoxical effect of inflating the United States' overall trade deficit, which, according to
the U.S. Census Bureau, rose by $28 billion in the first seven months of this year compared
with the same period last year.
The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the
practices of U.S. trading partners; they come from the United States' own spending habits.
The United States has run a persistent trade deficit since 1975, both overall and with most
of its trading partners. Over the past 20 years, U.S. domestic expenditures have always
exceeded GDP, resulting in negative net exports, or a trade deficit. The shortfall has
shifted over time but has remained between three and six percent of GDP.
Trump wants to boost
U.S. exports to trim the deficit, but trade wars inevitably invite retaliation that leads to
significant reductions in exports. Moreover, increasing the volume of exports does not
necessarily reduce trade deficits unless it is accompanied by a reduction in the country's
spending in terms of consumption and investment. The right way to reduce a trade deficit is
to grow the economy faster than concurrent domestic expenditures, which can be accomplished
only by encouraging innovation and increasing productivity. A trade war does the opposite,
damaging the economy, impeding growth, and hindering innovation.
Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall
U.S. trade deficit. If China buys more from the United States, it will purchase less from
other countries, which will then sell the difference either to the United States or to its
competitors.
For example, look at aircraft sales by the U.S. firm Boeing and its European
rival, Airbus. At the moment, both companies are operating at full capacity. If China buys
1,000 more aircraft from Boeing and 1,000 fewer from Airbus, the European plane-maker will
still sell those 1,000 aircraft, just to the United States or to other countries that might
have bought instead from Boeing.
China understands this, which is one reason it hasn't put
higher tariffs on U.S.-made aircraft. Whatever the outcome of the trade war, the deficit
won't be greatly changed.
A RESILIENT CHINA
The trade war has not really damaged China so far, largely because Beijing has managed to
keep import prices from rising and because its exports to the United States have been less
affected than anticipated.
This pattern will change as U.S. importers begin to switch from
buying from China to buying from third countries to avoid paying the high tariffs. But
assuming China's GDP continues to grow at around five to six percent every year, the effect
of that change will be quite modest.
Some pundits doubt the accuracy of Chinese figures for
economic growth, but multilateral agencies and independent research institutions set Chinese
GDP growth within a range of five to six percent.
Skeptics also miss the bigger picture that China's economy is slowing down as it shifts to
a consumption-driven model. Some manufacturing will leave China if the high tariffs become
permanent, but the significance of such a development should not be overstated. Independent
of the anxiety bred by Trump's tariffs, China is gradually weaning itself off its dependence
on export-led growth. Exports to the United States as a proportion of China's GDP steadily
declined from a peak of 11 percent in 2005 to less than four percent by 2018. In 2006, total
exports made up 36 percent of China's GDP; by 2018, that figure had been cut by half, to 18
percent, which is much lower than the average of 29 percent for the industrialized countries
of the Organization for Economic Cooperation and Development. Chinese leaders have long
sought to steer their economy away from export-driven manufacturing to a consumer-driven
model.
To be sure, the trade war has exacted a severe psychological toll on the Chinese economy.
In 2018, when the tariffs were first announced, they caused a near panic in China's market at
a time when growth was slowing thanks to a round of credit tightening. The stock market took
a beating, plummeting some 25 percent. The government initially felt pressured to find a way
out of the trade war quickly. But as the smoke cleared to reveal little real damage,
confidence in the market rebounded: stock indexes had risen by 23 percent and 34 percent on
the Shanghai and Shenzhen exchanges, respectively, by September 12, 2019. The resilience of
the Chinese economy in the face of the trade war helps explain why Beijing has stiffened its
negotiating position in spite of Trump's escalation.
China hasn't had a recession in the past 40 years and won't have one in the foreseeable
future, because its economy is still at an early stage of development, with per capita GDP
only one-sixth of that of the United States. Due to declining rates of saving and rising
wages, the engine of China's economy is shifting from investments and exports to private
consumption. As a result, the country's growth rate is expected to slow. The International
Monetary Fund projects that China's real GDP growth will fall from 6.6 percent in 2018 to 5.5
percent in 2024; other estimates put the growth rate at an even lower number.
Although the
rate of Chinese growth may dip, there is little risk that the Chinese economy will contract
in the foreseeable future. Private consumption, which has been increasing, representing 35
percent of GDP in 2010 and 39 percent last year, is expected to continue to rise and to drive
economic growth, especially now that China has expanded its social safety net and welfare
provisions, freeing up private savings for consumption.
The U.S. economy, on the other hand, has had the longest expansion in history, and the
inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped
to 2.0 percent from the first quarter's 3.1 percent. The trade war, without taking into
account the escalations from September, will shave off at least half a percentage point of
U.S. GDP, and that much of a drag on the economy may tip it into the anticipated downturn.
(According to a September Washington Post poll, 60 percent of Americans expect a recession in
2020.) The prospect of a recession could provide Trump with the impetus to call off the trade
war. Here, then, is one plausible way the trade war will come to an end. Americans aren't
uniformly feeling the pain of the tariffs yet. But a turning point is likely to come when the
economy starts to lose steam.
If the trade war continues, it will compromise the international trading system, which
relies on a global division of labor based on each country's comparative advantage. Once that
system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility
of trade wars -- countries will start decoupling from one another.
China and the United States are joined at the hip economically, each being the other's
biggest trading partner. Any attempt to decouple the two economies will bring catastrophic
consequences for both, and for the world at large. Consumer prices will rise, world economic
growth will slow, supply chains will be disrupted and laboriously duplicated on a global
scale, and a digital divide -- in technology, the Internet, and telecommunications -- will
vastly hamper innovation by limiting the horizons and ambitions of technology firms.
...
"... Yes, the U.S. government can hurt Huawei in the short term by limiting their access to technology (and to certain foreign markets). But, absent a viable competitor, this won't have much impact in the long term. Because Huawei is fundamentally not a technology company. Huawei is a human resources company. And is kind of obsessed with survival. ..."
"... Huawei's fundamental purpose has always been about survival. ..."
"... Huawei, like most engineering-based enterprises, has only one real resource, which is the cumulative brainpower of its people. This is the resource that creates the products and sells them to their customers. And as technology changes quickly, they must continually create and recreate the products – and therefore the value of the enterprise. Huawei's main strength is the system they have developed for the creation, assessment and distribution of value by over 190,000 people. It's about HR strategy. ..."
Huawei is going to beat Trump with human resources
By Jeff Towson
President Trump's placement of Huawei on the U.S. entity list was a body blow. The
magnitude of the hit should not be understated. Being cut off from U.S. technology so
suddenly staggered the multinational. But, to their credit, Huawei didn't go down. They took
the hit and stayed on their feet.
I'm not really sure what the U.S. government thought it would achieve with the ban. To
stop Huawei's growth in international markets? To shift 5G market share to Ericsson and
Nokia? To cripple the company? Just an assertion of principle?
I think they really just don't understand Huawei.
Yes, the U.S. government can hurt Huawei in the short term by limiting their access to
technology (and to certain foreign markets). But, absent a viable competitor, this won't have
much impact in the long term. Because Huawei is fundamentally not a technology company.
Huawei is a human resources company. And is kind of obsessed with survival.
Huawei's core strategy has always been about survival.
If you read Ren Zhengfei's talks and papers going back to the early 1990's, what jumps out
at you is how different Huawei is. The goal of the company has never really been about money.
Nor about becoming a tech giant. Nor about innovation. And it has definitely not been about
going public and getting a big payday. Huawei's fundamental purpose has always been about
survival.
"Being big and strong temporarily is not what we want. What we want is the ability and
resilience to survive sustainably," said Ren in 2001.
Actually he has been talking for literally decades about how Huawei can survive long-term
– and about the common causes of corporate decline. My simplistic take is that Ren came
up with a fairly logical plan for long-term survival: Serve your customers no matter what.
Then get big and slowly grind your competitors down with lower costs and greater R&D
spending. And within this, the only resource you really have are your people and their
cumulative brainpower.
Huawei's main resource is its people.
Huawei, like most engineering-based enterprises, has only one real resource, which is the
cumulative brainpower of its people. This is the resource that creates the products and sells
them to their customers. And as technology changes quickly, they must continually create and
recreate the products – and therefore the value of the enterprise. Huawei's main
strength is the system they have developed for the creation, assessment and distribution of
value by over 190,000 people. It's about HR strategy.
Unlike the companies in the U.S. and Europe, where the shareholders are the stakeholders
with ultimate say or multiple stakeholders, such as employees, owners and the community, at
Huawei, the only stakeholders you ever really hear about are the current employees. It's all
about the top contributing, current employees. Shareholders, providers of capital, retired
employees and even the founders are all a distant second in importance.
Note how different this is to other large engineering-focused companies (say GM and
Bosch), where much of the value goes into guaranteed salaries (regardless of contribution)
and into post-retirement benefits (i.e., not current employees). Huawei is not only focused
primarily on this one group, they are also operating much more as a meritocracy with regards
to labor.
Huawei to me looks a lot like what 3G capital has been doing in consumer-facing companies
like Budweiser and Burger King. They have instituted "meritocracy and partnership" on a
massive scale in a knowledge business. There is a lot of ownership. And you rise and fall
based on your performance.
Huawei is awesome at inspiring dedication in their top contributing, current employees.
And that is pretty logical. If brainpower is Huawei's main resource, this is the group that
creates that value. So recruiting and motivating this group is the biggest priority. And they
don't just want them motivated. They want them "all in."
In practice, this is actually pretty complicated. It's a big company. Employees are at
different stages of their lives and careers. How do you get current staff, senior staff and
incoming staff to go "all in" in creating value for customers – and therefore the
enterprise?
My outsider's take is that Huawei is mostly focused on motivating teams and team managers.
High-performance teams with aggressive and dedicated managers are the engine of Huawei. And
these are mostly in sales and marketing and R&D. They make the largest contributions to
the customers and therefore the enterprise. You motivate at the team level and within the
departments that matter most. And then you scale it up.
But how do you assess contributed value?
Staff are rated every 6-12 months across metrics such as sales performance (usually
team-based), talent, dedication, and the potential for advancement. The phrases I keep coming
across in my reading are "dedicated employees" and "high-performance teams." In fact, the
book on their HR book is titled Dedication.
Once assessed, how do you reward performance?
High-performing contributors are given higher bonuses, of course. But they are also
identified and given more opportunities (and responsibilities). They are given more training
and the option to participate in the employee share ownership program (very important). Low
performers, in contrast, are demoted or exited. Meritocracy works in both directions.
And this brings us back to the main point of this article: How does the U.S. tech ban
impact any of this? How does it impact an HR system for motivating the more than 190,000
employees that continually recreate the company and ensure its survival?
In the long term, it doesn't.
Yes, the company took a big hit in the short term in terms of its access to tech
(especially in semiconductors and in the consumer business) and to a few markets. But the
core of the company is still churning along like it has for 30 years. And I think it is very
likely Huawei will overcome these supply chain problems. And, ironically, the current crisis
is probably resulting in increased motivation and dedication across the company.
"... The lawsuit also aggressively contests Boeing's spin that competent pilots could have prevented the Lion Air and Ethiopian Air crashes: ..."
"... When asked why Boeing did not alert pilots to the existence of the MCAS, Boeing responded that the company decided against disclosing more details due to concerns about "inundate[ing] average pilots with too much information -- and significantly more technical data -- than [they] needed or could realistically digest." ..."
"... The filing has a detailed explanation of why the addition of heavier, bigger LEAP1-B engines to the 737 airframe made the plane less stable, changed how it handled, and increased the risk of catastrophic stall. It also describes at length how Boeing ignored warning signs during the design and development process, and misrepresented the 737 Max as essentially the same as older 737s to the FAA, potential buyers, and pilots. It also has juicy bits presented in earlier media accounts but bear repeating, like: ..."
"... Then, on November 7, 2018, the FAA issued an "Emergency Airworthiness Directive (AD) 2018-23-51," warning that an unsafe condition likely could exist or develop on 737 MAX aircraft. ..."
"... Moreover, unlike runaway stabilizer, MCAS disables the control column response that 737 pilots have grown accustomed to and relied upon in earlier generations of 737 aircraft. ..."
"... And making the point that to turn off MCAS all you had to do was flip two switches behind everything else on the center condole. Not exactly true, normally those switches were there to shut off power to electrically assisted trim. Ah, it one thing to shut off MCAS it's a whole other thing to shut off power to the planes trim, especially in high speed ✓ and the plane noise up ✓, and not much altitude ✓. ..."
"... Classic addiction behavior. Boeing has a major behavioral problem, the repetitive need for and irrational insistence on profit above safety all else , that is glaringly obvious to everyone except Boeing. ..."
"... In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual so as to further hide its existence from the public and pilots " ..."
"... This "MCAS" was always hidden from pilots? The military implemented checks on MCAS to maintain a level of pilot control. The commercial airlines did not. Commercial airlines were in thrall of every little feature that they felt would eliminate the need for pilots at all. Fell right into the automation crapification of everything. ..."
At first blush, the suit filed in Dallas by the Southwest Airlines Pilots Association (SwAPA) against Boeing may seem like a family
feud. SWAPA is seeking an estimated $115 million for lost pilots' pay as a result of the grounding of the 34 Boeing 737 Max planes
that Southwest owns and the additional 20 that Southwest had planned to add to its fleet by year end 2019. Recall that Southwest
was the largest buyer of the 737 Max, followed by American Airlines. However, the damning accusations made by the pilots' union,
meaning, erm, pilots, is likely to cause Boeing not just more public relations headaches, but will also give grist to suits by crash
victims.
However, one reason that the Max is a sore point with the union was that it was a key leverage point in 2016 contract negotiations:
And Boeing's assurances that the 737 Max was for all practical purposes just a newer 737 factored into the pilots' bargaining
stance. Accordingly, one of the causes of action is tortious interference, that Boeing interfered in the contract negotiations to
the benefit of Southwest. The filing describes at length how Boeing and Southwest were highly motivated not to have the contract
dispute drag on and set back the launch of the 737 Max at Southwest, its showcase buyer. The big point that the suit makes is the
plane was unsafe and the pilots never would have agreed to fly it had they known what they know now.
We've embedded the compliant at the end of the post. It's colorful and does a fine job of recapping the sorry history of the development
of the airplane. It has damning passages like:
Boeing concealed the fact that the 737 MAX aircraft was not airworthy because, inter alia, it incorporated a single-point failure
condition -- a software/flight control logic called the Maneuvering Characteristics Augmentation System ("MCAS") -- that,if fed
erroneous data from a single angle-of-attack sensor, would command the aircraft nose-down and into an unrecoverable dive without
pilot input or knowledge.
The lawsuit also aggressively contests Boeing's spin that competent pilots could have prevented the Lion Air and Ethiopian Air
crashes:
Had SWAPA known the truth about the 737 MAX aircraft in 2016, it never would have approved the inclusion of the 737 MAX aircraft
as a term in its CBA [collective bargaining agreement], and agreed to operate the aircraft for Southwest. Worse still, had SWAPA
known the truth about the 737 MAX aircraft, it would have demanded that Boeing rectify the aircraft's fatal flaws before agreeing
to include the aircraft in its CBA, and to provide its pilots, and all pilots, with the necessary information and training needed
to respond to the circumstances that the Lion Air Flight 610 and Ethiopian Airlines Flight 302 pilots encountered nearly three
years later.
And (boldface original):
Boeing Set SWAPA Pilots Up to Fail
As SWAPA President Jon Weaks, publicly stated, SWAPA pilots "were kept in the dark" by Boeing.
Boeing did not tell SWAPA pilots that MCAS existed and there was no description or mention of MCAS in the Boeing Flight Crew
Operations Manual.
There was therefore no way for commercial airline pilots, including SWAPA pilots, to know that MCAS would work in the background
to override pilot inputs.
There was no way for them to know that MCAS drew on only one of two angle of attack sensors on the aircraft.
And there was no way for them to know of the terrifying consequences that would follow from a malfunction.
When asked why Boeing did not alert pilots to the existence of the MCAS, Boeing responded that the company decided against
disclosing more details due to concerns about "inundate[ing] average pilots with too much information -- and significantly more
technical data -- than [they] needed or could realistically digest."
SWAPA's pilots, like their counterparts all over the world, were set up for failure
The filing has a detailed explanation of why the addition of heavier, bigger LEAP1-B engines to the 737 airframe made the plane
less stable, changed how it handled, and increased the risk of catastrophic stall. It also describes at length how Boeing ignored
warning signs during the design and development process, and misrepresented the 737 Max as essentially the same as older 737s to
the FAA, potential buyers, and pilots. It also has juicy bits presented in earlier media accounts but bear repeating, like:
By March 2016, Boeing settled on a revision of the MCAS flight control logic.
However, Boeing chose to omit key safeguards that had previously been included in earlier iterations of MCAS used on the Boeing
KC-46A Pegasus, a military tanker derivative of the Boeing 767 aircraft.
The engineers who created MCAS for the military tanker designed the system to rely on inputs from multiple sensors and with
limited power to move the tanker's nose. These deliberate checks sought to ensure that the system could not act erroneously or
cause a pilot to lose control. Those familiar with the tanker's design explained that these checks were incorporated because "[y]ou
don't want the solution to be worse than the initial problem."
The 737 MAX version of MCAS abandoned the safeguards previously relied upon. As discussed below, the 737 MAX MCAS had greater
control authority than its predecessor, activated repeatedly upon activation, and relied on input from just one of the plane's
two sensors that measure the angle of the plane's nose.
In other words, Boeing can't credibly say that it didn't know better.
Here is one of the sections describing Boeing's cover-ups:
Yet Boeing's website, press releases, annual reports, public statements and statements to operators and customers, submissions
to the FAA and other civil aviation authorities, and 737 MAX flight manuals made no mention of the increased stall hazard or MCAS
itself.
In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual so
as to further hide its existence from the public and pilots.
We urge you to read the complaint in full, since it contains juicy insider details, like the significance of Southwest being Boeing's
737 Max "launch partner" and what that entailed in practice, plus recounting dates and names of Boeing personnel who met with SWAPA
pilots and made misrepresentations about the aircraft.
Even though Southwest Airlines is negotiating a settlement with Boeing over losses resulting from the grounding of the 737 Max
and the airline has promised to compensate the pilots, the pilots' union at a minimum apparently feels the need to put the heat on
Boeing directly. After all, the union could withdraw the complaint if Southwest were to offer satisfactory compensation for the pilots'
lost income. And pilots have incentives not to raise safety concerns about the planes they fly. Don't want to spook the horses, after
all.
But Southwest pilots are not only the ones most harmed by Boeing's debacle but they are arguably less exposed to the downside
of bad press about the 737 Max. It's business fliers who are most sensitive to the risks of the 737 Max, due to seeing the story
regularly covered in the business press plus due to often being road warriors. Even though corporate customers account for only 12%
of airline customers, they represent an estimated 75% of profits.
Southwest customers don't pay up for front of the bus seats. And many of them presumably value the combination of cheap travel,
point to point routes between cities underserved by the majors, and close-in airports, which cut travel times. In other words, that
combination of features will make it hard for business travelers who use Southwest regularly to give the airline up, even if the
737 Max gives them the willies. By contrast, premium seat passengers on American or United might find it not all that costly, in
terms of convenience and ticket cost (if they are budget sensitive), to fly 737-Max-free Delta until those passengers regain confidence
in the grounded plane.
Note that American Airlines' pilot union, when asked about the Southwest claim, said that it also believes its pilots deserve
to be compensated for lost flying time, but they plan to obtain it through American Airlines.
If Boeing were smart, it would settle this suit quickly, but so far, Boeing has relied on bluster and denial. So your guess is
as good as mine as to how long the legal arm-wrestling goes on.
Update 5:30 AM EDT : One important point that I neglected to include is that the filing also recounts, in gory detail, how Boeing
went into "Blame the pilots" mode after the Lion Air crash, insisting the cause was pilot error and would therefore not happen again.
Boeing made that claim on a call to all operators, including SWAPA, and then three days later in a meeting with SWAPA.
However, Boeing's actions were inconsistent with this claim. From the filing:
Then, on November 7, 2018, the FAA issued an "Emergency Airworthiness Directive (AD) 2018-23-51," warning that an unsafe condition
likely could exist or develop on 737 MAX aircraft.
Relying on Boeing's description of the problem, the AD directed that in the event of un-commanded nose-down stabilizer trim
such as what happened during the Lion Air crash, the flight crew should comply with the Runaway Stabilizer procedure in the Operating
Procedures of the 737 MAX manual.
But the AD did not provide a complete description of MCAS or the problem in 737 MAX aircraft that led to the Lion Air crash,
and would lead to another crash and the 737 MAX's grounding just months later.
An MCAS failure is not like a runaway stabilizer. A runaway stabilizer has continuous un-commanded movement of the tail, whereas
MCAS is not continuous and pilots (theoretically) can counter the nose-down movement, after which MCAS would move the aircraft
tail down again.
Moreover, unlike runaway stabilizer, MCAS disables the control column response that 737 pilots have grown accustomed to and
relied upon in earlier generations of 737 aircraft.
Even after the Lion Air crash, Boeing's description of MCAS was still insufficient to put correct its lack of disclosure as
demonstrated by a second MCAS-caused crash.
We hoisted this detail because insiders were spouting in our comments section, presumably based on Boeing's patter, that the Lion
Air pilots were clearly incompetent, had they only executed the well-known "runaway stabilizer," all would have been fine. Needless
to say, this assertion has been shown to be incorrect.
Excellent, by any standard. Which does remind of of the NYT zine story (William Langewiesche
Published Sept. 18, 2019) making the claim that basically the pilots who crashed their planes weren't real "Airman".
And making
the point that to turn off MCAS all you had to do was flip two switches behind everything else on the center condole. Not exactly
true, normally those switches were there to shut off power to electrically assisted trim. Ah, it one thing to shut off MCAS it's
a whole other thing to shut off power to the planes trim, especially in high speed ✓ and the plane noise up ✓, and not much altitude
✓.
And especially if you as a pilot didn't know MCAS was there in the first place. This sort of engineering by Boeing is criminal.
And the lying. To everyone. Oh, least we all forget the processing power of the in flight computer is that of a intel 286. There
are times I just want to be beamed back to the home planet. Where we care for each other.
One should also point out that Langewiesche said that Boeing made disastrous mistakes with the MCAS and that the very future
of the Max is cloudy. His article was useful both for greater detail about what happened and for offering some pushback to the
idea that the pilots had nothing to do with the accidents.
As for the above, it was obvious from the first Seattle Times stories that these two events and the grounding were going to
be a lawsuit magnet. But some of us think Boeing deserves at least a little bit of a defense because their side has been totally
silent–either for legal reasons or CYA reasons on the part of their board and bad management.
Classic addiction behavior. Boeing has a major behavioral problem, the repetitive need for and irrational insistence on profit
above safety all else , that is glaringly obvious to everyone except Boeing.
"The engineers who created MCAS for the military tanker designed the system to rely on inputs from multiple sensors and with
limited power to move the tanker's nose. These deliberate checks sought to ensure that the system could not act erroneously or
cause a pilot to lose control "
"Yet Boeing's website, press releases, annual reports, public statements and statements to operators and customers, submissions
to the FAA and other civil aviation authorities, and 737 MAX flight manuals made no mention of the increased stall hazard or MCAS
itself.
In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual
so as to further hide its existence from the public and pilots "
This "MCAS" was always hidden from pilots? The military implemented checks on MCAS to maintain a level of pilot control. The commercial airlines did not. Commercial
airlines were in thrall of every little feature that they felt would eliminate the need for pilots at all. Fell right into the
automation crapification of everything.
A Secretive Committee of Wall Street Insiders Is the Least of the New York Fed's Concerns.
In July 17, Mary Callahan Erdoes, head of JPMorgan Chase & Co.'s $2.2 trillion asset and wealth management division, walked into
the wood-paneled tenth-floor conference room at the Federal Reserve Bank of New York to address some fellow Wall Street luminaries
-- Bridgewater Associates' Ray Dalio, Dawn Fitzpatrick of Soros Fund Management, short-seller Jim Chanos, and LBO kingpin David Rubenstein
among them.
All are members of the Investor Advisory Committee on Financial Markets (IACFM) -- a forum to provide financial insight to the
New York Fed. Chairing the meeting was New York Fed president John C. Williams, vice chair of the powerful, rate-setting Federal
Open Market Committee, who was a year into his tenure.
Erdoes held forth at the meeting, which included a buffet lunch.
---
And so on.
This is us, we have a unexhaustable desire for these secret meetings to meet, so we vote, every year to convene them. If these
secret meeting did not occur then we could never do a deal with the super wealthy and our precious will not be insured. Reply Saturday,
October 05, 2019 at 06:04 PM
White House Weighs Blocking Chinese Companies From U.S. Exchanges
By Alan Rappeport and Ana Swanson
WASHINGTON -- The Trump administration is discussing whether to block Chinese companies
from listing shares on American stock exchanges, the latest push to try to sever economic
ties between the United States and China, according to people familiar with the
deliberations.
The internal discussions are in their early stages and no decision is imminent, these
people cautioned.
The talks come as senior officials from both countries are scheduled to resume trade
negotiations in Washington early next month. President Trump, who has continued to give mixed
signals about the prospect of a trade deal with China, said earlier this week that an
agreement could come "sooner than you think." His decision to delay an increase in tariffs
until mid-October and China's recent purchases of American agricultural products has fueled
optimism that the talks could produce an agreement.
But the prospect of further limiting American investment in China underscores the
challenge that the two sides will continue to face even as they try to de-escalate a trade
war that has shaken the global economy. The administration has already increased scrutiny of
foreign investment with a particular eye toward China, including expanding the types of
investments that can be subject to a national security review.
Last week, the Treasury Department unveiled new regulations detailing how a 2018 law, the
Foreign Investment Risk Review Modernization Act, will work to prevent foreign firms from
using investments like minority stakes to capture sensitive American information. And the
United States has already blacklisted some Chinese companies, including Huawei, effectively
barring them from doing business with American companies.
Stocks dropped on Friday after a report on the deliberations was published by Bloomberg
News. The market continued to slide through most of the day. At close, the S&P 500 was
down 0.5 percent and the Nasdaq composite index was down 1.1 percent.
Losses were particularly steep in the technology sector, and among semiconductor stocks,
two parts of the market that have been sensitive to the latest updates on the economic
tensions between China and the United States.
Details of how the United States would restrict Chinese companies from American stock
markets were still being worked out and the idea remained in its early stages, the people
familiar with the deliberations said.
China hawks within the administration have discussed the possibility of tighter
restrictions on listed Chinese companies for many months. Supporters say the efforts would
close longstanding loopholes that have allowed Chinese companies with links to its government
to take advantage of America's financial rules and solicit funds from American investors
without proper disclosure.
Skeptics caution that the move could be deeply disruptive to markets and the economy and
risk turning American investors and pension funds into another casualty of the trade war.
The effect of limiting Chinese firms from raising capital inside the United States could
be significant. As of the beginning of this year, 156 Chinese companies were listed on
American exchanges and had a total market capitalization of $1.2 trillion, according to the
U.S.-China Economic and Security Review Commission.
"The underlying concerns have merit, but how to deal with them without creating a lot of
collateral damage is tricky," Patrick Chovanec, managing director at Silvercrest Asset
Management, wrote in a post on Twitter. "Abruptly delisting Chinese firms en masse would
clearly send shock waves through markets."
The idea gained traction on Capitol Hill this summer when Republicans and Democrats in the
Senate and the House introduced legislation that would delist firms that were out of
compliance with American regulators for three years. The lawmakers argued that Chinese
companies have been benefiting from American capital markets while playing by a different set
of rules.
American complaints center on a lack of transparency into the ownership and finances of
Chinese firms. The business community has long criticized China for classifying some auditor
reports on company finances as state secrets and outlawing cross-border transfers of
auditors' documentation.
In 2015, the Chinese affiliates of the Big Four accounting firms -- Deloitte Touch
Tohmatsu, KPMG, PricewaterhouseCoopers and Ernst & Young -- paid $500,000 each to settle
a dispute about their refusal to provide documentation on Chinese companies to the Securities
and Exchange Commission, which an American judge had ruled was a violation of United States
law.
The White House has grown more interested in blocking Chinese firms in recent weeks, with
some in the administration describing it as a top priority. Officials say the topic is not
yet an issue in bilateral negotiations with the Chinese and inserting it into the talks could
lead negotiations to fall apart again.
"This would be another step in ratcheting up the pressure," said Michael Pillsbury, a
China scholar at the Hudson Institute who said he raised the concept of investment
restrictions with the White House after negotiations with China broke down in the spring.
The White House declined to comment.
The concept has divided Mr. Trump's advisers along their usual fault lines, with Peter
Navarro, Mr. Trump's trade adviser, advocating action and Treasury Secretary Steven Mnuchin
urging caution....
A house bill bans using Huawei and ZTE phones; also adds 1 billion in taxpayer paid for
equipment to be donated to to USA companies so the USA companies can trash the China made
equipment and exchange if for 1 billion in USA and Israel made equipment.
I wonder does this mean the USA and Israel cannot compete with the Chinese?
"... With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now positioned itself on an investment trajectory to create a new "Huawei core" to compete with the world of Google-led Android systems outright. ..."
"... Beyond Apple and the iPhone, the Android operating system dominates in the global smartphone market. Describing it as an "operating system" is barely fitting; it might otherwise be described as "an ecosystem" with a wide range of Google orientated services within it. ..."
"... They include the popular browser Chrome, the YouTube video service, Google mail and, most critically, the "Google Playstore," which, owing to its popularity, attracts more developers and investors than any other unofficial App stores. This "ecosystem" creates a "web of comfort" which effectively entrenches the consumer in the Android orbit. ..."
"... p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from Android owing to the American government's decision has forced some difficult choices. It has made markets keen to observe how the Mate 30 will perform given its lack of Google applications and the need for users to obtain some apps through third-party stores. ..."
"... So, the question is: How are they now adapting and making that transition? Bengt Nordstrom of North Stream research in Sweden notes that "they have a strategy to become completely independent from U.S. technology. And in many areas, they have become independent." ..."
"... Huawei's announced bid to invest over 1 billion U.S. dollars in developing its own application "core" or ecosystem. This, in essence, is an effort to get developers to establish applications for the new "Huawei App store" and thus establish a self-reliant, independent path from the world of Android. ..."
"... To achieve this, the company has pledged a competitive revenue sharing scheme of 15 percent to developers, half of that what Apple and Google demand for participation in their own app-stores. ..."
September 21, 2019
Huawei's pivotal moment
By Tom Fowdy
Huawei launched its Mate 30 series on Friday, the first new device produced by the
Shenzhen telecommunications firm since it has been blacklisted by the United States
government and excluded from American technology markets.
The subsequent result of the listing had led Google to sever ties with the company and
prohibit new devices from using its Play Store services and operating system, something which
ultimately impacts the Mate 30 Series, which is using an open-source version of Android.
The impact of it all has led Western commentators to ask questions about Huawei's future
in Western smartphone markets, particularly what applications can it access.
However, not all is bleak, and what may start off as a hindrance for the company is set to
transform into an opportunity. The United States' assault on the company has forced Huawei to
innovate.
With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now
positioned itself on an investment trajectory to create a new "Huawei core" to compete with
the world of Google-led Android systems outright.
In this case, what seems like a detriment is part of a broader pivotal moment for Huawei.
The company's portfolio is about to change forever.
Beyond Apple and the iPhone, the Android operating system dominates in the global
smartphone market. Describing it as an "operating system" is barely fitting; it might
otherwise be described as "an ecosystem" with a wide range of Google orientated services
within it.
They include the popular browser Chrome, the YouTube video service, Google mail and,
most critically, the "Google Playstore," which, owing to its popularity, attracts more
developers and investors than any other unofficial App stores. This "ecosystem" creates a
"web of comfort" which effectively entrenches the consumer in the Android orbit.
U p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from
Android owing to the American government's decision has forced some difficult choices. It has
made markets keen to observe how the Mate 30 will perform given its lack of Google
applications and the need for users to obtain some apps through third-party stores.
So, the question is: How are they now adapting and making that transition? Bengt
Nordstrom of North Stream research in Sweden notes that "they have a strategy to become
completely independent from U.S. technology. And in many areas, they have become
independent."
First of all, we are well aware that Huawei is developing its own Harmony Operating System
as a contingency measure, although it has not chosen to apply it to the Mate 30 as an olive
branch to Google.
Second, and most excitingly is Huawei's announced bid to invest over 1 billion U.S.
dollars in developing its own application "core" or ecosystem. This, in essence, is an effort
to get developers to establish applications for the new "Huawei App store" and thus establish
a self-reliant, independent path from the world of Android.
To achieve this, the company has pledged a competitive revenue sharing scheme of 15
percent to developers, half of that what Apple and Google demand for participation in their
own app-stores.
This effort is combined with a wider scope in research and development from the company,
which is also designed to forfeit dependence upon American technology chains in terms of
critical components and other parts.
We have already seen massive investment pledges from Huawei to build new research and
development centers in the United Kingdom, Belgium, Italy and Brazil. They are not empty
promises, but a serious and strategic effort.
In this case, what was intended to be a political effort to destroy and contain Huawei is
likely to prove a pivotal turning point in the company's history with huge repercussions for
global smartphone and technology markets.
Instead of having once been reliant on and thus beneficial to American technology markets,
the outcome is that Huawei will re-emerge independent of and competing against it.
Armed with a pending new operating system, a new application development drive and a
broader research effort, what seemed otherwise a detriment is likely to bring a massive
opportunity. Thus, it is very important to examine the long-term prospects for the company's
fortunes ahead of short-term challenges.
"... "The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of effort in integrating the two chips. So the new chip uses less power and generates less heat while getting the job done," said Huawei fellow Ai Wei before the launch event. ..."
"... The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors, the first and largest of its kind. ..."
"... Another example is AI-based video quality improvements, which takes in a low quality video and render a better one. Objects in the rendered video have much sharper edges. Huawei technicians refused to explain how they made it, but the underlying tech seems to be object recognition, content-based pixel generation and noise reduction, since these are the tricks AI does well. ..."
"... Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone zoom to the next level," according to third-party review site DxOMark. The phone was on top of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed with more graphic features to continue Huawei's dominance. ..."
Smartest and fastest: Huawei reveals new smartphone chip Kirin 990 5G
By Gong Zhe
Chinese smartphone giant Huawei, which has been under heavy attack from the U.S.
government during the last few months, just revealed its next-generation smartphone
system-on-a-chip (SoC) product "Kirin 990 5G," signaling the company's business is not
stalled by foreign strangling.
The launch event was held simultaneously at IFA electronic show in Berlin, Germany, and in
Beijing on Friday.
In his keynote speech, Huawei's head of gadgets Richard Yu told the press that the chip is
more advanced than other flagship smartphone SoCs, because it has a built-in 5G modem.
Current rivals of the chip, like Qualcomm's Snapdragon 855, have no 5G modem and have to
rely on an extra chip to support 5G.
"The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of
effort in integrating the two chips. So the new chip uses less power and generates less heat
while getting the job done," said Huawei fellow Ai Wei before the launch event.
The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors,
the first and largest of its kind.
Flexible AI power
The chip also features three AI cores, two larger than the other smaller. This design,
first in smartphones, saves battery power by only using the small core to process simple AI
tasks, while resorting to the larger cores for more complex jobs.
The company named the cores "Ascend Lite" and "Ascend Tiny" to relate the cores to
Huawei's new, self-proclaimed "fastest AI training chip in the world," the Ascend 910.
Huawei built a showcase at the Beijing launch event to demonstrate the chip's AI power.
They showed a FaceID-like face recognition feature in a Kirin 990-powered developer board
that can work when the person is four meters away from the phone, times further than Apple's
current product.
Another example is AI-based video quality improvements, which takes in a low quality
video and render a better one. Objects in the rendered video have much sharper edges. Huawei
technicians refused to explain how they made it, but the underlying tech seems to be object
recognition, content-based pixel generation and noise reduction, since these are the tricks
AI does well.
Even better photos
Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone
zoom to the next level," according to third-party review site DxOMark. The phone was on top
of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed
with more graphic features to continue Huawei's dominance.
A Kirin 990-powered smartphone can shoot 4K videos (3840 x 2160 pixels) at 60 frames per
second, on par with market flagship phones.
The chip can also run DSLR-level noise-reduction algorithm – namely "Block Match 3D"
– to bring professional tech to consumer devices.
"Porting an algorithm from DSLR to smartphone may be easy. But getting the program to run
fast enough can be hard for any phone maker," Ai told CGTN Digital.
Non-U.S. tech
The design of Kirin 990 is still based on technology Huawei bought from British tech
company ARM, used by several mainstream brands.
After the U.S. began imposing restrictions on Huawei, ARM cut ties with the Chinese phone
maker. Despite this, Huawei has been able to use and modify AMRv8 technology thanks to its
permanent ARM license. Hence why chips like Kirin 990 can still be legally built and
sold.
In addition to ARM, there are other major smartphone tech companies cutting ties with
Huawei, forcing the Chinese company to create its own alternatives. After Google announced to
bar Huawei phones from installing their apps, Huawei started porting its IoT system "Harmony"
to smartphones.
But Huawei still wishes to use technologies from all over the world. As Ai Wei explained
at the launch event, "Huawei will not deliberately remove all U.S. tech from its smartphones.
But when the supply from U.S. was cut, Huawei has to find a way to survive."
"That's why Huawei chose to create its own technology," Ai added....
The point in article after article is that China is emphasizing technical advance in building
the economy from rural to urban applications and the emphasis will not be lessened. The rural
applications I am reading about are especially exciting.
I appreciate the interview, but Clayton Dube as director of the University of Southern
California's U.S.-China Institute knows remarkably little about China or American relations
with China. Possibly Dube is being especially cautious, but still:
"The air in Los Angeles," the academic explains by way of an example, "is influenced by
the air coming out of northern China. But of course, that bad air in China is produced by
factories often producing for the American market. And so we have not only outsourced
production, we've outsourced pollution."
This is absurdly wrong. China has been working on cleaning the environment for years now
and the effects as monitored have been dramatic.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
[ Surely so, this very day is "International Day of Peace in Nanjing" in memory of the
victims of the terrible Japanese occupation:
Four Years After Declaring War on Pollution, China Is Winning
Research gives estimates on the longer lives that are now possible in the country.
By Michael Greenstone
On March 4, 2014, the Chinese premier, Li Keqiang, told almost 3,000 delegates at the
National People's Congress and many more watching live on state television, "We will
resolutely declare war against pollution as we declared war against poverty."
China has had the benefit of skipping over other advanced nation's Legacy infrastructure.
Leapfrogging ahead in some areas of development is smart and saves money for China as
well, but that doesn't make China superior to other advanced nations.
The U.S. Has a Fleet of 300 Electric Buses. China Has 421,000
The rest of the world will struggle for years to match China's rapid embrace of electric
transit.
By Brian Eckhouse - Bloomberg
Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson
CHICAGO -- America's next fight with China is unfolding at a glistening new factory in
Chicago, which stands empty except for the shells of two subway cars and space for future
business that is unlikely to come.
A Chinese state-owned company called CRRC Corporation, the world's largest train maker,
completed the $100 million facility this year in the hopes of winning contracts to build
subway cars and other passenger trains for American cities like Chicago and Washington.
But growing fears about China's economic ambitions and its potential to track and spy on
Americans are about to quash those plans. Congress is soon expected to approve legislation
that would effectively bar the company from competing for new contracts in the United States,
citing national security and economic concerns. The White House has expressed its support for
the effort....
Terrific discussion on how the West perceives China...
[ Actually a discussion that shows a remarkable misperception of China even by an American
China academic-specialist. As such the discussion is important though discouraging. ]
"... I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world. ..."
"... There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?". ..."
"... We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights? ..."
"... it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great! ..."
"... Those are the same "hawks" that are busy destroying the rest of America as well. ..."
"... As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability. ..."
"... Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war. ..."
"... the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population. ..."
"... Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China. ..."
"... as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia." ..."
"... Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison. ..."
"... The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place ..."
"... Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%. ..."
"... Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ? ..."
"... The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the death blow to American Labor is over. In that light it makes little difference whether our corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest is coming to an end. And none too soon. ..."
"... I hope some candidates discuss the imperative to have the US start making it's own medications again. ..."
"... I could not believe the government has allowed the entire supply chain of building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S the national security issue we need to deal with immediately. As well as other vital drugs.. ..."
"... Chinese manufacturers have the wealth and experience to teach production line workers and make things anywhere. Western companies manufacturing in China have belatedly looked for facilities in neighboring countries and found the Chinese are already there. ..."
"... Trump doesn't give a damn about getting manufacturing jobs back into the United States! (Or at least his advisors don't). ..."
"... Low housing costs, lead to lower wages so UK employers were able to compete in a free trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics. ..."
"... He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had disappeared by the 20th. The West's high cost of living means high wages and an inability to compete in a free trade world. ..."
By Marshall Auerback, a
market analyst and commentator. Produced by Economy for All, a project of the Independent Media
Institute
"Chimerica" is a term originally coined by the historian Niall Ferguson and economist Moritz
Schularick to describe the growing economic relationship between the U.S. and China since the
latter's entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson : "The Chinese did the saving, the
Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese
did the lending, the Americans the borrowing." Much of the pre-crisis boom in global trade was
driven by this economic symbiosis, which is why successive American presidents tolerated this
marriage of convenience
despite the increasing costs to the U.S. economy . The net benefits calculation, however,
began to change after 2008, and the conflict has intensified further after the 2016
presidential election result. Today, the cumulative stress of Donald Trump's escalating trade
war is leading to if not an irreparable breach between the two countries, then certainly a
significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of
the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances,
they are not returning to home shores.
It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with
a coherent strategy to replace it is clearly beyond the president's abilities. America is
likely to remain a relative manufacturing wasteland, as barren as Trump's own ill-conceived
ideas on trade. At the same time, it's not going to be an unmitigated victory for China either,
as Beijing is increasingly suffering from a large confluence of internal and external
pressures.
Chimerica helped to launch China as a global trade power. To the extent that this marriage
helped the U.S. economy, it skewed toward the largely blue state coastal regions. Wall Street
banks located on the East Coast happily collected lucrative commissions and investment banking
fees, as China's export proceeds were recycled into U.S. treasuries, stocks, and high-end real
estate while the capital markets boomed; on the West Coast, "new economy" companies thrived,
their growth and profitability unhindered by the onslaught of Chinese manufactured exports. By
contrast, facilitated by technological advances that permitted large-scale outsourcing by U.S.
manufacturers, Chimerica laid waste to much of what was left of America's Rust Belt, and the
politics of many of the displaced workers mutated to the extent that Donald Trump became an
appealing alternative to the establishment in 2016.
The major legacy of Chimerica, then, is that too many American workers have been
semi-permanently replaced by low-cost offshored labor. Prior to great advances in technology,
along with globalization, displacement of the current labor force could only have occurred
through immigration of workers into the country. Historically, displacement by immigrants
generally began at the menial level of the labor force, and became more restrictive as when it
became correlated with significant unemployment. Given the rise of globalization and the
corresponding liberalization of immigration in the past few decades, however, policy no longer
arrests the displacement of American workers. The policy backlash has consequently manifested
itself more via trade protectionism. Trump has sought to consolidate his Rust Belt base of
supporters by launching a trade war, especially versus Beijing, the ultimate effects of which
he hoped would be to re-domicile supply chains that had earlier migrated to China.
Early on in his presidency, there was some hope that Trump's protectionism was at best a
bluff or, at worst, an aberration, and that the return of a Democrat to the White House in 2020
would eventually reestablish the status quo ante. But the president still can't get a wall, and
his protectionism has become more pronounced almost as if to compensate. The problem today is
that even if Trump is voted out of office in 2020, corporate America is becoming less inclined
to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk
of their manufacturing in China. There is too much risk in putting all of one's eggs in the
China basket, especially given
growing national security concerns . Hence, U.S. companies are taking action. In spite of
decades of investment in these China-domiciled supply chains, a number of American companies
are pulling out:
toy manufacturer Hasbro , Illinois-based
phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSun are
a few of the operators who are exiting the country.
But they are not coming back to the U.S., relocating instead to places like Vietnam,
Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben
Buttolph, says
that the company will never return to China: "We are trying to have multiple locations
certified for all of our products, so that if all of a sudden there's an issue with one of the
locations, we just flip the switch." Likewise, the CEO of Hasbro, Brian Goldner,
recently spoke of "great opportunities in Vietnam, India and other territories like
Mexico."
All is not lost for the U.S., however, as Goldner did celebrate the success of Hasbro's
facility in East Longmeadow, Massachusetts, which has resumed
production of Play-Doh in the U.S. for the first time since 2004 . It is doubtful, however,
that this represents the recapturing of the high value-added supply chains that Trump envisaged
when he first launched his trade assault on Beijing.
In general, as Julius Krein,
editor of American Affairs , writes: "United States industry is losing ground to foreign
competitors on price, quality and technology. In many areas, our manufacturing capacity cannot
compete with what exists in Asia."
These are not isolated examples.
Defense One also notes the following development:
It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip
giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese
entities. The Department of Commerce halved the number of licenses that let U.S. companies
assign Chinese nationals to sensitive technology and engineering projects.
This development consequently makes it hard to proclaim Beijing a winner in this dispute
either. The country still needs access to U.S. high tech. The government announced yet
another fiscal stimulus to the economy earlier this month in response to a cluster of
weakening economic data, much of which is related to the trade shock. It is also the case that
China is being buffeted politically, both externally and internally: externally, in addition to
the escalating trade war, China's own efforts to counter the effects of rising protectionism by
creating a " reverse
Marshall Plan " via the Belt and Road Initiative is
floundering .
China's "iron brother," Pakistan, is increasingly being victimized by India's aggressive
Hindu-centric nationalism . It is hard to imagine the Modi government opportunistically
taking the step of annexing Kashmir and undermining Pakistan, had it not sensed Beijing's
increasing vulnerability.
Internally, Beijing is finding it increasingly challenging as it seeks to enforce its "One
China" policy in Hong Kong and Taiwan. The
withdrawal of the controversial extradition law that first precipitated widespread
demonstrations in Hong Kong has not alleviated the political pressures in the territory, but
simply allowed an even bigger protest culture to take root and strengthen an independent
political mindset. Similarly, Taiwan has also openly supported the Hong Kong protesters,
pledging help to those seeking asylum . Both regions now constitute both a huge humiliation
and challenge to the primacy of China's ruling Communist Party. And now on top of that, foreign
manufacturers are leaving the country, weakening a totally leveraged manufacturing complex.
The implications of this divorce go well beyond the U.S. and China. They constitute another
step toward regionalization, another step away from a quaint ideological "post-history"
construct that saw Washington, D.C., as the head office and the rest of the world as a bunch of
branch plants for "America, Inc." It's hardly comforting to contemplate that the last time we
reached this historic juncture was the early 1900s, when a similarly globalized economy broke
down, followed by the Great War. As Niall Ferguson points out , "a high level of economic integration does not
necessarily prevent the growth of strategic rivalry and, ultimately, conflict." There's no
doubt that both Washington and Beijing will likely making soothing noises to the markets in
order to create favorable conditions for the trade talks in October, but their actions suggest
that they are both digging in
for a longer struggle . Today's trade wars, therefore, are likely to morph into something
more destructive, which is a lose-lose in an era where human advancement depends on greater
integration between economic powers.
There may be another aspect to this development and that is of geopolitics. You can see
that in Marshall's article when the CFO of Xentris said: "We are trying to have multiple
locations certified for all of our products, so that if all of a sudden there's an issue with
one of the locations, we just flip the switch." There is an anti-China hawks faction based in
the Republican party that has made its present felt. People like Robert Lighthizer, Peter
Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but
they have not reached the stage where they are asking: "Are you now, or have you ever been,
born Chinese?".
So we have seen a long string of sanctions and tariffs at play so that China will change its
laws and institutions to suit American interests. Yeah, I can't see that happening anytime
soon but hey, America First, Baby. We have also seen hawk factions against Russia, Iran and
not long ago Venezuela. The ones for Russia and Iran have been long going but the ones
against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do
the same against Cuba and threaten any country that does trade with them. Who knows what
other country may fall within his sights?
That being the case if you were running an international country, you can no longer just have
your manufacturing base or service operations just in one country. If Xentris is an example,
US companies may have to split manufacturing into several countries in case one fine day that
Trump will sanction yet another country that your company depends on.
I would imagine that it
would not be so efficient but it seems business people in the government are being pushed
aside by hawkish factions who do not care what effect it has on the economy or the country.
Great!
Those are the same "hawks" that are busy destroying the rest of America as well. Another
four years of this will, effectively, dismantle what democracy is left. The world trade won't
be the big issue. The departure of millions of Americans will.
If that happens, be sure to thank the Catfood Democrats for it. Because they are the
people who will do their very best and hardest to throw the next election to Trump, one way
or another.
It seems like diversification of supply chains can only be a good thing. As it is now,
China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze
them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals
consumed by US patients alone creates a serious vulnerability.
I really don't think it matters if manufacturing jobs are repatriated to the US, or just
set up and spread around elsewhere for now – since they'll be obsolete jobs in the near
future anyway, as robotics and AI get increasingly efficient at doing the work that human
workers currently do.
Situating the manufacturing in countries that are part of the Chinese sphere of influence
won't help much in a conflict. China would probably be able to sweep through much of
Southeast Asia quickly or interdict shipments if there was war.
So the status quo was preferable? The tone of the article seems to suggest that America should accept it place as a
third-world manufacturer, as if these Asian nations have some magical sauce that can't be
replicated. Gawd.
The US does have a lot of magic. Like one third of FDI related to tax evasion. Pulling Mac
Book manufacturing out of Austin for the lack of one 'screw', etc. So is the premise of going after China on trade and IP policies good. I would agree. Maybe
not in strategy, but at least someone has opened the box.
I agree with your comment, the article suggests the status quo was preferable. Of note, Trump has shown his supporters that something CAN be done other than follow the
"resistance is futile" path of the Bill Clinton/Bush Jr./Obama administrations.
I also suggest that the world wide presence/threat of the USA military and diplomatic
corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic
"spreading of democracy" around the world via military actions is a factor in USA job
loss. This is yet another cost of the bloated military to the general USA population.
I worked in the electronics industry for 30+ years and watched high margin manufacturing
move to Asia. Now the lower level component manufacturers (PCBs, passives) are firmly established in
Asia as the USA companies have helped train worthy competitors overseas. It took 25+ years to move much of USA manufacturing overseas, indicating to me that it
will take a long time to bring it back significantly, well outside the Trump time frame.
But I suspect Trump voters will appreciate Trump's headline efforts. If the Democrats push for more Free Trade as good for the USA, it will hurt them at the
ballot box.
The second time as farce. How tragicomic that Trump has succeeded in little more than
repatriating the manufacture of Play-Doh. On the other hand, the shipping cost of unbaked brick seems a rational factor in Hasbro's
decision. A GND that shortens supply lines would be more effective in repatriating heavy
industry, but then printed circuit boards aren't all that heavy .
The thing is Trump, as usual, got his strings pulled by the Deep State when he went for
actual implementation of a campaign promise. The DS doesn't care about working Americans,
they are simply against China.
So he goes and puts tariffs on a country, not a product. And surprise, said product
doesn't come back on-shore. Comical (and yeah, cosmically a bit just) that Vietnam is getting
so much of that manufacturing. Wasn't what he was elected for.
In general, as Julius Krein, editor of American Affairs, writes: "United States industry
is losing ground to foreign competitors on price, quality and technology. In many areas, our
manufacturing capacity cannot compete with what exists in Asia."
As a engineer up to my elbows in manufacturing for forty years, this was awfully easy to
predict way back then (I gave up complaining about it about 2000), and then watch happen
– real time. And to once again state the obvious, China did not TAKE American jobs,
American CEOs GAVE them our jobs. We will not fix this problem until we identify and fix the
root cause.
Now the only way to fix it is (once again obviously) massive government investment such as
mandated by the GND. We need the GND, it is not only required to save the world, it will save
our country.
Agree, it was predictable, and it was predicted. What we've been talking about is the "Giant sucking sound" Ross Perot foretold would
happen prior to the passing of NAFTA. It wasn't hard back then to see that he was right, but it took a few decades for the
public to feel the impact, boiling frogs and all that.
Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills,
and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price
of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery
way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever
direction, and everybody's eyes move in unison.
NAFTA and China are two completely separate things. I have actually supported NAFTA in
principle because we should encourage trade to be focused on our immediate neighbors. A
wealthier and safer Mexico and Central America would create markets for us and virtually
eliminate illegal immigrants as the southern border.
China is on the other side of the world and is not part of NAFTA. While we should have
cordial relations with it, if we are looking for inexpensive labor, south of the border is
the better place to focus on that. So Trump's tariffs on China are not the wrong thing to do
per se. The problem is that they are being done in a vacuum of general trade policy where he
is looking at everything as transaction bilateral relations with every country on the planet,
which requires an immense amount of detailed thought and negotiation, neither of which appear
to be a focus of this administration.
The countries that the companies are talking about moving their operations to are
generally part of the new TPP which the US is not part of. So, we have removed ourselves from
having trade relations with countries US CEOs are setting up operations in, but those
countries are now starting to work together to counter both China (original TPP purpose) and
the US (now that the US has bailed on it). Sounds like a recipe for a replay of China's giant
sucking sound.
The argument/discussion is not about how and where to outsource our jobs, it's about how
stupid it was to do it in the first place. Anyone smart enough to breath knows that Mexico is next door, and China is on the other
side of the world, but they are both part of the same giant sucking sound. The fact that you support both NAFTA ,think it was unwise to back out of the TPP, and
think the issue is the present administration's lack of " detailed thought and negotiation
" indicate a truly unbelievable level of denial.
NAFTA and MFN for China were two different actions towards the same goal . . . the use of
Free Trade to dismantle thingmaking in America and re-mantle thingmaking in foreign
export-aggression platforms to use against America.
Free Trade is the new Slavery. Militant Belligerent Protectionism is the new
Abolition.
I remember when a Midwest Democrat (Stabenow?) tried to get a law passed that would
prohibit a US corporation from deducting, from their federal taxes, the cost of moving
factories overseas. A very minor disincentive, but a disincentive nonetheless. The Repubs beat it down as "anti-business". Concern about American workers is something to express in political speeches around
election time but not in legislation.
Hidden within this narrative is the fact that some countries, and not only China, have for
long been playing beggar-thy-neighbor policies by restraining internal consumption and
redirecting savings to the rest of the world that in turn finance their exporting machines.
IMO, the biggest mistake made by China has been not to force fast enough a transition from a
saving economy to a consumer economy with more balanced external relationships.
These kind of
policies are confrontational. As confrontational as tariffs or even as economic sanctions in
my view. Yet, the prevailing economic narrative is that saving and exporting is the right
economic thing to do. In this sense I think it matters a lot to which countries are being re
directed investments of american companies leaving China. My intuition is that, for instance,
Vietnam migth be willing to play this game while Mexico not. Investing in countries that save
too much migth be counterproductive.
I very much regret this aggressive narrative that has become common place in which
countries are identified simply as competitors, if not enemies, in a global chess game.
Political moves are confrontational and or humiliating. These Game of Thrones dynamics are
played precisely when some international consensus in more important things like figthing
climate change would be more than desirable. We are headed to truly bad times.
Here is
an article by Steve Dickinson from the layers office Harris Bricken McVay Sliwoski that
is based on his Co's China practice. Steve's conclusion goes as follows:
The Chinese system put in place from 1992 to 2005 was a unique system and not likely to
be replaced in S.E./South Asia or in any other region of the world. So for manufacturers,
moving to a new region means doing the analysis from the ground up. Simply taking what they
do in China and moving it to a new location is not likely to be a workable solution.
Also the Chinese internal market continues to attract MNC's and this attraction will
continue to grow far into the future. China's middle class is already larger than the total
population of the US and it continues to grow rapidly. While down presently the Chinese
internal consumption continues to grow at an annual rate of some 8.5%.
Personal savings deposited in bank accounts reach the equivalent of some $US 30 Trillion !
Compare that to consumer debt at some $US 6.5 Trillion. In other words China is growing into
the largest consumer market on earth and the biggest advantage that its internal market
procures is its 'economies of scale' that make Chinese productions hyper-competitive. In
other words China is gaining the kind of advantage that the US had along the 20th century.
The advantage of a super large market size that dwarfs other national markets.
Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market,
and incentivizing the Chinese to offer better conditions to Co's of the rest of the world.
How can that help the US ?
The biggest problem of the West and particularly the US is its ideological approach to
economics. The Chinese adopted a pragmatic approach and it has served them well. Time to
relearn the meaning of political economics (économie politique).
I read Dickinson's PR piece linked by laodan. I used to work for a big law firm that had
an international practice group focusing on moving US businesses to China ( I was not
involved in that practice area, did environmental law and litigation.) The firm's PR
department tasked lawyers with certain expertise to generate these kinds of come-ons as part
of the compensation weighting scheme -- publish, and bring in business, or lose out in the
annual "whining for dollars" partnership division of spoils. Eat what you kill.
Dickinson is talking his book, of course. I have no idea if his read of the history and
the current state of affairs in China and the "Asian Tigers" (does anyone use that term any
more?) is accurate and complete, but what he describes is his firm's readiness to help
supranational (emphasize SUPRAnational) and post-national corporate entities get a leg up in
the race to the bottom. He'll help you find the places where the ruling class will give away
the biggest share of the "national birthright" so the corporate entity can maximize profit by
streamlining production and consumption, and of course growth. All the stuff that is killing
the planet. But his time frame, his personal time frame, presumably, as well as the framing
of the corporate shark entities which he is a remora to, cares nothing for the bigger
economic and ecological effects of more stuff, more shipping, more energy use, and of course
more combustion and consumption.
And I'd note that he carefully omits all the baksheesh and greasing of palms that i read
is such an important part of "doing business" at any kind of scale, to varying degrees
everywhere in the world. I wonder if his custom analyses of the relative merits of, say,
Vietnam vs. China vs. Cambodia vs. Taiwan includes sketching out the bribes that have to be
paid to close on the sale of national birthrights on the way to the bottom that the globalist
business model drives everything toward?
I'm sure he would be happy to have the ear and hourly billings of all the great decision
makers of all the various kinds of businesses, high to low tech, wanting to take full
advantage of the "opportunities" that may be on offer, on how to ride the asymptotically
downward curve of the race to the bottom, for fun and profit
Looks like China has had a pretty effective industrial policy, unlike the US where
corporate vampire capital dominion and corruption have bled the mopery white (not a racial
reference, of course ) Do economists and policy wonks in the US even dare to use the phrase
"industrial policy" any more? Or is it just presumed that "shareholder value" trumps all
else? Especially as the author puts it, again quoting Ferguson, where we are "in an era where
human advancement depends on greater integration between economic powers."
The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the
death blow to American Labor is over. In that light it makes little difference whether our
corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest
is coming to an end. And none too soon.
For national security reasons at minimum, I hope some candidates discuss the imperative to
have the US start making it's own medications again.
Makes more sense to subsidize our production of medication than to give billions in subsidies
to very profitable oil companies.
I agree. I could not believe the government has allowed the entire supply chain of
building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S
the national security issue we need to deal with immediately. As well as other vital
drugs..
Anecdotally, I have started making this my number one political conversation issue –
replete with references ( because of course not a soul believes it at first).. I have yet to
find a single person Repub or Demo who isn't horrified and against it .
Any nation with this much power over our drug supply they could kill millions of us in short
order
Even getting manufacturing out of China will not bankrupt that country as intended. If USA
is intent on pursuing a nationalistic basis to sanctions, I think its bound to fail. Trade
always finds a way as we can well remember from our own commercial / industrial
development.
Chinese manufacturers have the wealth and experience to teach production line workers and
make things anywhere. Western companies manufacturing in China have belatedly looked for
facilities in neighboring countries and found the Chinese are already there. What's still
available is land far from roads and rivers with little power supply.
Another thing is preserving wealth. US Industrialists will keep their money offshore and
remit only as much as they need in the homeland. A major problem imo is a mental restraint in USA thinking. Life is all about competition
and winning. The actual activity, whatever it is, provides no joy unless you win. That
fearful tag "No-one remembers who came second" is banded about. Thats not a philosophy for
happiness. It forces the population into displacement activities few of which are wholesome.
Here endeth the lesson.
It's not a bug, it's a feature! Trump doesn't give a damn about getting manufacturing jobs back into the United States!
(Or at least his advisors don't).
The trick is to move them out of nationalistic China, which is setting itself up as a
competitor for power, and move the jobs into nice docile low-wage colonies, like Mexico and
Indonesia and Bangladesh.
The only catch: China has all the integrated supply lines and is stable. Moving your
manufacturing into a dozen different uncoordinated unstable third-world banana republics has
its own down side.
The UK repealed the Corn Laws to embark on free trade. This reduced the price of bread, and lowered the cost of living, so UK employers could pay
internationally competitive wages. Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employer pays through wages, so the employer
is paying for that bread through wages. Expensive bread leads to higher wages making UK employers unable to compete in a free
trade world. "The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
Disposable income = wages – (taxes + the cost of living) Employees get their money from wages and the employer pays via wages. Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit. Ricardo is just talking about housing costs, employees all rented in those days. The appalling conditions UK workers lived in during the 19th century were well
documented.
Low housing costs, lead to lower wages so UK employers were able to compete in a free
trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had
disappeared by the 20th. The West's high cost of living means high wages and an inability to
compete in a free trade world.
Never mind our companies can off-shore to where employers can pay lower wages for higher
profits. Look at the US cost of living Donald; this is why those jobs ain't coming back. It's hard to make a good profit in the US, when employers have to cover the US cost of
living in wages, reducing profit. The cost of living = housing costs + healthcare costs + student loan costs + other debt
repayments + food + other costs of living
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history.
It was all going so well, until the neoliberals got to work.
The US created an open, globalised world with the Washington Consensus.
China went from almost nothing to become a global super power.
That wasn't supposed to happen, let's get the rocket scientists onto it.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
It did have, but now China has become too expensive and developed Eastern economies are
off-shoring to places like Vietnam, Bangladesh and the Philippines.
An open, globalised world is a race to the bottom on costs.
"The Washington Consensus was always going to work better for China than the US"
the rocket scientists.
Several years ago Naked Capitalism ran an article about how a young George Ball was one of
the New Immoralists for International Corporate Globalonial Plantationism. And that was
before neoliberalism.
"[A]n era where human advancement depends on greater integration between economic
powers."
Oh, by all the gods, no. And what, pray, defines 'human advancement'? What the hell is Mr Auerback talking
about?
Further integration only propels the speed at which resources are extracted and the planet
dies incrementally more. The future will not be one fully integrated planet guided by
whatever-the-hell oligarchs and their 'meritocratic' servitors deign the best options. The
future will of necessity be vastly more local, vastly more hand-made, vastly less energy- and
resource-intensive, and there will be vastly less intercontinental and intra-continental
trade. World-spanning – even continent-spanning political-economic arrangements have no
long term viability whatsoever. Trying to maintain such is a foolish waste of effort and
resources that could be more usefully be directed at de-growth and de-industrialization.
And with that, The Lord Curmudgeon shook his cane one last time at the kids on his lawn
and returned to the troll's cave from which he came.
The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. China was the latest victim of neoclassical economics. The biggest danger to capitalism is neoclassical economics; it brought capitalism to its
knees in the 1930s and is having another go now.
1929 and 2008 look so similar because they are; it's the same economics and thinking. Richard Vague has analysed the data for 1929 and 2008 and they were even more similar than
they initially appear. Real estate lending was actually the biggest problem in 1929.
Margin lending was another factor in 2008.
The 1920s US mistake is now global.
Japan, the UK, the US, Euro-zone and now China. The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. The debt fuelled growth model not only runs out of steam, all the debt in the economy then
acts like a drag anchor holding the economy back. Japan has been like this for thirty years.
Richard Koo explains the processes at work in the Japanese economy since the 1990s, which
are at now at work throughout the global economy.
"... The aim of the panel, called the Joint Authorities Technical Review, was to expedite getting the 737 Max into the air by creating a vehicle for achieve consensus among foreign regulators who had grounded the 737 Max before the FAA had. But these very regulators had also made clear they needed to be satisfied before they'd let it fly in their airspace. ..."
"... The FAA hopes to give the 737 Max the green light in November, while the other regulators all have said they have issues that are unlikely to be resolved by then. The agency is now in the awkward position of having a body it set up to be authoritative turn on the agency's own procedures. ..."
"... the FAA had moved further and further down the path of relying on aircraft manufactures for critical elements of certification. Not all of this was the result of capture; with the evolution of technology, even the sharpest and best intended engineer in government employ would become stale on the state of the art in a few years. ..."
"... Although all stories paint a broadly similar picture, .the most damning is a detailed piece at the Seattle Times, Engineers say Boeing pushed to limit safety testing in race to certify planes, including 737 MAX ..The article gives an incriminating account of how Boeing got the FAA to delegate more and more certification authority to the airline, and then pressured and abused employees who refused to back down on safety issues . ..."
"... In 2004, the FAA changed its system for front-line supervision of airline certification from having the FAA select airline certification employees who reported directly to the FAA to having airline employees responsible for FAA certification report to airline management and have their reports filtered through them (the FAA attempted to maintain that the certification employees could provide their recommendations directly to the agency, but the Seattle Times obtained policy manuals that stated otherwise). ..."
"... On Monday, the Post and Courier reported about the South Carolina plant that produced 787s found with tools rattling inside that Boeing SC lets mechanics inspect their own work, leading to repeated mistakes, workers say. These mechanic certifications would never have been kosher if the FAA were vigilant. Similarly, Reuters described how Boeing weakened another safety check, that of pilot input. ..."
"... As part of roughly a dozen findings, these government and industry officials said, the task force is poised to call out the Federal Aviation Administration for what it describes as a lack of clarity and transparency in the way the FAA delegated authority to the plane maker to assess the safety of certain flight-control features. The upshot, according to some of these people, is that essential design changes didn't receive adequate FAA attention. ..."
"... But the report could influence changes to traditional engineering principles determining the safety of new aircraft models. Certification of software controlling increasingly interconnected and automated onboard systems "is a whole new ballgame requiring new approaches," according to a senior industry safety expert who has discussed the report with regulators on both sides of the Atlantic. ..."
"... For instance, the Journal reports that Canadian authorities expect to require additional simulator training for 737 Max pilots. Recall that Boeing's biggest 737 Max customer, Southwest Airlines, was so resistant to the cost of additional simulator training that it put a penalty clause into its contract if wound up being necessary. ..."
"... Patrick Ky, head of the European Union Aviation Safety Agency, told the European Parliament earlier this month, "It's very likely that international authorities will want a second opinion" on any FAA decision to lift the grounding. ..."
"... Most prominently, EASA has proposed to eventually add to the MAX a third fully functional angle-of-attack sensor -- which effectively measures how far the plane's nose is pointed up or down -- underscoring the controversy expected to swirl around the plane for the foreseeable future. ..."
"... It's hard to see how Boeing hasn't gotten itself in the position of being at a major competitive disadvantage by virtue of having compromised the FAA so severely as to have undercut safety. ..."
"... has Boeing developed a plan to correct the trim wheel issue on the 787max? i haven't seen a single statement from them on how they plan to fix this problem. is it possible they think they can get the faa to re-certify without addressing it? ..."
"... Don't forget that the smaller trim wheels are in the NG as well. any change to fix the wheels ripples across more planes than just the Max ..."
"... The self-inflicted wound caused by systematic greed and arrogance – corruption, in other words. Boeing is reaping the wages of taking 100% of their profits to support the stock price through stock buybacks and deliberately under-investing in their business. Their brains have been taken over by a parasitic financial system that profits by wrecking healthy businesses. ..."
"... Shareholder Value is indeed the worst idea in the world. That Boeing's biggest stockholder, Vanguard, is unable to cleanup Boeing's operations makes perfect sense. I mean vanguards expertise is making money, not building anything. Those skills are completely different. ..."
"... One maxim we see illustrated here and elsewhere is this: Trust takes years to earn, but can be lost overnight. ..."
The FAA evidently lacked
perspective on how much trouble it was in after the two international headline-grabbing crashes
of the Boeing 737 Max. It established a "multiagency panel" meaning one that included
representatives from foreign aviation regulators, last April. A new Wall Street Journal article
reports that the findings of this panel, to be released in a few weeks, are expected to
lambaste the FAA 737 Max approval process and urge a major redo of how automated aircraft
systems get certified .
The aim of the panel, called the Joint Authorities Technical Review, was to expedite getting
the 737 Max into the air by creating a vehicle for achieve consensus among foreign regulators
who had grounded the 737 Max before the FAA had. But these very regulators had also made clear
they needed to be satisfied before they'd let it fly in their airspace.
The JATR gave them a venue for reaching a consensus, but it wasn't the consensus the FAA
sought. The foreign regulators, despite being given a forum in which to hash things out with
the FAA, are not following the FAA's timetable. The FAA hopes to give the 737 Max the green
light in November, while the other regulators all have said they have issues that are unlikely
to be resolved by then. The agency is now in the awkward position of having a body it set up to
be authoritative turn on the agency's own procedures.
The Seattle Times, which has broken many important on the Boeing debacle, reported on how
the FAA had moved further and further down the path of relying on aircraft manufactures for
critical elements of certification. Not all of this was the result of capture; with the
evolution of technology, even the sharpest and best intended engineer in government employ
would become stale on the state of the art in a few years.
However, one of the critical decisions the FAA took was to change the reporting lines of the
manufacturer employees who were assigned to FAA certification.
From a May post :
Although all stories paint a broadly similar picture, .the most damning is a detailed
piece at the Seattle Times,
Engineers say Boeing pushed to limit safety testing in race to certify planes, including 737
MAX ..The article gives an incriminating account of how Boeing got the FAA to delegate
more and more certification authority to the airline, and then pressured and abused employees
who refused to back down on safety issues .
As the Seattle Times described, the problems extended beyond the 737 Max MCAS software
shortcomings; indeed, none of the incidents in the story relate to it.
In 2004, the FAA changed its system for front-line supervision of airline certification
from having the FAA select airline certification employees who reported directly to the FAA
to having airline employees responsible for FAA certification report to airline management
and have their reports filtered through them (the FAA attempted to maintain that the
certification employees could provide their recommendations directly to the agency, but the
Seattle Times obtained policy manuals that stated otherwise).
Mind you, the Seattle Times was not alone in depicting the FAA as captured by Boeing. On
Monday, the Post and Courier reported about the South Carolina plant that produced 787s found
with tools rattling inside that
Boeing SC lets mechanics inspect their own work, leading to repeated mistakes, workers say.
These mechanic certifications would never have been kosher if the FAA were vigilant. Similarly,
Reuters described how Boeing weakened another safety check, that of pilot input.
One of the objectives for creating this panel was to restore confidence in Boeing and the
FAA, but that was always going to be a tall order, particularly after more bad news about
various 737 Max systems and Boeing being less than forthcoming with its customers and
regulators emerged.
From the Wall Street Journal :
As part of roughly a dozen findings, these government and industry officials said, the
task force is poised to call out the Federal Aviation Administration for what it describes as
a lack of clarity and transparency in the way the FAA delegated authority to the plane maker
to assess the safety of certain flight-control features. The upshot, according to some of
these people, is that essential design changes didn't receive adequate FAA attention.
The report, these officials said, also is expected to fault the agency for what it
describes as inadequate data sharing with foreign authorities during its original
certification of the MAX two years ago, along with relying on mistaken industrywide
assumptions about how average pilots would react to certain flight-control emergencies .
The FAA has stressed that the advisory group doesn't have veto power over modifications to
MCAS.
But the report could influence changes to traditional engineering principles determining
the safety of new aircraft models. Certification of software controlling increasingly
interconnected and automated onboard systems "is a whole new ballgame requiring new
approaches," according to a senior industry safety expert who has discussed the report with
regulators on both sides of the Atlantic.
If the FAA thinks it can keep this genie the bottle, it is naive. The foreign regulators
represented on the task force, including from China and the EU, have ready access to the
international business press. And there will also be an embarrassing fact on the ground, that
the FAA, which was last to ground the 737 Max, will be the first to let it fly again, and
potentially by not requiring safety protections that other regulators will insist on. For
instance, the Journal reports that Canadian authorities expect to require additional simulator
training for 737 Max pilots. Recall that Boeing's biggest 737 Max customer, Southwest Airlines,
was so resistant to the cost of additional simulator training that it put a penalty clause into
its contract if wound up being necessary.
It's a given that the FAA will be unable to regain its former stature and that all of its
certifications of major aircraft will now be second guessed subject to further
review by major foreign regulators. That in turn will impose costs on Boeing, of changing its
certification process from needing to placate only the FAA to having to appease potentially
multiple parties. For instance, the EU regulator is poised to raise the bar on the 737 Max:
Patrick Ky, head of the European Union Aviation Safety Agency, told the European
Parliament earlier this month, "It's very likely that international authorities will want a
second opinion" on any FAA decision to lift the grounding.
Even after EASA gives the green light, agency officials are expected to push for
significant additional safety enhancements to the fleet. Most prominently, EASA has proposed
to eventually add to the MAX a third fully functional angle-of-attack sensor -- which
effectively measures how far the plane's nose is pointed up or down -- underscoring the
controversy expected to swirl around the plane for the foreseeable future.
A monopoly is a precious thing to have. Too bad Boeing failed to appreciate that in its zeal
for profits. If the manufacturer winds up facing different demands in different regulatory
markets, it will have created more complexity for itself. Can it afford not to manufacture to
the highest common denominator, say by making an FAA-only approved bird for Southwest and
trying to talk American into buying FAA-only approved versions for domestic use only? It's hard
to see how Boeing hasn't gotten itself in the position of being at a major competitive
disadvantage by virtue of having compromised the FAA so severely as to have undercut
safety.
Even if Boeing finds solutions that international regulators can finally accept, their
implementation will take additional months. The AoA sensor and trim wheel issues will
likely require hardware changes to the 600 or so existing MAX airplanes. The demand for
simulator training will further delay the ungrounding of the plane. There are only some two
dozen 737 MAX simulators in this world and thousands of pilots who will need to pass
through them.
has Boeing developed a plan to correct the trim wheel issue on the 787max? i haven't seen
a single statement from them on how they plan to fix this problem. is it possible they think
they can get the faa to re-certify without addressing it?
The self-inflicted wound caused by systematic greed and arrogance – corruption, in
other words. Boeing is reaping the wages of taking 100% of their profits to support the stock
price through stock buybacks and deliberately under-investing in their business. Their brains
have been taken over by a parasitic financial system that profits by wrecking healthy
businesses.
It's not only Boeing – the rot is general and it is terrible to see the destruction
of American productive capacity by a parasitic finance sector.
Shareholder Value is indeed the worst idea in the world. That Boeing's biggest
stockholder, Vanguard, is unable to cleanup Boeing's operations makes perfect sense. I mean
vanguards expertise is making money, not building anything. Those skills are
completely different.
Shareholder value does what it intended to do, which is to maximise stock value in the
short term, even if it significantly cuts value in the long term.
By that measure allowing Boeing to take over the FAA and self-certify the 737-MAX was a
big success, because of short term maximization of stock value that resulted. It is now
someone else's problem regarding any long term harm.
Having worked at Boeing and the FAA, this report is very welcome. One thing: federal
hiring practices in a way lock out good people from working there. Very often the fed
managing some project has only a tenuous grasp is what is going on.
But has the job bc they
were hired in young and cheap, which is what agencies do with reduced budgets. That and job
postings very often stating that they are open only to current feds says it all.
So deferring
to the airline to "self-certify" would be a welcome relief to feds in many cases. At this
point, I doubt the number of their "sharpest and best intended" engineers is very high.
If
you want better oversight, then increase the number and quality of feds by making it easier
to hire, and decrease the number of contractors.
I deal with federal and state regulators (not airplane) all the time. Very well meaning
people, but in many cases are utterly unqualified to do the technical work. So it works well
when they stick to the policy issues and stay out of the technical details.
However, we have
Professional Engineers and other licensed professionals signing off on the engineering
documents per state law. You can look at the design documents and the construction
certification and there is a name and stamp of the responsible individual.
The licensing laws clearly state that the purpose of licensing is to hold public health
and safety paramount. This is completely missing in the American industrial sector due to the
industrial exemptions in the professional engineering licensing laws. Ultimately, there is
nobody technically responsible for a plane or a car who has to certify that they are making
the public safe and healthy.
Instead, the FAA and others do that. Federal agencies and the
insurance institute test cars and give safety ratings. Lawyers sue companies for defects
which also helps enforce safety.
One maxim we see illustrated here and elsewhere is this: Trust takes years to earn, but
can be lost overnight.
Boeing management and the FAA, having lost the trust of most people in the world through
their actions lately, seem to nevertheless think it will be a simple matter to return to the
former status quo. It seems as likely, or perhaps more likely, that they will never be
able to return to the former status quo. They have been revealed as poseurs and imposters,
cheerfully risking (and sometimes losing) their customers' lives so they can buy back more
stock.
This image will be (rightfully) hard for them to shake.
So people are going to quit their jobs rather than fly on Boeing planes? Joe and Marge
Six-Pack are going to choose flights not based on what they can afford but based on what make
of plane they are flying on? As if the airlines will even tell them in advance?
There are close to zero consequences to Boeing and FAA management. Click on the link to
the Purdue Sacklers debacle. The biggest inconvenience will be paying the lawyers.
From 1992 to 1999 I worked for the FAA running one of their labs in OKC. My role, among
other things, was to provide data to the Administrator on employee attitudes, business
practice changes, and policy impact on morale and safety. Back then, likely as now, it was a
common complaint heard from FAA execs about the conflict of interest of having to be both an
aviation safety regulatory agency and having to promote aviation. Congress seemed fine with
that – apparently still is. There is FAA pork in nearly every Congressional district
(think airports for example). Boeing is the latest example of how mission conflict is not
serving the aviation industry or public safety. With its headquarters within walking distance
of Capitol Hill, aviation lobbyists do not even get much exercise shuttling.
The 1996 Valuejet crash into the Florida swamps shows how far back the mission conflict
problem has persisted. Valuejet was a startup airline that was touted as more profitable than
all the others. It achieved that notoriety by flying through every FAA maintenance loophole
they could find to cut maintenance costs. When FAA started clamping down, Senate Majority
Leader Daschle scolded FAA for not being on the cutting edge of industry innovation. The
message was clear – leave Valuejet alone. That was a hard message to ignore given that
Daschle's wife Linda was serving as Deputy FAA Administrator (the #2 position) – a
clear conflict of interest with the role of her spouse – a fact not lost on
Administrator Hinson (the #1 position). Rather than use the disaster as an opportunity to
revisit FAA mission conflict, Clinton tossed Administrator Hinson into the volcano of public
outcry and put Daschle in charge. Nothing happened then, and it looks like Boeing might
follow Valuejet into the aviation graveyard.
Nothin' like regulatory capture. Along with financialized manufacturing, the cheap &
profitable will outdo the costly careful every time. Few businesses are run today with the
moral outlook of some early industrialists (not enough of them, but still present) who,
through zany Protestant guilt, cared for their reputations enough to not make murderous
product, knowing how the results would play both here and in Heaven. Today we have PR and
government propaganda to smear the doubters, free the toxic, and let loose toxins.
From food to clothing, drugs to hospitals, self-propelled skateboards to aircraft,
pesticides to pollution, even services as day care & education, it is time to call the
minions of manufactured madness to account. Dare we say "Free government from Murder
Inc."?
This is an excellent summary of the untenable situation that Boeing and the Federal
Government have gotten themselves into. In their rush to get richer the Elite ignored the
fact that monopolies and regulatory capture are always dangerously corrupt. This is not an
isolated case. FDA allows importation of uninspected stock pharmaceutical chemicals from
China. Insulin is unaffordable for the lower classes. Diseases are spreading through homeless
encampments. EPA approved new uses of environmentally toxic nicotinoid insecticide,
sulfoxaflor. DOD sold hundreds of billions of dollars of armaments to Saudi Arabia that were
useless to protect the oil supply.
The Powers-that-be thought that they would be a hegemon forever. But, Joe Biden's green
light for the Ukraine Army's attack against breakaway Donbass region on Russia's border
restarted the Cold War allying Russia with China and Iran. This is a multi-polar world again.
Brexit and Donald Trump's Presidency are the Empire's death throes.
NC readers know what the problem is as two comments above indicate clearly. Isn't the FAA
ashamed to keep conniving with the money and permitting dangerous planes to fly?
Boeing just got a WTO ruling against Airbus. It seems that one rogue produces others. Time
to clean the stable and remove the money addiction from safety regulation
I think that I can see an interesting situation developing next year. So people will be
boarding a plane, say with Southwest Airlines, when they will hear the following announcement
over the speakers-
"Ladies and gentlemen, this is your Captain speaking. On behalf of myself and the
entire crew, welcome aboard Southwest Airlines flight WN 861, non-stop service from Houston
to New York. Our flight time will be of 4 hours and 30 minutes. We will be flying at an
altitude of 35,000 feet at a ground speed of approximately 590 miles per hour.
We are pleased to announce that you have now boarded the first Boeing 737 MAX that has
been cleared to once again fly by the FAA as being completely safe. For those passengers
flying on to any other country, we regret to announce that you will have to change planes at
New York as no other country in the world has cleared this plane as being safe to fly in
their airspace and insurance companies there are unwilling to issue insurance cover for them
in any case.
So please sit back and enjoy your trip with us. Cabin Crew, please bolt the cabin doors
and prepare for gate departure."
"The Trade War Spurs China's Technology Innovators Into Overdrive" [
Industry Week ]. "In Shenzhen's glitzy financial district, a five-year-old outfit creates a
360-degree sports camera that goes on to win awards and draw comparisons to GoPro Inc.
Elsewhere in the Pearl River Delta, a niche design house is competing with the world's best
headphone makers. And in the capital Beijing, a little-known startup becomes one of the biggest
purveyors of smartwatches on the planet. Insta360, SIVGA and Huami join drone maker DJI
Technology Co. among a wave of startups that are dismantling the decades-old image of China as
a clone factory -- and adding to Washington's concerns about its fast-ascending international
rival.
Within the world's No. 2 economy, Trump's campaign to contain China's rise is in fact
spurring its burgeoning tech sector to accelerate design and invention. The threat they
pose is one of unmatchable geography: by bringing design expertise and innovation to the place
where devices are manufactured, these companies are able to develop products faster and more
cheaply ." •
Gee, didn't we have this advantage once? Thanks, neoliberals!
"... Furthermore, because of the horrific legacy of the one-child policy, China faces a rapidly aging population that will strain resources and reduce the number of working-age people . By 2050, it is estimated that the average Chinese will be 56 years of age. In contrast, the average American will be 44. No amount of spending or legal reform will prevent Beijing's coming demographic crisis. ..."
Part of the Trump administration's
latest round of 15 percent tariffs on Chinese imports went into effect Sunday, with the
rest to follow on December 15. These increases will impact the prices of many consumer goods
that Americans rely on, including clothing, appliances, televisions, smartwatches, textbooks,
diapers, coffee, and even whiskey. And given their timing, they'll likely have an effect on
holiday shopping. This makes all the more welcome President Trump's
recent statement during the G7 summit that China is looking to end the trade war and that
he too is open to making a deal.
Trump is right to negotiate with Chinese President Xi Jinping, as finding an off-ramp from
the trade war should be Washington's priority. America's interest is in out-competing Beijing,
not hurting our own economy in an attempt to damage theirs. The United States has a better hand
here, but we must play it to our advantage.
America's great strength is in our freedom, our market economy, and our democratic system.
The United States has attained a level of prosperity unseen in human history, and that economic
engine is what fuels our military power. Without a strong economy, we cannot have a strong
military. Thus an endless trade war endangers American security in the long term: as both sides
pile on retaliatory tariffs, the risk of recession increases. American consumers will feel each
new trade barrier as it hits their pocketbooks.
Washington must not pursue policies that hurt those it governs. And the suffering inflicted
by a trade war wouldn't just be limited to the pricing of consumer goods. It would also make us
weaker for no good reason. And it would lower tax revenues, requiring America to go further
into debt to maintain our present level of security.
Advertisement
Moreover, long-term trade attacks on China are unnecessary, because China already has more
problems than America. Beijing suffers from high national debt, a lack of clear economic
reform, and a rapidly aging population. It has few, if any, good or timely solutions to these
pressing issues.
According to the Institute of International Finance, China's total national, corporate, and
household debt is now
over 300 percent of its GDP. What makes this especially bad for Beijing is that the debt
was taken on very quickly after the 2008 global recession, without the power of a global
reserve currency to make borrowing easier, as the United States has. Moreover, this debt is
largely corporate and China's state-capitalist system makes it harder for Chinese companies
survive market pressures. Beijing has used cheap credit to fuel its exports and its economic
rise through fully and partially state-controlled national companies.
The Chinese economic system has undergone some reforms in recent years but
still remains too top-down and too focused on exports over consumption as compared to more
developed economies. In other words, China needs to transition to a full market economy like
Taiwan and South Korea did on their paths to prosperity, but it hasn't done so yet.
Furthermore, because of the horrific legacy of the one-child policy, China faces a
rapidly aging population that will strain resources and reduce the number of
working-age people . By 2050, it is estimated that the average Chinese will be 56 years of
age. In contrast, the average American will be 44. No amount of spending or legal reform will
prevent Beijing's coming demographic crisis.
This comparative weakness is why it makes sense to find a trade war off-ramp sooner rather
than later. China needs one badly and will eventually want a deal -- if it doesn't already. As
for the United States, recession may be inevitable, but it would be better if it were not
self-inflicted.
Already the trade war has cost American billions in higher prices for
imported products. American farmers have
been hit hard by China's retaliatory tariffs and, according to
a report by IHS Markit, U.S. manufacturing has shrunk for the first since 2009. Economists
polled by Reuters believe the trade war has increased the risk of a recession, with a
median of those surveyed giving a 45 percent chance of a downturn over the next two years.
Additionally, major
banks have
expressed concerns , as the stock market takes hits with every new tariff increase and
angry statement between Washington and Beijing.
I couldnt disagree more. I want more tariffs against China and Europe. I want closed borders
and zero migration. China has infiltrated our government, our defense agencies, our nuclear
agencies, our major research centers, our college campuses, our media and bribed our
politicians. China is an imminent threat to Hong Kong, Taiwan and its militarization of the
islands in the South China Sea are a threat to all of South Asia. China has been stealing US,
Canadian and European technology for decades to leapfrog the US into technological dominance
globally. China's plan is to force the US our of the Asia Pacific. China has infiltrated
Canada and Australia to a similar degree (if not more) than the US. If you pander to these
free trade globalists then you will be paving the way for a military conflict between Chinese
and American Hegemony in Asia and elsewhere around the world. I dont know about you but I
will take a tariff and trade war over a military war any day. Ramp up those tariffs and shift
those supply chains out of China toward more benevolent allies and the world be be all the
safer for it.
China has been waging a one sided trade war against us for over 30 years, it's about time we
resisted. Becoming more economically intertwined with our dangerous and genocidal rival
doesn't sound like the right answer to me, especially when China will continue protectionist
policies and currency manipulation regardless of what we do. America has allowed its
industrial base to hemorrhage since the 70s, and bending over for our enemy to keep cheap
trash flowing and American factories closed is not the right answer.
Is this a white box article the Chamber of Commerce is using to astroturf?
China is a Monstrous regime that is killing and enslaving its citizens. It will simply
kill everyone over 65, then 60 if it becomes convenient like they did with their one child
policy. Problem solved.
You wish to keep trading with criminals, polluters, and pirates so you can get cheap junk
at WalMart?
You have a job. I wish you would lose yours and that dozens of blue collar had working but
laid off Americans can find one. It isn't how much something costs in dollars (or how much of
your soul it costs), it is how much it costs in your virtuous labor. I'd rather pay double
for stuff but get triple wages rather than pay half but be all but permanently
unemployed.
Well said. Calling off the trade would be good for US consumers and the economy in general.
But while we are on the subject,calling off the war on immigration would also be good for US
consumers and the economy in general.
Wow. This article is off-base on any number of levels.
"These increases will impact the prices of many consumer goods that Americans rely
on,"
No, no they won't. Tariffs are paid for by the importer, not the consumer. If the importer
could randomly increase prices, they would do so without tariffs. The market sets prices.
"America's interest is in out-competing Beijing, not hurting our own economy in an attempt
to damage theirs."
If America could out-compete Beijing, American manufacturing would not have moved to
China. It turns out, the American people simply don't want to live according to 3rd world
standards. We want decent homes and stuff. We don't want to live in a cesspool of pollution.
I'm sure the Chinese people have the same preferences, they just don't get a choice.
"Moreover, long-term trade attacks on China are unnecessary, because China already has
more problems than America."
I agree with the author here, but not for the same reasons. Attacking China doesn't
resolve anything. American companies will just move to a different 3rd world country with
whom we can't complete. Why should I care if my clothes come from China or Vietnam?
I am 100% supportive of the trade war and building the wall and tariffs. I say zero
immigration and make all Chinese Tariffs permanent. Negotiate a trade deal with the tariffs
intact. Id rather have a trade war with China and permanent tariffs than a war with China.
China has been stealing technology and has infiltrated media, government, defense,
education, government officials (usually through bribes) from the US, Canada, Australia and
Europe. China is proving itself to be a threat to Hong Kong, Taiwan, Vietnam, Philippines,
Indonesia, India and South Asia.
Much of this "so called Russia Collusion" is actually a deflection of democratic
politicians China is bribing to take down Trump in order to continue their military and
technological theft, their existing preferential trade and their existing network. China is a
serious danger to the US and the rest of the world. It is preferential to sacrifice a small
amount of prosperity today for long term peace with China.
Propaganda. The aging of Chinese population? Not to worry, China has no real Social Security
system, and so relies on massive surpluses of savings. The 300% consumer debt ratio? That
would cripple any country with no help from trade. Should we let Wells Fargo and Goldman
refinance them?
Farmers hit hard? As I recall we have had the worst corn harvest in decades, and shame on
us for not growing more wheat, oats, and sugar cane. Our beef and poultry prices will be
affected, not to mention our fast food industry, which has been whipsawed by political
correctness. But China will effectively ration its pork, as it faces an even worse African
Swine Flu crisis, and an additional one on grains from the Black Army Worm.
US decline in manufacturing? Look first at our glut of automobiles, and the self vetting
of plant capacity by GM. Don't forget the crisis in car leases, which have made older cars
worth less than their outstanding loans. And note, that the fall in lithium prices indicates
that China's car electrification initiative is falling flat.
One thing left out of the equation is oil. And why should China live high on Iranian oil
(mostly wastefully burned in power plants, mind you, and not cars) while we suffer attacks on
Saudi oil from Iranian proxies (all on ChiRussia's dime)? Puts our trade negotiations in
clear perspective, doesn't it?
Stopping the war will not bring back China as our major trading partner. China is not going
to be in this vulnerable position with America again. She is going to develop other markets
Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson
CHICAGO -- America's next fight with China is unfolding at a glistening new factory in
Chicago, which stands empty except for the shells of two subway cars and space for future
business that is unlikely to come.
A Chinese state-owned company called CRRC Corporation, the world's largest train maker,
completed the $100 million facility this year in the hopes of winning contracts to build subway
cars and other passenger trains for American cities like Chicago and Washington.
But growing fears about China's economic ambitions and its potential to track and spy on
Americans are about to quash those plans. Congress is soon expected to approve legislation that
would effectively bar the company from competing for new contracts in the United States, citing
national security and economic concerns. The White House has expressed its support for the
effort.
Washington's attempt to block a Chinese company from selling train cars inside America is
the latest escalation in a trade war that has quickly expanded from a spat over tariffs and
intellectual property to a broader fight over economic and national security.
President Trump and lawmakers from both parties are increasingly anxious about the economic
and technological ambitions of China, which has built cutting-edge global industries, including
those that produce advanced surveillance technology. Those fears have prompted Washington to
take an expansive view of potential risks, moving beyond simply trying to curtail Chinese
imports.
In addition to slapping tariffs on $360 billion worth of Chinese products, the
administration has banned Chinese companies like Huawei, the telecom giant, from buying
sensitive American technology. It is moving to curb the ability of firms to export technology
like artificial intelligence and quantum computing from the United States to China. And
Congress has given the administration expansive power to block Chinese investment on national
security grounds.
Now lawmakers have added a provision to a military spending bill that would prevent the use
of federal grants to buy subway trains from state-owned or state-controlled companies, a
measure that would effectively block CRRC's business.
The bill has gained bipartisan support from lawmakers who say companies like CRRC pose a
threat to the United States. Part of the concern is economic: Flush with cash from its rapid
growth, China has pumped money into building globally competitive businesses, often creating
overcapacity in markets like steel, solar panels and trains.
That has lowered prices for consumers -- including American taxpayers who pay for subway
cars. While a subway car has not been manufactured solely by an American company in decades,
CRRC's low prices have raised concerns among American freight train companies that the company
could ultimately move into -- and demolish -- their business.
CRRC has consistently underbid its competitors, winning over urban transit agencies that
are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC's Chicago
subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by
Bombardier, the Canadian manufacturer. And CRRC also proposed to build the Chicago facility and
create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy
aims of the Chinese government to dominate key global industries like electric cars, robotics
and rail.
"When you can subsidize, when you can wholly own an enterprise like China does, you can
create a wholly unlevel playing field," said Senator Tammy Baldwin, a Wisconsin Democrat who is
a co-sponsor of the legislation. "We're used to that unlevel playing field existing between the
U.S. and China, but now it's happening in our own backyard."
Another more nefarious worry is also at play. Lawmakers -- along with CRRC's competitors --
say they are concerned that subway cars made by a Chinese company might make it easier for
Beijing to spy on Americans and could pose a sabotage threat to American infrastructure, though
CRRC says it surrenders control of all technology in the cars to its buyers. Nonetheless,
critics speculate that the Chinese firm could incorporate technology into the cars that would
allow CRRC -- and the Chinese government -- to track the faces, movement, conversations or
phone calls of passengers through the train's cameras or Wi-Fi.
Scott Paul, the president of the Alliance for American Manufacturing, which represents
manufacturers and the United Steelworkers, said the risks of giving a Chinese company the
ability to monitor or control American infrastructure could not be understated given recent
laws requiring Chinese companies to turn over data to Beijing upon request.
"I just think it would be irresponsible to assume the Chinese government to which this firm
must answer would be a reliable security partner, given its well documented track record," Mr.
Paul said.
Whether those fears are justified remains uncertain. Proponents of the bill have not made
clear how subway cars manufactured by a Chinese company would pose a greater espionage threat
than everything else that China makes and sells in the United States, including laptops, phones
and home appliances.
Dave Smolensky, a spokesman for CRRC, said the company was being unfairly targeted by
companies that wanted to legislate a competitor out of business under the guise of national
security. He said the firm was a victim to "an aggressive multimillion-dollar media
disinformation campaign," funded mostly by domestic freight train companies, intended to play
on popular fears about China's rise.
Employees at the Chicago factory also dismissed the concerns, saying they had not seen any
evidence that they were working to construct "spy trains."
"I haven't seen any secret wires yet," said Perry Nobles, an electrician for CRRC who was
rigging wires in the interior of the trains. "With the world full of cellphones and computers,
I'd think there's an easier way to get information."
Rising fears of China's ambitions in Washington have prompted officials to adopt an
unsparing view, with policymakers and national security officials warning domestic and foreign
governments not to trust Chinese equipment.
American officials have waged a global offensive against Huawei, telling other countries
that allowing a Chinese company to build the world's next generation of wireless networks would
be akin to handing national secrets to a foreign agent.
Like CRRC, the fear surrounding Huawei is largely based on concerns about technological
dominance by China's authoritarian government. No one has yet disclosed finding a backdoor in
Huawei's products that would allow it to snoop -- but officials say by the time one is
discovered, it may be too late.
"The Chinese are working to put their systems in networks all across the world so they can
steal your information and my information," Secretary of State Mike Pompeo said in an interview
in May. "This administration is prepared to take this on."
As Senator John Cornyn, Republican of Texas, introduced the provision in March, he said,
"China poses a clear and present danger to our national security and has already infiltrated
our rail and bus manufacturing industries."
Representative Kevin McCarthy, a Republican whose California district is home to a Chinese
bus maker, BYD, had opposed a version of the provision that would apply to buses as well as
trains. House lawmakers dropped the bus provision, but the Senate bill would apply to both.
Congress will take the issue up again in the coming weeks as part of the annual defense
bill.
The legislation would not affect the thousands of American subway cars that CRRC previously
won contracts to build, including an 846-car order for the Chicago L. But it would block the
company from future contracts, such as those under consideration by the Chicago Metra and the
Washington Metro.
The Chicago facility is the company's second in the United States. A factory in
Massachusetts that employs more than 150 people is already building trains for Boston, Los
Angeles and Philadelphia, prompting concerns that the company plans to expand rapidly in the
United States as it has in other foreign markets.
Like many Chinese state enterprises, CRRC is guided by Beijing's Made in China 2025 plan,
which lays out an agenda to dominate key industries.
In its 2018 annual report, Liu Hualong, the company's chairman and party secretary, pledged
to pursue the dual goals of "Party construction as well as developing into a world-leading
company with global competitiveness."
"We conscientiously followed the important instructions of General Secretary Xi Jinping,"
the report said, referring to the Chinese president and Communist Party leader.
The last American firm to make passenger rail cars, the Pullman Company, produced its final
car in 1981. Since then, major American cities have bought subway cars from Bombardier and
Japanese manufacturers like Kawasaki, Hyundai and Hitachi.
But American manufacturers of freight rail cars, including the Greenbrier Companies and
TrinityRail, which is based in Mr. Cornyn's home state of Texas, say CRRC could use its footing
in the United States to steal its business. Together with unions and others, they have mounted
a lobbying campaign against CRRC under an umbrella group known as the Rail Security
Alliance.
The group says American taxpayer dollars should not be spent in China, where the empty rail
cars are made before being shipped to the United States for further work at the company's
facilities in Illinois or Massachusetts.
"We think those dollars should stay here," said Erik Olson, the vice president of the Rail
Security Alliance.
CRRC sends over experts from its giant headquarters in Qingdao, China, to plants in other
countries. In Chicago, the American employees call these Chinese citizens "shifu," a polite
term for a skilled worker meaning "master" or "teacher."
On a sunny day in July, the company break room was split between shifus, wearing white
jumpsuits and eating stuffed buns, and American workers, many of whom had joined the company in
the last few months. The gleaming concrete factory floor was bare, save for a few dozen people
installing wiring, air ducts and other components into the empty shells of two rail cars.
"We are a little concerned because it's our livelihood," said Mr. Nobles, who was hired in
March from a previous factory job making frames for the Ford Explorer.
This summer, CRRC replaced the Chinese flag outside the factory with a Chicago flag. It has
also retained two Washington lobbying firms, Squire Patton Boggs and Crossroads Strategies, to
plead its case in Congress.
It may be too late. Senator Sherrod Brown, Democrat of Ohio, said he helped sponsor the bill
to prevent the American transit system from being "controlled by a foreign country that is not
particularly friendly to us."
"They spell out in black and white they're going to use foreign investment as a weapon, and
we're taking action to defend ourselves," Mr. Brown said.
Clowns should be increasingly used in redundancy (layoff, firing) meetings until it
becomes the norm and employers start to compete with each other to offer the best clown
redundancy experience and promote it as a benefit.
It would also create clown jobs, which would probably require more clown schools, meaning
that the tuition prices would go through the roof and young people dreaming of becoming
redundancy clowns would either have to come from wealth or take out massive clown loans to
fund their education for clown universities and grad schools. Shareholders can only take so
much top line costs and Wall Street pressure would force corporations to improve return on
investment and reduce redundancy clown labor expenses. Sadly, redundancy clowns would find
themselves training their own replacements – HB1 clowns from "low cost" countries.
Employers would respond to quality criticisms of the HB1 clown experience by publishing
survey results showing very similar almost ex-employee satisfaction with the new clowns.
Eventually, of course, redundancy clowns will be replaced by AI and robots. It's just the
future and we will need to think about how to adapt to it today by putting in place a UBI for
the inevitable redundant redundancy clowns.
According to the great military thinker, Maj. Gen. J.F.C. Fuller, 'the object of war is not
victory. It is to achieve political goals.'
Too bad President Donald Trump does not read books. He has started economic wars against
China, Russia, Iran, Cuba and Venezuela without any clear strategic objective beyond inflating
his ego as the world's premier warlord and punishing them for disobedience.
Trump's wars are economic. They deploy the huge economic and financial might of the United
States to steamroll other nations that fail to comply with orders from Washington. Washington's
motto is 'obey me or else!' Economic wars are not bloodless. Imperial Germany and the Central
Powers were starved into surrender in 1918 by a crushing British naval blockade.
Trade sanctions are not making America great, as Trump claims. They are making America
detested around the globe as a crude bully. Trump's efforts to undermine the European Union and
intimidate Canada add to this ugly, brutal image.
Worse, Trump's tariff war against China has damaged the economy of both nations, the world's
leading economic powers, and raised tensions in Asia. The world is facing recession in large
part due to Trump's ill-advised wars. All to prove Trump's power and glory.
Trump and his advisors are right about China's often questionable trade practices. I did 15
years of business in China and saw a kaleidoscope of chicanery, double-dealing, and corruption.
A favorite Chinese trick was to leave imports baking in the sun on the docks, or long delaying
them by 'losing' paperwork.
I saw every kind of craziness in the Wild East Chinese market. But remember that it's a
'new' market in which western-style capitalism is only one generation old. Besides, China
learned many of its fishy trade practices from France, that mother of mercantilism.
China indeed steals technical and military information on a mass scale. But so does the US,
whose spy agencies suck up information across the world. America's claims to be a victim are
pretty rich.
What Trump & Co don't understand is that China was allowed into America's Greater Asia
Co-Prosperity Sphere by the clever President Nixon to bring it under US influence – just
as Japan and South Korea were in the 1950's. China's trade surplus with the US is its dividend
for playing by Washington's rules. If China's trade bonus is stripped away, so will China's
half-hearted acceptance of US policies. Military tensions will rise sharply.
In China's view, the US is repeating what Great Britain did in the 19th century by declaring
war to force opium grown in British-ruled Burma onto China's increasingly addicted people.
Today the trade crop is soya beans and wretched pigs.
Trump's ultimate objective, as China clearly knows, is to whip up a world crisis over trade,
then dramatically end it – of course, before next year's elections. Trump has become a
master dictator of US financial markets, rising or lowering them by surprise tweets. No
president should ever have such power, but Trump has seized it.
There is no telling how much money his minions have made in short or long selling on the
stock market thanks to insider information. America's trillion dollar markets have come to
depend on how Trump feels when he wakes up in the morning and watches Fox news, the Mother of
Misinformation.
It staggers the imagination to believe that Trump and his minions actually believe that they
can intimidate China into bending the knee. China withstood mass devastation and at least 14
million deaths in World War II in order to fight off Japanese domination. Does the White House
really think Beijing will cave in over soya beans and semi-conductors in a daft war directed by
a former beauty contest and casino operator? China's new emperor, Xi Jinping, is highly
unlikely to lose face in a trade war with the US. Dictators cannot afford to retreat. Xi can
wait it out until more balanced minds again occupy the White House.
Trade wars rarely produce any benefits for either side. They are the equivalent of sending
tens of thousands of soldiers to be mowed down by machine guns on the blood-soaked Somme
battlefield in WWI. Glory for the stupid generals; death and misery for the common soldiers
This fool's war of big egos will inevitably end in a face-saving compromise between
Washington and Beijing. Get on with it.
"... The old adage that the 'sea is always the sea' holds true for US foreign policy. And Iran repeating the same old routines, whilst expecting different outcomes is, of course, one definition of madness. A new US Administration will inherit the same genes as the last. ..."
"... And in any case, the US is institutionally incapable of making a substantive deal with Iran. A US President – any President – cannot lift Congressional sanctions on Iran. The American multitudinous sanctions on Iran have become a decades' long knot of interpenetrating legislation: a vast rhizome of tangled, root-legislation that not even Alexander the Great might disentangle: that is why the JCPOA was constructed around a core of US Presidential 'waivers' needing to be renewed each six months. Whatever might be agreed in the future, the sanctions – 'waived' or not – are, as it were, 'forever'. ..."
"... "[So] decoupling is already in motion. Like the shift of tectonic plates, the move towards a new tech alignment with China increases the potential for sudden, destabilizing convulsions in the global economy and supply chains. To defend America's technology leadership, policymakers must upgrade their toolkit to ensure that US technology leadership can withstand the aftershocks. ..."
"... "The key driver of this shift has not been the President's tariffs, but a changing consensus among rank-and-file policymakers about what constitutes national security. This expansive new conception of national security is sensitive to a broad array of potential threats, including to the economic livelihood of the United States, the integrity of its citizens personal data, and the country's technological advantage". ..."
"... A Quinnipiac University survey last week found for the first time in Trump's presidency, more voters now say the economy is getting worse rather than better, by a 37-31 percent margin – and by 41-37 percent, voters say the president's policies are hurting the economy. ..."
"... This is hugely significant. If Trump is experiencing a crisis of public confidence in respect to his assertive policies towards China, the last thing that he needs in the run-up to an election is an oil crisis, on top of a tariff/tech war crisis with China. A wrong move with Iran, and global oil supplies easily can go awry. Markets would not be happy. (So Trump's China 'bind' can also be Iran's opportunity ). ..."
There is consensus amongst the Washington foreign policy élite that all factions in
Iran understand that – ultimately – a deal with Washington on the nuclear issue
must ensue. It somehow is inevitable. They view Iran simply as 'playing out the clock', until
the advent of a new Administration makes a 'deal' possible again. And then Iran surely will be
back at the table, they affirm.
Maybe. But maybe that is entirely wrong. Maybe the Iranian leadership no longer believes in
'deals' with Washington. Maybe they simply have had enough of western regime change antics
(from the 1953 coup to the Iraq war waged on Iran at the western behest, to the present attempt
at Iran's economic strangulation). They are
quitting that failed paradigm for something new, something different.
The pages to that chapter have been shut. This does not imply some rabid anti-Americanism,
but simply the experience that that path is pointless. If there is a 'clock being played out',
it is that of the tic-toc of western political and economic hegemony in the Middle East is
running down, and not the 'clock' of US domestic politics. The old adage that the 'sea is
always the sea' holds true for US foreign policy. And Iran repeating the same old routines,
whilst expecting different outcomes is, of course, one definition of madness. A new US
Administration will inherit the same genes as the last.
And in any case, the US is institutionally incapable of making a substantive deal with
Iran. A US President – any President – cannot lift Congressional sanctions on Iran.
The American multitudinous sanctions on Iran have become a decades' long knot of
interpenetrating legislation: a vast rhizome of tangled, root-legislation that not even
Alexander the Great might disentangle: that is why the JCPOA was constructed around a core of
US Presidential 'waivers' needing to be renewed each six months. Whatever might be agreed in
the future, the sanctions – 'waived' or not – are, as it were, 'forever'.
If recent history has taught the Iranians anything, it is that such flimsy 'process' in the
hands of a mercurial US President can simply be blown away like old dead leaves. Yes, the US
has a systemic problem: US sanctions are a one-way valve: so easy to flow out, but once poured
forth, there is no return inlet (beyond uncertain waivers issued at the pleasure of an
incumbent President).
But more than just a long chapter reaching its inevitable end, Iran is seeing another path
opening out. Trump is in a 'China bind': a trade deal with China now looks "tough to
improbable", according to White House officials, in the context of the fast deteriorating
environment of security tensions between Washington and Beijing. Defense One spells it out:
"It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. US chip
giants Intel and AMD abruptly ended
or declined to extend important partnerships with Chinese entities. The Department of Commerce
halved the number of
licenses that let US companies assign Chinese nationals to sensitive technology and engineering
projects.
"[So] decoupling is already in motion. Like the shift of tectonic plates, the move
towards a new tech alignment with China increases the potential for sudden, destabilizing
convulsions in the global economy and supply chains. To defend America's technology leadership,
policymakers must upgrade their toolkit to ensure that US technology leadership can withstand
the aftershocks.
"The key driver of this shift has not been the President's tariffs, but a changing
consensus among rank-and-file policymakers about what constitutes national security. This
expansive new conception of national security is sensitive to a broad array of potential
threats, including to the economic livelihood of the United States, the integrity of its
citizens personal data, and the country's technological advantage".
Trump's China 'bind' is this: A trade deal with China has long been viewed by the White
House as a major tool for 'goosing' the US stock market upwards, during the crucial
pre-election period. But as that is now said to be "tough to improbable" – and as US
national security consensus metamorphoses, the consequent de-coupling, combined with tariffs,
is beginning to bite. The effects are eating away at President Trump's prime political asset:
the public confidence in his handling of the economy: A Quinnipiac University
survey last week
found for the first time in Trump's presidency, more voters now say the economy is getting
worse rather than better, by a 37-31 percent margin – and by 41-37 percent, voters say
the president's policies are hurting the economy.
This is hugely significant. If Trump is experiencing a crisis of public confidence in
respect to his assertive policies towards China, the last thing that he needs in the run-up to
an election is an oil crisis, on top of a tariff/tech war crisis with China. A wrong move with
Iran, and global oil supplies easily can go awry. Markets would not be happy. (So Trump's China
'bind' can also be Iran's opportunity ).
No wonder Pompeo acted with such alacrity to put a tourniquet on the brewing 'war' in the
Middle East, sparked by Israel's simultaneous air attacks last month in Iraq, inside Beirut,
and in Syria (killing two Hizbullah soldiers). It is pretty clear that Washington did not want
this 'war', at least not now. America, as Defense One
noted , is becoming acutely sensitive to any risks to the global financial system from
"sudden, destabilizing convulsions in the global economy".
The recent Israeli military operations coincided with Iranian FM Zarif's sudden summons to
Biarritz (during the G7), exacerbating fears
within the Israeli Security Cabinet that Trump might meet with President Rouhani in NY at
the UN General Assembly – thus threatening Netanyahu's anti-Iran,
political 'identity' . The fear was that Trump could begin a 'bromance' with the Iranian
President (on the Kim Jong Un lines). And hence the Israeli provocations intended to stir some
Iranian (over)-reaction (which never came). Subsequently it became clear to Israel that Iran's
leadership had absolutely no intention to meet with Trump – and the whole episode
subsided.
Trump's Iran 'bind' therefore is somehow similar to his China 'bind': With China, he
initially wanted an easy trade achievement, but it has proved to be 'anything but'. With Iran,
Trump wanted a razzmatazz meeting with Rohani – even if that did not lead to a new 'deal'
(much as the Trump – Kim Jung Un TV spectaculars that caught the American imagination so
vividly, he may have hoped for a similar response to a Rohani handshake, or he may have even
aspired to an Oval Office spectacular).
Trump simply cannot understand why the Iranians won't do this, and he is peeved by the snub.
Iran is unfathomable to Team Trump.
Well, maybe the Iranians just don't want to do it. Firstly, they don't need to: the Iranian
Rial has been recovering steadily over the last four months and manufacturing output has
steadied. China's General Administration of Customs (GAC) detailing the country's oil imports
data shows that China has not cut its Iranian supply after the US waiver program ended on 2
May, but rather, it has
steadily increased Iranian crude imports since the official end of the waiver extension, up
from May and June levels. The new GAC data shows China imported over 900,000 barrels per day
(bpd) of crude oil from Iran in July, which is up 4.7% from the month before.
And a new path is opening in front of Iran. After Biarritz, Zarif flew directly to Beijing
where he discussed a huge, multi-hundred
billion (according to
one report ), twenty-five-year oil and gas investment, (and a separate) 'Road and Belt'
transport plan. Though the details are not disclosed, it is plain that China – unlike
America – sees Iran as a key future strategic partner, and China seems perfectly able to
fathom out the Iranians, too.
But here is the really substantive US shift taking place. It is that which is termed
"a new normal" now
taking a hold in Washington:
"To defend America's technology leadership, policymakers [are] upgrading their toolkit to
ensure that US technology leadership can withstand the aftershocks Unlike the President's trade
war, support for this new, expansive definition of national security and technology is largely
bipartisan, and likely here to stay.
with many of the president's top advisers viewing China first and foremost as a national
security threat, rather than as an economic partner – it's poised to affect huge parts of
American life, from the cost of many consumer goods to the nature of this country's
relationship with the government of Taiwan.
"Trump himself still views China primarily through an economic prism. But the angrier he
gets with Beijing, the more receptive he is to his advisers' hawkish stances toward China that
go well beyond trade."
"The angrier he gets with Beijing" Well, here is the key point: Washington seems to have
lost the ability to summon the resources to try to fathom either China, or the Iranian 'closed
book', let alone a 'Byzantine' Russia. It is a colossal attenuation of consciousness in
Washington; a loss of conscious 'vitality' to the grip of some 'irrefutable logic' that allows
no empathy, no outreach, to 'otherness'. Washington (and some European élites) have
retreated into their 'niche' consciousness, their mental enclave, gated and protected, from
having to understand – or engage – with wider human experience.
To compensate for these lacunae, Washington looks rather, to an engineering and
technological solution: If we cannot summon empathy, or understand Xi or the Iranian Supreme
Leader, we can muster artificial intelligence to substitute – a 'toolkit' in which the US
intends to be global leader.
This type of solution – from the US perspective – maybe works for China, but not
so much for Iran; and Trump is not keen on a full war with Iran in the lead up to elections. Is
this why Trump seems to be losing interest in the Middle East? He doesn't understand it; he
hasn't the interest or the means to fathom it; and he doesn't want to bomb it. And the China
'bind' is going to be all absorbing for him, for the meantime.
This is a Marxist critique of neoliberalism. Not necessary right but they his some relevant
points.
Notable quotes:
"... The ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. ..."
"... The ex ante tendency toward overproduction arises because the vector of real wages across countries does not increase noticeably over time in the world economy, while the vector of labor productivities does, typically resulting in a rise in the share of surplus in world output. ..."
"... While the rise in the vector of labor productivities across countries, a ubiquitous phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an explanation, why does the vector of real wages remain virtually stagnant in the world economy? The answer lies in the sui generis character of contemporary globalization that, for the first time in the history of capitalism, has led to a relocation of activity from the metropolis to third world countries in order to take advantage of the lower wages prevailing in the latter and meet global demand. ..."
"... The current globalization broke with this. The movement of capital from the metropolis to the third world, especially to East, South, and Southeast Asia to relocate plants there and take advantage of their lower wages for meeting global demand, has led to a desegmentation of the world economy, subjecting metropolitan wages to the restraining effect exercised by the third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was marginally lower -- than it had been in 1968. 5 ..."
"... This ever-present opposition becomes decisive within a regime of globalization. As long as finance capital remains national -- that is, nation-based -- and the state is a nation-state, the latter can override this opposition under certain circumstances, such as in the post-Second World War period when capitalism was facing an existential crisis. But when finance capital is globalized, meaning, when it is free to move across country borders while the state remains a nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large fiscal deficits against its wishes, then it would simply leave that country en masse , causing a financial crisis. ..."
"... The state therefore capitulates to the demands of globalized finance capital and eschews direct fiscal intervention for increasing demand. It resorts to monetary policy instead since that operates through wealth holders' decisions, and hence does not undermine their social position. But, precisely for this reason, monetary policy is an ineffective instrument, as was evident in the United States in the aftermath of the 2007–09 crisis when even the pushing of interest rates down to zero scarcely revived activity. 6 ..."
"... If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a beggar-my-neighbor policy, does lead to a significant export of unemployment from the United States, then it will invite retaliation and trigger a trade war that will only worsen the crisis for the world economy as a whole by dampening global investment. Indeed, since the United States has been targeting China in particular, some retaliatory measures have already appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be because the export of unemployment from the United States is insubstantial, keeping unemployment everywhere, including in the United States, as precarious as it is now. However we look at it, the world would henceforth face higher levels of unemployment. ..."
"... The second implication of this dead end is that the era of export-led growth is by and large over for third world economies. The slowing down of world economic growth, together with protectionism in the United States against successful third world exporters, which could even spread to other metropolitan economies, suggests that the strategy of relying on the world market to generate domestic growth has run out of steam. Third world economies, including the ones that have been very successful at exporting, would now have to rely much more on their home market ..."
"... In other words, we shall now have an intensification of the imperialist stranglehold over third world economies, especially those pushed into unsustainable balance-of-payments deficits in the new situation. By imperialism , here we do not mean the imperialism of this or that major power, but the imperialism of international finance capital, with which even domestic big bourgeoisies are integrated, directed against their own working people ..."
"... In short, the ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop and finds fascism. ..."
"... The first is the so-called spontaneous method of capital flight. Any political formation that seeks to take the country out of the neoliberal regime will witness capital flight even before it has been elected to office, bringing the country to a financial crisis and thereby denting its electoral prospects. And if perchance it still gets elected, the outflow will only increase, even before it assumes office. The inevitable difficulties faced by the people may well make the government back down at that stage. The sheer difficulty of transition away from a neoliberal regime could be enough to bring even a government based on the support of workers and peasants to its knees, precisely to save them short-term distress or to avoid losing their support. ..."
"... The third weapon consists in carrying out so-called democratic or parliamentary coups of the sort that Latin America has been experiencing. Coups in the old days were effected through the local armed forces and necessarily meant the imposition of military dictatorships in lieu of civilian, democratically elected governments. Now, taking advantage of the disaffection generated within countries by the hardships caused by capital flight and imposed sanctions, imperialism promotes coups through fascist or fascist-sympathizing middle-class political elements in the name of restoring democracy, which is synonymous with the pursuit of neoliberalism. ..."
"... And if all these measures fail, there is always the possibility of resorting to economic warfare (such as destroying Venezuela's electricity supply), and eventually to military warfare. Venezuela today provides a classic example of what imperialist intervention in a third world country is going to look like in the era of decline of neoliberal capitalism, when revolts are going to characterize such countries more and more. ..."
"... Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing for long. It has no vision for reinventing itself. Interestingly, in the period after the First World War, when capitalism was on the verge of sinking into a crisis, the idea of state intervention as a way of its revival had already been mooted, though its coming into vogue only occurred at the end of the Second World War. 11 Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize itself. And weapons like domestic fascism in the third world and direct imperialist intervention cannot for long save it from the anger of the masses that is building up against it. ..."
The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise disappears and so does this
ideological prop.
Harry Magdoff's The Age of
Imperialism is a classic work that shows how postwar political decolonization does not
negate the phenomenon of imperialism. The book has two distinct aspects. On the one hand, it
follows in V. I. Lenin's footsteps in providing a comprehensive account of how capitalism at
the time operated globally. On the other hand, it raises a question that is less frequently
discussed in Marxist literature -- namely, the need for imperialism. Here, Magdoff not only
highlighted the crucial importance, among other things, of the third world's raw materials for
metropolitan capital, but also refuted the argument that the declining share of raw-material
value in gross manufacturing output somehow reduced this importance, making the simple point
that there can be no manufacturing at all without raw materials. 1
Magdoff's focus was on a period when imperialism was severely resisting economic
decolonization in the third world, with newly independent third world countries taking control
over their own resources. He highlighted the entire armory of weapons used by imperialism. But
he was writing in a period that predated the onset of neoliberalism. Today, we not only have
decades of neoliberalism behind us, but the neoliberal regime itself has reached a dead end.
Contemporary imperialism has to be discussed within this setting.
Globalization and
Economic Crisis
There are two reasons why the regime of neoliberal globalization has run into a dead end.
The first is an ex ante tendency toward global overproduction; the second is that the
only possible counter to this tendency within the regime is the formation of asset-price
bubbles, which cannot be conjured up at will and whose collapse, if they do appear, plunges the
economy back into crisis. In short, to use the words of British economic historian Samuel
Berrick Saul, there are no "markets on tap" for contemporary metropolitan capitalism, such as
had been provided by colonialism prior to the First World War and by state expenditure in the
post-Second World War period of dirigisme . 2
The ex ante tendency toward overproduction arises because the vector of real wages
across countries does not increase noticeably over time in the world economy, while the vector
of labor productivities does, typically resulting in a rise in the share of surplus in world
output. As Paul Baran and Paul Sweezy argued in Monopoly Capital , following the lead of
Michał Kalecki and Josef Steindl, such a rise in the share of economic surplus, or a shift
from wages to surplus, has the effect of reducing aggregate demand since the ratio of
consumption to income is higher on average for wage earners than for those living off the
surplus. 3
Therefore, assuming a given level of investment associated with any period, such a shift would
tend to reduce consumption demand and hence aggregate demand, output, and capacity utilization.
In turn, reduced capacity utilization would lower investment over time, further aggravating the
demand-reducing effect arising from the consumption side.
While the rise in the vector of labor productivities across countries, a ubiquitous
phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an
explanation, why does the vector of real wages remain virtually stagnant in the world economy?
The answer lies in the sui generis character of contemporary globalization that, for the
first time in the history of capitalism, has led to a relocation of activity from the
metropolis to third world countries in order to take advantage of the lower wages prevailing in
the latter and meet global demand.
Historically, while labor has not been, and is still not, free to migrate from the third
world to the metropolis, capital, though juridically free to move from the latter to the
former, did not actually do so , except to sectors like mines and plantations, which
only strengthened, rather than broke, the colonial pattern of the international division of
labor. 4
This segmentation of the world economy meant that wages in the metropolis increased with labor
productivity, unrestrained by the vast labor reserves of the third world, which themselves had
been caused by the displacement of manufactures through the twin processes of
deindustrialization (competition from metropolitan goods) and the drain of surplus (the
siphoning off of a large part of the economic surplus, through taxes on peasants that are no
longer spent on local artisan products but finance gratis primary commodity exports to
the metropolis instead).
The current globalization broke with this. The movement of capital from the metropolis to
the third world, especially to East, South, and Southeast Asia to relocate plants there and
take advantage of their lower wages for meeting global demand, has led to a desegmentation of
the world economy, subjecting metropolitan wages to the restraining effect exercised by the
third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the
real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was
marginally lower -- than it had been in 1968. 5
At the same time, such relocation of activities, despite causing impressive growth rates of
gross domestic product (GDP) in many third world countries, does not lead to the exhaustion of
the third world's labor reserves. This is because of another feature of contemporary
globalization: the unleashing of a process of primitive accumulation of capital against petty
producers, including peasant agriculturists in the third world, who had earlier been protected,
to an extent, from the encroachment of big capital (both domestic and foreign) by the
postcolonial dirigiste regimes in these countries. Under neoliberalism, such protection
is withdrawn, causing an income squeeze on these producers and often their outright
dispossession from their land, which is then used by big capital for its various so-called
development projects. The increase in employment, even in countries with impressive GDP growth
rates in the third world, falls way short of the natural growth of the workforce, let alone
absorbing the additional job seekers coming from the ranks of displaced petty producers. The
labor reserves therefore never get used up. Indeed, on the contrary, they are augmented
further, because real wages continue to remain tied to a subsistence level, even as
metropolitan wages too are restrained. The vector of real wages in the world economy as a whole
therefore remains restrained.
Although contemporary globalization thus gives rise to an ex ante tendency toward
overproduction, state expenditure that could provide a counter to this (and had provided a
counter through military spending in the United States, according to Baran and Sweezy) can no
longer do so under the current regime. Finance is usually opposed to direct state intervention
through larger spending as a way of increasing employment. This opposition expresses itself
through an opposition not just to larger taxes on capitalists, but also to a larger fiscal
deficit for financing such spending. Obviously, if larger state spending is financed by taxes
on workers, then it hardly adds to aggregate demand, for workers spend the bulk of their
incomes anyway, so the state taking this income and spending it instead does not add any extra
demand. Hence, larger state spending can increase employment only if it is financed either
through a fiscal deficit or through taxes on capitalists who keep a part of their income
unspent or saved. But these are precisely the two modes of financing state expenditure that
finance capital opposes.
Its opposing larger taxes on capitalists is understandable, but why is it so opposed to a
larger fiscal deficit? Even within a capitalist economy, there are no sound economic
theoretical reasons that should preclude a fiscal deficit under all circumstances. The root of
the opposition therefore lies in deeper social considerations: if the capitalist economic
system becomes dependent on the state to promote employment directly , then this fact
undermines the social legitimacy of capitalism. The need for the state to boost the animal
spirits of the capitalists disappears and a perspective on the system that is epistemically
exterior to it is provided to the people, making it possible for them to ask: If the state can
do the job of providing employment, then why do we need the capitalists at all? It is an
instinctive appreciation of this potential danger that underlies the opposition of capital,
especially of finance, to any direct effort by the state to generate employment.
This ever-present opposition becomes decisive within a regime of globalization. As long as
finance capital remains national -- that is, nation-based -- and the state is a nation-state,
the latter can override this opposition under certain circumstances, such as in the post-Second
World War period when capitalism was facing an existential crisis. But when finance capital is
globalized, meaning, when it is free to move across country borders while the state remains a
nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large
fiscal deficits against its wishes, then it would simply leave that country en masse ,
causing a financial crisis.
The state therefore capitulates to the demands of globalized finance capital and eschews
direct fiscal intervention for increasing demand. It resorts to monetary policy instead since
that operates through wealth holders' decisions, and hence does not undermine their
social position. But, precisely for this reason, monetary policy is an ineffective instrument,
as was evident in the United States in the aftermath of the 2007–09 crisis when even the
pushing of interest rates down to zero scarcely revived activity. 6
It may be thought that this compulsion on the part of the state to accede to the demand of
finance to eschew fiscal intervention for enlarging employment should not hold for the United
States. Its currency being considered by the world's wealth holders to be "as good as gold"
should make it immune to capital flight. But there is an additional factor operating in the
case of the United States: that the demand generated by a bigger U.S. fiscal deficit would
substantially leak abroad in a neoliberal setting, which would increase its external debt
(since, unlike Britain in its heyday, it does not have access to any unrequited colonial
transfers) for the sake of generating employment elsewhere. This fact deters any fiscal effort
even in the United States to boost demand within a neoliberal setting. 7
Therefore, it follows that state spending cannot provide a counter to the ex ante
tendency toward global overproduction within a regime of neoliberal globalization, which makes
the world economy precariously dependent on occasional asset-price bubbles, primarily in the
U.S. economy, for obtaining, at best, some temporary relief from the crisis. It is this fact
that underlies the dead end that neoliberal capitalism has reached. Indeed, Donald Trump's
resort to protectionism in the United States to alleviate unemployment is a clear recognition
of the system having reached this cul-de-sac. The fact that the mightiest capitalist
economy in the world has to move away from the rules of the neoliberal game in an attempt to
alleviate its crisis of unemployment/underemployment -- while compensating capitalists
adversely affected by this move through tax cuts, as well as carefully ensuring that no
restraints are imposed on free cross-border financial flows -- shows that these rules
are no longer viable in their pristine form.
Some Implications of This Dead End
There are at least four important implications of this dead end of neoliberalism. The first
is that the world economy will now be afflicted by much higher levels of unemployment than it
was in the last decade of the twentieth century and the early years of the twenty-first, when
the dot-com and the housing bubbles in the United States had, sequentially, a pronounced
impact. It is true that the U.S. unemployment rate today appears to be at a historic low, but
this is misleading: the labor-force participation rate in the United States today is lower than
it was in 2008, which reflects the discouraged-worker effect . Adjusting for this lower
participation, the U.S. unemployment rate is considerable -- around 8 percent. Indeed, Trump
would not be imposing protection in the United States if unemployment was actually as low as 4
percent, which is the official figure. Elsewhere in the world, of course, unemployment
post-2008 continues to be evidently higher than before. Indeed, the severity of the current
problem of below-full-employment production in the U.S. economy is best illustrated by capacity
utilization figures in manufacturing. The weakness of the U.S. recovery from the Great
Recession is indicated by the fact that the current extended recovery represents the first
decade in the entire post-Second World War period in which capacity utilization in
manufacturing has never risen as high as 80 percent in a single quarter, with the resulting
stagnation of investment. 8
If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a
beggar-my-neighbor policy, does lead to a significant export of unemployment from the
United States, then it will invite retaliation and trigger a trade war that will only worsen
the crisis for the world economy as a whole by dampening global investment. Indeed, since the
United States has been targeting China in particular, some retaliatory measures have already
appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be
because the export of unemployment from the United States is insubstantial, keeping
unemployment everywhere, including in the United States, as precarious as it is now. However we
look at it, the world would henceforth face higher levels of unemployment.
There has been some discussion on how global value chains would be affected by Trump's
protectionism. But the fact that global macroeconomics in the early twenty-first century will
look altogether different compared to earlier has not been much discussed.
In light of the preceding discussion, one could say that if, instead of individual
nation-states whose writ cannot possibly run against globalized finance capital, there was a
global state or a set of major nation-states acting in unison to override the objections of
globalized finance and provide a coordinated fiscal stimulus to the world economy, then perhaps
there could be recovery. Such a coordinated fiscal stimulus was suggested by a group of German
trade unionists, as well as by John Maynard Keynes during the Great Depression in the 1930s.
9
While it was turned down then, in the present context it has not even been discussed.
The second implication of this dead end is that the era of export-led growth is by and large
over for third world economies. The slowing down of world economic growth, together with
protectionism in the United States against successful third world exporters, which could even
spread to other metropolitan economies, suggests that the strategy of relying on the world
market to generate domestic growth has run out of steam. Third world economies, including the
ones that have been very successful at exporting, would now have to rely much more on their
home market.
Such a transition will not be easy; it will require promoting domestic peasant agriculture,
defending petty production, moving toward cooperative forms of production, and ensuring greater
equality in income distribution, all of which need major structural shifts. For smaller
economies, it would also require their coming together with other economies to provide a
minimum size to the domestic market. In short, the dead end of neoliberalism also means the
need for a shift away from the so-called neoliberal development strategy that has held sway
until now.
The third implication is the imminent engulfing of a whole range of third world economies in
serious balance-of-payments difficulties. This is because, while their exports will be sluggish
in the new situation, this very fact will also discourage financial inflows into their
economies, whose easy availability had enabled them to maintain current account deficits on
their balance of payments earlier. In such a situation, within the existing neoliberal
paradigm, they would be forced to adopt austerity measures that would impose income deflation
on their people, make the conditions of their people significantly worse, lead to a further
handing over of their national assets and resources to international capital, and prevent
precisely any possible transition to an alternative strategy of home market-based growth.
In other words, we shall now have an intensification of the imperialist stranglehold over
third world economies, especially those pushed into unsustainable balance-of-payments deficits
in the new situation. By imperialism , here we do not mean the imperialism of this or
that major power, but the imperialism of international finance capital, with which even
domestic big bourgeoisies are integrated, directed against their own working people.
The fourth implication is the worldwide upsurge of fascism. Neoliberal capitalism even
before it reached a dead end, even in the period when it achieved reasonable growth and
employment rates, had pushed the world into greater hunger and poverty. For instance, the world
per-capita cereal output was 355 kilograms for 1980 (triennium average for 1979–81
divided by mid–triennium population) and fell to 343 in 2000, leveling at 344.9 in 2016
-- and a substantial amount of this last figure went into ethanol production. Clearly, in a
period of growth of the world economy, per-capita cereal absorption should be expanding,
especially since we are talking here not just of direct absorption but of direct and indirect
absorption, the latter through processed foods and feed grains in animal products. The fact
that there was an absolute decline in per-capita output, which no doubt caused a decline in
per-capita absorption, suggests an absolute worsening in the nutritional level of a substantial
segment of the world's population.
But this growing hunger and nutritional poverty did not immediately arouse any significant
resistance, both because such resistance itself becomes more difficult under neoliberalism
(since the very globalization of capital makes it an elusive target) and also because higher
GDP growth rates provided a hope that distress might be overcome in the course of time.
Peasants in distress, for instance, entertained the hope that their children would live better
in the years to come if given a modicum of education and accepted their fate.
In short, the ideology of neoliberal capitalism was the promise of growth. But with
neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological
prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop
and finds fascism. This changes the discourse away from the material conditions of people's
lives to the so-called threat to the nation, placing the blame for people's distress not on the
failure of the system, but on ethnic, linguistic, and religious minority groups, the
other that is portrayed as an enemy. It projects a so-called messiah whose sheer
muscularity can somehow magically overcome all problems; it promotes a culture of unreason so
that both the vilification of the other and the magical powers of the supposed leader
can be placed beyond any intellectual questioning; it uses a combination of state repression
and street-level vigilantism by fascist thugs to terrorize opponents; and it forges a close
relationship with big business, or, in Kalecki's words, "a partnership of big business and
fascist upstarts." 10
Fascist groups of one kind or another exist in all modern societies. They move center stage
and even into power only on certain occasions when they get the backing of big business. And
these occasions arise when three conditions are satisfied: when there is an economic crisis so
the system cannot simply go on as before; when the usual liberal establishment is manifestly
incapable of resolving the crisis; and when the left is not strong enough to provide an
alternative to the people in order to move out of the conjuncture.
This last point may appear odd at first, since many see the big bourgeoisie's recourse to
fascism as a counter to the growth of the left's strength in the context of a capitalist
crisis. But when the left poses a serious threat, the response of the big bourgeoisie typically
is to attempt to split it by offering concessions. It uses fascism to prop itself up only when
the left is weakened. Walter Benjamin's remark that "behind every fascism there is a failed
revolution" points in this direction.
Fascism Then and Now
Contemporary fascism, however, differs in crucial respects from its 1930s counterpart, which
is why many are reluctant to call the current phenomenon a fascist upsurge. But historical
parallels, if carefully drawn, can be useful. While in some aforementioned respects
contemporary fascism does resemble the phenomenon of the 1930s, there are serious differences
between the two that must also be noted.
First, we must note that while the current fascist upsurge has put fascist elements in power
in many countries, there are no fascist states of the 1930s kind as of yet. Even if the fascist
elements in power try to push the country toward a fascist state, it is not clear that they
will succeed. There are many reasons for this, but an important one is that fascists in power
today cannot overcome the crisis of neoliberalism, since they accept the regime of
globalization of finance. This includes Trump, despite his protectionism. In the 1930s,
however, this was not the case. The horrors associated with the institution of a fascist state
in the 1930s had been camouflaged to an extent by the ability of the fascists in power to
overcome mass unemployment and end the Depression through larger military spending, financed by
government borrowing. Contemporary fascism, by contrast, lacks the ability to overcome the
opposition of international finance capital to fiscal activism on the part of the government to
generate larger demand, output, and employment, even via military spending.
Such activism, as discussed earlier, required larger government spending financed either
through taxes on capitalists or through a fiscal deficit. Finance capital was opposed to both
of these measures and it being globalized made this opposition decisive . The
decisiveness of this opposition remains even if the government happens to be one composed of
fascist elements. Hence, contemporary fascism, straitjacketed by "fiscal rectitude," cannot
possibly alleviate even temporarily the economic crises facing people and cannot provide any
cover for a transition to a fascist state akin to the ones of the 1930s, which makes such a
transition that much more unlikely.
Another difference is also related to the phenomenon of the globalization of finance. The
1930s were marked by what Lenin had earlier called "interimperialist rivalry." The military
expenditures incurred by fascist governments, even though they pulled countries out of the
Depression and unemployment, inevitably led to wars for "repartitioning an already partitioned
world." Fascism was the progenitor of war and burned itself out through war at, needless to
say, great cost to humankind.
Contemporary fascism, however, operates in a world where interimperialist rivalry is far
more muted. Some have seen in this muting a vindication of Karl Kautsky's vision of an
"ultraimperialism" as against Lenin's emphasis on the permanence of interimperialist rivalry,
but this is wrong. Both Kautsky and Lenin were talking about a world where finance capital and
the financial oligarchy were essentially national -- that is, German, French, or British. And
while Kautsky talked about the possibility of truces among the rival oligarchies, Lenin saw
such truces only as transient phenomena punctuating the ubiquity of rivalry.
In contrast, what we have today is not nation-based finance capitals, but
international finance capital into whose corpus the finance capitals drawn from
particular countries are integrated. This globalized finance capital does not want the world
to be partitioned into economic territories of rival powers ; on the contrary, it wants the
entire globe to be open to its own unrestricted movement. The muting of rivalry between major
powers, therefore, is not because they prefer truce to war, or peaceful partitioning of the
world to forcible repartitioning, but because the material conditions themselves have changed
so that it is no longer a matter of such choices. The world has gone beyond both Lenin and
Kautsky, as well as their debates.
Not only are we not going to have wars between major powers in this era of fascist upsurge
(of course, as will be discussed, we shall have other wars), but, by the same token, this
fascist upsurge will not burn out through any cataclysmic war. What we are likely to see is a
lingering fascism of less murderous intensity , which, when in power, does not
necessarily do away with all the forms of bourgeois democracy, does not necessarily physically
annihilate the opposition, and may even allow itself to get voted out of power occasionally.
But since its successor government, as long as it remains within the confines of the neoliberal
strategy, will also be incapable of alleviating the crisis, the fascist elements are likely to
return to power as well. And whether the fascist elements are in or out of power, they will
remain a potent force working toward the fascification of the society and the polity, even
while promoting corporate interests within a regime of globalization of finance, and hence
permanently maintaining the "partnership between big business and fascist upstarts."
Put differently, since the contemporary fascist upsurge is not likely to burn itself out as
the earlier one did, it has to be overcome by transcending the very conjuncture that produced
it: neoliberal capitalism at a dead end. A class mobilization of working people around an
alternative set of transitional demands that do not necessarily directly target neoliberal
capitalism, but which are immanently unrealizable within the regime of neoliberal capitalism,
can provide an initial way out of this conjuncture and lead to its eventual transcendence.
Such a class mobilization in the third world context would not mean making no truces with
liberal bourgeois elements against the fascists. On the contrary, since the liberal bourgeois
elements too are getting marginalized through a discourse of jingoistic nationalism typically
manufactured by the fascists, they too would like to shift the discourse toward the material
conditions of people's lives, no doubt claiming that an improvement in these conditions is
possible within the neoliberal economic regime itself. Such a shift in discourse is in
itself a major antifascist act . Experience will teach that the agenda advanced as part of
this changed discourse is unrealizable under neoliberalism, providing the scope for dialectical
intervention by the left to transcend neoliberal capitalism.
Imperialist
Interventions
Even though fascism will have a lingering presence in this conjuncture of "neoliberalism at
a dead end," with the backing of domestic corporate-financial interests that are themselves
integrated into the corpus of international finance capital, the working people in the third
world will increasingly demand better material conditions of life and thereby rupture the
fascist discourse of jingoistic nationalism (that ironically in a third world context is not
anti-imperialist).
In fact, neoliberalism reaching a dead end and having to rely on fascist elements revives
meaningful political activity, which the heyday of neoliberalism had precluded, because most
political formations then had been trapped within an identical neoliberal agenda that appeared
promising. (Latin America had a somewhat different history because neoliberalism arrived in
that continent through military dictatorships, not through its more or less tacit acceptance by
most political formations.)
Such revived political activity will necessarily throw up challenges to neoliberal
capitalism in particular countries. Imperialism, by which we mean the entire economic and
political arrangement sustaining the hegemony of international finance capital, will deal with
these challenges in at least four different ways.
The first is the so-called spontaneous method of capital flight. Any political formation
that seeks to take the country out of the neoliberal regime will witness capital flight even
before it has been elected to office, bringing the country to a financial crisis and thereby
denting its electoral prospects. And if perchance it still gets elected, the outflow will only
increase, even before it assumes office. The inevitable difficulties faced by the people may
well make the government back down at that stage. The sheer difficulty of transition away from
a neoliberal regime could be enough to bring even a government based on the support of workers
and peasants to its knees, precisely to save them short-term distress or to avoid losing their
support.
Even if capital controls are put in place, where there are current account deficits,
financing such deficits would pose a problem, necessitating some trade controls. But this is
where the second instrument of imperialism comes into play: the imposition of trade sanctions
by the metropolitan states, which then cajole other countries to stop buying from the
sanctioned country that is trying to break away from thralldom to globalized finance capital.
Even if the latter would have otherwise succeeded in stabilizing its economy despite its
attempt to break away, the imposition of sanctions becomes an additional blow.
The third weapon consists in carrying out so-called democratic or parliamentary coups of the
sort that Latin America has been experiencing. Coups in the old days were effected through the
local armed forces and necessarily meant the imposition of military dictatorships in lieu of
civilian, democratically elected governments. Now, taking advantage of the disaffection
generated within countries by the hardships caused by capital flight and imposed sanctions,
imperialism promotes coups through fascist or fascist-sympathizing middle-class political
elements in the name of restoring democracy, which is synonymous with the pursuit of
neoliberalism.
And if all these measures fail, there is always the possibility of resorting to economic
warfare (such as destroying Venezuela's electricity supply), and eventually to military
warfare. Venezuela today provides a classic example of what imperialist intervention in a third
world country is going to look like in the era of decline of neoliberal capitalism, when
revolts are going to characterize such countries more and more.
Two aspects of such intervention are striking. One is the virtual unanimity among the
metropolitan states, which only underscores the muting of interimperialist rivalry in the era
of hegemony of global finance capital. The other is the extent of support that such
intervention commands within metropolitan countries, from the right to even the liberal
segments.
Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing
for long. It has no vision for reinventing itself. Interestingly, in the period after the First
World War, when capitalism was on the verge of sinking into a crisis, the idea of state
intervention as a way of its revival had already been mooted, though its coming into vogue only
occurred at the end of the Second World War. 11
Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize
itself. And weapons like domestic fascism in the third world and direct imperialist
intervention cannot for long save it from the anger of the masses that is building up against
it.
Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914
(Liverpool: Liverpool University Press, 1960).
Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York:
Monthly Review Press, 1966).
One of the first authors to recognize this fact and its significance was Paul Baran in
The Political Economy of
Growth (New York: Monthly Review Press, 1957).
For the role of such colonial transfers in sustaining the British balance of payments and the
long Victorian and Edwardian boom, see Utsa Patnaik, "Revisiting the 'Drain,' or Transfers
from India to Britain in the Context of Global Diffusion of Capitalism," in Agrarian
and Other Histories: Essays for Binay Bhushan Chaudhuri , ed. Shubhra Chakrabarti and
Utsa Patnaik (Delhi: Tulika, 2017), 277-317.
Federal Reserve Board of Saint Louis Economic Research, FRED, "Capacity Utilization:
Manufacturing," February 2019 (updated March 27, 2019), http://fred.stlouisfed.org .
This issue is discussed by Charles P. Kindleberger in The World in Depression,
1929–1939 , 40th anniversary ed. (Oakland: University of California Press,
2013).
Joseph Schumpeter had seen Keynes's The Economic Consequences of the Peace as
essentially advocating such state intervention in the new situation. See his essay, "John
Maynard Keynes (1883–1946)," in Ten Great Economists (London: George Allen
& Unwin, 1952).
Utsa Patnaik is Professor Emerita at the Centre for Economic Studies and Planning,
Jawaharlal Nehru University, New Delhi. Her books include Peasant Class Differentiation (1987),
The Long Transition (1999), and The Republic of Hunger and Other Essays (2007). Prabhat Patnaik
is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997),
The Value of Money(2009), and Re-envisioning Socialism(2011).
"... The real unemployment rate is probably somewhere between 10%-12%. ..."
"... The U-6 also includes what the labor dept. calls involuntary part time employed. It should include the voluntary part time as well, but doesn't (See, they're not actively looking for work even if unemployed). ..."
"... But even the involuntary part time is itself under-estimated. I believe the Labor Dept. counts only those involuntarily part time unemployed whose part time job is their primary job. It doesn't count those who have second and third involuntary part time jobs. That would raise the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and 'missing labor force' is grossly underestimated. ..."
"... The labor dept. also misses the 1-2 million workers who went on social security disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment insurance. That number rose dramatically after 2008 and hasn't come down much (although the government and courts are going after them). ..."
"... The way the government calculates unemployment is by means of 60,000 monthly household surveys but that phone survey method misses a lot of workers who are undocumented and others working in the underground economy in the inner cities (about 10-12% of the economy according to most economists and therefore potentially 10-12% of the reported labor force in size as well). ..."
"... The SSDI, undocumented, underground, underestimation of part timers, etc. are what I call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%. ..."
The real unemployment rate is probably somewhere between 10%-12%. Here's why: the 3.7% is
the U-3 rate, per the labor dept. But that's the rate only for full time employed. What the
labor dept. calls the U-6 includes what it calls discouraged workers (those who haven't looked
for work in the past 4 weeks). Then there's what's called the 'missing labor force'–i.e.
those who haven't looked in the past year. They're not calculated in the 3.7% U-3 unemployment
rate number either. Why? Because you have to be 'out of work and actively looking for work' to
be counted as unemployed and therefore part of the 3.7% rate.
The U-6 also includes what the labor dept. calls involuntary part time employed. It
should include the voluntary part time as well, but doesn't (See, they're not actively looking
for work even if unemployed).
But even the involuntary part time is itself under-estimated. I believe the Labor Dept.
counts only those involuntarily part time unemployed whose part time job is their primary job.
It doesn't count those who have second and third involuntary part time jobs. That would raise
the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and
'missing labor force' is grossly underestimated.
The labor dept. also misses the 1-2 million workers who went on social security
disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment
insurance. That number rose dramatically after 2008 and hasn't come down much (although the
government and courts are going after them).
The way the government calculates unemployment is by means of 60,000 monthly household
surveys but that phone survey method misses a lot of workers who are undocumented and others
working in the underground economy in the inner cities (about 10-12% of the economy according
to most economists and therefore potentially 10-12% of the reported labor force in size as
well). The labor dept. just makes assumptions about that number (conservatively, I may
add) and plugs in a number to be added to the unemployment totals. But it has no real idea of
how many undocumented or underground economy workers are actually employed or unemployed since
these workers do not participate in the labor dept. phone surveys, and who can blame them.
The SSDI, undocumented, underground, underestimation of part timers, etc. are what I
call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%.
Finally, there's the corroborating evidence about what's called the labor force
participation rate. It has declined by roughly 5% since 2007. That's 6 to 9 million workers who
should have entered the labor force but haven't. The labor force should be that much larger,
but it isn't. Where have they gone? Did they just not enter the labor force? If not, they're
likely a majority unemployed, or in the underground economy, or belong to the labor dept's
'missing labor force' which should be much greater than reported. The government has no
adequate explanation why the participation rate has declined so dramatically. Or where have the
workers gone. If they had entered the labor force they would have been counted. And their 6 to
9 million would result in an increase in the total labor force number and therefore raise the
unemployment rate.
All these reasons–-i.e. only counting full timers in the official 3.7%;
under-estimating the size of the part time workforce; under-estimating the size of the
discouraged and so-called 'missing labor force'; using methodologies that don't capture the
undocumented and underground unemployed accurately; not counting part of the SSI increase as
unemployed; and reducing the total labor force because of the declining labor force
participation-–together means the true unemployment rate is definitely over 10% and
likely closer to 12%. And even that's a conservative estimate perhaps." Join the debate on
Facebook More articles by: Jack Rasmus
Jack Rasmus is author of the recently published book, 'Central Bankers at the End of
Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He blogs
at jackrasmus.com and his twitter handle
is @drjackrasmus. His website is http://kyklosproductions.com .
Your tariffs are 10-25 percent, that means the great workers in the U.S. are paying the
bill.
Donald J. Trump @realDonaldTrump
"China is eating the Tariffs." Billions pouring into USA. Targeted Patriot Farmers getting
massive Dollars from the incoming Tariffs! Good Jobs Numbers, No Inflation (Fed). China having
worst year in decades. Talks happening, good for all!
When President Donald Trump wants to convey that something is a big deal, he often reaches
for the same big number: 10,000.
He says it's the number of points the Dow Jones Industrial Average would be up had the
Federal Reserve not raised interest rates. It's the number of people attending his rallies --
or the number forced to wait outside because they couldn't get in.
It's also the number of jobs a company plans to create, the headcount of captured Islamic
State fighters, the number of migrants in a caravan headed to the U.S., and the Allied casualty
count on D-Day.
Sometimes the number is accurate. Other times, it's a wild guess -- or wildly wrong.
Trump on Wednesday predicted the Dow would be up -- another 10,000 points -- if he hadn't
embarked on a trade war with China.
"If I wanted to do nothing with China, my stock market -- our stock market -- would be
10,000 points higher than it is right now," Trump told reporters in the Oval Office.
That would be a dramatic rise. With the Dow closing at 26,728 on Thursday, another 10,000
points would represent a 37% increase.
Memorable Number
From a marketing standpoint, there's a great reason to use 10,000: It's memorable.
"He uses this round number in particular because it seems big," said Jonah Berger, marketing
professor at the Wharton School of the University of Pennsylvania, which Trump often boasts of
attending.
"He wants to convey something is a big problem, or something would be quite different, so he
uses a big round number to try and sway his audience," said Berger, author of "Contagious: Why
Things Catch On."
Trump has used the number since his 2016 campaign -- in speeches, remarks to reporters and
one-on-one interviews -- but it could take on new significance as he seeks to burnish his
record with the approach of the 2020 election.
The president has repeatedly sought to use 10,000 to his political advantage, even when it
doesn't neatly match reality.
'Horrible People'
For instance, he said in January that Immigration and Customs Enforcement officers last year
removed 10,000 known or suspected gang members whom he described as "horrible people." (The
agency actually reported arresting that number but removing 5,872 known or suspected gang
members in fiscal year 2018.)
The White House declined to comment on Trump's use of 10,000.
The president has other verbal habits. He has often cited self-imposed two week deadlines
for major announcements.
While Trump is often faulted by fact-checkers for making false statements, his spokeswoman
has said journalists take the president's words too literally.
"I think the president communicates in a way that some people, especially the media, aren't
necessarily comfortable with," White House press secretary Stephanie Grisham told the
Washington Post in a recent interview. "A lot of times they take him so literally. I know
people will roll their eyes if I say he was just kidding or was speaking in hypotheticals, but
sometimes he is."
'Truthful Hyperbole'
Trump defended his use of what he called "truthful hyperbole" in his 1987 book "The Art of
the Deal," calling it an "innocent form of exaggeration."
"People may not always think big themselves, but they can still get very excited by those
who do," Trump wrote. "People want to believe that something is the biggest and the greatest
and the most spectacular."
Wittingly or not, Trump has taken to a number that comes up often in history, religion and
culture.
The army of the Ten Thousand marched against Artaxerxes II of Persia. During the conquest of
Mecca, Muhammad was said to have 10,000 soldiers. The King James Bible has dozens of references
to 10,000. Minnesota's nickname is the Land of 10,000 Lakes. A television game show called "The
$10,000 Pyramid" debuted in the U.S. in the early 1970s.
But Trump's references typically are rooted in current affairs.
The president used the number in July to talk about attendance at a North Carolina rally
where his supporters chanted "Send her back!" after he invoked the name of Representative Ilhan
Omar, a Minnesota Democrat.
"We had thousands and thousands of people that wanted to come, and we said, 'Please don't
come,'" Trump said. "It held 10,000 people. It was packed. We could've sold that arena 10
times."
Authorities said 8,000 people got into the arena in Greenville, filling it to capacity,
according to WITN-TV in North Carolina. About 2,000 were denied entry and between 750 and 1,000
were in an overflow area, the station said, citing police estimates.
Booing Ryan
In July, Trump used the number to attack former House Speaker Paul Ryan after the Wisconsin
Republican was quoted in a book saying the president doesn't know how government works.
"I remember a day in Wisconsin -- a state that I won -- where I stood up and made a speech,
and then I introduced him and they booed him off the stage -- 10,000 people," Trump told
reporters at the White House.
The president appeared to be referring to a December 2016 post-election rally in West Allis,
Wisconsin, where he publicly thanked Ryan, who was in the crowd. Audible, but not deafening,
boos were heard as Trump tried to quiet his supporters by telling them that Ryan had improved
"like a fine wine."
Then there's job creation -- a Cameron LNG liquefied natural gas export facility in
Louisiana or an Intel Corp. semiconductor plant in Arizona.
In separate statements, Trump said they'd each create 10,000 jobs.
Bringing Credibility
Whether Trump's use of the number is accurate or not, the specificity can bring credibility
to the president's claims, said Manoj Thomas, a behavioral scientist and marketing professor at
Cornell University's SC Johnson College of Business.
"Using a number to quantify a claim -- even implausible numbers -- makes it more credible
because numbers are concrete," Thomas said. "Claims without any numbers, for example, 'The Dow
would be much higher if not for the trade war,' are more difficult for the human mind to
instinctively process because the information is abstract and lacks specificity."
Trump could add even more credibility to his claim by making the number even more specific,
Thomas said.
For instance, Thomas suggested: "The Dow would be 4,600 points higher if not for the trade
war."
Markets Soar on News of China Talks, but Hopes
for Progress Are Low https://nyti.ms/2LrdVwH
NYT - Ana Swanson and Matt Phillips - September 5
WASHINGTON -- President Trump's decision to renew talks with China in the coming weeks
sent financial markets soaring on Thursday, as investors seized on the development as a sign
that both sides could still find a way out of an economically damaging trade war.
The rally sent the S&P 500 up more than 1 percent, underscoring just how much
financial markets are subsisting on hopes and fears about the trade war. Shares fell through
most of August, as Mr. Trump escalated his fight with China and imposed more tariffs, only to
snap back on Thursday after news of the talks.
But expectations for progress remain low, and many in the United States and China see the
best outcome as a continued stalemate that would prevent a collapse in relations before the
2020 election. Both Mr. Trump and President Xi Jinping of China are under pressure from
domestic audiences to stand tough, and the talks will happen after Mr. Trump's next round of
punishing tariffs take effect on Oct. 1.
"Continuing to talk soothes markets a little bit," said Eswar Prasad, the former head of
the China division at the International Monetary Fund. "But the political cost to making
major concessions is, I think, too high for either side."
The skepticism stems in part from what is emerging as a familiar pattern for Mr. Trump,
for whom China is both a source of leverage and a potential vulnerability heading into an
election year. The president has so far imposed tariffs on more than $350 billion worth of
Chinese goods and routinely shifts from blasting China and threatening additional punishment
to trying to calm the waters in the face of jittery markets and negative economic news.
Over two weeks, Mr. Trump has called Mr. Xi an enemy of America, ordered companies to stop
doing business in China and suggested the United States was in no rush to reach a trade deal.
On Sunday, he moved ahead with his threat to eventually tax every golf club, shoe and
computer China sends into the United States, placing tariffs on another $112 billion of
Chinese goods.
Stock investors have zeroed in on the threat the trade war poses to the economy, buying
and selling in tandem with Mr. Trump's trade whims. Thursday's rally was the fifth positive
performance for the market in the past six sessions. It brought the S&P 500 to within
striking distance -- less than 2 percent -- of its high of 3025.86, reached on July 26.
The coming weeks could result in more of the same, analysts say: tough words when the
president wants to rally his base and a temporary cooling off when it seems to be hurting an
economy that is one of his main arguments for re-election.
Mr. Trump and his advisers are wary of a potential challenge from Democrats who will try
to paint the president as weak on China. Officials are cognizant that striking a deal based
on the kind of limited concessions China is currently offering would most likely be a
political liability in the president's bid for re-election. Democrats, along with some
Republicans, have previously accused Mr. Trump of buckling on China after he reached a deal
that allowed ZTE, the Chinese telecom company, to avoid tough American punishment.
Yet as collateral damage from the trade war increases, Mr. Trump is facing pressure to
relent. The bond market has been flashing warning signs of a potential recession, and both
consumer confidence and the manufacturing sector have slowed.
The trade war is also clearly weighing on the Chinese economy, which is growing at its
slowest pace in more than two decades. But China has responded defiantly, imposing
retaliatory tariffs on $75 billion worth of American goods. The country is preparing to
celebrate the 70th anniversary of its founding on Oct. 1, and analysts say Beijing would be
unlikely to make concessions at such a politically delicate moment.
People familiar with Chinese economic policymaking have said in recent weeks that Chinese
leaders remain interested in reaching a trade deal with the United States, but that they are
wary of what appear to be ever-increasing demands from the United States and what they
describe as frequent shifts in the American negotiating position.
The Chinese government continues to insist that it will not accept any agreement that is
unequal, or that prevents it from pursuing economic policies that it needs for continued
growth.
While both countries have motivation to come to an agreement, each is still insisting the
other will be the first to bend.
"China and the US announced new round of trade talks and will work to make substantial
progress," Hu Xijin, the editor of the state-run Global Times, wrote on Twitter. "Personally
I think the US, worn out by the trade war, may no longer hope for crushing China's will.
There's more possibility of a breakthrough between the two sides." ...
"Few economists worked at the Federal Reserve in the early 1950s. Those who were on the
staff of America's central bank were relegated to the basement, at a safe remove from the
corridors where real decisions were made.
Economists had their uses, allowed William McChesney Martin, then the Fed's chairman. But
they also had 'a far greater sense of confidence in their analyses than I have found to be
warranted'. They were best kept down with the surplus furniture and the rats." •
Indeed!
"... Can China then depend on widening internal demand to maintain its global edge? There are two reasons why not. The present authorities worry that a widening middle stratum could jeopardize their political control and seek to limit it.[a] ..."
"... The second reason, more important, is that much of the internal demand is the result of reckless borrowing by regional banks, which are facing an inability to sustain their investments. If they collapse, even partially, this could end the entire economic edge[b] of China. ..."
A structural crisis is chaotic. This means that instead of the normal standard set of
combinations or alliances that were previously used to maintain the stability of the system,
they constantly shift these alliances in search of short-term gains. This only makes the
situation worse. We notice here a paradox – the certainty of the end of the existing
system and the intrinsic uncertainty of what will eventually replace it and create thereby a
new system (or new systems) to stabilize realities .
Now, let us look at China's role in what is going on. In terms of the present system,
China seems to be gaining much advantage. To argue that this means the continuing functioning
of capitalism as a system is basically to (re)assert the invalid point that systems are
eternal and that China is replacing the United States in the same way as the United States
replaced Great Britain as the hegemonic power. Were this true, in another 20-30 years China
(or perhaps northeast Asia) would be able to set its rules for the capitalist
world-system.
But is this really happening? First of all, China's economic edge, while still greater
than that of the North, has been declining significantly. And this decline may well amplify
soon, as political resistance to China's attempts to control neighboring countries and entice
(that is, buy) the support of faraway countries grows, which seems to be occurring.
Can China then depend on widening internal demand to maintain its global edge? There are
two reasons why not. The present authorities worry that a widening middle stratum could
jeopardize their political control and seek to limit it.[a]
The second reason, more important, is that much of the internal demand is the result of
reckless borrowing by regional banks, which are facing an inability to sustain their
investments. If they collapse, even partially, this could end the entire economic edge[b] of
China.
In addition, there have been, and will continue to be, wild swings in geopolitical
alliances. In a sense, the key zones are not in the North, but in areas such as Russia,
India, Iran, Turkey, and southeastern Europe, all of them pursuing their own roles by a game
of swiftly and repeatedly changing sides. The bottom line is that, though China plays a
very big role in the short run, it is not as big a role as China would wish and that some in
the rest of the world-system fear. It is not possible for China to stop the disintegration of
the capitalist system. It can only try to secure its place in a future
world-system.
As far as Wallerstein's bottom line: The proof is in the pudding. That said, there seems to
be a tendency to regard Xi as all-powerful. IMNSHO, that's by no means the case, not only
because of China's middle class, but because of whatever China's equivalent of deplorables is.
The "wild swings in geopolitical alliances" might play a role, too; oil, Africa's minerals.
NOTES [a] I haven't seen this point made elsewhere. [b] Crisis, certainly. "Ending the
entire economic edge"? I'm not so sure.
"... As Hudson points out, WW1 was a coup for the USA's financial sector and allowed them to gain control of academia to erase Marx and his Classical Economist allies and replace them with their own toadies along with their newly formed product--Propaganda and the nascent Police State, which the institution of Prohibition greatly facilitated. ..."
The latest by Crooke I found a curious read since he bases his article on his interpretation
of Adam Tooze's books about the world wars, neither of which I've read. Curious because we
know from Hudson that the counterrevolution by the Feudal Lords of banking and land holding
against Classical Economists and their political allies began in earnest well before then in
@1870 and that their Race for Africa was a big part of their efforts to regain their hold on
their home governments.
Within the USA, a similar revolution was being waged although it began several decades
later in response to the Populists.
As Hudson points out, WW1 was a coup for the USA's financial sector and allowed them
to gain control of academia to erase Marx and his Classical Economist allies and replace them
with their own toadies along with their newly formed product--Propaganda and the nascent
Police State, which the institution of Prohibition greatly facilitated.
I wrote the above to provide barflies with a contrasting historical context much of which
was recently reviewed via all the Marxian discussion and where the actual roots of
Neoliberalism are seated.
Deep at the core is the battle by Banksters and their allies to keep their institutions
private versus the Classical and Populist goal of making them public utilities and how the
World Wars helped the former to gain their goals.
Tooze's narrative seems okay on the surface, and it clearly fooled Crooke, but it's
incomplete. What did the European Powers run out first that generated WW1's stalemate? Money
for arms as posited or human bodies to man those arms? In George Seldes's censored interview
with Hindenburg a week after the Armistice, published in You Can't Print That! ,
the defeated Field Marshal admitted it was the entry of American Men--human numbers--that
turned the tide and made it clear to him that the war couldn't be won. Sure, money helped get
the doughboys over there, but before they arrived masses of money were sent in both
directions that didn't change the balance other than to create the unpayable postwar debts
the Americans demanded be paid.
karlofi@103
Hindenburg realised that the manpower resources of the US were crucial, though they hardly
came into play on the battle field. But it was US raw materials, combined with the British
blockade, that were the crucxial factor.
With the US the Alliance was simply, even minus Russia, too big, too powerful. And then
there was the military reality that the Allies were beginning to organise themselves on the
battlefield: including tanks etc.
As for the "Feudal Lords of Banking..." Hudson is a great resource, but his theory sounds
wrong to me.
When I first happened across Seldes's interview and knowing the "stabbed in the back"
claim that Hitler used in his rise to power, I was very curious as to why it was
censored--what possible reason could be claimed to withhold such an important set of
revelations? Clearly as Seldes himself says, if it had been published at the time, the entire
course of subsequent history would likely have taken a different direction. Are you familiar
with Seldes? He was I.F. Stone's idol and model with a penchant for truth-telling regardless
of the subject or people involved. The book I linked to is filled with similar stories that
contradicted the current narrative being sold to the masses, and his subsequent works are
similar. But as you might guess, few people have ever heard of him or his writings.
Given what Hudson reveals about the manipulation of the learning/teaching of
political-economy, it would be very wise to suspect much of what was/is produced via the
"social sciences," (history written by the victors) which is why my collegiate mentor
stressed the learning methodology he devised to try and arrive at the best non-subjective
conclusion as possible whatever the inquiry--to try and duplicate as closely as possible the
scientific method for confirmation of theories. I've discovered quite a lot of metaphysics
within the entire spectrum of social science disciplines that's made me question a vast
catalog of assumptions. As Fischer and other historians have discovered, historical truth
often lies literally in the margins--the annotations--made by decision makers or obscure
signals reports filed away within deep archives or forensic chemical reports detailing what
is or isn't present within the samples. The learning of the revealed truths can be painful,
making the adage Ignorance is Bliss rather powerful and enticing. But that's not for me as I
subscribe to the alternative adage, The Truth will set you Free.
I'm just reading Keen's 2nd Edition of his Debunking Economics: The Naked Emperor
Dethroned? where he writes on page 29: "[...], conventional Marxsim is as replete with
logical errors as is neoclassical economics, even though Marx himself provides a far better
foundation for economic analysis than did Walras or Marshall."
To my knowledge, Keen refers to himself as a Post-keynesian economist (not to be confused
with bastardized Keynesian or central banks' Neo-Keynesian economics), highly influenced by
the work of Hyman Minsky who learned under Schumpeter.
a farmer has at least 3 PhD qualifications just to contend in the business
No need for a tongue-in-cheek, you're on track, if manufacturing food is akin to other
manufacturing.
. . .from last year
August 2018, The fall of employment in the manufacturing sector
Today's manufacturing output is at least 5 percent greater than it was in 2000, but it has
become much more capital intensive and much less labor intensive. Accordingly, workers in
the sector are more likely to have at least some college education than their counterparts
of years past. But there are far fewer manufacturing workers overall, with about 7.5
million jobs lost since 1980.
What is most responsible for the manufacturing job losses? Rising trade with China is often
cited as a possible culprit. But competition from China only accounts for about a fourth of
the decline in manufacturing during the 2000s. This theory is further eroded by the fact
that local markets that did not compete with Chinese imports also saw employment
declines.
A skills mismatch -- the gap between the skills workers have and the skills employers need
-- has also contributed to the decline of manufacturing employment.
Prime age men and women with less than a high school degree have been hit particularly hard
by changes to manufacturing employment. As the manufacturing sector has shifted from
low-skilled to high-skilled work, workers who possess higher skill levels (e.g., engineers,
computer programmers, software developers, etc.) have become more sought after than before.
. . here
And the US supply of STEM graduates for any technical profession seems to be wanting.
Meanwhile we must recognize that employment is not directly tied to the economy, given
mechanization.
"... That assumption looks to be incorrect. New Deal Democrat sent us the latest post from China Law Blog, written by lawyers who specialize in Chinese law with an eye to helping businesses get set up and operate in China. The post by Dan Harris is every bit as firm as its headline: Repeat After Me: There Will be No US-China Trade Deal . It also contains a good summary of key developments and detail on the various goods targeted. Key sections: ..."
"... But what should you make of President Trump's ordering US companies to immediately start looking for an alternative to China? He can't really do that, can he? No, but in many respects this is exactly what Trump has been doing since the U.S.-China trade war began. Trump cannot literally require American companies to pull out of China, but he can and has made it so difficult that they all but have to leave China. And this is what most of the international lawyers and international trade lawyers at my firm have come to believe has been Trump's plan all along. ..."
"... Every step of the way, Trump has made it all but impossible for China to make a trade deal with the United States, which is why this blog has been consistently clear that there will be no trade deal between the United States and China . If the US-China trade war/cold war were really about trade imbalances, it would have ended long ago with China buying more soybeans and Boeing airplanes from the United States. But from the very beginning, the U.S. has demanded China stop stealing IP and open its markets for foreign companies, and there is just no way China will agree to either of these things. Lead negotiator Robert Lighthizer is without a doubt smart enough to have known this all along. All this leads us to believe that the U.S. plan has always been to force a slow decoupling of the U.S. and China and then work to convince the rest of the democratic world (the EU, Australia, Canada, Latin America, Japan, etc.) to decouple from China, as well. In June, in Does China WANT a Second Decoupling? The Chinese Texts Say That it Does we wrote of how China wants this decoupling, as well. ..."
"... The fact that Trump issues this "order" amidst rising recession fears only highlights how ending U.S.-China trade is at the top of his to-do list. ..."
"... The critical part of the China Law Blog's reading is that the Trump Administration is deadly serious about its two big asks, intellectual property and market access. It's credible to attribute that to Trump's US Trade Representative, Lighthizer. As Lambert put it, Lighthizer is the closest thing this Administration has to a Jim Baker. Lighthizer started at Covington & Burling, then served in the Regan Administration as Deputy USTR before going to Skadden. Lighthizer is as fierce a China hawk as they come and has a long history of saying that the entry of China into the WTO was at the expense of US jobs (see here , for instance) and even making a full-throated defense of protectionism . ..."
"... In April, China made a concession to the US by designating all fetanyl products as controlled substances, in the hope that that would reduce shipments to the US. The DEA has stated that China is the main source of US fentanyl . Fentanyl accounted 18,000 overdose deaths in 2018, one fourth of the total. If you count all synthetic opioids, the toll rises to 28,000. China nevertheless claimed even then that fentanyl shipments to the US were "extremely limited" . ..."
"... Fentanyl featured in the escalation on Friday, and it could conceivably serve as the basis for a national emergency threat (even though, per the discussion earlier, it would have good odds of being overturned). One of Trump's four tweets urged US carriers to do more to halt shipments arriving from China or other destinations (Mexico is believed to be a route for the entry of Chinese fentanyl to the US). ..."
"... In May I had a conversation with a long-time friend. My friend works for a global manufacturer with a household name. He has helped oversee construction of plants around the world. He helps source components from around the world. He told me that "everybody's moving out" (of China). ..."
"... A few short years ago they had the Trans-Pacific Partnership being negotiated. This was nicknamed the "everybody but China" pact as that was its mission – to cut China out of the Pacific. Add to that the "Pivot to Asia" introduced by Obama which was to militarily threaten China and the writing was on the wall for China. They were to be boxed in and shut down. Trump may be the front man now for this effort but all the China-hawks have come out of the woodwork to be let loose in the government. ..."
"... I suppose that the plan is to force US companies to bail out of China and relocate to places like Vietnam, India, Bangladesh, etc. But the question is whether these countries have the infrastructure to support these new factories? ..."
"... I have mentioned before the idea of a multipolar world and I believe that we re seeing it now in action. The US and its vassals will be one pole and another one is forming around China, Iran and Russia. I doubt that the EU will be another as they are following what Trump orders even if reluctantly. There may be another factor. For centuries we have had an economy predicated on growth but I suspect that by the end of this century will will have one based on contraction due to climate change and depletion of resources. Better strap in. It could be a bumpy ride. ..."
Trump has been up to what he seems to like to do best: whipsawing those who might be affected by his plans. On Friday, he put
Mr. Market and huge swathes of Corporate America in a tizzy by retaliating against China's tariff increases. China announced that
it would impose new tariffs on $75 billion of US goods and the restart of tariffs on autos and auto parts. Trump tweeted that he
would increase tariffs on Chinese goods already subject to tariffs: the $250 billion at 25% would go to 30% on October 1and the $300
billion at 10% would go to 15% in phases, on September 1 and December 1. Trump also "hereby ordered" US companies to pull out of
China, suggesting that he'd rely on the International Emergency Economic Powers Act of 1977.
Then, as most of you have likely heard, Trump made remarks at the G-7 summit that we widely interpreted as an indicator that he'd
back off again, by admitting to regrets about how the trade spat was going. When the press took up that line, Trump doubled down,
with the White House releasing a statement that Trump's sole regret was not raising tariffs higher.
Needless to say, the all-too-typical Trump to-ing and fro-ing made for an easy target.
From the Washington Post :
Former treasury secretary Lawrence Summers, a veteran of the Clinton and Obama administrations, said the White House's conflicting
statements were just the latest in a string of mixed messages that had made it impossible for people to understand its agenda.
"Deeply misguided policy and strategy has been joined for some time by dubious negotiating tactics, with promises not kept
and threats not carried out on a regular basis," Summers said in an interview. "We are at a new stage now with very erratic presidential
behavior and frequent denials of obvious reality. I know of no U.S. historical precedent."
And despite rousing himself to make a show of his resolve, the Administration did back down on one part of Trump's Friday missives,
that of "ordering" US companies to get out of Dodge, um, China.
From
the Wall Street Journal :
Aides to President Trump said Sunday he has no plans to invoke emergency powers and force companies to relocate operations
from China
"What he is suggesting to American businesses," [economic adviser] Mr. [Larry] Kudlow said, is that "you ought to think about
moving your operations and your supply chains away from China and secondly, we'd like you to come back home."
Treasury Secretary Steven Mnuchin also weighed in, telling "Fox News Sunday" that the president didn't have plans to invoke
emergency powers to force U.S. companies out of China.
"I think what he was saying is he's ordering companies to start looking," Mr. Mnuchin said."
The Journal also pointed out that Trump might have trouble forcing companies to exit:
Both Messrs. Mnuchin and Kudlow said that the president could theoretically force U.S. companies to leave China by invoking
a law known as the International Emergency Economic Powers Act of 1977, or IEEPA .
According to the Congressional Research Service, IEEPA can be used to deal with "any unusual and extraordinary threat" outside
the U.S. "to the national security, foreign policy or economy of the United States, if the president declares a national emergency
with respect to such threat."
The president is required "in every possible instance" to consult with Congress before exercising authorities granted by IEEPA,
and to specify in a report to lawmakers why the circumstances constitute a threat and why the actions are necessary, CRS said
in a briefing paper on the law issued earlier this year. The president must submit follow-up reports every six months .
Rod Hunter, a partner at Baker McKenzie and expert on international trade, said Mr. Trump could declare a state of emergency
and issue the order, but that doesn't mean it will stand.
"Congress could effectively override such a decision, and private parties would certainly challenge the action as an unconstitutional
takings, a violation of due process rights and beyond the statutory authority granted to the president by Congress," Mr. Hunter
said in an email.
Mind you, just like Brexit, there is a way to do what Trump wants to do that would not be so destructive and shambolic. Trump's
China policy appears to be intended to make American more economically self-sufficient so as to improve the prosperity of US workers,
as well as curb a competing imperialist.
But as we've described at some length in earlier posts, restoring America's manufacturing capabilities isn't just a matter of
weaning itself off cheap Chinese imports. The US has ceded a tremendous amount of know-how, from the factory floor on up. Getting
that back is a generation-long undertaking, requiring commitment to a national strategy that would include significant government
investment in fundamental research, renewed emphasis on education, including much cheaper higher education and vocational training
for those that aren't suited or inclined to go to college, and a reorientation of government spending and subsidies to favor productive
sectors over the connected. Not only would it be difficult to get any Administration to embrace open industrial policy, particularly
one that would break a lot of rice bowls (such as in our hugely wasteful arms industry and our bloated financial sector), maintaining
it beyond even a two-term Presidency would be an even taller order.
But where is the Trump tariff cage match likely to wind up? Given how often Trump has backed off when Mr. Market has had a hissy,
most commentator appear to have assumed before Friday's tit for tat that Trump would back down, if nothing else, in the form of allowing
a lot of exceptions, and the US and China would find a way for Trump to get enough concessions from China that he could declare peace
with honor.
That assumption looks to be incorrect. New Deal Democrat sent us the latest post from China Law Blog, written by lawyers who
specialize in Chinese law with an eye to helping businesses get set up and operate in China. The post by Dan Harris is every bit
as firm as its headline:
Repeat After
Me: There Will be No US-China Trade Deal . It also contains a good summary of key developments and detail on the various goods
targeted. Key sections:
The US-China Trade War Is and Will be the New Normal
I hate to say we told you so, but for nearly a year, WE TOLD YOU SO. Since October, 2018 we have been all but screaming at
anyone and everyone who has product made in China and sold into the United States to get out of China fast, if at all possible.
We say this and we set out the below timeline to prove this not so much to show that we have been right all along, but to try
to convince you that we are right when we now say there will be no resolution to the US-China trade war for a very long
time and you need to act accordingly.
The below is our timeline/proof of our having predicted a straight-line decline in US-China trade relations
But what should you make of President Trump's ordering US companies to immediately start looking for an alternative
to China? He can't really do that, can he? No, but in many respects this is exactly what Trump has been doing since the U.S.-China
trade war began. Trump cannot literally require American companies to pull out of China, but he can and has made it so difficult
that they all but have to leave China. And this is what most of the international lawyers and international trade lawyers at my
firm have come to believe has been Trump's plan all along.
Every step of the way, Trump has made it all but impossible for China to make a trade deal with the United States, which
is why this blog has been consistently clear that there will be no trade deal between the United States and China . If the US-China
trade war/cold war were really about trade imbalances, it would have ended long ago with China buying more soybeans and Boeing
airplanes from the United States. But from the very beginning, the U.S. has demanded China stop stealing IP and open its markets
for foreign companies, and there is just no way China will agree to either of these things. Lead negotiator Robert Lighthizer
is without a doubt smart enough to have known this all along. All this leads us to believe that the U.S. plan has always been
to force a slow decoupling of the U.S. and China and then work to convince the rest of the democratic world (the EU, Australia,
Canada, Latin America, Japan, etc.) to decouple from China, as well. In June, in
Does China WANT a Second Decoupling? The Chinese Texts Say That it Does we wrote of how China wants this decoupling, as well.
This latest Trump "order" does not have the force of law, so in that respect it is not an order at all. But in most other respects
it is. This order indicates Trump's passionate desire to rid the United States of what he sees as the China
scourge . More importantly, it is yet another
clear signal that he will continue to escalate this war with China until such time as he considers the United States to be victorious.
The fact that Trump issues this "order" amidst rising recession fears only highlights how ending U.S.-China trade is at the
top of his to-do list.
So in terms of what this means for your business, it means that you must stop believing there will be a solution to the trade
war that will allow you to go back to doing business with China the way you used to do business with China. You need to instead
recognize that this situation is the New Normal as between the United States and China and that, if anything, things are way more
likely to get worse than they are to get better.
I'm persuaded by this point of view because these writers have adopted the perspective that we've found to be very useful in other
geopolitical negotiations, which is to look at the bargaining position of both sides and see if there is any overlap. If there isn't,
there won't be an agreement unless one of both parties makes a significant concession.
One reason that other observers have likely missed what the China Law Blog discern is that there's an Anglo-American tendency
to assume that differences can be settled and a deal can be had. But as Sir Ivan Rogers pointed out with Brexit, and you have similar
dynamics with the US and China, there aren't precedents for trade deals where the two sides want to get further apart rather than
closer. Sir Ivan is of the point of view that the desire to disengage makes it much harder to come to terms.
The critical part of the China Law Blog's reading is that the Trump Administration is deadly serious about its two big asks,
intellectual property and market access. It's credible to attribute that to Trump's US Trade Representative, Lighthizer. As Lambert
put it, Lighthizer is the closest thing this Administration has to a Jim Baker. Lighthizer started at Covington & Burling, then served
in the Regan Administration as Deputy USTR before going to Skadden. Lighthizer is as fierce a China hawk as they come and has a long
history of saying that the entry of China into the WTO was at the expense of US jobs (see
here , for instance)
and even making a full-throated defense of
protectionism .
A part of the trade spat that hasn't gotten the attention it warrants and seems to confirm the China Law Blog's thesis is the
arm-wrestling over China's fetanyl exports to the US. It's not hard to see that this is an inherently important issue, since as I
understand it, fentanyl is so potent that it is very easy to overdose on it, making it markedly more dangerous than other addictive
drugs. In other words, the high death rate of fentanyl may make reducing supply a more effective strategy than it normally is in
"the war on drugs". Substitution with just about any other controlled substance would be less dangerous. And if Trump were to make
a dent in this problem, it would serve as a PR offset to some of the costs of his China strategy, like lost soyabean exports.
Fentanyl featured in the escalation on Friday, and it could conceivably serve as the basis for a national emergency threat
(even though, per the discussion earlier, it would have good odds of being overturned). One of Trump's four tweets urged US carriers
to do more to halt shipments arriving from China or other destinations (Mexico is believed to be a route for the entry of Chinese
fentanyl to the US).
In other words, it's not clear where this row ends, but there doesn't seem to be a path to depressurization, much the less resolution.
President Trump said China called U.S. officials on Sunday evening and said "let's get back to the table," a day after the
White House said the president regretted not escalating tariffs further on Chinese goods.
Speaking to reporters alongside Egyptian President Abdel Fattah Al Sisi, Mr. Trump called the discussions a "very positive
development." .
The Chinese government didn't immediately respond to Mr. Trump's remarks or to requests to corroborate the president's account
of a phone call having taken place. Chinese government officials have repeatedly said that Beijing wants to negotiate differences
on trade. On Monday, Beijing's lead trade negotiator, Vice Premier Liu He, told a conference that China still wants to continue
trade talks with the U.S. following heightened tensions in the past few days.
In May I had a conversation with a long-time friend. My friend works for a global manufacturer with a household name. He
has helped oversee construction of plants around the world. He helps source components from around the world. He told me that
"everybody's moving out" (of China).
The ones who can have not waited for Trump's message of Friday.
A few short years ago they had the Trans-Pacific Partnership being negotiated. This was nicknamed the "everybody but China"
pact as that was its mission – to cut China out of the Pacific. Add to that the "Pivot to Asia" introduced by Obama which was
to militarily threaten China and the writing was on the wall for China. They were to be boxed in and shut down. Trump may be the
front man now for this effort but all the China-hawks have come out of the woodwork to be let loose in the government.
I suppose that the plan is to force US companies to bail out of China and relocate to places like Vietnam, India, Bangladesh,
etc. But the question is whether these countries have the infrastructure to support these new factories? Do they have a trained,
educated workforce to man these factories? Is there a will to move to such places? As far as those countries are concerned, these
new companies could be seen as a two-edged sword. Yes they will bring investment and opportunities in those countries. But how
will they know if a Trump or someone like him later on will not order those factories out if there is a dispute or if the US demands
that those countries change their laws and open themselves up to financial exploitation? Trump is demanding the same of China
right now. And will Trump demand that all the other western countries move out of China?
I have mentioned before the idea of a multipolar world and I believe that we re seeing it now in action. The US and its
vassals will be one pole and another one is forming around China, Iran and Russia. I doubt that the EU will be another as they
are following what Trump orders even if reluctantly. There may be another factor. For centuries we have had an economy predicated
on growth but I suspect that by the end of this century will will have one based on contraction due to climate change and depletion
of resources. Better strap in. It could be a bumpy ride.
This is all pretty interesting. More theater than trade. And the reason is that there is no demand. Demographics has a lot
to do with it as well. It might not make any difference now how much a company can cut costs by moving to SE Asia because nobody
will be very eager to buy more crap anyway. And manufacturing cannot up and move cheaply if they have to reinvent and retool their
processes to make them more environmentally acceptable. It's a sea change. And a tap-dance.
According to this article,"
The DEA has stated that
China is the main source of US fentanyl. " I followed the link, and found "The DEA has said China is a main
source of fentanyl and other synthetic opioids." Which I take as meaning that even if the US could totally shut down Chinese
synthetic opioid production, someone will still be making and supplying it.
So, if the facts as given above are reconfigured, all it would take is for the Chinese producers of synthetic opioids to pay
the US patent holders their due. Problem solved! All kidding aside, the demands to get intellectual property paid for requires
a very pliant judicial system to actually recognize that an idea should be rightfully owned by a person.
Individual agency is a product of 'enlightenment' thinking which opened the pathway for an idea to be the creation of a person
who willed the idea into existence. A few steps later, a corporation becomes a person and then a group of people can somehow own
a single idea and be able to rent that idea out. To think that the Chinese would accept this cockamamie/historically embedded/English
common law idea would be to deny their own culturally based motivated reasoning.
I don't know how this situation will be resolved, but it is quite laughable that the diversion through tariffs of IP revenues
which in US legal logic should be paid to Corporations is actually going to go to the US Treasury.
"All this leads us to believe that the U.S. plan has always been to force a slow decoupling of the U.S. and China and then
work to convince the rest of the democratic world (the EU, Australia, Canada, Latin America, Japan, etc.) to decouple from China,
as well"
That is about right, and I do not doubt that this is the desire of Trump's negotiating team. Nor do I doubt that they can easily
steer talks to fail as described (by asking for concessions on market access favorable to the US side, AND by refusing to back
down on Huawei etc).
However, while effectively forcing a decoupling of China and US is straightforward, controlling its speed is not. Pull the
plug too fast (which China can threaten to accelerate), and some big US companies eat it. While Lighthizer and friends may be
willing to pay that price, it will make a lot of others very nervous.
Then, perhaps more importantly, is forcing the rest of the world to follow suit (or else there is no point). JP, ROK, DE (the
high tech suppliers besides US) all trade at least as much with China as US. The world market buying Chinese made goods is also
bigger than the US. It would take some skillful diplomacy to make it happen. This is not only beyond the level of the Trump admin,
but I would say all US administrations since the year 2000, with the Iran deal maybe the only exception I can think of.
China will end up defending itself by getting the overly aggressive and self-discrediting Team Trump reelected. By openly provoking
a small proxy conflict for example. Trump gets to do his Ronald Reagan act, which is what his audience wants. It will be a weird
political symbiosis. (an oversized personality can't survive without a suitably inflated enemy, and Joe Biden is no Hillary Clinton.
The media will play along – such drama is the only thing keeping them in business now.)
Anyway, if there is a counterbalancing force to prevent this, I would think it is wall street.
Apparently the US federal workers pension plan has started investing in index funds which include some Chinese companies that
have been in Trump & Co's target list. From the FT this morning:
The letter -- a copy of which was seen by the Financial Times -- said an impending investment shift by the FRTIB would mean
that about $50bn in US government pensions becomes exposed to the "severe and undisclosed" risks of being invested in selected
Chinese companies.
The letter, dated August 26, was copied to senior US officials including Mike Pompeo, US secretary of state, and Steven
Mnuchin, Treasury secretary.
"The Federal Retirement Thrift Investment Board made a short-sighted -- and foolish -- decision to effectively fund the
Chinese government and Communist party's efforts to undermine US economic and national security with the retirement savings
of members of the US Armed Services and other federal employees," Mr Rubio told the Financial Times.
One thing I remember from early on in this dispute was the US wanting more opportunities to invest in the Chinese market beyond
just exports/manufacturing. If pension funds are getting involved I would think that private investors would like to do the same
thing, which would make long-term decoupling more difficult, especially if US businesses also want to sell things to people in
China even if those things are made elsewhere.
As always your post was very informative and helpful and I certainly believe that pulling the US out of China is the goal of
this whole trade dispute. I just wonder if things like this will put a damper on their plans.
China Did Not Trick the US -- Trade Negotiators Served Corporate Interests
By Dean Baker
The New York Times ran an article * last week with a headline saying that the 2020
Democratic presidential contenders faced a serious problem: "how to be tougher on trade than
Trump." Serious readers might have struggled with the idea of getting "tough on trade." After
all, trade is a tool, like a screwdriver. Is it possible to get tough on a screwdriver?
While the Times's headline may be especially egregious, it is characteristic of trade
coverage which takes an almost entirely Trumpian view of the topic. The media portray the
issue of some countries, most obviously China, benefiting at the expense of the United
States. Nothing could be more completely at odds with reality.
China has a huge trade surplus with the United States, about $420 billion (2.1 percent of
GDP) as of 2018. However, this doesn't mean that China is winning at the expense of the
United States and because of "stupid" trade negotiators, as Trump puts it.
The U.S. trade deficit with China was not an accident. Both Republican and Democratic
administrations signed trade deals that made it easy to manufacture goods in China and other
countries, and then export them back to the United States.
In many cases, this meant that large U.S. corporations, like General Electric and Boeing,
outsourced parts of their operations to China to take advantage of low-cost labor there. In
other cases, retailers like Walmart set up low-cost supply chains so that they could undercut
their competitors in the U.S. market.
General Electric, Boeing, Walmart and the rest did not lose from our trade deficit with
China. In fact, the trade deficit was the result of their efforts to increase their profits.
They have little reason to be unhappy with the trade deals negotiated over the last three
decades.
It is a very different story for workers in the United States. As a result of the
exploding trade deficit, we lost 3.4 million manufacturing jobs between 2000 and 2007, 20
percent of the workers in the sector. This is before the collapse of the housing bubble led
to the Great Recession. We lost 40 percent of all unionized jobs in manufacturing.
This job loss not only reduced the pay of manufacturing workers, but as these displaced
workers flooded into other sectors, it put downward pressure on the pay of less-educated
workers generally. This is a pretty awful story, but it is not a story of China tricking our
so-called stupid negotiators; it is a story of smart negotiators who served well the interest
of corporations.
For some reason, the media always accept the Trumpian narrative that the large trade
deficits the U.S. runs with China (and most of the rest of the world) were the result of
other countries outsmarting our negotiators, or at least an accidental result of past trade
deals. The media never say that large trade deficits were a predictable outcome of a trade
policy designed to serve the wealthy.
The fact that trade is a story of winners and losers within countries, rather than between
countries, is especially important now that our trade conflicts are entering a new phase,
especially with China. While not generally endorsing Trump's reality TV show tactics, most
reporting has taken the position that "we" in the U.S. have genuine grounds for complaint
with China.
The complaints don't center on the under-valuation of China's currency, which is a problem
for manufacturing workers. Rather, the issue that takes center stage is the supposed theft by
China of our intellectual property.
While this sort of claim is routinely asserted, the overwhelming majority of people in the
United States have never had any intellectual property stolen by China. It is companies like
Boeing, GE, Pfizer and Merck that are upset about China not respecting their patent and
copyright claims, and they want the rest of us to have a trade war to defend them.
If the goals of trade policies were put to a vote, these companies would be hugely
outnumbered. However, they can count on the strong support of the media in both the opinion
pages, and more importantly, the news pages. The issue is entirely framed in their favor, and
dissenting voices are as likely to be heard as in the People's Republic of China.
There is a lot at stake in preserving the myth that ordinary workers were hurt as just an
accidental byproduct of globalization. The story is that it just happens to be the case that
hundreds of millions of people in the developing world are willing to do the same work as our
manufacturing workers for a lot less money.
Yes, the loss of millions of manufacturing jobs is a sad story, but is just part of the
picture. There are also millions of smart ambitious people in the developing world who are
willing to do the same work as our doctors, dentists, lawyers and other professions for a lot
less money.
But the people who design trade policy have made sure that these people don't have the
opportunity to put the same downward pressure on our most highly paid workers, as did their
counterparts working in families. And, for what it's worth, the trade model works the same
when we're talking about doctors as manufacturing workers. Less pay for U.S. doctors means
lower cost health care, just as lower pay for textile workers means cheaper clothes.
The key point is that winners in the global economy, along with the big corporations, got
their good fortune because they rigged the process, not because of anything inherent in the
nature of globalization. (This is the point of my book Rigged: How the Rules of Globalization
and the Modern Economy Were Structured to Make the Rich Richer. ** )
On this basic point, the media have no more interest in truth than Donald Trump. Hence, we
can expect further media parroting about being "tough" on trade.
"... Still, even if Trump isn't making sense, will China give in to his demands? The short answer is, "What demands?" Trump mainly seems exercised by China's trade surplus with America, which has multiple causes and isn't really under the Chinese government's control. ..."
"... Others in his administration seem concerned by China's push into high-technology industries, which could indeed threaten U.S. dominance. But China is both an economic superpower and relatively poor compared with the U.S.; it's grossly unrealistic to imagine that such a country can be bullied into scaling back its technological ambitions ..."
"... Which brings us to the question of how much power the U.S. really has in this situation. ..."
"... So while Trump's tariffs certainly hurt the Chinese, Beijing is fairly well placed to counter their effects. China can pump up domestic spending with monetary and fiscal stimulus; it can boost its exports, to the world at large as well as to America, by letting the yuan fall. ..."
"... At the same time, China can inflict pain of its own. It can buy its soybeans elsewhere, hurting U.S. farmers. As we saw this week, even a mostly symbolic weakening of the yuan can send U.S. stocks plunging. ..."
"... And America's ability to counter these moves is hindered by a combination of technical and political factors. The Fed can cut rates, but not very much given how low they are already. We could do a fiscal stimulus, but having rammed through a plutocrat-friendly tax cut in 2017, Trump would have to make real concessions to Democrats to get anything more -- something he probably won't do. ..."
"... So Trump is in a much weaker position than he imagines, and my guess is that China's mini-devaluation of its currency was an attempt to educate him in that reality. But I very much doubt he has learned anything. His administration has been steadily hemorrhaging people who know anything about economics, and reports indicate that Trump isn't even listening to the band of ignoramuses he has left. ..."
China Tries to Teach Trump Economics
But he doesn't seem to be learning.
By Paul Krugman
If you want to understand the developing trade war with China, the first thing you need to
realize is that nothing Donald Trump is doing makes sense. His views on trade are incoherent.
His demands are incomprehensible. And he vastly overrates his ability to inflict damage on
China while underrating the damage China can do in return.
The second thing you need to realize is that China's response so far has been fairly
modest and measured, at least considering the situation. The U.S. has implemented or
announced tariffs on virtually everything China sells here, with average tariff rates not
seen in generations. The Chinese, by contrast, have yet to deploy anything like the full
range of tools at their disposal to offset Trump's actions and hurt his political base.
Why haven't the Chinese gone all out? It looks to me as if they're still trying to teach
Trump some economics. What they've been saying through their actions, in effect, is: "You
think you can bully us. But you can't. We, on the other hand, can ruin your farmers and crash
your stock market. Do you want to reconsider?"
There is, however, no indication that this message is getting through. Instead, every time
the Chinese pause and give Trump a chance to rethink, he takes it as vindication and pushes
even harder. What this suggests, in turn, is that sooner or later the warning shots will turn
into an all-out trade and currency war.
About Trump's views: His incoherence is on view almost every day, but one of his recent
tweets was a perfect illustration. Remember, Trump has been complaining nonstop about the
strength of the dollar, which he claims puts America at a competitive disadvantage. On Monday
he got the Treasury Department to declare China a currency manipulator, which was true seven
or eight years ago but isn't true now. Yet the very next day he wrote triumphantly that
"massive amounts of money from China and other parts of the world is pouring into the United
States," which he declared "a beautiful thing to see."
Um, what happens when "massive amounts of money" pour into your country? Your currency
rises, which is exactly what Trump is complaining about. And if lots of money were flooding
out of China, the yuan would be plunging, not experiencing the trivial (2 percent) decline
that Treasury condemned.
Oh well. I guess arithmetic is just a hoax perpetrated by the deep state.
Still, even if Trump isn't making sense, will China give in to his demands? The short
answer is, "What demands?" Trump mainly seems exercised by China's trade surplus with
America, which has multiple causes and isn't really under the Chinese government's
control.
Others in his administration seem concerned by China's push into high-technology
industries, which could indeed threaten U.S. dominance. But China is both an economic
superpower and relatively poor compared with the U.S.; it's grossly unrealistic to imagine
that such a country can be bullied into scaling back its technological ambitions .
Which brings us to the question of how much power the U.S. really has in this
situation.
America is, of course, a major market for Chinese goods, and China buys relatively little
in return, so the direct adverse effect of a tariff war is larger for the Chinese. But it's
important to have a sense of scale. China isn't like Mexico, which sends 80 percent of its
exports to the United States; the Chinese economy is less dependent on trade than smaller
nations, and less than a fifth of its exports come to America.
So while Trump's tariffs certainly hurt the Chinese, Beijing is fairly well placed to
counter their effects. China can pump up domestic spending with monetary and fiscal stimulus;
it can boost its exports, to the world at large as well as to America, by letting the yuan
fall.
At the same time, China can inflict pain of its own. It can buy its soybeans elsewhere,
hurting U.S. farmers. As we saw this week, even a mostly symbolic weakening of the yuan can
send U.S. stocks plunging.
And America's ability to counter these moves is hindered by a combination of technical and
political factors. The Fed can cut rates, but not very much given how low they are already.
We could do a fiscal stimulus, but having rammed through a plutocrat-friendly tax cut in
2017, Trump would have to make real concessions to Democrats to get anything more --
something he probably won't do.
What about a coordinated international response? That's unlikely, both because it's not
clear what Trump wants from China and because his general belligerence (not to mention his
racism) has left America with almost nobody willing to take its side in global disputes.
So Trump is in a much weaker position than he imagines, and my guess is that China's
mini-devaluation of its currency was an attempt to educate him in that reality. But I very
much doubt he has learned anything. His administration has been steadily hemorrhaging people
who know anything about economics, and reports indicate that Trump isn't even listening to
the band of ignoramuses he has left.
So this trade dispute will probably get much worse before it gets better.
""You think you [Trump] can bully us [Xi]. But you can't. We, on the other hand, can ruin
your farmers and crash your stock market. Do you want to reconsider?""
Krugman is putting his "liberal" thinking in to Xi's mind.
US farmers are the darling of the "liberal"? I suspect not so much unless to oppose
Trump.
To see the mechanism that China could crash the stock market requires some thinking.
How could China do such a thing? Tariffs on $100B (in a $19,000B economy) in US exports is
emotional to the exchanges. Dumping US debt would raise interest rates and make T Bills
attractive over stocks, which is not a bad thing. The "liberals" know a 'deplorable' 36000
Dow is a dream. Then what does China do with all those USD?
The issue is a lot of "liberals" do not want Trump to succeed in efforts to reverse the
MNC expulsion of labor from the US to developing countries.
I look forward to Trump asking the DNC select why he or she "wants Xi to win over labor in
the US?"
The underlying loser in the Trump scheme are the MNC's so will the DNC go all in for MNC's
at the expense of the worker?
Nostalgia for a past that never was; Part 1 review of Paul Collier's "The future of
capitalism"
Paul Collier's new book "The future of capitalism" is a very hard book to review. It is
short (215 pages) but it covers an enormous area, from social and economic interpretation of
the past seventy years in the West, to pleas for "ethical" companies, "ethical" families and
even an "ethical" world, to a set of proposals for reform in advanced economies.
The most uncharitable assessment would be to say that, at times, the book comes close (I
emphasize "close") to nationalism, "social eugenics", "family values" of the moral majority
kind, and conservativism in the literal sense of the word because it posits an idealized past
and exhorts us to return there. But one could also say that its diagnosis of the current ills
is accurate and remarkably clear-sighted. Its recommendations are often compelling,
sophisticated and yet common-sensical.
I have therefore decided to divide my review in two parts. In this part I will explain the
points, mostly methodological and historical, on which I disagree with Collier. In the second
part, I will discuss the diagnoses and recommendations on which I mostly agree.
Pragmatism. Collier positions himself as a "pragmatist" battling both (1) ideologues:
Utilitarians, Rawlsian (who are accused, somewhat strangely, of having introduced identity
politics) and Marxists; and (2) populists who have no ideology at all but simply play on
people's emotions. All three kinds of ideologies are wrong because they follow their script
which is inadequate for current problems while populists do not even care to make things
better but only to rule and have a good time. It is only a pragmatic approach that, according
to Collier, makes sense.
Pragmatism however is an ideology like any other. It is wrong to believe oneself exempt
from ideological traps if one claims to be a "pragmatist". Pragmatism collects whatever are
the ruling ideologies today and rearranges them: it provides an interpretative framework like
any other ideology. Pragmatists are, as Keynes said in a similar context "practical men, who
believe themselves to be quite exempt from any intellectual influences, [but] are usually the
slaves of some defunct economist [or ideologue; my addition]."
Adam Smith. The second building block of Collier book is based on his interpretation of
Adam Smith, which has become more popular recently and tries to "soften" the hard edge of the
Adam Smith of the "Wealth of Nations" (self-interest, profit, and power) by a more congenial
Smith from "The Theory of Moral Sentiments". This is an old debate that goes almost 200 years
back ("Die Adam Smith Frage").
There are, I think, if not two Smiths, then one Smith for two sets of circumstances: in
TMS, it is the Smith for our behavior with family, friends and community; in the WoN, it is
the Smith of economic life, our behavior as "economic agents". I discuss this in "Capitalism,
Alone". David Wootton in "Power, Pleasure and Profit" very persuasively makes the same point.
And even Collier says exactly the same thing towards the end of his book, but in the early
parts he argues that the Adam Smith of TMS applies to economics as well.
Now, for an economist only the Smith from the WoN matters. Economists do not claim (or
should not claim) to have particularly valuable insights regarding how people behave outside
of economics. So it is fully consistent for economists to use a model of Smith's homo
economicus who is pursuing monetary gains only, or more broadly, his own utility only. That
of course does not exclude, as Collier and some other writers (e.g., Peter Turchin) seem to
believe, cooperation with others. It is obvious that many of our monetary objectives are
better achieved through cooperation: I am better off cooperating with people at my university
than setting my own university. But whether I do one or the other, I am pursuing my own
selfish interest. I am not doing things for altruistic reasons -- which perhaps I might do in
my interactions with family or friends.
My point in "Capitalism, Alone" is that under hyper-commercialized globalization Smith's
economic sphere is rapidly expanding and "eating up" the sphere where the Smith of TMS
applies. Commodification "invades" family relations and our leisure time. Both Collier and I
agree on that. But while I think that this is an inherent feature of hyper-commercialized
globalization, Collier believes that the clock can be turned back to an "ethical world" which
existed in the past while somehow keeping globalization as it is now. This is an illusion and
leads me to Collier's nostalgia.
Social-democracy. In Collier's view of the Golden Age (1945-75), social-democracy that
brought it about did this for ethical reasons. In several places he repeats more of less this
breathtaking sentence "[Roosevelt] was elected because people recognized the New Deal was
ethical". He argues that the origin of social-democracy lies in a (nice) co-operative
movement, not that the reforms in capitalism after WW1 and WW2 were the product of a century
of often violent struggle of social democratic parties to improve workers' conditions. It is
not because ethical leaders decided suddenly to make capitalism "nicer" but because the two
world wars, the Bolshevik revolution, the growth of social-democratic and communist parties,
and their links with powerful trade unions, exacted the change of course from bourgeoisie
under the looming threat of social disorder and expropriation. So it is not through the
benevolence of the right that capitalism was transformed, but because the upper classes,
chastised by past experience, decided to follow their own enlightened self-interest: give up
some in order to preserve more. (For similar interpretations, see Samuel Moyn, Avner
Offer,)
This difference in the interpretations of history is important because Collier's view
applied to today basically calls for ethical rulers -- to somehow appear. This is why at the
end of the book he discusses how political leaders should be elected (not by party members or
primaries, but by the elected representatives of their parties). My interpretation implies
that unless there are strong social forces that would push back financial sector excesses,
tax evasion, and high inequality nothing will be changed. What matters is not ethics or
ethical leaders but group/class interest and relative power.
The facts. And finally the Arcadia of the trente glorieuses * when Collier holds that
moral giants strode the Earth, companies cared about workers, families were "full" and
"ethical", never really existed, at least not in the way it is described in the book. Yes,
like many others I have pointed out that the trente glorieuses were very good years for the
West both in terms of growth and surely in terms of narrowing of wealth and income
inequalities. But they were no Arcadia and in many respects they were much worse than the
present.
The period of Collier's "ethical family" in which "the husband was the head" when every
member cared for each other, and several generations lived together, was a hierarchical
patriarchy that even legally forbid any other types of family-formation. (I remember that in
my high school in Belgium, only fathers were allowed to sign off on pupils' grades or school
absences. Not mothers.)
In the USA, the Golden Age was the age of social mimicry and conservatism, widespread
racial discrimination, and gender inequality. When it comes to politics, it is often
forgotten that during the Golden Age, France was basically twice on the edge of a civil war:
during the Algerian war and in 1968. Spain, Portugal, and Greece were ruled by quasi-fascist
regimes. Terrorism of RAF and Brigate Rosse came in the 1970s. Finally, if these years were
so good and "ethical" why did we have the universal 1968 rebellion, from Paris to
Detroit?
That imagined world never was, and we are utterly unlikely to return to it; not only
because it never was but because the current word is entirely different. Collier overlooks
that the world of his youth to which he wants people to return was the world of enormous
income differences between the rich world and the Third World. It is for that reason that the
English working class could (as he writes) feel very proud and superior to the people in the
rest of the world. They cannot feel so proud and superior now because other nations are
catching up. Implicitly, regaining self-respect for the English working class requires a
return to such worldwide stratification of incomes.
The book is thus built on the quicksand of a world that did not exist, will not exist, and
on a methodology that I find wanting. 2020s will not be the imagined 1945, however loudly we
clamor for it. But this does not mean that the analyses of current problems and the
recommendations are wrong. Many of them are very good. So I will turn to them next.
How to create an ethical county, if not the world: Part 2 review of Paul Collier's "The
future of capitalism"
This is the second part of my review of Paul Collier's "The future of capitalism". The
first part is here. *
In this review of Collier's policy recommendations, I will break the discussion into three
parts, following Collier's own approach: how to make companies more ethical, families
stronger, and the world better.
Ethical firm. Collier argues that, in order for companies to be seen as ethical and to
offer their workforce meaningful jobs, companies should include workers in management, give
much more power to the middle-level management, and do profit-sharing. These are all
well-taken recommendations, and I believe, like Collier, that they would increase companies'
profitability in addition to providing "better" jobs. The question however is how many
companies nowadays can afford to provide such meaningful and (relatively) stable jobs because
of fast-evolving changes driven by globalization. Nevertheless the idea is correct.
Collier then moves to what may be the most intriguing recommendation in the book and that
goes beyond the usual "let's have higher and more progressive taxes". He looks at the big
divide between the successful global cities (like New York and London) and their left-behind
hinterlands. The success of metropolises comes from economies of scale, specialization, and
complementarity (gains of agglomeration). People can specialize because the demand for
specialized skills is high (the best tax accountants are located in New York not in small
dilapidated cities). Companies can enjoy economies of scale because the demand is high and
specialized workers benefit from complementarity in skills from other workers with whom they
are in close geographical and intellectual contact.
So who are the main winners from metropolises' success, asks Collier? People who own land
and housing (as housing prices skyrocket) and highly skilled professionals who, after paying
higher rents, still make more in global cities than elsewhere. Collier's suggestion then,
based on his work with Tony Venables, is to tax heavily these two groups of people, i.e., to
introduce supplemental taxes which would be geographical: tax housing and high income
individuals living in London.
How to help hinterland catch up? Use the money collected in London or New York to give
subsidies to large cluster-like companies (like Amazon) if they set they businesses in the
left-behind cities like Sheffield or Detroit. One can quibble with this idea but the logic of
the argument is, I think, quite compelling, and the taxation suggested by Collier has the
advantage of going beyond the indiscriminate increase in taxes for all. We are talking here
of targeted taxation and targeted subsidies. This is the lieu fort of Collier's book.
Ethical family. I am less enthusiastic about the suggestions in this area. Here Collier is
at his most conservative although that social conservatism is masked under the cover of
scientific studies that show that children living in "full" families with two heterosexual
parents are doing much better than children living with one parent only.
Collier almost implies that (say) mothers should stay in unloving or abusive relationships
so that there would be both parents present in the family. Such families should, according to
Collier, be given support and for all children public pre-K and K education should be free
(very reasonable). Collier also very persuasively describes manifold advantages that the
children of the rich receive, not only through inheritance but through intangible capital of
parental knowledge and connections. This type of social capital inheritance is not a
well-researched topic and I hope this changes since its importance in real life is
substantial.
Collier displays clear preference for "standard" families and even some "social eugenics"
as when he criticizes UK policy that provides free housing and since 1999 extra benefits for
single mothers to have encouraged "many women...to bear children who will not be raised
well".
The argument that parents should sacrifice themselves (regardless of the psychic cost) for
children is also dangerous. It leads us to a family formation of the 19th century when women
often lived in terrible marriages because of social pressure not to be seen as abandoning or
not caring for their children. This is neither a desirable nor a likely solution for today.
An ethical family should consider interests of all members equally, not subjugate the
happiness of some (mostly mothers) to that of others.
Ethical world. Collier has surprisingly little to say about the ethical world. His ethical
world is a world largely closed to new migration which Collier rejects based on a not
unreasonable view going back to Assar Lindbeck and George Borjas of cultural incompatibility
between the migrants and the natives. Interestingly, Collier does not quote either of these
two authors nor any others. (The book is directed at the general audience so the mentions of
other authors are extremely rare except when it comes to Collier himself and a few of his
co-authors).
It is slightly disconcerting that Collier who has spent more than three decades working on
Africa has almost nothing to say about how Africa and African migration fits into this
"ethical world". There are only two ways in which he addresses migration.
First, migrants or refugees should stay in countries that are geographically close to the
source countries: Venezuelans in Colombia, Syrians in Lebanon and Turkey, Afghanis in
Pakistan. Why the burden of migrants should be exclusively borne by the limitrophe countries
** that are often quite poor is never explained. Surely, an ethical world would require much
more from the rich.
Second, he argues that the West should help good companies invest in poor countries in
order to increase incomes there and reduce migration. But how is this to be achieved is never
explained. It is mentioned almost as an afterthought and is considered deserving of two
sentences only (in two different parts of the book). This is in contrast with a detailed
explanation, discussed above, of how governments should encourage and subsidize large
companies to relocate to second-tier cities. Could a similar scheme be designed for
investments in Africa? Nothing is said.
Further, where does it leave African migrants crisscrossing the Mediterranean as I write?
There are no geographically close countries where they could go (surely not to Libya) nor can
they wait for years in Mali for the Western companies to bring them jobs. Again, nothing is
said on that. It is not surprising that Collier is very supportive of Emmanuel Macron whose
anti-immigration policy is quite obvious, and of Danish Social Democrats that are in the
process of creating a kind of national social democracy with new laws that practically reduce
immigration to a trickle. Collier favors Fortress Europe although he does not say so
explicitly.
In keeping with his anti-immigration stance, Collier argues that migration is not an
integral part of globalization. Why –in principle– goods, services and one factor
of production (capital) should be allowed to move freely while another factor of production
(labor) is to remain stuck is not clear. Surely, the fact that trade is driven by comparative
advantage and migration by absolute is not the reason to be against migration. On exactly the
same grounds, one could be against movement of capital too.
In conclusion, I think that the recommendations regarding the "ethical firm" and
metropolis-hinterland divergence are spot on; the recommendations on "ethical family" are a
combination of very perceptive and sensible points, and a view of the family that at times
comes from a different age, and almost nothing is said about an "ethical world". This latter
is a big omission in the era of globalization, but perhaps Collier was solely interested in
how to improve nation-states.
** Territories situated on a border or frontier. In a broad sense, it means border
countries -- any group of neighbors of a given nation which border each other thus forming a
rim around that country.
"... This strategy is not popular with US corporations and will earn Trump some more opposition. Former Rep. Joe Walsh (R-Ill.) on Sunday announced he would mount a primary challenge to President Trump ..."
Trump has put US companies on alert that he might force them to withdraw from China, where
they have $256 billion invested. He says he is given this power by the 1977 law called the
International Emergency Economic Powers Act, or IEEPA.
The Republican Party has spent over a century warning against government involvement in
the private sector, but now their leader is doing it big time. Trump ordering companies
around about where they can invest is a form of fascism or rightwing national socialism. Left
socialism is about public sector economic activity for the good of people. National socialism
is the state usurping economic resources on behalf of a small corporate and high-official
elite.
Tara Golshan at Vox explained how Trump unilaterally raised China tariffs in the first
place by 25% (he is threatening to go to 30%):
"Trump's White House cited Section 232 of the Trade Expansion Act of 1962, a provision
that gives the secretary of commerce the authority to investigate and determine the impacts
of any import on the national security of the United States -- and the president the power to
adjust tariffs accordingly."
So one thing that is going on is that measures passed by Congress for limited and extreme
situations are being misused by presidents for everyday policy-making. . . here
This strategy is not popular with US corporations and will earn Trump some more
opposition. Former Rep. Joe Walsh (R-Ill.) on Sunday announced he would mount a primary
challenge to President Trump . . .
here
"... What has caused the rapid decline in US manufacturing employment in recent decades? This column uses novel data to investigate the role of US multinationals and finds that they were a key driver behind the job losses. Insights from a theoretical framework imply that a reduction in the costs of foreign sourcing led firms to increase offshoring, and to shed labour." [link above] ..."
"... It looks like 'free' trade fundamentalists like Krugman are going to have to revisit their ideology... ..."
"... How pathetic can Democrats get with thier anti-worker policies ..."
"... Late 90's US corporations went whole in to industrializing [extreme low wage] China... FOREX, federal deficits, ignoring the US worker, etc. were in the [sympathetic] mix. There is a chicken, which egg is not important. ..."
"... Personally, I think that Trump is exploiting the distress of the working stiff and not doing anything for him. Meanwhile, the Democratic leadership has shown callous indifference toward the working stiff so Trump gets their votes, because at least he will acknowledge that there's a problem unlike kurt and his ilk. ..."
"A new assessment of the role of offshoring in the decline in US manufacturing employment,"
by Christoph Boehm, Aaron Flaaen, Nitya Pandalai-Nayar 15 August 2019 What has caused the rapid decline in US manufacturing employment in recent decades? This
column uses novel data to investigate the role of US multinationals and finds that they were
a key driver behind the job losses. Insights from a theoretical framework imply that a
reduction in the costs of foreign sourcing led firms to increase offshoring, and to shed
labour." [link above]
It looks like 'free' trade fundamentalists like Krugman are going to have to revisit
their ideology...
As for kurt, expect him to continue to deny the fact that 'free' trade has cost a
significant number of jobs and caused enough economic disruption to tilt the election to
Trump in 2016.
Further, expect the Democratic leadership to continue to tout the benefits of 'free' trade
without acknowledging its severe adverse effects, both economically and politically. And of
course, as long as they never acknowledge the adverse effects, they will never have to
address it which will allow Trump to continue to bludgeon them on the issue.
How pathetic can Democrats get with thier anti-worker policies
Late 90's US corporations went whole in to industrializing [extreme low wage] China...
FOREX, federal deficits, ignoring the US worker, etc. were in the [sympathetic] mix. There is
a chicken, which egg is not important.
The US worker lost in the evolutions. Aside from Trump who has tried anything for the US
working stiff?
Personally, I think that Trump is exploiting the distress of the working stiff and not
doing anything for him. Meanwhile, the Democratic leadership has shown callous indifference
toward the working stiff so Trump gets their votes, because at least he will acknowledge that
there's a problem unlike kurt and his ilk.
"... During his meeting with Johnson on Sunday at the G7 in France, the US president raised eyebrows when he responded in the affirmative to questions from reporters on whether he had any second thoughts about the tariff move. ..."
While one may accuse the US president of many things, having second thoughts is hardly one
of them: once Trump has decided on a course of action, he tends to follow through. Which is why
the global press gasped when a rare case of doubt emerged this morning during Trump's breakfast
meeting with the UK's Boris Johnson at the Biarritz G-7, when the US president acknowledged
having second thoughts about the escalating the trade war with China... only for his top
spokeswoman to later retract and say Trump meant he regretted not raising tariffs even
more.
During his meeting with Johnson on Sunday at the G7 in France, the US president raised
eyebrows when he responded in the affirmative to questions from reporters on whether he had any
second thoughts about the tariff move.
Every president of the USA for the past 50 years has cultivated US exports to China. You
want to just throw it away, only two or three years before the purchasing power of China
exceeds that of the USA???
China - 1.5 billion.
USA - 326 million
China growth rate 2018: 6.4%
USA growth rate 2018: 2.8% source
China now produces twice as many graduates a year as the US source
As of 2015, China had already taken global lead in manufacturing output:
source
China - $2,010 billion
USA - $1,867 billion
World market size, based on population:
source
China - 18.7%
USA - 4.3%
Greedy US corporations have been in bed with China robbing the US citizen with all those
job exports to China.
If things were produced in US, the corporations would have made less money, but the US
citizen would have been better off. The trade deficit which has been running for decades
wouldn't have been that much.
Anyone with a lick of commonsense knew Trump's detractors would be gunning for him during
his trip to Europe. Trump has not disappointed these people by continuing his effort to come
across as too clever for his own good. Trump gave these people more ammunition when he said
he has doubts about his actions.
During breakfast with the UK's Boris Johnson at the G-7 meeting in Biarritz, France Trump
acknowledged having second thoughts about the escalating the trade war with China. The
article below explores how this may cause Trump a great deal of grief.
Beijing just might be able to doom the president's chance of reelection. They can tune
tariffs to hurt Trump base.
Notable quotes:
"... China's tariff threats take aim at the heart of Trump's political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down. Soybean prices sank to a two-week low ..."
"... The tariffs beginning in September include 10% on pork, beef, and chicken, and various other agricultural goods, while soybeans will have the extra 5% tariff on top of the existing 25%. Starting in December, wheat, sorghum, and cotton will also get a 10% tariff. ..."
Some of the countermeasures will take effect starting Sept. 1, while the rest will come into
effect from Dec. 15, according to the announcement Friday from the Finance
Ministry. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300
billion of Chinese shipments
An extra 5% tariff will be put on American soybeans and crude-oil imports starting next
month. The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with
another 10% on top for some vehicles. With existing general duties on autos taken into account,
the total tariff charged on U.S. made cars would be as high as 50%.
China's tariff threats take aim at the heart of Trump's political support -- factories and
farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing
down. Soybean prices sank to a two-week low
.... ... ...
The tariffs beginning in September include 10% on pork, beef, and chicken, and various other
agricultural goods, while soybeans will have the extra 5% tariff on top of the existing 25%.
Starting in December, wheat, sorghum, and cotton will also get a 10% tariff.
"... "The 2008 experience demonstrated that the U.S. dollar as the global reserve and main trade currency is dangerous for all who use it. Currently any hickup in the U.S. economy leads to large scale recessions elsewhere." ..."
"... It has also become a primary tool for the US to assert extraterritorial jurisdiction over the world to enforce extreme uses of sanctions, as in blowing up the Iran deal. Already the EU has explored ways to get around that to work with Iran. ..."
"... The over use of sanctions, and abuse of the US financial position in order to govern others, reinforces the desire to deal with fears that dependence on the dollar risks vulnerability to economic depression due to US irresponsibility. ..."
"... The US is creating a perfect storm for the dollar, with is exactly what it would take to make others undertake the expense and difficulty of replacing it as the world reserve currency and presumed standard of exchange. ..."
"... I just had a thought. The USSA has been doing it all wrong for all these decades. There are at least two responses the USSA could have applied to the obviously impending debacle of simply allowing the Chinese to thoroughly undermine its industrial system. The most obvious response would have been tariffs, which could be perceived as an aggressive policy, but certainly not as the outright aggression of sanctions. ..."
"... Or probably even much better, a 'negative sales tax' on USSA manufactured products, which could in no way be perceived as aggressive at all. Note that there is (I presume) a vast difference between simply subsidizing companies (since subsidies coud then flow directly into the pockets of the companies' capitalists) and providing the companies' customers with a 'negative tax' on USSA produced products (basically an instant rebate). This could effectively provide price parity for the goods produced for the two countries, and could maintain the viability of the USSA manufacturing system. ..."
"... The US ruling class cannot grow out of its desire to extend its rule to the rest of the planet. But humanity is not as malleable as the American people-with their dreams of sharing in the dividends when America (Great Again) (aka its ruling class) orders the rest of the world around and exploits everyone the way that it exploits the working people in the United States. ..."
"... Are you not aware that the Bank of Japan basically owns 70% of the Japanese stock market in the from of ETFs? ..."
"... While Europe and Japan are failing economically at least America is at war with the second biggest power on the planet, making drastic moves justified in the face of a national emergency. ..."
"... I imagine now that John Maynard Keynes'ghost, if it were observing our current global political and economic affairs, would be having a laugh. It was Keynes who suggested the notion of International trade using a common trading currency created purely for International trade purposes, in a system in which nations would not be allowed to build up continuous balance-of-payments surpluses or deficits over several years, but would be required to spend their surpluses on countries forced to go into deficit because of other countries' desires for annual surpluses, leading to trade policies or currency manipulations to achieve such a dubious goal. ..."
"... The real solution though is a different system with some global exchange medium that can not be manipulated by one country or a block of selfish countries. ..."
The U.S. is decoupling itself from China. The effects of that process hurt all global
economies. To avoid damage other countries have no choice but to decouple themselves from the
U.S.
Today's Washington Post front page leads with a highly misleading headline:
It was China, not Trump, which retaliated. Trump reacted to that with a tweet-storm and by
intensifying
the trade war he started . The piece under the misleading headline
even says that :
President Trump demanded U.S. companies stop doing business with China and announced he
would raise the rate of tariffs on Beijing Friday, capping one of the most extraordinary
days in the long-running U.S.-China trade war. ... The day began with Beijing's announcement that it would impose new tariffs on $75 billion
in goods, including reinstated levies on auto products, starting this fall. It came to a
close Friday afternoon with Trump tweeting that he would raise the rate of existing and
planned tariffs on China by 5 percentage points.
Beijing's tariff retaliation was delivered with strategic timing, hours before an
important address by Powell, and as Trump prepared to depart for the G-7 meeting in
Biarritz.
After Trump's move the stock markets had a sad. Trade wars are, at least in the short
term, bad for commerce. The U.S. and the global economy are still teetering along, but will
soon be in recession.
The Trump administration is fine with that. (As is Dilbert creator
Scott
Adams (vid).)
U.S. grand strategy is to prevent other powers from becoming equals to itself or to
even surpass it. China, with with a population four times larger than the U.S., is the
country ready to do just that. It already built itself into an economic powerhouse and it is
also steadily increasing its military might.
China is thus a U.S. 'enemy' even though Trump avoided, until yesterday, to use that
term.
Over the last 20+ years the U.S. imported more and more goods from China and elsewhere
and diminishes its own manufacturing capabilities. It is difficult to wage war against
another country when one depends on that country's production capacities . The U.S. must
first decouple itself from China before it can launch the real war. Trump's trade war with
China is intended to achieve that. As Peter Lee
wrote
when the trade negotiations with China failed:
The decoupling strategy of the US China hawks is proceeding as planned. And economic pain
is a feature, not a bug. ... Failure of trade negotiations was pretty much baked in, thanks to [Trump's trade
negotiator] Lightizer's maximalist demands.
And that was fine with the China hawks.
Because their ultimate goal was to decouple the US & PRC economies, weaken the PRC,
and make it more vulnerable to domestic destabilization and global rollback.
If decoupling shaved a few points off global GDP, hurt American businesses, or pushed
the world into recession, well that's the price o' freedom.
Or at least the cost of IndoPACOM being able to win the d*ck measuring contest in East
Asia, which is what this is really all about.
Trump does not want a new trade deal with China. He wants to decouple the U.S. economy
from the future enemy. Trade wars tend to hurt all involved economies. While the decoupling
process is ongoing the U.S. will likely suffer a recession.
Trump is afraid that a downturn in the U.S. could lower his re-election chances. That
is why he wants to use the Federal Reserve Bank to douse the economy with more money without
regard for the long term consequences. That is the reason why the first part of his tweet
storm yesterday was
directed at Fed chief Jay Powell:
In his order for U.S. companies to withdraw from China, some close to the administration
saw the president embracing the calls for an economic decoupling made by the hawks inside
his administration.
The evidence of the shift may have been most apparent in a 14-word tweet in which Trump
appeared to call Xi an "enemy."
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" he said in a
Tweet posted after Powell gave a speech in Jackson Hole that contained implicit criticism
of Trump's trade policies and their impact on the U.S. and global economies.
Jay Powell does not want to lower the Fed interest rate. He does not want to increase bond
buying, i.e. quantitative easing. Interest rates are already too low and to further decrease
them has its own danger. The last time the Fed ran a too-low interest rate policy it caused
the 2008 crash and a global depression.
Expect Trump to fire Powell should he not be willing to follow his command. The U.S. will
push up its markets no matter what.
From Powell's perspective there is an additional danger in lowering U.S. interest
rates. When the U.S. runs insane economic and monetary policies U.S. allies will also want
decouple themselves - not from China but from the U.S. The 2008 experience demonstrated that
the U.S. dollar as the global reserve and main trade currency is dangerous for all who use
it. Currently any hickup in the U.S. economy leads to large scale recessions
elsewhere.
That is why even long term U.S. ally Britain warns of such danger and
looks for a way
out :
Bank of England Governor Mark Carney took aim at the U.S. dollar's "destabilising" role
in the world economy on Friday and said central banks might need to join together to create
their own replacement reserve currency.
The dollar's dominance of the global financial system increased the risks of a liquidity
trap of ultra-low interest rates and weak growth, Carney told central bankers from around
the world gathered in Jackson Hole, Wyoming, in the United States. ... Carney warned that very low equilibrium interest rates had in the past coincided with wars,
financial crises and abrupt changes in the banking system. ... China's yuan represented the most likely candidate to become a reserve currency to match
the dollar, but it still had a long way to go before it was ready.
The best solution would be a diversified multi-polar financial system, something that
could be provided by technology, Carney said.
Carney speaks of a "new Synthetic Hegemonic Currency (SHC)" which, in a purely
electronic form, could be created by a contract between the central banks of most or all
countries. It would replace the dollar as the main trade currency and lower the risk for
other economies to get infected by U.S. sicknesses (and manipulations).
Carney did not elaborate further but is an interesting concept. The devil will be, as
always, in the details. Will one be able to pay ones taxes in that currency? How will the
value of each sovereign currency in relation to SHC be determined?
That the U.S. dollar is used as a global reserve currency under the Bretton Woods
system is, in the words of the former French Minister of Finance Valéry Giscard
d'Estaing, an "exorbitant privilege". It if wants to keep that privilege it will have to go
back to sane economic and monetary policies. Otherwise the global economy will have no choice
but to decouple from it.
Posted by b on August 24, 2019 at 19:22 UTC |
Permalink
"The 2008 experience demonstrated that the U.S. dollar as the global reserve
and main trade currency is dangerous for all who use it. Currently any hickup in the U.S.
economy leads to large scale recessions elsewhere."
It has also become a primary tool for the US to assert extraterritorial jurisdiction over
the world to enforce extreme uses of sanctions, as in blowing up the Iran deal. Already the
EU has explored ways to get around that to work with Iran.
The over use of sanctions, and abuse of the US financial position in order to govern
others, reinforces the desire to deal with fears that dependence on the dollar risks
vulnerability to economic depression due to US irresponsibility.
The US is creating a perfect storm for the dollar, with is exactly what it would take to
make others undertake the expense and difficulty of replacing it as the world reserve
currency and presumed standard of exchange.
No one currency is quite as good now, but one could be improved, or a basket approach
could be used. In the ancient world, they used such a nominal currency as a standard by which
to value real currencies. We could again.
Trump does not want a new trade deal with China. He wants to decouple the U.S. economy
from the future enemy.
That may well be what is going on here. Something between total insanity and managed
insanity. The next president will unravel all of this in a year or so of effort. That is what
is so damaging. No business can plan on what is next. No policy is long term.
This is pure Trumpian logic unhinged. Hit them twice as hard as they hit you. I would not
dare to guess who is winding him up and pointing him in this direction. Trump has had one of
his busiest weeks yet.
I see Elisabeth Warren's crowd sizes are getting very large. I will feel better when no
one shows up to a Trump rally. China has time to wait this out and the ability to raise some
chaos on their own to help undermine Trump.
Sorry guys, it was the realization that the Empire had driven Russia into China's arms
that sparked the 'get tough' attitude on China.
The Empire HAD TO isolate China but their horrendous treatment of Russia provided an
opportunity for China to escape the coming 'smack down' by joining with Russia to challenge
Western global domination.
As usual, it is us 'little people that will suffer for the mistakes of our elites. And
elite propaganda means that most will suffer in silence, not realizing what really
happened.
It should be clear by now that elite adventurism is a choice that is not subject to
democratic controls. The sheeple will sleepwalk into WWIII.
Silver lining? Maybe a multi-lateral world saves us from the the more terrible dystopia of
a unilateral world.
I just had a thought. The USSA has been doing it all wrong for all these decades. There are
at least two responses the USSA could have applied to the obviously impending debacle of
simply allowing the Chinese to thoroughly undermine its industrial system. The most obvious
response would have been tariffs, which could be perceived as an aggressive policy, but
certainly not as the outright aggression of sanctions.
Or probably even much better, a 'negative sales tax' on USSA manufactured products, which
could in no way be perceived as aggressive at all. Note that there is (I presume) a vast
difference between simply subsidizing companies (since subsidies coud then flow directly into
the pockets of the companies' capitalists) and providing the companies' customers with a
'negative tax' on USSA produced products (basically an instant rebate). This could
effectively provide price parity for the goods produced for the two countries, and could
maintain the viability of the USSA manufacturing system.
But... no, we didn't do anything like that. Our Harvard trained economics geniuses hatched
the 'far superior' strategy of 'quantitative easing'. They simply eased all the money out of
the system and into the absurdly deep pockets of the oligarchs, supposedly in order to 'save
the system'. What a masterful strategy! So the options are all used up, and theres no sane
way forward. Great job.
So here's my plan. First, of course, we 'take care of' the lawyers. Well... no. First we
we bulldoze Harvard. Then we institute the mother of all class action lawsuits, the 99% as
plaintiffs and the 1% as defendants, and we clean them out (they will surely run off to
China, but good riddance). We will be left with all their fake money, but at least we can try
to start over.
From the article linked above...Just another model of political technology,....and of
civilization....
Titled 'Green is gold: the strategy and actions to China´s ecological civilization',
the plan that was analyzed during the UNEA assembly explains, in its beginning, its
starting point and destination: "Enjoying a beautiful house, a blue sky, a green land and
clean water is the dream of any Chinese citizen and, therefore, the center of the Chinese
dream (...) To achieve this vision, the government has decided to highlight the concept of
eco-civilization and incorporate it into every aspect of the economy, politics, culture and
social development of the country."
Definitely, a different political technology from that of Bannon...
Dianxi Xiaoge's YouTube channel is contemporary political technology at its finest.
Recommended viewing for all future world leaders.
Can one really get rid of one without just getting a new master? Contributor@4
Why not? Progress is not inevitable but it is possible.
The US ruling class cannot grow out of its desire to extend its rule to the rest of the
planet. But humanity is not as malleable as the American people-with their dreams of sharing
in the dividends when America (Great Again) (aka its ruling class) orders the rest of the
world around and exploits everyone the way that it exploits the working people in the United
States.
Somehow the profits of Empire never quite trickle down to the people who do the work
and man the armies.
Elsewhere, however the dream of ruling the planet either never occurred or was grown out of.
And people would be very happy to live good lives and make the earth a better place for
future generations.
Spot on in the first part of article about the inevitable new Cold War between China and
America and the serious fallout from the breakup of close economic ties. But not so good on
the second half wherein America central bankers are acting "insane"
while the rest of the developed world looks on in horror. Are you forgetting most of the
interest rates in Europe are now negative?
Are you not aware that the Bank of Japan basically owns 70% of the Japanese stock market in
the from of ETFs? America is way behind the curve when it comes to complete surrender to
"market forces." Trump wants Powell to play catchup now that it's game on with China. While
Europe and Japan are failing economically at least America is at war with the second biggest
power on the planet, making drastic moves justified in the face of a national emergency.
China is a bigger threat to America than Russia ever was because their economic model has
been so successful compared to the U.S. This is made more so because we no longer have a
government per se, only competing economic forces, while the Chinese have a government that
runs everything. If they lose this war, they still have a system. If we lose this war, we
lose everything.
I imagine now that John Maynard Keynes'ghost, if it were observing our current global
political and economic affairs, would be having a laugh. It was Keynes who suggested the
notion of International trade using a common trading currency created purely for
International trade purposes, in a system in which nations would not be allowed to build up
continuous balance-of-payments surpluses or deficits over several years, but would be
required to spend their surpluses on countries forced to go into deficit because of other
countries' desires for annual surpluses, leading to trade policies or currency manipulations
to achieve such a dubious goal.
The EU would be looking very different as a result, without a southern zone of debtor
nations with unstable economies and high unemployment, and a northern zone of smug nations
with full employment whose social welfare programs depend on an army of unemployed southerner
immigrants willing to work for peanuts.
When an American claims China has been behaving unfairly, what they really mean is that the
Chinese played America's rigged game and ended up outsmarting the dealer.
Why would others want to de-couple from US? What difference it would make to UK or other
EU vassals to serve FED/petro-dollar or to serve CCP/petro-yuan? Can one really get rid of
one without just getting a new master?
Posted by: Contributor | Aug 24 2019 20:02 utc | 4
The US$ is overvalued because there is, as it is the global reserve currency, a higher
demand for it than otherwise justifiable. In consequence U.S. companies buy up companies in
UK and Europe with an overvalued dollar. When the Fed lowers the price for US$ loans it
increases that effect. The Fed also creates bubbles, see the mortgage crisis, and the
currently overvalued stock markets, that have effects on foreign countries.
Said differently: The U.S. abuses is 'exorbitant privilege'. The hope is that China would
be less inclined to do so.
The real solution though is a different system with some global exchange medium that can
not be manipulated by one country or a block of selfish countries.
Here is an
interesting article entitled "The Dialectic of Globalization," that raises several important
questions pertaining to the phenomenon of globalism from the end of colonialism to the height
of "transnationalism" with the end of the cold war.
I can just about agree with its conclusions and provide my own opinion as to the end of
the "dialectic of globalism," that Trump seems to have, whether wittingly or not, ushered
into its next phase.
International neoliberalism needs vast amounts of regulating, but I do not believe that
Supranational governing agencies will be able to do this fairly and in the light of day. The
only other option then is to reassert state-controlled notions of legality which is what vast
proportions of the west seems to be clamoring for as can be seen with the
Trump-phenomenon.
It's just too bad being elected President doesn't come with a 90-day probationary
period that many employers use, because if they did Mike Pence would be considering a 2nd
Term run right now.........
Starting on
October 1st, the
250 BILLION
DOLLARS of goods
and products from
China, currently
being taxed at
25%, will be taxed
at 30%.
Additionally, the
remaining 300
BILLION DOLLARS of
goods and products
from China, that
was being taxed
from September 1st
at 10%, will now
be taxed at 15%.
From the same flaw the western MSM must suffer: did the NYT really expected China would
just treat Trump like a child, wait for him to lose the 2020 election and suddenly make
amends with the USA?
Did it really think this trade war was just a bad taste joke? Did it really think China
would just cave in in order to "defend globalisation"?
Do they really think of America as some kind of transcendental, abstract idea, and not a
concrete entity made of real human beings?
China announces tit for tat tariffs as yuan sinks to new low against the dollar.
Also sinking is Trump's popularity among US voters. AP has him at 36% approval versus 62%
disapproval. Remarkably, Trump's highest mark of 46% approval is for his handling of the
economy.
A no deal Brexit which Trump supports is just the thing to set off a recession in the EU
which spreads to Asia and the US.
What will his approval rating be then?
donkeytale , Aug 23 2019 13:43 utc |
86vk , Aug
23 2019 13:47 utc |
87
Wrong configuration from the last post (#85). I politely ask the administer to delete it.
The plan to retaliate against President Trump's tariffs suggests that neither side in the
trade war is prepared to back down.
I doubted this theory for a very long time, but now I'm beginning to believe it: Americans
really don't think they are responsible for the politicians they elect. They expect the rest
of the world to interpret any wrongdoings of their country as individual flaws of random
politicians. They expect the rest of the world to swallow the abuses by their POTUS under the
idea that they will elect another one the next election cycle. They expect the rest of the
world to be suportive, loyal and patient with their contry forever.
From the same flaw the western MSM must suffer: did the NYT really expected China would
just treat Trump like a child, wait for him to lose the 2020 election and suddenly make
amends with the USA? Did it really think this trade war was just a bad taste joke? Did it
really think China would just cave in in order to "defend globalisation"? Do they really
think of America as some kind of transcendental, abstract idea, and not a concrete entity
made of real human beings? Are they really that dense?
"Government set to inject more than $1 Trillion into US economy this year, but poorly
targeted and still isn't enough to improve the lives of most people".
Spot-on . Whenever I read this nonsense in the NYT or elsewhere I always ask myself the
same question ' Is this deliberate or are they really ignorant ? ' . I suspect the latter,
but I could be wrong.
Excuse me, how can the deficit be increasing [with Trump tax cuts]?
I was told that a simple bell curve graph called the 'Laffer Curve' indicates that cutting
taxes increases growth which increases revenue. Its simply mathematics.
Well, Lawrence H. Summers is right to worry when he says "Can central banking as we know
it be the primary tool of macroeconomic stabilization in the industrial world over the next
decade?"
I remember when Qaddafi was murdered and Libya fell. Within the first day or two a central
bank was set up in Libya. And look how well that is working out for them.
"It sure is weird that the labor market is the only place where the magic of the
marketplace -- price! -- doesn't work."
I also hear weirdness about price considerations when I read investment advice for workers
and their 401ks.
"Don't worry about the price. Invest now as much as you can. You can't predict the market
"
(Looks down at Twitter feed).
Haha so right and we mistakenly claim that economists don't know how the real economy
works. They know, and part of that knowledge is that you need to shill the BS for those with
the money if you wanna get your own piece of said pie.
Bizarre reasons for resignation of Patrick Byrne as CEO of Overstock, an internet retailing
company as per zerohedge today. I can't really understand what he is on about re the Clintons
and Russia, and he was closely connected to to Maria Butina.
What is interesting about Byrne is how he reacted to a vicious attack on his company by
naked short sellers a few years ago. Naked short selling is mass selling of shares that you
do not own. It is officially known as Failure to Deliver and has been in use for decades. It
is illegal but people get away with it and the SEC rarely prosecutes. Byrne was so infuriated
he set up a website called Deep Capture where, joined by some good investigative journalists,
he started exposing the naked short selling scam that came to a head when Lehman CEO Fuld
told Congress that naked short selling played a major role in undermining his company and
setting off the 2008 crisis. It coincided with research I was doing into the naked short
selling of a Spanish company with a subsidiary in the US and Deep Capture helped point in the
direction of probable culprits.
Byrne's stuff went on to became rather hysterical and overly conspiratorial. Pity
that.
"The Democrats could up their game by taking a deeper look into this issue." you mean the CIA democrats like Mark Warner? the
US has nothing to offer the world except war, which is why the people of the US must destroy this country. there is 1000% bipartisan
agreement on the war drive against both china & russia. both parties spend their days yelling at each other about who is the most
commie, like Moscow Mitch or Comrade Nancy, b/c they are unified in their war drive. as they are on anything else that matters.
this country exists to wage war, as the platform for projection of power, against competitors. nothing else. the illusion that
any of the operators w/in the system, any of them at all, are doing anything but crafting a persona in relation to power for self-aggrandizement,
not challenging power in the slightest, is not helpful.
b, what makes you think the Democrats are not in on the scam?
Also, just like the US funds NGOs in other countries, China too spends hugely and has bought many influential lobbyists and
think-tanks as well as media personalities and politicians in the US. Not very different than Israel lobbyists through AIPAC and
the massive Israel First big money. China influence operations in the US is likely significantly larger than US influence operations
in China since China is a closed CCP controlled system.
b wrote
"
The Democrats could up their game by taking a deeper look into this issue.
"
I agree with jb at comment #1
Yes there are "good" Democrats which are very much in the minority. The rest D/R are acolytes for the God of Mammon finance/war
based social order of the West.
Yes, we are in a very strange WWIII with lots of spinning plates and propaganda action and shedding of blood mostly where the
Western public does not "see" it
Excellent work b! Funding what on the surface appears to be a propaganda op aimed at another nation becomes a form of campaign
finance for a president's reelection campaign! I wonder how many such funds went to similar work on previous occasions?
It seems that at some point in time those within the Outlaw US Empire deemed it unimportant that other nations learn the funding
for numerous NGOs seeking to subvert them are overtly financed by the USG and are thus not NGOs at all but CIA appendages; and
that despite the overtness, the USG still claims those organizations to be legitimate NGOs.
I find it worthy in an ironic manner that the USA will soon be eclipsed by the nation it might have become had it not sought
to be a global empire. In fact, it's the very product of those Open Door policy advocates that will soon become the bane of their
descendants who opted for a financialized Free Lunch economy for themselves instead of a massively robust, resilient industrial/commercial
economy for all Americans.
Falun Gong is kinda like Scientology crossed with Amway. Get rich quick while simultaneously healing your goiters. In its best
days it was a terrible scam. Now it is just a blunt instrument that the US State Department uses to try and beat China with.
The Epoch Times' Jeff Carlson has been in the thick of uncovering the broad Democratic Party coup (in league with transnational
intelligence assets) against the Trump Presidency. Thus b's depiction here of the Dems potentially acting in the role of white
knight subverts mountains of evidence. As for Falun Gong's potential affiliations with the CIA and NED that's another quite plausible
storyline altogether.
Funny thing, after watching a Vesti News video on youtube I saw a video ad for the Epoch Times. It had a young white millennial
saying a bunch of propaganda drivel about the evil communist Chinese with regards to the Hong Kong protests.
Without suppression of Wall Street speculators the renaissance on manufacturing is impossible...
Notable quotes:
"... A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back? ..."
If I lived in the past, I might assume that re-industrialization would be as easy as building a new plant and plopping it down
in my model town; "build it and they will come." But this America is not that America. Things aren't that frictionless. They are
not, because of a concept that comes with the seventy five-cent word hysteresis attached,
covered here in 2015. Martin Wolf wrote :
"Hysteresis" -- the impact of past experience on subsequent performance -- is very powerful. Possible causes of hysteresis
include: the effect of prolonged joblessness on employability; slowdowns in investment; declines in the capacity of the financial
sector to support innovation; and a pervasive loss of animal spirits.
(To "loss of animal spirits" in the entrepreneurial classes we might add "deaths of despair" in the working class.) And if there
were a lot of people like me, living in the past -- in a world of illusion -- that too would would cause hysteresis, because we would
make good choices, whether for individual careers, at the investment level, or at the policy level, only at random.
Our current discourse on a manufacturing renaissance is marked by a failure to take hysteresis into account. First, I'm select
some representative voices from the discourse. Then, I will present a bracing article from Industry Week, "
Is US Manufacturing Losing Its Toolbox? " I'll conclude by merely alluding to some remedies. (I'm sure there's a post to be written
comparing the policy positions of all the candidate on manufacturing in detail, but this is not that post.)
"We're in the midst of a manufacturing renaissance -- something which nobody thought you'd hear," Trump said. "We're
finally rebuilding our country, and we are doing it with American aluminum, American steel and with our great electrical contractors,"
said Trump, adding that the original NAFTA deal "stole our dignity as a country."
Despite Trump's promises of a manufacturing "renaissance," the country is now in a manufacturing
recession
. The Federal Reserve just reported that the manufacturing sector had a second straight quarter of decline, falling below Wall
Street's expectations. And
for the first
time ever , the average hourly wage for manufacturing workers has dropped below the national average.
Amazingly, under Trump, America has experienced a 2½-year manufacturing jobs boom. More Americans are now employed in well-paying
manufacturing positions than before the Great Recession. The miracle hasn't slowed. The latest jobs report continues to show robust
manufacturing growth, with manufacturing job creation beating economists' expectations, adding the most jobs since January.
Obviously, the rebound in American manufacturing didn't happen magically; it came from Trump following through on his campaign
promises -- paring back job-killing regulations, cutting taxes on businesses and middle-class taxpayers, and implementing trade
policies that protect American workers from foreign trade cheaters.
But nothing has reversed the decline of the county's manufacturing base. From January 2017 to December 2018, it lost nearly
9 percent of its manufacturing jobs, and 17 other counties in Michigan that Mr. Trump carried have experienced similar losses,
according to a newly updated analysis of employment data by the Brookings Institution.
Perhaps the best reality check -- beyond looking at our operational capacity, as we are about to do -- is to check what the people
who will be called upon to do the work might think. From Industry Week, "
Many Parents
Undervalue Manufacturing as a Career for Their Children " (2018):
A mere 20% of parents associate desirable pay with a career in manufacturing, while research shows manufacturing workers actually
earn 13%more than comparable workers in other industries.
If there were a manufacturing renaissance, then parents' expectations salaries would be more in line with reality (in other
words, they exhibit hysteresis).
Another good reality check is what we can actually do (our operational capacity). Here is Tim Cook explaining why Apple ended
up not manufacturing in the United States (
from J-LS's post ).
From Inc. :
[TIM COOK;] "The products we do require really advanced tooling, and the precision that you have to have, the tooling and working
with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting
of tooling engineers and I'm not sure we could fill the room. In China you could fill multiple football fields.
"The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on
that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a
key thing and we've got to correct that. China called that right from the beginning."
With Cook's views in mind, let's turn to the slap of cold water administered by Michael Collins in Industry Week, "
Is US Manufacturing Losing
Its Toolbox? ":
So are we really in the long-hoped-for manufacturing renaissance? The agency with the most accurate predictions on the future
of jobs is the Bureau of Labor Statistics.
Their projection to 2026
shows that US manufacturing sector will lose 736,000 manufacturing jobs. I spoke with BLS economists James Franklin and Kathleen
Greene, who made the projections, and they were unwavering in their conclusion for a decline of manufacturing jobs.
This prompted me to look deeper into the renaissance idea, so I investigated the changes in employment and establishments in
38 manufacturing North American Industry Classification System (NAICS) industries from 2002 to 2018. I really hoped that the optimists
were right about the manufacturing renaissance, but
the data I collected in Table 1 (see link) shows some inconvenient truths -- that 37 out of the 38 manufacturing industries
are declining in terms of both number of plants and employees.
So, yeah. Mirage.
... ... ...
A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The
manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley
closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge
flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone
simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back?
So, when I see no doubt well-meant plans like Warren’s “Economic Patriotism” — and not to pick on Warren — I’m skeptical. I’m
not sure it’s enough.
Here are her
bullet points:
More actively managing our currency value to promote exports and domestic manufacturing.
Leveraging federal R&D to create domestic jobs and sustainable investments in the future.
Production stemming from federally funded research should take place in the United States
Taxpayers should be able to capture the upside of their research investments if they result in profitable enterprises.
R&D investments must be spread across every region of the country, not focused on only a few coastal cities.
Increasing export promotion to match the efforts of our competitors.
Deploying the massive purchasing power of the federal government to create markets for American-made products.
Restructuring worker training programs to deliver real results for American workers and American companies.
Dramatically scale up apprenticeship programs.
Institute new sectoral training programs.
There’s a lot to like here, but will these efforts really solve the hysteresis that’s causing our tooling problem? Just spit-balling
here, but I’d think about doing more. Start with the perspective that our tooling must be, as much as possible, domestic. (“If your
business depends on a platform, you don’t have a business.” Similarly, if your industrial base depends on the tooling of others,
it’s not an industrial base.)
As tooling ramps up, our costs will be higher. Therefore, consider tariff walls, as used by other developing nations when they
industrialized. Apprenticeships and training are good, but why not consider skills-based immigration that brings in the worker we’d
otherwise have to wait to train?
Further, simply “training” workers and then having MBAs run the firms is a recipe for disaster; management needs to be provided,
too.
Finally, something needs to be done to bring the best and brightest into manufacturing, as opposed to having them work on Wall
Street, or devise software that
cheats
customers with dark patterns. It’s simply not clear to me that a market-based solution — again, not to pick on her — like Warren’s
(“sustainable investments,” “research investments,” “R&D investments,” “export promotion,” and “purchasing power”) meets the case.
It is true that Warren also advocates a Department of Economic Development “that will have a single goal: creating and defending
good American jobs.” I’m not sure that’s meaningful absent an actual industrial policy, democratically arrived at, and a mobilized
population (which is what the Green New Deal ought to do).
"... "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting. ..."
"... The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement. ..."
American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and
agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding
that has delayed planting.
"The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean
Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these
tariffs is mounting."
The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on
the list of goods that will be taxed.
... ... ...
The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick
resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration
understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement.
Just days after Trump for the first time linked the ongoing Hong Kong protests with his
assessment of the US-China trade war, Beijing has issued an ultimatum to the White House: the
United States should not link trade negotiations with China to the Hong Kong protests,
denouncing such a move as a miscalculation.
In a short commentary published by Communist Party mouthpiece People's Daily late on Monday,
the author said that events in Hong Kong were the internal affairs of China, and linking them
with trade negotiations was a "dirty" aim.
"Making a fuss about Hong Kong will not be helpful to economic and trade negotiations
between China and the US," the commentary said. " They would be naive in thinking China would
make concessions if they played the Hong Kong card " the oped cautioned.
Chinese diplomatic observers also said Beijing considered the worsening situation in Hong
Kong a sovereignty issue and would be highly unlikely to cave to Washington's pressure.
The remarks followed a statement by US Vice-President Mike Pence on Monday which reiterated
President Donald Trump's demand to tie the largely stalled trade talks with Hong Kong's
deepening crisis, a day after hundreds of thousands of people marched peacefully in defiance of
repeated intimidation from Beijing. In an address at the Detroit Economic Club on Monday, Pence
said the Trump administration would continue to urge Beijing to resolve differences with the
protesters peacefully and warned that it would be harder for Washington to make a trade deal
with Beijing if there was violence in the former British territory. Separately, Mike Pompeo
said that China should allow Hong Kong protesters the freedom to express themselves, in what
China saw as clear interference in its own internal matters.
The Chinese article countered by saying that the top priority for Hong Kong was to stop
violence and restore order, adding that US politicians should not send the wrong message to
people creating chaos in the city. "In the face of political intimidation, we not only dare to
say no, but also take countermeasures," it warned.
Global Times, a tabloid controlled by the flagship state-run newspaper People's Daily, also
warned in an editorial on Monday that American political and public opinion elites should not
harbour the illusion they could influence China's decisions on Hong Kong.
"Because of the trade war, the US has lost the ability to impose additional pressure on
China," it said.
"The US should stop its meaningless threat of linking the China-US trade talks with the Hong
Kong problem. Beijing did not expect to quickly reach a trade deal with Washington. More
Chinese people are prepared that China and the US may not reach a deal for a long time."
Chinese analysts noted Trump appeared to have hardened his stance on Hong Kong in the past
week or so, under growing pressure from US lawmakers and extensive media coverage of the
increasingly violent protests. Indeed, it was only a month ago when we reported that "
Trump Abandoned Support For Hong Kong Protests To Revive Trade Talks With Beijing ." Now
that trade war is once again front and center, with Trump using it as leverage for further Fed
rate cuts, the US president is once again refocusing his attention on Hong Kong.
As the
SCMP writes , Trump initially focused on making a deal with China ahead of his 2020
re-election bid and adopted a hands-off approach by characterizing the protests as "riots"
which were a matter for China to handle. Over the past few days, he suggested Chinese President
Xi Jinping should resolve the situation by meeting with protest leaders and warned that any
violence in the handling of the Hong Kong crisis would exacerbate difficulties for attempts to
bring an early end to the trade war.
"Trump's about-face on Hong Kong, from being neutral to piling pressure on Beijing, is
largely due to domestic political pressure ahead of the presidential elections," said Shi
Yinhong, an international relations expert at Renmin University and an adviser to the State
Council which is China's cabinet.
" But the Hong Kong issue concerns China's sovereignty and the government's ability to
maintain stability, which in Beijing's view is of superior priority . China cannot afford to
make much compromise and will do everything to fend off interventions from abroad, in spite of
all the risks and ramifications," he said.
Despite the soured mood between China and the US over their spiralling trade war – as
well as escalating tensions over Huawei, Taiwan and other geopolitical rifts – both sides
were planning further trade talks in the coming 10 days, according to White House chief
economic adviser Larry Kudlow on Sunday.
Any progress would be virtually impossible with analysts cautioning that the US attempt to
"play the Hong Kong card" would further complicate the trade talks.
Meanwhile, in the latest significant escalation in diplomatic tensions, China responded
angrily to Washington's decision on a US$8 billion sale of F-16 fighter jets to Taiwan and
Trump's warning against Huawei citing national security threats.
"When a long list of old problems between the two countries remains unsolved, the US side
is now ramping up the pressure on Hong Kong," said Shen Dingli, a professor of US studies at
Fudan University. "China has so far refused to make concessions in the absence of adequate
mutual respect and trust and I don't think we'll have much room to compromise on Hong Kong or
other issues. We'll have to wait and see what the US would do next," he said.
Shi also said none of the flashpoints in the bilateral ties – from Hong Kong, Taiwan,
to the South China Sea and the denuclearisation of North Korea – had any easy solution in
sight, with both sides showing little willingness to cooperate and accommodate the other's
interests. He said the increasingly hardline, confrontational approach on China by Trump
– who faced mounting pressure in his bid for re-election, especially amid signs of a
looming global economic recession – would only make a trade deal increasingly
unattainable.
"Even if there were no Hong Kong crisis, could the US and China reach a trade deal? Even if
Beijing caved into Washington's pressure on Hong Kong, would it make it easier for them to
bridge their glaring differences in the trade talks and cut a deal?"
Of course not, and since Trump is far more interested in keeping trade war simmering and on
the verge of a substantial escalation if only to keep the Fed on its toes and ready for far
more aggressive rate cuts, and even "some quantitative easing", that's precisely what the US
president wants.
Trump's claim that China is paying for the tariffs is completely false and basically serves
to redirect income from his poor supporters to his wealthy supporters.
Not only that, the policy will have the consequence of further isolating the United States,
says Michael Hudson.
https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F08%2Fa-new-assessment-of-the-role-of-offshoring-in-the-decline-in-us-manufacturing-employment.html
<img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" />
By Christoph Boehm, Assistant Professor of Economics, University of Texas at Austin, Aaron
Flaaen, Senior Economist, Research and Statistics Division, Federal Reserve Board, and Nitya
Pandalai-Nayar, Assistant Professor of Economics, University of Texas at Austin. Originally
published at VoxEU
What has caused the rapid decline in US manufacturing employment in recent decades? This
column uses novel data to investigate the role of US multinationals and finds that they were a
key driver behind the job losses. Insights from a theoretical framework imply that a reduction
in the costs of foreign sourcing led firms to increase offshoring, and to shed labour.
One of the most contentious aspects of globalisation is its impact on national labour
markets. This is particularly true for advanced economies facing the emergence and integration
of large, low-wage, and export-driven countries into the global trading system. Contributing to
this controversy, between 1990 and 2011 the US manufacturing sector lost one out of every three
jobs. A body of research, including recent work by Bloom et al. (2019), Fort et al. (2018) and
Autor et al. (2013), has attempted to understand this decline in manufacturing employment. The
focus of this research has been on two broad explanations. First, this period could have
coincided with intensive investments in labour-saving technology by US firms, thereby resulting
in reduced demand for domestic manufacturing labour. Second, the production of manufacturing
goods may have increasingly occurred abroad, also leading to less demand for domestic
labour.
New Facts on Manufacturing Employment, Trade, and Multinational Activity
On the surface, the second explanation appears particularly promising. Manufacturing
employment declined from nearly 16 million workers in 1993 to just over 10 million in 2011,
shown by the black line in Figure 1. This large decline in manufacturing employment coincided
with a surge in outward foreign direct investment (FDI) by US firms (the blue line in Figure
1). Nevertheless, existing theories of trade and multinational production make ambiguous
predictions regarding the link between foreign production and US employment. Further, due to a
lack of suitable firm-level data on US multinationals, there has been limited research on their
role in the manufacturing employment decline (see Kovak et al. 2018 for a recent
exception).
Figure 1 US manufacturing employment and US outward FDI
Source : BEA for FDI; Longitudinal Business Database (LBD) and authors'
calculations for employment.
In a recent paper, we address the question of whether foreign input sourcing of US
multinationals has contributed to a decline in US manufacturing employment (Boehm et al. 2019).
We construct a novel dataset, which we combine with a structural model to show that US
multinationals played a leading role in the decline in US manufacturing employment. Our data
from the US Census Bureau cover the universe of manufacturing establishments linked to
transaction-level trade data for the period 1993-2011. Using two directories of international
corporate structure, we augment the Census data to include, for the first time, longitudinal
information on the direction and extent of firms' multinational operations. To the best of our
knowledge, our dataset is the first to permit a comprehensive analysis of the role of US
multinationals in the aggregate manufacturing decline in the US. With these data, we establish
three new stylised facts.
Fact 1: US-owned multinationals were responsible for a large share of the aggregate
manufacturing employment decline
Our first finding is that US multinational firms, defined as those US-headquartered firms with
foreign-owned plants, contributed disproportionally to the decline in US manufacturing
employment. While 33.3% of 1993 employment was in multinational-owned establishments, this
group directly accounted for 41% of the subsequent decline.
Fact 2: US-owned multinationals had lower employment growth rates than similar
non-multinationals
In Figure 2, we show that multinationals exhibited consistently lower net job creation rates in
the manufacturing sector, relative to other types of firms. Compared to purely domestic firms
and non-multinational exporting firms, multinationals created fewer jobs or shed more jobs in
almost every year in our sample. Of course, these patterns may not be causal, and other
characteristics of multinationals could be driving the low job creation rates. To address this
concern, we control for all observable plant characteristics, and find that multinational
plants experienced lower employment growth than non-multinational owned plants in the same
industry, even when the size and age of the plants are held constant.
Figure 2 Net US manufacturing job creation rates by type of US firm
Source : Authors' calculations based on the LBD, Directory of Corporation
Affiliations (DCA), and Longitudinal Foreign Trade Transactions Dataset (LFTTD)
Fact 3: Newly multinational establishments experienced job losses, while the parent
multinational firm expanded imports of intermediate inputs
An alternative way to assess the role of multinational activity on US employment with our data
is to use an 'event study' framework. We compare the employment growth trajectories of newly
multinational-owned plants to otherwise similar plants in terms of industry, firm age, and
plant size. As can be seen in Figure 3a, prior to the plants becoming part of a multinational,
their growth patterns are not different from the control group. However, in the years following
the multinational expansion, there is a brief positive but then sustained negative trajectory
of employment at these manufacturing plants. Ten years after the transition, these newly
multinational-owned plants have manufacturing employment that is about 20% smaller than an
otherwise similar plant.
Figure 3 US employment and import dynamics at new multinational plants
a) Relative imports
b) Cumulative relative employment (Index)
Source : Authors' calculations based on LBD, DCA, and LFTTD.
Further, these newly multinational firms increase imports following the expansion abroad. As
Figure 3b demonstrates, these firms substantially increase imports both from related parties
and other firms (at arms-length), relative to their control group. Taken together, Figures 3a
and 3b suggest that offshoring might explain the observed negative relationship between trade
and employment.
Structural Analysis: Did the Offshoring of Intermediate Input Production Result in a Net
Employment Decline in the US at the Firm Level?
While the patterns we identify above are suggesting that increased foreign input sourcing by
multinational firms led to a decrease in US manufacturing employment, they are not necessarily
causal. Standard models of importing, such as Halpern et al. (2015), Antras et al. (2017) or
Blaum et al. (2018), make ambiguous predictions as to whether foreign sourcing is associated
with increases or decreases in domestic employment. At the heart of this ambiguity are two
competing forces. First, a reduction in the costs of foreign sourcing leads firms to have
access to cheaper intermediate inputs. As a result, their unit costs fall and their optimal
scale increases. This 'scale effect' raises their US employment. On the other hand, firms
respond by optimally reallocating some intermediate input production towards the location with
lower costs. This 'reallocation effect' reduces US employment. Theoretically, the scale effect
could dominate the reallocation effect and lead to positive employment effects of offshoring,
or vice versa.
We use our microdata to estimate the relative strengths of these two competing forces. We
show that in a conventional class of models and in partial equilibrium, the value of a single
structural constant – the elasticity of firm size with respect to firm production
efficiency – completely determines which of the two forces dominates. Our estimation
approach is to develop a method to structurally estimate an upper bound on this constant using
our data on the universe of US manufacturing firms. While a high value of the upper bound
leaves open the possibility that foreign sourcing and domestic employment are complements, a
low value of the bound unambiguously implies that the two are substitutes.
Our estimates of the bound are small, indicating that during the period 1993-2011, the
reallocation effect was much larger than the scale effect. In other words, during this period
of aggregate manufacturing employment decline, multinationals' foreign input sourcing was
leading to a net decline of manufacturing employment within these firms.
Aggregate Implications for US Manufacturing Employment
It is important to point out that the model we use only speaks to employment changes within
existing firms and does not take into account general equilibrium forces that can also affect
employment. Since such general equilibrium effects are inherently difficult to assess,
estimates of how much of the observed aggregate decline can be attributed to offshoring of
multinational firms are uncertain and often require strong assumptions. We thus proceed under
two alternative sets of assumptions. In the first, we conduct a simple partial equilibrium
aggregation exercise, which uses observed changes in firm cost shares of domestic inputs
together with our estimated parameter bounds to obtain model-implied predictions of the
employment loss due to foreign sourcing. This approach captures both the direct impact of
foreign sourcing by existing firms as well as the first-order impact on domestic suppliers,
holding all else equal. Under the second, we model these indirect, general equilibrium effects,
such as firm entry and exit, explicitly. In both of these scenarios, we find that the
offshoring activities of multinationals explains about one-fifth to one-third of the aggregate
US manufacturing employment decline.
Policy Implications
Our research shows that the global sourcing behaviour of US multinational firms was an
important component of the manufacturing decline observed in the past few decades. These firms
set up production facilities abroad and imported intermediate goods back to the US, with the
consequence of reduced demand for domestic manufacturing workers. While our research suggests
that offshoring had a negative impact on employment, we caution that it does not support the
view that offshoring and trade should be contained with tariffs or other policy interventions.
Previous research has shown that both trade and offshoring are critical for consumers' access
to affordable goods in the US. Instead, our research implies that government assistance for
displaced manufacturing workers could facilitate their transition to new jobs in other
sectors.
Authors' note: Any opinions or conclusions expressed herein are those of the authors and
do not necessarily represent the view of the US Census Bureau or the Board of Governors or its
research staff.
It's not just big-ticket manufacturing (appliances, etc) .little stuff that a nation uses
on a daily basis has been off-shored as well -- electrical wiring, capacitors, even
foodstuffs like cookies and candy.
I think an overlooked aspect is environmental protection and labor working conditions as
well as wages.
We are offshoring our pollution by moving manufacturing to other countries with much less
stringent environmental regulation. Similarly, labor rules in those countries don't require
as much worker safety, so we are offshoring injuries as well.
As the other countries become wealthier and more educated, they are starting to push for
more of these protections as well as higher wages which is forcing the companies to move
their production again to keep their costs low.
An interesting recent trend is the rejection of our "recycling" from countries that used
to receive it, so the feel-good greenwashing of filling the recycling bins is started to
boomerang back to North America as countries ship back the trash parts of the recycling. This
will likely require a second recycling revolution with more domestic processing of recycling
or an admission that it simply isn't going to happen in which case the righteousness quotient
of many suburbanites is going to plummet.
This is such an easy problem to solve from a policy standpoint- and it has been solved by
countries as small as the Netherlands.
Legally mandate a small list of fully recyclable materials for manufacturers to use in
production and packaging, and enforce it with punitive tariffs on non conforming goods. This
can take many forms, one logical option being that of holding companies responsible for the
costs of recycling their products.
This is as applicable to soda bottles as it is to large and complex products like
automobiles; BMW is a world leader in lifecycle waste reduction and recycling of
vehicles.
As usual, the impediment isn't technology or consumerism, it's corporate profitability and
one time costs of adjusting the supply chain.
So the writer says "that government assistance for displaced manufacturing workers could
facilitate their transition to new jobs in other sectors." I take it to mean that a policy
such as "free college" as advocated by Sanders which would involve government funded
vocational training in other sectors would go a long away toward helping those displaced by
outsourcing?
I remember all that BS back in the 80's and 90's everybody was on the bandwagon about
careers in computers, or any other hi-tech. I was one of those who had *some* training at
least .. right before they offshored all those jobs to India. It was a double kick in the
nuts.So, manufacturing went to China, computing went to India. And people wonder why I'm so
bitter and cranky sometimes.
Napoleon: "Money has no Fatherland. Financiers are without patriotism and without shame.
Their sole object is gain." IMHO US manufacturing is the reason why we're not all speaking
German today. And we gave all that capacity away like a bunch of lemmings over the
cliff
"that government assistance for displaced manufacturing workers could facilitate their
transition to new jobs in other sectors."
This "implies" that there are "jobs in other sectors" that create as much economic value,
expertise and "innovation" as manufacturing jobs do. What are they–"service" jobs?
Taking in each other's laundry? Delivering McDonald's to your door? Netflix?
Manufacturing is not just a job category that can be changed out for something shiny and
new, it's vital infrastructure that represents a nation's ability to provide for itself, and
to create a standard of living that reflects that capability. Those "affordable goods" so
important to american "consumers" are manufactured goods. It's not just the price to
buy them, it's the ability to make them that's important.
Like it or not, the once mighty american economy was built on the mightiest manufacturing
capacity that the world had ever known. Trivializing it as being only about cheap stuff is a
colossal mistake. We used to know that, and we've only begun to pay the price for
forgetting.
We* might very well learn to make lasting things of value again .. on a lesser scale,
after half the population is dead from despair, war, and disease ..
Outsourcing of manufacturing jobs by multi-nationals contributed to job losses ..
Really! LOL!
30 years too late for this info.
Wasn't hard to see even way back in the 1980's how multi-nationals were working very hard to
export jobs and import their "anti-labor" behaviour they were excising outside the laws and
borders of the US.
Tariffs were historically used to protect domestic manufacturers. Both the fees and
increased price were use to boot domestic manufacturing, and hence domestic employment.
Yes, during the wave of industrialization. But they don't work so well once consolidation
starts. 1875-1925(roughly) was the golden age of US manufacturing, even the WWII bounce was
government DoD driven. Private ex-DoD manufacturing peaked in 1924 and was flat since then.
Then we have the 97-05 downwave which then has boosted us about back to 1925's ex-DoD high.
Just like the tech wave, it ended.
I mean, by 1925 Portsmouth Ohio was done by 1925, by 1950 they just bled manufacturing
while it consolidated around bigger cities after WWII.
We need self-efficiency not capitalists growth. It ain't happening people. Its over. We
need 10% contraction of GDP just to get manufacturing growing again from a much lower base.
Tariffs are dead in the water for growth now, and act like the opposite. They are also
creating a bubble in "base" consumption while killing domestic production and yes, eventually
overcapacity will kill base consumption and it crash again like last years 4th quarter
driving down domestic manufacturing further.
Anecdotally, in a field I worked in for a while, middle management in a small privately
owned "needle trades" firm, the "growth" among our competitors was in firms that (we assumed)
did their design work in US but manufactured overseas. Domestic manufacturers either adapted
to this, or closed down.
At least in this field, automation had next to nothing to do with it.
Instead, our research implies that government assistance for displaced manufacturing
workers could facilitate their transition to new jobs in other sectors.
Ah yes, the subsidised retraining for manufacturing jobs that, in fact, do not exist.
Louis Uchitelle covered this policy failure in his 2006 book "The Disposable American:
Layoffs and their consequences". Is the phrase "got the T-shirt" relevant here?
For the government to re-employ workers who have lost their factories would be a form of
industrial policy. Ours is never clearly stated, if there is one. But one thing is clear and
that is the government gave the internationals every opportunity to offshore our national
productivity without any safety net for labor except unemployment insurance. Which runs out.
Michael Pettis has just backed a proposal to tax foreign capital saving and investment here
in this country. Because most of it is just financial "investments". Foreign investment for
long term capital projects would be virtually unaffected. It is claimed that this tax on
money parking would reduce out trade deficit and make it fluctuate within an acceptable
balance. By doing something that sounds like real-time exchange rate adjustments for every
transacted trade, now to include foreign investment and savings. So why didn't the
government, after offshoring all those jobs, re-employ all the laid-off workers as banking
and investment managers? So all this unproductive foreign money is skewing our trade balance.
Making our unemployment deeply structural. It is so bizarre that we are "trading" in money at
all. We are trading in the medium of exchange, which is fiat, which itself is susceptible to
exchange rate adjustments with other money and all of it supposedly backed by the
productivity of that country. That foreign productivity is frequently nothing more than IMF
money, stolen and taken out of the country. The P word. Because the world has reached
manufacturing overcapacity, I assume, all this money is totally skewing the ledgers. It's
laughable except for the fact that the bean counters take it seriously. The mess we are in is
something more fundamental than balanced exchange rates. It's more like hoarding at its most
irrational. Way over my head. And for us to fix unemployment here in the US will take far
more than a tax on all this loose international money.
Yeah it's nice to have it "officially" credentialed etc its not like I haven't been saying
this since they passed NAFTA, but then I wasn't "credentialed" so nobody listened . its like,
"No $#!t sherlock ???" pretty much *everyone* who has spent some time in the industrial
sectors knows this by heart without even needing to be told. Of course maybe now its OK to
say it out loud or something . smh.
===the Role of Offshoring in the Decline in US Manufacturing Employment===
It is not just the role of offshoring in the decline of US manufacturing employment, BUT
the effect the offshoring, and the competing with foreign manufacturers, had on the existing
US manufacturing workforce. The manufacturers and manufacturing workers that remain in the US
have to compete with their cheaper foreign competition for work.
I spent most of the last 25 years working in plastics injection molding. After spending
the first six years of my career in plastics/ polymer research and development, I
transitioned to injection molding. In the mid 90's when I started in injection molding,
globalization had already begun especially in the automotive sector. The car manufacturers
were already setting up global and domestic supply chains. But even then the Chicago area
(and the US in general) was heavy in mold making and injection molding businesses.
Then China became a major player in the world economy, NAFTA started, etc. and in the
early 2000's it was like the last manufacturer who gets stuck in the US gets to turn out the
lights!
There were a lot of small to medium size mold maker shops and plastic injection molders in
the Chicago area that went under because they could not compete with the cheaper foreign
competition. It was very sad as I knew many small mom and pop mold makers and injection
molders in the Chicago area who were in business for 20 – 30+ years that closed.
The fact that many businesses/corporations in the US, due to offshoring and globalization,
are forced to compete with foreign competitors that have cheaper labor, less regulation,
cheaper land costs, etc. etc. is beyond reason.
And to this day you can see the effects of neoliberal globalization in any manufacturing
or other business you visit as they are dealing with consequences of having to compete
directly with cheaper foreign competitors through cost cutting, low wages, and running the
employees into the ground.
The tables were tilted against manufacturers and manufacturing employees in the US. It is
like the US manufacturing (and other sectors) are trying to fight a battle with one hand tied
behind our backs.
There is a good book that relates to this post. The book is called Failure to Adjust: How
Americans Got Left Behind in the Global Economy by Edward Alden.
NAFTA killed a bunch of material extraction jobs, but boosted a bunch of auto production
jobs down the supply chain. You can see that on the data. Granted, auto sales have been flat
for 20 year which has led to a flattening of employment growth since 2005 after the material
extraction driven drop.
That is why the Trump Administration just basically rebooted it.
lol, but it created a bunch of debt finance jobs throughout the economy as well, that
boosted existing manufacturing. Offshoring accounts for .1% of the job loss. Most of it is
consolidation and technology. My great grandfather lost his job in 1925 during the first wave
of consolidation. What about that?
As someone working in manufacturing, while I am glad that there is some acknowledgement
that outsourcing is responsible, I strongly disagree about not implementing tariffs.
Effectively workers are competing for a race to the bottom in wages, working conditions, and
other factors like environmental laws.
Guess what if there are tariffs? Things will cost more, but there will also be more jobs
for the working class. Actually there will also be quite a few white collar jobs too.
Engineering, HR, Finance, Sales, etc, are all needed in any manufacturing industry.
I suspect that net, most workers would be better off even if prices were higher due to the
jobs. The thing is, the top 10 percent would not be and the 1 percent would not be. That's
the main reason for this outsourcing. To distribute income upwards so the rich can
parasitically take it.
While our research suggests that offshoring had a negative impact on employment, we
caution that it does not support the view that offshoring and trade should be contained
with tariffs or other policy interventions. Previous research has shown that both trade and
offshoring are critical for consumers' access to affordable goods in the US. Instead, our
research implies that government assistance for displaced manufacturing workers could
facilitate their transition to new jobs in other sectors.
This is where I strongly disagree. As discussed above, I think that the net effect might
be beneficial for the majority of society.
The other is the old retraining claims, which never pan out. What jobs are there? Visit
the communities in the Midwestern US and Southern Ontario. Retraining for what? For jobs that
are part time, minimum wage, with few or no benefits?!
Manufacturing may not have been perfect, but at least there were benefits, it was often
full time, and the salaries allowed a middle class existence.
When I read things like this, as much as I dislike Trump, I can understand why people
would support him.
For the life of me I don't see how any other outcome could have happened. With the
economic system we have embraced at least in my long lifetime, it was inevitable that
"capital" would seek the lowest level playing field in the long term. Nation's boundaries
kept that flow "fenced" to a certain limit for as long as there have been physical borders
between countries. Once the cat was let out of the bag of competing countries after WW2, for
example the Japanese with computer driven machinery (lathes) that crushed American companies
that in too many cases refused to invest and welcomed the slow destruction of organized labor
here in the US, it was inevitable that that condition would be the future of manufacturing
here. The advent of the Mexican maquiladoras gave a great push to the exporting of jobs.
NAFTA put the nails in the coffin so many more of those good paying jobs. "Labor" was never
invited to those global meetings that proved to be so destructive to so many countries.
But, again. The system we embrace can have no other outcome. "Tariffs" will eventually lead
to wars. So in the words of that famous Russian: "What is to be done?"
Anybody have a solution? You will be saving civilization from itself. We need a complete
rethinking of how we live on this planet. That will take better humans that we have now that
lead nations. In the meantime it's, "kill them all and let God sort them out!" The weak will
succumb; the strong will continue to battle for territory, in this case jobs, jobs, jobs.
"Trump Is Delaying Tariffs on China for Holiday Shopping Season"
by Shira Feder...08.13.19...11:04AM ET
"The Trump administration announced Tuesday that tariffs set to be imposed Sept. 1 on
Chinese consumer products like electronics, sneakers, and video game consoles will not go
into effect until Dec. 15."...
US to Delay Some China Tariffs Until Stores Stock
Up for Holiday Shoppers https://nyti.ms/2H50NMv
NYT - Ana Swanson - August 13
The Trump administration on Tuesday narrowed the list of Chinese products it plans to
impose new tariffs on as of Sept. 1, delaying levies on cellphones, laptop computers, toys
and other consumer goods until after stores stock up for the back-to-school and holiday
shopping seasons. Stocks soared on the news.
The move, which pushed a new 10 percent tariff on some goods until Dec. 15 and spared
others entirely, came as President Trump faces mounting pressure from businesses and consumer
groups over the harm they say the continuing trade war between the United States and China is
doing.
Mr. Trump's earlier tariffs on Chinese imports were carefully crafted to hit businesses in
ways that everyday Americans would mostly not notice. But his announcement this month of the
10 percent tariff on $300 billion of Chinese goods meant consumers would soon feel the trade
war's sting more directly.
On Tuesday, Mr. Trump acknowledged as much.
"We're doing this for the Christmas season," he told reporters around noon. "Just in case
some of the tariffs would have an impact on U.S. customers." ...
... Mr. Trump's comments about the tariffs' impact on consumers followed the United States
trade representative's office announcement that while the new tariffs would take effect as
Mr. Trump had threatened, some notable items would not immediately be subject to them.
Consumer electronics, video game consoles, some toys, computer monitors and some footwear
and clothing items were among the items the trade representative's office said would not be
hit with tariffs until retailers had time to stockpile what they needed for their busiest
time of year.
The administration also said some products were being removed from the tariff list
altogether "based on health, safety, national security and other factors." A spokesman for
the trade representative's office said the products being excluded from the tariffs included
car seats, shipping containers, cranes, certain fish and Bibles and other religious
literature.
The S&P 500 climbed nearly 2 percent after the announcement, lifted partly by stocks
of retailers and computer chip producers that have been sensitive to indications that trade
tensions were getting either better or worse.
Best Buy, which gets a many of the products it sells from China, was among the
best-performing stocks in the S&P 500, up more than 8 percent in morning trading. The
Nasdaq composite index rose more than 2 percent. ...
OK, I'm having a very nerdy moment. Trying to understand why US-China bilateral trade
imbalance is so large. NOT because it's important, but just because it's kind of a puzzle; I
guess it's my inner @Brad_Setser 1/
6:39 AM - 10 Aug 2019
So last year US goods imports from China were $539.5 billion, US goods exports $120.3
billion. That's 4.5 to 1. Why so much asymmetry? I think 4 reasons: Hong Kong,
macroeconomics, value-added, and oil 2/
Hong Kong: effectively part of the Chinese economy, and the US runs a large surplus - $37
b in exports, only $6 b in imports. Basically a lot of US goods appear to enter China via HK
(something similar in Europe, where US exports to Germany go via Belgium/Netherlands) 3/
Adding HK reduces the export imbalance to "only" 3.5 to 1. Now macro: the US runs overall
trade deficit, with imports 1.5 times exports. China runs overall surplus, with imports only
0.8 exports. On some sort of gravity-ish story, this suggests ratio "should" be around 2
4/
Now add China's role as "great assembler", with value-added in exports really coming from
elsewhere; famous case of iPhone. Much less true than it used to be, but still means that
Chinese surplus is partly optical illusion 5/
Lastly, China imports a lot of oil, which means other things equal needs to run a surplus
on everything else. Used to be true of US, but with fracking we're now almost self-sufficient
in hydrocarbons (but not exporting to China) This adds a further reason for bilateral 6/
Someone with more time and patience should try to do the full accounting, but I think the
US-China bilateral can mainly be explained by "natural causes"; doesn't have much to do with
either country's trade policy 7/
I guess that Krugman is just a natural law kind of guy wherein IP protectionism and arbitrage
seeking cross border capital flows in an exorbitantly privileged global reserve currency are
just natural phenomenon like meteor showers and rain.
"... "While there were measures that could have been chosen with larger direct effects on supply chains, the announcements from Beijing represent a direct shot at the White House and seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly intemperate) response from the White House, and consequently expect a more rapid escalation of trade tensions." ..."
"... In a mid-day note, Krueger added that "the next stop on the currency manipulation road is probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with the potential for the president to use a "charge of currency manipulation to justify some combination of (more) tariffs, investment restrictions and export controls." ..."
"... Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields keeping pace. That was "an impressive move that suggests August will not experience the traditional summer doldrums. Who needs vacation anyway?" ..."
"... Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest margin (NIM), outlook. ..."
Analysts continued to warn about the dangers of an escalating trade war on Monday, as
China moved to strike back at the U.S., hitting U.S. stocks and boosting Treasuries.
Semiconductors, with direct exposure to trade, and banks stocks, which are sensitive to
interest rates, were among the decliners. The biggest U.S. banks slid, with the KBW Bank
Index dropping as much as 4.1% to the lowest since June 4. Bank of America Corp. led index
decliners, with a drop of 5.5%, the most since Dec. 4, while Citigroup Inc. shed more than 4%
and JPMorgan Chase & Co. slipped 3.8%.
Micron Technology Inc. fell 6.2% while Texas Instruments Inc. lost 4.4% and Intel Corp.
was down 4%. Apple Inc. dropped 5.6%, the most since May 13. Shares in Chinese tech giants
Alibaba Group Holding and JD.com Inc. fell near two month lows in U.S. Trading.
Agriculture equipment makers Deere & Co. and AGCO Corp. tumbled as China suspended
imports of U.S. agricultural products. The escalating trade tensions are also a major risk
for the U.S. automotive industry, which has a significant exposure to the country. According
to UBS's Global Wealth Management Chief Investment Officer Mark Haefele, the latest spat
raises the possibility that "tariffs could also be placed on auto imports."
President Donald Trump tweeted about China and the Fed on Monday morning, saying: "China
dropped the price of their currency to an almost a historic low. It's called 'currency
manipulation.' Are you listening Federal Reserve? This is a major violation which will
greatly weaken China over time!"
Here's a sample of some of the latest commentary:
Cowen, Chris Krueger
Krueger called China's retaliation "massive," adding that "on a scale of 1-10, it's an 11."
He cited the Chinese government calling on state buyers to halt U.S. agricultural purchases,
while there's "increased anecdotal evidence that the Chinese government is tightening its
overview of foreign firms."
"While there were measures that could have been chosen with larger direct effects on
supply chains, the announcements from Beijing represent a direct shot at the White House and
seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly
intemperate) response from the White House, and consequently expect a more rapid escalation
of trade tensions."
"There now will be increased expectations that the Fed will cut again in September to
offset the drag caused by this escalation in the trade war," he added. "Such moves will only
be a partial, lagged offset to the recessionary headwinds a cycle of retaliation would
cause."
In a mid-day note, Krueger added that "the next stop on the currency manipulation road is
probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with
the potential for the president to use a "charge of currency manipulation to justify some
combination of (more) tariffs, investment restrictions and export controls."
BMO, Ian Lyngen
"The wait is over for those wondering how Beijing would respond to Trump's recent tariff
announcement," BMO said. "The result: the yuan was allowed to depreciate well beyond
7.0."
Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the
obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields
keeping pace. That was "an impressive move that suggests August will not experience the
traditional summer doldrums. Who needs vacation anyway?"
"The most significant unknown at this moment," Lyngen added, "is how much further the yuan
will be allowed to fall given that it's already the weakest since 2008."
Morgan Stanley, Betsy Graseck (bank analyst)
Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on
Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest
margin (NIM), outlook.
Graseck didn't change her NIM assumptions -- yet. "We bake one additional cut of 25 basis
points in 2019 in-line with our economist, and bake in the 10-year at 1.75% by mid 2020," she
wrote. She'll update NIM and earnings per share estimates "if it looks like these trade
tariffs are going through as September approaches."
Morgan Stanley, Michael Zezas (policy strategist)
"The dynamics of U.S.-China negotiation and macro conditions mean the next round of tariffs
will likely be enacted, and investors are likely to behave as if further escalation will
follow in 2019 until markets price in impacts," Zezas wrote. "This supports our core view of
weaker growth and skews the Fed dovish."
Zezas sees incentives for the U.S. to escalate quickly. If the administration "understands
the Fed's trade policy reaction function, then it may also perceive that a more rapid
escalation could deliver one or more of three beneficial points ahead of the 2020 election:
1) A quicker, potentially more aggressive Fed stimulus response that could help the economy
heading into the election; 2) More time to re-frame the potential economic downside; and 3) A
major concession by China (not our base case, but it is, of course, a possibility)."
Veda, Henrietta Treyz
"The U.S. and China are moving into one of their most aggressive phases yet in the year-plus
long trade war and we fully expect things to escalate from here," Treyz wrote in a note.
Treyz added that China's ability to quickly adjust their currency is an advantage they
have over the U.S. that "goes to the heart of the issue for the Trump administration." The
administration may view China's communist regime as a "systemic advantage" versus "free
markets and democracy" in the U.S., as the Chinese can "subsidize domestic industry, quickly,
enact lower tax rates and provide stimulus."
Furthermore, her conversations with Republicans point to the belief that "China's economy
is on the brink of collapse," she said, with turmoil in Hong Kong "considered evidence of an
organic domestic uprising that many believe the Chinese government cannot contain."
Republicans may also believe Trump will "galvanize" his base behind him, while attracting
"anti-trade and union Democrats in the Rust Belt as he takes on the mantle of a war time
president going into 2020 by engaging in this trade war." ...
On Monday, China announced new tariffs on $60 billion of U.S. exports, and the United
States threatened new tariffs on up to $300 billion of Chinese goods. These actions were
cited as the principle reason for a decline of more than 600 points in the Dow Jones
industrial average, or about 2.4 percent in broader measures of the stock market. With the
total value of U.S. stocks around $30 trillion, this decline represents more than $700
billion in lost wealth.
This was not an isolated event. Again and again in the past year, markets have gyrated in
response to the state of trade negotiations between the United States and China.
The market sensitivity to threats and counter-threats in the trade war is quite
remarkable. Monday's announcement by the Chinese, for example, would be expected to raise
China's tariffs by about $10 billion. Much of this will show up as higher prices for Chinese
importers, and some of it will be avoided by diverting exports of goods such as liquid
natural gas to other markets, so the impact on U.S. corporate profits will be far less than
$10 billion. Meanwhile, U.S. tariffs are likely to raise corporate profits as higher import
costs push some business to domestic producers.
There is the further consideration that reasonable market participants should not have
entirely discounted the possibility of tariff increases Monday and that there surely remains
some chance a trade deal will be reached. So, in fact, the market should not even have moved
in full proportion to the change in corporate profitability associated with new tariffs.
There is a revealing puzzle here. Events whose direct impact on corporate profits is a few
billion dollars seem to be driving market fluctuations that change the total value of
corporations by hundreds of billions of dollars. To be sure, there would be many ways of
refining my calculation of the profit impact to recognize various feedbacks, and certainly
the imposition of tariffs increases uncertainty, which in general depresses markets. But with
any plausible calculation of the direct impact of tariff changes on profitability or
uncertainty about profitability, it is not possible to justify the kinds of changes in market
value we observed Monday or on many other days when there was news about the status of the
U.S.-China trade negotiations.
Part of the answer to the puzzle, I suspect, lies in markets' tendency to sometimes
overreact to news, especially in areas where they do not have long experience. This idea is
supported by the tendency illustrated by the market's Tuesday rally, which took place without
any particularly encouraging U.S.-China developments.
A larger part of the answer probably lies in the idea that the current trade conflict is a
possible prelude to a far larger conflict between the two nations with the largest economies
and greatest power for as far as can be foreseen. When it appears less likely that a conflict
over well-defined and ultimately not-that-difficult commercial issues can be resolved,
rational observers conclude that it is also less likely the United States and China can
manage issues ranging from 5G wireless technology to North Korea, from the future of Taiwan
to global climate change, and from the management of globalization to the security
architecture of the Pacific region.
A world where relations between the United States and China are largely conflictual could
involve a breakdown of global supply chains, a splinternet (as separate, noninteroperable
internets compete around the world), greatly increased defense expenditures and conceivably
even military conflict. All of this would be catastrophic for living standards and would also
have huge adverse effects on the value of global companies.
It is, I suspect, the greater risk of catastrophic medium-run outcomes, rather than the
proximate impact of trade conflicts, that is driving the outsize market reactions to trade
negotiation news.
This carries with it an important lesson for both sides: It is risky to turn the pursuit
of even vital national objectives into an existential crusade. Rather, even when nations have
objectives that are in conflict, it is important to seek compromise, to avoid inflammatory
rhetoric and to confine rather than enlarge the areas where demands are being made.
Establishing credibility that promises will be kept and surprises will be avoided is as or
more important with adversaries as with friends.
As the Trump administration carries on the trade negotiations, and as the presidential
campaign heats up, Americans will do well to remember that there is no greater threat to the
success of our national enterprise over the next quarter-century than mismanagement of the
relationship with China. It is not just possible but essential to be strong and resolute
without being imprudent and provocative.
As has long been expected, the White House is preparing to release a new rule on Wednesday barring
government agencies from buying equipment or doing any kind of business with Chinese telecoms giant
Huawei - ratcheting up tensions between the world's two largest economies at an already precarious
time for the global economy.
The Trump administration is expected to release a rule Wednesday afternoon that bans agencies
from directly purchasing telecom, video surveillance equipment or services from Huawei.
The prohibition was mandated by Congress as part of a broader defense bill signed into law last
year.
"The administration has a strong commitment to defending our nation from foreign
adversaries, and will fully comply with Congress on the implementation of the prohibition of
Chinese telecom and video surveillance equipment, including Huawei equipment,"
said
Jacob Wood, a spokesman for the Office of Management and Budget.
Per CNBC, the new rule is expected to take effect a week from Wednesday, and it applies not only
to Huawei, but also to a list of other telecom companies that have drawn security concerns, such as
ZTE and Hikvision.
The official said contractors will be able to seek waivers from individual federal agencies if
they believe their business with any of the targeted companies should be exempt from the rule.
Moreover, the new rule will also set a deadline of August 2020 for a broader ban
on
federal contractors doing business with Huawei and other firms.
The law passed by Congress is separate from the Trump Administration's own efforts to keep
Huawei in check.
The Commerce Department instigated the tensions between the US and China after it placed Huawei
on a blacklist that effectively bans the company from buying goods or doing any kind of business
with Huawei. A 90-day grace period that kept Huawei off the blacklist temporarily is now almost
over. And President Trump has apparently walked back his promised, made at the G-20 Summit in
Osaka, to ease the pressure on Huawei.
However, US chipmakers and tech firms can request waivers, and the CEOs of Google, Qualcomm,
Micron, Intel and others met with President Donald Trump at the White House last month and urged
the administration to issue those decisions quickly.
In an interview on CNBC, Huawei CSO Andy Purdy defended the company's track record, arguing that
European leaders in the UK and Germany had told their counterparts in the US that they had found no
evidence that Huawei was a security threat.
"We have tested the products of all vendors to international standards so that there's
trust through verification,"
Purdy said.
All Chinese government agencies
will be prohibited from buying CISCO and other American
telecommunications products. Furthermore, contractors dealing with
Chinese government agencies will also be so prohibited from buying
American telecom products.
America - population 329 million. Economic growth rate: 2.8%
China - population 1.4 billion. Economic growth rate: 6.5%
source:
Wikipedia
China is rapidly industrializing, and has the largest
manufacturing base in the world. The USA is already a mature
industrial economy, and since NAFTA has offshored most of its
manufacturing base. The USA leads the world in the design,
manufacture and export of weapons, but relies on coercive
political relationships (such as NATO) rather than the "free
market" to sell its overpriced and line of products to captive
satellite countries. China is rapidly expanding in the weapons
manufacturing sphere, as is Russia, and offer increasingly
competitive products at lower prices, and with fewer political
strings attached.
Something to think about before breastbeating and cheering
ourselves on.
Trump is getting the **** kicked out of him on CNBC and every
Financial media on the internet. When China dug in, that was the
end of the Trump bluff. For the first time, the absurd articles
about China losing are gone and now the new reality is that China
is going to squeeze the life out of Trump.
Huawei is just
another of Trump's wayward policies of getting Canadian poodles to
kidnap Huawei's founder's daughter. Nice dirty **** Trump. Women
already hate Trump this ices that cake.
Last week Huawei overtook Apple as the second largest smart
phone maker. Huawei announced it no longer had any dependence on
US manufacturers for 5G, another body blow to the blowhard.
Dozens of certifying agencies have no studied Huawei products
and have found zero instances of spyware or any instance of this
hardware being used for spying. In short, Trump and the NSA and
CIA look like a bunch of assholes. This will only accelerate
Huawei's 5G rollout.
Trump is being **** canned in every direction. The great part
of Trump von hitler's personality is that he knows his 10% Sept
Tariffs were essentially the end of his presidency, but is too
arrogant to reverse course. Instead, he is screaming at the Fed
for more loose money to support his bad policies. And he wants
more Farmer WELFARE. That dog don't hunt!
China is not going to roll over over for Trump. The financial
media is now tearing Trump a new ******* every hour. Markets are
not responding to Trump plunge team efforts. They continue to sell
off.
Where's the endgame they ask? This is the same deal as Trump
closing down the gov for nothing. Trumptards cheered as the orange
idiot painted himself in the corner and accomplished nothing. Not
one inch of wall has been constructed since Trump took office.
Trump floats on a raft of ********. Meanwhile Trump has a 20 year
history of hiring Illegals for Trump Organization. Total Fraud and
self dealer.
The GOP is now climbing the walls. Today Trump Screamed at the
Fed to reduce rates emergently and then said it had nothing to do
with China. Astonishing.
When China put an end to US Ag purchases effective immediately
they were basically saying they were tired of Trump's ********.
The farmer associations are turning on Trump round the clock.
Where is Trump? He's hiding out. But of course this has NOTHING to
do with China.
But here is Trump once again playing the phony national
Security card with Huawei when a dozen independent organizations
have published reports and cleared Huawei of the Trump
Administration's phony security claims.
Huawei Honor smartphones and tablets are really good. The top
models are even better than iPhones.
There were some Chinese
smartphones at Best Buy the last time I checked.
But I just bought the 128Gb Lenovo Zuk for $280 from Banggoog a
couple years ago when it was on sale. It's a little problematic to
update Android, but it works perfectly anyway. There is a forum
for Lenovo phones, though, with all answers.
Poland's state security agency arrested Huawei sales
director Wang Weijing and a Polish national over spying.
Dongfan Chung The 74-year-old former Boeing Co. engineer was
convicted in July of six counts of economic espionage and
other federal charges for keeping 300,000 pages of sensitive
papers in his home
Chi Mak He copied and sent sensitive documents on U.S.
Navy ships, submarines and weapons to China by courier.
Don't waste my time. A 20 second google search shows you
have no point, but the one on the top of your head.
Thus, Given the Chinese government's record on espionage,
"a good-faith assertion from Andy is not enough."
"In Huawei's
carrier business
, H1 sales revenue
reached CNY146.5 billion, with steady growth in production and
shipment of equipment for wireless networks, optical
transmission, data communications, IT, and related product
domains. To date, Huawei has secured 50 commercial 5G contracts
and has shipped more than 150,000 base stations to markets
around the world.
In Huawei's
enterprise business
, H1 sales revenue was
CNY31.6 billion. Huawei continues to enhance its ICT portfolio
across multiple domains, including cloud, artificial
intelligence, campus networks, data centers, Internet of
Things, and intelligent computing. It remains a trusted
supplier for government and utility customers, as well as
customers in commercial sectors like finance, transportation,
energy, and automobile.
In Huawei's
consumer business
, H1 sales revenue hit
CNY220.8 billion. Huawei's smartphone shipments (including
Honor phones) reached 118 million units, up
24% YoY
. The
company also saw rapid growth in its shipments of tablets, PCs,
and wearables. Huawei is beginning to scale its device
ecosystem to deliver a more seamless intelligent experience
across all major user scenarios. To date, the Huawei Mobile
Services ecosystem has more than 800,000 registered developers,
and 500 million users worldwide.
"Revenue grew fast up through May," said Liang. "Given the
foundation we laid in the first half of the year, we continue
to see growth even after we were added to the entity list.
That's not to say we don't have difficulties ahead. We do, and
they may affect the pace of our growth in the short term."
He added, "But we will stay the course. We are fully
confident in what the future holds, and we will continue
investing as planned – including a total of CNY120 billion in
R&D this year. We'll get through these challenges, and we're
confident that Huawei will enter a new stage of growth after
the worst of this is behind us."
WHAT A DUMB ****!: Thanks!!! That makes me 3 times
smarter than you because Huawei subcontractors do sell
Huawei products in the USA. You are an ignorant Asian
that should go back to his village and the one room
dirt floor hut... LOL
I'd be the first to say that I don't know everything about this
telecom but I will say this seems like a reasonable decision on
it's face for the US government not to put in Chinese
telecommunications equipment. Of course China is going to not like
it because with Hillary she just gave them direct access to damn
near anything through her email server.
First, Trump coerced the Fed into lowering interest rates which made US Dollars cheaper to
buy then he increased domestic taxation 10% though increasing the tariff on selected Chinese
goods. China then blocks the importation of all US foodstuffs and lowers the price of the
Yuan an amount equal to the tariff increase--and the US treasury and Trump have the gall to
call China the currency manipulator! NO, as usual with the Outlaw US Empire, it's accusations
are psychological projection of what itself does. Hudson discusses it
here . US financial markets have finally awakened to Trump's moves and have fallen 5%
over the last three trading days, with more likely to follow. Hudson on Trump:
"It's all a diversion so that people won't look at what's really happening, only at what
Trump is saying. But as people find that they have to pay higher prices, I don't think
they'll believe Trump. I think he's lost all credibility. That's why the stock market's
collapsing. They're aghast. They think that even Trump can't get away with this big a lie
when it's so obviously false."
As I commented last Friday on the AP article my local paper ran about the tariff hike, it
finally told the truth about who'll pay--US Consumers or China: US Consumers! AP, All
Propaganda, tore a gapping hole into Trump's narrative--but will people believe a media
outlet that's lied so often?
Trump can't win his global trade war. China won't capitulate; it's economy and society are
100x healthier than the Outlaw US Empire's and are resilient where the USA can only claim to
have been once upon a time. Why that is has been explained before. The transcript of this
interview's poor, but the topic covers the
answer by showing how Canada's economy became a victim of the same predators as the
USA's.
We know what happened, how and why. What we don't know how to do is reverse the situation
politically. Hudson compares the dire situation to that of Rome:
"So they obviously, the left-wingers such as Bernie Sanders, want to run for president as
a kind of educational campaign to make their policy clear to the people, but they know that
there's no way in which the ruling class will let them win.
"It's been very clear, if they did win, they would be assassinated very quickly. I've been
told that by presidential candidates. The threat is, you'll never be president, we have ways
of keeping you out, and should you succeed, we will do to you what the Romans did to every
advocate of democracy century after century, assassination."
It seems the best those of us residing within the Outlaw US Empire can hope for is that
Trump's policies will decimate US financial institutions worse than what occurred in 2008.
Hudson's perspective:
"I don't see any popular movement yet. You can very easily see why collapse is
inevitable....
"There's no way of knowing when there will be a break in the chain of payment. Usually
it's a bankruptcy of a big company, very often by fraud, as the 2008 crisis was bank mortgage
fraud. You don't know when people will fight back. Often, surprisingly, they only fight back
when things are getting better. But things still have a way to go to get much worse in
Canada, much worse in the United States, so I don't see any possibility of reform within the
next 4 to 8 years."
However, all that is about to change, because as Bank of America team of economists writes,
Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled
10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The
reason for this is that past measures had mostly avoided consumer goods. By contrast, the
threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA
expects the tariffs to be implemented, either on schedule or later this year, the period of
dormant trade war inflation is about to end with a bang, not a whimper.
... ... ...
Was Trump's announcement a negotiating tactic?
For the past year, one of the points of
biggest contention among economists and traders is that despite what is now a 1+ year trade war
with China, inflation due to higher tariffs has been strangely missing, with some claiming that
the goods targeted in previous tariff rounds were either not "consumer" enough, or simply had
more affordable substitutes from other, non-Chinese supply chains, allowing US consumer to
avoid having higher prices passed upon them.
However, all that is about to change, because as Bank of America team of economists writes,
Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled
10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The
reason for this is that past measures had mostly avoided consumer goods. By contrast, the
threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA
expects the tariffs to be implemented, either on schedule or later this year, the period of
dormant trade war inflation is about to end with a bang, not a whimper.
"... As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300 billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that in the eyes of Washington's China hawks, trade talks are no more than a formality with which to rip China off. ..."
"... While the White House is boasting about taxing China until a trade deal is reached, it should keep in mind that China will only accept a win-win agreement on the basis of mutual respect and equal treatment. ..."
"... Beijing's position has been consistent and clear: China does not want a trade war, but it is not afraid of one and will fight one if necessary. ..."
"... It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they will need to show some real sincerity first. ..."
Despite calling the just-concluded China-U.S. trade talks in
Shanghai "constructive" and hoping for more "positive dialogue," the White House on Thursday
announced plans to impose extra tariffs on Chinese imports from Sept. 1.
Washington's unilateral escalation of trade disputes is a serious breach of trust after the
two sides reached in June consensus to restart trade talks on the basis of equality and mutual
respect.
Apart from undermining the momentum of the newly resumed China-U.S. trade talks, the U.S.
flip-flopping again exemplifies Washington's untrustworthiness in striking a deal and its
disturbing propensity for bullying.
The U.S. administration should bear in mind that its bullying and tariff threat, which has
not worked in the past, will not work this time.
For over a year, the U.S.-initiated trade disputes with China have bogged down not just
economic growth of the two countries but that of the whole world. Meanwhile, an increasingly
capricious Washington is harming the current world order with more uncertainties.
As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300
billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade
deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that
in the eyes of Washington's China hawks, trade talks are no more than a formality with which to
rip China off.
Also, the new twist in China-U.S. trade talks shows that some Washington politicians are
trying to play tough against China on trade matters and gain cheap political points as the new
cycle of U.S. presidential election is looming.
Unlike previous rounds of taxing Chinese imports, the U.S. administration this time is
targeting a wide swath of consumer goods, and therefore, is "using American families as a
hostage" in its trade negotiations, according to Matt Priest, president of the Footwear
Distributors and Retailers of America.
While the White House is boasting about taxing China until a trade deal is reached, it
should keep in mind that China will only accept a win-win agreement on the basis of mutual
respect and equal treatment.
Beijing's position has been consistent and clear: China does not want a trade war, but it is
not afraid of one and will fight one if necessary.
In response to Washington's tariff assaults since March 2018, China has had to take forceful
counter measures. This instance will be no exception.
Still, Beijing remains committed to handling its trade problems with Washington as long as
the settlement is based on mutual respect and equality, and conform to China's core interests.
China, which still sees a steady economic growth and boasts enormous potential for further
development, will always find a way to withstand any pressure if there no deal is reached.
It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its
knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they
will need to show some real sincerity first.
"... US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism, as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it." ..."
"... Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. ..."
"... IMO, China can continue to refuse and stand up for its principles, while the world looks on and nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner. ..."
"... It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning. ..."
"... Russia's a target too, but most of its available loot was already grabbed during the 1990s. ..."
"... I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance hegemony and fiat money. ..."
"... The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates what you think Trump's trying to accomplish. Hudson has explained it all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it to exert control/hegemony on all aspects of political-economy. ..."
"... Trump hasn't proposed any new policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate Ship out to plunder all and sundry, including those that elected him. ..."
I will mention this again, to see what people here think, as they are intelligent people. I sent mails to Russian and Chinese
authorities about this.
"I will provide you with possible reasons behind the current trade wars and rejection of globalisation by the US. In short,
they think that they will save their hegemony, to a certain degree, that way.
There are long term GDP Growth and Socioeconomic Scenarios developed by the Intergovernmental Panel on Climate Change, the
OECD, and the world scientific community. They are generally used to measure the impact of Climate change on the World. In order
to measure it, Socioeconomic Scenarios were developed, as the level of economic growth in the world is very important for determining
the impact of Climate Change in the future. High growth levels will obviously affect Climate Change, so these GDP estimates are
important. The scenarios are with time horizon 2100.
For more on this you can check these studies here, some of the many dealing with this topic. They describe the scenarios for
the world.
There are 5 main scenarios, or "Shared Socioeconomic Pathways". All of them describe different worlds.
SSP 1 - Green World, economic cooperation, reduced inequality, good education systems. High level of economic growth, fast
catch up of the developing world with the developed world. High level of multipolarity.
SSP 2 - More of the same/ Muddling through - continuation of the current trends. Relatively high level of economic growth,
relatively fast catch up of the developing world with the developed world. Good level of multipolarity.
SSP 3 - Regional Rivalry - nationalisms, trade wars, lack of global cooperation, fragmentation of the word, environmental
degradation. Low levels of economic growth everywhere, the developing world remains poor and undeveloped. Low level of multipolarity,
West retains many positions.
SSP 4 Inequality - depicts a world where high-income countries use technological advances to stimulate economic growth;
leading to a high capacity to mitigate. In contrast, developments in low income countries are hampered by very low education
levels and international barriers to trade. Growth is medium, the catch up process between the developing world and the developed
world is not fast. Medium level of multipolarity.
SSP 5 Economic growth and fossil fuels take priority over green world - High levels of economic growth, fast catch up of
the developing world with the developed world. High level of multipolarity.
See SSP 3. A world of rivalry, trade wars, trade barriers, lack of global cooperation, and fragmentation, will lead to lower
level of growth in the developing world, and thus a slow catch up process. Multipolarity in such a world is weak as the developing
world is hampered.
In other words, a world of cooperation between countries will lead to higher economic growth in the developing world, faster
catch up process, and thus stronger multipolarity.
Low cooperation, fragmented world, high conflict scenarios consistently lead to low growth in the developing world and thus
to the US and the West retaining some of its positions - a world with overall bad economy and low level of multipolarity.
Basically, globalisation is key. The developing world (ex West) was growing slowly before globalisation (before 1990). Globalisation
means sharing of technology and knowledge, and companies investing in poorer countries. Outsourcing of western manufacturing.
Etc. After globalisation started in 1990, the developing world is growing very well. It is globalisation that is weakening the
relative power of the West and empowering the developing world. The US now needs to kill globalisation if it is to stop its relative
decline.
So what do we see: exactly attempts to create the SSP 3 scenario. Trade wars, sanctions, attacks on multilateral institutions
- the WTO, on international law, on the Paris Climate Change Agreement (which if accepted would put constraints on the US economy),
on the UN, bullying of Europe, lack of care for european energy needs, support for Brexit (which weakens Europe), crack down on
chinese students and scientists in the US, crack down on chinese access to western science data, demands to remove the perks for
poor countries in the WTO, etc. This is hitting economic growth in the whole world and the global economy currently is not well.
By destroying the world economy, the US benefits as it hampers the rise of the developing nations.
US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism,
as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science
community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much
as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer
serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it."
You ask, "The concept of multilateralism is not completely clear to me in relation to the global public/private finance issue
and I am not of faith but of questions...."
"In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal."
The key point for the Chinese during negotiations as I understand them via their published White Paper on the subject is
development and the international rules put in place at WTO for nations placed into the Developing category, which
get some preferential treatment to help their economies mature. As China often reminds the global public--and officials of the
Outlaw US Empire--both the BRI and EAEU projects are about developing the economies of developing economies, that the process
is designed to be a Win-Win for all the developing economies involved. This of course differs vastly from what's known as the
Washington Consensus, where all developing economies kowtow to the Outlaw US Empire's diktat via the World Bank and IMF and thus
become enslaved by dollar dependency/debt. Much is written about the true nature of the Washington Consensus, Perkins Confessions
of an Economic Hit Man and Klein's Disaster Capitalism being two of the more recent and devastating, and many nations
are able to attest to the Zero-sum results. The result is very few nations are willing to subject their economies to the pillaging
via Washington Consensus institutions, which Hudson just recently reviewed.
The Empire is desperate and is looking for ways to keep its Super Imperialism intact and thus continue its policy aimed at
Full Spectrum Dominance. But the Empire's abuse of the dollar-centric institutions of international commerce has only served to
alienate its users who are openly and actively seeking to form parallel institutions under genuine multilateral control.
However as Hudson illustrates, Trump doesn't know what he's doing regarding his trade and international monetary policies. Today's
AP above the fold headline in Eugene's The Register Guard screamed "Trump threatens 10% tariffs;" but unusually for such
stories, it explains that the 10% is essentially a tax on US consumers, not on Chinese companies, which provides a message opposite
of the one Trump wants to impart--that he's being tough on the Chinese when the opposite's true. China will continue to resist
the attempts to allow the international financial sharks to swim in Chinese waters as China is well aware of what they'll attempt
to accomplish--and it's far easier to keep them out than to get them out once allowed in, although China's anti-corruption laws
ought to scare the hell out of the CEOs of those corps.
The Empire wants to continue its longstanding Open Door policy in the realm of target nations opening their economies to the
full force of Imperial-based corps so they can use their financial might to wrestle the market from domestic players and institute
their Oligopoly. China already experienced the initial Open Door (which was aimed at getting Uncle Sam's share of China during
the Unequal Treaties period 115 years ago) and will not allow that to recur. China invokes its right under WTO rules for developing
economies to protect their financial services sector from predation; the Empire argues China is beyond a developing economy and
must drop its shields. We've read what Hudson advised the Chinese to do--resist and develop a publicly-based yuan-centered financial
system that highly taxes privatized rent-seekers while keeping and enhancing state-provided insurance--health, home, auto, life,
etc--while keeping restrictions on foreign land ownership since it's jot allowed to purchase similar assets within the domestic
US market.
The Outlaw US Empire insists that China give so it can take. Understandably, China says no; what we allow you to do, you should
allow us to do. Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. Obviously,
the latest proposal was merely a repetition of what came before and was rejected as soon as the meeting got underway, so it ended
as quickly as it started. IMO, China can continue to refuse and stand up for its principles, while the world looks on and
nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner.
It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same
since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning.
Russia's a target too, but most of its available loot was already grabbed during the 1990s. D-Party Establishment
candidates have yet to let it be known they'll try to do what Trump's failing to do, which of course has nothing to do with aiding
the US consumer and everything to do with bolstering Wall Street's Ponzi Scheme.
Good comment, karlof1 , i think that the attack against China is attack against the heart of multipolarity. It will be good
if b could post about the escalation of the trade war. This is important. The US clearly intends to resist multipoarity, and tries
to stop it.
If I would have had my act together last night I would have posted another link fro Xinhuanet (can't find now) about how
China wants to retain developing nation status and provides as data that the (I think) per capita GDP had gone down....gotten
worse in relation to the US per capita GDP.
I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance
hegemony and fiat money.
Passer by @30--
The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates
what you think Trump's trying to accomplish. Hudson has explained it
all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it
to exert control/hegemony on all aspects of political-economy.
Thus, there's no need to sponsor the reindustrialization that would lead to MAGA. Indeed, Trump hasn't proposed any new
policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate
Ship out to plunder all and sundry, including those that elected him.
In your outline, it's very easy to see why BRI is so attractive to other nations as it forwards SSP1. Awhile ago during a discussion
of China's development goals, I posted links to its program that's very ambitious and doing very well with its implementation,
the main introduction portal
being here .
psychohistorian @11 asked: "The concept of multilateralism is not completely clear to me in relation to the global public/private
finance issue and I am not of faith but of questions...."
karlof1 @31 covered it pretty well I think, but I want to try to answer in just a couple sentences (unusual for me).
Global private finance is driven by one thing and one thing only: making maximum profits for the owners quarter by financial
quarter. Global public finance is driven by the agendas of the nations with the public finance, with profits being a secondary
or lesser issue.
This boils down to private finance being forever slave to the mindless whims of "The Market™" (hallowed be Its name),
while public finance is, by its nature, something that is planned and deliberated. Nobody can guess where "The Market™"
(hallowed be Its name) will lead society, though people with the resources like placing bets in stock markets on the direction
It is taking us. On the other hand, if people have an idea which direction society should be heading in, public control
over finance is a precondition to making it so.
"The continuing practice of Neoliberalism by the Outlaw US Empire"
I'm not sure this will be the case anymore -
Former heads of DHS and NSA explain how the U.S. can keep Huawei at bay
"Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls
the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital
national-security related technologies."
he war of words between the world's top superpowers is getting more heated by the hour.
China's new ambassador to the United Nations, Zhang Jun, said on Friday that if the United
States wanted to fight China on trade, "then we will fight" and warned that Beijing was
prepared to take countermeasures over new U.S. tariffs, Reuters reports.
"China's position is very clear that if U.S. wishes to talk, then we will talk, if they want
to fight, then we will fight," he told reporters. Calling Trump latest tariff announcement an
"irrational, irresponsible act", Jun said that China "definitely will take whatever necessary
countermeasures to protect our fundamental right, and we also urge the United States to come
back to the right track in finding the right solution through the right way." The ambassador
also took a stab at the disintegration of good relations between the US and North Korea (with
Beijing's blessing no doubt), saying that "you cannot simply ask DPRK to do as much as possible
while you maintain the sanctions against DPRK, that definitely is not helpful" Yun said siding
the the Kim regime. It was more than obvious who the "you" he referred to was.
Pouring more salt on the sound, the Chinese diplomat said North Korea should be encourage,
and "we think at an appropriate time there should be action taken to ease the sanctions",
explicitly taking Pyongyang's side in the ongoing diplomatic saga between Kim and Trump.
When asked if China's trade relations with the United States could harm cooperation between
the countries on dealing with North Korea, Zhang said it would be difficult to predict. He
added: "It will be hard to imagine that on the one hand you are seeking the cooperation from
your partner, and on the other hand you are hurting the interests of your partner."
As North Korea's ally and neighbor, China's role in agreeing to and enforcing international
sanctions on the country over its nuclear and ballistic missile programs has been crucial.
However, it is what he said last that was most notable, as it touched on what will likely be
the next big geopolitical swan, namely Hong Kong. To wit, Jun said that while Beijing is
willing to cooperate with UN member states, it will never allow interference in "internal
affairs" such as the controversial regions of Xinjiang and Tibet, and - last but not least -
Hong Kong.
And in the latest warning to the defiant financial capital of the Pacific Rim, Jun virtually
warned that a Chinese incursion is now just a matter of time, he said that Hong Kong protests
are "really turning out to be chaotic and violent and we should no longer allow them to
continue this reprehensible behavior."
President Donald Trump's threat Thursday to put 10% tariffs on the remaining $300 billion of Chinese imports that aren't subject
to his existing levies
sent markets tumbling from Asia to Europe and in the U.S. on Friday. The new tax would hit American consumers, and businesses
are going to face even more
supply disruptions . China has already vowed to retaliate if Trump follows through.
Bloomberg Economics ' initial estimate of the
additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021.
Meanwhile, a simmering trade fight between Japan and South Korea
is boiling over , putting the health of two Asian export powers at stake. In Europe, concerns are mounting for a
hard U.K. exit from the European Union.
The week ended with fresh numbers out of Washington that show
U.S. trade actually declined during the first
six months of the year as exports flattened out.
I think that 10 years from now the biggest impact from Trump will be from his cancellation
of the Iran nuclear accord and unilateral imposition of strict sanctions which the Europeans
were not able to bypass in any meaningful way due the prevalence of the US dollar in global
transactions.
There is now significant motivation in Europe and even China in creating a real
alternative to the US dollar for international transactions which bypasses US banks. If this
happens to any significant degree, it would undercut the US dollar as the world's reserve
currency, resulting in a permanent drop in its value.
Without international support, US Government deficits and trade deficits will become
unsustainable, and there will be a significant drop in the American median standard of
living.
Hongkong is no longer of great importance for bejing as a financial and trading locus. up and
down the south china sea coast are many cities of far greater importance than Hongkong.
perhaps when the PLA finish in hongkong they can come over here and deal with antifa since
our government at any level does not appear to have the sense or spine to do it
themselves
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilization
(Edited version of the speech given by the TJ Wormwood, Chief Demonic Officer –
Finance, Lord of 3rd Ring of the 7th Circle, to invited audience at Davos.)
Dear Colleagues,
As you all know, I've been wrecking finance for millennia. [Pause for effect]
Nearly every major big idea, evolutionary leap forward, invention and discovery has improved
the miserable lot of mankind only through their ability to monetise it. Forget the theft of
fire – being able to monetise fire by attracting pretty and willing mates around a warm
campfire, or cooking the food others have hunted, is what mattered. Strip out the noise, and
the rise of mankind is largely due to improvements in the efficiency and ease of means of
exchange.
From the realisation hunters could barter their furs for other goods, to the rise of complex
products to finance global growth – the innovation of financial markets has been a major
driver of success for the Other Side in raising the wellbeing and prosperity of mankind. Pretty
much anything that holds back or disrupts trade, increases costs and holds back services is
naturally positive for our goal of global destabilisation.
So, here is the big plan:
Since 2007 we've been turning the Other Side's successful innovation of financial markets
against them. Global Financial Markets are incredibly rich in opportunities to distort truth,
hide lies, and undermine mankind – generating immediate greed, envy, suspicion and anger.
We've uncovered previously unimaginable ways in which to financially screw the World with
consequences that impact everyone.
We've overlaid the programme with our mastery and understanding of temptation, human greed,
avarice and pride, while adding subtlety and cunning. We merely suggest and advise. We are
facilitating the train-wreck of the global economy by destroying asset values while confounding
their understanding of money and wealth – the pillars of their society.
At its simplest form we are manipulating and driving constant market instability to keep
mankind distracted. Uncertainty clouds their future expectations – so we keep it raining.
A Mortgage crisis one year, followed by a Sovereign Debt crisis the next, spiced with a couple
of bank failures, and threats of global trade war. Overlay with confusion and distraction such
as social media, fake news, Bitcoin and populism, and it all works rather well.
Keep their leaders arguing. Keep the blame game going.
Our success can be seen in current financial asset prices. These are now hopelessly inflated
and distorted by foolish post financial crisis policy decisions. They are bubbles set to pop.
Empower the regulators and bureaucrats to compromise finance through zealous over-regulation,
making banking safer by destroying it. Usher in a new era of trade protectionism, the end of
Free Trade and increase the suspicion some countries are manipulating their currencies for
economic advantage. Sprinkle some dust of political catastrophe, the collapse of law, undo the
fair, just and caring society, while adding some eye of newt and complex environmental threats.
Make the rich so rich they don't notice, and the poor so poor they become invisible. If the
markets remain uncertain, then it distracts mankind from addressing these issues, making
society less stable!
There as some things we're really proud of, including the Euro, Social Media, Investment
Banks, the Tech Boom, and especially Quantitative Easing (which is still delivering confusion
and pain). New Monetary Theory could prove even better – it shows tremendous potential to
thoroughly unsettle confidence in money. Cybercurrencies are particularly fun – despite
coming up with the idea, neither we, nor even the distinguished members of our panel of eternal
guests, understand the why of them. They are libertarian nonsense – so, naturally we
continue to encourage them as get-rich-quick schemes, but they also further undermine
confidence in money and government. We made something up in a bar one night and called it a
Distributed Ledger - the humans ran with it and invented Blockchain, whatever that might
be..
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilisation, triggering systemic market events and regulatory backlashes
across markets. We are only now exploring the full potential of market illiquidity to rob
billions of pensioners of their savings.
We've persuaded investors to overturn proven tried and tested investment strategies and
wisdoms, nurturing a whole range of overpriced unprofitable US Tech "Unicorn" companies which
we are confident will prove utterly over-hyped and largely worthless. The success of social
media, data mining and new tech has increased levels of dissatisfaction and envy –
especially in our target younger demography.
The way we successfully pinned the blame on banks for the Global Financial Crisis –
despite the fact it was people who wanted mortgages to buy houses and fast cars - ensured
global regulators would over-react. We've allowed regulators to focus on banks while we target
the next financial crisis in other parts of the financial ecosystem.
Regulators forced the banks to de-risk. But risk does not disappear - it just goes somewhere
else. While banks understood risk and had massive staffs to manage risk, risk is now
concentrated in the hands of "investment managers" who are singularly ill-equipped to withstand
the next credit crunch and global recession, (which we've planned for next October – Save
the Date cards have been sent).
We are particularly pleased that many banks now exceed the 2.3 compliance officers for every
profitable banker ratio. Compliance and regulatory costs now exceed 10% of income at some
European banks – a stunning success and substantially decreasing the efficiency of
banking and exchanges.
We've some great new financial ideas we are still experimenting with, some of which show
great promise for further weakening society. Facebook Money is going to be a cracker, and I
particularly like the Spaceship to Mars project if only they knew what awaits them
By hiding inflation in the stock market, we assisted the accumulation of massive wealth by a
tiny percentage of the population to ferment income inequality dissatisfaction. When capital is
concentrated and the workers under the cosh, it creates all the right conditions for weak
disjointed government to aid and abet the rise of destabilising populism.
It's highly satisfying to watch the instability we've created in financial markets drive
fear and distrust across society. The debt crisis we engineered led to global financial
austerity, job insecurity, and rising inequality. We were surprised how easily we pushed the
Gig economy concept to further exploit and cow workers through regulators and authorities
– they barely noticed. Over this we've layered whole new levels of anxiety such as the
unknowns of data theft, the rise in envy coefficients through social media, fake news while
fuelling social distrust through resentment.
We've managed to persuade Governments to follow damaging and contradictory policies. As
society reeled in the wake of the financial crisis, we persuaded policy makers to cut back
spending through "austerity" spending programmes, simultaneously bailing out bankers while
flooding the financial economy with free money through Quantitative Easing.
Effectively we've split the world into two economies. A real economy which is sad, miserable
and deflating, and a financial economy that's insanely optimistic, massively inflated and ripe
to pop on the back of free money.
The resentment, instability, fear and general sense of decay has paid dividends in our drive
to break society by undermining the credibility of the political classes. Our approach to
politics has been simple – deskill the political classes, reduce their effectiveness as
leaders, while engineering economic, social and financial instability to drive rampaging
populist politics – just like in 1932! Populism may ultimately prove short-lived, but
it's difficult to see how the political classes will recover their power in time to reverse the
damages being done to the global environment.
While markets have burned, society become increasingly riven, and politics has failed, we've
distracted the humans from the rising levels of carbon dioxide in the atmosphere which
threatens to create global warming and rising sea levels, while plastics poison the oceans and
soil erosion threatens agriculture.
Now I love the ravenous hunger and sharp pointy teeth of polar bears as much as the next
demon, but needs must... needs must. I was also rather fond of the dinosaurs...
Our approach to ensuring destructive climate change has proved very effective. We've
supported, financed and advised the loudest green lobbies to ensure their message looks
ill-considered, wrong and economic suicide. We also paid big bucks to fund the loudest climate
change deniers. Our innovation of fake news to discredit and mitigate anything positive means
climate change remains a crank topic – even as our polar bears drown.
Meanwhile, through our dominance of global boardrooms and investment firms, we've made sure
that large corporates have bought-out and stifled new technologies that could solve the
environmental crisis.
Our future looks great – because their future is bleak!
The global smartphone bust is currently underway
(has been for some time) - but
there's a new, surprising trend that could highlight one reason why the Trump administration has
waged economic war against China.
First, let's start with the global smartphone shipment data
from the
International Data
Corporation
(IDC) Worldwide Quarterly Mobile Phone Tracker.
This new data details how worldwide smartphone shipments fell 2.3% in 2Q19 YoY. It also states
that smartphone manufacturers shipped 333.2 million phones in 2Q19, which was up 6.5% QoQ.
An escalating trade war between the US and China contributed to sharp declines in shipments in
both countries over the last year. However, the declines weren't nearly as severe as expected in
China over 1H19 versus 1H18, suggesting that three years of a smartphone bust in Asia could be
nearing a recovery phase. Asia/Pacific (excluding Japan and China) maintained solid momentum in 2Q
YoY, with shipments up 3% in the quarter fueled by Southeast Asia markets.
The surprising trend IDC detected is that Huawei surpassed Apple in 2Q19, making it the
first time in seven years that Samsung and Apple weren't the top smartphones manufactures in the
world.
Now it seems that a South Korea company [Samsung] and a Chinese company [Huawei] are the world
leaders in smartphone shipments, something that has irritated the Trump administration.
Samsung ranked No.1 with 75.5 million shipments in 2Q19, a 5.5% YoY increase. Huawei was No.2
with 58.7 million shipments in 2Q19, a 8.3% YoY jump. Apple was No.3 with 33.8 million shipments in
2Q19, a -18.2% YoY plunge.
1) Huawei announces a .6%
decline in shipments worldwide over the Q1 numbers.
2) Huawei announces an all-time high in domestic
operations that now take up 62% of its sales.
What do these two numbers hide?
That Huawei's shipments to the international market must have
suffered a considerable decline.
That the rise in sales in low-value Chinese phones doesn't
begin to offset the large drop in high-value developed world sales
except on a purely nominal numerical basis of numbers of phones
sold. The money isn't in the phones. It's in the plans. In fact,
China pioneered the idea of giving the phones away for free and
then making it all back on the gated connection plans.
But there's no way that one Chinese plan equals one western
plan in profitability back to the company, so buffing up the
domestic numbers at the expense of the cash cow numbers overseas
is ultimately not a good business strategy.
Plus of course Huawei can report any number it wants inside
China and nobody has any way of testing its veracity. They could
have shipped 20,000,000 phones to distributors on consignment and
then marked it up as sales.
It's still high-end, per se. But the price premium is no
longer justified because other companies have commoditized the
high-end features.
Frankly, the company was doomed the moment
Jobs died and the reins were turned over to Cook - an
accountant by training, who clearly has no futurist vision or
marketing skill whatsoever.
Jobs might have been a puffed up peacock, but he was a
master of creating the Reality Distortion Field.
There is one big problem that no one is talking about. The cell
phone market is over saturated! Practically everyone has got a
cell phone these days. It's like the auto industry. There has
been an over production 10 billion automobiles in the world for
7.2 billion people, of which half really can't afford to buy, much
less drive, or even have a place to park it. I have seen people
with 3 and 4 cell phones, but you only have 2 ears. How are more
cell phones going to help you? Even women don't multitask that
well.
The only thing that would make sales better on cell
phones is if you could combine the computing power of a Cray
computer into a roll-up tablet. Or, maybe a brain implant would
be even better.
Tim Cook: "When you step back and consider
Wearables and Services together two areas where we have
strategically invested in last several years, they now approach
the size of a Fortune 50 company."
Acknowledging and pricing macroeconomic uncertainties - Hansen and Sargent
False pretences of knowledge about complicated economic situations have become all too
common in public policy debates. This column argues that policymakers should take into
account what they don't know in their decision making. It describes a tractable approach for
acknowledging, characterising, and responding to different forms of uncertainty, by using
theories and statistical methods available at any particular moment.
---------
Yes, starting about 10,000 years ago.
After our current MMT, we will get the same false pretence, we will have a bunch of AOC
geeks on this blog explaining things have been fixed,'We won't do it again' to quote Ben,
among the many thousands of false pretencers. We will hear from the 'Uncle can fix it later'
crowd. "This time is different' chants another tribe. Someone will put up a blog, and we will
recite talking points absent any evidence.
The delusionals and their preachers do not go away, and neither do their followers. It is
like a religion, we know it is BS, but it keeps our hysteria in check.
Just as investors thought it was safe to buy-the f**king-dip after Powell's plunge,
President Trump steals the jam out of their donut by announcing new China tariffs...
"... on September 1st, putting a small additional Tariff of 10% on the remaining 300
Billion Dollars of goods and products coming from China into our Country "
In a series of tweets, Trump laid out the state of the China trade deal... in a word -
terrible...
Our representatives have just returned from China where they had constructive talks having
to do with a future Trade Deal. We thought we had a deal with China three months ago, but
sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed
to...
...buy agricultural product from the U.S. in large quantities, but did not do so.
Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the
United States – this never happened, and many Americans continue to die! Trade talks
are continuing, and...
...during the talks the U.S. will start, on September 1st, putting a small additional
Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China
into our Country. This does not include the 250 Billion Dollars already Tariffed at
25%...
...We look forward to continuing our positive dialogue with China on a comprehensive Trade
Deal, and feel that the future between our two countries will be a very bright one!
"... Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying large amounts of American farm products, which the president promised farmers would happen after a June meeting with Chinese President Xi Jinping. ..."
"... Mr. Trump took credit for China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese goods have put enormous pressure on the country, costing it jobs and prompting companies to leave. ..."
"... American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has shaken the world's economic confidence and rattled markets. ..."
"... Instead, both sides appear to be settling in for a lengthy economic conflict. ..."
"... Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new risks and challenges" and ward off what they described as "downward pressure on the economy," according to the Chinese state news media. China could turn "a crisis into an opportunity," the report added. ..."
"... A lengthy trade war presents China's leaders with some difficult options. China is enduring an economic slowdown that has been made worse by the trade tensions. Beijing has responded by ratcheting up spending on infrastructure and other big-ticket projects, a reliable growth strategy that nevertheless could worsen the country's debt problems and do little to solve economic imbalances that could hinder its long-term prospects. ..."
"... At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts trade talks with the spirit of equality, mutual respect, mutual understanding and mutual accommodation, can the trade talks make progress." ... ..."
"... the trade pressure by the United States on China has from the beginning been about undermining Chinese development. The US point has always been to stop Chinese scientific and technological advance but the Chinese have always understood and that is just not ever going to happen. ..."
"... Accept United States restrictions on Chinese investments in sensitive technologies without retaliating. ..."
"... Open up its services and agricultural sectors to full American competition. ..."
President Trump took credit for weakening
China's economy and downplayed the likelihood
of a trade deal before the 2020 election.
His comments came as his top negotiators were sitting
down to dinner with their counterparts in Shanghai.
Trump Goads China as Trade Talks
Resume https://nyti.ms/32X4vBj
NYT - Ana Swanson and Jeanna Smialek - July 30
WASHINGTON -- President Trump lashed out at China on Tuesday morning as trade talks
between the two nations resumed, taking credit for weakening China's economy and downplaying
the likelihood of a deal before the 2020 election.
The president's comments, in posts on Twitter and remarks to the press, came just as his
top negotiators were sitting down to dinner with their counterparts at the Fairmont Peace
Hotel in Shanghai. While both sides are trying to get trade talks back on track, Mr. Trump's
angry words underscored the diminishing prospects for a transformative trade deal anytime
soon and the extent to which the bilateral relationship has not unfolded in the way that Mr.
Trump expected.
"I think the biggest problem to a trade deal is China would love to wait and just hope,"
the president said. "They hope -- it's not going to happen, I hope, but they would just love
if I got defeated so they could deal with somebody like Elizabeth Warren or Sleepy Joe Biden
or any of these people, because then they'd be allowed and able to continue to rip off our
country like they've been doing for the last 30 years."
Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying
large amounts of American farm products, which the president promised farmers would happen
after a June meeting with Chinese President Xi Jinping. Mr. Trump emerged from that
meeting in Osaka, Japan, saying he had agreed to postpone tariffs on an additional $300
billion of Chinese products and allow American firms to resume sales of nonsensitive goods to
the Chinese telecom firm Huawei. In return, Mr. Trump said China would immediately start
buying American agricultural goods, touting it as a big win for farmers.
But no such purchases have happened, and, in the weeks since, Chinese officials disputed
that they had agreed to buy more farm products as a condition of the talks. On Sunday,
Chinese state media reported that "millions of tons" of American soybeans had been shipped to
China. But Mr. Trump on Tuesday said no such purchases had materialized.
China "was supposed to start buying our agricultural product now -- no signs that they are
doing so," Mr. Trump tweeted. "That is the problem with China, they just don't come
through."
His comments on Tuesday appeared to be an effort to give his negotiators more leverage and
to pressure China into making concessions in talks this week. Mr. Trump took credit for
China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese
goods have put enormous pressure on the country, costing it jobs and prompting companies to
leave.
But he seemed to veer between goading China to quickly accede to America's demands and
suggesting the country could get a better deal if it waits and a Democrat wins the 2020
presidential election. ...
US-China Trade Talks End With No Deal
in Sight https://nyti.ms/2GE3LHt
NYT - Alexandra Stevenson - July 31
American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has
shaken the world's economic confidence and rattled markets.
Treasury Secretary Steven Mnuchin and Robert E. Lighthizer, the Trump administration's top
trade negotiator, were seen leaving trade talks on Wednesday, the Chinese state news media
said.
Both sides "conducted frank, efficient and constructive in-depth exchanges on major issues
of common interest in the economic and trade field," said a statement late in the day that
was released by CCTV, China's state broadcaster.
Another round of high-level talks will take place in the United States in September, CCTV
reported.
The Trump administration had not yet released its own statement.
The meeting marked the first formal resumption of talks after negotiations fell apart
almost three months ago, with each side pointing fingers at the other for derailing a deal.
They agreed to try again after meeting last month on the sidelines of the Group of 20 summit
meeting in Osaka, Japan.
Instead, both sides appear to be settling in for a lengthy economic conflict.
Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top
leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new
risks and challenges" and ward off what they described as "downward pressure on the economy,"
according to the Chinese state news media. China could turn "a crisis into an opportunity,"
the report added.
A lengthy trade war presents China's leaders with some difficult options. China is
enduring an economic slowdown that has been made worse by the trade tensions. Beijing has
responded by ratcheting up spending on infrastructure and other big-ticket projects, a
reliable growth strategy that nevertheless could worsen the country's debt problems and do
little to solve economic imbalances that could hinder its long-term prospects.
Should China reach a quick deal, on the other hand, the country's leaders risk looking
weak in the face of foreign powers, undermining the Communist Party's historical claim to
rule.
At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign
Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts
trade talks with the spirit of equality, mutual respect, mutual understanding and mutual
accommodation, can the trade talks make progress." ...
As I have repeatedly documented on Economist's View, the trade pressure by the United States
on China has from the beginning been about undermining Chinese development. The US point has
always been to stop Chinese scientific and technological advance but the Chinese have always
understood and that is just not ever going to happen.
Trump is asking China to redo just about everything with its economy
By Heather Long - Washington Post
The Trump administration has finally presented the Chinese government with a clear list of
trade demands. It's long and intense (there are eight sections), and President Trump isn't
just asking Chinese President Xi Jinping for a few modifications. He's asking Xi to
completely change his plans to turn the Chinese economy into a tech powerhouse.
The demands include the following:
• China will cut the $336 billion U.S.-China trade deficit by at least $200 billion
by 2020, a 60 percent reduction.
• China will stop subsidizing tech companies.
• China will cease stealing U.S. intellectual property.
• China will cut its tariffs on U.S. goods by 2020.
• China will not retaliate against the United States (including against U.S.
farmers).
• The Chinese government will open China to more U.S. investment.
U.S.-China Trade Talks End With Strong Demands, but Few Signs of a Deal
By Keith Bradsher
BEIJING -- The extensive list of United States trade demands was unexpectedly sweeping,
and showed that the Trump administration has no intention of backing down despite Beijing's
assertive stance in the last few days. "The list reads like the terms for a surrender rather
than a basis for negotiation," said Eswar Prasad, an economics professor at Cornell
University.
Here are the highlights of the demands:
China must
■ Cut its trade surplus by $100 billion in the 12 months starting in June, and by
another $100 billion in the following 12 months.
■ Halt all subsidies to advanced manufacturing industries in its so-called Made In
China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric
cars, robotics, computer microchips and artificial intelligence.
■ Accept that the United States may restrict imports from the industries under Made
in China 2025.
■ Take "immediate, verifiable steps" to halt cyberespionage into commercial networks
in the United States.
■ Strengthen intellectual property protections.
■ Accept United States restrictions on Chinese investments in sensitive technologies
without retaliating.
■ Cut its tariffs, which currently average 10 percent, to the same level as in the
United States, where they average 3.5 percent for all "noncritical sectors."
■ Open up its services and agricultural sectors to full American competition.
The United States also stipulated that the two sides should meet every quarter to review
progress.
Trump definitely contributes a lot to the collapse of classic neoliberalism. He rejected neoliberal globalization in favor of using
the USA dominant position for cutting favorable to the USA bilateral deals. That undermined the role of dollar of the world reserve
currency and several mechanisms emerged which allow completely bypass dollar system for trade.
Notable quotes:
"... US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence. ..."
"... A new world is emerging, in which it will be much harder to separate economics from geopolitics. ..."
US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic
partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic
interdependence.
In response, China (and perhaps Europe) will fight to establish their own networks and secure control of their nodes. Again, multilateralism
could be the victim of this battle.
A new world is emerging, in which it will be much harder to separate economics from geopolitics. It's not the world according
to Myrdal, Frank, and Perroux, and it's not Tom Friedman's flat world, either. It's the world according to Game of Thrones
.
It made me do a face palm. Somebody thought they had separated economics from geopolitics or power…or at least they wanted
people to believe that and the jig is up.
“One reason for this is that in an increasingly digitalised economy, where a growing part of services are provided at zero
marginal cost, value creation and value appropriation concentrate in the innovation centers and where intangible investments are
made. This leaves less and less for the production facilities where tangible goods are made.”
It depends on what you mean by value.
If value is dollars in someone’s Cayman Islands tax-free account, then value is concentrated in NYC and SF.
But if we follow Natural Law (Marx or Mohammed) and define value as labor, then this is exactly wrong. A Natural Law economy
tries to maximize paid and useful work, because people are made to be useful.
The digital world steadily eliminates useful work, and steadily crams down the wages for the little work that remains. Real
value is avalanching toward zero, while Cayman value is zooming to infinity.
He’s talking more about the whims of the stock market and of our intellectual property laws. For example the marginal cost
for Microsoft to issue another copy of “Windows” is zero. Even their revised iterations of the OS were largely a rehash of the
previous software. Selling this at high prices worked out well for a long time but now the software can practically be had for
free because competitors like Linux and Android are themselves free. So digital services with their low marginal cost depend on
a shaky government edifice (patent enforcement, lack of antitrust) to prop up their value. Making real stuff still requires real
labor and even many proposed robot jobs–driving cars, drone deliveries, automated factories and warehouses–are looking dubious.
Dean Baker has said that the actual investment in automation during the last decades has slowed–perhaps because expensive and
complicated robots may have trouble competing with clever if poorly paid humans. And poorly paid is the current reality due to
population increases and political trends and perhaps, yes, automation.
And even if the masters of the universe could eliminate labor they would then have nobody to buy their products. The super
yacht market is rather small.
>the distribution of gains from openness and participation in the global economy is increasingly skewed. …. True, protectionism
remains a dangerous lunacy.
Well “openness and participation” is looking like lunacy to the Deplorables for exactly the reason given, so what is actually
on offer here?
With useful physical labor being off-shored, first world citizens should all be made shareholders in the new scheme. We shall
all then become dividend collecting layabouts buying stuff made by people we do not know, see, or care about. If they object we
simply have the military mount a punitive expedition until they get whipped back into shape. Sort of like now but with a somewhat
larger, more inclusive shareholder base. It will be wonderful!
Are you sayin’ the lefty Social Wealth Fund concept is really just another way of replicating the same old bougie program of
domination and suppression?
I’m saying that it can be and historically, and that there are and have been multi-national systems of super exploitation of
peripheral, primarily resource exporting populations, relative to a more broadly distributed prosperity for “higher” skilled populations
of the center. This has been a common perspective within anti-imperialist movements.
The argument is not without merit. Is this a “contradiction among the people” where various sectors of a larger labor movement
can renegotiate terms, or is it some more intransigent, deeply antagonistic relationship is a crucial question. The exportation
of manufacturing to the periphery is disrupting the political status-quo as represented by the center’s centrism, political sentiments
are breaking away to the left and right and where they’ll land nobody knows.
Why is Iran such a high priority for so many US elites?
I was just reading this John Helmer below, like Pepe Escobar I’m not sure who’s buttering his bread but it’s all food for thought
and fresh cooked blinis are tastier than the Twinkies from the western msm, and this thought came to mind: Iran is the perfect
test ground for the US to determine Russian weapons and tactical capabilities in a major war context in 2019. That alone might
make it worth it to the Pentagon, why they seem so enthusiastic to take the empire of chaos to unforseen heights (depts?). Somewhat
like the Spanish Civil War was a testing ground for the weapons of WW2.
1. Because it has a lot of non US controlled Oil.
2. Because it is Central on the eastern end of the silk road.
3. Because it does not kiss the US Ring bearers hand at every opportunity, and the US is determined to make it an example not
to be followed.
But consider Saudi us relations… who is kissing who’s ring?
Or consider Israeli us relations… ditto.
We’re a thuggish whore whose favors are easily bought; bring dollars or votes. Or kiss the ring.
An environmental insight here. The world stands devastated. It has reached its carrying capacity for thoughtless humans. From
here on in we have to take the consequences of our actions into account. So when it is said, as above, that the dollar exchange
rate is more important than the other bilateral exchange rates, I think that is no longer the reality. There is only a small amount
of global economic synergy that operates without subsidy. The vast majority is subsidized. And the dollar is just one currency.
And, unfortunately, the United States does not control the sun and the wind (well we’ve got Trump), or the ice and snow. Let alone
the oceans. The big question going forward is, Can the US maintain its artificial economy? Based on what?
That is a factor that seems ignored by the philosophers who are the subjects of the headline posting. It is a great oversight,
a shoe which has been released and is now impacting the floor. “The best laid schemes o’ mice an’ men”
Looks like the world order established after WWIII crumbed with the USSR and now it is again the law if jungles with the US as the
biggest predator.
Notable quotes:
"... The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet. ..."
"... Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy ..."
"... A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism" (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest. ..."
"... For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness. ..."
"... Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II. ..."
"... Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which let other countries share in prosperity and rising living standards. ..."
"... Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations' International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable basis to believe that war crimes and crimes against humanity." ..."
"... This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago, and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer. ..."
"... England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo. As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank." ..."
"... But now, cyber warfare has become a way of pulling out the connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium. ..."
"... On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas, this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions attack on Europe ..."
"... The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above. In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945. ..."
"... By following U.S. advice, countries have left themselves open to food blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands. ..."
"... It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either. ..."
"... But a few years ago Ukraine defaulted on $3 billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid. ..."
"... It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. ..."
"... Anticipating just such a double-cross, President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe. ..."
"... It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence. ..."
"... Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs, but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and settle for being a dominant minority. ..."
"... Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast their vote for Trump did so under the assumption that he would act as a catalyst for systemic change. ..."
"... Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms". Interesting times. ..."
"... Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery going on behind the scenes that has prevented that. ..."
"... To paraphrase the infamous Rummy, you don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the best thing we can say about Trump after the historic dust of his administration finally settles. ..."
"... Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet again. Nothing to see here, actually. ..."
"... So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change. ..."
"... Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. ..."
"... I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. ..."
"... If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be" to their portfolios, the global economy can never be put on a sustainable footing. ..."
"... In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same pretensions to superiority by the same people, to get number 3. ..."
"... Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble." ..."
"... He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and WaPo have to say, they are not reporting events but promoting agendas. ..."
"... The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed the OT WH reference to dawg both choosing and then compelling him to run. ..."
"... Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics" on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners. ..."
"... Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap. ..."
"... On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top. I'll take the USD hegemony any day compared to that prospect. ..."
"... Former US ambassador, Chas Freeman, gets to the nub of the problem. "The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs" https://www.youtube.com/watch?annotation_id=annotation_882041135&feature=iv&src_vid=Ge1ozuXN7iI&v=gkf2MQdqz-o ..."
"... Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT. ..."
"... The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy. ..."
The end of America's unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons
who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold
by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries
with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial
institutions.
This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become
the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved
what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter
has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using
Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black
political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense
that we might adhere to international norms, let alone laws or treaties.
The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together
– the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into
the Eurasian orbit, the "Heartland" nightmare of Halford Mackinder a century ago.
The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution
of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported
even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States
is now the greatest threat to peace on the planet.
Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign
policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure,
dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank
to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence,
not democracy.
In the Devil's Dictionary that U.S. diplomats are taught to use as their "Elements of Style" guidelines for Doublethink, a "democratic"
country is one that follows U.S. leadership and opens its economy to U.S. investment, and IMF- and World Bank-sponsored privatization.
The Ukraine is deemed democratic, along with Saudi Arabia, Israel and other countries that act as U.S. financial and military protectorates
and are willing to treat America's enemies are theirs too.
A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public
relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism"
(meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.
This trajectory could be seen 50 years ago (I described it in Super Imperialism [1972] and Global Fracture [1978].) It had to
happen. But nobody thought that the end would come in quite the way that is happening. History has turned into comedy, or at least
irony as its dialectical path unfolds.
For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that
opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties
that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.)
to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners
and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness.
The reality is that right-wing parties want to get elected, and a populist nationalism is today's road to election victory in
Europe and other countries just as it was for Donald Trump in 2016.
Trump's agenda may really be to break up the American Empire, using the old Uncle Sucker isolationist rhetoric of half a century
ago. He certainly is going for the Empire's most vital organs. But it he a witting anti-American agent? He might as well be – but
it would be a false mental leap to use "quo bono" to assume that he is a witting agent.
After all, if no U.S. contractor, supplier, labor union or bank will deal with him, would Vladimir Putin, China or Iran be any
more naďve? Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible
to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal
to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II.
Dismantling International Law and Its Courts
Any international system of control requires the rule of law. It may be a morally lawless exercise of ruthless power imposing
predatory exploitation, but it is still The Law. And it needs courts to apply it (backed by police power to enforce it and punish
violators).
Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country
have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy
years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which
let other countries share in prosperity and rising living standards.
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity
share was large enough to give them veto power over any loan or other policy. Without such power, the United States would not join
any international organization. Yet at the same time, it depicted its nationalism as protecting globalization and internationalism.
It was all a euphemism for what really was unilateral U.S. decision-making.
Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international
court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations'
International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture
policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable
basis to believe that war crimes and crimes against humanity."
[1]
Donald Trump's National Security Adviser John Bolton erupted in fury, warning in September that: "The United States will use any
means necessary to protect our citizens and those of our allies from unjust prosecution by this illegitimate court," adding that
the UN International Court must not be so bold as to investigate "Israel or other U.S. allies."
That prompted a senior judge, Christoph Flügge from Germany, to resign in protest. Indeed, Bolton told the court to keep out of
any affairs involving the United States, promising to ban the Court's "judges and prosecutors from entering the United States." As
Bolton spelled out the U.S. threat: "We will sanction their funds in the U.S. financial system, and we will prosecute them in the
U.S. criminal system. We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We
will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us."
What this meant, the German judge spelled out was that: "If these judges ever interfere in the domestic concerns of the U.S. or
investigate an American citizen, [Bolton] said the American government would do all it could to ensure that these judges would no
longer be allowed to travel to the United States – and that they would perhaps even be criminally prosecuted."
The original inspiration of the Court – to use the Nuremburg laws that were applied against German Nazis to bring similar prosecution
against any country or officials found guilty of committing war crimes – had already fallen into disuse with the failure to indict
the authors of the Chilean coup, Iran-Contra or the U.S. invasion of Iraq for war crimes.
Dismantling Dollar Hegemony from the IMF to SWIFT
Of all areas of global power politics today, international finance and foreign investment have become the key flashpoint. International
monetary reserves were supposed to be the most sacrosanct, and international debt enforcement closely associated.
Central banks have long held their gold and other monetary reserves in the United States and London. Back in 1945 this seemed
reasonable, because the New York Federal Reserve Bank (in whose basement foreign central bank gold was kept) was militarily safe,
and because the London Gold Pool was the vehicle by which the U.S. Treasury kept the dollar "as good as gold" at $35 an ounce. Foreign
reserves over and above gold were kept in the form of U.S. Treasury securities, to be bought and sold on the New York and London
foreign-exchange markets to stabilize exchange rates. Most foreign loans to governments were denominated in U.S. dollars, so Wall
Street banks were normally name as paying agents.
That was the case with Iran under the Shah, whom the United States had installed after sponsoring the 1953 coup against Mohammed
Mosaddegh when he sought to nationalize Anglo-Iranian Oil (now British Petroleum) or at least tax it. After the Shah was overthrown,
the Khomeini regime asked its paying agent, the Chase Manhattan bank, to use its deposits to pay its bondholders. At the direction
of the U.S. Government Chase refused to do so. U.S. courts then declared Iran to be in default, and froze all its assets in the United
States and anywhere else they were able.
This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago,
and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might
be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally
got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult
that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer.
But then came Venezuela. Desperate to spend its gold reserves to provide imports for its economy devastated by U.S. sanctions
– a crisis that U.S. diplomats blame on "socialism," not on U.S. political attempts to "make the economy scream" (as Nixon officials
said of Chile under Salvador Allende) – Venezuela directed the Bank of England to transfer some of its $11 billion in gold held in
its vaults and those of other central banks in December 2018. This was just like a bank depositor would expect a bank to pay a check
that the depositor had written.
England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo.
As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster
his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign
reserves held by the Venezuelan central bank."
Turkey seemed to be a likely destination, prompting Bolton and Pompeo to warn it to desist from helping Venezuela, threatening
sanctions against it or any other country helping Venezuela cope with its economic crisis. As for the Bank of England and other European
countries, the Bloomberg report concluded: "Central bank officials in Caracas have been ordered to no longer try contacting the Bank
of England. These central bankers have been told that Bank of England staffers will not respond to them."
This led to rumors that Venezuela was selling 20 tons of gold via a Russian Boeing 777 – some $840 million. The money probably
would have ended up paying Russian and Chinese bondholders as well as buying food to relieve the local famine.
[4] Russia denied this report, but Reuters has confirmed is that Venezuela has sold 3 tons of a planned 29 tones of gold to the
United Arab Emirates, with another 15 tones are to be shipped on Friday, February 1.
[5] The U.S. Senate's Batista-Cuban hardliner Rubio accused this of being "theft," as if feeding the people to alleviate the
U.S.-sponsored crisis was a crime against U.S. diplomatic leverage.
If there is any country that U.S. diplomats hate more than a recalcitrant Latin American country, it is Iran. President Trump's
breaking of the 2015 nuclear agreements negotiated by European and Obama Administration diplomats has escalated to the point of threatening
Germany and other European countries with punitive sanctions if they do not also break the agreements they have signed. Coming on
top of U.S. opposition to German and other European importing of Russian gas, the U.S. threat finally prompted Europe to find a way
to defend itself.
Imperial threats are no longer military. No country (including Russia or China) can mount a military invasion of another major
country. Since the Vietnam Era, the only kind of war a democratically elected country can wage is atomic, or at least heavy bombing
such as the United States has inflicted on Iraq, Libya and Syria. But now, cyber warfare has become a way of pulling out the
connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the
Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium.
Russia and China have already moved to create a shadow bank-transfer system in case the United States unplugs them from SWIFT.
But now, European countries have come to realize that threats by Bolton and Pompeo may lead to heavy fines and asset grabs if they
seek to continue trading with Iran as called for in the treaties they have negotiated.
On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran
and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument
in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored
Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas,
this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions
attack on Europe.
I have just returned from Germany and seen a remarkable split between that nation's industrialists and their political leadership.
For years, major companies have seen Russia as a natural market, a complementary economy needing to modernize its manufacturing and
able to supply Europe with natural gas and other raw materials. America's New Cold War stance is trying to block this commercial
complementarity. Warning Europe against "dependence" on low-price Russian gas, it has offered to sell high-priced LNG from the United
States (via port facilities that do not yet exist in anywhere near the volume required). President Trump also is insisting that NATO
members spend a full 2 percent of their GDP on arms – preferably bought from the United States, not from German or French merchants
of death.
The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above.
In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to
bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945.
The World Bank, for instance, traditionally has been headed by a U.S. Secretary of Defense. Its steady policy since its inception
is to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves. That is
why its loans are only in foreign currency, not in the domestic currency needed to provide price supports and agricultural extension
services such as have made U.S. agriculture so productive. By following U.S. advice, countries have left themselves open to food
blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands.
It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to
become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically
to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports
from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees
across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either.
Likewise, the IMF has been forced to admit that its basic guidelines were fictitious from the beginning. A central core has been
to enforce payment of official inter-government debt by withholding IMF credit from countries under default. This rule was instituted
at a time when most official inter-government debt was owed to the United States. But a few years ago Ukraine defaulted on $3
billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country
deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption
to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid.
It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. Europe has taken
notice that its own international monetary trade and financial linkages are in danger of attracting U.S. anger. This became clear
last autumn at the funeral for George H. W. Bush, when the EU's diplomat found himself downgraded to the end of the list to be called
to his seat. He was told that the U.S. no longer considers the EU an entity in good standing. In December, "Mike Pompeo gave a speech
on Europe in Brussels -- his first, and eagerly awaited -- in which he extolled the virtues of nationalism, criticised multilateralism
and the EU, and said that "international bodies" which constrain national sovereignty "must be reformed or eliminated."
[5]
Most of the above events have made the news in just one day, January 31, 2019. The conjunction of U.S. moves on so many fronts,
against Venezuela, Iran and Europe (not to mention China and the trade threats and moves against Huawei also erupting today) looks
like this will be a year of global fracture.
It is not all President Trump's doing, of course. We see the Democratic Party showing the same colors. Instead of applauding democracy
when foreign countries do not elect a leader approved by U.S. diplomats (whether it is Allende or Maduro), they've let the mask fall
and shown themselves to be the leading New Cold War imperialists. It's now out in the open. They would make Venezuela the new Pinochet-era
Chile. Trump is not alone in supporting Saudi Arabia and its Wahabi terrorists acting, as Lyndon Johnson put it, "Bastards, but they're
our bastards."
Where is the left in all this? That is the question with which I opened this article. How remarkable it is that it is only right-wing
parties, Alternative for Deutschland (AFD), or Marine le Pen's French nationalists and those of other countries that are opposing
NATO militarization and seeking to revive trade and economic links with the rest of Eurasia.
The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like
me. It took a colossal level of arrogance, short-sightedness and lawlessness to hasten its decline -- something that only crazed
Neocons like John Bolton, Elliot Abrams and Mike Pompeo could deliver for Donald Trump.
[2] Patricia Laya, Ethan Bronner and Tim Ross,
"Maduro Stymied in Bid to Pull $1.2 Billion of Gold From U.K.," Bloomberg, January 25, 2019. Anticipating just such a double-cross,
President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe.
Well, if the StormTrumpers can tear down all the levers and institutions of international US dollar strength, perhaps they
can also tear down all the institutions of Corporate Globalonial Forced Free Trade. That itself may BE our escape . . . if there
are enough millions of Americans who have turned their regionalocal zones of habitation into economically and politically armor-plated
Transition Towns, Power-Down Zones, etc. People and places like that may be able to crawl up out of the rubble and grow and defend
little zones of semi-subsistence survival-economics.
If enough millions of Americans have created enough such zones, they might be able to link up with eachother to offer hope
of a movement to make America in general a semi-autarchik, semi-secluded and isolated National Survival Economy . . . . much smaller
than today, perhaps likelier to survive the various coming ecosystemic crash-cramdowns, and no longer interested in leading or
dominating a world that we would no longer have the power to lead or dominate.
We could put an end to American Exceptionalism. We could lay this burden down. We could become American Okayness Ordinarians.
Make America an okay place for ordinary Americans to live in.
If Populists, I assume that's what you mean by "Storm Troopers", offer me M4A and revitalized local economies, and deliver
them, they have my support and more power to them.
That's why Trump was elected, his promises, not yet delivered, were closer to that then the Democrats' promises. If the Democrats
promised those things and delivered, then they would have my support.
If the Democrats run a candidate, who has a no track record of delivering such things, we stay home on election day. Trump
can have it, because it won't be any worse.
I don't give a damn about "social issues." Economics, health care and avoiding WWIII are what motivates my votes, and I think
more and more people are going to vote the same way.
Good point about Populist versus StormTrumper. ( And by the way, I said StormTRUMper, not StormTROOper). I wasn't thinking
of the Populists. I was thinking of the neo-etc. vandals and arsonists who want us to invade Venezuela, leave the JCPOA with Iran,
etc. Those are the people who will finally drive the other-country governments into creating their own parallel payment systems,
etc.
And the midpoint of those efforts will leave wreckage and rubble for us to crawl up out of. But we will have a chance to crawl
up out of it.
My reason for voting for Trump was mainly to stop the Evil Clinton from getting elected and to reduce the chance of near immediate
thermonuclear war with Russia and to save the Assad regime in Syria from Clintonian overthrow and replacement with an Islamic
Emirate of Jihadistan.
Much of what will be attempted " in Trump's name" will be de-regulationism of all kinds delivered by the sorts of basic Republicans
selected for the various agencies and departments by Pence and Moore and the Koch Brothers. I doubt the Populist Voters wanted
the Koch-Pence agenda. But that was a risky tradeoff in return for keeping Clinton out of office.
The only Dems who would seek what you want are Sanders or maybe Gabbard or just barely Warren. The others would all be Clinton
or Obama all over again.
I couldn't really find any details about the new INSTEX system – have you got any good links to brush up on? I know they made
an announcement yesterday but how long until the new payment system is operational?
arguably wouldn't it be better if for USD hegemony to be dismantled? A strong USD hurts US exports, subsidizes American consumption
(by making commodities cheaper in relative terms), makes international trade (aka a 8,000-mile+ supply chain) easier.
For the sake of the environment, you want less of all three. Though obviously I don't like the idea of expensive gasoline,
natural gas or tube socks either.
It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive
Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence.
Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs,
but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and
settle for being a dominant minority.
Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast
their vote for Trump did so under the assumption that he would act as a catalyst for systemic change.
What this change would consist of, and how it would manifest, remained an open question. Would he pursue rapprochement with
Russia and pull troops out of the Middle East as he claimed to want to do during his 2016 campaign, would he doggedly pursue corruption
charges against Clinton and attempt to reform the FBI and CIA, or would he do both, neither, or something else entirely?
Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international
order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment
desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms".
Interesting times.
Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery
going on behind the scenes that has prevented that. Whether or not he ever had or has a coherent plan for the havoc he has
wrought, he has certainly been the agent for change many of us hoped he would be, in stark contrast to the criminal duopoly parties
who continue to oppose him, where the daily no news is always bad news all the same. To paraphrase the infamous Rummy, you
don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the
best thing we can say about Trump after the historic dust of his administration finally settles.
Look on some bright sides. Here is just one bright side to look on. President Trump has delayed and denied the Clinton Plan
to topple Assad just long enough that Russia has been able to help Assad preserve legitimate government in most of Syria and defeat
the Clinton's-choice jihadis.
That is a positive good. Unless you are pro-jihadi.
Clinton wasn't going to "benefit the greater good" either, and a very strong argument, based on her past behavior, can be made
that she represented the greater threat. Given that the choice was between her and Trump, I think voters made the right decision.
Hudson's done us a service in pulling these threads together. I'd missed the threats against the ICC judges. One question:
is it possible for INSTEX-like arrangements to function secretly? What is to be gained by announcing them publicly and drawing
the expected attacks? Does that help sharpen conflicts, and to what end?
Maybe they're done in secret already – who knows? The point of doing it publicly is to make a foreign-policy impact, in this
case withdrawing power from the US. It's a Declaration of Independence.
It certainly seems as though the 90 percent (plus) are an afterthought in this journey to who knows where? Like George C.Scott
said while playing Patton, "The whole world at economic war and I'm not part of it. God will not let this happen." Looks like
we're on the Brexit track (without the vote). The elite argue with themselves and we just sit and watch. It appears to me that
the elite just do not have the ability to contemplate things beyond their own narrow self interest. We are all deplorables now.
The end of America's unchallenged global economic dominance has arrived sooner than expected
Is not supported by this (or really the rest of the article). The past tense here, for example, is unwarranted:
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their
equity share was large enough to give them veto power over any loan or other policy.
And this
So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. Germany agreed
to slow down the transfer.
Doesn't show Germany as breaking free at all, and worse it is followed by the pregnant
But then came Venezuela.
Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet
again. Nothing to see here, actually.
So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging
by some pygmy leaders (Merkel) does not signal a global change.
"So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging
by some pygmy leaders (Merkel) does not signal a global change."
I'm surprised more people aren't recognizing this. I read the article waiting in vain for some evidence of "the end of our
monetary imperialism" besides some 'grumbling and foot dragging' as you aptly put it. There was some glimmer of a buried lede
with INTEX, created to get around U.S. sanctions against Iran ─ hardly a 'dam-breaking'. Washington is on record as being annoyed.
Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD
as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. World bond market flows are 10X the size
of world stock market flows even though the price of the Dow and Facebook shares etc get all of the headlines.
And foreign exchange flows are 10-50X the flows of bond markets, they're currently on the order of $5 *trillion* per day. And
since forex is almost completely unregulated it's quite difficult to get the data and spot reserve currency trends. Oh, and buy
gold. It's the only currency that requires no counterparty and is no one's debt obligation.
That's not what Hudson claims in his swaggering final sentence:
"The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed
observer like me."
Which is risible as not only did he fail to show anything of the kind, his opening sentence stated a completely different reality:
"The end of America's unchallenged global economic dominance has arrived sooner than expected" So if we hold him to his first
declaration, his evidence is feeble, as I mentioned. As a scholar, his hyperbole is untrustworthy.
No, gold is pretty enough lying on the bosom of a lady-friend but that's about its only usefulness in the real world.
Always bemusing that gold bugs never talk about gold being in a bubble . yet when it goes south of its purchase price speak
in tongues about ev'bal forces.
thanks Mr. Hudson. One has to wonder what has happened when the government (for decades) has been shown to be morally and otherwise
corrupt and self serving. It doesn't seem to bother anyone but the people, and precious few of them. Was it our financial and
legal bankruptcy that sent us over the cliff?
Indeed! It is to say the least encouraging to see Dr. Hudson return so forcefully to the theme of 'monetary imperialism'.
I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you
haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. You can
find any number of articles on his web site that return periodically to the theme of monetary imperialism. I remember one in particular
that described how the rest of the world was brought on board to help pay for its good old-fashioned military imperialism.
If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt
status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long
as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington
neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be"
to their portfolios, the global economy can never be put on a sustainable footing.
Until the US returns to the path of genuine wealth creation, it is past time for the rest of the world to go its own way with
its banking and financial institutions.
In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same
pretensions to superiority by the same people, to get number 3.
UK withholding Gold may start another Brexit? IE: funds/gold held by BOE for other countries in Africa, Asian, South America,
and the "stans" with start to depart, slowly at first, perhaps for Switzerland?
Where is the left in all this? Pretty much the same place as Michael Hudson, I'd say. Where is the US Democratic Party in all
this? Quite a different question, and quite a different answer. So far as I can see, the Democrats for years have bombed, invaded
and plundered other countries 'for their own good'. Republicans do it 'for the good of America', by which the ignoramuses mean
the USA. If you're on the receiving end, it doesn't make much difference.
Agreed! South America intervention and regime change, Syria ( Trump is pulling out), Iraq, Middle East meddling, all predate
Trump. Bush, Clinton and Obama have nothing to do with any of this.
" So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. "
What proof is there that the gold is still there? Chances are it's notional. All Germany, Venezuela, or the others have is
an IOU – and gold cannot be printed. Incidentally, this whole discussion means that gold is still money and the gold standard
still exists.
What makes you think that the gold in Fort Knox is still there? If I remember right, there was a Potemkin visit back in the
70s to assure everyone that the gold was still there but not since then. Wait, I tell a lie. There was another visit about two
years ago but look who was involved in that visit-
And I should mention that it was in the 90s that between 1.3 and 1.5 million 400 oz tungsten blanks were manufactured in the
US under Clinton. Since then gold-coated tungsten bars have turned up in places like Germany, China, Ethiopia, the UK, etc so
who is to say if those gold bars in Fort Knox are gold all the way through either. More on this at --
http://viewzone2.com/fakegoldx.html
It wasn't last year that Germany brought back its Gold. It has been ongoing since 2013, after some political and popular pressure
build up. They finished the transaction in 2017. According to an article in Handelblatt (but it was widely reported back then)
they brought back pretty much everything they had in Paris (347t), left what they had in London (perhaps they should have done
it in reverse) and took home another 300t from the NY Fed. That still leaves 1236t in NY. But half of their Gold (1710t) is now
in Frankfurt. That is 50% of the Bundesbanks holdings.
They made a point in saying that every bar was checked and weighed and presented some bars in Frankfurt. I guess they didn't
melt them for assaying, but I'd expect them to be smart enough to check the density.
Their reason to keep Gold in NY and London is to quickly buy USD in case of a crisis. That's pretty much a cold war plan, but
that's what they do right now.
Regarding Michal Hudsons piece, I enjoyed reading through this one. He tends to write ridiculously long articles and in the
last few years with less time and motivation at hand I've skipped most of his texts on NC as they just drag on.
When I'm truly fascinated I like well written, long articles but somehow he lost me at some point. But I noticed that some
long original articles in US magazines, probably research for a long time by the journalist, can just drag on for ever as well
I just tune out.
This is making sense. I would guess that tearing up the old system is totally deliberate. It wasn't working so well for us
because we had to practice too much social austerity, which we have tried to impose on the EU as well, just to stabilize "king
dollar" – otherwise spread so thin it was a pending catastrophe.
Now we can get out from under being the reserve currency – the currency that maintains its value by financial manipulation
and military bullying domestic deprivation. To replace this old power trip we are now going to mainline oil. The dollar will become
a true petro dollar because we are going to commandeer every oil resource not already nailed down.
When we partnered with SA in Aramco and the then petro dollar the dollar was only backed by our military. If we start monopolizing
oil, the actual commodity, the dollar will be an apex competitor currency without all the foreign military obligations which will
allow greater competitive advantages.
No? I'm looking at PdVSA, PEMEX and the new "Energy Hub for the Eastern Mediterranean" and other places not yet made public.
It looks like a power play to me, not a hapless goofball president at all.
So sand people with sociological attachment to the OT is a compelling argument based on antiquarian preferences with authoritarian
patriarchal tendencies for their non renewable resource . after I might add it was deemed a strategic concern after WWII .
Considering the broader geopolitical realities I would drain all the gold reserves to zero if it was on offer . here natives
have some shiny beads for allowing us to resource extract we call this a good trade you maximize your utility as I do mine .
Hay its like not having to run C-corp compounds with western 60s – 70s esthetics and letting the locals play serf, blow back
pay back, and now the installed local chiefs can own the risk and refocus the attention away from the real antagonists.
Indeed. Thanks so much for this. Maybe the RICS will get serious now – can no longer include Brazil with Bolsonaro. There needs
to be an alternate system or systems in place, and to see US Imperialism so so blatantly and bluntly by Trump admin –
"US
gives Juan Guaido control over some Venezuelan assets" – should sound sirens on every continent and especially in the developing
world. I too hope there will be fracture to the point of breakage. Countries of the world outside the US/EU/UK/Canada/Australia
confraternity must now unite to provide a permanent framework outside the control of imperial interests. The be clear, this must
not default to alternative forms of imperialism germinating by the likes of China.
" such criticism can't begin to take in the full scope of the damage the Trump White House is inflicting on the system of global
power Washington built and carefully maintained over those 70 years. Indeed, American leaders have been on top of the world for
so long that they no longer remember how they got there.
Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it
now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's
inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of
a ruined building standing starkly above the smoking rubble."
I read something like this and I am like, some of these statements need to be qualified. Like: "Driving China and Russia together".
Like where's the proof? Is Xi playing telephone games more often now with Putin? I look at those two and all I see are two egocentric
people who might sometimes say the right things but in general do not like the share the spotlight. Let's say they get together
to face America and for some reason the later gets "defeated", it's not as if they'll kumbaya together into the night.
This website often points out the difficulties in implementing new banking IT initiatives. Ok, so Europe has a new "payment
system". Has it been tested thoroughly? I would expect a couple of weeks or even months of chaos if it's not been tested, and
if it's thorough that probably just means that it's in use right i.e. all the kinks have been worked out. In that case the transition
is already happening anyway. But then the next crisis arrives and then everyone would need their dollar swap lines again which
probably needs to cleared through SWIFT or something.
Anyway, does this all mean that one day we'll wake up and a slice of bacon is 50 bucks as opposed to the usual 1 dollar?
Driving Russia and China together is correct. I recall them signing a variety of economic and military agreement a few years
ago. It was covered in the media. You should at least google an issue before making silly comments. You might start with the report
of Russia and China signing 30 cooperation agreements three years ago. See
https://www.rbth.com/international/2016/06/27/russia-china-sign-30-cooperation-agreements_606505
. There are lots and lots of others.
He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and
WaPo have to say, they are not reporting events but promoting agendas.
The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical
foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed
the OT WH reference to dawg both choosing and then compelling him to run.
Whilst the far right factions fight over the rudder the only new game in town is AOC, Sanders, Warren, et al which Trumps supporters
hate with Ideological purity.
Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On
US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics"
on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.
On a household level it fits, but there no "loser" household that in infinity can print money that the "winners" can accumulate
in exchange for their resources and fruits of labor.
One wonder what are Trumps idea of US being a winner in trade (surplus)? I.e. sending away their resources and fruits of labor
overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish
liras? Also fiat-money. Or does he think US trade surplus should be paid in gold?
When the US political and economic hegemony will unravel it will come "unexpected". Trump for sure are undermining it with
his megalomaniac ignorance. But not sure it's imminent.
Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash
will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence.
There will be fierce competition to fill the gap.
On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and
austerity for all globally, a permanent recession. Probably not much better with the Chinese on top.
I'll take the USD hegemony any day compared to that prospect.
Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the
rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT.
The trade deficit required a large Government deficit to cover it and the US government could just create the money to cover
it.
Then ideological neoliberals came in wanting balanced budgets and not realising the Government deficit covered the trade deficit.
The US has been destabilising its own economy by reducing the Government deficit. Bill Clinton didn't realize a Government surplus is an indicator a financial crisis is about to hit. The last US Government surplus occurred in 1927 – 1930, they go hand-in-hand with financial crises.
Richard Koo shows the graph central bankers use and it's the flow of funds within the economy, which sums to zero (32-34 mins.).
The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy.
It should be remembered Bill Clinton's early meeting with Rubin, where in he was informed that wages and productivity had diverged –
Rubin did not blink an eye.
That bill alone makes Warren a viable candidate again, despite all her previous blunders. She is a courageous woman, that
Warren. And she might wipe the floor with the completely subservant to Israel lobby Trump. Who betrayed his electorate
in all major promises.
Notable quotes:
"... Not only would Warren's legislation prohibit some of the most destructive private equity activities, but it would end their ability to act as traditional asset managers, taking fees and incurring close to no risk if their investments go belly up. The bill takes the explicit and radical view that: ..."
"... Private funds should have a stake in the outcome of their investments, enjoying returns if those investments are successful but ab-1sorbing losses if those investments fail. ..."
"... Critics will say that Warren's bill has no chance of passing, which is currently true but misses the point. ..."
"... firms would share responsibility for the liabilities of companies under their control, including debt, legal judgments, and pension obligations to "better align the incentives of private equity firms and the companies they own." The bill, if enacted, would end the tax subsidy for excessive leverage and closes the carried interest loophole. ..."
"... The bill also seeks to ban dividends to investors for two years after a firm is acquired. Worker pay would be prioritized in the bankruptcy process, with guidelines intended to ensure affected employees are more likely to receive severance pay and pensions. It would also clarify gift cards are consumer deposits, ensuring their priority in bankruptcy proceedings. If enacted, private equity managers will be required to disclose fees, returns, and political expenditures. ..."
"... This is a bold set of proposals that targets abuses that hurt workers and investors. Most readers may not appreciate the significance of the two-year restriction on dividends. One return-goosing strategy that often leaves companies crippled or bankrupt in its wake is the "dividend recap" in which the acquired company takes on yet more debt for the purpose of paying a special dividend to its investors. Another strategy that Appelbaum and Batt have discussed at length is the "op co/prop co." Here the new owners take real estate owned by the company, sell it to a new entity with the former owner leasing it. The leases are typically set high so as to allow for the "prop co" to be sold at a richer price. This strategy is often a direct contributor to the death of businesses, since ones that own their real estate usually do so because they are in cyclical industries, and not having lease payments enables the to ride out bad times. The proceeds of sale of the real estate is usually dividended out to the investors, hence the dividend restriction would also pour cold water on this approach. ..."
"... However, there is precedent in private equity for recognizing joint and several liability of an investment fund for the obligations of its portfolio companies. In a case that winded its way through the federal courts until last year ( Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund ), the federal court held that Sun Capital Partners III was liable under ERISA, the federal pension law, for the unfunded pension obligations of Scott Brass, a portfolio company of that fund. The court's key finding was that Sun Capital played an active management role in Scott Brass and that its claim of passive investor status therefore should not be respected. ..."
"... Needless to say, private equity firms have worked hard to minimize their exposure to the Sun Capital decision, for example by avoiding purchasing companies with defined benefit pension plans. The Warren bill, however, is so broad in the sweep of liability it imposes that PE firms would be unlikely to be able to structure around it. It is hard to imagine the investors in private equity funds accepting liability for what could be enormous sums of unfunded pension liabilities ultimately flowing onto them. Either they would have to set up shell companies to fund their PE investments that could absorb the potential liability, or they would have to give up on the asset class. Either way, it would mean big changes to the industry and potentially a major contraction of it. ..."
"... I am surprised that Warren sought to make private equity funds responsible for the portfolio company debts by "joint and several liability". You can get to economically pretty much the same end by requiring the general partner and potentially also key employees to guarantee the debt and by preventing them from assigning or buying insurance to protect the guarantor from being liable. There is ample precedent for that for entrepreneurs. Small business corporate credit cards and nearly all small business loans require a personal guarantee. ..."
"... Warren's bill also has strong pro-investor provisions. It takes on the biggest feature of the ongoing investor scamming, which is the failure of PE managers to disclose to the investors all of the fees they receive from portfolio companies. The solution proposed by the bill to this problem is exceedingly straightforward, basically proclaiming, "Oh yeah, now you will have to disclose that." The bill also abolishes the ability of private equity managers to claim long term capital gains treatment on the 20 percent of fund profits that they receive, which is unrelated to the return on any capital that the private equity managers may happen to invest in a fund. ..."
"... We need a reparations movement for all those workers harmed by private equity. Seriously. ..."
"... It's so nice to see someone taking steps to protect the rights and compensation of the people actually doing the work at the companies and putting their interests first in case of bankruptcy. That those who worked hardest to make the company succeed were somehow the ones who took it in the shorts the worst has always struck me as a glaring inequity bordering on cruelty. ..."
Elizabeth Warren's
Stop Wall Street Looting Act , which is co-sponsored by Tammy Baldwin, Sherrod Brown, Mark Pocan and Pramila Jayapal, seeks to
fundamentally alter the way private equity firms operate. While the likely impetus for Warren's bill was the spate of private-equity-induced
retail bankruptcies, with Toys 'R' Us particularly prominent, the bill addresses all the areas targeted by critics of private equity:
how it hurts workers and investors and short-changes the tax man, thus burdening taxpayers generally.
"When the music stops, in terms of liquidity, things will be complicated. But as long as the
music is playing, you've got to get up and dance. We're still dancing,"
"A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.
How will the caitiff wretch be scared,
When first he finds himself awake
At the last trumpet, unprepared,
And all his grand account to make!
For in that universal call,
Few bankers will to heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'
When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weigh'd in the balance and found light!'
"... If you believe the US media if they just removed Putin, Russia would go back to being a good little puppet state just like under Yeltins. Which is a shockingly naïve way to look at international relations. ..."
"... It is not just Chinese but Asian in general. Watch several seasons of the Japanese cartoon "Gundam" and get back to me about who the good guys are and who the bad guys are in it. ..."
"... People always suffer when they allow corrupt sociopaths to gain power. That is as true today as it was in Germany in 1930's and 40's. ..."
"... According to news reports since the moron in charge announced that he had signed an executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei phones access to gmail and playstore. The android operating system is open source and still available to Huawei. ..."
"... Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on users 24/7/365 now means that Huawei phones have all the advantages with none of the disadvantages. ..."
"... In Games of Thrones, the good characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil characters grow in power and menace and rarely perish. The overwhelming message is that all people and all power are evil. There is no good in the world or what good there is will be quickly stomped out. Resistance is useless. ..."
"... The main message is really that resistance is futile . If the powers that be can condition the contemporary (and naturally idealistic) Western youth to accept that hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If resistance is futile, said youth will simply have to accept how things are and try to stay out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James Clapper ruin the planet. ..."
"... In the US 33% supported unilateral action, 70% of congress voted for the unilateral military action ..."
"... Thomas Jefferson said: "I tremble for my countrymen because I know God is just..." ..."
"... "The powerful do what they can and the weak suffer what they must." ..."
"... The movies Hollywood produced are often telling psychological conflicts as the central story. Each character has a certain fixed attitude and the interacting of the characters create the story. It does not matter if the setting is in antic times or in the far future. In the end there are always the bad and the good guy slamming it out in a fistfight. ..."
"... The historic Chinese drama which I currently favor are based on sociological storytelling. As they develop the stories form their characters. Their attitudes change over time because the developing exterior circumstances push them into certain directions. Good becomes bad and again good. The persons change because they must, not because the are genetically defined. I find these kind of movies more interesting. ..."
"... The take away quote "Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States." Empire is having its hand slapped back in Venezuela, Iran, Syria, ??? ..."
"... I see empire as a war junkie and they are starting to twitch in withdrawals which is dangerous but a necessary stage. Trumps latest tweets show that level of energy. The spinning plates of empire are not wowing the crowds like before.....what is plan Z? ..."
"... My own view is that, as with everything the US has done lately, it already lost the war before it even stepped into battle in the theater. ..."
"... Strangest thing of all that the US itself would do the forcing out of itself from the world's trust. ..."
"... As I've written previously, the political philosophers of the nascent USA thought they would have a Natural Aristocracy ( here and here ) somewhat based on a meritocratic system instead of the Old World's Inherited Aristocracy based on blood relations and closed to anyone not within a very small circle. Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment of evils the US citizenry has yet to overcome in its supposed--idealized--quest for self-government. ..."
"... If you are interested in watching a film with a sociological approach to telling a story and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday in Australia. The film is an exploration of British society during the Regency period (in the early 19th century), the class attitudes and opinions prevalent then, and the conditions and events that led to 60,000 - 100,000 labouring class people gathering at St Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry and foot soldiers acting on orders of the aristocracy. ..."
"... The culture I am immersed in (USA) is heavily weighted toward the dramatic and two dimensional. Simply put, mass perspective engineering is geared to over simplify and reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses through which impressions from the "outside world" pass through engineered to give the desired results rather than expand consciousness or engender critical thinking. In short, we are breeding for weakness and gullibility. ..."
"... If it is Hollywood, then you can be certain the intention is to manipulate the younger generation to supporting and idolising their permanent wars. On the face of it, that indeed appears to be the case. ..."
" Why The Takedown Of Heinz-Christian Strache Will Strengthen The Right | Main May 19, 2019 The story in the
American Conservative is very weak: that "the Americans" have already won the war is just
due to the built-in superiority: the "land of the free" against "communist dictatorship"
(so everybody knows who has to win). Or, a variation, "free market" against "state-owned".
A typical statement of that article: "China views commercial relations with other
countries as an extension of the political conflict between Western democracies and itself
-- that is, an extension of war." -- a very defining element of the "American" character,
to project the own aggression onto others.
There was another opinion-piece somewhere, can't find it anymore, where the author
argued that hopefully that "trade-war" will do really good for the Chinese economy --
forget about the US, and develop the home market.
As I believe that the sanctions are a great gift to Russia, I also believe that this
"trade-war" is a (potential) great gift to China.
That was an interesting article on psychological vs sociological storytelling and it makes
a good companion piece when thinking about how the US media personalizes US geo-political
conflicts with the heads of rival state (Putin, Xi, Castro, Kim Jong-un, Khomeini,
Gaddafi).
If you believe the US media if they just removed Putin, Russia would go back to
being a good little puppet state just like under Yeltins. Which is a shockingly naïve
way to look at international relations. States have permanent interests and any competent
head of State will always represent those interests to the best of their ability. True, you
could overthrow the government and replace every senior government figure with a compliant
puppet (which the US always tries to do), but the permanent interests that arise from the
inhabitants of the State will always rise up and (re)assert themselves. When the State
leadership is bribed or threatened into ignoring or acting against these needs it
ultimately creates a failed State.
Even the US media seems to subconsciously understand this, when they talk of "overly
ambitious US goals of remaking societies", however, they never make the logical next step
of investigating why these States do not wish to be remade as per the US imagined ideal,
what the interests of these actually are and how diplomacy can resolve conflicts.
According
to the US media everything boils down to the US = good, anyone who disagrees with our
policies = bad and diplomacy is just a measure of how vulgar our threats are during talks.
I'm specifically thinking of the US Ambassador to Russia, John Huntsman's boast of a US
aircraft carrier in the Mediterranean as being 100,000 tons of diplomacy to Russia - of all
the ridiculous and stupid things to says to Russia when supposedly trying to "ease"
tensions (I still can't believe Huntsmen, former Ambassador to China under Obama, is
regarded a "serious" professional ambassador within the State departments when compared to
all the celebrity ambassadorships the US President for fundraiser).
It is not just Chinese but Asian in general. Watch several seasons of the Japanese
cartoon "Gundam" and get back to me about who the good guys are and who the bad guys
are in it.
The whole notion that the "good guys" and the "bad guys" are set in stone
is antithetical to any worldview founded in Buddhism/Confucianism, or influenced by the
same. Can you imagine western children's programming teaching ambiguity between good and
evil? That which is which depends upon the observer's perspective? This is the sort of
concept that few western people get exposed to until graduate level ethics and philosophy
courses.
Or maybe not. I have never seen a single episode of "Game of Thrones" and maybe
that delves into ethical complexities that typical western mass media avoids. I wouldn't
know. What I do know is that this moral and ethical complexity is something that most Asian
children are introduced to before they hit their teens.
Trump just tweeted "If Iran wants to fight, that will be the official end of Iran. Never
threaten the United States again!". Needless to say, more ridiculousness, Trump is pretty
close to plagiarizing himself with his prior comments regarding North Korean "North Korean
Leader Kim Jong Un just stated that the "Nuclear Button is on his desk at all times." Will
someone from his depleted and food starved regime please inform him that I too have a
Nuclear Button, but it is a much bigger & more powerful one than his, and my Button
works!". I think Trump is getting desperate now waiting by the phone for the Iranians to
call him. Trump is certainly still smarting after the failed Venezuela coup and wants to
avoid a second embarrassing defeat, however I doubt the Iranians will care that much about
his latest threat by tweet.
GOT was jarring this season. In the penultimate episode, a dragon wreaks havoc on a western
capital city, brutally murdering most of its inhabitants.
It is impossible not to make the correlation of the dragon as China and kings landing
(The city) as Washington d.c.
From this one can glean that they were attempting to show the ascendancy of China and
the utter destruction of the U.S. With shades of gray thrown about as to if the people of
the city deserved to be burned alive and as to whether the dragon and its rider, China,
have become what they originally set out to vanquish. The old Nietzsche maxim...those who
fight with monsters...
It was indeed unsettling because there are no moral winners. It is well realised for
this reason but poorly written and produced in other aspects as noted above by other
posters.
"First published From Parameters, Summer 1997, pp. 4-14: US Army War College: "There will
be no peace. At any given moment for the rest of our lifetimes, there will be multiple
conflicts in mutating forms around the globe. Violent conflict will dominate the
headlines, but cultural and economic struggles will be steadier and ultimately more
decisive. The de facto role of the US armed forces will be to keep the world safe for our
economy and open to our cultural assault. To those ends, we will do a fair amount of
killing."
"Excerpts From Pentagon's Plan: 'Prevent the Re-Emergence of a New Rival':
"Our first objective is to prevent the re-emergence of a new rival, either on the
territory of the former Soviet Union or elsewhere, that poses a threat on the order of
that posed formerly by the Soviet Union.
This is a dominant consideration underlying the new regional defense strategy and
requires that we endeavor to prevent any hostile power from dominating a region whose
resources would, under consolidated control, be sufficient to generate global power.
These regions include Western Europe, East Asia, the territory of the former Soviet
Union, and Southwest Asia.
There are three additional aspects to this objective: First, the U.S. must show the
leadership necessary to establish and protect a new order that holds the promise of
convincing potential competitors that they need not aspire to a greater role or pursue a
more aggressive posture to protect their legitimate interests.
Second, in the non-defense areas, we must account sufficiently for the interests of the
advanced industrial nations to discourage them from challenging our leadership or seeking
to overturn the established political and economic order. Finally, we must maintain the
mechanisms for deterring potential competitors from even aspiring to a larger regional or
global role. An effective reconstitution capability is important here, since it implies
that a potential rival could not hope to quickly or easily gain a predominant military
position in the world."
... access to vital raw materials, primarily Persian Gulf oil"
GOT is an allegory that explores the nature of power. If you see China's destruction of
Washington it says more about you than the show. Firebombing of Dresden might be a more apt
analogy.
People always suffer when they allow corrupt sociopaths to gain power. That is as true
today as it was in Germany in 1930's and 40's.
The complaints about poor writing are just fan sadness at unexpected horrors that
actually make sense for the show. Loose ends created by these horrors will likely be
resolved in the last episode tonight.
WJ @13 thanks for the link, I am eternally hopeful that this particular thread gets pulled
on until it unravels.
One of my distinct memories of the immediate aftermath of 9/11 (I lived in NYC at the
time), was the trumpeting of the Post and other tabloids about 'the Dancing Arabs,' which
obviously fanned the flames of hatred towards the designated villains. Once it was revealed
that they were actually Israelis, then crickets until the whole thing was shoved down the
memory hole.
I'm going out today to buy a couple of Huawei 'phones'.
According to news reports since the moron in charge announced that he had signed an
executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei
phones access to gmail and playstore. The android operating system is open source and still
available to Huawei.
Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on
users 24/7/365 now means that Huawei phones have all the advantages with none of the
disadvantages.
They put their own chips in newer models and I have no doubt will find enough bright
sparks to take over apps integration meaning that this divergence point will become a boon
not a hurdle. Even better a Huawei costs 60% of a comparable korean model and half the
price of the fbi backdoored american shit.
I really like thinking expressed by an un-named english politician in a Henry Jackson
Society report: ""Huawei has long been accused of espionage" – a claim repeatedly
denied by the firm – and notes that "while there are no definitely proven cases", a
precautionary principle should be adopted."
All politicians are crooks and liars, everybody says so, lets lock em all up right now,
no need for evidence or trial or any of that due process nonsense, the precautionary
principle should apply.
I have never seen a single episode of "Game of Thrones" and maybe that delves into
ethical complexities that typical western mass media avoids. I wouldn't know.
Having suffered through four seasons of Game of Thrones, after a degree in philology and
literature, I'd be happy to share my impressions with you. In Games of Thrones, the good
characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil
characters grow in power and menace and rarely perish. The overwhelming message is that all
people and all power are evil. There is no good in the world or what good there is will be
quickly stomped out. Resistance is useless.
The main message is really that resistance is futile . If the powers that be can
condition the contemporary (and naturally idealistic) Western youth to accept that
hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If
resistance is futile, said youth will simply have to accept how things are and try to stay
out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and
wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James
Clapper ruin the planet.
Despite impressive production values, excellent acting (for the most part) and majestic
locations, Game of Thrones is truly the most evil large scale creative work I've ever seen.
On a philosophical level, Game of Thrones has no redeeming features. At best an
impressionable mind might come away with a hedonist mindset, i.e. the traditional salve of
weak spirits, carpe diem .
PS. There's some very good comments at the tail end of the
Takedown of Heinz-Christian Strache including one of my own covering in some depth the
Austrian political background to this event. Worth revisiting if you only saw the early
comments.
Using populations per country from '03 we get the following conclusions:
of the 36 countries outside the US we get 33% of the world population where
less than 8% supported unilateral military action by American and her allies
and 57% supported under no circumstances
this list excludes 42 additional countries with another 40% of world population who have
had their governments overthrown or attempted to be overthrown by the US since WWII
In the US 33% supported unilateral action, 70% of congress voted for the unilateral
military action
Being that the invasion was illegal and unpopular, the Bush admin invented a 'coalition
of the willing to give the appearance of support.
The Trump admin needed to create a similar type of facade for the Venezuelan coup. Such
things are needed specifically because the move is so unpopular and illegal.
I suppose that is a valid theory. But as the viewer we know the motivations of Dany and
why in some small regard the people in King's Landing deserve a little roughing up.
Thomas Jefferson said: "I tremble for my countrymen because I know God is just..."
The difference here is that we judge Assad even though we don't see what he is truly
doing.
Here we see what Dany has done, mass slaughter, and think to ourselves...we kinda had it
coming.
Concerning your take on GoT: Isn't this really the thesis of Thucydides through and
through reflected in GoT almost to a T?
"The powerful do what they can and the weak suffer what they must." GoT is not disturbing to be nihilistic and shocking. It is holding up a mirror to
history. But the quality of the show has declined since they have come to the end of the road in
adapting the source material. The show has overtaken the books.
The take away quote
"
As of the end of March, overseas investors bought a net of 1.77 trillion yuan (about 260.3
billion U.S. dollars) of bonds at the country's interbank bond market, up 31 percent from a
year earlier, and held 5.4 trillion yuan of yuan-denominated financial assets, up 19
percent year on year, according to the central bank.
"
What us peasants don't know is the extent to which China will let foreign investment
influence their socialistic ways. That said, China is the new empire, private or public is
yet to be determined but guess where all the "smart" money in the world is going? The money
movements are a giant sucking sound that will leave America under the global economic
bus.
Or not and China maintains its socialistic ways including projecting them around the
world.
The movies Hollywood produced are often telling psychological conflicts as the central
story. Each character has a certain fixed attitude and the interacting of the characters
create the story. It does not matter if the setting is in antic times or in the far
future. In the end there are always the bad and the good guy slamming it out in a
fistfight.
The historic Chinese drama which I currently favor are based on sociological
storytelling. As they develop the stories form their characters. Their attitudes change
over time because the developing exterior circumstances push them into certain
directions. Good becomes bad and again good. The persons change because they must, not
because the are genetically defined. I find these kind of movies more interesting.
That's the difference between materialism (marxism) and idealism (kantism, hegelianism
and noekantism). Besides, an idealist tv series helps selling more merch and doing more
sequels, hence the capitalist preference for idealism.
The take away quote
"Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by
the United States."
Empire is having its hand slapped back in Venezuela, Iran, Syria, ???
Where are they going to get their war on?
I see empire as a war junkie and they are starting to twitch in withdrawals which is
dangerous but a necessary stage. Trumps latest tweets show that level of energy. The
spinning plates of empire are not wowing the crowds like before.....what is plan Z?
Hot tip, GOT is just a movie. Please, no more psychological insights.
What fans really need, is some REAL WORLD justice, something that's noticeably missing
in today's world.
I agree that the American Conservative article was weak - as b obviously thought. It has
the US trade war against China completely wrong. I side with b in his hunch that China will
win. My own view is that, as with everything the US has done lately, it already lost the
war before it even stepped into battle in the theater.
And let's counter the author's point, in the weak article, that China needs the US trade
surplus more than the US needs the imports from China. The author says that China has no
way to substitute for exports to the US. There's abundant recent analysis on this, showing
the relatively small part of China's economy that hinges on this trade, but here's a good
Sputnik interview that illustrates how easily China can simply absorb goods into its own
domestic market:
"...we have our colossal domestic market, which has no competitors throughout the world.
Our consumer and innovation markets provide us with a large number of advantages and
room, giving China an opportunity to make a manoeuvre. Therefore, their blockage gives
China a chance to become even stronger. We must express our appreciation to our mentor,
Trump, for this, for this lesson and for forcing China to figure out how to withstand the
threats on its own."
The US used to be an important nation to do business with - commercial, diplomatic,
military. But as it has become "agreement incapable", nations are forced to replace it.
This takes a little time and readjustment, but then the change is permanent.
Strangest thing of all that the US itself would do the forcing out of itself from the
world's trust.
Crown Prince Mohammed bin Salman discussed regional developments, including efforts to
strengthen security and stability, in a phone call with U.S. Secretary of State Mike
Pompeo, the Saudi Media Ministry tweeted on Sunday.
"We want peace and stability in the region but we will not sit on our hands in light
of the continuing Iranian attack," Jubeir said. "The ball is in Iran's court and it is up
to Iran to determine what its fate will be."
He said the crew of an Iranian oil tanker that had been towed to Saudi Arabia early
this month after a request for help due to engine trouble were still in the kingdom
receiving the "necessary care". The crew are 24 Iranians and two Bangladeshis .
Is this a veiled threat on the lives of these crew members?
Re@ 51 James, well Sputniknews is reporting that the Saudi's claim that the Houthis are
planning to attack 300 critical infrastructure facilities in Saudi Arabia and the United
Arab Emirates in the coming weeks so that might be the instigating event your concerned
about
Thanks for your kudos! As I've written previously, the political philosophers of the
nascent USA thought they would have a Natural Aristocracy ( here and
here ) somewhat based on a meritocratic system instead of the Old World's Inherited
Aristocracy based on blood relations and closed to anyone not within a very small circle.
Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment
of evils the US citizenry has yet to overcome in its supposed--idealized--quest for
self-government.
Recall that George Washington was deemed safe to become the first
president because he could be trusted not to proclaim himself king --something often
forgotten by students of US History.
I've often lamented on the nature of the 1787 Constitution because it allows any POTUS
to become a king with almost zero hindrances on the power wielded. Sure, compared with
other systems of government at the time, the USA's was revolutionary, but only down to the
waist to borrow a phrase from Gilbert & Sullivan. Madison's theory, IMO, was--other
than being Aristocratic--okay until his most important check/balance was removed--that of
the "dueling oval office" where the losing POTUS candidate was awarded the
Vice-Presidency--imagine Hillary Clinton as Veep with Trump in the driver seat! IMO,
the
12th Amendment fatally wounded Madison's construction of a government that arrived at
great decisions based on a consensus of genuine national interests instead of partisanship.
Arguing that action is the great fault that must be corrected doesn't get much play
nowadays. Indeed, it's very difficult to debate Constitutional Reform given the engineered
political climate since the current situation suits the Ruling Oligarchy just fine.
I hope everyone had an opportunity to click the link I provided to the series of
paintings known as The Course of Empire . ICYMI, here it is again .
Please note which Empire's being copied and compare that with the predominant architectural
theme in the Outlaw US Empire's Imperium. Creditors ruled and eventually destroyed that
Empire. That's one historical lesson that's totally omitted from the historiography of the
USA.
By and large, we know what and where the problems are. The fundamental question is, will
we ever get the opportunity to fix them?
Their disadvantage is that they have to import energy. So they need export if they do
not wish to run a trade deficit.
They do not necessarily need the US for this though if they can trade in Yuan.
b, it is generally fund raising time during this time for some publishers (i.e.
counterpunch etc) and I would like to send you something as well. Can you please post the
payment information. Thanks.
If you are interested in watching a film with a sociological approach to telling a story
and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday
in Australia. The film is an exploration of British society during the Regency period (in
the early 19th century), the class attitudes and opinions prevalent then, and the
conditions and events that led to 60,000 - 100,000 labouring class people gathering at St
Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry
and foot soldiers acting on orders of the aristocracy.
The film is at least 150 minutes long and is a highly immersive experience. There is not
much plot in the Hollywood sense of the term. I believe reviews have been mixed with most
film critics complaining about the film being too long and boring. But if you are prepared
to watch a film that uses a sociological approach to telling a narrative, then you'll agree
with me that the film actually isn't long enough.
Very interesting studies and the ideas that they might spawn. The near parallels of the
micro and macro as well as the flow patterns.
The culture I am immersed in (USA) is heavily weighted toward the dramatic and two
dimensional. Simply put, mass perspective engineering is geared to over simplify and
reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses
through which impressions from the "outside world" pass through engineered to give the
desired results rather than expand consciousness or engender critical thinking. In short,
we are breeding for weakness and gullibility.
In regard to large scale dynamics resembling the physics of things like the laws of
thermodynamics, I am wondering if phenomena like those alluded to above might be engulfed
and influenced by these kinds of natural patterns. So for example: Looking past the drama
of sanctions, trade wars, and good guys vs. bad guys, wont the large scale movements caused
by these things begin to move according to a kind of physics?
I keep wondering what the result of this latest round of economic warfare will lead to.
If the USA continues to sanction, embargo and blockade (at the behest of banking cartels?)
will this not cause a mass exodus from dollar reserves, SWIFT, BIS and the like? I hear all
sorts of opinions, bushels of dis-info and I'm mostly at a loss as to what to think. We are
clearly nearing the end of the Bretton-Woods era so a reset is in order. The USA is a mere
6% of the world population and some would say at the end of it's due date as far an being
an "international influencer".
So if they and their EU poodles go ahead and sanction every nation who refuses to bend
the knee what's stopping these nations from simply bypassing these decrees and going about
their business? I get the sense that this is already happening quietly. Russia, China and
various partner nations are creating alternatives in many forms, be they interweb servers,
financial networks, OBOR, SCO and more I have never heard of.
Perhaps the ratcheting up of tensions could also be swept up in the turbulence of
thermodynamics? If sanctions become embargoes and then blockades, what happens to the
"compressions ratios in the Straits of Hormuz?
Well, I've come across a few advertisements, but I always thought it was some kind of
children's video game. I cannot imagine why anyone other than a socially stunted and
mis-developed American or Americanised adolescent could want to watch such infantile
deranged garbage.
If it is Hollywood, then you can be certain the intention is to manipulate the younger
generation to supporting and idolising their permanent wars. On the face of it, that indeed
appears to be the case.
Assuming the decoupling would take place, that could be easily perceived as "strategic
blackmail" imposed by the Trump administration. Yet what the Trump administration wants is not
exactly what the US establishment wants – as shown by an
open letter to Trump signed by scores of academics, foreign policy experts and business
leaders who are worried that "decoupling" China from the global economy – as if
Washington could actually pull off such an impossibility – would generate massive
blowback.
What may actually happen in terms of a US-China "decoupling" is what Beijing is already,
actively working on: extending trade partnerships with the EU and across the Global South.
And that will lead, according to Li, to the Chinese leadership offering deeper and wider
market access to its partners. This will soon be the case with the EU, as discussed in Brussels
in the spring.
Sun Jie, a researcher at the Institute of World Economics and Politics at the Chinese
Academy of Social Sciences, said that deepening partnerships with the Association of Southeast
Asian Nations (Asean) will be essential in case a decoupling is in the cards.
For his part Liu Qing, an economics professor at Renmin University, stressed the need for
top international relations management, dealing with everyone from Europe to the Global South,
to prevent their companies from replacing Chinese companies in selected global supply
chains.
And Wang Xiaosong, an economics professor at Renmin University, emphasized that a concerted
Chinese strategic approach in dealing with Washington is absolutely paramount.
All about
Belt and Road
A few optimists among Western
intellectuals would rather characterize what is going on as a vibrant debate between proponents
of "restraint" and "offshore balancing" and proponents of "liberal hegemony". In fact, it's
actually a firefight.
Among the Western intellectuals singled out by the puzzled Frankenstein guy, it is virtually
impossible to find another voice of reason to match Martin Jacques , now a senior fellow
at Cambridge University. When China Rules the World , his hefty tome published 10 years ago,
still leaps out of an editorial wasteland of almost uniformly dull publications by so-called
Western "experts" on China.
Jacques has understood that now it's all about the New Silk Roads, or Belt and Road
Initiative:
"BRI has the potential to offer another kind of world, another set of values, another set
of imperatives, another way of organizing, another set of institutions, another set of
relationships."
Belt and Road, adds Jacques, "offers an alternative to the existing international order. The
present international order was designed by and still essentially privileges the rich world,
which represents only 15% of the world's population. BRI, on the other hand, is addressing at
least two-thirds of the world's population. This is extraordinarily important for this moment
in history."
Dmitry Orlov offers a highly-pertinent review of a current report to the US Congress about
the severe degradation of the US's capacity to produce ANY heavy industrial goods - including
advanced weapons such as replacement aircraft carriers, cruisers, tanks and all the rest -
within its own borders, independent of (exceedingly vulnerable) global supply networks:
Also, the US only has 'plenty' of fossil-hydrocarbon fuel on cloud-cuckoo-land paper. In
reality, it has quite a lot of such stuff which it will never access, and will never be able
to access, because of the non-negotiable, iron logic of EROEI and EROCI (the second acronym
relating to energy returned on financial capital invested; currently a long way red-ink
negative across the whole US fracking ponzi). EROEI refers to the even more intractable,
terminally-insoluble problem of energy returned on ENERGY invested. When this gets down to
around 4 to 1 or thereabouts, it's game over for actually being able to maintain an
industrial hitech society that can hope - credibly - to do fossil-hydrocarbon mining in any
seriously challenging conditions - which most of the world's remaining pools of such fuels
now exhibit.
These predicaments are qualitatively different from problems; problems, by definition, can
hope to be solved; predicaments, inherently, can't be, and can only be endured. The world is
now close to the edge of a decisive non-availability of sufficient fossil-hydrocarbon fuels
to keep even a skeleton semblance of modern hitech industrial society operating - at all.
That's the predicament that is already staring us in the face, and that will soon be
trampling us into the ground. Doesn't mean that hopeless political inadequates such as
PompousHippo and The Insane Geriatric Walrus won't attempt to trigger such insanity as an
aggression against Iran, though, they being too stupid, too delusional, and too
morally-degenarate, to know any better.
This is the overall situation which insists that the US has literally zero chance of
attacking Iran, and actually getting anything remotely resembling a 'win' out of it. Read
Dmitry's piece to get a more detailed outline of why this is so.
PS: The above considerations apply just as decisively to the US's nuclear weapon capacity
as they do to all the other hitech industrial toys which USAmerica is now barely able to
produce on its own - at all.
"... Of course, correlation is not causation, and there is no shortage of alternative explanations for the decline in U.S. manufacturing. Globalization, offshoring, and skills gaps are just three frequently cited causes. Moreover, some researchers, like MIT's David Autor, have argued that workers are benefiting from working alongside robots. ..."
"... Yet the evidence suggests there is essentially no relationship between the change in manufacturing employment and robot use. Despite the installation of far more robots between 1993 and 2007, Germany lost just 19 percent of its manufacturing jobs between 1996 and 2012 compared to a 33 percent drop in the United States. (We introduce a three-year time lag to allow for robots to influence the labor market and continued with the most recent data, 2012). ..."
"... Korea, France, and Italy also lost fewer manufacturing jobs than the United States even as they introduced more industrial robots. On the other hand, countries like the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors. ..."
Don't blame the robots for lost manufacturing jobs
Scott Andes and Mark Muro
Wednesday, April 29, 2015
a recent blog we described new research by George Graetz
and Guy Michaels that shows the impact of automation
technology in productivity statistics. So now there is good
evidence that robots are a driver of economic growth.
However, this new evidence poses a question: Has
productivity growth from robots come at the cost of
manufacturing jobs?
Between 1993 and 2007 (the timeframe studied by Graetz and
Micheals) the United States increased the number of robots
per hour worked by 237 percent. During the same period the
U.S. economy shed 2.2 million manufacturing jobs. Assuming
the two trends are linked doesn't seem farfetched.
Of course, correlation is not causation, and there is no
shortage of alternative explanations for the decline in U.S.
manufacturing. Globalization, offshoring, and skills gaps are
just three frequently cited causes. Moreover, some
researchers, like MIT's David Autor, have argued that workers
are benefiting from working alongside robots.
So is there a relationship between job loss and the use of
industrial robots?
The substantial variation of the degree to which countries
deploy robots should provide clues. If robots are a
substitute for human workers, then one would expect the
countries with much higher investment rates in automation
technology to have experienced greater employment loss in
their manufacturing sectors. Germany deploys over three times
as many robots per hour worked than the United States,
largely due to Germany's robust automotive industry, which is
by far the most robot-intensive industry (with over 10 times
more robots per worker than the average industry). Sweden has
60 percent more robots per hour worked than the United States
thanks to its highly technical metal and chemical industries.
Yet the evidence suggests there is essentially no
relationship between the change in manufacturing employment
and robot use. Despite the installation of far more robots
between 1993 and 2007, Germany lost just 19 percent of its
manufacturing jobs between 1996 and 2012 compared to a 33
percent drop in the United States. (We introduce a three-year
time lag to allow for robots to influence the labor market
and continued with the most recent data, 2012).
Korea,
France, and Italy also lost fewer manufacturing jobs than the
United States even as they introduced more industrial robots.
On the other hand, countries like the United Kingdom and
Australia invested less in robots but saw faster declines in
their manufacturing sectors.
"Despite the installation of far more robots between 1993 and
2007, Germany lost just 19 percent of its manufacturing jobs
between 1996 and 2012 compared to a 33 percent drop in the
United States. "
Yes the U.S. and Germany have a similar
pattern. So what.
Why Factory Jobs Are Shrinking Everywhere
by Charles Kenny
April 28, 2014, 1:16 PM EDT
A report from the Boston Consulting Group last week
suggested the U.S. had become the second-most-competitive
manufacturing location among the 25 largest manufacturing
exporters worldwide. While that news is welcome, most of the
lost U.S. manufacturing jobs in recent decades aren't coming
back. In 1970, more than a quarter of U.S. employees worked
in manufacturing. By 2010, only one in 10 did.
The growth in imports from China had a role in that
decline–contributing, perhaps, to as much as one-quarter of
the employment drop-off from 1991 to 2007, according to an
analysis by David Autor and colleagues at the Massachusetts
Institute of Technology. But the U.S. jobs slide began well
before China's rise as a manufacturing power. And
manufacturing employment is falling almost everywhere,
including in China. The phenomenon is driven by technology,
and there's reason to think developing countries are going to
follow a different path to wealth than the U.S. did-one that
involves a lot more jobs in the services sector.
Pretty much every economy around the world has a low or
declining share of manufacturing jobs. According to OECD
data, the U.K. and Australia have seen their share of
manufacturing drop by around two-thirds since 1971. Germany's
share halved, and manufacturing's contribution to gross
domestic product there fell from 30 percent in 1980 to 22
percent today. In South Korea, a late industrializer and
exemplar of miracle growth, the manufacturing share of
employment rose from 13 percent in 1970 to 28 percent in
1991; it's fallen to 17 percent today.
"... When tariffs went up from 0 to 10% on some product categories last year, many suppliers agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows: higher orders lead to better deals with component suppliers and to higher production efficiencies, which means lower costs. ..."
"... Do you ship American wood for processing in China and re-exporting to the US? You might have issues getting that material into China as smoothly as before. And then, the US Customs office might give you a hard time when you bring the goods in, too! ..."
"... Who knows what non-monetary barriers the Chinese will erect. One can count on their creativity ..."
"... Several US companies asked our company to look for assembly plants in Vietnam and, in those cases where we found some options, they were much more expensive than China. There is a reason why China's share of hard goods production in Asia has kept growing in recent years -- competition is often non-existent. ..."
"... Now, with China's products suddenly much more expensive, what are these competing countries going to do? Won't they take advantage of it and push wages further up, at least for the export manufacturing sector? ..."
"... Mexico should be the clear winner of this trade war. They are next to the US, their labor cost is comparable to that of China, and many American companies have long had extensive operations there. ..."
Based on
allthe
articles I have read about the current geopolitical situation, I am not optimistic about
the affect of the US-China trade war on American importers. Dan Harris, who wrote "
the US-China Cold War start now, " announced that a "mega-storm" might be coming, and he
may be right.
Now, if things turn out as bad as predicted, and if tariffs apply on more goods imported
from China to the US -- and at higher rates -- what does it mean for US importers?
What
will the damage from the US-China trade war look like?
These are my thoughts about who or what is going to be hit hard by the ongoing 'trade
war:'
1. Small importers will be hit much harder than larger ones
If you work with very large Chinese manufacturers, many of them have already started to set
up operations outside of mainland China, for the simple reason that most of their customers
have been pushing for that.
They are in Vietnam, Malaysia, etc. And this is true in most industries -- from apparel to
electronics.
Do they still have to import most of their components from China? It depends on their
footprints. As I wrote before :
You set up a mammoth plant and you don't want your high-value component suppliers to be
more than 1 hour away from you, for just-in-time inventory replenishment? They can be
requested to set up a new manufacturing facility next to you.
2. A higher total cost of goods purchased from China
This one is obvious. If you have orders already in production, they will cost you more than
expected.
The RMB might slide quite a bit, and that might alleviate the total cost. I hope you have
followed my advice and started paying your suppliers in RMB , to benefit
from it automatically.
Beijing might also give other forms of subsidies to their exporters. They might be quite
visible (e.g. a higher VAT rebate) or totally 'under the table'.
3. Difficult
negotiations with Chinese suppliers
Can you say the tariffs are Beijing's fault, and so your suppliers should absorb the
tariffs? That's not going to work.
When tariffs went up from 0 to 10% on some product categories last year, many suppliers
agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows:
higher orders lead to better deals with component suppliers and to higher production
efficiencies, which means lower costs.
When tariffs go from 10% to 35%, what else can US buyers give their counter-parties?
Payments in advance? Lower quality standards? I don't believe that.
4. Difficulties at
several levels in the supply chain
Do you ship American wood for processing in China and re-exporting to the US? You might have
issues getting that material into China as smoothly as before. And then, the US Customs office
might give you a hard time when you bring the goods in, too!
Who knows what non-monetary barriers the Chinese will erect. One can count on their
creativity
5. Short-term non-elasticity of alternative sources
There are a finite number of Vietnamese export-ready manufacturers that can make your
orders. And, chances are, their capacity is already full. If you haven't prepared this move for
months (or years), other US companies have. The early bird gets the worm
Same thing with Thailand, Indonesia, India, and so on, with the exception of apparel and
(maybe) footwear.
Several US companies asked our company
to look for assembly plants in Vietnam and, in those cases where we found some options, they
were much more expensive than China. There is a reason why China's share of
hard goods production in Asia has kept growing in recent years -- competition is often
non-existent.
6. Faster cost increases in other low-cost Asian countries
Now, with China's products suddenly much more expensive, what are these competing countries
going to do? Won't they take advantage of it and push wages further up, at least for the export
manufacturing sector?
There could be some 'silver linings' due to the trade war
It is not all bad news though. We may see these benefits caused by China and the USA
slugging it out too:
7. Many opportunities for Mexico
Mexico should be the clear winner of this trade war. They are next to the US, their labor
cost is comparable to that of China, and many American companies have long had extensive
operations there.
8. Rapid consolidation in the Chinese manufacturing sector
The fittest will survive. Many uncompetitive manufacturers and traders will fold. Consolidation
will accelerate. I often look at what happened in Japan and South Korea . Each of these countries
developed very fast and, when the going got tough, the export manufacturing sector got
devastated. Only the most competitive survived.
9. Relaxed enforcement of anti-pollution
regulations in China?
I'd bet that, if the tariffs hit hard, far fewer operations will get closed for
environmental reasons. Preserving employment and social peace will prevail.
Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages.
More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing,
and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says,
an era of slow growth is here to stay.
In Summers's recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a
"responsible nationalism". Now he argues that politicians must recognise that "the basic responsibility of government is to maximise
the welfare of citizens, not to pursue some abstract concept of the global good".
One curious thing about the pro-globalisation consensus of the 1990s and 2000s, and its collapse in recent years, is how closely
the cycle resembles a previous era. Pursuing free trade has always produced displacement and inequality – and political chaos, populism
and retrenchment to go with it. Every time the social consequences of free trade are overlooked, political backlash follows. But
free trade is only one of many forms that economic integration can take. History seems to suggest, however, that it might be the
most destabilising one.
... ... ...
The international systems that chastened figures such as Keynes helped produce in the next few years – especially the Bretton
Woods agreement and the General Agreement on Tariffs and Trade (Gatt) – set the terms under which the new wave of globalisation
would take place.
The key to the system's viability, in Rodrik's view, was its flexibility – something absent from contemporary globalisation,
with its one-size-fits-all model of capitalism. Bretton Woods stabilised exchange rates by pegging the dollar loosely to gold, and
other currencies to the dollar. Gatt consisted of rules governing free trade – negotiated by participating countries in a series
of multinational "rounds" – that left many areas of the world economy, such as agriculture, untouched or unaddressed. "Gatt's purpose
was never to maximise free trade," Rodrik writes. "It was to achieve the maximum amount of trade compatible with different nations
doing their own thing. In that respect, the institution proved spectacularly successful."
Partly because Gatt was not always dogmatic about free trade, it allowed most countries to figure out their own economic objectives,
within a somewhat international ambit. When nations contravened the agreement's terms on specific areas of national interest, they
found that it "contained loopholes wide enough for an elephant to pass", in Rodrik's words. If a nation wanted to protect its steel
industry, for example, it could claim "injury" under the rules of Gatt and raise tariffs to discourage steel imports: "an abomination
from the standpoint of free trade". These were useful for countries that were recovering from the war and needed to build up their
own industries via tariffs – duties imposed on particular imports. Meanwhile, from 1948 to 1990, world trade grew at an annual average
of nearly 7% – faster than the post-communist years, which we think of as the high point of globalisation. "If there was a golden
era of globalisation," Rodrik has written, "this was it."
Gatt, however, failed to cover many of the countries in the developing world. These countries eventually created their own system,
the United Nations conference on trade and development (UNCTAD). Under this rubric, many countries – especially in Latin America,
the Middle East, Africa and Asia – adopted a policy of protecting homegrown industries by replacing imports with domestically produced
goods. It worked poorly in some places – India and Argentina, for example, where the trade barriers were too high, resulting in
factories that cost more to set up than the value of the goods they produced – but remarkably well in others, such as east Asia,
much of Latin America and parts of sub-Saharan Africa, where homegrown industries did spring up. Though many later economists and
commentators would dismiss the achievements of this model, it theoretically fit Larry Summers's recent rubric on globalisation:
"the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global
good."
The critical turning point – away from this system of trade balanced against national protections – came in the 1980s. Flagging
growth and high inflation in the west, along with growing competition from Japan, opened the way for a political transformation.
The elections of Margaret Thatcher and Ronald Reagan were seminal, putting free-market radicals in charge of two of the world's
five biggest economies and ushering in an era of "hyperglobalisation". In the new political climate, economies with large public
sectors and strong governments within the global capitalist system were no longer seen as aids to the system's functioning, but
impediments to it.
Not only did these ideologies take hold in the US and the UK; they seized international institutions as well. Gatt renamed itself
as the World Trade Organization (WTO), and the new rules the body negotiated began to cut more deeply into national policies. Its
international trade rules sometimes undermined national legislation. The WTO's appellate court intervened relentlessly in member
nations' tax, environmental and regulatory policies, including those of the United States: the US's fuel emissions standards were
judged to discriminate against imported gasoline, and its
ban on imported shrimp caught without turtle-excluding
devices was overturned. If national health and safety regulations were stricter than WTO rules necessitated, they could only
remain in place if they were shown to have "scientific justification".
The purest version of hyperglobalisation was tried out in Latin America in the 1980s. Known as the "Washington consensus", this
model usually involved loans from the IMF that were contingent on those countries lowering trade barriers and privatising many of
their nationally held industries. Well into the 1990s, economists were proclaiming the indisputable benefits of openness. In an
influential 1995 paper, Jeffrey Sachs and Andrew Warner wrote: "We find no cases to support the frequent worry that a country might
open and yet fail to grow."
But the Washington consensus was bad for business: most countries did worse than before. Growth faltered, and citizens across
Latin America revolted against attempted privatisations of water and gas. In Argentina, which followed the Washington consensus
to the letter, a grave crisis resulted in
2002 , precipitating an economic collapse and massive street protests that forced out the government that had pursued privatising
reforms. Argentina's revolt presaged a left-populist upsurge across the continent: from 1999 to 2007, leftwing leaders and parties
took power in Brazil, Venezuela, Bolivia and Ecuador, all of them campaigning against the Washington consensus on globalisation.
These revolts were a preview of the backlash of today.
Rodrik – perhaps the contemporary economist whose views have been most amply vindicated by recent events – was himself a beneficiary
of protectionism in Turkey. His father's ballpoint pen company was sheltered under tariffs, and achieved enough success to allow
Rodrik to attend Harvard in the 1970s as an undergraduate. This personal understanding of the mixed nature of economic success may
be one of the reasons why his work runs against the broad consensus of mainstream economics writing on globalisation.
"I never felt that my ideas were out of the mainstream," Rodrik told me recently. Instead, it was that the mainstream had lost
touch with the diversity of opinions and methods that already existed within economics. "The economics profession is strange in
that the more you move away from the seminar room to the public domain, the more the nuances get lost, especially on issues of trade."
He lamented the fact that while, in the classroom, the models of trade discuss losers and winners, and, as a result, the necessity
of policies of redistribution, in practice, an "arrogance and hubris" had led many economists to ignore these implications. "Rather
than speaking truth to power, so to speak, many economists became cheerleaders for globalisation."
In his 2011 book The Globalization Paradox
, Rodrik concluded that "we cannot simultaneously pursue democracy, national determination, and economic globalisation." The
results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push
back, for better or for worse, against the campaigns and institutions that promised more globalisation. "I'm not at all surprised
by the backlash," Rodrik told me. "Really, nobody should have been surprised."
But what, in any case, would "more globalisation" look like? For the same economists and writers who have started to rethink
their commitments to greater integration, it doesn't mean quite what it did in the early 2000s. It's not only the discourse that's
changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The
benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good
times may be running out.
Statistics from Global Inequality
, a 2016 book by the development economist Branko Milanović, indicate that in relative terms the greatest benefits of globalisation
have accrued to a rising "emerging middle class", based preponderantly in China. But the cons are there, too: in absolute terms,
the largest gains have gone to what is commonly called "the 1%" – half of whom are based in the US. Economist Richard Baldwin has
shown in his recent book, The Great Convergence, that nearly all of the gains from globalisation have been concentrated in six countries.
Barring some political catastrophe, in which rightwing populism continued to gain, and in which globalisation would be the least
of our problems – Wolf admitted that he was "not at all sure" that this could be ruled out – globalisation was always going to slow;
in fact, it already has. One reason, says Wolf, was that "a very, very large proportion of the gains from globalisation – by no
means all – have been exploited. We have a more open world economy to trade than we've ever had before." Citing The Great Convergence,
Wolf noted that supply chains have already expanded, and that future developments, such as automation and the use of robots, looked
to undermine the promise of a growing industrial workforce. Today, the political priorities were less about trade and more about
the challenge of retraining workers , as technology renders old jobs obsolete and transforms the world of work.
Rodrik, too, believes that globalisation, whether reduced or increased, is unlikely to produce the kind of economic effects it
once did. For him, this slowdown has something to do with what he calls "premature deindustrialisation". In the past, the simplest
model of globalisation suggested that rich countries would gradually become "service economies", while emerging economies picked
up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected
to have more industrial potential are going through the stages of automation more quickly than previously developed countries did,
and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.
For both Rodrik and Wolf, the political reaction to globalisation bore possibilities of deep uncertainty. "I really have found
it very difficult to decide whether what we're living through is a blip, or a fundamental and profound transformation of the world
– at least as significant as the one that brought about the first world war and the Russian revolution," Wolf told me. He cited
his agreement with economists such as Summers that shifting away from the earlier emphasis on globalisation had now become a political
priority; that to pursue still greater liberalisation was like showing "a red rag to a bull" in terms of what it might do to the
already compromised political stability of the western world.
Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced
by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill
Clinton passed Nafta, but failed to expand safety nets. "The issue is that the people are rightly not trusting the centrists who
are now promising compensation," Rodrik said. "One reason that Hillary Clinton didn't get any traction with those people is that
she didn't have any credibility."
Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues
for global growth, and that much of the damage done by globalisation – economic and political – is irreversible. "There is a sense
that we're at a turning point," he said. "There's a lot more thinking about what can be done. There's a renewed emphasis on compensation
– which, you know, I think has come rather late."
As Noam Chomsky
says, the term globalisation has been appropriated by a narrow sector of power and privilege to
refer to their version of international integration and it makes sense for them to own the term
because anyone who is opposed to their version becomes anti-globalisation -- someone who is
primitive and wants to go back to the stone age and that everyone likes international integration
but not the investor rights version of it.
In reality globalization was a politically correct term for neocolonialism
Notable quotes:
"... In finance, the change was marked by a fundamental shift in governments' attitudes away from managing capital flows and toward liberalization ..."
Globalization is in trouble. A populist backlash, personified by U.S. President Donald
Trump, is in full swing. A simmering trade war
between China and the United States could easily boil over. Countries across Europe are
shutting their borders to immigrants. Even globalization's biggest boosters now concede that it
has produced lopsided benefits and that something
will have to change .
Today's woes have their roots in the 1990s, when policymakers set the world on its current,
hyperglobalist path, requiring domestic economies to be put in the service of the world economy
instead of the other way around. In trade, the transformation was signaled by the creation of
the World Trade Organization, in 1995. The WTO not only made it harder for countries to shield
themselves from international competition but also reached into policy areas that international
trade rules had not previously touched: agriculture, services, intellectual property,
industrial policy, and health and sanitary regulations. Even more ambitious regional trade
deals, such as the North American Free Trade Agreement, took off around the same time.
In finance, the change was marked by a fundamental shift in governments' attitudes away from
managing capital flows and toward liberalization. Pushed by the United States and global
organizations such as the International Monetary Fund and the Organization for Economic
Cooperation and Development, countries freed up vast quantities of short-term finance to slosh
across borders in search of higher returns.
At the time, these changes seemed to be based on sound economics. Openness to trade would
lead economies to allocate their resources to where they would be the most productive. Capital
would flow from the countries where it was plentiful to the countries where it was needed. More
trade and freer finance would unleash private investment and fuel global economic growth.
But
these new arrangements came with risks that the hyperglobalists did not foresee, although
economic theory could have predicted the downside to globalization just as well as it did the
upside.
Globalization is simply a neoliberal economic substitute for colonialism.
Neoliberals contrary to popular opinion do not believe in self-regulating markets as
autonomous entities. They do not see democracy as necessary for capitalism.
The neoliberal globalist world is not a borderless market without nations but a doubled
world (economic -global and social- national) . The global economic world is kept safe from
democratic national demands for social justice and equality, and in return each nation enjoys
cultural freedom.
Neoliberals see democracy as a real problem. Democracy means the unwashed masses can
threaten the so called market economy (in fact manipulated and protected markets) with worker
demands for living wages and equality and consumer demands for competitive pricing and safe
products. Controlling both parties with money prevents that.
In fact, neoliberal thinking is comparable to that of John Maynard Keynes in one respect :
"the market does not and cannot take care of itself".
The neoliberal project did not liberate markets so much as protect them by protecting
capitalism against the threat of democracy and to reorder the world where borders provide a
captive market
Neoliberals insulate the markets by providing safe harbor for capital, free from fear of
infringement by policies of progressive taxation or redistribution. They do this by
redesigning government, laws, and other institutions to protect the market.
For example the stock market is propped up by the Feds purchases of futures, replacing the
plunge protection teams intervention at an even more extreme level. Manipulation of economic
statistics by the BLS also serve a similar purpose.
Another example is getting government to accept monopoly capitalism over competitive
capitalism and have appointed judges who believe illegal collusion is nothing more than
understandable and legal "conscious parallelism"
Now it seems to me the Koch-Soros think tank is an attempt to unify the neoliberal
globalist forces which represent factions from international greenies to nationalist
protectionists . In other words to repackage and rename neoliberal globalism while keeping
its essence. Be interesting to see what they come up with.
As for China opening to private international finance. They already did that but this
takes it to a new level. Like I said. Fake wrestling. This was one of the demands in the
trade negotiations by Trump. Why take one of your chips off the table if the game is for
real?
China was Made in USA (includes the City of London) like the EU and Putins neoliberal
Russia.
One day they will get around telling us they are all buddies, or maybe not. I suspect they
have a lot of laughs playing us like they do.
I could be wrong but this is more interesting than the official and semi official
narratives.
"... if the US ever held unipolar control in reality it was briefly during the period after the downfall of the USSR and up until the conquest of Iraq. ..."
"... An economic system, of which the financial system is a part of, is one of the fundamental structures of any society. Societies in today's world are defined at the sovereign state level, and the economic systems are defined by the governments of these states ..."
"... 'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not about global commerce, but rather about an effort by a certain group of wealthy elites, primarily centered in London and New York, and commonly referred to as 'Globalists' to transfer the authority for the definition and control of economic systems from sovereign states to a set of international institutions under their control. ..."
"... In doing so they strip the sovereignty from sovereign states, as as already happened with the EU, and create a global dictatorship, under the control of the 'Globalists' and completely isolated from any democratic oversight. A fascist project in the purest sense of fascism. ..."
"... The 'Multi-polar' group of nations are those nations who oppose this fascist project and who are working to maintain and restore the sovereignty of nations. ..."
Stating "globalism" is antithetical to "multipolarity" is a non-sequitor.
Globalism is the financial structure (or "system" if you will) through which capitalist
enterprises function. This is complex of course and includes capital markets, corporations,
multinational corporations, currency markets, commodities markets, trading agreements.
Politicians intervene in the functioning of globalism so there is seldom if ever anything
like a globalism free of political influence.
OTOH, "multipolarity" has no structure that I can see. It is an empty vessel, purely a
political, statist-inspired idea (whereas globalism is a "thing" which contains
political and economic ideas of course but those ideas may or may not be statist in concept
depending on the context) which can mean anything to anyone at any point in time.
I guess I would say the term is purely Orwellian. Thus, without reading anything other
than James's comment I would guess the author's idea is either nonsensical or propagandistic
in nature.
For me, the world became "multipolar" the minute the US invaded Iraq in 2003. The idea
that the US wishes to maintain its "unipolar" leadership of the world may be true in the
wishful sense of some neocons, however if the US ever held unipolar control in reality it
was briefly during the period after the downfall of the USSR and up until the conquest of
Iraq.
Today, I view the world as both multipolar and globalist. While many of the political and
economic tensions we see result from the disconnects between national political and global
economic conditions, I think we must admit if we are honest that many of the more recent
tensions are simply the result of Trump's presidency, which has the intended affect of being
"a bull in the china shop" of the globalist system.
This is not necessarily a bad thing in theory. Sadly, however, Trump is a geopolitical and
foreign policy moron who doesn't know what he is doing beyond enriching himself and creating
daily fake news headlines in hopes of being re-elected on behalf of the same global elites he
playacts at combatting for his worshipful audience of true believers.
'Globalism is the financial structure (or "system" if you will) through which capitalist
enterprises function.'
What B.S.!!
An economic system, of which the financial system is a part of, is one of the
fundamental structures of any society. Societies in today's world are defined at the
sovereign state level, and the economic systems are defined by the governments of these
states , which are supposed to function on behalf of the population of each state, and
in democratic states, are also supposed to be under the control of the overall population
through their democratic institutions. International institutions are there to coordinate
commerce between the different economic systems of sovereign states.
'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not
about global commerce, but rather about an effort by a certain group of wealthy elites,
primarily centered in London and New York, and commonly referred to as 'Globalists' to
transfer the authority for the definition and control of economic systems from sovereign
states to a set of international institutions under their control.
In doing so they strip the sovereignty from sovereign states, as as already happened
with the EU, and create a global dictatorship, under the control of the 'Globalists' and
completely isolated from any democratic oversight. A fascist project in the purest sense of
fascism.
The 'Multi-polar' group of nations are those nations who oppose this fascist project
and who are working to maintain and restore the sovereignty of nations.
@ donkeytale 15
I think the world has always been multipolar, the differences that give the definition
coming to (being presented to) the forefront, or being dissimilated, according to choice and
circumstance. The globalist direction aims to interweave or merge these differences (cultural
and historic, religion, philosophy and so on), or at least bring them under a common control.
So the idea that multipolarity represents anything more than increased recognition of various
regional power as opposed to recognition of one regional power (say western) as more visible,
is not much more than an indication of how global policy will be conducted, i.e. with an
emphasis on regional responsibility.
Recent US policy is not aimed at destroying the globalist order, it is a result of the
failure of one format of the globalist order, where the global financial order no longer
fitted into national or regional economic sense. This was the gfc, and there is simply no way
to continue the flow of trade and finance as it existed for the previous decades. The easing
of rates across the globe is paliative, it is no solution, you only have to look at national
debt levels to understand this, or in Eurozone try target2 differences. The world is now
partly funded by negative yielding debt. All of this works contrary to capitalist (in its
basic honest philosophy) understanding. In short "something" is going to happen to readjust
this circumstance, planned or otherwise. I have watched how in EU the single currency has
been used to takeover the traditional national hierarchies (banking, political and to a
degree social), but we don't have that sort of framework accepted at global level, only
various currency pegs, bilateral arrangements and so on. The IMF and sdr is not much liked.
What I have noted is virtual central bank currency is being promoted in several ways, be it
the bis just announcing it may become a necessity face to cryptocurrency or similar (with a
caveat of harmonising monetary policy) , EU organising a parallel payment system that avoids
commercial banks, even Instex is along these lines. Where the US and some others truly stand
with regard to this is a different question, as for now it (et al) still enjoy a financial
hegemony that is both organised and profitable. Interesting times, I just hope that a major
event is not the catalyst for reform, that the various parties can agree to withdraw to more
localised structure and agreement if any grand plans meet the resistance or failure that is
already partly visible. I doubt that will be allowed though, by the time people really want
to take part, there won't be much option left and circumstance will already be already
confused and conflictive.
@31 donkeytale.. well, if the usa didn't commit as much paper money as it does to the
military complex it runs, i suppose the financial complex where the us$ can be printed ad
nauseam might come into question.. the sooner oil isn't pegged to the us$ and etc. etc.
happens, the better off the world will be... and, i don't blame the usa people for this..
they are just being used as i see it - much the same here in canada with our politicians
thinking the prudent thing to do is to support the status quo.. the problem is the status quo
can only go on for so long, before a change inevitably happens...
as for swift - they went along with usa sanctions back in 2011 on iran, but then it was
brought to court in europe and overturned... but again - they are back in the same place
bowing down to usa exceptionalism... call it what you want.. another system needs to get made
if this one that exists is beholden to a special interest group - usa-uk-europe, where others
are 2nd rate citizens of the world... same deal imf... these world financial institutions
need to be changed to reflect the changes that are taking place... the voting rights of the
developed countries are skewed to favour the ones who have been raping and pillaging africa,
and etc. etc.. you may not think it matters, but i personally do.. and i don't blame the usa
for it..but they are being used as a conduit to further an agenda which is very unbalanced
and unfriendly to the world as i see it..
I am afraid that I cannot agree with much of what you said.
Dictatorship, as a governance system, has always failed, and will always fail. The
'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in the U.S.
in 1980 and the EU since 1990, have clearly demonstrated this fact through the destruction of
the economies of the U.S. and much of Europe and the impoverishment of their populations. And
since 2001, they have used the U.S. and British military and intelligence services and NATO
as their personal bludgeon in order to force the submission of any state that did not
voluntarily submit to their project of a 'Global' dictatorship.
Resistance to this 'Globalist' project is at the root of almost all conflicts in the world
today. The 'Multi-Polar' nations resisting the 'Globalists', in Ukraine, Syria, North Korea,
Venezuela, etc. is one front in this resistance. The other front is the resistance of
'Nationalists' (such as Trump, the Brexiteers, the Yellow Vests, and populists across Europe)
to the 'Globalists.
The Trump Presidency is not the cause of tensions in the world today, as you suggest, but
rather the symptom. Trump understands that without an industrial base, the U.S. is condemned
to becoming the 'India' of the Americas'. The central theme of his actions is to restore the
U.S. industrial base and U.S. sovereignty, which have largely been destroyed by the
'Globalists' and their 'Deep State' machine over the past 40 years. The 'Globalists' need
only the U.S. military and intelligence services, and care nothing for its population and
less for its sovereignty, and thus are fighting Trump every step of the way.
Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's
water with respect to Iran, but he is just about the only American politician that I see that
is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.
Reversing the 'Globalization' that has savaged the U.S. and Europe over the past several
decades will not come easily, nor without pain and tensions, and winners and losers. However
failure to do so guarantees the likely rapid and long term decline and impoverishment of all
populations under 'Globalist' control.
dh-mtl @29 explained it well, I thought, but some still don't seem to get it.
It is the difference between the UN, which has a law-based charter which upholds the national
sovereignty of each nation and forbids aggression against any sovereign country, and
the WTO, which is a rules-based agreement which forbids any national government to pass laws
which interfere in the profits of corporations.
Globalism is the project in which capital has complete freedom to do as it will, while humans
and national governments are forbidden such freedom.
Putin and Lavrov frequently point to the difference between international law, which they
support, and the "rules-based order" which the US and its partners-in-crime support, in which
the rules are used to destroy sovereign countries and enrich the multi-national corporations
which strip the planet at will, and go to the cheapest labor countries, with no environmental
laws, for their global production lines.
A multi-polar world is one with many sovereign countries, ruled by international law,
respected by all, with peaceful relations between all countries.
Globalism is when corporations rule the world, and we continue on the path of destruction of
all the natural wealth of the world in the turning of nature into commodities and then
trash.
@ wagelaborer who wrote
"
Globalism is the project in which capital has complete freedom to do as it will, while humans
and national governments are forbidden such freedom.
"
Perfectly stated!
I appreciate you, dh-mtl, bevin and others responding to donkeytale. I have not read the
comment because donkeytale is on bypass for me but it is nice to read other commenters taking
on donkeytale BS for others to see....thanks
Sorry if I need to pick your resopnse to donkeytale apart but there are a lot of
inconsistencies in your argument.
The 'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in
the U.S. in 1980 and the EU since 1990, have clearly demonstrated this fact through the
destruction of the economies of the U.S. and much of Europe and the impoverishment of their
populations.
You seem to imply that the 'globalists' (illuminati, Zionist bankers etc., etc.) did not
exist or had power before the 1980s, which could not be further from the truth. There are
several reasons why neo-liberalism took hold in the 1980s, creating the economic narrative
and agenda of today, none of which, are related to some kind of power grab by people that did
not hold any power beforehand. The threat of the cold war was waning in the 1980s and elites
felt less pressured by local populations potentially becoming 'too' sympathetic to communism
anymore. So they began rolling back social policies implemented in the post-war years to
counter communism's appeal. Computer technology going mainstream, creating all sorts of
economic spillovers to be harnessed by increased open and international trade was another
reason, there were many more. But the people you call 'globalists' controlled matters much,
much earlier than the 1980s.
The other front is the resistance of 'Nationalists' (such as Trump, the Brexiteers, the
Yellow Vests, and populists across Europe) to the 'Globalists.
If there truly were such politicians as 'nationalists' who somehow only hold the best
interest of their native people at heart, then why is that most European populists cosy up to
Israel? None of them have tried to reclaim control over their Central Banks and in the case
of i.e. Italy, do they try to break free from the Euro? Why are Polish nationalists rabidly
supporting the build up of US arms on their territory? I think it is about time to see beyond
this silly dichotomy of 'Globalist' vs 'Nationalist', at least while these Nationalists do
nothing substantial to actually help their lot and further squeeze the lower classes of their
countries in good neo-liberal fashion, same as their Globalist political 'opponents' they
claim to oppose.
Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's
water with respect to Iran, but he is just about the only American politician that I see
that is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.
So you admit that Trump is essentially a controlled zionist buffoon but at the same time
he is working towards restoring US sovereignty on behalf of the people? You mean he worked
for the US people when he lowered taxes for the rich even further, creating an ever larger US
public debt, and throwing Americans further into debt servitude of private finance? Or do you
mean his still open promise to invest large sums in the US crumbling infrastructure? Oh
right, he has instead opted to increase defence spending to combat the US many imaginary
enemies around the globe.
Look, I agree with you that global neo-liberalism is bad for the vast majority of people
on this planet but don't go looking for help from false prophets, such as Trump or other
'nationalists', you will only find yourself completely disappointed before long.
donkeytale , Jun 30, 2019 6:48:21 PM |
58dh-mtl , Jun 30, 2019 6:50:23 PM |
59
@50 Alexander P
Response to a few of your criticisms.
1. You say 'You seem to imply that the 'globalists' (illuminati, Zionist bankers etc.,
etc.) did not exist or had power before the 1980s'.
Not at all. They lost power from the mid-1930s to 1980. They regained power with Reagan,
followed by Clinton, W, and Obama. You only need to look at any graph that shows when income
inequality in the U.S. began to ramp up. The date is clear - 1980.
2. You say. 'If there truly were such politicians as 'nationalists' who somehow only hold
the best interest of their native people at heart'.
I didn't say that these 'Nationalists' or 'Populists' hold the best interests of their
native peoples at heart. Usually they are only interested in what they see as best for
themselves. But there is no doubt that they are resisting the 'Globalists' push to strip
their countries of their sovereignty, to transfer their wealth to the 'Globalist' elites, to
transfer their industries to wherever labor is the cheapest. I said that this was a 'second
front' against the 'Globalists'. And there is no doubt, from the fight that the 'Globalists'
are waging against Trump, 'Brexit' and populists and nationalists across Europe, that the
'Globalists' take this 'front' seriously.
3. You say. 'don't go looking for help from false prophets, such as Trump'.
You are right. It is unlikely that Trump will be able to 'Make America Great Again'. At
best he may be able to break the 'Globalists' hold on power in the U.S. However, this is a
necessary first step if the U.S. is ever to recover wealth and power that it had during the
middle of the last century, but which today is rapidly evaporating.
I agree with Alexander P that nationalist and populist presentation is often either
controlled opposition or a method of splintering and isolating influence. That is not to say
there are a lot of public in many countries who are sincere in their sentiment.
Sorry no link, recent :
"As he arrived at the Kempinski hotel lobby last December, journalists scuffled with
bodyguards as they tried to get their microphones and cameras close. Despite being jostled,
Zanganeh remained calm and waited to deliver a simple message: Iran can’t participate
in OPEC’s production cuts as long as it remains under U.S. sanctions and won’t
allow other members to steal its rightful market share."
I.E. approval for continued reduced opec oil supply to support prices depends on Iran (?),
lower prices otherwise affecting all other producers, and/or Iran is making the case that
sanctions are a theft of market share by other producers. The latter has been a part of the
cause of hostility in the gulf.
In Germany
"The 2018 report by the Federal Office for the Protection of the Constitution of Germany
(Bundesmat fur Verfassungsschutz, BfV), which was released on June 27, 2019 by the Federal
Minister of the Interior, Horst Seehofer and Thomas Haldenwang, head of the organization,
examines the activities of the intelligence services of the Iranian regime in Germany....
The BfV annual report states: "The central task of the Iranian intelligence services is to
spy against opposition movements and confront these movements. In this regard, evidences of
state-sponsored terrorism in Europe, which originates in Iran, have intensified during 2018."
" etc
is being used by ncr (the article source) to the effect of calling for closure of the
Iranian embassy. That aside, the report does show Germany is moving towards, or is willing
to, apply pressure on Iran now. France has also given indication that it is not fully behind
Iran (reprimand and warning on not respecting jcpoa etc.)
You are correct to say inequality began rising again in 1980; however, the rise must be
attributed to Carter and Volker--Reagan just continued the process. It seemed odd the GHW
Bush initially opposed it as "Voodoo Economics" but readily championed it all as VEEP, making
it just a political posture in the nomination race.
Thanks for the excellent response. One thing I failed to take into account is the
difference between the EU and the US financial systems so thanks for that corrective
explanation.
The Euro represents the biggest failure of the EU from where I sit. Centralised control of
the currency and banking systems is a grave error in that construct and the "European
Parliament" just seems too silly for me to even contemplate, although I'm sure there is some
logical explanation for its existence that I'm missing.
And you bet, I'm also sure the day of reckoning for the global debt overload is fast
approaching. What I don't understand is how one form of capitalism (neoliberal) versus
another (state managed) makes any difference in how this debt overload developed. China, for
instance, has used similar stimulus methods more frequently even than the US since 2008 to
keep its economic growth chugging along and certainly way more than the EU, which under
stimulated its own economy in response to the recession.
IMHO, Brexit is a forced over the top politicised reaction to this conservative German-led
response in light of the fact the UK kept its own currency and banking systems separate and
had the means to provide stimulus but didn't under the Tory buffoons in charge.
Grexit made much more sense to me than Brexit for many reasons. I was dismayed when the
Greek people failed in their courage after voting in Syriza follow through and tell the
Germans to take the Euro and their debt and put it where the sun don't shine.
What I believe people are tending to forget or overlook, such as wagelabourer @ 48 and
dh-mtl elsewhere, that while these postwar international re-orderings such as NATO, the UN
and the EU are nowhere near perfect, they are also not purely NWO conspiratorial constructs.
Rather they were created for a very specific purpose stemming from a lesson of history which
seems to have been rather easily tossed aside because of the relative success of these same
institutions: that is, clashing nationalisms inevitably lead to major conflict and
devastating wars, especially among the major imperialist states.
A while ago we discussed the obfuscation of classical economics in order to elevate the Junk
Economics of Randian Neoliberalism. And with Trump's Trade War and the 2020 election cycle's
start, I think it wise to revisit what's proven to be a timeless Michael Hudson essay from
2010, "America's
China Bashing: A Compendium of Junk Economics" , which provided the ground work for the
subsequent book he published on the topic.
The following excerpt remains the underlying issue prompting Trump's Trade War with
China:
"The cover story is that foreign exchange controls and purchases of U.S. securities keep
the renminbi's exchange rate low, artificially spurring its exports. The reality, of
course, is that these controls protect China from U.S. banks creating free 'keyboard
credit' to buy out Chinese companies to buy out Chinese companies or load down its economy
with loans to be paid off in renminbi whose value will rise against the deficit-ridden
dollar. It's the Wall Street arbitrage opportunity of the century that banks are
pressing for, not the welfare of American workers ."
As the years between have shown, the Chinese aren't fools and probably know more about
economics than their politicized US counterparts, Trump especially included.
@ William Gruff with the dh-mtl update about "control" during the early part of last
century....I agree and thanks
@ karlof1 with the Michael Hudson link.....I put a comment up last night with a quote from
Xinhuanet
"
BEIJING, June 30 (Xinhua) -- China on Sunday rolled out revised negative lists for foreign
investment market access, introducing greater opening-up and allowing foreign investors to
run majority-share-controlling or wholly-owned businesses in more sectors.
"
It makes me worry about how much of "China" will be allowed to be bought/controlled by the
private finance folk. I have been wondering about this since 2008 when the US started running
the "printing presses" bigly enough to double the deficit in less than 10 years.....I didn't
get any of those trillions, did you? At some point I expect there to be a meeting of global
"big wigs" who say they own this or that and wonder how that meeting will turn out relative
to Bretton Woods.
I still see China throwing out a faux lifeline to the private finance folk that will be
reeled in after the transition to a China led world.....want to make it look like the Koch
brothers and Soros with their new peace tank are leading the parade.....
"... Mr. Lidow is among the semiconductor executives in the United States who have become concerned that the trade war with China -- particularly the Trump administration's ban on selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He fears that recent events have convinced Chinese companies that American component makers can no longer be seen as dependable partners and are permanently shifting away from them. ..."
"... In May, President Trump ordered American companies on national-security grounds to stop selling components to companies like Huawei , China's big maker of mobile phones and networking equipment. And the administration placed five other Chinese entities on the same blacklist this month, including the computer maker Sugon and three subsidiaries. ..."
"... China has responded by saying it would put together its own "unreliable entities list," including many American tech companies. ..."
"... "The U.S. is in danger of becoming the vendor of last resort for China," said Walden Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing chips ..."
SAN FRANCISCO -- Alex Lidow has sold semiconductors in China for decades, starting at a
company, called International Rectifier, that his father and grandfather founded in the Los
Angeles area in 1947.
Now Mr. Lidow runs Efficient Power Conversion, which makes chips that manage electrical
power in cars and other products. Efficient Power has a strong foothold in China, but has
lately run into resistance from customers there that he traces to moves in Washington.
Mr. Lidow is among the semiconductor executives in the United States who have become
concerned that the trade war with China -- particularly the Trump administration's ban on
selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He
fears that recent events have convinced Chinese companies that American component makers can no
longer be seen as dependable partners and are permanently shifting away from them.
"In my 40 years in this business, I've had friends in China that viewed me as a trusted
supplier," Mr. Lidow said. "They can't now." His experience is part of the fallout affecting the American chip industry, one of the tech
sectors hardest hit by the tit-for-tat between the United States and China over trade and
national security.
In May, President Trump ordered American companies on national-security grounds to
stop selling
components to companies like Huawei , China's big maker of mobile phones and networking
equipment. And the administration placed
five other Chinese entities on the same blacklist this month, including the computer maker
Sugon and three subsidiaries.
Even if a new trade deal eases tensions -- Mr. Trump is set to meet with President Xi
Jinping of China in Osaka, Japan, on Saturday -- American chip executives and others said
lasting damage had already been done. They said Chinese officials and companies would step up
efforts to design and make more chips domestically. And Chinese customers seem likely to turn
to vendors from countries like Japan, South Korea and Taiwan if no homegrown chips are
available.
"The U.S. is in danger of becoming the vendor of last resort for China," said Walden
Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing
chips
Already, big American chip makers have taken a financial hit from the China bans. Micron Technology, which sells two of the
most widely used varieties of memory chips, disclosed Tuesday that the Huawei ban had lowered sales in its most recent quarter
by nearly $200 million. Huawei is Micron’s largest customer, accounting for around 13 percent of its revenue.
"... "The problem, is that China knows time is short for the President and subsequently there is 'no rush' to conclude a 'trade deal' for several reasons: ..."
"... The pressure is on the Trump Administration to conclude a "deal," not on China. Trump needs a deal done before the 2020 election cycle AND he needs the markets and economy to be strong. ..."
"... corporate profits continued to come under pressure. As noted previously, corporate profits have declined over the last two quarters and are at the same level as in 2014 with the stock market higher by almost 60%. ..."
"... But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't been paying attention. China has launched a national call in their press to unify support behind China's refusal to give into Trump's demands. To wit: ..."
"... "Lying behind the trade feud is America's intention to stifle China's development. The U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the 'storm' through compromise. ..."
By agreeing to continue talks without imposing more tariffs on China, China gains ample
running room to continue to adjust for current tariffs to lessen their impact. More
importantly, Trump gave up a major bargaining chip – Huawei.
"One of the things I will allow, however, is -- a lot of people are surprised we send and
we sell to Huawei a tremendous amount of product that goes into a lot of the various things
that they make -- and I said that that's OK, that we will keep selling that product."
No, a lot of people weren't surprised, just Trump as there has been pressure applied by U.S.
technology firms to lift the ban on Huawei. While he may have appeased his corporate campaign
donors for now, Trump gave up one of the more important "pain points" on China's economy.
This gives China much needed room to run.
Let's review what
we said a couple of months ago as to why their will ultimately be no deal.
"The problem, is that China knows time is short for the President and subsequently there
is 'no rush' to conclude a 'trade deal' for several reasons:
China is playing a very long game. Short-term economic pain can be met with
ever-increasing levels of government stimulus. The U.S. has no such mechanism currently,
but explains why both Trump and Vice-President Pence have been suggesting the Fed restarts
QE and cuts rates by 1%. (Update: Trump
says the U.S. should have Mario Draghi at the helm of U.S. monetary policy.)
The pressure is on the Trump Administration to conclude a "deal," not on China. Trump
needs a deal done before the 2020 election cycle AND he needs the markets and economy to be
strong. If the markets and economy weaken because of tariffs, which are a tax on domestic
consumers and corporate profits, as they did in 2018, the risk off electoral losses rise.
China knows this and are willing to 'wait it out' to get a better deal.
As I have stated before, China is not going to jeopardize its 50 to 100-year economic
growth plan on a current President who will be out of office within the next 5-years at
most. It is unlikely, the next President will take the same hard line approach on China
that President Trump has, so agreeing to something that is unlikely to be supported in the
future is unlikely. It is also why many parts of the trade deal already negotiated don't
take effect until after Trump is out of office when those agreements are unlikely to be
enforced.
In the meantime, as noted in #3 above, corporate profits continued to come under pressure.
As noted previously, corporate profits have declined over the last two quarters and are at the
same level as in 2014 with the stock market higher by almost 60%.
... ... ...
But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't
been paying attention. China has launched a national call in their press to
unify support behind China's refusal to give into Trump's demands. To wit:
"Lying behind the trade feud is America's intention to stifle China's development. The
U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the
'storm' through compromise.
History proves that compromise only leads to further dilemmas. During previous trade
tensions between the U.S. and Japan, Japan made concessions. As a result, its political
stability and economic development were adversely affected, with structural reform being
suspended and hi-tech companies being severely damaged.
China, with a population of 1.4 billion, is the world's largest manufacturing base.
Industrial upgrading and hi-tech innovation are crucial to China's economic development.
China needs to leave more resources to its descendants by protecting the environment, and
reaping the dividends of further opening-up. These are the core interests of China, and it
will never give them up.
The only way for a country to win a war is through development, not compromise. To achieve
development, China will open its door wider to the world and fight to the end."
These are Xi Jinping's mandates, dictated directly from his party, for the meeting with the
United States president in Osaka.
The only possible outcome for Trump was exactly what happened. Nothing. Just an agreement to
talk more.
"If your enemy is secure at all points, be prepared for him. If he is in superior
strength, evade him. I f your opponent is temperamental, seek to irritate him. Pretend to be
weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces
are united, separate them. If sovereign and subject are in accord, put division between them.
Attack him where he is unprepared, appear where you are not expected. "
China has been attacking the "rust-belt" states, which are crucial to Trump's 2020
re-election, states with specifically targeted tariffs. As noted by
MarketWatch:
"China has lashed back with tariffs on $110 billion in American goods, focusing on
agricultural products in a direct and painful shot at Trump supporters in the U.S. farm
belt."
While Trump is operating from a view that was a ghost-written, former best-seller, in the
U.S. popular press, Xi is operating from a centuries-old blueprint for victory in battle.
China clearly won this round, and the pressure is now squarely on Trump to get a deal done
before the 2020 election.
"... " China by contrast has historically conducted statecraft based on the concept of a civilization state – under which its strength is not measured by the weakness and subjugation of others but by its internal achievements. " ..."
"... In my view the Usa had an excellent opportunity to enact in a positive way after WW2 but blew it. The main reason was the failure to live up to the above quoted characterisation of the Chinese. To encourage potential achievers in the best sense of the word. ..."
"... Instead the Us oligarchy held back independent and creative thinking and brainwashed the population, in a way that weakened them. Jfk tried to encourage his countrymen but other forces prevailed. ..."
A.B. Abrams: In the introduction to this work I highlight that a fundamental shift in world
order was facilitated by the modernization and industrialization of two Eastern nations –
Japan under the Meiji Restoration and the USSR under the Stalinist industrialization program.
Before these two events the West had retained an effective monopoly on the modern industrial
economy and on modern military force. Russia's image is still affected by the legacy of the
Soviet Union – in particular the way Soviet proliferation of both modern industries and
modern weapons across much of the region was key to containing Western ambitions in the Cold
War. Post-Soviet Russia has a somewhat unique position – with a cultural heritage
influenced by Mongolia and Central Asia as well as by Europe. Politically Russia remains
distinct from the Western Bloc, and perceptions of the country in East Asia have been heavily
influenced by this. Perhaps today one the greatest distinctions is Russia's eschewing of the
principle of sovereignty under international law and its adherence to a non-interventionist
foreign policy. Where for example the U.S., Europe and Canada will attempt to intervene in the
internal affairs of other parties – whether by cutting off parts for
armaments ,
imposing economic sanctions or even launching military interventions under humanitarian
pretexts – Russia lacks a history of such behavior which has made it a welcome presence
even for traditionally Western aligned nations such as the Philippines, Indonesia and South
Korea.
While the Western Bloc attempted to isolate the USSR from East and Southeast Asia by
supporting the spread of anticommunist thought, this pretext for shunning Russia collapsed in
1991. Today the West has had to resort to other means to attempt to contain and demonize the
country – whether labelling it a human rights abuser or threatening its economic and
defense partners with sanctions and other repercussions. The success of these measures in the
Asia-Pacific has varied – but as regional economies have come to rely less on the West
for trade and grown increasingly interdependent Western leverage over them and their foreign
policies has diminished.
Even when considered as a Western nation, the type of conservative Western civilization
which Russia may be seen to represent today differs starkly from that of Western Europe and
North America. Regarding a Russia Pivot to Asia, support for such a plan appears to have
increased from 2014 when relations with the Western Bloc effectively broke down. Indeed, the
Russia's future as a pacific power could be a very bright one – and as part of the up and
coming northeast Asian region it borders many of the economies which appear set to dominate in
the 21 st century – namely China, Japan and the Koreas. Peter the Great is
known to have issued in a new era of Russian prosperity by recognizing the importance of
Europe's rise and redefining Russia as a European power – moving the capital to St
Petersburg. Today a similar though perhaps less extreme pivot Eastwards towards friendlier and
more prosperous nations may be key to Russia's future.
The Saker: We hear many observers speak of an informal but very profound and even
game-changing partnership between Putin's Russia and Xi's China. The Chinese even speak of a "
strategic comprehensive partnership of coordination for the new era ". How would you
characterize the current relationship between these two countries and what prospects do you see
for a future Russian-Chinese partnership?
A.B. Abrams: A Sino-Russian alliance has long been seen in both the U.S. and in Europe as
one of the greatest threats to the West's global primacy and to Western-led world order. As
early as 1951 U.S. negotiators meeting with Chinese delegations to end the Korean War were
instructed to focus on the differences in the positions of Moscow and Beijing in an attempt to
form a rift between the two. Close Sino-Soviet cooperation seriously stifled Western designs
for the Korean Peninsula and the wider region during that period, and it was repeatedly
emphasized that the key to a Western victory was to bring about a Sino-Soviet split. Achieving
this goal by the early 1960s and bringing the two powers very near to a total conflict
significantly increased prospects for a Western victory in the Cold War, with the end of the
previously united front seriously undermining nationalist and leftist movements opposing
Western designs from Africa and the Middle East to Vietnam and Korea. Both states learned the
true consequences of this in the late 1980s and early 1990s when there was a real risk of total
collapse under Western pressure. Attempts to bring an end to China's national revolution
through destabilization failed in 1989, although the USSR was less fortunate and the results
for the Russian population in the following decade were grave indeed.
Today the Sino-Russian partnership has become truly comprehensive, and while Western experts
from Henry Kissinger to the late Zbigniew Brzezinski among others have emphasized the
importance of bringing about a new split in this partnership this strategy remains unlikely to
work a second time. Both Beijing and Moscow learned from the dark period of the post-Cold War
years that the closer they are together the safer they will be, and that any rift between them
will only provide their adversaries with the key to bringing about their downfall. It is
difficult to comprehend the importance of the Sino-Russian partnership for the security of both
states without understanding the enormity of the Western threat – with maximum pressure
being exerted on multiple fronts from finance and information to military and cyberspace. Where
in the early 1950s it was only the Soviet nuclear deterrent which kept both states safe from
very real Western plans for massive nuclear attacks, so too today is the synergy in the
respective strengths of China and Russia key to protecting the sovereignty and security of the
two nations from a very real and imminent threat. A few examples of the nature of this threat
include growing investments in social engineering through social media – the results of
have been seen in Hong Kong, Taiwan and Ukraine, a lowering threshold for nuclear weapons use
by the United States – which it currently trains Western allies outside the NPT to
deploy, and even reports from Russian and Korean sources of investments in biological warfare
– reportedly being tested in
Georgia, Eastern Europe and South Korea .
The partnership between Russia and China has become truly comprehensive, and is perhaps best
exemplified by their military relations. From 2016 joint military exercises have involved the
sharing of extremely
sensitive information on missile and early warning systems – one of the most well
kept defense secrets of any nuclear power which even NATO powers do not share with one another.
Russia's defense sector has played a key role in the modernization of the Chinese People's
Liberation Army, while Chinese investment has been essential to allowing Russia to continue
research and development on next generation systems needed to retain parity with the United
States. There is reportedly cooperation between the two in developing next generation weapons
technologies for systems such as hypersonic cruise and anti aircraft missiles and new strategic
bombers and fighter jets which both states plan to field by the mid-2020s. With the combined
defense spending of both states a small fraction of that of the Western powers, which
themselves cooperate closely in next generation defense projects, it is logical that the two
should pool their resources and research and development efforts to most efficiently advance
their own security.
Cooperation in political affairs has also been considerable, and the two parties have
effectively presented a united front against the designs of the Western Bloc. In 2017 both
issued strong warnings to the United States and its allies that they would not tolerate an
invasion of North Korea – which was followed by the
deployment of advanced air defense systems by both states near the Korean border with
coverage of much of the peninsula's airspace. Following Pyongyang's testing of its
first nuclear delivery system capable of reaching the United States , and renewed American
threats against the East Asian country, China and Russia staged near simultaneous
exercises near the peninsula using naval and marine units in a clear warning to the U.S.
against military intervention. China's Navy has on several occasions deployed to the
Mediterranean for joint drills with Russian forces – each time following a period of high
tension with the Western Bloc over Syria.
In April 2018, a period of particularly high tensions between Russia and the Western Bloc
over Western threats both to take military action against the Syrian government and to
retaliate for an alleged but unproven Russian chemical weapons attack on British soil, the
Chinese Defense Minister Wei Fenghe traveled to Russia and more explicitly stated that the
Sino-Russian partnership was aimed at countering Western designs. Referring to the Sino-Russian
defense partnership as "as stable as Mount Tai" he
stated : "the Chinese side has come to show Americans the close ties between the Armed
Forces of China and Russia, especially in this situation. We have come to support you." A week
later China announced
large-scale live fire naval drills in the Taiwan Strait – which according to several
analysts were scheduled to coincide with a buildup of Western forces near Syria. Presenting a
potential second front was key to deterring the Western powers from taking further action
against Russia or its ally Syria. These are but a few examples Sino-Russian cooperation, which
is set to grow only closer with time.
The Saker: The US remains the most formidable military power in Asia, but this military
power is being eroded as a result of severe miscalculations of the US political leadership. How
serious a crisis do you think the US is now facing in Asia and how do you assess the risks of a
military confrontation between the US and the various Asian powers (China, the Philippines, the
DPRK, etc,).
A.B. Abrams: Firstly I would dispute that the United States is the most formidable military
power in the region, as while it does retain a massive arsenal there are several indicators
that it lost this position to China during the 2010s. Looking at combat readiness levels, the
average age of weapons in their inventories, morale both publicly and in the armed forces, and
most importantly the correlation of their forces, China appears to have an advantage should war
break out in the Asia-Pacific. It is important to remember that the for the Untied States and
its European allies in particular wars aren't fought on a chessboard. Only a small fraction of
their military might can be deployed to the Asia-Pacific within a month of a conflict breaking
out, while over 95% of Chinese forces are already on the region and are trained and armed
almost exclusively for war in the conditions of the Asia-Pacific. In real terms the balance of
military power regionally is in China's favor, and although the U.S. has tried to counter this
with a military 'Pivot to Asia' initiative from 2011 this has ultimately failed due to both the
drag from defense commitments elsewhere and the unexpected and pace at which China has
expanded and
modernized its armed forces.
For the time being the risk of direct military confrontation remains low, and while there
was a risk in 2017 of American and allied action against the DPRK Pyongyang has effectively
taken this option off the table with the development of a viable and growing arsenal of
thermonuclear weapons and associated delivery systems alongside the modernization of its
conventional capabilities. While the U.S. may have attempted to call a Chinese and Russian
bluff by launching a limited strike – which seriously risked spiraling into something
much larger – it is for the benefit of all regional parties including South Korea that
the DPRK now has the ability to deter the United States without relying on external support.
This was a historically unprecedented event, and as military technology has evolved it has
allowed a small power for the first time to deter a superpower without relying on allied
intervention. Changes in military technology such as the proliferation of the nuclear tipped
ICBM make a shooting war less likely, but also alters the nature of warfare to place greater
emphasis on information war, economic war and other new fields which will increasingly decide
the global balance of power. Where America's answer to the resistance of China and North Korea
in the 1950s to douse them with napalm, today winning over their populations through soft
power, promoting internal dissent, placing pressure on their living standards and ensuring
continued Western dominance of key technologies has become the new means of fighting.
That being said, there is a major threat of conflict in the Asia-Pacific of a different
nature. Several organizations including the United Nations and the defense ministries of
Russia, Singapore and Indonesia among others have warned of the dangers posed by Islamic
terrorism to stability in the region. Radical Islamism, as most recently attested to by Saudi Arabia's crown prince , played a key
role in allowing the Western Bloc to cement its dominance over the Middle East and North Africa
– undermining Russian and Soviet aligned governments including Algeria, Libya, Egypt and
Syria – in most cases with direct Western support. CIA Deputy Director Graham Fuller in
this respect referred to the agency's "policy of guiding the evolution of Islam and of helping
them against our adversaries." Several officials, from the higher brass of the Russian, Syrian
and Iranian militaries to the former President of
Afghanistan and the President
of Turkey , have all alleged Western support for radical terror groups including the
Islamic State for the sake of destabilizing their adversaries. As the Asia-Pacific has
increasingly slipped out of the Western sphere of influence, it is likely that this asset will
increasingly be put into play. The consequences of the spread of jihadism from the Middle East
have been relatively limited until now, but growing signs of danger can be seen in Xinjiang,
Myanmar, the Philippines and Indonesia. It is this less direct means of waging war which
arguably poses the greatest threat.
The Saker: Do you think that we will see the day when US forces will have to leave South
Korean, Japan or Taiwan?
A.B. Abrams: Other than a limited contingent of Marines recently deployed to guard
the American Institute , U.S. forces are not currently stationed in Taiwan. The massive
force deployed there in the 1950s was scaled down and American nuclear weapons removed in 1974
in response to China's acceptance of an alliance with the United States against the Soviet
Union. Taiwan's military situation is highly precarious and the disparity in its strength
relative to the Chinese mainland grows considerably by the year. Even a large American military
presence is unlikely to change this – and just 130km from the Chinese mainland they would
be extremely vulnerable and could be quickly isolated from external support in the event of a
cross straits war. We could, however, see a small American contingent deployed as a 'trigger
wire' – which will effectively send a signal to Beijing that the territory is under
American protection and that an attempt to recapture Taiwan will involve the United States.
Given trends in public opinion in Taiwan, and the very considerable pro-Western sentiments
among the younger generations in particular, it is likely that Taipei will look to a greater
rather than a lesser Western military presence on its soil in future.
Japan and particularly South Korea see more nuanced public opinion towards the U.S., and
negative perceptions of an American military presence may well grow in future – though
for different reasons in each country. Elected officials alone, however, are insufficient to
move the American presence – as best demonstrated by the short tenure of Prime Minister
Hatoyama in Japan and the frustration of President Moon's efforts to restrict American
deployments of THAAD missile
systems in his first year. It would take a massive mobilization of public opinion –
backed by business interests and perhaps the military – to force such a change. This
remains possible however, particularly as both economies grow increasingly reliant on China for
trade and as the U.S. is seen to have acted increasingly erratically in response to challenges
from Beijing and Pyongyang which has undermined its credibility. As to a voluntary withdrawal
by the United States, this remains extremely unlikely. President Donald Trump ran as one of the
most non-interventionist candidates in recent history, but even under him and with considerable
public support prospects for a significant reduction in the American presence, much less a
complete withdrawal, have remained slim.
The Saker: Some circles in Russia are trying very hard to frighten the Russian public
opinion against China alleging things like "China want to loot (or even conquer!) Siberia",
"China will built up its military and attack Russia" or "China with its huge economy will
simply absorb small Russia". In your opinion are any of these fears founded and, if yes, which
ones and why?
A.B. Abrams: A growth in Sinophobic sentiment in Russia only serves to weaken the nation and
empower its adversaries by potentially threatening its relations with its most critical
strategic partner. The same is applicable vice-versa regarding Russophobia in China. Given the
somewhat Europhilic nature of the Russian state in a number of periods, including in the 1990s,
and the considerable European soft influences in modern Russia, there are grounds for building
up of such sentiment. Indeed Radio Free Europe, a U.S. government funded nonprofit broadcasting
corporation with the stated purpose of "advancing the goals of U.S. foreign policy," notably
published sinophobic content aimed at depicting the Russian people as
victims of Chinese business interests to coincide with the Putin-XI summit in June 2019.
However, an understanding of the modern Chinese state and its interests indicates that it does
not pose a threat to Russia – and to the contrary is vital to Russia's national security
interests. While Russia historically has cultural ties to the Western nations, the West has
shown Russian considerable hostility throughout its recent history – as perhaps is most
evident in the 1990s when Russia briefly submitted itself and sought to become part of the
Western led order with terrible consequences. China by contrast has historically conducted
statecraft based on the concept of a civilization state – under which its strength is not
measured by the weakness and subjugation of others but by its internal achievements. A powerful
and independent Russia capable of protecting a genuine rules based world order and holding
lawless actors in check is strongly in the Chinese interest. It is clear that in Russia such an
understanding exists on a state level, although there is no doubt that there will be efforts by
external parties to turn public opinion against China to the detriment of the interests of both
states.
The idea that China would seek to economically subjugate Russia, much less invade it, is
ludicrous. It was from Europe were the major invasions of Russian territory came – vast
European coalitions led by France and Germany respectively with a third American led attack
planned and prepared for but stalled by the Soviet acquisition of a nuclear deterrent. More
recently from the West came sanctions, the austerity program of the 1990s, the militarization
of Eastern Europe, and the demonization of the Russian nation – all intended to subjugate
and if possible shatter it. Even at the height of its power, China did not colonize the
Koreans, Vietnamese or Japanese nor did it seek to conquer Central Asia. Assuming China will
have the same goals and interests as a Western state would if they were in a similar position
of strength is to ignore the lessons of history, and the nature of the Chinese national
character and national interest.
The Saker: The Russian military is currently vastly more capable (even if numerically much
smaller) than the Chinese. Does anybody in China see a military threat from Russia?
A.B. Abrams: There may be marginalized extreme nationalists in China who see a national
security from almost everybody, but in mainstream discourse there are no such perceptions. To
the contrary, Russia's immense contribution to Chinese security is widely recognized –
not only in terms of technological transfers but also in terms of the value of the joint front
the two powers have formed. Russia not only lacks a history of annexing East Asian countries or
projecting force against them, but it is also heavily reliant on China in particular both to
keep its defense sector active and to undermine Western attempts to isolate it. Russian
aggression against China is unthinkable for Moscow – even if China did not possess its
current military strength and nuclear deterrence capabilities. This is something widely
understood in China and elsewhere.
I would dispute that Russia's military is vastly more capable than China's own, as other
than nuclear weapons there is a similar level of capabilities in most sectors in both
countries. While Russia has a lead in many key technologies such as hypersonic missiles, air
defenses and submarines to name a few prominent examples, China has been able to purchase and
integrate many of these into its own armed forces alongside the products of its own defense
sector. Russia's most prominent fighter jet for example, the Flanker (in all derivatives from
Su-27 to J-11D), is in fact fielded in larger numbers by China than by Russia itself –
and those in Chinese service have access to both indigenous as well as Russian munitions and
subsystems. Furthermore, there are some less critical but still significant sectors where China
does appear to retain a lead – for example it deployed combat jets equipped with a new
generation of active electronically scanned array radars and air to air missiles from 2017
(J-20 and in
2018 J-10C ) – while Russia has only done so this in July 2019 with the
induction of the MiG-35. Whether this is due to a Chinese technological advantage, or to a
greater availability of funds to deploy its new technologies faster, remains uncertain.
Russia's ability to provide China with its most vital technologies, and China's willingness to
rely so heavily on Russian technology to comprise so much of its inventory, demonstrates the
level of trust between the two countries
The Saker: Do you think that China could become a military threat to other countries in the
region (especially Taiwan, India, Vietnam, the Philippines, etc.)?
A.B. Abrams: I would direct you to a quote by Malaysian Prime Minister Mahathir Bin Mohamed
from March this year. He stated: "we always say, we have had China as a neighbor for 2,000
years, we were never conquered by them. But the Europeans came in 1509, in two years, they
conquered Malaysia." This coming from a nationalist leader considered one of the most
sinophobic in Southeast Asia, whose country has an ongoing territorial dispute with China in
the South China Sea, bears testament to the nature of claims of a Chinese threat. It is
critical not to make the mistake of imposing Western norms when trying to understand Chinese
statecraft. Unlike the European states, China is not and has never been dependent on conquering
others to enrich itself – but rather was a civilization state which measured its wealth
by what it could its own people could produce. A harmonious relationship with India, Vietnam,
the Philippines and others in which all states' sovereign and territorial integrity is
respected is in the Chinese interest.
A second aspect which must be considered, and which bears testament to China's intentions,
is the orientation of the country's armed forces. While the militaries of the United States and
European powers such as Britain, the Netherlands, Belgium and France among others are heavily
skewed to prioritize power projection overseas, China's military has made disproportionately
small investments in power projection and is overwhelmingly tailored to territorial defense.
While the United States has over 300 tanker aircraft deigned to refuel its combat jets midair
and attack faraway lands, China has just three purpose-built tankers – less than
Malaysia, Chile or Pakistan. The ratio of
logistical to combat units further indicates that China's armed forces, in stark contrast
to the Western powers, are heavily oriented towards defense and fighting near their
borders.
This all being said, China does pose an imminent threat to the government in Taipei –
although I would disagree with your categorization of Taiwan as a country. Officially the
Republic of China (ROC- as opposed to the Beijing based People's Republic of China), Taipei has
not declared itself a separate country but rather the rightful government of the entire Chinese
nation. Taipei remains technically at war with the mainland, a conflict would have ended in
1950 if the U.S. had not placed the ROC under its protection. The fast growing strength of the
mainland has shifted the balance of power dramatically should the conflict again break out into
open hostilities. China has only to gain from playing the long game with Taiwan however –
providing scholarships and jobs for its people to live on the mainland and thus undermining the
demonization of the country and hostility towards a peaceful reunification. Taiwan's economic
reliance on the mainland has also grown considerably, and these softer methods of bridging the
gaps between the ROC and the mainland are key to facilitating unification. Meanwhile the
military balance in the Taiwan Strait only grows more favorable for Beijing by the year –
meaning there is no urgency to take military action. While China will insist on unification, it
will seek to avoid doing so violently unless provoked.
The Saker: In conclusion: where in Asia do you see the next major conflict take place and
why?
A.B. Abrams: The conflict in the Asia-Pacific is ongoing, but the nature of conflict has
changed. We see an ongoing and so far highly successful de-radicalization effort in Xinjiang
– which was taken in direct response to Western attempts to turn the province into 'China's Syria or
China's Libya,' in the words of Chinese state media, using similar means. We see a harsh
Western response to
the Made in China 2025 initiative under which the country has sought to compete in key
technological fields formerly monopolized by the Western Bloc and Japan – and the result
of this will have a considerable impact on the balance of economic power in the coming years.
We see direct economic warfare and technological competition between China and the United
States – although the latter has so far refrained from escalating too far due to the
potentially devastating impact reprisals could have. We further see an information war in full
swing, with Sinophobic stories often citing 'anonymous sources' being propagated by Western
media to target not only their own populations – but also to influence public opinion in
Southeast Asia and elsewhere. Influence over third parties remains vital to isolating China and
cementing the Western sphere of influence. Use of social media and social engineering, as the
events of the past decade have demonstrated from the Middle East in 2011 to Hong Kong today,
remains key and will only grow in its potency in the coming years. We also see a major arms
race, with the Western Bloc investing heavily in an all new generation of weapons designed to
leave existing Chinese and allied defenses obsolete – from laser air defenses to
neutralize China's nuclear deterrent to sixth generation stealth fighters, new heavy bombers,
new applications of artificial intelligence technologies and new hypersonic missiles.
All these are fronts of the major conflict currently underway, and the Obama and Trump
administrations have stepped up their offensives to bring about a new 'end of history' much
like that of the 1990s – only this time it is likely to be permanent. To prevail, China
and Russia will need to cooperate at least as closely if not more so as the Western powers do
among themselves.
The Saker: thank you very much for your time and answers!
That being said, there is a major threat of conflict in the Asia-Pacific of a different
nature. Several organizations including the United Nations and the defense ministries of
Russia, Singapore and Indonesia among others have warned of the dangers posed by Islamic
terrorism to stability in the region. Radical Islamism, as most recently attested to by
Saudi Arabia's crown prince, played a key role in allowing the Western Bloc to cement its
dominance over the Middle East and North Africa – undermining Russian and Soviet
aligned governments including Algeria, Libya, Egypt and Syria – in most cases with
direct Western support. CIA Deputy Director Graham Fuller in this respect referred to the
agency's "policy of guiding the evolution of Islam and of helping them against our
adversaries." Several officials, from the higher brass of the Russian, Syrian and Iranian
militaries to the former President of Afghanistan and the President of Turkey, have all
alleged Western support for radical terror groups including the Islamic State for the sake
of destabilizing their adversaries. As the Asia-Pacific has increasingly slipped out of the
Western sphere of influence, it is likely that this asset will increasingly be put into
play. The consequences of the spread of jihadism from the Middle East have been relatively
limited until now, but growing signs of danger can be seen in Xinjiang, Myanmar, the
Philippines and Indonesia. It is this less direct means of waging war which arguably poses
the greatest threat.
There is hardly such a thing called "Islamic Terrorism." In most egregious cases, such as
IS, etc., it can be shown that those lowlifes have been the mercenaries of the evil West and
their accursed implant in the ME (and nowadays the hindutvars too), collectively the avowed
enemies of true monotheism, Islam. I am including the recent Colombo attacks here.
How can any so-called "muslim" who is a tool-of-evil of the enemies of Islam, be a true
muslim? How then can it be termed "Islamic Terror"? Perhaps "Islamic Apostate Terror" would
be more suitable.
Of course, there are many other non-IS muslims who are called "terrorists." The
Palestinians, the Kashmiris, etc. For us muslims, they are simply freedom fighters.
Finally, there are a few muslims who do kill in the name Islam the Charlie Hebdo killers,
Bombay\Dhaka attackers, etc. Some of them are justified (due to intense provocations) and
others not at all. I will leave it for others to judge which falls under which category.
Perhaps the listed order will help decipher that.
It must be conceded, when it comes to setting the narrative of pure deceit, the West (and
its minions, the Jooscum and their lickspittle, the hindutvars), like in all things bad, can
be satanically good. We muslims are being decimated in the propaganda war.
We still got our True Monotheism though. The pagan/godless enemies of the Almighty One are
doomed to fail against it. God willing.
The American system ran on immigration that kept discontent about massive inequality under
control because a substantial proportion of the lowest SES were immigrants just glad to be in
the US. The tAmerican ruling class decided they could make more money by offshoring
everything that could be offshored and mass immigration to keep wags from going up in the non
offshorable parts of the economy.
China and America's venal globalising elite had converging agendas, but could not fool the
common people of America and their tribune . Even the military had began to get alarmed about
the economic growth and technological progress of China, which had been benefiting from
officially sanctioned preferential treatment by the US since Carter.
Free ride is over for China, we will see China's economic and military strength
progressively tested. What America built it can break.
China was made an economic superpower by the US elites. Not because they felt sorry for China
and wanted to speed up conversion to democracy by switching them to capitalist way of doing
business first.
They made them an economic superpower, because the US elites have lost their marbles. They
simply didn't see it coming. They wanted to turn China into one giant cheap sweatshop in
order to exploit their population with a low paying manufacturing jobs, which were never
supposed to make China reach.
But they did, because no matter how much the lost generation of the western elites were
foaming at their mouths about knowledge based economy, value added economy, high tech jobs
and the other crap, it is obvious that manufacturing remains a basis for any strong economy.
That doesn't look like it's going to change even when you add robots to the mixture.
I think that Napoleon was right when he warned the world about waking up the sleeping
dragon. First they made them an economic superpower, and now they want to contain them
militarily. Good luck with that.
There is a reason why China wants to build the silk road. Silk road implies land. The US
military has never been any good at land warfare. Neither where their predecessors –
the British. China, on the other hand, showed in Korea that even then, with a backward army,
equipped with handouts from the Soviet Union, they can pretty much trash the US army.
With the silk road initiative, China will seize the control of the entire Euro-Asian land
mass – the most populous and economically productive region of the world and will be
more than happy to let the US play pirates on the seas.
Abrams is giving the West too much credit for the Sino-Soviet rift of the late 5os and 60s.
That was NOT the doing of the CIA or Western Europe. It was 90% the fault of Mao who tried
to shove Khrushchev aside as the head of world communism. Because Stalin had treated Mao
badly, Krushchev wanted to make amends and treated Mao with respect. But Mao turned out to be
a total a-hole. There are two kinds of people: Those who appreciate friendly gestures and
those who seek kindness as 'weakness'.
It's like Hitler saw Chamberlain's offer as weakness
and pushed ahead. Being kind is nice, but one should never be kind to psychopaths, and
Khrushchev was nice to the wrong person.
Mao only understood power. He sensed Khrushchev as
'weak' and acted as if he wanted to be the new Stalin. He also made international statements
that made the US-USSR relations much worse. He berated Khrushchev for seeking co-existence
with the West and pressed on for more World Revolution.
He also ignored Soviet advice not to
attempt radical economic policies (that were soon to bring China to economic ruin -- at least
Stalin's collectivization led to rise of industry; in contrast, Mao managed to destroy both
agriculture and heavy industry).
When Stalin was alive, he didn't treat Mao with any respect,
and Mao disliked Stalin but still respected him because Mao understood Power. With Stalin
gone, Khrushchev showed Mao some respect, but Mao felt no respect for Khrushchev who was
regarded as a weakling and sucker.
It was all so stupid. China and Russia could have gotten along well if not for Mao's
impetuosity. Of course, Khrushchev could be reckless, contradictory, and erratic, and his
mixed signals to the West also heightened tensions. Also, he was caught between a rock and a
hard place where the Eastern Bloc was concerned. He wanted to de-Stalinize, but this could
lead to events like the Hungarian Uprising.
Anyway, Putin and Xi, perhaps having grown up in less turbulent times, are more stable and
mature in character and temperament than Mao and Khrushchev. They don't see the Russo-China
relations as a zero sum game of ego but a way for which both sides can come to the table
halfway, which is all one can hope for.
@Priss Factor You are probably right about Hitler seeing (Neville) Chamberlain as weak.
But Hitler was a dupe for Britains much smarter and devious elites, who successfully played
him to do their bidding. Hitler, along with the major members of the nazis, had been
significantly influenced by Neville's elder cousin who spurred the nazis towards 'the
ultimate solution'.
Instead of being weak in the manner Hitler may have thought, Neville saved Hitler from his
own generals.
In historical turns , when Britain has appeared weak, it mostly is a deliberate faint.
Be it in Gallipoli, St Petersburg in 1919, Norway or Singapore in WW2.
Commendable contribution by Mr Abrams to enlighten the confused western establishment.
" China by contrast has historically conducted statecraft based on the concept of a
civilization state – under which its strength is not measured by the weakness and
subjugation of others but by its internal achievements. "
In my view the Usa had an excellent opportunity to enact in a positive way after WW2 but
blew it. The main reason was the failure to live up to the above quoted characterisation of
the Chinese. To encourage potential achievers in the best sense of the word.
Instead the Us oligarchy held back independent and creative thinking and brainwashed the
population, in a way that weakened them.
Jfk tried to encourage his countrymen but other forces prevailed.
Americans cannot understand our relations with China by looking at events just the past 75
years. During the century before, European imperial powers and the United States treated
China as a open borders business opportunity backed by foreign military force. China was
infested by mini-colonies to profit from China's riches. The "Opium Wars" shock decent
Americans.
"... The result has been a disaster for consumers, the environment and the condition of the infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful list of the past history of awful, depressing headlines the company has generated: ..."
Of all the inhabitants of the Little Shop of Horrors that is neoliberalism, surely the most
gruesome cohort must be privatization of monopoly public services. And then within this
best-worst category, privatization of potable water and wastewater treatment utilities can't be
anything other than an outright winner of this ugly competition.
Where I live in southern England, the Thatcher administration – who else? –
privatized the previously state-owned company which has a monopoly, as all water supply and
sewage treatment inevitably requires, on providing potable water and treating wastewater which
flows into the sewer system and eventually, via treatment plants, back into the
watercourses.
The result has been a disaster for consumers, the environment and the condition of the
infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful
list of the past history of awful, depressing headlines the company has generated:
In 2007 Southern Water was fined £20.3 million for 'deliberate misreporting' and
failing to meet guaranteed standards of service to customers. Southern Water Chief Executive
Les Dawson said: "Today's announcement draws a line under a shameful period in the company's
history".
In 2011 Southern Water Ltd was fined £25,000 when sewage flooded into Southampton
water.
The company was ordered to pay £10,000 in fines and costs after sewage seeped into a
stream at Beltinge in Kent.
A leak of sewage from Southern Water's plant at Hurstpierpoint pumping station, West
Sussex, lead to fines and costs of £7,200 in 2011.
Southern Water was fined £50,000 in April 2011 for two offences relating to
unscreened discharges into Langstone Harbour, Hampshire, between November 2009 and April
2010.
In June 2010 Southern Water was fined £3,000 after it admitted polluting 2 km of a
Sussex stream with raw sewage, killing up to a hundred brown trout and devastating the fish
population for the second time in five years. Crawley Magistrates' Court heard that the
Environment Agency received calls from members of the public after dead fish were seen in the
Sunnyside Stream in East Grinstead on 30 August 2009.
In November 2014 Southern Water were fined £500,000 and agreed to pay costs of
£19,224 at Canterbury Crown Court after an Environment Agency investigation found that
untreated sewage was discharged into the Swalecliffe Brook, polluting a 1.2 kilometre stretch
of the watercourse and killing local wildlife. (www.gov.uk/government/news)
In December 2016 Southern Water was fined a record £2,000,000 for flooding beaches
in Kent with raw sewage, leaving them closed to the public for nine days. The Environment
Agency called the event "catastrophic", while the judge at Maidstone crown court said that
Southern Water's repeat offending was "wholly unacceptable " . The company apologised
unreservedly, as it did when fined £200,000 in 2013 for similar offences. Due to health
concerns, Thanet district council was forced to close beaches for nine consecutive days,
including the Queen's diamond jubilee bank holiday weekend. (The Guardian, 19 December
2016)
You would have thought, perhaps in hope rather than realism, that after this deluge of crap
(literally), Southern Water (and their investors) might have, if you'll forgive the pun,
wondered if it wasn't time to clean up their act. If so, you'd be, uncharacteristically for
Naked Capitalism readers, rather naive. Southern Water has made their previous civil
violations look like a spot of mustard on a necktie.
Southern Water was fined by the regulators here £126M on June 25th, which sounds a lot
but is in reality in slap on the wrists territory in view of their latest misconduct.
Before delving into the details of that, to provide some context, the utility is the usual
PE-orchestrated financial-engineering asset-sweating systematical reduction of a former public
service to a hollowed out husk.
Southern Water is owned by a consortium, which came together
Clive again, momentarily interrupting the flow, like a blocked sewer. The use of language
there is almost an art form. "came together". Did they all hook up on Tinder or something? Not
a bit of it. The "consortium" was a Private Equity instigated lash up of yield-hungry investors
chasing, like everyone else these days, above-average rates of return. Why didn't they simply
buy chunks of the publicly-traded equity tranches of the company to give themselves exposure to
this particular asset class (public utilities)? Because this wouldn't have given them
sufficient leverage and control over the institution to do their financial raping and
pillaging. Back, reluctantly, to Southern Water
in 2007 solely for this purpose.
The consortium members are shareholders in Greensands Holdings Limited, the top holding
company. [ ]
The Greensands consortium members comprise a mixture of infrastructure investment
funds, pension funds and private equity. The infrastructure funds are managed by JP Morgan
Asset Management, UBS Asset Management and Hermes Investment Management.
The pension funds are represented by JP Morgan Asset Management, UBS Asset Management,
Hermes Investment Management and Whitehelm Capital or are self-managed. Cheung Kong
Infrastructure and The Li Ka Shing Foundation are direct investors.
What have these fine upstanding custodians of our water supply been up to, then? Lying,
cheating, bullying and polluting. Ofwat, the UK water industry regulator, started peering more
closely at Southern Water in 2018. They
didn't like the look of what they saw .
A board which was asleep at the wheel:
Water resources management plan and market information
What we found
Overall, we had serious concerns in key areas of this assessment such as options
costing, Board involvement, assurance and leakage reduction presentation. The draft water
resources management plan option costs were not presented clearly and a limited description
of assurance was provided for both the plan and market information table. The late provision
of the market information and the time taken to update option cost information did not
provide confidence in the company's management of this data. The leakage reduction target, a
key plan metric, was not consistently presented in the plan and there was no evidence of
Board involvement or sign off.
Our assessment: serious concerns
A company that deliberately obfuscated the regulators:
What we found
[ ] We currently have four open cases – an enforcement case, a sewer requisition
case and two requests to appoint an arbitrator.
[ ]
In terms of the enforcement case, we do not consider that the company has met our
expectations and we have serious concerns. This is based on Southern Water not responding
fully to our requests for information (for example, by providing documents with missing pages
and/or text), not responding in a timely manner and providing relevant information that was
unclear. This has affected our ability to rely on the information provided and has required
us to take steps to seek further clarifications and grant extensions to previous deadlines
for responses, impacting our ability to progress the investigation as quickly and efficiently
as we would have liked.
Our assessment: serious concerns
These failings led the regulator to conduct a much wider-reaching inquiry. The full
regulatory report has to be read in its entirety to convey the awfulness that went on. But
edited highlights, or maybe that should be low-lights, were:
・Falsification of regulatory reporting for effluent discharge quality to avoid
fines:
In summary, as a consequence of now restating past WwTW performance data, we have
calculated that Southern Water has avoided price review penalties in past years amounting to
a total of £75 million (in 2017-18 prices). This has arisen as a direct consequence of
the practices in place within the company to implement ANFs at its WwTW (Clive:
Waste-water Treatment Works) over 2010 to 2017. The total amount of avoided price review
penalties reflects the restated figures that Southern Water has now provided about the
numbers of WwTW that were potentially non-compliant with permit conditions relating to final
effluent quality.
・Deliberate attempts at evasion -- government agencies monitor water treatment plants
but the operator predicted when the inspections and sampling was due and intentionally halted
to flow from treatment plants ("Artificial No Flow or ANF" events) so there was no output to
sample:
The Sampling Compliance Report provides evidence (mostly in the form of email extracts
between employees of Southern Water between 2010 and 2017), of staff anticipating the timing
of planned OSM (Clive: On Site Monitoring) samples across numerous WwTW, in order to ensure
that no effluent was available for sampling purposes. This deliberate practice (which took
place through a number of different methods) of creating an artificial "no flow" event
(described as an "Artificial No Flow or ANF") meant that a sample under the OSM regime could
not be taken thus ensuring that the sample (and as a consequence the relevant WwTW) would be
deemed as being compliant with permit conditions. As a result of this manipulation, a false
picture of Southern Water's WwTW performance (and how this was being achieved) was provided
internally within the company, to the Environment Agency (Clive: the UK's equivalent of
the EPA, similarly gutted, but that's another story for another time ) and to
Ofwat
・They even took waste water discharges away by tanker so nothing could be measured at
the outfall pipes.
Staff then used the knowledge about sample dates to put in place ANFs. This included,
for example, through the improper use of tankering (i.e. by tankering wastewater from one
WwTW to another to cause an ANF). Another method included 'recirculating' effluent within a
WwTW again to ensure there was no final effluent available for sampling.
・Senior management hassled and pressured employees to obfuscate performance
measures.
The report also highlighted occasions where employees felt pressured by senior managers
to create ANFs.
・The whistleblowing policy for employees actually started with a big red frightener
threatening dismissal for using the wrongdoing reporting mechanisms:
Southern Water has acknowledged in its Action Plan that there were deficiencies in its
organisational culture which prevented employees from being comfortable with speaking out
about inappropriate or non-compliant behaviours. This included having in place ineffective
whistleblowing processes which resulted in no staff coming forward to report their concerns
despite certain staff being obviously uncomfortable about the implementation of ANFs and
feeling pressured to act in an improper manner (as evidenced by emails we have seen that are
referenced in the Sampling Compliance Report).
The whistleblower policy Southern Water had in place at the time included on its first
page and highlighted in bold the following text: "Should any investigation conclude that the
disclosure was designed to discredit another individual or group, prove to be malicious or
misleading then that worker concerned would become the subject of the Disciplinary Procedure
or even action from the aggrieved individual."
By pretending that waste water being discharged into watercourses was of a higher quality
than it was, the investors pocketed profits that should have gone on infrastructure
improvements and staffing to enable treatment plants to be safely operated and checked
effectively.
Criminal investigations are pending .
But we've seen this movie many times before. Protected by the best corporate lawyers money
(public consumers' money, that is) can buy, a defence shield of auditors, layers of management
on whom the blame can be pinned and a complex legal argument which has to be constructed to a
high evidence threshold allowing jurors to be thrown off the scent to a degree that a
reasonable doubt emerges, we shouldn't hold our breaths.
So we're left with the penalties imposed. Unfortunately there's less here than meets the eye
initially from the headline figure. From the regulatory report:
This is a notice of Ofwat's intention to issue Southern Water with a financial penalty
amounting to £37.7 million reduced exceptionally to £3 million for significant
breaches of its licence conditions and its statutory duties. This is on the basis that
Southern Water has undertaken to pay customers about £123 million over the next five
years, some of which is a payment of price review underperformance penalties the company
avoided paying in the period 2010 to 2017 and some of which is a payment to customers for the
failures set out in this notice, paid in lieu of a penalty.
This means the regulator reduced the up-front cost (which would have come out of the profits
for fiscal 2019-20 in one hit) for an arrangement which allows Southern Water eee-zee payment
terms and to spread the cost over five years through a customer rebate initiative. And some of
the rebate is itself merely penalties which would have been levied if the wrongdoing --
environmental pollution and missed targets for waste processing quality -- had been identified
at the time. They are trying to bribe me with my own money.
The whole sorry saga shows how the entire publicly-overseen but privately-owned regulated
utility model is completely broken. The system is a sitting-duck for gaming and, at best, the
issues are uncovered well after the fact. If ever.
There is, however, a final failsafe currently still in place. Water quality standards in the
EU are mandated by EU Directive with redress available through the Court of Justice of the
European Union (CJEU). A Member State government can be fined and ordered to implement better
oversight and governance of the utilities. Thus, any temptation which the U.K. government might
succumb to, to "fix" problems like those entrenched in Southern Water by slackening off the
potable and wastewater standards, are prohibited by the threat of EU / CJEU referral.
The U.K. government has promised that, post-Brexit, environmental protections will be
"equivalent or better than" those specified in the EU Directive. I -- and similarly cynical
readers -- might well harbour a few doubts about that.
Mmm. I can't help but think that non-government ownership is not (necessariliy) the
problem, but PE (an industry that has made a lot of people rich in the last 20y by pricing
the same asset off ever-lower discount rates) certainly is.
Government ownership often results in unaccountable, faceless monopolies (I'm old enough to
remember British Rail, which felt that it was an entirely acceptable plan to raise fares to
push travellers off rail and onto the roads when the trains got too full) and the "taking
private" of steady-state utility businesses, with cashflows that were "ripe" for
securitisation and other smoke and mirrors moves, pushed accountability back into the dark
ages.
There have been a number of cases of assets like this bought by JVs of PE and public pension
plans. I wonder, were the latter just solicited to make the actions of the former look more
respectable ?
The government certainly doesn't always do a bang up job with everything it controls, but
when the government runs things, citizens at least theoretically have some recourse.
When a private corporation runs it, citizens can, literally in the case above, eat
s**t.
There is, however, a final failsafe currently still in place. Water quality standards in
the EU are mandated by EU Directive with redress available through the Court of Justice of
the European Union (CJEU). A Member State government can be fined and ordered to implement
better oversight and governance of the utilities. Thus, any temptation which the U.K.
government might succumb to, to "fix" problems like those entrenched in Southern Water by
slackening off the potable and wastewater standards, are prohibited by the threat of EU /
CJEU referral.
I do believe that the combination of Water Quality Framework
Directives , along with the Habitats
and Birds
Directives , are a major 'hidden' driver behind the people behind Brexit. These
Directives are written in such a way as to provide almost no wiggle room for national
regulators to escape hitting hard quantitative targets for water and habitat improvements.
The Fracking industry is a very significant example – the Water Frame Work Directive
also sets standards for groundwater, and its exceptionally difficult for the industry to meet
the standards of proof that they will not degrade the quality of these water bodies. The ECJ
is dominated by judges from northern European jurisdictions, which tend to take a far more
'literal' approach to Directives and their associated national laws and regulations. They
provide zero room to massage failures to hit targets.
Escaping those Directives will be worth billions to those two industries at the very
least. Well worth shoving a bit of money to the various campaigns. There are plenty of other
industries that likewise feel they will benefit from what will be an upcoming bonfire of the
Regulations.
I think too that the wriggle-room on water quality -- wastewater especially, potable is
generally not something that anyone would risk meddling with; well, unless you live in Flint,
Michigan, anyway -- has not escaped the notice of or despicable elites here.
The temptation by government to play along, grant "temporary" "exemptions" in response to
industry whining, sorry, lobbying, will prove difficult to resist, more than ever when the
U.K. government will be in a position to know that its word is final (it can simply make new
laws if it decides it doesn't like the old ones).
Will the U.K. as a society end up doing the right thing, or simply backsliding and
acquiescence because it's just easier? At least in the short term. I wish I had a definitive
answer to that one. Ask me again when we know for sure, although I suspect you'll have to dig
me up and open the coffin first.
International racketeering. First they hide the real "persons of interest" within a
consortium of consortiums of funds of funds – much like some special purpose "vehicle"
for wealthy investors – and then they lobby governments bye gaslighting them, saying
'We can do this economically and efficiently' and you are clearly running our of money, so
sell this water district to us and we'll get it back on track.' Right. Makes me wonder if
Bojo and his cronies are heavy into waste management. Pun intended.
I can only see a change when laws are adjusted so that executives can face actual jail
time. Spending a few months, if not a few years, in HMP Berwyn or HMP Bronzefield would
definitely not look good on either a resume or on LinkedIn so would concentrate their minds
wonderfully about the hazards of breaking laws. Till then, any penalties are merely
costs-of-doing -business and so are not a great risk.
Prison time for top executives and board members. Real cash on the nail fines, to be paid
in lump sums. Right to recover bonuses and distributions made to shareholders. Forfeiture of
company ownership to the Crown. For starters.
Limited liability is a privilege not a right and if the terms for limited liability isn't
fulfilled then the limited liability can, in some countries under certain conditions, become
unlimited liability. An example, trading while insolvent in Sweden (in Swedish, as the laws
are in Swedish and only concerns Sweden then it is unlikely to be found in many other
languages):
How do you put people who sat around a conference table in a corporation committee meeting
in jail? The entire process is designed and perfected to evade responsibility. Anytime I see something like this I class it as a complete fluke:
While I was reading this I was feeling increasingly obfuscated by the similarities I find
in the publicly-owned privately-managed sewage and waste plants in Madrid. I can easily
understand the frustration of the regulator with managers opacity. Imagine how bored must I
be sometimes, that I annually take a look at the reports that the managers of those plants
produce. These are rubbish reports. You have to spend a lot of time, first trying to
understand the real meaning of some concepts, second to gather the truly relevant variables
in order to assess the real performance of the plants.
I have to say that the situation in Spain must be worse than in the UK because regulators,
if they exist, never come up with auditing results, not to mention noticing misconducts. We
are miles away from being able to even fine those misconducts of which only a few have been
brougth to the public by NGOs.
Interestingly the former progressive Major of Madrid Carmena, now replaced with
conservatives in alliance with xenophobe populists, ordered the first audit (i believe it is
the first) of the waste treatment plant, a huge facility called Valdemingómez. I guess
that the current Major, whose name I don't want to recall, will hide audit results to the
public given that his party set years ago the current model for waste management.
Good waste management/recycling is going to be the industry of the future. Instead of
being publicly contrite about their excessive wealth, the Billionaires should all focus their
resources on fixing what will otherwise be an overwhelming mess. We will all be, as the
military says, "Overtaken by events" someday soon unless we get on top of this. Pollution,
garbage and sewage are the byproducts of our irresponsibility. Coupled with overpopulation.
Not good. Andrew Carnegie donated his money away on good things. Every little town in America
was a beneficiary, with a "Carnegie Library" among other things. But it made us all laugh out
loud when San Francisco named its new water treatment facility the "George W. Bush Sewage and
Water Treatment Facility" (or stg. like that). Unfortunately, the joke is really on us unless
we start demanding improvements and responsibility. The problem is already almost too big to
fix, Houston.
I knew an English guy circa 1999 who was then 35 years old and a hard Thatcherite in his
opinions (didn't do any actual political activism, of course) because the previous Labour
governments had ruined everything to the point that the country had to go to the IMF. He was
no fan of the NHS, either. NHS-reimbursed dentists had done a ton of unnecessary fillings on
him and his young friends as children. Worse, NHS doctors had misdiagnosed a life-threatening
illness for years until American emergency room doctors did a bunch of expensive tests and
cured him.
I wonder what he would have to say 20 years later now that the faults of privatization on
both sides of the Atlantic have been laid bare?
I don't think there is any alternative to constant watchdogging and activism by the
general public.
Sewage treatment is part of health care. Places without adequate sewage treatment suffer rampant diseases in potable water, fish,
animals and people exposed to it. Sewage treatment facilities are the only example of publicly run health care in the
U.S.
Each homeowner, and renter, pays a certain amount for it and it is handled to scientific
standards without a profit motive.
"... This story of lost American leadership and production is not unique. In fact, the destruction of America's once vibrant military and commercial industrial capacity in many sectors has become the single biggest unacknowledged threat to our national security. Because of public policies focused on finance instead of production, the United States increasingly cannot produce or maintain vital systems upon which our economy, our military, and our allies rely. Huawei is just a particularly prominent example. ..."
"... Higher budgets would seem to make sense. According to the 2018 National Defense Strategy, the United States is shifting away from armed conflicts in the Middle East to "great power" competition with China and Russia, which have technological parity in many areas with the United States. As part of his case for higher budgets, Mattis told Congress that "our military remains capable, but our competitive edge has eroded in every domain of warfare -- air, land, sea, space, and cyber." ..."
"... And yet, the U.S. military budget, even at stalled levels, is still larger than the next nine countries' budgets combined. So there's a second natural follow-up question: is the defense budget the primary reason our military advantage is slipping away, or is it something deeper? ..."
"... The loss of manufacturing capacity has been devastating for American research capacity. "Innovation doesn't just hover above the Great Plains," Mottl said. "It is built on steady incremental changes and knowledge learned out of basic manufacturing." Telecommunications equipment is dual use, meaning it can be used for both commercial and military purposes. The loss of an industrial base in telecom equipment meant that the American national security apparatus lost military capacity. ..."
"... "The middle-class Americans who did the manufacturing work, all that capability, machine tools, knowledge, it just became worthless, driven by the stock price," he said. "The national ability to produce is a national treasure. If you can't produce you won't consume, and you can't defend yourself." ..."
"... In the commercial sector, rebuilding the industrial base will require an aggressive national mobilization strategy. This means aggressive investment by government to rebuild manufacturing capacity, selective tariffs to protect against Chinese or foreign predation, regulation to stop financial predation by Wall Street, and anti-monopoly enforcement to block the exploitation of market power. ..."
Wall Street's short-term incentives have decimated our defense industrial base and
undermined our national security.
Early this year, U.S. authorities filed criminal
charges -- including bank fraud, obstruction of justice, and theft of technology -- against the
largest maker of telecommunications equipment in the world, a Chinese giant named Huawei.
Chinese dominance in telecom equipment has created a crisis among Western espionage agencies,
who, fearful of Chinese spying, are attempting to prevent the spread of Huawei equipment
worldwide, especially
in the critical 5G next-generation mobile networking space.
In response to the campaign to block the purchase of Huawei equipment, the company has
engaged in a public relations offensive. The company's CEO, Ren Zhengfei, portrayed Western
fears as an advertisement for its products, which are, he said, "so good that the U.S.
government is scared." There's little question the Chinese government is interested in using
equipment to spy. What is surprising is Zhengfei is right about the products. Huawei, a
relatively new company in the telecom equipment space, has amassed top market share because its
equipment -- espionage vulnerabilities aside -- is the best value on the market.
In historical terms, this is a shocking turnaround. Americans invented the telephone
business and until recently dominated production and research. But in the last 20 years, every
single American producer of key telecommunication equipment sectors is gone. Today, only two
European makers -- Ericsson and Nokia -- are left to compete with Huawei and another Chinese
competitor, ZTE.
This story of lost American leadership and production is not unique. In fact, the
destruction of America's once vibrant military and commercial industrial capacity in many
sectors has become the single biggest unacknowledged threat to our national security. Because
of public policies focused on finance instead of production, the United States increasingly
cannot produce or maintain vital systems upon which our economy, our military, and our allies
rely. Huawei is just a particularly prominent example.
When national security specialists consider preparedness, they usually think in terms of the
amount of money spent on the Pentagon. One of President Donald Trump's key campaign promises
was to aggressively raise the military budget, which he, along with Congress, started doing in
2017. The reaction was instant. "I'm heartened that Congress recognizes the sobering effect of
budgetary uncertainty on America's military and on the men and women who provide for our
nation's defense," then-defense secretary Jim Mattis said. Budgets have gone up every year
since.
Higher budgets would seem to make sense. According to the 2018 National Defense
Strategy, the United States is shifting away from armed conflicts in the Middle East to "great
power" competition with China and Russia, which have technological parity in many areas with
the United States. As part of his case for higher budgets, Mattis told Congress that "our
military remains capable, but our competitive edge has eroded in every domain of warfare --
air, land, sea, space, and cyber."
In some cases, our competitive edge has not just been eroded, but is at risk of being -- or
already is -- surpassed. The Chinese surge in 5G telecom equipment, which has dual civilian and
military uses, is one example. China is making key investments in artificial
intelligence, another area of competition. They even seem to be able to mount a rail gun on a naval ship ,
an important next generation weapons technology that the U.S. Navy has yet to incorporate.
And yet, the U.S. military budget, even at stalled levels, is still larger than the next
nine countries' budgets combined. So there's a second natural follow-up question: is the
defense budget the primary reason our military advantage is slipping away, or is it something
deeper?
The story of Huawei, and many others, suggests the latter.
♦♦♦
For over a century, America led the world in producing telecommunications equipment. The
American telecom industry, according to Zach Mottl of Atlas Tool Works, a subcontractor in the
industry, used to be a "crown jewel of American manufacturing." Mottl's company had been a
manufacturing supplier to AT&T and its Bell Labs from the early 1900s until the early
2000s. "The radar system was invented here. The transistor came out of Bell Labs. The laser. I
mean all of these high-tech inventions that have both commercial and military applications were
funded out of the research," Mottl told TAC . More than just the sexy inventions, there
was a domestic industrial sector which could make the equipment. Now, in a strategic coup for
our adversaries, that capability is gone.
Yet it wasn't one of those adversaries that killed our telecommunications capacity, but one
of our own institutions, Wall Street, and its pressure on executives to make decisions designed
to impress financial markets, rather than for the long-term health of their companies. In 1996,
AT&T spun off Bell Labs into a telecom equipment company, Lucent Technologies, to take
advantage of investors' appetite for an independent player selling high-tech telecom gear after
Congress deregulated the telecommuncations space. At the time, it was the biggest initial
public offering in history, and became the foundation of a relationship with financial markets
that led to its eventual collapse.
The focus on stock price at Lucent was systematic. The stock price was posted daily to
encourage everyone to focus on the company's relationship with short-term oriented financial
markets. All employees got a small number of "Founder's Grant Share Options," with executives
offered much larger slugs of stock to solidify the connection. When Richard McGinn became CEO
in 1997, he focused on financial markets.
Lucent began to buy up companies. According to two scholars , "The perceived
need to compete for acquisitions became a 'strategic' justification for keeping stock prices
high. This in turn demanded meeting or exceeding quarterly revenue and earnings targets,
objectives with which Lucent top executives, led by the hard-driving McGinn, became
obsessed."
Lucent got even more aggressive. McGinn's subordinate, an executive named Carly Fiorina,
juiced returns with a strategy based on lending money to risky startups who would then turn
around and buy Lucent equipment. Fiorina collected $65
million in compensation as the stock soared. And then, when the dot-com boom turned to
bust, the company, beset by accounting scandals designed to impress shareholders and the
financial markets, embarked on massive layoffs. CEO McGinn was among those laid off, but with a
$12.5 million severance package -- royal compensation for taking one of America's strategic
industrial assets down the road toward total destruction.
In the early 2000s, the telecom equipment market began to recover from the recession.
Lucent's new strategy, as Mottl put it, was to seek "margin" by offshoring production to China,
continuing layoffs of American workers and hiring abroad. At first, it was the simpler parts of
the telecom equipment, the boxes and assembly, but soon contract manufacturers in China were
making virtually all of it. American telecom capacity would never return.
Lucent didn't recover its former position. Chinese entrants, subsidized heavily by the
Chinese state and using Western technology, underpriced
Western companies. American policymakers, unconcerned with industrial capacity, allowed Chinese
companies to capture market share despite the predatory subsidies and stolen technology. In
2006, French telecom equipment maker Alcatel bought Lucent, signifying the end of American
control of Bell Labs. Today, Huawei, with state backing, dominates the market.
The erosion of much of the American industrial and defense industrial base proceeded like
Lucent. First, in the 1980s and 1990s, Wall Street financiers focused on short-term profits,
market power, and executive pay-outs over core competencies like research and production, often
rolling an industry up into a monopoly producer. Then, in the 2000s, they offshored production
to the lowest cost producer. This finance-centric approach opened the door to the Chinese
government's ability to strategically pick off industrial capacity by subsidizing its
producers. Hand over cash to Wall Street, and China could get the American crown jewels.
The loss of manufacturing capacity has been devastating for American research capacity.
"Innovation doesn't just hover above the Great Plains," Mottl said. "It is built on steady
incremental changes and knowledge learned out of basic manufacturing." Telecommunications
equipment is dual use, meaning it can be used for both commercial and military purposes. The
loss of an industrial base in telecom equipment meant that the American national security
apparatus lost military capacity.
This loss goes well beyond telecom equipment. Talking to small manufacturers and
distributors who operate in the guts of our industrial systems offers a perspective on the
danger of this process of financial predation and offshoring. Bill Hickey, who headed his
family's metal distributor, processor, and fabricator, has been watching the collapse for
decades. Hickey sells to "everyone who uses steel," from truck, car, and agricultural equipment
manufacturers to stadiums and the military.
Hickey, like many manufacturers, has watched the rise of China with alarm for decades.
"Everyone's upset about the China 2025 plan," he told TAC , referencing the current
Chinese plan causing alarm among national security thinkers in Washington. "Well there was a
China 2020 plan, 2016 plan, 2012 plan." The United States has, for instance, lost much of its
fasteners and casting industries, which are key inputs to virtually every industrial product.
It has lost much of its capacity in grain oriented flat-rolled electrical steel, a specialized
metal required for highly efficient electrical motors. Aluminum that goes into American
aircraft carriers now often comes from China.
Hickey told a story of how the United States is even losing its submarine fleet. He had a
conversation with an admiral in charge of the U.S. sub fleet at the commissioning of the USS
Illinois , a Virginia-class attack submarine, who complained that the United States was
retiring three worn-out boats a year, but could only build one and a half in that time. The
Trump military budget has boosted funding to build two a year, but the United States no longer
has the capacity to do high quality castings to build any more than that. The supply chain that
could support such surge production should be in the commercial world, but it has been
offshored to China. "You can't run a really high-end casting business on making three
submarines a year," Hickey said. "You just can't do it." This shift happened because Wall
Street, or "the LBO (leveraged buy-out) guys" as Hickey put it, bought up manufacturing
facilities in the 1990s and moved them to China.
"The middle-class Americans who did the manufacturing work, all that capability, machine
tools, knowledge, it just became worthless, driven by the stock price," he said. "The national
ability to produce is a national treasure. If you can't produce you won't consume, and you
can't defend yourself."
The Loss of the Defense Industrial Base
But it's not just the dual-use commercial manufacturing base that is collapsing. Our policy
empowering Wall Street and offshoring has also damaged the more specialized defense base, which
directly produces weaponry and equipment for the military.
How pervasive is the loss of such capacity? In September 2018, the Department of Defense
released findings of its analysis into its supply chain. The results highlighted how fragile
our ability to supply our own military has become.
The report listed dozens of militarily significant items and inputs with only one or two
domestic producers, or even none at all. Many production facilities are owned by companies that
are financially vulnerable and at high risk of being shut down. Some of the risk comes from
limited production capability. Mortar tubes, for example, are made on just one production line,
and some Marine aircraft parts are made by just one company -- one which recently filed for
bankruptcy.
At risk is everything from chaff to flares to high voltage cable, fittings for ships,
valves, key inputs for satellites and missiles, and even material for tents. As Americans no
longer work in key industrial fields, the engineering and production skills evaporate as the
legacy workforce retires.
Even more unsettling is the reliance on foreign, and often adversarial, manufacturing and
supplies. The report found that "China is the single or sole supplier for a number of specialty
chemicals used in munitions and missiles . A sudden and catastrophic loss of supply would
disrupt DoD missile, satellite, space launch, and other defense manufacturing programs. In many
cases, there are no substitutes readily available." Other examples of foreign reliance included
circuit boards, night vision systems, batteries, and space sensors.
The story here is similar. When Wall Street targeted the commercial industrial base in the
1990s, the same financial trends shifted the defense industry. Well before any of the more
recent conflicts, financial pressure led to a change in focus for many in the defense industry
-- from technological engineering to balance sheet engineering. The result is that some of the
biggest names in the industry have never created any defense product. Instead of innovating new
technology to support our national security, they innovate new ways of creating monopolies to
take advantage of it.
A good example is a company called TransDigm. While TransDigm presents itself as a designer
and producer of aerospace products, it can more accurately be described as a designer of
monopolies. TransDigm began as a private equity firm, a type of investment business, in 1993.
Its mission, per
its earnings call , is to give "private equity-like returns" to shareholders, returns that
are much higher than the stock market or other standard investment vehicles.
It achieves these returns for its shareholders by buying up companies that are sole or
single-source suppliers of obscure airplane parts that the government needs, and then
increasing prices by as
much as eight times the original amount . If the government balks at paying, TransDigm has
no qualms daring the military to risk its mission and its crew by not buying the parts. The
military, held hostage, often pays the ransom. TransDigm's gross profit margins using this
model to gouge the U.S. government are a robust 54.5 percent. To put that into perspective,
Boeing and Lockheed's profit margins are listed at 13.6 percent and 10.91 percent. In many
ways, TransDigm is like the pharmaceutical company run by Martin Shkreli, which bought rare
treatments and then price gouged those who could not do without the product. Earlier this year,
TransDigm
recently bought the remaining supplier of chaff and one of two suppliers of flares,
products identified in the Defense Department's supply chain fragility report.
Yet, Trandigm's stock price thrives because Wall Street loves monopolies, regardless of who
they are taking advantage of. Take this
analysis from TheStreet from March 2019, published after the latest Inspector General
report and directly citing many of the concerning facts from the report as pure positives for
the investor:
The company is now the sole supplier for 80% of the end markets it serves. And 90% of the
items in the supply chain are proprietary to TransDigm. In other words, the company is
operating a monopoly for parts needed to operate aircraft that will typically be in service for
30 years . Managers are uniquely motivated to increase shareholder value and they have an
enviable record, with shares up 2,503% since 2009.
Fleecing the Defense Department is big business. Its executive chairman W. Nicholas Howley,
skewered by Democrats and Republicans alike in a May 2019 House Oversight hearing for making up
to 4,000 percent excess profit on some parts and stealing from the American taxpayer, received
total compensation of over $64
million in 2013 , the fifth most among all CEOs, and
over $13 million in 2018 , making him one
of the most highly compensated CEOs no one has ever heard of . Shortly after May's hearing,
the company agreed to voluntarily return $16 million in overcharges to the Pentagon, but the
share price is at near record highs.
L3 Technologies, created in 1997, has taken a different, but also damaging, approach to
monopolizing Defense Department contracts. Originally, it sought to become "the Home Depot of
the defense industry" by going on an acquisition binge, according
to its former CEO Frank Lanza. Today, L3 uses its size, its connections within the government,
and its willingness to offer federal employees good-paying jobs at L3, to muscle out
competitors and win contracts, even if the competitor has
more innovative and better priced products . This practice attracted the ire of two
Republican congressmen from North Carolina, Ted Budd and the late Walter Jones, who found
in 2017 that L3 succeeds, in part, due to "blatant corruption and obvious disregard of American
foreign interest in the name of personal economic profit."
Like TransDigm, this isn't L3's first brush with trouble. It was
temporarily suspended from U.S. government contracting for using "extremely sensitive and
classified information" from a government system to help its international business interests.
It was the subject of a scathing Senate Armed Services Committee investigation
for
failing to notify the Defense Department that it supplied faulty Chinese counterfeit parts
for some of its aircraft displays. And it agreed to pay a
$25.6 million settlement to the U.S. government for knowingly providing defective weapon
sights for years to soldiers serving in Iraq and Afghanistan.
Yet, also like TransDigm, L3 has thrived despite its troubles. When the company was granted
an open-ended contract to update the Air Force's electronics jamming airplane in 2017,
Lieutenant General Arnold Bunch
outlined the Air Force's logic at a House Armed Services Subcommittee meeting. L3, he said,
is the only company that can do the job. "They have all the tooling, they have all the existing
knowledge, and they have the modeling and all the information to do that work," he said.
In other words, because L3 has a monopoly, there was no one else to pick. The system -- a
system designed by the financial industry that rewards monopoly and consolidation at the
expense of innovation and national security -- essentially made the pick for him. It is no
wonder our military capacities are ebbing, despite the large budget outlays -- the money isn't
going to defense.
♦♦♦
In fact, in some ways, our own defense budgets are being used against us when potential
adversaries use Wall Street to take control of our own Pentagon-developed technologies.
There's no better example than China's takeover of the rare earth metal industry, which is
key to both defense and electronics. The issue has frequently made the front page during the
recent trade war, but the seldom-discussed background to our dependence on China for rare
earths is that, just like with telecom equipment, the United States used to be the world leader
in the industry until the financial sector shipped the whole thing to China.
In the 1970s and 1980s, the Defense Department invested in the development of a
technology to use what are known as rare-earth magnets. The investment was so successful that
General Motors engineers, using Pentagon grants, succeeded in creating a
rare earth magnet that is now essential for nearly every high-tech piece of military equipment
in the U.S. inventory, from smart bombs and fighter jets to lasers and communications devices.
The benefit of DARPA's investment wasn't restricted to the military. The magnets make cell
phones and modern commercial electronics possible.
China recognized the value of these magnets early on. Chinese Premier Deng Xiaoping
famously said in 1992 that "The Middle East has oil, China has rare earth," to underscore
the importance of a rare earth strategy he adopted for China. Part of that strategy was to take
control of the industry by manipulating the motivations of Wall Street.
Wall Street's outsized control over defense contracting and industry means that every place
a foreign adversary can insert itself into American financial institutions, it can insert
itself into our defense industry.
At an Armed Services Committee hearing in 2018, Representative Carol Shea-Porter talked
about how constant the conflict between financial concentration and patriotism had been in her
six years on the committee. She recounted a CEO once telling her, in response to her concern
about the outsourcing of defense industry parts, that he "[has] to answer to stockholders."
Who are these stockholders that CEOs are so compelled to answer to? Oftentimes, China.
Jennifer M.
Harris , an expert in global markets with experience at the U.S. State Department and the
U.S. National Intelligence Council, researched a recent
explosion of Chinese strategic investment in American technology companies. She found that
China has systematically targeted U.S. greenfield investments, "technology goods (especially
semiconductors), R&D networks, and advanced manufacturing."
The trend accelerated, until the recent flare-up of tensions between the United States and
China. "China's foreign direct investment (FDI) stock in the U.S.
increased some 800% between 2009 and 2015," she wrote. Then, from 2015 to 2017, "Chinese
FDI in the U.S. climbed nearly four-fold, reaching roughly $45.6 billion in 2016 , up from just
$12.8 billion in 2014."
This investment runs right through Wall Street, the key lobbying group trying to ratchet
down Trump's tough negotiating posture with the Chinese. Rather than showing concern about the
increasing influence of a foreign power in our commerce and industry, Wall Street banks have
repeatedly followed Archie Cox down the path of easy returns.
In 2016, J.P. Morgan Chase agreed to pay a
$264 million bribery settlement to the U.S. government for creating a program, called "Sons
and Daughters," to gain access to Chinese money by selectively hiring the unqualified offspring
of high-ranking Communist Party officials and other Chinese elites. Several other banks are
under investigation for similar practices, including Citigroup and Goldman Sachs, who, not
coincidentally,
hired the son of China's commerce minister. It appears to have worked out for them. In
2017, Goldman Sachs
partnered with the Chinese government's sovereign wealth fund to invest $5 billion Chinese
government dollars in American industry.
In short, China is becoming a significant shareholder in U.S. industries, and is selectively
targeting those with strategic implications. Congresswoman Shea-Porter's discovery that defense
industry CEOs aren't able to worry about national security because they "[have] to answer to
shareholders" was disturbing enough. But the fact that it potentially translates as CEOs not
being able to worry about national security because they have to answer to the Chinese should
elevate the issue to the top of our national security discussion. This nexus of China, Wall
Street, and our defense industrial base may be the answer to why our military advantage is
ebbing. Even when American ingenuity can thrive, too often the fruits go to the Chinese.
In short, the financial industry, with its emphasis on short-term profit and
monopoly , and its willingness to ignore national security for profit, has warped our very
ability to defend ourselves.
How Did We Get Here?
Believe it or not, America has been here before. In the 1920s and 1930s, the American
defense industrial base was being similarly manipulated by domestic financiers for their own
purposes, retarding innovation and damaging the nation's ability to defend itself. And American
military readiness was ebbing in the midst of an increasingly dangerous world full of rising
autocracies.
Today it might be artificial intelligence or drones, but in the 1930s the key military
technology was the airplane. And as with much digital technology today, while Americans
invented the airplane, many of the fruits went elsewhere. The reason was similar to the problem
of Wall Street today. The American aerospace industry in the 1930s was undermined by fights
among bankers over who got to profit from associated patent rights.
In 1935, Brigadier General William Mitchell told Congress that the United States didn't have
a single plane that could go against a "first-class power." "It is a disgraceful situation and
is due," he said, "for one thing, to this pool of patents." The lack of aerospace capacity
reflected a broader industrial problem. Monopolists refused to invest in factories to produce
enough steel, aluminum, and magnesium for adequate military readiness, for fear of losing
control over prices.
New Dealers investigated, and by the time war broke out, the Roosevelt administration was in
the midst of a sustained anti-monopoly campaign. The Nazi war machine, like China today, gave
added impetus to the problem of monopoly in key technology-heavy industries. In 1941, an
assistant attorney general for the antitrust division, Norman Littell, gave a speech to the
Indiana State Bar Association about what he called "The German Invasion of American
Business."
The Nazis, he argued, used legal techniques, like patent laws, stock ownership, dummy
corporations, and cartel arrangements, to extend their power into the United States. "The
distinction between bombing a vital plant out of existence from an airplane and preventing that
plant from coming into existence in the first place [through cartel arrangements]," he said,
"is largely a difference in the amount of noise involved."
Nazis used their American subsidiary corporations to spy on U.S. industrial capacity and
steal technology, such as walkie-talkies, intertank and ground-air radio communication systems,
and shortwave sets developed by the U.S. Army and Navy. They used patents or cartel
arrangements to restrict the production of stainless steel, tungsten-carbide, and fuel
injection equipment. According to the U.S. military after the war, I.G. Farben, the Nazi
chemical monopoly, had influence over American production of "synthetic gas and oils,
dyestuffs, explosives, synthetic rubber ('Buna'), menthol, cellophane, and other products," and
sought to keep the United States "entirely dependent" on Germany for certain types of
electrical equipment.
The Nazis took advantage of an industrial system that was, like the current one, organized
along short-term objectives. But seeing the danger, New Dealers attacked the power of
financiers through direct financing of factories, excess profits taxes, and the breaking of the
power of the Rockefeller, Dupont, and Mellon empires through bank regulation and antitrust
suits. They separated the makers of airplanes from airlines, a sort of Glass Steagall for
aerospace. During the war itself, antitrust chief Thurman Arnold, and those he influenced,
sought to end international cartels and loosen patent rules in part because they allowed
control over American industry by the Nazis.
After the war, the link between global cartels and national security vulnerabilities was a
key driver of American trade and military strategy. America pursued globalization, but with two
differences from the form we have today. First, strategists sought to prevent the recurrence of
global cartels and monopolies. Second, they sought to become industrially intertwined with
allies, not rivals. While multinational corporations stretched across the West, they did not
locate production or technology development in Moscow or among strategic rivals, as we do today
in China.
Domestically, anti-profiteering institutions and rules protected against corruption,
especially important when the defense budget comprised a large chunk of overall American
research and development. The Defense Department's procurement agency -- the Defense Logistics
Agency -- was enormously powerful and oversaw procurement and supply challenges. The Pentagon
had the power to force suppliers of sole source products -- contractors that had monopolies --
to reveal cost information to the government. The financial health of defense contractors
mattered, but so did value to the taxpayer, a skilled defense industrial workforce, and the
ability to deliver quality products to aid in national defense.
A fragmented base of contractors and subcontractors ensured redundancy and competition, and
a powerful federal apparatus with thousands of employees with expertise in pricing and
negotiation kept prices reasonable. The Defense Department could even take ownership of
specialized tooling rights to create competition in monopolistic markets with specialized spare
part needs -- which is precisely where TransDigm specializes. This authority and expertise had
been carefully cultivated over decades to provide the material necessary to equip American
soldiers for World War II, the Korean and Vietnam wars, and the first Gulf war.
In the 1980s, while Ronald Reagan allowed Wall Street free rein elsewhere in the economy, he
mostly kept Wall Street from going after the defense base. But scholars began debating whether
it made sense to have such a large and expensive negotiating apparatus to deal with
contractors, or if a more "cooperative" approach should be taken. Business consultants
argued that the Pentagon could save money if it would simply be "a better customer, by
being less adversarial and more trusting" of defense contractors.
With the end of the Cold War, these arguments found new resonance. Bill Clinton took the
philosophical change that Reagan had pushed on the civilian economy, and moved it into the
defense base. In 1993, Defense Department official William Perry gathered CEOs of top defense
contractors and told them that they would have to merge into larger entities because of reduced
Cold War spending. "Consolidate or evaporate," he said at what became known as "The Last
Supper" in military lore. Former secretary of the Navy John Lehman noted, "industry leaders
took the warning to heart." They reduced the number of prime contractors from 16 to six;
subcontractor mergers quadrupled from 1990 to 1998. They also loosened rules on sole source --
i.e. monopoly -- contracts, and slashed the Defense Logistics Agency, resulting in thousands of
employees with deep knowledge of defense contracting leaving the public sector.
Contractors increasingly dictated procurement rules. The Clinton administration approved
laws changing procurement, which, as the Los Angeles Times put it, got rid of the
government's traditional goals of ensuring "fair competition and low prices." They reversed
what the New Dealers had done to insulate American military power from financiers.
The administration also pushed Congress to allow foreign imports into
American weapons through waivers of the Buy America Act, and demanded procurement officers stop
asking for cost data. Mass offshoring took place, and businesses could increase prices
radically.
This environment attracted private-equity shops, and swaths of the defense industry shifted
their focus from aerospace engineering to balance sheet engineering. From 1993 to 2000, despite
dramatic declines in Cold War military spending and declines in the number of workers in the
defense industrial base and within the military, defense stocks outperformed the S&P.
Today, the American defense establishment quietly finds itself in the same predicament it
did in the 1930s. Despite spending large amounts of money on weapons systems, it often gets
substandard equipment. It is dependent for key sources of supply on business arrangements with
potentially hostile powers. The problem is so big, so toxic, and so difficult that few
lawmakers even want to take it on. But the increasingly obvious danger of Chinese power means
we can no longer ignore it.
The Fix
Fortunately, this is fixable. Huawei's predatory pricing success has shown policymakers all
over the world what happens when we don't protect our vital industrial capacity. Last year,
Congress strengthened the Committee on Foreign Investment in the United States, the committee
that reviews foreign investment and mergers. The Trump tariffs have begun forcing a
long-overdue conversation across the globe about Chinese steel and aluminum overcapacity, and
Democrats like Representative Dan Lipinski are focused on reconstituting domestic manufacturing
ability.
Within the defense base itself, every example -- from TransDigm to L3 to Chinese
infiltration of American business -- has drawn the attention of members of Congress.
Representatives Ted Budd and Paul Cook are Republicans and Representatives Jackie Speier and Ro
Khanna are Democrats. They are not alone. Democratic Senator Elizabeth Warren and
Representative Tim Ryan have joined Khanna's demand for a TransDigm investigation.
Moreover, focus on production is bipartisan. One of the most ardent opponents of
consolidation in the 1990s is current presidential candidate Bernie Sanders, who in 1996
passed an amendment to block Pentagon subsidies for defense mergers, or what he called "Payoffs
for Layoffs." On the other end of the spectrum, Trump has refocused national security and trade
officials on the importance of domestic manufacturing.
Defense officials have also become acutely aware of the problem. In a 2015 briefing at the
Pentagon, in response to questions about Lockheed's acquisition of Sikorsky, then secretary of
defense Ash Carter
emphasized the importance of not having "excessive consolidation," including so-called
vertical integration, in the defense industry because it is "[not] good for the defense
marketplace, and therefore, for the taxpayer and warfighter in the long run." Carter's
acquisition chief, Frank Kendall,
also noted the "significant policy concerns" posed by the "continuing march toward greater
consolidation in the defense industry at the prime contractor level" and the effect it has on
innovation.
American policymakers in the 1990s lost the ability to recognize the value of production
capacity. Today, many of the problems highlighted here are still seen in isolation, perhaps as
instances of corruption or reduced capacity. But the problems -- diminished innovation,
marginal quality, higher prices, less redundancy, dependence on overseas supply chains, a lack
of defense industry competition, and reduced investment in research and development -- are not
independent. They are the result of the financialization of industry and of monopoly. It's time
for a new strategic posture, one that puts a premium not just on spending the right amount on
military budgets, but also on ensuring that financial actors don't capture what we do spend. We
must begin once again to recognize that private industrial capacity is a vital national
security asset that we can no longer allow Wall Street to pillage. By seeing the problem in its
totality, we can attack the power of finance within the commercial and defense base and restore
our national security capacity once again.
There are many levers we can use to reorder our national priorities. The Defense Department,
along with its new higher budgets, should have more authority to promote competition, break up
defense conglomerates, restrict excess defense contractor profits, empower contracting officers
to get cost information, and block private equity takeovers of suppliers. Congress could
reinstate the authority of the Defense Department to simply take ownership of specialized
tooling rights to create competition in monopolistic markets with specialized spare part needs,
a power it once had.
In the commercial sector, rebuilding the industrial base will require an aggressive
national mobilization strategy. This means aggressive investment by government to rebuild
manufacturing capacity, selective tariffs to protect against Chinese or foreign predation,
regulation to stop financial predation by Wall Street, and anti-monopoly enforcement to block
the exploitation of market power.
Policymakers must recognize that industrial capacity is a public good and short-term actors
on Wall Street have become a serious national security vulnerability. While private businesses
are essential to our common defense, the public sector must once again structure how we
organize our national defense and protect our defense industrial base from predatory finance.
For several decades, Wall Street has been organizing not just the financing of defense
contractors, but the capabilities of our very defense posture. That experiment has been a
failure. It is time to wake up, before it's too late.
Matt Stoller is a fellow at the Open Markets Institute. His book, Goliath: The
100-Year War Between Monopoly Power and Democracy, is due out this fall from Simon &
Schuster. Lucas Kunce spent 12 years in the United States Marine Corps, and is a veteran of the
Iraq and Afghanistan wars. The views presented are those of the authors and do not necessarily
represent the views of the Department of Defense or its components. This article was supported
by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the
responsibility of the authors.
Sobering read. However, it is likely that only a major war will spur legislators and
administrators into action. Until then Wall Street will reign and the US administrations will
keep threatening countries with sanctions if they buy equipment that prevents the US to
conduct an easy bombing campaign on them.
I've heard similar stories about the imminent collapse of the Russian Defense sector, they
can't make their own parts, they lack diversity of suppliers, there is a huge brain drain, no
customers (somewhat true since we practice extortion).
I'm not dismissing the author, actually quite the opposite and I am agreeing with you. The
secret ingredient is an actual sense of danger. The Russians are terrified, we pretend to be
terrified but know it's all threat inflation. If we had honest people in Congress proposing
targeted budgets for real needs rather than 'freedom of navigation' when we know it's power
projection then the fear of God might return to our habits. The author brought up the 20/30's
I bet WW2 gave us that fear again.
Dude, your government stopped being able to do anything this complicated somewhere around
1995. Your infrastructure is in shambles and diabetics are dying because of an insulin
monopoly that forces them to ration medication. The rope remark resembles you.
This is the longest litany about demise of American prowess in technology that I've ever read
in TAC so far. The story of destruction of Bell Labs, described in details by Matt Stoller is
very accurate: I have been eyewitness to it from 1983 and up to its gruesome end. Carly
Fiorina, one of the runners for President in 2016, delivered American icon coup-the-grace.
She even justified her claim on presidency on business experience: destruction of another
icon of American high-tech – Hewlett-Packard. Alas, there is the most fundamental
reason for the current situation in the 21-st century USA, was formulated 100+ years ago by
Vladimir Lenin: "For profit capitalists will be eager to sell us rope, with which we'll
hung them" .
Would anybody protest today that profit IS the Nature of capitalism ? And
more: those who substitute Reality with their wet dreams might be cured by watching
Democratic 2020 debates.
Great piece. There are lots of good articles here but not that many that tell something I
really didn't already know. Great perspective on the whole China issue. Amazing how sick our
financialized economy really is when you look under the hood.
This is excellent information. Hope folks on the Hill are reading this.
The Wall Street and finance industry depend on US military, long-term this is a disaster, but
they care only for short-term profits. Whoever thought that principles of free market apply
internationally, where other goverments are free to influence "free trade" in any way they
wish, while US goverment will do nothing is an idiot.
Large part of it is probably diversification and it does not affect the US exporters as they
also can diversify.
Notable quotes:
"... The bottom line is Trump and his misfit Cabinet didn't thoroughly think through all of the likely negative ramifications of "Making America Great Again" !! He impulsively makes decisions and when then fail - as they do often do - he blames others or creates diversionary chaos to change the subject. Trump's a fxxxxing overweight, repulsive imbecile, and the farmers are going to let him have it in 2020.....along with millions who rolled the dice him in 2016 but he crapped out on all of them..... ..."
"... What is happening to US cars in China? I know the market has taken a dump there, but are US cars losing market share as well? Are Chinese consumers shunning goods from US manufacturers? ..."
published new data Monday that shows
agricultural imports from the US have fallen, as Chinese buyers shift supply chains out of the
US to other countries because of the deepening trade war.
In the first five months of 2019, imports of agricultural products from the US crashed 55.3%
YoY . Much of decline was due to a 70.6% YoY decline of soybeans in the same period.
Chinese importers went to Brazil, Argentina, and ASEN countries (Thailand, Indonesia,
Malaysia, Singapore, Philippines, Vietnam, Brunei, Myanmar (Burma), Cambodia, and Laos). Data
showed imports from the EU, Australia, and Canada also jumped in the first five months as
Chinese buyers ditched American products.
The bottom line is Trump and his misfit Cabinet didn't thoroughly think through all of
the likely negative ramifications of "Making America Great Again" !! He impulsively makes
decisions and when then fail - as they do often do - he blames others or creates diversionary
chaos to change the subject. Trump's a fxxxxing overweight, repulsive imbecile, and the
farmers are going to let him have it in 2020.....along with millions who rolled the dice him
in 2016 but he crapped out on all of them.....
C'mon man, it's not a Trump thing, it's been the whole American policy since Ronald
Reagan. Trump didn't start the fire, he's just half-assing things the best he can.
We cannot withstand another year in which our most important foreign market continues to
slip away and soybean prices are 20 to 25%, or even more, below pre-tariff levels," said
John Heisdorffer, chairman of the American Soybean Association, in a statement published on
May 13.
Or.........what? You should've voted for Clinton and you'll vote for Bernie/Biden/Warren?
Come on man, spit it out. Or what?
What is happening to US cars in China? I know the market has taken a dump there, but are
US cars losing market share as well? Are Chinese consumers shunning goods from US
manufacturers?
From a report: Ren's downbeat assessment that the ban will hit revenue
by $30 billion , the first time Huawei has quantified the impact of the U.S. action, comes
as a surprise after weeks of defiant comments from company executives who maintained Huawei was
technologically self-sufficient. [...]
Huawei had not expected that U.S. determination to "crack" the company would be "so
strong and so pervasive," Ren said, speaking at the company's Shenzhen headquarters on
Monday.
Two U.S. tech experts, George Gilder and Nicholas Negroponte, also joined the session.
"We did not expect they would attack us on so many aspects," Ren said, adding he expects a
revival in business in 2021.
Only the greedy, selfish, well off, egotistical and share holders believe that Public
Services should, could and would benefit from privatisation and deregulation.
Education and Health for example are (in theory) a universal right in the UK. As numbers
in the population rise and demographics change so do costs ie delivery of the service becomes
more expensive.As market force logic is introduced it also becomes less responsive - hence
people not able to get the right drugs and treatment and challenging and challenged young
people being denied an education that is vital for them in increasing numbers.
Meanwhile - as Public Services are devalued and denuded in this system the private sector
becomes increasingly wealthy at the top while its workers become poorer and less powerful at
the bottom.
With the introduction of Tory austerity which punishes the latter to the benefit of the
former there is no surprise that this system does not work and has provided a platform for
the unscrupulous greedy and corrupt to exploit Brexit and produce conditions which will take
'Neoliberalism' to where logic suggests it would always go - with the powerful rich protected
minority exerting their power over an increasingly poor and powerless majority.
The competitive tender approach ensures the cheapest bids get the contracts and the cheapest
bids are those most likely to employ exploited labour and cheap materials as well as cutting
corners. Result? a job of sorts gets done, but the quality is rubbish, with no investment or
pride in the product. Look at Hong Kong where this is longstanding practice: new tunnel, half
the extractor fans do not work correctly because they were poorly installed. I once spoke to
the Chief Engineer of the Tsing Ma bridge, he was stressed out of his socks for the whole
construction period trying to monitor all the subcontractors who had bid so low they had to
cheat to make a profit with the result that they would try to cut corners and avoid doing
things if they thought they could get away with it. Good job that engineer was diligent.
Others may be less able or willing.
BTW: I seldom find comparisons in UK-media to other countries when those countries are
better.
I think that's because most of the UK media is propaganda for the established system,
which they rely on for advertising revenue and access to information. If an outlet's
journalists start seriously questioning the existing system, a few things happen: 1.
the journo doesn't get promoted within the system; 2. their access to information is
curtailed (they are not invited to briefings etc., and; 3. advertising revenue drops. As the
business model of most mainstream media is to present consumer audiences to advertisers, this
is not going to sit well with the owners, see 1 and 2 above leading to poor evaluations. Any
journo with half a brain quickly learns this and fits in. Only so far and no further.
As a Tory for most of my longish life, I have to agree that whilst some things have
flourished once privatised, certain services must remain in public ownership and control to
enable governments to improve or reduce, depending on national taxation and expenditure - if
people want better services then they must be prepared to pay for them, and of course the
long-term pensions of the workforce. Managers should be subject matter experts before running
departments, not just accountants or management consultants, so they can improve delivery not
just constantly re-structure or carp on about 'efficiency savings'.
Having worked in shipping, that industry has oscillated several times but rail is an
interesting example - a disaster in the dying days of national ownership, the private world
started well improving safety, reliability and capacity but has gone downhill in recent
years, not helped by the track management system. Again, the airlines started well but now
several have gone into administration and BA has 'down-qualitied' itself to become one of the
worst.
Some parts of the NHS can be provided by private industry but limited to service provision
and collective buying only - certainly NOT cancer screening.
Then, when you look at private providers who go bust and completely fail to provide any
acceptable capability - jails, probation, social care etc. one wonders when, if ever,
politicians will realise that it costs them, the civil service and commercial management an
incredible amount of time, effort and cost just to fail!
Outsourcing government work is the most inefficient way of getting it done for the benefit of
taxpayers. When the profits private companies make from it are added to what economies must
invest to pay the taxes for it it's astonishing how popular it has become throughout the
world, something only explicable if those authorising it are amongst the most stupid of
financial administrators or the most corrupt.
Outsourcing for example £1m worth of work requires that amount to be paid in taxes,
which needs about £5m to be earned in wages and profits to pay £1m in taxes,
which in turn needs an investment of perhaps ten times that amount, when the £1m is
borrowed by debt laden governments to be repaid by over-borrowed and overtaxed economies.
If the outsourced company is not profit-making it will borrow the capital to be able to
deliver what's required and that in turn will raise the amount it will want for future work,
which is what I think accounts for Carillion and the other outsource giants going to the
wall.
The process is generally the fault of governments failing to adhere strictly to the necessity
of only paying its workforce on average the same as the private sector pays its workers,
which in democracies is not an unfair requirement demanded by equality legislation. Many
would claim that such was why Margaret Thatcher decided on privatising so many public
utilities especially after the miners' strike in Ted Heath's government and why it gained so
much support and popularity when wages and benefits for similar skill levels seemed so much
better and jobs more secure for many public sector workers involved than they were in the
private sector. Now of course, the high costs of private necessary public services are making
life unbearable for the majority of workers and welfare recipients while profits are going
abroad to those who own them and the EU in getting the flak – courtesy of the media -
for the resultant poverty and austerity, allowed the false £350m a week to win the
referendum. The £4 billion a week worth of exports to the EU paid most of that and the
way companies are relocating to hedge against Brexit means a lot of lost jobs will go with
them – some earlier estimates but it at more than 100,000 - which doesn't seem to deter
those determinedly wanting out of the EU one little bit.
This is a blessing for the low labour cost Member States, who being in the populous markets
the multinationals need, can attract the UK industries looking to further cut costs and
freight charges so those that go will never come back because higher costs in the Brexit UK
will not be compensated for easily with uncompetitive price hikes for EU customers, unlike
CAP payments that have been promised to farmers by the government proBrexit Minister.
The doom and gloom felt by many I think is well justified when sovereign debt and bank credit
is considered relative to taxes. While sovereign debt is regarded as an asset and future
taxes are acceptable for bank credit and both can be securitized by banking systems to borrow
even more capital that will be acceptable to central banks as QE, it's not surprising that
sovereigns don't need to worry about economies being unable to provide the taxes their
governments unlawfully spend even when leaving it for future generations is also unlawful
i.e. is a crime, since if they don't, their central banks and bond holders covered by them
will. When the cost in trillions since 2016 already spent by government in preparing for
Brexit is included one can't help but think that the financial economy has made a proverbial
killing from UK incorporated and now owns most if not all of it. If most of the finance for
Brexit came from its financiers and investors is it possible that after Brexit they'll pour
trillions back into the economy to make it capable of not only surviving but also competing
favourably with the EU, Japan, China, and the US?
I have to disagree. Hardly anything has flourished after privatisation. The big failures,
which get all the publicity, were generally basket case private businesses which had to be
nationalised to save them from collapse.
Sometimes they are stuffed with public money and
sold at a loss to the public, like the Tory nationalisation of Rolls Royce, or deprived of
funds like British Rail to provide an excuse to liberate thousands of square miles of real
estate
This latter is the scheme for the NHS with hospitals and other property provided at
great public expense sold off to any shark who says he has the money, and once it's private
load the enterprise with debt and walk away.
Unlike the privatisations of the 80s and 90s there's barely any pretence these days
that new sell-offs are anything more than simply part of a quest to find new avenues for
profit-making in an economy with tons of liquid capital but not enough places to profitability
put it.
Back in the Thatcher/Reagan years there were at people around who genuinely believed in the
superiority of the market, or at least, made the effort to set out an intellectual case for
it.
Now we're in a different era. After 2008, hardly anyone really believes in neoliberal
ideas anymore, not to the point that they'd openly make the case for them anyway. But while
different visions have appeared to some extent on both left and right, most of those in
positions of power and influence have so internalised Thatcher's 'there is no alternative'
that it's beyond their political horizons to treat any alternatives which do emerge as
serious propositions, let alone come up with their own.
So neoliberalism stumbles on almost as a reflex action. Ben Fine calls it a 'zombie' but I
think the better analogy is cannibalism. Unlike the privatisations of the 80s and 90s there's
barely any pretence these days that new sell-offs are anything more than simply part of a
quest to find new avenues for profit-making in an economy with tons of liquid capital but not
enough places to profitability put it. Because structurally speaking most of the economy is
tapped out.
Privatising public services at this point is just a way to asset strip and/or funnel
public revenue streams to a private sector which has been stuck in neoliberal short-term, low
skill, low productivity, low wage, high debt mode for so long that it has lost the ability to
grow. So now it is eating itself, or at least eating the structures which hold it up and
allow it to survive.
The central premise used by Governments for privatising public servcies seems to have been
that publicly run services are inefficient compared to private companies; that the need to
turn a profit means wasteful systems and behaviours are minimised. Therefore, money can be
saved by outsourcing as private companies can provide the same or better service more
cheaply.
I think this is very disrespectful to all those who work in public service, many of whom
are dedicated to their jobs to provide care or a good service to members of the public. The
idea that making money is the only motivating force that can make someone do their job well
seems flawed. Further, if efficiency gains alone are not enough to make a profit, then the
only recourse for companies is to provide a poorer service or be more exploitative of their
employees, which is regularly played out.
This central premise is not widely challenged by politicians. It seems accepted as fact. I
wonder if there have been any studies to either support or challenge this idea.
The hard reality remains that the financial markets are, in the long term, forward-looking.
But in the short-term, they are dominated by high-speed electronic trading.
Anyone who felt
Monday's (December's, Q4's) meltdown, or watched Tuesday night's reopening of equity index
futures, watched in entertained astonishment, if not anguish.
Clearly, sentient, reasoned
thought has now been sacrificed at the altar of short-term profit. The task is to come up with
a thesis moving forward, and the challenge is to stick to that conclusion at times when the
evils of algorithmic, high-frequency and passive trading styles turn against those core
beliefs. Risk Management. Before one might profit with sustained regularity, one must learn to
effectively preserve one's capital.
just so 5 hours ago
You can
have whatever opinion you want about Yahoo's reporting of the daily ups and downs of the
markets, and keep in mind, the exchanges are betting parlors. That said, these types of wild
swings over the last 6 weeks or so, are very similar to what took place before housing bubble
burst in the late mid-ots, keep an eye on the amount of private uncollateralized debt that
mid-cap companies are carrying, if they start defaulting and these private equity houses
start running for cover, it create the same type of liquidity situation that Lehman's
caused.
It was neoliberalism that moved production to China and created condition for the Chinese own companies to compete. Now Trump
goes against neoliberal dogma. So it is not accidental that he was under attack and Russiagate was launched to ensure his resignation.
Notable quotes:
"... in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience to withstand the trade war, and will fight to the end if the U.S. administration persists." ..."
"... China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce Department over the mishandling of telecommunications equipment seized by American officials, demanding its release. ..."
"... However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska, as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within 45 days, but nearly two years have already passed since then. ..."
"... "The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in its lawsuit, which was filed on Friday in federal court in Washington. ..."
"... Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because it was made outside the United States and was being returned to the same country from which it came. ..."
"... The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval. The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied. ..."
"... Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday, five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology – were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy interests. ..."
"... don't expect a breakthrough: as Goldman's trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five. ..."
It's the weekend, which means the trade war between the US and China moved to the front page of the local propaganda media (in both
the US and China). And while Trump has yet to slam Beijing, focusing this morning on the all time high in the market instead, China
has been busy and in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience
to withstand the trade war, and will fight to the end if the U.S. administration persists."
Echoing what China's notorious twitter mouthpiece Hu Xijin said yesterday, the editorial said that just days ahead of the much
anticipated G-20 summit in Osaka where Trump and Xi are set to meet, " the U.S. must drop all tariffs imposed on China if it wants
to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win", according to Bloomberg.
The communist party's official paper also said the US had failed to take into account the interests of its own people, and they
are paying higher costs due to the trade dispute. "Wielding a big stick of tariffs" also disregards the condition of the U.S. economy
and the international economic order, according to the editorial.
Beijing's official warning to the US ended as follows: if the U.S. chooses to talk, "then it must show some good faith, take account
of key concerns from both sides and cancel all tariffs."
And just to prove that China isn't a paper tiger whose threats will be confined to the local newspapers,
Reuters reported that overnight China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce
Department over the mishandling of telecommunications equipment seized by American officials, demanding its release.
In an almost absurd reversal, the company whose entire existence can be traced to stealing and reverse-engineering foreign technology
and
trampling over corporate ethics , the complaint alleges that the US government took possession of hardware, including an ethernet
switch and computer server, which was transported from China to an independent laboratory in California for testing and certification
back in 2017.
However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska,
as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within
45 days, but nearly two years have already passed since then.
"The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in
its lawsuit, which was filed on Friday in federal court in Washington.
Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because
it was made outside the United States and was being returned to the same country from which it came.
The company is not seeking any financial compensation and is not challenging the seizure itself, but is sending a message to Washington,
saying "post-seizure failures to act are unlawful", in effect charging the Trump admin with doing precisely what it, itself has been
accused of. Huawei wants to force the Commerce Department to decide whether an export license is really necessary and, if not, release
the withheld equipment.
The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump
administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval.
The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied.
Huawei CFO Meng Wanzhou, daughter of the company's founder, has been detained in Canada since December on a U.S. warrant. She
is fighting extradition on charges that she misled global banks about Huawei's relationship with a company operating in Iran.
Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday,
five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology
– were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy
interests.
The fresh US blacklisting comes ahead of crucial talks between US President Donald Trump and Chinese President Xi Jinping in Osaka,
Japan, which are intended to ease tensions between the two sides. Still, don't expect a breakthrough: as
Goldman's
trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five.
A letter from over 600 US companies businesses in support of President Trump's tariffs on
approximately $300 billion of Chinese imports was scheduled to be submitted on Friday before
the Office of the United States Trade Representative (USTR), according to the Daily
Caller , which reviewed the document.
It is the intention of Coalition for a Prosperous America (CPA), Chief Economist, Jeff
Ferry to present the letter Friday morning during his testimony to the USTR. This letter
pushes back on the letter last week that asks Trump to stop the tariffs on China. Those
signers were mostly big-box retailers who manufacture their products in China.
This all comes as President Donald Trump said that he is considering slapping China with
more tariffs if Chinese President Xi Jinping does not meet with him during the G-20 summit in
late June. Since, the warning, the two have agreed to meet. However, Trump said if Xi does
not attend the event, he will immediately impose new
tariffs on $300 billion in
Chinese imports ,
including a number of consumer products. - Daily
Caller
In May, Trump raised tariffs on around $200 billion of Chinese goods from 10% to
25%. Three days later, China slapped around $60 billion in US goods with reciprocal tariffs.
"The global integration project with China, through liberalized trade, has failed. The
Communist Party of China has used its access to U.S. consumer and capital markets for a
predatory economic strategy to grow its state-owned enterprises, finance its military build up,
imprison its citizens in modern day concentration camps and challenge America's geopolitical
power," according to Coalition for a Prosperous America CEO Michael Stumo.
"Our American companies and workers have been weakened by this failed experiment. We want it
to stop," he added.
The Automotive Parts Remanufacturing Association (APRA) president, Joe Kripli. said, "for
years now the Chinese 'knock-off' of starters and alternators that have been entering the
country at ridiculously low cost and have been hurting the small [U.S.] remanufacturer that
is located in every state and has been in our communities since WWII. - Daily
Caller
"Fitzgerald USA is one of the few Made in America truck conglomerates. We recently started a
U.S. truck parts business as the trucking industry increasingly moves its operations to China.
America needs a strong manufacturing economy for jobs and national security. We support
President Trump and his use of tariffs on China," said Fitzgerald USA Director of Government
Relations, Jon Toomey.
Guess who didn't sign the letter? Apple - which is desperately trying to lobby the Trump
administration to ease the tariffs - arguing this week in front of the USTR that "U.S. tariffs
on Apple's products would result in a reduction of Apple's U.S. economic contribution," and
"weigh on Apple's global competitiveness
Cheap easy credit in USA has made us all debtors. The cheap money has been used to
purchase lots of cheap chinese **** from the large global publicly traded companies. The big
box stores partnered with American brands to move operations overseas and make **** real
cheap and sell those well known household brand names back to unsuspecting consumers.....to
the very people they have put out of a job. THIS is the largest redistribution of wealth in
the history of the planet. Free money, low paying jobs and cheap ****. As far as I am
concerned, if china steals a company's technology, cry me a ******* river. They deserve
it.
The super-capitalists as usual screw everybody else - the honest manufacturers, labour -
while destroying the fabric of society in their insane pursuit of profits for themselves and
their confreres.
Did Amazon also sign the petition? What about Facebook ,Google? I want to see the big
MNC's signing the letter. Let me see the country before profit there.
The key dynamic is low energy costs, cheap land, low corporate taxes and low shipping
costs to the market.
All four of those are in the US.
Factories will be built where the demand is located and there is and will be no longer any
advantage to produce products overseas.
Plants that used to take 1000 workers to run now take just 50 or less.
Automation would have impacted the work force in the US in 10 years but thanks to minimum
wage hikes it is happening right now and will grow exponentially in 2 years.
Why is it that folks put the blame on China? Our corporations are the ones that looked for
manufacturers that could make their product for less than American workers could.
Watch older episodes of Shark Tank and they all said time and time again that they have
contacts in China and could have the product made for peanuts....... That's how our
corporations make money.
Why don't we boycott Apple? We can't because it's in everyone's retirement portfolio one
way or another.
If the US was such a "free market" powerhouse, why not heed your own values instead of
doing protectionism? Answer: another myth destroyed that America is all about "free markets".
Add that to the mythology about being pro-dumbocracy, freedumb and all for international
"law".
(nytimes.com)
70
restricting China's access to American technology and stoking already high tensions as
President Trump and President Xi Jinping of China prepare to meet in Japan next week. From a
report: The Commerce Department announced that it would add four Chinese companies and one
Chinese institute to an "entity list," saying they posed risks to
American national security or foreign policy interests [Editor's note: the link may be
paywalled;
alternative source ] . The move essentially bars the entities, which include one of China's
leading supercomputer makers, Sugon, and a number of its subsidiaries set up to design
microchips, from buying American technology and components without a waiver from the United
States government.
The move could all but cripple these Chinese businesses, which rely on American chips and
other technology to manufacture advanced electronics. Those added to the entity list also
include Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics
Technology, and Wuxi Jiangnan Institute of Computing Technology, which lead China's development
of high performance computing, some of which is used in military applications like simulating
nuclear explosions, the Commerce Department said. Each of the aforementioned companies does
businesses under a variety of other names.
Blocking Chinese access to any particular technology just gives them an incentive to pour
massive resources into developing their own versions. They've learned that US companies are
not reliable suppliers. Same as many former allies have learned that being an ally of the US
is a double edged sword.
Cuts in sales to China by US companies means less money for US companies to invest in
developing advanced products. Don't be surprised if by 2030 China will be the sole supplier
of the worlds best, most advanced technology. Just look at what happened to the robotics
industry. Or better yet, go back to the previous century, when the US decided to unload their
steel mills to China at a huge discount to China to invest in financial instruments, then
whined like crazy that China was able to make steel cheaper because their new-to-them steel
mills had less debt to fund per to. Of steel produced.
If China had had to buy new steel mills, the cost of production per ton would have been
higher. But no, trading pieces of paper or bits in bank accounts was easier.
The Chinese hi-tech companies should thank the US for clearing out American products from
the
biggest market [datenna.com], so they can eventually enter the lucrative cycles of being
able to sell primitive products and re-invest the proceeds to create more advanced products,
without having to compete with the most advanced American products upfront, and in a few
short year they will produce more advanced ones.
Oh, don't the US know that Chinese supercomputers already cleared out of American chips
[wikipedia.org] and achieve top performance long time ago?
The App Store also instituted the idea of tech products being part of a
vertically-integrated, closed platform. Apple and Google (with its Google Play store) became
the dominant platform owners for mobile, because their scale and network effects made them the
gatekeepers for companies that wanted to enter the mobile market and access the app
marketplace. Even a company with as much power as Microsoft could do nothing to break the mobile
duopoly .
So whatever your
opinion of Google's Huawei snub, it certainly demonstrates just how much power Google has,
and how that power is centralized. For phone makers, Google is the only option -- Apple being
its own walled garden -- and for app makers and consumers alike, the App Store and Google Play
are the only existing choices.
This is hardly a secret or conspiratorial. Huawei has
long been attempting to develop its own operating system , precisely to prevent such
situations as this. Similarly, despite being the largest Android vendor by far, Samsung still
has its own Tizen operating system. Building your business on someone else's platform leaves
you at their mercy. There's also the question of user experience: Consumers can't actually buy
books on the Kindle app on an iPhone or iPad, because Amazon understandably wants to avoid the
30 percent cut that Apple takes on its operating system.
Perhaps a closed app store linked to a platform has outlived its early usefulness. Not only
does it cement power among entrenched companies, it also puts up barriers to competition. This
idea isn't so radical. Recently,
the Supreme Court ruled that Apple's customers can sue the company under antitrust law for
monopolistic behavior for the way in which it takes that 30 percent of everything on the app
store. There are technical avenues forward: Progressive Web Apps, or PWAs, operate in a more
open, more platform-neutral manner, and have significantly improved in functionality recently;
they could offer a more neutral way for companies to offer apps outside the constraints of an
app store.
Dell Technologies Inc
., HP Inc. , Intel Corp. and Microsoft Corp. are joining forces to oppose
President Donald Trump's proposed tariffs on laptop computers and tablets among $300 billion in
Chinese goods targeted for duties.
The companies submitted joint comments opposing the tariff escalation, saying it would hurt
consumer products and industry, while failing to address China's trade practices. The tariffs
are poised to hit during the peak holiday and back-to-school sales period, they said.
"The tariffs will harm U.S. technology leaders, hindering their ability to innovate and
compete in a global marketplace," the companies said in comments posted online.
Dell, HP, and Microsoft said they account for about half of the notebooks and detachable
tablets sold in the U.S. Prices for laptops and tablets will increase by at least 19% -- about
$120 for the average retail price of a laptop -- if the proposed tariffs are implemented,
according to a
study released this week by the Consumer Technology Association .
The companies said they spent a collective $35 billion on research and development in 2018
alone, and tariff costs would divert resources from innovation while providing "a windfall" to
manufacturers based outside the U.S. that are less dependent on American sales.
The Trump administration is considering public comments on the proposed duties and
hearing testimony from more than 300 U.S. companies and trade groups through June 25. The
tariffs could be imposed after a rebuttal period ends July 2.
The U.S. and China said their presidents
will meet in Japan next week to relaunch trade talks after a month-long stalemate.
"... The facts of the US economy and politics show clearly the correctness of the analysis in China that any expectation of 'mercy' from the Trump administration will in reality lead to heightened attacks by the US. ..."
"... The medium-term trajectory of the US economy [is] to slow down during 2019 and 2020 – which is necessarily a negative factor for President Trump's chances of re-election in 2020 and which interacts with the adverse effects of US tariff policy on US consumers such as price rises and falls in prices to farmers. ..."
"... Trump administration already acknowledges in practice that its policies will be a US 'lose', that is they will inflict pain on the US economy, and it is merely attempting to ensure that the 'lose' for China is bigger than the 'lose' for the US. ..."
"... Bloomberg and others calculate that the losses in a full year of the trade war would be $600 billion. ..."
"... In addition to these tariff effects the Trump administration US is equally concerned about the consequences of consumer boycotts, or restrictions, on US companies which would be equivalent to those it has carried out against Huawei. ..."
"... 'Beijing has scope for retaliation. Levers at its disposal include blocking access to its market -- a move that Goldman Sachs analysts estimate could reduce Apple's earnings per share by nearly 30 per cent.' ..."
"... These specific examples clearly illustrate that in practice, despite its claims to the contrary, the Trump administration starts from the framework that its policies will inflict pain on the US economy, but that it will be able to limit this loss. China's route to success is therefore to inflict pain on the US economy to a point that is unacceptable for Trump in seeking re-election. ..."
"... 'If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the US is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses.' On this logic: 'Geopolitical primacy, not maximum prosperity for Americans' was 'the president's true objective.' ..."
"... Forces in China claiming that the Trump administrations attacks will be stopped by 'appeasement', or by appeals for mercy, are presenting the reverse of the truth – such policies will lead to the Trump administration becoming more aggressive. This flows inevitably from the fact that the Trump administration's policy is not to seek a 'win-win' for the US but to create a 'lose-lose' with the aim that the 'lose' in terms of economic pain for the US should be 'modest'. This logic of the Trump administration's position means that any weakening of China's position, any alleviation of the pain inflicted on the US, will lead to the Trump administration becoming more aggressive, not less. ..."
"... it is also clear that Trump's measure of what is bearable is not the interests of the US people, but whether it affects the President's chances of re-election. In summary, only if the economic pain suffered by the US is sufficiently severe that it endangers Trump's re-election chances will the Trump administration desist from its attacks on China. ..."
"... When the 'lose' or 'pain' in US financial markets is not great the Trump administration proceeds to attack China. When, on the contrary, China's reaction increases pain in US financial markets Trump acts more reasonably. That is, whenever the Trump administration feels in a stronger position it increases its attacks on China, whenever the Trump administration feels weaker due to the pain in US financial markets it acts more reasonably to China. ..."
"... But once the Trump administration embarked on the course of a lose-lose confrontation then such a struggle can only be won by China relying on its own strength. Sufficient pain must be inflicted on the Trump administration that it decides it is better to abandon the lose-lose. And the criteria by which it will judge whether the pain in the 'lose-lose' is bearable is the effect on its chances of re-election. ..."
'At least two other organizations have more power over [US financial] markets
than the White House. They are the US Federal Reserve and the Chinese Communist
Party. Trump does not directly control either of them.'
This brutal analysis is particularly significant as it is by one of the most
senior and accurate Western specialists on financial markets –
John Authers
, Senior Bloomberg Editor for Markets and former Chief Markets
Commentator for the
Financial Times
. It encapsulates the interaction of
economic and political problems facing President Trump. As will be seen it also
summarises the relative strengths of China and the US in the 'trade war',
dictates the US administration's tactics in attacking China, and determines the
policies which will prevent the Trump administration carrying out its attempt to
block China achieving its development goals.
Analysis of these real facts of US financial markets and policy strongly
confirms the assessment emphasised by China's President Xi Jinping in his recent
speech
in
Yudu County, the place being highly symbolic as it was the starting point for
China's famous Long March, that China has to rely on its own strength in
resisting this attempt by the US administration to prevent China achieving
prosperity and national rejuvenation.
While the situation of China itself in the trade/economic war is naturally the
most important issue there are of course two sides involved in this conflict –
the other aspect of the situation is within the US. Analysis of this, which forms
the subject of this article, shows clearly why the Trump administration refuses
to accept 'win-win' relations with China and what is the inevitable outcome of
this administration's 'lose-lose' logic. Such analysis in turn shows that
frequent comparisons made in China to the Long March of 1934-35, or to Mao
Zedong's famous
essay
'On Protracted War', are not simply rhetorical metaphors, or references
to the historical traditions of the Communist Party of China (CPC), but provide
an accurate framework to understand the situation.
The Trump administration made a very serious miscalculation in launching the
'trade war' with China. It believed that either, or both, the leadership of China
would submit to the Trump administrations threats or the Chinese population would
not be prepared for a serious struggle with the US. Both calculations have proved
entirely wrong. China's leadership did not surrender to but hit back against the
US attacks. Furthermore anyone who follows China's domestic discussion, on what
is now by far the world's largest internet community, knows that this line was
strongly supported by the Chinese population.
The difference to the historical comparisons now frequently used in China, of
course, is that this is an economic war and not a military one. Therefore, the
weapons are different, and it is necessary to analyse what are the pressure
points on the US, and what armaments are most powerful for China. In turn this
examination of the situation in the US economy fully confirms the analyses made
of the situation in China and the reaction of different social layers to the
present conflict with the US.
Trends in China and the US
Examining the Chinese side of the 'trade war' Wang Wen has presented an
excellent
analysis
of the reaction of different social strata in China to the Trump
administration's economic aggression. Its analysis can be noted:
'
The vast
majority of ordinary people are highly supportive of the state's policy of
counter-bullying in the United States, and the current fear of the US exists
mainly in some social elites.'
But it is particularly striking that this analysis of trends within China,
made by a Chinese citizen, is fully confirmed from another 'external' angle –
that of the situation in the US and the forces operating on the Trump
administration. The facts of the US economy and politics show clearly the
correctness of the analysis in China that any expectation of 'mercy' from the
Trump administration will in reality lead to heightened attacks by the US.
Trump's economic policy is determined by the coming US Presidential electio. The starting point of any analysis of the situation in the US is that
President Trump is already entirely aware of the most important date he faces – 3
November 2020, the next US Presidential election. Securing re-election is his
paramount goal and this therefore determines the shaping of the Trump
administration's policies. Three time frames are crucial for this.
The impact of events in financial markets, which can occur in a very short
time frame – in some cases minutes/hours and almost invariably having a strong
impact over a period of days to months.
The medium-term trajectory of the US economy [is] to slow down during 2019 and
2020 – which is necessarily a negative factor for President Trump's chances of
re-election in 2020 and which interacts with the adverse effects of US tariff
policy on US consumers such as price rises and falls in prices to farmers.
Attempts to slow China's economy in the medium/longer term, through forcing
or persuading it to abandon its socialist path of development.
All three time frames however confirm a fundamental reality – that while
China's relations with most countries, and indeed with some previous US
presidents, can be most successful based on 'win-win' this will not occur with
the Trump administration.
This is due to the fact that the Trump administration
already acknowledges in practice that its policies will be a US 'lose', that is
they will inflict pain on the US economy, and it is merely attempting to ensure
that the 'lose' for China is bigger than the 'lose' for the US.
The Trump administration's 'lose-lose' analysis
An illustration on a small scale of the Trump administration's understanding
of the need to attempt to limit the extent of economic pain on the US is its
recent announcement of $16 billion of subsidies to US farmers – the bill for
which will be financed by other US taxpayers as is increasingly understood in the
United States. As
CNN
noted: 'Just as Mexico was supposed to pay for the wall, but isn't, now
China is supposed to pay for President Donald Trump's plan to bail out US
farmers. Neither statement is true, of course.'
Affecting wider sections of the US population, calculations by the Western
economics company Oxford Economics, which has no connection with China, found:
'Chinese manufacturing lowered prices in the United States for consumer goods,
dampening inflation and putting more money in American wallets trade with China
saved these families up to $850 that year.' Regarding the overall impact on the
global economy, including the adverse effect on US allies,
Bloomberg
and others calculate that the losses in a full year of the trade
war would be $600 billion.
In addition to these tariff effects the Trump administration US is equally
concerned about the consequences of consumer boycotts, or restrictions, on US
companies which would be equivalent to those it has carried out against Huawei.
The
Financial Times
noted for example that the immediate goal of the US sanctions
against Huawei are not simply or primarily to stop the supply of chips and
software but to destroy the consumer market for Huawei's products in the West –
where customers want guaranteed access to Google dependent products: 'Google's
decision this week to stop selling its Android operating system to Huawei for new
handsets makes little difference in China, where Huawei should be able to
convince buyers to switch to its operating system, now under development.
But
customers are more wedded to Android in international markets. Independent
analyst Richard Windsor estimates it will lose all those sales.' But the
Financial Times simultaneously noted that consumer retaliation against China
would have a devastating financial effect on Apple, one of the US's core and most
valuable companies: 'Beijing has scope for retaliation. Levers at its disposal
include blocking access to its market -- a move that Goldman Sachs analysts
estimate could reduce Apple's earnings per share by nearly 30 per cent.'
These specific examples clearly illustrate that in practice, despite its
claims to the contrary, the Trump administration starts from the framework that
its policies will inflict pain on the US economy, but that it will be able to
limit this loss. China's route to success is therefore to inflict pain on the US
economy to a point that is unacceptable for Trump in seeking re-election.
US financial markets
A decisive reason that such pain for the US is possible is that while the sums
noted in relation to US consumers, farmers, and allies above sound large the
Trump administration can in fact deal with amounts such as $16 billion to
farmers. But even such sums as the $600 billion loss for the global economy are
small compared to potential impacts on the size of US financial markets. The loss
of $600 billion in a year for the global economy is less than the amount that can
be lost in US financial markets in a single day, while a loss of $16 billion can
occur in seconds.
Due to the sheer scale of US financial markets the Trump
administration does not remotely have the resources to control the more than
$30,000 billion US share market or the $16,000 billion US Treasury bond market.
Pain inflicted on the US in such financial markets is therefore on a scale which
is destabilising to the Trump administration.
Examination of all three time frames operating on the Trump administration
considered above would require three separate analyses or an inordinately long
article. Therefore, due to their sheer scale, this article examines only the
first, most short term, but extremely powerful of these issues – the impact of
the trade war on US financial markets.
The real situation facing US presidents
John Authers' blunt comment cited at the beginning of this article, reveals
accurately the real domestic economic situation of a US President – which is very
different to the frequent perception in China. Unlike China, under the US
governmental system the President has little direct control over the most
powerful levers of the economy – there is no large state owned economic sector
which can be instructed by the President to increase its activity, the Federal
budget is decided by the Congress not by the President, and interest rates are
controlled by the Federal Reserve which under US law cannot be instructed by the
President.
The new factor in the trade war which Authers drew attention to, which is also
outside the US President's control, is China itself. The facts amply confirm that
the impact of China's statements and actions on US financial markets is now very
large – as will be demonstrated.
Larry Summers, former US Treasury Secretary,
clearly spelt out this numerically in a
commentary
for the Washington Post: 'On Monday [13 May], China announced new
tariffs on $60 billion of US exports, and the United States threatened new
tariffs on up to $300 billion of Chinese goods. These actions were cited as the
principal reason for a decline of more than 600 points in the Dow Jones
industrial average, or about 2.4 percent in broader measures of the stock market.
With the total value of US stocks around $30 trillion, this decline represents
more than $700 billion in lost wealth.'
This $700 billion loss to US shareholders directly resulted from China's
response to President Trump's announcement he was raising US tariffs against
China from 10% to 25%. To illustrate this direct impact Authers' accurately noted
the difference on US share markets between the week following Trump's
announcement of raising tariffs against China, during which there was no
announcement of a precise Chinese response, and the US financial markets'
reaction when China announced its counter tariffs: 'It's fair to say that Wall
Street did not anticipate China's retaliation to US tariffs. Last week, the
negative reaction to President Donald Trump's announcement of new tariffs on
China was oddly muted. On Monday, after China's response was announced just
before the market opened, the S&P 500 fell by more than it had done in the entire
previous week.'
Authers similarly noted the increasing skill of China's response and its
impact on US markets: 'The problem is that China knows how to respond. China
knows it can attack the presidential weak spot by acting in a way that damages
the Dow. Hence, it not only retaliated with tariffs of its own, but announced
them just as the New York market was about to open, at night in China, for
maximum effect.'
As already noted, the $700 billion loss in a single day on US share markets
was larger than the projected loss to the world economy for an entire year due to
the trade war – and over 40 times the $16 billion bill for Trump's subsidies to
US farmers. But even this sum is small compared to losses on US financial markets
that can occur due to others of China's economic actions. As
Authers
noted: 'In the last five years, the event that scared the US market
the most, by a wide margin, was the surprise Chinese yuan devaluation in 2015.'
The impact of this RMB devaluation was clear. Between 10 August and 24 August
2015, only 14 days, the RMB's exchange rate fell by 3.0%. The US S&P500 tracked
the RMB down falling by 11.2% by 25 August. In terms of current valuations of US
share markets this was equivalent to a loss of $3.8 trillion – more than six
times the total projected loss to the global economy of the trade war in a year,
or over 200 times Trump's subsidies to farmers.
The real aim of Trump's policy
This identification of the degree of pain which can be inflicted by China on
US financial markets, and on the US economy, is crucial because Trump's tariff
policies cannot, indeed are not intended to, improve the situation of the US
itself. Bloomberg columnist
Noah Smith
summarised the Trump administration's real aim very accurately
under the self-explanatory headline 'The Grim Logic of Trump's Trade War With
China – Maximizing American prosperity probably isn't the goal.' Apart from
comprador apologists for the US within China, noted by Wang Wen, this logic of
Trump's policy is by now well understood in China. But, nevertheless, it is worth
quoting this Bloomberg analysis at length as it summarises very accurately from a
US perspective the logic of the Trump administration:
'The trade war has cost to the US. Economists have shown that the actual burden
of tariffs has fallen mostly on American consumers -- in other words, the prices
consumers pay for imported goods has risen And higher prices on capital goods
and intermediate goods is raising expenses for US manufacturers, making them less
competitive. Meanwhile, Chinese retaliation has hurt US farmers
'So with losses mounting, it looked like there was little reason to continue
the trade war. Yet Trump is doubling down. Why?
'If Trump wants to slow China's ascent as a superpower, a trade war might be
an effective way to do it. If the harm to the US is modest and the costs for
China are severe and lasting, Trump might conclude that the former are acceptable
losses.' On this logic: 'Geopolitical primacy, not maximum prosperity for
Americans' was 'the president's true objective.'
In other words, as was already shown in the case of farm subsidies, the Trump
administration quite accurately does not believe that tariffs and other forms of
economic aggression against China aid US economic prosperity – on the contrary
they cause economic pain. But it decides to inflict this pain on US citizens and
companies in order to pursue neo-con policies trying to block China's prosperity
and national rejuvenation. But this policy requires that 'the harm to the US is
modest.' The problem is that the more tariffs are imposed , and above all if
China retaliates, the greater the pain not only for US financial markets but for
US consumers – that is US voters. As Authers noted: 'Meanwhile, the US can still
impose more tariffs, but the goods it has chosen to attack have been largely
invisible to consumers. Any further tariffs will take it into consumer products
where price rises will be visible and painful, and might even, again, act as a
spur to raise [interest] rates.' The effect on US financial markets, as already
noted, can be far more severe than the direct effect of the tariffs.
Why win-win will not work with the Trump administration
Understanding the Trump's administrations real aim shows not only why its goal
is not to improve the economic position of the US economy or US citizens but
simultaneously makes clear why its policies will not be stopped by appeals to
reason or 'win-win'. Forces in China claiming that the Trump administrations
attacks will be stopped by 'appeasement', or by appeals for mercy, are presenting
the reverse of the truth – such policies will lead to the Trump administration
becoming more aggressive. This flows inevitably from the fact that the Trump
administration's policy is not to seek a 'win-win' for the US but to create a
'lose-lose' with the aim that the 'lose' in terms of economic pain for the US
should be 'modest'. This logic of the Trump administration's position means that
any weakening of China's position, any alleviation of the pain inflicted on the
US, will lead to the Trump administration becoming more aggressive, not less.
This makes clear while most countries seek a 'win-win' with China, and can
therefore rightly be approached on this basis, and indeed this forms the basis of
China's foreign policy, this will not work with the Trump administration because
it is not seeking a 'win' – it is merely seeking that the 'lose' for the US it
knows will occur should not be sufficiently large to threaten Trump's
re-election.
It follows from this situation that the only thing that will deter the Trump
administration, and force it off its path of attacks on China, is if the 'lose'
for the US is bigger than it had anticipated – that is if the economic pain is
too large to be bearable from the point of view of the interests of the Trump
administration. From what has already been analysed, it is also clear that
Trump's measure of what is bearable is not the interests of the US people, but
whether it affects the President's chances of re-election. In summary, only if
the economic pain suffered by the US is sufficiently severe that it endangers
Trump's re-election chances will the Trump administration desist from its attacks
on China.
The only 'win' which the Trump administration takes into account is,
therefore, if the 'lose/pain' of the confrontation with China is seen as
endangering Trump's re-election chances and the 'win' is then simply the
lessening of that pain to a point where it is no longer seen as endangering
Trump's election campaign.
Confirmation of the forces acting on the Trump administration
This situation of the Trump administration which flows from its 'lose-lose'
logic is fully confirmed even in the extremely short term by the chronology of
President Trump's own personal responses to events in US financial markets in
announcing the increase in tariffs against China from 10% to 25%.
On 5 May Trump announced on
twitter
the raising of tariffs against China from 10% to 25%, there was no
immediate announced countermeasure by China, and the S&P 500 US share index
fell by only 0.5% on the following day.
In contrast on 13 May China announced counter tariffs and the S&P 500 fell
by 2.4% in a single day – costing US shareholders $700 billion as Larry
Summers noted.
For the rest of the following week the Trump administration attempted to
claim that trade talks would be resuming, and that Treasury Secretary Mnuchin
would probably be visiting Beijing in the near future – the S&P500 recovered
by 1.7%.
Having achieved this recovery in US financial markets President Trump then
initiated a new attack on China by requiring US companies to have permission
from the US government to sell components and software to Huawei.
China then responded to this strongly on 23 May. As the
Wall Street Journal
noted: ' The Dow Jones Industrial Average fell 286
points Thursday after a Chinese official said the US should "adjust its wrong
actions" if it would like to continue negotiations. The losses pulled the Dow
industrials into the red for the week, continuing a dismal stretch as it
hurtled toward its fifth straight weekly loss -- which would be its longest such
losing streak since 2011. '
In response to this fall on US financial markets President Trump then
immediately softened his rhetoric by
announcing
at a press conference that there was a 'good possibility' that
trade negotiations with China would get back on track and that issues with
Huawei might be settled in that deal.
The short term pattern was therefore extremely clear. When there was no
reaction from China, US financial markets did not fall, and Trump continued his
aggression against China. When, on the contrary, China responded strongly, US
financial markets fell and Trump attempted to present a picture he was lessening
his attack on China.
In addition to these short-term movements analysed above the same process over
a longer term also explains the dynamic of the 'hardening' and 'softening' of the
Trump administration's positions in the course of its negotiations with China.
During 2018, when the US economy was experiencing economic strengthening,
during a normal upswing of a business cycle, and with a strong share market,
Trump acted aggressively to China – launching the first set of anti-China
tariffs and threatening to expand them to a wider range of goods and increase
their rate to 25%.
Then in late 2018 the US economy began to slow, the Federal Reserve was
raising interest rates, and the US share market fell. In response to this, at
the beginning of 2019, Trump 'softened' his position – postponing the raising
of US tariffs against China from 10% to 25%.
When the US economy appeared to recover in the first quarter of 2019, with
the Federal Reserve suspending increases in interest rates, and the share
market rose, Trump then announced new aggressive actions against China by
raising tariffs from 10% to 25%.
This therefore clearly reflects the 'lose-lose' framework in which the Trump
administration operates. When the 'lose' or 'pain' in US financial markets is not
great the Trump administration proceeds to attack China. When, on the contrary,
China's reaction increases pain in US financial markets Trump acts more
reasonably. That is, whenever the Trump administration feels in a stronger
position it increases its attacks on China, whenever the Trump administration
feels weaker due to the pain in US financial markets it acts more reasonably to
China.
What is the Trump administration's bottom line?
While the above clearly shows why the Trump administration will not respond to
a 'win-win' framework, but only to economic pain, to avoid any misunderstanding
it should be made clear that it does not lead to the conclusion that the US and
China are locked in a 'war to the death'. All the evidence is that President
Trump is less interested in the long-term interests of the US than most
Presidents. The precise economic pain which is unacceptable to his administration
is that which would lead to endangering his re-election in 2020.
A relevant comparison which helps understand this dynamic is that is to a real
war, not just a trade one, which the US lost – the Vietnam war. Vietnam's tactics
in this were skilful in that political impacts guided military goals. The two
largest Vietnamese offensives of the war, the Tet Offensive in 1968 and the
Easter Offensive in 1972, were launched in US presidential election years.
Neither resulted in US military defeat but the political damage done to US
presidents ensured Vietnam's victory – Johnson was forced to abandon as hopeless
any attempt to run for re-election as president after Tet, and Nixon was so
convinced that his position as president would be threatened by the war that he
started a progressive US military withdrawal after 1968 and decided on a total US
withdrawal of US forces after the 1972 Easter Offensive.
In short, the 'bottom
line' for Vietnam's victory against the US was not total military defeat of the
US, which was never achieved, but inflicting such pain on US presidents that to
safeguard their own position they were forced to withdraw. The military struggle
in Vietnam was the means by which the decisive political victory in the US was
achieved.
But the precondition for that US political defeat was the military struggle in
Vietnam. If Vietnam had ceased inflicting pain on the US, both economic in terms
of the gigantic cost of the war and in terms of losses of American forces, then
the US instead of withdrawing would have increased its attacks on Vietnam. This
can be clearly seen in the opposite case in which the US achieved a great victory
– the destruction of the USSR. Gorbachev attempted to appease the US and beg for
mercy. The US did not lessen but increased its attacks as a result – culminating
in the catastrophic disintegration of the USSR itself, characterised by Putin as
'the greatest geopolitical catastrophe of the [20th] century'.
After this
tremendous defeat of Russia this again did not lead to a lessening but to further
intensification of attacks on Russia by the US – incorporating almost all of
Eastern Europe and large parts of the former USSR into NATO and launching of
attacks on Russia's position in its strategically decisive neighbour of Ukraine.
The strategic conclusion of the present US attacks on China fully confirms the
speech by Xi Jinping
emphasising
that the most important thing is to rely on ourselves. China has not been seeking
a confrontation with the US, a lose-lose. On the contrary China has been seeking
a win-win. But once the Trump administration embarked on the course of a
lose-lose confrontation then such a struggle can only be won by China relying on
its own strength. Sufficient pain must be inflicted on the Trump administration
that it decides it is better to abandon the lose-lose. And the criteria by which
it will judge whether the pain in the 'lose-lose' is bearable is the effect on
its chances of re-election.
Fortunately, the present struggle is an economic war and not a real war. The
'small arms' in that economic war are not rifles and revolvers but tariffs
against farmers and the subsidies these require, its medium weapons are consumer
boycotts, its heavy artillery are such issues as the impact on US financial
markets analysed above. It is a measure of the gigantic historical progress made
by China since 1949 under the People's Republic that it now only has to deal with
economic attacks by the Trump administration – for a century before that China
had to deal with actual military invasions.
The sacrifices made by the heroes of the Long March were far greater than
anything the people of China face today in the economic attacks by the Trump
administration. But the comparisons made by Xi Jinping to the Long March are
entirely apposite and not at all merely references to the CPC's historical
tradition.
The Kuomintang's Fifth Encirclement Campaign, the origin of Long March, was
designed by the KMT to destroy and annihilate the forces opposing it – why it is
also called the 'Fifth Extermination Campaign'. It was purposeless to have
attempted to appease or beg for mercy from the KMT, which was determined to
destroy the forces which later created the New China. Any appeasement, or appeal
for mercy, would have been met by the KMT crushing and massacring the forces they
opposed. Only resistance to the KMT created the possibility to later create the
People's Republic of China and lay the basis for China's national rejuvenation.
Similarly, the Trump administration is determined to block China's national
rejuvenation. As already shown, there is no point to attempt to appease it or beg
for mercy from it, this will merely lead to it becoming more aggressive. The
ultimate aim of the neo-cons at present directing the Trump administration's
policies is to block China's national rejuvenation and the final way to ensure
that is to ensure that that China should suffer the same historical catastrophe
as the USSR under Gorbachev.
Who is the 'elite' of Chinese society?
Analysis in China shows it is ordinary people who have understood the
aggressive actions of the Trump regime and supported the firm positions against
this taken by President Xi Jinping and other CPC leaders.
It is some parts of the 'social elite' which have entirely misunderstood the
situation and believed that appeasement and appeals for mercy would lead to the
Trump administration lessening its attack on China. The latter forces are the
exact opposite of an 'intellectual elite' – because to be an intellectual elite
means to see the situation accurately and, as seen, they are entirely in error.
It is the ordinary people of China who have shown they are the 'intellectual
elite' in accurately understanding the Trump administration and supporting the
positions taken by the CPC leadership. Those who wrongly analysed the situation
may or may not be a social elite but they are an intellectual 'non-elite' – those
who fail to see the situation accurately and have naďve illusions.
Conclusion
The analysis of the situation of the US economy and financial markets
therefore fully confirms the analysis made by others of the situation in China.
It shows why the Trump administration cannot be dealt with on the basis of
'win-win' but only on the basis of China's strength and through ensuring that the
Trump administration suffers severely in the 'lose-lose' path it has
unfortunately chosen. Only after the US administration has found that it suffers
pain from its present path will it be possible to return to a 'win-win' framework
between China and the US.
* * * The Chinese version of this article appeared at
Guancha.cn
.
President Donald Trump has announced that he will decide whether or not to add another $300
billion in tariffs on imports from China, in addition to the $200 billion he has already
imposed, and that he will do so in the two weeks following the G20 summit in Osaka. Trump's
"Art of the Deal" pressure tactics are familiar. He wants to try to make China give even
greater concessions, perhaps following a frosty meeting between the two leaders on the
sidelines of the G20, or perhaps no meeting at all.
China, however, is in no mood to make concessions.
Behind Trump's impulsiveness can be glimpsed a profound shift in U.S. trade policy, and in
US diplomacy, which has transformed the nature of international relations, with particularly
disturbing implications in the case of U.S.-China ties.
Donald Trump, acting on the advice of U.S. trade representative Robert Lighthizer and
Secretary of the Treasury Steven Mnuchin, is making demands of China -- or for that matter
Mexico, Germany, or France -- in a unilateral manner. He has attempted to immediately implement
tariffs and other forms of punishment (such as bans for reasons of national security in the
case of Huawei phones) without any institutional consultative process.
The U.S. constitution has a "commerce clause" that clearly assigns to Congress the power "to regulate
commerce with foreign
Nations, and among the several states, and with the Indian Tribes." Since 2002, the trade
promotion authority (an upgraded version of the fast-track authority established in 1974) gives
the president the right to negotiate trade agreements that Congress can vote for or against,
but cannot amend.
Over the last 20 years, fast-tracking has become the center of trade policy to a degree that
undermines the balance of powers and the constitution.
Although the executive's usurpation of trade authority has a long history, only now is the
president making such a transparent move to exclude the legislature -- not to mention economic
experts, let alone citizens -- from the formulation of trade policy. That means that a handful
of people can make decisions that impact every aspect of the U.S. economy.
Newspapers rarely mention the role of Congress in trade negotiations with China. It's almost
as if the various congressional committees involved in formulating trade policy have no role in
this process.
Equally striking is the absence from the policy debate of multilateral institutions that
address trade issues according to common practices and international law. For instance, the
World Trade Organization was established in 1993 with an explicit mandate to address trade and
tariff issues. The WTO and its trade experts once played a central role in U.S. trade
discussions -- when U.S. policy ostensibly conformed to established global norms, and
Washington even set new models for the world to follow.
Trump's unilateral demands of China make it crystal clear that Trump, and Trump alone, is
empowered to decide trade policy. What institutions and mechanisms remain to assure that the
president's authority in trade negotiations will not be abused and that trade is conducted with
the long-term interests of the country in mind?
But it goes further than that. Now Trump is demanding "detailed and enforceable commitments"
from China as a condition for a trade deal, suggesting that the United States alone determines
whether or not China is conforming with the agreement. Such an approach makes sense in
Washington these days. After all, the U.S. Commerce Department
imposed an export ban on the Chinese telecommunications company ZTE last year because it
did not pay fines for violating U.S. sanctions against sales to North Korea and Iran. In other
words, the United States thinks it can unilaterally set sanctions and punish violators without
any consultation with multilateral institutions.
This step goes beyond what the Chinese can tolerate.
"China is not a criminal. Nor is it making any mistakes. Why does the US want to supervise
us?" remarked Professor Wang Yiwei of Renmin University of China in a
recent interview , "If there's a supervision team to oversee the implementation, just like
what happened to ZTE, it is definitely directed at sovereignty and can't be accepted."
These "enforceable commitments" are offensive to China for a reason. This approach to trade
seems little different from the sanctions regimes that the United States put in place against
Iraq before its military invasion, or against Iran as part of an increasing military buildup
that could end in a military conflict. Moreover, the increased U.S. military drills off the
Chinese coast has given the trade negotiations process a negative spin.
The recent comments about the political protests in Hong Kong by secretary of state Mike
Pompeo suggest that those tariffs could quickly become sanctions -- which require even less
adherence to international norms.
And then, in the midst of all that tension, the U.S. military released an
Indo-Pacific Stategy Paper that refers to Taiwan as a "country," the first time the United
States has done so officially in 40 years. The agreement between the United States and the
People's Republic of China, after the normalization of diplomatic relations, required that the
United States not recognize Taiwan as a country, and the People's Republic of China has stated
explicitly that military action was an option in the case of U.S. interference in the Taiwan
question.
The combination of these actions threatens to erase all established norms between the two
nations.
The United States is now considering ending agricultural exports to China, and China is
considering cutting off the sales of rare earth elements to the United States. The latter are
essential for the guidance systems and for sensors in missiles and advance fighter planes. A
F-35 Fighter, for instance, requires 920 pounds of rare earth elements like neodymium iron
boron magnets and samarium cobalt magnets,
according to the Asia Times .
The risk of a rapid acceleration in tensions is no longer theoretical. Remember: the U.S.
decision to end the sale of scrap metal and copper to Japan in 1940, followed by the oil
embargo on August 1, 1941, transformed a trade war into a real war.
Trade should remain separate from security concerns. Moreover, it should not be the
plaything of a small number of men in the White House. The United States and China need to open
a broad dialogue on common concerns, from climate change and rapid technological evolution to
the growing concentration of wealth globally. That dialogue should rely more on citizen-led
dialogues and scholar-led conferences in order to move beyond the narrow negotiation process
that has brought the two countries to the brink of war.
le"> Tariffs raise the cost of goods. Higher generate the opportunities for alternative
sources as well as incentivize domestic production. Never forget that the higher price of
domestic production is offset by the reduction in the costs associated with domestic
unemployment. The reduction of wealth leaving the nation is a primary goal and responsibility
of the federal government. As is maintaining a secure border and civil and economic well
being of it's citizens.
Enjoyed that report. It's refreshing to see a seemingly non-biased examination of Chinese
Economic and Geopolitical relationships. Enjoying the improved air in quality Beijing.
For Donald Trump, tariffs are a substitute for diplomacy, just as harassment in his
personal life is a substitute for normal human interaction
Trump has two tools at his disposal as president. The first is his mouth: the
insults and threats that he issues verbally or by Twitter.
The second is the tariff. Trump has imposed trade restrictions left and right,
on allies and adversaries, for economic and political reasons, as part of a long-term offensive and out of
short-term pique.
If Trump could use tariffs even more indiscriminately, no doubt he would. He
would delight in slapping trade penalties on the Democratic Party, on Robert Mueller, on the mainstream media, on
all the women who have accused him of harassment, even on the First Lady for
slapping away his hand
at the airport in
Tel Aviv.
Trump the man
favored the legal suit
as his attack of
first resort; Trump the president has discovered the tariff.
With his penchant for naming names, Trump
calls himself
"Tariff Man," as if
boasting of a new superhero power. It's all-too-reminiscent of the cult film
Mystery Men
where the superpowers
are either invisible or risible (Ben Stiller's character, Mr. Furious, for instance, gets really
really
angry).
Trump uses tariffs like a bad cook uses salt. It covers up his lack of
preparation, the poor quality of his ingredients, the blandness of his imagination. It's the only spice in his
spice rack.
The latest over-salted dish to come out of the White House kitchen is the
president's threat to impose a 5 percent tariff on all Mexican goods on June 10. The threat has nothing to do with
what Mexico has done economically (that's a different set of threatened tariffs). Rather, it's all about
immigration. This time, Trump
will keep inflating
the cost of Mexican
goods "until such time as illegal migrants coming through Mexico, and into our Country, STOP." The tariffs will,
supposedly, rise 5 percent every month until they reach 25 percent in October.
Trump promised as a candidate that Mexico would pay for the wall he wanted to
construct along the southern border. Now, it seems, Mexico will pay for the lack of a wall as well.
The escalation is quite clear. What Mexico has to do to avoid these tariffs is
not.
"So, there's no specific target, there's no specific percent, but things have to
get better," Chief of Staff Mick Mulvaney
told Fox News Sunday
. "They have to get
dramatically better and they have to get better quickly."
Such is the usual Sunday morning quarterbacking that happens with White House
officials as they scramble to explain the inexplicable to a baffled news media.
Although they remain in the dark about what's expected of them, Mexican leaders
have warned
that they will apply
counter-tariffs if necessary and that the United States will suffer economically from such a tariff war.
These are not idle threats. Mexico is the third largest U.S. trading partner.
Even congressional Republicans, desperate to avoid this spat, are talking about trying to block the tariffs. Trump
has called them
"foolish" to do so. He
plans to move forward anyway.
Full Spectrum Offensive
Mexico is only the latest country to feel the wrath of Tariff Man.
In 2018, Trump
used Section 201
of the Trade Act to
impose tariffs on solar cells and washing machines, targeting primarily East Asian countries. Shortly thereafter,
he upped his game by assessing a 25 percent tariff on all steel imports, with Canada, Mexico, and the EU getting
hit the hardest.
China, however, has borne the brunt of Trump's animosity. In early May, the
Trump administration announced a surge in tariffs from 10 percent to 25 percent on $200 billion worth of Chinese
goods. He has also threatened to apply tariffs to the remaining $325 billion worth of Chinese goods entering the
country.
The escalation tactics don't seem to have done much to improve the prospects of
a trade deal between the two countries. China has naturally countered with its own tariffs.
When Trump lashed out against countries competing against the U.S. steel
industry, one of the major exceptions was Australia. That probably won't last long. Just before his Mexico
decision, the president was planning on imposing a tariff on Australian aluminum as well. His advisors
managed to dissuade him
, at least
temporarily.
Canada and Mexico, meanwhile, continue to get a pass on the steel tariffs as
long as the two countries sign a replacement deal for NAFTA. But Trump's latest move against Mexico may
throw that pending agreement
into
jeopardy.
Push Back
The threat and even the reality of retaliatory tariffs seem to have little
effect on Trump. He likes such geopolitical games of chicken. Congressional opposition only whets his appetite for
more confrontation, for he holds even his Republican allies in contempt.
He disregards the more level-headed advice of economic mandarins -- as well as
seven former ambassadors
to Mexico --
because he relishes flouting conventional wisdom in favor of his own unconventional stupidity. If farmers in swing
states protest that the markets for their soybeans have dried up, Trump will just authorize
another massive government purchase
of
their product -- and suddenly prisoners all over America will be surprised by tofu and edamame on their cafeteria
menus.
Republican voters
overwhelmingly support
Trump's trade
policies -- and the president really doesn't care a fig about anyone else.
The only pushback that might have some influence with Trump might be the
business community. The auto sector
is forecasting
billions of dollars in
costs associated with the Mexico tariffs. The Chamber of Commerce, which has come up with a more precise
annual price tag
for U.S. consumers of
$17.3 billion for a tariff level of 5 percent, is
considering
a legal challenge.
If the stock market goes into bearish hibernation, then the president is out of
luck.
Tweeted
Ian Shepherdson, the chief
economist at Pantheon Macroeconomics, "he's going to have to blink on tariffs, because the market can't live with
this level of crazy."
Shepherdson is wrong. The market has lived with this kind of crazy for more than
two years. And there are plenty of people who see profit in precisely the kind of volatility that Trump has
brought to financial markets.
When Trump went on a fundraising tour of New York recently, some big-name
financiers leapt at the opportunity to fete the president. Howard Lutnick, the head of Cantor Fitzgerald,
predicted
in 2017 that Trump would
provide a big bump for the world of finance (and, therefore, his own bottom line). Last month, as a reward for
that bump, Lutnick
invited
Trump to his triplex penthouse in
Manhattan and raised over $5 million toward his reelection.
That's the kind of crazy that the market is entirely comfortable with.
Misunderstanding Trade
Tariffs make sense for certain countries.
For instance, East Asian countries used tariffs very successfully to protect
their infant industries -- steel, shipbuilding, information technology -- against the overwhelming market advantages
of more advanced economies. Those tariffs raised the price of imports and encouraged consumers to buy domestic.
Tariffs can be part of a smart industrial policy of picking potential economic winners.
Tariffs can also protect a way of life -- Japanese rice culture, Mexican tortilla
makers, Vermont dairy farmers. Without some kind of trade protection, cheaper goods from outside will completely
overwhelm domestic producers and destroy long-standing traditions. Of course, there are other methods of
preserving such traditions, from government price supports to geographical designations (think: champagne).
Trump's tariffs have nothing to do with either of these aims. U.S. steel is not
an infant industry in need of protection. Trump doesn't care about protecting traditional lifestyles. He has
neither a progressive industrial policy of picking winners and losers in the economy nor a conservative approach
to ensuring the integrity of communities.
For Donald Trump, tariffs are a substitute for diplomacy, just as harassment
in his personal life is a substitute for normal human interaction. Tariff Man can think of only one way of dealing
with other countries: grabbing them by their trade policies until they squeal.
He believes, mistakenly, that trade is zero-sum (if they lose, American
wins). He also labors under the misconception that the U.S. Treasury somehow grows fat with the proceeds of
tariffs (it doesn't). He is as ignorant of the relations among nations as he is of the relations among people.
Tariff Man's superpower is even more ridiculous than that of Mr. Furious. It's
worse than impotent. It's self-defeating. Let's hope that principle applies ultimately to the 2020 elections as
well.
Share this:
"... Trump's declaration of economic war against China is like everything he does - impulsive, ill-considered, ill-prepared, and without any coherent strategy or series of tactics to achieve that strategy. ..."
"... NOTE - I am not pro-China, but anti-stupid, anti-disorganized, and anti-clueless, which is how everything gets done in the Trump WH, especially since his "economic advisors" really do not know anything about economics. ..."
Last month, "Avengers: Endgame" became the highest-grossing American film in the history of
China. It was a seminal moment, suggesting the partnership between China and Hollywood, which over the years has
moved in fits and starts, was finally firing on all cylinders. But the $614 million that Disney-Marvel booked may
turn out to be an outlier.
As the United States ups the stakes in a trade war, there are growing signs that China is quietly
retaliating against the U.S. entertainment business.
Beijing is now constricting Hollywood's ability to peddle its product in the country, say four
people who conduct business in China or closely monitor its relations with Hollywood.
"I don't want to use the words 'total freeze,' but it's real," said John Penotti, the producer of
"Crazy Rich Asians" and head of SK Global who specializes in Asian productions. "They're not saying it officially,
but the industry is operating as if it's close to a total shutdown."
In contrast to many countries, distribution in China requires government approval, and according
to these sources, the Chinese government is unlikely to offer distribution slots to more than a small handful of
movies. The latest Spider-Man, Secret Life of Pets and Toy Story movies appear likely to get the nod, but most other
summer and even fall hopefuls face being locked out of the world's second-largest film market.
Hollywood relies on China to power its foreign box office, which in turn powers its film revenue,
and the standoff reflects how much of a conundrum China represents for Hollywood.
The availability of so many overseas ticket-buyers at a time of intense entertainment competition
at home has been a boon for U.S. studios. But at the same time, the mercurial ways of Chinese regulators and the ways
that market penetration is subject to geopolitical crosswinds also make the nation a vexing place for studios to do
business.
If the trade war wears on and the market remains cut off, it could result in a reduction of the
budgets of studio movies, since it's Chinese yuan that make them possible.
"I think this poses a dire situation for Hollywood," said Aynne Kokas, a professor at the
University of Virginia and author of "Hollywood Made In China," about the complicated relationship between the two
entities. "There definitely will be a trickle-back effect. It's a very dangerous financial position to be reliant on
Chinese box office to recoup profits."
The Chinese market has become a place of increasing importance to the American movie business.
As the country has rapidly built theaters -- it now has more than 65,000 screens, a dozenfold increase compared to a
decade ago -- it has become a cash cow for American studios.
Three of Hollywood's top five movies at the worldwide
box office last year -- "Avengers: Infinity War," "Jurassic World: Fallen Kingdom" and "Aquaman" -- each collected more
than a quarter of their overseas dollars in China.
Other movies owe the country even more of their success. The underwater adventure "The Meg"
notched 40 percent of its foreign total in China, while Steven Spielberg's gamer-themed hit "Ready Player One"
approached 50 percent. China could become the biggest film market as soon as 2020,
according to
PricewaterhouseCoopers.
But to keep the dollars flowing, studios need those distribution slots. And that's where matters
get dicey.
China officially has a quota allowing in several dozen Hollywood movies per year -- 38 in
2019, 35 the year before. Those numbers are up by more than 20 percent in the past five years.
The Film Bureau and its China Film Group division determine what movies are given a distribution
slot. But with blackout periods, 11th-hour allowances and other unpredictable factors, even those who study the
market say it can be impossible to parse what makes the cut. And lately, with the trade war raging, few movies are.
Vanamali, 6 hours ago
As they say, "Everything is fair in love and war" - the Chinese are using whatever means they have at their disposal
Trump is using Tariffs to hurt the Chinese economy and business and the Chinese of course are going to retaliate with
whatever weapon they have
But gotta love the Trumptards "logic" - "They need our exports, without them they will starve, there will be rioting in
the streets" and "We are doing them a big favor by importing their products, if we shut off our market, their companies
will collapse, massive unemployment, there will be rioting in the streets" Bizarre "logic"
jayster, 12 hours ago (Edited)
Trump's declaration of economic war against China is like everything he does - impulsive, ill-considered, ill-prepared,
and without any coherent strategy or series of tactics to achieve that strategy.
China will defend its interests and retaliate as necessary, especially as they know Trump is an absolute moron.
NOTE - I am not pro-China, but anti-stupid, anti-disorganized, and anti-clueless, which is how everything gets done in the
Trump WH, especially since his "economic advisors" really do not know anything about economics.
ES175GC 12 hours ago
Trump is such a vengeful, hating person that it wouldn't surprise me at all that he deliberately wants to hurt all those
Hollywood liberals who despise him so much. "When I get hit, I hit back 10 times harder" is a famous Trump saying.
He operates on a juvenile level, as we all know, like a spoiled whining brat who has to get even with anyone who slights him.
It makes perfect sense that Trump will do everything he can to destroy Hollywood's business with China.
buhaobob, 12 hours ago
I agree except your premise that Trump would do this deliberately would require that Trump have a plan, and he has
demonstrated that his attention span is about the same as that of the average goldfish.
Zop1066, 15 hours ago (Edited)
We certainly do not need Chinese government influence in Hollywood or in any US media, period. Several films recently have
shied away from any even marginally critical reference to China for fear of losing Chinese box office receipts or Chinese
investment.
And the Chinese investors have not even tried to hide that they do indeed influence film scripts to suit the Chinese
government. Enough of that. Best they keep their money and invest perhaps in even harsher great wall internet controls,
internment camps, and super creepy internal population controls.
That'll sure keep the cinema in China boring and nonthreatening. Certainly wouldn't want anyone there to think for themselves
and question their government, no siree.
"... Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall Street and the stock market, Walmart and much of the IT sector against him at election time if his tariffs on China increase the cost of living and doing business. His diplomatic threat is really that the US will cut its own economic throat, imposing sanctions on its own importers and investors if China does not acquiesce. ..."
"... China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn't he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe. ..."
President Trump has threatened China's President Xi that if they don't meet and talk at the
upcoming G20 meetings in Japan, June 29-30, the United States will not soften its tariff war
and economic sanctions against Chinese exports and technology.
Some meeting between Chinese and U.S. leaders will indeed take place, but it cannot be
anything like a real negotiation. Such meetings normally are planned in advance, by specialized
officials working together to prepare an agreement to be announced by their heads of state. No
such preparation has taken place, or can take place. Mr. Trump doesn't delegate authority.
He opens negotiations with a threat. That costs nothing, and you never know (or at least, he
never knows) whether he can get a freebee. His threat is that the U.S. can hurt its adversary
unless that country agrees to abide by America's wish-list. But in this case the list is so
unrealistic that the media are embarrassed to talk about it. The US is making impossible
demands for economic surrender – that no country could accept. What appears on the
surface to be only a trade war is really a full-fledged Cold War 2.0.
America's wish list: other countries' neoliberal subservience
At stake is whether China will agree to do what Russia did in the 1990s: put a Yeltsin-like
puppet of neoliberal planners in place to shift control of its economy from its government to
the U.S. financial sector and its planners. So the fight really is over what kind of planning
China and the rest of the world should have: by governments to raise prosperity, or by the
financial sector to extract revenue and impose austerity.
U.S. diplomacy aims to make other countries dependent on its agricultural exports, its oil
(or oil in countries that U.S. majors and allies control), information and military technology.
This trade dependency will enable U.S. strategists to impose sanctions that would deprive
economies of basic food, energy, communications and replacement parts if they resist U.S.
demands.
The objective is to gain financial control of global resources and make trade "partners" pay
interest, licensing fees and high prices for products in which the United States enjoys
monopoly pricing "rights" for intellectual property. A trade war thus aims to make other
countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology goods
whose disruption will cause austerity and suffering until the trade "partner" surrenders.
China's willingness to give Trump a "win"
Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall
Street and the stock market, Walmart and much of the IT sector against him at election time if
his tariffs on China increase the cost of living and doing business. His diplomatic threat is
really that the US will cut its own economic throat, imposing sanctions on its own importers
and investors if China does not acquiesce.
It is easy to see what China's answer will be. It will stand aside and let the US
self-destruct. Its negotiators are quite happy to "offer" whatever China has planned to do
anyway, and let Trump brag that this is a "concession" he has won.
China has a great sweetener that I think President Xi Jinping should offer: It can nominate
Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama
got. And doesn't he deserve it more? After all, he is helping to bring Eurasia together,
driving China and Russia into an alliance with neighboring counties, reaching out to
Europe.
Trump may be too narcissistic to realize the irony here. Catalyzing Asian and European trade
independence, financial independence, food independence and IT independence from the threat of
U.S. sanctions will leave the U.S. isolated in the emerging multilateralism.
America's wish for a neoliberal Chinese Yeltsin (and another Russian Yeltsin for that
matter)
A good diplomat does not make demands to which the only answer can be "No." There is no way
that China will dismantle its mixed economy and turn it over to U.S. and other global
investors. It is no secret that the United States achieved world industrial supremacy in the
late 19 th and early 20 th century by heavy public-sector subsidy of
education, roads, communication and other basic infrastructure. Today's privatized,
financialized and "Thatcherized" economies are high-cost and inefficient.
Yet U.S. officials persist in their dream of promoting some neoliberal Chinese leader or
"free market" party to wreak the damage that Yeltsin and his American advisors wrought on
Russia. The U.S. idea of a "win-win" agreement is one in which China will be "permitted" to
grow as long as it agrees to become a U.S. financial and trade satellite, not an independent
competitor.
Trump's trade tantrum is that other countries are simply following the same economic
strategy that once made America great, but which neoliberals have destroyed here and in much of
Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its
competitive industrial advantage and become a high-cost rentier economy. Its GDP is
"empty," consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and
capital gains while the nation's infrastructure decays and its labor is reduced to a prat-time
"gig" economy. Under these conditions the effect of trade threats can only be to speed up the
drive by other countries to become economically self-reliant.
The crux of the "trade" dispute is never discussed: the Chinese refusal to allow the
international financial services sector to penetrate the Chinese economy and operate freely.
Get it? The Chinese won't let the Jews in to loot the place and the Jews are pissed.
Trumpstein, the cryto Jew, has promised his sponsors to rectify the situation. The Chinese
witnessed what happened when Yeltsin allowed the IMF to parachute Jeffrey Sachs and his Jew
Boys into Russia in 1991 Jews looted the place mercilessly, calling it democracy and
capitalism, and Russia is still recovering. The Chinese have a bright future, as long as they
keep the Jews out.
I agree.
I am afraid spokes person Trump and those he is speaking for have it wrong. They believe
external trade is interfering with the La-Zi-Faire fat cat monopoly powered corporations the
CPI (congress, president and Israeli governance represent.
Few western companies can compete because only monopoly endowed Global corporations are
allowed or licensed to compete. Individual ability, the creative mind of the lone rangers
with highly disruptive inventions and ideas, are not allowed access to the knowledge or money
to play. Making people pay for sleazy operating systems when better ones are free, allowing
big corporations to hack the data of everyone, and on and on.
Even when a person finds a way to play and actually produces a product or concept, the
financial condition of the inventor is so weak or the barriers to promote his product is so
strong that as soon as the idea or product is patented or copyrighted it somehow absorbed
into one of the monopoly powered giants; in other words, competition is only allowed if the
competitor gives the profits to one of the monopoly powered giants. China should be
complaining, at least their competitors can produce, in the USA governed America unlicensed
competition is denied.
Copyright, patents, standardized testing and licensing every breath have terminated
competition in America.
America still competes with Americans as long as the business does not compete with the
global corporations.
The problem Trump thinks he can solve, is not sourced in India, China, Iran, Russia, or
any other nation. The problem is at home, in government policy, laws that turn capitalistic
competition into monopolistic fat-cat wealth storing private domain havens. Education by
degree and license by examination and standardization of performance are used to restrict
competition. Education, is a bureaucracy and no matter its efficiency; a degree cannot
provide competitive performance. The USA governance over America has served only the interest
of monopoly endowed corporations and their oligarch owners and investors. Trump is trying to
overcome foreign competition, by threat and blocking maneuvers, to deny foreigners the fruits
of their competitive successes I do not believe he can be successful. Already the Russian and
Chinese have developed a new currency and banking system to circumvent the Trump block. Work
around-s are in progress everywhere.. Soon even the USA will not be allowed to compete I
fear.
It is not a matter of where the competition comes from, its that the monopoly powers have
used the behavior enforcing rule making capacity of the USA to deny native American
creativity; creativity that America needs to be competitive. USA policy continues to be to
enrich a few by channeling and encapsulating all effort within the confines of the monopoly
holders instead of encouraging every back yard to be a new competitor. It will be many years
before Americans will be able to compete..
What Trump is now demanding reminds me of the brutally efficient system that Trump grew up
in: New York City business. (Author Tom Wolfe has a great line in his book The Bonfire Of The
Vanities that the strange, unrelenting background droning sound one hears in NYC is that of
"people constantly braying for money").
New York City real estate in particular is an area of business that is so brutally
competitive, unscrupulous , and backstabbing that it is best described as war under another
name. It is a business arena where a close friend one day can turn into a staunch enemy the
next. Trust is rare.
New York real estate, in fact, brings to mind the old saying about sausage making: You
would never eat it if you saw it being made. Yet deals are made. In fact, a lot of them. This
is the milieu Trump comes from.
Trump isn't one of those more genteel, old-time American negotiators of prior years the
author of this article speaks fondly of. These are the very same people who so readily agreed
to disasters like NAFTA or allowed, for instance, Or allowed Japan to levy two hundred
percent duties on things like American made Harley Davidson motorcycles while the USA was
pressured (or bribed) to apply few if any comparable duties on Japanese motorcycles or
automobiles (or virtually anything else Japan sold in the USA). These toothless. genteel
types also stood back for decades and allowed Japan to use red tape (like obscure safety
regulations for instance) to make it almost impossibly difficult to sell American products
like automobiles in Japan.
These very same US negotiators, politicians, and bureaucrats have more recently stood back
and allowed China to absolutely devastate American manufacturing.
Screw China, It's now payback time. The Chinese are shaking in their boots because the
previously hoodwinked and comatose Americans are finally waking up. No more wimpy Obama or
Bush looking out for our interests. It is now Truly Scary Trump instead.
Wait until the negotiations are concluded to see if they are successful. The sausage that
comes out of them might be very appealing for the first time in many, many decades.
" His diplomatic threat is really that the US will cut its own economic throat, imposing
sanctions on its own importers and investors if China does not acquiesce "
I get that the US financial system is up to no good with their positions on China but the
criticisms Trump made of China are correct. They have lots of tariffs on finished goods from
the US. They require technology transfer to do business there. Their government and industry
are tied at the hip and they are manipulating their currency. All these things are true and
if we keep trading with them with the same terms we have been we would lose ALL our
industrial infrastructure. Now we hear over and over how we can't build anything but the
Chinese went from being dirt farmers to the largest industrial power in a fairly short period
of time. Could we not do the same at least for our own countries market? Certainly global
trade destruction between countries is not a good thing but we'd be fools to keep on as we
are now. At some point when you dig a hole you have to stop to get yourself out.
I don't think we have a choice if we wish to continue to be an industrialized country. All
those that say China will do fine without us are not taking into account how all the other
countries who are being handled the exact same way as we are, are going to handle China's
trade with them. Will they keep allowing China to have large tariffs on their products while
they Chinese ship whatever they wish into theirs? I'm not so sure they will. If the US starts
refusing the Chinese free entry without reciprocal trade then I can easily see others
following our lead.
We should have stopped this many years ago but as bad as the situation is now it will only
get worse if we don't act.
Let them remove their tariffs. We should take every single anti-trade act and tariff they
have on us, weigh them on China and "then" negotiate. If they don't wish to it's their
country they can do what they please and so can we.
"The crux of the "trade" dispute is never discussed: the Chinese refusal to allow the
international financial services sector to penetrate the Chinese economy and operate freely.
Get it? "
Absolutely. Like inviting a handful of worms into your apple -- economy hollowed out in an
eye blink.
However, there is another side to this "trade dispute" coin.
FIRE want to economicly destroy China. The neocon', MIC, security sector wants to destroy
China's 2025 plan to become high-tech world leaders. 5G, AI, semi conductors etc are some of
the areas that China's public/private sectors are voraciously pushing. Hence, the
(wonderfully "free market") US attacks on Heiwai.
These short term US gambles are more than likely to pay off by the medium-long term
undermining of US hegemony via Eurasian integration led by China & Russia.
And all the time we are left wondering whether the US will choose the "Samson Option" rather
than accept reduced status. (Insane with power lust, the US can't even accept "first among
equals")
The US is making impossible demands for economic surrender – that no country could
accept. What appears on the surface to be only a trade war is really a full-fledged Cold
War 2.0
.
Typical mobster protection racket threats. Now the US has moved from waging military wars
on behalf of their Jewish owners to aggressively push their neoliberal economic warfare for
them. The facade for promoting democracy and human rights is no longer required.
And to call attempts at starving the population and murdering children by denying them
essential medicines as has happened in Iraq and now is going on in Iran and Venezuela, a Cold
War 2.0 is a gross understatement. It is a flagrant act of war. America is launching a war of
attrition on the world and who better to spearhead that war than an idiot manipulated by
Zionist Jews? The fact that many countries remain silent is testament to their surrender. But
China may prove to be a different proposition.
"the United States achieved world industrial supremacy in the late 19th and early 20th
century" That is a myth. The US may have had the highest GDP because it was the leader in
manufacturing, as China is now, but Europe and in particular Germany was far ahead of the US
in technology and science. If you compare China to the US today the situation is very similar
to comparing the US to Germany before 1939. Germany was far ahead of the US in the number of
Nobel Prizes received thru 1945 and very few of the Americans that did receive the Nobel
Prize were native born. The US received a few Nobel Prizes starting in the 1940's because
some recent European immigrants that became US citizens received it for work they had done in
Europe. The three biggest technological breakthroughs of WW II were the jet, the rocket and
the atomic bomb. Germany invented the jet, built the first modern rockets and the German
scientist Otto Hahn split the atom in 1939 (for which he received the Nobel Prize in 1944)
kicking off the USA's atomic bomb project and Germany's limited attempt. The people that
eventually achieved success in the US were almost all recent European immigrants (Bethe,
Teller, etc.), many being Jewish.
I basically agree with the rest of the article. I believe Trump's tactics make sense. The
problem is it's too late. The US economy can't be fixed by anyone. The US has 22 trillion
dollars in debt and will never be able to pay it back. The dollar is going to take a deep
dive within the next few years and it will lose its status as the reserve currency. I believe
this based upon what people like Peter Schiff, Paul Craig Roberts, David Stockman and Ron
Paul say.
I think the two biggest events of the last 75 years were WW II, completely changing the
countries that run the world and the emergence of a backwards and dirt poor China to become
an economic powerhouse and I think they will get stronger.
The US is making impossible demands for economic surrender – that no country could
accept.
Yes country. If the world was one big free trade area, it there were no bloks or even no
countries in the sense we understand them then the population of the would be wealthier, on
average. But countries are not primarily economic units, even if one can look at them as
such.
Nation states exist and have the emergent quality that they to survive against other
nation states and the best way to do that is to gain extra power relative to other states, or
at least maintain their position. Why would America agree to terms of trade that do not
maintain its position relative to China.
U.S. negotiators are unwilling to acknowledge that the United States has lost its
competitive industrial advantage
There is no absolute standards by which such an advantage could be judged. The terms of
trade that are finally settled on will be a compromise and reflect the interests of both, and
the total balance of forces between the two.
The combination of both nations will make it extremely difficult for Washington to impose
its hegemonic agenda without serious repercussions as two of the world's leading military
forces seek to increase the level of co-operation between their nations.
Trump's Trade Tariff Theatre 2018 results:
Country/Trade Balance/2018 vs. 2017
Mexico: trade DEFICIT -$81.5 billion; up 14.9% from 2017;
Canada: trade DEFICIT -$19.8 billion; up 15.8% from 2017;
China: trade DEFICIT -$375.6 billion; up 11.6% from 2017;
South Korea: trade DEFICIT -$17.9 billion; down 22.4% from 2017;
Japan: trade DEFICIT -$67.7 billion; down 1.8% from 2017
Germany: trade DEFICIT -$68.3 billion; up 7.2% from 2017;
France: trade DEFICIT -$16.2 billion; up 5.8% from 2017;
Kingdom of Saudi Arabia: trade DEFICIT -$10.5 billion; up 313.3% from 2017;
Russia: trade DEFICIT -$14.1 billion; up 40.9% from 2017;
Asia: trade DEFICIT -$622.2 billion; up 8.8% from 2017;
Europe: trade DEFICIT -$202.4 billion; up 16.6% from 2017;
World: trade DEFICIT -$795.7 billion; up 10.4% from 2017
To all of the "free traders", the media ,and academia ,i have this simple question:
why i cant purchase a Toyota work van(the best and must popular of the world),neither here in
the USA nor abroad and bring it in?
how come that even in Cuba there are more of those Toyota work van than here in all
continental USA.
In 25 year i has to purchase more than 6 work vans,and like Penelope i have been waiting for
the Toyota ,and still waiting.
They ,the free traders,did not has allowed not even one.
The problem with the zio/US is the control of the US by the zionists and this control is
derived via the zionist privately owned FED and IRS that they got installed in 1913 and then
came the debt and wars and the hijacking of the foreign policy by the satanic zionists and
the US gov was started on a down hill slide pushed started by the zionists!
The trade policy of the zio/US has turned Russia into the largest grain exporter in the
world and turned Russia into an agriculture miracle , this can be shown by watch videos of
Russian agriculture on youtube. Germany is also in Russia building cars and other industrial
products for Russia thus bypassing the zio/US trade sanctions and last but not least Russia
is trading in non dollars in trade with more and more countries such as China thus
effectively rendering the dollar non and void in international trade.
So the people of the zio/US can thank their zionist masters for the demise of America and
true to form the zionist parasites are killing their American host
Join Mike Maloney as he examines the latest moves in the US/China trade war, and visits
some compelling arguments from the Foundation for Economic Education.
The "Chinese dragon" of the last two decades may be faltering but it is still hailed by
many as an economic miracle. Far from a great advance for Chinese workers, however, it is the
direct result of a consolidation of power in the hands of a small clique of powerful
families, families that have actively collaborated with Western financial oligarchs.
"Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall
Street and the stock market, Walmart and much of the IT sector against him at election time
if his tariffs on China increase the cost of living and doing business. "
Tariffs are taxes and both governments like collecting taxes.
Farmers. Farmers sell a commodity so if they cannot sell to China one result is they will
sell to other customers while China buys more from other producers.
Cost of living. DC does not care. There is a solid inflation lobby in the fed that
supports increasing the cost of living.
"Walmart and much of the IT sector against him." I am not buying it.
Well, more accurate to say that Germany and Britain invented the jet engine independently
of each other. Just as they both invented radar independently of each other as well.
As it is, the post-war jet engine was based primarily on the British design of Frank
Whittle, though some of the German ideas were also later incorporated.
Huawei Technologies Co Ltd has told Verizon Communications Inc that
the U.S. carrier should pay licensing fees for more than 230 of the Chinese telecoms equipment
maker's patents and in aggregate is seeking more than $1 billion, a person briefed on the
matter said on Wednesday.
Verizon should pay to "solve the patent licensing issue," a Huawei intellectual property
licensing executive wrote in February, the Wall Street Journal reported earlier. The patents
cover network equipment for more than 20 of the company's vendors including major U.S. tech
firms but those vendors would indemnify Verizon, the person said. Some of those firms have been
approached directly by Huawei, the person said.
The patents in question range from core network equipment, wireline infrastructure to
internet-of-things technology, the Journal reported. The licensing fees for the more than 230
patents sought is more than $1 billion, the person said.
Huawei has been battling the U.S. government for more than a year. National security experts
worry that "back doors" in routers, switches and other Huawei equipment could allow China to
spy on U.S. communications. Huawei has denied that it would help China spy.
Companies involved, including Verizon have notified the U.S. government and the dispute
comes amid a growing feud between China and the United States. The licensing fee demand may be
more about the geopolitical battle between China and the United States rather than a demand for
patent fees.
Huawei and Verizon representatives met in New York last week to discuss some of the patents
at issue and whether Verizon is using equipment from other companies that could infringe on
Huawei patents.
Verizon spokesman Rich Young declined to comment "regarding this specific issue because it's
a potential legal matter."
However, Young said, "These issues are larger than just Verizon. Given the broader
geopolitical context, any issue involving Huawei has implications for our entire industry and
also raise national and international concerns."
Huawei and U.S. wireless carriers T-Mobile US Inc and AT&T Inc did not respond to
Reuters' requests for comment. Sprint Corp declined to comment.
The United States last month put Huawei on a blacklist that barred it from doing business
with U.S. companies on security grounds without government approval, prompting some global tech
firms to cut ties with the world's largest telecoms equipment maker.
Washington is also seeking the extradition of Huawei Chief Financial Executive Meng Wanzhou
from Canada after her arrest in Vancouver last December on a U.S. warrant.
China has since upped the pressure on Canada, halting Canadian canola imports and in May
suspended the permits of two major pork producers.
(Reporting by Arjun Panchadar in Bengaluru and David Shepardson in Washington; Editing by
Anil D'Silva, Sriraj Kalluvila and Sandra Maler)
" -- seems to me a very complicated explanation for: If a country doesn't produce what it
consumes Such a country is entirely F ed!"
This is totally NOT what I said, so I'll restate my point differently.
IF people (localists, sovereignists etc.) really wanted less globalisation, without global
supply chains, etc., then it would be possible, at a price (in terms of productivity).
BUT in reality localists, sovereignists etc. don't really want de-globalisation for the sake
of it, they mostly want to increase exports and decrease imports, and in fact these localists
desires are stronger in countries (USA, UK) that are big net importers, and therefore think
they are losing in the globalisation race.
The reason localists want to increase exports and decrease imports is that it is a form of
mercantilism: if exports increase and imports decrease, there are more jobs and
contemporaneously there are also more profits for businesses, so it's natural that countries
want to import less and export more.
BUT exports are a zero sum game, so while this or that country can have some advantages by
being a net exporter, this automatically means that some other country becomes a net importer,
so onne can't solve the problem of unemployment by having everyone being net exporters (as
Krugman once joked by having everyone export to Mars).
So the big plan of localists cannot work in aggregate, if it works for one country it
creates a problem for another country. This is a really big problem that will cause increasing
international tensions.
We are seeing this dinamic, IMHO, in the Brexit negotiations, where in my opinion many
brexiters had mercantilist hopes, but of course the EU will not accept an accord that makes it
easy for the UK to play mercantilist.
I'll add that I think that Brexiters don't really realise that they are mercantilists,
but if you look at the demands and hopes of many Brexiters this is their "revealed
preference".
This is also a problem because apparently many people (not only the Brexiters, see also
EU's policies towards Greece) don't really realise what's the endgame for the policies they are
rooting for, it seems more like a socially unconscious tendency, so it is difficult to have a
rational argument with someone that doesn't really understand what he wants and what he is in
practice trying to do.
The reason that every country is trying to play mercantilist is that in most countries
inequality rose in the last decades, which creates a tendency towards underconsumption, that
must be countered through one of these 3 channels: (1) Government deficits; (2) Easy money
finance and increased levels of financial leverage; (3) net exports.
The first two channels lead to higher debt levels, the third apparently doesn't but, as
on the other side of net exports there has to be a net importer, in reality it still relies on
an increase in debt levels, only it is an increase in debt levels by someone else (sometimes
known as the net exporter -- "vendor-financing" the net importer)
The increase in leverage goes hand in hand with an increase of the value of capital assets
VS GDP, that is an increase of the wealth to income ratio.
So ultimately the increased level of inequality inside countries (as opposed to economic
inequality between countries, that is falling) leads to a world where both debt levels and
asset prices grow more than proportionally to GDP, hence speculative behaviour, and an economy
that is addicted to the increase of debt levels, either at home or abroad (in the case of net
exporting countries).
The countries that seriously want to become net exporters have to depress internal
consumption, which makes the problem worse at a world level. The countries like the USA, where
internal consumption is too much a big share of the pie relative to what the USA could gain by
exports, are forced to the internal debt route, and so are more likely to become net
importers.
However, in this situation where everyone acts mercantilist, by necessity someone will end
up a net importer because import/export is a zero sum game, so it doesn't really make sense to
blame this or that attitude of, for example, Americans for they being net importers: they are
forced into it because otherwise they would be in perma-depression.
“But it is unquestionably and unarguably true that American conflict (which may or may
not be of a military nature) with a rising China is literally inevitable”
As long as the US Casino -(”the stock market”) will react unfavourable to a
(real) American-Chinese conflict – there will be no (real) American-Chinese conflict
–
(just the games which are going on currently) – and just never forget – all of my
Chinese friends are really ”tough gamblers”.
“As long as the US Casino -(”the stock market”) will react unfavourable
to a (real) American-Chinese conflict – there will be no (real) American-Chinese
conflict “
Crash, then conflict?
One possibility is a US market crash entirely due to domestic shenanigans, followed by
demagogue blaming it all on “Chiner.”
"... The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from taking any more steps that might endanger the flying public. The two Boeing-indentured men are Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali Bahrami. ..."
"... The FAA has long been known for its non-regulatory, waiver-driven, de-regulatory traditions. It has a hard time saying NO to the aircraft manufacturers and the airlines. After the aircraft hijackings directing flights to Cuba in the 1960s and 1970s, the FAA let the airlines say NO to installing hardened cockpit doors and stronger latches in their planes. These security measures would have prevented the hijackers from invading the cockpits of the aircrafts on September 11, 2001. The airlines did not want to spend the $3000 per plane. Absent the 9/11 hijackings, George W. Bush and Dick Cheney might not have gone to war in Afghanistan. ..."
"... Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world's airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and public relations outfits, Boeing is used to getting its way. ..."
"... Right now, the Boeing/FAA strategy is to make sure Elwell and his FAA quickly decide that the MAX is safe for takeoff by delaying or stonewalling Congressional and other investigations. ..."
"... Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX's problems is a non-starter for Boeing. Boeing's flawed software and instructions that have kept pilots and airlines in the dark have already been exposed. New whistleblowers and more revelations will emerge. More time may also result in the Justice Department's operating grand jury issuing some indictments. More time would let the House Transportation and Infrastructure Committee, led by Chairman Peter DeFazio (D-OR) dig into the failure of accountability and serial criminal negligence of Boeing and its FAA accomplices. Chairman DeFazio knows the history of the FAA's regulatory capture. ..."
"... The FAA and its Boeing pals are using the "trade secret" claims to censor records sought by the House Committee. When it comes to investigating life or death airline hazards and crashes, Congress is capable of handling so-called trade secrets. This is all the more reason why the terminally prejudiced Elwell and Bahrami should step aside and let their successors take a fresh look at the Boeing investigations. That effort would include opening up the certification process for the entire Boeing MAX as a "new plane." ..."
The Boeing-driven FAA is rushing to unground the notorious prone-to-stall Boeing 737
MAX (that killed 346 innocents in two crashes) before several official investigations are
completed. Troubling revelations might keep these planes grounded worldwide.
The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground
the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from
taking any more steps that might endanger the flying public. The two Boeing-indentured men are
Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali
Bahrami.
Immediately after the crashes, Elwell resisted grounding and echoed Boeing claims that the
Boeing 737 MAX was a safe plane despite the deadly crashes in Indonesia and Ethiopia.
Ali Bahrami is known for aggressively pushing the FAA through 2018 to further abdicate its
regulatory duties by delegating more safety inspections to Boeing. Bahrami's actions benefit
Boeing and are supported by the company's toadies in the Congress. Elwell and Bahrami have both
acquired much experience by going through the well-known revolving door between the industry
and the FAA. They are likely to leave the FAA once again for lucrative positions in the
aerospace lobbying or business world. With such prospects, they do not have much 'skin in the
game' for their pending decision.
The FAA has long been known for its non-regulatory, waiver-driven, de-regulatory traditions.
It has a hard time saying NO to the aircraft manufacturers and the airlines. After the aircraft
hijackings directing flights to Cuba in the 1960s and 1970s, the FAA let the airlines say NO to
installing hardened cockpit doors and stronger latches in their planes. These security measures
would have prevented the hijackers from invading the cockpits of the aircrafts on September 11,
2001. The airlines did not want to spend the $3000 per plane. Absent the 9/11 hijackings,
George W. Bush and Dick Cheney might not have gone to war in Afghanistan.
The FAA's historic "tombstone" mentality (slowly reacting after the crashes) is well known.
For example, in the 1990s the FAA had a delayed reaction to numerous fatal crashes caused by
antiquated de-icing rules. The FAA was also slow to act on ground-proximity warning
requirements for commuter airlines and flammability reduction rules for aircraft cabin
materials.
That's the tradition that Elwell and Bahrami inherited and have worsened. They did not even
wait for Boeing to deliver its reworked software before announcing in April that simulator
training would not be necessary for the pilots. This judgment was contrary to the experience of
seasoned pilots such as Captain Chesley "Sully" Sullenberger. Simulator training would delay
ungrounding and cost the profitable airlines money.
Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world's
airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and
public relations outfits, Boeing is used to getting its way. Its grip on Congress – where
300 members take campaign cash from Boeing – is legendary. Boeing pays little in federal
and Washington state taxes. It fumbles contracts with NASA and the Department of Defense but
remains the federal government's big vendor for lack of competitive alternatives in a highly
concentrated industry.
Right now, the Boeing/FAA strategy is to make sure Elwell and his FAA quickly decide that
the MAX is safe for takeoff by delaying or stonewalling Congressional and other
investigations.
The compliant Senate Committee on Commerce, Science and Transportation, under Senator Roger
Wicker (R-MS), strangely has not scheduled anymore hearings. The Senate confirmation of Stephen
Dickson to replace acting chief Elwell is also on a slow track. A new boss at the FAA might
wish to take some time to review the whole process.
Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX's problems
is a non-starter for Boeing. Boeing's flawed software and instructions that have kept pilots
and airlines in the dark have already been exposed. New whistleblowers and more revelations
will emerge. More time may also result in the Justice Department's operating grand jury issuing
some indictments. More time would let the House Transportation and Infrastructure Committee,
led by Chairman Peter DeFazio (D-OR) dig into the failure of accountability and serial criminal
negligence of Boeing and its FAA accomplices. Chairman DeFazio knows the history of the FAA's
regulatory capture.
Not surprising on June 4, 2019, DeFazio sent a stinging letter to FAA's Elwell and his
corporatist superior, Secretary of Transportation Elaine L. Chao, about the FAA's intolerable
delays in sending requested documents to the Committee. DeFazio's letter says: "To say we are
disappointed and a bit bewildered at the ongoing delays to appropriately respond to our records
requests would be an understatement."
The FAA and its Boeing pals are using the "trade secret" claims to censor records sought by
the House Committee. When it comes to investigating life or death airline hazards and crashes,
Congress is capable of handling so-called trade secrets. This is all the more reason why the
terminally prejudiced Elwell and Bahrami should step aside and let their successors take a
fresh look at the Boeing investigations. That effort would include opening up the certification
process for the entire Boeing MAX as a "new plane."
The Boeing-biased Elwell and Bahrami have refused to even raise in public proceedings the
question: "After eight or more Boeing 737 iterations, at what point does the Boeing MAX 8
become a new plane?" Many, including Cong. David Price (D-NC), chair of the House
Appropriations Subcommittee, which oversees the FAA's budget, have already questioned the
limited certification process.
Heavier engines on the old 737 fuselage changed the MAX's aerodynamics and made it
prone-to-stall. It is time for the FAA's leadership to change before the 737 MAX flies with
vulnerable, glitch-prone software "fixes".
Notwithstanding the previous Boeing 737 series' record of safety in the U.S. during the past
decade – (one fatality), Boeing's bosses, have now disregarded warnings by its own
engineers. Boeing executives do not get one, two, three or anymore crashes attributed to their
ignoring long-known aerodynamic engineering practices.
The Boeing 737 MAX must never be allowed to fly again, given the structural design defects
built deeply into its system.
"... He would be given a lavish reception in Riyadh, where he would deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian homophobia." ..."
On the bright side, if ever there were a candidate who might be inclined to rethink our
relationship with the Saudis, it's Buttigieg.
Oh, who am I kidding? He would be given a lavish reception in Riyadh, where he would
deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian
homophobia."
The first explicit reaction against globalization to gain
popular attention was the Battle of Seattle in 1999
Why not the Zapatista uprising in 1994? It was explicitly against Nafta and neoliberalism.
The 1997 Asian financial crisis also triggered a very strong reaction against the US centered
globalized financial system, its hedge funds, and the IMF.
the neoliberal ideology on which it rested, didn't face any serious challenge until the
Global Financial Crisis of 2008
In 2003, the unified challenge of the poorer countries was so serious that it the collapsed
the WTO talks to the point that it has never recovered. 2008 was simply catastrophic.
More than globalization being challenged, I think it is US hegemony. Trump is definitely
uniting its challengers with his media circus in Venezuela, disruptive tariff threats against
Mexico, and the blacklisting of Huawei.
Likbez 06.09.19 at 11:38 pm (no link)
Trump election in 2016 was in essence a rejection of neoliberal globalization by the
American electorate which showed the USA neoliberal establishment the middle finger. That's
probably why Russiagate hysteria was launched to create a smoke screen and patch the
cracks.
The same is probably true about Brexit. That's also explains Great Britain prominent role
in pushing anti-Russia hysteria.
I think the collapse of neoliberal ideology in 2008 (along with the collapse of financial
markets) mortally wounded "classic" neoliberal globalization. That's why we see the
conversion of classic neoliberalism into Trump's "national neoliberalism" which rejects
"classic" neoliberal globalization based on multinational treaties like WTO.
As the result of crisis of neoliberal ideology we see re-emergence of far-right on the
political scene. We might also see the emergence of hostile to each other trading blocks
(China Russia Turkey Iran; possibly plus Brazil and India ) vs G7. History repeats
I suspect that the USA neoliberal elite (financial oligarchy and MIC) views the current
trade war with China as the key chance to revitalize Cold War schemes and strategically
organize US economic, foreign and security policies around them. It looks like this strategic
arrangement is very similar to the suppression of the USSR economic development during the
Cold War.
The tragedy is that Trump administration is launching the conflict with China, while
simultaneously antagonizing Russia, attacking EU and undermining elements of the postwar
world order which propelled the USA to its current hegemonic position.
On June 4th the Chinese government issued a travel alert for Chinese tourists thinking of
visiting the United States, a day after it issued a similar advisory to Chinese students
thinking of studying in the US over concerns for their safety and security.
Chinese in the US are reporting harassment and interrogations by US immigration authorities
and many now have the impression they are not welcome in the US.
The Global Times , speaking on behalf of the government stated:
The Chinese people find it difficult to accept the fact that they are being taken as
thieves. The US boasts too much superiority and has been indulged by the world. Due to its
short history, it lacks understanding of and respect for the rules of countries and laws of
the market.
The Americans of the early generations accumulated prosperity and prestige for the US,
while the current US administration behaves like a wastrel generation by ruining the world's
respect for the US."
... ... ...
The situation has become so tense that the Global Times on June 6,th in an op ed by Wei
Jianguo, said:
China is able to withstand US maximum pressure, due to the country's economic resilience,
and Chinese people's resolute determination. Suffering from a century of humiliation, the
Chinese nation has been accustomed to such pressure, as shown in the War of Resistance
against Japanese Aggression, as well as the Korean War or the War to Resist US Aggression and
Aid Korea. The unity of Chinese people is a vital reason for the country's fundamental
victory in history."
The Peoples' Daily stated, "America is the enemy of the world."
Trump is not a thinker, and never was. He is an impulsive narcissist. So the question is
whether the USA committed a blunder by unleashing open trade war with China, the war which now
extent the Cold War 2 to another nation (cementing emerging alliance between Russia and China
which is a death sentence to the USA global hegemony) and where the USA faces very resilient and
inventive opponent. And they will lose even if they win.
I actually am amazed by the level of reclines and arrogance the USA democratic is such topic.
I do not see multiyear preparation, mobilization of engineering talent and resources that is
needed for successfully procuring such a war. It looks like completely impulsive decision
partially based on the attempt to get some additional concessions from China. That attempt which
spectacularly failed and fueled very dangerous for the USA a wave of Chinese nationalists within
mainland china.
The key issue here is that is current stage of neoliberal decine the USA can't rely on
loyalty of its own key players and citizets ("greed is good" is the motto of neoliberalism; plus
Chinese have probably a very good access to Taiwan high technology industry, the access which is
impossible to cut). Such a low level loyalty previously existed just before the USA collapse,
when the CIA was able to tranfere to the West a mid level cipher officer from KGB headquarters (
Sheymov defected to
the United States in May 1980) and recruit at least one general (Kalugin). Actually KGB was at
the center and the main driving force of neoliberal counterrevolution in Russia (Trojan Horse so
to speak), as under Andropov they switch sides. So they were naturally allied with CIA at this
point
the point is that it does not take too much efforts for foreign intelligence agency now to
recruit the US citizens as the collapse of neoliberal ideology creates fertile ground for such an
efforts, much like the collapse of Bolsheviks ideology did for the USA. Some can just volunteer
appalled by the actions of neoliberal empire. In this sense cases of Manning and Snowen should
serve the US administration a stern warning sign that it is a very dangerous to rock the boat if
the country experience a collapse of imperial ideology (Neoliberalism). In this case the trade
war might be more difficult then they think.
China has more people and produce per year more engineers in STEM. So the USA does not hoild
allthe cards. it it has some advantages over the USA in the long term. Also the current
technologies are pretty established and "innovation" is often is limited to shriking the silicon
die and adding more core for CPUs.
Actually Intel CPUs have a horrible really outdated CISC instruction set and there might be
chance to use different instruction set with better overall chanracteristics. Only the billions
that Intel get from sales allow it to outpace the rivals. Failed stqrtup Transmeta, for exampel,
in late 1990th tried to emulate it via RISK. If throwing out emulation layer speeds up things
twice or more, why not to use this path giving enough man power, money and level of animosity
toward the USA?
The mechanism would "prevent and resolve national security risks", Xinhua said. Details
would be released soon, it added.
The announcement comes amid a souring of relations with the US after the most recent round
of trade negotiations ended without a deal in May.
Since then, the Trump administration has blacklisted Chinese telecommunications equipment
maker Huawei, while China has threatened to punish foreign companies that cut off ties with
Huawei by listing them as "unreliable".
The new Chinese regulations could prove similar to US export controls on strategic
technologies. Those controls -- covering military equipment, some encryption technologies, and
some dual-use products -- have long irked China. Chinese negotiators have often claimed that
their trade surplus could be trimmed if the US would relax controls on high-tech goods.
The mechanism will be developed by the National Reform and Development Commission under the
guidelines of China's national security law ,
passed in 2015, Xinhua said.
"This is a major step to improve [China's system] and also a move to counter the US
crackdown," tweeted Hu Xijin, editor-in-chief of the Global Times, a nationalist tabloid that
is sometimes used to float ideas that are not official policy. "Once taking effect, some
technology exports to the US will be subject to the control." Last month, the NDRC implied it
would block exports of rare earths , a material
with many strategic applications. After the trade talks broke down in May, Chinese president Xi
Jinping visited a manufacturer of rare earths magnets, used in electric vehicles and other new
technology applications, as a reminder that China holds some trump cards of its own.
READ Massages and free fish help east Europe tackle labour shortages
Rare earth are used in smartphones, lasers, instrument panels, wind turbines and MRI
machines and more than 90 per cent of hybrid and electric cars.
"... Now, each of the two superpowers appears to be crafting new economic weapons to aim at the other. What was once a fraught, but deeply enmeshed, trade relationship is threatening to break apart almost entirely, raising the specter of a new geopolitical reality in which the world's two superpowers would compete for economic influence and try to freeze each other out of key technologies and resources. - New York Times ..."
"... "This is now extremely delicate [time] because the Trump administration, through its brinkmanship tactics, has destabilized the entire relationship, commercial and otherwise," according to China expert Scott Kennedy - senior adviser at the Washington-based Center for Strategic and International Studies who studies Chinese economic policy. ..."
Beijing put big tech on notice last week, threatening 'dire
consequences' if companies such as Microsoft, Dell and Samsung comply with the Trump
administration's ban on sales of key American technology to Chinese companies, according to the
New York
Times . Any companies which cooperate with the new policy ' could face permanent
consequences ,' according to the Times. Chinese authorities also suggested using DC lobbyists
to resist the government's moves.
China - which is already
ditching Microsoft Windows for military applications - held a flurry of meetings on Tuesday
and Wednesday after tech firms for discussions amid the backdrop of Beijing's planned blacklist
of blacklisting
of US firms on an "unreliable entities list."
Also participating in meetings were semiconductor companies Arm of Britain and SK Hynix of
South Korea, according to the report, which cites a KPMG estimate that around 60% of all
semiconductors sold are connected to China's supply chain, so maybe by that new computer sooner
than later.
The breakneck unraveling of the world's most important trade relationship has left
companies and governments around the world scrambling . While the dispute had already been
nettlesome for Chinese-U.S. relations, the sudden ban on Huawei last month caught many by
surprise , raising the stakes by striking at the heart of China's long-term technological
ambitions.
Now, each of the two superpowers appears to be crafting new economic
weapons to aim at the other. What was once a fraught, but deeply enmeshed, trade relationship
is threatening to break apart almost entirely, raising the specter of a new geopolitical
reality in which the world's two superpowers would compete for economic influence and try to
freeze each other out of key technologies and resources. - New York
Times
"This is now extremely delicate [time] because the Trump administration,
through its brinkmanship tactics, has destabilized the entire relationship, commercial and
otherwise," according to China expert Scott Kennedy - senior adviser at the Washington-based
Center for Strategic and International Studies who studies Chinese economic policy.
More broadly, the warnings also seemed to be an attempt to forestall a fast breakup of the
sophisticated supply chains that connect China's economy to the rest of the world .
Production of a vast array of electronic components and chemicals, along with the assembly of
electronic products , makes the country a cornerstone of the operations of many of the
world's largest multinational companies. - New York
Times
"The Chinese government has regularly resorted to jawboning multinationals to try to keep
them in line when there are disputes between China and others that could lead these companies
to reduce their business in China."
For example, in 2015 Xi dropped by Seattle before heading to meet with President Obama.
While there, he had a chat with Amazon executives and Chinese tech executive in order to woo
them on the prospect of future business, while the Obama administration was reportedly trying
to push back against China's anticompetitive trade practices .
That said, China is far less likely to succeed this time around , according to Kennedy, who
says that " American companies aren't going to violate American laws, especially in such a
high-profile context where their actions are scrutinized."
"The companies are between a rock and a hard place, but that hard place will win out."
Three Chinese government bodies are involved in the recent discussions; the National
Development and Reform Commission (China's central economic planning agency), the Ministry of
Commerce and the Ministry of Industry and Information Technology. The Times posits that the
fact that the three are all involved suggests the meetings came from the top-down in an attempt
to rally support for Huawei - which was not specifically named.
" There is a strong perception in Beijing that the U.S. government is intent on blunting
China's technology rise , and that if this process is not slowed or stopped, the future of
China's entire digital economy is at risk," said Eurasia Group head of geotechnology, Paul
Triolo, adding "Mr. Xi and the party will be seen as unable to defend China's economic future"
it Huawei's 5G rollout is derailed by the Trump administration.
As the trade relationship between the United States and China has broken down, fears have
risen in China that major companies will seek to move production elsewhere to avoid
longer-term risks . In the meetings this week, Chinese officials explicitly warned companies
that any move to pull production from China that seemed to go beyond standard diversification
for security purposes could lead to punishment , according to the two people. - New York
Times
"China Threatens 'Dire Consequences' If Tech Giants Comply With Trump Ban"
"And US Threatens Jail If They Don't"
Love it love it love it. Reminds me of the great line from Pride & Prejudice, "You're
mother will never speak to you again if you marry him, and I (your father) will never speak
to you again if you don't."
In R&D spending, China ranks 2nd place after US. China has over 8M new grads each
year. Do you really believe stealing can make a country great. The trade war is about
suppressing a new rising power of technology and economy.
There's a whole lot more to what China is up to than buying and selling. They've been
working on how to rule the whole earth for 5000 years and the CCP thinks maybe now is the
time. Here's a brief history of Chinese power games. They play for keeps. https://www.newenglishreview.org/custpage.cfm?frm=189701&sec_id=189701
China's fightback strategy is simple: Force non-us corporations to abandon us-sourced
technologies, and, hence, non-us corporations will not be bound by US laws, and, hence, won't
subject to us blackmail laws.
The strategy already worked. ARM's founder said it will have to abandon US-sourced
technology ( eventually abandon US-located headquarters) to keep the Chinese market, and, so
other non-us corporations, such as Europe, Japanese, or Korean based corporations will have
to follow. They have no other feasible choices.
In short, the world is divided into two groups: US group and non-us group. Congratulations
to Trump: He has succeeded in isolating US from the world.
First step is to encourage, urge and force non-us corporations to make the choice using
the gigantic china market.
Second step is to drive out us corporations at the time when there is alternative for
US-made parts. Whenever US corporation is not the sole supplier, then China will declare that
any product containing that part will be forbidden in the Chinese market. And, to make the
situation even worse for US-sourced technology, any parts produced by non-us corporations
using US-sourced technology will not be allowed in the Chinese market.
This is the reverse of the entity list.
In this game, one that has a bigger market prevails. China just happened to have 1.4
billion consumers while US has less than 0.4 billion. China wins. By poisoning American
sourced technology, China will succeed in isolating US corporations.
You seem to be confused. ARM created a separate joint venture in China called ARM mini
China that will license existing tech to China as a way to circumvent US rules. However, this
creates a Chinese ARM license separate from the rest of the world. So it is China that is
actually separated from further innovation outside of China.
The Roman Emperor Caligula is best known for appointing his horse to one of the vacant
consulships. Given the current quality of professional politicians on offer in the western
world, he does not seem as crazy as he once was thought to be.
But he is also known for something else-- the phrase "Oderint dum Metuant" -- which is
Latin for "Let them hate (us), so long as they fear (us)."
Not my favorite motto but I'll take it over "Here's my wallet. Don't you like me now?"
"... The US has decided that China can't be allowed to become a technological power any more than it is now. It's fine if all they do is make T-shirts, and low-tech crap, but anything more advanced then a digital alarm clock can not be allowed. ..."
"... Anytime you weaponize something (the dollar), countermeasures will be invented to neutralize that weapon........only a matter of time. ..."
"... We're so balls deep in debt la la land now that having a conversation about wealth creation via production feels a lot like making balloon animals while wearing a clown suit. ..."
"... Much More Than a Trade War ..."
"... it signals the implosion of America's tinsel, derivative-based economy ..."
"... the high dive of the middle class into serfdom ..."
"... Politicians here in the US are desperate for me to believe it is all China's fault. Not the lying, stealing politicians and MBAs that have stolen my future but China. I am not buying it. Even if China has stolen America's wealth, who let them? Who helped and got rich? That's right, US politicians and MBAs. ..."
"... The only reason why this is a trade war in the first place, is because we're attempting to undo the shitty deals signed by Bill Clinton. Let this be a lesson: Don't sign shitty deals. No matter how much they donate to your campaign. ..."
"... Asking this of a politician is like asking a leech to stop living off blood. ..."
I watch Fox News Sunday and today all of the usual suspects were blaming Trump for
everything under the sun--including committing crimes and needing to be put in jail. It bears
repeating that they said the same things about Reagan and his trade wars--which benefited
Americans immensely.
Trump will win unless the Dems can get rid of him. China is a paper tiger and always has
been.
They are a totalitarian communist state and as such are a sworn enemy of the US and its
historic peoples. They must be taken down and that is not hyperbole--they never should have
been allowed to trade with the civilized world in the first place without first shutting down
the Kims in Norkland and dismantling their communist state.
Russia would have been more in
order in 1992 than China. ******* Clintons.
(Those companies and organizations which have contributed to and/or financed the creation
of the Chinese Communist Party's ultra-Orwellian system for command and control: Social
Credit System.)
Microsoft, Cisco, Apple, Yahoo, Narus
Rockefeller Foundation, MIT, Princeton University, University of Texas System,
Northwestern University, Oregon State Treasury, et al.
Recommended Reading:
The People's Republic of the Disappeared --- by Michael Caster
Bullets and Opium --- by Liao Yiwu
The People's Republic of Amnesia --- by Louisa Lim
Recommended Viewing:
In the Name of Confucius --- DVD (Jia Kongzi, Zhi Ming)
Free China - Free China --- DVD (Zi You Zhongguo)
The Sun Behind the Clouds [Tibet's Struggle for Freedom] --- DVD
Is it so hard to understand that the chinks KNOW that the yuan is trash and that's why
both the CB and the public are stacking gold. They're preparing for what comes next.
According to Jim Willie, that will be an Asian gold trade note as proposed by the PM of
Malaysia.
"China and its citizens would greatly benefit from eliminating barriers."
It's too bad they never did this, but now it no longer matters. The US has decided that
China can't be allowed to become a technological power any more than it is now. It's fine if
all they do is make T-shirts, and low-tech crap, but anything more advanced then a digital
alarm clock can not be allowed.
China would do best to forget about the US and hope that it can make due with it's
domestic market. With 1.3 billion people this seems like it should be possible.
They need dollars to buy US goods and services. They also need them to buy oil from
Saudis. They have dollar based loans that require payment in dollars.
"The United States has discovered the Achilles heel of China. The same one Japan had in
the 80s when it seemed that it was going to invade the world. Its dependence on the US dollar
to maintain its large domestic imbalances, a very fragile house of cards of excess capacity,
real estate bubble and unproductive spending."
Oh, yeah. .......we just "figured" that one out. It's not like we haven't used that scheme
on.......well, EVERYONE. Even our own citizens are slaves to a debt dollar system. It is all
we got left......well that and the A-bomb. But at the same time, it is our biggest weakness
because if we can't get the world to expand dollar debt, 5 hen we will have to do it
ourselves. Hence the, "China is not the largest holder of US bonds in the world, not even
close. It's the
US . In fact, China has already reduced part of its holdings in US bonds and yields fell
."
We are the largest holder of our own debt.....and can print up what we need to buy what is
necessary to drive yields down. But at some point it will be like playing monopoly with
yourself......a zero sum game. Anytime you weaponize something (the dollar), countermeasures
will be invented to neutralize that weapon........only a matter of time.
Indeed. Anyone pushing that narrative is part of the totalitarian regime or is dumb as a
bag of hammers. Either way, they lose all credibility in my opinion.
The author has never been to China to know anything about it, much less write about it,
and he knows even less about the trade relationships of the two countries.
For instance, He says: " China has a trade deficit with most of its other partners"....
WRONG!!!! It is the U.S. who has the deficits with other countries, not China! China
has a manufacturing economy, not a consumer economy, so the trade balance is in its favor, as
manufacturing economies are in demand and have very little deficit.
And the author also reveals his biases about China by saying: "China's Achilles heel has
been to try to be a reserve currency whilst maintaining capital controls and increasing state
intervention...." What do you think the U.S. Federal Reserve does, if it is not the very same
thing? Weren't they the ones who sets interest rates, control the rates of inflation,
dictating the supply of money, and doing economic bailouts to the banks in 2008 and 2009 with
our money?
Secondly, he is just regurgitating the same old propaganda already put out about China,
and really doesn't provide anything new. Why can't ZH find better writers to publish than
this?
You are correct. China usually runs surpluses. But not with everyone.
In 2018, China posted a trade surplus of USD 351.76 billion, the lowest since 2013, as
exports increased 9.9 percent, its strongest performance in seven years, while imports were
up 15.8 percent. The biggest trade surpluses were recorded with Hong Kong, the US, the
Netherlands, India, the UK, Vietnam, Singapore and Indonesia. China recorded trade deficits
with Taiwan, South Korea, Australia, Germany, Brazil and South Africa.
"China's Achilles heel has been to try to be a reserve currency whilst maintaining
capital controls and increasing state intervention...."
This is impossible. One cannot institute strong capital controls and have a reserve
currency at the same time. China knows this and has never tried to become the reserve
currency.
yeah, they said they'd work on "migration" into their country, and try to do something
about those staged caravans..but what they didn't do is say they'd stop their citizens from
invading the US like they have been doing for decades, and they didn't say they'd secure
their side of the border between the US and Mexico. So, how is the border more secure
exactly? Oh, and they didn't say they'd pay for a wall.
These same games go on, round and round, between both parties, with people twisting
everything, including nothing burgers and actual defeats into some kind of bizarre "winning"
********, to avoid legitimate criticism of their idol in the White House. Trumpets and
Obamabots are peas in a pod in more ways than they realize, but watch out, you'll get an eye
jab if you walk between them, with all the fingers pointing.
Winning, like alcohol, is addictive. Sometimes you find yourself all out of booze, so you
find yourself taking swigs of Aqua Velva. Lots of Aqua Velva heads around here.
Same old script: China bad. China steals. China need to shape up or else. USA good. USA too soft on China. USA will be great again when China surrenders to US
slavery. Think that about sums up these articles.
I agree. The "investor" class. And by that i do not mean all investors, just the non
productive LEECHES at the top playing games with fake "financial instruments"
They are non producers. They are lampreys. Same as on the bottom. I have absolutely no
problem with rich people. I am blessed to hang with many self made millionaires who are all
about designing / manufacturing unique products sold all over the world. They produce wealth
and a product, not by skimming.
We're so balls deep in debt la la land now that having a conversation about wealth
creation via production feels a lot like making balloon animals while wearing a clown
suit.
But.... it actually works. There will ALWAYS be a market for well engineered quality
products . ALWAYS.
Don't chase that race to the bottom. That is what was sold to the Us
Consooooooooooooooooooooooooooomer (**** I hate that name, I am not a consumer) for the last
thirty year. They bought the ****, they own it. **** em, let 'em choke on the icrapple and
other swarf.
Ha.
I am not balls deep in debt. My total life debt so far is $800. USA incorporated... THEY
have debt. That is not my debt.
Politicians here in the US are desperate for me to believe it is all China's fault. Not
the lying, stealing politicians and MBAs that have stolen my future but China. I am not buying it. Even if China has stolen America's wealth, who let them? Who helped and got rich? That's
right, US politicians and MBAs.
Yes, we have Democrat and Republican pols at the federal level spending this country into
decline by trillions, and financing it all with inflation, which is why we're paying higher
prices for virtually everything now, than we've ever paid.
The only reason why this is a trade war in the first place, is because we're attempting to
undo the shitty deals signed by Bill Clinton. Let this be a lesson: Don't sign shitty deals.
No matter how much they donate to your campaign.
BEIJING, June 9 (Xinhua) -- For years, non-U.S. transnational firms, vying to carve a niche
in the global market with cutting-edge technologies or products, often find themselves fronting
an opponent far more powerful and brutal than any commercial rival they have ever contested
with -- the U.S. government.
Many foreign entities, whose business may seem irrelevant to the United States, have been
forced by Washington with threats of sanctions to comply with U.S. domestic laws and
regulations.
"After so many years fancying itself as the champion of the Rule of Law, the U.S. seems to
be making headway in forging a world under the rule of law," said Zhou Qing'an, an analyst of
international relations at China's Tsinghua University. "Only it's the American law of the
jungle."
WEAPONIZED JURISDICTIONAL SYSTEM
In recent years, the U.S. government has slapped sanctions on and posed threats to an
increasing array of foreign entities under the pretext of infringements of its tailor-made
rules and regulations concerning anticorruption, taxation, investment and arms exports,
crafting a long-range weapon with its jurisdictional system, the very foundations undergirding
a country's authority.
Citing Cuba as an example of the U.S. jurisdictional overreach, Mauricio Santoro, head of
the Department of International Relations at the State University of Rio de Janeiro, said that
for many times, the United States has enacted new laws and regulations to justify its
punishments on foreign companies having commercial contacts with Cuba, a country that has long
been taken as a thorn in the flesh by Washington.
In the latest round of sanctions against the Caribbean country, Washington activated Title
III of the Helms-Burton Act, which put companies operating on properties confiscated by the
Cuban government at risk of being sued in U.S. courts.
It's not just the entities from countries deemed by the United States as rivals or
competitors that were exposed to the arbitrary abuse of Washington's jurisdictional power.
Firms of its allied countries which refuse to yield to the U.S. supremacy can also find
themselves under fire of such an overstretched jurisdictional "weapon."
In 2014, the U.S. Department of Justice fined Alstom, a French power and transportation
conglomerate, 772 million U.S. dollars, alleging the French company has broken America's
Foreign Corrupt Practices Act, which eventually led to the partial acquisition of Alstom by
General Electric, its arch rival in the United States.
Last month, the U.S. Commerce Department put Huawei, a Chinese company that has taken the
lead in 5G technology, and its affiliates on a blacklist that requires the federal government
approval for any sale and transfer of U.S. technologies to the Chinese firm.
Up to now, the United States is still lobbying other countries to exclude Huawei from 5G
networks construction over groundless accusations of spying.
"What is the most effective way to win a losing race? You change the rules and draw a foul
on your competitors, rude but effective," Zhou explained with a metaphor. "That is exactly what
the United States is doing to its competitors, even allies."
UNABASHED INTERNATIONAL DARWINIST
For decades, the United States has been touting itself as the flag-bearer of "freedom,
equality, justice and humanity," but in recent words and deeds, the Washington government is
exposing itself as an international Darwinist who sees the world as a jungle where the powerful
preys on the vulnerable.
By overstretching its jurisdiction and applying unilateral sanctions, the United States is
challenging the sovereignty of other countries, said Philippe Bonnecarrere, a French senator,
denouncing the U.S. extraterritorial jurisdiction as power logic.
Echoing the senator's words, Swaran Singh, professor at School of International Studies in
Jawaharlal Nehru University, noted that extending jurisdiction of U.S. domestic laws beyond its
border "has no legal standing whatsoever."
"It's only its position of power in international system that has allowed the United States
to arbitrarily impose its domestic laws abroad while rejecting several other universally
recognized international laws and norms," said the professor.
However, it is also the "universally recognized international laws and norms," which the
United States once paid, even sacrificed so much to build several decades ago and now is
turning its back on, that helped the country build its advantages over other countries.
Thanks to economic globalization, large European firms all have capital from different
countries, including the United States, and due to Washington's threat of sanctions, they have
to comply with American rules, said Bonnecarrere.
Even though an international Darwinist's obsession with the jungle law can not be changed
overnight, if the past is any prologue, "the obsession with power relations," as the French
senator put it, "is mortifying."
BACKLASHES FROM ALL AROUND
In a world where multilateralism and win-win cooperation are still the mainstream of the
times, an international Darwinist with zero-sum mentalities like the United States is bound to
face backlashes from within and outside the country.
David S. Cohen, a former deputy director of the CIA and former undersecretary of U.S.
Treasury Department, warned in an article published in April that the U.S. sanctions will not
only weaken countries being punished, but "breed resentment and alienate would-be international
partners."
"In the long run, it works against U.S. foreign policy interests and threatens the American
economy," said the article.
As the world's biggest economy, the United States enjoys "an outsize role in business
transactions around the world." The U.S. extraterrestrial jurisdiction, a typical prelude to
economic sanctions, would certainly cast a bigger shadow over the whole world.
Managing Director of the International Monetary Fund (IMF) Christine Lagarde said earlier
this week that the existing and potential tariff hikes resulted from the U.S.-initiated trade
tensions with China could reduce global gross domestic product (GDP) by 0.5 percent in
2020.
Earlier this year, The Economist sounded a warning in an article for Washington. "Far from
expressing geopolitical might, America's legal overreach would then end up diminishing American
power," it said.
(Xinhua reporters Tang Ji and Ying Qiang in Paris, Hu Xiaoming in New Delhi, Zhou Xingzhu in
Brasilia contributed to the story.)
"... Across-the-board rivalry with China is becoming an organising principle of US economic, foreign and security policies. ..."
"... An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives might still win out. But that is far less likely if China's natural rise is threatened. ..."
"... The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers, attacking its allies and destroying the institutions of the postwar US-led order. ..."
The disappearance of the Soviet Union left a big hole. The "war on terror" was an inadequate replacement. But China ticks all boxes.
For the US, it can be the ideological, military and economic enemy many need. Here at last is a worthwhile opponent. That was the
main conclusion I drew from this year's Bilderberg meetings.
Across-the-board
rivalry with China is becoming
an organising principle of US economic, foreign and security policies.
Whether it is Donald Trump's organizing principle is less important. The US president has the gut instincts of a nationalist and
protectionist. Others provide both framework and details. The aim is US domination. The means is control over China, or separation
from China.
Anybody who believes a rules-based multilateral order, our globalised economy, or even harmonious international relations, are
likely to survive this conflict is deluded. The astonishing
white paper on the
trade conflict
, published on Sunday by China, is proof. The -- to me, depressing -- fact is that on many points Chinese positions are right.
The US focus on
bilateral imbalances is economically illiterate. The view that theft of intellectual property has caused huge damage to the US
is
questionable . The proposition that China has grossly violated its commitments under its 2001 accession agreement to the World
Trade Organization is hugely exaggerated.
Accusing China of cheating is hypocritical when almost all trade policy actions taken by the Trump administration are in breach
of WTO rules, a fact implicitly conceded by its determination
to destroy the
dispute settlement system .
A dispute over the terms of market opening or protection of intellectual property might be settled with careful negotiation. Such
a settlement might even help China, since it would lighten the heavy hand of the state and promote market-oriented reform.
But the issues are now too vexed for such a resolution. This is partly because of the bitter breakdown in negotiation. It is still
more because the US debate is increasingly over whether integration with China's state-led economy is desirable. The fear over Huawei
focuses on national security and technological autonomy.
[Neo]liberal commerce is increasingly seen as "trading with the enemy".
A framing of relations with China as one of zero-sum conflict is emerging. Recent remarks by Kiron Skinner, the US state department's
policy planning director (a job once held by cold war strategist George Kennan) are revealing. Rivalry with Beijing,
she suggested at a
forum organised
by New America , is "a fight with a really different civilisation and a different ideology, and the United States hasn't had
that before".
She added that this would be "the first time that we will have a great power competitor that is not Caucasian". The war with Japan
is forgotten.
But the big point is her framing of this as a civilizational and racial war and so as an insoluble conflict. This cannot be accidental.
She is also still in her job. Others present the conflict as one over ideology and power.
Those emphasising the former point to President Xi Jinping's Marxist rhetoric and the reinforced role of the
Communist party . Those emphasising the latter point to China's rising economic might. Both perspectives suggest perpetual conflict.
This is the most important geopolitical development of our era. Not least, it will increasingly force everybody else to take sides
or fight hard for neutrality. But it is not only important. It is dangerous. It risks turning a manageable, albeit vexed, relationship
into all-embracing conflict, for no good reason. China's ideology is not a threat to liberal democracy in the way the Soviet Union's
was. Rightwing demagogues are far more dangerous.
An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the
Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives
might still win out. But that is far less likely if China's natural rise is threatened.
Moreover, the rise of China is not an important cause of western malaise. That reflects far more the indifference and incompetence
of domestic elites. What is seen as theft of intellectual property reflects, in large part, the inevitable attempt of a rising economy
to master the technologies of the day. Above all, an attempt to preserve the domination of 4 per cent of humanity over the rest is
illegitimate.
This certainly does not mean accepting everything China does or says. On the contrary, the best way for the west to deal with
China is to insist on the abiding values of freedom, democracy, rules-based multilateralism and global co-operation. These ideas
made many around the globe supporters of the US in the past.
They still captivate many Chinese people today. It is quite possible to uphold these ideas, indeed insist upon them far more strongly,
while co-operating with a rising China where that is essential, as over protecting the natural environment, commerce and peace.
A blend of competition with co-operation is the right way forward. Such an approach to managing China's rise must include co-operating
closely with like-minded allies and treating China with respect.
The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers,
attacking its allies and destroying the institutions of the postwar US-led order.
Today's attack on China is the wrong war, fought in the wrong way, on the wrong terrain. Alas, this is where we now are.
This is end of the classic neoliberal globalization and the start of isolation of the USA
from China and forming an alternative, led by China trading block, unless the deal is reached.
WTO rules were the door openers, which allowed Google and Facebook pollute millions of
smartphones outside the USA. By rejecting them the USA start the process of self-isolation. Now
local government who were afraid to act might want to get even and you can get a stronger
backlash then anticipated.
The only factor here is that while the USA citizens are afraid of their own government
snooping more then snooping by Chinese's government, the same is true to many foreign countries
too. Citizens of those countries move to Gmail because they care less about the USA snooping then
the snooping of their local government by the local webmail providers. This is a widespread
illusion. They should use foreign based ISP for that.
Removal of Facebook is actually a big plus which increases attractiveness of Huawei phones.
But truth be told the value of smartphone is exaggerated. Combination of a tablet and basic flip
flop phone works even better. The same but to lesser extent is true with Google spying
applications, especially Gmail. Only complete idiot uses Gmail as Web client, as Gmail is the
central point of collection of data for both Google and the US government (actually all "Five
eyes" goverments). It is like giving keys for you home or apartment to them. Not the Microsoft is
much better. Using your own Internet Service Provider (ISO) is the best option in the current
environment. It also allows more effectively to combat spam. Unless you want to be a bug under
microscope -- no Google on you your phone is a good, sound policy
Notable quotes:
"... These actions add to the potential fallout for American companies to reckon with. US tech enterprises will lose out on sales to Huawei ..."
"... Restrictions could boomerang back on Google and Facebook, which count on their apps being widely installed around the world to collect data and sell advertising against. And then there's the potential for damaging retaliation by China, which could blacklist important US companies like Apple that do business there. ..."
"... And if the crackdown lasts (an important if -- some expect the Huawei restrictions to be lifted should a trade deal be reached) and the Chinese telecom comes out intact, it could emerge even stronger, having been forced to develop new technology in-house. If the American blacklist fails to strangle Huawei, it could come out stronger and more innovative than it was before. ..."
The US crackdown on Huawei was bound to have unintended consequences. Some of them are
starting to come to the surface.
The Trump administration is looking to shut out the Chinese telecom company from selling its
technology in the US, as well as banning American firms from selling products to the company.
Now Google, which banned Huawei from updates of its ubiquitous Android operating system, is
warning that the restriction could become a national security issue, according to the
Financial Times
(paywall). That's because Huawei, the world's No. 2 handset maker, will likely move quickly to
develop its own parallel version of Android, which could have more software bugs and be more
susceptible to hacking.
That's just one of many potential consequences as the US clampdown ripples through
everything from semiconductor supplies to ambitions for self-driving cars. The American
government blacklisted Huawei for long-simmering
espionage concerns after trade talks between the world's two largest economies broke down.
The Trump administration has since given companies a 90-day window to adjust to the new
restrictions.
In the meantime, chipmakers including Qualcomm, Intel, and Xilinx are reportedly
halting sales of technology (paywall) to Huawei. The embattled Chinese company has
responded by stockpiling chips and components and ramping up its development of
alternatives.
Facebook, which has more than 2 billion users around the world, will no longer allow its app
to come preinstalled on Huawei phones,
according to Reuters . Huawei phone buyers can still download the app from the Google Play
store for now, but that option will go away if Google's relationship with the Chinese company
is severed.
These actions add to the potential fallout for American companies to reckon with. US tech
enterprises will lose out on sales to Huawei, and the ban could also slow the implementation of
new technologies around the world. The rollout of self-driving cars, for instance, may get a
boost from 5G gear, and Huawei appears to be the only supplier that can provide reliable 5G kit
widely and at low cost. Restrictions could boomerang back on Google and Facebook, which
count on their apps being widely
installed around the world to collect data and sell advertising against. And then there's
the potential for
damaging retaliation by China, which could blacklist important US companies like Apple that
do business there.
And if the crackdown lasts (an important if -- some expect the Huawei restrictions to be
lifted should a trade deal be reached) and the Chinese telecom comes out intact, it could
emerge even stronger, having been forced to develop new technology in-house. If the American
blacklist fails to strangle Huawei, it could come out stronger and more innovative than it was
before.
In a series of provocative actions, the United States is making clear it is prepared to
fight a war to block Beijing's rise as an economic and geostrategic competitor.
The "cold war" between the United States and China took a major step toward becoming a "hot"
war over the weekend at the annual Shangri-La defense summit in Singapore. The Financial
Times, not known for hyperbole, wrote that "The growing dispute between the US and China on
trade and technology is increasing the risk of military conflict or outright war."
At the summit, representatives of the Pacific nations that would be caught in the crossfire
of such a conflict warned of the imminent possibility of a new Pacific war.
"Our greatest fear, therefore, is the possibility of sleepwalking into another international
conflict like World War One," said Philippines Defense Minister Delfin Lorenzana. "With the
untethering of our networks of economic interdependence comes growing risk of confrontation
that could lead to war."
US officials used the summit to continue their efforts to encircle China militarily and
strangle it economically, with acting US Defense Secretary Patrick Shanahan declaring China to
be "the greatest long-term threat to the vital interests of states across this region."
Just days earlier, Vice President Mike Pence, addressing the graduating class at West Point,
predicted war in the Pacific, in Europe and in the Americas within the graduates'
lifetimes.
"It is a virtual certainty that you will fight on a battlefield for America at some point in
your life Some of you will join the fight on the Korean Peninsula and in the Indo-Pacific,
where North Korea continues to threaten the peace, and an increasingly militarized China
challenges our presence in the region. Some of you will join the fight in Europe, where an
aggressive Russia seeks to redraw international boundaries by force. And some of you may even
be called upon to serve in this hemisphere.
"And when that day comes, I know you will move to the sound of the guns and do your duty,
and you will fight, and you will win."
The United States' actions are extraordinarily reckless and provocative. Seeing a challenge
to its dominance, it is seeking to use every tool at its disposal, including military force, to
compel China's submission to its will. The United States is simultaneously escalating conflicts
around the world -- including its regime change operation in Venezuela and its dispatch of
additional troops to the Middle East to "counter" Iran -- to shore up its flagging global
hegemony through military means.
Chinese Defense Secretary Wei Fenghe responded to the US threats with militarist bluster of
his own, saying, "Should anybody risk crossing the bottom line, the [People's Liberation Army]
will resolutely take action and defeat all enemies." He warned the United States against
encouraging Taiwanese separatism, declaring, "If anyone dares to split Taiwan from China, the
Chinese military has no choice but to fight at all costs."
The divisions between the United States and China are centered on the Chinese state
initiative called "Made in China 2025." The plan envisions a substantial expansion of Chinese
industry into high-value-added and high-technology manufacturing, areas traditionally dominated
by the United States and its allies.
In recent decades, Chinese companies have made substantial developments in the
high-technology sector, including robotics, mobile phones and IT infrastructure. This
development was expressed most directly in the growth of Huawei, the Chinese mobile phone and
telecommunications firm, which was on track to become the world's leading smartphone maker by
the end of the year.
Last month, the United States moved to effectively destroy Huawei as a global competitor to
Apple and Samsung by banning US companies from selling it software and components. Google
locked the company out of the Android operating system and associated services, while Broadcom
and Qualcomm announced they would no longer sell the company chips it needs to continue
production.
The move enjoys broad bipartisan support beyond the Trump White House. There is an emerging
consensus within the American ruling class that China must be prevented from becoming a global
technological, and thus military, peer of the United States.
The growth of US-China tensions has overshadowed the 30th anniversary of the Tiananmen
Square massacre. At the summit, Wei defended the bloody crackdown against the 1989 protests by
workers and students, declaring the protests were "political turmoil that the central
government needed to quell, which was the correct policy."
He continued, "Due to this, China has enjoyed stability, and if you visit China you can
understand that part of history."
But three decades of "stability" -- the effective transformation of China into a gigantic
sweatshop for American and world capitalism -- have come at a tremendous cost. China is not an
imperialist country. It remains dependent on foreign corporate investment and finance. Now, it
is once again in the crosshairs of a nuclear-armed United States determined to go to any
lengths to secure its global hegemony.
In the immediate aftermath of the Tiananmen Square massacre, the International Committee of
the Fourth International wrote, "The repression in China is being carried out in the direct
interests of the imperialists. In attacking the Chinese workers, the bureaucracy is acting as
their agent, seeking to restore 'labor discipline' and to repress the mass opposition of the
working class to the policies of capitalist restoration and the rampant exploitation and social
inequality which it has engendered."
While publicly condemning the massacre, the first Bush administration secretly made clear to
the Chinese government that the event was an "internal affair" and affirmed the value of the
Sino-American relationship "to the vital interests of both countries."
The ICFI statement continued, "Imperialism gloats over the broken bodies of the Chinese
workers, seeking to exploit them for the purpose of crude anticommunist propaganda, while at
the same time calculating that the brutal state repression will translate into higher rates of
exploitation and even greater profits from the tens of billions of dollars worth of direct
investment and joint ventures already operating on Chinese soil."
This is precisely what happened. Following Deng Xiaoping's Southern Tour of 1992, in which
he encouraged Chinese entrepreneurs to "get rich," US investment in China ballooned, leading to
a profit bonanza for American corporations, along with the fantastic enrichment of the upper
echelons of the Chinese Communist Party, through the exploitation of the Chinese working
class.
The arguments by leading Chinese figures that an accommodation and partnership with US
imperialism would offer a peaceful road toward China's national development have proven to be a
pipe dream.
If Chinese officials accept US demands, it will be a massive blow to the Chinese economy,
causing mass unemployment and engendering protests and political turmoil. But to stand up to
the United States means, sooner or later, to fight a war between nuclear powers, in which
millions dead on both sides would be an optimistic scenario.
Thirty years after the Tiananmen Square massacre, all the arguments that the laws of
imperialism identified by Lenin after the outbreak of World War I had been superseded by
globalization and technological development have proven false. The capitalist system, riven by
a new scramble for a re-division of the world, is hurtling toward a new world war.
The only thing standing between humanity and this catastrophe is the international working
class. It is urgently necessary for the workers of China, the United States and the whole world
to unify their struggles in a common fight against the capitalist system, which is the root
cause of imperialist war. This means building sections of the International Committee of the
Fourth International in China and all over the world as the vanguard of a working class
movement against imperialist war.
The US trade war against China, which started just over a year ago, has now escalated to a
full-scale economic confrontation backed by the military might of American imperialism.
The rapid acceleration of the US drive against China and its increasingly bellicose
character was underscored in a major speech delivered by the acting US Defense Secretary
Patrick Shanahan on the weekend.
Over the past month, the US has hiked tariffs on hundreds of billions of dollars worth of
Chinese goods, threatened the imposition of new imposts on all Chinese imports and virtually
black banned the telecoms giant Huawei from the supply of US-made components in an attempt to
cripple its global operations.
Speaking at the annual Shangri-La Dialogue in Singapore, organised by the International
Institute for Strategic Studies, which included participants from China, Shanahan delivered a
40-minute blast against Beijing in which he emphasised US readiness to use military power to
secure its interests.
The speech coincided with the release of an Indo-Pacific Strategy Report by the US Defense
Department accusing China of seeking "Indo-Pacific hegemony in the near-term and, ultimately
global pre-eminence in the long-term."
The report called China a "revisionist" power that sought to undermine the international
system from within, attempting to exploit its benefits while eroding the values and principles
of the "rules-based order" -- the standard reference to US dominance.
While claiming that the US "does not seek conflict," Shanahan said "we know that having the
capability to win wars is the best way to deter them." The US had already committed $125
billion for "operational readiness and sustainment" for the next financial year and is
preparing to allocate an additional $104 billion for research and development of emerging
technologies.
"This finding will boost the depth and capacity of our armed forces, and also help expand
our training -- including with allies and partners -- to improve mission readiness critical to
meeting this region's challenges" he said.
The read out of his remarks provided by the Defense Department said the Indo-Pacific was
"our priority theatre." The US Pacific Command had four times more assigned forces than in any
other area, with more than 370,000 service members devoted to the region.
The US had "more than 2000 aircraft, providing the ability to project power across the vast
distances of this region" together with "more than 200 ships and submarines to ensure freedom
of navigation."
The integrated character of the US offensive -- on the economic, diplomatic, political and
military fronts -- was emphasised in remarks clearly directed against China.
"[Some] actors undermine the system by using indirect, incremental actions and rhetorical
devices to exploit others economically and diplomatically, and coerce them militarily. They
destabilise the region, seeking to reorder its vibrant and diverse communities towards their
exclusive advantage."
This characterisation most closely fits the actions of the United States, extending over
decades -- from the dropping of two atomic bombs on Japan in the dying days of World War Two,
the launching of the Korean War in 1950 in which an estimated 2.5 million people lost and the
Vietnam War in which killed more than three million.
US intervention has not been confined to military action. In the wake of the Asian financial
crisis of 1997-98, the International Monetary Fund, at the direction of Washington, imposed an
economic "restructuring" program across the region which plunged it into a crisis, equivalent
in scope and depth to the Great Depression of the 1930s.
The enduring image of that intervention is the photograph of IMF managing director Michel
Camdessus standing over seated Indonesian president Suharto as he signed a so-called IMF
bailout program to impose what was known as the "Washington consensus."
Economic devastation resulted in Indonesia and across the region as "structural adjustment"
was imposed. Indonesian real wages feel by 30 percent, the incidence of poverty doubled and
more than 20 million workers were made jobless. Unemployment rates in South Korea and Malaysia
tripled.
In the years since then, the IMF policies -- directed by the US Treasury Department -- have
been branded as a "mistake." They were anything but. The economic firestorm was a consciously
directed operation.
At that point the US feared its economic supremacy in the region was being threatened by
Japan. When the crisis broke in July 1997, with the devaluation of the Thai baht, setting off
currency devaluations and a financial crisis across Southeast Asia, Tokyo intervened with a
proposal to set up a $100 billion Asian Monetary Fund in order to safeguard its economic
interests in the region.
This was forcefully rejected at a September 1997 meeting of the IMF and G7 in Hong Kong.
Faced with the prospect of a conflict with the US, Japan withdrew its proposal, opening the way
for the imposition of Washington's "restructuring" demands, based on the breaking up of the
economic and financial ties between the countries of the region and Japan.
However, the Asian crisis was to bring about a major economic shift in which China was to
become the major global manufacturing centre. Following Deng Xiaoping's southern tour in 1992,
foreign capital flowed into the country, secure in the knowledge that, as the Tiananmen Square
Massacre of June 1989 and the far broader suppression of the working class in all the major
industrial centres had demonstrated, the regime would act as the guarantor of its profit
interests.
By the end of the 1990s, China had become integrated into the global circuit of capital and
on that basis its entry into the World Trade Organisation (WTO) was backed by the Clinton
administration. After China's admission into the WTO in 2001, the flow of global capital
increased as the regime committed itself to further market opening.
The policy of the US was grounded on the premise that collaboration with China would be
encouraged so long as it remained a producer and assembler of consumer goods, boosting the
profits of US and other corporations that used it as a base for their manufacturing operations.
A new term was coined to describe this collaboration "Chimerica."
However, the eruption of the global financial crisis in 2008, centred in the US financial
system, marked another major turning point, with far-reaching consequences in China as more
than 23 million workers lost their jobs. Fearful of an eruption in the working class, the
Chinse regime undertook a massive stimulus program, spending more than $500 billion and opening
up credit for the provision of vast infrastructure projects.
This policy, based on a rapid expansion of credit, could not continue indefinitely and under
President Xi Jinping a new turn was initiated. In order to maintain economic growth and prevent
a crisis that would call into question the legitimacy of the regime, a new policy had to be
initiated.
This was the origin of the "Made in China 2025" plan in which China would move up the value
chain, not only producing cheap consumer goods and relying on infrastructure spending but also
moving into the development of high-tech manufacturing in areas such as telecommunications,
health and pharmaceutical products and artificial intelligence.
This, however, is regarded by the US as an existential threat to its global economic and
military dominance, which, as the latest strategic report by the Defense Department and the
speech by Shanahan has underscored, it is determined to crush by all means necessary including
war.
"... The short-term impact on China could be smaller than previously expected. Factories that sold only to the United States have developed new markets over the past year. Even if those factories stop exporting to the U.S., they will not go bankrupt immediately. It helps that the service sector is experiencing a labor shortage and could absorb some slack. For example, in China a delivery man sometimes makes more than an average office worker. ..."
"... Shipments to the United States and shipping prices have dropped since the new tariffs were announced. ..."
"... Researchers at the New York Fed have determined that the new round of tariffs on Chinese products will cost the typical American household an additional $831 per year. ..."
"... "China has been slaughtering USA" It is American corporations not China. ..."
"... “The Communist Party didn’t fight Japan,” said the sprightly 97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade. “They made up a whole bunch of stories afterward, but it was all fabricated.” ..."
...The main takeaway from our notes below: The Chinese are buckling up for a long ride.
Beijing is preparing for a protracted standoff. The leadership has concluded that the
intention of U.S. negotiators is not just to resolve trade imbalances but also prevent China
from moving up the value chain, a key long-term objective for the Chinese.
Tariffs on the remaining $300 billion of Chinese products would hurt China, but the
United States would also feel the pain. Profit margins for consumer goods manufacturers
average less than 5 percent. U.S. importers would either have to pay the tariffs, charge
their customers more, or find suppliers elsewhere.
The short-term impact on China could be smaller than previously expected. Factories
that sold only to the United States have developed new markets over the past year. Even if
those factories stop exporting to the U.S., they will not go bankrupt immediately. It helps
that the service sector is experiencing a labor shortage and could absorb some slack. For
example, in China a delivery man sometimes makes more than an average office
worker.
Huawei will not be a part of any negotiations. Beijing thinks that Huawei is more of a
political issue and would be targeted whether or not they make concessions on trade.
... ... ...
There has been a significant shift in the way that Beijing manages nationalist sentiment
inside China. Until May the government had been trying to contain hawkish views on the
U.S.-China relationship, but now they are just letting it grow. (See
Now China's Got Its Own Anti-U.S. Trade War Song .) Not only does this demonstrate that
Beijing does not expect any short-term solution, because the negative sentiment will make it
difficult for President Xi to make concessions, it also allows China to harden its diplomatic
position given popular domestic sentiment.
As for whether the Chinese are front-loading shipments to the United States to avoid
pending tariffs, port data and local analysts indicate this has not yet happened.
Shipments to the United States and shipping prices have dropped since the new tariffs
were announced. The pending tariffs could cause some front loading, but it would be hard
to beat the latest round of tariffs because they were imposed a few days after the
announcement. Only products shipped before the new tariffs' effective date are exempt.
The consequences of a protracted trade war are manifold. The economic impact includes a drag
on economic growth, import price inflation which will allow U.S. domestic and other foreign
policy makers to raise prices, and the knock-on effects to other trading partners as the
shuffle begins to find new sources and markets for different products. Researchers at the
New York Fed have determined that the new round of tariffs on Chinese products will cost the
typical American household an additional $831 per year. Trade barriers between the world's
economic superpowers will slow global growth and put political pressure on all affected
governments, stoking increasing nationalism and protectionism overseas while increasing
inflation and reducing living standards at home.
The investment implications of a protracted trade war are still playing out. We have seen
how sensitive markets have been to the trade news, with a strong risk-off bias resulting from
adverse developments in the fourth quarter. While volatility will continue, there is no
indication that the Chinese will attempt to liquidate their large holdings of U.S. Treasury
securities. To do so would only drive down the value of the dollar, which would run counter to
Beijing's desire for a weaker yuan. There is also no imminent change to monetary policy from
the Federal Reserve as a result of trade saber-rattling, but if the financial markets begin to
spiral out of control because of tariffs, then we could see a repeat of 1998, when the Fed
eased as a result of the Asian financial crisis. With neither side apparently willing to step
back from the brink, investors should be discounting a higher probability for a drawn-out
fight.
... ... ...
The conclusions are obvious. Unless the current trajectory is quickly changed, the Chinese
are digging in for a long fight. The cost to the United States will be high; the cost to the
Chinese will be higher. The only question is who will endure and be the most innovative in this
battle of wills. As I have written before in "No One Wins a Trade War," the short-term costs
are likely to outweigh the long-term benefits regardless of who "wins."
Comments
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1. Guggenheim Partners is based in Chicago and represent Obama's point of view
2. Apr 4, 2018 Scott Minerd predicted at 50% plunge in the stock market
3. Once again Scott predicting a 50% drop in the market in 2020
4. April 29, 2019 Scott predicted a rate hike by the Fed
The Long march is a propaganda piece hoping people will invest more in their bond mutual
funds. Scott should spend a lot less time on TV and more time in the office.
The longer this trade war goes on the more and more unstable the Chinese economy will
become. Because the current tariffs on China are small peanuts to the remaining $200+ billion
which will shut down their electronics industry.
Agreed with the second point, that they are finding new markets and shifting production
line to new place. A new leather goods factory just opened in Cambodia, majority owner is a
Chinese friend, rest is a Cambodian business group. His products are in every major markets,
and third party label for our brand names. Business as usual for him, he can’t close
his China shops because he lives there.
You don’t get the point. We are printing worthless paper to exchange the actual
products, such as computers, furniture and machines. We don’t “eat” money,
we consume products. To an extent that we can maintain dominance is to innovate and turn into
“affordable” products domestically and overseas.
Now all the foreigners including
not white anglo saxon protestant waking up and will circumvent dollars/sterlings,
that’s bad trend. Germany and Russian would be pleased.
Umm.. If you want to gauge the effect of the Chino - Mericah Trade Tariff Circus, then it
doesn't get real until Trump goes after the mid-point trans shipment points....all those
mutually accessible ports of call that have equal access to both party's...Geeezzze, is
everyone working for CNN, Clown News Network......Trump and Friends are just going to set up
different ways to ship goods into and out of the Merikah.... it's that simple!!!!!
The LAST man brave enough to publish anything critical of Chicoms throws in the towel. Not
worth the prison terms, the violence, the relentless state attacks on journalists and their
families. Totalitarian cuks with their asshat trolls. Glad Trump will starve them out with
tariffs. Be happy never to trade with China until their people throw out the commie murderous
imperialists - let them do business with their like-minded asshat buddies in Moscow -
Staged arrest with planted drugs, beaten upon arrest, protesters immediately arrested
(even though they protested one at a time to avoid the law making group protests illegal -
the mark of every totalitarian regime). THIS is your brave PUTIN. Cannot allow any TRUTH
about his corrupt kleptostate, lest Russians finally have ENOUGH of the rape and thievery
that pillages their national assets and resources for the oligarchs' gain, with their lips on
Putin's sphincter as he gives them a reach around.
Tell me again how GREAT China and Russia are, and how the USA sucks. We don't arrest and
kill our journalists. In fact, they are allowed to stage absurd, fact-free assaults on the
ruling party without end.
I'll take freedom over tyranny every time.
Proud-Christian-White-American-Man , 1 hour ago
link
Laugher NYC: Best post of the afternoon! This is the type of post that makes Zero Hedge
comments worth reading.
Proud-Christian-White-American-Man , 1 hour ago
link
"As I have written before in “
No One Wins a Trade War ,” the short-term costs are likely to outweigh the
long-term benefits regardless of who “wins.""
Translation: The US should give up fighting the trade war and go back to losing the
trade war. Americans don't want to withstand short term pain , so just give up and surrender
to the Chinese communist government.
Reality Check: If the US stays the course then the following will happen:
New factories will open up to replace the Chinese suppliers.
More US workers will be employed with rising wages.
The US will reopen critical industries like rare earths making the US much more
militarily secure.
Existential menaces like Fentanyl exported from China will be drastically
reduced.
"New Long March" Cross Rubicon─Save/Lose. The CCP Didn’t Fight Imperial Japan; the KMT Did. While the KMT military defended China against Japan during WWII, the CCP built up strength
for the civil war.
This was not by accident but by design. The CCP had a choice: it could have prioritized
defending the country against Japan during the war, or it could have prioritized seizing
control of China from those who did fight the Japanese. It chose the latter. Meanwhile, by
choosing to actually try to defend China against Japan during the war, the Nationalists
handed the country to the CCP afterwards.
Which is why Xi and the CCP’s decision to create a national observance day to honor
its defense of China during the second Sino-Japanese War represents the height of hypocrisy.
It’s one thing to try to suppress all information exposing the Party’s failings,
which killed millions of Chinese, while demanding Japan take a correct view of history (which
Tokyo should do). It’s another thing altogether to falsely claim credit for one of the
defining moments of your country’s modern history. And it’s really something
unprecedented to create a national holiday to honor your Party for doing something it
consciously avoided; namely, putting China’s defense over the CCP itself.
Classy.
✅ China gives little credit — and less help — to Kuomintang vets who
fought in WWII
“The Communist Party didn’t fight Japan,” said the sprightly
97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade.
“They made up a whole bunch of stories afterward, but it was all
fabricated.”
Most independent historians agree that it was the forces of the Kuomintang, led by
Mao’s archrival, Chiang Kai-shek, that led the anti-Japanese struggle and suffered the
vast majority of casualties.
Following the war’s end, the exhausted and divided Kuomintang were defeated by
the communist s in a renewed civil war and fled to Taiwan, cementing Mao’s claim to
having defeated imperialism, unified the country and overthrown the old feudal order.
“This joint victory over the external enemy and the internal one, including the
landlord class, is a fundamental component of (the party’s) founding myth,” said
Harvard University China scholar Anthony Saich.
Proud-Christian-White-American-Man , 1 hour ago
link
B-Bond: Interesting history background. The commies have always been the cowards waiting
to pounce on an exhausted opponent. Same formula in Russia 1917. The Czar exhausted his
soldiers in WWI which opened the door for Lenin to cowardly sneak in on a sealed train
courtesy the German government. That treachery only got the Germans a very temporary victory
in the Treaty of Brest Litovsk for a few months. Post war, the commies came close to
overthrowing the new Weimar republic. That's what happens when you make deals with a Godless
murderous cult based on hate and envy called communism.
So, if I understand this correctly one globalist stooge contacted a bunch of other
globalist stooges and asked them to confirm his pre-conceived talking points.
Big surprise, they were happy to do so. As usual, they blather about no winners in a trade
war-- then launch into an explanation of how badly the US consumer will lose and how
beneficial this will ultimately be to China. That sure sounds like an apportionment of trade
war winners and losers if you ask me.
What emerges is a picture of cynical beneficiaries of the current global order trying to
frighten the Americans into giving up by harping upon the costs, yet trying to assuage their
national pride by suggesting that giving up will actually be scored as a draw, which is the
best result they can ever hope for due to the fact that there are no winners and losers in a
trade war.
Yet it is China who is comparing this event to the Long March -- not a time of glory but
of acknowledgement of crushing defeat and gigantic sacrifice to set the table for a future
triumph. They seem to understand that they could lose this war if they are not fanatically
dedicated to victory. They sure as **** aren't telling their people that nobody wins a trade
war. Wonder why this dichotomy exists?
Well, Scott Guggenheim can tell you. It's because HE LOSES if Trump wins. Him and his
profitable Chinese pals. They'd all have to go out and find a new gig rather than keep
sucking off their current comfy one.
Creative destruction starts with knocking **** down and it is high time and beyond that we
knocked this **** down. Even if it puts Scott and his buddies on the unemployment line.
Proud-Christian-White-American-Man , 1 hour ago
link
Cheap Chinese Crap:" So, if I understand this correctly one globalist stooge contacted a
bunch of other globalist stooges and asked them to confirm his pre-conceived talking
points." Good cogent analysis of Scott Guggenheim's real motivation. it's the old WIFFM mentality.
What's In It For Me. If Scott is such a cheerleader for the Chinese, then it might be time for him to move to
China and 'enjoy' his social credit score.
It's not about who wins but about who looses. Chinese are used to hardship, not the Americans. Even if the pain is greater
for Chinese, it will be political suicide in the USA for their administration to pursue this policy....
A centrally planned, in huge debt, social credit focused country like China, will NOT
survive the long term damage. They have one billion plebes to feed and keep happy. Think T Square.
The business of China is business. The business of the US is war. China is better situated to endure a long fight. They've made themselves self sufficient,
have ambitious economic plans with the Belt and Road initiative, and are sitting on a
mountain of gold. The US depends on an economic hegemony that is dwindling and doesn't think long term. The US empire is in a managed decline
The Chinese can manufacture anything. The US can't say that. Their agricultural technology is second to none and their energy sector is advancing by
leaps and bounds. They are innovative, the US has lost it's innovative curiosity. Too many
public education mouth breathers staring at their TVs and phones to be bothered with
thinking. Just the way the state like it.
Chinese investment in Africa is solving their raw materials and energy issues, hence the
Belt and Road initiative. People think that building roads and ghost cities in the African
desert is a bad idea, but they know the desert is greening and are thinking long term. The
US, on the other hand, sends troops.
"Their agricultural technology is second to none..." Stop reading there.
China can not come close to feeding itself, and its agritech is decades behind the US. TFP
ranking, growth..by any measure, China's ag sector, while it has improved, is far behind the
US.
Population growth and the "growing middle class" has also reversed the growth in ag
acreage, while fewer young Chinese are going in to farming. Even with the most optimistic
growth projections from CHINA itself, it won't reach even 75% of its needs domestically by
2030, far less if growth continues to slow.
If China pisses off enough of the world, it will once again starve. That's one way to
control population growth.
Why are all these Democrats and RINOs siding with China instead of Americas?
Simple. It's because like China -- Joe Biden, Sen. Mitch McConnell, Rep. Justin Amash, the
U.S. Chamber of Commerce, etc., etc., they have all been bought off with Chinese money.
The dumb American Political Sellouts have been bought with U.S. dollars. Now how dumb is that, when the Thief that is buying your favor, plucks it out of your
right pocket to hand you the loot.
"Why are all these Democrats and RINOs siding with China instead of Americas?"
It's simple. They are not Nationalistic. They are complete Globalist sell outs . In their
book, USA comes LAST. Anything that weakens mom and pop USA makes them stronger.
Click bait investment firm with Chinese investments that are not going well, so he wants
your support. This should be an add off the the side not a FEATURE Tylers.
This is a GOOD thing. We have lost our manufacturing to China (and Asia) to benefit Wall
street and the globalist and the Rich. There is no solution except to have these tariffs.
With our government taxes and structure there is no way we can have 1 or 2 dollar wages. It
might take an adjustment, but we MUST stop this cheap stuff from coming in. Sad but
True>
Good luck pinning your hopes on Trump for bringing jobs back lol. Why would you want those
jobs back anyway, I thought you had a ton more job openings than needed?
Please, this is not a trade war, this is a trade reset, it is needed to make MAGA. China is dependent on foreign trade to be successful. Well over 40% of their economy is dependent on exporting.
Trump knows the central bank economy is on a path to total destruction. He knows that soon
we will have a global reset. Anything he can do to weaken China now will ensure they continue
to be weak at the time of the reset. By diverting the USA supply chain away from China by
bringing it back to the USA or getting new suppliers from other nations he is helping to
ensure a better position for the USA at the time of the reset.
Yes, this is no trade war, it is a trade reset...people are being filled with propaganda
like the wording "trade war" even though the truth is right there in front of them...it is a
big puzzle, just need to find the pieces and they then fit like a glove (not OJ'S glove) and
you have the real truth...
Only 18% of Chinese GDP is export. Of this, only 18% goes to the U.S. So less than 4% of
Chinese GDP is export to the U.S. The fact that you could not set such records straight makes
the rest of your post pointless.
Researchers at the New York Fed have determined that the new round of tariffs on Chinese
products will cost the typical American household an additional $831 per year.
Why is it these so called experts never say what doing nothing HAS cost the American
household...like lost jobs?
Correct, NOT doing this has cost Americans billions in lost earnings / revenue over the
last 30 years. They certainly don't want to factor THAT wet mess into the equation.
US Secretary of State Mike Pompeo doubled down on vilification of Сhinese telecoms giant Huawei as "an
instrument of government" suggesting that the company was a national security threat by acting as an
agent for Beijing.
Like his boss, President Trump, and many others in Washington, Pompeo seems blind to an alternative
glaring reality. The US government is the consummate instrument of American corporations. Its
congenital service to corporate profit-making is the real national security risk to American citizens
and a global security threat for all people of the world due to the wars that Washington unswervingly
pursues on behalf of US corporate interests.
The irony could not be richer. President Trump has
banned Huawei from US markets by executive order on the grounds that the company's smartphones could
be spying devices for the Chinese government. This move by a nation whose government espionage
agencies were
exposed
using every US telecom, tech and social media company as a conduit for their global
harvesting of private citizens' data as well as that of foreign heads of state.
Moreover, the White House claim that Huawei is an instrument of Beijing state authorities is a
risible form of guilt projection. The Trump administration's ban on Huawei is nothing more than US
government abusing its state power to hamper a Chinese competitor from outperforming American tech
corporations. Huawei's products are reputedly cheaper and smarter than US rivals. Some observers also
point out that the Chinese technology is invulnerable to hacking by the American spy agency, the NSA,
further adding to its consumer appeal. Outperformed on market principles, the US government takes a
legalistic, propagandistic sledge hammer to smash Huawei from the marketplace in order to bestow an
unfair advantage to inferior American corporations.
So, just who exactly is being an instrument for whom?
Governments in all nations of course use their legislative, fiscal and policy resources to try to
build up key companies for their national economic development. It's standard practice throughout
history and the world over. Governments can use subsidies and grants to boost companies, or tariffs to
shield them from foreign competition.
The US, however, is a stellar example of how government intervenes strenuously at every stage in
the market to benefit private corporations. Without massive injections of public money for grants, tax
deductions, subsidies, and so on, American corporations would not have risen to the scale they have,
as Michael Parenti documents in 'Democracy for the Few'. This relationship, of course, negates the
myth of US "
free market capitalism
." In reality, American corporations are publicly supported
entities whose profits go to private shareholders. The overarching agent for this process of
centrally-planned corporate capitalism is the American government.
From its earliest days as a European colony, it was the newfound federal authorities who rolled
back frontiers with the native Americans through genocidal wars in order to benefit cattle and cereal
companies, mining magnates, transport and telecoms, oil firms, and firearms manufacturers.
In its young years as an imperial power, it was Washington that organized and dispatched federal
troops to wage wars in the Caribbean and Latin America – all for the sole benefit of Wall Street and
the expanding agro-industry. Retired Marine Major General Smedley Butler, in his 1930s book 'War is a
Racket', described the American military as a henchman for US corporate profits. But without the
government acting as recruiter, financier and commander-in-chief, the US Army could not function as a
henchman for the corporations.
Let's take a few specific examples in history to illustrate the instrumental role of the US
government in advancing or defending corporate interests. In 1953, President Eisenhower authorized the
coup in Iran organized by the CIA and Britain's MI6. A main objective of that intervention was to
seize Iranian oil. Five US corporations subsequently exploited the Iranian feast, until the revolution
in 1979 kicked them out along with the American puppet dictator, Shah Mohammad Reza Pahlavi. It's a
fair bet that current military threats from the Trump administration against Iran are prompted by a
strategic desire to reclaim American corporate interests.
In 1954, Guatemala's elected leader Jacobo Arbenz set out to nationalize underused agricultural
land to benefit the rural poor. His land reforms involved expropriating properties belonging to the
American-owned United Fruit Company, as William Blum details in 'Killing Hope.' Acting on United's
interests, Washington intervened with a CIA-backed coup against Arbenz, which subsequently led to
decades of mass murder of indigenous Guatemalans under US-backed military dictatorships.
Following the Cuban revolution in 1959, one of the main protagonists for US military invasion of
the island and for covert sabotage operations was the American soft drinks industry, headed up by
Coca-Cola and Pepsi. They feared the nationalization of sugar plantations by the Castro government
would hit their profits.
There are also
suggestions
that President John F Kennedy may have been assassinated by powerful US state forces,
working in cahoots with American corporate interests, because he didn't adopt a sufficiently
aggressive policy towards Cuba after the Bay of Pigs fiasco in 1961. Related to JFK's assassination
was his reluctance to go to war in Vietnam in the early 1960s, which big oil companies and weapons
manufacturers were all avidly pushing. His successor, the Texan Senator Lyndon Baines Johnson, who was
close to both industries, duly obliged by paving the way for all-out war in Indochina after 1964. Up
to two million Vietnamese were killed, as were some 58,000 US troops. Millions more maimed. The
corporations made huge profits from the decade-long slaughter. But the US economy began a long descent
that continues today from incurring fiscal debts over Vietnam, which prompted Washington to abandon
the gold standard, and heralded the age of funny money with the dollar acting as an overrated
international reserve currency.
Many more examples could be cited to illustrate how US government – both the White House and
Congress – are agents for corporate profits, often to the horrendous detriment of international peace
and the common good of ordinary Americans.
The 2003 war on Iraq – killing over one million civilians and maiming tens of thousands of
Americans – was widely seen as a pretext for grabbing Iraqi oil for US corporations like Halliburton,
for whom then vice president Dick Cheney was previously an executive board member.
The present warmongering towards Venezuela by Washington is openly touted by White House National
Security Advisor John Bolton as being about US corporate lust for the country's oil reserves – which
are reckoned to be the biggest on the planet.
Out of the top 12 corporate financial
donors
to politicians in Washington, three of them are weapons companies: Boeing, Lockheed Martin,
and Northrop Grumman; a fourth is oil titan Exxon-Mobil. There is an obvious correlation between
corporate bidding and foreign policies embarked on by US governments which leads to conflict and wars,
which in turn repays these corporations with soaring profits.
The American government is the best instrument that corporate money can buy.
Thus, when Trump, Pompeo and other Washington political (and media) prostitutes pontificate and
rail against Huawei, just remember: these talking heads are bought and paid for – lock, stock and
barrel.
Like this story? Share it with a friend!
The statements, views and opinions expressed in this column are
solely those of the author and do not necessarily represent those of RT.
We should object to the neoliberal complete "instumentalization" of education: education became just a mean to get nicely paid job.
And even this hope is mostly an illusion for all but the top 5% of students...
And while students share their own part of responsibility for accumulating the debt the predatory behaviour of neoliberal universities
is an important factor that should not be discounted and perpetrators should be held responsible. Especially dirty tricks of ballooning
its size and pushing students into "hopeless" specialties, which would be fine, if they were sons or daughters of well to do and parent
still support then financially.
Actually neoliberalism justifies predatory behaviour and as such is a doomed social system as without solidarity some members of
financial oligarchy that rules the country sooner or later might hand from the lampposts.
Notable quotes:
"... It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young 18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked against them legally. ..."
"... There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed to the non-profit and for profit institutes. ..."
"... It's easy to explain, really. According to the Department of Education ( https://studentaid.ed.gov/sa/repay-loans/understand/plans ) you're going to be paying off that loan at minimum payments for 25 years. Assuming your average bachelor's degree is about $30k if you go all-loans ( http://collegecost.ed.gov/catc/ ) and the average student loan interest rate is a generous 5% ( http://www.direct.ed.gov/calc.html ), you're going to be paying $175 a month for a sizable chunk of your adult life. ..."
"... Majoring in IT or Computer Science would have a been a great move in the late 1990's; however, if you graduated around 2000, you likely would have found yourself facing a tough job market.. Likewise, majoring in petroleum engineering or petroleum geology would have seemed like a good move a couple of years ago; however, now that oil prices are crashing, it's presumably a much tougher job market. ..."
"... To confuse going to college with vocational education is to commit a major category error. I think bright, ambitious high school graduates– who are looking for upward social mobility– would be far better served by a plumbing or carpentry apprenticeship program. A good plumber can earn enough money to send his or her children to Yale to study Dante, Boccaccio, and Chaucer. ..."
"... A bright working class kid who goes off to New Haven, to study medieval lit, will need tremendous luck to overcome the enormous class prejudice she will face in trying to establish herself as a tenure-track academic. If she really loves medieval literature for its own sake, then to study it deeply will be "worth it" even if she finds herself working as a barista or store-clerk. ..."
"... As a middle-aged doctoral student in the humanities you should not even be thinking much about your loans. Write the most brilliant thesis that you can, get a book or some decent articles published from it– and swim carefully in the shark-infested waters of academia until you reach the beautiful island of tenured full-professorship. If that island turns out to be an ever-receding mirage, sell your soul to our corporate overlords and pay back your loans! Alternatively, tune in, drop out, and use your finely tuned research and rhetorical skills to help us overthrow the kleptocratic regime that oppresses us all!! ..."
"... Genuine education should provide one with profound contentment, grateful for the journey taken, and a deep appreciation of life. ..."
"... Instead many of us are left confused – confusing career training (redundant and excessive, as it turned out, unfortunate for the student, though not necessarily bad for those on the supply side, one must begrudgingly admit – oops, there goes one's serenity) with enlightenment. ..."
"... We all should be against Big Educational-Complex and its certificates-producing factory education that does not put the student's health and happiness up there with co-existing peacefully with Nature. ..."
"... Remember DINKs? Dual Income No Kids. Dual Debt Bad Job No House No Kids doesn't work well for acronyms. Better for an abbreviated hash tag? ..."
"... I graduated law school with $100k+ in debt inclusive of undergrad. I've never missed a loan payment and my credit score is 830. my income has never reached $100k. my payments started out at over $1000 a month and through aggressive payment and refinancing, I've managed to reduce the payments to $500 a month. I come from a lower middle class background and my parents offered what I call 'negative help' throughout college. ..."
"... my unfortunate situation is unique and I wouldn't wish my debt on anyone. it's basically indentured servitude. it's awful, it's affects my life and health in ways no one should have to live, I have all sorts of stress related illnesses. I'm basically 2 months away from default of everything. my savings is negligible and my net worth is still negative 10 years after graduating. ..."
"... My story is very similar to yours, although I haven't had as much success whittling down my loan balances. But yes, it's made me a socialist as well; makes me wonder how many of us, i.e. ppl radicalized by student loans, are out there. Perhaps the elites' grand plan to make us all debt slaves will eventually backfire in more ways than via the obvious economic issues? ..."
It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan
default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could
be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young
18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked
against them legally. In any case during a poor economy, those with more education appear to be employed at a higher rate than
those with less education. The issue for those pursuing an education is the ever increasing burden and danger of student loans and
associated interest rates which prevent younger people from moving into the economy successfully after graduation, the failure of
the government to support higher education and protect students from for-profit fraud, the increased risk of default and becoming
indentured to the government, and the increased cost of an education which has surpassed healthcare in rising costs.
There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed
to the non-profit and for profit institutes.
Ranger Rick, November 9, 2015 at 11:34 am
It's easy to explain, really. According to the Department of Education (
https://studentaid.ed.gov/sa/repay-loans/understand/plans
) you're going to be paying off that loan at minimum payments for 25 years. Assuming your average bachelor's degree is about $30k
if you go all-loans ( http://collegecost.ed.gov/catc/ ) and the
average student loan interest rate is a generous 5% ( http://www.direct.ed.gov/calc.html
), you're going to be paying $175 a month for a sizable chunk of your adult life.
If you're merely hitting the median income of a bachelor's degree after graduation, $55k (http://nces.ed.gov/fastfacts/display.asp?id=77
), and good luck with that in this economy, you're still paying ~31.5% of that in taxes (http://www.oecd.org/ctp/tax-policy/taxing-wages-20725124.htm
) you're left with $35.5k before any other costs. Out of that, you're going to have to come up with the down payment to buy a
house and a car after spending more money than you have left (http://www.bls.gov/cex/csxann13.pdf).
Louis, November 9, 2015 at 12:33 pm
The last paragraph sums it up perfectly, especially the predictable counterarguments. Accurately assessing what job in demand
several years down the road is very difficult, if not impossible.
Majoring in IT or Computer Science would have a been a great move in the late 1990's; however, if you graduated around
2000, you likely would have found yourself facing a tough job market.. Likewise, majoring in petroleum engineering or petroleum
geology would have seemed like a good move a couple of years ago; however, now that oil prices are crashing, it's presumably a
much tougher job market.
Do we blame the computer science majors graduating in 2000 or the graduates struggling to break into the energy industry, now
that oil prices have dropped, for majoring in "useless" degrees? It's much easier to create a strawman about useless degrees that
accept the fact that there is a element of chance in terms of what the job market will look like upon graduation.
The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who
majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of
many people in my generation.
At the same time, I do believe in personal responsibility-I'm wary of creating a moral hazard if people can discharge loans
in bankruptcy. I've been paying off my student loans (grad school) for a couple of years-I kept the level debt below any realistic
starting salary-and will eventually have the loans paid off, though it may be a few more years.
I am really conflicted between believing in personal responsibility but also seeing how this generation has gotten screwed.
I really don't know what the right answer is.
Ulysses, November 9, 2015 at 1:47 pm
"The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who
majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of
many people in my generation."
To confuse going to college with vocational education is to commit a major category error. I think bright, ambitious high
school graduates– who are looking for upward social mobility– would be far better served by a plumbing or carpentry apprenticeship
program. A good plumber can earn enough money to send his or her children to Yale to study Dante, Boccaccio, and Chaucer.
A bright working class kid who goes off to New Haven, to study medieval lit, will need tremendous luck to overcome the
enormous class prejudice she will face in trying to establish herself as a tenure-track academic. If she really loves medieval
literature for its own sake, then to study it deeply will be "worth it" even if she finds herself working as a barista or store-clerk.
None of this, of course, excuses the outrageously high tuition charges, administrative salaries, etc. at the "top schools."
They are indeed institutions that reinforce class boundaries. My point is that strictly career education is best begun at a less
expensive community college. After working in the IT field, for example, a talented associate's degree-holder might well find
that her employer will subsidize study at an elite school with an excellent computer science program.
My utopian dream would be a society where all sorts of studies are open to everyone– for free. Everyone would have a basic
Job or Income guarantee and could study as little, or as much, as they like!
Ulysses, November 9, 2015 at 2:05 pm
As a middle-aged doctoral student in the humanities you should not even be thinking much about your loans. Write the most
brilliant thesis that you can, get a book or some decent articles published from it– and swim carefully in the shark-infested
waters of academia until you reach the beautiful island of tenured full-professorship.
If that island turns out to be an ever-receding mirage, sell your soul to our corporate overlords and pay back your loans!
Alternatively, tune in, drop out, and use your finely tuned research and rhetorical skills to help us overthrow the kleptocratic
regime that oppresses us all!!
subgenius, November 9, 2015 at 3:07 pm
except (in my experience) the corporate overlords want young meat.
I have 2 masters degrees 2 undergraduate degrees and a host of random diplomas – but at 45, I am variously too old, too qualified,
or lacking sufficient recent corporate experience in the field to get hired
Trying to get enough cash to get a contractor license seems my best chance at anything other than random day work.
MyLessThanPrimeBeef, November 9, 2015 at 3:41 pm
Genuine education should provide one with profound contentment, grateful for the journey taken, and a deep appreciation
of life.
Instead many of us are left confused – confusing career training (redundant and excessive, as it turned out, unfortunate
for the student, though not necessarily bad for those on the supply side, one must begrudgingly admit – oops, there goes one's
serenity) with enlightenment.
"I would spend another 12 soul-nourishing years pursuing those non-profit degrees' vs 'I can't feed my family with those paper
certificates.'
jrs, November 9, 2015 at 2:55 pm
I am anti-education as the solution to our economic woes. We need jobs or a guaranteed income. And we need to stop outsourcing
the jobs that exist. And we need a much higher minimum wage. And maybe we need work sharing. I am also against using screwdrivers
to pound in a nail. But why are you so anti screwdriver anyway?
And I see calls for more and more education used to make it seem ok to pay people without much education less than a living
wage. Because they deserve it for being whatever drop outs. And it's not ok.
I don't actually have anything against the professors (except their overall political cowardice in times demanding radicalism!).
Now the administrators, yea I can see the bloat and the waste there. But mostly, I have issues with more and more education being
preached as the answer to a jobs and wages crisis.
MyLessThanPrimeBeef -> jrs, November 9, 2015 at 3:50 pm
We all should be against Big Educational-Complex and its certificates-producing factory education that does not put the
student's health and happiness up there with co-existing peacefully with Nature.
"You must be lazy – you're not educated."
"Sorry, you are too stupid for our elite university to admit, just as your brother was too poor for our rich club to let
in."
"I am going to kill you intellectually. I will annihilate you intellectually. My idea will destroy you and I don't have
to feel sorry at all."
Kris Alman, November 9, 2015 at 11:11 am
Remember DINKs? Dual Income No Kids. Dual Debt Bad Job No House No Kids doesn't work well for acronyms. Better for an abbreviated
hash tag?
debitor serf, November 9, 2015 at 7:17 pm
I graduated law school with $100k+ in debt inclusive of undergrad. I've never missed a loan payment and my credit score
is 830. my income has never reached $100k. my payments started out at over $1000 a month and through aggressive payment and refinancing,
I've managed to reduce the payments to $500 a month. I come from a lower middle class background and my parents offered what I
call 'negative help' throughout college.
my unfortunate situation is unique and I wouldn't wish my debt on anyone. it's basically indentured servitude. it's awful,
it's affects my life and health in ways no one should have to live, I have all sorts of stress related illnesses. I'm basically
2 months away from default of everything. my savings is negligible and my net worth is still negative 10 years after graduating.
student loans, combined with a rigged system, turned me into a closeted socialist. I am smart, hard working and resourceful.
if I can't make it in this world, heck, then who can? few, because the system is rigged!
I have no problems at all taking all the wealth of the oligarchs and redistributing it. people look at me like I'm crazy. confiscate
it all I say, and reset the system from scratch. let them try to make their billions in a system where things are fair and not
rigged...
Ramoth, November 9, 2015 at 9:23 pm
My story is very similar to yours, although I haven't had as much success whittling down my loan balances. But yes, it's
made me a socialist as well; makes me wonder how many of us, i.e. ppl radicalized by student loans, are out there. Perhaps the
elites' grand plan to make us all debt slaves will eventually backfire in more ways than via the obvious economic issues?
Technoimperialism is effective, but what it Huawei can switch to some derivative CPU and
chipsets?
Notable quotes:
"... Authored by Fan Yu via The Epoch Times, ..."
"... A wide-ranging ban similar to the one imposed on Huawei and its affiliates would effectively bar other foreign companies whose products contain at least 25 percent U.S.-sourced technology from supplying the Chinese. ..."
"... What does this mean in practice? More companies may begin to adopt localized R&D and manufacturing practices. Instead of Chinese factories supplying the world when labor costs were low, localized operations to directly supply the China market may be set up. ..."
"... Around 33.2 percent of American companies operating in China are delaying or cancelling investments in China altogether, according to the most recent American Chamber of Commerce in China survey released on May 22. If the tariffs are more permanent in nature, U.S. companies will likely move production outside of China, which is increasingly seen as a prudent choice given rising political instability within China and growing labor costs. ..."
"... If Bibi ask Chump to drop the tariffs on China for the security of Israel, What do you think will be Chump's answer? ..."
During the Cold War ,
around half of the world ran on the technologies, machinery, and political ideologies developed
by the Soviet Union. The other half - the free world - adopted those of the United States and
its allies.
As trade war
tensions between the United States and China escalate, could we be on the cusp of a new
version of the cold war, one which is driven by technology and finance?
Since U.S. President Donald Trump has deemed Chinese telecommunications giant Huawei Technologies as a national
security threat and barred it from purchasing key U.S. equipment, Beijing has engaged in an
escalating tit-for-tat that could have lasting ramifications on the technology industry going
forward.
And Huawei may just be the beginning. Several other Chinese companies are being considered
to join the blacklist with Huawei.
If a technology cold war does come to pass, it would significantly alter the existing
technology landscape, dismantle global supply chains, and cleave off the global trade network that has underpinned
China's rise as a global economic power .
Decoupling of the Global Supply Chain
Global consumers are used to seeing this familiar description donning Apple products'
packaging for years: "Designed by Apple in California. Assembled in China."
That's the model followed by most technology companies during the past few decades. American
companies develop new technologies and products in the United States, which are assembled by
comparatively cheap labor in China, and then shipped for sale globally.
Going forward, purchase orders would likely need to be rerouted.
A wide-ranging ban similar to the one imposed on Huawei and its affiliates would
effectively bar other foreign companies whose products contain at least 25 percent U.S.-sourced
technology from supplying the Chinese.
What does this mean in practice? More companies may begin to adopt localized R&D and
manufacturing practices. Instead of Chinese factories supplying the world when labor costs were
low, localized operations to directly supply the China market may be set up.
Around 33.2 percent of American companies operating in China are delaying or cancelling
investments in China altogether, according to the most recent American Chamber of Commerce in
China survey released on May 22. If the tariffs are more permanent in nature, U.S. companies
will likely move production outside of China, which is increasingly seen as a prudent choice
given rising political instability within China and growing labor costs.
Another 35.5 percent of respondents are adopting an "In China, for China" approach to
mitigate the impact of tariffs , according to the AmCham survey. That refers to manufacturing
products to be sold in China, within China. That strategy may be broadened in a full-on
technology cold war, as research and innovation may also need to be localized and companies may
need to erect internal information barriers.
Losers, Big and Small
Chinese companies will be the main losers -- there are no existing domestic replacements for
many U.S.-sourced components. For example, Huawei's chip-making arm HiSilicon currently derives
its Kirin chip architecture on license from UK-based semiconductor firm ARM Holdings. But in
May, ARM notified Huawei that it would stop licensing its chip designs to HiSilicon due to
having certain U.S.-sourced origins.
Huawei also lost access to Google's Android software platform, which is the main operating
system running on all Huawei smartphones. As of the end of May, the U.S. Commerce Department
gave Huawei a temporary, 90-day license to provide security patches to existing phones.
In addition, Huawei has been suspended from the Wi-Fi Alliance, an industry standard-setting
body for technology protocols.
These events don't just hobble Huawei -- they effectively ground its ambitions to a halt.
Without access to these technologies, there's simply no way for Huawei to reach its goal of
overtaking Samsung as the world's No. 1 smartphone supplier. And on the networking front,
Japan's SoftBank became the latest potential customer to reject Huawei for 5G networking
equipment, announcing on May 31 that it would be turning to European telecom giants Nokia and
Ericsson instead.
Should similar bans extend to other Chinese companies -- many of which have far smaller
operational support and balance sheets than Huawei -- many of them could cease operations
altogether.
Comments
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China's empire is growing and the US empire s shrinking. Unfortunately many can't grasp
that and will deny it till the end instead of accepting it and working with the next world
power. All empires come to an end.
Our economy is a consumer based economy not a manufacturing based economy like it once
was. Can we return to a manufacturing based economy? Not sure if Americans are ready to push
their kids into getting a job at the factory making boots, footballs, washing machines......
instead of swaying them into going to college. Don't forget, someone has to work in the
factories if we are going to make stuff.
If you study high wage manufacturing driven economies like Germany, you will notice that
the productivity of their workers is sky high (as it has to be in order to remain
competitive). The plants are highly automated. Workers are very well trained and have expert
skills in keeping the production line running at peek pace and quality.
Frankly, I just don't think American workers have what it takes to adopt that kind of
model.
Not with the education system we have now....the Fed has killed off the industrial trades,
and everyone thinks they will can spend $100,000 a year for an education to sit behind a desk
and play solitaire......or become a politician.
Someone has to fix the machines and get their hands dirty. Not all our kids are IT
'coders'. Now we want the gooberment to give them 'free' college for a 'diversity degree' and
they graduate with NO SKILLS and no knowledge. So we drug up our youth with drugs imported by
China and open the flood doors for worker bees. Sounds like a plan.
The free world flourished during the cold war. it was great for the West. Technology
advanced by leaps and bounds and the middle class grew. Nothing bad about this at all.
So you believe Epoch Times, a Falun Gong publication? What's missing in the article is the
most obvious: the trade war will force China to climb the value chain a lot quicker. The most
like scenario is that China will become a high-tech manufacturing powerhouse before much, if
anything, is moved back to U.S.
What would make any sane person believe that stopping the ARM license would stop them
being made in China? Has that ever worked for anything else, ever?
their tech will fall behind as the US advances. Same thing happened with the Soviet Union
once they ran out of Germans and US tech. By '91, they were woefully behind the West--like 35
years.
There was never anything wrong with Research in the USSR, Development was their problem, now as Russia again they remain at the leading edge of Research, and seem to have finally gotten a handle on Development. They have never been behind in Research, any serious scientist in the West can and will read Russian just to keep up.
Its been that way all my life, the US seems to have
forgotten it though, because they believe they're exceptional and only they can do
research.Hubris will kill you.
The Russians are pulling way ahead because of that Ubermensch stupidity, laughing the whole time at it. That smirk of Putins, its there for a reason.
What would make any sane person believe that stopping the ARM license would stop them
being made in China?
No kidding. For instance, take this statement:
Chinese companies will be the main losers -- there are no existing domestic replacements
for many U.S.-sourced components.
Propaganda via lies of omission. This could easily be turned around to say:
American companies will be the main losers -- there are no existing domestic
replacements for many Chinese-manufactured "U.S.-sourced" components.
But hey, the Epoch Times is a propaganda mill for the Falun Gong cult which the Chinese
government banned 20 years ago, so it's kind of the anti-China equivalent of The
Gatestoned Institution .
the chinese domestic market is the new big dog on the block. it is big enough to dictate
what the rest of the world will use. the hubris of the usa is arrogance squared. the
consequences are potentially damning to usa tech. this is the dumbest move in business and
geopolitical history.
The West is in for a big surprise. China has technologically advanced neighbors (Russia,
India) and a host of countries who want to do business who are also technologically advanced.
The Silk Road is well advanced to supplant trade with North America. Germany is already in
place in Russia and China and will not lose sleep with the loss of North America. It is the
US that has the most to lose.
They cannot see past their own jingo. The Chinese just thanked Trump at the Moscow summit, for forcing them to do what inertia
stopped them doing years ago. Seems like its already backfiring, and now full dedollarization is now the official
agenda. Yuan futures in most everything, convertible to gold, were just announced at one press conference. The ruble looks around -95% undervalued right now.
umm--you do know that it wasn't so long ago that Russia defaulted on all of its loans,
right? and that no one with a brain is going back into that market again, right?
No worries, the PTB in our fed government (both sides) and the globalists want cheap labor
from the illiterates that are allowed to flood our country and Europe. We will look much like
the cheap labor in China. I find it funny that 'open border' morons like the D's demand
$15/hour min wage laws for flipping a hamburger. They are nuts. Can't have it both ways.
No they didn't, they were disconnected from Gargoyle Play.Android is open source and HW played a big part in its development. Maybe more than Gargoyle.. This kind of disinformation discredits the whole article, the author is a no nothing
hack, probably Mosley moonlighting from his janitors job.
My small anecdotal experience was back in 2008 when I worked for a US Company who made
large components for nuclear projects. Like AP1000. Within a year of my working there, we
were hosting the chinese and actually sending our engineers and quality people to live in
China for 6 months at a time to TEACH THEM HOW TO MAKE THE PRODUCT. The quality people came
back disgusted because they didn't care about 'tolerances'. I have since left there, but it
was eye opening how US companies willingly sell our technology to them.
In the meantime, the corp bosses built a huge addition onto our building with luxurious
soundproof walls/doors/windows to move in. Big bucks stuff. No expense spared.
Not really, the Chi-Com government OWNERSHIP of businesses is dramatic.
When a chinese government entity (think strawman, shell company, a "holding
company") answerable and subservient to the state party apparatus owns the majority of
any company's stock and/or gives it direction from on high, it cannot be said to be "a
private company". At least not by any kind of western standard of the meaning of the word
"private".
They're trying to fake people out (and succeeding to some degree) as the western mind may
misinterpret it as merely being crony-socialism but in fact it's communist via the shell
corps.
What you describe sounds like fascism i.e. capitalism is allowed, private companies are
allowed but are directly answerable to government.
Anyways you look at it, China has a strong capitalist element. They have private property
now. They have billionaires as a result of these companies FFS. They have a stock market .
They have realestate developers. That's no longer 'communism'.
The largest corporations are government owned and a "private company" is not given
direction by any government entity in what to supply or in what quantities to supply to "the
market", there are no government mandated quotas.
And you are confused (or being evasive) about what socialism and capitalism are, fascism
& communism are both Marxist.
With capitalism, the market decides all, from pricing to profits to wages and companies
rise & fall on what is sold into that market ...thats why rickshaws never caught
on here because people didn't have to eat their horses for meat and we eventually produced
affordable cars for transport...lol.
Need I remind you that the CCP means the Chinese Communist Party?
Perhaps they need some better capitalist marketers to "rebrand" their, ahem,
operation ;-)
"... China assembled an "unreliable entities list" for retaliation against foreign companies, individuals and organizations that "do not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons, and seriously damage the legitimate rights and interests of Chinese companies." ..."
"... And out of nowhere, Trump warned Mexico to stop the immigrant flow in 10-days or face tariffs. Global CEOs who were rushing to rearchitect their China supply chains, digested the risk that these investments could be instantly devastated by some future tariff - imposed to achieve Americas geopolitical objectives - and they prepared to warn shareholders they're putting new investment on hold. As the US treasury yield curve inverted, with 3mth bills at 2.34% and 10yrs at 2.12%. Which of course, is one of the most reliable warnings of looming recession. ..."
"... "Tariffs are being used as a proactive, combative tool. The GDP hit will be at least double. Modelling these tariffs require more complex frameworks." ..."
"... " Global trade was already in the process of fracturing ," added the strategist. "Now Huawei can't use Google's operating system." Their phones are as good as paperweights. "But do you really want to bet that Huawei can't spend the next 6mths building a competing operating system?" We're entering a world of competing superpowers. " The overall impact will be to operate economies with redundant technologies, fewer efficiencies, lower ROEs, lower ROAs. And ironically, or perhaps by design, it'll be bad for profits, but okay for labor ." ..."
Submitted by Eric Peters, CIO of One River Asset Management
"Don't say we didn't warn you!" declared the China People's Daily. And historians rushed to remind us that Beijing used the phrase
in advance of their 1962 border war with India and 1979 war with Vietnam.
China assembled an "unreliable entities list" for retaliation against foreign companies, individuals and organizations that "do
not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons,
and seriously damage the legitimate rights and interests of Chinese companies."
Pence responded by warning Beijing we could double tariffs. "Engaging in activities that run afoul of US sanctions can result
in severe consequences, including a loss of access to the US financial system," warned the US Treasury's undersecretary for terrorism
– you see, the Europeans are building systems to circumvent American sanctions. Today, those sanctions are directed at Iran, Russia,
North Korea, Venezuela, but tomorrow they may be directed at China.
Naturally, the Europeans threatened only themselves - 1,500-year habits are hard to break. Germany and France fought bitterly
over who would become European Commission President. Brussels warned Rome to honor its obligation to contain its growing debt. Italy's
Salvini threatened to launch a parallel currency – step #1 in the process to abandon the euro and default.
And out of nowhere, Trump warned Mexico to stop the immigrant flow in 10-days or face tariffs. Global CEOs who were rushing to
rearchitect their China supply chains, digested the risk that these investments could be instantly devastated by some future tariff
- imposed to achieve Americas geopolitical objectives - and they prepared to warn shareholders they're putting new investment on
hold. As the US treasury yield curve inverted, with 3mth bills at 2.34% and 10yrs at 2.12%. Which of course, is one of the most
reliable warnings of looming recession.
Framework
"Economists generally use tax frameworks to evaluate the trade war," said my favorite strategist. "They calculate a -0.4% hit
to GDP, which is not such a big deal. But they're using the wrong tool." Tax frameworks treat tariffs as a tax. They then model
how a nation's currency adjusts to the tax, how corporate profit margins shrink to absorb the tax, and how consumers shoulder the
remaining burden. "Tariffs are being used as a proactive, combative tool. The GDP hit will be at least double. Modelling these tariffs
require more complex frameworks."
"If all of the affected nations simply agreed to adopt new tax regimes, then the tax framework would work fine," continued my
favorite strategist. "But the world has built specialized supply chains. So if Nation A tries to hurt Nation B, and Nation B is
part of critical supply chains that impact Nation A, then there are many things B can do to harm A in non-linear ways." Banning
rare earth metal exports is a small example. "Once Apple locks down their product production for Nov 2019 release, China knows exactly
how to push that past Feb 2020."
" Global trade was already in the process of fracturing ," added the strategist. "Now Huawei can't use Google's operating system."
Their phones are as good as paperweights. "But do you really want to bet that Huawei can't spend the next 6mths building a competing
operating system?" We're entering a world of competing superpowers. " The overall impact will be to operate economies with redundant
technologies, fewer efficiencies, lower ROEs, lower ROAs. And ironically, or perhaps by design, it'll be bad for profits, but okay
for labor ."
"... "It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides," according to the white paper, which also listed details of what it described as U.S. backtracking. ..."
"... As Vice Commerce Minister Wang Shouwen, who led the working-level team in the negotiations, said China is willing to work with the US to find solutions, but the latter's strategy of maximum pressure and escalation can't force concessions from China: "When you give the U.S. an inch, it takes a yard", he said. ..."
And, as of this weekend, we now appear to be in the "despondent acceptance" phase (unlike
the Kubler-Ross model, acceptance precedes anger and nuclear war), because as Xinhua reported
overnight, China is now laying the blame squarely on the US for the breakdown of trade talks
between the world's two biggest economies, but hinted at its willingness to resume stalled
negotiations with Washington while rejecting any attempt to force concessions from Beijing.
In a
white paper on China's official position on the trade talks released by the State Council
Information Office on Sunday, Beijing made it clear the US government "should bear the sole and
entire responsibility" for the current stalemate, and hit back at allegations that Beijing had
backtracked from its earlier promises.
The trade war has not " made America great again," the white paper said, but has done
serious harm to the U.S. economy by increasing production costs, causing higher prices hikes,
damaging growth and people's livelihoods, as well as creating barriers to U.S. exports to
China.
"It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues,
will only make things worse for all sides," according to the white paper, which also listed
details of what it described as U.S. backtracking.
"The Chinese government rejects the idea that threats of a trade war and continuous tariff
hikes can ever help resolve trade and economic issues," according to the white paper. "Guided
by a spirit of mutual respect, equality and mutual benefit, the two countries should push
forward consultations based on good faith and credibility in a bid to address issues, narrow
differences, expand common interests, and jointly safeguard global economic stability and
development," it said, according to
Bloomberg .
As Vice Commerce Minister Wang Shouwen, who led the working-level team in the
negotiations, said China is willing to work with the US to find solutions, but the latter's
strategy of maximum pressure and escalation can't force concessions from China: "When you give
the U.S. an inch, it takes a yard", he said.
Meanwhile, when asked about US firms’ complaints that customs clearance was taking longer since the start of the trade war, he advised companies to contact the relevant authorities. “If certain firms are faced with specific issues, they can talk to local commerce departments,” he said.
On the increasingly touchy matter of exports of rare earth minerals, Wang repeated Beijing’s comments of the past week. “With the world’s richest rare earth resources we are willing to satisfy the normal needs of other countries,” he said. “But it’s unacceptable if other countries use rare earths imported from China to suppress China’s development.”
But in what could be the worst news for bulls who are clutching at any straw now to indicate an improvement in diplomatic relations, when asked about the possibility of a summit between Xi and Trump on the sidelines of the Group of 20 summit in Osaka, Japan later this month – as suggested by the American president in May – Wang said he had no information on the matter, according to the SCMP.
Shi Yinhong, an adviser to China’s State Council and a specialist in US affairs at Renmin University in Beijing, said that despite the pressure from the US, Beijing had shown restraint in its efforts to fight back... which it has indeed, suggesting that Trump's read of the calculus - one according to which China has more to lose than gain from taking trade war to the next level - is the correct one.
“In the areas of trade and technology, China has less leverage than the US, but it has kept its retaliatory measures within these areas,” he said. “If it extended its efforts to areas like North Korea and Iran, it could do much greater damage to Trump.”
The punchline: when addressing the chances of the two sides achieving a breakthrough in their trade negotiations by the time of the G20 summit, Shi said: “The difference is too wide and would be impossible for them to bridge in a month.”
"... Meanwhile on Thursday a Chinese Foreign Ministry spokesman responded to the White House position at a moment Pompeo keeps up the pressure campaign on European allies, saying, the US has not offered proof that Huawei's products present a security risk. ..."
"... "We hope that the United States can stop these mistaken actions which are not at all commensurate with their status and position as a big country," said spokesman Geng Shuang, according to Reuters. ..."
"... And Huawei, for its part, is reportedly taking steps to block its employees from taking part in technical meetings with American contacts, which has even included sending home American employees that were based at its Chinese headquarters in Shenzen. ..."
Secretary of State Mike Pompeo has again put Germany and the rest of Europe on notice regarding China's controversial
telecom giant Huawei, warning they could be cut off from crucial US intelligence sharing over Huawei's 5G networks now
being built.
Pompeo issued the ultimatum following a meeting with German Foreign Minister Heiko Maas on Friday, saying the decision
on whether to allow Huawei equipment would have severe consequences, according to
Reuters
. His
words came at the start of a five-day European tour: "They [Germany] will take their own sovereign decisions, [but we]
will speak to them openly about
the
risks
... and in the case of Huawei the concern is
it
is not possible to mitigate those anywhere inside of a 5G network
," Pompeo
said
.
Germany, alongside the UK and France, has refused to budge amidst the ratcheting pressure from the US over worries that
China's intelligence is using its next generation networks as "back door" for aggressive telecommunications
eavesdropping.
Pompeo told the news conference further:
"(There
is) a risk we will have to change our behavior in light of the fact that we can't permit data on private citizens or
data on national security to go across networks that we don't have confidence (in)."
As we reported previously the Trump administration
first
notified its Berlin counterparts
of the intelligence sharing concerns in early March, when US Ambassador to Germany
Richard A. Grenell told Germany's economics minister in an official letter that the European ally and intelligence
partner "wouldn't be able to keep intelligence and other information sharing at their current level if Germany allowed
Huawei or other Chinese vendors to participate in building the country's 5G network."
It was noted at the time the warning is
"likely
to cause alarm among German security circles"
amid persistent terror threat, largely the result of Merkel's
disastrous "Open Door" policies which allowed over 1 million middle eastern immigrants into he country. And yet it
appears Germany's national security state establishment has remained unmoved, or at least unable to prevail over
Merkel's government.
Meanwhile on Thursday a Chinese Foreign Ministry spokesman responded to the White House position at a moment Pompeo
keeps up the pressure campaign on European allies, saying, the US has not offered proof that Huawei's products present a
security risk.
"We hope that the United States can stop these mistaken actions which are not at all commensurate with their status and
position as a big country," said spokesman Geng Shuang, according to Reuters.
And Huawei, for its part, is
reportedly
taking steps to block
its employees from taking part in technical meetings with American contacts, which has even
included sending home American employees that were based at its Chinese headquarters in Shenzen.
"... The long, dense economic relationship appears to have passed its peak, writes Patrick Lawrence. ..."
"... The fallout from these mutually imposed taxes on trade will be considerable all by itself. Global supply chains will inevitably be disrupted -- a potential threat to worldwide economic stability. U.S. importers are expected to start shifting purchases away from China in favor of alternative suppliers with lower cost structures. American investors are likely to reconsider the mainland as a production platform, in many cases diverting investment dollars elsewhere. ..."
"... In the financial markets, this process is termed "decoupling." The long, dense economic relationship between the U.S. and China, the reasoning runs, appears to have passed its peak. ..."
"... With bilateral trade talks stalled, both sides have begun to indicate -- directly or by inference -- that they are now prepared to draw blood. Once the long-term damage begins, as appears increasingly likely, it is difficult to see how there will be any turning back from it. ..."
"... The only known back door into Huawei systems was created by the National Security Agency, which hacked its servers at some point between 2010 and 2012; this was revealed in the documents Edward Snowden made public in mid -- 2013. In effect, the U.S. accuses China of doing what it has already done. ..."
"... "When it comes to policy caprice motivated by paranoia and Deep State lies, the attack on Huawei is in a class all by itself," David Stockman, the former White House budget director, wrote on his blog earlier this month. "The whole case has been confected by Washington-domiciled economic nationalists who think prosperity stems from the machinations of the state and that state-sponsored 'national champions' are essential to winning the race for global economic and technological dominance." ..."
"... Last week the president suggested that the Huawei dispute can be negotiated as part of a broader agreement on trade. At the same time, Dan Coats, the director of national intelligence, has been crisscrossing the country to warn U.S. companies, universities, and other institutions of the perils of doing business with China. Coats's focus is on the high-technology sector. ..."
"... There are two lessons to draw from this spectacle. Trump's position on Huawei gives the game away: If the company is truly a national security threat, it makes no sense to offer it as a chip to be bargained in trade talks with Beijing. Equally, Coats's barnstorming tour is a clear indication that the national security apparatus is actively seeking to cast China as a strategic threat to the U.S. -- as the Pentagon declared it to be in a defense review earlier this year. ..."
"... Turning off the supply of rare earths is not the "nuclear option" China may consider it, as there are alternative suppliers. At the same time, the mainland accounts for nearly three-quarters of world supplies. When it blocked sales to Japan during a diplomatic dispute in 2010, prices rose precipitously and there was mayhem among manufacturers dependent on Chinese supplies. ..."
"... Xi made a remark in Jiangxi that is not to be missed. "We are now embarking on a new Long March," he said, referencing the famous retreat Mao led after Chinese Nationalists defeated the Red Army in 1934. "And we must start all over again." ..."
"... Unless Washington opens to a more cooperative partnership with Beijing -- an unlikely prospect -- this could be the moment China begins to displace the U.S. as the preeminent power in the western Pacific. ..."
"... The US has to regain a real economy and stop the insane military spending. Regardless of China. ..."
"... ‘”Trump’s position on Huawei gives the game away: If the company is truly a national security threat, it makes no sense to offer it as a chip to be bargained in trade talks with Beijing.” Absolutely the case. Trump has been caught before in this same kind of contradictory stance, as with tariffs on steel and aluminum. ..."
"... Trump seems to think he can command the wind and the waves. He has an immense ego, and there is the fact that he is a good deal less clever than he thinks he is. ..."
"... Trump believes that by intimidation and threats, he can make something happen that cannot happen through the ordinary operations of the economies. In this we see him most like the thugs that came to run a number of European countries in the 1930s. ..."
"... Trump’s “MAGA” is nothing more than thinking you can make that heart-warming post-WWII slogan, “the American Dream,” come alive again, many decades later and in an entirely different set of circumstances. “The American Dream” was based in a world where almost every competitor was prostrate from war while America remained relatively unscathed. So, America supplied, for a while, a huge share of the world’s demands, but its share has been declining ever since. ..."
"... Naturally, many Americans want to believe otherwise. Trump’s base – the nation’s Wal-Mart shoppers and the residents of its huge gulag of trailer parks – certainly does, and its hopes comes tinged with everything from superstition to religiosity. ..."
"... America’s elites, the members of its power establishment, do not believe in the same way, but they are deeply concerned about America’s relative decline. ..."
"... They do believe that America’s still great remaining strength can be used to extract concessions from the world without sacrificing anything at home and without sacrificing its role as the center of world empire, a role that comes with many perks and privileges ..."
"... One thinks of the infamous German industrialists and bankers’ – as well as notable American ones – early support for Hitler, although I do not mean to say the situations are identical. ..."
"... You can try fighting by the methods Trump is using, but those methods risk, through acts like the blithe laying on of massive new tariffs and sanctions, not only reduced economic activity in the world, they risk ultimately real wars. ..."
"... The real pity is that Trump at his core is not that much different from the rest of the fools who have been leading this country for the past several decades. He’s just “old school” in his style: he doesn’t wear soft kid gloves whilst attempting to strangle his geopolitical competitors the way all his chums before him did, the sonorous Barack Obama included. ..."
"... Constant warfare is a big part of US consumption. ..."
"... It is becoming increasingly clear that the US is subject to an arms industry racket which is draining its resources and ruining its real potential. ..."
"... We are becoming a country of idle over-weight vets running around on motorcycles wearing red MAGA hats, supported by billionaires, while the rest toil. ..."
"... This will likely come to a head sooner rather than later, and the conflict can be understood in broader terms as between a hegemonic global model and a multi-polar global model ..."
"... While confidence that such measures can inflict enormous harm is justified, the corresponding confidence that America’s preeminent position atop the world’s economic structures is not subject to challenge or change is misguided. The challenge has been ongoing for over five years now, and the change will likely appear suddenly. The preference would be for the U.S. guided to a soft landing into a multi-polar world, but Washington’s policy hawks seem committed to rolling the dice. ..."
"... Washington’s policy setters are gangsters who operate largely through intimidation, extortion and racketeering. ..."
"... This trade war sounds dangerous – didn’t the Smoot Hawley tariffs precipitate the great depression? And the inevitable economic war (even if it is a faux war based on lies, driven by the neocons) could well lead to a real war if we let it….. ..."
"... But trade wars are easy to win! Our very smart cheeto-in-chief has told us. You wouldn’t doubt him would you? ..."
"... The US has abdicated their manufacturing and innovative technologies, shutting down heavy industry under Reagan and Bush I (replacing it with a “service economy”) while outsourcing high end technology and offshoring technical jobs, initially to China mostly under Clinton and Bush II. ..."
"... It’s tempting to conclude that tariffs and action against Huawei are part of the same strategy. I don’t think they are. The tariffs are playing to Trump’s voter gallery. ..."
"... So long as the Chinese can find a way to save face AND give face to Trump, compromise is possible. Huawei is about the Deep State being unable to access Huawei’s facilities. Its a double bluff. The NSA etc (via 5 Eyes) have great access to western controlled telecoms. ..."
The long, dense economic relationship appears to have passed its peak, writes Patrick
Lawrence.
Special to Consortium News
P resident Donald Trump's trade war with China is swiftly taking a decisive turn for the
worse.
Step by step, each measure prompting retaliation, a spat so far limited to tariff increases,
now threatens to transform the bilateral relationship into one of managed hostility extending
well beyond economic issues. Should Washington and Beijing define each other as adversaries, as
they now appear poised to do, the consequences in terms of global stability and the balance of
power in the Pacific are nearly incalculable.
The trade dispute continues to sharpen. Later this week Beijing is scheduled
to raise tariffs already in place on $60 billion worth of American exports -- the latest in
a running series of escalations Washington set in motion nearly a year ago. Two weeks later the
U.S., having increased tariffs on $200 billion worth of Chinese products earlier this month, is
to consider imposing levies on an additional $325 billion worth of imports from the
mainland.
The fallout from these mutually imposed taxes on trade will be considerable all by
itself. Global supply chains will inevitably be disrupted -- a potential threat to worldwide
economic stability. U.S. importers are expected to start shifting purchases away from China in
favor of alternative suppliers with lower cost structures. American investors are likely to
reconsider the mainland as a production platform, in many cases diverting investment dollars
elsewhere.
For its part, China is already rotating its gaze westward toward the Middle East and Europe.
As if to underscore the point, the East Hope Group, a large Chinese manufacturer, announced
late last week that it plans to
invest $10 billion in Abu Dhabi's industrial sector. Beijing is already drawing Western
Europe into its trillion-dollar Belt
and Road Initiative . In time, Europe could begin to replace the U.S. as a source of the
foreign investment capital China needs.
Decoupling
In the financial markets, this process is termed "decoupling." The long, dense economic
relationship between the U.S. and China, the reasoning runs, appears to have passed its
peak.
With bilateral trade talks stalled, both sides have begun to indicate -- directly or by
inference -- that they are now prepared to draw blood. Once the long-term damage begins, as
appears increasingly likely, it is difficult to see how there will be any turning back from
it.
Two weeks ago, the White House issued an executive order barring
purchases of telecommunications equipment from any foreign company deemed to pose a threat to
U.S. national security. It also requires American companies to obtain licenses before exporting
U.S. telecoms technology to such firms. While an administration official described the order as
"company and country agnostic," it is all but explicitly intended to damage the global position
of Huawei, the highly competitive Chinese company that is a leader in cellular telephone sales
and 5G telecommunications networks.
Huawei has long been in Washington's sights. Chief among the allegations against it , the
company is accused of providing China with a "back door" into its telecoms networks, so
allowing Beijing to spy on any entity using Huawei equipment. The U.S. has never provided
evidence of this, and both Huawei and Beijing vigorously deny any such arrangement. The
only known back door into Huawei systems was created by the National Security Agency, which
hacked its servers at some point between 2010 and 2012; this was revealed in the documents
Edward Snowden made public in mid -- 2013. In effect, the U.S. accuses China of doing what it
has already done.
"When it comes to policy caprice motivated by paranoia and Deep State lies, the attack
on Huawei is in a class all by itself," David Stockman, the former White House budget director,
wrote on his blog earlier this month. "The whole case has been confected by
Washington-domiciled economic nationalists who think prosperity stems from the machinations of
the state and that state-sponsored 'national champions' are essential to winning the race for
global economic and technological dominance."
Contradictory Narrative
There is little question that freezing Huawei out of the U.S. market and depriving it of
U.S. -- made components will do damage, in all likelihood lasting, to the company. The
Eurasia Group terms the administration's executive order "a grave escalation with China
that at a minimum plunges the prospect of continued trade negotiations into doubt." But as it
has on other policy questions, the Trump administration is tripping over its own contradictory
narratives at this point.
Last week the president suggested
that the Huawei dispute can be negotiated as part of a broader agreement on trade. At the same
time, Dan Coats, the director of national intelligence, has been crisscrossing the country
to
warn U.S. companies, universities, and other institutions of the perils of doing business
with China. Coats's focus is on the high-technology sector.
There are two lessons to draw from this spectacle. Trump's position on Huawei gives the
game away: If the company is truly a national security threat, it makes no sense to offer it as
a chip to be bargained in trade talks with Beijing. Equally, Coats's barnstorming tour is a
clear indication that the national security apparatus is actively seeking to cast China as a
strategic threat to the U.S. -- as
the Pentagon declared it to be in a defense review earlier this year.
Beijing has so far shown restraint in its responses, but there are signs it is stiffening
its spine. On Friday it issued a draft of its own set of
tighter regulations governing potential cyber-security breaches.
Xi Jinping had earlier visited a rare-earth processing facility in Jiangxi Province -- a
move read as the Chinese leader's subtle suggestion that Beijing may consider blocking exports
of minerals that are essential components in a variety of high-tech devices.
Turning off the supply of rare earths is not the "nuclear option" China may consider it,
as there are alternative suppliers. At the same time, the mainland accounts for nearly
three-quarters of world supplies. When it blocked sales
to Japan during a diplomatic dispute in 2010, prices rose precipitously and there was
mayhem among manufacturers dependent on Chinese supplies.
Xi made a remark in Jiangxi that is not to be missed. "We are now embarking on a new Long
March," he said, referencing the famous retreat Mao led after Chinese Nationalists defeated the
Red Army in 1934. "And we must start all over again."
With formal talks lapsed for the time being, there is now no shortage of signaling from
either Washington or Beijing. But Xi, China's most assertive leader since the Great Helmsman,
appears to understand the moment as larger than mere gestures. U.S. -- China relations have
entered a decisive phase. America cannot win in a long-term confrontation with China.
Unless Washington opens to a more cooperative partnership with Beijing -- an unlikely
prospect -- this could be the moment China begins to displace the U.S. as the preeminent power
in the western Pacific.
Patrick Lawrence, a correspondent abroad for many years, chiefly for the International
Herald Tribune , is a columnist, essayist, author, and lecturer. His most recent book is "Time
No Longer: Americans After the American Century" (Yale). Follow him @thefloutist . His web site is www.patricklawrence.us.
Support his work via www.patreon.com/thefloutist .
If you value this original article, please considermaking a donationto Consortium News so we can bring you more stories like this
one.
dean 1000 , May 31, 2019 at 11:12
The Empire the US built and acquired after WWII could not last no matter who is president.
We have been advised of this coming reality for 30 or 40 years. Washington can’t adjust
b/c it is controlled by a two party system that is owned by the 10%.
Since wall street bought a bunch of manufacturing companies and exported them to China the
US hasen’t had a real economy. It has been one bubble economy after another. A stock
bubble, tech bubble, dot com bubble, and a killer 8 trillion $ housing bubble, and a
completely unnecessary bank bailout.
The US has to regain a real economy and stop the insane military spending. Regardless of
China.
Zhu , May 31, 2019 at 06:14
Trump, in effect, is walling the US off from the rest of the world, as Ming-Qing dynasty
China did until 1911.it turned out badly for Chinese people. It’s likely to turn out
badly for the US.
Truth , May 29, 2019 at 17:27
One solution to rare minerals is to break the illegal clinton & bush era mining
agreements around the Grand canyon and Nevada which has turned our resources into cash from
russia and canada into the pockets of the deep state “elected” in D<C and
these states. It would be nice if every now and then a real journalist who publishes a full
story would get a complete story published. Consortium does better than most but still needs
to step up their game.
An article that includes explaining why all NAFTA and trade agreements since Kennedy have
been total sellouts of USA in exchange for party owned companies of the "elected"
‘”Trump’s position on Huawei gives the game away: If the company is
truly a national security threat, it makes no sense to offer it as a chip to be bargained in
trade talks with Beijing.” Absolutely the case. Trump has been caught before in this same kind of contradictory stance, as with tariffs on
steel and aluminum.
I think the truth is that he is a man ready to use any gimmick to get what he wants,
regardless of logic or facts or principle. Another way to say that is to speak of a criminal
mentality.
It is exactly what the mob has always done in making someone an offer they can’t
refuse. “Don’t want to pay protection money? Well, don’t be surprised if
your joint gets burned down.”
Trump essentially wants to transfer huge amounts of trade surplus from China to the United
States, not by any change in the economic activity or policies of the two countries but by
fiat.
But of course, the world doesn’t work that way.
The United States’ trade deficits are its own doing, not China’s. The United
States doesn’t save, and it doesn’t tax adequately. It consumes, and a productive
country like China is only too pleased to supply what it wants. That makes a flow of goods in
one direction and a flow of money in the other. Economics 101.
Trump seems to think he can command the wind and the waves. He has an immense ego, and
there is the fact that he is a good deal less clever than he thinks he is.
Trump believes that by intimidation and threats, he can make something happen that cannot
happen through the ordinary operations of the economies. In this we see him most like the
thugs that came to run a number of European countries in the 1930s.
He genuinely does not understand – or if he understands, he doesn’t care
– what is behind the surpluses and deficits and just insists that they will be changed
as a matter of his personal will. Does that not remind us of anyone from history?
At any rate, it comes down to his admiring “the strong man” and believing he,
and he alone, can play that role for the United States. And there are more than a few
Americans that believe him too. After all, the great American journalist and historian who
documented the rise and fall of the Nazis, William L. Shirer, once said that he thought the
United States might be the first country to go fascist voluntarily. He based that thought on
his observation of many attitudes and beliefs and trends in the United States.
Trump’s “MAGA” is nothing more than thinking you can make that
heart-warming post-WWII slogan, “the American Dream,” come alive again, many
decades later and in an entirely different set of circumstances. “The American
Dream” was based in a world where almost every competitor was prostrate from war while
America remained relatively unscathed. So, America supplied, for a while, a huge share of the
world’s demands, but its share has been declining ever since.
In today’s world, all the old competitors have not only come roaring back, but a lot
of new ones have come into being, and that reality is the future.
Naturally, many Americans want to believe otherwise. Trump’s base – the
nation’s Wal-Mart shoppers and the residents of its huge gulag of trailer parks –
certainly does, and its hopes comes tinged with everything from superstition to
religiosity.
America’s elites, the members of its power establishment, do not believe in the same
way, but they are deeply concerned about America’s relative decline. They have been
working away for years on the problem, as in their past bashing of Japan or China, but they
are not ready to work for fundamental change in America, as, for example, in its tax and
savings structures and its grotesque inequalities.
They do believe that America’s still great remaining strength can be used to extract
concessions from the world without sacrificing anything at home and without sacrificing its
role as the center of world empire, a role that comes with many perks and privileges. And
while most of them do not like Trump’s style or background, I think for now they are
willing to see whether he can get the ugly job done. One thinks of the infamous German
industrialists and bankers’ – as well as notable American ones – early
support for Hitler, although I do not mean to say the situations are identical.
You can try fighting by the methods Trump is using, but those methods risk, through acts
like the blithe laying on of massive new tariffs and sanctions, not only reduced economic
activity in the world, they risk ultimately real wars.
Even if they don’t go so far as war, they are shaking up some fundamental post-WWII
arrangements that America is going to miss. Decades-old allies, like some of those in Europe,
are beginning to re-think their relationship with such a hostile, single-minded America and
to glance around in other directions, as towards the very China Trump attacks and towards
Russia, a country whose openness to business would have resembled a miracle under the
communists and whose wealth of natural resources offers altogether new opportunities.
Realist , May 30, 2019 at 01:32
The real pity is that Trump at his core is not that much different from the rest of the
fools who have been leading this country for the past several decades. He’s just
“old school” in his style: he doesn’t wear soft kid gloves whilst
attempting to strangle his geopolitical competitors the way all his chums before him did, the
sonorous Barack Obama included.
The problem that bothers the US policy makers is real: what to do about the balance of
payments deficit? The Trump team seems to be nit-picking areas where imports can be reduced,
for instance by blocking Chinese tech exports.
All of these moves are nonsense because they
miss the real problem: the US economy has a long standing structural quandary. It devotes so
much of its resources to flashy, ornamental and useless defense high tech weapons and gismos
that it is running itself into the ground.
It is becoming increasingly clear that the US is
subject to an arms industry racket which is draining its resources and ruining its real
potential. What needs to be done is to cut the military budget in half and redirect the
resources to improving the infrastructure of the country and making investment once again
profitable inside the USA. Where is the politician who dares make these proposals? Wake up
America. We are becoming a country of idle over-weight vets running around on motorcycles
wearing red MAGA hats, supported by billionaires, while the rest toil.
bardamu , May 29, 2019 at 00:07
It is strange to discuss confrontation with China only in terms of trade deals so soon
after Obama’s “pivot to Asia,” Trump’s militarism with respect to
North Korea, and the militarism of both the Obama and Trump regimes as regards Russia and
also through western and central Asia, which are clearly areas in which China has no less
natural interest than the United States.
Among these, surely tariffs are the least of most anyone’s worries.
jaycee , May 28, 2019 at 16:27
This will likely come to a head sooner rather than later, and the conflict can be
understood in broader terms as between a hegemonic global model and a multi-polar global
model.
The hegemonic global model has been an American project since the demise of the Soviet
Union, usually presented in euphemism – “globalization”, the
“exceptional” nation, the “rule-based international system”, etc. In
recent years, US politicians have overstepped by a reckless use of the international
financial system to deter designated adversaries.
Presently moving through Congress are bills
designed to use sanctions (“maximum pressure”) to attack both Russia’s Nordstream natural gas pipeline to Europe and China’s claims in the South China Sea.
While confidence that such measures can inflict enormous harm is justified, the corresponding
confidence that America’s preeminent position atop the world’s economic
structures is not subject to challenge or change is misguided. The challenge has been ongoing
for over five years now, and the change will likely appear suddenly. The preference would be
for the U.S. guided to a soft landing into a multi-polar world, but Washington’s policy
hawks seem committed to rolling the dice.
Realist , May 28, 2019 at 17:41
Washington’s policy setters are gangsters who operate largely through intimidation,
extortion and racketeering. If you look up the definitions of those words you will see they
describe to a tee what the American government does. Shutting down Nordstream (and all the
other sanctions over transparently absurd claims) is meant entirely to damage the Russian
economy and destabilise the country’s government, plus to steal away customers in the
energy sector.
They are protecting nobody’s “rights of navigation” in the
South China Sea, rather they are telegraphing to Bejing that Chinese trade with the world can
be shut down on a moment’s notice by Uncle Sam, specifically they are trying to put the
kibosh on the Chinese “Belt and Road Initiative.” The cusses in Washington have
gone so far as to tell Canada that it does not have control over the Northwest Passage, long
considered to be within its internal waters–you know, all those islands connected by
ice for most of the year. Hence forth, Washington decreed that they are international waters
and that it would control them. If that’s being a good neighbor to a country that has
supported your every crazed demand for over 200 years, the “Great White North”
needs to get a restraining order from the World Court against Uncle Sam, plus they need to
find better friends elsewhere on the planet.
I tend to substitute the euphemism “rogue nation” for those others.
Excellent comment.
Realist , May 28, 2019 at 16:22
India, Vietnam, and the Philippines will thank China for the opportunity to manufacture
schlock for sale at Wal*Mart and for the major investments that new Chinese shareholders will
have made in their companies. These countries will now have wares to trade along the Belt and
Road linking all of Eurasia where everyone keeps getting richer by the day. Since people the
world over, except for congenitally retarded neocons, know a good deal when they see one, all
these countries will start telling Uncle Sam to cram it when he keeps demanding they sanction
their new found friends and trading partners because freedom and democracy, Putin and the
other names on Sam’s shit list. They’ll start deciding that all those American
bases give them no clout, no influence, no pay-off and no security… nothing useful at
all, unless prosecuting the crimes and repairing the damage caused by the garrison soldiers
provides local entertainment. It will be time to relocate those rat-holes to the American
side of Trump’s Wall.
Will the silver lining be new American self-sufficiency in manufacturing? The development
of needed resources using new innovative technologies? A plethora of jobs at good pay for
working American men and women? Will American oligarchs once again begin investing in America
itself? If you can arrange that with American greenbacks now buying a tenth as many Yuans,
Euros, Yen, Rupees, Rubles and even Pesos than they once did because Trump decided to
“shake things up,” maybe you can sell all those treasuries needed to run the
government in Washington to the Tooth Fairy.
It’s not true that “you can never go
home again:” just watch the dollars come flooding back to North America when the whole
rest of the world stops trading in them. This whole bit of history should be engaging to
watch on some future television show similar to James Burke’s
“Connections.”
If only Barack Obama had eased up on the extreme Trump bashing at
that White House Correspondents’ Dinner.
Harpo Kondriak , May 28, 2019 at 20:13
“Watch those dollars come flooding back” – when the real fun starts.
Those that don’t understand why there has been little inflation from the bank bailouts
will get their answer. And they won’t like it.
Seamus Padraig , May 28, 2019 at 14:46
As a life-long protectionist, I always believed that our foolish dependence on imports
would ultimately end in tears, and it is now clear how right I was. Just to think: we could
have saved ourselves all this trouble and misery simply by voting down NAFTA and declining to
extend Most-Favored Nation trade status (as it used to be called) to China 25 years ago. But
now, putting our industry back on track is really gonna hurt. Pity …
Zhu , May 31, 2019 at 06:39
Any US reindustrialization is likely employ robots. The homeless will just keep on
increasing.
Godfree Roberts , May 28, 2019 at 12:29
“Europe could begin to replace the U.S. as a source of the foreign investment
capital China needs.”?
China is the leading recipient of FDI but its need for foreign capital is rapidly diminishing
and it is the world leader in IP
Zhu , May 31, 2019 at 06:40
A fair amount of foreign investment is laundered bribe money from China.
evelync , May 28, 2019 at 11:28
This trade war sounds dangerous – didn’t the Smoot Hawley tariffs precipitate
the great depression?
And the inevitable economic war (even if it is a faux war based on lies, driven by the
neocons) could well lead to a real war if we let it…..
I can’t help but secretly imagine that perhaps the retaliation that Patrick Lawrence
writes about – namely China’s shift to other trade partners – happens
smoothly and quickly enough to deprive our neocons of their super power resources to put an
end to what Charles Misfeldt in his comments refers to as Crooks, liars, thieves, cowards and
traitors running things…..errr ruining things.
I know that’s not the answer because it could be devastating too.
It’s up to the electorate to shift away from the ideologues, both neoliberal and
neocons.
But will we demand better government?
Most politicians in power have been too afraid to challenge the idea of
“exceptionalism” which is used to keep the primitive war machine going.
Thanks for the article and the interesting and informative comments….much
appreciated…
Jeff Harrison , May 28, 2019 at 11:19
But trade wars are easy to win! Our very smart cheeto-in-chief has told us. You
wouldn’t doubt him would you?
Actually, one wonders why anyone takes the US and its accusations seriously. Especially by
the European vassal states. Yes, your equipment/software will have a backdoor if the US wants
one there. That much is clear from the Snowden releases. And a Reuters report this morning
gives a hint at how it’s done. Huawei apparently is continuing to make the mistake of
sending things out via FedEx. Magically, two of the parcels wound up in the US without the
benefit of Huawei changing their shipping request. Huawei would never have known if they
hadn’t looked at the routing of the parcel after they got it. Hopefully, there
wasn’t any sensitive information in the documents routed to the US because it’s a
sure thing that the USG now has copies of them. Same for the European vassals. Angela
Merkel’s phone hacked. Electronic interception equipment installed on undersea
telephone cables. That’s before we get to the NSA office in all the telecoms spying on
us. Most of the world’s telecommunications run through the US. So, not only do we get
to listen in on a phone call from Paris to Des Moines, we get to listen in on one from Paris
to Shanghai.
And the European vassals continue to toe the American line albeit a bit more
reluctantly.
michael , May 28, 2019 at 11:15
The US has abdicated their manufacturing and innovative technologies, shutting down heavy
industry under Reagan and Bush I (replacing it with a “service economy”) while
outsourcing high end technology and offshoring technical jobs, initially to China mostly
under Clinton and Bush II.
Short-term profits soared with the cheaper labor, but giving away
high end technologies leading to innovations for China was resoundingly stupid. Chinagate was
(is) much more dangerous than Russiagate to National Security.
Having given away
America’s capabilities to China, no amount of negotiating will “level the playing
field” . We can no longer compete with China not because of labor costs, but because of
the improvements the Chinese have made in so many fields over twenty years, while America sat
stagnant (except of course for overpriced weapons and surveillance tools to watch American
citizens).
Zhu , May 31, 2019 at 06:47
The US has always imported its Einsteins and Teslas. We Americans are educated to be
cannon fodder in wars of vanity. At best, we’re educated to be Trump – Romney
style connivrrs and crooks.
Historically, when two hegemonic powers clash the result is always war. What we are
witnessing between Washington and Beijing today is no different. But Washington will not
allow China to ‘displace the US as the preeminent power in the western Pacific.’
The trade war will become world war. https://www.ghostsofhistory.wordpress.com/
does not have a valid certificate (Firefox warned me).
Charles Misfeldt , May 28, 2019 at 08:44
I look at this picture and see all the representative’s on America’s side of
the table are conservative scumbags who have no intention of engaging in behavior that
benefits myself or the majority in America. Crooks, liars, thieves, cowards and
traitors…
MichaelWme , May 28, 2019 at 06:55
“a spat so far limited to tariff increases”
Not quite. The US has announced that any Chinese person travelling outside of China can be
arrested, as it had Meng Wanzhou arrested in Canada for selling Huawei phones to Iranians.
China threatened to execute 3 Canadians in retaliation, so Canada released Ms Meng from
prison and put her under house arrest while the legal processes of extradition are now
thought to require many years.
China hasn’t executed the 3 Canadians, and Ms Meng is in
her C$20 million home, and is likely to remain there for the foreseeable future. What
happened to Ms Meng can happen to any Chinese executive who travels outside China to the EU
or the Americas or Japan.
E Wright , May 28, 2019 at 04:50
It’s tempting to conclude that tariffs and action against Huawei are part of the
same strategy. I don’t think they are. The tariffs are playing to Trump’s voter
gallery.
So long as the Chinese can find a way to save face AND give face to Trump,
compromise is possible. Huawei is about the Deep State being unable to access Huawei’s
facilities. Its a double bluff. The NSA etc (via 5 Eyes) have great access to western
controlled telecoms.
They don’t want to lose that access by allowing an outside
operator, so they accuse Huawei of what they are doing, on the assumption that Beijing does
what they do.
A January 2018 Bloomberg article suggests that Chinese officials may reduce their purchases
of U.S. government bonds. It is very unlikely that China can do so in any meaningful way
because doing so would almost certainly be costly for Beijing. And even if China took this
step, it would have either no impact or a positive impact on the U.S. economy.
China reduced its holdings of U.S. debt in March by about $20.5 billion, bringing its
overall ownership down to $1.12 trillion.
There was some more detailed coverage of this not long ago, probably on Strategic Culture.
China has largely stopped buying US treasuries for a few years now, and more recently has
been very slowly reducing its holdings. It has to recycle its US dollars from its exports to
the US somehow - instead of buying US treasuries and thereby funding the US military
encirclement of China, it is using them for infrastructure investments in Eurasia under BRI -
much of that is denominated in US dollars.
So that Carnegie Endowment crap is nothing but mindless bullshit propaganda*. No wonder
the US fails in everything it tries to do these days - these are the sort of idiots who
"advise" the US government what to do!!
As to that troll - B's advice is always this: Don't feed the trolls
* Disclaimer - I haven't read the troll's links, nor do I intend to.
Russia has largely eliminated its holdings of US treasuries. Many other countries have
also reduced their holdings, including several US allies (eg Japan, if I recall correctly).
Many countries in Eurasia now have huge gold reserves instead, which is a much better bet -
not just Russia and China but also Kazakhstan, for example.
China reduced its holdings of U.S. debt in March by about $20.5 billion, bringing its
overall ownership down to $1.12 trillion.
Those U.S. Treasuries fluctuations are very likely following trade movements rather
than political intentions. As commented before, China's enormous exports require large-scale
FX handling and USTs are the easiest way to do that.
It's not a credible political threat to sell those off, as the next wave of 'QE' money
printing is imminent and it will specifically target USTs (per Bloomberg article two days
ago, with projected Fed balance sheet to soon grow beyond the recent peak). In other words,
anything China might sell will be absorbed by the Federal Reserve with freshly printed money.
In the scheme of the money printing madness, another trillion USD is not a large
amount.
Why has Russia then sold their USTs? Probably for fear of being disconnected from the
SWIFT system and being stuck with worthless paper. In any case Russia's total divestment of
their entire UST stock didn't register in the ebb and flow of the market.
President Trump loves to blame China for the job losses that have devastated American
workers under globalization. But the truth is that Trump is blaming the wrong party. Trump's
reckless trade war against China is misguided and amounts to a colossal charade that will not
solve the actual problem.
Yes, it is true that numerous American manufacturing jobs have been shipped overseas to
China, thereby leaving American workers jobless and suffering. But China did not steal these
jobs.
No. These jobs were given to China. It was all legal and legitimate. China merely accepted
the gift.
What would anyone expect China to do? Accepting these jobs was a perfectly rational course
of action.
China was an underdeveloped nation with a large population of poor people willing to work
for a fraction of the hourly wages of American workers. And then corporations came along and
presented China with an attractive offer: We would like to build manufacturing plants in China
and hire droves of your unemployed people to work there. What was China supposed to do?
Naturally, China said yes.
This is hardly stealing.
Are You Tired Of The Lies And Non-Stop Propaganda?
It is true that these new jobs in China were intended to displace American workers. But does
that concern belong to China? Does China have the responsibility to care for the well-being of
American workers? Is China supposed to prioritize American workers over its own workers?
Of course not.
China is supposed to look out for itself and for its own workers, not for American workers.
Thus it was perfectly proper for China to allow the manufacturing plants to be built in China
and employ Chinese workers. China did not steal these jobs.
So if China is not at fault, then who is to blame for the devastation caused to American
workers?
The answer is plain to see, and it lies within our own shores. The fault belongs squarely
with corporate America.
It was corporate America that made these decisions. Corporate America decided to close their
American plants and open new plants in China. Corporate America decided to lay off multitudes
of American workers and ruin entire American communities.
And who profited from the destruction to American workers? It was the wealthy executives and
shareholders of American corporations. They earned millions of dollars for themselves by
cutting the costs of their workforce.
This is part of the larger trend of economic inequality that is eroding the entire middle
class in America. Wealth is being shifted away from the workers down below and transferred up
into the hands of the wealthy executives and shareholders at the top.
Trump blaming China is nonsense. China is not at fault. To be sure, China is hardly an angel
and indeed engages in improper trade practices. But even if China agreed to whatever
bone-headed demands Trump is seeking, the problem still would not be solved. The truth is that
America cannot possibly compete against China on labor costs. The standard of living is much
lower in China and thus Chinese workers are willing to accept wages far below living wages in
America. So corporate America will continue to transfer more and more jobs to China and
elsewhere. If we do not address this fundamental economic reality, then we will never solve the
problem.
Trump blaming China has an insidious aspect to it as well. Focusing all the ire upon China
is a grand misdirection that conceals the true culprit, namely, the super-rich corporate
executives and shareholders in America.
This is part of Trump's standard playbook. Trump falsely proclaims to be fighting for
blue-collar workers, when in truth, Trump acts entirely in favor of the rich at the top.
Surprisingly, this seems to work. Some of the hard-working Americans who are being crushed
by Trump's idiotic trade war and who should be denouncing Trump, nonetheless praise him for
standing up to China, believing that Trump is fighting for blue-collar jobs. It is painful to
witness such good people falling victim to Trump's despicable con job.
In order to actually save the middle class, we need to focus on the true cause of the
problem. We must direct our great powers of reform where they belong -- upon the wealthy
executives and shareholders of corporate America who caused this problem in the first
place.
The nature of the problem is that corporate America has no incentive to protect American
workers. In fact, corporate America has every incentive to harm American workers by shifting
their jobs overseas.
So the financial incentives must be reconfigured. If corporate America is going to ship
American jobs overseas, it must not be permitted to pocket all the profits themselves and leave
their displaced workers with nothing. Instead, corporations that send jobs offshore must be
required to sufficiently compensate their displaced American workers. Executives and
shareholders must not be permitted to enrich themselves unless and until their workers are
financially secure.
Our society must favor people over profits, not profits over people.
This article was
originally published by "
Salon " -
Amid the escalating economic war between the
US and China, discussions have intensified on how Beijing might stand up to the economic
power of America,
especially given that the global economy is increasingly dependent
on the US dollar as the main currency for international trade, and the closing of US markets
could do some serious damage to China's export-oriented companies. China's main foreign-policy
publication, the
Global Times
, points to three trump cards that Beijing could use
to at least level the playing field in its fight with the Trump administration and cause
appreciable harm to the US economy, possibly forcing its opponent to temporarily scale back
its ambitions.
According to an
article
in the
Global Times
by a professor at the Renmin University of China, the three
trump cards are:
1) banning the export of rare earths to the US;
2) blocking US companies' access to Chinese markets; and
3) using China's portfolio of US Treasury bonds to bring down the US government debt
market.
Each of these trump cards are worth looking at in detail,
both in terms
of their impact on the US economy and also in terms of any possible retaliation from the
US and the repercussions for the global economy as a whole.
Banning the export of rare earths to the US would actually be a pretty serious
blow for US electronics manufacturers and, indeed, US high-tech manufacturers generally.
This is because rare earths are a key raw material for the production of smartphones, various
chips, and other high-value-added products that are the biggest cash cows of US companies
such as Apple and Boeing.
President Donald Trump during a meeting with Chinese Vice Premier Liu He over trade
talks in the Oval Office, February 22, 2019
Reuters, an agency one could hardly accuse of sympathising with Beijing,
reports
: "The United States has again decided not to impose tariffs on rare earths and
other critical minerals from China, underscoring its reliance on the Asian nation for a
group of materials used in everything from consumer electronics to military equipment."
China does not exactly have a monopoly on such materials, but the market would
definitely be in short supply
without Chinese exports, with all the price implications
that would bring. Moreover, it is likely that some deficit positions will be impossible
to close no matter how much money is involved.
Not everything is that simple, however. Should such a ban be introduced, then
Beijing will encounter certain technical difficulties.
If sanctions are only imposed
on US companies, then they will still be able to purchase the necessary materials through
Japanese or European straw buyers, making the embargo pointless. But if China imposes a
total export ban, then it won't just be US companies that suffer but European ones as well,
leading to EU reprisals against Chinese exporters to Europe. This would be very painful
for China, especially given the economic war with the US that is making access to European
markets invaluable to the Chinese economy.
It appears that a ban on rare earth exports is a powerful weapon, but its use will require
the utmost delicacy and serious diplomatic efforts to avoid any extremely unpleasant side
effects.
The second trump card mentioned by the
Global Times
is blocking US
companies' access to the fast-growing and extensive Chinese market.
This should
be looked at from a political, rather than economic, point of view (although the latter
may seem logical). The aim of such restrictive measures is not to inflict unacceptable damage
on the US economy, but to make the full might of America's corporate lobbying machine work
against Donald Trump and support his political opponents.
According to
the S&P Dow Jones Indices, Asia only accounts for around 14 per cent of
the sales of S&P 500 companies. If we assume that China makes up the majority of this, then
not even a complete closure of the Chinese markets would be a disaster. There are a few
important details, however.
First,
China is the only (and final) market for sales growth for many US
companies.
So if China closes, the graphs at business presentations won't be
showing any kind of growth.
Second,
China plays a key role in many production chains that end with sales
in the US and other markets
. A loss of access to Chinese production would therefore
severely damage the competitiveness of American companies on the world (and even on
the US) market, especially if their European and Japanese competitors retain complete
access to China's production facilities.
As a result, the profits of US companies and the future of the American stock
market (which is a key political barometer given that many Americans have invested their
savings in shares) would be at risk.
It might be possible to offset these problems
by transferring production to other Asian countries with cheap labour and favourable terms,
but this couldn't be done quickly and it would be risky, given that Trump is waging trade
wars with everyone from the European Union to loyal US allies such as Japan and India. In
light of this,
US companies will have a huge incentive to prevent Trump from being elected
for a second term, and the lobbying and political capabilities of that part of the US corporate
sector that will suffer the most from this trump card could really play a key role in the
political victory of Trump's opponents.
The third trump card involves China dumping its portfolio of US Treasury bonds.
The
Global Times
writes: "China holds more than $1 trillion of US Treasury bonds.
China made a great contribution to stabilizing the US economy by buying US debt during the
financial crisis in 2008. The US would be miserable if China hits it when it is down." One
can conclude from this that
Beijing will most probably save dumping its portfolio
of US treasury bonds for dessert – in that it will have the biggest impact when the US stock
market is experiencing its next crisis.
China's Vice Premier Liu He (left) speaks during a meeting with President Donald
Trump (right) in the Oval Office of the White House on February 22, 2019
The move is not likely to cause catastrophic damage in and of itself (although the value
of US bonds will definitely fall), but if it is done at the moment when America is most
vulnerable, then China's portfolio may well end up being the straw that breaks the camel's
back.
Beijing is not displaying a particularly cocksure attitude.
As the
Global Times
' editor-in-chief quite rightly notes on
Twitter
:
"Most Chinese agree that the US is more powerful than China and Washington holds
initiative in the trade war. But we just don't want to cave in and we believe there
is no way the US can crush China. We are willing to bear some pain to give the US a
lesson."
As China lays its trump cards on the table, the world's globalised economy will
creak and collapse.
Globalisation is going backwards, and chances are we'll
end up with a completely different economic system that has more protectionism. Instead
of a global market, there will be several large regional markets with their own rules, dominant
currencies, technical standards, and financial systems.
Just as the US attack on Huawei is shortsighted
and will have serious consequences for USA,
the same would apply to China if they were to
reciprocate.
China wants to boost international
trade, not harm it, so they will work around
the bans to promote trade with others (long
term strategic play), not go head to head. I
suspect China may do something small just for
domestic optics, but the smart play is to let
the consequences of US actions play out on US
businesses, whilst boosting import substitution
and alternative supply chains.
I don't believe rare earth exports will be
banned (they may be restricted a bit as part
of a long term protection of domestic supply)
and I don't expect US Treasuries to be dumped
(buying at any scale had already ceased).
This isn't about backing one side over the
other - I just think one party is going to play
this smarter than the other.
This is a copy paste article. Why are all
these so called articles parrotting the same
line: Rare earth monopoly, whereas in
reality, they can' t even name the product
of dependency and how much it would cost to
find a different supplier.
If sanctions are only imposed on US
companies, then they will still be able to
purchase the necessary materials through
Japanese or European straw buyers, making
the embargo pointless. But if China imposes
a total export ban, then it won't just be US
companies that suffer but European ones as
well, leading to EU reprisals against
Chinese exporters to Europe. This would be
very painful for China, especially given the
economic war with the US that is making
access to European markets invaluable to the
Chinese economy.
If that is all the options they have,
they got nothing!
China watchers,
economists, and investors have been forming
battle-lines for years as they debate the
true strength and sustainability of China's
economy and its role as a global player.
Those of us that paint a picture of future
collapse and a day of reckoning are often
accused of spreading "doom-****" when we
claim that the Chinese have masked over
their dire situation by continually
expanding credit.
In January, Beijing injected a staggering
$685 billion in new credit into its
financial system and the money continues to
leak out causing assets to rise across the
globe. Today China continues to prop up the
unpropable, and yes, while no such word
exists, when it comes to China's economy it
should, for "unpropable" describes the
financial collapse that can only be
postponed but not stopped.
The article
below argues that this will have a major
impact in currency markets going forward.
Big Bad Wolf, 5G can wait, it's a luxury not
a necessity. Our networks run plenty fast
and, like Europe, we can pay higher prices
for a local workforce. China works due to
slave labor, if the people there wake up
they are done. That's why a complete
security state is necessary. Nip that
awareness in the bud. Now, go back to
Germany and celebrate Islam.
We'll just starve the rats out. China has
zero hold over us, there is nothing that
they make or export that cannot be
replaced. Will prices of some goods rise,
yes, but at the end of the day we don't need
them as much as they need us.
3 dumb cards. Strategical US dumb thinking.
US have a very short term strategy. That's
easy to understand. US will have elections
in 1.5 years and the campaign for election
is knocking at the door. China has a long
term strategy. China do not have elections.
Those US guys simply do not understand this.
rare earths (RE). Look at Russia. It
provides US with rocket engines and take
US cosmonauts to ISS. Why? To slower the
research. If Ru will not sale, the US
will accelerate the development of space
ships. So will do China with RE. They
will provide RE, maybe it will increase
the price a bit.
blocking US companies' access to
Chinese markets. Why you should do this?
China needs some US products which do
not have replacements or are protected
by IP laws. And to be clear. It is also
easier to import legally a product and
reverse engineer it, that to acquire it
illegal or spying in other countries
dumping US Treasury. Russia had far
more less US Treasury. They gradually
dump them not to interfere with the
market price. They do not want to loose
large amounts of money. But if China
sells all of them together US dollar may
crash and with it all China's financial
assets. What if US will print trillions
of dollars? US will loose, but also
China.
US is still the larger economy. Those
measures are affordable only if China is far
ahead of US. All this dumb cards will
backfire in less than 5 years. US sanctions
just showed the week points in China's
development. They will address them in order
to neutralize the effects. What should they
do? They have to look north and do what
Russia did. They will invest in software,
research, they will substitute the products.
They should just develop themselves
independent from US system. Also they will
gradually sale dollars and US Treasury.
1) banning the export of rare earths to the
US; (Hurts China exporters too)
2) blocking US companies' access to Chinese
markets; (US companies pull back US dollar
invested)
3) using China's portfolio of US Treasury
bonds to bring down the US government debt
market. (US buys back without a problem).
If China depends on this 3 matters, then it
has no Trump Cards,
President Xi's trade war is a threat, no
doubt. China's trade war against the United
States has resulted in hollowed out cities
where a once strong manufacturing sector
supported communities across the nation.
Have no illusions, this war that Xi is
waging against America is something that has
hurt us for thirty years and will likely
continue to do so. Best to fight back now
while we still can.
China will do none of these -- neoliberalism
is the reason. The key to imploding the
amerikan rat regime is to STOP buying
amerikan goods and especially services of
ANY kind...... much of the stuff is junk
anyway and can be replaced with far higher
quality goods and services available from
other states and nations.
Banning the export of rare earths to
the US....Not everything is that simple,
however. Should such a ban be
introduced, then Beijing will encounter
certain technical difficulties. If
sanctions are only imposed on US
companies, then they will still be able
to purchase the necessary materials
through Japanese or European straw
buyers, making the embargo pointless.
But if China imposes a total export ban,
then it won't just be US companies that
suffer but European ones as well,
leading to EU reprisals against Chinese
exporters to Europe. This would be very
painful for China, especially given the
economic war with the US that is making
access to European markets invaluable to
the Chinese economy.
Alternatively, China could impose quotas
on its exports to Japan and Europe based on
their current need of rare earth. It'll be
their prerogative if they want to re-export
to the US at (much higher) price. OR they
could use the US trademarked brute, thuggish
method of sanctioning those who dare to do
business with the US.
The second trump card mentioned by
the Global Times is blocking US
companies' access to the fast-growing
and extensive Chinese market. This
should be looked at from a political,
rather than economic, point of view
(although the latter may seem logical).
The aim of such restrictive measures is
not to inflict unacceptable damage on
the US economy, but to make the full
might of America's corporate lobbying
machine work against Donald Trump and
support his political opponents.
It takes more than corporate sponsorship
to get a presidential hopeful nominated.
It's really up to Deep State - the very same
Deep State that has allowed Trump launch and
take the trade war as far as he has now.
Trump's defeat in the poll would only
indicate Deep State's defeat in the trade
war with China. But the election of a new
president will not change the game. The
entire experience has left a bad taste in
China's mouth. They know about the shadow
government and no figure head will be able
to tame the angry dragon now. They could
demand the lasts of these corporations to
move and invest in China if they want access
to the 1.5 billion people's market. This
will facilitate more technology transfers or
the so-called "theft."
The third trump card involves China
dumping its portfolio of US Treasury
bonds. The Global Times writes: "China
holds more than $1 trillion of US
Treasury bonds. China made a great
contribution to stabilizing the US
economy by buying US debt during the
financial crisis in 2008. The US would
be miserable if China hits it when it is
down." One can conclude from this that
Beijing will most probably save dumping
its portfolio of US treasury bonds for
dessert – in that it will have the
biggest impact when the US stock market
is experiencing its next crisis.
Understanding that China may likely dump
their holdings, other nations (Japan, the
UK, Ireland, etc) might rush to dump theirs
before China gets the chance to have their
"dessert." Nobody wants to be left holding
the bag (of worthless treasury notes). So
it's not China's act of dumping that will
trigger the avalanche. It's the fear that
they might. So far, they are saying they
won't and giving no indication they would
for good reasons. They don't want to start
the panic now.
The Chinese have a fourth Trump
card..........stop doing business with the
U.S. all together. The U.S. does this with
Venezuela and it works very well at
collapsing the economy of the country.
The 5th option would be to get OPEC to stop
trading oil in dollars. Just that alone
would make the U.S. currency worthless, and
bring America to its knees. 9 of the
14 OPEC nations are already toying with the
idea of doing just that.
(Bloomberg) -- U.S. President Donald Trump's
decision to blacklist Huawei Technologies
Co. is making it more expensive to fatten up
China's seafood.
Futures on rapeseed meal,
which is used to feed China's massive
aquaculture industry, posted their longest
winning streak since October on expectations
supplies will tighten. The world's top fish
producer has stopped buying Canadian
rapeseed, also known as canola, for the
coming months -- a time when China usually
boosts purchases.
"There have so far been no purchases of
Canadian canola for arrival between April to
August," said Hou Xueling, an analyst at
Everbright Futures Co. That means "the bulls
could drive up prices to an unimaginable
level."
China, the largest buyer of Canadian
canola, typically increases imports from
April to August to make rapeseed meal. This
period is the peak demand season for its
fish farming sector, Hou said. The official
China National Grain and Oils Information
Center also confirmed that the Asian country
hasn't bought any Canadian canola for the
coming months.
The ongoing diplomatic spat after
Canada's arrest of Huawei's Chief Financial
Officer Meng Wanzhou late last year on a
U.S.
"I have been making this point for some time, that immigration leading to lower average
IQs, while bad, cannot logically lower scientific productivity because in absolute numbers
the talented fraction remains unaffected. There are still the same numbers of smart
people."
I wouldn't say that at all; or at least I would say the situation isn't quite what you may
think of it. Changing demographics* can certainly change economic/scientific/national policy,
perhaps disastrously so. Karlin's piece ends with an ominous reference to the Brazilian
president, but it just as easily might have been someone like America's AOC and her very
unwise 100% green energy in 10 years scheme. Changing demographics means more AOC's and more
turns at the economic disaster roulette wheel. In a democracy (or a representative republic),
it's easy for a lower IQ population to impose its disastrous ideas on the higher IQ former
majority; hence, the election of Hugo Chavez in Venezuela and the resultant economic
dysfunction.
In the future, not only will China produce quality scientific research, but efficiencies
conferred by its cultural and ethnic homogeneity may allow its corporations to out compete
American companies to a much greater degree than mere scientific discovery might otherwise
suggest. Additionally, China's economy will be so large that its companies will be able to
afford the massive R&D costs required for making ever more difficult discoveries. Their
smaller global competition likely won't be able to match spending, so China's corporations
could one day become far more dominant than you might anticipate. After all, it's really
about who can best exploit new discoveries and not just about who makes them first.
Otherwise, ancient China would have ruled the world; they invented paper, gunpowder, and the
compass.
Huawei was maybe 3% of the global smartphone market in Q4 of 2011 but it is set to pass
both Samsung and Apple in marketshare within the next five years. You see a bit of this
cultural/linguistic/ethnic homogeneity = efficiency phenomenon with the video game industry,
specifically in regards to competition between Sony and the much larger, but more
multicultural and less efficient Microsoft. Japan's Sony corporation dominates Microsoft in
sales just like their car companies dominate their American competition; GM was recently
chased out of Europe because it couldn't compete and none of these companies can sell
anything in Japan.
Also, notice that the EU core area has a white European population probably on par with
the white European-American population, but the US still has the greater share of scientific
discovery. I would posit this has much to do with the efficiency conferred by language
homogeneity in the United States (English) -- among other things. China in the future will
enjoy many of the same efficiencies the US has now, in terms of both language and culture.
And this is why India isn't as dynamic as some have predicted. Despite having a "smart
fraction", it is a low trust society deeply divided by color and class. Its leadership,
imposed by the lower IQ fraction, is also somewhat inept. The same fate awaits the United
States under current demographic trends.
*Has there been a single example of a global superpower in modern history that has lost
its ethnic majority but still retained functional status and prosperity over the long term?
Maybe Singapore (but they weren't a superpower), although I admittedly know little about that
country. Austria-Hungary? In any case, I would suspect the sample size here is far too small
to make any definitive prediction about the future of scientific discovery and resultant
economic success for the United States of America.
While the decision hasn't been made official, it was reported earlier this month by Canadian
military magazine Kanwa Asian Defense , which noted that Beijing won't just jump over to Linux
- and will instead develop their own over fears of US surveillance (and of course, in
retaliation for Huawei's blacklisting).
Thanks to the Snowden, Shadow Brokers, and Vault7 leaks, Beijing officials are well aware
of the US' hefty arsenal of hacking tools , available for anything from smart TVs to Linux
servers, and from routers to common desktop operating systems, such as Windows and Mac.
Since these leaks have revealed that the US can hack into almost anything, the Chinese
government's plan is to adopt a "security by obscurity" approach and run a custom operating
system that will make it harder for foreign threat actors -- mainly the US -- to spy on
Chinese military operations. -
ZDnet
The new OS will be developed by a newly established "Internet Security Information
Leadership Group" as reported by the
Epoch Times , citing Kanwa.
The group does not trust the "UNIX" multi-user, multi-stroke operating system either ,
which is used in some of the servers within the People's Liberation Army (PLA), Kanwa
reported. Therefore, Chinese authorities ordered to develop an operating system dedicated to
the Chinese military.
The group also believes that the German-developed programmable logic controller (PLC),
used in 70 percent of China's industrial control system today, poses huge risks to China's
national security . In its opinion, China is not a "network superpower," but merely a
"network giant," Kanwa reported. Therefore, Chinese authorities have laid out plans to
upgrade China's network -- to become more advanced in cyber technology. -
Epoch Times
Huawei, meanwhile, is dropping Android OS for its own operating system, code-named HongMeng.
It should be ready to launch in late 2019 domestically, and sometime in 2020 for international
markets, according to TechRadar .
Google announced on May 20 that it would partially cut off Huawei devices from using the
Android operating system, however the Mountain View - based company was given an extension
until August 19 by the White House. Other tech companies which have blacklisted Huawei include
Qualcomm, ARM, Micron and several tech industry standards organizations such as Bluetooth, SD
and WiFi alliances.
"Huawei knew this was coming and was preparing. The OS was ready in January 2018 and this
was our 'Plan B'. We did not want to bring the OS to the market as we had a strong relationship
with Google and others and did not want to ruin the relationship. Now, we are rolling it out
next month," said Huawei's Managing Director and VP of the Middle East Enterprise Business
Group.
The OS,
which could be called Ark OS when launched , is expected to be compatible with mobile
phones, computers, tablets, TVs, connected cars, smartwatch, smart wearables and others.
All applications that work with Android are expected to work with this new OS without any
need for further customization, Elshimy claims, adding that users will be able to download
apps from the Huawei AppGallery. - TechRadar
It is unknown whether apps available via Google's Play Store will be carried in Huawei's
store.
NEW HAVEN, Conn. (Project Syndicate) -- "When governments permit counterfeiting or copying
of American products, it is stealing our future, and it is no longer free trade." So said
President Ronald Reagan, commenting on Japan after the Plaza Accord was concluded in
September 1985.
Today resembles, in many respects, a remake of this 1980s movie, but with a
reality-television star replacing a Hollywood film star in the presidential leading role --
and with a new villain in place of Japan.
Back in the 1980s, Japan was portrayed as America's greatest economic threat -- not only
because of allegations of intellectual-property theft, but also because of concerns about
currency manipulation, state-sponsored industrial policy, a hollowing out of U.S.
manufacturing, and an outsize bilateral trade deficit.
In its standoff with the U.S., Japan ultimately blinked, but it paid a steep price for
doing so -- nearly three "lost" decades of economic stagnation and deflation. Today, the same
plot features China.
Notwithstanding both countries' objectionable mercantilism, Japan and China had something
else in common: They became victims of America's unfortunate habit of making others the
scapegoat for its own economic problems.
Like Japan bashing in the 1980s, China bashing today is an outgrowth of America's
increasingly insidious macroeconomic imbalances. In both cases, a dramatic shortfall in U.S.
domestic saving spawned large current-account and trade deficits, setting the stage for
battles, 30 years apart, with Asia's two economic giants.
Deficits made in America
When Reagan took office in January 1981, the net domestic saving rate stood at 7.8% of
national income, and the current account was basically balanced. Within two and a half years,
courtesy of Reagan's wildly popular tax cuts, the domestic saving rate had plunged to 3.7%,
and the current account and the merchandise trade balances swung into perpetual deficit.
In this important respect, America's so-called trade problem was very much of its own
making. Yet the Reagan administration was in denial. There was little or no appreciation of
the link between saving and trade imbalances. Instead, the blame was pinned on Japan, which
accounted for 42% of U.S. goods trade deficits in the first half of the 1980s.
Japan bashing then took on a life of its own with a wide range of grievances over unfair
and illegal trade practices. Leading the charge back then was a young deputy U.S. trade
representative named Robert Lighthizer. Fast-forward some 30 years and the similarities are
painfully evident.
Predictable decline in savings
Unlike Reagan, President Donald Trump did not inherit a U.S. economy with an ample
reservoir of saving. When Trump took office in January 2017, the net domestic saving rate was
just 3%, well below half the rate at the onset of the Reagan era. But, like his predecessor,
who waxed eloquently of a new "morning in America," Trump also opted for large tax cuts --
this time to "make America great again."
The U.S. national savings rate has fallen from 7.8% of GDP when Reagan took office to just
2.8% today. The result was a predictable widening of the federal budget deficit, which more
than offset the cyclical surge in private saving that normally accompanies a maturing
economic expansion. As a result, the net domestic saving rate actually edged down to 2.8% of
national income by late 2018, keeping America's international balances deep in the red --
with the current-account deficit at 2.6% of gross domestic product and the merchandise trade
gap at 4.5% in late 2018.
And that's where China assumes the role that Japan played in the 1980s. On the surface,
the threat seems more dire.
After all, China accounted for 48% of the U.S. merchandise trade deficit in 2018, compared
to Japan's 42% share in the first half of the 1980s. But the comparison is distorted by
global supply chains, which basically didn't exist in the 1980s.
Data from the OECD and the World Trade Organization suggest that about 35%-40% of the
bilateral U.S.-China trade deficit reflects inputs made outside of China but assembled and
shipped to the U.S. from China. That means the made-in-China portion of today's U.S. trade
deficit is actually smaller than Japan's share of the 1980s.
Like the Japan bashing of the 1980s, today's outbreak of China bashing has been
conveniently excised from America's broader macroeconomic context. That is a serious mistake.
Without raising national saving -- highly unlikely under the current U.S. budget trajectory
-- trade will simply be shifted away from China to America's other trading partners.
With this trade diversion likely to migrate to higher-cost platforms around the world,
American consumers will be hit with the functional equivalent of a tax hike.
Lighthizer as clueless today as he was then
Ironically, Trump has summoned the same Robert Lighthizer, veteran of the Japan trade
battles of the 1980s, to lead the charge against China. Unfortunately, Lighthizer seems as
clueless about the macro argument today as he was back then.
In both episodes, the U.S. was in denial, bordering on delusion.
Basking in the warm glow of untested supply-side economics -- especially the theory that
tax cuts would be self-financing -- the Reagan administration failed to appreciate the links
between mounting budget and trade deficits.
Today, the seductive power of low interest rates, coupled with the latest strain of voodoo
economics -- Modern Monetary Theory -- is equally alluring for the Trump administration and a
bipartisan consensus of China bashers in the Congress.
The tough macroeconomic constraints facing a saving-short U.S. economy are ignored for
good reason: there is no U.S. political constituency for reducing trade deficits by cutting
budget deficits and thereby boosting domestic saving.
America wants to have its cake and eat it, with a health-care system that swallows 18% of
its GDP, defense spending that exceeds the combined sum of the world's next seven largest
military budgets, and tax cuts that have reduced federal government revenue to 16.5% of GDP,
well below the 17.4% average of the past 50 years.
This remake of an old movie is disconcerting, to say the least. Once again, the U.S. has
found it far easier to bash others -- Japan then, China now -- than to live within its means.
This time, however, the movie might have a very different ending.
I use both. Up to Ubuntu with Mint. Plus Raspbian and Android.
But, for somethings, you can't beat Microsoft for ease of use and interoperability. I rip
and transcode my DVDs in Windows 7. I use Microsoft Office '13. Browse using Firefox, Thor
and Chrome. And I have some specific audio processing tools that only exist in Windows.
And if you are a Chinese military or other intelligence professional with access to a
"SIPR" class network it probably would be safe bet that US manufactured computer systems
and networking gear has been appropriately "modified" not to use those chipsets since long
before the "deal" of "deals" was made with the Yankee Dog ( http://www.911research.wtc7.net/wtc/groundzero/cleanup.html
) to send the remaining American technical manufacturing labor force out on the
street!...
Rinse and repeat for India's government intel and military professionals as well!....
Doesn't deal with the hardware back doors, but its a start. I do believe they have their own o/s already waiting after Kaspersky got banned a few years ago for finding both the hardware and s/w backdoors.
That hard disk firmware that called home was a classic.
Oh, yes. They're going to develop their own OS, just like Huawei. What ********. Huawei
will use vanilla android and China will pull an Apple, and rebrand Linux. But it sounds good,
to say you're going to crank out a brand new operating system, like it's a CRUD web app.
"... Since Apple gets 20% of its revenue from China and manufactures its iPhones (which generated 60% of its total 2018 revenue) there, few companies are as exposed to Beijing's retaliation. Apple has already been suffering in the region, seeing sliding revenue as consumers buy more phones from Huawei and other local brands. ..."
"... Citi warns that independent due diligence reveals " a less favorable brand image desire for iPhone and this has very recently deteriorated." As a result, Citi is materially lowering its sales and EPS estimates below consensus as China represents 18% of Apple sales "which we believe could be cut in half. " ..."
"Apple's iPhone, iPad, and Mac systems are at risk of experiencing demand
destruction due to collateral damage from the sales ban to Huawei."
U.S. companies such as Apple and Nike, which rely on China for a major part of their growth
and which have targets painted on their backs as Beijing and Washington ratchet up trade-war
tensions, are "bracing for China's retaliatory wrath" according to
Bloomberg
.
While Beijing has yet to formally retaliate after Trump blacklisted Huawei,
Chinese state media last week said China is "well armed to deliver counterpunches," without
giving specific details. And as companies await China's next move, there is rising, if
unwelcome, suspense over what form retaliation might take. Companies might "just have to
read the tea leaves on how their business operations are being treated,'' Erin Ennis, senior
vice president of the U.S.-China Business Council, said in an interview with Bloomberg
Television on Saturday.
As Bloomberg notes, one option China could use is from the 2017 "template" when relations
with South Korea deteriorated over Seoul's decision to deploy a missile shield. The
government curbed travel to South Korea, hurting cosmetics companies that rely on Chinese
tourists, while local authorities shut most of Lotte Shopping's China stores, alleging fire
safety violations. Consumers boycotted South Korean products, dealing a devastating blow to
Hyundai Motor sales. A similar pattern of action took place during the 2013 trade feud with
Japan which escalated over territorial disagreements in the East China Sea.
... ... ...
Since Apple gets 20% of its revenue from China and manufactures its iPhones (which generated 60% of its total 2018 revenue)
there, few companies are as exposed to Beijing's retaliation. Apple has already been suffering in the region, seeing sliding revenue
as consumers buy more phones from Huawei and other local brands. According to relatively optimistic research by Wedbush analyst Dan
Ives, blowback from Trump's Huawei ban could cost Apple about 3% to 5% of its iPhone sales in China.
... ... ...
Citi warns that independent due diligence reveals "
a less favorable brand image desire for iPhone and this has very
recently deteriorated."
As a result,
Citi is materially lowering its sales and EPS estimates below consensus as
China represents 18% of Apple sales "which we believe could be cut in half.
"
The article is devoid any technical substance and operated with value threat notion. As such this attempt of to spread FUD.
In this case the USA are fighting to preserve their technological edge by trying to destroy the leading China company which became a
competitor to domestic firms.
Control of Wi-Fi network is damaging to the targeted nation security. The question is: who would allow such a control? All
measures will be deployed against foreign powers exploitation.
But what about control of telecoms and putting NSA equipment directly in telecom data centers like the NSA practices
domestically and in vassal countries, for example, in Ukraine. And they manages to spy of Angela Merkel phone in Germany. Please
note that Germany is one of the most sophisticated technically nations in the world.
Notable quotes:
"... The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm's purchasing of U.S. technology. Google's parent, Alphabet, suspended some of its business with Huawei , Reuters reported. ..."
"... The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing's growing military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United States has accused China of widespread, state-sponsored hacking for strategic and commercial gain. ..."
"... "Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger," the company said in a statement in response to questions from Reuters. Such moves, it said, would only limit "customers in the U.S. to inferior and more expensive alternatives." ..."
n early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a
destructive digital war game.
The operatives – agents of the Australian Signals Directorate, the nation's top-secret eavesdropping agency – had been given a
challenge. With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment
installed in the 5G network, the next-generation mobile communications technology, of a target nation?
What the team found, say current and former government officials, was sobering for Australian security and political leaders: The
offensive potential of 5G was so great that if Australia were on the receiving end of such attacks, the country could be seriously
exposed. The understanding of how 5G could be exploited for spying and to sabotage critical infrastructure changed everything for
the Australians, according to people familiar with the deliberations.
Mike Burgess, the head of the signals directorate, recently explained why the security of fifth generation, or 5G, technology was so
important: It will be integral to the communications at the heart of a country's critical infrastructure - everything from electric
power to water supplies to sewage, he said in a March speech at a Sydney research institute.
Washington is widely seen as having taken the initiative in the global campaign against Huawei Technologies Co Ltd, a tech
juggernaut that in the three decades since its founding has become a pillar of Beijing's bid to expand its global influence. Yet
Reuters interviews with more than two dozen current and former Western officials show it was the Australians who led the way in
pressing for action on 5G; that the United States was initially slow to act; and that Britain and other European countries are
caught between security concerns and the competitive prices offered by Huawei.
The Australians had long harbored misgivings about Huawei in existing networks, but the 5G war game was a turning point. About six
months after the simulation began, the Australian government effectively banned Huawei, the world's largest maker of telecom
networking gear, from any involvement in its 5G plans. An Australian government spokeswoman declined to comment on the war game.
After the Australians shared their findings with U.S. leaders, other countries, including the United States, moved to restrict
Huawei.
The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the
use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm's
purchasing of U.S. technology. Google's parent, Alphabet,
suspended
some of its business with Huawei
, Reuters reported.
Until the middle of last year, the U.S. government largely "wasn't paying attention," said retired U.S. Marine Corps General James
Jones, who served as national security adviser to President Barack Obama. What spurred senior U.S. officials into action? A sudden
dawning of what 5G will bring, according to Jones.
"This has been a very, very fast-moving realization" in terms of understanding the technology, he said. "I think most people
were treating it as a kind of evolutionary step as opposed to a revolutionary step. And now that light has come on."
The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing's growing
military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul
that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United
States has accused China of widespread, state-sponsored hacking for strategic and commercial gain.
If Huawei gains a foothold in global 5G networks, Washington fears this will give Beijing an unprecedented opportunity to
attack critical infrastructure and compromise intelligence sharing with key allies. Senior Western security officials say
this could involve cyber attacks on public utilities, communication networks and key financial centers.
In any military clash, such attacks would amount to a dramatic change in the nature of war, inflicting economic harm and
disrupting civilian life far from the conflict without bullets, bombs or blockades. To be sure, China would also be
vulnerable to attacks from the U.S. and its allies. Beijing complained in a 2015 defense document, "China's Military
Strategy," that it has already been a victim of cyber-espionage, without identifying suspects. Documents from the National
Security Agency leaked by American whistleblower Edward Snowden showed that the United States hacked into Huawei's systems,
according to media reports. Reuters couldn't independently verify that such intrusions took place.
However, blocking Huawei is a huge challenge for Washington and its closest allies, particularly the other members of the
so-called Five Eyes intelligence-sharing group – Britain, Canada, Australia and New Zealand. From humble beginnings in the
1980s in the southern Chinese boom town of Shenzhen, Huawei has grown to become a technology giant that is deeply embedded
in global communications networks and poised to dominate 5G infrastructure. There are few global alternatives to Huawei,
which has financial muscle – the company reported revenue for 2018 jumped almost 20 percent to more than $100 billion – as
well as competitive technology and the political backing of Beijing.
"Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger," the company said in a
statement in response to questions from Reuters. Such moves, it said, would only limit "customers in the U.S. to inferior
and more expensive alternatives."
For countries that exclude Huawei there is a risk of retaliation from Beijing. Since Australia banned the company from its
5G networks last year, it has experienced disruption to its coal exports to China, including customs delays on the Chinese
side. In a statement, China's foreign ministry said it treated "all foreign coal equally" and that to assert "China has
banned the import of Australian coal does not accord with the facts."
Tension over Huawei is also exposing divisions in the Five Eyes group, which has been a foundation of the post-Second World
War Western security architecture. During a trip to London on May 8, U.S. Secretary of State Mike Pompeo issued a stark
warning to Britain, which has not ruled out using Huawei in its 5G networks. "Insufficient security will impede the United
States' ability to share certain information within trusted networks," he said. "This is exactly what China wants; they want
to divide Western alliances through bits and bytes, not bullets and bombs."
Chinese President Xi Jinping (left) is shown around the offices of Huawei in London by company founder Ren Zhengfei in 2015. Ren
has rejected allegations that Huawei would engage in espionage on behalf of the Chinese government. REUTERS/Matthew Lloyd/Pool
Employees work on a mobile phone production line at Huawei's factory campus in the southern Chinese city of Dongguan. Huawei has
eclipsed telecom equipment giants Ericsson and Nokia in terms of market share. REUTERS/Tyrone Siu
Huawei's 74-year old founder, Ren Zhengfei, is a former officer in China's military, the People's Liberation Army. "Mr. Ren
has always maintained the integrity and independence of Huawei," the company said. "We have never been asked to cooperate
with spying and we would refuse to do so under any circumstance."
In an interview with Reuters at the company's headquarters in Shenzhen, Eric Xu, a deputy chairman, said Huawei had not
allowed any government to install so-called backdoors in its equipment - illicit access that could enable espionage or
sabotage - and would never do so. He said 5G was more secure than earlier systems.
"China has not and will not demand companies or individuals use methods that run counter to local laws or via installing
'backdoors' to collect or provide the Chinese government with data, information or intelligence from home or abroad," the
Chinese foreign ministry said in a statement in response to questions from Reuters.
Washington argues that surreptitious backdoors aren't necessarily needed to wreak havoc in 5G systems. The systems will rely
heavily on software updates pushed out by equipment suppliers - and that access to the 5G network, says the United States,
potentially could be used to deploy malicious code.
So far, America hasn't publicly produced hard evidence that Huawei equipment has been used for spying.
Asked whether the United States was slow to react to potential threats posed by 5G, Robert Strayer, the State Department's
lead cyber policy diplomat, told Reuters that America had long been concerned about Chinese telecom companies, but that over
the past year, as 5G loomed closer, "we were starting to talk more and more with our allies." Banning Huawei from 5G
networks remains "an end goal," he said.
"... The sort of result that's to be expected from a Fire-Aim-Ready approach to policy making ..."
"... They're trying real hard to take a large company out of business without any evidence of said company doing anything wrong. Never even looked at them before but this definitely makes me want to get a Huawei phone next. And to stay well clear of everything from any US based company. ..."
"... Nothing here is really Huawei's fault - they're just the coincidental closest target to impact point of a greater trade war. All the posturing against Huawei specifically is just that - posturing. ..."
"... Basically it's because Mr. President is paranoid and somewhat crazy. A sane president would not be so childish, ..."
"... It's an empire in decline fighting the was for global supremacy, the democrats are just as crazy, not that I like Trump ..."
"... It's often said that wounded animals are the most dangerous. That's what this looks like to me. The US empire might be near dead, but one swipe of its huge tail can still break you if you get in the way. ..."
"... The US will never be as dominant as it was in the decades after WW II, but that was a one shot deal mainly because it had the only large industrial base that hadn't been blown to smithereens by the end of the war. ..."
"... Indeed. And how much have we heard about backdoors in Cisco and others here of late - it's a multiple, not a percentage. They all need a bit of pointing and laughing in a sense. IIRC, the telnet "backdoor" required one to be inside the LAN already...while the other baddies the Reg has reported on did not. ..."
No cybersecurity rules means networks are destined to be balkanized
... ... ...
One possible consequence, Steven Weber, professor of political science and international relations at UC Berkeley, told The Register
, is a world where boundaries are shaped more by technology standards than geographic features.
That is to say, we may be headed toward nationalized technology stacks that don't interoperate and nationalized supply chains.
This defeats the entire purpose of an open internet
... ... ...
Google has suspended Huawei's license to use its Android mobile operating system. The decision prevents the Chinese company from
adding Google services like Gmail, Google Maps, Play Store and other Google apps to new devices, though existing ones
will continue to function . It also complicates
security updates and all but guarantees Huawei will forge ahead with its rumored fork of the Android Open Source Project.
Microsoft has pulled the Huawei MateBook X Pro from its online store; Huawei devices are no longer available at BestBuy.com. At
Amazon.com, however, Huawei laptops, tablets and phones can still be had.
Huawei forward
Huawei could open up a branch company in the USA. Design, program, manufacture, and market those USA products as a USA company.
Nothing left to target.
Of course, still sending the profits home.
Re: Huawei forward
Also Chinese investors could buy a significant number of shares of US companies, making them suspect of Chinese affiliation, and
the US government will be faced with the dilemma of closing US companies. Re: Huawei forward
Trump conveniently forgets..
Anything that doesn't accord with his very, very limited world view. He also tends to forget which lies he told last time and
will happily contradict himself.. Re: Huawei forward
Unless the Chinese govt rolls over and declares Trump the winner of his trade war, apparently. If that happens, all the security
worries will blow away like a fart in the wind.
How does that work, exactly? Well, since Trump has never bothered to spell out what he wants the Chinese to do, he can declare
victory at any moment, but he wants a statement of surrender to show the faithful.
They're trying real hard to take a large company out of business without any evidence of said company doing anything wrong.
Never even looked at them before but this definitely makes me want to get a Huawei phone next. And to stay well clear of everything
from any US based company.
Nothing here is really Huawei's fault - they're just the coincidental closest target to impact point of a greater trade war.
All the posturing against Huawei specifically is just that - posturing.
But that's not the same as saying the greater trade war is without merit. It absolutely makes a difference how overall trade
between the US and China is structured, and a certain segment of our market has been saying for a long time that we had the short
end of the stick here and needed to change things. Even the El Reg author acknowledged that.
Of course it's much more complex to ask whether this tactic is actually going to fix anything, or just make things worse. Your
mileage may vary.
And I can imagine that if you are neither an American nor a Chinese citizen, then you don't really stand to gain anything from
this fight no matter who wins, so it's understandable if you're more frustrated than anything else. I don't blame anyone for not
wanting to jump into a fight that doesn't affect them - just remember that it does affect someone else.
It will be interesting to see what the Chinese targets are going to be. Probably GM and farmers since that hits Trump's base
- just as electioneering starts for 2020.
Then wait for Boeing to be really suffering from the 737Max before announcing a ban on Boeing in China (airbus manufacture there)
There is a lot of 'good ole boy' stuff that goes into every Airbus plane no matter where it is made so Trump could easily stop
Airbus from operating in China.
China could retaliate by treatening to start calling in all the US Debt that it carries. That will sink the DOW in a flash.
The Trump bubble will burst and he'll be impeached (well that's what I hope)
The Yuan could easily replace the USD as the world's currency.
Trump had better watch out or this will end badly for him. His grasp of history relating to trade wars can probably be measured
on a pinhead.
It's often said that wounded animals are the most dangerous. That's what this looks like to me. The US empire might be near
dead, but one swipe of its huge tail can still break you if you get in the way.
I seem to remember the same being said in the 80s when it was Japan that had the huge trade advantage over the US. Now granted
China is FAR larger and will easily overtake the US as world's largest economy without its per capita GDP needing to exceed 30%
of the US's, but like Japan did with its aging population China has some demographic challenges awaiting it when the parents of
the two "one child" generations reach retirement age, which is just beginning.
The US will never be as dominant as it was in the decades after WW II, but that was a one shot deal mainly because it had the
only large industrial base that hadn't been blown to smithereens by the end of the war.
Indeed. And how much have we heard about backdoors in Cisco and others here of late - it's a multiple, not a percentage. They
all need a bit of pointing and laughing in a sense. IIRC, the telnet "backdoor" required one to be inside the LAN already...while
the other baddies the Reg has reported on did not.
What makes the Huawei router telnet backdoor (now patched) unusual is that for 8 long years GCHQ has been code-reviewing Huawei
products in a dedicated department. Didn't that include routers?
Japanese CPU designer Arm has a facility in Austin, Texas, USA, that validates Arm-compatible and licensed chip designs for
customers around the world, including those in China, and thus is restricted by the White House's latest crackdown.
Moral of this story. Don't do business with the US, they will turn on you whenever it's financially beneficial for them and
unilaterally break deals, without any means for recourse.
An unreliable partner. Like any other bully, best to let them play in the sandbox by themselves.
What is interesting is that Huawei got some fundamental patents in connection to 5G, without licensing these patents there
will be no 5G role out, and Nokia and Ericsson are at least 1 year behind Huawei in development of 5G ...
This is political, and is being used by Trump to get China to move on the Trade agreement, which he want to "fix", but it might
end up causing the rollout of 5G to be delayed by years.
"What are the Chinese going to do - sue them in Federal court ?"
What could happen is that Huawei starts to sue every competitor, in every market the competitor sells in, whose competing products
use the components they're not allowed to use on the basis of unfair competition, illegal government subsidy or whatever fits
in the jurisdiction. There are a lot more courts around the world than Federal courts.
As if the US is goi g to honour those patents when it's no longer convenient.
International law is for everyone else, just look at the US' violations of the the Venezuan embassy in Washington and railroading
the UN's investigation into US war crimes.
We have a US govt that thinks that 'might makes right'. Literally the definition of a rogue state.
"The 'backdoor' that Bloomberg refers to is Telnet, which is a protocol that is commonly used by many vendors in the industry
for performing diagnostic functions. It would not have been accessible from the internet," said the telco in a statement to The Register,
adding: "Bloomberg is incorrect in saying that this 'could have given Huawei unauthorized access to the carrier's fixed-line network
in Italy'.
Remember it was Bloomberg that published the article about motherboards that were made in China having an extra chip that 'leaked'
stuff back to china.
Apple and Supermicro were the main targets (amongst others).
Both companies undertook extensive investigations and found no evidence of these chips.
Despite repeated appeals Bloomberg refused to relase their evidence to the world.
To me this implies that it was a bit of fiction designed to make certain stocks go down so that shorters could make a killing.
People may take it for granted that their 'phones work everywhere but it was not ever thus. I used to have to borrow a tri-band
'phone for visits to the US. My normal mobile worked everywhere except the US. Later on I had the same problem with South Korea.
There was a time (back in the analogue TV days) when a TV bought in one European country wouldn't work in many of the others.
Digital TV is based on common underlying compression standards. (Although, even here there is scope for creating artificial incompatibilities.)
Unfortunately there is no common transmission standard, although DVB satellite transmission schemes are fairly widely adopted.
People can now move almost anywhere in the world reasonably cheaply. Some of their gadgets are useless outside their home country.
Many of these problems are caused by "special interest groups", manufacturer inspired protectionism and plain political stupidity.
People can now move almost anywhere in the world reasonably cheaply. Some of their gadgets are useless outside their home
country.
Many outside electrical gadgets have problems in the USA. They use a different voltage and AC frequency from that used by developed
countries. Happily, that means that their stuff doesn't work outside the "land of the fee".
The Trump administration has started a trade war with China, which has responded in kind. Trade wars eventually come to an
end even if it takes a long time. The "Cold War" with the Soviet Union was carried out as both an arms race, and a trade war and
while that took 45 years to conclude, it did end.
Masking the US/China trade war as a security issue doesn't work very well. Threatening to stop the sale of mobile phones using
a US designed open source operating system because of concerns about security holes in a yet to be rolled out 5g core network
is a weak argument. If there are 5G issues, why not 4G?. Where is the evidence, given that Huawei have set up a joint venture
with GCHQ to examine the core network software.? Is this another "Weapons of Mass Destruction" report where we are asked to believe
without evidence. We all ended up with egg on our collective faces then. Tony Blair's reputation was, and still is, trashed. May's
reputation could similarly ............ (Ok, I concede that would be a stretch!)
The weakest part of the argument is that it denies itself a way out when the trade war ends (or is suspended). Donald and Xi
could come to a truce tomorrow (a beautiful victory?) but that would leave the declared security issues unresolved. If the US
removes the trade ban on Huawei surely they will be letting Chinese spying tools into strategic national networks. What about
the mobile phones?. They are said to be a security risk now because the US (parroted by 5 eyes) says so. That won't magically
disappear because the US and China come to an agreement on steel imports. Will the UK and other countries who have followed the
lead of the US similarly change track when the US and China make up. ?
We are following our special relationship partners down a deep rabbit hole based on the assertions of some highly suspect political
operators.
Well said. Much of this problem is due to the deregulation of Corporate financials. I'm not a finance person so am not sure
that's the correct term. What I'm talking about is at the time of globalization/free trade when RRSPs were allowed to participate
in corporate stock outside of national scope. Such was the case in Canada at the time. Since then, these corporations outsource
as much work as possible to developing economies to reduce cost and most no longer have any R&D worth mentioning, all in the name
of increasing profit for the Ponzi/Pyramid scheme that is the deregulated stock market and that is effect of changing the corporate
tax burden. Since the late 1970s corporations have been able to increasingly buy their own taxation system, it seems. The more
regulated, or in authoritarian regimes financially controlled, corporations still seem to have effective R&D.
The above boils down to the populace having been duped by bad faith politicians. As much I don't like Trump and his crazy train
this all started a long time before him.
Actually, the politicians themselves were duped by the bad faith bankers and in general people who got compensated in options.
It can even look like good intentions.
The deregulation that allowed for evil things like CDS (being able to buy fire insurance on your neighbor's house...without
his knowledge, and even get a can of gasoline in the deal) - was sold as a way to make getting loans easier for minorities so
they could buy homes and have a stake in society - a good thing that would result in less crime and violence and more self-policing.
What it actually was is more interesting - in the insurance biz it's illegal to sell insurance to other than the entity directly
involved, and there are also regulations that the insurance company has to keep the buck to pay claims in hand - this was all
missing from the Frank-Clinton removal of Glass Steagall.
The road to hell is indeed paved with good intentions, or at least can be sold as such.
In hindsight, we know that some of the financialization tech new instruments invented as a result by Blythe Masters of JP Morgan
and some others developed in the City of London turned out to be "weapons of financial mass destruction".
There was plenty of blame to go around (in this case the left side of the aisle started the ball rolling, but...no one was
at all innocent). From the banks making loans that were obviously never going to be paid off - no need to care as now Goldman
Sachs, AIG, JP Morgan, and of course Deutsche bank were standing there buying the loans to sell tranches at a profit - to the
people taking those loans, to the people buying the tranches of them....
If so I think it is time for China to take Taiwan back.
That wouldn't the US modus operandus. There'd need to be a false flag operation like the USS Liberty (but done without exposing
it's actually a false flag.
USS Liberty a false flag operation - ahh setting up a US intelligence vessel to be shot up by the Israelis. How did rhapsody
work or were they hit by US aircraft in disguise?
Wow. The Americans have certainly let their paranoia show immensely
But this move of what they have done is bassically similar to what the USA were claiming Huawei and China could do shutting
off 5G services because of their kit
America certainty have a paranoid schizophrenia mental illness building
"Are you now or were you ever a member of the Communist party" questions of the 1950's. The reds under every bed paranoia of
that age is alive and kicking.
Yeah, I had to answer that one for a security clearance in the '70's myself. One wonders how Brennan, Chief of CIA for the
previous admin, was an avowed communist yet still managed to get that job?
His role in the current thrashing is interesting to say the least.
Brennan is not an "avowed communist". That lie came about based on the fact that he voted for Gus Hall, the Communist Party
presidential candidate in 1976. There is no evidence that Brennan himself was ever a member of the Communist Party or even that
his political viewpoint is communist generally.
But that his political enemies consider calling him a communist to be an effective attack says a lot about American paranoia.
Ok: Trump is a nasty, corrupt, ignorant child and his motivations in this are probably as petty and wrong as is ever the case.
And you can't ignore the fact that this is happening in the context of a wider trade war, which, while it may have some logical
underpinnings (China does steal and cheat on a an epic scale) is also contaminated by the Orange Idiot's floundeing incompetence
and wayward spite.
So I am no apologist for Trump or his toxically incompetent administration: it may actually be almost as vile as the Chinese
regime at this point in time.
But the fact that the attack on Huawei is being mounted by people who are stupid, ignorant and explicitly odious doesn't mean
it is the wrong thing to do.
I've said before that it is irrelevant whether Huawei has been caught producing dodgy hard- or software and I have framed my
point in terms of capabilities and intentions: emphasising that capabilities are what count here.
It's simply this: China has an authoritarian, undemocratic, repressive, ofttimes murderous regime; it ruthlessly oppresses
minorities among its citizens; practises draconian censorship; has shown every sign of territorial aggressiveness and growing
military adventurism; is building up its armed forces at a worrying rate; is becoming ever wealthier and more powerful; and has
the ability both in technological know-how and in industrial capacity to supply a sizeable fraction of the free world's communications
and computing infrastructure. With no checks or balances or transparency, the Chinese state could compel any of its companies
to do whatever it wishes ("Make this happen for us, and keep your mouths shut about it, or next month you will be executed for
corruption"), and every aspect of its behaviour in the last 20 years proves that it will use technology -- a wonderful equaliser
in the world of asymmetric warfare -- for its own ends, lying, stealing and cheating at every turn. I don't see how this is even
a controversial statement by this point.
So the question is not what China intends, but what it can do, and this ought to worry us very badly. Given everything
we know of China's government, it would be suicidally stupid to gift it with power, influence or any kind of entry into
our just-about-free societies.
As the west wakes up to the threat of China, actual conflict becomes ever more likely (I would personally suggest, inevitable,
unless regime change occurs, which seems most improbable). China will become ever more strongly motivated to resort to technological
sabotage and espionage. Right now we don't want China stealing data on our (for example) nuclear submarine fleet. If it comes
to conflict, we don't want them bricking those boats while they're still dockside.
So Huawei is just the start. China certainly could use its companies for malign ends: so we must act protectively, as if it
is doing so, and will do so in the future.
"So the question is not what China intends, but what it can do"
This goes against pretty much every standard the Western world stands for. China COULD compel Huawei to put in backdoors. But
then again Huawei kit is probably the most closely-studied kit in the world, and it is trivially easy to compare firmware releases
to make sure that the kit you have is running the same version as a trusted reference version. It might be more difficult to check
that the hardware you get isn't a one-off specially modified version instead of the standard one, but the organisations likely
to be targeted in this way are either big enough to have the resources for deep checks or would not be buying Huawei kit anyway.
For the vast majority of commercial customers and 100% of retail customers, having eg GCHQ check out the kit is a perfectly
acceptable safeguard, indeed one which they do not even get from other vendors' kit (eg Cisco) which might be backdoored with
other countries' spying malware.
A, buy kit from china and check it for backdoors, weaknesses, vulnerabilities.
C, buy kit from a company HQ in Finland (but with chips made all over the world) and don't bother checking for any flaws, vulnerabilities
etc but trust it implicitly cos Finns are really nice people.
And therein is the problem. It is not pres Trump, he is only supporting the US 3 letter agencies and they are the ones with
the big problem. Their problem is that they want to put backdoors in Huawei networking equipment but if they do that it
means that the Chinese government will have samples of the US spying software and there is the big problem. The 3 letter agencies
can only see one way out of that and it is banning Huawei equipment, in their eyes that makes the problem go away and leaves their
spying on the population as normal using the so called American equipment.;
"deal with longstanding issues like government favoritism toward local companies"
How is it that that can be a point of contention ? Name me one country in this world that doesn't favor local companies.
These people company representatives who are complaining about local favoritism would be howling like wolves
if Huawei was given favor in the US over any one of them.
I'm not saying that there are no reasons to be unhappy about business with China, but that is not one of them.
Here's the problem. Lets say the sake of argument Huawei is not guilty of
putting spyware in their 5G stuff. How would they prove it? They basically given out there
source code, and apart from such slack security features nothing was found, but that was
apparently no enough.
Apart from proving a negative there is nothing they can do. I'm not saying that China is not
a repressive regime, but to be honest I don't think they have the resources to filter out the
juicy bits of the 5G traffic, and have enough on their hands just monitoring their internal
massive population without having to take on the US as well. And why should they, since the NSA
is already doing such a great job of it already.
The problem is that the great Orange one and is motley collection of right wing hawks are
thinking that is what i would do in China's place and getting themselves lathered up in a right
wing frenzy where they see reds under every bed.
If China was smart (and they are), what they should do is announce that all Apple phones are
banned in China and all Chinese companies are not allowed to do business with Apple, until
Apple can prove they do not provide back doors for the US government in their equipment. I
wonder what effect a 10% drop in apple share price and all those pension funds that depend on
them will have
..and we're all going to be poorer for it. Americans, Chinese and bystanders.
I was recently watching the WW1 channel on youtube (awesome thing, go Indy and team!) - the
delusion, lack of situational understanding and short sightedness underscoring the actions of
the main actors that started the Great War can certainly be paralleled to the situation
here.
The very idea that you can manage to send China 40 years back in time with no harm on your
side is bonkers.
"... The ban might actually provide a bit of a boost to other software developers, if it prompts users to look beyond the Google offerings that came with their phone and seek out some alternatives. In most cases, the alternatives are far better. ..."
Currently everybody else is losing. Forcing other countries (supposedly friends and
allies) to abandon equipment of one manufacturer for that of your own company is not very
nice and for us quite expensive. And that is not even factoring in the known fact that some
of these manufacturers had backdoors in their equipment - for which actual proof exists. So
considering our own national security we should forbid companies to do business with e.g.
Cisco...
Powerful is not the same as lawful, no matter what those in positions of power might claim
or like to imagine.
Is this a distinction worth making? Yes, because otherwise law enforcement officers come
to think that their word is law, and that they are themselves above the law. The result of
that is a police state.
Probably true. Huawei are probably just collateral damage in the inevitable socio-economic
conflict between the US and China. The US is used to running the world (not especially well
if you ask me). China with four times the population and an economy about the same size as
the US that is growing much faster doesn't actually seem to have that much interest in
running the world. But since the US is run by folks with no principles, poor memories, few
useful skills,and no planning ability whatsoever, I have to guess that the Chinese will "win"
in the long run.
Pretty irritating that Huawei is simply leverage while the US and China thrash out a trade
deal.
I have a Mate 10 Pro and the best phone I've had, was planning to go for the Mate 30 Pro
when it comes out.
Reckon I still will, I've already been reducing dependence on Google before this happened
anyway. I'll have to shift my business email over to ProtonMail like I already do with my
personal accounts. I'm trying out OSM instead of gmaps. I've already ditched gplay music.
Just need Proton calendar which is in development and that's another service binned off.
Not sure what's going to happen with apps I've bought through Google and have active subs
though...
The problem isn't the apps you use, there certainly are equivalents of the Google ones.
But they still mostly rely on the Google Play API to interface with your phones devices and
storage mechanisms. OSM is a pretty good replacement for gmaps, but will be of little use
without Google Location Services.
Will the ban actually prevent anyone using a Huawei device from accessing a Google service
(eg. Gmail) or just prevent them from downloading the official Google apps to do so? I
suspect the latter as the first would seem impossible to police. In which case there are
better alternatives out there.
The ban might actually provide a bit of a boost to other software developers, if it
prompts users to look beyond the Google offerings that came with their phone and seek out
some alternatives. In most cases, the alternatives are far better.
For email, try AquaMail. Easily handles my many email addresses split across Gmail, own
domains using Google's mailservers, Yandex and own domains using Yandex's mailservers.
OSMAnd+ provides as good mapping as Google Maps (better in remote and off-road areas), is
much more customiseable and you can download entire country maps to your phone, without
pissing about with Google Maps's silly area selection download. And its navigation is pretty
decent, lthough it lacks the Googley stuff like weather and nearest junk food shop
listings.
Wire is an encrypted messaging/video-calling/VOIP app, offering everything Hangouts (or
whatever Google's offering is called this week) does.
Yandex browser or Kiwi browser are Chrome but with added support for extensions
PulseSMS is text messaging with built in backup and the ability to send and receive SMS
through your phone from your laptop.
You can put backdoor in the router. The problem is that you will never be able to access it.
also for improtant deployment countires inpect the source code of firmware. USA is playing dirty
games here., no matter whether Chinese are right or wrong.
They're not necessarily silos. If you design a network as a flat space with all interactions
peer to peer then you have set yourself the problem of ensuring all nodes on that network are
secure and enforcing traffic rules equally on each node. This is impractical -- its not that if
couldn't be done but its a huge waste of resources. A more practical strategy is to layer the
network, providing choke points where traffic can be monitored and managed. We currently do
this with firewalls and demilitarized zones, the goal being normally to prevent unwanted
traffic coming in (although it can be used to monitor and control traffic going out). This has
nothing to do with incompatible standards.
I'm not sure about the rest of the FUD in this article. Yes, its all very complicated. But
just as we have to know how to layer our networks we also know how to manage our information.
For example, anyone who as a smartphone that they co-mingle sensitive data and public access
on, relying on the integrity of its software to keep everything separate, is just plain asking
for trouble. Quite apart from the risk of data leakage between applications its a portable
device that can get lost, stolen or confiscated (and duplicated.....). Use common sense. Manage
your data.
"... The real issue is the semiconductors - the actual silicon. ..."
"... China has some fabs now, but far too few to handle even just their internal demand - and tech export restrictions have long kept their leading edge capabilities significantly behind the cutting edge. ..."
"... On the flip side: Foxconn, Huawei et al are so ubiquitous in the electronics global supply chain that US retail tech companies - specifically Apple - are going to be severely affected, or at least extremely vulnerable to being pushed forward as a hostage. ..."
Internet, phones, Android aren't the issue - except if the US is able to push China out of
GSM/ITU.
The real issue is the semiconductors - the actual silicon.
The majority of raw silicon wafers as well as the finished chips are created in the US or
its most aligned allies: Japan, Taiwan. The dominant manufacturers of semiconductor equipment
are also largely US with some Japanese and EU suppliers.
If Fabs can't sell to China, regardless of who actually paid to manufacture the chips,
because Applied Materials has been banned from any business related to China, this is pretty
severe for 5-10 years until the Chinese can ramp up their capacity.
China has some fabs now, but far too few to handle even just their internal demand - and
tech export restrictions have long kept their leading edge capabilities significantly behind
the cutting edge.
On the flip side: Foxconn, Huawei et al are so ubiquitous in the electronics global supply
chain that US retail tech companies - specifically Apple - are going to be severely affected,
or at least extremely vulnerable to being pushed forward as a hostage.
"... The British aerospace sector (not to be confused with the company of a similar name but more Capital Letters) developed, amongst other things, the all-flying tailplane, successful jet-powered VTOL flight, noise-and drag-reducing rotor blades and the no-tailrotor systems and were promised all sorts of crunchy goodness if we shared it with our wonderful friends across the Atlantic. ..."
"... We shared and the Americans shafted us. Again. And again. And now *they* are bleating about people not respecting Intellectual Property Rights? ..."
"Without saying so publicly, they're glad there's finally some effort to deal with longstanding issues
like government favoritism toward local companies, intellectual property theft, and forced technology
transfers."
The British aerospace sector (not to be confused with the company of a similar name but more Capital
Letters) developed, amongst other things, the all-flying tailplane, successful jet-powered VTOL flight,
noise-and drag-reducing rotor blades and the no-tailrotor systems and were promised all sorts of crunchy
goodness if we shared it with our wonderful friends across the Atlantic.
We shared and the Americans shafted us. Again. And again. And now *they* are bleating about people not
respecting Intellectual Property Rights?
And as for moaning about backdoors in Chinese kit, who do Cisco et al report to again? Oh yeah, those
nice Three Letter Acronym people loitering in Washington and Langley...
A claimed deliberate spying "backdoor" in Huawei routers used in the core of Vodafone
Italy's 3G network was, in fact, a Telnet -based remote debug interface.
The Bloomberg financial newswire reported this morning that Vodafone had found
"vulnerabilities going back years with equipment supplied by Shenzhen-based Huawei for the
carrier's Italian business".
"Europe's biggest phone company identified hidden backdoors in the software that could have
given Huawei unauthorized access to the carrier's fixed-line network in Italy,"
wailed the newswire.
Unfortunately for Bloomberg, Vodafone had a far less alarming explanation for the deliberate
secret "backdoor" – a run-of-the-mill LAN-facing diagnostic service, albeit a hardcoded
undocumented one.
"The 'backdoor' that Bloomberg refers to is Telnet, which is a protocol that is commonly
used by many vendors in the industry for performing diagnostic functions. It would not have
been accessible from the internet," said the telco in a statement to The Register ,
adding: "Bloomberg is incorrect in saying that this 'could have given Huawei unauthorized
access to the carrier's fixed-line network in Italy'.
"This was nothing more than a failure to remove a diagnostic function after
development."
It added the Telnet service was found during an audit, which means it can't have been that
secret or hidden: "The issues were identified by independent security testing, initiated by
Vodafone as part of our routine security measures, and fixed at the time by Huawei."
Huawei itself told us: "We were made aware of historical vulnerabilities in 2011 and 2012
and they were addressed at the time. Software vulnerabilities are an industry-wide challenge.
Like every ICT vendor we have a well-established public notification and patching process, and
when a vulnerability is identified we work closely with our partners to take the appropriate
corrective action."
Prior to removing the Telnet server, Huawei was said to have insisted in 2011 on using the
diagnostic service to configure and test the network devices. Bloomberg reported, citing a
leaked internal memo from then-Vodafone CISO Bryan Littlefair, that the Chinese manufacturer
thus refused to completely disable the service at first:
Vodafone said Huawei then refused
to fully remove the backdoor, citing a manufacturing requirement. Huawei said it needed the
Telnet service to configure device information and conduct tests including on Wi-Fi, and
offered to disable the service after taking those steps, according to the document.
El Reg understands that while Huawei indeed resisted removing the Telnet
functionality from the affected items – broadband network gateways in the core of
Vodafone Italy's 3G network – this was done to the satisfaction of all involved parties
by the end of 2011, with another network-level product de-Telnet-ised in 2012.
Broadband network gateways in 3G UMTS mobile networks are described in technical detail in
this Cisco (sorry)
PDF . The devices are also known as Broadband Remote Access Servers and sit at the edge of
a network operator's core.
Plenty of other things (cough, cough, Cisco) to panic about
Characterising this sort of Telnet service as a covert backdoor for government spies is a
bit like describing your catflap as an access portal that allows multiple species to pass
unhindered through a critical home security layer. In other words, massively over-egging the
pudding.
Many Reg readers won't need it explaining, but Telnet is a routinely used method of
connecting to remote devices for management purposes. When deployed with appropriate security
and authentication controls in place, it can be very useful. In Huawei's case, the Telnet
service wasn't facing the public internet, and was used to set up and test devices.
Look, it's not great that this was hardcoded into the equipment and undocumented – it
was, after all, declared a security risk – and had to be removed after some pressure.
However, it's not quite the hidden deliberate espionage backdoor for Beijing that some
fear.
Twitter-enabled infoseccer Kevin Beaumont also shared his thoughts on the story,
highlighting the number of vulns in equipment from Huawei competitor Cisco, a US firm:
For example, a pretty bad remote access hole was discovered in some Cisco
gear , which the mainstream press didn't seem too fussed about. Ditto hardcoded root
logins in Cisco video surveillance boxes. Lots of things unfortunately ship with insecure
remote access that ought to be removed; it's not evidence of a secret backdoor for state
spies.
Given Bloomberg's previous history of trying to break tech news, when it claimed that tiny
spy chips were being secretly planted on
Supermicro server motherboards – something that left the rest of the tech world
scratching its collective head once the initial dust had settled – it may be best to take
this latest revelation with a pinch of salt. Telnet wasn't even mentioned in
the latest report from the UK's Huawei Cyber Security Evaluation Centre, which savaged
Huawei's pisspoor software development practices.
While there is ample evidence in the public domain that Huawei is doing badly on the
basics of secure software development, so far there has been little that tends to show it
deliberately implements hidden espionage backdoors. Rhetoric from the US alleging Huawei is a
threat to national security seems to be having the opposite effect around the world.
With Bloomberg, an American company, characterising Vodafone's use of Huawei equipment as
"defiance" showing "that countries across Europe are willing to risk rankling the US in the
name of 5G preparedness," it appears that the US-Euro-China divide on 5G technology suppliers
isn't closing up any time soon. ®
Bootnote
This isn't shaping up to be a good week for Bloomberg. Only yesterday High Court judge Mr
Justice Nicklin
ordered the company to pay up £25k for the way it reported a live and ongoing
criminal investigation.
"... The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will have to obtain a licence from the US government to sell technology to Huawei. At the same time, US president Donald Trump signed an executive order declaring the US telecoms sector faced a "national emergency" -- giving the commerce department the power to "prohibit transactions posing an unacceptable risk" to national security . ..."
"... "The US has basically openly declared it is willing to engage in a full-fledged technology war with China," he said. ..."
"... Huawei has few alternatives for critical semiconductors to Qualcomm, which would likely be denied an export license if the US follows through on its threat of putting Huawei on the "Entity List" (the second most stringent category, but still sufficient for the US to bar licensing). One is Murata, but Japan has joined the US ban on Huawei 5G products, and would presumably fall in line if the US were to ask Japan to tell Murata not to sell semiconductors to Huawei. ..."
"... On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety. One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the latter has white pilots with nice Irish accents)." ..."
"... Chinese interests have made large investments many countries in Africa, so it's conceivable it could get other countries on the continent to follow its lead. Admittedly, China plus those countries collectively may not be large enough to do considerable damage to Boeing. But this action would break the hegemony of the FAA as certifier for US manufacturers, and that could prove crippling in the long run. ..."
The White House and US Department of Commerce took steps on Wednesday night that would in effect ban Huawei from selling technology
into the American market, and could also prevent it from buying semiconductors from suppliers including Qualcomm in the US that are
crucial for its production .
The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will
have to obtain a licence from the US government to sell technology to Huawei. At the same time, US president Donald Trump signed
an executive order declaring the US telecoms sector faced a "national emergency" -- giving the commerce department the power to "prohibit
transactions posing an unacceptable risk" to national security .
Paul Triolo, a technology policy expert at Eurasia Group, a risk consultancy, said it was a "huge development" that would not
only hurt the Chinese company but also have an impact on global supply chains involving US companies such as Intel, Microsoft and
Oracle.
"The US has basically openly declared it is willing to engage in a full-fledged technology war with China," he said.
Huawei has few alternatives for critical semiconductors to Qualcomm, which would likely be denied an export license if the
US follows through on its threat of putting Huawei on the "Entity List" (the second most stringent category, but still sufficient
for the US to bar licensing). One is Murata, but Japan has joined the US ban on Huawei 5G products, and would presumably fall in
line if the US were to ask Japan to tell Murata not to sell semiconductors to Huawei.
The advantages of China going after Boeing, as opposed to making life miserable for US technology companies, would be considerable.
Targeting, say, Microsoft would be an obvious tit for tat. By contrast, China was the first country to ground the 737 Max, and its
judgment was confirmed by other airline regulators and eventually the FAA. China does not have a credible competitor to Boeing, so
it could wrap continued denial of certification of the 737 Max in the mantle of being pro-safety, even if independent parties suspected
this was a secondary motive.
On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely
seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety.
One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the
latter has white pilots with nice Irish accents)."
Chinese interests have made large investments many countries in Africa, so it's conceivable it could get other countries on
the continent to follow its lead. Admittedly, China plus those countries collectively may not be large enough to do considerable
damage to Boeing. But this action would break the hegemony of the FAA as certifier for US manufacturers, and that could prove crippling
in the long run.
Another issue that hasn't gotten the attention it warrants is that Boeing appears to lack the stringent software development protocols
necessary for "fly by wire" operations. Boeing historically has relied on pilots being able to reassert control over automated functions';
Airbus has "fly by wire" systems as far more prominent and accordingly the expectation and ability of pilots to override these systems
is lower.
However, many articles noted that MCAS took the 737 further into a fly-by-wire philosophy than it had been before. Yet Boeing
was astonishingly lax, having only two angle of attack sensors, of which only one would be providing input to MCAS, and then on an
arbitrary-seeming basis.
By contrast, the Airbus philosophy stresses redundancy, not only in hardware -- they use not three but four angle of attack sensors
-- but in software, and even software development. "Two or more independent flight control computing systems are installed using
different types of microprocessors and software written in different languages by different development teams" and verified using
formal methods (" Approaches
to Assure Safety in Fly-By-Wire Systems: Airbus Vs. Boeing ").
Microsoft will reportedly become the latest tech giant to 'suspend' its relationship with
Huawei, according to
the South China Morning Post .
One week after Washington first imposed strict limits on Huawei and its affiliates that will
make it almost impossible for American firms buy Huawei products or sell American-made
components to the company, a handful of chipmakers, telecoms companies and tech firms
(Alphabet) have reportedly scaled back or severed their relationship with Huawe.
Though Microsoft said yesterday that it hadn't made a decision, the SCMP reported Friday
morning that Microsoft had decided to stop accepting new orders from Huawei for operating
systems and other content-related services: Windows operating systems for laptops and other
content-related services. The US software giant has already removed Huawei laptops from its
online stores.
Just one more prime example why no companies should use Microsoft software.
The issue is clear as a bell. Become dependent on a US supplier and the Gov of the USSA
could cut off your contracts with impunity. That risk is too high for any manufacturing
entity.
I am not a fan of Linux. I do not like the way it manages memory. Also while it has gotten
better, it remains something of an unmade bed in that much of the software doesn't work
particularly well. But the same cold be said for Microsoft. How many times does Windows
OFFICE have to lock up before you comprehend the nightmarish patch system which has become
Windows?
GNU meaning not Unix never developed into a GUI. Ghost BSD looks interesting, BSD PC has
limited compatibility but UNIX is flatly superior in how it handles memory. Unix is
brilliant. I also love Open Office, it is better than Microsoft Office and you can save all
your files to the Microsoft format if you want. Open Office is perfect transitional software
and FREE! Why are school districts paying microsoft instead of using Open Office.
Win 10 is invasive garbage. I don't want anything managing my computer
"automatically".
Huawei is a real wakeup call for the world... the US is an unreliable trader. They can
never be trusted. This is not just about that lunatic Turmp. If AOC ever got to the White
House she could do the same under the New Green Deal NATIONAL SECURITY EMERGENCY.
The Constitution gave Congress the exclusive power over Commerce but over time, the
Congress delegated more and more power to the Exec with this kind of dreadful outcome.
Founding Fathers wanted checks and balances. But here you have one person, interrupting
commerce and contracts with the stroke of a pen that has never been approved by Congress.
That is simply too much risk.
The Chinese like anyone else make mistakes. BUT CHINA does not repeat the same mistake
twice unlike the USSA that seems to be caught in the revolving door of mistakes.
Better that this happens early in the life of Huawei than much later. China could actually
lead the world into the adaptation of open source destroying both Microsoft, Google and Apple
at the same time. Remember Apple took BSD and then made proprietary changes. That is the
APPLE OS which is much more stable than anything Windows ever made.
While people knock apple Iphone for cost, the Apple laptops are very stable and
essentially virus and worm immune. For a novice users that's why Apples are great.
I have had Unix based machines run for years with never being turned off, always rock
stable. It is head and shoulders above everything. FreeBSD
Here is a UNIX GUI. I know nothing about these guys but will check it out. A non power
user only needs a solid browser, and a good word processor, Open Office works with BSD.
Personally I don't think Apple should be grouped with Google and microsoft. I don't see as
Apple has done anything wrong other than selling their products at a premium to the novices.
That's not a crime and novices benefit. So quit packaging Apple in with Google and
Microsoft.
BTW, Blackberry OS is Unix based. It is a canadian company so likely a US poodle.
Huawei were attacked because they are a threat to Apple, not to "our national
security." The only thing Trump cares about are the profits of big companies.
Yes, but the real question is did you cut ties with the NBA, Nike, grape Kool-Aid,
McDonald's, Popeye's, your parole officer, KFC, crotch-grabbing, your six illegitimate
children and the local welfare office?
I knew Nokia was doomed when it partnered with Microsoft. They should have instead
partnered with and help fund the Open Source Software community. By now, we'd have
spectacular phones, free of logjams of spyware, bloatware, and ads.
Now you have Windoze PC's with logjams of spyware, bloatware, and ads. Well, unless you
hack it to make it a Workable PC. It's weird having to Hack your own PC to make it sane.
Why shouldn't Corning glass or Micron flash memory be sold to Huawei for use in phones
bound for Europe? Huawei sells 30 times more phone in Europe than USA. I bought Huawei phone
in Norway and I think is my best phone ever, I use Samsung Galaxy Note 9 in USA, but I carry
the Huawei for photos and for WiFi calls from Norway. Try to do wifi calls from the Galaxy
using Starbucks wifi and then using the same wifi try Huawei, you would see the difference
right away.
The US is going to sanction itself into economic irrelevance as the rest of the world says
F you. We only have two friends now, Israel and KSA. Nice work, Donnie.
"... However, nothing in the actual piece talks about security concerns. (I point this out because I perceive a trend towards such misleading summaries and headlines which contradict what the actual reporting says.) ..."
"... These companies do not have security concerns over Huawei. But the casual reader, who does not dive down into the actual piece, is left with a false impression that such concerns are valid and shared. ..."
"... South China Morning Post ..."
"... This move by Google-USG is mostly a propaganda warfare move. Huawei doesn't depend on smartphone sales to survive. It's American market was already small, while China's domestic market is huge. China is not Japan. ..."
"... Trump's heavy handed move against Huawei will backfire. The optic is unsettling; the US looks to be destroying a foreign competitor because it is winning. ..."
"... Until the reserve currency issue favoring the "exceptional" nation changes, the economic terrorism will continue.. ..."
"... What is funny in all these stories, is that there is little to no Huawei equipment (not the end-user smart phone, home router and stuff, but backbone routers, access equipment,..) anywhere in the US -- they are forbidden to compete. Most telcos are quite happy to sell in the US, as the absence of these Chinese competitors allows for healthy margins, which is no longer true in other markets. ..."
"... The US is trying desperately to quash tech success / innovation introduced by others who are not controlled by (or in partnership with) the US, via economic war, for now just politely called a trade war - China no 1 adversary. ..."
"... Attacking / dissing / scotching trade between one Co. (e.g. Huawei) and the world is disruptive of the usual, conventional, accepted, exchange functioning, and throws a pesky spanner in the works of the system. Revanchard motives, petty targetting, random pot-shots, lead to what? ..."
"... The war against Huawei is only one small aspect within the overall Trade War, which is based on the false premise of US economic strength. Most of the world wants to purchase material things, not financial services which is the Outlaw US Empire's forte and most of the world can easily forego. Trump's Trade War isn't going as planned which will cause him to double-down in a move that will destroy his 2020 hopes. ..."
However, nothing in
the actual piece talks about security concerns. (I point this out because I perceive a trend towards such misleading summaries
and headlines which contradict what the actual reporting says.)
The British processor company ARM, which licenses its design to Huawei, cites U.S. export controls as the reason to stop cooperation
with Huawei:
The conflict is putting companies and governments around the world in a tough spot, forcing them to choose between alienating
the United States or China .
Arm Holdings issued its statement after the BBC reported the firm had told staff to suspend dealings with Huawei.
An Arm spokesman said some of the company's intellectual property is designed in the United States and is therefore " subject
to U.S. export controls ."
Additionally two British telecom providers quote U.S. restrictions as reason for no longer buying Huawei smartphones:
BT Group's EE division, which is preparing to launch 5G service in six British cities later this month, said Wednesday it would
no longer offer a new Huawei smartphone as part of that service. Vodafone also said it would drop a Huawei smartphone from
its lineup. Both companies appeared to tie that decision to Google's move to withhold licenses for its Android operating software
from future Huawei phones.
These companies do not have security concerns over Huawei. But the casual reader, who does not dive down into the actual
piece, is left with a false impression that such concerns are valid and shared.
That the Trump administration says it has security reasons for its Huawei ban does not mean that the claim is true. Huawei
equipment is as good or bad as any other telecommunication equipment, be it from Cisco or Apple. The National Security Agency
and other secret services will try to infiltrate all types of such equipment.
After the sudden ban on U.S. entities to export to Huawei, chipmakers like Qualcomm temporarily stopped their relations with
Huawei. Google said that it would no longer allow access to the Google Play store for new Huawei smartphones. That will diminish
their utility for many users.
The public reaction in China to this move was quite negative. There were many calls for counter boycotts of Apple's i-phones
on social media and a general anti-American sentiment.
The founder and CEO of Huawei, Ren Zhengfei, tried to counter that. He gave a
two hour interview (vid, 3 min excerpt with subtitles)
directed at the Chinese public. Ren sounds very conciliatory and relaxed. The Global Times and the South China Morning
Post only have shortexcerpts
of what he said. They empathize that Huawei is well prepared and can master the challenge:
I do not believe this is precisely what will happen. Huawei already has its licenses purchased. In addition they could decide
to disrespect the IP if this was the case.
Huaweis's suppliers in Japan, South Korea, Taiwan (ROC), and Britain are examining if they can continue to make business with
Huawei, while some have already declared a suspension in cooperation.
The issue is that these non-American companies nonetheless use some American components of technology, and if they proceed
they will be sanctioned by the US themselves.
It is the same reason why Russia's Sukhoi did not in the end sell its SSJ-100 airliners to Iran -- East Asian tech companies
can hardly be expected to be more gung-ho on defying the US than Russia's leading defense plant......
@p #2 - Huawei surely has their processors *as of now*.
That - if USA would not ban Huawei (HiSilicon) processors, because of using that ARM technology. Thing is, Huawei would be
isolated from next-generation ARM processors. They are locked now in their current generation.
Even Qualcomm today, for what I know, bases their processors on ARM's "default" schemes, instead of doing their development
"from scratch", in a totally independent way. It would push for slow but steady decline as "top" smartphone vendor into "el cheapo"
niche.
Boeing is the counter-part in the contest to destroy Huawei. China has great leverage over Boeing's future. It is the nation with
the biggest market now and downstream for 10-20 years. China need planes, thousands of them.
As for Huawei's chief doubting the prowess of the Chinese students, he only needs to look at the rapidity of the conversion
of his nations' economy to a 98% digital economy. All that conversion was done by local, entrepreneurial innovators in the software
and hardware tech sector. It happened only in China and completely by Chinese young people who had phones and saw the future and
made it happen.
It has been Chinese minds building Chinese AI on Chinese Big Data.
Yes, they need Russian technologists and scientists. Those Russian minds in Russia, in Israel, in South Korea are proven difference
makers.
The need China now has will meet the solution rapidly. For five years, the Double Helix of Russia-China has been coming closer
in education and R&D institutes in both nations. China investors and Chinese sci-tech personnel are in the sci-tech parks of Russia,
and Russians are in similar facilities in China. More will happen now that the Economic War against China threatens.
Huawei will have solutions to replace all US components by the end of the year. It will lose some markets. but it will gain
hugely in the BRI markets yet to be developed.
In the long run, the US makers will rue the day Trump and his gang of Sinophobes and hegemonists took aim at Huawei and China's
tech sector.
This move by Google-USG is mostly a propaganda warfare move. Huawei doesn't depend on smartphone sales to survive. It's American
market was already small, while China's domestic market is huge. China is not Japan.
Besides, it's not like Europe is prospering either. Those post-war days are long gone.
And there's no contradiction between what the CEO said and the Government line: both are approaching the same problem from
different points of view, attacking it from different fronts at the same time. "Patriotism" is needed insofar as the Chinese people
must be prepared to suffer some hardships without giving up long term prosperity. "Nationalism" ("politics") is toxic insofar
as, as a teleological tool, it is a dead end (see Bannon's insane antics): the Chinese, after all, are communists, and communists,
by nature, are internationalists and think beyond the artificial division of humanity in Nation-States.
Talking Digital and security in the same sentence is laughable.... NOTHING Digital is 'secure',,, never has,,, never will.
Digital destroys everything it touches. At present, excepting for now the low wage States, it is destroying economies ever
so slowly one sector at a time. This has nothing to do with security and everything to do with the dying West, especially the
USA which is trying desperately to save what's left of its production whether it be 5G, Steel plants or Nord Stream. The West
created China when it happily allowed and assisted Western corporations to move the production there in order to hide the inflation
that was being created for wars and welfare and now has to deal with the fallout which eventually will be their undoing.
A full-blown trade war was probably inevitable, driven by geopolitical concerns as much or more than economics.
One wonders what each of China and US has been doing to prepare. It seems like the answer is "very little" but since it's USA
that is driving this bus, I would think that USA would've done more to prepare (than China has).
PS It's not just Boeing. China also supplies the vast majority of rare earth minerals.
Her captivity and probable imprisonment in the US explain his attitude. She is a high profile pawn. The US must convict her
in order to justify what they have done to her so far. She may not serve time, in the US prisons, but she will be branded a guilty
person, guilty of violating the Empire's rules (laws).
Imagine Ivanka in the same situation. Her daughter singing in Mandarin would be little help. The Trump Family will be a number
one target for equal treatment long after "45" leaves office.
The US Empire is wild with Power. All of that Power is destructive. And all the globe is the battlefield, except USA. But History
teaches that this in-equilibrium will not last long.
We've seen how Europe caved to US pressure to stop trading with Iran. Now Japan and others are caving to pressure to stop trading
with China. There is already pressure and negotiation to stop Nordstream. And all of the above leads to questions about Erdogan's
resolve.
Trump's heavy handed move against Huawei will backfire. The optic is unsettling; the US looks to be destroying a foreign competitor
because it is winning.
The ramifications of trade war with China (where the supply and manufacturing chain of most consumer electronics is these days)
is disruptive. Trump has created uncertainty for many manufacturers since there is Chinese part content is just about everything
these days. Some manufacturers might relocate production to the US but most will try to simply decouple from the US entirely.
Exposure to the US is really the problem not exposure to China.
The trade war with Iran was also unlikely to persist. But it has persisted, and deepened as European poodles pretended to resist
and then pretended not to notice that they didn't.
A new Bloomberg opinion piece agrees with that view
No, it doesn't b. You say USA trade war will fail because it lacks international support. Bloomberg says USA should get international
support to make it more effective. The difference is that it is highly likely that USA will get international support. It already
has support from Japan.
USA has proven that it can effectively manipulate it's poodle allies. Another example is Venezuela where more than two dozen
countries recognized Guido only because USA wanted them to.
<> <> <> <> <> <> <>
It's not Trump but the US Deep State that causes US allies to fall in line. Any analysis that relies on Trump as President
is bound to fail as his public persona is manipulated to keep Deep State adversaries (including the US public) off-balance.
Like President's before him, Trump will take the blame (and the credit) until another team member is chosen to replace him
in what we call "free and fair elections".
What is funny in all these stories, is that there is little to no Huawei equipment (not the end-user smart phone, home router
and stuff, but backbone routers, access equipment,..) anywhere in the US -- they are forbidden to compete. Most telcos are quite
happy to sell in the US, as the absence of these Chinese competitors allows for healthy margins, which is no longer true in other
markets.
So the Huawei ban hits first and foremost the US' partners.
China can only undo the US-exceptionalsim if and when it can visibly project military power. The only way to achieve
that is tt has to make great haste in building a few fleets of aircraft carriers, fregats and destroyers, etc. It must
build a grand, visibly magnificent Chinese Navy.
Modi wins in India, another victory for the world oligarchs. Exactly mimicking conditions in the U$A. Media and governmental
capture by the uber wealthy...
The US is trying desperately to quash tech success / innovation introduced by others who are not controlled by (or in partnership
with) the US, via economic war, for now just politely called a trade war - China no 1 adversary.
Afaik, the entire smart-phone industry is 'integrated' and 'regulated' by FTAs, the WTO, the patent circuit, the Corps. and
Gvmts. who collaborate amongst themselves.
Corps. can't afford to compete viciously because infrastructure, aka more encompassing systems or networks (sic) are a pre-requisite
for biz, thus, Gvmts. cooperate with the Corps, and sign various 'partnerships,' etc.
sidebar. Not to mention the essential metals / components provenance, other topic. see
Attacking / dissing / scotching trade between one Co. (e.g. Huawei) and the world is disruptive of the usual, conventional,
accepted, exchange functioning, and throws a pesky spanner in the works of the system. Revanchard motives, petty targetting, random
pot-shots, lead to what?
As I wrote in the Venezuela thread, major US corps are already belt tightening by permanently laying off managers, not already
cut-to-the-bone production staff, and another major clothing retailer is closing its 650+ stores. And the full impact of Trump's
Trade War has yet to be felt by consumers. As Wolff, Hudson and other like-minded economists note, there never was a genuine recovery
from 2008, while statistical manipulation hides the real state of the US economy. One thing that cannot be hidden is the waning
of revenues collected via taxes which drives the budget deficit--and the shortfall isn't just due to the GOP Congress's tax cuts.
The war against Huawei is only one small aspect within the overall Trade War, which is based on the false premise of US economic
strength. Most of the world wants to purchase material things, not financial services which is the Outlaw US Empire's forte and
most of the world can easily forego. Trump's Trade War isn't going as planned which will cause him to double-down in a move that
will destroy his 2020 hopes.
Data for 2019 is probably slightly different, but the trends should keep on. That data also does not separate Android-based
phones from non-Android phones. So, segmenting Android into Google and China infrastructures would mean
1) Huawei retains a $152B market - China
2) Huawei retains an unknown share in $87B market - APAC
3) Huawei loses a $163,9B market - all non-China world.
At best Huawei looses 40,7% of world market. That if all APAC population would voluntarily and uniformly drop out of Google
services into Huawei/China services (which they would not). At worst Huawei retains 37,7% of the marker (if APAC population would
uniformly follow Google, which they would not either).
"... Since the end of the Cold War, the American government has become increasingly delusional, regarding itself as the Supreme World Hegemon. As a result, local American courts have begun enforcing gigantic financial penalties against foreign countries and their leading corporations, and I suspect that the rest of the world is tiring of this misbehavior. Perhaps such actions can still be taken against the subservient vassal states of Europe, but by most objective measures, the size of China's real economy surpassed that of the US several years ago and is now substantially larger , while also still having a far higher rate of growth. Our totally dishonest mainstream media regularly obscures this reality, but it remains true nonetheless. ..."
"... Provoking a disastrous worldwide confrontation with mighty China by seizing and imprisoning one of its leading technology executives reminds me of a comment I made several years ago about America's behavior under the rule of its current political elites: ..."
"... Normal countries like China naturally assume that other countries like the US will also behave in normal ways, and their dumbfounded shock at Ms. Meng's seizure has surely delayed their effective response. In 1959, Vice President Richard Nixon visited Moscow and famously engaged in a heated "kitchen debate" with Premier Nikita Khrushchev over the relative merits of Communism and Capitalism. What would have been the American reaction if Nixon had been immediately arrested and given a ten year Gulag sentence for "anti-Soviet agitation"? ..."
"... But Bolton's apparent involvement underscores the central role of his longtime patron, multi-billionaire casino-magnate Sheldon Adelson, whose enormous financial influence within Republican political circles has been overwhelmingly focused on pro-Israel policy and hostility towards Iran, Israel's regional rival. ..."
"... Although it is far from clear whether the very elderly Adelson played any direct personal role in Ms. Meng's arrest, he surely must be viewed as the central figure in fostering the political climate that produced the current situation. Perhaps he should not be described as the ultimate puppet-master behind our current clash with China, but any such political puppet-masters who do exist are certainly operating at his immediate beck and call. In very literal terms, I suspect that if Adelson placed a single phone call to the White House, the Trump Administration would order Canada to release Ms. Meng that same day. ..."
As most readers know, I'm not a casual political blogger and I prefer producing lengthy
research articles rather than chasing the headlines of current events. But there are
exceptions to every rule, and the looming danger of a direct worldwide clash with China is
one of them.
Consider the arrest last week of Meng Wanzhou, the CFO of Huawei, the world's largest
telecom equipment manufacturer. While flying from Hong Kong to Mexico, Ms. Meng was changing
planes in the Vancouver International Airport when she was suddenly detained by the Canadian
government on an August US warrant. Although now released on $10 million bail, she still
faces extradition to a New York City courtroom, where she could receive up to thirty years in
federal prison for allegedly having conspired in 2010 to violate America's unilateral
economic trade sanctions against Iran.
Although our mainstream media outlets have certainly covered this important story,
including front page articles in the New York Times and the Wall Street Journal
, I doubt most American readers fully recognize the extraordinary gravity of this
international incident and its potential for altering the course of world history. As one
scholar noted, no event since America's deliberate 1999
bombing of China's embassy in Belgrade , which killed several Chinese diplomats, has so
outraged both the Chinese government and its population. Columbia's Jeffrey Sachs
correctly described it as "almost a US declaration of war on China's business
community."
Such a reaction is hardly surprising. With annual revenue of $100 billion, Huawei ranks as
the world's largest and most advanced telecommunications equipment manufacturer as well as
China's most internationally successful and prestigious company. Ms. Meng is not only a
longtime top executive there, but also the daughter of the company's founder, Ren Zhengfei,
whose enormous entrepreneurial success has established him as a Chinese national hero.
Her seizure on obscure American sanction violation charges while changing planes in a
Canadian airport almost amounts to a kidnapping. One journalist asked how Americans would
react if China had seized Sheryl Sandberg of Facebook for violating Chinese law especially if
Sandberg were also the daughter of Steve Jobs.
Indeed, the closest analogy that comes to my mind is when Prince Mohammed bin Salman of
Saudi Arabia kidnapped the Prime Minister of Lebanon earlier this year and held him hostage.
Later he more successfully did the same with hundreds of his wealthiest Saudi subjects,
extorting something like $100 billion in ransom from their families before finally releasing
them. Then he may have finally over-reached himself when Washington Post columnist
Jamal Khashoggi, a Saudi dissident, was killed and dismembered by a bone-saw at the Saudi
embassy in Turkey.
We should actually be a bit grateful to Prince Mohammed since without him America would
clearly have the most insane government anywhere in the world. As it stands, we're merely
tied for first.
Since the end of the Cold War, the American government has become increasingly delusional,
regarding itself as the Supreme World Hegemon. As a result, local American courts have begun
enforcing gigantic financial penalties against foreign countries and their leading
corporations, and I suspect that the rest of the world is tiring of this misbehavior. Perhaps
such actions can still be taken against the subservient vassal states of Europe, but by most
objective measures, the size of China's real economy surpassed that of the US several years
ago and is now substantially larger ,
while also still having a far higher rate of growth. Our totally dishonest mainstream media
regularly obscures this reality, but it remains true nonetheless.
Provoking a disastrous worldwide confrontation with mighty China by seizing and
imprisoning one of its leading technology executives reminds me of
a comment I made several years ago about America's behavior under the rule of its current
political elites:
Or to apply a far harsher biological metaphor, consider a poor canine infected with the
rabies virus. The virus may have no brain and its body-weight is probably less than
one-millionth that of the host, but once it has seized control of the central nervous
system, the animal, big brain and all, becomes a helpless puppet.
Once friendly Fido runs around foaming at the mouth, barking at the sky, and trying to
bite all the other animals it can reach. Its friends and relatives are saddened by its
plight but stay well clear, hoping to avoid infection before the inevitable happens, and
poor Fido finally collapses dead in a heap.
Normal countries like China naturally assume that other countries like the US will also
behave in normal ways, and their dumbfounded shock at Ms. Meng's seizure has surely delayed
their effective response. In 1959, Vice President Richard Nixon visited Moscow and famously
engaged in a heated "kitchen
debate" with Premier Nikita Khrushchev over the relative merits of Communism and
Capitalism. What would have been the American reaction if Nixon had been immediately arrested
and given a ten year Gulag sentence for "anti-Soviet agitation"?
Since a natural reaction to international hostage-taking is retaliatory international
hostage-taking, the newspapers have reported that top American executives have decided to
forego visits to China until the crisis is resolved. These days, General Motors sells more
cars in China than in the US, and China is also the manufacturing source of nearly all our
iPhones, but Tim Cook, Mary Barra, and their higher-ranking subordinates are unlikely to
visit that country in the immediate future, nor would the top executives of Google, Facebook,
Goldman Sachs, and the leading Hollywood studios be willing to risk indefinite
imprisonment.
Canada had arrested Ms. Meng on American orders, and this morning's newspapers reported
that a former
Canadian diplomat had suddenly been detained in China , presumably as a small
bargaining-chip to encourage Ms. Meng's release. But I very much doubt such measures will
have much effect. Once we forgo traditional international practices and adopt the Law of the
Jungle, it becomes very important to recognize the true lines of power and control, and
Canada is merely acting as an American political puppet in this matter. Would threatening the
puppet rather than the puppet-master be likely to have much effect?
Similarly, nearly all of America's leading technology executives are already quite hostile
to the Trump Administration, and even if it were possible, seizing one of them would hardly
be likely to sway our political leadership. To a lesser extent, the same thing is true about
the overwhelming majority of America's top corporate leaders. They are not the individuals
who call the shots in the current White House.
Indeed, is President Trump himself anything more than a higher-level puppet in this very
dangerous affair? World peace and American national security interests are being sacrificed
in order to harshly enforce the Israel Lobby's international sanctions campaign against Iran,
and we should hardly be surprised that the National Security Adviser John Bolton, one of
America's most extreme pro-Israel zealots,
had personally given the green light to the arrest. Meanwhile, there are credible reports
that Trump himself remained entirely unaware of these plans, and Ms. Meng was seized on the
same day that he was personally meeting on trade issues with Chinese President Xi. Some have
even suggested that the incident was a deliberate slap in Trump's face.
But Bolton's apparent involvement underscores the central role of his longtime patron,
multi-billionaire casino-magnate Sheldon Adelson, whose enormous financial influence within
Republican political circles has been overwhelmingly focused on pro-Israel policy and
hostility towards Iran, Israel's regional rival.
Although it is far from clear whether the very elderly Adelson played any direct personal
role in Ms. Meng's arrest, he surely must be viewed as the central figure in fostering the
political climate that produced the current situation. Perhaps he should not be described as
the ultimate puppet-master behind our current clash with China, but any such political
puppet-masters who do exist are certainly operating at his immediate beck and call. In very
literal terms, I suspect that if Adelson placed a single phone call to the White House, the
Trump Administration would order Canada to release Ms. Meng that same day.
Adelson's fortune of $33 billion ranks him as the 15th
wealthiest man in America, and the bulk of his fortune is based on his ownership of extremely
lucrative gambling casinos in Macau, China . In effect, the Chinese government currently has
its hands around the financial windpipe of the man ultimately responsible for Ms. Meng's
arrest and whose pro-Israel minions largely control American foreign policy. I very much
doubt that they are fully aware of this enormous, untapped source of political leverage.
Over the years, Adelson's Chinese Macau casinos have been involved in all sorts of political
bribery scandals , and I suspect it would be very easy for the Chinese government to find
reasonable grounds for immediately shutting them down, at least on a temporary basis, with
such an action having almost no negative repercussions to Chinese society or the bulk of the
Chinese population. How could the international community possibly complain about the Chinese
government shutting down some of their own local gambling casinos with a long public record
of official bribery and other criminal activity? At worst, other gambling casino magnates
would become reluctant to invest future sums in establishing additional Chinese casinos,
hardly a desperate threat to President Xi's anti-corruption government.
I don't have a background in finance and I haven't bothered trying to guess the precise
impact of a temporary shutdown of Adelson's Chinese casinos, but it wouldn't surprise me if
the resulting drop in the stock price of Las Vegas Sands Corp would reduce
Adelson's personal net worth were by $5-10 billion within 24 hours, surely enough to get his
immediate personal attention. Meanwhile, threats of a permanent shutdown, perhaps extending
to Chinese-influenced Singapore, might lead to the near-total destruction of Adelson's
personal fortune, and similar measures could also be applied as well to the casinos of all
the other fanatically pro-Israel American billionaires, who dominate the remainder of
gambling in Chinese Macau.
The chain of political puppets responsible for Ms. Meng's sudden detention is certainly a
complex and murky one. But the Chinese government already possesses the absolute power of
financial life-or-death over Sheldon Adelson, the man located at the very top of that chain.
If the Chinese leadership recognizes that power and takes effective steps, Ms. Meng will
immediately be put on a plane back home, carrying the deepest sort of international political
apology. And future attacks against Huawei, ZTE, and other Chinese technology companies would
not be repeated.
China actually holds a Royal Flush in this international political poker game. The only
question is whether they will recognize the value of their hand. I hope they do for the sake
of America and the entire world.
"... Launching a tech war or a trade war against any country is not appropriate, nor is it the best way to defend national security, Macron said. ..."
"... Out of the total of 70 billion U.S. dollars Huawei spent on buying components in 2018, some 11 billion dollars went to U.S. companies, the Reuters reported Friday. ..."
"... The spirit of openness is what helped the United States develop. However, Washington's restrictions on Huawei, based on unfounded allegations and political speculations, fall foul of the golden rules it once embraced ..."
WASHINGTON, May 22 (Xinhua) --
Washington last week declared a national emergency over what it claimed are technological
threats, and announced restrictions on sale and transfer of American technologies to China's
Huawei.
The telecom company has long been accused by the United States of being able to use its
network equipment to spy on foreign nations for the Chinese government. However, "no
intelligence service has published clear evidence that Huawei inserted 'backdoors' for Chinese
authorities to access the data that passes through its networks," according to a December 2018
article by U.S. media Politico.
Given the lack of proof that Huawei threatens U.S. security, last week's twin moves by
Washington -- the use of state apparatus to oppress a company -- are a reflection of nothing
but bullying.
The smearing campaign against Huawei aside, the United States has also been trying to rally
Europe to abandon Huawei products, citing security threats. It was not welcome.
"Europe must not be dragged into the trade dispute between China and the United States,"
Germany's powerful BDI industrial lobby group was quoted by media reports as saying in a
statement on Thursday.
France too refused to take orders from the United States. "Our perspective is not to block
Huawei or any company," President Emmanuel Macron told the VivaTech conference in Paris on
Thursday.
Launching a tech war or a trade war against any country is not appropriate,
nor is it the best way to defend national security, Macron said.
The ban on the supply of U.S.-made chips to Huawei is a lose-lose in any sense, as it poses
a threat to Huawei's viability and U.S. companies also pay the price.
Out of the total
of 70 billion U.S. dollars Huawei spent on buying components in 2018, some 11 billion dollars
went to U.S. companies, the Reuters reported Friday.
"The ban will financially harm the thousands of Americans employed by the U.S. companies
that do business with Huawei," said Catherine Chen, a Director of the Board at Huawei, in a The
New York Times article on Friday. "A total ban on Huawei equipment could eliminate tens of
thousands of American jobs."
Although Huawei does not do much business in the United States, the company is the sole
provider of networking equipment to many rural American internet providers, according to a CNN
article on Tuesday.
"Those companies have said it will take time -- or may be impossible -- to replace their
Huawei technology with a rival's," it added.
As a move to ease the repercussion of the ban, the U.S. Department of Commerce on Monday
issued a 90-day temporary license loosening restrictions on business deals with Huawei.
Huawei doesn't intend to isolate itself from others, but wants to make as many friends as
possible, its founder Ren Zhengfei told Chinese media on Tuesday when asked why Huawei didn't
use substitutes before the United States took the latest aggressive measures.
"We don't want to do harm to friends," he said. "We want to help them achieve good balance
sheets. Even if we make adjustments, we still ought to render help."
The spirit of
openness is what helped the United States develop. However, Washington's restrictions on
Huawei, based on unfounded allegations and political speculations, fall foul of the golden
rules it once embraced
.
For Washington to win in an era of cooperation and inter-dependence, it would be better to
revive the spirit of openness.
"... In a company-wide memo, ARM told employees that their designs contain "US origin technology," which would be affected by the Trump administration's May 15 Executive Order to "protect our country against critical national security threats." ..."
"... Also cunning thing would be to change brand name a bit like change/remove 1 letter. ..."
"... Yet, they find out they are buying from another vendor that complies with China's demands and poof there goes another company ..."
"... Xi should have listen to Deng Xiaoping. Keep your head down, go about your business and shut the **** up. But Xi the chest pounding panda declared Made in China 2025 and spooked everyone. China should de-robe him then hang him high! ..."
"... There has been a suspiciously sudden rise in China hawkishness among American citizens (e.g., commentators on these boards) coincident with what to outside observers has been a very obvious post-Russia tsunami of political and MSM anti-China propaganda (it's often easier to see propaganda from the outside than from the inside). ..."
"... Yes, but not all of China is restricted from using ARM. Only Huawei. Other phone manufacturers will be unaffected. ..."
Japanese-owned chip designer
ARM Holdings
has notified its staff to halt "
all active contracts,
support entitlements, and any pending engagements
" with Huawei and its subsidiaries in order to comply with the
recent US clampdown, according to the
BBC
. Based in the
UK and owned by Japan's Softbank, ARM designs and licenses processors used in all types of electronic devices, including
smart phones, tablets, laptops, televisions, automotive systems and more.
"
ARM is the foundation of Huawei's smartphone chip designs, so this is an insurmountable obstacle for Huawei
,"
said Geoff Blaber of CCS Insight, adding: "That said, with an abundance of companies in Huawei's supply chain already
having taken action to comply with the US order,
Huawei's ability to operate was already severely affected
."
In a company-wide memo, ARM told employees that their designs contain "US origin technology," which
would be affected by the Trump administration's May 15
Executive Order
to "protect our country against critical national security threats."
The US has argued that the Chinese government could force companies such as Huawei to install backdoors on their devices
to allow for spying on US networks - an accusation Huawei has repeatedly denied.
Softbank - which is also one of Japan's largest mobile carriers - has joined with
Japan's largest carriers
DoCoMo and KDDI in announcing that they will stop taking orders for Huawei handsets.
Nope, cross licensing is strictly forbidden under the licensing
ARM uses. If uou want to use ARM based designs, you have two
choices. Buy the chips already made, or license a core and fab the
package yourself.
If you fab it yourself, you have to market the cores and chips
as being nased on theirs.
That's it. I learned this when looking to have some Asics made
up for compute decices and decided to review all of my options. I
decided two things looking into that.
1 I wouldn't have anything made until I could have them made
here in the US. Still waiting for a FAB with older equipment to
for such things to pop up. I simply don't trust China.
2 I would start from scratch using a RISC design with MIT
license to avoid the decades of no development by actually having
a real open licensing scheme. The GPL crap sucks.
Licenses to independent third parties do not matter yet.
"ARM Holdings
has notified its staff to halt "
all
active contracts, support entitlements, and any pending
engagements
" with Huawei and its subsidiaries"
KASHGAR, China -- A God's-eye view of Kashgar, an ancient city in
western China, flashed onto a wall-size screen, with colorful icons
marking police stations, checkpoints and the locations of recent
security incidents. At the click of a mouse, a technician explained,
the police can pull up live video from any surveillance camera or
take a closer look at anyone passing through one of the thousands of
checkpoints in the city...
There's no such things a national security. This is U.S. corporate
security protecting the corporate interests of the other telecom
corporations that license to operate through the U.S. corporation.
Comprendo?
The way this gloal fraud operates really is a laughable
pathetic joke with what's hidden because is criminal. That includes
everything globally that alleged to be classified or some level of so
called top secret but none of it is. The sedtion and treason of the
government saw to those eliminations along with the cancellation of
all NDA's, or other similar docments to attempt to use threat,
coercion, murder as a consequence.
When is there going to be a fully functional so called smart phone
that is not hackable, trackable, fully compliant with all unalienable
rights, usable globally, with a degree of voice and data encryption
to ensure no possibility of interception or monitoring? Oh and free
phone w/ $25 unlimited voice and data monthly.
Xi should have listen to Deng Xiaoping. Keep your head down, go about
your business and shut the **** up. But Xi the chest pounding panda
declared Made in China 2025 and spooked everyone. China should
de-robe him then hang him high!
Simple! Send the Chinese navy to Venezuela at the time when the
U.S. is sending its naval forces to Iran. That should rattle
Washington greatly. That should up the ante greatly too. Then see
who blinks first.
There has been a suspiciously sudden rise in China hawkishness among
American citizens (e.g., commentators on these boards) coincident
with what to outside observers has been a very obvious post-Russia
tsunami of political and MSM anti-China propaganda (it's often easier
to see propaganda from the outside than from the inside).
A good
discussion of the opposing point of view has just aired on RT, among
the host, an American living in Russia, Fred Teng, President of the
America China Public Affairs Institute, and James Bradley (American),
author of The China Mirage. You may think this is just propaganda
from the opposite direction, but if so you will at least have two
poles to position yourself between rather than just one side of the
story. If you have an open mind.........it is well worth watching.
https://m.youtube.com/watch?v=6C1kYnrm1cA
All you ignorant fuckers need to
take a one month vacation to China. Come back and lets talk then.
Your world outlook will have been greatly humbled and you would be
more willing to be of the cooperative model of world politics rather
than this senseless belligerence I see here.
I remember being photographed at every highway underpass. I
remember not being able to view You Tube or any video on Facebook
because it was blocked...
This is an major O'sh2t because all of China's cell phones use ARM!
China is now like African no internet village because they don't have
smart phones... LOL
"... And once trade talks had broken down, there was a 'scramble' to implement the measures against Huawei. ..."
"... this report effectively confirms that the administration wasn't being entirely truthful when it said there was 'no link' between Huawei and the trade talks. Trump said back in December that he would go so far as to intervene in efforts to extradite Meng Wanzhou if it would help with the trade talks. And although that would be extreme, we should rule it out just yet. ..."
If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining
chip' during trade talks with the Chinese,
Bloomberg just put the issue to rest.
In a report sourced to administration insiders,
BBG reported that the Trump administration waited to blacklist Huawei until talks with the
Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the
talks. Plans to punish Huawei - including possible economic sanctions - had been kicking around
for months. And prosecutors took their first tentative steps toward holding Huawei
'accountable' by convincing Canada to arrest Huawei CFO Meng Wanzhou.
And once trade talks had broken down, there was a 'scramble' to implement the measures
against Huawei.
Though BBG doesn't offer a definitive answer on this, it reports that some are suspicious
that Trump is pressuring Huawei to 'gain a negotiating edge' with Beijing (meanwhile, the
Chinese leadership are furious about the decision).
Timing of the U.S. action raised questions about whether President Donald Trump is
punishing the company in part to gain a negotiating edge with Beijing in a deepening clash
over trade. Talks between Beijing and Washington deadlocked this month as Trump accused China
of backing out of a deal that was taking shape with U.S. officials, saying China reneged on
an agreement to enshrine a wide range of reforms in law.
Another take on what happened suggested that the decision to hold back on Huawei actually
came from the bureaucracy, as administration officials were worried President Trump would just
scrap the measures as a favor to Xi, like he did last year with ZTE Corp. Those concerns
haven't entirely abated.
Washington has offered Huawei some wiggle room by suspending the new restrictions for 90
days. The company has been stockpiling chips, and reportedly already has enough to keep its
business running for three months.
But this report effectively confirms that the administration wasn't being entirely
truthful when it said there was 'no link' between Huawei and the trade talks. Trump said back
in December that he would go so far as to intervene in efforts to extradite Meng Wanzhou if it
would help with the trade talks. And although that would be extreme, we should rule it out just
yet.
EU and China struggle over key concerns ahead of summit😲
Yet the summit might not produce a joint statement - as previous Chinese pledges on
speeding-up talks on an investment agreement, plus opening up its markets more to European
companies, havefailed to materialise.
"We can certainly agree on a joint statement, the question is how substantive this will
be," a senior EU official said. The EU wants to see concrete steps from China.
Failing to agree on a joint statement, however, is a sign of the EU's unsuccessful bid
to commit China to give greater access of its markets to European companies, and engage
seriously in reforming global trade rules within the World Trade Organisation (WTO).
The EU hoped to make China address longstanding European complaints, and to commit to
concluding an investment agreement that aims to secure better market access and fair
treatment for European companies in China by 2020.
The EU also hopes to achieve an agreement on indications of geographical origins to
protect European brands in China by the end of the year.
An EU official said that the recent foreign investment law adopted in China, does not
address all the issues of concern for Europeans,for instance on prohibited sectors,
dual regime for foreign and domestic operations, and on forced technological
transfer.
"We agree there has been a lot of promises, it is time for action, not only words.
[…] We want to make sure we have a modern framework for investment protection in a
binding agreement with mechanism to solve disputes," the EU official added.
“While the [European] Commission is getting tougher on China, at least for
now it does not seem to be aiming for a confrontation with China,” he said.
But even if the EU doesn’t fully align itself with the increasingly
hawkish Trump administration , a shift in China-EU relations seems inevitable.
“The EU has no interest in cooling its China relationship, but if it does not act
now to protect its economy from unfair state-owned enterprise competition in the EU market,
then the citizens of Europe might ask for more protection,” Wuttke said.
“[There is] growing realism in Europe and the end of naivety when it comes to
China.”
Exclusive: In China, the Party’s push for influence inside foreign firms stirs
fears😲
BEIJING (Reuters) - Late last month, executives from more than a dozen top European
companies in China met in Beijing to discuss their concerns about the growing role of the
ruling Communist Party in the local operations of foreign firms, according to three people
with knowledge of the discussions.
China got fucked the minute they agreed to invest trillions into US debt securities in
exchange for being given unlimited access to sell into the US market. This terrible
arrangement set them up to be crushed economically if the US were to close its doors to
Chinese exports, and to lose much of what they made from their trade surplus with the US if
they ever tried to unload their holdings.
Their main stock market now is down over 30% since the tariffs went into force last June,
and they are closing factories so fast that the price of oil to heat and power those
factories has fallen by the same 30+% as the Chinese stock market. And now, were the Chinese
to start off loading their US Treasury holdings, they would drive the bond market down about
10-20%, which would be another several hundreds of billions of dollars lost. A clean sweep
mop up operation would be done by the Fed and Anointed Banks in a afternoon. Answer this, why
is a good soldier to the PLA, HSBC advertising like crazy for deposit's in $ when they have
unlimited access to the Yuan? BOOM !!!
China's future access to U.S. dollars via their exports is the sword hanging above their
Chicom heads.
The Chinese were advised for a long time that they were going to have to make changes in
their trade policies if they were to avoid their present troubles. They were told not to hold
the US Treasury securities they were forced to buy, and instead sell them off slowly and
re-invest the capital into domestic infrastructure projects that would expand the size of the
Chinese middle class. And they were told to diversify their export markets, so that they
would not be so dependent on the US consumer to buy Chinese products, The Chinese did little
on the first initiative, and little on the second as well, although the second is difficult
to accomplish since there are not many consumer markets that can buy anywhere near what the
US can buy.
Not a pretty picture. But many saw this day coming. Unfortunately for China, not nearly
enough of the decision makers in the Forbidden City did. Xi Jinping played the card to walk
away from agreed upon section of the trade deal, he played his hand. Confusis say, you made
your bed now sleep in it...............
China would go from having the largest overall trade surplus in the world to having a
trade surplus smaller than Ireland if you take away the U.S. Trade Surplus China
Steals……….
Xi Jinping has now lost Face and the Entire Globe now knows it.
Well that should end the extradition case of Ms Weng. Clearly politically motivated. Her
attorney's Steptoe in DC are top drawer. This also means that Huawei may sue Trump for
damages.
That's because Steptoe never loses to the DOJ. There are three top firms in DC that are
DOJ killers. Steptoe is one of them. Williams & Connolly another. The Ted Stevens Case
was the greatest legal slaughter of the DOJ in history. 6 Gov attorney's sanctioned and
threatened by the Judge for disbarment. That's the way to kick the Gov ***. All six counts
dropped!
Meng is still in Canada so that is a Canadian Jurisdiction but the Canadian law is express
that political motivation is insufficient grounds for extradition. This is evidence of
precisely that.
All this over a charge of fraud... LOL. It doesn't get any weaker than that!
China will never do that. They are about business and they are not going to harm a
customer over politics. Trump does this routinely. He puts sanctions on Venezuela to harm the
women and children to soften up the Gov. He has done it with Russia. It is always indirect
attacks to get something unrelated. The cowardly conduct of a bully. Hitler did the same sort
of things. The siege of Stalingrad for example.
The damage Trump is doing to Google is incomprehensible. Huawei is one of Google's largest
customers. Can you even imaging the implications?
If you were a manufacturer of smartphones and were licensing an OS from Google and Trump
then blocks the license.... How many makers of smartphone do you think will want to be
dependent on this kind of lunatic gov? No country should want to deal with the US for
anything. Look at Russia, they were buying jet engines for their MC 21 and Trump Gov cuts
them off. Now they are making their own engines not buying US made engines. How does that
help the US manufacturer? Russia will make their engines and compete with the US makers.
"... China will only redouble its efforts to produce advanced technologies domestically. ..."
"... As a negotiating strategy, the decision makes even less sense. U.S. officials claim it had nothing to do with stalled trade talks, but it certainly looks like Trump wants to use Huawei as leverage, just as he did last year with ZTE Corp ..."
"... Worse, the decision undermines the implicit point of any U.S.-China trade deal: not just to increase commerce but to stabilize relations between the world's two most powerful nations. ..."
"... targeting Huawei so nakedly will only further marginalize the few moderates in the Chinese leadership and embolden hawks who see conflict as unavoidable ..."
"... Crushing Huawei, by contrast, simply looks like a strategic miscalculation -- and one with potentially disastrous consequences. ..."
Banning one of China's most high-profile companies from US networks makes sense. Putting it out of business does
not.
In its struggle with China over trade and national security, the US has many legitimate grievances, and a
variety of weapons for seeking redress. That doesn't mean it should use all of them.
The nuclear missile the U.S. just launched at Huawei Technologies Co. Ltd. is a case in point. Last week, the
Commerce Department placed Huawei and nearly 70 of its affiliates on an "
Entity
List
," which means that U.S. suppliers may now need a license to do business with them. Both Huawei's mobile
phones and its network equipment rely on American components, including advanced semiconductors. If the ban is
applied stringently, it
could drive
one of China's most high-profile companies -- employing more than 180,000 people -- out of business.
That would be a serious mistake. The U.S. has long argued that Huawei poses a national-security threat. And
there certainly are legitimate
reasons to worry
that incorporating Huawei gear into America's networks will leave them vulnerable both to
spying and, in the event of a conflict, sabotage. But the U.S. is already taking other prudent steps to prevent
Huawei equipment from being used domestically. Seeking to put the company out of business as well is both
disproportionate and deeply unwise.
For one thing, it will impose collateral damage. Blameless companies around the world -- including Huawei's
American suppliers
-- could lose business, face disruptions and incur significant new costs. Allies that have
resisted
U.S. pressure to shun Huawei's equipment will resent being backed into a corner: Even if President
Donald Trump loosens the noose a bit, they can hardly take the chance that restrictions won't be re-imposed later.
China will only redouble its efforts to produce advanced technologies domestically.
As a negotiating strategy, the decision makes even less sense. U.S. officials claim it had nothing to do with
stalled trade talks, but it certainly looks like Trump wants to use Huawei as leverage,
just as he did last year
with ZTE Corp. Trump has already
invoked
national security far too often in pursuing his scattered trade battles. Doing so here would set
another terrible precedent while almost certainly backfiring: It will aggravate the current impasse and give
Beijing little incentive to abide by any eventual agreement.
Worse, the decision undermines the implicit point of any U.S.-China trade deal: not just to increase commerce
but to stabilize relations between the world's two most powerful nations. While tensions are inevitable, a healthy
trading relationship should in theory restore ballance, reminding both sides of the benefits of cooperation and
strengthening constituencies that have reason to prefer peace to war. By contrast, targeting Huawei so nakedly
will only further marginalize the
few moderates
in the Chinese leadership and embolden hawks who see conflict as unavoidable. For ordinary
Chinese, it will be hard to avoid the impression that the U.S. is simply trying to limit their economic
possibilities.
Even on its own terms, finally, this gambit is likely to fail. To be effective, an assault on Huawei would need
to be embedded in a larger strategy with a clearer endgame in mind. That's nowhere in evidence: Is the aim to
cripple China's tech industry? Teach the country its place? Give a boost to non-Chinese suppliers? Provoke a
conflict? End one? Without a more focused goal, Trump risks simply alienating U.S. allies, infuriating average
Chinese and raising the chances of confrontation, all to no obvious end.
What the U.S. needs is a larger plan that seeks a healthier coexistence with China. That means building up
America's defenses, leveraging its competitive strengths, working with allies to pressure China to conform to
global norms, and taking the lead in writing new rules that can constrain its more disruptive behavior. Crushing
Huawei, by contrast, simply looks like a strategic miscalculation -- and one with potentially disastrous
consequences.
May 20, 2019
Private Equity is a Driving Force Behind Devious Surprise Billings by Eileen Appelbaum Surprise medical bills are in the news almost daily. Last Thursday, the
White House called for legislation to protect patients from getting surprise doctor bills
when they are rushed to the emergency room and receive care from doctors not covered by
insurance at an in-network hospital.
The financial burden on patients can be substantial -- these doctor charges can amount to
hundreds or even thousands of dollars.
What's behind this explosion of outrageous charges and surprise medical bills? Physicians'
groups, it turns out, can opt out of a contract with insurers even if the hospital has such a
contract. The doctors are then free to charge patients, who desperately need care, however much
they want.
This has made physicians' practices in specialties such as emergency care, neonatal
intensive care and anesthesiology attractive takeover targets for private equity firms.
As health reporter Bob Herman observed , acquisition of these health services "exemplifies
private equity firms' appetite for buying health care providers that wield a lot of market
power."
Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not
operate like an ordinary marketplace. Physicians' practices in these specialties do not need to
worry that they will lose patients because their prices are too high.
Patients can go to a hospital in their network, but if they have an emergency, have a baby
in the neonatal intensive care unit or have surgery scheduled with an in-network surgeon, they
are stuck with the out-of-network doctors the hospital has outsourced these services to.
This stands in stark contrast to other health-care providers, such as primary-care
physicians, who will lose patients if they are not in insurers' networks.
It's not only patients that are victimized by unscrupulous physicians' groups. These
doctors' groups are able to coerce health insurance companies into agreeing to pay them very
high fees in order to have them in their networks.
They do this by threatening to charge high out-of-network bills to the insurers' covered
patients if they don't go along with these demands. High payments to these unethical doctors
raise hospitals' costs and everyone's insurance premiums.
That's what happened when private equity-owned physician staffing firms took over hospital
emergency rooms.
A 2018
study by Yale health economists looked at what happened when the two largest emergency room
outsourcing companies -- EmCare and TeamHealth -- took over hospital ERs. They found:
" that after EmCare took over the management of emergency services at hospitals with
previously low out-of-network rates, they raised out-of-network rates by over 81 percentage
points. In addition, the firm raised its charges by 96 percent relative to the charges billed
by the physician groups they succeeded."
TeamHealth used the threat of sending high out-of-network bills to the insurance company's
covered patients to gain high fees as in-network doctors. The researchers found:
" in most instances, several months after going out-of-network, TeamHealth physicians
rejoined the network and received in-network payment rates that were 68 percent higher than
previous in-network rates."
What the Yale study failed to note, however, is that EmCare has been in and out of PE hands
since 2005 and is currently owned by KKR. Blackstone is the once and current owner of
TeamHealth, having held it from 2005 to 2009 before buying it again in 2016.
Private equity has shaped how these companies do business. In the health-care settings where
they operate, market forces do not constrain the raw pursuit of profit. People desperate for
care are in no position to reject over-priced medical services or shop for in-network
doctors.
Private equity firms are attracted by this opportunity to reap above-market returns for
themselves and their investors.
Patients hate surprise medical bills, but they are very profitable for the private equity
owners of companies like EmCare (now called Envision) and TeamHealth. Fixing this problem may
be more difficult than the White House imagines.
With $105 billion in global sales last year, Huawei has a vast web of customers and suppliers on
nearly every continent. The company is the world's largest provider of equipment used in 5G telecom networks, and the
second largest seller of cellphones. Last week, Huawei said that it spends more than $1 out of every $7 of its annual
$70 billion procurement budget buying equipment from U.S. companies.
Google said it would restrict Huawei's access to future updates of its Android operating
software, which powers many of Huawei's phones. Other U.S. manufacturers also began suspending business dealings with
the Chinese firm.
The markets punished many of those suppliers Monday, including Intel, Broadcom and Qualcomm, as
well as Micron and semiconductor manufacturer Cypress. Chip makers Qualcomm and Broadcom fell 6 percent. Intel
declined nearly 3 percent, and Lumentum Holdings shares fell more than 4 percent after the company said it would stop
selling to Huawei.
The United States said last week it was adding Huawei to a
trade blacklist
because the company "is engaged in activities that are contrary to U.S. national security or
foreign policy interest." That punishment means U.S. firms aren't allowed to sell to Huawei unless they get special
approval from the government.
On Monday evening, the Commerce Department
slightly eased
the timing of the restrictions, saying it would allow some transactions to continue for 90 days,
to facilitate "certain activities necessary to the continued operations of existing networks and to support existing
mobile services." The temporary reprieve will allow Huawei to receive U.S. equipment to service existing Huawei
mobile phone users and rural broadband networks.
Kevin Wolf, a former senior Commerce Department and current partner at Akin Gump, called the
reprieve "very narrow." "It's not relief for exporters. It really is to prevent unintended operational problems with
existing networks," Wolf said.
The United States views Huawei as a security risk because it believes the company has close ties
to the Chinese government, which Huawei has denied. U.S. officials have said Huawei could potentially tap into and
monitor sensitive U.S. communications through its network technology.
Ren Zhengfei, the founder of Huawei, said that the U.S had underestimated his company as he
sought to dismiss the impact of the ban.
"The current practice of U.S. politicians underestimates our strength," Ren said in a group
interview with Chinese media Tuesday morning. Huawei had a stockpile of chips and "can't be isolated" from the world,
he said.
The 90-day extension "doesn't mean much" and Huawei is fully prepared for the American actions,
Ren said, even appearing to brag about luring workers away from U.S. companies.
"We are very grateful to the U.S. companies. They have made a lot of contributions to us," he
said in the comments, which were shared in real time by state media. "Many of our consultants are from American
companies like IBM."
Earlier, Huawei reacted to Google's decision to stop allowing updates by saying the Chinese
company had "made substantial contributions to the development and growth of Android around theworld."
"As one of Android's key global partners, we have worked closely with their open-source platform
to develop an ecosystem that has benefitted both users and the industry," said spokesman Joe Kelly, adding that
Huawei would continue to provide security updates and after-sales services to its existingsmartphone and tablet
products.
Google's announcement came at an awkward time for Huawei, which on Tuesday is expected to unveil
its Honor 20 series of smartphones in London, and security experts were divided on how quickly and severely the ban
could hurt Huawei.
Some said Huawei is bigger and better prepared for the blockade than its Chinese competitor ZTE
was last year when the Trump administration restricted ZTE from doing business with U.S. firms. The U.S.
later eased
ZTE's punishment.
Washington announced last week that it would impose new prohibitions on Huawei, including a
ban on US companies selling components or services to the telecoms giant. The seriousness of
these actions is difficult to understate, as Rosenblatt Securities analyst Ryan Koontz
explained. If Huawei is pushed to the brink of collapse, Beijing might label this 'an act of
war'.
"The extreme scenario of Huawei's telecom network unit failing would set China back many
years and might even be viewed as an act of war by China," Koontz wrote. "Such a failure
would have massive global telecom market implications."
But bringing a massive global Chinese firm to its knees is one way to demonstrate to
Beijing, and the rest of the world, which ignored Washington's warnings about Huawei, the true
reach of American economic power. And it's one way to put a timer on talks with Beijing,
ensuring that the trade skirmish won't drag on until the height of campaign season.
American firms weren't the only ones to act. In Europe, German chipmaker Infineon
Technologies said it would suspend deliveries to Huawei, at least until it has had a chance to
determine the significance of Washington's executive order (though company sources later denied
these reports and said shipments to Huawei would continue).
Since hostilities with the US began, Huawei has been stockpiling components. It now has
enough of a buffer supply to keep its business running without interruption for at least three
months.
Nikkei reported late last week that Huawei had reportedly asked suppliers to help it build
up enough stockpiles to last it a year, but it's unlikely that Huawei has accumulated enough
buffer stock to last it anywhere near as long.
If Washington refuses to back down, this three-month window might become the next critical
deadline for the trade talks.
If it wasn't clear before, we now know that President Trump wasn't kidding when he said late
last year that Huawei could become 'a bargaining chip' in the trade skirmish. Whether the
prosecution of Meng Wanzhou factors into it remains to be seen, but President Trump did tell
Fox News over the weekend that he wouldn't allow China to surpass the US on his watch.
Huawei's odds of finding replacement suppliers are slim, as Koontz explained. Huawei "is
heavily dependent on U.S. semiconductor products and would be seriously crippled without supply
of key U.S. components."
It's clear where Beijing stands on this. We wouldn't be surprised to see a 'consumer
movement' emerge in China where middle-class consumers ditch foreign phones and proudly
proclaim their support for Huawei.
On Sunday afternoon, President Trump threatened Iran with military intervention via tweet.
Yet, analysts blamed the growing pressure on Huawei for the risk-averse trading atmosphere.
US stocks were on track to open lower. Meanwhile, Huawei's dollar-denominated corporate
bonds tumbled again on Monday after one of their biggest declines in recent memory on Friday.
The selloff comes as fears of a Huawei bankruptcy are beginning to intensify.
Beijing has maintained its aggressive posture, with its Ministry of Foreign Affairs warning
in response to news of the Google ban that China would do what it needed to do to protect its
companies' "legitimate rights", and also hinted at legal actions it might take. Over the
weekend, Beijing compared the trade skirmish with its actions in the Korean War, about as clear
a sign as any that we're in for a protracted conflict.
Whatever happens, it looks like the showdown over Huawei has eclipsed the broader trade-war
narrative. So much for the Huawei crackdown being a 'separate issue' from the trade talks, like
Trump officials had previously insisted.
Bottom line: If we don't get a deal by the end of June, this trade war is going to really
heat up.
So, Huawei is dependent upon Western semiconductor manufacturers. But I thought the
Chinese were the leaders in innovation? That's all I hear on here and elsewhere. Seems to me
that they should have invented and created their own semiconductor industry back in the
1800's when Westerners began to mess with them. One would think that the great and powerful
and super duper intelligent Chinese would have discovered and invented it first in the first
place. Certainly the Chinese or their pals in the USSR could have done so sometime in the
'50s, '60s, '70s, '80s or '90s? No?
The US might win this battle but it has already lost the war. It is in a position similar
to Ukraine which was the richest and most developed Sovjet republic after the breakup - but
which is now one of the biggest shitholes in the entire Galaxy, feasted upon by a bunch of
Zionazi oligarchs. Think of the US as an Ukraine on steroids.
Trump and his diverse actions will hurt Huawei. Maybe even badly. Long term, maybe even
short term, the US won't gain anything from it. It is in a position where it can only lose.
Not because the potential of the US isn't "terrific" (actually it coud be the most promising
country) - but because the US is designed to fail as it is basically a failed state
already.
Im confused, how would not choosing to do business with Huawei possibly be considered an
act of war?
Especially when China largely keeps their markets closed to the west?
After speaking to some Chinese immigrrants... according to them, they'll never come to any
kind of fair agreement with the west. They're not interested in a level playing field at all.
All they care about is making sure the Chinese state gets all the benefits in order to
further Chinas power and influence.
Great news. Huawei already has completed development of its own OS, no doubt an Android
clone. This finally gives us a path off of the Goolag/ Android OS. In 19 months Rabbi Trump
will be gone, which is good, but his destroying the Android monopoly may be his biggest
achievement.
An android clone? No way that would be stealing again. No they will make their own special
sauce OS that will electrocute the citizen if they don't adhere to the state directives.
There are so many other better ways to run a phone interface , I wonder if these two
systems have been kept as monopolies so that the Spooks at the NSA and CIA are able to find
their way around easily
The take away quote
"
Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by
the United States.
"
Empire is having its hand slapped back in Venezuela, Iran, Syria, ???
Where are they going to get their war on?
I see empire as a war junkie and they are starting to twitch in withdrawals which is
dangerous but a necessary stage. Trumps latest tweets show that level of energy.
The
spinning plates of empire are not wowing the crowds like before.....what is plan Z?
Indeed, the biggest cost may be imposed on investors, who for years have inflated the
economic potential of communist China's state-directed economy. Major public companies in the
United States, including Apple, Caterpillar, and Boeing, are among some of the leading
exporters to China. Yet exports to China accounted for just 7.2 percent of overall American
exports in 2018. According to the U.S. Trade
Representative , the top export categories that year were: aircraft ($18 billion),
machinery ($14 billion), electrical machinery ($13 billion), optical and medical instruments
($9.8 billion), and vehicles ($9.4 billion).
Hmmm. This sounds suspiciously like the arguments Brexiters have dragged out about the EU.
Remember the "German car manufacturers will help us get everything we want because we're such
a large market and they can't afford to lose us"?
People of a country can decide to put up with a heck of a lot of economic pain if they
decide they're defending their country.
Base issue seems clear. Two large economies with very different models of governing. One a
Totalitarian state run economy, and our economy based on greed and consumption, to support
GDP. The theory that the world need be interconnected by trade, has run its course. We really
don't even need a Nafta re done treaty. All 3 economies have exhausted what works for them,
and can simply abandon what doesn't. If a cuntry has something to sell and the buyer country
sees a price advantage the deal will go down.
Tariffs do not get passed along into higher consumer prices unless the product has a very
high inelasticity in demand.
Here's a thought experiment: suppose I sell an imported product for $10. The government
imposes a 25% tariff, so I decide to up the price to $12.50. Here's your issue: if I could
charge $12.50 for the product, why wouldn't I just have charged that in the first place?
Charity? No, I didn't charge that because every time I tried, sales collapsed.
And if you understand retail, especially imports, gross margins are enormous. Sales prices
can be 10 times cost of goods. So that $10 product probably just cost $1. And a 25% tariff on
$1 is only 25 cents. Top of the line iPhones cost about $180 to make but retail for close to
$1000.
Tariff expenses come out of some combination of negotiated lower prices with vendors, lost
jobs as importers seek to cut costs, and lower profits. Consumer prices are the last thing to
consider.
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a
trade war which we are winning (or not). How will we know that we won? After victory do we
buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a
financially comfortable retired person who has plenty of stuff that I have accumulated over
the years; a trade victory might have a different meaning to a young couple starting a life.
Who gets the spoils of victory, me or the youngsters?
China has been running much the same economic model as Japan in the 1970's and 1980's, an
export-led autarchy heavily dependent on debt financing. When Japan started to open its
financial markets in the later 1980's, things started grinding to halt and by the early
1990's stagnation started.
China is on much the same track, though Xi has been careful not to liberalize the
financial markets too much, and has otherwise done a good job of keep growth on track. But it
can't last, and if a trade war does not tip China into stagnation, something else will in the
not-too-distant future.
Any downturn will bring the legitimacy of the CCP into question, and the traditional
response of dictatorships in that situation is to find a foreign conflict to distract the
population. With mutual distrust, and even dislike, growing on both sides, things could get
very messy.
In the 2017/2018 trade year, the US exported $12 billion of soy to China. That's.
particularly important for two reasons:
* China accounts for the majority of US soy exports, so the trade war affects that sector
more that the others you mention.
* The people affected are one of the cores of Trump's base.
The latter point is particularly significant, because the success or failure of the war
will be determined by political stamina, not by economics directly. Who can hold out longer,
Xi or Trump, as his political position erodes. One of the "weaknesses" of a democracy is the
greater sensitivity to the broader political environment (ie, not just the Politburo). Are
you so sure that the US will win this war of attrition?
@Kent – Thank you! Finally someone with actual understanding about retail and the
ridiculous profit margins of imported goods, especially from Asia. As someone who worked
first-hand at a shoe factory in China, managing the account, I was aghast at how low U.S.
companies like Nike or even Wal-Mart drove down the production costs ($6-18 dollars landed),
while selling the shoes for $30 – $120 dollars.
Theoretically all that juiced-up profits from outsourcing should have been reinvested to
create new jobs for U.S. workers over the past 20 years. That's what economists and corporate
lobbyists will argue. Empirically, however, those profits were reinvested to the stock market
for fat quarterly bonuses.
The underlying issue with China is their long standing demand to disclose all development
info about any product doing trade in China. Take Apple, they butted heads with the FBI and
refused to unlock an Iphone that belonged to a killer. Then they enter China and the
government there demands all the tec info for phone development and Apple simply hands over
their deepest secrets. Its the same for Ford, Cat or any others wanting to do business in
China. I for one, can live without any China trade if these have to be the requirements.
There is a long list of other cheap labor countries that would welcome our trade without
being forced to provide trade secrets.
"So what happens in the next T-bill auction when China doesn't show up and instead sits on
the sidelines–does the Treasury end up paying higher interest rates to sell the
instruments necessary to finance our federal spending? And, if so, what does an increase in
those interest rates do to our economy?"
Interest rates for treasuries are always set by the Federal Reserve. The secret sauce is
the Primary Dealer banks. They are required, by law, to make the market for treasuries.
Meaning they have to buy any treasuries that aren't sold. And they do so at the interest rate
set by the Fed. And they always, always have all the money they need to do so. The Fed just
prints it and adds it to their balances.
It's the beauty of a fiat currency. The USA cannot be held hostage to foreign financial
agents.
This trade war is about regime in change in China, as Bannon has said on many occasions. The
Chinese are finally waking up to our true intentions. America can't allow a more successful
economic model to exist anymore than they allow socialism in Venezuela.
The only surprising outcome of the clash will be that American corporations will
experience massive collateral damage due to supply chain disruption and being shut out of the
largest consumer market in the world in China.
The U.S. Empire has decided if U.S. corporation can't run ruff shod over the Chinese
government like they do here and everywhere else, they cannot be allowed to submit to Chinese
government rule in exchange for the benefits of the Chinese market place.
It's probably the only time in recent history that the defense of market forces resulted
in a direct hit on the "free" market itself. Like all front line troops, U.S. corporations
will suffer many casualties in the battle ahead. They didn't volunteer for this trade war and
they had no idea that this would be a hill that many would die on.
The paradox of this situation is not lost on them and most are paralyzed by what lies
ahead.
You are conveniently forgetting that much of the Chinese goods subject to the increased
tariffs are goods manufactured by American corporations utilizing Chinese labour due to its
much reduced costs. Those American companies are going to lose market share and profits
because of these new tariffs. They will not be happy!
I wonder if they could by commodities? Buy surplus oil would be a logical choice. They could
sell their treasuries, use dollars for oil, thereby drive up the price of oil for everyone,
including the US.
Granted that could eventually help the US, but in the short term could be a pain.
Slugger , I don't think your question is ignorant at all. I think it's very wise. If
only we asked the "Why?" and "What does a win look like?" of all these literal and figurative
wars, we might get somewhere.
I do not, ultimately, believe Trump's trade war with China is going to make the US into a
manufacturing powerhouse again. Those days have come and gone. It will definitely increase
the cost of a lot of junk we buy from China.
The hope, however, is that it will force China into a position wherein we could demand
more fairness in terms of patents and technology theft.
The time when it was beneficial for China to trade real goods for numbers in a computer was
long since past. They keep doing it out of habit. Trump is doing both countries a big favor.
Historically, it has not been wise to discount China's capacity to overcome disruptions that
would vivisect virtually any other civilisational hegemon on this planet. China survived the
Mongols, the English, and the Japanese. And itself many many times over.
We're barely a blink in the eye of China's history. I would not be as sanguine about who
"needs" whom more over the long term.
(Just to be clear: I have more than my share of criticisms of American trade policy of the
past couple of generations, including our posture vis-a-vis China.)
"Slugger
May 17, 2019 at 9:58 am
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a
trade war which we are winning (or not). How will we know that we won? After victory do we
buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a
financially comfortable retired person who has plenty of stuff that I have accumulated over
the years; a trade victory might have a different meaning to a young couple starting a life.
Who gets the spoils of victory, me or the youngsters?"
You. Definately you.
Youngsters need to be able find a job that pays for their basic needs and a path to be
able to keep growing or stabilize that lifestyle.
This war bumps prices higher, but won't bring those jobs back. High skill jobs are already
in high demand with few takers so more of those won't help the majority. The rest will either
be automated, moved from China to other countries (which is already happening as China wants
to move from sweatshops to a consumer middle class economy and places like India and Vietnam
are taking up the slack), or abandoned due to a lack of profit margins.
I'm not saying we should or shouldn't do this with China. They haven't exactly been
treating us or our companies well after all. But this is NOT going to benefit the regular
American. Low skill, sustainable, reliable work is just Not going to be a thing.
What will help is encouraging the ability to gain high skills and mobility for those high
skill jobs that are in desperate need of workers, aiding low skill workers so that they can
afford the things they need and not be 100% exploited, and figure out what to do with the
many many middle age and up folks who were trained to be middle class to transition them into
one or the other and not hate life while doing so.
We can go fix or break our trading systems with other countries as we see fit, but we
really need to stop thinking it's going to fix things. Same goes for immigration for that
matter.
The author shows his ignorance. The Bank of China is a commercial bank. Foreign reserves are
held by the People's Bank of China. Different entities. I assume the rest of the article is
full of inaccuracies.
It is hard to know if China has already lost. Their published economic numbers are not very
accurate. A key point is that the standard economic models of International Trade are wrong.
"Free Trade" can have benefits, but does mandate optimal outcomes. For example, lower cost
players can transfer economic production to their soil. There are many equilibrium points
(vs. the one of standard economics) in international trade when productivity changes or there
are economies of scale. With many of these points it would be better a nation not Trade. The
US Trade with China fits this bill. This non-standrd was demonstrated by Baumol and See:
https://www.amazon.com/Conflicting to
-National-Interests-Robbins-Lectures/dp/0262072092/ref=sr_1_5?s=books&ie=UTF8&qid=1473299717&sr=1-5&keywords=Baumol+Trade
We need to follow the actual Terrain of economic results vs. the incorrect map of standard
economics.
Organizational and Technological stage drives over 80% of economic growth (see Solow). The
Chinese have latched on to US creativity to drive their economy (plus an investment rate of
45% vs. 20% for the US). In parallel the US went Crony Capitalist and its TFP went from 3% to
.4%/year. Can a Crony capitalist US recover its productivity growth and can a State
Capitalismt Chinese dictatorship be innovative without the West. The US under Trump is
attempting to displace its currrent ruling elites. This will not happen in China. My guess is
China has lost at trade and will lose at Economic productivity growth.
Sounds more like a pointless Pyrrhic victory. Tit-for-tat trade wars have many unintended
consequences, can easily expand into other sectors, and ultimately consumers and employees
will bear the burden.
Americans' fear and hatred of China is so great that we are yearning for China's lost
regardless of how it may harm Americans.
Take the latest "emergency order" to put Huawei in the "entity list" to ban it from
purchasing American products. If implemented, it will cost American companies $11 billions of
sales from Huawei, and lost of thousands of high tech and good quality jobs. If Huawei is
destroyed, the 5G market will probably be picked up by Swedish and Finland companies, and the
smart phones market by South Korean Samsung, not any US company. But who cares, as long as
Huawei is destroyed, right?
Take a look of all opinion pages in the media and comments in the Internet, if the supply
chain is moved from China to Vietnam, then it is a win for Americans, right? Who care whether
Vietnamese can produce it as efficiently as Chinese or not, or whether Vietnam is also a
communist country?
This *jihadic* style pursuit to destroy China is also blinding ordinary intelligent
Americans of common sense about the relative strengths and weaknesses of both sides. This
author, for example, ignores all the possible ways Chinese can hit back if they also decide
to go the self-destructive ways or even "nuclear" (figuratively or literally) options. And
yes, the options are not restricted to financial tool like US bonds only, e.g.
1. Stop selling rare earth to American companies – which means we can't even make
F-35 fighters. The last congressional study finds that it will take at least 10 years for US
to re-open our rare earth mine.
2. Start making the life of all American companies difficult in China – GM and Ford
are selling more cars in China than in US, Apple has its 2nd largest market in China. The
growth rate of China for these companies are higher than US.
3. Stop cooperating with US on geopolitical front, e.g. start helping North Korea to
perfect their ICBM, or buying lots of oil from Iran, etc.
These are just random thoughts I come out from 2 minutes of brainstorming. I am very sure
1.4 billions people can think of many things much more deeply and creative than me. Have the
author or any of the people in DC think through all the possibilities before shouting for
war? Good luck if you think they do.
And rest assured when the dusk settles, ordinary Americans will NOT be any penny richer or
our life any better.
This country has a long history of insecurity toward and racism against Asians. Sadly, the
current fight proves that this ugly chapter has not close.
Right now Trump administration clearly wants to slow down China development and Chinese
leadership understand that. The game is probably similar to the game the USA played with the USSR
-- create economic difficulties to the point when disintegration, or the social upheaval is possible.
China level of internal debt denominated in dollars probably dwarf their Treasury holdings (this also is true for Russia).
This situation is considered by many commenters a huge weak point and that might be
Trump team calculation: in their current situation Chinese's can't afford to lose such a large export market as the USA: many
enterprises will simply be bankrupt.
The US consumers might still feel the pinch, but ultimately Beijing needs the trade surplus more than the USA needs their
trade.
If this is wrong, Trump administration might make already bad situation worse, as if China
can switch goods flows and survive more of less intact that might undermine dollar as the
reserve currency. They also now will probably completely ignore sanctions against Iran, making
them non-essential: a kick in the chin to the Trump and neocons who surround him in WH.
Looks like we are on the wedge of creation of two hostile to each other neoliberal systems instead of one: one with the center in
Washington and the
second with the center in Peking.
It is bad strategy to attack several countries simultaneously (the war on two forints) and
that's what Trump is doing: Iran, Russia and China are three major battlefields now. There are
also some tensions with EU too.
The concept of face while somewhat interesting is probably exaggerated and is redundant here.
This comments really gats to the bottom of it: " It has always seemed to me that "Face" is the
distant inferior cousin of Honor and a much closer sibling to Pride or even Hubris. That is, the
Asian concept of Face has everything to do with how you are perceived and almost none with how
you "are". Honor, meanwhile, demands a rigorous adherence to a code of conduct and force of will
that places less emphasis on perception and more on "being". Westerners (myself included) tend to
get those two confused. "
Notable quotes:
"... 6: It goes a pretty long way to be aware of some more imaginative things that especially state aligned business can do if you are in China. Things like precision weighing any electronic equipment you take there before and after are just best practice. ..."
I
don't think the Washington decision makers, as opposed to perhaps career Sinologists in the
State Department, quite understand the dynamics of the Trump Administrations relationship with
China and the risks America appears to be running. The bit that seems to be missing is a
realistic appreciation of "Face".
A quick search of the internet reveals scholarly definitions of "Face" together with the
description of it in socio - cultural terms that in my opinion do not do it justice. Couple
that with Western insensitivity, NeoCon hubris and Trumps preference for believing everything
is a negotiable transaction and we are set up for a monumental falling out with China that has
lethal consequences for America.
I will give a few examples of Face, you can find plenty more on your own. Did you know it is
an insult to request a Chinese to sign a written contract? If he has agreed to the terms and
said as much in front of other Chinese then that is enough. "Face" does the rest. Did you know
that in certain circumstances "Face" requires you to lie to, or ignore, authorities in support
of family and friends? This last, in my opinion, is the reason for the current Chinese attempt
at omnipresent surveillance; "we tremble at the power of the Emperor in Peking, but the
mountains are high".
Col. Lang makes the point that the Japanese went to war to dispel the threatened perception
that "they weren't the men they thought they were". Well with "Face' in China its more than
that, you are your "Face". To damage someones "Face" is to create a lifelong mortal, implacable
enemy. There is no way, short of death, to recover once you have given offense. Against that
standard Trump, Bolton and Pompeo are playing with fire. "Just kidding" doesn't cut it.
It may surprise some of you to know that the West was trading with China right through the
cold war - in US dollars only. Nixon didn't discover China either. It also may surprise some
that China is perfectly capable of making very high quality reasonably priced sophisticated
goods, and always has been. The reason that Walmart sells cheap Chinese schlock is because
that's what they asked China to supply. As for "stealing intellectual property", don't make me
laugh. We all do it and China has plenty of very smart people that create first rate IP of
their own. I make the case that China is a sophisticated and capable economy, with its own
amour propre, not some third world hole populated by leaders that can be bought or
threatened, and Trump risks forgetting this at our peril.
To this end I note that the trade war is not going to Americas advantage, China has vast
holdings of American debt, China buys Iranian oil, judging by reports of Sochi discussions,
Russia AND China are likely to support Iran and both Korea and Taiwan are vulnerable. In my
opinion President Trump has a very small window left in which to fire Bolton and perhaps Pompeo
and embark on a more conciliatory line, before China becomes an irreversible, implacable
enemy.
So unless we economically surrender to them expect war?
See, that's the attitude Trump and the Trade Representative display. It is
impossible we could find a compromise that would be better for both sides. It is a purely
binary zero-sum game. If we do not "win," then we "lose," which means surrendering to an
implacable enemy who will destroy us. It's no wonder the majority of the world's people think
America is the greatest danger to world peace. This is why Bolton is able to find support
throughout the nomenklatura. Most Chinese still hold to Confucian concepts of honor,
something the American elites abandoned decades ago as unprofitable.
My son, Jason, is fluent in both Mandarin and Cantonese was headquarered in Hong Kong for
years but now works out of Tokyo but spends a great deal of time in China conducting
business. He would probably argue that, if anything, Walrus is understating the importance of
Face in China. There are numerous rituals associated with interacting with Chinese that must
be observed in order for communication and agreement to flow properly.
I think many in America, maybe even Trump, have an image of China as a backward country
full of uneducated dumb people. Nothing could be further from the truth as a large segment of
the population is not only eductated but intellectually the equal of Americans.
As far as handling the trade war between China and the U.S., I think in some ways China
has an advantage in it's government directed relationship with business. It allows China to
react quickly to adverse conditions, faster and with more cohesiveness than our capitalist
system. Watch for China to move it's manufactured products through numerous other countries
to avoid some of the impact of tariffs.
China is also not as responsive to consumer complaints as the U.S. democracy. As soon as
Trump's base starts complaining about the higher prices at Walmart etc. Congress and Trump's
re-election campaign officials will start to make China tariffs seem intolerable.
I would think the Chinese see Trump as something to be persevered for a few years regardless
of who he surrounds himself with at this point. I wonder if they have a term for "face
incapable" as a parallel concept to the Russian "agreement incapable"? As such they probably
see his administration as a no more sophisticated than a hornets nest, to be avoided if
possible and swatted if necessary.
It has always seemed to me that "Face" is the distant inferior cousin of Honor and a much
closer sibling to Pride or even Hubris. That is, the Asian concept of Face has everything to
do with how you are perceived and almost none with how you "are". Honor, meanwhile, demands a
rigorous adherence to a code of conduct and force of will that places less emphasis on
perception and more on "being". Westerners (myself included) tend to get those two
confused.
If the Chinese were bound by the authors concept of Face, China must be a paradise without
corruption. Instead of polluted water land and air, wizened elders concerned over their
stewardship and the lose of face from an environmental catastrophe, would provide a
harmonious balance between man and nature. Instead, its a paradise and a ghetto where
passerby's walk nonchalantly around the dieing. Where companies reluctantly provide netting
to slow the steady suicide of their workers. They do tend to plan for the long term, and they
can certainly hold a grudge I would agree. How far are you willing to bend-knee for someone
else's concept of pride though? Tariffs, which have been around since antiquity, seem like a
small infraction for all this talk of life-long mortal, implacable enemies. Yesterday I saw a
Chinese TV program that roughly translated said Donald Trump was literally in the White House
crying over soybean prices. POTUS literally crying over the Chinese governments response to
our rising tariffs after decades of unfair trade practices that benefited the Chinese (elites
anyway). So you shouldn't think that saving Face is a two way street or will result in a
mutually beneficial deal.
IMO, China has been "an irreversible, implacable enemy" for decades now. It just so
happens that our own fifth column in the Party of Davos have aided and abetted this
implacable enemy while making sure that we voluntarily disarmed and did not fight back a war
that they are fully engaged in. The consequence has been that we are paying for our own
destruction. China is more authoritarian & militaristic today than it was three decades
ago and there are several people who believe they currently pose an existential threat to the
US & the West in general.
While tariffs may not be the best strategy, we have to admire Trump's courage and
determination to finally fight back in the face of massive internal opposition from our fifth
column. When you look at the sheer scale at which the Chinese are buying think-tanks,
academics, media, K-Street lobbyists & political influence it is staggering and only the
Israeli influence operation is bigger in depth & breadth. Ever since Bill Clinton gave
China Most Favored Nation status and the Party of Davos furthering their own narrow
short-term financial interests, we have directly financed and transferred technology to China
and dismantled our industrial base. China joined the WTO but has thumbed their noses at every
adverse WTO ruling that showed they play not by the rules but are predatory.
You dismiss the scale of IP theft, forced technology transfer, product dumping, state
subsidies and industrial espionage as everyone does it. That's typical of the China
apologists in the West.
I think you over-estimate China's financial strength. There are several macro analysts
with excellent long-term analytical track records who believe that China is desperately short
USD. This theme that you note that China can crash the UST market is already proven to be
false. China in fact sold hundreds of billions of UST in 2014-2016 with no perturbation in
the UST market.
On the contrary the financial pressure on China is increasing as their debt-fueled
malinvestments grow. I'm willing to bet you that we'll see this pressure manifest in a
devaluation of the RMB.
Sure, they've kicked our ass these past couple decades. Now they've got cocky and think they
own us. Supply chains can re-orient.
As a red-blooded American I'd like my home team to seriously up their game and of course
beat the Chinese at their own mercantilist game. A good start would be to put the squeeze on
their massive USD short position. Eurodollar market is a perfect spot to begin. The Chinese
have US$1.3 trillion debt maturing in 12 months. They've either got to redeem or rollover.
Devalue & bleed reserves. Or else sell USD assets & lose collateral. Margin call
time! Wake-up call time for BRI - if Trump chooses to squeeze at this immediate
vulnerability. Trump can also take the next critical step - restrict their access to our
capital markets. The SEC can also come down hard on all their fraudulent listings.
Maybe Australia is losing its best & brightest moving to China. Not here. In fact it
is the opposite. Young Chinese techies whoever can get a visa are immigrating here. Wealthy
Chinese including top CCP officials are using every mechanism that they can avail to get
their capital out. Chinese capital controls are tightening. If they had an open capital
account their trillion dollar reserve would vanish overnight as capital flees. You must know
that China's domestic security budget is larger than their defense budget. The CCP fear their
own people more than anyone else. Why do you think they're amping up their domestic
surveillance expenditure?
I can also give you an anecdotal experience. Newly minted billionaire and founder of Zoom,
Eric Yuan spoke to our tech analyst team a year ago. I happened to be in that meeting. He was
categorical that if he had been in China and had half the success, CCP would effectively
control his company. He said every Chinese techie dreams of moving to America.
Jack Ma, was banded out here in the west as the new breed Chinese tech entrepreneur. A
billionaire on the Davos circuit. Did he really own Alibaba or was it the CCP? How come his
shareholding was suddenly zeroed out?
Do you think any smart Chinese really trusts the CCP? Why would they? You talk about
"face" & culture and the 3,000 year history of the Han people. What about the history
& culture of the Tibetans? Or the culture & traditions of the Uyghurs with over 2
million of them currently undergoing brutal "re-education" in concentration camps in
Xinjiang?
The authoritarian CCP have had a free ride on us for over two decades. It is time to suit
up and give them a little taste of their own medicine. I hope Trump retains his resolve.
I don't care one iota about their "Face". Not at the expense of deindustrializing large
sections of the American Heartland. Which has already happened. Our trade relationship with
China has been a disaster. The only people to benefit are large shareholders.
As for them holding our debt it's threat is non-existent. Let them sell all of the bonds.
China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in
U.S. debt. The Federal Reserve if need be can buy them all up but even that won't be
necessary due to insatiable demand for the bonds even at these ridiculous low interest
rates.
In fact their obsession with "Face" indicates a psychopath. Defines as no sense of right
and wrong and is generally bolder, more manipulative, and more self-centered than a
sociopath. That sums up their dealings with us the last 25 years.
Only a fool continues to play this game of theirs. Stealing our technology at will, forced
50/50 partnerships, currency manipulation, dumping into our country to destroy industries,
etc. etc. etc.
Plus they are expanding geographically now due to us making them rich. They are 1.3
million homogeneous Han for the most part. Especially compared to our country. I have to say
their government has definitely improved the lives of their citizens as a whole and I respect
that. But enough of our weak kneed leaders giving away the store.
I personally am being hurt by the tariffs due to many LVP flooring products I sell are
sourced from China. I have no problem taking a hit for the greater good and have been working
on sourcing from different locations.
Thanks for pointing the finger at China -looking out for their own interests - the bloody
bas-ards.
I guess you believe that had China had remained insular, the US would not have
de-industrialized to a different country? As if NAFTA wasn't a great sucking sound. Hmm. Me
things the problem lies closer to home - but no finger pointing there.
Totally impressed with the TrumpTareef - Totally on top of everything.
Oh wait, the tax advantages that encourage de-industrialization remain. But I guess Trump
doesn't understand taxes and how wealthy corporations and people use them to move production
overseas and not pay taxes ....
Meanwhile, global de-dolarization accelerates. At some % the US loses its special status
and there will be a reckoning.
I see a lot of hot air - not new policy: Manufacturing did not come back, US
infrastructure is a joke and continues to crumble, workforce participation continues
dropping, and hourly median wage remain stagnant. Why? Because it requires actual policies
that lessen the profitability of some (very wealthy friends in the circle Trump wants to
run).
Here's my prediction - Trump will fold by summer or sooner.
Apologies for butting-in in an otherwise fascinating conversation... but....
There is considerable but misplaced talk of "capitalism" being thrown about in some
threads, whilst Harlan worries about the deindustrialization of the West, ostensibly, due to
China. China has little to do with deindustrialization. A centralized monetary system coupled
with electoral politics, can only be sustained through the use of perpetual fiscal
deficits.
In order for the political construct to be able to run perpetual fiscal deficits, national
debt must necessarily expand. As debt conforms to the law of diminishing marginal utility
however, this is a compounding strategy.
Thus, in order to compensate for the loss of purchasing power, government borrowing must
progressively increase till eventually it goes parabolic. Hence the reason debt in the USA
doubled between 2008 and 2016. This is the parabolic phase.
In order to sustain this strategy, fiscal revenue must ideally expand. In order to
increase fiscal revenue however, legislation must be brought to bear. As legislation and
fiscality become progressively more restrictive in one country, economic actors migrate to
countries where they can achieve an economic advantage.
As a corollary, as legislation and fiscality become progressively more restrictive,
barriers are raised in business and industry. As barriers rise, so does unemployment and/or
under employment whilst business dynamism is proportionally stifled.
In this context therefore, artificially lowering interest rates to ostensibly kick start
the economy, actually reinforces the offshoring dynamic to the detriment of SMEs and the
benefit of large corporations.
If China can be blamed for anything therefore, it can only be blamed to have opened the
doors wide open to Western corporations to allow them to shift their production technology
out of Europe and the USA.
All the while, the finance industry is laughing all the way to the bank.... their own
bank that is.. ..
Chas Freeman was president Richard Nixon's senior interpreter for Nixon's visit to China.
Here is an interesting description by Freeman of some of that trip--
Something to which not enough consideration is given is that China has a considerable
volume of foreign loans, those are increasing, they are denominated in dollars (particularly
since the yuan is not convertible), and must be serviced in dollars. That means that China
needs a lot of dollars which it obtains via selling goods to the United States.
Said another way, China cannot reduce the amount it sells to the U. S. or buy more from
the U. S. without a convertible currency or reducing its level of foreign debt.
Your commentary exudes the naivety that the Chinese have preyed on for the past 50 years.
Their meekish and subservient mannerisms hide a ruthless and immoral inner nature. They would
still be a backward country if not for our elite's insatiable greed. What have they produced
organically that wasn't ripped off from developed countries? What do they offer cultural
other than a social credit system with improved state surveillance techniques? They treat
their own people like dogs and they still have dog eating festivals. China offers a way of
life that is an antithesis of the West, so it is inevitable that there will be a clash. The
question isn't if but when. The longer we delude ourselves into thinking that economics will
change China, the more blood will be shed when the reckoning occurs.
Chinese chauvinism puts American exceptionalism to shame. They've been the Celestial Empire
thousands of years longer than the upstart Anglo-American Empire. In last 30 years the
Western Elite dumped "noblesse oblige" for "get it while you can". China's entry into the WTO
directly hallowed out manufacturing in the Mid-West ultimately resulting to Donald Trump's
trade war.
This was a result of CEOs and Wall Street Raiders moving manufacturing to low wage, no
environmental regulation, nations to make a quick buck. China was a willing partner in the
con in order to modernize.
China's retail sales are now greater than America's. Since the US declared an economic
war, GM will have to drop Buick and Cadillac brands and market their cars in China as
Chinese. But "Face" likely will make that ploy unsuccessful.
GM sold over 4 million vehicles in China last year, even more than it sold in the North
American market. The U.S. only exported 267,000 passenger vehicles to China. Apple sales
declined 30% in China. In an economic war Chinese will avoid buying American branded
products. They have alternatives. Americans don't have a choice at Walmart except to pay the
higher prices due to the tariffs.
Those GM vehicles were built in China by a JV with majority Chinese ownership. The product
line sold at Wal-Mart has plenty of things made in countries other than China. We have a
twenty trillion dollar economy with Chinese imports making up 500 billion. We've got plenty
of options.
China has been emboldened as the west moved their manufacturing base there and transferred
their technology. They've been taking the next steps directly influencing our politics.
Huawei while it claims it is an employee owned company is controlled by the CCP as many
"private" companies in China. The west would be foolish to not put an end to Chinese
subterfuge that undermines their economy and national security.
I don't buy it at all. As others have pointed out China requires access to American markets
to 1) make their dollar denominated loan payments and 2) keep foreign manufacturing located
in the country. The cost of tariffs to the United States is finding alternative sources in
supply chains and higher end cost to consumers. We're insanely rich, we can afford that
without issue. The cost of tariffs to China, in the ultimate analysis, is foreign companies
moving their manufacturing out of the country, which would utterly devastate them.
So far as I understand the Trump administration is demanding nothing more than China play
by the rules of the game as written. If they're not willing to do so, **** 'em.
A well written contract contains enforceable penalties for non-performance with the money
often held in escrow. That's the way I write them. Trump is using the balance of US/China
trade to penalize the Chinese for reneging on the verbal and draft agreements they made with
us.
True. I am not familiar with the agreements so can't discuss it intelligently.
Just saying it seems hardly anyone lives up to agreements any more regardless of in writing
or not.
And dealing with countries is dealing with the people who represent it ..I do believe you
catch more flies with honey than vinegar. You can always swat them later if honey doesn't do
the trick.
This is a traditional problem deeply embedded in Chinese culture. Westerners in the 1800s
concluded that it was impossible to write a binding contract in classical Chinese. There were
hopes for Mandarin, but... I was reading about this as a college student studying Chinese
in the 1970s and have never ceased running across complaints about it. Chinese contracts are
only as good as the will of the contractors and the influence you can bring to bear. When you
are dealing with government, a contract is good until the officials get replaced with new
faces. Even big players like McDonald's are not exempt.
"...what was meant as the flagship of McDonald's planned expansion into the People's
Republic of China (it already had outlets in Hong Kong and Taiwan) was destined for
controversy. In 1994 -- only two years after opening -- a legal battle pitted the
transnational corporation against Beijing's government in a land dispute symptomatic of
China's no holds barred modernization.
"In question was McDonald's 20-year lease on the strategically located property at
Wangfujing -- a busy central shopping district -- and the city's attempts to shutter the
restaurant to make way for a new super sized shopping mall. McDonald's balked at the eminent
domain order, which flattened the surrounding neighborhood. In the end the burger joint was
the lone building standing amid acres of rubble. The dispute raised serious concerns among
foreign investors over the efficacy of business contracts in China at a time when the
Communist state was seen as the future of global markets.
"But in late 1996 McDonald's China president Marvin Whaley announced a reconciliation. "In
a spirit of teamwork and partnership, we've developed a plan that will allow our strong
expansion in the city to continue."
Note that it took two years for the "spirit of teamwork and cooperation' to kick in for a
multi-billion dollar cooperation who could presumably have just been given another good spot
for a hamburger stand. If the officials involved had been willing. Your mileage may vary, but
you are unlikely to do better.
Chinese will respect a verbal contract - the difficulty is getting them to say the terms in
front of other Chinese. Lieing to you is permissible.
Our business solved the problem by using irrevocable letters of credit. That way we could
both blame the banks and not accuse each other of skulduggery. Hence Face was always kept
intact.
For the record and to preclude pointless ad hominem attacks, the Chinese are intelligent
hard working people for whom sophisticated business and finance was a way of life while we
were still living in mud huts. They revere education. They do not subscribe to Modern Judeo
Christian ethics but a much older Confucian creed. For that reason pleas for China to 'play
by the rules" just do not compute.
China is not some modern, fly by night, Westphalian creation. You are dealing with the
Middle Kingdom - 3000 years old and the Chinese, after centuries of oppression now demand
respect. The idea that once again the West can dictate to China is offensive to Chinese and,
considering their economy, downright delusional.
China has its problems. Face as a concept does not extend beyond family and immediate
friends, so the concept of higher loyalty to a Chinese nation (ie patriotism) is not strong.
Neither is respect for national law, nor respect for institutions or companies. This is the
source of all commercial crime (eg: fraud, adulterated products pollution).
The governments reaction to the tendencies of its population include draconian punishments
and now attempts at nationwide surveillance.
The problem Trump fails to recognise is that the CCP and its leaders have Face. Threaten
that and China will become an implacable and unbeatable enemy.
The underlaying philosophies are in some ways diametrically opposed. We in the West are
object and goal oriented, with an ideals based culture, while the East has more of a feedback
oriented view, ie. Yin and Yang.
Even the concept of time is different, as we think of ourselves as individuals, thus
moving through our context, the future is in front and the past behind, traveling the events
of our lives. While the Eastern view is the past is in front and the future behind, as they
see themselves as part of their context and necessarily witness events after they occur, then
the situation continues.
Both are valid in their own context. Though our presumption of moving toward some ideal is
flawed. When some is good, more is not always better. Consider efficiency, which is to do
more with less. Then the ideal of efficiency would be to do everything with nothing. Those
most committed to this view see Armageddon as the door to their ideal state.
What should be kept in mind about the East is that with Communism and the Party system,
then becoming China Inc, to global capitalism, they have adopted essentially Western ideas
and tried framing them through their own lens. The reason would be that such an ideals, goal
oriented paradigm is very effective in the short and medium term, but creates that much more
blowback, in the long term. While China might seem a threat to the current American status
quo, the real danger is our own social and economic breakdown. We have been living on the
equivalent of a national home loan since Reagan, if not Roosevelt and if the holders of that
debt try calling it due, say trading it for remaining public assets, we will be revisiting
feudalism.
The Russian and the Chinese, as well as the Iranians, etc. are really just boogie men,
being thrown up to distract us. This Iranian situation seems to have be a total disconnect
with reality. Something is brewing, whether planned, or just the wheels really coming off the
train.
Both we and the Chinese seem to be headed to our own versions of Brexit. The Russians went
through it with the fall of the Soviet Union.
"...the concept of higher loyalty..." Sounds like the Chinese exclusion act might have
been a good idea afterall. How many generations in the US will it take for a Chinese national
to actually assimiate and become "American"?
"...unbeatable enemy." The PRC is not the Middle Kingdom. President Xi is not the subject
of Master Po's "Everlasting Wrong" and he is well aware that China is certainly not
"unbeatable". These are trade negotiations and right now they need us one hell of a lot more
than we need them. Convincing his fellows in the CCP of that is probably going to be harder
for him than for Trump to do the same with Congress.
Walrus, I find the most illuminating thing about your informative post is the reaction you
elicited. Comment after comment, in my opinion, illustrates some degree of unwillingness or
inability to acknowledge and tolerate a culture clearly different from ours. I am reminded of
a South Park episode called "Toleration" in which the whole town wrongly assumes toleration
of the other requires wholehearted celebration of the other. Nothing could be further from
the truth. There's plenty many of us don't like about today's Chinese culture and society,
but it's their culture and society. They don't have to conform to our ways anymore than we
have to conform to theirs, but we should acknowledge the difference and deal with it.
In the name of tolerance of another culture are we going to surrender to their predatory
behavior? Are we going to allow the Chinese to continue to "beat us at our own game" as
Walrus alludes? Sure the Party of Davos have benefited from the current relationship but why
should the US in it's national interest continue to allow an authoritarian state to steal our
IP, subsidize their companies to dump products in our market and prevent our companies to
sell into their market unless they transfer technology, only to have it stolen?
That type of predatory behavior is not about cultural difference but taking advantage of a
situation that we allowed. Tariffs may not be the best strategy but at least Trump is saying
the current arrangement no longer works. It makes no sense to say in order to protect Chinese
"face" we should continue this arrangement where we have the short end of the deal. I hope
that Trump doesn't back down in the face of Chinese influence operations in the US and his
perception of what's best for his reelection. IMO, the Chinese threat is significantly larger
than any threat from Russia or Iran, and saying we should walk on eggshells to not offend
their cultural sensibilities is frankly ridiculous.
I believe Walrus over-estimates their strengths. There is a reason why their "best and
brightest" continue to immigrate to Silicon Valley in droves. I know some of them personally
as I have backed their entrepreneurial ventures. They will be the first to tell you that they
have given up a lot in terms of familial connection to immigrate to the US as they don't
share nor do they want their kid's futures to be subject to the capriciousness of Xi
Jinping's authoritarian vision.
Jack, why surrender to their predatory behavior? Just stop dealing with them. Stop allowing
American nationalists to buy Chinese made goods and stop selling China our goods. Why not
make the stuff ourselves or learn to do without? Why are those American farmers growing
soybeans for the Chinese. Let them grow stuff for Americans. Sure this approach is even more
extreme that the current tariff war, but it will make us immune to Chinese predatory
practices, won't it? The isolation of Sakoku as the purest form of American nationalism. As
an added benefit of implementing a policy of Sakoku, there would be no more American foreign
adventurism.
I say this tongue in cheek realizing it will never be implemented. But wouldn't this a
better implementation of American nationalism than demanding that all other countries simply
bend to our demands in all matters?
I wholeheartedly agree with you that we should end our overseas interventionism. I've
opposed it for a long time from Vietnam to Iraq & Syria. The costs in the trillions of
dollars, the destabilization of fragile societies to the unnecessary sacrifices of our
soldiers and their families have not provided any meaningful benefit to us.
As far as China is concerned I believe the situation is more complex. One thing I've
noticed in general and exemplified by the comments on this thread is the conflation of the
heritage and Confucian values of the Chinese people on the CCP. Let's not be under any
illusion. The CCP is unabashedly totalitarian. I've no quarrel with the Chinese people. On
the contrary they have my deepest sympathies for having to endure under the boot of the
CCP.
Of course any change in their form of government is for them to effect just as our
forefathers did here. The important point that I believe needs to be made is that we provided
the finance, the technology and the markets to enable the economic development of an
authoritarian regime. An argument can be made that those early decisions to bring in China
into the global economic framework was in the belief it would enable them to reform. I was
persuaded then by Sir James Goldsmith & Ross Perot and others that the GATT trade deal
driven by Wall St would be a disaster for our working class. Neither Bill Clinton nor the
Republicans asked the question then what if the CCP doesn't reform and instead intensifies
their authoritarianism?
Of course the big transfer of our industrial base was completely our own doing as our
political system is fully captured by the Party of Davos. In retrospect it should be clear
that the CCP never intended to relinquish their monopoly on power and would become even more
repressive to maintain it. The CCP is not our friend. They are an implacable enemy who are
now using their growing economic and military strength to directly interfere and subvert our
societies. The scale of their influence operations and the direct use of cash to purchase
influence and espionage is something much larger than at the depth of the Cold War with the
Soviet Union. It is high time we understand this threat and act. At least Trump in his own
limited way gets that something needs to change even if in his mind it is purely
transactional. I'd like to highlight a current example where the Trump administration is
moving to ban Huawei from our market. Opeds are being furiously written and published in our
national media in defense of Huawei, while the company hires the top cybersecurity official
in the Obama administration with top secret clearance as their lobbyist. There are no Opeds
here or in China that Google, Facebook, and other US companies are banned in China. Why is
that? IMO, it's because we accept the authoritarianism of the CCP. The neocons made a lot of
noise demonizing Sadam & Assad as brutal dictators, yet they're silent as Xi Jinping has
millions of Uighurs in concentration camps. If we don't act to check the CCP now our
grandchildren will regret it as they'll have to fight a war.
Quote -"The idea that once again the West can dictate to China is offensive to Chinese and,
considering their economy, downright delusional."
I believe this is the underlying driver to the individual Chinese acceptance of the cost to
any conflict, it also links directly to what they see as a Century of Humiliation where China
wasn't powerful. The very use of the word Humiliation in any translation directly links into
their concept of Face.
Quote- "China has its problems, Face as a concept does not extend beyond family and immediate
friends"
I believe to extend and change this cultural concept of what constitutes Face is behind
the national introduction of Social Credit scores for all citizens and available on line to
all citizens. It is in fact intended as a national reputation system whereby an unrelated
Chinese can lose Face when interacting with other citizens. China is the elephant in the room
in any Western political, defence and economic policy debate.
IMHO, the USA holds most of the cards in this negotiation:
1. The USA trade deficit with China is huge and China needs to sell to the USA, as it will
not find other countries to make up for the lost market.
2. It is not uncommon for supply chains to change. Goods that today are manufactured in
China will likely be made in other asian countries which have even lower wages if the trade
war really goes for a significant amount of time.
3. The inflationary and GDP contraction risk of a trade war is not that high, as the
imported chinese goods make up only 2,3% of the USA GDP.
4. The fact that China has lots of USA sovereign debt is not something that can not be
solved by the FED. A few economists have already pointed that in the past 5 or 10 years.
5. China already is an enemy of the USA. Worst case, it will be more active in the
hotspots in the World, instead of only spying and hacking the hell out of the USA.
So, do not panic. The ones that should be panicking are the chinese.
China gets our middle class and the west gets cheap socks in return.As our middle class
disappears overseas our cheap socks become unaffordable because there are no jobs for our
young workers.The only way to get our middle class back is to stop buying cheap socks.or to
put the price up on our middle class.any idiot can make cheap socks but middle class is
priceless.the backbone of a stable society.Secondly any society that lives beyond its means
through over population is doomed and under no circumstances must it be allowed to
expand.China's growing affluence will increase competition for resources as it's middle class
expands and this will lead to conflict.Cheap socks might end up causing WWIII
Just as a reminder - having run International businesses, I just want to clarify that U.S.
Businesses are not saints. There is a certain amount of cheating, browbeating and stealing as
long as we don't get caught and profits are increasing.
We might not like the Chinese using our methods but that is the way the cookie crumbles.
At this point about two-thirds of Prudential's profits come from overseas subsidiaries and
one of the reasons for that success is our ability to mimic what works in their domestic
companies and to do it somewhat better and cheaper.
Since the profits were repatriated to the U.S., I had to deal with a lot of government
flack about hurting their domestic companies and their employees.
1: Highly sophisticated Culture. They tend to react pretty well if one can show a more
then basic degree of understanding of their history.
2: They greatly prefer nuance. Simple answers imply simple minds.
3: I have not been in the position to actually have to get formal contracts with them. I
can certainly echo however that making a Chinese promise something in front of other Chinese
about whose perception he cares is usually sufficient to have a pretty honorable commitment
to something, it is often easier said then done.
4: I initially had some disdain for the Chinese way of not directly letting you know how
annoyed they are at any given point (Russians are fairly straightforward in this), but
essentially, their point of view is also that if you are incapable of assessing how annoyed
they are you are not a valid negotiation partner.
5: Also, keeping annoyance beneath the radar does not create scenes, and if a scene is
created reactions may have to be forced. Vengeance is a thing with the Chinese . My
impression is that they can be mollified though, and generally regard vengeance as an
expensive luxury item, I also got the impression that you need to go out of your way to
seriously become a target of vengeance, just professional disagreements are not a cause for
vengeance, especially not if you are a foreigner. They also have a pathway of not having to
take vengeance to save their faces by asserting that the offender is
insane/feebleminded/crazy and thus beneath vengeance. Its not a position you want to be in
though.
6: It goes a pretty long way to be aware of some more imaginative things that especially
state aligned business can do if you are in China. Things like precision weighing any
electronic equipment you take there before and after are just best practice.
Via ChasFreeman.net,
Remarks to the Freeman Spogli Institute for International Studies China Program
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Senior Fellow, Watson Institute for International and Public Affairs, Brown University
Stanford, California, 3 May 2019
President Trump's trade war with China has quickly metastasized into every other domain
of Sino-American relations.
Washington is now trying to dismantle China's
interdependence with the American economy, curb its role in global governance, counter its foreign
investments, cripple its companies, block its technological advance, punish its many deviations
from liberal ideology, contest its borders, map its defenses, and sustain the ability to penetrate
those defenses at will.
The message of hostility to China these efforts send is consistent and apparently
comprehensive. Most Chinese believe it reflects an integrated U.S. view or strategy. It does not.
There is no longer an orderly policy process in Washington to coordinate, moderate, or
control policy formulation or implementation. Instead, a populist president has effectively
declared open season on China.
This permits everyone in his administration to go after
China as they wish. Every internationally engaged department and agency – the U.S. Special Trade
Representative, the Departments of State, Treasury, Justice, Commerce, Defense, and Homeland
Security – is doing its own thing about China. The president has unleashed an undisciplined
onslaught. Evidently, he calculates that this will increase pressure on China to capitulate to his
protectionist and mercantilist demands. That would give him something to boast about as he seeks
reelection in 2020.
Trump's presidency has been built on lower middle-class fears of displacement by immigrants and
outsourcing of jobs to foreigners. His campaign found a footing in the anger of ordinary Americans
– especially religious Americans – at the apparent contempt for them and indifference to their
welfare of the country's managerial and political elites. For many, the trade imbalance with China
and Chinese rip-offs of U.S. technology became the explanations of choice for increasingly unfair
income distribution, declining equality of opportunity, the deindustrialization of the job market,
and the erosion of optimism in the United States.
In their views of China, many Americans now appear subconsciously to have combined
images of the insidious Dr. Fu Manchu, Japan's unnerving 1980s challenge to U.S. industrial and
financial primacy, and a sense of existential threat analogous to the Sinophobia that inspired the
Anti-Coolie and Chinese Exclusion Acts.
Meanwhile, the ineptitude of the American elite revealed by the 2008 financial crisis, the
regular eruptions of racial violence and gun massacres in the United States, the persistence of
paralyzing political constipation in Washington, and the arrogant unilateralism of "America First"
have greatly diminished the appeal of America to the Chinese elite.
As a result, Sino-American interaction is now long on mutual indignation and very short
on empirically validated information to substantiate the passions it evokes.
On each
side, the other is presumed guilty of a litany of iniquities. There is no process by which either
side can achieve exoneration from the other's accusations. Guesstimates, conjectures,
a priori
reasoning
from dubious assumptions, and media-generated hallucinations are reiterated so often that they are
taken as facts. The demagoguery of contemporary American populism ensures that in this country
clamor about China needs no evidence at all to fuel it. Meanwhile, Chinese nationalism answers
American rhetorical kicks in the teeth by swallowing the figurative blood in its mouth and
refraining from responding in kind, while sullenly plotting revenge.
We are now entering not just a post-American but
post-Western
era.
In
many ways the contours of the emerging world order are unclear. But one aspect of them is certain:
China will play a larger and the U.S. a lesser role than before in global and regional governance.
The Trump administration's response to China's increasing wealth and power does not bode well for
this future. The pattern of mutual resentment and hostility the two countries are now establishing
may turn out to be indelible. If so, the consequences for both and for world prosperity and peace
could be deeply unsettling.
For now, America's relationship with China appears to have become a vector compounded of many
contradictory forces and factors, each with its own advocates and constituencies. The resentments
of some counter the enthusiasms of others. No one now in government seems to be assessing the
overall impact on American interests or wellbeing of an uncoordinated approach to relations with
the world's greatest rising power. And few in the United States seem to be considering the
possibility that antagonism to China's rise might end up harming the United States and its Asian
security partners more than it does China. Or that, in extreme circumstances, it could even lead
to a devastating trans-Pacific nuclear exchange.
Some of the complaints against China from the squirming mass of Sinophobes who have attached
themselves to President Trump are entirely justified. The Chinese have been slow to accept the
capitalist idea that knowledge is property that can be owned on an exclusive basis. This is, after
all, contrary to a millennial Chinese tradition that regards copying as flattery, not a violation
of genius. Chinese businessfolk have engaged in the theft of intellectual property rights not just
from each other but from foreigners. Others may have done the same in the past, but they were
nowhere near as big as China. China's mere size makes its offenses intolerable. Neither the
market economy in China nor China's international trade and investment relationships can realize
their potential until its disrespect for private property is corrected. The United States and the
European Union (EU) are right to insist that the Chinese government fix this problem.
Many Chinese agree. Not a few quietly welcome foreign pressure to strengthen the enforcement of
patents and trademarks, of which they are now large creators, in the Chinese domestic market. Even
more hope the trade war will force their government to reinvigorate "reform and opening." Fairer
treatment of foreign-invested Chinese companies is not just a reasonable demand but one that serves
the interests of the economically dominant but politically disadvantaged private sector in China.
Chinese protectionism is an unlatched door against which the United States and others should
continue to push.
But other complaints against China range from the partially warranted to the patently bogus.
Some recall Hermann Göring's cynical observation at Nuremberg that:
"The people can always be
brought to the bidding of the leaders. That is easy. All you have to do is tell them they are
being attacked and denounce the pacifists for lack of patriotism and exposing the country to
danger. It works the same way in any country."
There is a lot of this sort of manipulative
reasoning at play in the deteriorating U.S. security relationship with the Chinese. Social and
niche media, which make everything plausible and leave no truth unrefuted, facilitate this. In the
Internet miasma of conspiracy theories, false narratives, fabricated reports, fictive "facts," and
outright lies, baseless hypotheses about China rapidly become firm convictions and long-discredited
myths and rumors find easy resurrection.
Consider the speed with which a snappy phrase invented by an Indian polemicist –
"debt-trap diplomacy" – has become universally accepted as encapsulating an alleged Chinese policy
of international politico-economic predation. Yet the only instance of a so-called a "debt trap"
ever cited is the port of Hambantota, commissioned by the since-ousted autocratic president of Sri
Lanka to glorify his hometown.
His successor correctly judged that the port was a white
elephant and decided to offload it on the Chinese company that had built it by demanding that the
company exchange the debt to it for equity. To recover any portion of its investment, the Chinese
company now has to build some sort of economic hinterland for the port. Hambantota is less an
example of a "debt trap" than of a stranded asset.
Then too, China is now routinely accused of iniquities that better describe the present-day
United States than the People's Middle Kingdom. Among the most ironic of such accusations is the
charge that it is China, not a sociopathic "America First" assault on the international
status
quo
, that is undermining both U.S. global leadership and the multilateral order remarkably
wise American statesmen put in place some seven decades ago. But it is the United States, not
China, that is ignoring the U.N. Charter, withdrawing from treaties and agreements, attempting to
paralyze the World Trade Organization's dispute resolution mechanisms, and substituting bilateral
protectionist schemes for multilateral facilitation of international trade based on comparative
advantage.
The WTO was intended as an antidote to mercantilism, also known as "government-managed trade."
China has come strongly to support globalization and free trade. These are the primary sources of
its rise to prosperity. It is hardly surprising that China has become a strong defender of the
trade and investment regime Americans designed and put in place.
By contrast, the Trump administration is all about mercantilism – boosting national power by
minimizing imports and maximizing exports as part of a government effort to manage trade with
unilateral tariffs and quotas, while exempting the United States from the rules it insists that
others obey.
I will not go on except to note the absurdity of the thesis that "engagement" failed to
transform China's political system and should therefore be abandoned. Those who most vociferously
advance this canard are the very people who used to complain that changing China's political order
was
not
the objective of engagement but that it
should
be. They now condemn
engagement because it did not accomplish objectives that they
wanted
it to have but used to
know that it
didn't
. It is telling that American engagement with other illiberal societies
(like Egypt, the Israeli occupation in Palestine, or the Philippines under President Duterte) is
not condemned for having failed to change them.
That said, we should not slight the tremendous impact of America's forty-year opening to China
on its socioeconomic development.
American engagement with China helped it develop
policies that rapidly lifted at least 500 million people out of poverty.
It transformed
China from an angry, impoverished, and isolated power intent on overthrowing the capitalist world
order to an active, increasingly wealthy, and very successful participant in that order. It
midwifed the birth of a modernized economy that is now the largest single driver of the world's
economic growth and that, until the trade war intervened, was America's fastest growing overseas
market. American engagement with China helped reform its educational system to create a
scientific, technological, engineering, and mathematical ("STEM") workforce that already accounts
for one-fourth of such workers in the global economy. For a while, China was a drag on human
progress. It is now an engine accelerating it. That transformation owes a great deal to the
breadth and depth of American engagement with it.
Nor should we underestimate the potential impact of the economic decoupling, political
animosity, and military antagonism that U.S. policy is now institutionalizing.
Even if
the two sides conclude the current trade war, Washington now seems determined to do everything it
can to hold China down. It seems appropriate to ask: can the United States succeed in doing this?
What are the probable costs and consequences of attempting to do it? If America disengages from
China, what influence, if any, will the United States have on its future evolution? What is that
evolution likely to look like under conditions of hostile coexistence between the two countries?
Some likely answers, issue by issue.
First
: the consequences of
cutting back Sino-American economic
interdependence.
The supply chains now tying the two economies together were forged by market-regulated
comparative advantage. The U.S. attempt to impose government-dictated targets for Chinese
purchases of agricultural commodities, semiconductors, and the like represents a political
preemption of market forces. By simultaneously walking away from the Paris climate accords, TPP,
the Iran nuclear deal, and other treaties and agreements, Washington has shown that it can no
longer be trusted to respect the sanctity of contracts. The U.S. government has also demonstrated
that it can ignore the economic interests of its farmers and manufacturers and impose politically
motivated embargoes on them. The basic lesson Chinese have taken from recent U.S. diplomacy is
that no one should rely on either America's word or its industrial and agricultural exports.
For these reasons, the impending trade "deal" between China and the United States – if there is
one – will be at most a truce that invites further struggle. It will be a short-term expedient,
not a long-term reinvigoration of the Sino-American trade and investment relationship to American
advantage. No future Chinese government will allow China to become substantially dependent on
imports or supply chains involving a country as fickle and hostile as Trump's America has proven to
be. China will instead develop non-American sources of foodstuffs, natural resources, and
manufactures, while pursuing a greater degree of self-reliance. More limited access to the China
market for U.S. factories and farmers will depress U.S. growth rates. By trying to reduce U.S.
interdependence with China, the Trump administration has inadvertently made the United States the
supplier of last resort to what is fast becoming the world's largest consumer market.
The consequences for American manufacturers of "losing" the China market are worsened by the
issue of scale. China's non-service economy already dwarfs that of the United States. Size
matters. Chinese companies, based in a domestic market of unparalleled size, have economies of
scale that give them major advantages in international competition. American companies producing
goods – for example, construction equipment or digital switching gear – have just been put at a
serious tariff disadvantage in the China market as China retaliates against U.S. protectionism by
reciprocating it. One side effect of the new handicaps U.S. companies now face in the China market
is more effective competition from Chinese companies, not just in China but in third country
markets too.
Second
: the U.S. effort to
block an expanded Chinese role in global
governance
.
This is no more likely to succeed than the earlier American campaign to persuade allies and
trading partners to boycott the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB).
That has isolated the United States, not China. Carping at the Belt and Road initiative and
related programs from outside them does nothing to shape them to American advantage. It just
deprives American companies of the profits they might gain from participating in them.
The United States seems to be acting out of nostalgia for the simplicities of a bipolar world
order, in which countries could be pressured to stand with either the United States or its then
rival. But China is not hampered by a dysfunctional ideology and economic system, as America's
Soviet adversary was. What's more, today's China is an integral member of international society,
not a Soviet-style outcast. There is now, quite literally, no country willing to accept being
forced to make a choice between Beijing and Washington. Instead, all seek to extract whatever
benefits they can from relations with both and with other capitals as well, if they have something
to offer. The binary choices, diplomatic group-think, and trench warfare of the Cold War have been
succeeded by national identity politics and the opportunistic pursuit of political, economic, and
military interests wherever they can be served. Past allegiances do not anywhere determine current
behavior.
The sad reality is that the United States, which led the creation of the Bretton Woods
institutions that have been at the core of the post-World War II rule-bound international system,
now offers these institutions and their members neither funding nor reform. Both are necessary to
promote development as balances of supply, demand, wealth, and power shift. The new
organizations, like the AIIB and the New Development Bank, that China and others are creating are
not predatory intrusions into the domain of American-dominated international finance. They are
necessary responses to unmet financial and economic demand. Denouncing them does not alter that
reality.
Other countries do not see these organizations as supplanting pre-existing lending institutions
long led by the United States. The new institutions supplement the World Bank Group and regional
development banks. They operate under slightly improved versions of the lending rules pioneered by
the Bretton Woods legacy establishments. China is a major contributor to the new development
banks, but it does not exercise a veto in them as the U.S. does in the IMF and World Bank. The
AIIB's staff is multinational (and includes Americans in key positions). The New Development
Bank's first president is Indian and its principal lending activity to date has been in South
Africa.
Washington has chosen to boycott anything and everything sponsored by China. So far, the sad
but entirely predictable result of this attempt to ostracize and reduce Chinese influence has not
curbed China's international clout but magnified it. By absenting itself from the new
institutions, the United States is making itself increasingly irrelevant to the overall governance
of multilateral development finance.
Third
: the U.S. campaign to
block China's international investments,
cripple its technology companies, and impede its scientific and technological advance.
The actions of the Committee on Foreign Investment in the United States (CFIUS) to prevent
Chinese investment in American industry and agriculture are well publicized and are becoming ever
more frequent. So are official American denunciations of Chinese telecommunications companies like
Huawei and ZTE amidst intermittent efforts to shut them down. In an ominous echo of World War I's
anti-German, World War II's anti-Japanese, and the Cold War's anti-communist xenophobia, the FBI
has begun issuing loud warnings about the menace posed by the large Chinese student presence on
American campuses. Washington is adjusting visa policies to discourage such dangerous people from
matriculating here. It has also mounted a strident campaign to persuade other countries to reject
Chinese investments under the "Belt and Road" initiative.
In the aggregate, these policies represent a decision by the U.S. political elite to try to
hamstring China, rather than to invest in strengthening America's ability to compete with it.
There is no reason whatsoever to believe this approach can succeed. China's foreign direct
investments have more than doubled over the past three years. Third countries are openly declining
to go along with U.S. opposition to intensified economic relations with China. They want the
capital, technology, and market openings that Chinese investment provides. U.S. denunciations of
their interest in doing business with China are seldom accompanied by credible offers by American
companies to match what their Chinese competitors offer. You can't beat something with nothing.
It's also not clear which country is most likely to be hurt by U.S. government obstruction of
collaboration between Chinese and American STEM workers. There is a good chance the greatest
damage will be to the United States. A fair number of native-born Americans seem more interested
in religious myths, magic, and superheroes than in science. U.S. achievements in STEM owe much to
immigration and to the presence of Chinese and other foreign researchers in America's graduate
schools. The Trump administration is trying to curtail both.
China already possesses one-fourth of the world's STEM workforce. It is currently graduating
three times as many STEM students annually as the United States. (Ironically, a significant
percentage of STEM graduates in the United States are Chinese or other Asian nationals. Around
half of those studying computer sciences in the United States are such foreigners.) American loss
of contact with scientists in China and a reduced Chinese presence in U.S. research institutions
can only retard the further advance of science in the United States.
China is rapidly increasing its investments in education, basic science, research, and
development even as the United States reduces funding for these activities, which are the
foundation of technological advance. The pace of innovation in China is visibly accelerating.
Cutting Americans off from interaction with their Chinese counterparts while other countries
continue risks causing the United States to fall behind not just China but other foreign
competitors.
Finally
: the
U.S. military
is in China's face
.
The U.S. Navy and Air Force patrol China's coasts and test its defenses on a daily basis. U.S.
strategy in the event of war with China – for example, over Taiwan – depends on overcoming those
defenses so as to be able to strike deep into the Chinese homeland. The United States has just
withdrawn from the treaty on intermediate nuclear forces in part to be able to deploy nuclear
weapons to the Chinese periphery. In the short term, there is increasing danger of a war by
accident, triggered by a mishap in the South China Sea, the Senkaku Archipelago, or by efforts by
Taiwanese politicians to push the envelope of mainland tolerance of their island's unsettled
political
status quo
. These threats are driving growth in China's defense budget and its
development of capabilities to deny the United States continued military primacy in its adjacent
seas.
In the long term, U.S. efforts to dominate China's periphery invite a Chinese military response
on America's periphery like that formerly mounted by the Soviet Union. Moscow actively patrolled
both U.S. coasts, stationed missile-launching submarines just off them, supported anti-American
regimes in the Western Hemisphere, and relied on its ability to devastate the American homeland
with nuclear weapons to deter war with the United States. On what basis does Washington imagine
that Beijing cannot and will not eventually reciprocate the threat the U.S. forces surrounding
China appear to pose to it?
Throughout the forty-two years of the Cold War, Americans maintained substantive
military-to-military dialogue with their Soviet enemies. Both sides explicitly recognized the need
for strategic balance and developed mechanisms for crisis management that could limit the risk of a
war and a nuclear exchange between them. But no such dialogue, understandings, or mechanisms to
control escalation now exist between the U.S. armed forces and the PLA. In their absence Americans
attribute to the PLA all sorts of intentions and plans that are based on mirror-imaging rather than
evidence.
The possibility that mutual misunderstanding will intensify military confrontation and increase
the dangers it presents is growing. The chances of this are all the greater because the internal
security and counterintelligence apparatuses in China and the United States appear to be engaged in
a contest to see which can most thoroughly alienate the citizens of the other country. China is a
police state. For Chinese in America, the United States sometimes seems to be on the way to
becoming one.
It's hard to avoid the
conclusion
that, if Washington stays on its current
course, the United States will gain little, while ceding substantial ground to China and
significantly increasing risks to its wellbeing, global leadership, and security.
Economically
, China will become less welcoming to American exports. It will
pursue import substitution or alternative sourcing for goods and services it has previously sourced
in the United States. With impaired access to the world's largest middle class and consumer
economy, the United States will be pushed down the value chain. China's ties to other major
economies will grow faster than those with America, adversely affecting U.S. growth rates. Any
reductions in the U.S. trade deficit with China will be offset by increases in trade deficits with
the countries to which current production in China is relocated.
China's role in
global governance
will expand as it adds new institutions and
funds to the existing array of international organizations and takes a larger part in their
management. The Belt and Road initiative will expand China's economic reach to every corner of the
Eurasian landmass and adjacent areas. The U.S. role in global rule-making and implementation will
continue to recede. China will gradually displace the United States in setting global standards
for trade, investment, transport, and the regulation of new technologies.
Chinese
technological innovation
will accelerate, but it will no longer advance
in collaboration with American researchers and institutions. Instead it will do so indigenously
and in cooperation with scientists outside the United States. U.S. universities will no longer
attract the most brilliant students and researchers from China. The benefits of new technologies
developed without American inputs may be withheld rather than shared with America, even as the
leads the United States has long enjoyed in science and technology one-by-one erode and are
eclipsed. As cordiality and connections between China and the United States wither, reasons for
Chinese to respect the intellectual property of Americans will diminish rather than increase.
Given the forward deployment of U.S. forces, the Chinese
military
has the great
advantage of a defensive posture and short lines of communication. The PLA is currently focused on
countering U.S. power projection in the last tenth or so of the 6,000-mile span of the Pacific
Ocean. In time, however, it is likely to seek to match American pressure on its borders with its
own direct military pressure on the United States along the lines of what the Soviet armed forces
once did.
The adversarial relationship that now exists between the U.S. armed forces and the PLA already
fuels an arms race between them. This will likely expand and accelerate. The PLA is rapidly
shrinking the gap between its capabilities and those of the U.S. armed forces. It is developing a
nuclear triad to match that of the United States. The good news is that mutual deterrence seems
possible. The bad news is that politicians in Taiwan and their fellow travelers in Washington are
determinedly testing the policy frameworks and understandings that have, over the past forty years,
tempered military confrontation in the Taiwan Strait with dialogue and rapprochement. Some in
Taiwan seem to believe that they can count on the United States to intervene if they get themselves
in trouble with Chinese across the Strait. The Chinese civil war, suspended but not ended by U.S.
unilateral intervention in 1950, seems closer to a resumption than it has been for decades.
As a final note on politico-military aspects of Sino-American relations, in the United States,
security clearances are now routinely withheld from anyone who has spent time in China. This
guarantees that few intelligence analysts have the Fingerspitzengefühl – the feeling derived from
direct experience – necessary to really understand China or the Chinese. Not to worry. The
administration disbelieves the intelligence community. Policy is now made on the basis of
ignorance overlaid with media-manufactured fantasies. In these circumstances, some enterprising
Americans have taken to combing the dragon dung for nuggets of undigested Chinese malevolence, so
they can preen before those in power now eager for such stuff. There is a Chinese expression that
nicely describes such pretense: 屎壳螂戴花儿 -- 又臭又美 – "a dung beetle with flowers in its hair still
stinks."
All said, this does not add up to a fruitful approach to dealing with the multiple challenges
that arise from China's growing wealth and power. So,
what is to be done?
该怎么办？
Here are a few
suggestions
.
First
, accept the reality that China is both too big and too embedded in the
international system to be dealt with bilaterally. The international system needs to adjust to
and accommodate the seismic shifts in the regional and global balances of wealth and power that
China's rise is causing. To have any hope of success at adapting to the changes now underway,
the United States needs to be backed by a coalition of the reasonable and farsighted. This
can't happen if the United States continues to act in contempt of alliances and partnerships.
Washington needs to rediscover statecraft based on diplomacy and comity.
Second
, forget government-managed trade and other forms of mercantilism. No
one can hope to beat China at such a statist game. The world shouldn't try. Nor should it
empower the Chinese government to manage trade at the expense of market forces or China's
private sector. Governments can and – in my opinion – should set economic policy objectives,
but everyone is better off when markets, not politicians, allocate capital and labor to achieve
these.
Third
, instead of pretending that China can be excluded from significant
roles in regional and global governance, yield gracefully to its inclusion in both. Instead of
attempting to ostracize China, leverage its wealth and power in support of the rule-bound order
in which it rose to prosperity, including the WTO.
Fourth
, accept that the United States has as much or more to gain than to
lose by remaining open to science, technology, and educational exchanges with China. Be
vigilant but moderate. Err on the side of openness and transnational collaboration in
progress. Work on China to convince it that the costs of technology theft are ultimately too
high for it to be worthwhile.
Fifth
and finally, back away from provocative military actions on the China
coast. Trade frequent "freedom of navigation operations" to protest Chinese interpretations of
the U.N. Convention on the Law of the Sea for dialogue aimed at reaching common understandings
of relevant interests and principles. Ratify the Convention on the Law of the Sea and make use
of its dispute resolution mechanisms. As much as possible, call off military confrontation and
look for activities, like the protection of commercial shipping, that are common interests.
Seek common ground without prejudice to persisting differences.
In
conclusion
:
both China and the United States need a peaceful
international environment to be able to address long-neglected domestic problems.
Doing
more of what we're now doing threatens to preclude either of us from sustaining the levels of
peace, prosperity, and domestic tranquility that a more cooperative relationship would afford.
Hostile coexistence between two such great nations injures both and benefits neither. It
carries unacceptable risks. Americans and Chinese need to turn from the path we are now on.
We can – we must – find a route forward that is better for both of us.
The article presents itself as being forward thinking, yet no
mention of the robot revolution and how destabilizing it will be
for both sides. As it stands today, it seems the economic conflict
is between the US and China-perhaps. But when these robots come on
line the economic war is going to be between the laborer and the
employee world wide.
The demise of the US economy and
manufacturing base in the US is a direct result of cheap labor, so
one has a clear picture of what cheap labor will do. Outside of
stuff falling from the sky for free, there isn't anything that
will be more devastating to the world labor market than a robot
enhanced with AI. Sure, products may become cheaper due to
reduced labor cost, but if people do not have a job to raise
enough income, then how are they going to buy stuff? Clearly, the
whole capitalistic system will collapse and then what? What will
be our choices? Will we have to shun progress in order to save the
current system that has brought us all this wonderful labor saving
innovation? Will people choose the hard road over the easy road?
It seems to me that things always take the path of least
resistance.
The only advantage China has is cheap labor.The robot revolution
will upset the apple cart for both sides. It will be interesting,
to say the least, when both sides realize that innovation is both
a blessing and a curse.
This is a pretty good article, I agree with a lot of it. The part
I don't like is the author's extreme worship of property rights.
He ignores the commons, things held in common by the people,
things like science and culture. For example, Disney's copyright
on its films will never expire if Disney can help it. Even an
American's personal data is now someone else's private property,
probably including their genetic data since even genes can be
patented.
"... More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the money keeps flowing. ..."
Former Army Colonel Lawrence Wilkerson, who was chief of staff for Secretary of State Colin Powell in the George W. Bush administration,
warns in a new The Real News interview with host Sharmini Peries that the United States government is driving down a "highway to
war" with China -- a war for which Wilkerson sees no sound justification.
The drive toward war is not undertaken in response to a real threat posed by China to the people of America. Instead, argues Wilkerson,
the US government is moving toward war for reasons related to money for both the military and the broader military-industrial complex,
as well to advance President Donald Trump's domestic political goals.
Wilkerson, who is a member of the Ron Paul Institute for Peace and Prosperity's Academic Board, elaborates on the US military's
money-seeking motivation to advance the new China scare, stating:
All of this right now, first and foremost, is a budget ploy. They want more money.
And that's largely because their personnel costs are just eating their lunch. And, second, it's an attempt to develop - and
this has something to do with money too of course - another threat, another cold war, another feeding system .
The military just hooks up like it is hooking up to an intravenous, you know, an IV system and the money just pours out-slush
fund money, appropriated money, everything else.
More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex
alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace
dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the
money keeps flowing.
Google has reportedly suspended its licences and product-sharing agreements with Chinese
communications giant Huawei, as Washington accuses the company of spying for Beijing. The
Silicon Valley tech giant has cut its business deals with Huawei that involve the transfer of
hardware and software, Reuters and The Verge report. Following the move, Huawei will lose
access to Android operating system updates, and its forthcoming smartphones will be shut out of
some Google apps, including the Google Play Store and Gmail apps. The Chinese firm however will
still have access to the open source version of the Android operating system.
We have confirmed this is genuine.
Huawei will only be able to use the public version of Android, and won't get access to
proprietary apps and services from Google
Huawei will have to create their own update mechanism for security patches https://t.co/7eTi4JvWsE
Washington repeatedly accused Huawei of installing so-called 'backdoors' into its products
on behalf of the Chinese government. The heads of six US intelligence agencies warned
American citizens against using Huawei products last year, and the Chinese company's phones
were banned from US military bases shortly afterwards.
"... Since the collapse of the Soviet Union, the world has not seen these levels of concentration of ownership. The Soviet Union did not die because of apparent ideological reasons but due to economic bankruptcy caused by its uncompetitive monopolistic economy. Our verdict is that the US is heading in the same direction. ..."
"... In a future instalment of this report, we will show that the oligarchization of America – the placing it under the rule of the One Percent (or perhaps more accurately the 0.1%, if not 0.01%) - has been a deliberate ideologically driven long-term project to establish absolute economic power over the US and its political system and further extend that to involve an absolute global hegemony (the latter project thankfully thwarted by China and Russia). ..."
"... In present-day United States a few major investors – equity funds or private capital - are as a rule cross-owned by each other, forming investor oligopolies, which in turn own the business oligopolies. ..."
"... A study has shown that among a sample of the 1,500 largest US firms (S&P 1500), the probability of one major shareholder holding significant shares in two competing firms had jumped to 90% in 2014, while having been just 16% in 1999. (*2). ..."
"... Institutional investors like BlackRock, Vanguard, State Street, Fidelity, and JP Morgan, now own 80% of all stock in S&P 500 listed companies. The Big Three investors - BlackRock, Vanguard and State Street – alone constitute the largest shareholder in 88% of S&P 500 firms, which roughly correspond to America's 500 largest corporations. (*3). Both BlackRock and Vanguard are among the top five shareholders of almost 70% of America's largest 2,000 publicly traded corporations. (*4). ..."
A close-knit oligarchy controls all major corporations. Monopolization of ownership in US
economy fast approaching Soviet levels
Starting with Ronald Reagan's presidency, the US government willingly decided to ignore the
anti-trust laws so that corporations would have free rein to set up monopolies. With each
successive president the monopolistic concentration of business and shareholding in America has
grown precipitously eventually to reach the monstrous levels of the present day.
Today's level of monopolistic concentration is of such unprecedented levels that we may
without hesitation designate the US economy as a giant oligopoly. From economic power follows
political power, therefore the economic oligopoly translates into a political oligarchy. (It
seems, though, that the transformation has rather gone the other way around, a ferocious set of
oligarchs have consolidated their economic and political power beginning from the turn of the
twentieth century). The conclusion that
the US is an oligarchy finds support in a 2014 by a Princeton University study.
Since the collapse of the Soviet Union, the world has not seen these levels of concentration
of ownership. The Soviet Union did not die because of apparent ideological reasons but due to
economic bankruptcy caused by its uncompetitive monopolistic economy. Our verdict is that the
US is heading in the same direction.
In a later report, we will demonstrate how all sectors of the US economy have fallen prey to
monopolization and how the corporate oligopoly has been set up across the country. This post
essentially serves as an appendix to that future report by providing the shocking details of
the concentration of corporate ownership.
Apart from illustrating the monopolization at the level of shareholding of the major
investors and corporations, we will in a follow-up post take a somewhat closer look at one
particularly fatal aspect of this phenomenon, namely the
consolidation of media (posted simultaneously with the present one) in the hands of
absurdly few oligarch corporations. In there, we will discuss the monopolies of the tech giants
and their ownership concentration together with the traditional media because they rightfully
belong to the same category directly restricting speech and the distribution of opinions in
society.
In a future instalment of this report, we will show that the oligarchization of America
– the placing it under the rule of the One Percent (or perhaps more accurately the 0.1%,
if not 0.01%) - has been a deliberate ideologically driven long-term project to establish
absolute economic power over the US and its political system and further extend that to involve
an absolute global hegemony (the latter project thankfully thwarted by China and Russia). To
achieve these goals, it has been crucial for the oligarchs to control and direct the narrative
on economy and war, on all public discourse on social affairs. By seizing the media, the
oligarchs have created a monstrous propaganda machine, which controls the opinions of the
majority of the US population.
We use the words 'monopoly,' 'monopolies,' and 'monopolization' in a broad sense and subsume
under these concepts all kinds of market dominance be it by one company or two or a small
number of companies, that is, oligopolies. At the end of the analysis, it is not of great
importance how many corporations share in the market dominance, rather what counts is the death
of competition and the position enabling market abuse, either through absolute dominance,
collusion, or by a de facto extinction of normal market competition. Therefore we use the term
'monopolization' to describe the process of reaching a critical level of non-competition on a
market. Correspondingly, we may denote 'monopoly companies' two corporations of a duopoly or
several of an oligopoly.
Horizontal shareholding – the cementation of the
oligarchy
One especially perfidious aspect of this concentration of ownership is that the same few
institutional investors have acquired undisputable control of the leading corporations in
practically all the most important sectors of industry. The situation when one or several
investors own controlling or significant shares of the top corporations in a given industry
(business sector) is referred to as horizontal shareholding . (*1). In present-day United
States a few major investors – equity funds or private capital - are as a rule
cross-owned by each other, forming investor oligopolies, which in turn own the business
oligopolies.
A study has shown that among a sample of the 1,500 largest US firms (S&P 1500), the
probability of one major shareholder holding significant shares in two competing firms had
jumped to 90% in 2014, while having been just 16% in 1999. (*2).
Institutional investors like BlackRock, Vanguard, State Street, Fidelity, and JP Morgan, now
own 80% of all stock in S&P 500 listed companies. The Big Three investors - BlackRock,
Vanguard and State Street – alone constitute the largest shareholder in 88% of S&P
500 firms, which roughly correspond to America's 500 largest corporations. (*3). Both BlackRock
and Vanguard are among the top five shareholders of almost 70% of America's largest 2,000
publicly traded corporations. (*4).
Blackrock had as of 2016 $6.2 trillion worth of assets under management, Vanguard $5.1
trillion, whereas State Street has dropped to a distant third with only $1 trillion in assets.
This compares with a total market capitalization of US stocks according to Russell
3000 of $30 trillion at end of 2017 (From 2016 to 2017, the Big Three has of course also
put on assets).Blackrock and Vanguard would then alone own more than one-third of all US
publicly listed shares.
From an expanded sample that includes the 3,000 largest publicly listed corporations
(Russell 3000 index), institutions owned (2016) about
78% of the equity .
The speed of concentration the US economy in the hands of institutions has been incredible.
Still back in 1950s, their share of the equity was 10%, by 1980 it was 30% after which the
concentration has rapidly grown to the present day approximately 80%. (*5). Another study puts
the present (2016) stock market capitalization held by institutional investors at 70%. (*6).
(The slight difference can possibly be explained by variations in the samples of companies
included).
As a result of taking into account the common ownership at investor level, it emerges that
the US economy is yet much more monopolized than it was previously thought when the focus had
been on the operational business corporation alone detached from their owners. (*7).
The
Oligarch owners assert their control
Apologists for monopolies have argued that the institutional investors who manage passive
capital are passive in their own conduct as shareholders as well. (*8). Even if that would be
true it would come with vastly detrimental consequences for the economy as that would mean that
in effect there would be no shareholder control at all and the corporate executives would
manage the companies exclusively with their own short-term benefits in mind, inevitably leading
to corruption and the loss of the common benefits businesses on a normally functioning
competitive market would bring.
In fact, there seems to have been a period in the US economy – before the rapid
monopolization of the last decade -when such passive investors had relinquished control to the
executives. (*9). But with the emergence of the Big Three investors and the astonishing
concentration of ownership that does not seem to hold water any longer. (*10). In fact, there
need not be any speculation about the matter as the monopolist owners are quite candid about
their ways. For example, BlackRock's CEO Larry Fink sends out
an annual guiding letter to his subject, practically to all the largest firms of the US and
increasingly also Europe and the rest of the West. In his pastoral, the CEO shares his view of
the global conditions affecting business prospects and calls for companies to adjust their
strategies accordingly.
The investor will eventually review the management's strategic plans for compliance with the
guidelines. Effectively, the BlackRock CEO has in this way assumed the role of a giant central
planner, rather like the Gosplan, the central planning agency of the Soviet command
economy.
The 2019 letter (referenced above) contains this striking passage, which should quell all
doubts about the extent to which BlackRock exercises its powers:
"As we seek to build long-term value for our clients through engagement, our aim is not to
micromanage a company's operations. Instead, our primary focus is to ensure board
accountability for creating long-term value. However, a long-term approach should not be
confused with an infinitely patient one. When BlackRock does not see progress despite ongoing
engagement, or companies are insufficiently responsive to our efforts to protect our clients'
long-term economic interests, we do not hesitate to exercise our right to vote against
incumbent directors or misaligned executive compensation."
Considering the striking facts rendered above, we should bear in mind that the establishment
of this virtually absolute oligarch ownership over all the largest corporations of the United
States is a relatively new phenomenon. We should therefore expect that the centralized control
and centralized planning will rapidly grow in extent as the power is asserted and methods are
refined.
Most of the capital of those institutional investors consists of so-called passive capital,
that is, such cases of investments where the investor has no intention of trying to achieve any
kind of control of the companies it invests in, the only motivation being to achieve as high as
possible a yield. In the overwhelming majority of the cases the funds flow into the major
institutional investors, which invest the money at their will in any corporations. The original
investors do not retain any control of the institutional investors, and do not expect it
either. Technically the institutional investors like BlackRock and Vanguard act as fiduciary
asset managers. But here's the rub, while the people who commit their assets to the funds may
be considered as passive investors, the institutional investors who employ those funds are most
certainly not.
Cross-ownership of oligarch corporations
To make matters yet worse, it must be kept in mind that the oligopolistic investors in turn
are frequently cross-owned by each other. (*11). In fact, there is no transparent way of
discovering who in fact controls the major institutional investors.
One of the major institutional investors, Vanguard is ghost owned insofar as it does not
have any owners at all in the traditional sense of the concept. The company claims that it is
owned by the multiple funds that it has itself set up and which it manages. This is how the
company puts it on
their home page : "At Vanguard, there are no outside owners, and therefore, no conflicting
loyalties. The company is owned by its funds, which in turn are owned by their shareholders --
including you, if you're a Vanguard fund investor." At the end of the analysis, it would then
seem that Vanguard is owned by Vanguard itself, certainly nobody should swallow the charade
that those funds stuffed with passive investor money would exercise any ownership control over
the superstructure Vanguard. We therefore assume that there is some group of people (other than
the company directors) that have retained the actual control of Vanguard behind the scenes
(perhaps through one or a few of the funds). In fact, we believe that all three (BlackRock,
State Street and Vanguard) are tightly controlled by a group of US oligarchs (or more widely
transatlantic oligarchs), who prefer not to brandish their power. It is beyond the scope of
this study and our means to investigate this hypothesis, but whatever, it is bad enough that as
a proven fact these three investor corporations wield this control over most of the American
economy. We also know that the three act in concert wherever they hold shares.
(*12).
Now, let's see who are the formal owners of these institutional investors
In considering these ownership charts, please, bear in mind that we have not consistently
examined to what degree the real control of one or another company has been arranged through a
scheme of issuing different classes of shares, where a special class of shares give vastly more
voting rights than the ordinary shares. One source asserts
that 355 of the companies in the Russell index consisting of the 3000 largest corporations
employ such a dual voting-class structure, or 11.8% of all major corporations.
We have mostly relied on www.stockzoa.com for the shareholder data. However, this and
other sources tend to list only the so-called institutional investors while omitting corporate
insiders and other individuals. (We have no idea why such strange practice is employed
"... All last week, anti-American propaganda flourished across the country, with the slogan "Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on Chinese social media platforms. ..."
With the trade war between the US and China suddenly erupting after a 5-month ceasefire,
CCTV 6, the movie channel of China's leading state television broadcaster, aired three
anti-American movies last week,
reported What's On Weibo .
The three movies are Korean war films: Heroic Sons and Daughters (1964), Battle on
Shangganling Mountain (1954), and Surprise Attack (1960), which aired about one week after
President Trump raised an existing 10% tariff on $200 billion worth of Chinese goods to
25%.
All last week, anti-American propaganda flourished across the country, with the slogan
"Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on
Chinese social media platforms.
... ... ...
China's government broadcasting anti-American movies to hundreds of millions of its people
shows how officials are starting up the propaganda machines ahead of a potential armed conflict
with the US...
Chinese spokesperson Hu Xijin writes: "there's no equal negotiation without fighting." No
need for negotiation (or fighting). Assuming Trump imposes the rest of the tariffs, US trade
with China will recede to nothing. Inciting anti-American feelings in mainland China just
makes the break in relations easier. Goodbye China!
China has no intention of going to actual war over trade with the U.S. - they have plenty
of other potential markets, as is repeatedly alluded to here and elsewhere. This televised
propaganda is about manipulating the attitudes of their own disillusioned, controlled
populace.
So they're broadcasting regular American television? Those shows do a great job demeaning
and shitting on average American men while holding up minorities and freaks as capable
people. They didn't need to invent any propaganda; just use the same **** *** producers have
been feeding us dumb goyim for decades.
Isage master of the The famous paper tiger threat of turning something into glass, empty
fuckin threat from a country whose professional army has managed to lose every major conflict
in the last 50 years to poorly equipped sometimes barefoot soldiers armed with nothing more
that AK -47s.
please see Korean villagers, Vietnamese villagers, iraqi villagers, afghan villagers and
Syrian Villagers.
and the vaunted Israelis who who only win against ancient armies with ancient gear, but
faced with dedicated Hezbollah Lebanese villagers again .....lose.
Give it up, you are masters of snatching defeat from the jaws of victory... not much
else.
"... Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially clear with a nation-first politician like Donald Trump. ..."
"... Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud, independent nations - that should have been the lesson from the North Korea fiasco. ..."
"... Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. ..."
by: Shareholders Unite
Shareholders
Unite Small-cap, macro, value, momentum Shareholdersunite
(11,300 followers) Summary It is difficult to see the Chinese caving to the demands of the Trump government, which seem to involve
a wholesale change of China's economic model.
Either some middle ground is found or we risk a serious escalation with multiple risks to the state of the world economy, with
many known and unknown facilities.
The end state could be a wholesale decoupling of the American and Chinese economies, and while some would applaud such an outcome,
it's unlikely to be better than what we've got.
The Trump administration seems to have the illusion that if you raise the stakes high enough, other countries will cave to US
demands. There might also be an element of creating foreign adversary in order to unite the domestic front, we don't know.
Trade tensions have been taken way too far when the government slapped tariffs on Canadian steel exports because of national security
concerns, but in the case of China, there are some legitimate concerns. Mind you, these concerns don't involve:
China's mercantilism - its trade surplus has all but vanished (see below).
The bilateral trade deficit the US has with China that's way overstated (much of the value added comes from other countries,
most notably the US), meaningless and not amenable to change from deliberate policy measures (the US trade deficit is caused by
a lack of savings with respect to investments; in so far as policy manages to reduce the bilateral trade deficit with China, the
deficit will simply reappear elsewhere as long as the saving/investment balance isn't changed).
While China has "manipulated" its currency in the past in order to keep it low, in recent years they've done exactly the opposite,
trying to keep their currency from falling.
China isn't paying for the tariffs, US importers and consumers are.
Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially
clear with a nation-first politician like Donald Trump.
Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud,
independent nations - that should have been the lesson from the North Korea fiasco.
Just as there is one thing worse than a severe economic recession, which is caving to US pressure for the Iranian ayatollas, the
same holds for Chinese politicians in charge of policy.
It's true that the pain from the escalation in the trade war is probably significantly larger in China compared to the US, but
that doesn't make them more likely to be the first to cave, especially considering that what the US administration seems to demand
is a wholesale
change of China's economic model . That's never going to happen. Since there are no free elections, they can endure the pain
for longer, and much fewer people own stocks, so even while the sell-off in China might be worse, it's hitting much fewer people.
In fact, caving to US demands, or even being seen to be caving, might well be a one-way ticket to political oblivion. Which is
why China's leaders called President Trump's bluff. Contrast this with the situation in the US.
Trade experts like Krugman
argue that the short-term economic impact as such on the US economy is fairly moderate, and who are we to disagree? However,
a further escalation isn't likely to go by unnoticed, and there is this ephemeral concept called "confidence", of which the stock
market might be one of the best indicators:
The market is already reeling, and this could become uncomfortable pretty soon for a president who prides himself on the rally
in the markets.
The real danger
The risk is that this becomes a protracted conflict with each party digging in, egged on by heated domestic rhetoric. The longer
this lasts, the greater the following risks:
Sentiment spilling over in the real economy
A large yuan depreciation
Collateral damage
A wholesale decoupling of the Chinese and American economies
Sentiment is turning, and at a certain point, this can very well start to affect consumption, investment, and lending decisions
in the real world. We're not there yet, but look how the sell-off at the end of last year cowered the Fed into one of the more spectacular
retreats in policy. This wasn't because of the market sell-off itself but because of the increasing signs that sentiment could hit
the real economy, even if much of the more immediate risks were abroad.
Moreover, in a highly leveraged financial system, you never know what you're going to find when the investor flows recede. Things
can go very fast here. Look how Argentina was able to sell a 100-year bond in 2016, only to be hit by the receding flows pretty soon
after.
Another real risk is a substantial yuan depreciation . It's the most effective way the Chinese can absorb the direct tariff cost
on their competitiveness, but it runs the risk of becoming a self-fulfilling prophesy.
The markets have already twice succumbed to yuan depreciation scares, in 2015 and at the start of 2016, and the PBoC spent $1
trillion of its $4 trillion reserves plus draconian capital controls to stop the rot.
We're not talking hypotheticals here - guess when that gap-up happened? On the day of the Trump tweets announcing the 25% tariffs:
A substantial yuan depreciation will risk inserting a major deflationary blow to the world economy as it exports the effects of
the US tariffs on China to the rest of the world.
Given the shaky state of the eurozone, we're not relishing this prospect at all. We have long argued that the eurozone is one
downturn away from disintegration, with Italy as its focal point.
Italy is already in a recession and has a dysfunctional government consisting of a left-wing and right-wing populist party which
are constantly bickering. What's more, it has unsustainable debt dynamics and a potential banking doom loop, should the debt dynamics
trigger a market selloff, and has no lender of last resort.
With all the debt and leverage in the world economy, it's a bit like riding a bicycle - you have to keep cycling to stop falling
over.
Decoupling
While the direct monetary impact of the tariffs is fairly moderate (it's a modest, albeit highly regressive, tax increase), another
likely consequence is a further relocation of supply chains and decoupling of the US and Chinese economies.
We have already read numerous company CCs which described rerouting supplies from China, albeit not usually back to the US, and
we're not imagining stuff. From Monday's issue of DigiTimes:
If 10% tariffs can do that, 25% of tariffs will accelerate this and the next round, where the US levies tariffs on all Chinese
imports even more.
Some within the US administration seems to relish this, as it weakens China economically, but a hard Chinese landing won't pass
the US unnoticed, and the end result could very well be two competing economic blocks and a new sort of cold war.
One of the very first economic measures the Trump government took was to get the US out of the TPP, which not only gave up a lot
of leverage over China, but the mostly ASEAN countries who are part of the TPP (without the US) are now firmer in China's orbit as
a result, and they will have unenviable choices to make in terms of their future alignment.
It's also unfortunate that Trump has been waging trade wars on multiple fronts (see
here for an overview ), alienating many partners in the process.
Now might be as good a time as any to remind people of the unpopular thesis that trade isn't a zero-sum game and that both the
US and China have greatly benefited from their economic integration the past couple of decades.
The US got increased exports as well - not as spectacular as the Chinese exports to the US, but this is in part an optical illusion.
Much of China's exports to the US contain value added produced elsewhere, even from the US itself:
You see that less than half of the value added of Chinese electronics export to the US is actually produced in China itself. The
iPhone is a classic example:
In the case of the Apple iPhone, this means that China's
exports balance accounts for the full $500 iPhone value, when China adds only approximately $15 to $30 of the value to the phone.
Most of the iPhone value accretes to Samsung in Korea ($150) and to Apple - the brand owner and engineer. This highlights how
the normal accounting of trade flows is inherently distorted under the current trade-deficit estimates.
Yes, the US has lost manufacturing jobs as a result, but it failed to compensate those who lost from trade like other countries
have (via massive active labor market policies, for instance in the Nordic countries, where there is little in the way of an industrial
waste land as a result).
The US has also gained. It found willing buyers for its Treasuries, keeping interest rates low, cheap consumer goods, keeping
inflation low - which allowed the Fed to keep low interest rates, and which in turn increased economic growth and employment.
It's not perfect, and we're not blind to China's IP theft and the conditions it places on American companies operating in the
country. But China's rise has propelled half a billion people out of poverty and turned them into eager consumers of US agricultural,
cultural and high-tech products.
Conclusion
While a number of American grievances are right, the Trump administration seems to want a wholesale sellout of China, abandoning
its economic model. That's not going to happen, and even less so because they also antagonized potential allies, like ASEAN countries,
the EU and Canada.
There are two choices here: either some middle ground is found or this could spiral out of control, with major economic risks
involved and a wholesale decoupling of the Chinese and American economies. Economics 101 argues quite clearly that that world is
unlikely to be better than the one we have, despite all the imperfections of the latter.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72
hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from
Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
33 out 90 suppliers of Huawei are US companies. If Huawei do not buy from them who will buy
them? It's two way street.
Trump is breaking neoliberalism createing two camps of neoliberal countries hostile to each
other. Potential partners for China are Russia, Turkey, Syria, Iraq, Iran, Pakistan and North
Korea so this would be a weaker, but still formidable in economic and military capacity
block.
On Wednesday, U.S. President Donald Trump issued an executive order barring U.S. firms from
using telecom equipment made by companies accused of being a national security risk; this
includes Chinese tech giant Huawei. The U.S. Commerce Department questioned whether Huawei will
be able to continue purchasing components from its American suppliers. In response, the Chinese
Commerce Ministry said on Thursday
Huawei will survive with supply chain alternatives and reengineering designs, it will make
Huawei stronger with better products. American high tech products and parts suppliers can
wait until American companies come up with design to utilise their products, hopefully not
long enough to cripple all these high tech parts manufacturers.
"... US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China ..."
"... Or do they want to cut off all opportunities for China's future development? In my opinion, the relevant measures that the Americans have been initiating since the very beginning of the trade war to the present day are most likely real steps to contain China rather than some form of sanctions. This is a desire to hinder China's development in various spheres, specifically in trade, economic development, industrial development, science and technology, in the financial sphere and even in the area of human resources in China. They want to hamper our development on all sides. ..."
"... You might know that we used to have the popular concept of the so-called "hybrid war" but I would not describe the behaviour of Americans using this term. They just want to cut off all of China's development opportunities. They want to limit our ability to thrive as much as possible. ..."
"... Today I heard you talking about Russia, about the principles of preserving your development and sovereignty, I agree with that. The geopolitical situation is different for everyone, the history is different. There may be differences in how countries approach dealing with issues. ..."
"... The advantage of the United States is its hegemony in the global financial system. The second advantage is the strong alliance system that was formed after the Second World War and the Cold War. And another one is a still high level of weapons development in the world. ..."
"... Over the past decades, Americans have repeatedly initiated hostilities, and acute social inequality has flared up inside the country. Today, hegemony in the ideological system is being lost; and some countries and regions' confidence in the USA is being lost. ..."
Dmitry Kiselyov, the general director of Rossiya Segodnya International Information Agency, discussed the recent
escalation in the Sino-American trade war with Kong Dan, the former chairman of CITIC Group; Zhang Weiwei, a Chinese
professor of international relations at Fudan University and a senior research fellow at the Chunqiu Institute; and Li Shimo,
an investor and billionaire, founder and managing director of Chengwei Capital, owner of many US Silicon Valley companies.
US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China
Dmitry Kiselyov: What resources does China have?
Kong Dan: Without a trade war, our view of the United States would be superficial; now we
know the other side as well. I, as a representative of business circles, do not really
understand the subtleties of what the Americans want. Do they just think that Chinese
development is unacceptable for them?
Or do they want to cut off all opportunities for China's future development? In my opinion,
the relevant measures that the Americans have been initiating since
the very beginning of the trade war to the present day are most likely real steps to
contain China rather than some form of sanctions. This is a desire to hinder China's
development in various spheres, specifically in trade, economic development, industrial
development, science and technology, in the financial sphere and even in the area of human
resources in China. They want to hamper our development on all sides.
Dmitry Kiselyov: But is it hostile?
Kong Dan: I would call this approach competition. But competition can be different: hostile,
non-hostile
Dmitry Kiselyov: Competition without rules is animosity
Kong Dan: You might know that we used to have the popular concept of the so-called "hybrid
war" but I would not describe the behaviour of Americans using this term. They just want to cut
off all of China's development opportunities. They want to limit our ability to thrive as much
as possible.
China May
Regulate Energy Imports from US Amid Trade Row Competition has various forms or different
aspects. I also have a counter-question for you, how do Russians assess the nature of those
sanctions measures that the Americans have implemented against Russia?
The United States considers us its adversaries. They previously included Russia, China,
Iran, and North Korea on their blacklist, a list of terrorist forces. And China is first on the
list. Are we hostile to them?
Today I heard you talking about Russia, about the principles of preserving your development
and sovereignty, I agree with that. The geopolitical situation is different for everyone, the
history is different. There may be differences in how countries approach dealing with
issues.
I previously worked as the head of the largest state-owned company in China, so, of course,
I understand what kind of mission one carries on his/her shoulders. I am willing to make
efforts to stimulate the development of the Russian-Chinese partnership as a whole; I think
there is still a lot to do in this direction. The US underestimates the potential of President
Putin and Russia, China and President Xi Jinping. They will pay a heavy price for it.
I would like to name two advantages of the trade war for us.
First of all, we have an advantage in a unique, specific management system in the trade
fight with the United States. I believe that the Americans do not want to minimize the trade
deficit; they just want to eliminate our institutional advantage. Of course, we will not
retreat from such a line. If the Americans want to
cross the red line , then I am sure that President Xi and the Chinese government has a
definite response to win the trade war.
Secondly, we have our colossal domestic market, which has no competitors throughout the
world. Our consumer and innovation markets provide us with a large number of advantages and
room, giving China an opportunity to make a manoeuvre. Therefore, their blockage gives China
a chance to become even stronger. We must express our appreciation to our mentor, Trump, for
this, for this lesson and for forcing China to figure out how to withstand the threats on its
own.
Why China is Likely to Emerge Victorious in Trump-Driven Trade War
Dmitry Kiselyov: You said you have confidence that China will emerge victorious in this
trade war, what does this victory mean? When will it come?
Kong Dan: Trump has said many times that he can hit our stock market to destroy it. As for
us, we are doing everything well, we are successfully organising work, and we are looking for
ways for rapid development in recent years. Our goal of a 100-year-old rebirth of the nation
can be achieved -- and that is our victory Of course, we understand that the United States
wants to impede our development. If they want to destroy us then I think they will fail. Only
in their dreams!
Zhang Weiwei: I support Mr Kong's view that the Chinese consumer market is the largest in
the world! Especially, in the field of innovation. And if one leads the battle with such
colossal markets, then the
initiators will surely fail .
'If US Continues to Maintain Hegemony, It Will Suffer Heavy Losses'
Dmitry Kiselyov: What will then become of the defeated United States?
Kong Dan: It is very hard to explain all this only in military terms. China neither wants to
seize the United States nor does it want to take a dominant position like the United States. We
simply do not want the United States to cut off all the opportunities for our country's
development.
Li Shimo: I would like to note that in the course of a trade war, each of the parties has
its own strengths and weaknesses. Our advantage is that we have a strong political system. The
second one is social cohesion. The third one, as has already been stated, China has quite large
domestic markets. The fourth one, China is the world's largest trading country and also the
largest trading nation in the history of mankind.
The advantage of the United States is its hegemony in the global financial system. The
second advantage is the strong alliance system that was formed after the Second World War and
the Cold War. And another one is a still high level of weapons development in the world.
However, the United States and China have different development goals. China is simply
looking for suitable paths to future accelerated development. But the US has a dilemma.
Previously, there was a different situation, there was hegemony -- a very important driving
force, a very important pillar, the so-called "soft power", and particularly they had
ideological dominance. Over the past decades, Americans have repeatedly initiated hostilities,
and acute social inequality has flared up inside the country. Today, hegemony in the
ideological system is being lost; and some countries and regions' confidence in the USA is
being lost.
Therefore, if they now wish to continue to maintain hegemony,
they will suffer heavy losses. But if they back down from it -- for instance, Trump wants to
abandon ideological dominance -- it will turn into a power struggle in its purest form. This
will lead to a loss of ideological advantage in the international arena.
How to assess the outcome of the battle? I would suggest that you read the 19th National
Congress of the Communist Party of China report delivered by President Xi Jinping. In it, he
outlined two challenges: the first one -- 2035, the second one -- 2049. These two goals are
quite clear and realistic If we can complete these tasks, then the victory will be ours.
China's Three Future Milestones: 2021, 2035, 2049
Dmitry Kiselyov: What are these challenges?
Kong Dan: China has two development goals for the current century. The first is that by 2021
when the CPC will celebrate its 100th anniversary, it will fully and comprehensively build a
moderately prosperous society in China. Another goal by 2049, when it will be 100 years since
the founding of the PRC, China should reach the level of the most advanced developed countries.
Moreover, there is another intermediate task between these two goals of the current century --
by 2035 China has to move into the category of moderately developed countries.
Zhang Weiwei: China borrowed its methodology and planning practices from the USSR. However,
over the past decades, we have brought a lot of innovation into this process. Now it is no
longer the old decision-making but strategic and guiding planning. The Americans could see that
over the past 40 years China has been fulfilling all its five-year plans ahead of schedule, and
that frightened them. If we are talking about how the China-US trade war will end, then
personally I would like to quote Americans who say: "if you can't beat them, join them".
China Presents New Model of Development as Western & Soviet Models Failed
Dmitry Kiselyov: How many fingers are needed to describe the Chinese model, and what in fact
is that, if we are talking about the alternative?
Zhang Weiwei: The Chinese Model of Development has several features. First, the leading
ideology must be based on real facts. "Practice is the sole criterion of truth". As a result,
we found that a developing country, such as China, needs to carry out modernisation. Looking at
the rest of the world, it becomes clear that the Western model is not successful. The Soviet
model also did not prevail. Therefore, Deng Xiaoping said that we need to follow our own path.
We did not fall into the trap of "colour revolutions", we were looking for the path we needed
based on reality. That is the key thing.
I would like to add a
little bit. If we talk about reforms in socialist countries, we can name two basic models.
The first is the Gorbachev model, which is characterised by a radical nature. This is
political and economic shock therapy. The cost of such reforms was very high and they were not
quite successful.
The Cuban Castro model implies supportive conservative therapy. They did not build a market
economy; they were not included in the processes of globalisation but resorted only to spot
adjustment and correction.
Reforms according to the Chinese model are characterised by balance, prudence, and
sustainability. We have carried out bold economic reforms, built a market economy, and joined
the process of globalisation. However, we treat political reforms with caution and prudence;
everything should serve economic reforms, and, ultimately, improve people's living
standards.
The American model provides for the concept of political equality "One person, one vote", a
multiparty system for governing a country. Strictly speaking, it only started working in 1965.
The Chinese model began to take shape in 1978. Their starting points are more than ten years
apart. Of course, they can compete with each other but I consider the Chinese model to be more
successful and attractive; and I have already been talking about this for 20 years.
The views and opinions expressed by the speakers and the contributor do not necessarily
reflect those of Sputnik.
China's state media signaled a lack of interest in resuming trade talks with the U.S. under
the current threat of higher tariffs, while the government said stimulus will be stepped up to
buttress the domestic economy.
Without new moves that show the U.S. is sincere, it is meaningless for its officials to come
to China and have trade talks, according to a commentary by the blog Taoran Notes, which was
carried by state-run Xinhua News Agency and the People's Daily, the Communist Party's
mouthpiece. The Ministry of Commerce spokesman
said Thursday he had no information about any U.S. officials coming to Beijing for further
talks.
U.S. equities fell on concern that talks between the world's two largest economies have
stalled. The Shanghai Composite Index also declined. "If the U.S. doesn't make concessions in
key issues, there is little point for China to resume talks," said Zhou Xiaoming, a former
commerce ministry official and diplomat. "China's stance has become more hard-line and it's in
no rush for a deal" because the U.S. approach is extremely repellent and China has no illusions
about U.S. sincerity, he said. No Rush for a Deal
According to Zhou, the commerce ministry spokesman on Thursday effectively ruled out talks
in the near term. In comments to the media, ministry spokesman Gao Feng said that China's
three major concerns need to be addressed before any deal can be reached, adding that the
unilateral escalation of tensions in Washington recently had "seriously hurt" talks.
The U.S. has been talking about wanting to continue the negotiations, but in the meantime it
has been playing "little tricks to disrupt the atmosphere," according to the Taoran commentary
on Thursday night, citing Trump's steps this week to curb Chinese telecom giant Huawei
Technologies Co.
"We can't see the U.S. has any substantial sincerity in pushing forward the talks. Rather,
it is expanding extreme pressure," the blog wrote. "If the U.S. ignores the will of the Chinese
people, then it probably won't get an effective response from the Chinese side," it added.
The blog reiterated China's three main concerns for a deal are tariff removal, achievable
purchase plans and a balanced agreement text, as first revealed by Vice Premier Liu He. They
mark the official stance as much as the will of the Chinese public, it wrote.
"If anyone thinks the Chinese side is just bluffing, that will be the most significant
misjudgment" since the Korean War, it said.
Read: China Vows 'People's War' as Trade Fight Takes Nationalist Turn
In addition to putting the Taoran commentary on WeChat, the People's Daily newspaper had
three defiant articles on the trade war in the physical newspaper Friday.
A front page commentary from the Communist Party's propaganda department headlined 'No Power
Can Stop the Chinese People from Achieving Their Dream' said "the trade war will not cripple
China, it will only strengthen us as we endure it," citing the hardships China has overcome
from the Opium War to floods to the SARS epidemic in 2002-2003.
There were two editorials on page three, with one saying "China doesn't intend to change or
replace the U.S., and the U.S. can't dictate to China or hold back our development." The other
said claims from some officials in the U.S. that they have "rebuilt" China over the past 25
years are "outrageous" and shows their vanity, ignorance and distorted mentalities.
US President Donald Trump declared a national emergency over Huawei, which he has deemed a
national security threat. His new executive order makes it more difficult for US companies to
do business with the Chinese tech giant. RT America's Manila Chan chats with investigative
journalist Ben Swann, who says no evidence exists for the Trump administration's claim.
#RTAmerica#InQuestionRT#QuestionMore
U.S. cannot spy via Chinese made technology products. That is the problem. When did
competition against American technology get to be a national security threat? It is about
creating a monopoly of only certain products in America. I hope American companies fight
back. Prices in American stores have already started to rise. Monopolies mean high
prices.
In the age of technology...any country
who doesn't SPY on other countries or their own citizens is LYING thru their teeth! USA is NO
DIFFERENT than CHINA.....they both are rogue nations, competing for the same thing,
TECHNOLOGY LEADERSHIP! The problem is....HUAWEI just got the upper hand in 5G technology
before the US can compete...so as such, the US threatens other countries with scare tactics
until the US can develop and deploy 5G technology to compete with CHINA. It's all about MONEY
and BUSINESS.
USA has dishonestly gathered more data on it's own civilians than it can access or
understand in several lifetimes, they have the gaul to attack others without proof?
UNREAL
Boeing and Hollywood are two week stops that China can hit with impunity.
Notable quotes:
"... China has outspent the US on R&D since 2009 and now invests three times as much each year. ..."
"... The issue with these chips highlights just how ridiculous the American position is. The chips referred to are Intel processors they use in servers and qualcomm (arm core) processors in cell phones. Funny thing is, these processors are not even made in the US, and their replacement isn't that much of an issue, not for a company with the resources Huawei possesses. ..."
"... For government and other high security uses China has options like the MIPs based Loongson but that wouldn't work in the commercial environment so hopelessly devoted to x86 and windows. Probably the best solution would be to make an x86 analog like AMD markets, and it wouldn't take that long to do. ..."
"... The United States attacked China's largest telecom equipment maker Huawei. If China decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely heavily on it for revenue, or tech giant Apple, which depends on them for iPhone manufacturing. ..."
"... Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's stocks rose more than 4% and 2% in early trading on May 16. . . here ..."
"... Chip fab is the only remaining significant technological lead that America retains anymore, but the raw engineering brainpower behind that industry in the US is mostly imported from China anyway. The Chinese have no shortage of brilliant engineers, they just have not really had the need to do without Intel and AMD before. Now they do. ..."
"... Within a year or so China will be producing chips as good as America's. Another year after that and America will be eclipsed in that industry. No longer will people be looking for "Intel Inside!" stickers on products but rather "Huawei Inside!" . ..."
"... What doesn't seem to be clear, or else ignored/excused here -- China is today just as globalist as the US and in fact the multinational corporations in control of both countries are inextricably linked, especially in the high tech sector currently under the intense MoA thread microscope. ..."
"... By our standards exploitation of workers in China is a grim picture , which compares with the grim blue collar conditions in the US, the equal and opposite result of the globalist equation wrt offshoring factory jobs endemic to capitalist production. ..."
"... MoA China "experts" should study the reality of globalization after removing the rose colored glasses if you wish to be considered analysts instead of merely wishful thinkers/cheerleaders of groupthink delusion. ..."
@William Gruff #75: China is already producing world-class ARM chips. HiSilicon 's latest Kirin
processors are on par with Qualcomm's Snapdragon and Samsung's Exynos processors. Apple's
A-series is ahead of them all, but what does it matter if Apple's rising prices and falling
quality are going to kill Apple anyway?
Per Reuters, Huawei spends $11b on US components, and its ability to withstand this hit will
vary by segment: "Huawei being unable to manufacture network servers, for example, because
they can't get key U.S. components would mean they also stop buying parts from other
countries altogether," said an executive at a Huawei chip supplier.
"They can relatively better manage component sourcing for mobile phones because they have
their own component businesses for smartphones. But server and network, it's a different
story," the executive said.
Are there any articles on how dependent Apple and Boeing are on Chinese components? This
strategy seems incredibly short-sighted.
Remember the "Asian pivot"? Did Huawei and other critical tech companies start making
independent chips back then? Or before? When were the tariffs planned? Speculation, anyone?
The issue with these chips highlights just how ridiculous the American position is. The chips
referred to are Intel processors they use in servers and qualcomm (arm core) processors in
cell phones. Funny thing is, these processors are not even made in the US, and their
replacement isn't that much of an issue, not for a company with the resources Huawei
possesses.
Huawei already has its own arm based soc's it uses in it's high end phones and they can
replace processors in it's low end phones with lesser versions of these.
The Intel processors will be tougher to do for the commercial market because of software
compatibility issues.
For government and other high security uses China has options like the MIPs based Loongson
but that wouldn't work in the commercial environment so hopelessly devoted to x86 and
windows. Probably the best solution would be to make an x86 analog like AMD markets, and it
wouldn't take that long to do.
The United States attacked China's largest telecom equipment maker Huawei. If China
decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely
heavily on it for revenue, or tech giant Apple, which depends on them for iPhone
manufacturing.
Huawei uses Qualcomm's modems in its high-end smartphones and has been in settlement talks
with the chip supplier over a licensing dispute. Tensions between the United States and
Huawei could delay this licensing settlement, sending Qualcomm's stock down 4.4% on May
16.
Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the
United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's
stocks rose more than 4% and 2% in early trading on May 16. . .
here
"Soon U.S. chip companies will have lost all their sales to the second largest
smartphone producer of the world. That loss will not be just temporarily, it will become
permanent." --b
This is a crucial and important development. So long as China is just developing their
domestic chip designs as an academic exercise they will forever trail behind the market
leaders by at least one technological iteration. Why try so hard with chip designs that will
only ever just be used in college degree theses papers and proof of concept models? Real
innovation comes from scratching an itch; from fulfilling an actual need. Chip fab is the
only remaining significant technological lead that America retains anymore, but the raw
engineering brainpower behind that industry in the US is mostly imported from China anyway.
The Chinese have no shortage of brilliant engineers, they just have not really had the need
to do without Intel and AMD before. Now they do.
In the short term the transition will be painful for China. The first few iterations of
their replacement chip designs will be buggy and not have the features of chips they could
have bought for cheaper from the US. They will also have problems ramping up capacity to meet
their needs. Typical growing pains, in other words. In the long term, though, this will be
seen as the point at which the end started for America's chip tech dominance. Within a
year or so China will be producing chips as good as America's. Another year after that and
America will be eclipsed in that industry. No longer will people be looking for "Intel
Inside!" stickers on products but rather "Huawei Inside!" .
Isnt it clear the US is globalist? Uhhm, well, yes, it's only been clear for the prior 75
years at least. In fact Lenin laid it all out during WWI so one could
say it's been clear for 100 years.
What doesn't seem to be clear, or else ignored/excused here -- China is today just as
globalist as the US and in fact the multinational corporations in control of both countries
are inextricably linked, especially in the high tech sector currently under the intense MoA
thread microscope.
Why aren't Huawei making making more smartphone chips in production? Because so many
Chinese component manufacturers are still heavily invested in churning out product for Apple.
These companies employ millions in "relatively high paying" factory jobs and account for a
large slice of Chinese export income and stock market capitalization. These corporate
oligarchs supported by the Chinese government retain a vested interest in the status quo.
This is not to minimize Huawei or Chinese growing ability to compete at the design and
innovation level as well as production, it is simply rightsizing the perspective to fit the
reality. Huawei production is growing worldwide but this doesn't mean Apple or Samsung will
evaporate or fall by the wayside and the Chinese need Apple and its markets too . In
fact, Huawei is now willing for the first time to sell microchips to third party cell phone
producers including Apple. Successful capitalist growth for China depends on increasing
production into new products, technologies and markets not replacing current platforms with
new. The product cycle will take care of itself in time anyway.
China is still in the industrial growth phase of its capitalist development, although
beginning to transition to the higher phase for sure. Of course.
MoA China "experts" should study the reality of globalization after removing the rose
colored glasses if you wish to be considered analysts instead of merely wishful
thinkers/cheerleaders of groupthink delusion.
Trump calculation is probably that neoliberalism in China already corrupted Communist Party enough for US being able to
destabilize the country buy depriving it of export revenue. And it is true that influence neoliberal Fifth column in china exists
and can compete with Communist Party for power. If Trump timing is correct China will be crushed. If this in incorrect the
USA might be crushed. This is a very high stake game as Trump burn bridges way too easily (being reckless and arrogant all his
life). Bulling as a negotiating tactics might be OK for New York real estate market is not that good in negotiating with
countries such as China.
Both countries are neoliberal countries but Chinese have more flexibility as remnants of Communist Party control remain in
place. But the same remnants are also a bog danger, as China might find itself in the position of the USSR when the US
crushed oil price and deprived it of much of its export revenue. In this case Communist Party will be blamed for social
disruptions and might lose power due tot he power of Chine Fifth column of
nouveau riche like happened in the USSR (opposition was supported by huge cash injections from the USA). I hope they study the
USSR experience very carefully and will not repeat Gorbachov mistakes (although it is difficult, as it is very difficult to find a
more stupid politician then Gorbachov, unless we assume that he was a traitor). Also the level of nationalism in China is
much higher and that might help. In any case this uncharted territory for both China and the USA.
The Trump administration seems to have the illusion that if you raise the stakes high enough, other countries will cave to US
demands. There might also be an element of creating foreign adversary in order to unite the domestic front. If Chinese will hold
their position tight despite the pain, Trump might lose the election in 2020 as he will be unable to protect the economy for
more then a year and the first signs of reception nullify his changes, as he will be blames for it.
Notable quotes:
"... This article titled 'Face' by Walrus over at SST is well worth a read alongside b's piece. https://turcopolier.typepad.com/sic_semper_tyrannis/2019/05/face-by-walrus.html ..."
"... Both these articles give a very clear picture of what the drunken louts 'Team Trump' are up against in their so called trade war. Very much like a drunken spectator climbing into the ring thinking he can take on a professional boxer. ..."
"... The US attack on China did not start with Trump. This is what Obama's military "Pivot to Asia" was about, as was the TPP, which explicitly was designed to develop an economic alliance that left China out. Capitalist trade wars are also not new, as are hot wars. They are part of capitalism. ..."
"... "Intellectual property" is a laughable assertion, an audacious attempt by the US to corner all human advances and claim them as the property of US capitalists, to be only used for their profits. As if! ..."
"... What an appalling ruling elite in the USA. Blamers and punishers. Never take any responsibility for their murderous acts ..."
"... The U.S. talks about pressuring China until they give in. China talks about a solution that respects the dignity of each party. ..."
"... I had the sudden realisation that US politics is essentially monarchist in its nature, for all the complicated legal and constitutional structures that have been built around it over the past 240+ years. US politics and culture are fixated on one individual with extreme powers; the superhero obsession in Hollywood is one symptom of that. ..."
"... In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers, viziers and sometimes the janissaries who became a hereditary class during that period. ..."
"... Idolatry is universal. People always gravitate towards Alpha personalities. ..."
"... In looking into US culture and why it gives rise the type of leadership it has, I think it may be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all other peoples want to be like them and all they (Americans) have to do is free those peoples from the nasty dictators ruling over them. ..."
"... Patrick Armstrong in one of his articles has said that in his dealings with US officials as Canadian ambassador or diplomat, is that American officials genuinely believed that all they had to do was overthrow the evil dictator and the people would welcome Americans or willingly join the US system. ..."
"... But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square. ..."
"... We hold both these views simultaneously, hence, as Orwell called it, Doublethink. ..."
"... The British court said, no patent, no copyright and no monopoly can last longer than 7 years. that was 1787-89, and it explains the for a short time clause in the USA constitution. ..."
"... I don't think the US sees the world's nations as commanded by their senior politician. Far from it, but to keep the US public locked in a child's mentality, the govt and its MSM present every political event/action/reaction as between personalities. Can't have reason and logic breaking out among the minions can we? ..."
"... China's "competitive advantages" are too big for a confederation of micro-countries in the Pacific to overcome. ..."
"... b said;" the U.S. economic system is based on greed and not on the welfare of its citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20 years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great? ..."
"... Smacking down China is a strategic priority for the Deep State. ..."
"... the neocons in the US believes it is now or never to defend the USA unique position as world power. They believe, that if they don't fight now, they will have lost. I say, they already have. ..."
"... Trust the UnitedSnake to blame the Chinese for reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to China. Chinese commentators are fuming at the audacity of the demands. 'WTF, Do they think we'r their gawd damned 51st state ?' ..."
"... Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo, by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial arsons against Yugo. ..."
Both these articles give a very clear picture of what the drunken louts 'Team Trump' are
up against in their so called trade war. Very much like a drunken spectator climbing into
the ring thinking he can take on a professional boxer.
@ Peter AU 1 | May 17, 2019 4:33:54 PM |
1 5 Trump
demanded concessions on trade
banned Huwei
made military [plans with Taiwan
saber rattled in the China Sea
Trump wants improved trade conditions for improved economic climate in the U.S.
But there are others in the admin who want something else.
But still: "backup chips it has independently developed"
That's a good one Mr Moon.
The US attack on China did not start with Trump. This is what Obama's military "Pivot to
Asia" was about, as was the TPP, which explicitly was designed to develop an economic
alliance that left China out.
Capitalist trade wars are also not new, as are hot wars.
They are part of capitalism.
"Intellectual property" is a laughable assertion, an audacious attempt by the US to corner
all human advances and claim them as the property of US capitalists, to be only used for
their profits.
As if!
What an appalling ruling elite in the USA. Blamers and punishers. Never take any
responsibility for their murderous acts.
Rise up people, these are dangerous, stupid leaders and elites.
B says: Whatever face is at the top is only representing the layers below.
Yes, this is the case when complex governmental systems are functioning properly. In
this case power is distributed throughout the system, based on the role each individual
within the system. People must have a collaborative culture for complex systems to function
properly.
People of an authoritarian nature hate complex systems and distributed power, as such
systems limit the freedom of action of the authoritarian leader. The corollary to this is
that systems must be kept simple to accommodate authoritarian leaders. And simple systems
are much less powerful and effective than complex systems.
My observation is that, in the U.S., authoritarianism is the dominant culture, as
opposed to a collaborative culture of the Chinese that is implied by B's comment.
Indeed we see many signs in these negotiations that the U.S. is operating based on a
culture of authoritarianism, whereas China is operating based on a culture of
collaboration. Among the signs:
The tendency that B. noted of Americans to assign all power to the leader.
(This is not the first time, and in fact it is a common mistake of the U.S. and one of the
reasons that their regime change efforts almost never achieve a result that is favorable
for the U.S.)
The U.S. talks about winning and losing. China talks equity.
The U.S. talks about pressuring China until they give in. China talks about a
solution that respects the dignity of each party.
The principle behind negotiations for people of a collaborative culture is 'Win-Win or
No-Deal'. For Authoritarians, Win-Win is a compromise, and compromise is the equivalent of a
loss. My conclusion is that there is only a very low probability that the U.S. and China will
successfully negotiate a trade deal. The cultures of the authoritarian Americans and the
collaborative Chinese are too divergent. China will only accept Win-Win and the U.S. cannot
accept Win-Win.
Classic US empire strategy.
Build up a supplier and when they start to be serious a competitor take them down.
Asian Tiger crisis,forcing occupied Japan into the Plaza Accord etc.
They left it too long with China, way too long.
China has not recycled its trade dollars surplus into USTs since 2014.
No replacement suppliers like Vietnam or Indonesia etc will do either, no more vendor
finance
for the US.
It will have to live within its means, no wonder the neocohens are going
insane.
We are watching the death of the $ as GRC first hand.
NO jared, Trump is in charge, fully responsible and yet totally irresponsible. He hires
and fires, he barks the orders, Trump is not captive. You may desperately wish to believe
that but NO, Trump wants it like this and NO dissent.
This is Henry Kissinger's plan implemented by Trump. A war criminal implementing a
sociopath war criminal's plan. Trump is a killer and an oligarchs stooge and he like the
rewards.
See the fabulous Aaron Mate discussion previously linked in the last thread.
I'd be curious to know what other MoA barflies think of the US tendency to personalize
other countries' governments and political systems and reduce them all to monarchies of one
sort or another, and what this says about the American psychology generally. So much of the
US slather and accusations against Russia and China and what those nations are supposedly
doing look like psychological projection of the US' own sins and malevolent behaviour.
I was in hospital nearly 20 years ago for a major operation and some of my recuperation
there was spent watching a few old "Star Trek: Next Generation" episodes. Watching those
shows, I was struck by how much "power" the Star Trek captain Jean-Luc Picard appeared to
wield. Every one of his subordinates deferred to his decisions and very few challenged
him.
I know this is an old TV show with scripts that emphasise individual action over
collective action and delineating a whole culture on board the Starship fleet (this is a
long time before "Game of Thrones") but I had the sudden realisation that US politics is
essentially monarchist in its nature, for all the complicated legal and constitutional
structures that have been built around it over the past 240+ years. US politics and culture
are fixated on one individual with extreme powers; the superhero obsession in Hollywood is
one symptom of that.
In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women
period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers,
viziers and sometimes the janissaries who became a hereditary class during that period.
@ dh-mtl 21
You provided an excellent analysis of two very different kinds of people, westerners and
Asians (Chinese). Americans who believe that Chinese are pretty much like them, and respond
to people, to pressures and and to situations in the same way, are badly mistaken.
I would add another: Westerners want instant results and quick profits whereas Chinese take
the long view. Heck, they've been around for five thousand years so why not.
I'm glad you raise the issue of increased prices for US consumers, b. I have been looking
in vain for a mention of this even in alternative media. Nobody appears to be talking about
it.
If I can go off track for a moment the events surrounding Boeing are highly significant
and a parallel to what is happening generally in the US. Here is a something I wrote for
naked capitalism but did not send - Yves is too fierce and I don't trust her. A bit like a
feminine Colonel what's his name Laing...
Because of the prestige of Boeing Wall Street left its dimantling until quite late -
1997. GE and Ford had already produced their versions of the 737 Max in the 1960s with the
Corvair and the Pinto respectively as finance people started to take over the running of US
companies. There is something very sad in watching a once magnificent company reduced by
bankers to a shadow of its former self.
There has been a trade imbalance for quite a while but it didn't seem to matter much. The
Chinese raised their standard of living, Americans got cheap stuff, surplus dollars went
into treasuries to fund the deficit.
It all worked pretty well until Trump and MAGA. Somehow he thinks he'll bring the jobs
back but no Americans are going to make sneakers and circuit boards for $2 an hour.
I have just replied to Karlof1 in I think the previous thread and I link into this. In
looking into US culture and why it gives rise the type of leadership it has, I think it may
be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all
other peoples want to be like them and all they (Americans) have to do is free those
peoples from the nasty dictators ruling over them.
Patrick Armstrong in one of his articles has said that in his dealings with US officials as
Canadian ambassador or diplomat, is that American officials genuinely believed that all
they had to do was overthrow the evil dictator and the people would welcome Americans or
willingly join the US system.
All the economic momentum is in Eurasia, centering on China, India, and Russia.
China is spearheading this drive and re-assuming its historical status as the richest
land in the world. Instead of resisting, Washington should be working with projects like
the BRI that help enrich everyone. (Indeed, why doesn't Washington announce a BRI for North/South America, perhaps a Yellow
Brick Road? But that's an aside...)
And concerns about Chinese spying through their companies should be equaled with
internal reflection about the practice in the United States. Perhaps it would be wise for
both countries to develop and practice international standards that respect human rights in
an Everything's Connected world.
Given how the US and China frequently treat "different" people with disdain, that's a
lot to ask. But no country or people is spotless regarding abusing human rights and some
wisdom with power would be welcome from both governments.
You point out that our entertainment industry focuses its plots on strong leaders, and Good
Guys vs Bad Guys, and we definitely internalize that, especially when our overlords want to
demonize another country, and use our entertainment-induced perspective as a shortcut.
They tell us that the leader of the targeted country is a Bad Guy and we must kill the
people in order to save them. And Americans nod and comply. Except for the 5% that prefers
peace, and they argue that the leader is not a Bad Guy, so we shouldn't kill the people to
save them.
No American ever thinks to argue international law or basic morality, we just argue about
the plot lines.
But, at the same time, on another level, Americans understand that the president is a
puppet and must obey orders, or have his brains blown out in bright daylight, in the town
square.
We hold both these views simultaneously, hence, as Orwell called it, Doublethink.
China has succeeded because it does not honor copyright and patent monopolies. Western
civilization is failing because it imposes the feudal monopoly by rule of law system.. The
state will make sure a few fat cats are lords and the masses are their slaves.
---
It is almost asking the change of China's political system." <= no its not, the struggle
today is freedom, human rights and the right to self determination not socialism vs
capitalism.. it the struggle today is capitalism vs monopolism.. because monopolism aims to
make every single human being alive its slave to a very few monopoly powered corporate
giants.. China is a clear example of what can be if the masses are allowed to compete
without the shackles of copyrights, patents and other thin air monopolies.
Some aspects of China's trade behavior can and should be criticized.
Why? Because of that "intellectual property" stuff? Japan basically built itself from the
ground up in the post-war through allowed and unallowed intellectual property theft. Canon
and Nikon, for example, essentially fac-similed Leica during that period; after the
transition to digital, they erased their theft past, but it doesn't change the objective
truth both wouldn't exist without stealing technology from a defeated country (Germany). It
did the same with missile reentrance technology it stole from the USSR after the Cold
War.
< Technology is a product of the human mind.. copyright and patents are thefts of the
products of the human mind.. and human mind assets do not belong to anyone, to any
country.. Instead, copyright and patents (intellectual property) are and should be in the
public domain (but the scum that write the laws have created from thin air; rights which do
not exist, and given the rights they fabricated to their feudal lords and the corporations
owned by such lords. So the lawmaking scum have made it possible for a few (feudal lords)
to establish and maintain a monopoly in the good life, over the masses in the world. ..
Just as in the in England, France and Switzerland, where only the rich, corrupt
politicians, and criminal few hung out and traded copyright and patent monopolies in the
coffee houses, (much like stocks and bonds are traded today, monopoly trading was a game
between fat cats (today's the fat cats are wall street barons), ..monopolies allow rich and
wealth to support their royal life styles at the price of enslaving the masses to poverty.
Luckily a court in England, threaten by an angry crowd of the masses, denied the wealthy
their perpetual lifetime patents and copyright demands, no longer could the fat cats
squeeze ownership of an intellectual creation from its creator, convert it to intangible
property, and use the intellectual property to monopolize the world.
The British court
said, no patent, no copyright and no monopoly can last longer than 7 years. that was
1787-89, and it explains the for a short time clause in the USA constitution.
I don't think the US sees the world's nations as commanded by their senior politician. Far
from it, but to keep the US public locked in a child's mentality, the govt and its MSM
present every political event/action/reaction as between personalities. Can't have reason
and logic breaking out among the minions can we?
As for Trump being in charge, I rather doubt it, no US president has been "in charge" of
any thing except possibly what is for lunch since Washington.
Too many policies Trump began, such as negotiations with NK, have been trashed by his
"teams" who I believe are actually his minders put in place by the Deep State.
Is Trump a great guy? A NY developer by their very nature is not a great guy. But I do
think he wants to be seen as a great president. To do that he has to pull off some deals
that will be remembered which is why he wanted the deal with NK, that Pompeo blew up.
I also think that the govt is preparing for the time when the dollar is no longer the
reserve currency. And to do that you need to pull manufacturing back from abroad (from
China), seize critical assets (from Venezuela),break any and all treaties that require you
to spend money you won't have (making NATO (pay as you go).
All things the govt is doing, admittedly with the most horrific management team since
Taft's. But they are moving on all fronts to circle the wagons of US commerce.
They know what is coming, some of them may see war as the way to bilk a few more
trillions out of the treasury, but I don't think the military will let them. For they know
that if they go up against a nation that Russia and China support and botch it, that
R&C will go for the throat and that, more so than the currency crash would be the end
of the US.
These moves we see are very serious because the end game is for the continued existence
(or death)of the US. And many of these tactical moves are very high risk because they
hasten the end of the dollar. I give the dollar five years more, tops. Then it will be just
one in a basket of currencies until the yuan makes its way to the top.
And where that strange UN Agenda 21 fits in this I don't know, its plan for the US is
for drastically reduced population (70% loss, from what?)the remaining population in mega
cities and truly vast areas of no go set aside for the "environment." It reads like a
National Parks program on crack with a side of Hunger Games.
The next five years are going to be really critical and I personally think the US will
only make it by the skin of its teeth.
@ Jen. Another thought. The era in which the current state of America was conceived.
British colonies in a war of separation or independence against the British. Europe and
Britain at that time mostly ruled by hereditary monarchs nobles and lords ect.
Americans which I take it at that time would have been mostly British ancestry had done
away with hereditary monarchs and so forth. It would have been somewhat exceptional at the
time. In the targeting of the leader of a nation as the source of all evil, I wonder if
that relates back to doing away with hereditary leadership especially monarch.
President Trump has declared a national emergency due a threat to the US from "the ability
of foreign adversaries to create and exploit vulnerabilities in information and
communications technology or services, with potentially catastrophic effects, and thereby
constitutes an unusual and extraordinary threat to the national security, foreign policy,
and economy of the United States," so various actions and prohibitions have been stipulated
here .
I think war reporting rules are in place with China, and Trade war has started.
Every month that passes without a crisis is a success for China right now as it over takes
US in GDP, tech, and trade links.
Key issues are bringing Europe in - the Huawei ban extended to Europe is battlefield #1,
Northstream (gas link to Russia) is #2.
First get Europe on board, the US can up things a lot further.
If Trump gets this right, he can delay outright defeat by China under well beyond his 8
years are up. (Bush or Obama early on could have won, or could have found a peaceful
solution).
A president doesn't have to obey the orders of the powers that be just because they
threaten to kill him otherwise. A brave president would defy them to do their worst. If
they went ahead and killed him, he would still have accomplished something important. By
exposing the nature of the system, he would have robbed it of its legitimacy and brought a
revolution much closer.
You've all been trained very well to ignore the class warfare.
China's "peaceful rise" was convenient when it enriched the Western elite.
But when China makes a play for equal footing, the must be smacked down. In each case (rise, smack-down) ordinary people (like yourselves) get f*cked. Kissinger's NWO? It's for the children.... No, not YOUR children. Welcome to the rabbithole.
Best example of a country stealing foreign inventions and protecting its 'uneconomical'
industries with tariffs is the USA.
It was notorious that in the C19th American publishers pirated authors and musicians from
Europe, particularly of course from Britain where the intellectual properties of Dickens
and his contemporaries laid the basis for many an American publishing fortune.
Among the primary victims were American authors who couldn't compete against stolen
imports.
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories
will force production to other countries in the area like Vietnam where costs are not going
to be much higher than China.
Granted, the US may be pissed off that Huawei is placing back doors in their systems but
I suspect that they are only copying what the US has done for years with US companies like
Microsoft.
My daughter managed 5 factories located in China of a clothing manufacture based in the
US some years ago. She said there was constant chaos as the workers were continually on
strike. Bad air, dangerous machines, poor wages. few bathrooms, bad water, childcare is
chaining you child to a fence for the day, and the like. Her boss flew to China and asked
for the cheapest costs possible. They showed him a factory full of little children cranking
out production. He left crying his eyes out. He was a cold hearted bastard but even that
was too much for him to see.
I viewed first hand the destruction trade agreements like NAFTA caused to good union
wages and benefits in the US. Hell, that is what got Trump elected. It is tough to watch
your children go into the same profession and make 50% less in wages and fringes 30 years
later.
Intellectual property and patents? No so sure about that, the views here are new to me.
I always supported them but I guess I need to dig deeper on that one.
In the net I think China is the loser, fewer jobs, higher food costs, their markets are
down 30%, ours are peaking and are seen as a safe haven for money. Export numbers for China
are dropping as is the trade balance.
At this point it is not a trade war but a re balancing of markets IMHO. If it was a real
trade war things would be far worse. Middle supplier countries will be hurt, US farmers,
some markets win some lose. If it was business as usual then it would be business as usual.
Trump is stirring the pot and what the endgame is is anyone's guess. Did anyone really
believe China would just bend over and accept any demands from the US?
All that being said China can easily wait it out and hope Trump loses and the policy is
reversed which I am sure his policies will be reversed if anyone else gets elected.
Your link about Boeing is a good one. Today at Naked Capitalism was a
story about a possible 'payback' link between Huawei and Boeing. China has the option
of causing a great deal of pain to both the US and Boeing in retaliation.
They could declare the recertified 737-MAX to be unsafe, so much so they're cancelling
all orders and forbidding any landings in or overflights of China. If Canada hadn't screwed
up so badly, the local Bombardier airplane might have been substituted for the 737. But
Canada did goof in a major way.
There is no way that the US could subsidize the growth of a larger population base
forever.
China sends vast amounts of manufactured goods to the United States; the US pays for all
this with dollars it can effortlessly print. So who is subsidizing whom?
The National Basketball Association Inc. is hiring its first head of government and
public affairs in China as it seeks to protect its most important international market at
a time of high tension in the U.S.-China relationship.
What I don't like about Chas Freeman's article is his tone-deafness.
He has been around government enough to know better. Smacking down China is a strategic
priority for the Deep State. But Chas says:
There is no longer an orderly policy process in Washington to coordinate, moderate, or
control policy formulation or implementation. Instead, a populist president has
effectively declared open season on China.
It's a bit disturbing to see people here read Kissinger's 2014 Op-Ed (finally) but say
nothing about Chas Freeman's assertion that it's all made up by a "populist" President.
<> <> <> <> <> <> <>
If the above hurt your feeling please feel free to retreat to your happy place. We'd all
be better off.
Not happy, just learned to live with it. I think I get your point. The policy really
means little, the underlying issues will never change.
Been in the rabbit hole for a really long time. If more people jump in maybe things will
really start to change.
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories
will force production to other countries in the area like Vietnam where costs are not
going to be much higher than China.
First of all, this is not a new phenomenon: low wages, low technology industries are
already being transferred to India and SE-Asia. The Chinese know this and there are
innumerous articles on the internet you can find about it.
But even if this process accelerates, that won't solve the manufacturing problem of the
USA: it will continue to be abroad. Besides, China's "competitive advantages" are too big
for a confederation of micro-countries in the Pacific to overcome. It has a socialist
economy (centrally planified economy, under the hegemony of the working class); it has 1.5
billion people that will only peak in 2030; it is decades ahead in built infrastructure; it
has a huge scale economy advantage (e.g. infrastructure projects that are required to reach
a certain desired productive level, which are profitable in China, may not be profitable in
e.g. Malaysia simply because it is too small); its financial sector is not dominant over
production. But then, I repeat: even if the USA nukes China, manufacturing still won't go
back to American soil.
America's problem is a secular fall of its profit rates, not manufacturing capacity: it
can import whatever and how much products it needs simply because it can print world money
(Dollar system).
b said;" the U.S. economic system is based on greed and not on the welfare of its
citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20
years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but
why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great?
I know next to nothing about the "Huawei" business, so a new
article about it is something to grab at. Pretty cut and dried, huh? Hauwei is pure
evil, and no 'ifs' or 'buts' about it.
But who is this guy. A couple of quick searches turned up some more of his output.
'It's now or never': The untold story of the dramatic, Canadian-led rescue of Syria's
White Helmets
How Israel became a defender of the Syrian people
Just another neocon hack peddling BS, so I'm back to square one.
China will wait it out until Trump is out of office. The Chinese leadership is pretty
smart and had at least three years to prepare for the worst case scenario. Once Chinese
industries as a whole follow Huawei's footsteps (i.e. Plan B), there will be no turning
back. They'll set off Plan B once they see Trump winning 2020.
Are we to asume from "Some aspects of China's trade behavior can and should be criticized"
that the United States are shining example of trade (and all other) policies,all others to
follow?
For government and other high security uses China has options like the mips based
Loongson but that wouldn't work in the commercial environment so hopelessly devoted to
x86 and windows. Probably the best solution would be to make an x86 analog like amd
markets, and it wouldn't take that long to do.
Chinese-Taiwanese joint venture Zhaoxin has been making x86 processors since
2013, based on VIA Technologies' x86 license. These processors are manufactured by
Taiwanese TSMC, but may switch to Chinese SMIC
once it launches its 14nm process later this year.
"Whatever face is at the top is only representing the layers below." --b
The truth of this is also why so many in America hate Trump so much. He is too perfect a
reflection of what America truly stands for. Trump accurately represents America, from
America's bloated, over-inflated sense of self-importance and worth to America's
pussy-grabbing foreign policy. Trump-hate is really self-hate.
Delusional American Russiagater Trump Derangement Syndrome victims will protest, but
such people are incapable of taking a good hard look at themselves.
Hmm... "delusional" and "American" are redundant adjectives here. I should
be more careful with my writing style.
Mr. Gruff you have it almost correct, Americans and the USA are not one in the same and
they never have been.
I still don't think you guys get it.. The 7 article constitution of the USA apportions the
power to rule between two branches and separates the masses from their personal political
powers and their human rights. Its result is not a democracy, but a few people rule
republic. 100% of the authority to rule (operate and make decisions) is vested in one
person (Art. II, rule and decide: President w/VP backup), subject only to the powers
distributed to the two bodied legislative structure ( Art. I, pass law and raise money: 450
house+100 senate persons). Critical to understand => one person makes all decisions, and
directs the day to day government. Article III thru VII defines the judiciary and clarifies
various situations. (525 popularly elected + 2 electoral college appointed <=paid
governors) vs. 350,000,000 powerless governed persons entitled only to 3 votes/voter
[Senator(1), House members(2)] and allowed one vote/voter for each President(1) and VP(1)
<=but both Art. II persons are appointed by the electoral college).
The USA is about delivering to the ownership of a very few, all of the assets, all of
the power, and all of the services once possessed by the many. The demand for all of the
possessions of the many, to be delivered to the few, has expanded over time from 13 colony
America to earth and now space. No one but the few are entitled to anything and the USA and
other governments are there to be sure of it. But how is 'total possession vested in the
few' to be maintained? By rule of law!
But what law would transfer everyone's possessions into the ownership of a few? Ah, the
laws of monopoly.. so rule of law, from thin air , generates=> monopoly powers
and rights of ownership.. Examples of laws that bear monopoly powers and that transfer
ownership rights are copyright laws, patent laws, as they convert monopoly powers that once
the many shared (via governments) now belong to the few. The transfer is called
privatization. Oil is controlled for the benefit of the private few by ownership laws and
right to produce contracts. All in all the function of t he USA has been to make a few very
wealthy at the expense of the many.
The trade issues, sanctions, wars, tariffs, race wars, oil wars, religious wars etc. are
about which people are going to be the few. Until the form and function of governments are
determined by the masses from the bottom, instead of by the few from the top, nothing will
ever change. The masses will suffer or prosper according to which government is the
winner.
US factories moved to China because the US economy is based on greed?!! US government greed
for the company's money maybe. US factories moved to China because it was cheaper to
produce products there and then pay the expense to ship them all the way back. The US has
one of the highest federal tax rates on earth, and add in high state taxes for an
unacceptable situation. US fiat paper money is the base problem.
William Gruff @ 72 & snake 71
I was just about to say the very same thing !
Delusions of grandeur ! And now major self-harm systems !
But are these degenerates above the law ? They are after all genocidal mass murder's!
String um up I say or shall we fry um ?
Right now the brain dead American public are like something out of -- - -
'The invasion of the body snatchers ' film
@58, JackRabitt, Smacking down China is a strategic priority for the Deep State.
the first time I got some type of glimpse of the average American Mind on China, as it
filtered down from "the deep state" to the more fearfully ill-informed quarters of society
no doubt, was in the post 9/11 universe. The person or persons pushing the meme, may have been a bit confused by all the
conspiracy theories about 9/11 unfolding at the time.
Anyway, Chinese troops he/she/they asserted readers were close to the Mexican border
approaching, advancing swiftly.
In hindsight, maybe accidentally, although I doubt, Trump combines the elements of that
narrative perfectly. And it is not my intention to argue right or wrong here. But
apparently down at the border there is this "invasion" on the other hand there's also the
Yellow Peril.
DontBelieveEitherPropaganda , May 18, 2019 9:58:41 AM |
link
Well, the chinese system of power has always been the thoughest to understand for any
outsider. It has been this way, but in the last years it seems the so called age of
information has lead to erode the curtains of this complex mechanism. At least for those
who want to look behind those curtains, and not use them to project their propaganda.. ;)
And it is a good sign that while Xi tired to establish himself in such a unique position
of power like Mao, and openly tried to put himself into the historic succession of the old
emperors (like Mao did too), that the will of the people and party still tips the scale of
power.
It means the chinese confucian tradition and its consequences for a ruler even today still
matter. Even though they are anyway lost on someone who is not of Asian origin.
What to westerners look like a dictator, is of a different nature as one can even
imagine with western eyes. Every ruler has to strive for balance, for harmony, which in
turns makes hearing of the peoples popular will be a necessity.
Even though many Chinese say, they like any other people only strive for what they need
most ;) (like harmony and compromise). Though many also say, that the chinese will always
choose stability and security over freedom. And i guess that is what many from the western
world dont get about China, and also about the Putinists.
I say let them and every one else have their choice. Just like i say let the US do theirs,
and reap what they seeded.
For those able to read German check out the Books of Peter Scholl-Latour on China. The
most telling and authorative books from a journalist who has reported first had for over 60
years, and has always defended and honored his own perspective;
While the western so called reporters were trapt in their professional delusion of pro-NATO
propaganda, and while the SDS praised the culture revolution as a democratic means, when
whole china was terrorized and millions slaugtherd.
Hard to walk that middle ground, while being attacked from ideological drones from both
sides i guess..
Anyway, the neocons in the US believes it is now or never to defend the USA unique
position as world power. They believe, that if they don't fight now, they will have
lost.
I say, they already have.
Short of pulling a Hitler on China, meaning a total annihilation of the Chinese people,
there is nothing they can do. And even Bolton will have a hard time trying to push through
a clear cut genocide ;)
We will see China rise. Those who feared of this will see that china will not be half as
bad as thought, and those who gloirfy china and put them into a good (vs bad US) black-wide
scheme will learn of the faults of the Chinese power and its projection (Like its own
believe of supremacy, of racism (a reason why china in the cold war was pretty
unsuccessful in Africa, where most knew who deeply racist Chinese treated their fellows as
workers, guest students,..).
All in all, what we need is a true and functional global community of nations and
people, where goverments truely work together to balance out the stronger world powers. And
with the pressure of Chinas rise and its strugle with the US, we may finally have a better
chance for this to at least partially succed.
I hope.. ;) Or of course it nuclear winter time. We will see.
China now, Japan in the 1980s - it's "deja vu all over again!"
"AFTER ITS DEFEAT in World War II, Japan was content to take foreign inventions -- the
transistor, the laser, the videotape player -- and convert them into products that it could
market around the world. Japan acquired much of its base of Western technology, most of it
American, perfectly legally through licensing, careful study of scientific papers and
patents, and imitation. But when the U.S. wasn't willing to share, some Japanese companies
simply copied with little regard for patents and other intellectual property rights that
the courts have only recently begun to define in many areas of high technology.
The U.S.,
confident of its technical superiority, ''sold out to the Japanese,'' says G. Steven Burrill, head of the high-technology consulting group at Arthur Young, a Big Eight
accounting firm. ''We let them share our brain.''
Now, belatedly awake to the recognition
that Japan has been eating their breakfast, lunch, dinner, and bedtime snack, American
companies are stirring. IBM vs. Fujitsu over computer software, Honeywell vs. Minolta over
automatic focusing, Corning Glass vs. Sumitomo Electric over fiber optics -- these are only
the latest, best-publicized complaints that Japan has stolen American technology.
Even as
those legal battles are fought out, the copycat cliche is becoming obsolete. A series of
studies financed by the U.S. government since 1984 warn that Japan has caught up with the
U.S. or passed it in the development of integrated circuits, fiber optics, computer
hardware engineering, and advanced materials like polymers. It is pressing hard in some
areas of biotechnology, and lags primarily in computer software.
Already there are signs
that the Japanese, buoyed by their new prowess, have assumed the arrogance of the U.S.
along with its technology."
"A MEASURE of Japan's progress can be found in the number of patent filings in the U.S.,
Japan's most important export market. ..."
"THE FACT that Americans now worry about their access to Japanese technology is an
acknowledgment of Japan's new scientific competence. When the Japanese were known primarily
as copycats, the flow of technology was essentially in one direction. It was also cheap.
Aaron Gellman, president of a consulting firm, says that for years U.S. firms licensed
technology to the Japanese without asking for a grant-back, the right to use any
improvements they made. Says Gellman: ''This was very arrogant and implied that no one
could improve on our technology.''"
"U.S. scientists and companies have failed to take advantage of opportunities to tap
Japanese academic research. ''What's wrong here is pure laziness,'' says Martin Anderson,
an analyst with the MAC Group, a consulting firm in Cambridge, Massachusetts."
Trust the UnitedSnake to blame the Chinese for
reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to
China.
Chinese commentators are fuming at the audacity of
the demands.
'WTF, Do they think we'r their gawd damned 51st state ?'
Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo,
by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial
arsons against Yugo.
How the UnitedSnake destroyed Toshiba and took over its crown jewel chip tech,... Toshiba was severely punished for breaking fukus
sanction on USSR, by selling state of art milling
machine to the Soviets. the unitedsnake slapped a heavy fine, demanded
the resignation of Toshiba CEO, imposed a ten
years ban on Toshiba products, FORCED the Japs
to share their latest chip tech with Merikkans. Toshiba never recovered from that disaster.
An excellent summary of many aspects of a serious and deteriorating situation. In the end, China has a lot of brainpower to apply to situations like this.They are used to speaking and writing one of the world's most difficult languages. They are used to playing Go, one of the world's most difficult board games. And their national endowment of analytical skills immensely surpasses that of the United
States.
They are said to have eight times as many students in math and science and engineering
in their universities. Xi himself is very bright, having earned degrees in difficult subjects at demanding
universities, and he is calm and very forward-thinking. Just consider that magnificent
long-term Silk Road Project. When I think of Trump with his constant mock-heroic poses and foot-high signatures on
every silly memo and his gang of noisy, pompous thugs in top appointments, I can't help
thinking I know how this will turn out in the end.
China's
yuan slide risks trolling Trump It's good to remember that would not be the first time. After the first round of
tariffs, China devalued the Renminbi and it basically
wiped out the tariffs . In fact, it didn't even need to devalue that much: 1 Renminbi
is now US$ 0.14 -- just a little over the Government max upwards band of 1:7.
In 2013, the CEO of French hi tech co Alstom
was arrested by FBI, while changing flight at
New York.
His 'crime', breaking MERIKKAN anti corruption
law by bribing govn officials in INDONESIA ! Such is the LONG arm of merikkan extra territorial jurisdiction, rings a bell ...
Ms meng ?
Just like Toshiba, the French paid a very heavy price. The CEO went to jail, Allstom,
the crown
jewel of French industry, was FORCED to sell off its core business to its main rival, GE.
!
What did Ian Fleming's fundamental law of probability says....
ONCE IS HAPPENSTENCE, TWIC IS COINCIDENCE...
US MegaCos. outsourced and 'globalised' with the blessing, nay encouragement! of the Pol.
Class. Cheaper labor and lax environmental rules, in comparison with 'home' (US, W countries,
etc.) is a mantra. That is of course good enough, and one can track, say, sh*t-clothes
factories transiting from Bangladesh, to China, to Malaysia, to Mexico, etc.
Other motives, the first is lack of responsibility and involvement which allows
domineering and rapacious behavior. Foreign co. implant can just leave, relocate, if
whatever. A random /racist term/ exploited worker in the 3rd world is not voting in US
elections.
Deadly industrial pollution is outsourced, and energy use etc. at home while not
curtailed or significantly diminished is not as high as one might see under condition of
the industries returning home - a sort of 'greener' environment can be touted.
The PTB simply cannot grasp why some US citizens, who live high on the hog, house, 2
cars, 3 kids, endless dirt cheap consumer goods, etc. produced by 'slaves' abroad,
complain. If the 'stuff' was produced at home, it would cost much more, the pay would be
going to 'low-level' US labor -- in a more closed economic circuit there would be more
'equality' as things stand today in the US - *not* claiming it's a general rule.
Trump had some confused? thoughts about turning the present situation around, and
relocating industrial - some extractive - manufacturing - jobs back home, say 1960s, with
decent pay, to ppl who would then vote for him.
The stumbling block is that profits to shareholders, oligarchs, chief CEO's, asset
trippers, usurers, Mafia types, Banks and other Fin, and Politicians who in the US are
highly paid lackeys, etc. is set to diminish, as 'the pie' can no longer be grown much to
accomodate all these grifters. Due to energy constraints, disruption of climate change,
etc.
Brit and Dutch spooks now concur with Trump the charlatan's claim of Huawei security risk ! Trust the Brits to doublecross the Chinese, after they've been given the huawei source
codes to examine and declared it free of bugs. As for the Dutch , they seems to be the goto guys these days, whenever the 5liars need
some loyal poodles to corroborate their B.S., cue the M17 'investigation'.
This is a good overview of Huawai crisis, but the reason for it is deeper. Huaway is just a skirmish in a much larger war for
the supremacy in the neoliberal world. At the same time this is a crisis of neoliberlism as social system. Much like the crisis of
Bolshevism.
After 2008 the neoliberal elite lost legitimacy. Nasty jokes about Trump and Obama are just a tip of the iceberg, they just show
the level of distrust. In a way they are like anecdotes about Brezhnev during "Stagnation" ("Zastoy" in Russian ) period.
Simplifying, Trump is some variation on the theme of of Gorbachov. and a counterrevolution against Trump was similar to the
counterrevolution against Gorbachov ("putsch" with the main difference that putsch was instigated by Gorbachov himself and he lost
power as the result). While most probably the dirt will be swiped under the carpet, some minor figures might go to jail
in the USA as the result as this was clearly attempt of the palace coup by intelligence agencies with the support of Obama
administration and Clinton wing of republican partty.
The level of lies in MSM and level of lies of politicians on the Capital Hill is a clear sign that the social crisis is reached
the state "when the elite can't govern as usual, and prols can't live usual". People working in Wall-mart essentially live in
a third world country.
The most telling sign that this stage has come is that the neoliberal elite no longer is able to tell the truth to the
population. Russiagate was partially an attempt to cement the cracks in neoliberal facade (loss of the legitimacy of neoliberal
elite) by redirecting the anger of population to the external enemy. In this sense neoliberal elite badly long for a war, which
would solve their problems, but in the modern world this is too dangerous move. But new local wars (Iran, Venezuela ) are still a
possibility, especially because Israel fifth column ( Adelson, Hassid mafia -- Kushner and Co, etc) partially controls Trump
and were able to secure the appointments of Bolton and Pompeo.
BTW attitude to Jews here turned to be much worse (especially in NYC, there are a lot of Hassidic sects). Jews also are very
convenient scapegoats and always were.
The Trump attempt to bully China is based on the understanding that China is a neoliberal state too and as such it should fold
in the name of neoliberal globalization, as the USA is the dominant neoliberal power -- kind like the USSR was for Bolshevism.
It is funny that China defection to neoliberalism doomed Bolshevism :-)
As neoliberalism is a flavor of Trotskyism (Trotskyism for the rich :-) it can't be decoupled from the neoliberal
globalization ("Financial oligarchy of all countries unite") like Trotskyism can't be decoupled for the idea of the
World revolution. If you decouple those two you will get Stalinism.
The question now is about the control of globalization. Where is the center? In the USA or in China (China is pushing its own
version via Belt and Road Initiative -- a China-centered trading network)
As for China-USA trade war timing is everything. If it is too late the USA will come out of it with bloody nose with the
continuation of the Great Recession in the cards. The root case was only patched, but never fixed -- secular stagnation continued
past 2010: concentration of wealth at the top undermine consumption of the middle class (lower class does not matter much) and
external expansion is limited as there will be no the second USSR collapse and no new markets. As Marxist taught us -- all
imperialistic wars are the wars for the redistribution of the markets. I think this might be the case now. .
If timing for Trump attack is right, China will be crushed and pushed into economic depression.
I am incompetent in this area but it looks to me that Trump in his usually bulling style overdid it putting too much
pressure, and as a result China revolted. Neither China not the USA understand the full consequences of this move, but that does not
matter. Chinese reaction suggests that "the Rubicon was crossed" and the real trade war is in th cards. May be some
compromise reached, but if the neoliberal world is stilt into two camps: USA-dominated and China-dominated (much weaker, but
Russia and possibly India, Pakistan and Iran probably will gravitate to it). Replaying the Cold War on a new level and with
much weaker cards in the USA hands.
Looks like Trump recently understood that he committed a blunder and is trying to back off, but that might be too little too
late.
Notable quotes:
"... It's the clearest sign yet that the basic assumptions of globalization are collapsing. ..."
"... the story of the use of SWIFT against Iran, and increasingly it's the story of fights over tech/networks ..."
1. A thread on why Trump decision to put Huawei on the entity list is a very big deal indeed, as
@Dimi and others are arguing.
ft.com/content/c8d6ca . This is a far
bigger step than just excluding Huawei from the US market.
2. It requires any US company that wants to supply Huawei to first ask the US government for permission. This has obvious implications
for Google's Android operating system, Qualcomm chips and a myriad of other suppliers
4. The globalization of the 1990s massively transformed the world economy. National economic systems that had previously been
separate from each other became densely interpenetrated, and deeply dependent on financial, informational and trade networks that
spanned borders.
5. These networks are structurally embedded. Supply chains have been globalized, in the pursuit of economic efficiencies. It's
hard to imagine how the world economy could work without them. But the pursuit of efficiency created strategic vulnerabilities.
6. Some networks had hub structures meaning that states that could control the hub could control the network. Others relied on
crucial components that were single sourced or sourced within an individual country.
7. The last decade has seen states move increasingly to exploit these vulnerabilities against others or to shore their own vulnerabilities
up against outside attackers. That's the story of the use of SWIFT against Iran, and increasingly it's the story of fights over
tech/networks
9. The Huawei move displays both US fears about vulnerabilities, and US efforts to exploit them. The US is worried that 5G networks
could compromise US communications to surveillance.
10. US is not only moving to push Huawei out of existing markets - but to damage Huawei's core business by potentially preventing
it from using core US components (such as Qualcomm chips or Android OS (it remains to be seen exactly which technologies will be
listed). Chinese hawks are talking about retaliating through e.g. blocking sales of rare earths again.
11. This will also reinforce Chinese efforts to build "autonomous and controllable" technology and supply chains outside US control
to decrease their vulnerability to future attack.
12. The old model of globalization is in serious trouble. The networks that tie the world economy together are being exploited
for strategic gain. The US move is both a response to fears about its own vulnerabilities, and an effort to exploit China's vulnerabilities
in return.
13. The result will likely be escalation - but we don't know for sure. We still don't have anything that approaches a strategic
analysis of this new field of politics and how it works. Historical experience provides no good recent analogies.
14. During the Cold War, the US dominated parts of the global economy and Comecon were largely disconnected, with the exception
of raw commodities such as grain. Now, the economies of US, Europe, China and Russia are deeply intertwined.
15. If you want to be pessimistic, you can resort to scorpions-in-bottles analogies. If you want to be optimistic, you can point
to continued shared interests that states have in avoiding major economic disruptions. The willingness of the US to push this so
far and so hard
16. suggests the skeptics may find their fears justified - but we'll be finding out. Interesting times for international political
economy scholars, if frightening times for the international political economy. Finis.
Why not? Hollywood those days mostly produced utter junk. It's an easy and lucrative move
Notable quotes:
"... The most obvious is the simple fact that the U.S. is much less dependent on its services exports to China than South Korea is. While certain sectors might feel some pain, it's not likely to be strong enough to force the White House to back down. (Indeed, Trump might not mind if liberal Hollywood takes a hit.) ..."
"... Similarly, many Chinese industries rely fundamentally upon licensed American services. In 2018, foreign films accounted for 38% of China's box office; the most lucrative among them were American. That trend continues: Over the weekend, "Avengers: Endgame" became the third-highest grossing film in Chinese history. ..."
Trying to boycott U.S. entertainment and travel, as Beijing did
with South Korea, will only backfire on Chinese companies and consumers.
By Adam Minter , May 17,
2019 8:00 PM
Adam Minter is a Bloomberg Opinion columnist. He is the author of "Junkyard Planet: Travels in the Billion-Dollar
Trash Trade" and the forthcoming "Secondhand: Travels in the New Global Garage Sale.
China may want to stand tough against Donald Trump's trade threats. It's going to have a hard time retaliating, though, and
not only because it doesn't import enough goods to match the U.S. president tariff-for-tariff.
One obvious target would be the
$58.9 billion in
services the U.S. exports to China. These include everything from Hollywood blockbusters to tourism and education. In theory,
Beijing could easily enough cut off the flow of American entertainment into China and Chinese students and tourists out of the
mainland. Indeed, the nationalist editor-in-chief of the Global Times newspaper has already
suggested such a strategy.
China has some experience with this. After South Korea agreed to deploy a U.S. anti-missile system on its soil in 2016, Chinese
television stations were
informed that programs involving South Korean stars wouldn't be approved for broadcast, while Chinese venues began
canceling appearances by K-pop
bands and other South Korean celebrities. On top of restrictions on outbound tourism, the measures helped knock 0.4% off South
Korea's expected growth rate in 2017.
On the other hand, the unofficial boycott didn't persuade Seoul to reverse its decision. And there are many reasons to think
a similar strategy directed at the U.S. would be even less effective.
The most obvious is the simple fact that the U.S. is much less dependent on its services exports to China than South Korea
is. While certain sectors might feel some pain, it's not likely to be strong enough to force the White House to back down. (Indeed,
Trump might not mind if liberal Hollywood takes a hit.)
The second reason is more important. Chinese businesses are often as dependent upon U.S. services as American retailers are
on their mainland-based supply chains. Restricting Chinese tourism to the U.S., for instance, would damage China's airlines, many
of which have been handsomely subsidized in a battle for dominance over hyper-competitive trans-Pacific air routes.
Similarly, many Chinese industries rely fundamentally upon licensed American services. In 2018, foreign films accounted for
38% of China's box office; the most lucrative among them were American. That trend continues: Over the weekend, "Avengers: Endgame"
became the third-highest
grossing film in Chinese history.
Chinese regulators are already worried about
slowing box-office revenue
. In 2016, they even
temporarily lifted
quotas on foreign films to help cinema owners. It's unlikely they'd seek to add new burdens now to the struggling industry.
In recent years, the most high-profile buyers of U.S. entertainment content have been China's celebrated tech champions. In
2015, Tencent Holdings Ltd. agreed to pay the National Basketball Association
$500 million
(potentially rising to $700 million) for the rights to stream the league's games, highlights and other content in China. It
was a smart investment: The NBA is the
most popular professional sports league among Chinese viewers. During the 2017 finals, more than
170 million people in China streamed the games live.
And Tencent isn't the only Chinese tech company leaning upon the NBA to boost user counts. The league has signed more than
a dozen media partnerships in China, including a
March 2019 agreement with Alibaba Group Holding Ltd. under which the NBA agreed to create content for Alibaba users. (Alibaba
Vice Chairman Joseph Tsai owns 49 percent of the Brooklyn Nets NBA franchise.)
Ultimately, the biggest impediment to any Chinese boycott of U.S. services may be the Chinese public. Though there's no question
that Chinese popular opinion is behind Beijing, there's little evidence so far that the trade war has diminished consumer enthusiasm
for American movies and vacations. During the key Chinese New Year travel period, the U.S. was the
most popular long-haul travel destination for Chinese tourists. Los Angeles reported a
6.9% boost in Chinese visitors last
year.
While some Chinese might just switch to illegal streaming services and pirated downloads if cut off from their favorite American
TV shows and movies, trying to bar them from visiting the U.S., sending their kids to university there or seeking medical treatment
could quickly provoke a backlash among middle-class citizens. Especially at a time when growth is slowing at home, that's a constituency
the government can't afford to alienate.
Of course, none of this means the Trump Administration should think its services exports are entirely immune. As American culture
becomes more globalized, it becomes easier to emulate. China's film industry is getting more polished in spite of censorship.
Yao Ming is steadily
improving Chinese
basketball in spite of China's state meddling in sport. And low-cost airlines give Chinese access to a wide variety of destinations
just as compelling as Los Angeles. For now at least, though, China will have a hard time restricting what it can't replace.
Uh, no, Tom, she won't be collecting a lot of voters, well, at least not near enough. Biden
has already been "chosen" like Hillary was over Bernie last time. You should know by now Tom,
we don't select our candidates, they're chosen for us for our own good. 2 hours ago
This is going to take a long time. You just can't turn this ship around overnight.
US Political System:
United States is neither a Republic and even less Socialistic. US, in the technical
literature, is called a Polyarchy (state capitalism). Polyarchy (state capitalism) idea is old,
it goes back to James Madison and the foundation of the US Constitution. A Polyarchy is a
system in which power resides in the hands of those who Madison called the wealth of the
nation. The educated and responsible class of men. The rest of the population is to be
fragmented and distracted. They are allowed to participate every couple of years by voting.
That's it. The population have little choice among the educated and responsible men they are
voting for.
This is not an accident. America was founded on the principle, explained by the Founding
Father that the primary goal of government is to protect the minority of the opulent against
the majority. That is how the US Constitution was designed sort of ensuring that there will be
a lot of struggle. US is not as the same as it were two centuries ago but that remains the
elites ideal.
Polyarchy (state capitalism) it is a system where small group actually rules on behalf of
capital, and majority's decision making is confined to choosing among selective number of
elites within tightly controlled elective process. It is a form of consensual domination made
possible by the structural domination of the global capital which allowed concentration of
political powers.
A republic is SUBORDINATE to democracy. Polyarchy can't be subordinated to any form of
Democracy. 2 hours ago Is the author, to use an English term, daft? Tulsi Gabbard won't get out
of the primaries, much less defeat Sanders or Biden. Farage achieved his goal (Brexit), then
found out (SHOCK!) that the will of the people doesn't mean anything anymore.
If Luongo had wanted to talk about the people's uprising, he should've mentioned the Tea
Party. 3 hours ago Gabbard appears to have some moral fibre and half a backbone, at least for a
politician, regardless of their views, Farage is a slimy charlatan opportunistic populist shill
3 hours ago (Edited) I like Tulsi Gabbard on MIC stuff (and as a surfer in my youth - still
dream about that almost endless pipeline at Jeffreys Bay in August), but...
On everything else?
She votes along party lines no matter what bollocks legislation the Democrats put in front
of Congress. And anyone standing full-square behind Saunders on his socialist/marxist
agenda?
Do me a favour. 1 hour ago (Edited) Farage left because he saw what UKIP was becoming...a
zionazi party.
Also Gabbard is a CFR member. 3 hours ago Gold, Goats and Guns? Certainly not guns under
President Gabbard! Here's her idea of "common sense gun control:"
I'm totally against warmongering, but I have to ask - what good is it to stop foreign
warmongering, only to turn around and incite civil war here by further raping the 2nd
Amendment? The CFR ties are disturbing as hell, too. And to compare Gabbard to Ron Paul? No,
just...no! 3 hours ago Always been a fan of Bernie, but I hope Gabbard becomes president. The
world would breathe a huge sigh of relief (before the assassination). 4 hours ago By this time
in his 1st term, Obama had started the US Wars in Syria and Libya and has restarted the Iraq
War.
Thus far Trump has ended the War in Syria, pledged not to get us dragged into Libya's civil
wars and started a peace process with North Korea.
Venezuela and Iran look scary. We don't know what Gabbard would actually do when faced with
the same events. Obama talked peace too.
On Wednesday, DJT declared a national emergency by executive order over alleged threats to
US technology.
He invoked the International Emergency Economic Powers Act, giving the president authority
to regulate commerce in response to alleged threatening emergency conditions.
According to White House press secretary Sarah Sanders:
The order "protect(s) America from foreign adversaries who are actively and increasingly
creating and exploiting vulnerabilities in information and communications technology
infrastructure and services in the United States (sic)."
Huawei responded saying: "Restricting (the company) from doing business in the US will not
make the US more secure or stronger." i
"(I(nstead, this will only serve to limit the US to inferior yet more expensive
alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the
interests of US companies and consumers."
"We are ready and willing to engage with the US government and come up with effective
measures to ensure product security."
The Trump regime has been pressuring, bullying, and threatening other countries not to adopt
Huawei's 5G technology.
Beijing's Foreign Ministry spokesman Geng Shuang responded to Trump's order, saying it's
directed against "specific Chinese companies," calling it "disgraceful and unjust," adding:
"We urge the US side to stop oppressing Chinese companies under the pretext of security
concerns and provide a fair, just and non-discriminatory environment for their normal
investment and operation."
According to the Eurasia Group, the latest Trump regime action is "a grave escalation with
China that at minimum plunges the prospect of continued trade negotiations into doubt,"
adding:
"Unless handled carefully, this situation is likely to place US and Chinese companies at new
risk."
Beijing will surely react strongly to this latest action, making it all the harder to
resolve major differences between both countries.
"... Department of Commerce Announces the Addition of Huawei Technologies Co. Ltd. to the Entity List ..."
"... Commerce Secretary Wilbur Ross said in a statement President Donald Trump backed the decision that will "prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests." ..."
"... in a move that is seen as aimed at keeping the Chinese company Huawei out of the US market, President Trump has declared a "national emergency" to protect U.S. communications networks giving the federal government broad powers to bar American companies from doing business with certain foreign suppliers. ..."
"... As we detailed earlier, in what appears to be the US government's latest salvo in its war against Huawei, President Trump is reportedly preparing to sign an executive order that would prohibit American firms from using equipment made by foreign telecom companies that pose a 'security threat', according to Bloomberg , which sourced its report to administration insiders. ..."
"... "This is neither graceful nor fair," ministry spokesman Geng Shuang said at a news briefing in Beijing. "We urge the U.S. to stop citing security concerns as an excuse to unreasonably suppress Chinese companies and provide a fair and equitable and non-discriminatory environment for Chinese companies to operate in the U.S." ..."
"... As Huawei pushes to assume a global leadership position in 5G, the US's efforts to try and discredit the company have included successfully pushing for the arrest of its CFO, Meng Wanzhou, in Canada, on charges she helped the company violate US sanctions on Iran. ..."
"... After the Iraq invasion of Kuwait there was a throng of viciously victimized people who claimed examples of Iraqi's bayoneting babies in incubators, raping nurses and killing patients in hospitals. It was all a lie and it was propagated by Western PR companies paid with the gold and silver coins of the Kuwaiti government. ..."
"... Since you have such insight perhaps you want to share with us fools the reason why Huawei is so dangerous? Being an arm of the Chinese government is a bit vague and it's easy to argue that Google and Facebook are arms of the US government. ..."
"... The US is becoming outright hostile. Soon companies will avoid the US altogether out of fear of being persecuted and accused of violating US national security without any proof or even venue to address the accusations. It's amazing how fast the US has gone from having been a freedom principled nation with the rule of law to a tyrannical police state with out of control lawmakers contradicting their own constitution. ..."
"... the last time the US did this with chips, China simply obtained the equipment to make their own.......a permanent loss of what was a good business for the US. ..."
"... Companies spend exorbitant amounts on building their businesses, sales, assembly lines and supply chains. Trump comes along and just wipes out years of work and profitability with the stroke of a pen. He doesn't seem to "get" that those products are still going to be built and sold, just not with US parts anymore and maybe not in the US, but sales will still increase throughout Asia, etc.........and by doing what he's done, those Asian markets will simply shun US products. ..."
Reuters reports that the
U.S. Commerce Department is adding Huawei Technologies Co Ltd and 70 affiliates to its
so-called "Entity List"
- a move that will make it much more difficult for the telecom giant to buy parts and components
from U.S. companies. U.S. officials said the decision would also
make it difficult for Huawei to sell some products
because of its reliance on U.S. suppliers.
Department of Commerce Announces the Addition of Huawei Technologies Co. Ltd. to the Entity List
WASHINGTON – Today, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce announced that it will be
adding Huawei Technologies Co. Ltd. and its affiliates to the Bureau's Entity List.
This action stems from information
available to the Department that provides a reasonable basis to conclude that Huawei is engaged in activities that are
contrary to U.S. national security or foreign policy interest
. This information includes the activities alleged in
the Department of Justice's public superseding indictment of Huawei, including alleged violations of the International
Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA by providing prohibited financial services to Iran, and
obstruction of justice in connection with the investigation of those alleged violations of U.S. sanctions.
The sale or transfer of American technology to a company or person on the Entity List requires a license issued by
BIS,
and a license may be denied if the sale or transfer would harm U.S. national security or foreign policy
interests. The listing will be effective when published in the Federal Register.
"This action by the Commerce Department's Bureau of Industry and Security, with the support of the President of the
United States, places Huawei, a Chinese owned company that is the largest telecommunications equipment producer in the world,
on the Entity List. This will prevent American technology from being used by foreign owned entities in ways that potentially
undermine U.S. national security or foreign policy interests,"
said Secretary of Commerce Wilbur Ross. "President
Trump has directed the Commerce Department to be vigilant in its protection of national security activities. Since the
beginning of the Administration, the Department has added 190 persons or organizations to the Entity List, as well as
instituted five investigations of the effect of imports on national security under Section 232 of the Trade Act of 1962."
Additions to the Entity List are decided by the End-User Review Committee which is comprised of officials from the Department
of Commerce, Department of Defense, State Department, and Department of Energy. Under § 744.11(b) of the Export Administration
Regulations, persons or organizations for whom there is reasonable cause to believe that they are involved, were involved, or
pose a significant risk of becoming involved in activities that are contrary to the national security or foreign policy
interests of the United States, and those acting on behalf of such persons, may be added to the Entity List.
The Bureau of Industry and Security's mission is to advance U.S. national security and foreign policy objectives by
ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology
leadership.
BIS is committed to preventing U.S.-origin items from supporting Weapons of Mass Destruction (WMD)
projects, terrorism, or destabilizing military modernization programs.
Commerce Secretary Wilbur Ross said in a statement President Donald Trump backed
the decision that will "prevent
American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or
foreign policy interests."
Under President Trump's leadership, Americans will be able to trust that our data and
infrastructure are secure.
#ICTSupplyChain
Update (1645ET):
Confirming what we previewed earlier,
in a move that is seen as aimed at keeping the
Chinese company Huawei out of the US market, President Trump has declared a "national emergency" to protect U.S.
communications networks giving the federal government broad powers to bar American companies from doing business with certain
foreign suppliers.
"The president has made it clear that
this administration will do what it takes to keep America safe and
prosperous, and to protect America from foreign adversaries who are actively and increasingly creating and exploiting
vulnerabilities
in information and communications technology infrastructure and services in the United States," the
statement said.
The order authorizes the commerce secretary to block transactions involving communications technologies built by firms
controlled by a foreign adversary that puts U.S. security at "unacceptable" risk -- or poses a threat of espionage or sabotage to
networks that underpin the day-to-day running of vital public services... which would include the Chinese firm Huawei.
As WaPo details, Trump's executive order
instructs the commerce secretary to develop an enforcement regime and permits
the secretary to name companies or technologies that could be barred,
according to officials.
The order acknowledges that, although an open investment climate is generally positive, the United States needs to do more to
protect the security of its networks.
The national emergency declaration comes a day after a congressional hearing in which senators from both parties
joined administration officials in calling out the risks of doing business with a company like Huawei.
They emphasized
that the problem was less about the company than the authoritarian country whose system of laws, which lacks due process and
transparency, it must obey.
"It's not about overseeing Huawei. It's about overseeing China,"
said Sen. Lindsey O. Graham (R-S.C.),
chairman of the Senate Judiciary Committee during the hearing on 5G security.
But, of course,
"The executive order is company and country agnostic,"
replies a senior White House
official when asked if the executive order targets Huawei and China (h/t @W7VOA)
* * *
As we detailed earlier, in what appears to be the US government's latest salvo in its war against Huawei, President Trump is
reportedly preparing to sign an executive order that would prohibit American firms from using equipment made by foreign telecom
companies that pose a 'security threat', according to
Bloomberg
, which sourced its report to administration insiders.
The official who spoke with Bloomberg insisted the order wasn't intended to single out any country or company, but anybody who
has been following the ongoing spat with Huawei should instantly recognize that this simply isn't true (though, with the trade
negotiations at a very delicate impasse, we understand why the administration needs to maintain this pretense). Though Huawei and
its fellow Chinese telecoms giant ZTE already face serious restrictions on selling their products in the US, Huawei still
maintains a US subsidiary in Texas.
The order, which could be signed as soon as Wednesday, wouldn't outright ban sales to US entities, but it would grant the
Commerce Department more authority to review products and purchases made by firms with connections to adversarial countries (we
doubt that's directed at Ericsson and Sweden).
China's foreign ministry has already lashed out at the US over reports of the executive order.
"This is neither graceful nor fair," ministry spokesman Geng Shuang said at a news briefing in Beijing. "We urge the
U.S. to stop citing security concerns as an excuse to unreasonably suppress Chinese companies and provide a fair and equitable
and non-discriminatory environment for Chinese companies to operate in the U.S."
Washington has been campaigning for months to stop its allies around the globe from allowing Huawei products to be used in
their 5G networks, but to little avail. Yesterday, Huawei promised
to sign a "no spy"
pledge
to governments like the UK that are still deciding how much reliance on Huawei they are willing to stomach.
As Huawei pushes to assume a global leadership position in 5G, the US's efforts to try and discredit the company have
included successfully pushing for the arrest of its CFO, Meng Wanzhou, in Canada, on charges she helped the company violate US
sanctions on Iran.
American lawmakers suspect Huawei's equipment could be used for spying - and not without reason.
Just last month,
Ars
Technica
found a backdoor like vulnerability in Huawei's Matebook laptop series which could have allowed remote hackers to
gain access to the system. Chinese law also could technically compel companies like Huawei to cooperate with authorities.
But even if the order is signed on Wednesday, it might not take effect for six months, as it would take time for the Commerce
Department to "fashion an approach" to the order.
In the meantime, Verizon and other US telecoms firms are still way behind in the war to dominate the global market for 5G
networking equipment.
"Stop suppressing our companies, you unreasonable, evil bullies!
The Chinese people will not be treated with such indignity!"
-China, as they suppress foreign companies.
All the time back doors into Huawei equipment are found and all
the time Huawei claims it was an accident and that they are
complying with countries' privacy and telecommunication laws. Of
course they spy! Everybody spies on everybody.
And do we really
need faster internet? 5G is also rather intrusive. Due to the high
frequencies involved, more base stations, repeaters and antennas
need to be used, operating at higher output levels. Do we really
want to expose our bodies to these kinds of frequencies and power?
Apple CEO Tim Cook on Bloomberg's Lie-Chips fable:
"
This
did not happen
.
There's no truth to this
."
Apple's Tim Cook Calls For 'Bloomberg' To Retract Story About
Chinese Spy Chips. The word from everyone willing to go on record about the
Bloomberg
spy chip story is that
it didn't happen. U.S. National Intelligence Director, Dan Coats, added his voice
to the chorus of officials denying any knowledge of the matter and
finding no reason to believe the story.
The one named source for the story expressed extreme
doubts about the story's validity
. To spare their
credibility,
Bloomberg
needs to produce evidence or a
retraction. Tim Cook has made it abundantly clear what he thinks
about
Bloomberg
's only path forward.
OMG Huawei's 5G could be used for SPYING! You know, sort of like
what the U.S. government and private corporations are already
doing.
Seriously though, let's look into a crystal ball. Let's say
China becomes the techno leader for alot more things in the coming
future. So what is the U.S. going to do? Block a ton of new
technology, while U.S. citizens remain in the stoneage, while
China forges ahead?
All those millions of Mexicans the U.S. let in, will not be
creating the newest tech for the world in the future. So get used
to a lagging 3rd-world-like stance.
After the Iraq invasion of Kuwait there was a throng of viciously
victimized people who claimed examples of Iraqi's bayoneting
babies in incubators, raping nurses and killing patients in
hospitals. It was all a lie and it was propagated by Western PR
companies paid with the gold and silver coins of the Kuwaiti
government.
Anyone who believes that Huawei is not an arm of
the Chinese government is a fool. First of all, almost all
companies in China serve as agents of the Chinese government, this
is a fact. Second, some are more government than others and some
are an inner working of the strategy, a key player...a knight.
Huawei is a knight not a rook.
I have been there many times and I have spent a lot of time
with Chinese people in business. Huawei is an agent of the
government just like James Bond served Her Secret Service. Huawei
is a stealth fighter, make no mistake.
"Doth lady protests too much, me thinks". That's the planned,
contrived and paid for wailing of the PR industry that has been
thrown the gold and silver coins by the Chinese. Those are
Western companies selling their souls to deliver the virgin Huawei
to the West. Buyer beware.
Since you have such insight perhaps you want to share with us
fools the reason why Huawei is so dangerous? Being an arm of
the Chinese government is a bit vague and it's easy to argue
that Google and Facebook are arms of the US government.
Good. Trump should block these fools. Just another nail in the
coffin of the Chinese machine.
Enjoy your depression, China.
You earned it.
By the way folks...Barr has the IG Report by Horrowitz...and it
is
DEVASTATING!!!
The US is becoming outright hostile. Soon companies will avoid the
US altogether out of fear of being persecuted and accused of
violating US national security without any proof or even venue to
address the accusations. It's amazing how fast the US has gone
from having been a freedom principled nation with the rule of law
to a tyrannical police state with out of control lawmakers
contradicting their own constitution.
The rest of the world may
soon abandon the US because the risks outweigh the benefits of
dealing with a country that behaves this way. I don't know if
American lawmakers and leaders realize this because the standard
notion seems to be that the US is number one in everything and the
rest of the world who live in mud huts are all desperately trying
to either reach the US or will do anything to do business with the
US. That is a paranoid and self delusional notion and view.
Get your gddamn act together USA and stop going down this path
of ever more conflict and war, it really doesn't suit you. The
spirit of the Unites States was always that of individual freedom,
liberty and opportunity. Where has that optimistic can-do attitude
and zest for life gone?
I guess no one has told
him that there are only 4 major Telecom Wireless Networking
companies left in the world. They are
Huawei (China), Ericsson
(Sweden), Nokia (Finland), and ZTE (China)
.
Lucent
, formerly of AT&T Bells was brought out by Nokia,
and
Cisco
has dropped out of Telecom equipment entirely,
and is focused on Enterprise Networking Solutions.
Although, Ericsson (Sweden), Nokia (Finland) are not Chinese
companies, but they have extensive sales and operations in China.
About
20%
of their sales are derived in the Chinese Telecom
markets. They also have extensive research and manufacturing
facilities in China, to take advantages of the local engineering
talents and low cost electronic manufacturings.
Currently, 90% of Ericsson and Nokia telecom equipments are
made in China. Cisco also has extensive manufacturing and
suppliers in China.
I challenge the
Orange Dotard
to ban Ericsson, Nokia,
and Cisco and their extensive networks of suppliers, affiliates,
and associates in China.
I don't see why, they will not be a National Security Threat,
if Huawei and its suppliers are a National Security Threat.
Totally agree. And the last time the US did this with chips,
China simply obtained the equipment to make their own.......a
permanent loss of what was a good business for the US.
"........ a move that will make it much more difficult for the
telecom giant to buy parts and components from U.S. companies.
U.S. officials said the decision would also
make it
difficult for Huawei to sell some products because of its
reliance on U.S. suppliers.
"
And if Chinese companies can't buy a part out of the US, do
you suppose they will just do what they always do?........start
making their own and cause US companies to lose even more
business?
Trump and his minions never seem to think things through
past the initial attack to the potential consequences of their
actions. Wonder how long it will take for China to restrict
sales of rare earths to the US.
"And if Chinese companies can't buy a part out of the US,
do you suppose they will just do what they always
do?........start making their own and cause US companies to
lose even more business?"
Huawei is not like other
Chinese companies, such as ZTE, that relies on US Companies
for their chips. They make their own chips.
Yes, Huawei has suppliers in US, but they are not
unreplaceable. Trumpturd just killed their business with
Huawei, that's all.
Honest to god, Asoka, there are days where I think the
real, true, unstated goal of Trump is to destroy the US
one sector at a time. To what end, I truly don't know.
There is no way that these actions against Huawei will be
good for US businesses affected. Every step Trump takes
takes away one more piece of hard-earned profitable
business from US companies, farmers, etc, with no end in
sight.
Companies spend exorbitant amounts on building their
businesses, sales, assembly lines and supply chains.
Trump comes along and just wipes out years of work and
profitability with the stroke of a pen. He doesn't seem
to "get" that those products are still going to be built
and sold, just not with US parts anymore and maybe not in
the US, but sales will still increase throughout Asia,
etc.........and by doing what he's done, those Asian
markets will simply shun US products.
And, because of what he's done, more supply chains are
going to move AWAY from US parts to mitigate risk of
Trump doing this again to yet another industry.
"Totally agree. And the last time the US did this with
chips, China simply obtained the equipment to make their
own.......a permanent loss of what was a good business for
the US."
Yes, O'Bomer banned the sales of
high-performance chips for Supercomputers, to Chinese
companies. But he didn't know that China already
has high-performance chips, but they don't have the low
price that comes from high volume to compete with Intel's
Chips. So Chinese Companies just keep buying from Intel in
huge quantities, like millions of them to make
Supercomputers.
By banning the sales to China, O'Bomer has handed the
Intel's Chinese Market (worth billions each year) to local
Chinese Chip Companies. With half of their global market
gone, Intel were forced to close down their Xeon chip
production lines.
There are a few more large companies in the space like Intel,
Qualcomm, Samsung and Hewlett Packard and a long list of
smaller ones with 5G specialized niches. The space needs
healthy competition especially to find solutions to the
environmental and health concern that are associated with 5G
systems and which are very valid.
well hey the chinese are very patient but i'd say goodbye
Starbuck, Apple, and of coz no rare earths for the US anymore. to
begin with. Then liquidate US debt and see if Trump isnt
assassinated by the MIC...
"Update (1645ET):
Confirming what we previewed
earlier, in a move that is seen as aimed at keeping the Chinese
company Huawei out of the US market,...."
What's not said in
this article, Huawei left the U.S. in 2013. Huawei announced at
the end of April 2013 that it had given up trying to
compete in the US telecoms equipment market. "We will focus on the
rest of the world, which is reasonably big enough and is growing
significantly."
I am not a heavy cell phone user at all. Basic plan.
But the
Huawei model had the features at a lower price (bought on Ebay)
with some performance better that the competition. I've been very pleased with it, but again I'm a basic user.
Charges fast and holds the charge well.
"Waiting for China to impose heavy tariffs on
Hollywood films. "
Why not ? They are total CIA
inspired BS or Just pyrotechnic Nonsense. Plus Holly
Wood is just a *** store front so why support those
a$$holes. Frankly I'\d sooner watch a good European,
Korean movie etc because I can read the sub titles.
Much better quality acting.
It must be terrible being Chinese and knowing you're smarter than
those Americans. But those basetards always have a new scam to
follow the last one. Fact is, the Chinese would do the NSA thing
if they were on top. These people understand political history. A
culture persists as long as it "provides for the national
defense".
Lest you forget, great nations take liberties with the
truth. Just ask the American Indians, Mexicans, Spanish, English,
Black people and everybody else who got played to enrich the
nation. Same thing today.
Plenty of examples of rats within all the cultures you named
that were willing to sell out their own for a buck. In fact it
is probably the reason they are not on top in the first place.
That doesn't count the Subsidiaries already here in the state's,
because selling and buying is a two sided coin....so now the
Demopublicans can with hold licensing until the correct
Tribute/Campaign Contribution is paid to some off shore account
that only our Congressional Salons can manage to have...it's
always only about the Benjamins Bro...next to come, Operation
Iranian Liberation......
Plaza accord, Asian Tiger crisis, and now China trade war.
Notable quotes:
"... Submitted by Christopher Dembik of SaxoBank ..."
"... The tone is clearly different in China where the official media, such as CCTV and People's Daily, adopted a tougher stance. ..."
"... As of yesterday, all the articles and TV reports mention "trade war". This terminology change means a lot and confirms that the negotiations have entered a more dangerous phase. ..."
Yesterday evening, senior Trump administration officials tried to appease tensions. US
secretary of the Treasury Mnuchin confirmed, without giving much detail, that the US-China
trade talks are still ongoing. The tone is clearly different in China where the official
media, such as CCTV and People's Daily, adopted a tougher stance. It is interesting to
note that in the previous rounds of trade disputes that occurred since Autumn 2018, People's
Daily articles mostly used the term "trade friction" instead of "trade war" until now As of
yesterday, all the articles and TV reports mention "trade war". This terminology change means a
lot and confirms that the negotiations have entered a more dangerous phase.
In addition, China has tightened its "national security" review for foreign investments,
which can be considered as another step in the retaliation process.
... ... ...
Trump's approval rate is still high
On the US domestic front, President Trump is now seeking $15 billion to bail out farmers in
order to mitigate the negative impact of the trade war. Interestingly, more and more Republican
Congressmen that were interviewed yesterday on US TV were very vocal against the latest
measures decided by the Trump administration. It is, however, unlikely to have any influence on
the ongoing process or to push the administration to comprise with Beijing. Trump is looking at
polls and the message they send is bright and clear: as of yesterday, 42% of US voters
supported Trump's policy (FiveThirtyEight). His electoral base has remained stable, faithful
and very broad since he was elected.
What's next?
By May 18 -- Potential US tariffs on global auto sector.
June 1 -- China's move to raise the rate of additional tariffs to 25% on 2,493 US
products (representing $60 billion worth of US imports) will come into effect. In addition,
list 3 tariffs from 10% to 25% decided by the USA against China will truly be implemented for
all products. For the moment, an exemption applies to list 3 products exported before May 10
and arriving in the US before June 1. For these products, the duty rate is still at 10%.
June 17 -- The USTR will hold a public hearing on potential duty of up to 25% tariffs on
virtually all Chinese goods (list 4 tariffs) that are not currently covered by previous
tariffs hikes. It will be followed by at least a week of discussions.
June 28 -- Likely meeting between presidents Trump and Xi at the G20 meeting in Osaka to
reach a compromise on trade issues.
By three methods we may learn wisdom: First, by reflection, which is noblest; Second,
by imitation, which is easiest; and third by experience, which is the bitterest." --
Confucius
The US has been the biggest offender in trade wars for decades. The petrodollar conceived
by Kissinger and Nixon forced countries to buy oil in USD. How is that not warlike? China and
other countries are trying to unhitch themselves from the dollar and who can blame them? The
problem is that when they are successful, and they will be, all those dollars will come home
to mommy and inflation will run rampant.
The country that prints the money will always have the upperhand against the country that
works hard and dirty to acquire the said money.
China is one of the cheapest producers,but that doesnt mean that the US cannot either
import or manufacture its own product.
Case in point im a salesman from greece. I know for a fact that the chinese sell a t-shirt
for 2 euros a piece (wholesale) and greek producers for 4 euros a piece. All the t-shirts are
sold (retail) for 12-70 euros. So its not about costs but about profit.
If greece decides tomorow to take back its production from the sick ***** and impose
tariffs on them literaly nothing will change.
Despite all the rhetoric about buying from other places than China, the facts remain,
manufacturing is not returning to America. Nor are the jobs coming here to America, nor is
the wealth. Conditions in America doesn't favor it. Agriculture was always America's strong
suite. But, with the trade wars causing farmers to go bankrupt, you can be assured of losing
that too. The question is now, who will feed all you American fat asses, when all your
farmers go broke?
Consumer economies are the economies of third world countries, and that is what America
has got. China, with its manufacturing economy, will go on to make investments in other
countries, and leave America in the dust.
You have had tariffs for over a year and not one company has returned from Overseas or
left China. In fact more US companies have moved manufacturing to China.
In the USA you have unions, the epa, osha, IRS... and the most litigious tort system and
most unreliable employees in the world. You have the most disability claims, the most
lawsuits against employers etc. Most absenteeism. Most employee theft. Gender issues,
bathroom issues, diversity issues. Your gov continue to pack on the minimum wages eliminating
any potential to make products to compete with the world.
In short the US is dying on the vine. Trump has caused so much bad blood with Asia, that
US global businesses will have difficulty penetrating Asian markets which are the only thing
that matters for the next 100 years. You Trumptard RACISTS are losers.
500,000 manufacturing jobs added in Us in last two years.
Where’d they come from.
US companies leaving China accelerating - relocating elsewhere in Asia, and bringing back
workers to US. Increasing location in US of foreign owned manufacturing plants to avoid trade
issues and tariffs.
The US is not only not dying on the vine, growth ACCELERATED in last several quarters.
Can’t hire skilled workers — no one available to take them. My daughter was
approached by 3 recruiters to lure her away from her job - she moved for a big pay increase -
they upped their offer 20% - and goit the job of her dreams, with all benefits at a major
company - and she is an ARTIST!! The huge increase in content production has created a golden
age even for liberal arts professions.
The US ONLY issue is its debt, which it can start to solve by simply retiring debt held by
the Fed, and continuing open market purchases and retirements. Monetize while inflation is
low and dollar strong. This will likely come with next rate drop (if we get one).
Chiona living on a MASSIVE consumer/mortgage debt bubble like the US faced in 2007. The
tide will wash over their financial industry, as it has begun, and the central government
will burn its reserves bailing them out. What goes up...
China hitting the wall of wage growth where it has become more expensive than its
competitors in SE Asia and India.
The next decade will be a lot more difficult for China. It’s totalitarian state will
need to become even more militant and oppressive to survive.
Every auto made in the world, every mower, every computer, every modem, every LED TV,
every telco switch, every smart phone, virtually any product you can think of has Chinese
Components or is manufactured in China. China is the largest semiconductor maker in the
world. LED lights... CHINA.
As we view the global economy we should consider that much of the "free trade" movement is
driven by mega companies desire for larger markets and greed. The desire of companies to both
develop and control future rules has caused them to lobby individual governments into giving
up control and becoming subservient to corporate “efficiency.”
This is probably not in the best interest of the average citizen as we can see by surging
inequality. Those concerned that a trade agreement with low wage nations will not be a great
job creator for America have history on their side. The piece below argues that fair trade
trumps free trade!
anybody pointing the finger at China because of IP theft and not doing the same to the
USSA is either brainwashed beyond repair, stupid like a piece of wood, a paid troll or any
combination of these.
"accuse the enemy of doing what you secretly do"
- plenty of people in powerful positions all across history
Most aren't paying attention to what Trump says.... he said a year ago that China was
wanting to make a deal. Trump said, "BUT,they're not ready yet" , meaning that they wanted a
small change to the imbalance like Canada and Mexico received.
China's trade imbalance is seriously astronomical compared to any other country we do
business.
Canada's trade imbalance is $20,000,000,000 per year with US.
China's trade imbalance is $420,000,000,000 per year with US.
We have almost the same trade with each $660 B with China and $620 B with Canada.
Canada is ripping us off. China is not ripping us off, they're ******* us.
Worst case is we STOP trading with China. Best case they reduce the trade imbalance
90%.
the other side of the coin is a chinese boycott of usa brands means a dollar devaluation
in the form of a tanked market. the chinese market means not much. the usa equity/bond market
is everything. a falling dollar takes a lot powder out of usa guns.
If winning elections at the expense of the electorate is the main concern of politicians,
might that suggest gross immorality amongst the political class?
On the other hand, if supporting politicians because they mouth soothing platitudes, while
yet their policies and actions, defenestrate the quality of life of the electorate, suggests
indoctrination, might that not be cause for serious concern?
Now, it's doubtless that leaders will be required to take unpopular stances sometimes, but
ought not those stances be based on cogent analysis of reality, and the elimination or
reduction of self contributory inputs?
All in all, leadership is about courage - to do what's right, and necessary, even if it
requires declaring mea culpa. Humility, is often the true indicator of leadership
abilities.
Which reminds us of Alexander, the Great that is, who had to turn back from his expedition
in India, when his troops balked at going further. He could have razzmatazzed them no doubt,
but he realized they were telling him that exhaustion was prevalent, pushing forward offered
no additional gains, and better to return home to sex their wives, teach their sons
horsemanship, give their daughters away in marriage, till their farms, chill out, smell the
roses, party, and reminisce to their children and grandkids about their adventures..
Alexander, Great that he is, listened, and with a heavy heart, due to his adventurous
nature, signaled the retreat, and homewards it was. That is why they called him Great, not
because of his martial prowess which was indeed formidable, but because of his discerning
prowess..
On the other hand, there was Marcus Crassus, who was so avaricious, he went East to war,
and got as much gold as his heart desired..molten, and poured down his throat. He died rich,
literally filled with gold, cheers...
Its real simple, if you don't like the cost of doing business in China along with being
required by the twisted communist government to turn over your intellectual property as a
requirement for doing your manufacturing there, then bring it home to America.
Not very long ago int he early 1990s I can still recall watching on the cable news
programs Chinese rockets launching and blowing up just prior to achieving orbit. The Clintons
then were at it full bore trading access to top secret rocket technologies from Loral Space
and Technology (Bernie Schwartz) CEO for campaign cash. Clintons transferred Top Secret
technologies from State Department to Commerce Department allowing them the access to Sell
out America to the Communists. It is why they had to arrange for the liquidation of Commerce
Secretary Ron Brown. Remember the video of Bill Clinton laughing and cajoling at the Ron
Brown funeral, then when he sees the camera on him, he immediately turns on the bitter tears.
These people are the phoniest crooks to ever come to power in America.
Was at Wal Mart yesterday. Surprisingly there isn't any products made in China that I
needed to buy. All the food, cleaning supplies, and toiletries are still made in the United
States. The clothing section had made in Malaysia, Singapore, India, Mexico. So in reality,
other countries can take market share from China. Some of the production will return to
United States as well.
"... The REAL REASON behind the TRADE WAR: Israhell: "I want Iran embargoed and starved to death." China: "I will buy Iran's oil." BAM! Trade War! ..."
The 'play of the day' above comes against a backdrop of markets trying to accentuate the
positive in the latest US-China trade war deterioration. Indeed, Moody's has declared a trade
deal will still be done and a Bloomberg survey of US economists shows around two thirds think a
deal will be signed by year-end, a fifth by 2020, and only 13% don't see a deal for at least
five years. Field Marshall, please take these men and women out and have them shot, there's a
good chap.
The rhetoric from China has turned starkly, aggressively nationalist. The Global Times is
calling for a "People's War", a 1930's Mao reference to repelling Japanese imperialism; "trade
war" now fills Chinese media, having been largely absent for months; and Tuesday's People's
Daily mouthpiece posted an image of the Chinese flag with "Talk -- fine! Fight -- we'll be
there! Bully us -- delusion!" superimposed on it. US President Trump is also not backing down
in a further set of trade-related tweets, again stating tariff revenues will support 'patriot'
farmers and adding: "China will be pumping money into their system and probably reducing
interest rates, as always, in order to make up for the business they are, and will be, losing.
If the Federal Reserve ever did a "match," it would be game over, we win! In any event, China
wants a deal!"
A huge fiscal deficit; trade tariffs; a rapid increase in military expenditure; 'Patriot'
farmers; and a political call for lower interest rates for a national struggle. It all sounds
very Chinese, doesn't it? But that shouldn't be a surprise. Last year's ' The Rise and Fall and
Rise of the Great Powers (and Great Currencies)' argued the historical lessons of the economics
of past power struggles are that one must have low borrowing costs, spend a lot on a large
military, and be mercantilist if your enemy is. True, one also needs to be economically
vibrant, and that isn't assured with mercantilism, militarism and large fiscal deficits. Yet
real free trade, pacifism, and austerity is *ruinous* for Great Power . Which is why the EU is
not a Great Power but a Great Whinger.
Some in the markets are starting to get this.
Regular Bloomberg commentator Noah Smith yesterday published an article --'The Grim Logic
Behind Trump's Trade War With China'-- that admits he was wrong to expect a trade deal, that
Trump is doubling down, and concludes "There may be a grim sort of logic to this approach If
Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do
it. If the harm to the US is modest and the costs for China are severe and lasting, Trump might
conclude that the former are acceptable losses. Geopolitical primacy, not maximum prosperity
for Americans, might be the president's true objective . if weakening China really is the goal,
then this could be just the opening rounds of a long and grinding trade war." That's' what I
argued back in November 2017's 'On Your Marx' special reports, which stressed a New Cold War
was likely ahead.
However, many in markets are still acting like a Treasury clerk telling Churchill that
Badolf Hissler can offer him a great deal on cut-price bullets, ships, and planes .
On a related front, we see reports of an alleged Iranian drone attack on Saudi oil
pipelines(!); also hear Iran's leader say there will be no war with the US; and Trump has
stated reports of 120,000 US troops moving to the region are fake news -- because if he were to
send troops it would " a hell of a lot more ." Mixed messages to put it mildly.
for 40 years, western liberals and capitalists have had a nebulous idea of China
developing, opening and "liberalizing." It hasn't usually occurred in the ways they wanted,
but China certainly has become a big market and has moved towards a more open economy and
somewhat, more open society overall, while still maintaining a "fascist" structure.
But we can all agree - that process is done. China's economy, society and politics are
what they are. The country is "grown-up." Do not ever expect the communist party to change
the tight, top-down structure it has. Do not expect changes to politics, do not expect anyone
in China to give up control, and certainly don't expect foreigners to have any say or
influence within China. China will always do exactly what benefits China and the CCP.
Trump is merely being a realist. So accept that, and trade/invest/exchange
accordingly.
Is it any surprise that a "Noah Smith" of Bloomberg would attribute all the wrong
motives and strategy behind President Trump's and America's trade dispute with China's
totalitarian regime?
That he sees the Chinese Communist Party as honest, good faith partners in this
scenario?
There is nothing Trump could ever do to please the internationalist media.
I seriously doubt if "weakening" China is Trump's primacy here. Perhaps a by-product but
let's finally admit one thing: The US-China trade arrangement is egregious at best. What no one is willing to discuss yet is the fact that this "philosophy" of evening out
trade with China will soon take on a life of its own: With the US consumer. We need to bring back a lot of jobs back to the US economy and that's not rocket science.
It won't happen overnight but it will indeed happen.
What is the point of this piece? To demonstrate the author’s wit and historical
knowledge (was that entire little playlet not invented)?
To maximize American prosperity long term, should the US simply allow China to cheat,
manipulate and intimidate its way to the top? China has proven that, unlike the US, its
growth is a zero sum game. It adds nothing to the equation of global growth except cheap
labor, which subtracts wealth from other nations by taking away their well-paid manufacturing
jobs. It contributes almost no raw materials, imports its food and energy, and has stolen
most of its technology at enormous cost to Western innovators.
The US has always provided net inputs to the system of global growth. Natural resources,
renewable materials (crops, renewable energy), and the relentless innovation and productivity
increases of its workforce. China is an extractor. Thus it needs to expand its borders
through exploitative economic imperialist initiatives under their One Belt One Road scam, and
their militaristic imperialism in the South China Sea. The US is a machine that puts out far
more than it takes in. China is the opposite. If the US directs its economic output away from
China’s vast and relentless maw, China’s machine will slow and sputter.
The real point of the trade war is to end the vacuum of Western and Asian prosperity by
China’s greedy and imperialist machine of economic destruction. China knows and
implements that its economic growth by definition comes at the cost of others’
prosperity. That the US took 20 years to wake the **** up is astonishing.
The key factor here is that the USA is a neoliberal state which means profits before people
and outsourcing to area with lower labor cost. Like leopard can't change its spots, neoliberalism
can't change it "free movement of goods and labor" principles, or it stop being
neoliberalism.
No jobs will come back to the USA as financial oligarchy is transnational body that uses the
USA military as an enforcer for their gang. It does not care one bit about the common people in
the USA.
Pause on the sound and fury for necessary precision. Even if the Trump administration slaps
25% tariffs on all Chinese exports to the US, the IMF has projected that would trim just a
meager slither – 0.55% – off China's GDP. And America is unlikely to profit,
because the extra tariffs won't bring back manufacturing jobs to the US – something that
Steve Jobs told Barack Obama eons ago.
What happens is that global supply chains will be redirected to economies that offer
comparative advantages in relation to China, such as Vietnam, Indonesia, Bangladesh, Cambodia
and Laos. And this redirection is already happening anyway – including by Chinese
companies.
BRI represents a massive geopolitical and financial investment by China, as well as its
partners; over 130 states and territories have signed on. Beijing is using its immense pool of
capital to make its own transition towards a consumer-based economy while advancing the
necessary pan-Eurasian infrastructure development – with all those ports, high-speed
rail, fiber optics, electrical grids expanding to most Global South latitudes.
The end result, up to 2049 – BRI's time span – will be the advent of an
integrated market of no less than 4.5 billion people, by that time with access to a Chinese
supply chain of high-tech exports as well as more prosaic consumer goods.
Anyone who has followed the nuts and bolts of the Chinese miracle launched by Little
Helmsman Deng Xiaoping in 1978 knows that Beijing is essentially exporting the mechanism that
led China's own 800 million citizens to, in a flash, become members of a global middle
class.
As much as the Trump administration may bet on "maximum pressure" to restrict or even block
Chinese access to whole sectors of the US market, what really matters is BRI's advance will be
able to generate multiple, extra US markets over the next two decades.
We don't do
'win-win'
There are no illusions in the Zhongnanhai, as there are no illusions in Tehran or in the
Kremlin. These three top actors of Eurasian integration have exhaustively studied how
Washington, in the 1990s, devastated Russia's post-USSR economy (until Putin engineered a
recovery) and how Washington has been trying to utterly destroy Iran for four decades.
Beijing, as well as Moscow and Tehran, know everything there is to know about Hybrid War,
which is an American intel concept. They know the ultimate strategic target of Hybrid War,
whatever the tactics, is social chaos and regime change.
The case of Brazil – a BRICS member like China and Russia – was even more
sophisticated: a Hybrid War initially crafted by NSA spying evolved into lawfare and regime
change via the ballot box. But it ended with mission accomplished – Brazil has been
reduced to the lowly status of an American neo-colony.
Let's remember an ancient mariner, the legendary Chinese Muslim Admiral Zheng He, who for
three decades, from 1405 to 1433, led seven expeditions across the seas all the way to Arabia
and Eastern Africa, reaching Champa, Borneo, Java, Malacca, Sumatra, Ceylon, Calicut, Hormuz,
Aden, Jeddah, Mogadiscio, Mombasa, bringing tons of goods to trade (silk, porcelain, silver,
cotton, iron tools, leather utensils).
That was the original Maritime Silk Road, progressing in parallel to Emperor Yong Le
establishing a Pax Sinica in Asia – with no need for colonies and religious proselytism.
But then the Ming dynasty retreated – and China was back to its agricultural vocation of
looking at itself.
They won't make the same mistake again. Even knowing that the current hegemon does not do
"win-win". Get ready for the real hardcore yet to come.
The Swine fever is sweeping china hog farms and since the start of 2019 200+ millions hogs
have been culled. Chinese hog production is down from 2016 high of 700 million to below 420
million by the end of the year. The fever is not under control.
Soybeans from Ukraine are unloaded at the port in Nantong, in eastern China. Imports of
soy used to come from the US, but have slumped since the trade war began. Should point out
that the Ukraine soy production matures at a different time of the year than the US soybean.
The USA planting season starts in Late april, may and june. Because of the harvest time
differences worldwide the USA supplies 80% of the late maturing soybeans needed by
October/Nov and December.
Perhaps this is one of the "casualties" ( https://www.rt.com/news/459355-us-austria-embassy-mcdonalds/
) of economic war given the significance of China and just how important it is to the U.S. in
it's purchases of $USD to maintain the illusion of it's reserve currency status and
"vigor"...
Surprised this didn't happen first at the U.S. Embassies in Russia and China?... Obviously
Ronald McDonald has turned into a charity of sorts helping out Uncle $am in his ailing
"health" these dayz!...
SUPER SIZE ME!... Cause I'm not lovin it anymore!... I'm needin it!!!!
I've never understood this "jobs aren't coming back" argument. Do you really think that it
will stop tariffs? They're happening. Better start preparing.
Oh, right, tariffs WILL bring back American jobs! Then why didn't the Administration
impose them fully in 2017? Why negotiate at all; just impose all the tariffs!?! lol
Pepe is correct as usual. Even if America tariffs the world the jobs aren't coming back as
corporations will be unable to turn profits in such a highly taxed country like America would
be. What could happen however is America can form an internal free market again going
isolationist with new home grown manufacturing.
You VERY obviously have ZERO knowledge of Chinas history and its discoveries/inventions
etc USED BY THE WEST.
I suggest that you keep your eyes open for "History Erased-China" on Y Tube. The series
shows what would happen in todays world if countries and their contributions to the world did
not happen.
"... Thanks to USA govt publicity, Huawei phones are selling like hot cakes in Europe. Apple fans are jumping ship ..."
"... American lawmakers are compromised by the Israeli government & the military security state. It's the US that wants a back door to China's 5G. China pays with smears but it won't matter. China has 5G and the US doesn't. ..."
In
Latest Move Against Huawei, Trump To Order New Restrictions On Foreign Telecom Companies
by
Tyler Durden
Wed, 05/15/2019 - 11:04
0
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In what appears to be the US government's latest salvo in its war against Huawei, President Trump is reportedly
preparing to sign an executive order that would prohibit American firms from using equipment made by foreign telecom
companies that pose a 'security threat', according to
Bloomberg
, which sourced its report to administration insiders.
The official who spoke with Bloomberg insisted the
order wasn't intended to single out any country or company, but anybody who has been following the ongoing spat with
Huawei should instantly recognize that this simply isn't true (though, with the trade negotiations at a very delicate
impasse, we understand why the administration needs to maintain this pretense). Though Huawei and its fellow Chinese
telecoms giant ZTE already face serious restrictions on selling their products in the US, Huawei still maintains a US
subsidiary in Texas.
The order, which could be signed as soon as Wednesday, wouldn't outright ban sales to US entities, but it would grant
the Commerce Department more authority to review products and purchases made by firms with connections to adversarial
countries (we doubt that's directed at Ericsson and Sweden).
China's foreign ministry has already lashed out at the US over reports of the executive order.
"This is neither graceful nor fair,"
ministry spokesman Geng Shuang said at a news briefing in
Beijing. "We urge the U.S. to stop citing security concerns as an excuse to unreasonably suppress Chinese companies
and provide a fair and equitable and non-discriminatory environment for Chinese companies to operate in the U.S."
Washington has been campaigning for months to stop its allies around the globe from allowing Huawei products to be
used in their 5G networks, but to little avail. Yesterday, Huawei promised
to sign a
"no spy" pledge
to governments like the UK that are still deciding how much reliance on Huawei they are willing to
stomach.
As Huawei pushes to assume a global leadership position in 5G, the US's efforts to try and discredit the company have
included successfully pushing for the arrest of its CFO, Meng Wanzhou, in Canada, on charges she helped the company
violate US sanctions on Iran.
https://www.dianomi.com/smartads.epl?id=4855
American lawmakers suspect Huawei's equipment could be used for spying - and not without reason.
Just last month,
Ars Technica
found a backdoor like vulnerability in Huawei's Matebook laptop series which could have allowed remote
hackers to gain access to the system. Chinese law also could technically compel companies like Huawei to cooperate with
authorities.
But even if the order is signed on Wednesday, it might not take effect for six months, as it would take time for the
Commerce Department to "fashion an approach" to the order.
In the meantime, Verizon and other US telecoms firms are still way behind in the war to dominate the global market
for 5G networking equipment.
Trump is not good for Chinese business.
China knows its coming.
Can only make a deal with obama/clinton/bush. Clearer motive for
China Collusion vs Russian Collusion.
Sad to imagine the US technology security under
obama/clintons/bush. USA will be up for sale while we sleep.
Major credit to Pres. Trump is hard to swallow by the left.
ZH is thoroughly infested with Hasbara trolls trying to ensure
that the Orange *** - aka Israel's Best Buddy - gets defended.
There are at least 5 or 6 kikes on this thread alone.
"This is neither graceful nor fair,"
ministry spokesman
Geng Shuang said at a news briefing in Beijing.
The irony of them saying it's not graceful or fair when they do
the same thing to foreign companies in China. I mean they don't
even allow youtube or instagram in China among many others. What
is the big threat of instagram other than flat out protectionism?
Then you expect other countries to be open?
Hopefully no one. The world doesn't need it. What is it
about "we don't want your ****" that you don't understand?
You going to force us to buy it? Give it a shot 李娜.
A recent exploration trip to the bottom of the Mariana
Trench - the deepest spot on Earth, found human trash on
the floor of the ocean - an old tire, metal pieces,
plastic, even fabric that looked like men's pants.
China's garbage is everywhere in the Earth's oceans. The
US needs to stop exporting our trash for China to dump,
and start controlling our production of plastic waste in
particular. We are doing a far better job than China or
India, but not enough.
True. I saw those reports. I'm not even sure why this
is a difficult concept for the Chinese. The US economy
is not here to serve China. We're not "beholden" to
buy Chinese products. The mood (and tide) has shifted.
Every trip to Walmart is another 20 gallons of paint
for a Chinese warship. WTF is wrong with us? I avoid
Chinese products whenever possible--even if it means I
pay significantly more.
I had a Chinese neighbor when I was in college. He
used to always leave his garbage outside his door. The
dumpster was 50 feet away. Used to bug the **** out of
me.
Ha,Ha!!! And to think American companies are not a security
threat, like Cisco and others cooperating with NSA, which Edward
Snowden has said to be.
This is just the latest continuation
of America's war on Huawei since 2003. Huiwei saw this coming
back in January, and has asked its compontent suppliers to move
out of the U.S.,. I am sure that angered the Trump
administration, but there is nothing Trump can do about that, if
they leave. Not only do they take the technology with them, but
also all those jobs. So, thinking he was going to retaliate
against Huawei, Trump wants to sign an executive order from "using
Huawei's equipment", which means, Trump has just encourage
Huawei's suppliers to take Huawei's earlier advise and leave the
U.S., if they want to stay in business. Trump's executive order
is sort of like cutting your nose off to spite your face.
What's not said in this article, Huawei left the U.S. in 2013.
Ren Zhengfei put the US's attitude down to jealousy at Huawei's
technical superiority over US rivals such as Cisco. Huawei
announced at the end of April 2013 that it had given up trying to
compete in the US telecoms equipment market. "We will focus on the
rest of the world, which is reasonably big enough and is growing
significantly."
By discouraging US telecoms companies from buying Huawei
equipment out of fear that it would open the country's key
infrastructure up to cyberespionage, the government would deny
domestic carriers access to market-leading technology.
Ren also said: U.S. concerns over cyber-espionage has been
mounting at a time when Huawei has done next to no business with
leading American carriers.
"If you look at Huawei's total market share in the US telecoms
equipment market, it is close to 0%. Given that we have virtually
no presence in the US telecoms infrastructure market, there is no
connection between Huawei and any information security incident
that has occurred in the country".
Again to remind you, Ren said this in 2013! Here it is, 6
years later, and the U.S. is still trying to put Huawei out of
business, to satisfy its own spying needs. If anyone is worried
about security, then it should be against the U.S., not Huawei.
It has been proven over and over that Hulawei imbeds exploits
in its hardware. Countries that were STUPID enough to install
their equipment have been retrofitting and spending fortunes
trying to test and close all the back doors and exploits that
expose them to theft and much worse.
Yeah, Hulawei probably
figured out the US was on to them - the FBI clearly was, and
figured if they could infest our partner countries with their
Trojan horses they could attack us through them.
Clever. But indefensible. They deserve to be sanctioned and
punished under international law for cyber crimes of the
highest order.
Back in early 2017 I attended a presentation by Bill Priestap,
Deputy Director of Counterintelligence at the FBI (yes THAT
Priestap) in which he laid out how the US Intelligence Community
had been screaming at the Obama Administration for 8 solid years
that China was the single greatest threat to the US and Western
democracies, and they were achieving their goals through IP theft,
backdoor spyware, commercial, industrial and military espionage,
corruption, and massively imbalanced trade policies. He was
stunned by the HRC/BHO/Kerry resistance to DO anything or even
slow the train down, and said he HOPED the Trump Administration
would pay attention. He laid out the 20 biggest threats.
Ugh. Might be too late. In certain tech like CCTV, you can't
escape Huawei. They started cranking out hisilicon a few years
ago and now those chips are in lots of application specific
systems. Most Taiwanese, Korean, etc. brands now use them as
designed from their Chinese partners. There are no other IP
camera systems out there now.
'American lawmakers suspect Huawei's equipment could be used for
spying - and not without reason."
American lawmakers are
compromised by the Israeli government & the military security
state.
It's the US that wants a back door to China's 5G. China pays
with smears but it won't matter.
China has 5G and the US doesn't.
ChiComs do not believe in Profit but they do believe in
accepting billions of dollars from foolish global investors
trying to "get in on the ground floor on a fantastic Asian
investment opportunity!!" Suckers are going to lose their shirts as a result of
their ChiCom lending. Good.
In the immortal words of little Georgie Jr, 'bring it on'...
right? Isn't this Trumpy's role in his puppet masters script of
global chaos, regime change? to 'out their OWO and introduce us
to their NWO before Mother Nature arrives?
Isn't it best if the
puppets don't see those strings jerking them around stage? Isn't
this why the saying exists here in 'purgatory', no pain, no gain?
Isn't this how we learn, the hard way? We are witnessing the rug
being pulled on the OWO... enjoy the show.
It has become a cliché to quote William Butler Yeats’s poem “The
Second Coming,” written almost 100 years ago in the aftermath of World War I. But no one has said it better: “Things fall
apart; the centre cannot hold; / Mere anarchy is loosed upon the world . . . And what rough beast, its hour come round at last, /
Slouches toward Bethlehem to be born?”
Donald Trump's decision to raise duties on Chinese goods from ten to 25 percent of additional $200 billion of China exports
came into force. It is unclear how this will work and how much the US consumers will pay. Probably half of this raise
so from 5% to 10% which might be not very noticeable outside such items as shoes and clothing. The cost of Chinese's shoes already
is quite high -- plastic regular $60-30 with discounts on holiday. Leather -- $100-$50 and almost no discounts.
Trump uses his favorite "bully in the schoolyard" style, a typical the American foreign policy tactic to direct, lawless
pressure. First, they accuse partners of violations, to introduce restrictions on this basis (and at the same time to plunge world
markets into panic), and then to agree on the resumption of negotiations. But the previous decisions about tariffs were left, of
course, in force.
His gambit to conclude a deal with North Korea collapsed in failure in Hanoi in February, and
it is a huge blow to his self-styled image of a master dealmaker. Trump also faces a flurry
of congressional subpoenas at home from Democrats who now control the House of
Representatives. Hence with mounting legal and political troubles, Trump is cornered and
desperately needs a conclusion to the prolonged trade war with China, which has netted zero
benefits for him.
The prospect of a trade deal with China remains as elusive as ever, despite Trump's
increased tariffs to pressure China to come to the negotiating table with the list of
concession that he wants. It is highly unlikely that China will grant Trump the concessions
he wants. China remembers clearly the deal that Tokyo concluded with Washington in the 1990s
that caused Japan to slip into economic stagnation for many years. That period has now been
dubbed Japan's "lost decade."
China is not dumb and it will not concede to Trump.
Worse still, the move to increase tariffs took place while Chinese Vice-Premier Liu He was
in Washington to negotiate with the Trump administration.
It is a blunder by Trump and will be perceived by the Chinese as a cheap shot against
President Xi Jinping. The tariffs hike came despite Xi's
"beautiful letter" to Trump, and it is a massive loss of face for the Chinese leader to
see his group of officials return home from Washington with no deal to conclude the trade
war.
Xi could not afford to look weak in front of his people and he knows that millions of
Chinese netizens access information about the outside world by using virtual private networks
(VPNs) to circumvent the Great Firewall. Many ordinary Chinese know about the trade war's
latest developments and should any deal with Trump infringe on China's core interests, it
will be political suicide for Xi.
One of the main reasons the US-China trade talks broke down was that Washington's demands
were unpalatable to China. Some of the demands from the US, such as an end to government
support for state companies in specific industries and a streamlined approval process for
genetically engineered US crops, are a direct challenge to the Communist Party of China's
control of the economy.
Since Xi took office, he has extended the party's reach into every corner of Chinese
society, and every businessman in China who aspires to reach the top of the hierarchy knows
that they must receive the blessing of the party. It is not surprising that even Jack Ma, who
is one of China's most internationally recognizable figures, has been revealed to be a member
of the CPC after years of denial.
Hence in the face of renewed pressure from Trump, Xi and the Chinese government have
reached the conclusion that it is better to bear the consequences of increased tariffs than
to concede to US demands.
Xi is in for the long haul and can well afford to ride out the storm. And based on Trump's
past negotiations such as his failed bid to pressure House Democrats to fund his wall on the
Mexican border, which led to the longest government shutdown in US history, Xi knows that the
chances are good that Trump will blink first.
Trump uses his regular bulling style, but for him there are no mechanism out or this deadlock. China can't retaliate dollar to dollar but they
can encourage boycott of US goods that are replaceable with Chinese models such as Apple phones
In any cases there will additional unemployment in China and an additional stress on Chinese economy, which probably two
factors the Trump is counted on.
Notable quotes:
"... China should ban Boeing products for its compromise on aviation safety. Hit where it hurts with consumer power. ..."
"... When the 25 percent hits 345 billion dollars of additional untaxed imports Americans will just buy less. After this next round of taxes we will be on the road to bankrupting China and Iran. Europe's turn comes next. ..."
"the Chinese won't do us
the courtesy of saying hey this is because of your detention of madam Meng" actually this is
poorly understood by this professor. it's not a discourtesy, it is the opposite. it is a
courtesy to give Canada an opportunity to save face. that is, Canada frees madam Meng and can
claim they did so for OTHER reasons than bowing to Chinese pressure. It is a face-saving
measure for Canada's benefit. Come on, more cultural understanding is needed.
Western fools have learned one lesson : the CHINESE are NOT SOFT or like the JAPANESE in
the 80's.
The CHINESE have their mightiest WILL to stand against the demonic tyranny of the
US - the whole world know US is descending as US itself is struggling like one mad dog for
its prestigious status of world domination - refusing to acknowledge the country the nation
"in the last days of Rome".
When the 25 percent hits 345 billion dollars of additional untaxed imports Americans will
just buy less. After this next round of taxes we will be on the road to bankrupting China and
Iran. Europe's turn comes next.
"... "The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalist, state-owned Global Times tabloid wrote . ..."
"... The Global Times also accused the Trump administration of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow's interview on "Fox News Sunday" in which Trump's top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump's claim that China would foot the bill. ..."
"... More than just a retaliation to "unprovoked" US aggression, China now sees its response as a crusade against the western style of life. During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired a statement saying that China would " fight for a new world." ..."
"... The editorial also hinted that more retaliations are coming, saying that "China has plenty of countermeasures" and telling its readers that "the US tariff moves are very much like spraying bullets. They will cause a lot of self-inflicted harm and are hard to sustain in the long term. China, on the other hand, is going to aim with precision, trying to avoid hurting itself." ..."
"... The conclusion: "the Chinese side is obviously more realistic while the US is falsifying. This will, to a large extent, influence how the two countries digest the trade war impacts." ..."
China Calls For "People's War" Against The US, Vows To "Fight For A New World"
by
Tyler Durden
Tue, 05/14/2019 - 15:50
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While market mood has shifted diametrically from yesterday, with stocks sharply higher on Tuesday following what has
widely been interpreted as conciliatory comments from both president Trump and various members of China's ruling elite,
one would be hard pressed to find any de-escalation amid the Chinese press commentaries written in the aftermath of the
latest escalation in trade war between the US and China.
In a series of editorials and op-ed articles published Monday
and Tuesday, Chinese state media slammed what it labeled the Trump administration's "
greed and arrogance
",
called for a "
people's war
" targeting the US "
with precision
" as China begins a "
fight
for a new world
."
"The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and
morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalist,
state-owned Global Times
tabloid wrote
.
Urging indirect boycott of US goods and services, the editorial slammed Trump and suggested a nation-wide uprising
against the US aggression: "The trade war in the US is the creation of one person and one administration, but it affects
that country's entire population.
In China, the entire country and all its people are being threatened. For us,
this is a real 'people's war.'"
Whether this means a renewed collapse in Chinese iPhone sales remains to be
seen - for confirmation, watch for a new guidance cut from Apple in the coming days.
The
Global Times
also accused the Trump administration
of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow's interview on "Fox News Sunday" in
which Trump's top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump's
claim that China would foot the bill.
More than just a retaliation to "unprovoked" US aggression, China now sees its response as a crusade against the
western style of life. During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired
a statement saying that China would "
fight for a new world."
"As President Xi Jinping pointed out, the Chinese economy is a sea, not a small pond," anchor Kang Hui said on his 7
p.m. news show. "A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is
still there." Hui concluded echoing a popular refrain, that "China doesn't want to fight, but it is not afraid to
fight."
The Global Times also mocked Trump's suggestion that the tariff hike would "force companies to leave China", stating
that "the consumption capabilities and market consumption potential driven by demand are what foreign companies value
most when they come to China." As a result,
"the White House might as well try to call on American companies such as General Motors, Ford,
Apple, McDonald's and Coca-Cola to leave China. Will any of them follow?
"
The editorial also hinted that more retaliations are coming, saying that "China has plenty of countermeasures" and
telling its readers that "the US tariff moves are very much like spraying bullets. They will cause a lot of
self-inflicted harm and are hard to sustain in the long term. China, on the other hand, is going to aim with precision,
trying to avoid hurting itself."
In an amusing twist, China then accused Trump of spinning and "seeking to beautify the trade war", while
Beijing has been "blunt about the difficulties and losses that the trade war will bring to the Chinese economy."
The conclusion: "the Chinese side is obviously more realistic while the US is falsifying. This will, to a large
extent, influence how the two countries digest the trade war impacts."
Whatever side of the ideological divide one finds themselves, this is hardly the rhetorica that will allow China to
reach a quick and painless compromise.
Right or wrong, the Chinese will fight as one for China. As well,
they have allies and resources, but the main thing is they are
homogenous and patriotic.
America is controlled from Jerusalem,
who will exit at the first sign of the gravy-train slowing, not to
mention *****-hat American snowflakes, a treacherous media and
politics. Etc.
Beware, Americans, about what you are getting into. You have
turned trade negotiations into a war and you will not win this
long-term. Just like all the others.
The Giant has awoken. Good job Trump. I guess it was all fake
news when you were telling us gullible Americans we were
winning. Any other wars you would like to start? Oh yea, Iran
and perhaps Venezuela first. Must stick with the
Israel
First
agenda.
The real issue is intellectual property. If the Chinese can't
steal our IP, they got nothing and they know it. Also we should
send home all their undergrad and graduate students. Let them
learn all this sh## on their own.
China is calling for a war, they've been engaged in for decades
via their technology, patent, forced technology transfers, and
copyright theft. And we should probably include their
subsidies of politically connected firms exporting products,
but at least in that case, the Chinese taxpayers are paying for
the subsidies.
If China wants a 'new world', they need to put on their big boy
pants and DEDOLLARIZE. You can't beat an opponent when you play by
the opponent's rigged rules!
The USA can't abolish neoliberalism. And the logic of neoliberalism is to use low cost labor oversees. Which means china.
Notable quotes:
"... If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the U.S. is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical primacy, not maximum prosperity for Americans, might be the president's true objective. ..."
Trump is doubling down. He's
raising
tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, and imposing new tariffs on almost all of the
remaining $325 billion or so. China today said it would retaliate and starting next month would impose tariffs on $60 billion of
U.S. goods. This is the biggest trade war in modern American history.
... ... ...
If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the U.S.
is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical
primacy, not maximum prosperity for Americans, might be the president's true objective.
Unusually shallow take from Noah. The real reason for the trade war is China's subsidizing SOEs. They subsidize them until
the SOEs outcompete all other manufacturers so much that competition dies, and then take over the market. See Moly Corp and rare
earths as an example.
Such dumping is pretty easy to catch, and pretty easy to stop. Perhaps a more focused but more severe tariff structure on things
like steel, tires etc would make more sense as an enforcement mechanism.
Note that the Chinese are willing to give lip service to things that they supposedly agree to, but cannot actually put the
mechanisms in place without "losing face". Gimme a break. If Xi hadn't crowed about China's intent for dominance by means of mercantilism,
we would still be bending over. Now the only face being lost is his.
The Chinese will never give up their use of administrative barriers to impede trade internally. But at least they could have
said they would. But they couldn't even do that. So again, tariffs are about the only thing they will listen to.
The flaw there is that the SOEs may generate a lot of employment in China, but they don't actually generate as much economic
growth. And the govt knows this. The support for the SOEs isn't about giving them market share, but to keep them from collapsing
precipitously, with all the resulting unemployment. It's China's version of the auto bailout, just on an extended basis. They
make up only 25% of China's economy today, down from 50% in 2000.
If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the
U.S. is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical
primacy, not maximum prosperity for Americans, might be the president's true objective.
Are we living on the same planet? Coherent, long-term strategic thinking and geopolitical calculus are about as foreign to
Trump as marital fidelity.
Except the Chinese have fewer cards to play. They are in the mother of all bubbles that they desperately want to deflate with
a soft landing. And they were well on their way to doing it. Until Xi crowed about it, and basically rubbed the world's nose in
his ass with the SCS and OBOR, on top of the trade issues.
That soft landing is now in serious jeopardy. And we all will pay, so I take no satisfaction from China's troubles, now and
imminent. But don't blame trump for it happening. It was all those thousand vauted people whose hubris you worship.
Whatever China's economic problems are, and why wouldn't a country with such enviable rapid growth into the (soon to be) world's
largest economy with the worlds' most internet connected population, have some problems, but they at least seem to study and plan
for their future in an intelligent and rational way.
I don't blame Trump for being a pathological liar and a narcissist, but the spineless Republican Party and "conservatives"
who have done nothing to thwart his idiotic behavior. The Chinese have a word for those without a backbone, it translates as "folding
chair". My sources tell me a different story about Public Opinion in China.. fwit.. No, they've seen this Trump in action long
enough to know he's unreliable as a trading pardner and unbelievable as a leader... He'll fold and the OBOR will proceed more
or less as envisioned... Too bad America (trump) has "poisoned" many allies in Asia.
The sky is falling and it's all Donald Trumps fault!
The problem is not tariffs or Donald Trump (specifically with China)
The problems are state sanctioned intellectual property theft and cheating on international trade agreements by the Chinese dictatorship.
Producers can shift their supply chains away from China to countries that do not view/treat the USA as an adversary and those
products will not have tariffs on them. Problem solved. A few years of extra prices from supply-chain resourcing is a very small
price to pay to address a dictatorship that seeks to undermine democratic values and human rights.
If you are looking for cheap labor, the labor you find will be unskilled and without technical resources. It means they must
be brought up to today's standards, technically, with your IP. It is the US CEO's that gave away the farm, looking for cheap labor.
Apple taught them how to make iPhones, guess what happened? Regardless where they go, US CEO's must give up IP for technical competence.
This time the United States has all the cards. We buy $500 billion per year from them. They only buy $100 billion a year from
us. We have 5x leverage. All we have to do is play the hand according to economic game theory.
If our long run goal is to have a larger economy (and with it all the benefits of being the largest economy, including military
security by being able to afford capital ships and planes), we must stop paying China $400 billion extra more than they take from
us.
If China wants to trade, its trade -- $500 billion for $500 billion. If they simply want to use our consumers to build more
factory capital we should not allow it. And because of the asymmetry in the balance of trade, we hold all the cards.
This is Trump's hand to lose by caving in. The optimal move in this game is to raise tariffs and hold until China increases
its purchases.
(And -- tariffs might actually raise S&P 500 earnings long run as additional manufacturing is diverted to old and new U.S.
factories -- no one knows and the prognosticator "economists" here have as much empirical evidence as the Austrian School, i.e.
they really have no idea other than how they think tariffs ought to cause a recession.)
There were much better ways to do this. Trump only knows his unilateral tariff way. But it is an improvement over "lead from
behind" Obama, who did nothing.
The West normalizing relations with China is apt to go down as the biggest blunder in all of human history. China needs to
be isolated and cut off at the knees.
Chinese trade policies have always been predatory to the US across Republican and Democrat administrations since Reagan was
President. The cost of labor in China is cheap at about $4/hour. Add to that there are few environmental or OSHA-like standards
and the pollution is so obvious that at the 2008 Beijing Olympics industry was shut down so that the smog might clear. No US manufacturer
without tariff protection can compete with that for unskilled labor. That is a fact. If the US wants to keep some semblance of
manufacturing in this country, then tariffs are necessary. And that goes for the countries in the New Nafta and the proposed TPP.
The hypocrisy on tariffs is maddening because California's agricultural and Maine and Massachusetts' shoe industry for just a
few examples survive only because of the tariffs. Getting tough with China is long overdue, and the political outrage over trying
to protect US interests is just Trump Derangement from educated people who should know better.
Buying "made in China" was far too easy, although quality usually suffered (and sometimes dangerously so). Tariffs will force
our purchasing agents to look around for better deals...Not a bad idea.
We need to stop allowing Chinese Nationals into our STEM programs!
Look at any graduate program at a top US University's comp sci program, physics, math or any engineering department and you
will see that it is heavily filled -- if not dominated -- by Chinese Nationals.
China has a well organized program to send students to IS STEM programs and US jobs at tech firms and steal the technology.
I mean...same plan forever?
That plan is to soak the middle class to make life better for the working class. The theory is mfg will return to the US, because
we'll have 9-billion percent tariffs on all imports.
The net middle-class life goes downhill, the net working-class life goes up.
then next software and robots will be outlawed.
Washington & Wall Street want to stay top dog as long as possible. If that means most Americans are poorer than they might
be, their attitude is, too bad for them. The power base only looks out for itself. That isn't too surprising, since most people
are selfish.
The rise of China would be no big deal if it wasn't a totalitarian state. That makes it extremely dangerous, depending on the
wishes of the man at the top. Fortunately, the US is protected from invasion by large oceans, and democratic neighbors with close
trade and cultural ties. And then there are all the nukes. No sane person would risk using them first.
Mr. Smith writes about the 'why' of trumpy's trade war:
"It's also possible, of course, that the trade war is a purely populist endeavor, and that maintaining tariffs is simply
a way for Trump to look tough. "
Reality TV show for trumpy... that will hurt millions of Americans... and trumpy and his cronies will never feel it. Just like
his business partners that he cheated.
You hit the nail right on the head! Good report. Pres Trump main goal is to cripple and contain the rise of China. The trade
war is his strategy. As to whether it will succeed or not, only time will tell....The rest of the reasons are just "red herrings"
and surprisingly, most Americans felled for it hook line and sinker. But the rest of the world knows all along because US is a
hegemonic nation and there are abundant examples of countries that were destroyed by the US for challenging her dominance all
over the world. That's why US keep changing the "goal post" from trade deficits to stealing of intellectual property and force
technology transfers and now state subsidies. Just as China agrees to US demands, the latter now up the ante and is now insisting
that China has to change her laws so that the US can enforce them. Very soon it will be regime change. It will be interesting
to see what happen next because to me war is never easy to win. Both sides will suffer and so will the rest of the world. To even
think that the US economy is immune to it because it is strong and the numbers are good and it will be able withstand the perfect
storm is hubris. Maybe Pres Trump and his neocons can prove history and the Smoot Haley Tariff Act wrong...?
If you know anything about Narcissists, this is most likely Trumps way of getting you to focus on something other than his
deplorable Mueller report, his son DonJr, his huge losses as a business man and his impending Tax returns exposed.
After vowing over the weekend to "never surrender to external pressure",
Beijing has defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies
on $60 billion in US goods.
CHINA SAYS TO RAISE TARIFFS ON SOME U.S. GOODS FROM JUNE 1
CHINA SAYS TO RAISE TARIFFS ON $60B OF U.S. GOODS
CHINA SAYS TO RAISE TARIFFS ON 2493 U.S. GOODS TO 25%
CHINA MAY STOP PURCHASING US AGRICULTURAL PRODUCTS:GLOBAL TIMES
CHINA MAY REDUCE BOEING ORDERS: GLOBAL TIMES
CHINA ADDITIONAL TARIFFS DO NOT INCLUDE U.S. CRUDE OIL
CHINA RAISES TARIFF ON U.S. LNG TO 25% EFFECTIVE JUNE 1
CHINA TO RAISE TARIFFS ON IMPORTS OF U.S. RARE EARTHS TO 25%
China's announcement comes after the White House raised tariffs on some $200 billion in Chinese goods to 25% from 10% on Friday
(however, the new rates will only apply to goods leaving Chinese ports on or after the date where the new tariffs took effect).
Here's a breakdown of how China will impose tariffs on 2,493 US goods. The new rates will take effect at the beginning of next
month.
2,493 items to be subjected to 25% tariffs.
1,078 items to be subject to 20% of tariffs
974 items subject to 10% of tariffs
595 items continue to be levied at 5% tariffs
In further bad news for American farmers, China might stop purchasing agricultural products from the US, reduce its orders for
Boeing planes and restrict service trade.
There has also been talk that the PBOC could start dumping Treasurys (which would, in addition to pushing US rates higher, could
also have the effect of strengthening the yuan). Though if China is going to dump Treasuries, will they also be dumping US stocks
and real estate?
China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China.
Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.
"It's not China that pays tariffs. It's the American importers, the American companies that pay what in effect is a tax increase
and oftentimes passes it on to U.S. consumers," Wallace said.
As we
noted earlier , on Saturday, President Donald Trump said in tweets that it would be wise for China to "act now" to finish a trade
deal with the U.S., warning that "far worse" terms would be offered after what he predicted would be his certain re-election in 2020.
* * *
And so, as attention turns to China's "countermeasures", Bloomberg notes that while the Communist Party hasn't yet announced what
steps it would take, "the commentaries are probably the first part of its response, since state media in China is tightly controlled
and the government dictates what can be covered."
"If they weren't being seriously provoked, the Chinese people would not favor any trade war. However, once the country is strategically
coerced, nothing is unbearable for China in order to safeguard its sovereignty and dignity," the Global Times said in the editorial.
If the U.S. is to play a roller-coaster-style thriller game, it will bear the consequences."
In an earlier editorial, the Global Times said the U.S. has made a fundamental misjudgment, that is, believing China is unilaterally
benefiting from China-U.S. economic and trade relations."
"The U.S. has misunderstood the interests of both sides, and seriously underestimated China's endurance," the Global Times warned.
So to summarize the current state of the talks that on Friday were described as "constructive" helping send the Dow soaring by
over 500 points intraday, here is a
quick recap courtesy
of Mish Shedlock :
Trump demands China put commitments into law.
China replied that "no one should expect China to swallow bitter fruit that harms its core interests".
Trump ordered Lighthizer to begin the process of imposing tariffs on all remaining imports from China This would impact an
additional $300 billion worth of goods.
China said it would retaliate.
On Saturday, Trump warned China not to retaliate or it would face worse terms. Trump Tweeted "Love collecting BIG TARIFFS!"
Kudlow said on Sunday he expected retaliatory tariffs to kick in but that it had not happened yet.
China warned Trump on Sunday not to underestimate China's endurance and that China is not afraid to fight.
China posted its own set of demands for further talks including the removal of all extra tariffs.
As Mish concludes, "This dialog is what's known as "constructive". It's so constructive that further talks between Trump and have
been pushed back until the end of June, subject to change of course."
Meanwhile, as the market's hope for quick resolution fades, keep an eye on Apple and other Chinese consumer-reliant companies,
for the market's snap reaction - if Beijing plans to engage in "soft retaliation", it is those corporations that derive much of their
revenue from China that will be hit first and hardest. And if there is indeed a shift in sentiment, it will first appear in US equity
futures and Chinese stocks, both of which open for trading in just a few hours.
The idea behind imposing tariffs is to discourage buying, but 10-25% doesn't really make an impact on that front. It only proves
that the gubbermint wants to squeeze more out of the little people. Unfortunately, it will backfire (if not already) as shortsighted
policies (especially ones that are carried out over Twitter) usually do.
The verdict is not in on that yet. A corporation like Cummins can pay the tariff and deduct it as a business expense same with
a importer that is a corporation. LCC now have been destroyed by RINOTAX so they must pass that on to consumers or change to corporations.
Bottom line the consumer and or Taxpayer will eat the Tariffs.
Large multinationals are livid at Trump for this. The GOP is comatose, It has the feeling of a George Bush Subprime moment.
The GOP is going to take a big hit for this. Trump is mentally ill and out of control. Congress will have to rescind the section
232 delegation and remove that power from Trump.
The us trades with 102 nations and China has factories and banks in virtually all Asian countries. So there is a logistical
fix for this too. And as I have said before HONG KONG has its own treaty with the USA so it is immune to Trump Tariffs. All tariffs
are based on shipping origins and destinations so that's a pretty easy fix. Attacking 1 country out of 102, just makes the other
101 countries nervous about the arbitrary and capricious conduct of Trump.
China as you yourself stated is a heavyweight not some small outfit that can be pushed around by Trump. China is the largest
manufacturer in the world. 1000 metric tons of steel etc. Trump is harming US multinationals in China so Trump's days are numbered.
Corporations will be hamming republicans tomorrow. Trump is not smart, he's mentally ill and very sick. He had a breakdown when
he closed the gov and this is similar in that his mental illness responses are the same paranoia. The threats are similar etc.
Same disease different circumstance. And China knows this. They put the hammer down with their three demands. They will not budge.
China gets a bad rap because they were once very poor. But Gen MacArthur said that if the Chinese Army had not held off the
Japanese and fought to the death, the US Marines could not have taken the Japanese islands.
One other point. Part of the Asian culture is restraint. If China wanted to bust TRUMP hard they would cancel all Boeing Aircraft
orders. Mao would have done that. China is now very focused on business and trade and will only retaliate in small measured ways.
America's character went to **** in Vietnam. Then Bush family war criminals got into power. The only thing good about Obama
was he distanced America from the Jooz. But along came Trump and his joo daughter and son of a crook in law Kushner and then Trump
was antagonizing Iran, Jerusalem with the US embassy and put a US military base in Israel. So Trump is Bibi's houseboy. Then to
enforce this Trump appoints bolton, pompeo and Abrams, arms Saudi and signs on for year 17 in Afghanistan. Yet all this is just
fine with the TRUMPTARDS as long as they can chant built the wall. Absolutely astonishing how this Orange Tyrant is never held
accountable by his Trumptards.
Trump sounds terrified. His 60 tweets a day are indicative of someone suffering from fear. I have seen this in battle and thats
why everyone else gets clear of the yapper. His number is up.
I wonder if the Chinese media will show all the factories owned by the communist party cadres chugging along with free money
from the government, while millions of workers in privately owned factories are losing their jobs. All Trump wanted was for these
government run industries to go private, but the communist party needs to give jobs to friends and relatives. Because if you're
not a friend or relative of the communist party, you don't really matter in China.
what about the factories of Lockheed martin, Boeing, rayteon, churning along along with free money from the US government,
while millions of workers in privately owned companeis such as SEARs, Toys R US are losing their jobs?
Correction, Trump wants China to open up their markets to western exploitation which is not happening. If you understand history
about China it is mired in exploitation from European powers in the region. I don't blame China for its protectionism and their
ambitions to become an independent country.
The Orange Swine cut taxes for big corporations and multi millionaires and now lets middle class consumers pay the trade war
with China. And then orders the Fed to cut rates by 1% to destroy the Dollar. What's next? Value added tax anyone?
North American includes the USA and Canada. China exports 438 Billion and imports 180 billion from North America.
So if you look at it intelligently, US Tariffs have very little leverage but do harm the US supply chain enormously. When China
applies retaliatory tariffs to the US and Canada, they can hurt you badly. The US farmer is the prime example.
But the most important thing to look at is not your silly protectionism but the size of the ASIAN markets. China has been consolidating
all of Asia. They have companies and banks in all of those countries and their Asia Trade alone is over 2 trillion annually. Trump
screams about applying tariffs to 380 Billion in goods with no comprehension of how much he loses in access to Asia.
So as Bill O'Neil said, the only thing that matters for the next 100 years is the Asian Consumer. Nothing else matters. Asian
growth is exploding.
The chief export of the USA is aircraft 130 Billion a year. That will change drastically with Boeing. China is building its
own narrow body aircraft. Russia is also getting into the narrowbody aircraft space. The US doesn't want to be cultivating enemies
in Asia.
Many go directly to Washington coffers. But maney will be taken mostly from the US consumers
of Chinese goods. Also it is unclear what sanctions China will introduce in return, if any.
Notable quotes:
"... But the prolonged trade war — and Friday’s tariff hike — serves as ammunition for hawks on both sides, who see a more confrontational struggle for global dominance unfolding. ..."
"... In China, there is a growing belief that the U.S. motive in the talks is not to balance trade relations, but to undermine China, slow its rise and hamper its ability to best America in strategic high-tech fields. ..."
"... Hu Xijin , editor of the Communist Party-owned Global Times , has tweeted in English that China was “fully prepared for an escalated trade war.” He argued there is increased popular support in Beijing for a confrontational approach to the U.S. ..."
"... “The real intention of the U.S. is to squeeze China’s space in new technologies,” the editorial said. ..."
"... “Things will continue to slide downward into deeper competitive tensions,” Gill predicted, “including on the economic front because trade is not the problem. The deeper problem … is the question of economic and technological competition. ..."
"... Chinese President “Xi Jinping is not a forgiving man, so I think we can see that Xi Jinping will take a more robust stance against the U.S. if and when he feels that the Chinese government is able to do so successfully,” Tsang said. ..."
"... The United States faces a possibility that in decades, China could overtake it as the world’s largest economy. China’s economy is already ranked No. 1 in terms of purchasing parity power, a measure that adjusts GDP to account for price differences in countries. ..."
Even if the two sides can break through the stalemate and strike a deal on trade, the larger
message of the week is that U.S.-China relations have changed fundamentally, and there is
probably no going back.
Although their business relations are deeply entwined, the White House and China view
themselves as aggressive rivals jostling for global influence and geopolitical power.
The trade war launched by Trump is just one manifestation of this. Military friction in the
South China Sea, a string of espionage scandals, China’s rising military strength and the
Trump administration’s battle against Chinese tech giant Huawei are all signs of an
ominous chill in relations.
Although a trade deal seemed at hand in recent weeks, Trump administration officials have
accused China of reneging on agreements that had been made over months of negotiations. To
pressure Beijing to return to its previous commitments, Washington ratcheted up tariffs on $200
billion in products from China from 10% to 25%. China announced immediately that it would
retaliate.
Some experts said last-minute revisions from China are typical of its negotiating strategy,
as with Trump’s mercurial bargaining style.
If trade negotiators do not reach a deal in coming weeks, the U.S., Chinese and global
economies will be hurt, say analysts, who assume both sides will find a way to end the
impasse.
“My baseline scenario is that both leaders still need a deal for political reasons,
so we are likely to get one in the next few weeks, but it won't be this week,” said
Arthur Kroeber of Gavekal Dragonomics , a
financial research firm headquartered in Hong Kong. “The maneuvering right now is
mainly end-of-negotiation stuff. But both sides are playing brinkmanship pretty hard so there
is material risk (say 20 to 25%) that we don’t get a deal.”
But the prolonged trade war — and Friday’s tariff hike — serves as
ammunition for hawks on both sides, who see a more confrontational struggle for global
dominance unfolding.
In China, there is a growing belief that the U.S. motive in the talks is not to balance
trade relations, but to undermine China, slow its rise and hamper its ability to best America
in strategic high-tech fields.
Tariffs already have prompted some U.S. firms in China to shift their supply chains
elsewhere. China hawks in the Trump administration believe that applying heavy taxes on imports
can be one way to “decouple” from China.
U.S. legal charges against Huawei executive Meng Wanzhou, and Secretary of State Michael R.
Pompeo’s blunt efforts to dissuade European nations from using Huawei in 5G telecom
networks by threatening not to share intelligence, have hardened suspicions in China, as have
harsh criticisms and rhetoric from other senior officials in the Trump administration.
“None of the news of the past year or two has been very positive in terms of the
geopolitical direction of this relationship. It’s gone from tense to worse, and while the
trade relationship seems to get a lot of the headlines, a lot more problematic, even dangerous
elements are unfolding in other areas of the relationship particularly around security and
military affairs,” said Bates
Gill, China expert and professor at Macquarie University in Sydney, Australia.
“A so-called resolution of the current trade war is not going to remove or resolve the
fundamental structural problems in the economic relationship,” he said.
U.S. business has long favored engagement with China, arguing that external pressure from
the United States and others has pushed China to open its economy. More recently, however, that
assumption has been called into question by many in the West, giving Trump more political space
to go after China on trade and other areas.
Still, Jacob Parker , vice
president of China Operations at the U.S.-China Business Council , warned that if the Trump
administration confronts China too aggressively, it could backfire. He said that instead of
persuading China to open up more to American companies and ending its insistence that they
share their technology in return for market access, aggressive new tariffs could have the
opposite effect.
Parker also warned that Friday’s tariff hike on $200 billion of Chinese imports
— and Trump’s threats to slap tariffs on an additional $325 billion in Chinese
goods in the near future — has undermined economic reformers in the Chinese system and
strengthened the voices of hard-liners.
“That hardens those voices domestically and reinforces the perspective that the U.S.
is trying to contain China,” he said. “If we push the Chinese too far, I think
there’s a concern in the business community that we may go beyond what China can accept
and that things could start to fall apart. If that happens, I think we can at the least expect
that the Chinese economic reform process would come to an end.”
And in Washington, the lack of a deal would result in “increased tensions between the
national security wing of the U.S. administration, who will be happy with this result, and the
business-tech community, who are anxious to expand their participation in China and will be
pretty mad,” said Kroeber, of the Hong Kong financial research firm.
Stephen K. Bannon , former
chief strategist to Trump, is among a group of hawks who formed the Committee on the Present
Danger: China, an organization that sees its role as warning
Americans and political and business leaders of the “existential threats” to
America posed by China.
Meanwhile, Hu Xijin ,
editor of the Communist Party-owned Global
Times , has tweeted in English that China was “fully prepared for an escalated trade
war.” He argued there is increased popular support in Beijing for a confrontational
approach to the U.S.
“More and more Chinese now tend to believe the current US government is obsessed
with comprehensively containing China,” he tweeted Thursday.
A Global Times editorial Thursday said trade was “only a sideshow” in the
confrontation between the U.S. and China and the real issue was the U.S. fear that China would
catch up to it in high-tech fields.
“The real intention of the U.S. is to squeeze China’s space in new
technologies,” the editorial said.
Many analysts, including Australian professor Gill, share the view that relations are in
long-term decline.
“Things will continue to slide downward into deeper competitive tensions,”
Gill predicted, “including on the economic front because trade is not the problem. The
deeper problem … is the question of economic and technological competition.
“Ultimately at the bottom of all of this, the problem abides that the two countries
don’t trust each other and see each other as long-term strategic competitors.”
Steve Tsang ,
director of the SOAS China Institute
at the University of London, said regardless of who is president, the U.S. and China will
become increasingly competitive in the next two decades.
Chinese President “Xi Jinping is not a forgiving man, so I think we can see that
Xi Jinping will take a more robust stance against the U.S. if and when he feels that the
Chinese government is able to do so successfully,” Tsang said.
As relations decline, both Washington and Beijing are likely to compete to draw countries
into their orbit, he predicted.
He said European countries and the U.K. would drift toward the U.S. “because
ultimately this is what we believe in more. You will have a whole bunch of other countries that
will drift towards the Chinese because they remain fundamentally authoritarian
states.”
China’s global Belt and Road Initiative — in which it projects its international
power through soft loans for infrastructure — would also draw some nations to China, he
added.
Underscoring frictions are U.S. fears that China may overtake it in a range of high-tech
fields including space exploration, artificial intelligence, surveillance technology,
driverless cars and even military hardware.
Huawei’s emergence as the global leader in 5G technology — with no American
rival — was a shock to U.S. policymakers.
Parker, of the U.S.-China Business Council, said that although the U.S. and China face a
challenging security relationship, it is important to ensure that trade is not affected.
“I think there’s definitely a competitive dynamic between the U.S. and China,
and that will continue into the future. The twist is to ensure that the national security
issues don’t get entwined with the businesses’ side.”
The United States faces a possibility that in decades, China could overtake it as the
world’s largest economy. China’s economy is already ranked No. 1 in terms of
purchasing parity power, a measure that adjusts GDP to account for price differences in
countries.
“It would be a major milestone. It would send a lot of shock waves and shivers
certainly in the United States and much of the rest of the world and I think would be seen as a
major turning point, not unlike the United States overtaking the United Kingdom as the
world’s largest economy back in the late 19th century,” Gill said. “It would
certainly be the end of an era and the beginning of a new one.”
Trump's misguided tariff/trade war policies are straight out of the 19th century. They are
tearing apart relations with our allies and playing straight into Putin's hands. They will
cost U.S. consumers and businesses billions in tariff fees and higher prices on goods. They
are squeezing American farmers to the breaking point. Nobody wins a trade war.
Trump bravado is probably unwarranted. Here the train already left the station: the USA can do a damage to Chine economy only
by talking considerable damage to the empire and probably to the status of the dollar as well.
Notable quotes:
"... Commenting on this list, the Editor in Chief of the Global Times, Hu Xijin, who has become a real-time translator for Chinese unspoken intentions on twitter, explained that "from perspective of China's politics, there is little room for compromises. They will insist. This political logic won't be changed no matter how much additional tariffs the US will impose." ..."
"... Trump responded immediately on Twitter when he made it clear on Saturday that the US would not relent, stating that the Chinese may have felt they were "being beaten so badly" in the recent talks that it was better to drag their feet in hopes he would lose the 2020 election and get a better deal from the Democrats. Trump then said that "the only problem is that they know I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!" ..."
Following some soothing words from both the US and Chinese sides on Friday that while talks
to avert a tariff hikes had failed, they were "constructive" and there was grounds for
"cautious optimism" for the future, the standoff between the U.S. and China abruptly escalated
over the weekend when China's vice premier Liu He said that China is planning how to retaliate
and listed three core concerns that must be addressed, and on which it wouldn't make
concessions, ahead of any deal including:
i) the complete removal of all trade-war related tariffs,
ii) set targets for Chinese purchases of goods in line with real demand and
iii) ensure that the text of the deal is "balanced" to ensure the "dignity" of both
nations.
Commenting on this list, the Editor in Chief of the Global Times, Hu Xijin, who has become a
real-time translator for Chinese unspoken intentions on twitter, explained that "from
perspective of China's politics, there is little room for compromises. They will insist. This
political logic won't be changed no matter how much additional tariffs the US will impose."
Trump responded immediately on Twitter when he made it clear on Saturday that the US would not relent, stating that the
Chinese may have felt they were "being beaten so badly" in the recent talks that it was better to drag their feet in hopes he
would lose the 2020 election and get a better deal from the Democrats. Trump then said that "the only problem is that they know
I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them
if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!"
Trade, however, doesn't represent the only U.S.-China economic activity whose profile has
lowered recently. For example, since 2016, two-way foreign direct investment (purchases of
so-called hard assets, like factories and real estate, as opposed to financial assets, like
government bonds) has cratered by fully 70 percent. Most of the drop is due to an 80 percent
decrease in Chinese investment in the United States, and the bulk of that decline came in 2018.
But American direct investment in China peaked back in 2008, as the recession struck, hasn't
come close to recovering since, and is also down slightly since 2012.
U.S.-China economic flows are still so great that they won't dry up completely. Nor should
anyone expect the current unwinding to continue at its current pace. After all, China still
boasts advantages in many manufacturing industries (which dominate bilateral trade) sure to
sustain sales to American households and businesses. Chief among them are the scale of existing
production complexes in China and the efficiencies that result, along with the wide range of
cost-reducing subsidies these sectors receive from Beijing. Further, China can't expect to find
foreign markets capable of replacing its sales to the United States, and therefore supporting
its own ability to grow and maintain the employment levels vital for political stability. Nor
will American businesses be able to totally blow off the enormous Chinese market and its own
still-impressive growth.
.... ... ...
Nonetheless, the days are over when the United States -- or at least its
political and business leaders -- saw mushrooming commerce with China as an expressway to
greater national prosperity and higher profits, not to mention a powerful contributor to global
well-being, security, and stability, and a means of democratizing China itself. With all these
hopes dashed, Washington and the American business community will find ample reasons to keep
looking for exits.
Alan Tonelson is the founder of RealityChek, a public policy blog focusing on
economics and national security, and the author of The Race to the Bottom.
I do not necessarily support his course of action...but I feel that sometimes, doing
the unexpected and unconventional thing can lead to new doors and new possibilities.
China's internal debt situation is so precarious that it can ill-afford a trade war
with US. China has a trade surplus of $325 billion with the US. This kind of skewed
number is totally unacceptable. By reneging on the provisional agreements over IP and
other hurdles, China is playing with fire.
I am not a Trump supporter but I think his policy on China is right on the money. No
other US president had the courage to address this issue.
Even if the two sides can break through
the stalemate and strike a deal on trade, the larger message of the week is that U.S.-China
relations have changed fundamentally, and there is probably no going back. Although their
business relations are deeply entwined, the White House and China view themselves as aggressive
rivals jostling for global influence and geopolitical power. The trade war launched by Trump is
just one manifestation of this. Military friction in the South China Sea, a string of espionage
scandals, China's rising military strength and the Trump administration's battle against
Chinese tech giant Huawei are all signs of an ominous chill in relations. Although a trade deal
seemed at hand in recent weeks, Trump administration officials have accused China of reneging
on agreements that had been made over months of negotiations. To pressure Beijing to return to
its previous commitments, Washington ratcheted up tariffs on $200 billion in products from
China from 10% to 25%. China announced immediately that it would retaliate. Some experts said
last-minute revisions from China are typical of its negotiating strategy, as with Trump's
mercurial bargaining style. If trade negotiators do not reach a deal in coming weeks, the U.S.,
Chinese and global economies will be hurt, say analysts, who assume both sides will find a way
to end the impasse. "My baseline scenario is that both leaders still need a deal for political
reasons, so we are likely to get one in the next few weeks, but it won't be this week," said
Arthur Kroeber of Gavekal Dragonomics , a
financial research firm headquartered in Hong Kong. "The maneuvering right now is mainly
end-of-negotiation stuff. But both sides are playing brinkmanship pretty hard so there is
material risk (say 20 to 25%) that we don't get a deal." But the prolonged trade war -- and
Friday's tariff hike -- serves as ammunition for hawks on both sides, who see a more
confrontational struggle for global dominance unfolding. In China, there is a growing belief
that the U.S. motive in the talks is not to balance trade relations, but to undermine China,
slow its rise and hamper its ability to best America in strategic high-tech fields. Tariffs
already have prompted some U.S. firms in China to shift their supply chains elsewhere. China
hawks in the Trump administration believe that applying heavy taxes on imports can be one way
to "decouple" from China. U.S. legal charges against Huawei executive Meng Wanzhou, and
Secretary of State Michael R. Pompeo's blunt efforts to dissuade European nations from using
Huawei in 5G telecom networks by threatening not to share intelligence, have hardened
suspicions in China, as have harsh criticisms and rhetoric from other senior officials in the
Trump administration. "None of the news of the past year or two has been very positive in terms
of the geopolitical direction of this relationship. It's gone from tense to worse, and while
the trade relationship seems to get a lot of the headlines, a lot more problematic, even
dangerous elements are unfolding in other areas of the relationship particularly around
security and military affairs," said Bates Gill, China expert and professor at Macquarie
University in Sydney, Australia. Advertisement "A so-called resolution of the current trade war
is not going to remove or resolve the fundamental structural problems in the economic
relationship," he said. U.S. business has long favored engagement with China, arguing that
external pressure from the United States and others has pushed China to open its economy. More
recently, however, that assumption has been called into question by many in the West, giving
Trump more political space to go after China on trade and other areas. Still, Jacob Parker , vice president of China
Operations at the U.S.-China Business
Council , warned that if the Trump administration confronts China too aggressively, it
could backfire. He said that instead of persuading China to open up more to American companies
and ending its insistence that they share their technology in return for market access,
aggressive new tariffs could have the opposite effect. Parker also warned that Friday's tariff
hike on $200 billion of Chinese imports -- and Trump's threats to slap tariffs on an additional
$325 billion in Chinese goods in the near future -- has undermined economic reformers in the
Chinese system and strengthened the voices of hard-liners. "That hardens those voices
domestically and reinforces the perspective that the U.S. is trying to contain China," he said.
"If we push the Chinese too far, I think there's a concern in the business community that we
may go beyond what China can accept and that things could start to fall apart. If that happens,
I think we can at the least expect that the Chinese economic reform process would come to an
end." And in Washington, the lack of a deal would result in "increased tensions between the
national security wing of the U.S. administration, who will be happy with this result, and the
business-tech community, who are anxious to expand their participation in China and will be
pretty mad," said Kroeber, of the Hong Kong financial research firm. Advertisement
Stephen K. Bannon , former
chief strategist to Trump, is among a group of hawks who formed the Committee on the Present
Danger: China, an organization that sees its role as warning
Americans and political and business leaders of the "existential threats" to America posed by
China. Meanwhile, Hu Xijin ,
editor of the Communist Party-owned Global
Times , has tweeted in English that China was "fully prepared for an escalated trade war."
He argued there is increased popular support in Beijing for a confrontational approach to the
U.S. "More and more Chinese now tend to believe the current US government is obsessed with
comprehensively containing China," he tweeted Thursday. A Global
Times editorial Thursday said trade was "only a sideshow" in the confrontation between the U.S.
and China and the real issue was the U.S. fear that China would catch up to it in high-tech
fields. "The real intention of the U.S. is to squeeze China's space in new technologies," the
editorial said. Many analysts, including Australian professor Gill, share the view that
relations are in long-term decline. "Things will continue to slide downward into deeper
competitive tensions," Gill predicted, "including on the economic front because trade is not
the problem. The deeper problem is the question of economic and technological competition.
"Ultimately at the bottom of all of this, the problem abides that the two countries don't trust
each other and see each other as long-term strategic competitors." Steve Tsang , director of the SOAS China Institute at the University of
London, said regardless of who is president, the U.S. and China will become increasingly
competitive in the next two decades. Chinese President "Xi Jinping is not a forgiving man, so I
think we can see that Xi Jinping will take a more robust stance against the U.S. if and when he
feels that the Chinese government is able to do so successfully," Tsang said. As relations
decline, both Washington and Beijing are likely to compete to draw countries into their orbit,
he predicted. He said European countries and the U.K. would drift toward the U.S. "because
ultimately this is what we believe in more. You will have a whole bunch of other countries that
will drift towards the Chinese because they remain fundamentally authoritarian states." China's
global Belt and Road Initiative -- in which it projects its international power through soft
loans for infrastructure -- would also draw some nations to China, he added. Underscoring
frictions are U.S. fears that China may overtake it in a range of high-tech fields including
space exploration, artificial intelligence, surveillance technology, driverless cars and even
military hardware. Huawei's emergence as the global leader in 5G technology -- with no American
rival -- was a shock to U.S. policymakers. Parker, of the U.S.-China Business Council, said
that although the U.S. and China face a challenging security relationship, it is important to
ensure that trade is not affected. "I think there's definitely a competitive dynamic between
the U.S. and China, and that will continue into the future. The twist is to ensure that the
national security issues don't get entwined with the businesses' side." The United States faces
a possibility that in decades, China could overtake it as the world's largest economy. China's
economy is already ranked No. 1 in terms of purchasing parity power, a measure that adjusts GDP
to account for price differences in countries. "It would be a major milestone. It would send a
lot of shock waves and shivers certainly in the United States and much of the rest of the world
and I think would be seen as a major turning point, not unlike the United States overtaking the
United Kingdom as the world's largest economy back in the late 19th century," Gill said. "It
would certainly be the end of an era and the beginning of a new one." Trump's
tariff hike on Chinese goods takes effect as the two sides keep talking "
"... And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying jobs here manufacturing them. ..."
"... I have worked with Chinese auto parts suppliers. They run from OK to horrible. ..."
"... In reality, the tariffs are 'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year - perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year. ..."
John Murphy of Bank of America joins CNBC's "Closing Bell" to discuss the impact of new tariffs on the auto industry.
William 23 hours ago
And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying
jobs here manufacturing them.
c craig f 21 hours ago
Cars that do not use Chinese parts will sell better and the world it will keep turning
P Park Slope 23 hours ago
Great. I'll keep my old one. Thanks for the savings.
BobBob, yesterday
I have worked with Chinese auto parts suppliers. They run from OK to horrible. I'd never buy from them - maybe as a LAST option
to avoid going belly up. The problem then becomes losing repeat customers due to quality and reliability problems....
GeorgeGeorge, 10 hours ago
Do not understand how the anti-Trump politicians and the media can be against these tariffs. In reality, the tariffs are
'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year -
perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year.
In an unusual move, the Chinese delegation has come clean to the domestic press about
Beijing's remaining trade-deal related demands, exposing steep divides that could make it a
final deal impossible for Trump, who has repeatedly said he will only accept a "great"
deal.
Unsurprisingly, Liu He, the leading Chinese trade negotiator, confirmed what Beijing has
intimated time and time again :
That without the complete removal of all trade-war related tariffs, Beijing will not
remorse a deal.
The other two demands were related to American commitments to buy Chinese goods , something
that could also pose a problem.
In a wide-ranging interview with Chinese media after talks in Washington ended Friday,
Vice Premier Liu He said that in order to reach an agreement the U.S. must remove all extra
tariffs, set targets for Chinese purchases of goods in line with real demand and ensure that
the text of the deal is "balanced" to ensure the "dignity" of both nations.
China for the first time made clear what it wants to see from the U.S. in talks to end their trade war, laying
bare the deep differences that still exist between the two sides.
In a wide-ranging
interview
with Chinese media after talks in Washington ended Friday, Vice Premier Liu He said that in order to
reach an agreement the U.S. must remove all extra tariffs, set targets for Chinese purchases of goods in line with
real demand and ensure that the text of the deal is "balanced" to ensure the "dignity" of both nations.
Liu's three conditions underscore the work still to be done if an accord is to be reached between the world's
two largest economies. President Donald Trump's own negotiators told China it has a month to seal a deal or face
tariffs on all its exports to the U.S.
That threat was made during talks Friday in Washington, hours after Trump upped the ante by imposing a second
round of punitive duties on $200 billion in Chinese goods. China vowed retaliation, but hadn't announced any
details as of Saturday evening in Beijing.
U.S. Trade Representative Robert Lighthizer said the administration would on Monday release details of its
plans for tariffs on an additional $300 billion in imports from China, setting the process in motion for Trump to
deliver on the threat to hammer all Chinese trade.
U.S. officials insist they have been working on a deal that would bring an end to what they portray as China's
rampant theft of American intellectual property and rein in the industrial subsidies that have fueled the rapid
ascent of Chinese corporate giants.
Trump's move to raise tariffs on Friday came after China backed away from prior commitments to enshrine changes
promised at the negotiating table in Chinese law, according to U.S. officials. During his meetings in Washington
this week Liu said China was ready to commit to pushing reforms via State Council directives but again balked at
changing any laws, according to one person familiar with the discussions.
In his interview Liu said both sides agreed to keep talking despite what he called "some temporary resistance
and distractions,'' and to hold future meetings in Beijing. He dismissed the idea that talks had broken down.
"It's normal to have hiccups during the negotiations. It's inevitable."
Liu also struck a note of defiance. "For the interest of the people of China, the people of U.S. and the the
people of the whole world, we will deal with this rationally," the vice premier said. "But China is not afraid,
nor are the Chinese people," adding that "China needs a
cooperative agreement
with equality and dignity."
'Candid and Constructive'
In a series of tweets that cheered markets, Trump declared Friday that the talks with China had been candid and
constructive. "The relationship between President Xi and myself remains a very strong one, and conversations into
the future will continue," he said. Further talks are possible, but there's no immediate plan for the next round,
according to a person familiar with the negotiations.
Liu's comments, however, revealed yet another new fault line: a U.S. push for bigger Chinese purchases to level
the trade imbalance than had originally been agreed.
To Be Tariffed...Maybe
Top 10 U.S. imports from China which haven't been tariffed in current dispute
According to Liu, Trump and Chinese President Xi Jinping agreed "on a number" when they met in Argentina last
December to hammer out the truce that set off months of negotiations. That "is a very serious issue and can't be
changed easily."
The amount of purchases by China should be "in line with reality," according to a commentary by state news
agency Xinhua on Saturday. China also sees the removal of all the extra tariffs that have been imposed since last
year as a precondition to a deal, whereas U.S. negotiators see retention of some duties as a key mechanism to
enforce a deal.
The lack of progress left major question-marks hanging over the search for a deal on trade -- just one source
of tensions in a
growing geopolitical rivalry
that's already shifting supply chains and testing established economic and
security alliances.
Trump, who is seeking re-election on the back of a booming U.S. economy, on Friday sought to justify his
decision to hike tariffs as well as to convince businesses and financial markets that he wasn't walking away from
a deal.
No Rush
"There is absolutely no need to rush," the U.S. president said. In another tweet, Trump
proposed a vast new plan
to use income from tariffs to buy up the crops of American farmers who've watched
their exports to China collapse, and send them to poor countries as aid.
The presidential good humor hid what people familiar with the discussions say has been an increasingly gloomy
mood around the negotiations in recent days.
Before a rebound late Friday, U.S. equity markets had posted their worst week of the year, as the trade truce
that had been in place for months was shattered by the new U.S. tariffs. The S&P 500 recovered from earlier losses
Friday, ending the day 0.4% higher.
Election Year
This week's tariff move is likely to have
significant
short-term consequences for retailers and other U.S. businesses reliant on imports from China. But
extending it to all trade would increase the economic and political stakes even further for Trump and American
businesses.
Such a step would see price increases on smartphones, laptops and other consumer goods -- the kind that Trump's
advisers have been eager to avoid, out of concern for the domestic fallout. It would
likely provoke further retaliation
, and some economists are predicting it could even tip the U.S. economy into
recession just as Trump faces re-election in 2020.
'Gets Harder'
This week's talks have also amplified the differences that remain between the two governments as they navigate
their own domestic politics as well as a growing international rivalry.
Liu's interview underlined the need for any agreement not to be seen as undermining Chinese sovereignty -- as
the U.S. demand to change domestic laws surely would be.
The text "must be balanced" for the dignity of a country, Liu said, repeating China and the U.S. are "trying to
meet halfway" despite different views on some crucial issues.
Securing a trade deal is likely to get harder from here unless outside factors, such as
an economic downturn
, force a compromise, according to Ely Ratner, a China expert who served in the
administration of President Barack Obama and is now director of studies at the Center for a New American Security
think-tank.
"The question is can the Chinese come back and offer enough such that Trump can sell it?'' he said. "It is
going to be hard for them to do that in the face of Trump escalating. I think it gets harder as this thing goes
on, and it gets harder politically for Trump.''
-- With assistance by Jennifer Jacobs, Ye Xie, Andrew Mayeda, Jim Jia, Natalie Lung, Saleha Mohsin, and Jenny
Leonard
Looks like pendulum start swinging against privatization...
Notable quotes:
"... As corporate profits are the private sector's yardstick of success, privatized monopolies are likely to abuse their market power to maximize rents for themselves. Thus, privatization tends to burden the public, e.g., if charges are raised. ..."
"... In most cases, privatization has not closed the governments' fiscal deficits, and may even worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue from privatized SOEs, or tax evasion by the new privatized entity. ..."
"... In most cases, profitable SOEs were privatized as prospective private owners are driven to maximize profits. Fiscal deficits have often been exacerbated as new private owners use creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained earnings. ..."
"... As a rule of thumb, I'd say that any privatisations that require the introduction of convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most of their ongoing income from the public sector are likely to be contrary to the long-term public interest. In the UK, unfortunately, all these ships sailed a long time ago ..."
"... Chicago is the proving grounds for thirty or so years of the Democrats' surrender to neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of Daley to undo and the work of the Clintonians to undo. It will take more than one term for Lightfoot. ..."
"... Privatization, at any cost, is no longer a choice. We have abused the pension system and now the public must pay for private companies to provide the most basic services. ..."
"... I keep thinking that perhaps an Act could or should be introduced here in UK (same for the States, i suppose), which should ensure that all politicians that enable any type of privatisation of public resources or PFI arrangement (yes that old chesnut), should be made personally responsible for the results therof. ..."
"... And any losses to the public accidentally or "accidentally" occasioned by such commandeering over public resources, to be treated like deliberate misappropriation by the said public officials. With the financial and custodial penalties as may be appropriate. ..."
"... lots of private services that are suspiciously similar to public utilities in terms of natural monopoly, such as cable TV, internet and even railroads. Maybe these should be nationalized and treated more like public services. It can work when they're adequately funded and oversight accountability has teeth; major airports are a good example. ..."
"... Plus the state giveaways includes tens of millions of dollars each year in corporate tax credits in the name of job creation. A report by the nonprofit " Good Jobs First " revealed that over 300 Illinois companies are keeping the state taxes paid by their employees. EDGE- the Economic Development in a Growing Economy is a corporate freebie tax credit, which is partly from the state personal income taxes paid by workers. That's right, the biggest welfare queens are the corporations collecting and keep their employees state income tax payments. ..."
"... Can it get worse? According to the Chicago Trib , "The Chicago Mercantile Exchange (CME), for example, with billions of untaxed contracts worth well over a quadrillion dollars, and whose profit margin in recent years is higher than any of the top 100 companies in the nation, had the hubris to demand an $85 million per year tax break. They got it." The money is there to secure the pensions and budget but has been diverted to the corporate welfare queens for honoring us mere serfs with their presence in the humble fiefdom of Illinois. ..."
"... Michael Hudson, to his immense credit, explains the pernicious effects of privatization of common goods repeatedly throughout his work, and demonstrates that it has been with us at least as long as the ancient practice of land alienation and rural usury. ..."
Posted on April 7,
2019 by Jerri-Lynn Scofield Jerri-Lynn
here. Another succinct post by Jomo Kwame Sundaram that makes clear the "benefits" of
privatization are not evenly distributed, and in fact, typically, "many are even worse off"
when the government chooses to transfer ownership of the family silver.
Note that SOE is the acronym for state owned enterprise.
For those interested in the topic, see also another short post by the same author from last
September, debunking other arguments to promote the privatization fairy, Revisiting
Privatization's Claims .
By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development.
Originally published at Inter Press
Service
In most cases of privatization, some outcomes benefit some, which serves to legitimize the
change. Nevertheless, overall net welfare improvements are the exception, not the rule.
Never is everyone better off. Rather, some are better off, while others are not, and
typically, many are even worse off. The partial gains are typically high, or even negated by
overall costs, which may be diffuse, and less directly felt by losers.
Privatized Monopoly Powers
Since many SOEs are public monopolies, privatization has typically transformed them into
private monopolies. In turn, abuse of such market monopoly power enables more rents and
corporate profits.
As corporate profits are the private sector's yardstick of success, privatized monopolies
are likely to abuse their market power to maximize rents for themselves. Thus, privatization
tends to burden the public, e.g., if charges are raised.
In most cases, privatization has not closed the governments' fiscal deficits, and may even
worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue
from privatized SOEs, or tax evasion by the new privatized entity.
Options for cross-subsidization, e.g., to broaden coverage are reduced as the government is
usually left with unprofitable activities while the potentially profitable is acquired by the
private sector. Thus, governments are often forced to cut essential public services.
In most cases, profitable SOEs were privatized as prospective private owners are driven to
maximize profits. Fiscal deficits have often been exacerbated as new private owners use
creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained
earnings.
Meanwhile, governments lose vital revenue sources due to privatization if SOEs are
profitable, and are often obliged to subsidize privatized monopolies to ensure the poor and
underserved still have access to the privatized utilities or services.
Privatization Burdens Many
Privatization burdens the public when charges or fees are not reduced, or when the services
provided are significantly reduced. Thus, privatization often burdens the public in different
ways, depending on how market power is exercised or abused.
Often, instead of trying to provide a public good to all, many are excluded because it is
not considered commercially viable or economic to serve them. Consequently, privatization may
worsen overall enterprise performance. 'Value for money' may go down despite ostensible
improvements used to justify higher user charges.
SOEs are widely presumed to be more likely to be inefficient. The most profitable and
potentially profitable are typically the first and most likely to be privatized. This leaves
the rest of the public sector even less profitable, and thus considered more inefficient, in
turn justifying further privatizations.
Efficiency Elusive
It is often argued that privatization is needed as the government is inherently inefficient
and does not know how to run enterprises well. Incredibly, the government is expected to
subsidize privatized SOEs, which are presumed to be more efficient, in order to fulfil its
obligations to the citizenry.
Such obligations may not involve direct payments or transfers, but rather, lucrative
concessions to the privatized SOE. Thus, they may well make far more from these additional
concessions than the actual cost of fulfilling government obligations.
Thus, privatization of profitable enterprises or segments not only perpetuates exclusion of
the deserving, but also worsens overall public sector performance now encumbered with remaining
unprofitable obligations.
One consequence is poorer public sector performance, contributing to what appears to be a
self-fulfilling prophecy. To make matters worse, the public sector is then stuck with financing
the unprofitable, thus seemingly supporting to the privatization prophecy.
Benefits Accrue to Relatively Few
Privatization typically enriches the politically connected few who secure lucrative rents by
sacrificing the national or public interest for private profit, even when privatization may not
seem to benefit them.
Privatization in many developing and transition economies has primarily enriched these few
as the public interest is sacrificed to such powerful private business interests. This has, in
turn, exacerbated corruption, patronage and other related problems.
For example, following Russian voucher privatization and other Western recommended reforms,
for which there was a limited domestic constituency then, within three years (1992-1994), the
Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was
the greatest such recorded catastrophe in the last six millennia of recorded human history.
Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the
Russian economy; many then monetized their gains and invested abroad, migrating to follow their
new wealth. Much of this was celebrated by the Western media as economic progress.
As a rule of thumb, I'd say that any privatisations that require the introduction of
convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most
of their ongoing income from the public sector are likely to be contrary to the long-term
public interest. In the UK, unfortunately, all these ships sailed a long time ago
After the recent Chicago municipal elections, I wrote up some notes on the reasons for the
discontent. This article by Sundaram explains exactly how these schemes work. Further, you
can apply his criteria of subsidies for the rich, skimming, and disinheriting the middle
class and poor to all of the following instances in Chicago.
If I may–some for instances of how Sundaram's observations turn up in U.S.
cities:
Chicago is the proving grounds for thirty or so years of the Democrats' surrender to
neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is
the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of
Daley to undo and the work of the Clintonians to undo. It will take more than one term for
Lightfoot.
Consider:
–Parking meters and enforcement have been privatized, starving the city of funds and,
more importantly, of its police power.
–Taxes have been privatized in TIFs, where money goes and is never heard from
again.
–There have been attempts to privatize the park system in the form of the Lucas museum
and the current Obama Theme Park imbroglio, involving some fifty acres of park land.
–The school system has been looted and privatized. The Democrats are big fans of
charter schools (right, "Beto"), seeing them as ways to skim money off the middle class and
the poor.
–Fare collection on public transit has been privatized using a system so deliberately
rudimentary and so deliberately corrupt that it cannot tell you at point of service how much
you have paid as fare.
–Boeing was enticed to Chicago with tax breaks. Yes, that Boeing, the one that now
deliberately puts bad software in your airplane.
–Property tax assessment has been an opaque system and source of skimming for
lawyers.
–Zoning: Eddie Burke, pond scum, is just the top layer of pollution.
–And as we have made our descent, all of these economic dogmata have been enforced by
petty harassment of the citizenry (endless tickets) and an ever-brutal police force.
And yet: The current Republican Party also supports all of these policies, so let's not
pretend that a bunch of Mitch McConnell lookalikes are headed to Chicago to reform it.
Providing professional services i.e. architecture, engineering, etc. for a public entity,
local or federal, does not yield unreasonable profits. Typically, the public agencies have
their own staff to monitor and cost control a project. The professional services provided to
private developers yields far more profit- oftentimes twice the profits associated with
public agency work. Most professional services companies will transition their work to the
public agencies during a recession.
At any rate, especially in Illinois, privatizing the work to avoid pension liabilities is
no longer a choice. Michael Madigan pension promises will require the public to maintain a
public service budget with no staff to fill potholes. Essentially, these are the no work jobs
made popular by the Soprano crew twenty years ago.
Discussion of the downside of the privatization of public services is merely an
oscillation from discussing the weather, the Bears or any other kitchen table discussion
– nothing more than pleasant small talk to pass the time.
Privatization, at any cost, is no longer a choice. We have abused the pension system and
now the public must pay for private companies to provide the most basic services.
The question is, what can one do to help arrest this wholesale theft of public resources
and their expropriation into the hands of well connected. " Public", as in, it is the working
public over the last 100 or 200 years that created (or paid for), the electricity grid, or
public schools, or entire armed or police forces
I keep thinking that perhaps an Act could or should be introduced here in UK (same for the
States, i suppose), which should ensure that all politicians that enable any type of
privatisation of public resources or PFI arrangement (yes that old chesnut), should be made
personally responsible for the results therof.
And any losses to the public accidentally or "accidentally" occasioned by such
commandeering over public resources, to be treated like deliberate misappropriation by the
said public officials. With the financial and custodial penalties as may be appropriate.
Anybody out there with similar thoughts or should i really try harder and give up on
drugs?
I vociferously disagree with the assertion that the wrecking of pension funding in the
past is the reason we are forced to leave privatization schemes in place today.
In a similar vein, the are lots of private services that are suspiciously similar to
public utilities in terms of natural monopoly, such as cable TV, internet and even railroads.
Maybe these should be nationalized and treated more like public services. It can work when
they're adequately funded and oversight accountability has teeth; major airports are a good
example.
Let's not forget the privatization of the
Chicago Skyway , not once but twice.
Plus the state giveaways includes tens of millions of dollars each year in corporate tax
credits in the name of job creation. A report by the nonprofit " Good Jobs
First " revealed that over 300 Illinois companies are keeping the state taxes paid by
their employees. EDGE- the Economic Development in a Growing Economy is a corporate freebie
tax credit, which is partly from the state personal income taxes paid by workers. That's
right, the biggest welfare queens are the corporations collecting and keep their employees
state income tax payments.
Can it get worse? According to the
Chicago Trib , "The Chicago Mercantile Exchange (CME), for example, with billions of
untaxed contracts worth well over a quadrillion dollars, and whose profit margin in recent
years is higher than any of the top 100 companies in the nation, had the hubris to demand an
$85 million per year tax break. They got it." The money is there to secure the pensions and
budget but has been diverted to the corporate welfare queens for honoring us mere serfs with
their presence in the humble fiefdom of Illinois.
Paging Mike Madigan- The Institute on Taxation and Economic Policy lists Illinois as one
of the "Terrible Ten" most tax-regressive states, imposing a much higher rate on poor
residents for sales and excise taxes, property taxes and income taxes. Al Capone would be
proud of him.
Michael Hudson, to his immense credit, explains the pernicious effects of privatization of
common goods repeatedly throughout his work, and demonstrates that it has been with us at
least as long as the ancient practice of land alienation and rural usury.
Natural monopolies ought to be nationalised, full stop.
I support public ownership of natural monopolies, however it would be helpful if these
pieces contained data, case studies or footnoted entries providing some empirical evidence of
the author's thesis.
This article comes at a time when the clarion call for privatizing Eskom, SA's electricity
utility, is hitting deafening levels. To the private sector, efficiency = maximizing profits
by making the "bloated" enterprise lean (aka cutting the workforce) and quite literally mean
(aka cutting services to "unprofitable" segments of the market, iow, the poor and
vulnerable). When profits soar because the holy grail of efficiency is achieved, the
mainstream business press brings out the champagne and toasts this "success" as proof that
the previously "moribund" (they always exaggerate the state of things) monopolistic monolith
has been given a new lease on life by privatizing it and the template is set for rescuing
other "ailing" SOEs.
The drawbacks are never laid out as cleary as they are in this article and the plight of
those worst affected, whether laid-off workers or those whose services have been cut, never
makes it into the headlines.
And then there is prison privatization where the burden of operation and maintaining the
institution should clearly be on the public so as to be constant reminder of the burden,
among others reasons. The motivations by private prison operators to reduce services and
costs out of site of the pesky prying eyes of the public are manifold.
Privatization is a great way to avoid having user fees wasted by providing services, and
instead put to better use funding the re-election campaigns of politicians supporting
privatization. Plus, it provides much-needed consulting fees for former politicians as well
as job-creating 7-figure salaries for the CEOs,
(/snark, if you couldn't tell)
On a side note, the Dilbert comic strip is written about private industry ,
There was a rudimentary plan
put forward last June that recommended some pretty substantial privatizations of U.S.
government assets and services which include:
-Privatizing the US Post Office ( through an Initial Public Offering or outright sale to a
private entity ).
-Sell off U.S. government owned electricity transmission lines ( U.S. government owns 14% of
this nations power transmission lines through TVA, Southwestern Power Administration, Western
Area Power Administration, and Bonneville Power Administration ).
-Spin-off the Federal Aviation Administrations air traffic control operations into a private
nonprofit entity.
-Spin-off the Department of Transportations operations of the Saint Lawrence Seaways Locks
and Channels into a private non-profit entity.
-End the federal conservatorship of Fannie Mae and Freddie Mac, then regulate a new system of
private guarantors for their MBS securities.
At heart, the problem with privatization is that marketing to a government-employed
purchaser or "purchase influencer" is ridiculously cheap, due to their poor accountability
strictures.
This is abetted by the Katamari Damacy process (self-accretionary tendency) of money and
power.
In Oz the electricity grids were privatized as they would be cheaper that way – or
so people were told. Instead, the cost of electricity has risen sharply over the years to the
point that it is effecting elections on both the State and Federal level as the price hikes
are so controversial. A problem is that those companies have to pay back the loans used to
buy the public electricity grids and as well, the senior management award themselves sky-high
wages because they are totally worth it. These are factors that were never present when it
was publicly owned. And just to put the boot in, those very same companies have been
'gold-plating' the electricity grid for their gain-
Meanwhile, whatever money the governments made selling their electricity companies has
been long spent on white elephants or buying themselves re-elections by giving out goodies to
voters.
buying themselves re-elections by giving out goodies to voters.
I don't reside in the states, so I don't see much of the detail of daily life. What are
these "goodies" of which you speak? In what I am able to read on the internet, people aren't
being given goodies any more. At least the old-time politicians handed out jobs, and turkeys
at Christmas. The current crop do hand out jobs to their kids and immediate family, but not
so much to anyone else.
The county "poorhouse" in Lebanon County, PA over the years evolved into a bare-bones but
very well run nursing home with caring, long-term staff. The Republican county commissioners,
however, year after year, avoided raising taxes by underfunding the retirement plan for the
employees. Then, "suddenly" there was a crisis because the underfunding had become legally
untenable.
The solution was to sell the operation to a for-profit operator to fund the pansion plan
shortfall at the minimal level required legally. In the next contract, the new owner cut
health care and other benefits. The wages had always been minimal and he was free of the old
pension plan requirements.
The employees went on strike for many months, the owner brought in replacements from
companies that specialize in that service, until the employees had to cave in.
I had been counting on that facility when my sister was diagnosed with Alzheimers. I have
family that is able to step in so she is provided for. Many others in the county are not so
fortunate. Here are some staff comments: https://www.indeed.com/cmp/Cedar-Haven-Healthcare-Center/reviews?fcountry=ALL
" instead of trying to provide a public good to all, many [ordinary working people] are
excluded because it is not considered commercially viable or economic to serve them."
There are also social and class dimensions to the exclusion. Private Internet Service
Providers (ISPs) in the USA have made the "not commercially viable or economic to serve them"
argument for decades when pressed about their refusal to wire the entire country. Their
"business model" leaves millions without reliable broadband service in a variety of settings,
from rural areas and small towns to inner cities and low income suburbs. In many cases,
citizens in those areas have no access to broadband at all.
When small towns and counties in the US have taken the initiative to wire their
localities, the ISPs have bribed state legislatures to pass laws prohibiting public broadband
throughout the rest of the state. Talk about subversion of democracy! Insult to injury: the
ISPs who wailed about "unfair competition" to state legislators then refuse to wire areas
throughout the rest of the state.
Lack of universal and affordable broadband has two major effects:
➤ Local governments are shut out of economic opportunities because they lack
connectivity. They are unable to shepherd business startups and existing businesses that need
broadband to thrive. People move away. Businesses relocate or downsize. Local economies are
left with erroding tax bases and boarded up downtowns.
➤ Children and young people in "broadband deserts" cannot tap into the many sources
of learning that exist on the web. In particular, they don't have the opportunity to learn
anything about frontend or backend web development applications such as, html, php, Ruby on
Rails, Photoshop or Indesign.
That is one reason the US tech industry lacks workers from different backgrounds. Most
tech workers grew up in areas the ISPs considered "commercially viable". In addition, many
tech workers are self taught to some degree, even those with computer science degrees. It is
difficult to be self taught if you lack access to the most basic resources and tools.
America's revolution to a socialist, government-planned society complete with reserve currency helicopter money also known as
"MMT", may or may not be successful but it certainly will be attempted, and every moment will be not only televised but also tweeted.
On Thursday morning, Visa and MasterCard tumbled after the democratic party's "progressive" socialist wing consisting of Bernie
Sanders and Alexandria Ocasio-Cortez, announced they would introduce legislation on Thursday to cap credit card interest rates at
15%, a sharp drop from current levels . The proposal follows not long after AOC also proposed the "Green New Deal" - which among
its various policy proposals urged to give a generous and recurring cash handout to any and every American, regardless if they work
or not, and which according to analysts would cost the US as much as $100 trillion over the next several years.
In addition to a 15% federal cap on interest rates, states could establish their own lower limits, under the legislation.
Sanders, the socialist Vermont senator running for the Democratic nomination for president, told the WaPo in an interview that
a decade after taxpayers bailed out big banks, the industry is taking advantage of the public by charging exorbitant rates. " Wall
Street today makes tens of billions from people at outrageous interest rates," he said.
Ocasio-Cortez, the socialist New York representative who is expected to run for the Democratic nomination for president as soon
as she is eligible, will introduce the House version of the bill.
According to some, the proposal is quite timely, and comes just as credit card rates recently hit an all time high despite artificially
low interest rates, according to Creditcards.com, which has been tracking the data since 2007 and compiles data from 100 popular
cards. The median interest rate was 21.36% last week compared with 20.24% about a year ago and 12.62% about a decade ago, according
to the website.
Rates have been rising fastest for those with the lowest credit scores , said Ted Rossman, an industry analyst for Creditcards.com.
"Issuers are taking an opportunity to charge people with lesser credit a bit more," he said.
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For borrowers with high credit scores the average rate was 17.73 percent last week compared with 16.71 percent a year ago. For
those with poor credit scores, the average is now about 24.99 percent compared with 23.77 percent a year ago. The difference in the
increase is about 20 basis points higher for customers with a low credit score. A basis point is a common way to measure changes
in percentages.
"It may not sound like that much, but that is just in one year," Rossman said. And even small increases in rates can be crippling
to a cash strapped borrower, he said. "It is the ultimate slap in the face when you're already down."
That may well be, but we wonder what Sanders and AOC will do when the bulk of their supporters, those with the lowest credit rating
and by implication paying the highest interest rates - are de-carded as credit card companies tighten standards "just enough" to
eliminate all those who would be in the 15%+ interest universe anyway . Will they then force credit card companies to issue cheap
(or free) debt to anyone? Inquiring minds want to know...
Meanwhile, considering that in a time of inverted yield curves banks are scrambling for every dollar in interest income, the proposal
is expected to meet stern resistance from the banking industry, which brought in $113 billion in interest and fees from credit cards
last year, up 35 percent since 2012, according to S&P Global Market Intelligence. It also has zero chance of passing the Senate for
at least the next two years, where Republicans hold the majority.
"I am sure it will be criticized," Sanders said of the legislation. "I have a radical idea: Maybe Congress should stand up for
ordinary people."
Quoted
by the WaPo , the 15 percent cap would be the same as the one Congress imposed on credit unions in 1980, Sanders said. (The National
Credit Union Administration, the industry's regulator, raised that cap to 18 percent in 1987 and has repeatedly renewed it at that
higher level.)
Subprime consumers would discover their credit lines would be eliminated overnight. Could create a wave of bankruptcies in
short order. If they really want to crack down they need to start tinkering with the rates these payday loan companies charge.
Interest rate reflects that credit card debt is unsecured. If you cap it, most people will simply not have access to credit
cards as the banks won't take the risk. Next, there will be a bill that ensures everyone has a credit card. Going into debt is
an American past time, right?
Sure, lowering the interest rates banks can charge on credit cards is a good idea - at first glance - but, in reality, it is
simply another "gatekeeper" move. That means addressing a symptom of an issue, rather than it's real causative reason for existing.
The central banking system, and the banks it controls internationally, including the Fed and headquartered in Basil, Switzerland
- is a criminal enterprise designed to transfer the wealth of sovereign nations into the pockets of a tiny minority of fiends,
and in the process, handing over all power to govern victim nations - through the influence of money in politics. This tiny group
of very sick people are behind 90% of the misery and death in this world - including all wars and profits derived therein. Since
they also control the media they have also foisted an incredibly successful mind control program on their victims. Here in the
US, people run around after whatever the latest "big story" is purported to be - always making sure to box themselves into their
manufactured personalities, repeating what they have been programmed to say. Everyone is watching the giant circus, and misses
the machinations of profound evil - resulting in horrific consequences for all life on Earth.
The Fed and the banks need to exposed for what they are and destroyed, and the fiends behind them exposed, stripped of all
assets, and sentenced to hard labor. Unfortunately, the US government and it's various branches of "justice" is owned by said
fiends and would have to be overthrown to do what needs to be done.
"... Current Establishment Survey (CES) Report ..."
"... Current Population Survey (CPS ..."
"... The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35 hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs are growing by 155,000. So which report is accurate? How can full time jobs be declining by 191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small number of full time jobs as a share of the total labor force appears as a fall in the unemployment rate for full time workers. Looked at another way, employers may be converting full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time jobs increase. ..."
"... The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of 646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000 suggests large numbers of workers are dropping out of the labor force (a technicality that actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor Force' totals. In other words, a million–or at least a large percentage of a million–workers have left the labor force. This too is not an indication of a strong labor market and contradicts the 263,000 and U-3 3.6% unemployment rate. ..."
"... Whether jobs, wages or GDP stats, the message here is that official US economic stats, especially labor market stats, should be read critically and not taken for face value, especially when hyped by the media and press. The media pumps selective indicators that make the economy appear better than it actually is. Labor Dept. methods and data used today have not caught up with the various fundamental changes in the labor markets, and are therefore increasingly suspect. It is not a question of outright falsification of stats. It's about failure to evolve data and methodologies to reflect the real changes in the economy. ..."
"... Government stats are as much an 'art' (of obfuscation) as they are a science. They produce often contradictory indication of the true state of the economy, jobs and wages. Readers need to look at the 'whole picture', not just the convenient, selective media reported data like Establishment survey job creation and U-3 unemployment rates. ..."
The recently released report on April jobs on first appearance, heavily reported by the
media, shows a record low 3.6% unemployment rate and another month of 263,000 new jobs created.
But there are two official US Labor dept. jobs reports, and the second shows a jobs market much
weaker than the selective, 'cherry picked' indicators on unemployment and jobs creation noted
above that are typically featured by the press.
Problems with the April Jobs Report
While the Current Establishment Survey (CES) Report (covering large businesses)
shows 263,000 jobs created last month, the Current Population Survey (CPS ) second
Labor Dept. report (that covers smaller businesses) shows 155,000 of these jobs were
involuntary part time. This high proportion (155,000 of 263,000) suggests the job creation
number is likely second and third jobs being created. Nor does it reflect actual new workers
being newly employed. The number is for new jobs, not newly employed workers. Moreover, it's
mostly part time and temp or low paid jobs, likely workers taking on second and third jobs.
Even more contradictory, the second CPS report shows that full time work jobs actually
declined last month by 191,000. (And the month before, March, by an even more 228,000 full time
jobs decline).
The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35
hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs
are growing by 155,000. So which report is accurate? How can full time jobs be declining by
191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full
time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small
number of full time jobs as a share of the total labor force appears as a fall in the
unemployment rate for full time workers. Looked at another way, employers may be converting
full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time
jobs increase.
And there's a further problem with the part time jobs being created: It also appears that
the 155,000 part time jobs created last month may be heavily weighted with the government
hiring part timers to start the work on the 2020 census–typically hiring of which starts
in April of the preceding year of the census. (Check out the Labor Dept. numbers preceding the
prior 2010 census, for April 2009, for the same development a decade ago).
Another partial explanation is that the 155,000 part time job gains last month (and in prior
months in 2019) reflect tens of thousands of workers a month who are being forced onto the
labor market now every month, as a result of US courts recent decisions now forcing workers who
were formerly receiving social security disability benefits (1 million more since 2010) back
into the labor market.
The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further
questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of
646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000
suggests large numbers of workers are dropping out of the labor force (a technicality that
actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the
previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor
Force' totals. In other words, a million–or at least a large percentage of a
million–workers have left the labor force. This too is not an indication of a strong
labor market and contradicts the 263,000 and U-3 3.6% unemployment rate.
Bottom line, the U-3 unemployment rate is basically a worthless indicator of the condition
of the US jobs market; and the 263,000 CES (Establishment Survey) jobs is contradicted by the
Labor Dept's second CPS survey (Population Survey).
GDP & Rising Wages Revisited
In two previous shows, the limits and contradictions (and thus a deeper explanations) of US
government GDP and wage statistics were featured: See the immediate April 26, 2019 Alternative
Visions show on preliminary US GDP numbers for the 1st quarter 2019, where it was shown how the
Trump trade war with China, soon coming to an end, is largely behind the GDP latest numbers;
and that the more fundamental forces underlying the US economy involving household consumption
and real business investment are actually slowing and stagnating. Or listen to my prior radio
show earlier this year where media claims that US wages are now rising is debunked as well.
Claims of wages rising are similarly misrepresented when a deeper analysis shows the
proclaimed wage gains are, once again, skewed to the high end of the wage structure and reflect
wages for salaried managers and high end professionals by estimating 'averages' and limiting
data analysis to full time workers once again; not covering wages for part time and temp
workers; not counting collapse of deferred and social wages (pension and social security
payments); and underestimating inflation so that real wages appear larger than otherwise.
Independent sources estimate more than half of all US workers received no wage increase
whatsoever in 2018–suggesting once again the gains are being driven by the top 10% and
assumptions of averages that distort the actual wage gains that are much more modest, if at
all.
Ditto for GDP analysis and inflation underestimation using the special price index for GDP
(the GDP deflator), and the various re-definitions of GDP categories made in recent years and
questionable on-going GDP assumptions, such as including in GDP calculation the questionable
inclusion of 50 million homeowners supposedly paying themselves a 'rent equivalent'.
A more accurate 'truth' about jobs, wages, and GDP stats is found in the 'fine print' of
definitions and understanding the weak statistical methodologies that change the raw economic
data on wages, jobs, and economic output (GDP) into acceptable numbers for media promotion.
Whether jobs, wages or GDP stats, the message here is that official US economic stats,
especially labor market stats, should be read critically and not taken for face value,
especially when hyped by the media and press. The media pumps selective indicators that make
the economy appear better than it actually is. Labor Dept. methods and data used today have not
caught up with the various fundamental changes in the labor markets, and are therefore
increasingly suspect. It is not a question of outright falsification of stats. It's about
failure to evolve data and methodologies to reflect the real changes in the economy.
Government stats are as much an 'art' (of obfuscation) as they are a science. They
produce often contradictory indication of the true state of the economy, jobs and wages.
Readers need to look at the 'whole picture', not just the convenient, selective media reported
data like Establishment survey job creation and U-3 unemployment rates.
When so doing, the bigger picture is an US economy being held up by temporary factors (trade
war) soon to dissipate; jobs creation driven by part time work as full time jobs continue
structurally to disappear; and wages that are being driven by certain industries (tech, etc.),
high end employment (managers, professionals), occasional low end minimum wage hikes in select
geographies, and broad categories of 'wages' ignored.
Jack Rasmus is author of the recently published book, 'Central Bankers at the
End of Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He
blogs at jackrasmus.com and his twitter
handle is @drjackrasmus. His website is http://kyklosproductions.com .
"... I don't think the US government should use operating systems made in China for the same reason that most governments shouldn't use operating systems made in the US and in fact we just got proof since Microsoft is now known to be telling the NSA about bugs in Windows before it fixes them. ..."
"... All the major western tech companies cooperate with the western security services. In Murder in Samarkand I gave the first public revelation that the government can and does listen through your mobile phone microphone even when the phone is ostensibly switched off, a fact that got almost no traction until Edward Snowden released documents confirming it six years later. China is full of western devices with backdoors that are exploited by western intelligence. That the tables turn as Chinese technology advances is scarcely surprising. ..."
Theresa May almost certainly sacked Gavin Williamson not just on the basis of a telephone billing record showing he had a phone
call with a Telegraph journalist, but on the basis of a recording of the conversation itself.
It astonishes me that still, after Snowden and his
PRISM revelations, after Wikileaks
Vault 7 releases , and after numerous other sources including
my own humble contribution, people still manage to avoid the cognitive dissonance that goes with really understanding how much we
are surveilled and listened to. Even Cabinet Ministers manage
to pretend
to themselves it is not happening.
The budget of the NSA, which does nothing else but communications intercept, is US $14.2 billion this year. Think about that enormous
sum, devoted to just communications surveillance, and what it can achieve. The budget of the UK equivalent, GCHQ, is Ł1.2 billion,
of which about 10% is paid by the NSA. Domestic surveillance in the UK has been vastly expanded and many taboos broken. But the bedrock
of the system with regard to domestic intercepts is still that legal restrictions are dodged, as the USA's NSA spies on UK citizens
while the UK's GCHQ spies on US citizens, and then the information is swapped. It was thus probably the NSA that harvested Williamson's
phone call, passing the details on. Given official US opposition to the UK employing Huawei technology, Williamson's call would have
been a "legitimate" NSA target.
Mass surveillance works on electronic harvesting. Targeted phone numbers apart, millions of essentially random calls are listened
to electronically using voice recognition technology and certain key words trigger an escalation of the call. Williamson's call discussing
Huawei, China, the intelligence services, and backdoors would certainly have triggered recording and been marked up to a human listener,
even if his phone was not specifically targeted by the Americans – which it almost certainly was.
Williamson of course is relying on the security services' secrecy about their methods to maintain his protests of innocence, secure
in the knowledge that the recording of him would not be produced. The existence of the recording – of which I am extremely confident
– is the only possible explanation for May's degree of certainty and swift action against one of her very few loyal allies.
All of which of course throws into stark relief the stunning hypocrisy of those who are worried that Huawei will be used for electronic
eavesdropping, when they are up to their ears in electronic eavesdropping themselves. One of my heroes is the great Richard Stallman,
who put it this way six years ago:
RMS: Well, it's perfectly reasonable suspicion to me. I don't think the US government should use operating systems made in
China for the same reason that most governments shouldn't use operating systems made in the US and in fact we just got proof since
Microsoft is now known to be telling the NSA about bugs in Windows before it fixes them.
RSS: I was just going to bring this up exactly, so I was saying that the NSA recently received notifications about the zero-day
holes in advance and [incomprehensible] the NSA and the CIA to just crack PCs abroad for espionage purposes.
RMS: Now, [incomprehensible] that this proves my point, which is that you have to be nuts if you were some other country and
using Windows on your computers. But, you know, given that Windows has a universal back door in it, Microsoft would hardly need
to tell the NSA about any bugs, it can tell the NSA about the mal-feature of the universal back door and that would be enough
for the NSA to attack any computer running Windows, which unfortunately is a large fraction of them.
All the major western tech companies cooperate with the western security services. In Murder in Samarkand I gave the first public
revelation that the government can and does listen through your mobile phone microphone
even when the phone is ostensibly switched off, a fact that got almost no traction until Edward Snowden released documents confirming
it six years later. China is full of western devices with backdoors that are exploited by western intelligence. That the tables turn
as Chinese technology advances is scarcely surprising.
Personally I do not want the Chinese, Americans, Russians or British eavesdropping on me, or on each other, and I wish that they
would stop. The spy games will of course continue, as they make money for a lot of well-connected people. But for any side to claim
moral superiority in all of this is just nonsense.
Stephen K. Bannon served as chief strategist for President Trump from January 2017 to
August 2017.
Getting tough with China to bring manufacturing jobs back to the United States was the
linchpin of President Trump's electoral march through the Rust Belt during his 2016 victory.
Today, the goal of the radical cadre running China -- the Chinese Communist Party (CCP) -- is
to be the global hegemonic power. The president's threatened
tariffs on Sunday demonstrate the severity of this threat. But as Washington and Beijing
wrap up months of negotiations on a trade deal this month, whatever emerges won't be a trade
deal. It will be a temporary truce in a years-long economic and strategic war with China.
These are six "understandings" that highlight why it is futile to compromise with this
regime.
The first understanding : The CCP has been waging economic war against industrial
democracies ever since China joined the World Trade Organization (WTO) in 2001, and now China
has emerged as the greatest economic and national security threat the United States has ever
faced.
As a framework for the current trade talks, China must agree to end forced technology
transfers; intellectual property theft; cyberintrusions into business networks; currency
manipulation; high tariff and nontariff barriers; and unfair subsidies to state-owned
enterprises. However, if the CCP agrees to the United States' demands in an enforceable manner,
it would amount to a legal and regulatory dismantling of Chinese state capitalism.
The second understanding : The trade deal under negotiation this month is not a deal between
two similar systems seeking closer ties, as its cheerleaders on Wall Street and in the media
and academia argue. Rather, this is a fundamental clash between two radically different
economic models.
The best U.S. result is a detailed document in which China renounces its predatory,
confiscatory and mercantilist practices while providing ample means to monitor and promptly
enforce the agreement.
The best CCP result is to get the tariffs lifted by filing reams of paper with false,
unenforceable promises that will allow it to run out the clock on the Trump administration and
hope for a less antagonistic Democratic alternative.
The third understanding : Chinese state capitalism is highly profitable for its owners --
the members of the CCP. Stagnant state-owned enterprises gain a competitive edge through
massive government subsidies and the cost savings won by stealing the intellectual property,
technology and innovations of foreigners.
If China halted such grand theft, its enterprises would be rapidly outcompeted by the
Germans, South Koreans, Japanese and especially the United States.
This fact explains much about internal Chinese politics today. President Xi Jinping faces a
palace sharply divided between reformers led by chief trade negotiator Liu He and a swarm of
hawks who have profited and gained power from the status quo. Within China itself, it is both
gallows humor and even money as to whether Liu He will be celebrated as the next Deng Xiaoping
or end up in a Chinese gulag.
The fourth understanding : Trump advisers inside and outside the White House are playing on
the president's well-earned pride in a rising stock market and a fear he might lose the Farm
Belt to try to box him into a weak deal. But it is a decidedly false narrative that any failure
to reach a deal will lead to a market meltdown and economic implosion.
In fact, there is no better argument for Trump keeping his bold tariffs on China than the
latest report that the U.S. economy grew at an annualized rate of 3.2 percent
in the first quarter .
Anything less than a great deal will subject the president to relentless criticism from the
Charles E. Schumer and Bernie Sanders wings of the Democratic Party. In addition, Sens. Marco
Rubio (R-Fla.) and Ted Cruz (R-Tex.) might use it to get to the right of Trump on China --
potentially setting up a later primary challenge. For these reasons, the president's best
political option is not to surrender, but rather, to double down on the tariffs -- they have
been highly effective in pressuring the Chinese without harming the U.S. economy.
The fifth understanding : Even the toughest agreement needs effective monitoring, which is
difficult even with accommodating partners and perhaps impossible with China. The danger is for
the president to sign what appears to be a reasonable deal and find out several years later
that the United States was hoodwinked.
The United States failed to adequately monitor China's entry into the WTO in 2001. Instead
of access to a billion Chinese consumers, the United States lost more than 5 million
manufacturing jobs since 2000.
The sixth understanding : The world now bears witness to a rapidly militarizing totalitarian
state imprisoning
millions in work camps; persecuting Uighurs, Christians and Buddhists; and spying on, and
enslaving, its own population.
This is history in real time; and the world is a house divided -- half slave, half free.
Trump and Xi are facing off to tip the scales in one direction or the other. One way leads to
the benefits of freedom, democracy and free-market capitalism. The other leads to a
totalitarian and mercantilist power run on state capitalism with Chinese characteristics.
The United States' fight is not with the Chinese people but with the CCP. The Chinese people
are the first and continuous victims of this barbarous regime.
The central issues that must be faced are China's intentions on the world stage and what
those ambitions mean for U.S. prosperity. With our country at a crossroads, it is more
important than ever that Trump follow his instincts and not soften his stance against the
greatest existential threat ever faced by the United States.
1. China must agree to end forced technology transfers; intellectual property theft;
cyberintrusions into business networks; currency manipulation; high tariff and nontariff
barriers; and unfair subsidies to state-owned enterprises.
In the good 'ol USA, we refer to this as "corporate welfare", direct federal subsidies (eg
farm subsidies), MIC and government 'no-bid defense' contract, oil depletion allowance, tax
credits and other tax incentives such as accelerated depreciation, dividend tax, Advanced
Technology Program, federal land giveways, local & state land & tax "incentive"
giveways, carried interest, welfare and food stamp costs paid to employees of companies like
Walmart and McDonalds (because employee wages for full time employment fall below poverty
level), the clunker auto subsidy program to bail out US auto companies, the mortgage interest
deduction, and more. The cherry on top is, of course, the trillions of dollars in TARP and QE
given to giant banks to bail out Wall Street.
For all the hot air, it appears that reciprocity is not really what Steve has in mind.
2. The best U.S. result is a detailed document in which China renounces its predatory,
confiscatory and mercantilist practices while providing ample means to monitor and promptly
enforce the agreement.
Steve? Steve?? Are you aware that the U.S. is currently trying to economically strangle
countries all over the world with economic sanctions? Venezuela. Cuba. Syria. Iran.
Russia.North Korea. Lebanon. Yemen. And if economic sanctions don't work, we bomb them. Iraq.
Afghanistan. Libya. Syria.
3. by stealing the intellectual property, technology and innovations of
foreigners.
Libya's gold "disappeared". As did much of Iraq's gold. And the Bank of England, citing
U.S. sanctions as its legal fig leaf, confiscated $1.2 billion of Venezuelan gold. As to
stealing technology, no one does it better than Uncle Same: Vault 7 and Stuxnet are prime
examples of US spying on foreign technology companies.
4. But it is a decidedly false narrative that any failure to reach a deal will lead to
a market meltdown and economic implosion.
I dunno. I'm hearing a lot of very unhappy muttering in the rural Midwest, where I live. I
think we're facing the very real possibility of a large-scale Trumpian economic disaster, due
to his trade war, negative trending macoeconomic indicators, the unbelievable Trumpian debt
(the biggest debt in the history of the galaxy, putting Obama and Bush Jr., and even WWII
debt to shame), and the looming loss of the dollar's world reserve currency status. Toss in a
global recession, to boot. This feels like "implosion" to me.
5. Instead of access to a billion Chinese consumers, the United States lost more than 5
million manufacturing jobs since 2000.
Typical capitalist hypocrisy. We demand free markets for other people. Never for
ourselves. Many American companies have been doing fine selling to "a billion Chinese
consumers". The problem is, Americans participating in the free market often choose Chinese
goods.
Not only are you full of hot air, Steve-- you and Bolton and the rest of Trump's
Israel-first neocon apologists are effectively destroying our economy and our country. When
the very likely "implosion" does occur, watch the rats (hate to use that metaphor, since the
lowest mangy flea-bitten rat is better than any neocon) scurry for the exits, blaming
everyone but themselves.
Who is Steve Bannon going to blame? Ocasio-Cortez, who else?
Understanding the core nature of China is important to comprehend the lack of flexibility
ingrained in their system. This comes in the ideology that directs its actions. China is
still very much a communist country, and the Chinese Communist Party (CCP) controls
everything. While it may appear both State-owned and private firms operate within China's
economic system. This is mostly an illusion following economic reforms in the 1980s.
In reality, the communist system does not allow for true private ownership and views all
"tech innovation" as essential to its national interests. Thus, private and state-owned
Chinese firms act in the interest of the Chinese regime when it comes to foreign investments
in the high-tech sectors. Below is the second part of a part-two series which explores why
China is on a one-track path and blind to other options going forward. This is a recipe for
conflict.
What pisses me off is the fact that pretty much every western company has decided to
manufacture in China.
My Mrs bought me a coat today. A nice snazzy Italian brand. Then looking at the label it
says made in China. So it's not an Italian coat at all. It's a Chinese coat with Italian
branding.
Burberry do the same thing. They can basically charge whatever they want for coats, and as
a consumer you buy into that British heritage . Low and behold their stuff is made in
China.
Perhaps we should slap the tariffs (I'm not a fan of tariffs BTW,) on the western
companies that continue to outsource to China .
The ceding of national interests, without the wilful, knowing consent of both political
parties, and citizens believing they could simply vote their way out of this or that brand of
swamp, could never have been accomplished ..
The story of the scorpion, and the frog, crossing the river ..
After much pleading by the scorpion, the frog did give the scorpion a lift to safely cross
the river, and after being bitten during the crossing, frog crys out "but you promised you
would not bite me!!"
Scorpion replys, " you knew what i was when you picked me up .. "
The story of the American body politic, on steroids the last 40 -50 years ..
That is exactly what happened. The murican and other corporations moved to the larger
consumer markets for their products, Asia. China has moar than 3 times the population of
murica. Labour is plenty, wages are low, no benefits or overtime. 12 hour days or moar is the
norm there. It's not China that people should be blaming for the transition to manufacture
there. The corporations are all about profits. They care less about you and yoar family or
jobs for you. The corporations are making money like never before. GM sells 3 times as many
cars in China than in murica. It costs money to ship over seas, cheaper to move manufacturing
to where the demand is.
China also has a growing middle class that will be big consumers of goods, whereas murica
has a decling middle class and retiring baby boomers. Murica is in decay. Neglected
infrastructure, dying cities, NY, Baltimore, Seattle, Detroit, Chicago, SanFran, farms are
over producing and need social welfare from tax payers, high consumer debts, low consumption
of goods. Car manufacturers will be back at the Fed window for free tax payers money to avert
total bankruptcy. We've seen this play before and here we are again.
Murica is bankrupt. This is why the banks around the world are buying gold reserves. All
currencies eventually become worthless paper for fire starting or heating in winter. There is
no currency that ever exceeded 100 yrs. as money. Gold has been money for thousands of
years.
Economies work best when currencies are stable in value. Once we know what the goal is, we
then look for a way to achieve it and the best way has always been to base a currency on
gold. Nobody has found a better way, even in the form of a proposal and nobody has ever
needed to find a better way, because gold has always worked very well.
The fight is actually with America's own politicians and corporations. They sold out
America long ago. The Chinese trade differently. They don't have to bomb. It's really too bad
what American democracy stands for today around the world. Nobody wants anything to do with
it and gradually they're dumping it.
British and Roman empires were not much different towards the end of their rein. They
become complacent and arrogant towards other countries. Eventually they run out of friends,
then start woars to rape and pillage gold, silver and resources. An attempt to sustain the
costs of maintaining their exuberant life style and military around the globe. Rome at first
started debasing their gold and silver money. Once trading partners realized their coins were
not pure, they called the empire a fraud and didn't want to trade with the crooks. Woar
ensued.
what a dumbass. bannon represents the wacko christian wing of the zionazi party.
usa oligarchy greed did this to the american people. the chinese happily cooperated likely
wondering how they were being screwed because the usa policy was so stupid. the usa made the
mistake of thinking the chinese would roll over like the japanese and koreans did, once the
spice started flowing.
the chinese don't have to give anything because the usa screwed itself so badly they need
china to keep producing crap for the usa because there is no competitive alternative either
by other countries to fill the gap and certainly not with a built from scratch usa
manufacturing sector. the usa is so stupid it has foreign countries make critical military
tech parts to maximize profit for mic.
does bannon really think the chinese people won't riot if they are unhappy with .gov? does
he remember tianemen square? it's american people who won't do anything about .gov and the
oligarchs screwing them.
according to bannon it is okay for the usa to kill millions of muslims and christians in
the mid east for jewland and the zionazis but wrong for china to control their influence in
china?
bannon's calling is a homeless alchy. he fits the part with lunatic rants and his
appearance.
The problem here isn't the WTO, it's the WTC. Bannon says China entered the WTO in 2001
and have been criminals ever since. Also in 2001 the Neocons started their insane wars after
blowing up the WTC and have been criminals ever since. Eighteen years of pissing away cash
and not minding the store - and these lunatics are back in the White House. Anybody hoping
for a happy ending with China is just as nuts.
You fat ******* zio-slob/slut troll. It may have been a good idea if it were just about
trade and you are willing to actually seek a mutually beneficial compromise, but when you are
also poking them militarily it changes the dynamics of the successful negotiations and
cooperation. Who wants to do a deal with someone who continually sends warships up and down
your coastline in engaging in provactive actions
Bannon has got some screws loose in the head. Getting tough with China isn't going to
bring manufacturing jobs back to the United States for ten reasons:
1. Those jobs have nowhere in the U.S. to come home to. Most of the factories have been
shut down and demolished years ago.
2. American workers have been out of the loop for so long, that they are basically
unskilled and untrained at this point...... all 95.5 million of them!
3. The fight isn't against China, as it is against corporate America. Corporate America
doesn't want to pay the higher wages or benefits here. That is why they went hunting for the
cheap labor in China in the first place. It's not China's fault!
4. America's entire tax system stinks and its predatory. There is nothing that is going to
make those businesses in China go to America , particularly when China is offering those same
companies tax incentives to stay.
5. China's transportation infrastructure is far better than America's. America's road
system is now a full 40 years behind China's, and America's rail system is 75 years behind
China's. Air transportation is about the same as the U.S., but China has the better airports
for handling large number of passengers and freight. Maritime shipping is first rate all the
way, the U.S. can't hardly touch them in moving freight overseas.
6. The United States routinely blocks the World Trade Organization's appointments of
judges who could rule on tariffs, because the U.S. wants to load the dice in their favor at
the WTO. Companies are often used as captive hostages by the U.S.,. Not the case with
China.
7. The U.S. has a notoriety for not honoring any treaty it signs. The WTO has cited the
U.S. as undisciplined, and the decision of whether to comply with international legal
obligations varies depending on which domestic political actors are engaged in the policy
process. Some American institutions are more likely to supply compliance than others. Why
would any company want to come to America without any assurances in governing trade rules or
a hostile political environment that turns on a dime?
8. China is the ideal place for emerging markets. It has access to lots of different
manufacturing for emerging businesses, something the U.S. lacks these days.
9. China has economic free zones, like Shanghai, Hong Kong, Macau, etc.,. The U.S. has
nothing to compare.
10. China's main priority has been shifted from expansion to stability. By stability, what
is implied is demand that is internal, rather than external, and that requires a focus on the
consumer. This could represent an opportunity for businesses that invest in the opportunity
to sell goods in the country. As it stands now, there is really no reason for a company in
China to come to the U.S., because every American is maxed out on credit and doesn't have the
money to buy anything. Why set up a business in the U.S. when the U.S. economy is in imminent
danger of collapsing over night, and becoming a casualty???
This is another false (fraudulent non-existent choice) being presented by the global so
called but no longer existent elite. U.S. vs China. It doesn't make any difference whether it
is the corporations presenting the false choice or the so called deep state. Either way it
has no truth and therefore no value.
As I've provided extensive facts and evidence as details on both sides all governments are
full of traitors. Traitors both foreign, domestic and international. Any future global
attempt at government will never consist of any of these two places or any other since all
others continue to fail in their own right to take the appropriate actions in their own
governments or against those that are attempting to implement wholly criminal operations
internationally.
Very little of the Chinese technology was stolen by them. It was freely given by US
universities getting big bucks to fill seats and US corporations looking to boost executives
pay and perks, plus offloading the headaches they were getting paid big bucks to solve, by
offshoring to China. As evidenced by the recent tax cut for corporations and the funds they
brought back from overseas bringing back or creating jobs in the US is a pipe dream. Your
CEO's thought it was more important to feather their nests, and in many cases putting their
company into hock, to buy back their stock. Raises or funds for R&D? Fuggeddaboutit. With
China in the cross hairs the captains of industry are sailing to other shitholes for their
stuff rather than the US. Don't blame the Chinese for the "best and brightest" selling the US
down the drain to enrich themselves. One of the many reasons the US is circling drain due to
self inflicted hurt is the whole country from top to bottom wants **** and they want it now
no matter what it takes whether it be power, riches, or both.
Trump continued tweeting on the trade situation Monday. "The United States has been losing,
for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion
Dollars. Sorry, we're not going to be doing that anymore!" he wrote.
"Risks of a full blown trade war are escalating," Chua Hak Bin, a senior economist at
Maybank Kim Eng Research Pte. in Singapore, said before the ministry's announcement. "Trump's
threat may backfire as China will not want to negotiate with a gun pointing at their
heads."
... ... ...
China was considering delaying a U.S. trip this week by a trade delegation led by Vice
Premier Liu He after Trump's tariff threat, according to people familiar with the matter. Liu
and about 100 other officials had been scheduled to arrive Wednesday for what was shaping up to
be the final round of negotiations.
The two sides have been locked in intense negotiations since last year for an agreement to
address U.S. concerns over China's trade surplus, alleged theft of intellectual property and
forced technology transfers. Trump and Xi agreed to a tariff truce on Dec. 1 to allow senior
officials time to negotiate.
... ... ...
White House economic adviser Larry Kudlow said on Fox News that the president was "issuing a
warning." While "great progress" has been made in the talks, structural and enforcement issues
remained, he said.
... ... ...
Trump imposed duties of 25 percent on an initial $50 billion of Chinese goods last year and
then 10 percent on an additional $200 billion in products in September. Those duties were set
to rise to 25 percent on Jan. 1 and then again on March 1, but Trump delayed that as talks
continued. China has imposed tariffs on $110 billion of U.S. exports in retaliation and
repeatedly warned it would counter tariffs with actions of its own.
That means there's a risk China would counter any extension of U.S. levies, though the
smaller size of its imports may constrain its ability to do so.
"China isn't likely to make concessions that the U.S. want with a big stick hanging over its
head," said Zhou Xiaoming, a former Ministry of Commerce official and diplomat. "If the tariffs
that Trump threatens are implemented on Friday, China has to respond."
So much for months and months of constant leaks, headlines, tweets, and press reports that
US-China trade talks are going great, and are imminent amid an ocean of "optimism" (meant
solely to sucker in amateurs into the most obvious bull headfake since 1987).
Just after noon on Sunday, President Trump tweeted that 10% tariffs paid by China on $200
billion in goods will rise to 25% on Friday, and that - contrary to what he himself and his
chief economist, Larry Kudlow has said for months, talks on a trade deal have been going too
slowly.
And, just to underscore his point, Trump also threatened to impose 25% tariffs on an
additional $325 billion of Chinese goods "shortly."
With the tariff rate on numerous goods originally set at 10% and set to more than double in
2019, Trump postponed that decision after China and the US agreed to sit down for trade talks;
following Trump's tweet it is now confirmed that trade talks have hit an impasse and that
escalation will be needed to break the stalemate.
It was as recently as Friday that Vice President Mike Pence told CNBC that Trump remained
hopeful that he could strike a deal with China (at the same time as he was urging for a rate
cut from the Fed).
Curiously, on Wednesday, the White House - clearly hoping to sucker in even more naive bulls
to buy stocks at all time highs - said the latest round of talks had moved Beijing and
Washington closer to an agreement. Press secretary Sarah Sanders said, "Discussions remain
focused toward making substantial progress on important structural issues and re-balancing the
US-China trade relationship."
In recent weeks there were multiple reports that China and U.S. were close to a trade deal,
and an agreement could come as soon as Friday. Major sticking points the U.S. and China have
been intellectual property theft and forced technology transfers. There has also been
disagreement as to whether tariffs be removed or remain in place as an enforcement
mechanism.
While it was not clear why Trump has decided to escalate his tariff policy, the most obvious
explanation is that for a White House, which has been obsessed with pushing the S&P to
record levels, this was the last lever it had at its disposal. And now that the S&P is back
at all time highs, the lies can end, if only for the time being.
Meanwhile, crickets about the border/invasion situation, even here on ZH articles. From an
off-duty, decompressing senior border patrol guy I happened to meet - El Paso alone has had
over half a million "migrants" come thru seeking "asylum". They are releasing about 2000 a
week into the US, leasing buildings, including a Las Cruces high school for the weekend to
stage them. he said unusual number of Cubans, maybe from VZ. Lots of sickness/disease, he
personally saw flesh-eating infections, dying AIDS patients, children accompanied by unknown
males. Already 90% who had court hearings were no-shows. They've found cutoff ankle monitors
at airports.Their hands are tied by archaic laws and a (((congress))) unwilling to do ****
about it. The **** governor of NM, Lujan-Grisham ****-blocking any effort to stem the tide.
But articles about giant meteors, James Woods, Russia-gate, China, etc, etc ad nauseum.
Sorry for the hi-jack. The globalists have mobilized their armies. Chinese **** I can live
without, except SKS in a pinch. Might need it when the in country migrant hordes are given
the sign and LE and mil stand down.
BTW< he said two more caravans are forming, one of about 30000.
Interesting to see how the stock market futures will react. If they dive, we can just
blame someone else. If it does good, we can give all the credit to Trump. And if we don't,
Trump will surely give himself credit for it and gloat.
When the U.S. taxes another country's goods, it puts downward pressure on that country's
currency. When China's yuan falls against the U.S. dollar, it makes Chinese goods cheaper,
canceling out some of the effect of the tariff. The yuan was at about 16 cents to the dollar
earlier this year, but as Trump imposed tariffs on Chinese goods and ramped up his trade-war
rhetoric, it fell to roughly 14 cents -- a decline of more than 12 percent:
Warren Buffett, who has long slammed the hedge fund industry for charging high fees,
escalated his criticism of private-equity firms that have been raising record sums of money in
recent years.
"We have seen a number of proposals from private equity funds where the returns are really
not calculated in a manner that I would regard as honest," Buffett said Saturday at Berkshire
Hathaway Inc.'s annual meeting. "If I were running a pension fund, I would be very careful
about what was being offered to me."
Buffett has a consistent history of blasting asset managers for charging high management
fees and collecting performance fees on gains that sometimes don't beat broader markets. The
presence of private-equity firms looking for leveraged buyouts of companies has also made it
tougher in recent years for Buffett to find large acquisitions for Berkshire.
"We're not going to leverage up Berkshire," Buffett said.
Buffett and Berkshire Vice Chairman Charles Munger criticized how some private equity firms
portray performance. Firms will include money that's sitting in Treasury bills waiting to be
deployed when charging management fees, but will exclude it when calculating a so-called
internal rate of return, the performance measure in which most funds are judged, Buffett
said.
"It makes their return look better if you sit there a long time in Treasury bills," Buffett
said. "It's not as good as it looks."
Munger described the practice as "lying a little bit to make the money come in." He added
that many pensions are picking private equity because they don't have to mark down the value of
the assets as steeply in a downturn, saying that this was "a silly reason to buy
something."
Buffett has previously criticized the use of debt by private equity funds, saying in his
2014 letter
to shareholders that Berkshire offers another, more permanent buyer, when people are looking to
sell their businesses. He acknowledged on Saturday that leveraged investments would outperform
in good environments, but he cited the 1998 collapse of hedge fund Long-Term Capital Management
as an example of the downside.
While some have argued that Berkshire has embedded leverage by being able to use cash flows from
its insurance businesses in acquisitions, Buffett said he wouldn't be adding debt to chase
deals.
"Covenants to protect debt holders have really deteriorated," Buffett said. "I would not get
excited about so-called alternative investments."
-- With assistance by Katherine Chiglinsky, and Hannah Levitt
When you hear the same cue words you know exactly where it comes from.
Peace as its goal through staged wars ( undeclared since WW11).
"
February 9, 1950 -- The Senate Foreign Relations Subcommittee introduces Senate Concurrent
Resolution 66 which begins:
"Whereas, in order to achieve universal peace and justice, the present Charter of the
United Nations should be changed to provide a true world government constitution."
The resolution was first introduced in the Senate on September 13, 1949 by Senator Glen
Taylor (D-Idaho). Senator Alexander Wiley (R-Wisconsin) called it "a consummation devoutly to
be wished for" and said, "I understand your proposition is either change the United Nations,
or change or create, by a separate convention, a world order." Senator Taylor later
stated:
"We would have to sacrifice considerable sovereignty to the world organization to enable
them to levy taxes in their own right to support themselves."
Me**** the problem with this draft of war plan is that if you are pointing fingers of a
" Presidential coup" at home and expect the Treasonous culprits to do time, you can't
purpose the same scheme in a foreign country without reprecusions.
And I think that is the Traitors in the White House plan to save their slimy asses....
Expose the undeclared coup through media ( weaponized as usual) and bring down Barrs
attempts to clean up our own swamp.
As commander in chief Trump has a n op problem.
Whoever inititated this because of ecconomic warefare ( bankers... How the web catches
you at every corner) both at home ( USA) and world.
War, undeclared, declared, either way and use universal peace as goal equals profits for
the war machine and depopulation for the world.
Win win situation for the original planers of one world govetnment.
You remember Dulles don't you ( Dulles airport).
New plan same as the old plan:
April 12, 1952 -- John Foster Dulles, later to become Secretary of State, says in a
speech to the American Bar Association in Louisville, Kentucky, that "treaty laws can
override the Constitution." He says treaties can take power away from Congress and give
them to the President. They can take powers from the States and give them to the Federal
Government or to some international body and they can cut across the rights given to the
people by their constitutional Bill of Rights.
A Senate amendment, proposed by GOP Senator John Bricker, would have provided that no
treaty could supersede the Constitution, but it fails to pass by one vote."
The jobs reports are fabrications and that the jobs that do exist are lowly paid domestic
service jobs such as waitresses and bartenders and health care and social assistance. What has
kept the American economy going is the expansion of consumer debt, not higher pay from higher
productivity. The reported low unemployment rate is obtained by not counting discouraged workers
who have given up on finding a job.
I was listening while driving to rightwing talk radio. It is BS just like NPR. It was about
the great Trump economy compared to the terrible Obama one. The US hasn't had a great economy
since jobs offshoring began in the 1990s, and with robotics about to launch Americans are
unlikely ever again to experience a good economy.
The latest jobs report released today claims 236,000 new private sector jobs. Where are the
jobs, if they in fact exist?
Manufacturing, that is making things, produced a mere 4,000 jobs.
The jobs are in domestic services. There are 54,800 jobs in "administrative and waste
services." This category includes things such as employment services, temporary help
services, and building services such as janitor services.
"Health care and social assistance" accounts for 52,600 jobs. This category includes
things such as ambulatory health care services and individual and family services.
There are a few other jobs scattered about. Warehousing and storage had 5,400 new
jobs.
Real estate rental and leasing hired 7,800.
Legal services laid off 700 people.
Architectural and engineering services lost 1,700 jobs.
There were 6,800 new managers.
The new jobs are not high value-added, high productivity jobs that provide middle class
incomes.
In the 21st century the US economy has only served those who own stocks. The liquidity that
the Federal Reserve has pumped into the economy has driven up stock prices, and the Trump tax
cut has left corporations with more money for stock buybacks and dividend payments. The
institute on Taxation and Economic Policy reports that 60 Fortune 500 companies paid no taxes
on $79 billion in income, instead receiving a rebate of $4.3 billion. https://itep.org/notadime/
The sign of a good economy is when companies are reinvesting their profits and borrowed
money in new plant and equipment to meet rising demand. Instead, US companies are spending more
on buybacks and dividends than the total of their profits. In other words, the companies are
going into debt in order to drive up their share prices by purchasing their own shares. The
executives and shareholders are looting their own companies, leaving the companies less
capitalized and deeper in debt. https://systemicdisorder.wordpress.com/2016/10/26/work-harder-for-speculators/
Meanwhile, for the American people the Trump regime's budget for 2020 delivers $845 billion
in cuts to Medicare, $1.5 trillion in cuts to Medicaid, and $84 billion in cuts to Social
Security disability benefits.
History is repeating itself: Let them eat cake. After me the deluge.
"... the Huawei controversy is part of a wider conflict, with America determined to stop the Chinese changing the world's power structure, moving it from under America's control. When China was just a cheap manufacturing centre for low-tech goods, that was one thing. But when China started developing advanced technologies and began to dominate global trade, that was another. China must be put back in its box. ..."
"... America failed to bring Russia to her knees, so now the focus is directly on destroying, or at least containing China. China has already outspent America in Africa, Central and South America, buying influence away from America in her traditional spheres of influence. Attempts to neutralise North Korea are coming unstuck. ..."
"... Behind the cyber war, there is a financial war. In the financial war, America has the advantage of its currency hegemony, which it exercises to the full. It has allowed Americans to have lived beyond their means by importing more goods than they export, and the government spends more than it receives in taxes. In order to achieve these benefits, inward capital flows are necessary to finance them. To date, these have totalled in current value-terms some $25 trillion, being total foreign ownership of dollar assets and deposits. ..."
"... In 2017, Hong Kong was the third largest recipient of foreign direct investment (substantially property) after the US and China. FDI inflows rose by £104bn to total nearly $2 trillion. Largest investors were China, followed by corporate money channeled through offshore centers. ..."
"... China is sure to see the financial and monetary stability of Hong Kong as being vital to the Mainland's interests. Apart from the Bank of China's Hong Kong subsidiary being the second largest issuer of bank notes, the Peoples' Bank itself maintains reserve balances in Hong Kong dollars, which in the circumstances Kyle Bass believes likely, they can increase to support the HKMA's management of the currency peg. ..."
"... The alternative is for Washington to recognise and accept that its days of being a uni-polar global power are coming to an end but that is not possible when power is in the hands of maniacal psychos like Bolt-on. ..."
"... Bretton Woods, World Bank, IMF, BIS, just for starters. The US/UK built the present financial system. Of which most of the world has joined, because in the main it profits them. ..."
"... What are the benefits? Being enslaved by a bunch of inbred assholes in Switzerland? ..."
Behind the Huawei story, we must not forget there is a wider financial war being waged by
America against China and Russia. Stories about China's banks being short of dollars are
incorrect: the shortage is of inward capital flows to support the US Government's budget
deficit. By attracting those global portfolio flows instead, China's Belt and Road Initiative
threatens US Government finances, so the financial war and associated disinformation can be
expected to escalate. Hong Kong is likely to be in the firing line, due to its role in
providing China with access to international finance.
Introduction
Huawei is hitting the headlines. From ordering the arrest of its Chief Financial Officer in
Vancouver last December to the latest efforts to dissuade its allies from adopting Huawei's 5G
mobile technology, it has been a classic deep state operation by the Americans. Admittedly, the
Chinese have left themselves open to attack by introducing a loosely-drafted cybersecurity law
in 2016/17 which according to Western defence circles appears to require all Chinese technology
companies to cooperate with Chinese intelligence services.
Consequently, no one now knows whether to trust Huawei, who have some of the leading
technology for 5G. The problem for network operators is who to believe. Intelligence services
are in the business of dissembling, which they do through political puppets, all of which are
professionals at being economical with the truth. Who can forget Weapons of Mass Destruction?
More recently there was the Skripal poisoning mystery: the Russians would have been
bang-to-rights, if it wasn't for Skripal's links through Pablo Miller to Christopher Steele,
who put together the dodgy dossier on Trump's alleged behaviour in a Russian hotel.
The safest course is to never believe anything emanating from a government security agency,
which does not help hapless network operators. They, and the rest of us, should look at
motives. The attack on Huawei is motivated by a desire to impede China's technological
progress, which is already eclipsing that of America, and America is using her leadership of
the 5-eyes intelligence group of nations to impose her geostrategic will on her allies. The row
in Britain this week escalated from a cabinet-level security breech on this subject, to
American threats of withholding intelligence from the UK if UK companies are permitted to order
Huawei 5G equipment, to the sacking of the Minister of Defence.
A threat to withhold intelligence sharing, if carried out, only serves to isolate the
Americans. But you can see how desperate the Americans are to eliminate Huawei. Furthermore,
the Huawei controversy is part of a wider conflict, with America determined to stop the Chinese
changing the world's power structure, moving it from under America's control. When China was
just a cheap manufacturing centre for low-tech goods, that was one thing. But when China
started developing advanced technologies and began to dominate global trade, that was another.
China must be put back in its box.
So far, all attempts to do so appear to have failed. Control of Afghanistan, seen as an
important source of minerals ready to be exploited by China, has been a costly failure for the
West. Attempts to wrest control of Syria from Russia's sphere of influence also failed. Russia
is China's economic and military ally. America failed to bring Russia to her knees, so now the
focus is directly on destroying, or at least containing China. China has already outspent
America in Africa, Central and South America, buying influence away from America in her
traditional spheres of influence. Attempts to neutralise North Korea are coming unstuck.
In truth, there is an undeclared war between China and Russia on one side, and America and
her often reluctant allies on the other. It will now escalate, mainly because America
increasingly needs global portfolio flows to cover her deficits.
America's financial war
strategy
Behind the cyber war, there is a financial war. In the financial war, America has the
advantage of its currency hegemony, which it exercises to the full. It has allowed Americans to
have lived beyond their means by importing more goods than they export, and the government
spends more than it receives in taxes. In order to achieve these benefits, inward capital flows
are necessary to finance them. To date, these have totalled in current value-terms some $25
trillion, being total foreign ownership of dollar assets and deposits.
America's policy of living beyond its means now requires more than just recycled trade
flows: inward portfolio flows are required as well. Global portfolios, comprised of commercial
cash balances as well as investment money, periodically increase their exposure to other
regions, potentially leaving America short. The problem is resolved by destabilising the region
that has most recently benefited from capital investment, to encourage money to return to
dollars and thus America's domestic markets. Now that she is due to escalate infrastructure
spending both in China and along the new silk roads, it is China's turn.
This will be the opinion of Qiao Liang, who was a Major-General in the PLA and one of its
chief strategists. It was his explanation for the South-East Asian crisis of 1997, when a run
started on the Thai baht and spread to all neighbouring countries. In the decade prior to the
crisis, the region saw substantial inward capital flows, so much so that countries such as
Malaysia, the Philippines and Indonesia ran significant deficits on their balance of payments.
This conflicted with the US's trade balance, which was beginning to deteriorate. The solution
was the collapse of the South-east Asia investment story, which stimulated the re-allocation of
investment resources in favour of the dollar and America.
Qiao Liang cites a number of other examples from the Latin-American crisis in the
early-1980s to Ukraine, whose yellow revolution reversed investment flows into Central Europe.
This did not go to plan, with over a trillion dollars-worth of investment coming out of Europe,
most being redirected to the Chinese economy, which was the most attractive destination at that
time. Through the new Shanghai-Shenzhen-Hong Kong Stock Connect, in April 2014 China
facilitated inward investment and the ability for foreign investors to realise profits without
going through exchange controls.
Being the gateway for foreign investors, our story now moves to Hong Kong. According to
Chinese and Russian intelligence sources, America tried to destabilise it with covert support
for the Occupy Hong Kong movement between September and December 2014. The Fed ended its QE
that October, and international capital was needed back in the US. The Americans had also
escalated the row over the Spratly Islands and Scarborough Shoal at the beginning of that year,
which effectively halted free trade negotiations between China, Japan, South Korea, Macau,
Taiwan and Hong Kong. The Chinese hoped this potential free trade area could be expanded to
include the ASEAN FTA, which would then have been the largest in the world by GDP and an area
in which they could develop the renminbi as the reserve currency.
These plans were effectively scuppered, but China was not provoked into a public response by
these actions. Instead, they started reducing their US Treasury holdings in their dollar
reserves from $1.27 trillion to $1.06 trillion in 2016 – not a great fall, but
demonstrating they were not recycling their trade surpluses into dollars.
All that happened at a time when both the American and global economies were expanding
– admittedly at muted rates. Trump's trade protectionism has changed that, and early
indications are that the US economy is now stalling. Tax revenues are falling short, while
government expenditures are rising. America now urgently needs more inward capital flows to
finance the growing budget deficit.
If Qiao Liang were to comment, doubtless his conclusion would be that America will increase
its attack on China to precipitate disinvestment and reallocation to the dollar. And so, the
attacks have begun; first by trying to break Huawei. Now, the mainstream media, perhaps with
off-the-record briefings, are claiming China and Hong Kong are facing difficulties.
Last week, the Wall Street Journal published an article claiming China's banks are running
out of dollars. Clearly, this is untrue. China's banks can acquire dollars any time they want,
either by selling other foreign currencies in the market, or by selling renminbi to the
People's bank. They have their dollar position because they choose to have it, and furthermore
all commercial banks use derivatives, which are effectively off-balance sheet exposure.
Furthermore, with the US running a substantial trade deficit with China, dollars are flooding
in all the time.
Following the WSJ article, various other commentators have come up with similar stories. How
convenient, it seems, for the US Government to see these bearish stories about China, just when
they need to ramp up inward portfolio flows to finance the budget deficit.
There is, anyway, a general antipathy among American investors to the China story, so we
should not be surprised to see the China bears restating their case. One leading China bear, at
least by reputation for his investment shrewdness, is Kyle Bass of Hayman Capital Management.
According to , he has written his first investment letter in three years, saying of Hong Kong,
"Today, newly emergent economic and political risks threaten Hong Kong's decades of stability.
These risks are so large they merit immediate attention on both fronts."
If only it were so simple. It is time to put the alternative case. Hong Kong is important,
because China uses Hong Kong and London to avoid being dependent on the US banking system for
international finances. And that's why the US's deep state want to nail Hong Kong.
Lop-sided
analysis
Bass is correct in pointing out the Hong Kong property market appears highly geared, and
that property prices for office, residential and retail sectors have rocketed since the 2003
trough. To a large extent it has been the inevitable consequence of the currency board link to
the US dollar, which broadly transfers the Fed's inflationary monetary policy to Hong Kong's
more dynamic economy. Bass's description of the relationship between the banks, the way they
finance themselves and property collateral is reminiscent of the factors that led to the
secondary banking crisis in the UK in late-1973. Empirical evidence appears to be firmly on
Bass's side.
Except, that is, for a significant difference between events such as the UK's secondary
banking crisis, and virtually every other property crisis. Hong Kong is a truly international
centre, and the banks' role in property transactions is as currency facilitator rather than
lender. In 2017, Hong Kong was the third largest recipient of foreign direct investment
(substantially property) after the US and China. FDI inflows rose by £104bn to total
nearly $2 trillion. Largest investors were China, followed by corporate money channeled
through offshore centers.
So, yes, Hong Kong banks will be hurt by a property crisis, but not as much as Bass implies.
It is foreign and Chinese banks that have much of the property as collateral. It is not the
Hong Kong banks that have fuelled the property boom with domestic credit, but foreign
money.
Bass fails to mention that a collapse in property prices and the banking system is unlikely
to be confined to Hong Kong. Central banks have made significant progress in ensuring all
banking systems are tied into the same credit cycle. Unwittingly, they have simply guarenteed
that the next credit crisis will hit everyone at the same time. It won't be just Hong Kong, but
the EU, Japan, Britain and America. Everyone will be in difficulty to a greater or lesser
extent.
Interestingly, the Lehman crisis, which occurred after Hong Kong property prices had already
doubled from 2003, caused strong inflows to develop, driving the Hong Kong dollar to the top of
its peg. The situation appears to be similar today, with US outward investment at low levels,
but near-record levels of foreign ownership of dollar assets. Despite Hong Kong's foreign
direct investment standing at $2 trillion, the prospect of capital repatriation to Hong Kong
should not be ignored.
Probably the most important claim in Bass's letter is over the future of the currency peg
operated by the Hong Kong Monetary Authority (HKMA). He claims that the "aggregate balance",
which is a line-item in the HKMA's balance sheet, is the equivalent of the US Fed's excess
reserves, and that "Once depleted, the pressure on the currency board will become untenable and
the peg will break."
The aggregate balance on the HKMA's balance sheet has declined significantly over the last
year, from HK$180bn to HK$54.4bn currently. The decision about changes in aggregate balances
comes from the banks themselves, and for this reason they are commonly taken to reflect capital
flows into and out of the Hong Kong dollar. This is different from aggregate balances
reflecting actual pressures on the peg, as suggested by Bass.
The HKMA maintains a US dollar coverage of 105%-112.5% of base money (currently about 110%)
and has further unallocated dollar reserves if necessary. The peg is maintained by the HKMA
varying its base money, not just by managing a base lending rate giving a spread over the Fed's
fund rate, not just by influencing the commercial banks' aggregate balances, but by addressing
the three other components that make up the monetary base. These are Certificates of
Indebtedness, Government notes and coins in circulation and Exchange Fund Bills and Notes
(EFBNs). In practice, it is the EFBNs in conjunction with the aggregate balances that are used
to adjust the monetary base and keep the currency secured in the Convertibility Zone of 7.75
and 7.85 to the US dollar.
In maintaining the peg, the HKMA prioritises maintaining it over managing the money supply.
There is little doubt this goes against the grain of mainstream Western economists who believe
inflation good, deflation bad. Over the last year base money in Hong Kong contracted from
HK$1,695bn to HK1,635bn. Does this worry the HKMA? Not at all.
How the Chinese will act in the circumstances of a new global credit crisis is yet to be
seen, but we should bear in mind that they are probably less Keynesian in their approach to
economics and finance than Westerners. Admittedly, they have freely used credit expansion to
finance economic development, but theirs is a mercantilist approach, which differs
significantly from ours. We simply impoverish our factors of production through wealth transfer
by monetary inflation. We think this can be offset by fuelling financial speculation and asset
inflation. China enhances her production and innovation by generating personal savings. Wealth
is created by and linked more directly to production.
The objectives and effects of monetary and credit inflation between China's application of
it and the way we do things in the West are dissimilar, and it is a common mistake to ignore
these differences. The threat to China's ability to manage its affairs in a credit crisis is
significantly less than the threat to Western welfare-dependent nations whose governments are
highly indebted, while China's is not.
China is sure to see the financial and monetary stability of Hong Kong as being vital to the
Mainland's interests. Apart from the Bank of China's Hong Kong subsidiary being the second
largest issuer of bank notes, the Peoples' Bank itself maintains reserve balances in Hong Kong
dollars, which in the circumstances Kyle Bass believes likely, they can increase to support the
HKMA's management of the currency peg.
Conclusions
It is a mistake to think the Hong Kong property market is as much of a systemic danger as it
first appears. Expectations of a devaluation of the peg appear to be wishful thinking by the
bears.
Far more important are the consequences of the cyber and financial war being pursued against
China and Russia, its close ally, by the American deep state. Under President Trump it was
accelerated by his trade tariff policies, which are fundamentally an attack on China's economy.
China will be a hard nut to crack, and the effect of America's trade protectionism has been to
trigger a diminution in international trade, which is now becoming apparent. The negative
effects on the American economy appear to be being underestimated.
The attempt to destroy Huawei's 5G global ambitions is both the current and most visible
part of an undeclared cyber and financial war. Trade protectionism was only a step along the
way. The financial war is now escalating with the global economy facing at least a significant
recession, almost certain to trigger an overdue credit crisis. The Chinese have long been on a
financial war footing, as shown by Qiao Liang's analysis of how America needs global portfolio
flows and what they are prepared to do to attract them. Western thinking that the Chinese and
their Russian allies are vulnerable to American hegemony has been disproved time and again.
Financial analysts consistently fail to understand the Chinese are not muppets.
China will not be provoked, and by standing firm, they are sure to protect Hong Kong and get
on with diverting investment flows from a failing US economy into its Belt and Road Initiative.
This will force a financial crisis on the Americans of their own making. At least, that's how
China has always seen it and they see no need for their passive financial war strategy to
change.
The Washington strategy described here to prevent China from becoming a global player in
geo-politics and technology is doomed to failure as more and more countries side with China
(including Russia, which wants its own share of the action). It will lead to a hot war and I
believe Washington knows this and is stepping in that direction.
The alternative is for Washington to recognise and accept that its days of being a
uni-polar global power are coming to an end but that is not possible when power is in the
hands of maniacal psychos like Bolt-on.
Bretton Woods, World Bank, IMF, BIS, just for starters. The US/UK built the present
financial system. Of which most of the world has joined, because in the main it profits
them.
All clubs have rules. All clubs have requirements. Or else, by by.
China wants in the club, wants the club facilities, the club benefits, wants to go to the
parties and be warmly accepted at the bar. But it doesn't like the rules. But it doesn't like
being outside the club either.
The Communist Chinese government, decades used to treating its own people as dirt. This is
how they roll.
So too Iran, Maduro, Cuba, Putin.
They want the benefits of the west, but not the strings. State Street, as we say in
Massachusetts ( State Street in Boston is where the state capital is, and it is one way
only)
"...financial war being waged by America against China and Russia."
And by China and Russia against America. Lets not pretend the Russians and Chinese are
innocent victims here. Its a competition. Thats the way the world works. Were all competing
for trade, money and resources.
She rips the Obama White House for its allegiance to Citibank. But she does nto understadn that the problem is not with
Citibank, but with the neoliberalism as the social system. Sad...
Democrats and Republicans are just two sides of the same coin as for neoliberalism. Which presuppose protecting banks, like
Citigroup, and other big corporations. The USA political system is not a Democracy, we have become an Oligarchy with a two Party
twist (Poliarchy) in whihc ordinary voters are just statists who have No voice for anyone except approving one of the two
preselected by big money candidates. It's time we put a stop to this nonsense or we'll all go down with ship.
Anyway, on a positive note
"Each time a person stands up for an ideal to improve the lot of others, they send forth a current that can sweep down the mightiest walls of oppression and resistence." RFK
This budget deal is absolutely disgusting. More financial deregulation, the potential for
a second TARP, cuts to pensions, and cuts to funding for Pell Grants to help out students.
Once again, the people lose.
So tough, so strong, and so right. And I love that she's not afraid to rip into Democrats
and the White House for their complicity in selling out our country and tax dollars to the
big banks. We need more strong politicians on both sides of the aisle like this.
It's not party specific, though the Republicans are the worst. Both parties are to be
blame. The biggest blame goes to the Americans who do not vote and those who have no clue who
or what they are voting for. The government is the way it is, it's because of the attitude of
Americans towards politics. Majority do not give a shit and hence you have that pile up in
Washington and states legislature.
Elizabeth Warren is like a fictional do gooder character from Hollywood. No one take her
seriously.
Blame all the politicians you want, you Americans voting or not voting are the lousiest
employers in the world, because you hire a bunch of corruptors into your government. These
corruptors in fact control your lives.
They abuse your money, spending every penny on everything but on you. You would not hand
over your wallet or bank accounts to a strangers, yet are precisely doing that by putting
these corruptors in the government.
This speech encapsulates and exposes all that is wrong with America in general and with
our governance in particular. Taking the heinous provision out of the bill would be a great
first baby step toward cleaning up our politics, economy and collective spirit as a nation.
All the "smart money" says that Warren is engaged in a Quixotic attempt to do something good
in a system that is irredeemably corrupted by money and the lust for power. The cynics may be
right, perhaps America is doomed to be consumed by the parasites to the last drop of
blood...but maybe not. Maybe this ugly indefensibly corrupt malevolent move to put the
taxpayers back on the hook for the next trillion dollar bail out theft will be sufficient to
wake up hundreds of millions of us. When the people wake up and turn on the lights, the
crooks and the legally corrupt will slither away back into their hole...and many may just
wind up in prison, where they belong. But so long as corrupt dirty dastardly interests can
keepAmerica deceived and asleep, they will continue to drain our nation's life's blood dry.
Please share this video widely. If half as many folks watch this speech as watched the Miley
Cyrus "Wrecking Ball" YouTube, the provision to which Warren is objecting will be taken out
very quickly indeed.
As George Carlin said a decade ago,who are we going to replace these politicians with?
They did not fall out of the sky or come from a distant planet. They are US. You can vote all
you want and replace every last one of them but nothing will change. It is human nature.
Besides the road from being on the local town council, to the mayor,Gov then into the Capital
is littered with test to weed out anyone who might really pose a danger to the system. The
occasional odd one that does make it to power is castrated or there simply to give the
illusion that elections matter. Unless you can eliminate the attraction of greed,ego and
power nothing will ever change. Just a quick look back at history tells you what is happening
now and what will be going on in our future. The only difference is there are more zeros.
In a few days we may be witnessing a massive game of "chicken" between the world's two
largest economies:
"If China does not cut Iran oil purchases to zero, the Trump administration may have to
make a decision on blocking Chinese banks from the U.S. financial system. That could have
unintended consequences for finance and business between the world's two biggest economies,
already in negotiations over trade disagreements.
The unnamed "senior official" consulted for this article is remarkably confident the
Chinese will blink on this matter, based on a what seems a limited understanding of what
constitutes their base interest. In previous times, foreign policy initiatives always
featured internal deliberation with advocates from all sides of an issue, so a complete range
of option and consequence could be anticipated. Such process seems to have been
abandoned.
"... The real test for having an “unprecedentedly high level” relationship would be to coordinate diplomatic campaigns against U.S. policies. Working together they are more likely to split off American allies and friends from unpopular initiatives, such as unilateral sanction campaigns. ..."
"... Lets all mindlessly repeat the platitudes of Thinktankistan entities like CATO... Russian economy is smaller than new York... Russian relies on oil sales and doesn't make anything.... These sock puppets must think we are imbeciles. ..."
"... He's an Atlantacist fool. Senior fellow at the CATO institute, pretty much says it all. His style is to drop the odd truth-bomb (like criticizing the ill-advised NATO expansion and US geopolitical belligerence) but he still sticks to the main planks of Euro-Atlantic narratives. ..."
...Beijing and Moscow share one very big objective: resist U.S. dominance. Washington
expanded NATO up to Russia's borders; America's navy patrols the Asia-Pacific and treats those
waters as an American lake. Elsewhere there is no issue upon which Washington fails to
sanctimoniously pronounce its opinion and piously attempt to enforce its judgment.
Unfortunately, for quite some time Washington has seemed determined to give both China and
Russia good cause for discontent. Instead, in response, Washington should do its best to
eliminate behaviors which bring its two most important competitors together. Then the United
States wouldn't need to worry what Presidents Putin and Xi were saying to one another
.
Thus, Washington has done much to bring its two leading adversaries together. However,
hostility is a limited basis for agreement. There is no military alliance, despite Chinese
participation in a Russian military exercise last fall. Neither government is interested in
going to war with America and certainly not over the other’s grievances. A shared sense
of threat could change that, but extraordinarily sustained and maladroit U.S. policies would be
required to create that atmosphere.
When the two countries otherwise act for similar purposes, it usually is independently, even
competitively, rather than cooperatively. For instance, both are active in Cuba, contra
Washington’s long-failed policy of starving the regime into submission. Beijing and
Moscow also are both supporting Venezuela’s beleaguered Maduro government. However, China
and Russia appear to be focused on advancing their own government’s influence, even
against that of the other.
Both nations have a United Nations Security Council veto, though the PRC traditionally has
preferred to abstain, achieving little, rather than cast a veto. However, working together they
could more effectively reshape allied proposals for UN action. They could do much the same in
other multilateral organizations, though usually without having a veto.
The real test for having an “unprecedentedly high level” relationship would
be to coordinate diplomatic campaigns against U.S. policies. Working together they are more
likely to split off American allies and friends from unpopular initiatives, such as unilateral
sanction campaigns. Europe is more likely to cooperate if the PRC, valued for its economic
connections, joined Russia, still distrusted for its confrontation with Ukraine and
interference in domestic European politics. So far this former communist “axis” has
been mostly an inconvenience for the United States, rather than a significant hindrance,
Still, that could change if the Trump administration makes ever more extraordinary
assertions of unilateral power. Washington officials appear to sense the possibilities, having
periodically whined about cooperation between China and Russia, apparently ill-prepared for any
organized opposition to U.S. policies.
... ... ...
Doug Bandow is a Senior Fellow at the Cato Institute and a former Special Assistant to
President Ronald Reagan. He is the author of Foreign Follies: America's New Global Empire
.
"China appears poised to absorb Russia’s sparsely populated east."
Good Lord, but when does this endless BS end? Seriously, no-one really believes this
yet these clowns and fools keep trotting out these absurd canards.
"In a sense, the Putin-Xi meeting was much ado about nothing. The relationship
revolves around what they are against, which mostly is the United States. They would have
little to talk about other than the latest grievance about America to express or American
activity to counter."
Yeah sure... no reason why Putin and Xi wouldn't want to talk about economic links
given that Russia-China trade is now over $100B per year equivalent.... a figure reached
more than 5 years earlier than Western "experts" had predicted, and which is growing very
strongly.
Lets all mindlessly repeat the platitudes of Thinktankistan entities like CATO...
Russian economy is smaller than new York... Russian relies on oil sales and doesn't make
anything.... These sock puppets must think we are imbeciles.
Orwell predicted "It is a warfare of limited aims between
combatants who are unable to destroy one another, have no material cause
for fighting and are not divided by any genuine ideological difference."
He's an Atlantacist fool. Senior fellow at the CATO institute, pretty much says it
all. His style is to drop the odd truth-bomb (like criticizing the ill-advised NATO
expansion and US geopolitical belligerence) but he still sticks to the main planks of
Euro-Atlantic narratives.
The granting of a "permanent normal trading relationship" (PNTR) and then the subsequent
accession to the World Trade Organization (WTO) in 2001 have been a boon for China, but the
persistence of ongoing American trade deficits have led many,
including the current president, to judge the United States a loser in ongoing trade
negotiations with Beijing. It's not a totally irrational judgment: China's WTO accession
hasn't been
great for U.S. manufacturers .
Part of the problem stems from the extraordinary fact that Washington has seldom deployed a
negotiator who is actually well-versed in trade issues. Since the days of the Clinton
administration, it has been the U.S. Treasury Secretary, as opposed to the country's chief
trade representative, who has consistently directed trade negotiations, with the resultant (and
eminently predictable) impact that financial interests have superseded those of any other
economic sector. That pattern was briefly disrupted when President George W. Bush appointed
Alcoa's CEO, Paul O'Neill, to head the Treasury, and then CSX president John W. Snow, but
ultimately the " Wall Street uber alles " mentality again prevailed with the appointment
of Hank Paulson (to be followed by Tim Geithner, Jack Lew, and now Steve Mnuchin -- all of whom
have finance-centric backgrounds).
For all of the supposed financial sophistication of America's Wall Street-based Treasury
Secretaries, it is indeed ironic that China has consistently been able to play them for fools
with the implied threat of its so-called "nuclear option," a highly flawed
narrative that alleges that as a final resort, Beijing would dump its huge stockpile of
U.S. Treasuries, thereby driving up U.S. rates, and creating a catastrophic depression for the
U.S. economy. That so-called threat to the bond market is the traditional reason why successive
Treasury Secretaries have been hesitant to resort to the blunt trauma force of trade sanctions
or tariffs when it came to negotiating with Beijing. They were also comforted by the idea that
as it modernized, China would increasingly abide by traditional norms of free trade doctrine
against all
available evidence that shows that it has not played by the same rules.
Let's leave aside the internal incoherence of the nuclear option: China exiting
dollar-denominated assets could well create downward pressure on the external value of the
free-floating currency. But that would enhance U.S. export competitiveness, assuming, of
course, that America has anything left to export, an unfortunate legacy of the Treasury's
malign neglect of U.S. manufacturing. It's also operationally wrong (see here
for further detail), and mistakenly assumes (against all historical evidence to the contrary)
that Beijing would pursue an economic policy that is the functional equivalent of cutting its
own nose to spite its face, as Paul Krugman, among others, notes.
Even if Paulson, Geithner, Lew, Mnuchin, etc., didn't truly believe in the "nuclear option,"
they have been happy to tamp down the possibility of a trade war in order to keep the capital
markets stable. Each trade "deal" has therefore largely sustained the status quo, the price for
which sees Beijing usually offering up a few well-timed purchases of soybeans or Boeing
aircraft (although the latter will be more problematic in light of the 737 fiasco). But China's
policy makers have never been forced to deal with the economic consequences of their country's
mercantilism, which has resulted in the steady erosion of America's Rust Belt, as the U.S.
economy gave back the considerable employment gains it achieved during the 1990s, via
a
historic contraction in manufacturing employment .
Things have changed markedly since Trump seized the "China trade" portfolio from the
Treasury's Steve Mnuchin, and placed it under the control of Robert Lighthizer, the current
trade representative. Unusually for a member of the Trump administration, Lighthizer actually
knows his brief. He has had literally decades of experience in trade issues, dating from his
days as a deputy U.S. trade representative in 1983 (when Japan was widely perceived as the main
trade threat), to his current role as America's chief trade negotiator. As Trump's U.S. Trade
Representative (USTR), he has provided policy flesh and bones to the president's robustly
unilateral approach in trade.
If anything, Lighthizer's trade hawkishness has become even more pronounced over the years,
as he has shifted his attention away from Japan to China. In his 2010 congressional
testimony , he argued that U.S. policy makers gravely underestimated the threat posed to
American manufacturing by virtue of China's entry into the WTO, marshaling an array of evidence
to cast doubt on the idea that its entry had brought any significant economic benefits to U.S.
workers and businesses. He also highlighted the mercantilist nature of Beijing's state
capitalism and noted that the country's administrative complexity likely precluded it embracing
WTO rules, even if wanted to do so (which he doubted):
"As part of China's system, specific large companies receive government patronage in the
form of credit, contracts, and subsidies. The Chinese government, in turn, sees these
'national champions' as a means of competing with foreign rivals and encourages their
dominant role in the domestic economy and in export markets
{[S]cholars have questioned whether -- given its lack of institutional capacity and the
complexity of its constitutional, administrative, and legal system -- China is even capable
of complying with its WTO obligations.
No doubt in thrall to the prevailing free-trade ideology, Washington's "policy passivity"
made it loath to use available tools such as the WTO's "421" special safeguards to counter
the resultant trade shock. In that same testimony, Lighthizer also signaled that he was
uninterested in the niceties of WTO style multilateralism, more inclined to the use of "
aggressive unilateralism "
via executive orders, diplomatic pressure, and most importantly,
the use of Section 232 of the 1962 Trade Expansion Act to levy tariffs on various
products, premised on the notion that the targeted country (in today's case, China)
represented a national security threat.
Most significant from the Lighthizer perspective is an explicit rejection of the idea that
China needs to do more than just buy more U.S. goods before the two countries strike a
permanent trade deal, which in any case is highly problematic if the end objective is to bring
the bilateral trade balance between the two countries to zero.
"The scope for explosive growth in soybeans is actually fairly limited, as the pre-tariff
base for soybeans [the number one or two largest U.S. export to China] was quite high -- the
United States was supplying $12 billion of China's almost $40 billion in oil seed imports. A
huge tilt away from Brazil might cause U.S. beans exports to double, but getting much more
than that would be difficult (there is a natural seasonality to soybean trade that favors
alternating supply from the Southern and Northern Hemispheres).
"The real growth would need to come in sectors where China doesn't buy much now. Corn. Rice.
Perhaps pork and beef Getting really big numbers there though would risk pushing up U.S.
prices, and getting China to abandon its goal of self-sufficiency in basic grains."
So U.S. farm prices would be pushed up, which would hurt U.S. domestic consumers, even as it
cosmetically dresses up America's trade position vis a vis China.
"China has signaled it is willing to let foreign firms take majority stakes in a few more
sectors, and has reiterated its belief that technology transfer isn't a legal requirement for
entry into the Chinese market. There are likely to be settlements on some long-standing
disputes as well -- the rating agencies have gotten approval to enter the Chinese market; Visa,
American Express and Mastercard likely will
finally get approval too (
Mastercard through a joint venture not everything changes); and some tariffs introduced as
retaliation in the past may get dropped."
But how does the entry into China of consumer credit card companies or the ratings agencies
help Americans? Ironically, this looks precisely like the kind of sop to finance that Trump
said he would eschew. However, because of corporate/Wall Street pressure, the Trump agenda
pivoted a few months ago from selective decoupling and protection of American strategic
industries to opening up China for U.S. investment and pushing China to treat American
companies doing business in China more equally. That is why leading U.S. companies have become
friendlier and increasingly less critical of the president's trade policy, even as the economic
commentariat has continued to blast him.
Trump himself needs to understand that a third to a half of 'trade' is really transnational
production with inputs from suppliers coordinated by mostly third-party manufacturers in Asia
(notably in semiconductors). The purpose of modern mercantilism (particularly as it is
practiced in China today) is not just to sell more finished goods but to try to monopolize the
high value added rungs of supply chains. It is unclear that targeting China's bilateral trade
surplus with the United States will ultimately disrupt these entrenched supply chains. It
almost certainly won't bring semiconductor manufacturing back to America's shores.
In the end, therefore, pushing China's leadership to make structural changes to open up
China to American companies is probably an illusion. Beijing is unlikely to rip up the model
that has seen it create national champions that can now compete successfully with America's
biggest corporations. It may make token promises to curtail cybertheft, or the subsidies that
the administration complains create an uneven playing field for American companies. But, as
noted above, even Lighthizer himself has cast doubt that Beijing could enforce those promises,
given the administrative complexity of its system of governance. In his eagerness to claim a
win, therefore, Trump ironically might end up settling for the usual Faustian bargain: more
large Chinese purchases, selective decoupling of supply chains (as American companies
rethink
their reliance on China ), and increased domestic protection for certain sectors (such as
5G) on national security grounds, Lighthizer's considerable efforts notwithstanding. We may
have reached the peak as far as this particular tariff war goes, but the longer-term trade
tensions will almost certainly persist well beyond this hollow 'victory,' which Mr. "Art of the
Deal" will no doubt claim for himself when the negotiations do officially end.
Excellent assessment of the situation here. I suppose another factor for Trump is the fact
that as the US 2020 elections drew ever nearer, he will want some sort of win – any
sort of win – to take to the American people to show that he was tough on China and got
a better deal. His opponents will disagree with the deal. Hell, probably most economists will
disagree but Trump will only care what his supporters think as they are the ones that will
re-elect him.
But of course the interests of people like Robert Lighthizer may come into play here as he
may not care what Trump wants. He is the sort of person that might just blow up negotiations
in order to be tough on China to get it to buckle. I have seen this movie before. Let me
quote from a Salon article here-
"In the summer of 1941, before leaving for Placentia Bay, U.S. President Franklin D.
Roosevelt had ordered a freeze on Japanese assets. That measure required the Japanese to seek
and obtain licenses to export and pay for each shipment of goods from the United States,
including oil. This move was most distressing to the Japanese because they were dependent on
the United States for most of their crude oil and refined petroleum products. However,
Roosevelt did not want to trigger a war with Japan. His intention was to keep the oil flowing
by continuing to grant licenses. Roosevelt had a noose around Japan's neck, but he chose not
to tighten it. He was not ready to cut off its oil lifeline for fear that such a move would
be regarded as tantamount to an act of war.
That summer, while Roosevelt, his trusted adviser Harry Hopkins and U.S. Undersecretary of
State Sumner Welles were attending the shipboard conference off Newfoundland and Secretary of
State Cordell Hull was on vacation at the Greenbrier in West Virginia, the authority to grant
licenses to export and pay for oil and other goods was in the hands of a three-person
interagency committee. It was dominated by Assistant Secretary of State Dean Acheson, whom
one historian described as the "quintessential opportunist of U.S. foreign policy in
1941."
Acheson favored a "bullet-proof freeze" on oil shipments to Japan, claiming it would not
provoke war because "no rational Japanese could believe that an attack on us could result in
anything but disaster for his country." With breathtaking confidence in his own judgment, and
ignoring the objections of others in the State Department, Acheson refused to grant licenses
to Japan to pay for goods in dollars. That effectively ended Japan's ability to ship oil and
all other goods from the United States.
Acheson's actions cut off all American trade with Japan. When Roosevelt returned, he decided
not to overturn the "state of affairs" initiated by Acheson, apparently because he feared he
would otherwise be regarded as an appeaser. Once Roosevelt perpetuated Acheson's trade
embargo, the planners in Japan's imperial military headquarters knew that oil to fuel their
fleet, as well as rubber, rice and other vital reserves, would soon run out."
And we all know what happened next. So I would not be surprised if Robert Lighthizer could
very well be the re-encarnation of Dean Acheson and given half a chance, would seek to put
China under the gun if he thought that he would get away with it.
Rev Kev
I hope you are right. LIghthizer is actually one of the few beacons of hope in the Trump
Administration. But I fear he'll drink the Trump Kool-Aid and basically settle for less than
half a loaf. That's a fascinating historical precedent you have cited. Thank you for bringing
it to my attention.
Very interesting article. In the mean time Japans aim was land conquest. They raped,
murdered, and pillaged their neighbors so WWII USA/Japan was not avoidable to say the least.
They worshipped an emperor and thought they were superior ideologically and militarily. One
could argue that they should have addressed the Japan issue years earlier.
Trump has taken on 20+ years of terrible trade deals and is now stepping up to change it. He
should be applauded! Instead, everyone in the peanut gallery (news media) takes pot shots at
him. We are dealing with a "COMMUNIST" country here which says it all. We now have a business
man running the USA thank God. To make changes will take time!
Darn. When I read the headline, I hoped the article would explain what a victory in U.S.
trade policy with China would look like -- that is, what kind of trade relationship would
"rectify lingering structural problems that have devastated U.S. manufacturing (with genuine
enforcement provisions)." That's a tough question to answer! But all this article describes
is why Trump's policy won't achieve that result. Every policy tried so far has not achieved
that result, so it's not really surprising that this one won't either. In fact, the article
seems to suggest that China cannot play by reasonable trade rules. So what is victory?
Seriously, we need an answer to that one.
How can State Capitalism have caused that 'quantum leap' for China when everyone told us
Central Planning does not work?
If it does work, maybe the US should try it in a way other than the PPT, Fed bailouts, ag
subsidies, military industrial complex, mortgage subsidies, sanctions on rivals, military
action on rivals, etc they already do.
As I understand it, US manufacturing left the US for other countries because of the lower
cost of labour and the lower cost of doing business in foreign countries. What would bring
manufacturing back from foreign countries? Maybe when the cost of doing business in the US
(i.e., wages and salaries of the working class) are lower than those in foreign countries.
Maybe a labour contigent made up entirely of robots would bring back manufacturing to the
US.
While lower wage costs helped drive it, now they the ever rising cost of shipping their
wares. Course they have seen the Chinese boycotts work so well, they may think they will have
a US version to deal with, as so many dislike ok, hate globalization, that any that smacks of
it has a PR problem. Course its likely we will see a repeat of NKoroea too
different budget line probably, so can still be presented as cost-saving also factor in
the use of consultants before/during/after off-shoring – but again different budget
line!
I'm not sure at all what others think a "victory' would look like, but to me it would be
anything that finally raises the profile our (Western Nations) reliance (addiction?) on
supply chains emanating from CHina that impact, negatively, our National Security. If we
could even BEGIN to discuss this dilema I'd be satisfied. And it appears we are beginning to
question the dependence.
China has been at war with the United States for decades. It is an all domain,
unrestricted war. The Chinese do not play by any rules but their own. They have used the
West's strengths of an open political and market system against North American and European
industrialized democracies.
A win against China means re-industrializing the United States across all manufacturing
industries. Tariffs and regulations are the most efficient means to effect this result.
Negotiating is a fool's errand. China will not live up to its obligations under the
agreement anyway.
Perhaps, readers should ask themselves if China is beginning to resemble the Third Reich.
Dictatorship, concentration camps, military buildup, territorial expansion, religious
persecution, military aggression, economic warfare, racist ideology If so, then we should
determine what steps the West and its allies in the East should take to ensure its survival
and prosperity.
Probably we need tariffs to protect against the wage race to the bottom. Not at all clear
trumps 25% threat is high enough.
But spending big on overdue infra would employ lots of blue collars, some at union wages not
in competition w foreign labor, and focusing on higher unemployment regions first avoids
inflation.
Regarding changes in Chinese gov us has been warmonger for decades, assassinates foreign
leaders etc China so far not nearly as aggressive.
Our corporations which benefit from unlimited credit via our very own Military Industrial
Capitalism are no different from China's SOEs. China is protecting essential industries, so
are we. We have tried to force austerity on the rest of our economy – but China does
not. Why is that? And because we have succeeded in establishing the world's most unequal
society, we should be proud of our success. Mindless and shameful as it has been. China
doesn't think it would be politically beneficial to do that to 1.5 billion Chinese. They will
find their own way. Why should they now shoot themselves in the foot just because we did? For
them to bend to our demand that they stop being so mercantilist means they would have to
impose austerity on their people to some degree. It's an appropriate point for a showdown.
And I can't imagine we will win unless we are willing to continue our own ridiculous social
"structure" which is undemocratic and tyrannical. We're looking at a political revolution
because everyone is fed up. China is not. Who's right? We can only brag that we have the
"liberal" high ground because we haven't faced facts yet.
The latest Iran sanctions salvo, the claim that "waivers" for China and others will be
eliminated, is another complication. It will be perceived, with good reason, as deliberately
interfering with world trade under false pretenses. An aggressive follow-up and this could be
an effective way for team Trump to get out of whatever agreements they made in negotiations
so far. More drama
I would not say advantage US; for example China needs US semiconductors. To me if feels
like the US and China are two pilots locked in a kamikaze plane together; both nations are
floating on a sea of debt and IMO prone to massive downside risk during a recession (eg, US
corporate balance sheets are in very poor shape due to debt used to fund stock buybacks). The
US has the reserve currency, but China has sane leadership and doesn't have to carry around
other countries. Interesting times.
@ William Gruff
"Planned economies cannot have overproduction problems like market economies do" I don't
agree with that; look at China's empty cities (overproduction of everything in that city).
The recent book China's Great Wall of Debt went through China's massive overproduction of
certain items (do they really need that much cement?). The book's thesis is that China builds
what it knows how to build, whether it needs it or not.
@ 8 Dan
Yes, I mourn the dimming of Pepe Escobar's brilliance as he churns out article after article
about the fucking silk or belt road, but I guess we have to live and to eat and in Pepe's
case to travel.
Trump was bought by the Zionists a long time ago. He had to go cap in hand to Carl Icahn
in the early 1990s to get bailed out. That's Carl Icahn the famous greenmail crook of the
1980s. Greenmail consisted in buying a large stake in a company and making demands.
Management would then make a very generous offer to just go away, much like the mafia
operate. When greenmail was banned, Icahn carried on terrorizing companies by buying a hefty
stake and demanding a seat on the board. From there he would insist on the sale of a
subsidiary, the proceeds from which would swell his coffers. The company, now reduced in
size, would then be attacked by another hedge fund in the form of a hostile takeover. Icahn
and others, such as Nelson Pelz, were just two of a vast number of Jewish financiers who took
full advantage of the liberalization of financial markets begun by Reagan and Thatcher and
masterminded by Milton Friedman. The huge sums of money gained by private equity/hedge funds
could now be used to finance the political campaigns of those supportive of Zionism, buy up
media and a long etc.
Where I disagree with many on the right and some on the left is in the extent of Jewish
power before this period. It is a tremendously complex area which I try to approach in my
research without prejudice, more like a detective than a historian. I found out surprising
things, such as Jewish people were not allowed into the top gentlemen's clubs in the US until
the 1960s. The whole narrative about the Russian revolution being a totally Jewish conspiracy
is also open to question. Lord Salisbury, three times British Prime Minister and of good
English aristocratic stock (The Cecil family) was talking about fomenting revolution in
Russia as early as 1888.
Data Tells: China's BRI promotes global trade
By Zhang Xinyuan
As a development strategy proposed by China that focuses on connectivity and cooperation
on a trans‐continental scale, the Belt and Road Initiative (BRI) has significantly
boosted global trade and investment in recent years.
With a wave of trade protectionism sweeping across the world in recent years, causing
global economic turmoil, China still adheres to economic openness, actively pushing toward
economic globalization, and striving to build a more convenient and liberal environment for
international trade and investment.
BRI is one of the most important tools for China to achieve that goal. About 125 countries
and 29 international organizations have signed cooperation agreements with China on jointly
building the Belt and Road, according to data published in March on China's official Belt and
Road website.
The total trade volume of goods between China and countries along the Belt and Road
exceeded six trillion U.S. dollars from 2013 to 2018, according to a Ministry of Commerce
(MOFCOM) statement on Thursday.
The average annual growth rate of trade between China and countries along the Belt and
Road hit four percent during the 2013-2018 period, higher than the growth rate of China's
foreign trade during the same period, accounting for 27.4 percent of China's total trade in
goods, according to MOFCOM.
According to the Belt and Road Big Data Annual Report of 2018 from the State Information
Center, BRI in 2017 connected 71 countries around the world, spanning across Asia, Europe,
and Eastern Africa, and in total the BRI countries' foreign trade reached 9.3 trillion U.S.
dollars in 2017, 27.8 percent of the total world trade volume.
Among the BRI countries, South Korea ranks first in terms of foreign trade volume,
reaching over one trillion U.S. dollars in 2017, Singapore and India follows with 697 billion
U.S. dollars and 617 billion U.S. dollars, respectively, the report showed.
In terms of trade commodities, the top import and export commodities among BRI economies
fall in the same categories, including electronic machinery, sound recorder and reproducers,
and televisions, followed by nuclear reactors, boilers, and other heavy machinery, based on
the report.
Private enterprises in China have played a major role in trade with BRI economies. In
2017, China's private enterprises trade with BRI countries reached 619 billion U.S. dollars,
representing 43 percent of the total trade volume between China and BRI countries. Foreign
companies grabbed 36.6 percent of the trade pie, while state-owned enterprises got 19.4
percent of the market share.
BRI has greatly prompted the development of private economies in China and further opened
its market to foreign companies.
As Jimmy Carter observed....the US spread death and destruction investing in war and spending
on war to the tune of trillions, China is investing in the future.
Carter to Trump: While China has some 18k miles of high-speed rail, the US has wasted $3
trillion on military spending. "It's more than you can imagine. China has not wasted a single
penny on war, and that's why they're ahead of us. In almost every way."
China set a defense budget growth target of 7.5 percent in 2019, slower than last year but
still enough to fulfill President Xi Jinping's plans to build a world-class military.
Authorities made the announcement on Tuesday in a statement released ahead of the National
People's Congress, the annual gathering of China's legislature in Beijing. In 2018, before
the trade war started to affect China's economy, officials predicted an increase of 8.1
percent to 1.11 trillion yuan ($164 billion). ...
When the US economy was a larger share of the world economy, then access to the US market
meant more. For example, World Bank statistics say that the US economy was 40% of the entire
world economy in 1960, but is now about 24%. The main source of growth in the world economy
for the foreseeable future will be in emerging markets.
For a sense of the shift, consider this figure from the most recent World Economic Outlook
report, published by the IMF (April 2019). The lines in the figure show the trade flows
between countries that are at least 1% of total world GDP. The size of the dots for each
country is proportionate to the country's GDP.
In 1995, you can see international trade revolving around the United States, with another
hub of trade happening in Europe and a third hub focused around Japan. Trade between the US
and China shows up on the figure, but China did not have trade flows greater than 1% of world
GDP with any country other than the US.
The picture is rather different in 2015. The US remains an international hub for trade.
Germany remains a hub as well, although fewer of its trade flows now exceed 1% of world GDP.
And China has clearly become a hub of central importance in Asia.
[Graph]
The patterns of trade have also shifted toward greater use of global value chains--that
is, intermediate products that are shipped across national borders at least once, and often
multiple times, before they become final products. Here's the overall pattern since 1995 of
falling tariffs and rising participation in global value chains for the world economy as a
whole.
[Graph]
Several decades ago, emerging markets around the world worried about having access to
selling in US and European markets, and this market access could be used by the US and
European nations as a bargaining chip in economic treaties and more broadly in international
relations. Looking ahead, US production is now more tied into global value chains, and the
long-term growth of US manufacturing is going to rely more heavily on sales to markets
outside the United States.
For example, if one is concerned about the future of the US car industry, the US now
produces about 7% of the world's cars in 2015, and about 22% of the world's trucks. The
future growth of car consumption is going to be primarily outside the US economy. For the
health and long-term growth of the US car business, the possibility of unfair imports into
the US economy matters a lot less than the access of US car producers to selling in the rest
of the world economy.
The interconnectedness of global value chains means that General Motors already produces
more cars in China than it does in the United States. In fact, sales of US multinationals now
producing in China are already twice as high as exports from the US to China. Again, the
long-term health of many US manufacturers is going to be based on their ability to
participate in international value chains and in overseas production.
Although what caught my eye in this World Economic Outlook report was the shifting
patterns of world trade, the main emphases of the chapter are on other themes that will come
as no surprise to faithful readers of this blog. One main theme is that shifts in bilateral
and overall trade deficits are the result of macroeconomic factors, not the outcome of trade
negotiations, a theme I've harped on here.
The IMF report also offers calculations that higher tariffs between the US and China will
cause economic losses for both sides. From the IMF report:
"The starting point is a collapse in US–China trade, which falls by 25–30
percent in the short term and somewhere between 30 percent and 70 percent over the long term,
depending on the model and the direction of trade. The decrease in external demand leads to a
decline in total exports and in GDP in both countries. Annual real GDP losses range from
–0.3 percent to –0.6 percent for the United States and from –0.5 percent to
–1.5 percent for China ... Finally, although the US–China bilateral trade deficit
is reduced, there is no economically significant change in each country's multilateral trade
balance."
Some advocates of higher tariffs take comfort in noting that the estimated losses to
China's economy are bigger than the losses to the US economy. Yes, but it's losses all
around! As the 21st century economy evolves, the most important issues for US producers are
going to involve their ability to compete in unfettered ways in the increasingly important
markets outside the US.
Private Equity Pillage: Grocery Stores and Workers At Risk
By Eileen Appelbaum & Rosemary Batt
The private equity business model is to strip assets from companies that they acquire. The
latest victims: retail grocery chains.
Since 2015 seven major grocery chains, employing more than 125,000 workers, have filed for
bankruptcy. The media has blamed "disruptors" -- low-cost competitors like Walmart and
high-end markets like Whole Foods, now owned by Amazon. But the real disruptors in this
industry are the private equity (PE) owners who were behind all seven bankruptcies. They have
extracted millions from grocery stores in the last five years -- funds that could have been
used to upgrade stores, enhance products and services, and invest in employee training and
higher wages. As with the bankruptcies of common household names like Toys "R" Us, PE owners
throw companies they own into unsustainable debt in order to capture high returns for
themselves and their investors. If the company they have starved of resources goes broke,
they've already made their bundle.
This is all perfectly legal. It should not be.
The media has blamed "disruptors" like Walmart, Whole Foods, and Amazon for grocery
store bankruptcies. But the real disruptors in this industry are the private equity
owners.
The bankrupted PE-owned grocery chains include East Coast chains A&P/Pathmark,
Fairway, and Tops; West Coast chains Fresh & Easy and Haggen; the Southeastern Grocers
chains (BI-LO, Bruno's, Winn-Dixie, Fresco y Más, and Harveys); and in the Midwest,
Marsh Supermarkets. We could find no comparable publicly traded grocery chains that went
bankrupt during this period....
[ This report is excellent, important but complex and long. A careful reading is warranted
for those interested. ]
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
Looting: The Economic Underworld of Bankruptcy for Profit
By George A. Akerlof and Paul M. Romer
DURING THE 1980s, a number of unusual financial crises occurred. In Chile, for example,
the financial sector collapsed, leaving the government with responsibility for extensive
foreign debts. In the United States, large numbers of government-insured savings and loans
became insolvent-and the government picked up the tab. In Dallas, Texas, real estate prices
and construction continued to boom even after vacancies had skyrocketed, and then suffered a
dramatic collapse. Also in the United States, the junk bond market, which fueled the takeover
wave, had a similar boom and bust.
In this paper, we use simple theory and direct evidence to highlight a common thread that
runs through these four episodes. The theory suggests that this common thread may be relevant
to other cases in which countries took on excessive foreign debt, governments had to bail out
insolvent financial institutions, real estate prices increased dramatically and then fell, or
new financial markets experienced a boom and bust. We describe the evidence, however, only
for the cases of financial crisis in Chile, the thrift crisis in the United States, Dallas
real estate and thrifts, and junk bonds.
Our theoretical analysis shows that an economic underground can come to life if firms have
an incentive to go broke for profit at society's expense (to loot) instead of to go for broke
(to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation,
or low penalties for abuse give owners an incentive to pay themselves more than their firms
are worth and then default on their debt obligations....
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
11:31 AM - 19 Apr 2019
Private Equity Pillage details the business model that allows private equity firms to
bankrupt chains, throw workers out of jobs, stiff vendors and still make a profit, in the
context of grocery stores. 2/12
Here's an overview of the business model. Private equity firms have rigged the process so
they can extract profits not only from their investors (often public pension funds) but also
from the companies that it "invests" in. Here's how: 3/12
Investors, using money from public employees' pensions for example, put their $$$ in a
particular private equity fund. Right off the bat, the private equity firm makes a profit
because they collect management fees for just accepting the money. 4/12
The traditional story is that private equity firms invest in already distressed companies.
Yet more and more they are healthy, proven companies that the PE firm then forces to take on
debt (which the company now pays interest on). This erodes its ability to stay competitive.
5/12
On top of the new financial pressures a company faces from this debt, it *also* pays
monitoring fees to the PE firm. It may need to sell assets too, like real estate, and then
pay rent to occupy the buildings it once owned. Where do the proceeds go? Usually, the PE
firm. 6/12
With all this money being siphoned off from the company, it is in a much more difficult
position to compete. 7/12
Case in point: Albertsons, the 2nd largest grocer, struggles to compete, unlike Kroger's
(the largest). The difference? Albertsons is owned by PE firm Cerberus and lacks $$$ to
invest in multi-modal retailing. Kroger's can do all that Amazon-owned Whole Foods does &
more. 8/12
Now in a precarious situation, the company might liquidate, restructure, or be sold. None
might be the PE firm's most desirable outcome, but financial engineering usually ensures that
it comes out on top (and it might be first in line to divvy up assets). 9/12
Even if the PE firm doesn't make money from the bankruptcy, it has made money throughout
the entire process via fees on its investors and the company it acquired, as well as from the
assets the company sold off. The losers? Workers, investors like pension funds, vendors.
10/12
But common sense reforms can help. These could be limiting the debt an acquired company
can take on, being transparent about fees, limiting payments to PE firms in the aftermath of
a buyout, making PE firms joint employers, and protecting workers if a company goes bust.
11/12
Private equity gets away with all of this because of loopholes in current law. But that
doesn't mean what they are doing makes sense for either workers or the economy. We need
reforms that center workers and others taken advantage of in the current PE model. 12/12
The work by Rosemary Batt and Eileen Appelbaum is thorough and important, explaining an
institutionally provoked struggle of traditional retailers to survive that is misunderstood
by economics reporters and seldom understood by economists. That Amazon is not a treat to
traditional retailers needs to be realized. Traditional retailers in China by contrast are
faring well, with Alibaba.
My advice is to drop the idea of acquiring gold. There are just too many issues for the
small buyer to safely overcome.
1) If gold prices ever shoot through the roof (as the seller sites keep hinting at) I'd
expect the US government to politely invite you to sell them your stocks. This happened in
the Thirties, and can certainly happen again. It is probably impossible to accumulate
anything more than a few pieces of jewelry without being put on somebody's list. The Feds
closely monitor virtually every financial transaction made in this country.
2) How will you know you're getting pure 24k gold vs 23 or 18k stuff? Worse than that, the
Chinese have become VERY good at gilding Tungsten bars or disks. Even central Banks have
been taken in by this scam, and what do you suppose your chances are? The 19.25 gm/cubic
cm. density of Tungsten is very, very close to the 19.3 density of Gold. I'd imagine with a
bit of powder metallurgy work involving a speck of 22.5 Osmium, the numbers could be exactly
matched. There are a few other tests, but nobody outside of the huge dealers or central banks
can afford to do them.
3) come the financial disaster, how will you "spend" your gold? Even if you're certain you
have the genuine product, how will you convince me? Or anybody else, for that matter.
It'll come down to what the guy at the pawn shop will give you for it, and that'll probably
be on the order of 1/3 the value. (there is always the Official Government purchasers, and at
their price and their penalties for holding out)
I'd suggest you buy US "junk silver" in small cash deals - the old silver coins minted up
to 1964. The odds are much higher somebody will understand these have a superior value, and
they're in sizes suitable for small purchases. Even so, would you reasonably expect anybody
to accept a couple Ben Franklin half dollars in exchange for a sack of food - especially
if there is a severe food shortage going on? If your kids know about this acquisition,
you'd better prepare for the burglars - they talk about everything to everybody. Come to
think of it, I know of an adult who lost tens of thousands worth of silver because he was
motor mouth about it. Total loss. BTW, telling your insurance guy is the same as putting it
on a billboard - this information gets shared!
Do as Karlof1 suggested - find a reputable coin dealer in your vicinity. Don't buy at
Amazon, Ebay et al..
Also, if manageable buy 1 ounce coins only as this will save you surcharge that always
comes with the smaller ones. Stick with well known brands - Canadian Maple Leaf, Austrian
Philharmonics, Australian Kangaroo, Britannia, American Eagle - and stay away from collector
items.
Notional value of the coins:
Britannia 100 GBP, Philharmonics 100 Euro, Maple Leaf 50 CAD, American Eagle 50 US, Kangaroo
50 AUS.
Watch Gold spot price prior to any purchase at barchart.com (ticker ^XAUUSD - ^XAUCAD),
stockcharts.com (ticker $Gold), investing.com etc (ticker XAU/CAD - XAU/US).
This is an interesting but probably way too simplistic view. The USA as a neoliberal
superpower can't change its course. It now depends and it turn needs to support all the
neoliberal empire superstructure no matter what. Or vanish as en empire. Which is not in
Washington and MIC or Wall Street interests.
So "Empire Uber Alles" is the current policy which will remain in place. Even a slight
deviation triggers the reaction of the imperial caste (Mueller witch hunt is one example,
although I do not understand why it lasted so long, as Trump folded almost instantly and became
just Bush III with the same set of neocons driving the USA foreign policy )
The internal logic of neoliberal empire is globalization -- enforcing opening of internal
markets of other countries for the US multinationals and banks. So the conflict with the
"nationalist" (as as neocon slur them "autocratic") states, which does not want to became the USA
vassals ( like the Russia and China ) is not the anomaly, but the logical consequence of the USA
status and pretenses as imperial center. Putin tried to establish some kind of détente
several time. He failed: "Carnage needs to be destroyed" is the only possible attitude and it
naturally created strong defensive reaction which in turn strains the USA resources.
Meantime the standard of living of workers and middle class dropped. While most of the drop
is attributable to neoliberalism redistribution of wealth up, part of it is probably is
attributable to the imperial status of the USA.
The USA neoliberal elite after 1991 became completely detached from reality (aka infected
with imperil hubris) and we have what we have.
Those 700 billions that went to Pentagon speak for themselves.
And in turn create the caste of imperial servants that are strongly interested in maintaining
the status quo and quite capable to cut short any attempts to change it. The dominance of neocons
(who are essentially lobbyists of MIC) in the Department of State is a nice illustration of this
mouse trap.
So the core reason of the USA current neocon foreign policy is demands and internal dynamics
of neoliberal globalization and MIC.
In other words, as Dani Rodik said "...today's Sino-American impasse is rooted in
"hyper-globalism," under which countries must open their economies to foreign companies,
regardless of the consequences for their growth strategies or social models."
The American foreign policy Blob's latest worry is that Venezuela's radical leftist
government is
reaching out to the Middle East for support against growing pressure from Washington.
Specifically, President Nicolás Maduro is reportedly trying to establish extensive
political and financial links with Syrian President Bashar al-Assad and his ally in Lebanon,
Hezbollah . The
latter has repeatedly condemned
U.S. policy towards Maduro , and already appears to have
shadowy economic ties to Caracas. There are indications that Maduro's regime may be
utilizing Hezbollah to launder funds from the illegal drug trade.
Washington's fear is that lurking behind an Assad-Hezbollah-Maduro alliance is America's
arch-nemesis, Iran, which has close relations with both Assad and Hezbollah. Tehran's apparent
objective would be to strengthen the Venezuelan regime, boost anti-U.S. sentiment in the
Western Hemisphere, and perhaps acquire some laundered money
from a joint Maduro-Hezbollah operation to ease the pain of U.S. economic sanctions
re-imposed following the Trump administration's repudiation of the nuclear deal.
Although Iran, Assad, and Hezbollah remain primarily concerned with developments in their
own region, the fear that they want to undermine Washington's power in its own backyard is not
unfounded. But U.S. leaders should ask themselves why such diverse factions would coalesce
behind that objective.
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It is hardly the only example of this to emerge in recent years, and the principal cause
appears to be Washington's own excessively belligerent policies. That approach is driving
together regimes that have little in common except the need to resist U.S. pressure.
Washington's menacing posture undermines rather than enhances American security, and especially
in one case -- provoking an expanding entente between Russia and China -- it poses a grave
danger.
The current flirtation between Caracas and anti-American factions in the Middle East is not
the first time that American leaders have worried about collaboration among heterogeneous
adversaries. U.S. intelligence agencies and much of the foreign policy community warned for
years about cooperation between Iran
and North Korea over
both nuclear and ballistic missiletechnology
. During the Cold War, a succession of U.S. administrations expressed frustration and anger at
the de facto alliance between the totalitarian Soviet Union and democratic India. Yet the
underlying cause for that association was not hard to fathom. Both countries opposed U.S.
global primacy. India was especially uneasy about Washington's knee-jerk diplomatic and military support for
Pakistan , despite that country's history of dictatorial rule and aggression.
Alienating India was a profoundly unwise policy. So, too, has been Washington's longstanding
obsession with weakening and isolating Iran and North Korea. Those two countries have almost
nothing in common, ideologically, politically, geographically, or economically. One is a weird
East Asian regime based on dynastic Stalinism, while the other is a reactionary Middle East
Muslim theocracy. Without the incentive that unrelenting U.S. hostility provides, there is
little reason to believe that Tehran and Pyongyang would be allies. But Washington's vehemently
anti-nuclear policy towards both regimes, and the brutal economic sanctions that followed, have
helped cement a de facto alliance between two very strange bedfellows.
Iranian and North Korean leaders have apparently reached the logical conclusion that the
best way to discourage U.S. leaders from considering forcible regime change towards either of
their countries was to cooperate in strengthening their respective nuclear and missile
programs. Washington's
regime change wars , which ousted Iraq's Saddam Hussein and Libya's Moammar Gaddafi -- and
the unsuccessful attempt to overthrow Syria's Assad -- reinforced such fears.
The most worrisome and potentially deadly case in which abrasive U.S. behavior has driven
together two unlikely allies is the deepening relationship between Russia and China.
Washington's
"freedom of navigation" patrols in the South China Sea have antagonized Beijing, which has
extensive territorial claims in and around that body of water. Chinese protests have grown in
both number and intensity. Bilateral relations have also deteriorated because of Beijing's
increasingly aggressive posture toward Taiwan and
Washington's growing support for the island's de facto independence. The ongoing trade war
between the United States and China has only added to the animosity. Chinese leaders see
American policy as evidence of Washington's determination to continue
its status of primacy in East Asia, and they seek ways to undermine it.
Russia's grievances against the United States are even more pronounced. The expansion of
NATO to the borders of the Russian Federation, Washington's repeated trampling of Russian
interests in the Balkans and the Middle East, the imposition of economic sanctions in response
to the Crimea incident, the Trump administration's withdrawal from the Intermediate Nuclear
Forces treaty,
U.S. arms sales to Ukraine , and other provocations have led to a new
cold war . Russia has moved to increase diplomatic,
economic, and even military cooperation with China. Beijing and Moscow appear to be
coordinating
policies on an array of issues,
complicating Washington's options .
Close cooperation between Russia and China is all the more remarkable given the extent of
their bitterly competing interests in Central Asia and elsewhere. A mutual fear of and anger
toward the United States, however, seems to have overshadowed such potential quarrels -- at
least for now.
There even appears to be a "grand collusion" of multiple U.S. adversaries forming. Both
Russia and China are increasing their economic links with
Venezuela , and Russia's military involvement with the Maduro regime is also on the rise.
Last month, Moscow dispatched two nuclear-capable bombers to Caracas
along with approximately 100 military personnel. The latter contingent's mission was to
repair and refurbish Venezuela's air defense system in light of Washington's menacing rhetoric.
That move drew a
sharp response from President Trump.
Moscow's policy toward the Assad government, Tehran, and Hezbollah has also become more
active and supportive. Indeed, Russia's military intervention in Syria, beginning in 2015, was
a
crucial factor in tilting the war in favor of Assad's forces, which have now regained
control over most of Syria. Washington is thus witnessing Russia getting behind two of its
major adversaries: Venezuela and an Iran-led coalition in the Middle East.
This is a classic example of
balancing behavior on the part of countries worried about a stronger power that pursues
aggression. Historically, weaker competitors face a choice when confronting such a power:
bandwagon or attempt to balance against that would-be hegemon. Some very weak nations may
have little choice but to cower and accept dependent status, but most midsize powers (and even
some small ones) will choose the path of defiance. As part of that balancing strategy, they
tend to seek any allies that might prove useful, regardless of differences. When the perceived
threat is great enough, such factors are ignored or submerged. The United States and Britain
did so when they formed the Grand Alliance with the totalitarian Soviet Union in World War II
to defeat Nazi Germany. Indeed, the American revolutionaries made common cause with two
reactionary autocracies, France and Spain, to win independence from Britain.
The current U.S. policy has produced an array of unpleasant results, and cries out for
reassessment. Washington has created needless grief for itself. It entails considerable
ineptitude to foster collaboration between Iran and North Korea, to say nothing of adding
Assad's secular government and Maduro's quasi-communist regime to the mix. Even worse are the
policy blunders that have driven Russia to support such motley clients and forge ever-closer
economic and military links with a natural rival like China. It is extremely unwise for any
country, even a superpower, to multiply the number of its adversaries needlessly and drive them
together into a common front. Yet that is the blunder the United States is busily
committing.
Ted Galen Carpenter, a senior fellow in security studies at the Cato Institute and a
contributing editor at , is the author of 12 books and more than 800 articles. His latest book
is Gullible Superpower: U.S. Support for Bogus Foreign Democratic Movements (2019).
"I never thought I'd be saying this, but if the Soviet Union still existed, the United States
would not dare to do what it is doing now" – said to me by an anti-Communist Romanian
who had fled Romania when it was still Communist ruled. We were attending a demonstration
against the Clinton air war which was the final death blow to Yugoslavia.
The emergence of a powerful anti-American world coalition is a good thing; US world
hegemony has been good neither for the US nor for the world. The main danger is that the US,
seeing its power slip away, will resort to all out war, even nuclear war. I pray that the US
rulers are at least sane even if they are quite evil and over-bearing.
Current US foreign policy, set by the White House and Commander-in-Chief, reflects the beliefs
of the Deplorables who put Trump into office: sadly, most of these dupes believe the myth of
American Exceptionalism [copyright Sarah Palin]. The nexus of confusing social media and
reality TV with genuine reality, and 1950s Hollywood jingoism, has them waiting for a crisis
[possibly a gay Star Wars/Kardashian-type monster] that can only be saved before the final
commercial by their 'Hero'.
Hello,
Let's see here.
It's gotten to the point where the great United States is ruled by Trump and the strangest of
people, like freak Bolton and Pompeo and the Presidents son in law?
Are the voters nuts? The lousy choices of war mongers Hillary and Trump?
Look at the foreign leaders in the pictures.
Then look at the nasty hate filled, historically ignorant bums I named above.
The difference?
They, the leaders of those four nations threaten no one and no other nation, but clown Trump
and his advisers do every day.
Take away any power from Trump and his advisers, yeah, wishful thinking, I know, and read a
book by Noam Chomsky or an article or three by Bernie Sanders and maybe you will see what a
circus the white house is, of this nation. Ironically, America has never been LESS great. What
a damn crying shame, know what I mean?
There is a diverse coalition of weaker countries opposing the U.S. because
A. Each have been the target of regime change and figure they they better pool their resources
and help each other when they can 'the axis of resistance'.
or
B. The wolves are waiting at the wood's edge just waiting to humiliate the United States, the
last flickering light of all that is good.
Well since we are a nation of narcissists we believe B because we cannot fathom that other
countries act in their own interests.
This slur "authoritarian state" is now peddled by neocons as synonym for the "countries we do not like"
This neocons in not very inventive... We already saw this line from Robert Kagan, who
actually is a better writer. This neocon/neolib pressitute can't even use proper terms such as
"neoliberalism" and "Washington consensus"
And slide to far-right nationalism and neo-fascism is direct result of neoliberalism
dominance for the last 40 years (since Carter) and sliding of the standard of living of workers
and the middle class.
Notable quotes:
"... Both countries have touted the virtues of their systems, while arguing that Western values are a source of decadence, amorality and disorder in the Western world. ..."
As international rivalry intensifies, the core strategic task for the U.S.-led democratic
community is to contain the geopolitical influence and political disruption caused by
authoritarian great powers, namely China and Russia. Yet that task is made all the harder
because illiberalism -- and sympathy for those illiberal powers -- is simultaneously surging
among key actors on the political right. If the U.S. and its allies are to succeed in the great
global rivalry of the 21st century, the right must confront the threat of illiberalism within
its ranks -- just as the left did during a previous twilight struggle in the 20th century.
... ... ...
This time, the threat is not expansionist communism, but a combination of autocracy and
geopolitical revisionism. China has been moving toward a dystopian future of high-tech
authoritarianism, as it pushes for greater power and influence overseas. Putin's Russia has
consolidated an illiberal oligarchy, while using information warfare, political meddling and
other tools to subvert liberal democracies in Europe, the U.S. and beyond.
Both countries have touted the virtues of their systems, while arguing that Western
values are a source of decadence, amorality and disorder in the Western world.
... ... ...
It is not for nothing that the political scientist Marc Plattner has
written that the gravest threat to liberal democracy today is “that it will end up
being abandoned by substantial segments of the right.” And even in the U.S., there are
alarming signs that conservative commitment to the norms of liberal democracy is under
strain.
Communism was not a threat, but actually benefited the world in many ways.
It was communism that put pressure on capitalism to provide labor a fair share of wealth and
income. As soon as Soviet communism collapsed, capitalism returned to its avaricious roots,
resulting in stagnant wages for the working class. And the pauperization of the working class
in recent decades is the cause for the current revolt against liberal capitalism.
So it was the competition from communism that was helping capitalism to stay healthy. Without
it capitalism has degenerated into a Dickensian dystopia. We should therefore welcome any
alternative socio-economic models to liberal capitalism.
It was communism that put pressure on capitalism to provide labor a fair
share of wealth and income. As soon as Soviet communism collapsed,
capitalism returned to
Thats a great point Che.
I have never ever looked at it from that angle.
Interesting.
Robert Kagan of the Brookings Institution, who has long been a leading conservative
intellectual, warns that this disillusion with liberal democracy “is clearly present
among American conservatives, and not just among the ‘alt-right.’
Honest and real conservatives are far and fewer in today's MAGA/tea party infested GOP.
Forget career politicians like Ted Cruz or McConnell, even the previously decent conservative
think tanks/pundits like from NR or Erik Erickson or others have all given up on any
principles and just bow at the altar of Trump now.
No they haven’t, Trump decided to put McConnell in charge so of course the
#neverTrumpers like the McConnell presidency...which consists of appointing Republican judges
at record pace and little else.
The biggest need is to resist holy warriors like Hal Brands who want to destroy the world
if it resists their version of revealed truth. They are the biggest threat to the human
future. The United States has to learn to live in a world that it cannot control. The
American goal should be to work towards a constructive human future not some kind of holy war
to impose American control on the rest of the world. The United States is the biggest
military spender. In recent history, It has been the world's global aggressor.
It has an
history of wars that have made little difference whether America won or lost them. Perhaps
the United States could succeed with some kind of genocide that wiped out all of the parts of
the world that refuse to accept American supremacy. But, short of that kind of disgrace, the
United States is not going to succeed in achieving any meaningful goal through war. As long
as America does not destroy the world, the future is going to be determined by economic
competition and the destinies that the people of different parts of the world choose for
themselves.
I had wondered if it was noticed the Liberalism was dying. The world has turned hard
right, with all the anger, nationalism, do-as-I-say, and social intolerance.
I don't even the children of today.
I might suggest that liberals themselves are destroying their freedoms with illogical
illiberal liberalism.
YOU can't do that, say that, act like that, think like that...no no no...we must act and
be correct, nice, polite, all forgiving and never critical.
Huh?
The freedoms that so many of us marched for, fought for, voted for, sang about (thank gawd
the music still lives), got bloody for, even died for, are slipping away quicker than you can
say me, me, me...it's all about me.
Maybe...small maybe...our youth can once again awaken America and the world's conscience.
Maybe? Maybe not!
Wha? It seems our LIttle Cultural Revolution is just warming up. Wait till AOC et al are
all growed up.
"This is a moment when the “free world” needs to be strong and united."
Is this the same "free" world that jails grandmothers over contested historical views?
That has reneged on free speech?
Thanks to a truly ethnomasochistic immigration policy, I assure you that this will not
happen. The West will be lucky if squeaks through this period without a civil war.
"... Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world's largest trading economy is a regime in urgent need of repair. ..."
"... Today's impasse between the US and China is rooted in the faulty economic paradigm I have called "hyper-globalism," under which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers" in the language of trade economists and lawyers. ..."
Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to
foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot
accommodate the world's largest trading economy is a regime in urgent need of repair.
CAMBRIDGE – The world economy desperately needs a plan for "peaceful coexistence" between the United States and China. Both sides
need to accept the other's right to develop under its own terms. The US must not try to reshape the Chinese economy in its image
of a capitalist market economy, and China must recognize America's concerns regarding employment and technology leakages, and accept
the occasional limits on access to US markets implied by these concerns.
The term "peaceful coexistence" evokes the Cold War between the US and the Soviet Union. Soviet leader Nikita Khrushchev understood
that the communist doctrine of eternal conflict between socialist and capitalist systems had outlived its usefulness. The US and
other Western countries would not be ripe for communist revolutions anytime soon, and they were unlikely to dislodge the Communist
regimes in the Soviet bloc. Communist and capitalist regimes had to live side by side.
Peaceful coexistence during the Cold War may not have looked pretty; there was plenty of friction, with each side sponsoring its
own set of proxies in a battle for global influence. But it was successful in preventing direct military conflict between two superpowers
armed to the hilt with nuclear weapons. Similarly, peaceful economic coexistence between the US and China is the only way
to prevent costly trade wars between the world's two economic giants
Today's impasse between the US and China is rooted in the faulty economic paradigm I have
called "hyper-globalism," under
which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies
or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without
such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers"
in the language of trade economists and lawyers.
Thus, the main US complaint against China is that Chinese industrial policies make it difficult for US companies to do business
there. Credit subsidies keep state companies afloat and allow them to overproduce. Intellectual property rules make it easier for
copyrights and patents to be overridden and new technologies to be copied by competitors. Technology-transfer requirements force
foreign investors into joint ventures with domestic firms. Restrictive regulations prevent US financial firms from serving Chinese
customers. President Donald Trump is apparently ready to carry out his threat of slapping additional punitive tariffs on $200 billion
of Chinese exports if China does not yield to US demands in these areas.
For its part, China has little patience for arguments that its exports have been responsible for significant whiplash in US labor
markets or that some of its firms are stealing technological secrets. It would like the US to remain open to Chinese exports and
investment. Yet China's own opening to world trade was carefully managed and sequenced, to avoid adverse impacts on employment and
technological progress.
Peaceful coexistence would require that US and China allow each other greater policy space, with international economic integration
yielding priority to domestic economic and social objectives in both countries (as well as in others). China would have a free hand
to conduct its industrial policies and financial regulations, in order to build a market economy with distinctive Chinese characteristics.
The US would be free to protect its labor markets from
social dumping and to exercise greater oversight over Chinese investments that threaten technological or national security objectives.
The objection that such an approach would open the floodgates of protectionism, bringing world trade to a halt, is based on a
misunderstanding of what drives open trade policies. As the principle of comparative advantage indicates, countries trade because
it is in their own interest. When they undertake policies that restrict trade, it is either because they reap compensating benefits
elsewhere or because of domestic political failures (for example, an inability to compensate the losers).
In the first instance, freer trade is not warranted because it would leave society worse off. In the second case, freer trade
may be warranted, but only to the extent that the political failure is addressed (and compensation is provided). International agreements
and trade partners cannot reliably discriminate between these two cases. And even if they could, it is not clear they can provide
the adequate remedy (enable compensation, to continue the example) or avoid additional political problems (capture by other special
interests such as big banks or multinational firms).
Consider China in this light. Many analysts believe that China's industrial policies have played a key role in its transformation
into an economic powerhouse. If so, it would be neither in China's interests, nor in the interest of the world economy, to curb such
practices. Alternatively, it could be that these policies are economically harmful on balance, as others have argued. Even in that
case, however, the bulk of the costs are borne by the Chinese themselves. Either way, it makes little sense to empower trade negotiators
– and the special interests lurking behind them – to resolve fundamental questions of economic policy on which there is little agreement
even among economists.
Those who worry about the slippery slope of protectionism should take heart from the experience under the General Agreement on
Tariffs and Trade prior to the establishment of the World Trade Organization. Under the GATT regime, countries had much greater freedom
to pursue their own economic strategies. Trade rules were both weaker and less encompassing. Yet world trade expanded (relative to
global output) at a more rapid clip in the three and a half decades after World War II than it has under the post-1990 hyper-globalist
regime. Similarly, one can make a convincing case that, thanks to its unorthodox growth policies, China today is a larger market
for foreign exporters and investors than if it had stuck to WTO-compliant policies.
Finally, some may say that these considerations are irrelevant, because China has acceded to the WTO and must play by its rules.
But China's entry into the WTO was predicated on the idea that it had become a Western-style market economy, or would become one
soon. This has not happened, and there is no good reason to expect that it will (or should). A mistake cannot be fixed by compounding
it.
A global trade regime that cannot accommodate the world's largest trading economy – China – is a regime in urgent need of repair.
"... "The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this is what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is no more viewed as a perfect model for all. Moreover, many people in the very western countries are skeptical about it," Lavrov said. ..."
"... "The US and its allies are trying to impose their approaches on others," Lavrov noted. ..."
"... "They are guided by a clear desire to preserve their centuries-long dominance in global affairs although from the economic and financial standpoint, the US – alone or with its allies – can no longer resolve all global economic and political issues," he said. ..."
"... "In order to preserve their dominance and recover their indisputable authority, they use blackmail and pressure. They don't hesitate to blatantly interfere in the affairs of sovereign states." ..."
"... Agree with the assessment other than the claim the US has had centuries long global dominance, or even influence. ..."
Russian Foreign Minister Sergei Lavrov declared today that the Western, liberal model of society is dying, and a new world order
is taking its place.
Lavrov made the comments at his annual meeting with students and professors at the Foreign Ministry's Diplomatic Academy, reported
Russian state news agency TASS.
"The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this
is what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is
no more viewed as a perfect model for all. Moreover, many people in the very western countries are skeptical about it," Lavrov
said.
According to him, global development is guided "by processes aimed at boosting multipolarity and what we call a polycentric world
order."
"Clearly, multipolarity and the emergence of new centers of power in every way requires efforts to maintain global stability
and search for a balance of interests and compromises, so diplomacy should play a leading role here," Lavrov went on to say.
"Particularly because there are a lot of issues that require generally acceptable solutions."
These include regional conflicts, international terrorism, food security and environmental protection. This is why we believe
that only diplomacy can help make agreements and reach sustainable decisions that will be accepted by all.
"The US and its allies are trying to impose their approaches on others," Lavrov noted.
"They are guided by a clear desire to preserve their centuries-long dominance in global affairs although from the economic
and financial standpoint, the US – alone or with its allies – can no longer resolve all global economic and political issues,"
he said.
"In order to preserve their dominance and recover their indisputable authority, they use blackmail and pressure. They don't
hesitate to blatantly interfere in the affairs of sovereign states."
Perry Colace
When I was a kid, the Soviet Union was the enemy. Now Russia (with an economy, population, military and world influence the
fraction of the United States) seems to be one of the few places in the world that makes any bit of sense and ACTUALLY cares a
little bit about its culture and people.
Fluff The Cat
"The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this is
what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is
no more viewed as a perfect model for all.Moreover, many people in the very western countries are skeptical about it," Lavrov
said.
A Judaic-Masonic world order is the end goal. It entails the complete loss of sovereignty for all Western nations and the slow
genocide of white Christians via miscegnation and displacement by third-worlders.
lnardozi
I can't think of a man more American than Putin.
Sell the bases, come home, stop bothering others and trying to run world affairs.
Then we can spend a nice nice century or so rebuilding our infrastructure and trimming our out-of-control federal government.
The clue is right there in the name - the united STATES of America. A state is a sovereign country with its own laws - except
for those powers enumerated in the Constitution which the federal government should have.
That's the whole point - competition in government. You don't like the state you're in - you're guaranteed the choice of 49
others, along with all your possessions.
notfeelinthebern
Agree with the assessment other than the claim the US has had centuries long global dominance, or even influence.
johnnycanuck
Western global dominance, US took over from the British Empire with the assistance of the banksters class. It's all there in
the history books, you just need to spend time
consider me gone
As much as I hate to say it, this was Winston Churchill's idea. Even as the war was just starting, he was a major advocate
for the West controlling the globe after WWII.
But I'll bet he had no idea that the West would abandon traditional Western values in the process. He wouldn't watch TV and
predicted it would turn society into unthinking idiots. He nailed that one anyhow.
The Alliance
"...many people in the very western countries are skeptical about it," Lavrov said.
Skeptical?
I, for one, would show up early and highly motivated to march against, and to destroy, these treasonous, malevolent, collectivist
Globalists.
The Globalists within the United States government are traitors--traitors, by definition. They have declared war on our republic.
CDN_Rebel
Russia works because they have a ruthless tyrant who happens to be incredibly competent. That same system with a weak ruler
will collapse entirely in a matter of months. I like Putin, but he needs to groom an ironfisted successor pronto.
As for the chows - they need to print half a trillion a month to stay afloat and that's your model?
The west is only fucked because the sleeping masses refuse to acknowledge that Marxists have undermined our institutions...
It would take only a few years to scrub these subversive ***** from our society if we had the balls to do it
johnnycanuck
yadda yadda yadda.. marxists, subversives, commies, all the catch phrases of ye old Joe McCarthy. Russia works because Russians
have a history of enduring adversity. Unlike Americans.
Moribundus
It is eventually end of era of western imperialism, era that lasted 900 years. Game is over
"... Trump's failure here is his alone. Closing the border could be accomplished with a simple executive order. It has happened before: Reagan ordered the closing of the border when DEA agent Enrique "Kiki" Camarena was murdered on assignment in Mexico in 1985, for instance. ..."
"... Trump's empty threats over the past two years have had real-world consequences, prompting waves of migrants trying to sneak into the country while they still have the chance. His recent move to cut all foreign aid to Guatemala, Honduras, and El Salvador is another empty gesture that will probably have similar consequences. The funds directed to those countries were used for programs that provided citizens with incentives not to migrate elsewhere. (The situation was not ideal from an isolationist point of view, but a wiser man would have built the wall before cutting off the aid.) ..."
"... Trump's betrayal of American workers is perhaps best encapsulated by the fact that one of the members of the advisory board of his National Council for the American Worker (which claims to "enhance employment opportunities for Americans of all ages") is the CEO of IBM, a company that has expressed a preference for F-1 and H-1B visa holders in its job postings. ..."
"... There are more former Goldman Sachs employees in the Trump White House than in the Obama and Bush administrations combined. ..."
"... It is hard to escape the conclusion that Trump is not actually interested in curbing immigration and reversing America's demographic decline. He is a con artist and a coward who is willing to betray millions of white Americans so that he can remain in the good graces of establishment neoconservatives ..."
"... As Ann Coulter has put it, "He's like a waiter who compliments us for ordering the hamburger, but keeps bringing us fish. The hamburger is our signature dish, juicy and grilled to perfection, you've made a brilliant choice . . . now here's your salmon. " ..."
"... Third, he put an end to American funding for Palestinians. This coincided with the passing of a bill that codified a $38 billion, ten-year foreign aid package for Israel. Trump also authorized an act allocating an additional $550 million toward US-Israel missile and tunnel defense cooperation. ..."
"... Trump's track record on Israel shows that he is capable of exercising agency and getting things done. But he has failed to address the most pressing issue that America currently faces: mass immigration and the displacement of white Americans. The most credible explanation for his incompetence is that he has no intention of delivering on his promises. There is no "Plan," no 4-D chess game. The sooner white Americans realize this, the better. ..."
"... We elected America's first Jewish president, nothing more" ..."
"Unlike other presidents, I keep my promises," Trump boasted in a
speech delivered on Saturday to the Republican Jewish Congress
at a luxury hotel in Las Vegas. Many in the audience wore red yarmulkes emblazoned with his name. In his speech, Trump condemned
Democrats for allowing "the terrible scourge of anti-Semitism to take root in their party" and emphasized his loyalty to Israel.
Trump has kept some of his promises. So far, he has kept every promise that he made to the Jewish community. Yet he has reneged
on his promises to white America – the promises that got him elected in the first place. It is a betrayal of the highest order: millions
of white Americans placed their hopes in Trump and wholeheartedly believed that he would be the one to make America great again.
They were willing to endure social ostracism and imperil their livelihoods by supporting him. In return, Trump has turned his back
on them and rendered his promises void.
The most recent example of this is Trump's failure to keep his promise to close the border. On March 29, Trump threatened to close
the border if Mexico did not stop all illegal immigration into the US. This would likely have been a highly effective measure given
Mexico's dependence on cross-border trade. Five days later, he suddenly retracted this threat and said that he would give Mexico
a " one-year warning
" before taking drastic action. He further claimed that closing the border would not be necessary and that he planned to establish
a twenty-five percent
tariff on cars
entering the US instead.
Trump's failure here is his alone. Closing the border could be accomplished with a simple executive order. It has happened
before: Reagan ordered the closing of the border when DEA agent Enrique "Kiki" Camarena was murdered on assignment in Mexico in 1985,
for instance.
Trump's empty threats over the past two years have had real-world consequences, prompting waves of migrants trying to sneak
into the country while they still have the chance. His recent move to cut all foreign aid to Guatemala, Honduras, and El Salvador
is another empty gesture that will probably have similar consequences. The funds directed to those countries were used for programs
that provided citizens with incentives not to migrate elsewhere. (The situation was not ideal from an isolationist point of view,
but a wiser man would have built the wall before cutting off the aid.)
The past two years have seen a surge in illegal immigration without precedent in the past decade. Since late December, the Department
of Homeland Security has released 125,565 illegal aliens into the country. In the past two weeks alone,
6,000 have been admitted. According to current projections, 2019 will witness around 500,000 to 775,000 border crossings. Additionally,
about 630,000 illegal aliens will be added to the population after having overstayed their visas. By the end of the year,
more than one million illegal aliens will have been added to the population:
These projections put the number of illegal aliens added to the U.S. population at around one to 1.5 million, on top of the
11 to
22 million illegal aliens who are already living across the country. This finding does not factor in the illegal aliens who
will be deported, die over the next year, or leave the U.S. of their own will. As DHS data has revealed, once border crossers
and illegal aliens are released into the country, the overwhelming majority are never deported.
In February, Trump signed a
bill allowing the DHS
secretary to add another 69,320 spots to the current H-2B cap of 66,000. On March 29, DHS began this process by announcing that it
would issue an additional
30,000 H-2B visas this year. The H-2B visa program allows foreign workers to come to the US and work in non-agricultural occupations.
Unlike the H-1B program, a Bachelor's degree is not required; most H-2B workers are employed in construction, maintenance, landscaping,
and so on. The demographic most affected by the expansion of the H-2B program will be unemployed working-class Americans. This flies
in the face of Trump's promise to protect American workers and stop importing foreigners.
Trump has indicated that he has plans to expand the H-1B visa program as well. "We want to encourage talented and highly skilled
people to pursue career options in the U.S.," he said in a
tweet in January.
Trump's betrayal of American workers is perhaps best encapsulated by the fact that one of the members of the advisory board
of his National Council for the American Worker
(which claims to "enhance employment opportunities for Americans of all ages") is the CEO of IBM, a company that has
expressed a preference for F-1 and H-1B visa holders
in its job postings.
Trump has been working on legal immigration with Jared Kushner, who has quietly been crafting a
plan to grant
citizenship to more "low- and high-skilled workers, as well as permanent and temporary workers" (so, just about everyone). Kushner's
plan proves the folly of the typical Republican line that legal immigration is fine and that only illegal immigration should be opposed.
Under his plan, thousands of illegal aliens will become "legal" with the stroke of a pen.
There is a paucity of anti-immigration hardliners in Trump's inner circle (though Stephen Miller is a notable exception). Trump
has surrounded himself with moderates: the Kushners, Mick Mulvaney, Alex Acosta, and others. There are more former Goldman Sachs
employees in the Trump White House than in the Obama and Bush administrations combined.
The new DHS secretary, Kevin McAleenan, who was appointed yesterday following Kirstjen Nielsen's resignation, is a middle-of-the-road
law enforcement official who served under Obama and Bush and is responsible for the revival of the "
catch-and-release " policy, whereby
illegal aliens are released upon being apprehended. It was reported last week that Trump was thinking of appointing either Kris Kobach
or Ken Cuccinelli to a position of prominence (as an "
immigration czar "),
but this appears to have been another lie.
Trump's failure to deliver on his promises cannot be chalked up to congressional obstruction. Congress. As Kobach said in a recent
interview , "It's not like we're powerless and it's not like we have to wait for Congress to do something. . . . No, we can actually
solve the immediate crisis without Congress acting." Solving the border crisis would simply demand "leadership in the executive branch
willing to act decisively." Kobach recently outlined an intelligent
three-point plan that Trump could implement:
Publish the final version of the regulation that would supersede the Flores Settlement. The initial regulation was
published by the Department of Homeland
Security in September 2018. DHS could have published the final regulation in December. Inexplicably, DHS has dragged its feet. Finalizing
that regulation would allow the United States to detain entire families together, and it would stop illegal aliens from exploiting
children as get-out-of-jail free cards. Set up processing centers at the border to house the migrants and hold the hearings in one
place. The Department of Justice should deploy dozens of immigration judges to hear the asylum claims at the border without releasing
the migrants into the country. FEMA already owns
thousands of travel trailers and mobile homes that it has used to address past hurricane disasters. Instead of selling them (which
FEMA is currently doing), FEMA should ship them to the processing centers to provide comfortable housing for the migrants. In addition,
a fleet of passenger planes should deployed to the processing centers. Anyone who fails in his or her asylum claim, or who is not
seeking asylum and is inadmissible, should be flown home immediately. It would be possible to fly most migrants home within a few
weeks of their arrival. Word would get out quickly in their home countries that entry into the United States is not as easy as advertised.
The incentive to join future caravans would dissipate quickly. Publish a proposed Treasury regulation that prohibits the sending
home of remittances by people who cannot document lawful presence in the United States. This will hit Mexico in the pocketbook: Mexico
typically brings in well over $20 billion a year in
remittances , raking in
more than $26 billion in 2017. Then, tell the government of Mexico that we will finalize the Treasury regulation unless they do two
things to help us address the border crisis: (1) Mexico immediately signs a "safe third country agreement" similar to our agreement
with Canada. This would require asylum applicants to file their asylum application in the first safe country they set foot in (so
applicants in the caravans from Central America would have to seek asylum in Mexico, rather than Canada); and (2) Mexico chips in
$5 billion to help us build the wall. The threat of ending remittances from illegal aliens is a far more powerful one than threatening
to close the border. Ending such remittances doesn't hurt the U.S. economy; indeed, it helps the economy by making it more likely
that such capital will be spent and circulate in our own country. We can follow through easily if Mexico doesn't cooperate.
It would not be all that difficult for Trump to implement these proposals. Kobach still has faith in Trump, but his assessment
of him appears increasingly to be too generous. It is hard to escape the conclusion that Trump is not actually interested in
curbing immigration and reversing America's demographic decline. He is a con artist and a coward who is willing to betray millions
of white Americans so that he can remain in the good graces of establishment neoconservatives . At the same time, he wants to
maintain the illusion that he cares about his base.
As Ann Coulter has put it, "He's like a waiter who compliments us for ordering the hamburger, but keeps bringing us fish.
The hamburger is our signature dish, juicy and grilled to perfection, you've made a brilliant choice . . . now here's your salmon.
"
Nearly everything Trump has done in the name of restricting immigration has turned out to be an empty gesture and mere theatrics:
threatening to close the border, offering protections to "Dreamers" in exchange for funding for the ever-elusive wall, threatening
to end the "anchor baby" phenomenon with an executive order (which never came to pass), cutting off aid to Central American countries,
claiming that he will appoint an "immigration czar" (and then proceeding to appoint McAleenan instead of Kobach as DHS secretary),
and on and on.
While Trump has failed to keep the promises that got him elected, he has fulfilled a number of major promises that he made to
Israel and the Jewish community.
First, he moved the American embassy from Tel Aviv to Jerusalem. Trump claimed that the move would only cost $200,000, but in
reality it will end up being more than
$20 million . The construction
of the embassy also led to a series of bloody protests; it is located in East Jerusalem, which is generally acknowledged to be Palestinian
territory.
Second, he pulled the US out of the Iran nuclear deal. Netanyahu
claimed on Israeli TV that Israel was responsible for convincing him to exit the deal and reimpose sanctions on Iran. (Both Trump
and Netanyahu falsely alleged that Iran lied about the extent of its nuclear program; meanwhile, Israel's large arsenal of chemical
and biological weapons has escaped mention.) Third, he put an end to American funding for Palestinians. This coincided with the
passing of a
bill that codified a $38 billion, ten-year foreign aid package for Israel. Trump also authorized an act allocating an additional
$550 million toward US-Israel missile and tunnel defense cooperation.
Fourth, he recognized Israel's sovereignty over the Golan Heights (in defiance of the rest of the world, which recognizes the
Golan Heights as Syrian territory under Israeli occupation). Trump's Golan Heights proclamation was issued on March 21 and was celebrated
by Israel. Trump's track record on Israel shows that he is capable of exercising agency and getting things done. But he has failed
to address the most pressing issue that America currently faces: mass immigration and the displacement of white Americans. The most
credible explanation for his incompetence is that he has no intention of delivering on his promises. There is no "Plan," no 4-D chess
game. The sooner white Americans realize this, the better.
If you haven't picked up a copy of Vicky Ward's book, Kushner, Inc.: Greed. Ambition. Corruption. The Extraordinary Story
of Jared Kushner and Ivanka Trump , you really should.
I haven't read Mr. Graham's essay yet, but I thought those two links would fit in nicely. I stay in a low boil, like it is,
and having plodded through both those reviews, I can't stand reading too much on this topic at once.
Something's gotta give. Or are the brainless goy just going to let themselves be led off a cliff?
Oh, yes. There's an interview with Ward on
BookTV .
Yep. Trump's a lying POS pond scum like the rest of the DC swamp that he said he was going to drain, turns out he is one of them
all along. We elected America's first Jewish president, nothing more. He needs to change his campaign slogan to MIGA, Make Israel
Great Again, that was the plan of his handlers all along.
What I want to know is, who are those idiots who still keep showing up at his rallies? Are they really that dumb?
Even Sanders came out and said we can't have open borders. I've also heard him said back in 2015 that the H1b visa program
is a replacement program for American workers. If he grows a pair and reverts back to that stance, teams up with Tulsi Gabbard,
I'll vote for them 2020. Fuck Trump! Time for him and his whole treasonous rat family to move to Israel where they belong.
His "implicitly white" supporters would have abandoned him in droves, not wanting to be associated with a racist, thus pointing
up the weakness of implicit whiteness as a survival strategy. And is it actually a survival strategy? A closer look at it makes
me think it's more of a racial self-extermination strategy. After all, what kind of a survival strategy is it that can't even
admit its goals to itself? And it's exactly this refusal of whites to explicitly state that they collectively want to continue
to exist as a race that is the greatest impediment to their doing so. It's an interesting problem with no easy solution. How
do you restore the will to live to a race that seems to have lost it? And not only lost its will to live, but actually prides
itself on doing so? Accordingly, this "betrayal" isn't a betrayal at all. It's what American whites voted for and want. Giving
their country away and accepting their own demographic demise is proof of their virtue; proof of their Christian love for all
mankind.
You are definitely onto something here.
Still, I feel it's not that deep and complicated. It could be that they simply don't believe that the danger is closing in.
Boils down to wrong judgment. People who haven't had the need to think hard about serious things tend to develop that weakness.
I guess that boils down to "good times make weak men."
Hard times are coming and they'll make hard men.
The catch is simple: will be enough of them in time ?
Switching to the Democrats is no solution. The DNC has proven itself to be a criminal organization through sabotaging Sander's
campaign and then being instrumental in creating Russophobia, in collusion with Obama, the CIA, the FBI, and the DoJ. The DNC
has rules in place stating that super delegates – elitists aligned with the DNC – can vote if one nominee does not win on the
first ballot at the National Convention.
Because we have a HUGE number of hats in the Democratic ring, the chances that the nomination
will not be decided on a first vote are extremely high, with the result being that the Democratic nominee is not going to be decided
by voters in the primaries but by super delegates, i.e., the elitists and plutocrats.
Democracy exists when we vote to support
candidates chosen by the elites for the elites; when we stop doing that, the elites turn on democracy. It is a sham; we will have
a choice in 2020: between Pepsi and Coke. You are free to choose which one you prefer, because you live in a democracy. For more
on the rigging of the democratic primaries for 2020, see
Since the 1971 floating of the US dollar onto the global markets, and 1973 creation of the
Petro dollar, the world has experienced a consistent collapse of productive manufacturing jobs,
infrastructure investment, long term planning on the one hand and a simultaneous increase of
de-regulation, short term speculation, financial services, and low wage retail jobs. During
this post 1971 process of decline, debt slavery became a norm both in developed countries and
developing sector nations alike, while outsourcing caused the castration of national
sovereignty and an ever greater reliance on "cheap labor" and "cheap resources" from abroad. It
was even called the
"controlled disintegration" policy of Federal Reserve Chairman Paul Volcker in 1978 as he
was preparing to raise interest rates to levels that made it impossible for a majority of small
and medium agro-industrial enterprises to compete against corporate monoliths. The most
concrete model of this collapse was unveiled to the world in 1996 by the late American
economist Lyndon LaRouche known as the Triple Curve Collapse Function.
Some have called this collapse "a failure of globalization". Executive Intelligence Review's
Dennis Small has
repeatedly stated over many years that this is characterization is false. Globalization
should rather be seen as a complete success- in that when looked at from a top down
perspective, it becomes increasingly clear that the architects of this policy achieved exactly
what they set out to do. That intention was to impose an artificial closed/zero-sum game
paradigm upon a species whose distinguishing characteristic is its creative reason and capacity
constantly grow and self-perfect both on the surface of the earth and beyond. A primary figure
in the oligarchy's tool box of sociopathic agents who shaped this program for depopulation and
zero sum thinking over the years is a Canadian-born operative by the name of Maurice Strong.
Although having died in 2015, Strong's life and legacy are worth revisiting as it provides the
modern reader a powerful, albeit ugly insight into the methods and actions of the British-Deep
State agenda that so mis-shaped world history through the latter half of the 20 th
century.
While this exercise will have value for all truth seekers, this story should carry
additional weight for Canadians currently witnessing
their own government collapsing under the weight of the contradictions built into a system
which Strong led in shaping (i.e.: the need for nuclear and industrial productive potential
embodied by SNC Lavalin and the obedience to a "green" post-industrial paradigm antagonistic to
such productive capacity).
Journalist Elaine Dewar's groundbreaking 1994 book "Cloak of Green" which every
truth-seeker should read, dealt rigorously with Strong's role as a recruit of Rockefeller
assets in the 1950s, an oil baron, vice president of Power Corporation by 30, Liberal Party
controller, Privy Councilor, and founder of Canada's neo-colonial external aid policy towards
Africa which tied Africa into IMF debt slaves, we will focus here on the role Strong has played
since 1968 in subverting the anti-entropic potential of both his native Canada and the world at
large. It was through this post-1968 role that Strong performed his most valued work for the
genocidal agenda of his British masters who seek to reduce the world population to a "carrying capacity"
of less than a billion .
RIO and Global Governance
In 1992, Maurice Strong had been assigned to head the second Earth Summit (the first having
been the 1972 Stockholm Conference on the Human Environment also chaired by Strong). The Rio
Summit had established a new era in the consolidation of NGOs and corporations under the
genocidal green agenda of controlled starvation masquerading behind the dogma of
"sustainability'. This doctrine was formalized with Agenda 21 and the Earth
Charter , which Strong co-authored with his collaborated Jim Macneil during the 1990s. At
the opening of the Rio Summit, Strong announced that industrialized countries had "developed
and benefited from the unsustainable patterns of production and consumption which have produced
our present dilemma. It is clear that current lifestyles and consumption patterns of the
affluent middle class, involving high meat intake, consumption of large amounts of frozen and
convenience foods, use of fossil fuels, appliances, home and work-place air-conditioning, and
suburban housing- are not sustainable. A shift is necessary toward lifestyles less geared to
environmentally damaging consumption patterns."
"The concept of national sovereignty has been an immutable, indeed sacred, principle of
international relations. It is a principle which will yield only slowly and reluctantly to the
new imperatives of global environmental cooperation. What is needed is recognition of the
reality that in so many fields, and this is particularly true of environmental issues, it is
simply not feasible for sovereignty to be exercised unilaterally by individual nation-states,
however powerful. The global community must be assured of environmental security."
Two years earlier, Strong gave an interview
wherein he described a "fiction book" he was fantasizing about writing which he described in
the following manner:
" What if a small group of world leaders were to conclude that the principal risk to the
Earth comes from the actions of the rich countries? And if the world is to survive, those rich
countries would have to sign an agreement reducing their impact on the environment. Will they
do it? The group's conclusion is 'no'. The rich countries won't do it. They won't change. So,
in order to save the planet, the group decides: Isn't the only hope for the planet that the
industrialized civilizations collapse? Isn't it our responsibility to bring that
about?"
When this statement is held up parallel to this man's peculiar life, we quickly come to see
that the barrier between reality and fiction is more than a little blurry.
The Destruction of Nuclear Power
It is vital to examine Strong's role in crippling Canada's potential to make use of nuclear
power, one of the greatest beacons of hope mankind has ever had to break out of the current
"fixed" boundaries to humanity's development. Indeed, the controlled use of the atom, along
with the necessary discovery of new universal principles associated with this endeavor, have
always represented one of the greatest strategic threats to the oligarchic system, which
depends on a closed system of fixed resources in order to both manage current populations and
justify global governance under "objective" frameworks of logic. Fission and fusion processes
exist on a level far beyond those fixed parameters that assume the earth's "carrying capacity"
is no greater than the 2 billion souls envisioned by today's London-centered oligarchy. If
mankind were to recognize his unique creative potential to continuously transcend his
limitations by discovering and creating new resources, no empire could long exist. With Canada
as the second nation to have civilian nuclear power, and a frontier science culture in physics
and chemistry, the need to destroy this potential in the mind of the British Deep State of
Canada was great indeed.
To get a better sense of the anti-nuclear role Strong has played in Canadian science policy,
we must actually go back once again to Strong's reign at the Department of External Aid in
1966.
Humanity's trend towards utilizing ever more dense forms of fire was always driven by a
commitment to scientific and technological progress. The realization that this process drives
the increase of human potential population density (both in quantity and quality of life) was
recognized at the turn of the 20th century and serves as the foundation for American economist
Lyndon LaRouche's method of economic forecasting. The graph above features American per capita
access to energy and the post-1975 sabotage of the expected transition to nuclear fission and
fusion
Technological Apartheid for Africa
A key reason that Strong had been brought into Canada's Civil Service to head up the
External Aid office in 1966 was to sabotage the international efforts leading scientists and
statesmen had achieved in making Canada an exporter of its original CANDU reactors. Since 1955,
leading patriots within Atomic Energy Canada Ltd. (AECL) and the National Research Council such
as C.D. Howe and his collaborator C.W. Mackenzie, ensured that the export of advanced nuclear
technology was made available to developing countries such as India and Pakistan. In Canada
this policy was advanced vigorously by Prime
Minister John Diefenbaker, who also saw atomic power as the key to world peace.
The banners under which this advanced technology transfer occurred were both the Columbo Plan and President
Dwight Eisenhower's
Atoms for Peace . This progressive approach to international development defined "external
aid" not around IMF conditionalities, or simply money for its own sake, but rather as the
transfer of the most advanced science and technology to poor countries with the explicit
intention that all nations would attain true sovereignty. This is the model that China has
adopted today under the
Belt and Road Initiative.
When Strong got to work in External Aid, and later formed the Canadian International
Development Agency, Canada's relationship to "LDCs" (lesser developed countries) became reduced
to advancing "appropriate technologies" under the framework of monetarism and a perverse form
of systems analysis. After JFK's assassination, a parallel operation was conducted in America's
USAid. No technology or advanced infrastructure policy necessary for the independence of former
colonies were permitted under this precursor to what later became known as "sustainability" and
"zero growth". Under Strong's influence, Canada's role became perverted into inducing LDCs to
become obedient to IMF/World Bank "conditionalities" and the reforms of their bureaucracies
demanded by the OECD in order to receive money. Both in Canada and in developing countries,
Strong was among the key agents who oversaw the implementation of the OECD's strategy of
"closed systems analysis" for national policy management.
Petrol and Pandas
In his role as President of Petro Canada (1976-78), Strong endorsed the national call to create a nuclear moratorium for
Canada which had been carried out by the Canadian Coalition for Nuclear Responsibility in
1977. This document not only demanded an immediate halt to the continuation of all reactors
then under construction, but also made the sophistical argument that more jobs could be created
if "ecologically friendly" energy sources and conservation methods were developed instead of
nuclear and fossil fuels. Strange desires coming from an oil executive, but not so strange
considering Strong's 1978-1981 role as Vice-President of the World Wildlife Fund (WWF), an
organization founded by the British and Dutch monarchies as a Royal Dutch Shell initiative in
1963. Strong was Vice President during the same interval that WWF co-founder Prince Philip was
its President.
In 1971, while still heading up the External Aid Department, Strong was a founding member of
the 1001 Club, which was an elite international organization created by Prince Bernhard of the
Netherlands created to finance the emerging green agenda for world governance. The 1001 Club
worked in tandem with Prince Bernhard's other secretive club known as the "Bilderberg Group"
which he founded in 1954. In this position, Strong helped to recruit 80 Canadian "initiates" to
this elite society otherwise known as "Strong's Kindergarten", the most prominent being Lord
Conrad Black, Barrick Gold's Peter Munk (1927-2018) and Permindex's late Sir Louis Mortimer
Bloomfield (1906-1984). As documented elsewhere, the latter was discovered to be at the heart
of the plot to
assassinate President John F. Kennedy by New Orleans District Attorney Jim Garrison.
Strong Decapitates Ontario Nuclear Energy
By 1992, Strong had completed his role heading the Rio Earth Summit in Brazil and had
returned to his native land to attempt to finalize the dismantling of Canada's nuclear program
in his new assignment as President of Ontario Hydro, a position he held from 1992 to 1995 under
the formal invitation of Bob Rae, then-NDP Premier of Ontario and brother of Power Corp.'s John
Rae. Bob Rae later served as the leader of the Liberal Party from 2011-2013 in preparation for
Justin Trudeau's appointment to become the party's new figurehead in April of 2013.
Strong was brought in to this position at the time that Ontario had the most ambitious
nuclear program in North America and was proving to be a thorn in the side of the zero-growth
agenda demanded by the British Empire. The completion of the massive Darlington system in
Ontario had demonstrated what successful long-term science planning could accomplish, although
the utility found itself running far over budget. The budgetary problems (which occurred during
a deep recession in 1992) were used by Strong to "restructure" the provincial energy
utility.
The "remedies" chosen by Strong to solve Ontario Hydro's financial woes involved immediately
canceling all new planned nuclear energy development, firing 8 of the 14 directors, and
downsizing the utility by laying off 14 000 employees, many of whom were the most specialized
and experienced nuclear technicians in Canada.
Before leaving his post in 1995 with the fall of Bob Rae's government, Strong ensured that
his work would continue with his replacement Jim MacNeill who headed Ontario Hydro from 1994 to
1997. MacNeill was co-architect of both the Earth Charter and the genocidal Agenda 21 during
the Rio Summit and a long time Deep State agent. Under MacNeill, Strong's mandate to
unnecessarily shut down eight reactors for refurbishment and one permanently was effected in
1997, while Ontario Hydro itself was broken up into three separate entities. With the
irreparable loss of specialized manpower and skills Strong and MacNeill left Ontario Hydro and
AECL mortally wounded for years to come.
Surprising all observers, AECL and the Ontario utilities were able to remobilize their
remaining forces to pull together the successful refurbishment of all reactors– the last
of which came back online in October 2012. While Canada's moratorium on nuclear power
continued, with SNC Lavelin's 2011 takeover, an approach for cooperation on international
nuclear construction in
partnership with China began in July 2014, much to Strong's chagrin.
Strong's Failed Attempt to Infiltrate China
For much of the 21 st century, Strong's talents were put to use in an attempt to
subvert the aspirations of Asian development, and of a Eurasian alliance formed around the
driving economic grand design of the emerging Belt and Road Initiative. Strong was deployed to
Beijing University where he acted as Honorary Professor and Chairman of its Environmental
Foundation and Chairman of the Advisory Board of the Institute for Research on Security and
Sustainability for Northwest Asia.
In the face of the meltdown of the Trans-Atlantic economy, the Chinese have successfully
resisted the Green New Deal agenda that demanded the submission of their national sovereignty
to the "New World Order" of zero-growth and depopulation. In spite of this pressure, a powerful
tradition of Confucianism and its commitment to progress has demonstrated its powerful
influence in the various branches of the Chinese establishment who see China's only hope for
survival located in its strategic partnership with Russia and long term mega projects to lift
its people out of poverty and into the 22nd Century. This was made fully clear when China
rejected the "special relationship" with Canada in December 2017 .
Speaking of the importance of the Belt and Road Initiative which had combined with the
Eurasian Economic Union and BRICS, President Xi Jinping stated in 2017: "We should foster a
new type of international relations featuring win-win cooperation; and we should forge
partnerships of dialogue with no confrontation and of friendship rather than alliance. All
countries should respect each other's sovereignty, dignity and territorial integrity, each
other's development paths and social systems, and each other's core interests and major
concerns In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical
maneuvering. What we hope to achieve is a new model of win-win cooperation. We have no
intention to form a small group detrimental to stability, what we hope to create is a big
family of harmonious co-existence."
The Belt and
Road Initiative has arisen as a true opposition to the bipolar insanity of western right
wing militarism/monetarism on the one side and left wing depopulation under "
Green New Deals " on the other. Trillions of dollars of credit in great infrastructure
projects across Eurasia, Africa and Latin America have resulted in the greatest burst of
cultural optimism, productivity and if the population and leadership of the west act with the
proper passion and wisdom, there is a very good opportunity to rid humanity of the legacy of
Maurice Strong.
Trump's Kakistocracy Is Also a Hackistocracy: The invasion of hucksters has reached the
Federal Reserve.
By Paul Krugman
It's no secret that Donald Trump has appointed a lot of partisan, unqualified hacks to key
policy positions. A few months ago my colleague Gail Collins asked readers to help her select
Trump's worst cabinet member. It was a hard choice, because there were so many qualified
applicants.
The winner, by the way, was Wilbur Ross, the commerce secretary. That looks like an even
better call now: Ross's department has reportedly prepared a report declaring that imports of
European cars threaten U.S. national security. This is both ludicrous and dangerous. It gives
Trump the right to start a new phase in his trade war that would inflict severe economic
damage while alienating our allies -- and, as a result, undermine national security.
Until recently, however, one agency had seemed immune to the continuing hack invasion: the
Federal Reserve, the single institution most crucial to economic policymaking. Trump's Fed
nominees, have, by and large, been sensible, respected economists. But that all changed last
week, when Trump said he planned to nominate Stephen Moore for the Fed's Board of
Governors.
Moore is manifestly, flamboyantly unqualified for the position. But there's a story here
that goes deeper than Moore, or even Trump; it's about the whole G.O.P.'s preference for
hucksters over experts, even partisan experts.
About Moore: It goes almost without saying that he has been wrong about everything. I
don't mean the occasional bad call, which all of us make. I mean a track record that includes
predicting that George W. Bush's policies would produce a magnificent boom, Barack Obama's
policies would lead to runaway inflation, tax cuts in Kansas would produce a "near immediate"
boost to the state's economy, and much more. And, of course, never an acknowledgment of error
or reflection on why he got it wrong.
Beyond that, Moore has a problem with facts. After printing a Moore op-ed in which all the
key numbers were wrong, one editor vowed never to publish the man's work again. And a
blizzard of factual errors is standard practice in his writing and speaking. It's actually
hard to find cases where Moore got a fact right.
Yet Moore isn't some random guy who caught Trump's eye. He has long been a prominent
figure in the conservative movement: a writer for the Wall Street Journal editorial page,
chief economist of the Heritage Foundation, a fixture on the right-wing lecture circuit.
Why?
You might say that the G.O.P. values partisan loyalty above professional competence. But
that's only a partial explanation, because there are plenty of conservative economists with
solid professional credentials -- and some of them are pretty naked in their partisanship,
too. Thus, a who's who of well-known conservative economists rushed to endorse the Trump
administration's outlandish claims about the benefits from its tax cut, claims they knew full
well were unreasonable.
Nor has their partisanship been restrained and polite. Many of us are still mourning the
death of Alan Krueger, the Princeton economist best known for research -- since vindicated by
many other studies -- showing that increases in the minimum wage don't usually seem to reduce
employment. Well, the Nobel-winning conservative economist James Buchanan denounced those
pursuing that line of research as "a bevy of camp-following whores."
So conservatives could, if they wanted, turn for advice to highly partisan economists with
at least some idea of what they're doing. Yet these economists, despite what often seem like
pathetic attempts to curry favor with politicians, are routinely passed over for key
positions, which go to almost surreally unqualified figures like Moore or Larry Kudlow, the
Trump administration's chief economist.
Many people have described the Trump administration as a kakistocracy -- rule by the worst
-- which it is. But it's also a hackistocracy -- rule by the ignorant and incompetent. And in
this Trump is just following standard G.O.P. practice.
Why do hacks rule on the right? It may simply be that a party of apparatchiks feels
uncomfortable with people who have any real expertise or independent reputation, no matter
how loyal they may seem. After all, you never know when they might take a stand on
principle.
In any case, there will eventually be a price to pay. True, there is, wrote Adam Smith, "a
great deal of ruin in a nation." America isn't just an immensely powerful, wealthy,
technologically advanced, peaceful country. We're also a nation with a long tradition of
dedicated public service.
Even now -- as I can attest from personal interactions -- a great majority of those
working for the Treasury Department, the State Department and so on are competent,
hard-working people trying to do the best they can for their country.
But as top jobs systematically go to hacks, there is an inevitable process of corrosion.
We're already seeing a degradation of the way our government responds to things like natural
disasters. Well, there will be more and bigger disasters ahead. And the people in charge of
dealing with those disasters will be the worst of the worst.
The "Independent" Federal Reserve Isn't Quite What It Is Cracked Up to Be
By Dean Baker
Neil Irwin had a New York Times article * warning readers of the potential harm if the
Federal Reserve loses its independence. The basis for the warning is that Donald Trump seems
prepared to nominate Steven Moore and Herman Cain to the Fed, two individuals with no obvious
qualifications for the job, other than their loyalty to Donald Trump. While Irwin is right to
warn about filling the Fed with people with no understanding of economics, it is wrong to
imagine that we have in general been well-served by the Fed in recent decades or that it is
necessarily independent in the way we would want.
The examples Irwin gives are telling. Irwin comments:
"The United States' role as the global reserve currency -- which results in persistently
low interest rates and little fear of capital flight -- is built in significant part on the
credibility the Fed has accumulated over decades.
"During the global financial crisis and its aftermath, for example, the Fed could feel
comfortable pursuing efforts to stimulate the United States economy without a loss of faith
in the dollar and Treasury bonds by global investors. The dollar actually rose against other
currencies even as the economy was in free fall in late 2008, and the Fed deployed trillions
of dollars in unconventional programs to try to stop the crisis."
First, the dollar is a global reserve currency, it is not the only global reserve
currency. Central banks also use euros, British pounds, Japanese yen, and even Swiss francs
as reserve currencies. This point is important because we do not seriously risk the dollar
not be accepted as a reserve currency. It is possible to imagine scenarios where its
predominance fades, as other currencies become more widely used. This would not be in any way
catastrophic for the United States.
On the issue of the dollar rising in the wake of the financial collapse in 2008, this was
actually bad news for the U.S. economy. After the plunge in demand from residential
construction and consumption following the collapse of the housing bubble, net exports was
one of the few sources of demand that could potentially boost the U.S. economy. The rise in
the dollar severely limited growth in this component.
The other example given is when Nixon pressured then Fed Chair Arthur Burns to keep
interest rates low to help his re-election in 1972. This was supposed to have worsened the
subsequent inflation and then severe recessions in the 1970s and early 1980s. The economic
damage of that era was mostly due to a huge jump in world oil prices at a time when the U.S.
economy was heavily dependent on oil.
While Nixon's interference with the Fed may have had some negative effect, it is worth
noting that the economies of other wealthy countries did not perform notably better than the
U.S. through this decade. It would be wrong to imply that the problems of the 1970s were to
any important extent due to Burns keeping interest rates lower than he might have otherwise
at the start of the decade.
It is also worth noting that the Fed has been very close to the financial sector. The
twelve regional bank presidents who sit on the open market committee that sets monetary
policy are largely appointed by the banks in the region. (When she was Fed chair, Janet
Yellen attempted to make the appointment process more open.) This has led to a Fed that is
far more concerned about keeping down inflation (a concern of bankers) than the full
employment portion of its mandate.
Arguably, Fed policy has led unemployment to be higher than necessary over much of the
last four decades. This has prevented millions of workers from having jobs and lowered wages
for tens of millions more. The people who were hurt most are those who are disadvantaged in
the labor market, such as African Americans, Hispanics, and people with less education.
Insofar as the Fed's "independence" has meant close ties to the financial industry, it has
not been good news for most people in this country.
"... Privatization typically enriches the politically connected few who secure lucrative rents by sacrificing the national or public interest for private profit, even when privatization may not seem to benefit them. ..."
"... For example, following Russian voucher privatization and other Western recommended reforms, for which there was a limited domestic constituency then, within three years (1992-1994), the Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was the greatest such recorded catastrophe in the last six millennia of recorded human history. ..."
"... Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the Russian economy; many then monetized their gains and invested abroad, migrating to follow their new wealth. Much of this was celebrated by the Western media as economic progress. ..."
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src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" />
Has
Privatization Benefitted the Public? Posted on April 7,
2019 by Jerri-Lynn Scofield Jerri-Lynn
here. Another succinct post by Jomo Kwame Sundaram that makes clear the "benefits" of
privatization are not evenly distributed, and in fact, typically, "many are even worse off"
when the government chooses to transfer ownership of the family silver.
Note that SOE is the acronym for state owned enterprise.
For those interested in the topic, see also another short post by the same author from last
September, debunking other arguments to promote the privatization fairy, Revisiting
Privatization's Claims .
By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development.
Originally published at Inter Press
Service
In most cases of privatization, some outcomes benefit some, which serves to legitimize the
change. Nevertheless, overall net welfare improvements are the exception, not the rule.
Never is everyone better off. Rather, some are better off, while others are not, and
typically, many are even worse off. The partial gains are typically high, or even negated by
overall costs, which may be diffuse, and less directly felt by losers.
Privatized Monopoly Powers
Since many SOEs are public monopolies, privatization has typically transformed them into
private monopolies. In turn, abuse of such market monopoly power enables more rents and
corporate profits.
As corporate profits are the private sector's yardstick of success, privatized monopolies
are likely to abuse their market power to maximize rents for themselves. Thus, privatization
tends to burden the public, e.g., if charges are raised.
In most cases, privatization has not closed the governments' fiscal deficits, and may even
worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue
from privatized SOEs, or tax evasion by the new privatized entity.
Options for cross-subsidization, e.g., to broaden coverage are reduced as the government is
usually left with unprofitable activities while the potentially profitable is acquired by the
private sector. Thus, governments are often forced to cut essential public services.
In most cases, profitable SOEs were privatized as prospective private owners are driven to
maximize profits. Fiscal deficits have often been exacerbated as new private owners use
creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained
earnings.
Meanwhile, governments lose vital revenue sources due to privatization if SOEs are
profitable, and are often obliged to subsidize privatized monopolies to ensure the poor and
underserved still have access to the privatized utilities or services.
Privatization Burdens Many
Privatization burdens the public when charges or fees are not reduced, or when the services
provided are significantly reduced. Thus, privatization often burdens the public in different
ways, depending on how market power is exercised or abused.
Often, instead of trying to provide a public good to all, many are excluded because it is
not considered commercially viable or economic to serve them. Consequently, privatization may
worsen overall enterprise performance. 'Value for money' may go down despite ostensible
improvements used to justify higher user charges.
SOEs are widely presumed to be more likely to be inefficient. The most profitable and
potentially profitable are typically the first and most likely to be privatized. This leaves
the rest of the public sector even less profitable, and thus considered more inefficient, in
turn justifying further privatizations.
Efficiency Elusive
It is often argued that privatization is needed as the government is inherently inefficient
and does not know how to run enterprises well. Incredibly, the government is expected to
subsidize privatized SOEs, which are presumed to be more efficient, in order to fulfil its
obligations to the citizenry.
Such obligations may not involve direct payments or transfers, but rather, lucrative
concessions to the privatized SOE. Thus, they may well make far more from these additional
concessions than the actual cost of fulfilling government obligations.
Thus, privatization of profitable enterprises or segments not only perpetuates exclusion of
the deserving, but also worsens overall public sector performance now encumbered with remaining
unprofitable obligations.
One consequence is poorer public sector performance, contributing to what appears to be a
self-fulfilling prophecy. To make matters worse, the public sector is then stuck with financing
the unprofitable, thus seemingly supporting to the privatization prophecy.
Benefits Accrue to Relatively Few
Privatization typically enriches the politically connected few who secure lucrative rents by
sacrificing the national or public interest for private profit, even when privatization may not
seem to benefit them.
Privatization in many developing and transition economies has primarily enriched these few
as the public interest is sacrificed to such powerful private business interests. This has, in
turn, exacerbated corruption, patronage and other related problems.
For example, following Russian voucher privatization and other Western recommended reforms,
for which there was a limited domestic constituency then, within three years (1992-1994), the
Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was
the greatest such recorded catastrophe in the last six millennia of recorded human history.
Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the
Russian economy; many then monetized their gains and invested abroad, migrating to follow their
new wealth. Much of this was celebrated by the Western media as economic
progress.
Yes it does. I've now added a sentence to my introduction to make that clear. I noticed
the omission when I was uploading the post, but wasn't sure whether readers would be
confused.
As a rule of thumb, I'd say that any privatisations that require the introduction of
convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most
of their ongoing income from the public sector are likely to be contrary to the long-term
public interest. In the UK, unfortunately, all these ships sailed a long time ago
After the recent Chicago municipal elections, I wrote up some notes on the reasons for the
discontent. This article by Sundaram explains exactly how these schemes work. Further, you
can apply his criteria of subsidies for the rich, skimming, and disinheriting the middle
class and poor to all of the following instances in Chicago.
If I may–some for instances of how Sundaram's observations turn up in U.S.
cities:
Chicago is the proving grounds for thirty or so years of the Democrats' surrender to
neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is
the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of
Daley to undo and the work of the Clintonians to undo. It will take more than one term for
Lightfoot.
Consider:
–Parking meters and enforcement have been privatized, starving the city of funds and,
more importantly, of its police power.
–Taxes have been privatized in TIFs, where money goes and is never heard from
again.
–There have been attempts to privatize the park system in the form of the Lucas museum
and the current Obama Theme Park imbroglio, involving some fifty acres of park land.
–The school system has been looted and privatized. The Democrats are big fans of
charter schools (right, "Beto"), seeing them as ways to skim money off the middle class and
the poor.
–Fare collection on public transit has been privatized using a system so deliberately
rudimentary and so deliberately corrupt that it cannot tell you at point of service how much
you have paid as fare.
–Boeing was enticed to Chicago with tax breaks. Yes, that Boeing, the one that now
deliberately puts bad software in your airplane.
–Property tax assessment has been an opaque system and source of skimming for
lawyers.
–Zoning: Eddie Burke, pond scum, is just the top layer of pollution.
–And as we have made our descent, all of these economic dogmata have been enforced by
petty harassment of the citizenry (endless tickets) and an ever-brutal police force.
And yet: The current Republican Party also supports all of these policies, so let's not
pretend that a bunch of Mitch McConnell lookalikes are headed to Chicago to reform it.
Providing professional services i.e. architecture, engineering, etc. for a public entity,
local or federal, does not yield unreasonable profits. Typically, the public agencies have
their own staff to monitor and cost control a project. The professional services provided to
private developers yields far more profit- oftentimes twice the profits associated with
public agency work. Most professional services companies will transition their work to the
public agencies during a recession.
At any rate, especially in Illinois, privatizing the work to avoid pension liabilities is
no longer a choice. Michael Madigan pension promises will require the public to maintain a
public service budget with no staff to fill potholes. Essentially, these are the no work jobs
made popular by the Soprano crew twenty years ago.
Discussion of the downside of the privatization of public services is merely an
oscillation from discussing the weather, the Bears or any other kitchen table discussion
– nothing more than pleasant small talk to pass the time.
Privatization, at any cost, is no longer a choice. We have abused the pension system and
now the public must pay for private companies to provide the most basic services.
The question is, what can one do to help arrest this wholesale theft of public resources
and their expropriation into the hands of well connected. " Public", as in, it is the working
public over the last 100 or 200 years that created (or paid for), the electricity grid, or
public schools, or entire armed or police forces
I keep thinking that perhaps an Act could or should be introduced here in UK (same for the
States, i suppose), which should ensure that all politicians that enable any type of
privatisation of public resources or PFI arrangement (yes that old chesnut), should be made
personally responsible for the results therof.
And any losses to the public accidentally or "accidentally" occasioned by such
commandeering over public resources, to be treated like deliberate misappropriation by the
said public officials.
With the financial and custodial penalties as may be appropriate.
Anybody out there with similar thoughts or should i really try harder and give up on
drugs?
Michael Hudson, to his immense credit, explains the pernicious effects of privatization of
common goods repeatedly throughout his work, and demonstrates that it has been with us at
least as long as the ancient practice of land alienation and rural usury.
Natural monopolies ought to be nationalised, full stop.
I support public ownership of natural monopolies, however it would be helpful if these
pieces contained data, case studies or footnoted entries providing some empirical evidence of
the author's thesis.
This article comes at a time when the clarion call for privatizing Eskom, SA's electricity
utility, is hitting deafening levels. To the private sector, efficiency = maximizing profits
by making the "bloated" enterprise lean (aka cutting the workforce) and quite literally mean
(aka cutting services to "unprofitable" segments of the market, iow, the poor and
vulnerable). When profits soar because the holy grail of efficiency is achieved, the
mainstream business press brings out the champagne and toasts this "success" as proof that
the previously "moribund" (they always exaggerate the state of things) monopolistic monolith
has been given a new lease on life by privatizing it and the template is set for rescuing
other "ailing" SOEs.
The drawbacks are never laid out as cleary as they are in this article and the plight of
those worst affected, whether laid-off workers or those whose services have been cut, never
makes it into the headlines.
And then there is prison privatization where the burden of operation and maintaining the
institution should clearly be on the public so as to be constant reminder of the burden,
among others reasons. The motivations by private prison operators to reduce services and
costs out of site of the pesky prying eyes of the public are manifold.
Privatization is a great way to avoid having user fees wasted by providing services, and
instead put to better use funding the re-election campaigns of politicians supporting
privatization. Plus, it provides much-needed consulting fees for former politicians as well
as job-creating 7-figure salaries for the CEOs,
(/snark, if you couldn't tell)
On a side note, the Dilbert comic strip is written about private industry ,
There was a rudimentary plan
put forward last June that recommended some pretty substantial privatizations of U.S.
government assets and services which include:
-Privatizing the US Post Office ( through an Initial Public Offering or outright sale to a
private entity ).
-Sell off U.S. government owned electricity transmission lines ( U.S. government owns 14% of
this nations power transmission lines through TVA, Southwestern Power Administration, Western
Area Power Administration, and Bonneville Power Administration ).
-Spin-off the Federal Aviation Administrations air traffic control operations into a private
nonprofit entity.
-Spin-off the Department of Transportations operations of the Saint Lawrence Seaways Locks
and Channels into a private non-profit entity.
-End the federal conservatorship of Fannie Mae and Freddie Mac, then regulate a new system of
private guarantors for their MBS securities.
At heart, the problem with privatization is that marketing to a government-employed
purchaser or "purchase influencer" is ridiculously cheap, due to their poor accountability
strictures.
This is abetted by the Katamari Damacy process (self-accretionary tendency) of money and
power.
In Oz the electricity grids were privatized as they would be cheaper that way – or
so people were told. Instead, the cost of electricity has risen sharply over the years to the
point that it is effecting elections on both the State and Federal level as the price hikes
are so controversial. A problem is that those companies have to pay back the loans used to
buy the public electricity grids and as well, the senior management award themselves sky-high
wages because they are totally worth it. These are factors that were never present when it
was publicly owned. And just to put the boot in, those very same companies have been
'gold-plating' the electricity grid for their gain-
Meanwhile, whatever money the governments made selling their electricity companies has
been long spent on white elephants or buying themselves re-elections by giving out goodies to
voters.
buying themselves re-elections by giving out goodies to voters.
I don't reside in the states, so I don't see much of the detail of daily life. What are
these "goodies" of which you speak? In what I am able to read on the internet, people aren't
being given goodies any more. At least the old-time politicians handed out jobs, and turkeys
at Christmas. The current crop do hand out jobs to their kids and immediate family, but not
so much to anyone else.
described
as "probably the most dishonest argument in the entire Medicare for All debate."
"People who love their employer-based insurance do not get to hold on to it in our current
system. Instead, they lose that insurance constantly, all the time. It is a complete
nightmare."
-- Matt Bruenig, People's Policy Project
In an
interview with the Washington Post , the Democratic leader said she is "agnostic" on
Medicare for All and claimed, "A lot of people love having their employer-based insurance and
the Affordable Care Act gave them better benefits."
Matt Bruenig, founder of the left-wing think tank People's Policy Project, argued in a
blog post that Pelosi's statement "implies that, under our current health insurance system,
people who like their employer-based insurance can hold on to it."
"This then is contrasted with a Medicare for All transition where people will lose their
employer-based insurance as part of being shifted over to an excellent government plan,"
Bruenig wrote. "But the truth is that people who love their employer-based insurance do not get
to hold on to it in our current system. Instead, they lose that insurance constantly, all the
time, over and over again. It is a complete nightmare."
To illustrate his point, Bruenig highlighted a University of Michigan study showing that
among Michiganders "who had employer-sponsored insurance in 2014, only 72 percent were
continuously enrolled in that insurance for the next 12 months.
"This means that 28 percent of people on an employer plan were not on that same plan one
year later," Bruenig noted.
"Critics of Medicare for All are right to point out that losing your insurance sucks,"
Bruenig concluded. "But the only way to stop that from happening to people is to create a
seamless system where people do not constantly churn on and off of insurance. Medicare for All
offers that. Our current system offers the exact opposite. If you like losing your insurance
all the time, then our current healthcare system is the right one for you."
All On Medicare -- a pro-Medicare for All Twitter account -- slammed Pelosi's remarks,
accusing the Democratic leader of parroting insurance industry talking points:
The Speaker's alternative to the Medicare for All legislation co-sponsored by
over 100 members of her caucus is a bill to strengthen the Affordable Care Act (ACA), which
she
introduced last week .
"We all share the value of healthcare for all Americans -- quality, affordable healthcare
for all Americans," Pelosi told the Post . "What is the path to that? I think it's the
Affordable Care Act, and if that leads to Medicare for All, that may be the path."
The nation's largest nurses union was among those who expressed disagreement with the
Speaker's incrementalist approach.
In a
statement last week, National Nurses United president Zenei Cortez, RN, said Pelosi's plan
would "only put a Band-Aid on a broken healthcare system."
"National Nurses United, along with our allies, will continue to build the grassroots
movement for genuine healthcare justice and push to pass Medicare for All," Cortez concluded.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License
@Andrei Martyanov All true. And one more point: compared with China, how much of the
present-day US economy is even real – i.e., results in the production of actual
goods that people might want, as opposed to dodgy financial/insurance transactions which may
add a lot of dollar value to GDP, but don't create anything real that enhances the quality of
life for the masses?
Economist used to have a joke: every time you break your leg, you increase GDP. First, you
gotta pay the hospital (transaction), then you gotta pay your doctor (another transaction),
then you gotta pay for your case (yet another transaction). All those transactions make it
look like 'wealth' is being created, because they are–numerically, at
least–increasing per capita GDP. But still: wouldn't you and the country actually be
better off if you hadn't broken your leg in the first place?
China, emerged as an "honest broker" among countries in the Middle East, and used the
free market system to improve relations with its trading partners and grow its economy. The
IC appears to find fault with Russia because it is using the system the US created to
better advantage than the US.
Industrial Capitalism is the system China and Russia are running on. America briefly had
this system from 1868 to 1912; it was called the American System of Economy (Henry
Clay/Peshine Smith).
This type of economy uses state credit (from Treasury not banks) and injects it into
industry. Industry then grows, and people's welfare is increased through improved
productivity.
Finance Capitalism came out of London and hopped to America, especially post WW2. At the
same time Atlantacism and Rim theory hopped. America still runs under this BIZWOG (Britain
Israel World Government) matrix. This matrix depends on finance capitalism.
Finance Capitalism is the placing of EXISTING ASSETS onto a private bank ledger, to then
hypothecate said assets into new bank credit. For example, a ships bill of lading may be used
to create new bank credit, or existing homes are put on double entry ledger to make housing
bubbles.
The closer analogs to China and Russian economy are American System of Economy, not the
current American BIZWOG finance capital. The historical analogs would also be Canada
1938-1974, when Canada had a sovereign economy. Canada post 1974 was converted to finance
capitalism and now are debt laden and suffering like the rest of the west.
Kaiser's Germany used industrial capitalism then Japan's Manchurian Railroad Engineers
copied it for Japan. Mussolini in Italy copied parts of it, and NSDAP in Germany resurrected
Frederick List and the Kaiser's methods.
Finance Capital out of wall street funded the Bolsheviks in what amounted to a looting
operation of Russia. It is any wonder that finance capitalism found succor with communism
since they are both pyramid schemes?
Rim Theory, Atlantacism, Finance Capitalism, and Brzezinsky's chessboard are part of the
same thing, an excuse matrix for gobbling up the world into one double entry private bank
ledger, to then benefit a special (((usury))) finance class of plutocrats.
The "markets" that China and Russia operate on are those of industrial capitalism, using
state credit. China has four large state banks, and they often cancel debt instruments
(housed in the state bank) to then effectively put debt free money into their economy. Russia
injects gold into their Central Bank Reserves, to then emit Rubles. Both China and Russia
inject into industry, their farm sectors, and other sectors to get a desired output to help
their people, not put them into debt servitude.
The BIZWOG matrix will collapse, it is anti-logos and hence against the natural order. It
is on the wrong side of history.
"... By Thomas Ferguson, Director of Research for the Institute of New Economic Thinking; Professor Emeritus, University of Massachusetts, Boston. Originally published at the Institute of New Economic Thinking website ..."
"... Kane, who coined the term "zombie bank" and who famously raised early alarms about American savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them. ..."
"... We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues, state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing the financial system. ..."
"... In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk, in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion. Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge piece of any upside if they rescue two failing institutions? ..."
Running in the background, though, was a new, darker theme: That the post-2008 reforms had gone too far in restricting policymakers'
discretion in crises. The trio most responsible for making the post-Lehman bailout revolution -- Ben Bernanke, Timothy Geithner,
and Henry Paulson --
expressed their
misgivings in a joint op-ed :
But in its post-crisis reforms, Congress also took away some of the most powerful tools used by the FDIC, the Fed and the Treasury
the FDIC can no longer issue blanket guarantees of bank debt as it did in the crisis, the Fed's emergency lending powers have
been constrained, and the Treasury would not be able to repeat its guarantee of the money market funds.
These powers were critical in stopping the 2008 panic The paradox of any financial crisis is that the policies necessary to
stop it are always politically unpopular. But if that unpopularity delays or prevents a strong response, the costs to the economy
become greater.
We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next
fire from becoming a conflagration.
Sotto voce fears of this sort go back to the earliest reform discussions. But the question surfaced dramatically in Timothy Geithner's
2016 Per Jacobsson Lecture, " Are We Safer? The Case for Strengthening
the Bagehot Arsenal ." More recently, the Group of Thirty
has advanced similar suggestions -- not too surprisingly, since Geithner was co-project manager of the report, along with Guillermo
Ortiz, the former Governor of the Mexican Central Bank, who introduced the former Treasury Secretary at the Per Jacobson lecture.
Aside from the financial collapse itself, probably nothing has so shaken public confidence in democratic institutions as the wave
of bailouts in the aftermath of the collapse. The redistribution of wealth and opportunity that the bailouts wrought surely helped
fuel the populist surges that have swept over Europe and the United States in the last decade. The spectacle of policymakers rubber
stamping literally unlimited sums for financial institutions while preaching the importance of austerity for everyone else has been
unbearable to millions of people.
Especially in money-driven political systems, affording policymakers unlimited discretion also plainly courts serious risks. Put
simply, too big to fail banks enjoy a uniquely splendid situation of "heads I win, tails you lose" when they take risks. Scholars
whose research INET has supported, notably
Edward Kane , have shown how the certainty of government bailouts advantages large financial institutions, directly affecting
prices of their bonds and stocks.
For these reasons INET convened a panel at a G20 preparatory meeting in Berlin on "
Moral Hazard Issues in Extended Financial Safety Nets ."
The Power Point presentations of the three panelists are presented in the order in which they gave them, since the latter ones sometimes
comment on Edward Kane
's analysis of the European banks. Kane, who coined the term "zombie bank" and who famously raised early alarms about American
savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them.
Peter Bofinger
, Professor of International and Monetary Economics at the University of Würzburg and an outgoing member of the German Economic Council,
followed with a discussion of how the system has changed since 2008.
Helene Schuberth
, Head of the Foreign Research Division of the Austrian National Bank, analyzed changes in the global financial governance system
since the collapse.
The panel took place as public discussion of a proposed merger between two giant German banks, the Deutsche Bank and Commerzbank,
reached fever pitch. The panelists explored issues directly relevant to such fusions, without necessarily agreeing among themselves
or with anyone at INET.
But the point Robert Johnson, INET's President, and I
made some years back , amid an earlier wave of talk about using public money to bail out European banks, remains on target:
We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues,
state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with
bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best
practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many
years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing
the financial system.
The simplest way to do that is to have the state take equity in the banks it rescues and write down the equity of bank shareholders
in proportion. This can be done in several ways -- direct equity as a condition for bailout, requiring warrants that can be exercised
later, etc. The key points are for the state to take over the banks, get the bad loans rapidly out of those and into a "bad bank,"
and hold the junk for a decent interval so the rest of the market does not crater. When the banks come back to profitability,
you can cash in the warrants and sell the stock if you don't like state ownership. That way the public gets its money back .at
times states have even made a profit.
In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk,
in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion.
Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge
piece of any upside if they rescue two failing institutions?
there needs to be an asset tax on/break up of the megas. End the hyper-agglomeration of deposits at the tail end.
not holding my breath though. (see NY state congressional delegation)
to be generous, tax starts at $300 billion. Even then it affects only a dozen or so US banks. But would be enough to clamp
down on the hyper-scale of the largest US/world banks.
The world would be better off with lot more mid-sized regional players.
Anyone who mentions Timmy Geithner without spitting did not pay attention during the Obama reign of terror. He and Obama crowed
about the Making Home Affordable Act, implying that it would save all homeowners in mortgage trouble, but conveniently neglected
to mention that less than 100 banks had signed up. The thousands of non-signatories simply continued to foreclose. Not to mention
Eric Holder's intentional non-prosecution of banksters. For these and many other reasons, especially his "Islamic State is only
the JV team" crack, Obama was one of our worst presidents.
Fergusons graph on DBK's default probabilities coincides with the ECB's ending its asset purchase programme and entering the
"reinvestment phase of the asset purchase programme". https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html
The worst of the euro zombie banks appear to be getting tense and nervous. https://www.youtube.com/watch?v=dKpzCCuHDVY
Maybe that is why Jerome Powell did his volte-face last month on gradually raising interest rates. Note that the Fed also reduced
its automatic asset roll-off. I'm curious if the other euro-zombies in the "peers" return on equity chart are are experiencing
volatility also.
Apparently the worst fate you can suffer as long as you don't go Madoff is Fuld. According to wikipedia his company manages
a hundred million which must be humiliating. It's not as humiliating as locking the guy up in prison would be by a very long stretch.
Greenspan famously lamented that there isn't anything the regulators can really do except make empty threats. This is dishonest.
The regulations are not carved in stone like the ten commandments. In China they execute incorrigible financiers all the time.
Everybody forgets (or at least does not mention) that Greenspan was a member of the Class of '43, the (mostly Canadian) earliest
members of the Objectivist Cult with guru Ayn Rand. Expecting him to act rationally is foolish. It may happen accidentally (we
do not know why he chose to let the economy expand unhindered in 1999), but you cannot count on it. In a world with information
asymmetry expecting markets to be concerned about reputation is ridiculous. To expect them to police themselves for long term
benefit is even more ridiculous.
I think Finance is currently about 13% of the S&P 500, down from the peak of about 18% or so in 2007. I think we will have
a healthy economy and improved political climate when Finance is about 8-10% of the S&P 500 which is about where I think finance
plays a healthy, but not overwhelming rentier role in the economy.
"... Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street mafia. ..."
"... The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the united billionaires under Trump administration. ..."
"... Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate, excoriated the billionaires who sent Delphi auto parts company down to Mexico ..."
"... Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs, he has never made a product in his life, it's all money and billions made from your money, out of the US treasury ..."
"... The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions, he hasn't created a single job as Donald Trump himself like to mention. ..."
"... Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a special billionaires loophole called 'carried interest'. ..."
"... They were two candidates who said that they would close that loophole: one was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away. ..."
Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's
not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street
mafia.
Recently, Trump announced another big alliance with the vulture billionaire, Paul Singer, who, initially, was supposedly against
him. It looks like the Trump big show continues.
The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the
united billionaires under Trump administration.
As Greg Palast told to Thom Hartmann:
Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This
is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate,
excoriated the billionaires who sent Delphi auto parts company down to Mexico.
Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the
vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs,
he has never made a product in his life, it's all money and billions made from your money, out of the US treasury.
He is against what Obama created, which is a system under Dodd–Frank, called 'living wills', where if a bank starts going bankrupt,
they don't call the US treasury for bail-out. These banks go out of business and they are broken up so we don't have to pay for the
bail-out. Singer wants to restore the system of bailouts because that's where he makes his money.
The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money
and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically
investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions,
he hasn't created a single job as Donald Trump himself like to mention.
Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a
special billionaires loophole called 'carried interest'.
They were two candidates who said that they would close that loophole: one
was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall
Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break
called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away.
His political activities include funding the Manhattan Institute for Policy Research and he has written against raising taxes
for the 1% and aspects of the Dodd-Frank Act. Singer is active in Republican Party politics and collectively, Singer and others affiliated
with Elliott Management are "the top source of contributions" to the National Republican Senatorial Committee.
A number of sources have branded him a "vulture capitalist", largely on account of his role at EMC, which has been called a vulture
fund. Elliott was termed by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going
after countries for unpaid debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near
default-such as Argentina, ]- through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. Singer's
business model of purchasing distressed debt from companies and sovereign states and pursuing full payment through the courts has
led to criticism, while Singer and EMC defend their model as "a fight against charlatans who refuse to play by the market's rules."
In 1996, Elliott bought defaulted Peruvian debt for $11.4 million. Elliott won a $58 million judgment when the ruling was overturned
in 2000, and Peru had to repay the sum in full under the pari passu rule. When former president of Peru Alberto Fujimori was attempting
to flee the country due to facing legal proceedings over human rights abuses and corruption, Singer ordered the confiscation of his
jet and offered to let him leave the country in exchange for the $58 million payment from the treasury, an offer which Fujimori accepted.
A subsequent 2002 investigation by the Government of Peru into the incident and subsequent congressional report, uncovered instances
of corruption since Elliott was not legally authorized to purchase the Peruvian debt from Swiss Bank Corporation without the prior
approval of the Peruvian government, and thus the purchase had occurred in breach of contract. At the same time, Elliott's representative,
Jaime Pinto, had been formerly employed by the Peruvian Ministry of Economy and Finance and had contact with senior officials. According
to the Wall Street Journal, the Peruvian government paid Elliott $56 million to settle the case.
After Argentina defaulted on its debt in 2002, the Elliott-owned company NML Capital Limited refused to accept the Argentine offer
to pay less than 30 cents per dollar of debt. With a face value of $630 million, the bonds were reportedly bought by NML for $48
million, with Elliott assessing the bonds as worth $2.3 billion with accrued interest. Elliott sued Argentina for the debt's value,
and the lower UK courts found that Argentina had state immunity. Elliott successfully appealed the case to the UK Supreme Court,
which ruled that Elliott had the right to attempt to seize Argentine property in the United Kingdom. Alternatively, before 2011,
US courts ruled against allowing creditors to seize Argentine state assets in the United States. On October 2, 2012 Singer arranged
for a Ghanaian Court order to detain the Argentine naval training vessel ARA Libertad in a Ghanaian port, with the vessel to be used
as collateral in an effort to force Argentina to pay the debt. Refusing to pay, Argentina shortly thereafter regained control of
the ship after its seizure was deemed illegal by the International Tribunal for the Law of the Sea. Alleging the incident lost Tema
Harbour $7.6 million in lost revenue and unpaid docking fees, Ghana in 2012 was reportedly considering legal action against NML for
the amount.
His firm... is so influential that fear of its tactics helped shape the current 2012 Greek debt restructuring." Elliott was termed
by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going after countries for unpaid
debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near default-such as Argentina,
Peru-through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. In 2004, then first deputy managing
director of the International Monetary Fund Anne Osborn Krueger denounced the strategy, alleging that it has "undermined the entire
structure of sovereign finance."
we wrote that " Trump's rhetoric is concentrated around a racist delirium. He avoids to take direct position
on social matters, issues about inequality, etc. Of course he does, he is a billionaire! Trump will follow the pro-establishment
agenda of protecting Wall Street and big businesses. And here is the fundamental difference with Bernie Sanders. Bernie says no more
war and he means it. He says more taxes for the super-rich and he means it. Free healthcare and education for all the Americans,
and he means it. In case that Bernie manage to beat Hillary, the establishment will definitely turn to Trump who will be supported
by all means until the US presidency. "
Yet, we would never expect that Trump would verify us, that fast.
"... I don't see how nations- or states- can develop other than with a mercantilist mindset. Doesn't the failure of globalization demand a return to mercantilist methods in order to have a functioning society in the modern, technological world? ..."
"... From my limited and naive understanding of history, it seems to me that the opportunity for peaceful coexistence on the planet is consistently being squandered by Western nations -- particularly the US. ..."
The European multinational is following a trend started by Boeing, which
recently opened a new completion plant in China. On the face of it, the decision by the two
companies (which dominate the civilian aviation market) makes sense: build where your biggest
customer lives, especially as China does not yet have a fully homegrown civil aviation industry
ready to compete globally. The benefits are many, including the goodwill and esteem of the
country that would be buying these planes. In the long term, however, that might prove to be a
costly miscalculation. Based on its recent history ( here and
here ), it
won't take long for China to catch up and largely displace both companies domestically in
Beijing's home aviation market, as well as seizing a large chunk of the corporate duopoly's
global market share. Airbus and Boeing could therefore be making short-term decisions with
negative long-term consequences for their future profitability.
Given China's formidable economic advancement, none of this should come as a surprise to
either Airbus or Boeing. Nor should it shock Western governments. The problem is that everybody
has historically been guided by the naïve assumption that simply admitting China to
organizations such as the World Trade Organization (WTO) would induce Beijing to, in
the words of Philip Pan , "eventually bend to what were considered the established rules of
modernization: Prosperity would fuel popular demands for political freedom and bring China into
the fold of democratic nations. Or the Chinese economy would falter under the weight of
authoritarian rule and bureaucratic rot." China has unquestionably modernized, but its
politically illiberal, dirigiste polity has, if anything, massively
moved in the opposite direction, strengthened by that very modernization process that has done
anything but falter. Furthermore, the country has many aims and goals that are antithetical to
the long-term prosperity of Western companies and economies (as the European Union is
beginning to recognize ).
Boeing and Airbus might simply become the latest Western sacrificial lambs. Beijing has
explicitly targeted wide-bodied aircrafts as one of its 10 new priority sectors for import
substitution in its " Made in China
2025 " document, so whatever short-term gains Airbus and Boeing receive in terms of
securing additional orders from China could well be undermined longer-term. The resultant
technology transfers and lower labor costs will almost certainly give Beijing a quantum leap
toward competing directly and ultimately displacing both companies. Given the merger with
McDonnell Douglas, Boeing will continue its march toward effectively becoming a branch of the
U.S. Department of Defense, as its civilian market share crashes, but Airbus doesn't really
have the luxury of a military alternative, given the relative paucity of European defense
expenditures.
As if Boeing needed any further problems, the 737 fiasco represents the latest in a series
of setbacks for the company. Boeing's 737 global recall, coming on the heels of the initial
launch problems of the 787 Dreamliner some six years ago (where the " demoduralization " of
production meant that Boeing "could not fully account for stress transmission and loading at
the system level," as Gary Pisano and Willy Shih write ), together
illustrate the dangers of spreading manufacturing too far across the globe: Engineers,
notes CUNY fellow Jon Rynn , "need
to 'kick the tires' of the new production processes they design. So while a market may be
global, production and the growth of production take place most efficiently" in relatively
close geographic quarters.
American companies such as Boeing consistently underestimate the value of closely
integrating R&D and manufacturing, while underplaying the risks of separating them (
as
recent events have demonstrated again to the company's cost ). By deciding to expand its
A330 production in China, Airbus looks poised to repeat Boeing's error, a potential
miscalculation that most European Union companies have hitherto largely avoided, because the EU
has prioritized domestic manufacturing/discouraged offshoring more than its U.S. counterparts
(in regard to the loss of U.S. manufacturing jobs attributable to China, the American
Economic Review paper by Justin R. Pierce and Peter K. Schott specifically notes that there
was "no similar reaction in the European Union, where policy did not change").
Beijing itself has historically balanced its purchases from both major civil aviation
manufacturers to ensure that it does not rely too heavily on one aircraft supplier, which means
that Airbus will likely benefit from the void created by the 737 recall. All the more reason
why the European conglomerate should be wary of following the pied piper-like expansion into
China. (The 737 recall also complicates resolution of the U.S.-China trade conflict, which had
appeared closer to resolution in light of Beijing's proposal to buy an additional $1.2tn in
U.S. exports over six years. Boeing aircraft purchases featured heavily on Beijing's shopping
list.)
But the longer-term challenges relate to China's economic development path and its
corresponding move up the high-tech curve, which have largely been characterized by
mercantilist policies of protection and heavy government subsidy. In this regard, the Chinese
state has followed a national development strategy first outlined in the
mid-19th century by the German economist Friedrich List , who argued that the national
government should play a crucial role in promoting, guiding, and regulating the process of
national economic advancement.
Protectionism, List argued, should play a role here as well during the country's "catch up"
phase of technological development. List wrote the analysis against a historic backdrop where
Germany was beginning to challenge the dominant economic power of its time, the United Kingdom.
So the defenders of Beijing might well point to his work to show that there is nothing new
about using the state as a principal instrument to accelerate economic development and
innovation.
However, List was analyzing two capitalist economies operating within the context of a
19th-century gold standard global financial system, which invariably circumscribed the scope of
state involvement (the finite availability of gold reserves limiting fiscal policy options). By
contrast, today the global economy operates under a fiat currency system, and what therefore
distinguishes China's economic domestic development from its 19th century predecessors is the
sheer scale of fiscal resources it can deploy in the furtherance of its economic (and military)
objectives. Some of these objectives might not be so benign to the West
longer-term.
Which points to another consideration for the West: for all of its supposed embrace of
capitalism, China is still primarily a state-dominated economy, which eschews the disciplines
of a free market economy. This means it has the capacity (and ideological predisposition) to
use the national fiscal policy as a loss leader, absorbing losses well beyond what would be
tolerated in an economy dominated by private enterprise (private companies, of course, can go
bust). Beijing underwrites its designated national champions by relying on a combination of
subsidies (some disguised, as they flow through state-backed investment funds and the financial
sectors) and "Buy China" preferences to develop Chinese products, even though these policies
are contrary to the rules of WTO membership, which China eagerly joined in 2001. As the
economist Brad Setser argues
, "various parts of the Chinese state compete, absorb losses, and then
consolidat[e] around the successful firms. Other countries [might] worry about the
[scale of the cumulative] losses," notes Setser, but not the Chinese government, which simply
socializes the losses at the national level, and writes them off.
In this regard, Boeing and Airbus would do well to consider China's experience in the solar
industry. Designating this as another strategic sector for growth in the 1990s, Chinese solar
companies, with the explicit backstop of the state, ultimately raised enough funding via debt
to build sufficient solar capacity for the world three times over. The overinvestment
ultimately killed the cash flows of major Western competitors and knocked them out of the
business, leaving the market free for China to dominate. Commenting on the trend, Scientific
American highlighted
that "between 2008 and 2013, China's fledgling solar-electric panel industry dropped world
prices by 80 percent, a stunning achievement in a fiercely competitive high-tech market. China
had leapfrogged from nursing a tiny, rural-oriented solar program in the 1990s to become the
globe's leader in what may soon be the world's largest renewable energy source."
Here was a classic case of state-guided/supported commercial companies receiving benefits
that went far beyond anything in, say, Korea or Taiwan, or even Japan in the earlier part of
their development. Now this trend is manifesting itself across the entire spectrum of the
Chinese guided economy, including agricultural equipment, industrial machinery,
telecommunications, AI, computer chips, and civil aviation. In another disturbing parallel that
Boeing and Airbus would do well to consider, "[t]he timeline of China's rise began in the late
1990s when Germany, overwhelmed by the domestic response to a government incentive program to
promote rooftop solar panels, provided the capital, technology and experts to lure China into
making solar panels to meet the German demand," according
to Scientific American . Much like the German solar companies, which shipped valuable
manufacturing and technological expertise to China, to sustain demand, Boeing and Airbus could
well be signing their economic death warrants by agreeing to offshore increasing amounts of
production in China to sustain their global market shares (aided and abetted by their more
market-oriented governments, which frown on the idea of national industrial policy).
The same thing is happening in wind power in China, which is expected to see offshore wind
capacity grow from 2 gigawatts last year to 31 gigawatts in the next decade. China's expansion
here has already forced Siemens and Gamesa to merge to cope with the rising competitive
challenge. As far as aviation itself goes, Setser
makes the point that "China may cut into the United States' future exports by building its
own competitor to the 737 and also cut into Europe's future exports if Airbus decides to build
the A330 in China and China buys
'Made in China' Rolls-Royce engines for the C929 and the A330." Even if this allows the
duopoly to maintain its dominance in global civil aviation, it is hard to see how shifting
manufacturing production of aircraft components to China to get orders constitutes a "win" for
the U.S. or European workers who are already being displaced. And Boeing's
weak-kneed response to the 737 crisis will likely exacerbate the company's problems going
forward.
The bottom line is that both Western governments and Western corporations have persistently
underestimated the power of China's economic development model, and the corresponding economic
threat that it poses to the West's own affluence. The usual criticism leveled against the
Chinese growth model is that a country that subsidizes its industries ends up with inefficient
industries, because heavily protected local firms are shielded from global competition,
ultimately leaving the country that resorts to protectionism with inferior products. The idea
of national champions, built up via state dirigisme, according to classic liberal economic
doctrine, ultimately ensures that economic efficiency and commercial considerations get
squeezed out. Rent-seeking and corruption become institutionalized, goes the argument, so these
national champions ultimately will not be able to compete in the global marketplace. That was
certainly the assumption of Milton Friedman, who called the
Chinese Communist Party's state-driven strategy "an open invitation to corruption and
inefficiency." By contrast, according to Defense and the National Interest , the governing
assumptions of capitalist economies is that "[t]he discipline of the 'marketplace,'" not the
state, is better suited to choose winners and knock out losers "who cannot offer the prices or
quality or features of their competitors."
China represents the ultimate repudiation of these seemingly ironclad economic laws. The
country's success has come across a slew of industries: clean tech, notably wind and solar
power, internet companies (despite overwhelming censorship, China has corporate behemoths, such
as Alibaba, or Baidu, which rival Google in scale and scope), and more recently, in the
telecommunications sector (where Huawei has clearly benefited from "Buy China" preferences
created by the state via its state-owned telecommunications enterprises and now is considered
to be the global leader in 5G telephony). In practice, therefore, there is no reason why the
same model cannot work with regard to civil aviation even as Airbus and Boeing eagerly provide
the rope with which they may hang their respective companies in the future.
Designating this as another strategic sector for growth in the 1990s, Chinese solar
companies, with the explicit backstop of the state, ultimately raised enough funding via
debt to build sufficient solar capacity for the world three times over.
I'm confused. Why should it matter that they raised funding via debt? It kinda reads like
Auerback feels this should shock us, or make us think China is "cheating" or somesuch. But
iirc there's a nice book by Mazzucato that proves something that Chomsky's been saying since
forever about the US (federal) govt. Now to be sure, the US govt tends to mainly simply give
away money, rather than extending loans, but..
Fiat economies have solidly proved that debt is just noise. Unless politicians use it as a
cudgel to kill good fiscal governance. I am confused about the use of the term "socializing
losses" here because what really seems to be happening is China is creating social value.
When our corporations are coddled and their externalized costs and losses are socialized we,
the tax payers, are the ones who suffer the austerity in order to keep the dollar "strong"
and etc. I'll never forgive this country for allowing our corporations to murder American
labor in the 80s and hot-foot it off to China to make their profit. Now that was definitely
socializing losses – in fact it was socializing losses in advance. I don't think we
will ever recover from that little episode of free marketeering. China might be scary because
they are so very powerful, pragmatic and adaptable. But they are no more "illiberal" than we
are. It's time to set some standards.
Just to point out that Airbus has had an assembly plant in Tianjin in China since 2010. I
recall reading a few years ago that Airbus found costs were so high because of a shortage of
the right workers it would actually have been cheaper to make them in France. Airbus also
assemble aircraft in the US for precisely the same reason – to get a manufacturing
'foothold' in important markets to prevent mercantilist retaliation.
But as the article says, many a manufacturer has found to their cost that the Chinese
simply don't play fair, they will extract every bit of information they can from those plants
and use it for their new Comac aircraft (which so far are not very impressive, nobody wants
to buy them).
You may consider that chinese don't play fair, it also migth be considered that Airbus
strategy is just another way of economic colonization and to prevent the surge of new
competitors maintaining the duopoly. Is it fair?
Given the recent drift of political geostrategy leaded by the US in which anything is
"fair" to defend particular interests, my opinion is that China interest on developing their
own airplane industry is not only fair but very reasonable. One wonders when the US will put
in place another arbitrary ban.
I don't see how nations- or states- can develop other than with a mercantilist mindset.
Doesn't the failure of globalization demand a return to mercantilist methods in order to have
a functioning society in the modern, technological world?
The argument that globalization has not failed is tested by growing social tensions and
inequality around the world. A return to mercantilism, or a version thereof seems logical.
Thriving internal markets linked to strong alliances seem to offer a path into the future
that is workable. Peaceful nations trading among themselves. Over time, resource issues can
be worked out peacefully. The competition will be over functioning economies, not world
domination. But to get there, nations have to have both security and technical ability.
Should the Chinese or the Russians be trusted to bring about a positive transformation in
world society? Time will tell. I would hope so.
From my limited and naive understanding of history, it seems to me that the opportunity
for peaceful coexistence on the planet is consistently being squandered by Western nations --
particularly the US.
If a functioning world government is not possible, than the next best thing would be
functioning national governments that set standards and economic policy that benefited the
majority of citizens, not just the elite. It seems the truly intelligent, and wise ones see
this.
If a functioning world government is not possible, than the next best thing would be
functioning national governments that set standards and economic policy that benefited the
majority of citizens, not just the elite. It seems the truly intelligent, and wise ones see
this.
This is what we had under the Bretton Woods system from appoximately 1945 to 1973.
Moderate free trade with each country setting its own goals, policies, and standards, yet
being connected economically to other countries. An intermediate level between full
mercantilist protectionism and completely open free trade and unrestricted currency flows. It
was replaced by neoliberalism's goal of open borders with unrestricted free trade, currency
flows, and labor.
Yes, but a return seems inevitable. If not, serfdom and peasantry brought back due to
excessive crapification of production and rent seeking by a global oligarchy is in our
future.
Native populations would gladly buy less advanced goods and services if produced locally
and offered secured jobs and livelihoods. Made in China, Made in USA, Made in Russia- makes
perfect sense. Supplying the world through monopolistic corporations is only feasible if not
weaponized. But that is the path not taken.
If you ask a neoliberal what the end game would look like, and they are forced to answer,
most people would be horrified by the answer.
Brexit is a good analogy. The transition could be a managed affair with less pain to go
around, or a crash out.
In the end, saner heads will prevail if only for growing grass roots efforts to create a
fairer economy and necessity.
US forced UK to break and give up jet turbine, Radar, and many other technologies.
Philips, Dutch under Nazi occupation, had all it's patents abrogated and USA assets seized
and never returned. WW 2 made USA a world power not just from being isolated from war but
because USA stole everything and everyone of any value.
Blame the United States for many things, but realize that technology like radar and jet
turbines were extremely important during the Second World War.
During a major war everything is open to theft, or even just being given away, by everyone
as merely surviving becomes more important than any other concern by the various states.
There are also the large businesses that often, very illegally and even treasonously,
continue to do business with their country's enemies. Those businesses just get nasty words
usually and keep their profits (of course).
Examples of both are the Polish and French work on the German Enigma encryption system
given to the British, the Soviet theft and reverse engineering of American technology, IBM's
leasing and maintaining its punchcard machines (census records used in Holocaust) Ford's
manufacturing and maintaining its vehicles and Standard Oil's running its refineries in, and
shipping when possible oil, into Europe for the Nazis, the Nazis stold from everyone
(technology in armored vehicles, artillery, radar, radio) likewise the Japanese who also got
technology from the Nazis. And everyone stold from the Germans.
The only reason the United States got to take full use of what it got was because it's
universities, businesses, and factories were all intact afterwards.
Nobody wants to buy them now but in a few years they will just like cars from S. Korea
were looked upon as inferior to Japanese ones but now they they're deemed to be just as good
and better value for the money.
When I worked there, it seemed that Boeing was always on the cutting edge of bad corporate
ideas. So it's baffling to me that it's taken them so long to have their guts carved out by
China. I mean, the peer pressure at the corporate country club I infer is rather intense. But
I appreciate it as my pension from them is now in a seaparate autonomous account. That is no
guarantee it will be truly insulated but it helps.
I have worked in the electronics industry in Northern California for many years and
watched the outsourcing of manufacturing and some design overseas.
I believe that many in the industry have realized that moving manufacturing and design
overseas has helped to create some very worthy competitors.
Some years ago, I was told of a company that wanted a low end product for an existing
product line.
The company negotiated with a Chinese company and rebranded one of their inexpensive
products, but only after the Chinese company was told of design changes/improvements.
As I was told, the USA company realized they had helped bring a competitor up the learning
curve and would not do it again.
I remember reading that the telecom companies also went into China with assembly plants
and found they did not see the revenue they projected because they "trained new competition"
that opened their own facilities.
Probably there will be considerable lower-level resistance inside Boeing to moving
assembly/design to China, but the "big picture" executives will rule the day.
People will get with the program, as one technician who was being laid off about 20 years
ago related to me. "They told me I could leave that day, or get more pay by training my
overseas replacement for two weeks."
People will get with the program, as one technician who was being laid off about 20
years ago related to me. "They told me I could leave that day, or get more pay by training
my overseas replacement for two weeks."
This has been happening in the United States since the 80s. I am surprised we have
workers, knowledge, or equipment left to be stolen, sold, given away, or thrown away for our
Blessed Elites' God Mamon.
I expect the Chinese to be fools as, for a very old civilization, they are surprisingly
parochial and shortsighted, but seeing my fellow Americans throwing everyone else, including
most Americans, into the compost pile because "greed, for lack of a better word, is good"
makes me want to drink.
Once you impoverish and enrage the population of a nation as large as the United States
what does anyone expect to happen? To everyone else?
This was made possible by keeping the decision secret from the targeted technician(s)
until the last moment before implementation. If the company had told these technicians
several years ahead of time that " in several years time we will give you the choice of
leaving immediately or working for two weeks to train the overseas replacement we will
replace you with" . . . . that the technician(s) in question would have saved up two weeks
worth of living expenses so as to be able to surprise the company with their own last-second
refusal to train the replacement for two weeks pay when the time came.
Which is why the company never told these technicians about this "train your replacement"
plan several years in advance. I sincerely hope this technician was able to withhold certain
key information from his trainee. Even better would be if he had been able to give his new
trainee certain subtle dis-information and dis-training would which lead to downstream decay
in the foreign replacements' performance sometime after the replacement was made. Hopefully
to the detriment of the company which pulled that stunt.
I had to do it twice. I trained my Indian replacement for my world-leader high-tech
employer.
Ten years later, trained my Chinese replacement for my other world-leader employer.
Other countries [might] worry about the [scale of the cumulative] losses," notes Setser,
but not the Chinese government, which simply socializes the losses at the national level,
and writes them off.
Auerback's entirely right on this. But I disagree completely: Boeing and Airbus
should sign suicide pacts. The capitalists are selling China the rope to hang them
with – and please, China, do hang them! While you're at it, keep developing the green
tech the species needs to survive.
"Considering" a move overseas sounds like an indirect way of asking for more special
treatment in the two companies' respective home markets. Which they will probably need
– the market for airliners might be overextended even without the Boeing fiasco.
It is not "Boeing" and "Airbus" as such which are making these decisions. It is actual
human executive persons inside offices in buildings called "Boeing" and "Airbus" who are
making these decisions.
In the current Forced Free Trade environment, if those executives making those decisions
will make more personal money with in order to retire richer with by relocating the bussiness
to China, they will relocate the bussiness to China. If it goes extinct after they have taken
their personal money and run; it is no longer their problem to care about. So they won't care
about it.
My main take-away from Marshall's post is that China is harnessing the power of fiat money
to develop its economy. Why shouldn't all countries do that? It seems to me ideological
blinders are preventing it except perhaps in military expenditures in the U.S. All caveats
regarding human rights, inequality, corruption, environment, etc., apply of course.
Airbus has plant in Tianjin since 2010. The information that China managed to extract from
it did not make the COMAC C919 a competitive aircraft.
So, Airbus and Boeing may think now that the risks of setting a plant in China are less
than expected.
Civil aviation is a particular industry. There is a lot of know-how in the design offices
and in the supply chains. This know-how cannot be copied from a manufacturing plant.
Same thing with the conventional auto industry, however, it's a totally different story
with high speed rail, ship-building, and telecommunications, for which China has caught up.
China's electric vehicle industry also seems promising. I think Comac's ARJ21 and C919 are
good enough to be competitive on China's domestic market.
It is also the publicly-held stock company model, whereby management and boards compute
risk/reward far out enough to match their personal enrichment deadlines, no more.
Neoliberals concentrate on the next quarter's earnings; these companies are pr0bably
eyeing the cheaper labor in the plants in China. I can see that as their main incentive.
Combine the insights of this post with MMT and you have a winner. With a few
qualifications:
1. success (wealth creation?) should be measured by the ability of the nation, with perhaps a
few of its closets friends, to support and defend itself – NOT by how fast the number
of zeros in the financial portfolios of its citizens grows;
2. nor should it be measured by how (temporarily?) cheaply Western consumers can continue the
consumption of the cars, televisions, etc that powers the growth of those portfolios.
Auerbac's choice of the future for the Western airline industry as a potential object of
concern is, however, interesting. It suggests he hasn't been reading Naked Capitalism's
warnings about that industry's planet-killing potential.
I'm catching up on NC post reading this morning and had just finished the post from
earlier this week, "Work of the Past " before I read this one. Autour's study of the widening
wage gap increases between workers with low and high education levels, which, as commenters
there pointed out, were seen as almost natural phenomena, no agency involved, segues nicely
into this post. And, resulted in my thinking about the rise of so-called 'toxic
masculinity.'
When I moved to Long Beach, California in the '80's, I lived just a few miles from the
then-thriving McDonnell-Douglas assembly plant. Driving by, you could see the end product
planes, still an unpainted dull metallic gray, sitting in a row on the tarmac. Crews would
then paint on the distinctive livery of the purchasing airline and the new plane, in glowing
color, would be rolled out. The CEO of the airline would arrive, have his tie cut off (don't
ask!) and take delivery of the new plane in a ceremony that involved the proud workers.
For a short time, I worked there, hiring training pilots. The esprit-de-corps in
the plant was infectious. People were immensely proud to be working there and had a vested
interest in each plane as it rolled off the assembly line. (There was a growing concern with
workers going out for Friday lunch and never coming back; or returning and then falling
asleep inside the wings or engine cowlings, but that was at the end, when workers knew the
company was contracting.)
I was there when the company sold plants in San Diego and older guys with years of
experience came up to Long Beach to work as temporary contractors. Then the LB plant
closed.
All those employees, mainly white males, who had good jobs, worked hard, crafting a
product they were proud of, that flew all over the world (spewing carbon dioxide, but that's
another tale), owned a nice little house, took family vacations, cut adrift.
Our nation's lack of an industrial policy not only strips workers of their jobs, their
sources of income and their pensions, but takes away their dignity, their reason for getting
up in the morning. It strips away the bonds they have forged with their co-workers and
smashes the pride they had in their product. It emasculates them. And, what is left becomes
poisoned and toxic, turns to hate and despair.
We do have an industrial policy – go to war for the oil companies to name one
objective. Our government concludes pacts to force other countries to buy our grain, pharma,
planes, medical equipment etc. etc.
Unfortunately, this plicy do not translate into manufacturing in this countries because these
companies chase cheap labor elsewhere around the world.
China is still primarily a state-dominated economy, which eschews the disciplines of a
free market economy.
This is the most hilarious quote I think I have ever seen on Naked Capitalism.
If your competitor's strategy is having them eat your lunch, rather than criticize that
strategy, maybe you might consider learning a thing or two from it.
One assumes that the CEOs of these companies making these decisions actually care about
the future of the company, the future of their country. They don't. They care about getting
rich. They live in a different world than the rest of us. End of story.
China is doing what Japan did with automobiles and consumer electronics after WW2.
Toyota was once warehouse with a dormitory, and the workers found out if they were going to
work today by looking out the window to see if there was smoke coming from the warehouse
chimney.
And I am glad it happened, my 1995 Toyota Tacoma is better and cheaper than anything made in
USA. Also true for my 2004 Mazda3.
The contributors to this blog seem to have no regard for USA consumers.
Yes my local clothing store closed down long ago, but they never had my size pants anyway.
Walmart does, Costco does, and for far less $.
Do you really think that Boeing deserves our support? Do you really think they have acted
responsibly?
I think Boeing is just another oligarch, like VW, that will do anything to increase
profits.
"Yes my local clothing store closed down long ago, but they never had my size pants
anyway. Walmart does, Costco does, and for far less $."
You must be both not so old and not so tall. I'm both. Nike used to make XL t-shirts that
fit me, but now its XXLs are too small. I have one Nike t-shirt from at least thirty years
ago and it fits perfectly, so my body isn't what changed.
And if you don't realize that Walmart quality is far below what one would have found in US
clothing stores thirty years ago, there's nothing more to say.
Walmart and Amazon sell the same socks, t shirts, and pants.
And so does Hanes if you order direct online.
I don't think any of them are made in USA.
I used to buy fine cotton t shirts made in L.A (CA)
They are no longer in business because they cost $20, and Hanes now sells for $5 online.
Walmart quality varies, so do their prices.
I know what I want, and am glad to buy it for less anywhere that sells it.
Most of the CEOs don't care about the worker that works for them.
They largely see them as something to exploit so that they can get their big stock options
bonus. Boeing is no different, nor is Airbus.
From the CEO's point of view, they outsource, they transfer technology, and for a few
years, the profits will be good. Then when the full extent of the failure becomes apparent,
they will be gone anyways, having cashed in on their stock options and a new CEO will be
there to take the fall.
It's the MBA culture run amok and it has been responsible for a large amount of the damage
done to the middle classes of the Western world. They are creating future competitors and
destroying their own communities.
A while back, Eamonn Fingleton noted this problem – only for Japan.
The Chinese have long wanted to develop their own domestic aerospace industry. An example
of one area that China needs to master is the jet turbine blade manufacturing. It's an
extremely difficult part of making a competent aircraft, as higher inlet temperatures mean
more efficient aircraft.
The difference is that China takes a more long term view of what is in the best interest
of their nation, however flawed and corrupt the CCP may be. The US ruling oligarchs are a
naked kleptocracy that milk their population.
To paraphrase Bill Clinton, that depends upon the definition of "modernized." China will
always be the preeminent communist country, but Deng and others realized that China could
earn big bucks by playing a capitalist game, as long as Chinese businessmen do not interfere
with the government.
Airbus and Boeing are merely the latest suckers to believe that China will ever change.
Der Spiegel noted years ago that Chinese engineers were videotaped in the middle of the night
taking measurements of Germany's Transrapid train. Today China has the best technology from
all major train manufacturers, with short-sighted entities such as the state of California
seriously considering buying Chinese trains (before the new governor canceled the project, of
course).
The aircraft horse has already left the barn. China's C919 is a 737 clone which will allow
China to stop buying smaller airliners, with many countries naively buying it to save money.
Obtaining Airbus and Boeing technology will allow China to do the same for larger
airliners.
If you want a real laugh, read the articles written by libertarians about how Americans
will always be more productive than Chinese, so allowing China into the WTO and giving it
PNTR will not hurt us in the long run.
The basic problem in the West is that the neo-liberal ideology has merged with human greed
to form an economic/political system that is divorced from reality. At least the Party in
China has Russia as an example and must deal with the real world to stay in power less they
lose their mandate to rule. America has its exceptionalism. China has its chauvinism. My
opinion is that the iPhone sales cratered there for one reason; Trump's trade war. Boeing's
boneheaded decision to add a fatally flawed fly-by-wire system to the 737 Max without telling
anyone and with no training deserves prison time for Chicago executives for manslaughter.
They won't go to jail and the last manufacturing American led industry will die away.
Mid-America is a colony to global oligarchs and their bi-coastal lackeys. The only way to
turn our fate around is to restore democracy and government by and for the people.
W e are still trying to fathom the apparent but transient palace-coup attempts of Rod
Rosenstein and Andrew McCabe. No one has gotten to the bottom of the serial lying by McCabe and
James Comey, much less their systematic and illegal leaking to pet reporters.
We do not know all the ways in which James Clapper and John Brennan seeded the dossier and
its related gossip among the press and liberal politicians -- only that both were prior
admitted fabricators who respectively while under oath misled congressional representatives on
a host of issues.
The central role of Hillary Clinton in funding the anti-Trump, Russian-"collusion,"
Fusion/GPS/Christopher Steele dossier is still not fully disclosed. Did the deluded FISA court
know it was being used by Obama-administration DOJ and FBI officials, who withheld from it
evidence to ensure permission to spy on American citizens? Could any justice knowingly be so
naïve?
Do we remember at all that Devin Nunes came to national prominence when he uncovered
information that members of the Obama administration's national-security team, along with
others, had systematically unmasked surveilled Americans, whose names then were leaked
illegally to the press?
One day historians will have the full story of how Robert Mueller stocked his legal team
inordinately with partisans. He certainly did not promptly disclose the chronology of, or the
interconnected reasons for, the firings of Lisa Page and Peter Strozk. And his team has largely
used process-crime allegations to leverage mostly minor figures to divulge some sort of
incriminating evidence about the president -- none of it pertaining to the original mandated
rationale of collusion.
These are the central issues and key players of this entire sordid attempt to remove a
sitting president.
But we should remember there were dozens of other minor players who did their own parts in
acting unethically, and in some cases illegally, to destroy a presidency. We have mostly
forgotten them. But they reflect what can happen when Washington becomes unhinged, the media go
berserk, and a reign of terror ensues in which any means necessary is redefined as what James
Comey recently monetized as a "Higher Loyalty" to destroy an elected president.
Here are just a few of the foot soldiers we have forgotten.
Anonymous
On September 5, 2018 (a date seemingly picked roughly to coincide with the publication of Bob
Woodward's sensational tell-all book about the inside of the Trump White House), the New
York Times printed a credo from a supposed anonymous Republican official deep within the
Trump administration. In a supposed fit of ethical conviction, he (or she) warned the nation of
the dangers it faced under his boss, President Trump, and admitted to a systematic effort to
subvert his presidency:
The dilemma -- which he does not fully grasp -- is that many of the senior officials in
his own administration are working diligently from within to frustrate parts of his agenda
and his worst inclinations. I would know. I am one of them.
Anonymous elaborated:
Given the instability many witnessed, there were early whispers within the cabinet of
invoking the 25th Amendment, which would start a complex process for removing the president.
But no one wanted to precipitate a constitutional crisis. So we will do what we can to steer
the administration in the right direction until -- one way or another -- it's over.
We do not know whether Anonymous was describing the coup attempt as described by Andrew
McCabe that apparently entailed Rod Rosenstein at the Justice Department informally polling
cabinet officials, or marked a wider effort among Never Trump Republicans and deep-state
functionaries to ensure that Trump failed -- whether marked by earlier efforts to leak
confidential calls with foreign officials or to serve up unsubstantiated rumors to muckrakers
or simply slow-walk or ignore presidential directives.
In any case, Anonymous's efforts largely explain why almost daily we hear yet another mostly
unsubstantiated account that a paranoid, deranged, and dangerous Trump is holed up in his
bedroom with his Big Macs as he plans unconstitutional measures to wreck the United States --
and then, by accident, achieves near-record-low peacetime unemployment, near-record-low
minority unemployment, annualized 3 percent GDP growth, record natural-gas and oil production,
record deregulation, comprehensive tax reform and reduction, and foreign-policy breakthroughs
from the destruction of ISIS to cancellation of the flawed Iran deal.
James Baker
In the course of congressional testimony, it was learned that the FBI general counsel, James
Baker, for a time had been under investigation for leaking classified information to the press.
Among the leaks were rumored scraps from the Steele dossier passed to Mother Jones
reporter David Corn (who has denied any such connection) that may have fueled his sensational
pre-election accusation of Trump–Russian collusion.
Nonetheless, about a week before the 2016 election, Corn of Mother Jones was writing
lurid exposés, such as the following, to spread gossip likely inspired from the
Christopher Steele dossier (italics inserted):
Does this mean the FBI is investigating whether Russian intelligence has attempted to
develop a secret relationship with Trump or cultivate him as an asset? Was the former
intelligence officer and his material deemed credible or not?
An FBI spokeswoman says, "Normally, we don't talk about whether we are investigating
anything." But a senior US government official not involved in this case but familiar with
the former spy tells Mother Jones that he has been a credible source with a proven record of
providing reliable, sensitive, and important information to the US government. In June,
the former Western intelligence officer -- who spent almost two decades on Russian
intelligence matters and who now works with a US firm that gathers information on Russia for
corporate clients -- was assigned the task of researching Trump's dealings in Russia and
elsewhere, according to the former spy and his associates in this American firm.
What does "assigned" mean, and by whom? That Fusion/GPS (which, in fact, is a generic
opposition-research firm with no particular expertise in Russia) hired with disguised Clinton
campaign funds a has-been foreign-national spy to buy dirt from Russian sources to subvert a
presidential campaign?
Those leaks of Christopher Steele's dirt also did their small part in planting doubt in
voters' minds right that electing Trump was tantamount to implanting a Russian asset in the
White House. Baker has been the alleged center of a number of reported leaks, even though the
FBI's general counsel should have been the last person to disclose any government communication
to the press during a heated presidential campaign. And there is still no accurate information
concerning what role, if any, Baker played in Andrew McCabe's efforts to discuss removing the
president following the Comey firing.
Evelyn Farkas
On March 1, 2017, just weeks after Trump took office, the New York Times revealed that.
in a last-minute order, outgoing president Obama had vastly expanded the number of government
officials with access to top-secret intelligence data. The Obama administration apparently
sought to ensure a narrative spread that Trump may have colluded with the Russians. The day
following the disclosure, a former Pentagon official, Evelyn Farkas (who might have been a
source for the strange disclosure of a day earlier), explained Obama's desperate eleventh-hour
effort in an MSNBC interview:
I was urging my former colleagues, and, and frankly speaking the people on the Hill . . .
it was more actually aimed at telling the Hill people, get as much information as you can,
get as much intelligence as you can before President Obama leaves the administration.
Because I had a fear that somehow that information would disappear with the senior people
who left so it would be hidden away in the bureaucracy, um, that the [stutters] Trump folks
-- if they found out how we knew what we knew about their [the] Trump staff, dealing
with Russians -- that they would try to compromise those sources and methods, meaning we no
longer have access to that intelligence.
So I became very worried because not enough was coming out into the open and I knew that
there was more. We have very good intelligence on Russia, so then I had talked to some of my
former colleagues and I knew that they were also trying to help get information to the
Hill.
Despite media efforts to spin Farkas's disclosure, she was essentially contextualizing how
outgoing Obama officials were worried that the incoming administration would discover their own
past efforts ("sources and methods") to monitor and surveil Trump-campaign officials, and would
seek an accounting. Her worry was not just that the dossier-inspired dirt would not spread
after Trump took office, but that the Obama administration's methods used to thwart Trump might
be disclosed (e.g., " if they found out how we knew what we knew about their [the] Trump
staff, dealing with Russians -- that they would try to compromise those sources and methods,
meaning we no longer have access to that intelligence" ).
So Farkas et al. desperately sought to change the law so that their rumors and narratives
would be so deeply seeded within the administrative state that the collusion narrative would
inevitably lead to Congress and the press, and thereby overshadow any shock at the improper or
illegal methods the Obama-administration officials had authorized to monitor the Trump
campaign.
And Farkas was correct. Even today, urination in a Russian hotel room has overshadowed
perjury traps, warping the FISA courts, illegal leaking, inserting a spy into the Trump
campaign, and Russian collusion with Clinton hireling and foreign agent Christopher Steele.
Samantha Power
We now forget that for some reason, in her last year in office, but especially during and after
the 2016 election, Power, the outgoing U.S. ambassador to the United Nations, reportedly asked
to unmask the names of over 260 Americans picked up in government surveillance. She offered no
real explanations of such requests.
Even stranger than a U.N. ambassador suddenly playing the role of a counterintelligence
officer, Power continued her requests literally until the moments before Trump took office in
January 2017. And, strangest of all, after Power testified before the House Oversight and
Government Reform Committee, Representative Trey Gowdy reported that "her testimony is 'they
[the unmasking requests] may be under my name, but I did not make those requests.'"
Who, in the world, then, did make those requests and why and, if true, did she know she was
so being used?
And were some of those unmasking requests leaked, thus helping to fuel media rumors in late
2016 and early 2017 that Trump officials were veritable traitors in league with Russia? And why
were John Brennan, James Clapper, Susan Rice, and Sally Yates reportedly in the last days (or,
in some cases, the last hours) requesting that the names of Americans swept up in surveillance
of others be unmasked? What was the point of it all?
In sum, did a U.N. ambassador let her name be used by aides or associates to spread rumors
throughout the administrative state, and thereby brand them with classified government
authenticity, and then all but ensure they were leaked to the press?
We the public most certainly wondered why the moment Trump was elected, the very name Carter
Page became synonymous with collusion, and soon Michael Flynn went from a respected
high-ranking military official to a near traitor, as both were announced as emblematic of their
erstwhile complicit boss.
Ali Watkins and James Wolf
Watkins was the young reporter for Buzzfeed (which initially leaked the largely fake
Steele dossier and erroneously reported that Michael Cohen would implicate Trump in suborning
perjury) who conducted an affair with James Wolf, a staffer, 30 years her senior, on the Senate
Intelligence Committee.
Wolf, remember, systematically and illegally began leaking information to her that found its
way into sensationalized stories about collusion. But as Margot Cleveland of the
Federalist pointed out, Watkins was also identified by Buzzfeed "in court filings
as one of the individuals who 'conducted newsgathering in connection with the Dossier before
Buzzfeed published the Article' on the dossier. This fact raises the question of whether
Watkins received information from Wolfe concerning the dossier and, if so, what he leaked."
In other words, the dossier was probably planted among U.S. senators and deliberately leaked
through a senior Senate aide, who made sure that the unverified dirt was published by the press
to damage Donald Trump.
And it did all that and more.
The list of these bit players could be easily expanded. These satellites were not
coordinated in some tight-knit vast conspiracy, but rather took their cue from their superiors
and the media to freelance with assumed impunity, as their part in either preventing or ending
a Trump presidency. And no doubt the Left would argue that the sheer number of federal
bureaucrats and political appointees, in a variety of cabinets and agencies, throughout the
legislative and the executive branches, all proves that Trump is culpable of something.
Perhaps. But the most likely explanation is that a progressive administrative state, a
liberal media, and an increasingly radicalized liberal order were terrified by the thought of
an outsider Trump presidency. Therefore, they did what they could, often both unethically and
illegally, to stop his election, and then to subvert his presidency.
In their arrogance, they assumed that their noble professions of higher loyalties and duties
gave them exemption to do what they deemed necessary and patriotic. And others like them will
continue to do so, thereby setting the precedent that unelected federal officials can break the
law or violate any ethical protocols they please -- if they disagree with the ideology of the
commander in chief. We ridicule Trump for going ballistic at each one of these periodically
leaked and planted new stories that raised some new charge about his stupidity, insanity,
incompetence, etc. But no one has before witnessed any president subjected to such a
comprehensive effort of the media, the deep state, political opponents, and his own party
establishment to destroy him.
Subversion is the new political opposition. The nation -- and the Left especially -- will
come to regret the legacy of the foot soldiers of the Resistance in the decades to come.
Is Donald Trump
starting to look like a softie on the trade conflict with China compared to sections of the U.S. business and political
elite?
Dorian
Bon
explains the background.
WHEN DONALD Trump
launched
his
trade war on China
last spring, he had to drag the U.S. political and business establishment along with him.
Most elected
officials in both parties and a large majority of corporate execs cringed at the thought of a protracted trade war that
would disturb the ordinary flow of profits and investments between the world's two largest economies.
Now, as Trump and
his team seek a negotiated settlement with Chinese President Xi Jinping, Trump finds himself in the opposite position --
facing bipartisan pressures not to back down or compromise in any U.S.-China trade deal.
Even Trump's own
trade negotiator Bob Lighthizer -- who helped bend Japanese auto companies to the will of the Reagan administration in the
mid-1980s -- has
grown
frustrated with the president
, wanting him to take a harder line on Chinese telecom giant Huawei and keep the threat of
further tariff increases on the table.
Donald Trump and Xi Jinping meet during the 2018 G20 Summit in Buenos Aires
The context for this
strange turnabout is the new common sense across the political spectrum: the idea that China poses a threat to U.S. jobs,
security and technological dominance.
Trump's advisers
fully expect the eventual Democratic nominee in 2020 to try to outflank him to the right on China and the defense of U.S.
manufacturing. And the political competition over anti-Chinese toughness could very well throw a wrench into the continuing
bilateral negotiations with China.
Even big American
capital -- which, outside of the steel industry, has been almost universally opposed to Trump's tariffs -- is warming to the
administration's more aggressive stance toward China.
Most U.S. CEOs are
still hostile to the use of tariffs as an economic weapon, especially against their North American and European trading
partners. But they also have serious concerns about the rapid development of Chinese high-tech manufacturing, the transfer
-- by contract and by coercion -- of U.S. technologies to Chinese firms, and investment restrictions for U.S. companies in
China.
Somewhat to their
surprise, Corporate America sees Trump forcing Xi's hand on these issues more effectively than Barack Obama or George W.
Bush before him.
Josh Bolten,
president of the Business Roundtable -- an association of the U.S.'s largest companies, collectively worth $8 trillion and
employing 15 million workers --
put
it this way
during a recent interview with Washington trade experts Scott Miller and Bill Reinsch on their podcast
The
Trade Guys
:
The CEOs of the
Business Roundtable have found themselves in agreement...with the Trump administration on most of the objectives of the
very aggressive posture that the administration has taken with respect to China.
As both of you
also know, that is an evolution...of the business community's position. The Roundtable doesn't speak for the whole
business community, but I think there has been an evolution throughout the business community on this. And that is that
the posture of waiting for democratic, market-oriented capitalism gravity to have its effect on the Chinese has proven
not to be a viable approach.
Bolten went on to
lament the defeat of the Trans-Pacific Partnership (TPP) -- a major Obama-era economic agreement that Trump opposed on the
campaign trail and terminated once he took office -- as a missed opportunity to contain China's rise and secure crucial
markets where U.S. and Chinese companies are in direct competition.
Bolten and most of
the U.S. ruling class see -- somewhat in contrast to Trump -- the strengthening of a multilateral alliance of Western and
pro-Western countries as the best strategy to counter the threat of a growing Chinese rival.
But Bolten is
unambiguous and Trump-sounding about the goal of the strategy. "All of our interests are actually consistent with each
other in confronting the threat that an economically hegemonic China poses for the entire world," he explained.
HEARING A leading
representative of the American corporate elite talk about the threat of Chinese economic hegemony on "the entire world" is
alarming to say the least -- and demonstrates that Trump doesn't have a monopoly on anti-China discourse by any stretch of
the imagination.
That isn't to
underplay the serious disagreements over strategy between the Trump administration and most of the U.S. business world.
Many corporate
leaders are concerned about the fact that Trump is simultaneously in tense trade negotiations with the European Union and
brandishing
the threat of tariffs on car imports
(primarily impacting Germany and Japan), a move which virtually every single
American auto-company angrily opposes.
And they appear to
be signing on only half-heartedly to Trump's renegotiated NAFTA, now dubbed the U.S.-Mexico-Canada Agreement -- which
contains some attractive updates on digital trade (mostly lifted from the TPP, ironically enough), but is broadly seen as a
step backwards for corporate profits and preferable only to a collapse of NAFTA altogether.
These raise question
for U.S. corporate rulers: If Trump is so concerned with the Chinese threat, why doesn't he focus his fire in that
direction, instead of toward allies?
This will be the
line of attack against Trump from much of the political and corporate establishment, including those who are Democrats or
support them, moving forward into the new election cycle.
To Trump and his
team, however, trade disputes and negotiations with Canada, Mexico, the European Union, Japan and China are all so many
elements of a larger plan to keep as much of global industry as possible within the continental U.S.
For the largest
American companies -- which have positioned themselves at the technological peak of a globalized network of supply chains,
markets and investments -- Trump's economic nationalism poses an opportunity to challenge China, but new problems in
relation to the rest of the world.
The biggest CEOs and
industry lobbies are still figuring out a response.
THE REVERBERATIONS
of the U.S.-China trade war have been felt across the corporate world, perhaps nowhere more starkly than in
telecommunications.
As geopolitical
tensions between the U.S. and China have deepened, telecom companies and state governments have been preparing for the
highly anticipated rollout of 5G cellular networks. 5G, or fifth generation, technology is expected to speed up data flows
(and increase data volumes) across cell phone and other digital communication systems.
Many analysts
predict the degree of change brought on by 5G will be similar to that of the 3G and 4G evolutions, which underpinned the
smartphone boom. This time around, however, most eyes are trained on what the new networks will mean for digitized and
computerized manufacturing, commerce and transportation more broadly.
For the leadership
of both main U.S. political parties, the excitement around 5G has been muted by hostility toward the world's largest
telecom equipment supplier (and second largest cell phone seller), the Chinese corporation Huawei.
With $7.55 billion
in profits in 2017 and the most cost-competitive telecom equipment in the world, Huawei has been widely predicted to be one
of the main beneficiaries of the 5G expansion.
But Congress has
been on an offensive against the company
since
2012
, and the Trump administration has escalated the attacks.
Trump has gone on a
global campaign with broad bipartisan support to persuade allied states to ban Huawei entirely from their domestic markets.
He has also planned to issue an executive order to bar the company from the U.S. economy as well, though he seems to have
now turned this threat into a bargaining chip in his dealmaking with Xi and China.
The justification
for bans is that Huawei could use its access to the cellular networks it builds overseas to spy on foreign governments. The
extraordinary hypocrisy of this claim coming from the main surveillance power in world history has not been lost on most
people following the debate.
Meanwhile, Trump
instructed the Canadian government to arrest and extradite Huawei's Chief Financial Officer Meng Wanzhou, daughter of
Huawei founder and President Ren Zhengfei, during a routine visit to Vancouver. The charges against Wanzhou stemmed from
alleged violations of U.S. sanctions on Iran.
Wanzhou's
extradition hearing
began this week and could drag on for months.
Wanzhou's arrest
could also be used as a bargaining chip by Trump, though most of Trump's staff is reticent to bring a separate legal
proceeding into a trade agreement for fear of discrediting the courts.
PART OF what is so
striking about the case of Huawei and 5G is how it flatly contradicts the whole logic of the current neoliberal world order
of free markets and free trade.
According to the
propaganda, under neoliberalism, any buyer should be allowed to make their purchases from any company that offers the best
products for the lowest prices. For many buyers, including national governments, that company is clearly Huawei.
Now, however, the
U.S. state is attempting to restrict the field and eliminate the Chinese option from the market. In other words, what we're
witnessing in this crucial sector of the global economy is an open attempt by the world's most powerful state to create
trade blocs in telecommunications that shut out one of China's most prominent companies.
While both
Republicans and Democrats in Congress are rallying behind the attacks on Huawei, the response from the U.S. and European
information technology industries has been much more conflicted.
The main lobby for
telecom and technology companies in the U.S., the Information Technology Industry Council, has been clamoring for Trump to
strike a deal with Xi and drop the tariffs. Chuck Robbins, CEO of the largest American telecom equipment maker, Cisco
Systems, insists Trump's tariffs and sanctions are unnecessary.
"We don't need
anything else to beat these guys or to beat any of our competition in the marketplace,"
Robbins
said in February
. Huawei competitors Ericsson and Nokia -- multinational companies based in Sweden and Finland,
respectively -- have claimed that
they're
ready to supply Europe's 5G infrastructures
in the event of a Huawei ban, indicating they may have some sympathy with
Trump's efforts.
AS OF now, the Trump
administration's campaign to block Huawei from the world's markets has had mixed results. Both
British
and
German
intelligence
agencies are leaning toward accepting Huawei as a legitimate business partner, as is the
French
Senate
.
In the Czech
Republic,
a
conflict has emerged
pitting President Miloš Zeman, who wants to strengthen ties with China, and the Czech
cybersecurity agency, which has labeled Huawei a threat to national security. Debates on the same topic are also underway
in
Italy
and
Canada
.
Australia's Foreign
Minister Marise Payne, staking out the most extreme anti-Huawei position, has
fully
embraced Trump's ban
and vowed to maintain it, even if Trump himself backs away from his current position. New
Zealand's Prime Minister Jacinda Ardern, on other the hand,
rejected
the idea of a blanket ban
.
Despite ongoing
China-India tensions, the offer of cheap telecommunications equipment to expand India's cellular infrastructure seems too
attractive for Modi and his business allies to decline. The fact that the Trump administration is simultaneously
weighing
raising tariffs and restrictions
on Indian products is certainly not helping to convince Modi to further antagonize
Beijing.
However unsuccessful
the Trump White House has been in forcing the hand of other states, the president and congressional leaders are well aware
of the economic leverage they have against key Chinese companies.
Last year, the Trump
administration brought China's second telecom corporation, ZTE, to the brink of collapse when he issued
a
temporary ban on trade
between the company and American suppliers. ZTE is totally dependent on U.S. imports of advanced
communications equipment and might have been destroyed if Trump had not chosen to lift the ban before entering negotiations
with Xi.
Similar bans by the
Trump administration have nearly brought down the Chinese state-owned chipmaking company Fujian Jinhua, which has announced
it will have to
cease
production altogether in March
if it cannot buy more imports of crucial American equipment.
WITH ALL of these
variables at play, the next year in the U.S.-China economic relationship is impossible to predict.
The financial costs
of unraveling one of the largest state-to-state commercial relationships in modern history may prove too high for either
side to escalate the 2018-19 trade conflict any further, especially as the global economy passes the high point of the
business cycle and heads toward
another
likely recession
.
The two heads of
state plan to meet at the end of March, possibly at Trump's Mar-a-Lago resort in Florida, to sign a trade agreement.
For Trump to sell
the deal to an increasingly hawkish Congress, he will have to demonstrate "progress" on the goals he articulated at the
outset of the trade war: more Chinese purchases of American products, stronger intellectual property safeguards for U.S.
corporations and less state subsidies for Chinese companies. It remains to be seen whether Trump will decide to incorporate
a compromise on Huawei into the deal.
Whatever the outcome
of this round of negotiations -- and it is still possible that they could fall apart -- what is unfolding today is
undoubtedly just the first act in a long and tempestuous drama.
China is clearly a
growing geopolitical rival to the U.S., and Chinese corporations are quickly developing the capacity to compete with their
U.S. counterparts on a global scale in the most advanced areas of high-tech manufacturing.
This means that many
more economic confrontations between the two states are inevitable. And as politicians on both sides of the aisle have made
abundantly clear, Trump will not be the last president to stoke tensions with China.
Then there is the
question of how the perspectives of the largest American businesses will change as this conflict develops.
Josh Bolten, the
Business Roundtable president, claims that the CEOs he represents have been through an "evolution" in their views that
brings them closer to Trump's "aggressive posture" toward China. Yet at the same time, there continues to be near-universal
opposition to tariffs and trade wars within these elite strata.
So what kind of
"aggressive posture" do these leading American capitalists hope to adopt? With more money and power concentrated in their
hands than any other ruling class in the world, the stance that these elites take toward U.S.-China relations will be very
important.
If the American 1
Percent drifts any further toward the rising economic nationalism articulated by their political representatives in
Washington, future flare-ups between the two countries may be a great deal worse.
The Pentagon's inspector general has formally opened an investigation into a watchdog
group's allegations that acting Defense Secretary Patrick Shanahan has used his office to
promote his former employer, Boeing Co.
Citizens for Responsibility and Ethics in Washington filed an ethics complaint with the
Pentagon's inspector general a week ago, alleging that Shanahan has appeared to make statements
promoting Boeing and disparaging competitors, such as Lockheed Martin.
Shanahan, who was traveling with President Donald Trump to Ohio on Wednesday, spent more
than 30 years at Boeing, leading programs for commercial planes and missile defense systems. He
has been serving as acting Pentagon chief since the beginning of the year, after James Mattis
stepped down.
The probe comes as Boeing struggles to deal with a public firestorm over two deadly crashes
of the Boeing 737 Max 8 jetliner within the last five months. And it focuses attention on
whether Trump will nominate Shanahan as his formal pick for defense chief, rather than letting
him languish as an acting leader of a major federal agency.
Dwrena Allen, spokeswoman for the inspector general, said Shanahan has been informed of the
investigation. And, in a statement, Pentagon spokesman Tom Crosson said Shanahan welcomes the
review.
"Acting Secretary Shanahan has at all times remained committed to upholding his ethics
agreement filed with the DoD," said Crosson. "This agreement ensures any matters pertaining to
Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or
actual conflict of interest issue(s) with Boeing."
During a Senate hearing last week, Shanahan was asked by U.S. Sen. Richard Blumenthal,
D-Conn., about the 737 Max issue. Shanahan said he had not spoken to anyone in the
administration about it and had not been briefed on it. Asked whether he favored an
investigation into the matter, Shanahan said it was for regulators to investigate.
On Wednesday, Blumenthal said that scrutiny of Shanahan's Boeing ties is necessary. "In
fact, it's overdue. Boeing is a behemoth 800-pound gorilla -- raising possible questions of
undue influence at DOD, FAA and elsewhere," said Blumenthal.
Shanahan signed an ethics agreement in June 2017, when he was being nominated for the job of
deputy defense secretary, a job he held during Mattis' tenure. It outlined the steps he would
take to avoid "any actual or apparent conflict of interest," and said he would not participate
in any matter involving Boeing.
The CREW ethics complaint, based to a large part on published reports, including one by
Politico in January, said Shanahan has made comments praising Boeing in meetings about
government contracts, raising concerns about "whether Shanahan, intentionally or not, is
putting his finger on the scale when it comes to Pentagon priorities."
One example raised by the complaint is the Pentagon's decision to request funding for
Boeing 15EX fighter jets in the 2020 proposed budget. The Pentagon is requesting about $1
billion to buy eight of the aircraft.
Shanahan, 56, joined Boeing in 1986, rose through its ranks and is credited with rescuing
a troubled Dreamliner 787 program. He also led the company's missile defense and military
helicopter programs.
Trump has seemed attracted to Shanahan partially for his work on one of the president's
pet projects -- creating a Space Force. He also has publicly lauded Shanahan's former employer,
Boeing, builder of many of the military's most prominent aircraft, including the Apache and
Chinook helicopters, the C-17 cargo plane and the B-52 bomber, as well as the iconic
presidential aircraft, Air Force One.
This is only the third time in history that the Pentagon has been led by an acting chief,
and Shanahan has served in that capacity for longer than any of the others.
Presidents typically take pains to ensure the Pentagon is being run by a Senate-confirmed
official, given the grave responsibilities that include sending young Americans into battle,
ensuring the military is ready for extreme emergencies like nuclear war and managing overseas
alliances that are central to U.S. security.
3 hours ago Why did Trump
appoint a former Boeing executive and industry lobbyist to the the Secretary of Defense to
replace General Mattis? What in Shananhan's background makes him qualified to lead our nation's
military forces? 3 hours ago WITHOUT A DOUBT HE DID., ALSO INVESTIGATE NIKKI HALEY'S APPOINTED
ON BOEING'S BOARD TO REPLACE SHANAHAN. FOLLOW THE HOEING KICKBACKS(MONEY), TO DONALD TRUMP'S
FAMILY. 3 hours ago
Shanahan probably helped Boeing on the promise of a later payback just like Ms. Nikki Haley did
while Gov of SC where Boeing built a new plant on her watch. She helped big time to keep the
Unions out of the new Boeing plant and now Boeing is going to put her on their board of
directors. Nothing like a bit of an obvious payoff. 2 hours ago Reminds me of the Bush Jr days in
the White House. During the Gulf War (#2) Vice President #$%$ Cheney awarded oil company
Halliburton (Cheney was CEO before accepting the VP job) to deliver meals for the troops. The
contract was ?No Bid.? Why was an oil company delivering food to troops with a no bid contract?
After Cheney?s Job was over being VP he went back to being CEO at Halliburton and moved
Halliburton?s headquarters to Dubai. What an American! 2 hours ago Now we understand why Boeing
& the FAA hesitated to ground those planes for few days despite many countries who did
grounded those plane which is a precedent for a country to ground & NOT wait for the
manufacturer. ONLY after Canada grounded those planes Boeing & the FAA & that's because
Canada IS a the #1 flight partner of the US ! 4 hours ago Years ago there was a Boeing
procurement scandal and Trump does love the swamp he claims to hate.
"President typically take pains to ensure the Pentagon is being
run by Senate confirmed official" .Presidents typically don't put incompetent people in cabinet positions or give his kids top security
level clearances when they have no need and no experience that requires one...well, no one has accused trump of being presidential
or typical - ever
Dianna 4 hours ago
The swamp is now the " Trump Cesspool."
Nonconservative 3 hours ago
Hey deplorables....hows that swamp draining going?...ANYWORD on that great big beautiful health plan with lower premiums and keeping my own doctor?....what about infrastructure?...any
idea when the roads in every city will be driveable again...or did we spend all the money from the US govt. paying Trump to stay
at his own hotels?........hello?......hello deplorables?......anybody home????
Pierre Escargot 1 hour ago
Pentagon to probe if Shanahan used office
to help Boeing. Why not? Robert Mueller's and James Comey turned government service into self-service.
"... "If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela. So not a smooth short % decline rate." ..."
"... Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has soared (expected to top $250T in 2019). ..."
"... Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since it will be a push over compared to Iran. ..."
"If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically
thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela.
So not a smooth short % decline rate."
Energy is the economy, The economy cannot function without energy. Thus its logical that a decline in energy supply will reduce
the economy. The only way for this not to apply is if there are efficiency gains that offset the decline. But at this point the
majority of cost effective efficiency gains are already in place. At this point gains become increasing expensive with much smaller
gains (law of diminishing returns). Major infrastructure changes like modernizing rail lines take many decades to implement and
also require lots of capital. Real capital needed will be difficult to obtain do to population demographics (ie boomers dependent
on massive unfunded entitlement & pensions).
Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from
about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the
Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has
soared (expected to top $250T in 2019).
My guess is that global economy will wipe saw in the future as demographics, resource depletion (including Oil) and Debt all
merge into another crisis. Gov't will act with more cheap and easy credit (since there is no alterative TINA) as well as QE\Asset
buying to avoid a global depression. This creating a wipesaw effect that has already been happening since 2000 with Boom Bust
cycles. This current cycle has lasted longer because the Major central banks kept interest rates low, When The Fed started QT
and raising rate it ended up triggering a major stock market correction In Dec 2018. I believe at this point the Fed will no longer
seek any further credit tightening that will trip the economy back into recession. However its likely they the global economy
will fall into another recession as consumers & business even without further credit tighting by CB (Central Banks) Because they've
been loading up on cheap debt, which will eventually run into issues servicing their debt. For instance there are about 7M auto
loans in delinquency in March of 2019. Stock valuations are largely driven by stock buybacks, which is funded by debt. I presume
companies are close to debt limit which is likely going to prevent them from purchase more stock back.
Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major
Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since
it will be a push over compared to Iran. I think once all of remaining independent Oil Exports are seized that is when the
major powers start fighting each other. However is possible that some of the proxy nations (Pakastan\India),(Israel\Iran), etc
trigger direct war between the US, China, and Russia at any time.
Notice that the US is now withdrawing from all its major arms treaties, and the US\China\Russia are now locked into a Arms
race. Nuclear powers are now rebuilding their nuclear capacity (more Nukes) and modernizing their deployment systems (Hypersonic,
Very large MIRV ICBMS, Undersea drones, Subs, Bombers, etc.
My guess is that nations like the US & China will duke it out before collapsing into the next Venezuela. If my assessment is
correct, The current state of Venezuela will look like the garden of Eden compared to the aftermath of a full scale nuclear war.
Currently the Doomsday clock (2019) is tied with 1953 at 2 minutes:
1953 was the height of the cold war. I presume soon the Doomsday clock will be reduced to less than 2 Minutes later this
year, due to recent events in the past few weeks.
"the world's nuclear nations proceeded with programs of "nuclear modernization" that are all but indistinguishable from
a worldwide arms race, and the military doctrines of Russia and the United States have increasingly eroded the long-held taboo
against the use of nuclear weapons."
" The current international security situation -- what we call the "new abnormal" -- has extended over two years now.
It's a state as worrisome as the most dangerous times of the Cold War, a state that features an unpredictable and shifting
landscape of simmering disputes that multiply the chances for major military conflict to erupt."
"Monopoly" is such an ugly term. We prefer to call it "market power" these days, because of
course it's a good thing if the job creators and their enterprises have more power to do all
the good things they do for us.
It's clearly class warfare, if not racism, to use the term of abuse, "monopoly", when you
mean "market power".
Normally, when banks look into merging, the impetus is either opportunism, whether well
informed or not, or desperation. The only thing that differentiates the possible combination of
Deutsche Bank, long the sickest man of Europe, and not all that healthy Commerzbank is that the
desperation isn't driven by the usual urgency, that a bank is about to keel over, unless, as
some wags speculate, Deutsche's first quarter numbers are coming in so bad that the bank needs
to have some of credible plan to Do Something before it announces the results. One commentor at
the Financial Times reported that "DBK was and is having trouble with wholesale funding spreads
widening very strongly." That suggests that the German giant, after so many years of limping
along, may be too close to a tipping point for the officialdom to sit pat.
Bloomberg also highlighted high borrowing costs due to credit risk:
For Deutsche Bank, the urgency to address the situation is exacerbated by high funding
costs and the risk of a credit rating cut. Chairman Paul Achleitner is said to see an
expansion of Deutsche Bank's retail deposit base -- which Commerzbank would bring -- as one
way to lower funding costs.
Germany is a particularly difficult banking market . Readers may recall how Michael Hudson,
in his classic article From Marx to Goldman Sachs, pointed out how it had been inconceivable to
Marx that finance-oriented capitalists would win out because their way of operating was harmful
to manufacturing. Germany embraced an industry-oriented approach to capitalism, while Britain
sought to be the world's banker. Hudson argues that an unfortunate and not widely recognized
outcome of Germany's defeat in World War I was it helped advance finance-oriented capitalism
into a dominant position.
While I can't prove it (and I hope those who know the German banking market better will pipe
up), some of the difficulties Deutsche and Commerzbank are suffering appears to be the results
of Germany being ambivalent about bank profits, as in on some level (and perhaps explicitly in
some circles) seeing them as a drag on commerce if they rise above a very modest level. The
reason I suspect this is that when I worked with the Japanese, who are also strongly
mercantilist, manufacturing-oriented, banking profits were seen as a bad thing. Japanese banks
had fabulously low returns on assets by global standards and were extremely lean. Sumitomo
Bank, which was a bad boy by seeking to be Japan's most profitable bank, was pretty close to
Citibank in total assets, had half as many foreign branches and about 2/3 as many domestic
branches. In the mid-1980s, Citi had over 100,000 employees. Sumitomo Bank had 16,000 and was
planning to reduce the number to 14,500.
Germany's Landesbanken have government backing and their Sparkasse purportedly are not
profit oriented. The fact that most advanced economies feel the need to at least one bank as a
serious international player is undermined by the big banks having even more
difficult-than-in-other-countries competition for retail deposits.
But Germany feels it can't not have a national champion.
From Bloomberg :
By bowing to officials' desire to forge a durable German lender with global reach out of
two troubled firms, Deutsche Bank's leaders are hardly putting their woes behind them:
massive job cuts, political turbulence, a weakening European economy, U.S. probes into its
dealings with Donald Trump and a herculean integration – not to mention skeptical
clients and investors -- lie ahead if they reach a deal.
That does not excuse Deutsche Bank having long been spectacularly mismanaged. It's been
operating under what amounts to regulatory forbearance since the crisis, with capital levels
way way below any other big international bank. But Deutsche is the classic "too big to fail"
bank. Whether it is too big to bail is debatable, but the EU's new Banking Recovery and
Resolution Directive, which banking experts almost to a person declared to be a horrorshow, was
supposed to end bailouts and force bail ins .refusing to recognize that that's a prescription
for bank runs. And even though Deutsche is very much the German government's problem, as
readers no doubt have figured out, German politicians hate fiscal spending and stealth
monetization of spending. So until there is a crisis to force their hands, they are allergic to
providing official support to Deutsche.
No one is trying to put lipstick on this pig . It's remarkable to see how little support
there is for the prosed merger. I've never seen comments in major media outlets, particularly
citing the opinions of insiders. From the Financial Times
:
The long-mooted idea of merging the two has been met with stiff opposition from the bank's
influential unions, and scepticism by five of Deutsche Bank's top six shareholders, who fret
that it may derail the lender's internal restructuring.
Among the few clear supporters of a deal are Paul Achleitner, Deutsche Bank chairman,
Martin Zielke, Commerzbank chief executive and private equity fund Cerberus, one of the
biggest shareholders in both lenders.
Deutsche Bank management had previously been resistant to a merger, but lacklustre
performance, combined with the prospect of lower-for-longer interest rates and pressure from
the German government to address the lenders' bloated costs and measly returns, triggered a
rethink.
Of course, the reason for having to resort to Commerzbank is no major international bank
would be saddled with a garbage barge like Deutsche. It's not just that it's hard to see why
any bank that wasn't subject to German political pressures would even consider this idea; their
regulators would nix it directly or kill the deal by imposing insurmountable conditions.
The nominal excuse for the deal is unpersuasive . The claim is that cost-cutting efforts at
both banks have not gone deep enough, and the only way to cut further is to merge. I am
admittedly generalizing from the US, but we have had far more bank consolidation than anywhere
in the world. Bigger banks are not more efficient. Even if there are theoretical economies of
scale in funding and in certain lines of business, they are often not realized. On top of that,
there are diseconomies of scope.
For instance, it's clear that one of the hoped-for sources of cost savings is branch
consolidation. But the US experience is that this is often a fail. Even when branches seem to
overlap, customers don't like it when their favorite branch disappears. More customers than the
banks expect leave.
The employees' union expects that up to 30,000 jobs would be axed if the merger went
through. A common pattern with US bank deals is that the combined makes cuts that the separate
banks could have made but didn't. One wonders here if a reason for the transaction is to
bulldoze labor organizations.
The two banks expect to lose customers ..and this comment suggests they are mainly looking
at business customers. Again from the Financial
Times :
They estimated that while annual costs would fall by €2.3bn, a deal would trigger
revenue losses of around €1.5bn because of clients moving business to rivals to
maintain diverse banking relationships.
A worsening of the Deutsche Bank train wreck is guarantted . Clive gave a warning when the
merger idea hotted up at the end of January:
The big banks have totally lost control of their IT estates. They have no consolidated
idea what their installed assets are and what they do. I was on a conference call yesterday
which managed to finally conclude -- after 9 months and I am not kidding -- definitively that
an application was really still needed (it had been targeted for possible
decommissioning).
We bought a US bank's UK book for a specific retail product two years ago. With a lot of
luck we'll be able to do a very soft launch post migration onto our hosting (and there was
the distinct advantage that we shared the same hosting platform and suppliers) in another six
months. Full migration might, just might, be completed in another 18 months. The budget for
the migration programme is £1.9bn. For one bloody product book. Bog standard vanilla
consumer lending product lines. And we had to take an axe to a lot of the US bank product
offers.
DB and CB would burn through their entire shareholders' equity before they even got half
way through.
Even yours truly, who is hardly plugged into IT circles, has been hearing horror stories for
at least 15 years. Richard Smith flagged this 2018 article, Inside Deutsche
Bank's "dysfunctional" IT division . From the top of the piece:
So, COO Kim Hammonds is leaving Deutsche Bank. Less than a month after describing Deutsche
as, "vastly complex," the, "most dysfunctional place she's ever worked," and in the middle of
a, "difficult transformation," Hammonds has left, "by mutual agreement with the supervisory
board." She was, "a breath of fresh air," according to the chairman. In some ways, however,
Hammonds does not seem to have been fresh enough.
Hammonds' key task at Deutsche Bank was to streamline the bank's unwieldy array of
operating systems. When now ex-CEO John Cryan presented his "Strategy 2020" plan in October
2015, he expressed his intention of eliminating 6,000 Deutsche Bank contractors and cutting
the bank's operating systems from 45 to four. Two and a half years later, Deutsche still has
32 different operating systems, and the contractors we spoke to complained that the bank has
become "toxic" to work for.
Lots of ugly detail for those of you who like that sort of thing.
And it's not as if Commerzbank is much better. Richard also cited this Handlesblatt story,
Buchungspanne verärgert Commerzbank-Kunden , which he summarized as "A recent outbreak
of TSB-like core banking cockupry (direct debits and standing orders failing)."
But as he concluded, "There's no set of systems so bad that you can't make them worse by
doing a merger, so bring it on, say I."
If nothing else, this merger will be a full employment act of German bank consultants who
can take the pain of working on such a mess. But even from this remove, it's obvious that the
effort to prop up zombie-in-the-making Deutsche is running out of tricks. This will end badly.
The only question is how quickly that becomes undeniable.
" seeing [bank profits] as a drag on commerce if they rise above a very modest level "
Right. I am not German but Dutch, and these two countries are geographically and
spiritually close enough to share opinions on lots of things.
There exists a quite widespread sentiment here that "banks do not make profits, they steal
somebody else's profits". The idea being that *real* profits are generated in a *real*
economy where *real* things are done, built, manufactured and dug up. This in contrast to a
"financial sector" leeching off the money streams that inevitably exist in the real economy,
only to create pseudo-profits that more harm than benefit said real economy.
Personally, this view to me does not seem too far-fetched. But then, I'm not a banker.
DB needs to become smaller, not larger. Few years back, it was talking about selling its
US equity business, no idea why that fell through. That IMO should be really the first step,
not any sort of mergers.
There was an excellen article by somene, maybe even the ex-CEO of DB on its IT woes. IIRC,
it was basically that the whole stuff was a collection of fiefs that were built in the last
two decades, where the only goal was revenue or day 1 PnL, w/o any idea on what it takes to
run the business.
I think that sort of "Worry About Day 2 Operations..but never actually do anything about
it" is not an uncommon occurrence. My current firm / senior management is trying to
un-pretzel their architecture out of a similar (if on a smaller platform) issue that has
built up over 10 years. It's pretty hard to get out of it even with a lot of senior will and
money. I can't imagine it building up over 20+ years!
I wonder what DB's data governance looks like. I bet the now ex-COO wasn't able to get the
existing power-structure slapped around sufficiently to put the control / governance into
place so that the architecture could be unwound. If step 1 (Data governance/ control over
existing architecture) is impossible, then the rest is just a side-show (I know from current
experience).
At one of my previous gigs, the firm struggled with anything new. I actually came up with
a framework for them, which included commited revnue for the product to merge to the main
systems, and a hard cap on revenue/no of deals until it was done.
15 years later, I just heard from my colleague there that the system I put in to deal with
something is still doing it. It seems that the main cultprit is actually not the FO, as
usual, but IT, who saw any successfull implementation outside of their process as a direct
threat (especially if it was done on a fraction of their budget).
That then means you get a lot of small projects, which just get done – because the
business has to work, after all – but never rolled into anything as the IT dept is
constitutionally unable to do so due to its internal politics.
On your other point – well, to have some data governence, you have to know what data
you have, and how it works. W/o that, you'll never get there.
Same goes for architecture. It's one thing to draw pretty pictures and boxes to present,
but w/o actually understanding what's there now, and how it can work in the future (and that
means not just on a sunny day, but when the midden hits the fan too), then control over the
architecture gives you little, apart from some IT guys (and gals) getting to play with new
technology to put on their CVs.
My last year at a TBTF was working on a project to try and get our arms around
architecture standards. It was the first time we had federated the bu based architects. Of
course every BU "already had architectural standards". BU A had a documents store with 8000
entries documenting everything they knew about, BU B had a live, breathing web application
that changed weekly as their governance process dictated, BU C had a 22 page powerpoint. That
was 3 out of 12 at the table.
We took over tracking a global decommissioning initiative. It was basically low hanging
fruit to just dump complexity. I found we hadn't even agreed on what decommissioning meant.
Apps that were "decommissioned" 4 years earlier were still live in production because we
couldn't figure out how to comply with regulatory reporting requirements without leaving it
up. Another BU decided they weren't going to try and hit the goal because "they were making
money". It was herding cats. Architects would agree to do something, and go back into their
BU's and get stonewalled or outright directed to not do it. Regardless, it was a worthy
effort because the first step in fixing a problem is admitting you have it.
My experience is that the IT orgs mirror the BU structure and governance. In three massive
banks, I've only seen one centrally governed IT group, which very much mirrored how the
company was run. It was an acquisition machine and the core merger methodology was to merge
onto a common platform. The number 2 exec in the company ran the mergers and was ruthless,
the CEO never flinched. There would be no legacy. It failed during the crisis, largely
because that strong central governance made fatal business decisions that killed the whole
org. So be careful what you wish for.
One of the UKs largest asset managers comes to mind as an example of the Centralization
through IT platform approach.
All Investment Banks are to a great degree just franchise businesses. Go and make some
money. Here is some budget and some desk space. Buy a computer and get on with it.
When I arrived in June 2016, I was told there well over a hundred systems in use. In
essence, whenever some star signing was made, such star was told to go and buy whatever he /
she needed.
To this day, the IT dysfunction continues. Sometimes, good systems are taken out of
service due to cost and ones that can't work with what's left are retained. Go figure!
In addition to equities, the structured and leverage finance toxic waste should also
go.
I get the impression that Stefan Hoops, the new head of global transaction banking, will
detach bits from Treasury, Markets and Corporate Finance and add them to GTB and make a
commercial bank, a new core to the bank. One can expect a pull back from the US, too.
The new model is likely to be Barclays plus, i.e. commercial banking with some IB and
asset servicing, not a pure commercial bank like Lloyd's.
That new model would make much sense, as DB cannot survive just on commecial banking in
Germany (Any plans to do just that would pretty much kill it, as it's too large to be
supported by that), and there's no reasonable retail play unless it wants to to outside
Germany.
But it would still require dropping substantial parts of the IB business. I see very
little appetite for that..
Amazing! Yves' post and the various comments make it sound like IT has all the properties
of a virus. Almost impossible to cure or expunge when it becomes dysfunctional. Moreover, its
components can become toxic and morph into some new form.
To me it's like accounting or engineering or operations. It's a reflection of the
business. Keep in mind the example above represented a global MNC with 3 distinct credit card
businesses, three distinct retail banking franchises, trading in every major capital market,
investment banking organized by US, EMEA and Asia, Wealth Management with distinct
philosophical differences by geography with core operations on 4 continents. And I suspect
this is small time compared to Clive's experiences.
These organizations are too big and far too complex. NC has had numerous posts on how
scale drives inefficiency once reaching a certain point. This is 100% the case.
The heart of the banking and other IT problems, imo, is this: The people who wrote the
original code to perform specific tasks understood, or were advised by people who understood
exactly what the task was, what it did, how it fitted into the overall banking process , and
what specific process upstream and downstream handoffs were required.
Bring in a new generation (or two) of new bankers who assume "the computer handles that"
– without understanding the what and why of whatever 'that' is. Now you have the
problem of not only computer integration, but also the problems of lost competency and lost
institutional memory of core banking functions. That's before taking into account the budget
cutting undermining IT departments, creating its own disfunction. imo.
Bankers are like puppies and someone else needs to clean up the mess they leave
behind.
"It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back
of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the
Presidents Bankers, Nomi Prins.
Look at the mess those naughty banker puppies have made, who will clear it up for
them?
The structure of the Euro-zone meant there was no one to clean up properly after those
naughty banker puppies.
Speaking with no more qualification than being German, I would not say that banking
profits are unwanted in general rather the industry has two or three significant challenges
compared to the US.
First of all profit margins are very low across all businesses, even favoured ones such as
automotive struggle to generate double digit operating margins and a sustained double digit
net profit margin outside IT is very rare. Second there is good competition for retail
customers and switching banks or keeping several accounts at different banks is very easy.
'Normal' banking consisting of debit card, credit card, online banking, wire transfers, ATM
service and savings account are available for everyone not involved in personal bankruptcy
proceedings free of charge. Hence 'access to deposit funding' not making profits is cited as
a reason to merge. Interestingly the Sparkassen are usually on the expensive end of retail
because they are committed to local branches and good conditions. The third point I would
like to raise is more of a probably justified stereotype – Germans do a lot less
borrowing than some other cultures see for instance private debt to GDP figures. Where I grew
being in debt was considered shameful and everyone tried to pay back their debt ASAP be it 5
Mark for lunch or the mortgage on the house.
Other financial sectors, for instance insurance, do very good business and achieve
significant profits in Germany.
I don't think the difference you mention can be symplistically qualified as "cultural". It
may also be, and probably more importantly, about incentives put in place to promote debt
growth or lack thereof. Could it be that Germany didn't put them in the first place to
prevent consumption and force surpluses or, easier, lending rates were in comparative terms
and in relation with inflation higher in Germany than other Euro countries. If you believe
that people in Spain, for instance, is willing to become wildly indebted to buy a house
because of 'cultural reasons' you are mistaken. It is that many feel that there is no
alternative. But then, becoming indebted results in a culture of debt
I have read that by the end of 2018 consumer credit and the housing marke were heating in
Germany .
Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting.
Regulatory policies and a credit based monetary system have resulted in massive real price increases in inelastic areas of demand
such as healthcare, education and housing eroding purchasing power.
Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China, which has subsidized
state-owned enterprises, has essentially slave labor costs and low to no environmental regulations. Unrestrained immigration policies
have resulted in a massive supply wave of semi- and unskilled labor suppressing wages.
Recommended initial steps to reform:
1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund massive infrastructure
lowering total factor costs and increasing productivity. This would eliminate
2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France's maybe? Medicare model needs serious reform but is
great at low admin costs.
3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other Asian export model
countries.
4. Take savings from healthcare costs and interest and invest in human capital–educational attainment and apprenticeships programs.
5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply over time.
As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at doing (i.e. not President)
such as Secretary of the Treasury etc. And I think she likes the media spotlight and to hear herself talk a little to much, but
all quibbling aside, can we clone her??? The above comment and video just reinforce "Stick to what you are really good at Liz!".
I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when I hear Warren, Sanders,
or AOC say something my first reaction is "Yes, what she/he said!".
The Boeing Company BA recently won a $250 million contract to offer weapon system
integration for the Long Range Stand-Off (LRSO) Cruise Missile. Work related to the deal is
scheduled to be completed by Dec 31, 2024.
The contract was awarded by the Air Force Nuclear Weapons Center, Eglin Air Force Base,
Florida. Per the terms of the deal, this aerospace giant will provide aircraft and missile
carriage equipment development and modification, engineering, testing, software development,
training, facilities and support necessary to fully integrate the LRSO Cruise Missile on the
B-52H bomber platform.
Attributes of LRSO
The LRSO is a nuclear-armed air-launched cruise missile, under development. It is set to
replace the current AGM-86 air launched cruise missile (ALCM). LRSO, might be up to about 50%
longer than Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER) and still be
suitable for internal carriage by the B-2 and B-52.
Our View
AGM-86 ALCM has been serving the U.S. Air Force quite efficiently. However, with
increasingly sophisticated air defense systems developed by America's nemeses, especially
Russia, demand for a new stealth nuclear-armed cruise missile capable of either destroying
these defenses or penetrating them has been increasing consistently. In this scenario, the LRSO
comes as the most credible stealthy and low-yield option available to the United States
(according to Strategic Studies Quarterly Report).
Boeing's B-52, which has been the U.S. Air Force's one of the most preferred bombers, is
completely dependent on long-range cruise missiles and cannot continue in the nuclear mission
beyond 2030 without LRSO. As B-52 is expected to play a primary role in the U.S. nuclear
mission for at least next decade and ALCM is already well beyond its originally planned end of
life, we may expect more contracts similar to the latest one to usher in from the Pentagon in
the coming days. This, in turn, should prove conducive to Boeing.
Price Performance
In a year's time, shares of Boeing have gained about 16.5% against the industry's 2.2%
decline.
I first suggested the U.S. economy was headed toward a recession more than a year ago, and now others are forecasting the same.
I give a business downturn starting this year a two-thirds probability.
The recessionary indicators are numerous. Tighter monetary policy by the Federal Reserve that the central bank now worries it
may have overdone. The near-inversion in the Treasury yield curve. The swoon in stocks at the end of last year. Weaker housing activity.
Soft consumer spending. The tiny 20,000 increase in February payrolls, compared to the 223,000 monthly average gain last year. Then
there are the effects of the deteriorating European economies and decelerating growth in China as well as President Donald Trump's
ongoing trade war with that country.
There is, of course, a small chance of a soft landing such as in the mid-1990s. At that time, the Fed ended its interest-rate
hiking cycle and cut the federal funds rate with no ensuing recession. By my count, the other 12 times the central bank restricted
credit in the post-World War II era, a recession resulted.
It's also possible that the current economic softening is temporary, but a revival would bring more Fed restraint. Policy makers
want higher rates in order to have significant room to cut in the next recession, and the current 2.25 percent to 2.50 percent range
doesn't give them much leeway. The Fed also dislikes investors' zeal for riskier assets, from hedge funds to private equity and leveraged
loans, to say nothing of that rankest of rank speculations, Bitcoin. With a resumption in economic growth, a tight credit-induced
recession would be postponed until 2020.
"Recession" conjures up specters of 2007-2009, the most severe business downturn since the 1930s in which the S&P 500 Index plunged
57 percent from its peak to its trough. The Fed raised its target rate from 1 percent in June 2004 to 5.25 percent in June 2006,
but the main event was the financial crisis spawned by the collapse in the vastly-inflated subprime mortgage market.
Similarly, the central bank increased its policy rate from 4.75 percent in June 1999 to 6.5 percent in May 2000. Still, the mild
2001 recession that followed was principally driven by the collapse in the late 1990s dot-com bubble that pushed the tech-laden Nasdaq
Composite Index down by a whopping 78 percent.
The 1973-1975 recession, the second deepest since the 1930s, resulted from the collapse in the early 1970s inflation hedge buying
of excess inventories. That deflated the S&P 500 by 48.2 percent. The federal funds rate hike from 9 percent in February 1974 to
13 percent in July of that year was a minor contributor.
The remaining eight post-World War II recessions were not the result of major financial or economic excesses, but just the normal
late economic cycle business and investor overconfidence. The average drop in the S&P 500 was 21.2 percent.
At present, I don't see any major economic or financial bubbles that are just begging to be pricked. The only possibilities are
excess debt among U.S. nonfinancial corporations and the heavy borrowing in dollars by emerging-market economies in the face of a
rising greenback. Housing never fully recovered from the subprime mortgage debacle. The financial sector is still deleveraging in
the wake of the financial crisis. Consumer debt remains substantial but well off its 2008 peak in relation to household income.
Consequently, the recession I foresee will probably be accompanied by about an average drop in stock prices. The S&P 500 fell
19.6 percent from Oct. 3 to Dec. 24, but the recovery since has almost eliminated that loss. A normal recession-related decline of
21.2 percent – meeting the definition of a bear market – from that Oct. 3 top would take it to 2,305, down about 18 percent from
Friday's close, but not much below the Christmas Eve low of 2,351.
A. Gary Shilling is president of A. Gary Shilling & Co., a New Jersey consultancy, a Registered Investment Advisor and author
of "The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation." Some portfolios he manages invest
in currencies and commodities.
The_Mick, 9 hours ago
"I first suggested the U.S. economy was headed
toward a recession more than a year ago, and now others are forecasting the same." And yet you were WRONG a year ago! You don't get excused for last year just because you're still predicting it!
Of course a recession is coming - maybe this year but maybe not for 10 years. Recessions happen from time to time but they are not
predictable because economics has too many variables we can't quantify.
And do you think you're impressing anyone by adding "maybe a bear market too"???
What do you mean "maybe"? If there's a recession then, of course, our slightly overpriced market will experience a bear market! DUH!
Terry7 hours ago I expected a deeper understanding from My Shilling.
This article seems very week. If he had submitted it as an an economic paper I don't think he would get high marks. Many historical
economic facts glossed over or omitted. Terrible job of describing the causes of the early 1970s world recession . As for a recession
without a bear market.....? Don't make me laugh.... And buy the way we are already in a bear market !
This decade is a lot like the 1990s in that it has been a nice long run. But no business cycle goes on for every. It's just does
not work like that because it is cycle in nature. After a ten year run in stocks it is less risky for serious money to be out of
them that in them. That is why the bond market is so solid right not. Because it's not work risking all your cash for maybe a couple
more percent when you have already make 300% or more..
The western economies are just running off free or very cheap money being constantly pumped into investment assets by the central
banks. There are no real guts to them. USA, EU and Japan have been running the printing presses with abandonment. At the same time
China and India are becoming the industrial power houses because they had over one billion people who will work for next to nothing.
Because every investment asset is pumped up of "free" money in the form of very low interest rate loans from the FED etc. Things
are very fragile. And someone has give Powel this "reality check". So the FED does a 180 on policy and now looks like a Wall St poodle.
And they speculators have gone back to pumping FANG stocks
But they all know this market is very pumped up and fragile. And they all keep their stop loss triggers very tight. That is why
it falls so dramatically when it takes a hit. Like OMG the FED funds rate going from 2.75% to 3.00% !! So tread very carefully .
The cracks are all around
Salo, 7 hours ago
I am only surprised when I read
that another recession is not coming.
Almost 10 years since the "end" of the Great Recession, and all it took was $22 Trillion of borrowed money, a $4 Trillion in the
red Fed balance sheet and interest rates just barely north of 2%. Oh, and one big beautiful corporate tax cut. Who knew expansionary
economies were so uncomplicated?
Ricardo, 6 hours ago
I remember reading
Gary Shilling's articles a few years after the Crash of 2009 when he attempted to prove without a doubt that market returns would
be sub-par for decades to come. He was wrong and you would have missed out on the longest and biggest bull market in history. Be
wary of what Gary has to tell you.
How the Boeing 737 Max grounding and the Genoa
bridge collapse show us that allowing companies to self-certify the safety of their products can be deadly
On
Wednesday the United States joined 42 other countries in grounding Boeing's 737 Max 8 jets, days after a crash
in Ethiopia of a 737 Max 8 jet left 157 people dead. The United States was a holdout, taking days longer to
ground the planes than most of Europe. Our Federal Aviation Administration (FAA) said, in those days between,
that they weren't grounding the planes because "
the
agency's own reviews of the aircraft show no 'systematic performance issues.'
"
There were some conflicting accounts of exactly how
the US came to ground the 737 Max 8. A
statement from Boeing
on Wednesday read that "Boeing has determined -- out of an abundance of caution and in
order to reassure the flying public of the aircraft's safety --
to
recommend to the FAA the temporary suspension of operations
of the entire global fleet of 371 737 MAX
aircraft."
In other words, Boeing claimed it was their idea /
recommendation that the FAA ground the aircraft. Meanwhile, Donald Trump declared that he grounded the aircraft
by executive order, forcing the FAA's hand.
Which begs the question -- why did it take a
presidential decree and/or the company itself to get the FAA, the main agency responsible for overseeing
airplane transit in the United States, to ground potentially dangerous aircraft?
As James Hall, the former National Transportation
Safety Board chairman,
explained in the Times
, in 2005 the FAA turned its safety certification responsibilities over to the
manufacturers themselves (if manufacturers met some requirements). In plain speak, this means that Boeing got
to decide if Boeing's airplanes were safe enough to fly -- with no additional third-party checks.
The FAA said the purpose of this change was to
save the aviation industry roughly $25 billion
between
2006 to 2015.
Given this, it makes you wonder if the statement on
Tuesday by Acting FAA Administrator Daniel K. Elwell -- that the agency had conducted its own review -- was
factual, or if the agency had simply reviewed the safety review that Boeing had conducted on itself. It also
clarifies why Boeing came to recommend to the FAA that their planes be grounded, rather than the FAA taking any
decisive action on their own.
The term for this maze, where a government safety
agency allows an industry to regulate itself so the industry can
save some
money
, and where the industry itself has to be the one to recommend to government that their product
shouldn't be in operation pending investigation, is
regulatory
capture
.
From Wikipedia
: "Regulatory capture is a form of government failure which occurs when a regulatory agency,
created to act in the public interest, instead advances the commercial or political concerns of special
interest groups that dominate the industry or sector it is charged with regulating."
The issue, in short, is that it is rarely in a
business' self-interest to ensure the absolute safety of their products. Safety testing takes time, money, and
if inspections reveal problems that need fixing, more money. Corporations are profit maximizers and pursue
whatever method they need to minimize cost (including minimizing fixing flaws in their products) and maximize
profit.
Without the threat of outside inspection or serious
repercussions, there are few incentives to fix potential problems. Insurance covers accidents, and most
mega-corporations have funds set aside in their operating budgets to pay the (generally small, relative to
their operating budgets) fines governments may impose if and when a problem is discovered.
This is why it is unlikely that industry will ever
sufficiently regulate itself on safety issues.
Remember Edward Norton's job in "Fight Club"?
"The car crashes and burns with everyone trapped inside. Now,
should we initiate a recall? Take the number of vehicles in the field, A. Multiply it by the probable rate of
failure, B. Multiply the result by the average out-of-court settlement, C. A x B x C equals X. If X is less
than the cost of a recall, we don't do one."
The United States isn't alone in turning over
self-certification of its transportation and infrastructure to industry. The Genoa Bridge Collapse in Italy
last year, in which 43 people died, is another case.
The
Morandi Bridge is a privately-owned toll bridge, publicly built but later sold off to Autostrade, a company
majority owned by the Benetton clothing family. As a private infrastructure company, Autostrade has a profit
maximization goal of keeping bridge maintenance costs low and toll profits high. Thanks to further
privatization efforts of the Italian government, the
safety and inspection
of bridges
is also conducted by private companies. In the case of the Morandi Bridge, the inspection
company responsible for safety checks and certification of the bridge was owned by Autostrade's parent company,
leaving the company that owns the bridge to self-certify its
safety.
The result, as the world saw, was a bridge that collapsed.
As Texas engineer Linwood Howell
said in the Times,
"the engineers inspecting the bridge would have their own professional liabilities to
worry about, including the profits of the company that was paying them," i.e. a clear conflict of interest
between maintaining basic safety and ensuring their own jobs.
Meanwhile, as Italian law professor Giuliano
Fonderico
noted
, "the government behaved more like its first priority was cooperating with Autostrade, rather than
regulating it."
George Stigler, who received the Nobel Peace Prize
in Economics
in part for his work around regulatory capture
in 1982, believed that it was likely that industry would
come to dictate the regulatory issues within their industries because of personal connections, a greater
understanding of issues facing industry than the general public, but mostly, a public ignorance around what
their regulators are up to.
Perhaps it is time for people to pay
a little more attention to what our regulators, who we pay to protect us from bridge collapses and plane
crashes, are up to. There are some
people with big ideas on fixes
for regulatory capture, but public demand will also need to exist for real
reform efforts to take place.
Boeing Co. tumbled early Monday on heightened scrutiny by regulators and prosecutors over
whether the approval process for the company's 737 Max jetliner was flawed.
A person familiar with the matter on Sunday said that the U.S. Transportation Department's
Inspector General was examining the plane's design certification before the second of two
deadly crashes of the almost brand-new aircraft.
Separately, the Wall Street Journal reported that a grand jury in Washington, D.C., on
March 11 issued a subpoena to at least one person involved in the development process of the
Max. And a Seattle Times investigation found that U.S. regulators delegated much of the plane's
safety assessment to Boeing and that the company in turn delivered an analysis with crucial
flaws.
Boeing dropped 2.8 percent to $368.53 before the start of regular trading Monday in New
York, well below any closing price since the deadly crash of Ethiopian Airlines Flight 302 on
March 10. Ethiopia's transport minister said Sunday that flight-data recorders showed "clear
similarities" between the crashes of that plane and Lion Air Flight 610 last October.
U.S. Federal Aviation Administration employees warned as early as seven years ago that
Boeing had too much sway over safety approvals of new aircraft, prompting an investigation by
Transportation Department auditors who confirmed the agency hadn't done enough to "hold Boeing
accountable."
The 2012 investigation also found that discord over Boeing's treatment had created a
"negative work environment" among FAA employees who approve new and modified aircraft designs,
with many of them saying they'd faced retaliation for speaking up. Their concerns pre-dated the
737 Max development.
In recent years, the FAA has shifted more authority over the approval of new aircraft to the
manufacturer itself, even allowing Boeing to choose many of the personnel who oversee tests and
vouch for safety. Just in the past few months, Congress expanded the outsourcing arrangement
even further.
"It raises for me the question of whether the agency is properly funded, properly staffed
and whether there has been enough independent oversight," said Jim Hall, who was chairman of
the National Transportation Safety Board from 1994 to 2001 and is now an aviation-safety
consultant.
Outsourcing Safety
At least a portion of the flight-control software suspected in the 737 Max crashes was
certified by one or more Boeing employees who worked in the outsourcing arrangement, according
to one person familiar with the work who wasn't authorized to speak about the matter.
The Wall Street Journal first reported the inspector general's latest inquiry. The watchdog
is trying to assess whether the FAA used appropriate design standards and engineering analysis
in approving the 737 Max's anti-stall system, the newspaper said.
Both Boeing and the Transportation Department declined to comment about that inquiry.
In a statement on Sunday, the agency said its "aircraft certification processes are well
established and have consistently produced safe aircraft designs," adding that the "737 Max
certification program followed the FAA's standard certification process."
The Ethiopian Airlines plane crashed minutes after it took off from Addis Ababa, killing all
157 people on board. The accident prompted most of the world to ground Boeing's 737 Max 8
aircraft on safety concerns, coming on the heels of the October crash of a Max 8 operated by
Indonesia's Lion Air that killed 189 people. Much of the attention focused on a flight-control
system that can automatically push a plane into a catastrophic nose dive if it malfunctions and
pilots don't react properly.
In one of the most detailed descriptions yet of the relationship between Boeing and the
FAA during the 737 Max's certification, the Seattle Times quoted unnamed engineers who said the
planemaker had understated the power of the flight-control software in a System Safety Analysis
submitted to the FAA. The newspaper said the analysis also failed to account for how the system
could reset itself each time a pilot responded -- in essence, gradually ratcheting the
horizontal stabilizer into a dive position.
Software Fix
Boeing told the newspaper in a statement that the FAA had reviewed the company's data and
concluded the aircraft "met all certification and regulatory requirements." The company, which
is based in Chicago but designs and builds commercial jets in the Seattle area, said there are
"some significant mischaracterizations" in the engineers' comments.
The Organization of Petroleum Exporting Countries will once again become a nemesis for U.S.
shale if the U.S. Congress passes a bill dubbed NOPEC, or No Oil Producing and Exporting
Cartels Act, Bloomberg
reported this week , citing sources present at a meeting between a senior OPEC official and
U.S. bankers.
The oil minister of the UAE, Suhail al-Mazrouei, reportedly told lenders at the meeting that
if the bill was made into law that made OPEC members liable to U.S. anti-cartel legislation,
the group, which is to all intents and purposes indeed a cartel, would break up and every
member would boost production to its maximum.
This would be a repeat of what happened in 2013 and 2014, and ultimately led to another oil
price crash like the one that saw Brent crude and WTI sink below US$30 a barrel. As a result, a
lot of U.S. shale-focused, debt-dependent producers would go under.
Bankers who provide the debt financing that shale producers need are the natural target for
opponents of the NOPEC bill. Banks got burned during the 2014 crisis and are still recovering
and regaining their trust in the industry. Purse strings are being loosened as WTI climbs
closer to US$60 a barrel, but lenders are certainly aware that this is to a large extent the
result of OPEC action: the cartel is cutting production again and the effect on prices is
becoming increasingly visible.
Indeed, if OPEC starts pumping again at maximum capacity, even without Iran and Venezuela,
and with continued outages in Libya, it would pressure prices significantly, especially if
Russia joins in. After all, its state oil companies have been itching to start pumping
more.
The NOPEC legislation has little chance of becoming a law. It is not the first attempt by
U.S. legislators to make OPEC liable for its cartel behavior, and none of the others made it to
a law. However, Al-Mazrouei's not too subtle threat highlights the weakest point of U.S. shale:
the industry's dependence on borrowed money.
The issue was analyzed in depth by energy expert Philip Verleger in an Oilprice
story earlier this month and what the problem boils down to is too much debt. Shale, as
Total's chief executive put it in a 2018 interview with Bloomberg, is very capital-intensive.
The returns can be appealing if you're drilling and fracking in a sweet spot in the shale
patch. They can also be improved by making everything more efficient but ultimately you'd need
quite a lot of cash to continue drilling and fracking, despite all the praise about the decline
in production costs across shale plays.
The fact that a lot of this cash could come only from banks has been highlighted before: the
shale oil and gas industry faced a crisis of investor confidence after the 2014 crash because
the only way it knew how to do business was to pump ever-increasing amounts of oil and gas.
Shareholder returns were not top of the agenda. This had to change after the crash and most of
the smaller players -- those that survived -- have yet to fully recover. Free cash remains a
luxury.
The industry is aware of this vulnerability. The American Petroleum Institute has vocally
opposed NOPEC, almost as vocally as OPEC itself, and BP's Bob Dudley said this week at CERAWeek
in Houston that NOPEC "could have severe unintended consequences if it unleashed litigation
around the world."
"Severe unintended consequences" is not a phrase bankers like to hear. Chances are they will
join in the opposition to the legislation to keep shale's wheels turning. The industry,
meanwhile, might want to consider ways to reduce its reliance on borrowed money, perhaps by
capping production at some point before it becomes forced to do it.
The European banking system is about to implode with Italian banks in the worst state but
which banks then owe the counter party risks, step forward the French banks. Macron is as it
will be recalled a Rothschild banker.
The likes of the British banks aren't much better of course but the EU needs the UK and
more importantly it's money to rescue thewe EU banks. Trouble is this is impossible task, but
the EU is not about to allow the fifth largest economy to simply walk away.
"But the impotence one feels today -- an impotence we should never consider permanent -- does
not excuse one from remaining true to oneself, nor does it excuse capitulation to the
enemy, what ever mask he may wear. Not the one facing us across the frontier or the
battle lines, which is not so much our enemy as our brothers' enemy, but the one that
calls itself our protector and makes us its slaves. The worst betrayal will always be to
subordinate ourselves to this
Apparatus,
and to trample underfoot, in its service,
all human values in ourselves and in others."
Simone Weil
"And in some ways, it creates this false illusion that there are people out there looking
out for the interest of taxpayers, the checks and balances that are built into the system
are operational, when in fact they're not. And what you're going to see and what we are
seeing is it'll be a breakdown of those governmental institutions. And you'll see
governments that continue to have policies that feed the interests of -- and I don't want
to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone
else...
If TARP saved our financial system from driving off a cliff back in 2008, absent
meaningful reform, we are still driving on the same winding mountain road, but this time
in a faster car... I think it's inevitable. I mean, I don't think how you can look at all
the incentives that were in place going up to 2008 and see that in many ways they've only
gotten worse and come to any other conclusion."
Neil Barofsky
"Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower
turned one-woman swat team, the 340-page tome takes the reader along on her gut-wrenching
workdays for an entire seven months inside one of the most powerful and corrupted
watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank
of New York.
The days were
literally
gut-wrenching. Segarra reports that after months of being
alternately gas-lighted and bullied at the New York Fed to whip her into the ranks of the
corrupted, she had to go to a gastroenterologist and learned her stomach lining was gone.
She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of
conversations between New York Fed officials and Goldman Sachs. After being fired for
refusing to soften her examination opinion on Goldman Sachs,
Segarra released the tapes to ProPublica and the radio program This American Life
and
the story went viral from there...
In a nutshell, the whoring works like this. There are huge financial incentives to go
along, get along, and keep your mouth shut about fraud. The financial incentives encompass
both the salary, pension and benefits at the New York Fed as well as the high-paying job
waiting for you at a Wall Street bank or Wall Street law firm if you show you are a
team player
.
If the Democratic leadership of the House Financial Services Committee is smart, it will
reopen the Senate's aborted inquiry into the New York Fed's labyrinthine conflicts of
interest in supervising Wall Street and make removing that supervisory role a core
component of the Democrat's 2020 platform. Senator Bernie Sanders' platform can certainly
be expected to continue the accurate battle cry that 'the business model of Wall Street is
fraud.'"
"At this point in the cycle, a pickup in inflation will generally lead to corporate margin
compression, which is potentially more supportive of maintaining a long duration stance,"
Bartolini, lead portfolio manager for U.S. core bond strategies, said after the jobs figures.
He sees annual CPI remaining around this report's consensus of 1.6 percent -- the slowest since
2016 -- for a while.
Benchmark 10-year yields enter the week at 2.63 percent, close to the lowest level in two
months. In the interest-rate options market, traders have been ramping up positions that target
lower yields in five- and 10-year notes.
DougDoug,
The Fed is pretty much DONE with rate hikes, as paying the INTEREST on, 22 Trillion in
Debt will get,.. UGLIER and UGLIER ! Especially with, all the new,.. Tax and SPEND Demo'Rat
Liberals, coming into, Congress ! "We the People", will be,.. TOAST !!
I'm HOLDING, my "Floating Rate" senior secured, Bond CEF's and my Utility and Tech, CEF's,
too ! Drawing NICE Dividends,.. Monthly !
The World is NOT ending for, the USA,.. THANKS,.. to Trump !
NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is launching a review of the main set of rules governing stock
trading, opening the door to the biggest potential changes in a decade-and-a-half, the head of the agency said on Friday.
The possible changes are aimed at making it easier to trade illiquid stocks, making more trading information available to investors,
and improving the speed and quality of public data feeds needed for trading.
The SEC in 2005 adopted a broad framework called Regulation National Market System that was largely aimed at ensuring retail investors
get the best price possible and preventing trades from being executed at prices that are inferior to bids and offers displayed on
other trading venues.
Since then, faster, more sophisticated technology has put a bigger focus on rapid-fire, high-speed trading. There has also been
an influx of new electronic stock exchanges, fragmenting liquidity and increasing costs for brokers around exchange connectivity
and market data needed to fuel algorithmic trading.
"It is clear that the market challenges we faced in the early 2000s are not the same as the issues that we confront over a decade
later," Jay Clayton, chairman of the SEC, said at an event in New York.
To get a better grasp of current market issues, the SEC held a series of roundtable discussions with industry experts last year
that led to potential rule-making recommendations around thinly-traded securities, combating retail fraud, and market data and market
access, Clayton said.
Some areas the SEC is looking at include:
- Increasing the speed of, and adding more stock price information to, public data feeds to help make them more competitive against
the more expensive, private data feeds sold by most stock exchanges.
- Allowing thinly-traded securities to trade only on their listing market, rather than on all 13 U.S. stock exchanges.
- Improving disclosure around reverse mergers.
- Adjusting the quote size of some high-priced stocks.
The 2019 review follows an active 2018 for the SEC.
The regulator adopted rules to increase transparency around broker-dealer stock order routing and private off-exchange trading
venues. It also ordered a pilot program to test banning lucrative rebate payments that exchanges make to brokers for liquidity-adding
stock orders.
judi 1 hour ago What about Naked Shorting? It is out of control and no one including the SEC is doing anything to stop it??
Tara 41 minutes ago The rules implemented in 2005 did nothing to help retail traders with accounts under 25K.
When are you going to address the real issue of stock price manipulation? Also, bring back the uptick rule. And while you are at
it, we need rules to punish dishonest analysts who publish opinions of price that are so far off the charts, they never reflect actual
earnings often announced days later.
Rob 38 minutes ago They are going to make it more in favor of big boys aka the banks
• The OPEC+ cuts have likely already tipped the oil market into a supply deficit,
according to Barclays.
• OECD inventories fell dramatically over the past two years, and came back to
the five-year average in 2018, where they have mostly remained.
• The OPEC+ cuts quickly headed off a renewed surplus, and will likely drain
inventories over the course of this year. Inventories are set to fall below the
five-year average.
• Still, Barclays says the market return to balance or even a small surplus in
the second half of 2019.
• Some of the more catastrophic oil forecasts for 2019 centered on a sharp
slowdown in Chinese demand.
• China's car sales actually contracted year-on-year over the last few months,
and car sales could continue to fall this year.
• But China's demand, while slowing relative to years past, is still expected to
grow by 0.5 mb/d in 2019, according to Barclays, the same rate of expansion as
2018.
• Next year, however, China's demand growth could slow a bit more, dipping below
0.4 mb/d, continuing a gradual deceleration in demand growth.
"... Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously."" ..."
"... "Erie Locomotive Plant Workers Strike against Two-Tier" [ Labor Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it would impose a two-tier pay system that would pay new hires and recalled employees up to 38 percent less in wages, institute mandatory overtime, reorganize job classifications, and hire temporary workers for up to 20 percent of the plant's jobs. ..."
"... Workers voted on Saturday to authorize the strike." • Good. Two-tier is awful, wherever found (including Social Security). ..."
"[S]hopping with T was different. When she walked into a store, the employees greeted her by name and began to
pull items from the racks for her to try on. Riding her coattails, I was treated with the same consideration, which is how I
wound up owning a beautiful cashmere 3.1 Philip Lim sweater that I had no use for and rarely wore, and which was eventually
eaten by moths in my closet.
Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It
felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously.""
"Erie Locomotive Plant Workers Strike against Two-Tier" [
Labor
Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in
place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it
would impose a two-tier pay system that would pay new hires and recalled employees up to 38
percent less in wages, institute mandatory overtime, reorganize job classifications, and hire
temporary workers for up to 20 percent of the plant's jobs.
Workers voted on Saturday to
authorize the strike." • Good. Two-tier is awful, wherever found (including Social
Security).
Senator Brian Schatz (D-Hawaii) is expected to introduce a new tax bill today. The senator
says his bill would tax the sale of stocks, bonds and derivatives at a 0.1 rate. It would apply
to any transaction in the United States. The senator says his proposal would clamp down on
speculation and some high frequency trading that artificially creates more market
volatility.
"... Face it. Mass production of consumer electronics in the USA is almost non-existent. An entire important industry has been lost forever based on wage arbitrage. But even if there were not a 10:1 wage disparity, the skill level and work ethic of Americans is pathetic compared to the diligent Asian worker bees. Reality is a cruel mistress ..."
"... Russia just passed up the U.S. in grain exports. Their economy in real terms grows year on year. Russia has more natural wealth available to exploit than USA that includes lands rich in minerals, timber, water, etc. ..."
"... With regards to traitorous fifth column atlantacists and oligarchy, Russia's shock therapy (induced by the Harvard Boys) in the 90's helped Russian's figure out who the real enemy is. Putin has marginalized most of these ((Oligarchs)), and they longer are allowed to influence politics. Many have also been stripped of their ill gotten gains, for example the Rothschild gambit to grab Yukos and to own Russia was thwarted. Dollar debts were paid off, etc. ..."
"... The Western European based US economy is fast draining out (along with people of Western European descent) and the days of US world manufacturing leadership (1950's) are a distant memory. ..."
"... Maybe the takeaway from US/Chinese history is that the US needs its own Maoist style Cultural Revolution. Nothing short of US Maoism is needed to root out every aspect of the current rotten system and get a fresh start from zero. ..."
War, in this model, begins when the first shots are fired.
Well, think again in this new era of growing great-power struggle and competition.
It all war, all the time and another point to remember is that there is always a war between
the .001% and the rest of us.
Another thing is that we proles, peasants and peons should give some serious thought to
having the "elite" fight their own battles, on their "own" (though mostly stolen) shekels for
once. Read More Agree: foolisholdman Reply
Agree/Disagree/Etc. More... This Commenter Display All Comments
Feb 15, 2019 Next Phase, Xi & Trump, Coordinate The Transition
US industrial production plunges, this doesn't mean that manufacturing jobs are not coming
back to the US this means the [CB] is deteriorating quickly as Trump brings back
manufacturing.
Feb 16, 2019 Pentagon Warns of Chinese Space Lasers | China News Headlines
A new Pentagon report says #China and Russia have developed #laser weapons to target US
satellites. Need a Space Force?
governing elites have developed other means of warfare -- economic, technological, and
covert -- to achieve such strategic objectives. Viewed this way, the United States is
already in close to full combat mode with respect to China.
Looked at this way, there are countless wars all the time as well as a huge gray area that
is debatable. I think there is merit in defining war as actual kinetic weapons firing in both
directions. Even then, there are gray areas, but at least they are minimized
"The time and investment required to rebuild/replace supply chains in a JIT world means
much of what's left of America's real economy would disappear within weeks.
American trade negotiators are apparently oblivious to this. I find that very weird."
Of course they're not oblivious, as you can see everytime the stock market goes down, some
US official came out to say a deal/talk is on the way. Both the negotiators and the market
know.
They're just betting on enough pressure will force China to surrender, like Japan did in
the 80s.
@Erebus In the distant past
there were at least 1000 PC Board manufacturers in the US .now there are only 2 or 3. Most US
PCB houses are actually a middleman with an iphone fronting for one of the many Chinese PCB
factories. You supply the Gerber Files and the payment, of course, and your finished PC
Boards come back by air the next day.
Now here is the kicker: our US PC Board supplier is
located in Illinois and owned by you guessed it Hindus. Half the staff are also Hindus. In
general, the Chinese PCBs are of higher quality than the Hindu .er US PCBs.
Face it. Mass
production of consumer electronics in the USA is almost non-existent. An entire important
industry has been lost forever based on wage arbitrage. But even if there were not a 10:1
wage disparity, the skill level and work ethic of Americans is pathetic compared to the
diligent Asian worker bees. Reality is a cruel mistress
Russia just passed up the U.S. in grain exports. Their economy in real terms grows year on
year. Russia has more natural wealth available to exploit than USA that includes lands rich
in minerals, timber, water, etc.
With regards to traitorous fifth column atlantacists and oligarchy, Russia's shock therapy
(induced by the Harvard Boys) in the 90's helped Russian's figure out who the real enemy is.
Putin has marginalized most of these ((Oligarchs)), and they longer are allowed to influence
politics. Many have also been stripped of their ill gotten gains, for example the Rothschild
gambit to grab Yukos and to own Russia was thwarted. Dollar debts were paid off, etc.
Russia could go further in their symphony of church and state, and copy Justinian
(Byzyantine empire) and prevent our (((friends))) from teaching in schools,bein control of
money, or in government.
With regards to China, they would be not be anywhere near where they are today if the West
had not actively transferred their patrimony in the form of transplanted industry and
knowledge.
China is only temporarily dependent on export of goods via their Eastern seaboard, but as
soon as belt and road opens up, she will pivot further toward Eurasia. If the U.S. factories
withdrew from China tomorrow, China already has our "knowledge" and will find markets in
Eurasia and raw materials in Africa, etc.
People need to stop whistling past the graveyard.
The atalantacist strategy has run its course, internal development of U.S. and linking up
with belt and road would be in America's best future interests. But, to do that requires
first acknowledging that money's true nature is law, and not private bank credit. Further,
the U.S. is being used as whore of Babylon, where her money is "Federal Reserve Notes" and
are international in character. The U.S is not sovereign. Deep state globalism does not
recognize national boundaries, or sovereignty.
@Alfa158 Alternatively, one
could examine a nations ability to rapidly expand their economy to meet wartime needs. In
this scenario, other factors such as access to raw materials come into play. In this
perspective, the equations would change dramatically.
I think there is merit in defining war as actual kinetic weapons firing
Why limit it to that? I'd say there's plenty of merit in the author's definition especially since it would tend
to shed some lights on the origins of major conflicts.
That US elites that are split on who to go after first compromised by going after both Russia
and China at the same time is a definition of insanity. The US doesn't have a chance in hell
of subduing or defeating the Russia/China alliance. The US is already checkmated. The more it
goes after some big win the worse will be its defeat.
So the question (for me) is not which side will win, the question is the scenario of the
decline of the US Empire. Someone here mentioned the EU turning East. At some point the EU
will decide that staying a US vassal is suicide and it will turn East. When that happens then
the virus of US insanity will turn inwards into itself.
The US has recently focused on South America by installing several fascist regimes and is
now trying to get Venezuela. But the US backed regimes are laying the groundwork for the next
wave of revolution soon to come. Wherever I look the US is its own worst enemy. The big
question is how much suffering before it ends.
@jacques
sheete The author's definition makes the term a purely rhetorical one tantamount to an
angry child saying "this means war!" to another angry child, or "The War on Drugs" or "The
Battle of the Sexes" etc.
Admittedly, this is all semantics, so have it your way if you want, as it is not worth the
time of further debate. As for me, I prefer to have terms as precise as possible.
Klare discovers the US crusade against China – 8 years after the Obama/Hillary "pivot"
to East Asia sending 2/3 of the US Navy there and putting together the TPP to excluded China.
As usual he is right on top of things.
And he begins with this gem: " "The media and many politicians continue to focus on
U.S.-Russian relations, in large part because of revelations of Moscow's meddling in the 2016
American presidential election and the ongoing Mueller investigation." Huh? Does he mean the
$4700 in Google ads or the $50,000 in Facebook ads traced to some alleged Russian sources? A
Russiagater from the start.
I remember some years ago before the shale revolution Klare was warning us about "peak oil."
I think we were supposed to have run out of it by now.
Klare is a hack who cycles things that any conscious person reading the newspapers would have
known long ago.
P.s. He says that Apple is the number one cell phone. No longer. He should improve his
Google search skills or his set of assumptions which have turned him into a Russiagater.
Huawei now sells more cell phones worldwide than Apple ( https://gearburn.com/2018/08/huawei-smartphone-sales-2018/
). And Huawei does this even though it is effectively excluded from the US market (You cannot
find it in stores) whereas Apple has unfettered access to the enormous Chinese market. You
find Huawei everywhere – from Italy to Tanzania. How would Apple fare if China stopped
purchases of its products? Not so well I am afraid.
Usa is at war against everyone , from China to Latinamerica , from Europe to India , from the
islamic world to Africa . Usa is even at war against its own citizens , at least against its
best citizens .
I don't think it's simple "Eastern" vs "Western" Europeans; my take is Protestants vs
Catholics vs Orthodox. In that order. The biggest difference is between Protestant and
Orthodox. Catholics are, sort of, in the middle.
Or, in practical terms, don't see much difference between Austrians and Slovenes.
That's for Europe.
When we speak of the culture war or the war on drugs or the war between the sexes or a trade
war we are misusing the word war.
War with China means exactly shooting and bombing and killing Chinese and American people.
Expanding the meaning of the word only makes it meaningless.
Admittedly, this is all semantics, so have it your way if you want, as it is not worth
the time of further debate. As for me, I prefer to have terms as precise as possible.
I agree on all four points.
However, if you didn't want a debate, or at least a response, then why did you bother
bringing it up? (That's a rhetorical question, since I neither expect nor really care what
the response would be; now I'm asking myself why I bothered !!!)
Russia under Putin is an exporter of non GMO grains where as the U.S. exports GMO grains
thatt the Chinese do not want as these GMO grains are a destuctive to humans and
animals.
I hope that's true. To Hell with that GMO crap!!! Anyone using it for farming ought to be forced to drink
glyphosate straight for breakfast.
As far as the war with China goes, we ain't seen nothing yet. It won't be pretty, especially
considering that the US is starting it with severe self-inflicted wounds.
Yes, and the ads were often absurd – one somehow featuring Yosemite Sam and gun rights
and another for a dildo, I believe. Great for click bait maybe but not real winners for a
campaign.
As the incomparable Jimmy Dore says on his show, which should be required watching for
everyone, if the Russians can swing an election with such modest resources against maybe $1-2
billion spent by the Donald and the Hillary together, then every candidate for offices high
and low should run not walk with $54,700 in hand to secure a cheap and easy victory from the
Russobots.
I don't think China stands the chance. As we all know diversity is strength and China is
mono-cultured rather than the obviously superior multi. So China will continue to decline,
while US goes from strength to strength thanks to its brilliant, brilliant multicultural
philosophy.
China was dumb enough to try real socialism, while obviously the fake one is the way to
go. You convince your domestic population of your humanitarian credentials – via the
phony socialism, plus you don't have to share a cent with them. How clever is that? Phony
socialism is the way to go – it eliminates the need for the real one.
At some point one must consider that this is all a fraud. In Washington Ocasio-Cortez and the
Democrats are proposing to eviscerate the US economy with their Green New Deal. While here we
find Washington launching a long term struggle for economic, political, and military
superiority over China.
As was once said in another context by an individual remembered in history, "What is
truth?" A question which either revealed his own puzzlement or was simply a rhetorical
dismissal of the question altogether. Likely both at the same time. One can be simply bemused
by the turn of events.
Is all this activity simply a song and dance to entertain, terrify, confuse, and amuse the
public while the real ordering of the world takes place behind closed doors? Put
Ocasio-Cortez together with the Pentagon and we have apparently a commitment by the US to
force the entire world to immolate itself. No state shall be superior to the US and the US
shall be a third world hellhole. Cui bono?
@joe
webb Russia and China are certainly not natural allies. However, deranged international
banditry of the US (called foreign policy in the DC bubble) literally forced them to ally
against a common threat: dying demented Empire.
As you call Chinese "Chinks", I suggest you stop using everything made in China, including
your clothes, footwear, tools, the light bulbs in your house, etc. Then, using your likely
made in China computer and certainly made in China mouse, come back and tell us how great
your life has become. Or you can stick to your principles of not using China-made stuff,
write a message on a piece of paper (warning: make sure that neither the paper nor the pen is
made in China), put it into a bottle, and throw it in the ocean. Be patient, and in a few
centuries you might get an answer.
In the halls of the Kremlin these days, it's all about China -- and whether or not
Moscow can convince Beijing to form an alliance against the West.
Russia's obsession with a potential alliance with China was already obvious at the
Valdai Discussion Club, an annual gathering of Russia's biggest foreign policy minds, in
2017.
At their next meeting, late last year, the idea seemed to move from the speculative to
something Russia wants to realize. And soon
Seen from Moscow, there is no resistance left to a new alliance led by China. And now
that Washington has imposed tariffs on Chinese exports, Russia hopes China will finally
understand that its problem is Washington, not Moscow.
In the past, the possibility of an alliance between the two countries had been hampered
by China's reluctance to jeopardize its relations with the U.S. But now that it has already
become a target, perhaps it will grow bolder. Every speaker at Valdai tried to push China
in that direction.
Another hurdle, reported in the journal Nature this week, is that China is cleaning up
its air pollution. That sounds great for pollution-weary Chinese citizens. But
climatologists point out that some of that air pollution had actually been cooling the
atmosphere, by blocking out solar radiation. Ironically, less air pollution from China
could mean more warming for the Earth.
@AnonFromTN Frankly, I
really don't give a damn about what you say. But do not use racial slurs FIRST. I use racial
slurs ONLY in RESPONSE to the comments that contain them, in retaliation. If you don't use
racial slurs, I wouldn't either.
@DB
Cooper DB,
Thanks for the PCB mfg video. Asian roboticized surface mount assembly plants are even more
impressive. At one time supplied specialized instrumentation to the FN factory in South
Carolina where the 50 cal machine guns are made, and received a tour. Crude by Asian
standards, but efficient in its own way. Base price on a 50 LMG at the time was $5k without
any of the extras: tripod, flash suppressor, water cooling, advanced night vision sights,
etc. Base price would be $10k by now. The US Guv does not allow this kind of production to go
offshore .but apparently cares not a jot about the production of consumer electronics, a
massive and growing worldwide market.
Have read the Chinese shops assemble $1000 I-pods for
as little as $5 each including parts sourcing, making domestic production here impractical.
Surprisingly, the Germans manage to produce high end electronics and their manufacturing
labor rates are even higher than North America. Says something about the skill and diligence
level of the US workforce ..where just passing a drug test and not having felonies or bad
credit is a major achievement.
@Anonymous Yes, it is quite
off putting, even though most of the article is quite sound. Possibly Klare was obliged to
add this bit of nonsense in order to get it published in TomDispatch but who knows.
@nsa
A good friend supplies hi-end PCBs to EU & RU electronics mfrs, particularly in DE.
Judging by the numbers I hear, hi-end electronics is still very much alive in Europe while
it's all but dead in NA.
It's a capital intensive business, and raw labour cost is a minor component in the total
cost of doing business. NA has put so many socio-political obstructions & regulatory
costs in the way that even at min wage it makes no business sense to locate there. I doubt it
would make sense even with free labour.
As Steve Jobs told Obama point blank, "Those jobs aren't coming back". NA's manufacturing
ecosystem (rather than mere infrastructure), which includes social-cultural aspects as well
as physical plant has been disappeared, and only dire necessity will build a new one. I
explicitly avoid the word "rebuild", as that train left the station years ago. NA still
"assembles" stuff, but it doesn't manufacture except on a small, niche scale.
Manufacturing is a difficult and very demanding business. 21st C manufacturing is not
simply an extension of the 20th's. It's a radically different hybrid of logistics, design
& production engineering, "smart" plant, and financial mgmt.
Not for the faint of heart. Much easier to flip burgers/houses/stocks/used
cars/derivatives/credit swaps/ until there's nothing left to flip.
Where a war begins – or ends – can be hard to define. Michael Klare is right,
'War' and 'peace' are not 'polar opposites'. We often look at wars in chronological
abstraction: the First World War started on the 28th July 1914. Or did it only become a
global war one week later when Great Britain declared war on Germany? The causes can be of
long duration. The decline of the Ottoman Empire, for which the other Great Powers were
positioning themselves to benefit, might have begun as far back as 1683 when the Turks were
defeated at the Battle of Vienna. It ultimately led to the events of 1914.
Great power rivalry has always led to wars; in the last hundred years world wars. Graham
Allison wrote that the US can 'avoid catastrophic war with China while protecting and
advancing American national interests' if it follows the lessons of the Cold War. History
shows that wars are caused by the clash of interests, that's always at some else's expense.
When core interests collide there is no alternative to war – however destructive. https://www.ghostsofhistory.wordpress.com/
The real conflict is a cultural/ideological war in which liberal democracy tries to apply
its system worldwide under the delusion that egalitarianism, freedom, your definition of
rights, is universal.
China will never accept this. Russia is already fighting back. Nor does any developing
country look like they will ever truly embrace western values. It's gonna be SWPLs + WEIRDs
vs The Rest of Humanity.
The new Cold War will last much longer than any trade issue and conflict over values will
always be the underlying motivation, until the west either ends its universalist crusade, or
abolishes liberal democracy within its own borders.
I would be more sympathetic with Klare's fear of cold war with China if he could just assure
me that Chinese writers are equally able to voice concern with their own government's side of
the equation.
History shows that wars are caused by the clash of interests, that's always at some
else's expense. When core interests collide there is no alternative to war – however
destructive.
Pretty much, BUT, with one little difference re "some else's expense" now. M.A.D.
scenario.
Even limited exchange of thermonuclear M.I.R.V.s could affect everyone (even if somebody
can define that "limited" in the first place).
My take: we haven't developed, as species, along our capability for destruction.
Cheerful thought, I know.
Pepe Escobar says:
'US elites remain incapable of understanding China'
That's B.S., Pepe should've known better .
They dont 'misunderstand', they'r simply lying thru their teeth.
The following are all bald faced lies,
Classic bandits crying robbery.
Lawmaker: Chinese navy seeks to encircle US homeland
[bravo, This one really takes the cake !]
US Accuses China Of Preparing For World War III
US accuses China of trying to militarise and dominates space
USN have to patrol the SCS to protect FON for international shipping..
tip of an iceberg
Those who uttered such nonsense aint insane, stupid or cuz they 'misunderstand'
[sic] China. They know we know they'r telling bald faced lies
but that doesnt stop them lying with straight face .
This is the classic def of psychopaths:
people who'r utterly amoral, no sense of right or wrong, there's no such word as
embarrassment in their vocab.
Is it sheer coincidence that all the 5lies have been ruled by such breeds ?
Ask Ian Fleming's fundamental law of prob .
but why couldnt they produce one decent leader
in all of three hundred years.
5lies have more than their fair share of psychopaths no doubt, but surely not everybody is
like joe web and co., I know this for a fact. ?
Trouble is .
Washington DC is a veritable cesspool that
no decent man would want to dip his foot into it.
They might as well put it in the job requirement, 'Only psychopaths need apply '
Thats why in the DC cesspool, only the society's dregs rise up to the top.
A case of garbage in, garbage out .
A vicious circle that cant be fixed, except to be broken.
1) People from China PRC has as a people on the whole become quite disgusting. But please
exclude ppl from Hong Kong, Taiwan, Tibetans, Uyghurs etc. I confirm that PRC China people by
and large are now locusts of the world. I am one of them by birth. how did it happen? Deep
question for philosophers. It wasn't like this 60 years ago. some poisonous element entered
the veins of the collective, infected at least 70 percent. I worry for Russia due to its
inflated self confidence when dealing with PRC. Lake Baikal deal was almost sealed before it
got shelved. Still, using racial curses don't hurt anyone but yourself. All the big internet
advocates for Russia such as Orlov and Saker and Karlin don'tunderstand The Danger of China
PRC. If you understand then you have a responsibility to keep yourself décent and
respectable.
2) USA aside from its liberals and Zionist Jews etc. Has become a slowly stewing big asylum
for psychologically infantile and demented big babies. How did it happen again is a big
philosophical myth to me. Western Europe is sinking primarily because they came to resemble
the US. especially French and Brits and Spanish.
3) Russia is ruled by a few individuals with brains and maybe a bit of conscience but the
elite ruling class behave in such a way that one would conclude that they share the China PRC
virus, just not as advanced. Your basic Russian people are in a state of abject degradation
dejection, not changed all that much since 1990s. Only slightly ahead of the Ukrainians. If
one cares about Russia then shove aside 19th century naive romanticism and face reality.
4) A sustained and massive war by USA against China maybe the only miniscule chance
Greek/Christian civilization can be saved. Otherwise descend of history into thousand year
dark age. The latter is more likely due to advanced stage of brain dead disease gripping the
entire West.
If you have observed cities like Detroit or Greater Los Angeles than you know that "white
flight" as oppose to sycophancy is the end result of black or Hispanic populations reaching a
certain level. Whites leave and the US then has another internal third world like Detroit or
East LA.
It is a game of musical chairs where the white move into remote hinterlands, which develop
into suburbs or exurbs, then of course as these become population centers the blacks and
Hispanics enter them and the whites flee again.
What you will see is white flight from the US with the wealthiest whites simply moving to
other developed countries. The 1% would move to New Zealand or Tasmania.
The handicap for the USA in the confrontation is twofold its élite are in conflict
(and afraid, and contemptuous of) at least half of their own populace.
Plus, all the resources of all kinds directed to enterprises in the Middle East, subtracted
thusly from other enterprises.
Furthermore, there is the occasional bullying of Europe, and the continuous bullying of
Russia, yet more resource drains.
The USA spreads itself too thin, perhaps.
@peterAUS Chinese are
neither for money nor for ethnic power, Chinese is for 5 principles of peaceful coexistence,
treating all nations large and small as equal with respect.
Chinese believes we are now living in a rapidly changing world Peace, development,
cooperation and mutual benefit have become the trend of our times. To keep up with the times,
we cannot have ourselves physically living in the 21st century, but with a mindset belonging
to the past stalled in the oldays of colonialism, and constrained by the zero-sum Cold War
mentality.
Chinese is determined to help the world to achieve harmony, peace and prosperity thru the
win-win approaches.
@Китайский
дурак 2) The riddle reads simply: democracy,
multiracialism, economic welfare (no-limit printing of currency made possible by uncontested
military "overmatch").
I lived in the Philippines and would chalk that up to fairly typical of a country run by
China since it is effectively controlled by a syndicate of Fujian family cartels.
First, you have a choke-hold on the economy and wages are depressed to near starvation
levels.
Second, Chinese will bring corruption to the nth degree by bribing whichever politician
will serve their own interests at the expense of the public.
Thirdly, those Chinese who cannot succeed in business will get into the drug trade and
China and Taiwan has created the Philippines drug war by making meth.
Fourth, there are fiery pogroms when the local population react with "burnouts" and
innocent Chinese are killed.
This is on the horizon in Africa. Probably.
In the West, Chinese were held in check by Jews and WASPS and to some degree by
Malaysians. I see Africa becoming like the Philippines once Chinese can become citizens
there, however.
@Biff The Romans create a
desert and call it peace; British Empire imitated Roman Empire, USA is born out of British
Empire; so only the White People particular the Anglo-Saxon is not ready for peace or
salvation. But rest of the world has been waiting for peace or salvation for a long long
time.
Chinese are neither for money nor for ethnic power, Chinese is for 5 principles of
peaceful coexistence, treating all nations large and small as equal with respect.
Peace, development, cooperation and mutual benefit have become the trend of our
times.
Chinese is determined to help the world to achieve harmony, peace and prosperity thru
the win-win approaches.
Three options here:
Preferably,you are just pulling our legs. Not bad attempt, actually. Got me for a second.
Most likely, you are simply working. Sloppy and crude but, well, "you get what you pay
for". 50 Cent Army. Retired but needing money. Sucks, a?
Crazy and the least probable, you really believe in all that. Ah, well
@jeff
stryker Obviously you are brain washed by the 'god-fearing' morally defunct evil
'Anglo-Saxon', blaming every of your own failure on the Chinese just like what the Americans
and their Five-Eyes partners are doing right now.
The Filippino, the Malay and all the SE Asia locals have the guns not the Chinese, if the
Chinese do not hand over their hard earned money they will use what their ex-colonial masters
taught them since Vasco da Gama discovered the East Indies, masscared the Chinese and took it
all. The Dutch, Spanish, English, Japanese and the American all have done it before in order
to colonized the East Indies.
Before WWII, the American is just one of the Western imperialists ravaged and wreaked
havoc of Asia with barbaric wars, illicit drugs like Opium, slavery, stealing, robbing,
looting, plundering, murdering, torturing, exploiting, polluting, culture genocide, 'pious'
fanaticism, unmatchable greed and extreme brutality. In fact it is hard to tell the
difference between the American and the unrepentant war criminal Japanese who is more lethal
and barbaric to Asians until the Pearl Harbour incident.
For over seventy years the US has dominated Asia, ravaging the continent with two major
wars in Korea and Indo-China with millions of casualties, and multiple counter-insurgency
interventions in Indonesia, Thailand, Malaysia, the Philippines, Timor, Myanmar, Pakistan and
Afghanistan. The strategic goal has been to expand its military and political power, exploit
the economies and resources and encircle China.
USA is 10,000 miles away on the other side of the Pacific. USA is not an Asian nation, and
American is an alien to Asia. American is a toxin and a plague to Asian, They have done
enough damage to Asian already, they are not wanted, not invited and not loved in Asia, go
home Yankee.
@peterAUS You should know
the White man has some fallacies built into their culture, such as they believe that the
White man's words must be taken as given truth, only the White man can invent and the White
man can succeed, and the Whte man's culture is the final form of civilization.
The West (Europeans and their offshoots like the American, Aussie, etc.) is where is now,
because of those hundreds of millions of people all over the world who were robbed and
murdered, those who become victims of their very madness of colonialism and orientalism, of
the crusades and the slave and Opium trades. Cathedrals and palaces, museums and theatres,
train stations – all had been constructed on horrid foundations of bones and blood, and
amalgamated by tears.
The West squandered all the wealth they obtained thru stealing, looting and murdering
hundreds of millions of people all over the world in the scrabbling of a dog-eat-dog play
rough over the monopoly to plunder the rest of the world through two World Wars, one on the
edge of Armageddon, and on the verge of another Armageddon. It proves the West is incapable
of bringing peace and prosperity to the mankind because of their flawed culture, civilization
and religion. The chaos and suffering of the world in the last few hundreds of years under
the dominance the West proves they are a failure.
Human beings deserve better, we need to depart from the chaotic and harmful world order
and path established by the moronic West. China proposed a new way of life, a win-win
approach for the well-being of mankind like Belt-Road-Initiative to build and trade the world
into peace, harmony and prosperity. The West should not be the obstacle for achieving such
refreshing winner for all initiative. The West should embrace the new approach proposed by
China because the West will benefit from it. I call upon you, let go the old, obsolete,
failed and detrimental believe passed onto you by your colonialist forebears please, welcome
the new era.
As Steve Jobs told Obama point blank, "Those jobs aren't coming back". NA's
manufacturing ecosystem (rather than mere infrastructure), which includes social-cultural
aspects as well as physical plant has been disappeared, and only dire necessity will build
a new one. I explicitly avoid the word "rebuild", as that train left the station years ago.
NA still "assembles" stuff, but it doesn't manufacture except on a small, niche scale.
Manufacturing is a difficult and very demanding business. 21st C manufacturing is not
simply an extension of the 20th's. It's a radically different hybrid of logistics, design
& production engineering, "smart" plant, and financial mgmt.
Not for the faint of heart. Much easier to flip burgers/houses/stocks/used
cars/derivatives/credit swaps/ until there's nothing left to flip.
All true, leaving the question of what happens to North America before it reaches the
African street market economy (low tech, low investment, low trust, basic products, vibrant
and over each morning).
The Western European based US economy is fast draining out (along with people of Western
European descent) and the days of US world manufacturing leadership (1950's) are a distant
memory.
Maybe the takeaway from US/Chinese history is that the US needs its own Maoist style
Cultural Revolution. Nothing short of US Maoism is needed to root out every aspect of the
current rotten system and get a fresh start from zero.
If Chinese took over the world it would look like the Philippines.
Shabu labs everywhere? Corrupt politicians blowing away homeless squatters when some
Chinese guy wanted to build a shopping center or Chinese arsonists setting squats on fire?
Dictators living off wages Chinese don't want to pay exploited peasants?
No thanks, the whites don't want Chinese family cartels running our economies. We can see
the harm you have done in Burma, Philippines etc.
@jeff
stryker This Joe Wong is obviously a WuMao (professional trolls paid by Beijing to parrot
their government's pathological propaganda). Any mainland Chinese who can read will confirm
this fact. It is not worth your time to deal with folks like him.
@jeff
stryker Australians, Philippines, Singaporeans, Vietnamese, Taiwanese, Russians,
Italians, Japanese,Mongolians, Koreans, New Zealanders, a tiny anguished minority of mainland
Chinese themselves, everyone has gotten the mail, everyone has seen them on the streets,
everyone understood -- what a Beijing lorded world shall be like, coffee beans in the
morning. Americans are last in getting the news. Americans can be dim witted. Too many Nobel
winning economists and globalist bankers in America. And China is the gift of these white
people to the world.
@peterAUS thanks and if you
are a young man, congrats for your rationality. I am old, but probably have ten or 20 years
left, if not all those years real fit.
The young guys need to not fuc themselves up with regard to earning a living .keep your
mouth shut , sort of, and your name protected.
I hope a new generation of "White Nationalists" come along sans Hitlerism. Stay rational,
with just the facts M'am if you don't recall that line it was Dragnet and Detective Jack Webb
I think .you are young, Congrats.
Stick to the facts, keep your ego under control, keep a smile on your face .. Buddhist
wisdom to spread a little love around and it is essential for snaring a woman.
The Facts are with us. The Future is with us, including hard times, civil war, and so on.
The Sentimental Lie (Joseph Conrad) of race equality cannot stand for long.
@jeff
stryker Australian people nowadays are far less wrapped up in America than at any time
that I can remember but Australian politicians are just as bought and paid for as are those
in the US.
Australians generally are much more well travelled than most Americans and have been to
various places both in Asia and Europe, especially the UK. Despite having seen the longer
term results of "diversity" with their own eyes they overwhelmingly seem to think that things
will somehow work out differently in Australia. To even suggest that mass immigration from
the third world is a ticking time-bomb is to be branded a racist of the very worst kind.
"The best way for the US to win a war over China is not to outsource their labor
there."
Too bad you don't get to decide what "the best way for the US" is, no matter how many
times you vote America has owners, and the owners aren't the average Americans.
PS. Philippines is just the poor-man version of USA. Does the American capitalist class
have many concerns for their working class? The money class are all the same.
Your rant about Chinese of SE Asia is also quite similar with that of American Whites for
the Jews, or South African Blacks for the Whites, just only on economic side, not
politics.
Filipinos are nothing but semi retarded 85 IQ trying hard Americans, the vast majority who
are too stupid to copy the better parts of US high culture, and so ape and cargo cult the
trashiest and lowest of the low parts of US culture, or maybe low IQ Austronesians are just
prone to overall trashiness unless they are regulated by a somewhat draconian conservative
culture like Muslim Malays are.
@Китайский
дурак Perhaps some Russians like you are willing to live
under the Anglo-Saxon's dominance, submitted to Anglo-Saxon's zero-sum, beggar-thy-neighbour,
negative energy infested cult culture, and try to talk like them and walk like them, but not
everybody is like those feeble Russians. Other people has their long history, culture and
identity to protect. Please do not smear other people's integrity because you are lack of it.
If they turn on their radars we're going to blow up their goddamn SAMs [surface-to- air
missiles]. They know we own their country. We own their airspace We dictate the way they
live and talk. And that's what's great about America right now . It's a good thing,
especially when there's a lot of oil out there we need.
Comments about the bombing of Iraq in the late 1990s, which he directed. Interview
Washington Post (August 30, 1999); quoted in Rogue State, William Blum, Common Courage Press,
2005, p. 159.
William Blum,
RIP
Somebody should do an autopsy on him !
In korea, a UN coaliton force , bristling with bombers, jet fighters, complete air
superiority.no less. Tanks, artilleries, carbines, couldnt subdue the PLA fighting with ww1
vintage rifles.
There is never any UN coalition force in Korea war. Its a illegal US led aggression, known
as Unified/United Command, in violating of UNSC charter. US deceived UN by using 'United
Command' in its letterhead when communicating. And then go ahead to lie shamelessly using UN
name.
By acting before the Security Council could act, the US was in violation of Article 2(7)
of the UN Charter which requires a Security Council action under Chapter VII before there
is any armed intervention into the internal affairs of another nation unless the arms are
used in self-defense. (See Article 51 of the UN Charter. The US armed intervention in Korea
was clearly not an act of self defense for the US.) Also the actions of the UN have come to
be referred to as the actions of the "United Nations Command"(UNC), but this designation is
not to be found in the June and July 1950 Security Council resolutions authorizing
participation in the Korean War. (3) What is the significance of the US using the UN in
these ways?
The current US military command in South Korea claims to wear three hats: Command of US
troops in South Korea, Combined Forces Command (US and South Korean troops), and "United
Nations Command" with responsibilities with respect to the Armistice. The United Nations,
however, has no role in the oversight or decision making processes of the "United Nations
Command". The US Government is in control of the "United Nations Command". The use by the
US of the designation "United Nations Command", however, creates and perpetuates the
misconception that the UN is in control of the actions and decisions taken by the US under
the "United Nations Command".
The Democratic People's Republic of Korea (more commonly referred to as North Korea) has
called for disbanding the "United Nations Command"(UN Command). At a press conference held
at the United Nations on June 21, 2013, the North Korean Ambassador to the UN, Ambassador
Sin Son Ho argued that the actions of the US Government using the designation "United
Nations Command" are not under any form of control by the United Nations. (4) Since the UN
has no role in the decision making process of what the US does under the title of the
"United Nations Command", North Korea contends the US should cease its claim that it is
acting as the "United Nations Command".
Anyway, there is hardly a tree left in China and since 2006, China has been the world's
largest emitter of CO2 annually and though they pay lip service they accept no binding
target for reduction; quite the opposite.
Pls has slight decency to check before spewing nonsense.
According to Nasa, China has planted & expanded forest the size of Amazon,
contributing 1/4 of global greenery effort.
Its now working on massive irrigation projects in Tibet & Xinjiang, including dams
that will overshadow 3Gorges. These will convert arid Xinjiang into another green agriculture
pasture & food basket providing economic to it landlocked natives.
China's effort to roll back desertification is also very impressive, converting thousands
of hectares deserts into green forest using proprietary planting method.
It has built world most hydropower stations & dams in China, and help built in Asia,
Africa with grants & subsidized loan. Forefront in reusable energy, EV, solar.
And China is the staunchest supporter of CO2 emission control with solid actions, when US
write off Kyoto treaty in Paris as hoax.
what's about Spore that have 75% majority Chinese mainly come from Fujian too, HK,
Taiwan!? Do they fare well & very safe, or a shithole filled with drugs & crimes that
you projected to be?
And then compare with Chinese minority countries:
Msia with 25% Chinese contributing 70% economy, Indonesia 3% Chinese contributing 70%
economy.
Thailand, Myanmar, Laos, Cambodia, Philippines, .
It seems that the more Chinese % a country has, the more its prosperous & safe, vice
versa. So Chinese is in fact the main economic & safety contributing factor, instead of
the other way round you painted.
If Chinese are indeed as evil as you make out to be, then China will be worst than India,
dysfunctional like Philippines, completely crimes & drugs infested like Mexico. Yet China
today is biggest growing economy in real ppp, and world safest country well surpassing nearly
all whites countries. No?
Vietnam tried to purge Chinese ethics under Ho Chih Min anti-China policy, ended paralyzed
its entire economy until Chinese were brought back to help. Today its still the Chinese
ethics controlling its majority economy & ruling elites.
Indonesia Prez Suharto slaughtered million of Chinese ethics under Yanks CIA instigation
to coup pro-China Prez Sukarno, and their economy suffered. Suharto later brought back
Chinese to run 70% of economy, while his cronies suck off remaining.
Malaysia Mahatir had forthright admonished his disgruntled Malays complaining about 20%
Chinese controlling 70% economy. He famously said Malays race by inheritance is lazy and bad
in economic, screwing up every gov granted projects & handouts. So let the skillful
Chinese take care of all business, and Malays can tax on them to make Malaysia prosperous.
All subsequent leaders follow that policy, and the result is continuous economy growth.
Myanmar purged Chinese after independent, immediately encountered dysfunction economy.
Today its still relying on Chinese ethic to support the main economy behind.
Thailand, Cambodia, Laos didn't purge Chinese ethics, and Chinese are similarly their main
economy contributors.
There is one common observation in all these countries, where ever Chinese live, they are
mostly law obedient, work diligently and eventually established in businesses contributing to
most prosperity.
Whereas in majority Catholics Philippines, are literally controlled by Vatican appointed
bishops, who forbid contraceptive & divorce, directly causing its explosive population,
leading to grave poverty & crimes. These bishops are also colluding with corrupted
politicians to dictate election outcome using their churh influence.
When pro-China Prez Duerte declared war on drugs with China help is achieving good result,
these West-appointed bishops are leading their followers in full force to oppose, all in syn
with West govs 'human rights'. Dont that smell fishy?
So will Philippines be better off without Chinese? Im not sure, just like whites, some
Chinese are also ruthless crimals. But your sweeping statements & allegation certainly is
fundamentally flawed.
But CIA has been plotting anti-Chinese ethic riots in Asean for a long time as part of
China containment plan. Previously Denk posted one article on this.
@TT
Your description of Malaysians as lazy and stupid is why Indonesians kill ethnic Chinese and
not some CIA plot. That's the thinking right there that motivates Malays to dislike ethnic
Chinese.
China did not help Duterte. China makes the drugs there or in Taiwan. Duterte pleaded with
them to stop sending shabu to the Philippines but China does not care and so Filipinos
continue to stagger around like zombies in their squats.
Philippines has the additional post-colonial curse of Mestizo half-breed Spanish
landowning and political class of "Hacienderos" while Malaysians are unified under Islam.
Since these Spanish-blooded elite are part-white, some of the blame for the problems in the
Philippines can be attributed to whites.
As for CIA containment plans, you'll probably say that the reason Singapore immigration
allowed so many Indians in was because the US government wanted to import a competitive
ethnic group to prevent Chinese in Singapore from controlling all of Southeast Asia.
"An emboldened China could someday match or even exceed U.S. power on a global scale, an
outcome American elites are determined to prevent at any cost."
They will fail. The United States, like Carthage, is doomed to lose its struggle for
dominance; too many things are running against it. Not only does China have the far larger
population, but consider the following factors that run in their favor:
1. Like the US, China has a highly advanced and productive agriculture industry, making
them all but immune to nation-killing food blockades.
2. China has an average IQ that may approach Japan's before it levels out; Japan is
insanely outsized in terms of competitiveness, mainly due to its intelligent, group-oriented
population, so imagine how much stronger China could be.
3. China is geographically situated in the heart of the world's economic engine, Asia.
This puts China in prime position to break out from US dominance and, potentially, even
surround the Americans by making their trading partners their vassals.
4. The US is located far away and in a fairly unimportant region of the world. It will be
difficult for the US to get reinforcements to the Asian theater in the advent of a conflict.
American allies know this, so they will be predisposed to making peace with the Chinese as
the power balance continues to shift in China's favor.
5. Universalist dogma outsourced to American satellites Australia and New Zealand will
eventually make both countries Chinese vassals. Sometime in this century both countries will
have majority Asian populations due to immigration. Polls have repeatedly shown that Asian
immigrants have positive feelings towards the Chinese, despite the propaganda efforts of the
Americans. Take a look at what the Israel Lobby has accomplished and imagine what a future
China Lobby in those countries will do. Also, there is virtually no way to stop this from
eventually happening as this diversity dogma is spouted by the US at the highest level and is
now deeply ingrained in its future Chinese satellites. Before the end of the century, the
Chinese will have naval bases in both countries and the US will have none.
6. China is free from the social-trust killing, national ethos-sapping political
divisiveness seen in the US – no feminism, no attacks on its majority Han population.
America, on the other hand, is beset with hundreds of hate hoaxes targeted at its most
important demographic, white males – the group that disproportionately dies in its
wars, invents its best technology, and exports the best elements of its culture. If there is
a military conflict between China and the United States ten years hence, expect the critical
white male demographic to sit it out.
7. The Chinese are deeply patriotic and nationalistic. The US has experienced an
unprecedented decline in patriotism according to polls; that trend will continue. Therefore,
there is little appetite in the US for confrontation. This as a hungry China chomps at the
bit to show everyone who "the real ruler of the world is", a concept I sometimes see floated
on their social media.
8. The US is rapidly losing cultural influence due to a diminished Hollywood. The last
several American tent poll films, for instance, have crashed in Asia. Meanwhile movies like
Alita: Battle Angel (adapted from a Japanese anime) have done well in that market while doing
not so well in the US (and coming under immense fire from SJW gatekeepers for portraying a
female as something other than a weirdo). This means that tastes are diverging between the
two markets, a trend the Chinese can exploit in the future due to shared tastes across the
region and American inability to make anything other than low-quality superhero movies.
Hollywood is also now pretty much incapable of making the kinds of movies Asians (and
Europeans) used to see – science fiction, fantasy, and action/adventure movies –
due to rampant anti-white male hate and an industry focused on other demographics. Gone are
the movies like Robocop, Aliens, Jurassic Park, Die Hard, The Terminator, The Lord of The
Rings, and the Matrix. Gone because the white guys who made them are aging out of the
industry (or changing genders) and now all Hollywood wants to make are infantile superhero
movies for the Idiocracy demographic.
And did you see the Oscars this year? What an embarrassment. They actually nominated Black
Panther for Best Picture. I can't imagine anyone in Asia cares. They couldn't even get a
host.
9. The Chinese are primed to dominate influential cultural industries like video games in
a way that the Americans cannot due to checklist diversity requirements and the many
anti-male gatekeepers within the industry.
The video game industry is now three times the size of Hollywood and much more influential
than Hollywood for the youth. When technology and budgets are not a limiting factor,
politically-incorrect nations like Japan dominate over large American corporations like
Microsoft. The American video game industry, led by Microsoft, has effectively zero influence
in Asian nations due to American corporate greed, developer laziness, checklist diversity,
feminism, and a short-sighted strategy of broadly targeting low quality material to low
quality people (stupid FPS games).
Microsoft has been crushed so badly by the Japanese that they are now putting their
software on the Nintendo Switch; they simply cannot compete on any level. Meanwhile, Chinese
cultural influencers grow in power. They await only a maturation in Chinese taste and a
forward-thinking export policy but it will come. China's Tencent already owns a significant
stake in Epic Games, a streaming platform that will compete with America's Steam for
dominance of the huge online market.
One day, China will dominate their inferior American competition just as the Japanese and
Koreans have done. This bodes very badly for the US in the future, especially when you stop
to consider that all movies may be CGI in the future. The Chinese market is still immature,
but when it does mature, it will dominate – games, movies, music everything.
10. Divisive rhetoric promoted by the American elite and aimed at white European-Americans
– an effort to suppress white group solidarity – will eventually drive a wedge
between Europe and America that the Chinese, through their Russian ally, can exploit. You
already see a bit of this in Germany's refusal to cancel their gas pipeline (Nordstream 2, if
I recall), and Italy's defiance of the Empire over Venezuela. When racist American
politicians like Kamala Harris begin stealing money from European Americans and handing it to
blacks through reparations schemes, expect the Europeans to start thinking twice about their
relationship with this country.
After Trump loses in 2020, European elites will celebrate but not for long. Over the
following decade, both the far left (for economic reasons) and the far right (for ethnic
reasons) may unite against the United States. That will be made all the easier once the
United States is no longer able to elect a competent European as president. Europe isn't
going to want to be ruled over by someone of a different ethnic group that hates their
own.
11. China is unified in a way the US never can be again. China is 90% Han Chinese. The US
gets more diverse and divided by the day. Therefore, the Chinese public is more resilient to
conflict with rivals.
12. China's political model is far superior to their American counterpart. The Americans,
for instance, elect incompetent leaders through national popularity contests; said leaders
then rule only for favored interests. China, on the other hand, is run by smart people for
the benefit of all Chinese – the nation-state.
13. China's economic model is far superior to the corrupt, inefficient American corporate
model. Whereas China is a meritocracy not beset with crippling diversity requirements and
feminism. Tellingly, whenever the two models have gone head-to-head, such as in Africa, the
Chinese have won by a large margin. I see nothing that will change that in the future as that
would require a wholesale rethinking in the US of their basic philosophies, both on the left
and the right and that is impossible at this point.
The US is a proposition nation, so dogma lies at the heart of civic life. The Chinese, in
contrast, are free to pick and chose from the best of each ideology and apply it where
warranted because they are a blood and soil nation – group interest comes first, not
allegiance to dogma. Everyone in the US is an extremist of some sort – socialist,
corporatist, environmentalist, etc. That's no way to run a government.
14. The US will soon lose the moral high ground. As the US devolves into a police state,
as it continues kicking dissidents off the internet and silencing whistle blowers (and
attacking nations like Iran and Venezuela), nations around the world will cease to see a
difference between the US and China. At that point, they my either go independent (perhaps in
alliance with India or Russia) or openly start to flirt with a Chinese alliance. After all,
what does it matter if both states are authoritarian? At least the Chinese don't have a
history of invading their competition.
15. The divided American public may not support more military spending over social service
spending; this likelihood will only increase in the future due to demographic changes. They
see that China has a competent single-payer medical program and will want the same for
themselves, not pay for missiles and guns for other people.
16. The US cannot pursue relationships with vital nations like Russia due its anti-male
and anti-European dogma, now infused into society at the highest levels. It will take decades
to erase that and by then it will be too late.
"Someone here mentioned the EU turning East. At some point the EU will decide that staying a
US vassal is suicide and it will turn East. When that happens then the virus of US insanity
will turn inwards into itself."
True. One day someone like Kamala Harris or Stacey Abrams will be president. Will Europe
want to be ruled by non-Europeans who hate Europeans, want to tear down their monuments, and
steal their money for reparations payments?
"The USA has lost strategic air superiority, as well as strategic brain power. I wonder
how the USA would look after a week of retaliatory aerospace strikes?"
Like New Orleans after Katrina – a breakdown in the social order as all the diverse
groups start fighting each other and shooting at rescue efforts because they're morons and
thieves.
"Open the USA borders wide open and encourage 1 billion South Aemricans, Africans, SE
Asians and South Asians into the USA is the fastest and easiest way to close the human
resource gap between the USA and China."
How exactly is an efficient democracy supposed to work in that instance? Seems like
dysfunction, low social trust, and corruption would reign. Besides, the Chinese population
will still be far more intelligent overall, so no gap will be closed. The US should have
focused on immigration from Europe and increasing its white birth rate back in the 1970s.
They'd be in a far stronger position now if they had done that then.
@Anon Which West European
nations willing to move to dysfunctional disUnited States filled with crimes &
unemployment en masse?
May be some poor cousins of East European. But they will soon find US is worst than their
country, no good jobs, homeless without affordable accommodation, crime infested, their
whites is actually marginalized by diversification, LGBT conflict with their WASP value. Most
will want go back soon.
So its left with only choice of finest selection of 1.3B poor Indians, Latino, South
Americans, Africans & ME refugees willing to go anywhere just to get out of their
countries shithole.
When they arrived, hundreds of millions whites, Chinese & Asians will flee like been
no tomorrow.
Here it go, United States of Asshole is founded. Pls handover all nukes to UNSC before
implementing lest been exchange for food or use for heating in winter.
@jeff
stryker Its Malaysia PM Mahatir who said Malays are inheritingly lazy. Im just quoting.
Do educate yourself about CIA & Muslim politicians instigated riots against ethnic
Chinese before writing off in ignorant.
Spore was shielded from all these info distorted with West msm propaganda. I had only
learned about these details from Indonesian Chinese friends whose family had suffered these
trauma. After some readings, also Indonesia under current Chinese ethnic President Jokowi,
did all these CIA-Muslims Generals collision genocides been publicized. How about you, where
you got yours?
China did not help Duterte. China makes the drugs there or in Taiwan. Duterte pleaded
with them to stop sending shabu to the Philippines but China does not care and so Filipinos
continue to stagger around like zombies in their squats.
Why did you say China didn't help Prez Duerte in drugs war, your Chinese philippino
mistress told you? Pls cite your evidence.
Its widely publicized in our msm, West msm that China gov working with Philippines police
to track & dry up many drugs supply, even donated rehab centers as part of long term
solution. So you mean all these West msm are lying to help China.
In your word, these shabu are make & sold by China gov? Or they are part of global
drug syndicates that operated in every countries including all West?
As for CIA containment plans, you'll probably say that the reason Singapore immigration
allowed so many Indians in was because the US government wanted to import a competitive
ethnic group to prevent Chinese in Singapore from controlling all of Southeast Asia.
Let these unequal US FTA & India CECA speak itself. These were shoved into our PM LEE
ass to screw SG, allowing unlimited Indians of all kinds & their families to live &
work in SG, with their mostly internationally unrecognized qualifications mandatory to be
accepted.
Also both US & India nationals enjoy tax free in property investment, while Sporeans
& all foreigners subjected to 3% + 7% + 7% tax regimes, literally giving them a 10~17%
profits upfront.
Indians as " competitive " ethnic group to suppress SG Chinese, you are joking or
seriously think Indians IQ80 & its education is superior to Sg Chinese IQ107 that rank
consistently Top in SAT, PISA & Olympiad?
These are the dredge of India, violent drunkard, not those US get. Numerous are caught
with fake certificates when they simply could not even do the most basic task, near
illiterate. A documentary show was make to investigate how widespread & complex is it in
India, even there are someone stationed to pick up call as reference to certify everything.
These including medical MD cert, aka fake Indian Drs that India Health Ministry condemn
openly been so rampant up to 80% of India Drs(that was posted in one of Unz old discussion
2yrs ago)
@Erebus If both US &
China go on full trade war 100% tariff, to the brim of stop trading, who do you think can
last longer?
As you said, in mere wks, US will be paralyzed with every shelves empty & factories
shut down. Emergency declared with imports from other sources with much chaos. Frustrated,
nation wide civil riots may ensue with states like California, Texas, demanding
independent.
Whereas for China its life as usual with some restructuring, since it can live without
yanks useless financial services, msm & few chips easily replaced by EU/Jp or live
without. Airbus will be happy to replace Boeing.
China total export to US is ~$500B, 50% are imported components, so $350B damage is passed
back to US $250B(total US export to China) & global suppliers $100B.
That make China actual impact only $150B, $4T reserved, it can theoretically offset the
trade loss for >20yrs, while continue to expand its domestic consumption, BRI & global
trade to fuel growth.
But the world will be in chaos to get double impact of a totally collapsed US $21T GDP
& China import cut. With all economies stunt, global financial mkt burst, consumption all
dive, US allies turning to China for leadership & trade, a WW3 look imminent as yank is
left with only one product – weapons!
But not to worry, it should be very short one in yelling, as no yanks want to die with
empty belly, nor there are $ to pump vessels & bombers or resources to prepare long war.
Military is quickly paralyzed with desertion, & split between seperated states. There go
51 disUnited states of America.
So China is indeed discussing with yanks from great strength. But with farsight, they
prefer to settle yanks brinkmanship in Chinese humble & peaceful way.
I hope China can drag on until US can no longer conceal its pain with fake data,
screamming out loudly for truce to sign China dictates trade agreement. China need to teach
yank a painful lesson to humble it once & for all, including a WTO style unequal treaty
that yank shoved down china throat.
For all the refugees the US creates in the Mideast, it doesn't except many of them. Most
Iraqi and Afghani refugees have no hope of entering the US; European countries that protested
the war in Iraq end up absorbing the human cost.
As for the CIA cooperating with Muslims in anti-Chinese anything, I am skeptical. My
feeling about Indonesia is that a 3% minority owning everything and displaying contempt for
the natives as lazy savages is enough fuel ethnic hatred and Chinese backing of Suharto
didn't help things.
Indians don't represent job competition for Singapore, they are simply a basic menace to
your society. And it is possible that the US government, not wanting to see Singapore become
a vassal state of China, wanted your country's population to become more well,
diversified.
If both US & China go on full trade war 100% tariff, to the brim of stop trading,
who do you think can last longer?
China would take a hit, but not greater than the whole world could be expected to take.
Probably quite a bit less.
There's little doubt in my mind that China is in a much stronger position to both survive
and to be in a position to take advantage of the world's eventual recovery. As you note
$4T reserved, it can theoretically offset the trade loss for >20yrs
It also has the world's widest and deepest industrial infrastructure.
It's not only the $4T and the infrastructure. China also has a lot of gold within its
domestic system, which it can mobilize to make purchases from the the rest of the world's
staggered economies. Approx 20kT, by some quite carefully done estimates. Mobilizing that
gold, of course, is where things get tricky. The world would be awash with useless dollars
and how all that liability gets unwound would cause a lot of Central Bankers and their govts
a lot of sleepless nights.
"Which West European nations willing to move to dysfunctional disUnited States filled with
crimes & unemployment en masse?"
Quite a number of Europeans would have moved to the US circa 1965 – 1990 with the
countries then demographics, which was the point being made in the comment. The US is a huge
country with lots of space. In 1980, virtually all Eastern Europeans would have been better
off in almost any place in the US over where they were. The US Ruling Class had the chance
but cast it aside for lesser and more divisive groups so they could win elections and stiff
their workers. Even the US now is a mostly a better place to live than virtually any place in
Eastern Europe, and quite a number of places in overcrowded Western Europe – now filled
with Muslim invaders, rising crime, higher unemployment than the US, and yearly riots.
@Erebus One TV celebrity
went on crusade to expose Monsanto GMO toxicity impact in food chain few yrs ago.
He visited US & collected clinical evidences of GMO cancer causing from several US
professors, publicized them online. These force China gov to investigate, and their clinical
test too revealed mice & animals fed with GMO have huge tumors growing all over
shortly.
China agriculture minister was investigated, found to hold lucrative high pay job in
Monsanto taking bribery, and blanket approved all untested Monsanto GMO seeds, grains &
weed killer. Even those used as domestic animals feed but banned for wild animals in US were
introduced into food chain. Some also passed off as non GMO to plant in vast land not
approved for GMO.
About 30% of China food chain & vast agriculture lands contaminated, no longer
productive. That agri minister got arrested. No sure what China gov is doing about it. But
Prez Xi is hailing organic food. Tibets & Xinjiang have mega irrigation projects on going
now, might be to open up new agri lands to offset.
@jeff
stryker Tonnes of evidences on CIA-Muslim generals instigated riots & massacre since
1965. You choose to see otherwise.
A trove of recently released declassified documents confirms that Washington's role in the
country's 1965 massacre was part of a bigger Cold War strategy. https://www.theatlantic.com/amp/article/543534/
I couldn't find one article published in one unz comment by Denk?, where West msm
interviewing Indonesia biggest opposition party. Their chiefs had audacity to brag how they
will instigate another massive anti-Chinese riots to win next election.
The jews are much more vicious & open in controlling US, but you won't see CIA staged
riots & protest against their jewish masters Aipac.
Thailand Chinese ethnic are holding most economy too, but their politicians elites been
Chinese don't instigate riot against own ethnic to meddle election.
US government, not wanting to see Singapore become a vassal state of China, wanted your
country's population to become more well, diversified.
Its not diversification, its complete indianized with Weapon of Mass Migration, by jews
controlled US to push back China influence. As China refused to let jews control them!!! Its
also happening for Sri Lanka, Nepal, Bhutan, Mauritius now.
Its Top to bottom all indians now in SG, 9% Indians with India new migrants controlling
75% Chinese & 15% Malays. Since when Indians have turn so great well surpass all Chinese
capability, over a short span of 10yrs since Obama's new balance in Asia Pacific started. Its
a regime change, silent coup.
Starting from Indian Prez, Indian DPM(a ex-criminal for leaking state secret data, he was
highly touted as best future PM to test voter response, but a Chinese PM candidate was
eventually selected for coming election as voters brainwashing not yet complete), national
DBS bank CEO chairman Indian. Central bank MAS chief Indian. Law, Home Affair, Foreign
Minister all Indians. High court judges flooded Indians. Chief judge Indian. Top senior
counsels(equivalent to Queen Councils) many Indians. MPs also new india migrants. MSM
journalist & writers flooded Indians.
Some are India newly arrived Indians of no credential. Yet no msm reporting on that. Its
near complete regime change in stealth.
@Erebus In addition to the
herbicide and insecticide resistance some plants are modified to withstand prolonged dry
conditions, or to produce more of certain proteins or vitamins, or to increase yields.
The corn or maize we now have started from an indigenous plant in Central and South
America. Twenty plants would produce a tablespoon of grain. The native corn plant can still
be found. Over thousands of years these were bred for increased size and yields but probably
for other reasons as well like drought resistance. That's genetic modification over many
generations.
In this country the Food and Drug Admin. and Dept. of Agriculture have studied the
genetically modified plants extensively. Not that government agencies always get it right but
it would be interesting to see a real life example of these plants actually harming people,
or animals and insects. Sometimes the fear of Frankenfoods is related to a fear of lower cost
imports and a sop for the local farmers.
Having an interest in horticulture I produced greenhouse bedding plants for the most part.
One significant expense was pesticides. We took great pains to carefully watch the crops. If
the aphids, or other creatures, showed up we would strive to isolate the affected plants and
only treat the ones with aphids and some that were nearby. Lots of hours with a bright light
and magnifying glass. We didn't proactively apply these because of the expense. Sometimes an
entire greenhouse required several treatments and there goes much of the profit. On the other
hand refusing to use pesticides leads to total crop failures. Nobody applies pesticides if
there are no pests. Without pesticides the world population would be much smaller and the
remaining living people would know about famines.
In terms of space, most Europeans would immigrate to US cities. Chicago was popular with
Slavs, for instance. And of course Silicone Valley. Very few immigrants move to rural
wide-open areas. There is nothing to do there and Norwegians in 1990 were no longer
homesteading on the North Dakota plains.
By 1990, few Irish wanted to immigrated to Boston or Italians to New Jersey. Europe was
actually safer and more prosperous when I was young than the US.
Europeans prior to 1965 were attracted to the US middle-class standard of living and that
has shrunken precipitously.
The refugee crisis in Europe is relatively recent. As for unemployment, indeed this is
bad. But the social safety net is slightly better and there is less poverty overall in
Western Europe.
"Very few immigrants move to rural wide-open areas."
Sure, if you're talking Nevada or New Mexico desert. But there are areas considered
"rural" in the US that have relatively mid-sized cities nonetheless. Oklahoma City has a
population roughly equal to the population of Latvia's capital, for example. And I'm sure
that Eastern Europeans could have been coaxed to leave Europe for the US had America pursued
a deal with the Soviets – white South Africans, too. Certainly, this could have been
done with success post Soviet breakup. Some Western Europeans could also have been coaxed,
perhaps a few million, with the right financial incentives. Along with substantial efforts to
increase the native European birthrate and targeted, gender-imbalanced ~skills-based
immigration* from emerging market, high IQ countries, US demographics would be in a far
better place today. The country would be less divided and more rational on a global stage
(and probably friends with Russia, too).
*In other words, purposely encourage 2 to 1 female immigration from places like Korea and
China back when they were both poor and filled with people ready to emigrate and compliment
that with an equal but reversed ratio elsewhere (Vietnam, Laos). This forces interbreeding
and prevents formation of divisive ethnic communities, while also having the benefit of
harming your competitor's demographics down the road. Actor Keanu Reeves is something like
1/8th Japanese. But most people just think he's a white guy.
If that kind of policy had been adopted in 1965, along with my plan above (and a few other
things not mentioned), things would be better for the US now. The US would be overwhelmingly
white with a small admixture of smart Asian while leaving descendants who look European; the
kind of internecine racial strife we see now could have been avoided. However, that kind of
plan requires a competent, and rational, near-authoritarian to be in charge. As Fred Reed has
pointed out, that kind of plan is not capable in Western countries that choose their leaders
via popularity contest with a birthright citizenship voting base.
That's genetic modification over many generations.
One wonders how many fish genes made their way into corn over those generations, and how
they got in there.
it would be interesting to see a real life example of these plants actually harming
people, or animals and insects.
Pesticides of increasing toxicity are surely not good for insects. As for harming people,
I doubt we'd see any more harm than the fructose and aspartame etc, or the growth hormones
and rampant anti-biotic use in husbandry that those agencies approved have caused. Of course,
genetics is much more complex, and so who knows what will turn up in humans a few generations
from now.
Without pesticides the world population would be much smaller and the remaining living
people would know about famines.
I'm of the firm opinion that a smaller population would be a very, very good thing, and
we'll be seeing famines soon enough anyway, but on a scale that will dwarf all other
famines.
"Pesticides of increasing toxicity are surely not good for insects. As for harming people, I
doubt we'd see any more harm than the fructose and aspartame etc, or the growth hormones and
rampant anti-biotic use in husbandry that those agencies approved have caused. Of course,
genetics is much more complex, and so who knows what will turn up in humans a few generations
from now.'
The pests who feed on domesticated crops lived in nature before people were around. When
they stumble upon thousands of acres of corn or wheat they rapidly reproduce to exploit the
windfall. The pesticides will hopefully kill or drive off many of these insects but their
total number would probably be higher than in a pre-human environment. There is a balance of
power.
Utilizing the "precautionary principle" one could say any technical advance might have
some unanticipated detrimental effect in the near or distant future. Therefore let's stop all
new technology. For now we have the methods of physical science to guide us. These aren't
perfect but it's the best we have and more sensible than the precautionary principle, also
called the paralysis principle.
"..a smaller population would be a very, very good thing, and we'll be seeing famines soon
enough anyway, but on a scale that will dwarf all other famines.".
I'm hoping my family and I (and you) are not among the culled billions. Death by
starvation is not a pleasant way to go, so I've heard.
their total number would probably be higher than in a pre-human environment. There is a
balance of power.
Probably? Pre-human? Yours is the disingenuity of a pesticide salesman.
The insect world is in a massive die off, losing of ~75% its flying population over 3
decades, as attested by countless studies. The studies tell us what we already know. 40 yrs
ago, a 2 hr drive in the countryside at night meant 30 min spent scraping insects off your
windshield and headlights. Every lonely streetlight in the middle of nowhere had a cloud
around it. Screens to protect the radiator, or even the entire front of the car were sold by
every automotive shop and gas station. Seen one lately?
Utilizing the "precautionary principle" one could say any technical advance might have
some unanticipated detrimental effect in the near or distant future.
One could say it, and one would often be right for doing so. As the complexity of the
technological advance increases, so do its effects. Who considered 50 years ago that
pesticide use would devastate the insect world? Who knows with any level of certainty what
the effect of that will be on the ecosystem we live in? What we know is it ain't gonna likely
to be good, and may be devastating. They're now found in mother's milk with potential effects
we lack the tools and brain power to comprehend, never mind predict.
When it comes to playing with complex, chaotic systems that support our life on the
planet, humans are like a monkey with a hand-grenade. To borrow a phrase "If the planet's
ecosystem was simple enough to understand, we'd be too simple to understand it. " Our
myopia & hubris will kill us, if our stupidity and belligerence doesn't do it first.
The insect "die off" is an interesting occurrence. Puerto Rico lost a large percentage of
insects while at the same time they decreased pesticide use by 80%. This die off is observed
in a limited number of regions of the world. It isn't known exactly what caused the drop in
insect population. Some say pesticides, others say climate change (the theory that explains
all things), are killing the bugs.
Pesticides have been overused in the past but there have been impressive improvements in
the technology which reduces the amounts required. There are herbicides and pesticides
designed with chemical half lives. These kill the weeds or pests then break down into
harmless components and in 10-14 days can no longer be detected in the field. Unfortunately
for some any improvements will require some kind of technology.
We are all going to die eventually, hopefully later rather than sooner.
In his highly acclaimed 2017 book, Destined for
War , Harvard professor Graham Allison assessed the likelihood that the United States
and China would one day find themselves at war. Comparing the U.S.-Chinese relationship to
great-power rivalries all the way back to the Peloponnesian War of the fifth century BC, he
concluded that the future risk of a conflagration was substantial. Like much current analysis
of U.S.-Chinese relations, however, he missed a crucial point: for all intents and purposes,
the United States and China are already at war with one another. Even if their present
slow-burn conflict may not produce the immediate devastation of a conventional hot war, its
long-term consequences could prove no less dire.
To suggest this means reassessing our understanding of what constitutes war. From Allison's
perspective (and that of so many others in Washington and elsewhere), "peace" and "war" stand
as polar opposites. One day, our soldiers are in their garrisons being trained and cleaning
their weapons; the next, they are called into action and sent onto a battlefield. War, in this
model, begins when the first shots are fired.
Well, think again in this new era of growing great-power struggle and competition. Today,
war means so much more than military combat and can take place even as the leaders of the
warring powers meet to negotiate and share
dry-aged steak and whipped potatoes (as Donald Trump and Xi Jinping did at Mar-a-Lago in 2017).
That is exactly where we are when it comes to Sino-American relations. Consider it war by
another name, or perhaps, to bring back a long-retired term, a burning new version of a cold
war.
Even before Donald Trump entered the Oval Office, the U.S. military and other branches of
government were already gearing up for a
long-term quasi-war, involving both growing economic and diplomatic pressure on China and a
buildup of military forces along that country's periphery. Since his arrival, such initiatives
have escalated into Cold War-style combat by another name,
with his administration committed to defeating China in a struggle for global economic,
technological, and military supremacy.
This includes the president's much-publicized "trade war" with China, aimed at hobbling that
country's future growth; a techno-war designed to prevent it from overtaking the U.S. in key
breakthrough areas of technology; a diplomatic war intended to isolate Beijing and frustrate
its grandiose plans for global outreach; a cyber war (largely hidden from public scrutiny); and
a range of military measures as well. This may not be war in the traditional sense of the term,
but for leaders on both sides, it has the feel of one.
Why China?
The media and many politicians continue to focus on U.S.-Russian relations, in large part
because of revelations of Moscow's meddling in the 2016 American presidential election and the
ongoing Mueller investigation. Behind the scenes, however, most senior military and foreign
policy officials in Washington view China, not Russia, as the country's principal adversary. In
eastern Ukraine, the Balkans, Syria, cyberspace, and in the area of nuclear weaponry, Russia
does indeed pose a variety of threats to Washington's goals and desires. Still, as an
economically hobbled petro-state, it lacks the kind of might that would allow it to truly
challenge this country's status as the world's dominant power. China is another story
altogether. With its vast economy, growing technological prowess, intercontinental "Belt and
Road" infrastructure project, and rapidly modernizing military, an emboldened China could
someday match or even exceed U.S. power on a global scale, an outcome American elites are
determined to prevent at any cost.
Washington's fears of a rising China were on full display in January with the release of the
2019 Worldwide Threat Assessment of the U.S. Intelligence Community, a synthesis of the views
of the Central Intelligence Agency and other members of that "community." Its conclusion: "We
assess that China's leaders will try to extend the country's global economic, political, and
military reach while using China's military capabilities and overseas infrastructure and energy
investments under the Belt and Road Initiative to diminish U.S. influence."
To counter such efforts, every branch of government is now expected to mobilize its
capabilities to bolster American -- and diminish Chinese -- power. In Pentagon documents, this
stance is summed up by the term "overmatch," which translates as the eternal preservation of
American global superiority vis-à-vis China (and all other potential rivals). "The
United States must retain overmatch," the administration's National
Security Strategy insists, and preserve a "combination of capabilities in sufficient scale
to prevent enemy success," while continuing to "shape the international environment to protect
our interests."
In other words, there can never be parity between the two countries. The only acceptable
status for China is as a distinctly lesser power. To ensure such an outcome, administration
officials insist, the U.S. must take action on a daily basis to contain or impede its rise.
In previous epochs, as Allison makes clear in his book, this equation -- a prevailing power
seeking to retain its dominant status and a rising power seeking to overcome its subordinate
one -- has almost always resulted in conventional conflict. In today's world, however, where
great-power armed combat could possibly end in a nuclear exchange and mutual annihilation,
direct military conflict is a distinctly unappealing option for all parties. Instead, governing
elites have developed other means of warfare -- economic, technological, and covert -- to
achieve such strategic objectives. Viewed this way, the United States is already in close to
full combat mode with respect to China.
Trade War
When it comes to the economy, the language betrays the reality all too clearly. The Trump
administration's economic struggle with China is regularly described, openly and without
qualification, as a "war." And there's no doubt that senior White House officials, beginning
with the president and his chief trade representative, Robert
Lighthizer , see it just that way: as a means of pulverizing the Chinese economy and so
curtailing that country's ability to compete with the United States in all other measures of
power.
Ostensibly, the aim of President Trump's May 2018 decision to impose $60 billion in tariffs
on Chinese imports ( increased
in September to $200 billion) was to rectify a trade imbalance between the two countries, while
protecting the American economy against what is described as China's malign behavior. Its trade
practices "plainly constitute a grave threat to the long-term health and prosperity of the
United States economy," as the president put it when
announcing the second round of tariffs.
An examination of the demands submitted to Chinese negotiators by the U.S. trade delegation
last May suggests, however, that Washington's primary intent hasn't been to rectify that trade
imbalance but to impede China's economic growth. Among the stipulations Beijing must acquiesce
to before receiving tariff relief, according to leaked documents
from U.S. negotiators that were spread on Chinese social media:
halting all government
subsidies to advanced manufacturing industries in its Made in China 2025 program, an endeavor
that covers 10 key economic sectors, including aircraft manufacturing, electric cars, robotics,
computer microchips, and artificial intelligence; accepting American restrictions on
investments in sensitive technologies without retaliating; opening up its service and
agricultural sectors -- areas where Chinese firms have an inherent advantage -- to full
American competition.
In fact, this should be considered a straightforward declaration of economic war.
Acquiescing to such demands would mean accepting a permanent subordinate status
vis-à-vis the United States in hopes of continuing a profitable trade relationship with
this country. "The list reads like the terms for a surrender rather than a basis for
negotiation," was the way Eswar
Prasad, an economics professor at Cornell University, accurately described these
developments.
Technological Warfare
As suggested by America's trade demands, Washington's intent is not only to hobble China's
economy today and tomorrow but for decades to come. This has led to an intense, far-ranging
campaign to deprive it of access to advanced technologies and to cripple its leading
technology firms.
Chinese leaders have long realized that, for their country to achieve economic and military
parity with the United States, they must master the cutting-edge technologies that will
dominate the twenty-first-century global economy, including artificial intelligence (AI),
fifth-generation (5G) telecommunications, electric vehicles, and nanotechnology. Not
surprisingly then, the government has invested in a major way in science and technology
education, subsidized research in pathbreaking fields, and helped launch promising startups,
among other such endeavors -- all in the very fashion that the Internet and other American
computer and aerospace innovations were originally financed and
encouraged by the Department of Defense.
Chinese companies have also demanded technology transfers when investing in or forging
industrial partnerships with foreign firms, a common practice in international development.
India, to cite a recent example of this phenomenon, expects
that significant technology transfers from American firms will be one outcome of its
agreed-upon purchases of advanced American weaponry.
In addition, Chinese firms have been accused of
stealing American technology through cybertheft, provoking widespread outrage in this country.
Realistically speaking, it's difficult for outside observers to determine to what degree
China's recent technological advances are the product of commonplace and legitimate investments
in science and technology and to what degree they're due to cyberespionage. Given Beijing's
massive investment in science, technology, engineering, and mathematics education at the
graduate and post-graduate level, however, it's safe to assume that most of that country's
advances are the result of domestic efforts.
Certainly, given what's publicly known about Chinese cybertheft activities, it's reasonable
for American officials to apply pressure on Beijing to curb the practice. However, the Trump
administration's drive to blunt that country's technological progress is also aimed at
perfectly legitimate activities. For example, the White House seeks to ban Beijing's government
subsidies for progress on artificial intelligence at the same time that the Department of
Defense is
pouring billions of dollars into AI research at home. The administration is also acting to
block the Chinese acquisition of U.S. technology firms and of
exports of advanced components and know-how.
In an example of this technology war that's made
the headlines lately, Washington has been actively seeking to sabotage the efforts of
Huawei , one of China's most
prominent telecom firms, to gain leadership in the global deployment of 5G wireless
communications. Such wireless
systems are important in part because they will transmit colossal amounts of electronic
data at far faster rates than now conceivable, facilitating the introduction of self-driving
cars, widespread roboticization, and the universal application of AI.
Second only to Apple as the world's supplier of smartphones and a major producer of
telecommunications equipment, Huawei has sought to take the lead in the race for 5G adaptation
around the world. Fearing that this might give China an enormous advantage in the coming
decades, the Trump administration has tried to prevent that. In what is widely described as a "
tech
Cold War ," it has put enormous
pressure on both its Asian and European allies to bar the company from conducting business
in their countries, even as it sought the arrest in Canada of Huawei's chief financial officer,
Meng Wanzhou, and her extradition
to the U.S. on charges of tricking American banks into aiding Iranian firms (in violation of
Washington's sanctions on that country). Other attacks on Huawei are in the works, including a
potential
ban on the sales of its products in this country. Such moves are regularly described as
focused on boosting the security of both the United States and its allies by preventing the
Chinese government from using Huawei's telecom networks to steal military secrets. The real
reason -- barely disguised -- is simply to block China from gaining technological parity with
the United States.
Cyberwarfare
There would be much to write on this subject, if only it weren't still hidden in the shadows
of the growing conflict between the two countries. Not surprisingly, however, little
information is available on U.S.-Chinese cyberwarfare. All that can be said with confidence is
that an intense war is now being waged between the two countries in cyberspace. American
officials accuse
China of engaging in a broad-based cyber-assault on this country, involving both outright
cyberespionage to obtain military as well as corporate secrets and widespread political
meddling. "What the Russians are doing pales in comparison to what China is doing,"
said Vice President Mike Pence last October in a speech at the Hudson Institute, though --
typically on the subject -- he provided not a shred of evidence for his claim.
Not disclosed is what this country is doing to combat China in cyberspace. All that can be
known from available information is that this is a two-sided war in which the U.S. is
conducting
its own assaults. "The United States will impose swift and costly consequences on foreign
governments, criminals, and other actors who undertake significant malicious cyber activities,"
the 2017 National Security Strategy affirmed. What form these "consequences" have taken has yet
to be revealed, but there's little doubt that America's cyber warriors have been active in this
domain.
Diplomatic and Military Coercion
Completing the picture of America's ongoing war with China are the fierce pressures being
exerted on the diplomatic and military fronts to frustrate Beijing's geopolitical ambitions. To
advance those aspirations, China'sleadership is relying heavily on a much-touted
Belt and Road Initiative , a trillion-dollar plan to help fund and encourage the
construction of a vast new network of road, rail, port, and pipeline infrastructure across
Eurasia and into the Middle East and Africa. By financing -- and, in many cases, actually
building -- such infrastructure, Beijing hopes to bind the economies of a host of far-flung
nations ever closer to its own, while increasing its political influence across the Eurasian
mainland and Africa. As Beijing's leadership sees it, at least in terms of orienting the
planet's future economics, its role would be similar to that of the Marshall Plan that cemented
U.S. influence in Europe after World War II.
And given exactly that possibility, Washington has begun to actively seek to undermine the
Belt and Road wherever it can -- discouraging allies from participating, while stirring up
unease in countries like Malaysia and Ugandaover the enormous
debts to China they may end up with and the heavy-handed
manner in which that country's firms often carry out such overseas construction projects.
(For example, they typically bring in Chinese laborers to do most of the work, rather than
hiring and training locals.)
"China uses bribes, opaque agreements, and the strategic use of debt to hold states in
Africa captive to Beijing's wishes and demands," National Security Advisor John Bolton
claimed in a December speech on U.S. policy on that continent. "Its investment ventures are
riddled with corruption," he added, "and do not meet the same environmental or ethical
standards as U.S. developmental programs." Bolton promised that the Trump administration would
provide a superior alternative for African nations seeking development funds, but -- and this
is something of a pattern as well -- no such assistance has yet materialized.
In addition to diplomatic pushback, the administration has undertaken a series of
initiatives intended to isolate China militarily and limit its strategic options. In South
Asia, for example, Washington has abandoned its past position of maintaining rough parity in
its relations with India and Pakistan. In recent years, it's
swung sharply towards a strategic alliance with New Dehli, attempting to enlist it fully in
America's efforts to contain China and, presumably, in the process punishing Pakistan for its
increasingly enthusiastic role in the Belt and Road Initiative.
In the Western Pacific, the U.S. has stepped up its naval patrols and forged new
basing arrangements with local powers -- all with the aim of confining the Chinese military to
areas close to the mainland. In response, Beijing has sought to escape the grip of American
power by establishing miniature bases on Chinese-claimed islands in the South China Sea (or
even
constructing artificial islands to house bases there) -- moves widely condemned by the
hawks in Washington.
To demonstrate its ire at the effrontery of Beijing in the Pacific (
once known as an "American lake"), the White House has ordered an increased pace of
so-called freedom-of-navigation operations (FRONOPs). Navy warships regularly sail within
shooting range
of those very island bases, suggesting a U.S. willingness to employ military force to resist
future Chinese moves in the region (and also creating situations in which a misstep
could lead to a military incident that could lead well, anywhere).
In Washington, the warnings about Chinese military encroachment in the region are already
reaching a fever pitch. For instance, Admiral Philip Davidson, commander of U.S. forces in the
Pacific, described the
situation there in recent congressional testimony this way: "In short, China is now capable of
controlling the South China Sea in all scenarios short of war with the United States."
A Long War of Attrition
As Admiral Davidson suggests, one possible outcome of the ongoing cold war with China could
be armed conflict of the traditional sort. Such an encounter, in turn, could escalate to the
nuclear level, resulting in mutual annihilation. A war involving only "conventional" forces
would itself undoubtedly be devastating and lead to widespread suffering, not to mention the
collapse of the global economy.
Even if a shooting war doesn't erupt, however, a long-term geopolitical war of attrition
between the U.S. and China will, in the end, have debilitating and possibly catastrophic
consequences for both sides. Take the trade war, for example. If that's not resolved soon in a
positive manner, continuing high U.S. tariffs on Chinese imports will severely curb Chinese
economic growth and so
weaken the world economy as a whole, punishing every nation on Earth, including this one.
High tariffs will also increase costs for American consumers and endanger
the prosperity and survival of many firms that rely on Chinese raw materials and
components.
This new brand of war will also ensure that already sky-high defense expenditures will
continue to rise, diverting funds from vital needs like education, health, infrastructure, and
the environment. Meanwhile, preparations for a future war with China have already become the
number one priority at the Pentagon, crowding out all other considerations. "While we're
focused on ongoing operations," acting Secretary of Defense Patrick Shanahan reportedly
told
his senior staff on his first day in office this January, "remember China, China, China."
Perhaps the greatest victim of this ongoing conflict will be planet Earth itself and all the
creatures, humans included, who inhabit it. As the world's top two emitters of climate-altering
greenhouse gases, the U.S. and China must work together to halt global warming or all of us are
doomed to a hellish future. With a war under way, even a non-shooting one, the chance for such
collaboration is essentially zero. The only way to save civilization is for the U.S. and China
to declare peace and focus together on human salvation.
Michael T. Klare, aTomDispatch
regular, is the five-college professor emeritus of peace and world security
studies at Hampshire College and a senior visiting fellow at the Arms Control Association. His
most recent book isThe Race for What's
Left. His next book, All Hell Breaking Loose: Climate Change, Global Chaos, and
American National Security , will be published in 2019.
The genuinely expert panelists could not articulate America's demands beyond the familiar
'level playing field' that America created by shackling China with uniquely humiliating
conditions before admitting it to the WTO.
Today, China generates 20% of global GDP (the US 15%), its imports and exports are in
balance, its currency fairly valued, its economy one third larger and growing three times
faster than America's and it produces essential technology that America needs and cannot
provide.
It is almost impossible to imagine a war scenario that the US could win, short of China
invading America.
Excellent article Mister Klare, but would like to raise a few quibbles.
1) As far as "economic" war, China has been fighting one for decades. It's called competing
and trying to do the best to improve your people's lot. The US is finally starting to fight
back but some of it's measures are inappropriate and/or ineffective.
2) As far as the US trying to confine the Chinese military to its own region, I really
haven't seen that the Chinese military is particularly interested in operation outside their
own region anyway. It seems to be focused on protecting China and its own neighborhood and
interests, and the Chinese aren't stupid enough to bleed away their wealth and blood in
distant misadventures.
3) I'd gotten the impression from the Deep State's rhetoric that they are much hotter on
fighting a shooting war with Russia than with China. In an extended struggle, as long as it
doesn't go nuclear, US chances are much better against a Russia whose economy is only a
fraction of China's.
Keynes says this, "All trade is only barter." The Wall Street/China Gambit is key to
understanding today. Clinton signed MFN trade status with China, screwing over NAFTA. Those
Zenith TV's that were supposed to be made in Mexico became Chinese made electronics.
Balanced trade was also thrown out the window, as Wall Street was in on the gambit. Trade
in goods was unbalanced, and America supplied dollars to China to make up the difference.
China then recycled those mercantile won dollars back to the U.S. to buy Tbills, helping keep
interest rates low, and acting as a prime variable in forming U.S. housing bubble. Returning
dollars then spun out into the American economy, so American's could buy more Chinese goods
from transplanted American factories.
The wall street China gambit turned mainstreet American's into Zeros, while wall street
became heroes.
Any discussion of China current economic status cannot overlook the role of Wall Street
exporting of jobs, to then get wage arbitrage. Immigrating third world people into America is
also a function of this "finance capitalism" as it wants wage arbitrage from third world
labor as well.
Finance Capitalism in turn is part of Zion and Atlantacism. International credit "banking"
will send its finance capital anywhere in the world to get the lowest price. In the case of
China, overhang of communist labor in the mid 90's was available to make things, and then
export Chinese made goods back to U.S. (at the China price.)
China still uses Atlantic doctrine, where raw materials come in by ship, and finished
goods with increment of production value add leave by ship. (Value add is key element to
making any economy thrive. Just extracting raw materials turns a country into Africa, witness
the attempt at turning Russia into an extraction economy in the 90's.)
Note difference in American policy in the 90's: Russia was to become extraction, and China
was to become value add. As Tucker Carlson says, America is run by a ship of fools.
For China, "Eurasia" beckons, and raw materials can be had from China's interior and via
overland routes. This then is a pivot away from London/Zion Atlantacism (finance capital) and
toward industrial capitalism.
In other words, both U.S. and the West have hoisted themselves on their own petard. People
that wax poetic about China's gains overlook this important mechanism of "gifting" of our
patrimony to China. It is very easy to copy or be a fast follower, it is beyond difficult to
invent and create.
Wall Street and greed gave away our patrimony, which was hard won over the ages in order to
make wage arbitrage today, and gave away the future.
China uses state banks, and also forgives debts lodged in their state banks. This is
actually one of the secret methods used to rope-a-dope on the west. The Chinese economy is
not debt laden, and what public debts there are, are lodged in a State Bank, where they can
be jubileed or ignored.
The U.S. and the West had better take a long hard look at finance capital method, which
uses only "price signals" to make economic decisions, as pricing is main vector from which
jobs were exported, and which China cleverly used to climb up its industrial curve. Sovereign
money/Industrial Capitalism IS the American System of Peshine Smith and Henry Clay.
Atlantacism/Zionism/Finance Capital is not American – the parasite jumped to the U.S.
from London.
China is wisely in control of its money power via its state banks and is pivoting away
from Atlantacism now that it has served its purpose. The belt and road routes are mostly
overland, with some coastal sea routes, and there isn't a thing sea power (((atlantacists)))
can do about it.
China has played the game well, but don't overlook the gifting of Western patrimony caused
by a false neo-liberal finance capital economic ideology, which blinds Western adherents.
@joe
webb Yeah, so America can topple China and go after Russia immediately afterwards? I
don't think the Russians are so stupid.
There is only 1 way Russia survives the 21st century without being broken up and ruined,
and that is allying itself with China. The same is true for China.
The only way China can survive intact is to ally itself with Russia.
Pretty simple stuff I am sure each country understands.
China's real economy, of course dwarfs that of the US'.
The author touches on a nuclear trade option China holds over the US that I see little
mention of elsewhere. High tariffs are one thing, but a closure of trade in components and
raw materials would do far more than
endanger the prosperity and survival of many firms that rely on Chinese raw materials
and components.
Should China block exports of everything other than finished goods to the US, almost every
US factory would close due to lack of parts and materials. The time and investment required
to rebuild/replace supply chains in a JIT world means much of what's left of America's real
economy would disappear within weeks.
What then?
Unlike Russia, the US is highly vulnerable to targeted sanctions. American trade
negotiators are apparently oblivious to this. I find that very weird.
author Klare said: "The media and many politicians continue to focus on U.S.-Russian
relations, in large part because of revelations of Moscow's meddling in the 2016 American
presidential election and the ongoing Mueller investigation."
– What "revelations"? "What meddling"?
– He tipped his hand right off the bat. Klare is just another run of the mill
Communist with a case of the Trump Derangement Syndrome, complete with Communism's favorite
scam, 'global warming'.
Klare said: "Ostensibly, the aim of President Trump's May 2018 decision to impose $60
billion in tariffs on Chinese imports (increased in September to $200 billion) was to rectify
a trade imbalance between the two countries "
– No, the aim is to encourage China to removes it vastly more & extreme tariffs
on US goods & services.
Klare said: " continuing high U.S. tariffs on Chinese imports will severely curb Chinese
economic growth and so weaken the world economy as a whole, punishing every nation on Earth,
including this one. High tariffs will also increase costs for American consumers and endanger
the prosperity and survival of many firms that rely on Chinese raw materials and
components."
– Nonsense, all China needs to do is remove it's many times over more severe
tariffs.
– If the US's lesser tariffs on Chinese goods / services 'hurt the US', then why
don't China's massive tariffs on US goods / services hurt China?
And to think some take this fraud, Klare, seriously.
The media and many politicians continue to focus on U.S.-Russian relations, in large
part because of revelations of Moscow's meddling in the 2016 American presidential election
and the ongoing Mueller investigation.
It's not the economy stupid. According to many "experts" on this site, since the US economy
and military expenditures are 10 times bigger than Russia's, it seems "logical" to those
experts that the US army is 10 times better. I would argue that not only is not 10 times
better, it's not even equal to Russia's army. Again, according to the same types of "experts"
Russia's economy is the size of Italy. Why don't then someone break the good news to Italy
and encourage them to go to war with Russia? Since their economies are equal – it seems
that Italy stands a fair chance of beating Russia, thus eliminating the need of the 10 times
superior army to fight them. The moronity on this site, man – it's unbelievable.
China is not suffering from massive degeneration as the US is. Instead of trying to prevent
China from becoming a leading nation of the world, why could the US not accept China's coming
prominence and concentrate on strengthening its own population ? Unlike the US, China is not
interested in "ruling the world", it is only interested in expanding its economy. For the
rest, it is dedicated to stability and cooperation. No threat to the world at all, except for
some compulsive hegemonists in the Pentagon.
This article is pure propaganda and as such is based upon lies, misconceptions and pure
fantasy.
If there already is a war it is all in the minds of Anericans, and they have already lost
that war because America needs allies and can only create enemies amongst people that were
its friends.
Europe will join with Russia as soon as it can get away from the US bully. That means
550million Europeans will join 160 million Russians. 710 million people with Russian
technology and Chinese investment (China already runs Btitain's North Sea gas), will produce
an economic power that will humiliate the USA at every turn.
All of South America wants to break with the US, the entire Orient hates the US. America is
actually doing to Africa what the US accuses Russia and China of doing.
If there really is a war between the US and China then the US has already lost it. The rest
of the world wants only one thing: the absolute collapse of the entire US. Everyone hates the
US. No one will ever support you US dictators and bullies 100%.
You stab everyone in the back sooner or later and your only interest is supporting the
fascist and racist Israel that is genociding the true Semites, the Palestinians.
I'm amazed Fred Unz publishes this sort of trash. It is unadulterated lies, brainless
stupidity and total hog wash. Pure drivel.
It is often said that, had the Western and Eastern Europeans formed a coalition rather
than fight WW I, they would still be dominant.
And if I had wings, I could fly to the moon.
The Eastern Europeans had never accepted the Western Enlightenment (still haven't), and to
have done so would have destabilized their family structure -- the deep structure of their
society -- exactly as it has finally destabilized ours, today. The nature of authority and
organization in Eastern Europe differed considerably from that of Western Europe. Their forms
of organization were different enough to make integration impossible, and perhaps to make
formation of a coalition impossible.
China's organizational forms, family structure, and and social assumptions in general
differ even more from the present day form of the Western Enlightenment than did those of
East Europe c.a. AD 1900.
It's at times like these we get to test the assumption that reason and fear of death can
lead to agreement on a modus vivendi.
I will never believe the Zionist controlled U.S. will go to war with China as long as one
U.S. company remains in China and damn near all the major U.S. companies are in business in
China, this is a ploy for the zionist controlled MIC to loot the America taxpayer!
I didnt read the article but I dont think china needs the US for anything they are well on
their way to be the dominant world power the US and ist zionist occupied government are
losers the zionists want never ending wars which stupid USA has done,,china and all the rest
will eventually dump the rothchild banking system and form its own which will in all likely
hood benefit more than the zionist one does
No mention of an ideological battle, and no wonder, as "the Chinks" et al have apparently
already won that one, as evidenced by the fact that the last US general election was merely
yet another idiotic, meaningless [ yet highly entertaining], cat fight over blue socialism
versus red socialism.
The US vs China trade war is just another power/domination battle scam between two
competing, wholly criminal orgs, both totally against anything ever resembling truly free
trade ..nothing more.
"The US and China must work together to halt global warming or all of us are doomed to a
hellish future." Really? If this doesn't prove this guy is a lefty shill, nothing does. Even
the clowns raking in grants and trying to impoverish everyone with higher taxes have seen the
light and have been saying "climate change" lately. Many scientists are now arguing that we
may be headed into a new cooling period rather than a "hellish" warming period that brought
us so much prosperity. This "global warming" religion with its hockey stick icons and polar
bear mythology is worse than the Heaven's Gate religion.
"The rest of the world wants only one thing: the absolute collapse of the entire US.
Everyone hates the US. No one will ever support you US dictators and bullies
100%. You stab everyone in the back sooner or later and your only interest is supporting
the fascist and racist Israel that is genociding the true Semites, the Palestinians."
Well yes. As history has shown, occupation and rule by Jahweh's Chosen People tends to
bring this fate down upon the host country.
Oh, for Pete's sake:
1. It will always be China+Russia vs. the US. The EU, site of WWIII, will just soil
itself.
2. The Debt Bubble US economy will collapse. At some point. Changes every calculation.
3. The US will devolve into a state of civil war. Of some sort. Paralyze the place.
Momentum is with China and Russia. The US is sliding into history's toilet.
Just give it a few more years. And the whole world sees and knows it. The whole world can
get along very well without the US. And would very much like that to be.
Global warming my azz! But the rest of it rings pretty true. If nukes arn't used, Russia and
China will win this war simply because they have the gold now and the US has spread its fiat
petro dollar all over the world which will come back big time to bite them. That is if China
and Russia are smart enough to go on a gold exchange standard.
since the US economy and military expenditures are 10 times bigger than Russia's, it
seems "logical" to those experts that the US army is 10 times better. I would argue that
not only is not 10 times better, it's not even equal to Russia's army.
I would argue the same.
Russia is a land power. This means using a land army and area denial. Russia does not need
to power project with a blue water Navy and she does not follow Atlantacist doctrine.
Atlantacist doctrine got its start when our (((friends))) evolved the method during the
Levantine Greek City State period, where our tribal friends would be stationed in various
entrepot cities ringing the Mediterranean. They would use their tribal connections to Launder
pirated goods, and to push their "international" usurious money type, which in those days was
silver. Simultaneously they were taking rents on their secret East/West mechanism, whereby
exchange rates between gold and silver were exploited. Gold was plentiful in India and Silver
more plentiful in the West, so the Caravan's took arbitrage on exchange rates as silver
drained east and gold drained west.
The U.S. inherited Atlanticist method after WW2. The U.S. is not an island economy like
England – it does not need to go around the world beating up others to then extract raw
materials. The U.S. is actually more like Russia in that U.S. can afford to have economic
autarky and be independent. The U.S. does not need to power project with a blue water navy,
despite the false narrative (((inheritance))) passed down to us, especially after WW2. Nobody
likes being punked with false narrative.
U.S. military expenditures are so heavy because of this tendency of finance capital to
search the world for gains, and this means posting overseas military bases, which in turn are
expensive to operate. Russia only has a "close in" defensive posture of area denial. This is
far less expensive than power projecting.
Also, GDP figures are misleading. In the U.S. if housing prices go up it reflects in GDP
growth, when in reality – the house didn't improve. GDP figures are lies. If finance
takes 50% cut of the economy, they are only pushing finance paper back and forth at each
other this is not the real economy, but it shows up in GDP because finance paper is an
"asset".
Russia's economy is much larger than their GDP, probably it is closer to Germany's in real
terms. Real terms = real economy = the making of goods and services.
China is not America's natural ally, Russia is. Atlantacist doctrine sold America's
patrimony to China for cheap, and then the ((international)) will just jump to another
host.
America has been parasitized by false doctrine and the output is thus that of an infected
brain – an output that is crazy. Finance plutocracy typically will not let go
willingly, but has to be removed forcefully.
Russia is a country of vodka drunks and Dubai prostitutes run by a syndicate of Israel
oligarchs and ex-KGB who kill their journalists in foreign countries.
China is dependent on outsourcing and if the US factories were to withdraw tomorrow the
Chinese economy would take a huge hit.
@Erebus The US is vulnerable
in so many other ways too, see how fast the store shelves empty just on the news of an
approaching big storm. Panic buying is rife and some people keep minimal food available at
home. I know people who have to stop at an ATM to get $20. All kinds of vital distribution of
food, water, power, fuel and more seems to pass through a myriad of often vulnerable
bottle-necks real or virtual. Easy targets for low cost, low tech sabotage teams I'd think.
I'm inclined to think also that this threatening hysteria possibly is a deep state psy-op
designed to prime Americans prior to the enactment of some sort of "democracy"
modifications.
America is the most powerful country solely because it has the most powerful economy in the
world, and that was in no small measure due to America's abundance of arable land, navigable
waterways, natural resources ect ect. . In a few decades China has rocketed close to US level
and is in a global hegemon trajectory solely on the quality and size of its population .
There is not much doubt about the outcome of any competition between China and the West,
especially as much of the profits of the ruling class in the West has come from offshoring
and investment in China and their economy of scale production suppressing labour's power in
the West. The Chinese and their Western collaborators will just wait Trump out. Trump is a
populist not a creature of the Deap State alarmed at China's rise. The leading strategists of
America's foreign policy establishment still don't realise what they are dealing with in
China.
Perhaps the greatest victim of this ongoing conflict will be planet Earth itself and all
the creatures, humans included, who inhabit it. As the world's top two emitters of
climate-altering greenhouse gases, the U.S. and China must work together to halt global
warming or all of us are doomed to a hellish future.
Better to reign in hell. Anyway, there is hardly a tree left in China and since 2006,
China has been the world's largest emitter of CO2 annually and though they pay lip
service they accept no binding target for reduction; quite the opposite.
Even if their present slow-burn conflict may not produce the immediate devastation of a
conventional hot war, its long-term consequences could prove no less dire.
The manufacturing should be done in the most advanced regions of Earth ie the West,
because that is where the technology and will exists to protect the environment. China is
trying to churn out cheaper goods and does not care what damage they do in cutting
environmental corners.
https://en.wikipedia.org/wiki/Climate_change_in_China
China still supports the "common but differentiated responsibilities" principle, which
holds that since China is still developing, its abilities and capacities to reduce
emissions are comparatively lower than developed countries'. Therefore, its emissions
should not be required to decrease over time, but rather should be encouraged to increase
less over time until industrialization is farther along and reductions are feasible
In other words the global environment is going to continue to be ripped apart like a car
in a wrecking yard by China. "Industrialization is farther along" is obviously Chinese speak
for "when China is able to dominate the world with enormous productive capacity and we do not
even have to pay lip service any more".
In today's world, however, where great-power armed combat could possibly end in a
nuclear exchange and mutual annihilation, direct military conflict is a distinctly
unappealing option for all parties. Instead, governing elites have developed other means of
warfare -- economic, technological, and covert -- to achieve such strategic objectives.
Viewed this way, the United States is already in close to full combat mode with respect to
China.
No, the appeal of a real war will increase precipitously for any clear loser in the
economic competition who has a rapidly declining military advantage (especially in
thermonuclear first strike capacity due to proximity fuses and sub location tech), and we all
know who that is going to be. A shooting war will come, and the sooner it comes the
better for the whole world. Reassuring Russia that it will not be subjected to the same
treatment by the West at some point in the future will be the main problem inhibiting the
coming military take down (and nuking if necessary) of China.
As to bringing in Hindoos and Pakis into to the America-China conflict with a singular
example of the demand for defense related technology transfer by the former
India is a mediocrity but Pakistan is a nightmare for all concerned, given that after
imbibing religious mumbo jumbo from moronic Arabs, with which havocs were created in
Afghanistan via neoconnish America, now they are fellating uncircumcised Chinese for crumbs
the ungodly Chinese will play the idiotic Pakis like a fiddle to the detriment of the
West!
Negotiations with Beijing to address structural economic reforms are taking place on
a track that's separate from the talks about the quantity of American products the Chinese may
agree to buy to reduce the U.S. trade deficit, one of the people briefed on the matter said.
The Chinese have offered to ramp up purchases of American goods by $1.2 trillion over six
years, according to the person. It's still unclear how Beijing would follow through on those
purchases if retaliatory tariffs remained in place and other trading barriers aren't removed, the
person added. China bought $130 billion in U.S. goods in 2017, according to U.S. figures.
After several rounds of face-to-face meetings between U.S. and Chinese officials since last
year, the sides are now in regular contact via phone and video-conference to hammer out the
details of a deal, according to the person.
The U.S. Trade Representative's office said Thursday it will publish a notice in the Federal
Register delaying the increase of tariffs on Chinese imports until further notice. Trump had
previously planned to raise tariffs on March 1, but on Sunday dropped the threat amid progress at
the negotiating table.
Mars Descending? U.S. Security Alliances and the International Status of the Dollar
A
decade after the global financial crisis, the dollar continues to maintain its status as the
chief international currency. Possible alternatives such as the euro or renminbi lack the broad
financial markets that the U.S. possesses, and in the case of China the financial openness that
allows foreign investors to enter and exit at will. Any change in the dollar's predominance,
therefore, will likely occur in response to geopolitical factors.
Linda S. Goldberg and Robert Lerman of the Federal Reserve Bank of New York provide an
update on the dollar's various roles. The dollar remains the dominant reserve currency,
with a 63% share of global foreign exchange reserves, and serves as the anchor currency for
about 65% of those countries with fixed exchange rates. The dollar is also widely utilized for
private international transactions. It is used for the invoicing of 40% of the imports of
countries other than the U.S., and about half of all cross-border bank claims are denominated
in dollars.
This wide use of the dollar gives the U.S. government the ability to fund an increasing debt
burden at relatively low interest rates. Moreover, as pointed out by the New York
Times , the Trump administration can enforce its sanctions on countries such as Iran
and Venezuela because global banks cannot function without access to dollars. While European
leaders resent this dependence, they have yet to evolve a financial system that could serve as
a viable alternative.
The dollar's continued predominance may also reflect other factors. Barry Eichengreen of UC-Berkeley and Arnaud J. Mehl and
Livia Chitu of the European Central Bank have examined the effect of geopolitical factors
-- the "Mars hypothesis" -- versus pecuniary factors -- the "Mercury hypothesis" -- in
determining the currency composition of the international reserves of 19 countries during the
period of 1890-1913. Official reserves during this time could be held in the form of British
sterling, French francs, German marks, U.S. dollars and Dutch guilders.
The authors find evidence that both sets of factors played roles. For example, a military
alliance between a reserve issuing country and one that held reserves would boost the share of
the currency of the reserve issuer by almost 30% if there was a military alliance between these
nations. They conjecture that the reserve issuer may have used security guarantees to obtain
financing from the security-dependent nation, or to serve the role of financial center when the
allied country needed to borrow internationally.
Eichengreen, Mehl and Chitu then use their parameter estimates to measure by how much the
dollar share of the international reserves of nations that currently have security arrangements
with the U.S. would fall if such arrangements no longer existed. South Korea, for example,
currently holds 84% of its foreign reserves in dollars; this share would fall to 54% in the
absence of its security alliance with the U.S.
Similarly, the dollar component of German foreign exchange reserves would decline from 98% to
68%.
The dollar may be safe from replacement on economic grounds. But the
imminent shrinkage of the British financial sector due to the United Kingdom's withdrawal
from the European Union shows that political decisions follow their own logic, sometimes
without regard for the economic consequences. If the dollar lose some of its dominance, it may
be because of self-inflicted wounds.
"... While the Tea Party was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-, it represented a more authoritarian, right [wing] version of neoliberalism. ..."
"... Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering. Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. ..."
"... Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders' energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood" path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy. ..."
"... In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many concerned about the rise of U.S. fascism. ..."
"... We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism. ..."
"... While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the chance of a better world. They have not yet been offered one."' ..."
In Chapter 1, we traced the rise of our neoliberal conjuncture back to the crisis of liberalism during the late nineteenth and
early twentieth centuries, culminating in the Great Depression. During this period, huge transformations in capitalism proved impossible
to manage with classical laissez-faire approaches. Out of this crisis, two movements emerged, both of which would eventually shape
the course of the twentieth century and beyond. The first, and the one that became dominant in the aftermath of the crisis, was the
conjuncture of embedded liberalism. The crisis indicated that capitalism wrecked too much damage on the lives of ordinary citizens.
People (white workers and families, especially) warranted social protection from the volatilities and brutalities of capitalism.
The state's public function was expanded to include the provision of a more substantive social safety net, a web of protections for
people and a web of constraints on markets. The second response was the invention of neoliberalism. Deeply skeptical of the common-good
principles that undergirded the emerging social welfare state, neoliberals began organizing on the ground to develop a "new" liberal
govemmentality, one rooted less in laissez-faire principles and more in the generalization of competition and enterprise. They worked
to envision a new society premised on a new social ontology, that is, on new truths about the state, the market, and human beings.
Crucially, neoliberals also began building infrastructures and institutions for disseminating their new' knowledges and theories
(i.e., the Neoliberal Thought Collective), as well as organizing politically to build mass support for new policies (i.e., working
to unite anti-communists, Christian conservatives, and free marketers in common cause against the welfare state). When cracks in
embedded liberalism began to surface -- which is bound to happen with any moving political equilibrium -- neoliberals were there
with new stories and solutions, ready to make the world anew.
We are currently living through the crisis of neoliberalism. As I write this book, Donald Trump has recently secured the U.S.
presidency, prevailing in the national election over his Democratic opponent Hillary Clinton. Throughout the election, I couldn't
help but think back to the crisis of liberalism and the two responses that emerged. Similarly, after the Great Recession of 2008,
we've saw two responses emerge to challenge our unworkable status quo, which dispossesses so many people of vital resources for individual
and collective life. On the one hand, we witnessed the rise of Occupy Wall Street. While many continue to critique the movement for
its lack of leadership and a coherent political vision, Occupy was connected to burgeoning movements across the globe, and our current
political horizons have been undoubtedly shaped by the movement's success at repositioning class and economic inequality within our
political horizon. On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party
was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was
perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-,
it represented a more authoritarian, right [wing] version of neoliberalism.
Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering.
Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in
the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories of
good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election, Trump effectively
tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality, channeling political
anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism (corporate diversity,
political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie Sanders, Trump was a crisis
candidate.
Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders'
energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood"
path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy.
Universal health care. Free higher education. Fair trade. The repeal of Citizens United. Trump offered a different response to
the crisis. Like Sanders, he railed against global trade deals like NAFTA and the Trans-Pacific Partnership (TPP). However, Trump's
victory was fueled by right neoliberalism's culture of cruelty. While Sanders tapped into and mobilized desires for a more egalitarian
and democratic future, Trump's promise was nostalgic, making America "great again" -- putting the nation back on "top of the world,"
and implying a time when women were "in their place" as male property, and minorities and immigrants were controlled by the state.
Thus, what distinguished Trump's campaign from more traditional Republican campaigns was that it actively and explicitly pitted
one group's equality (white men) against everyone else's (immigrants, women, Muslims, minorities, etc.). As Catherine Rottenberg
suggests, Trump offered voters a choice between a multiracial society (where folks are increasingly disadvantaged and dispossessed)
and white supremacy (where white people would be back on top). However, "[w]hat he neglected to state," Rottenberg writes,
is that neoliberalism flourishes in societies where the playing field is already stacked against various segments of society,
and that it needs only a relatively small select group of capital-enhancing subjects, while everyone else is ultimately dispensable.
1
In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg
argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many
concerned about the rise of U.S. fascism.
We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left
neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested
in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right
and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political
philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism.
While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking
with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the
chance of a better world. They have not yet been offered one."'
Mark Fisher, the author of Capitalist Realism, put it this way:
The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness
of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately
great effect. The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under
capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.4
I think that, for the first time in the history of U.S. capitalism, the vast majority of people might sense the lie of liberal,
capitalist democracy. They feel anxious, unfree, disaffected. Fantasies of the good life have been shattered beyond repair for most
people. Trump and this hopefully brief triumph of right neoliberalism will soon lay this bare for everyone to see. Now, with Trump,
it is absolutely clear: the rich rule the world; we are all disposable; this is no democracy. The question becomes: How will we show
up for history? Will there be new stories, ideas, visions, and fantasies to attach to? How can we productively and meaningful intervene
in the crisis of neoliberalism? How can we "tear a hole in the grey curtain" and open up better worlds? How can we put what we've
learned to use and begin to imagine and build a world beyond living in competition? I hope our critical journey through the neoliberal
conjuncture has enabled you to begin to answer these questions.
More specifically, in recent decades, especially since the end of the Cold War, our common-good sensibilities have been channeled
into neoliberal platforms for social change and privatized action, funneling our political energies into brand culture and marketized
struggles for equality (e.g., charter schools, NGOs and non-profits, neoliberal antiracism and feminism). As a result, despite our
collective anger and disaffected consent, we find ourselves stuck in capitalist realism with no real alternative. Like the neoliberal
care of the self, we are trapped in a privatized mode of politics that relies on cruel optimism; we are attached, it seems, to politics
that inspire and motivate us to action, while keeping us living in competition.
To disrupt the game, we need to construct common political horizons against neoliberal hegemony. We need to use our common stories
and common reason to build common movements against precarity -- for within neoliberalism, precarity is what ultimately has the potential
to thread all of our lives together. Put differently, the ultimate fault line in the neoliberal conjiuicture is the way it subjects
us all to precarity and the biopolitics of disposability, thereby creating conditions of possibility for new coalitions across race,
gender, citizenship, sexuality, and class. Recognizing this potential for coalition in the face of precarization is the most pressing
task facing those who are yearning for a new world. The question is: How do we get there? How do we realize these coalitional potentialities
and materialize common horizons?
Ultimately, mapping the neoliberal conjuncture through everyday life in enterprise culture has not only provided some direction
in terms of what we need; it has also cultivated concrete and practical intellectual resources for political interv ention and social
interconnection -- a critical toolbox for living in common. More specifically, this book has sought to provide resources for thinking
and acting against the four Ds: resources for engaging in counter-conduct, modes of living that refuse, on one hand, to conduct one's
life according to the norm of enterprise, and on the other, to relate to others through the norm of competition. Indeed, we need
new ways of relating, interacting, and living as friends, lovers, workers, vulnerable bodies, and democratic people if we are to
write new stories, invent new govemmentalities, and build coalitions for new worlds.
Against Disimagination: Educated Hope and Affirmative Speculation
We need to stop turning inward, retreating into ourselves, and taking personal responsibility for our lives (a task which is ultimately
impossible). Enough with the disimagination machine! Let's start looking outward, not inward -- to the broader structures that undergird
our lives. Of course, we need to take care of ourselves; we must survive. But I firmly believe that we can do this in ways both big
and small, that transform neoliberal culture and its status-quo stories.
Here's the thing I tell my students all the time. You cannot escape neoliberalism. It is the air we breathe, the water in which
we swim. No job, practice of social activism, program of self-care, or relationship will be totally free from neoliberal impingements
and logics. There is no pure "outside" to get to or work from -- that's just the nature of the neoliberalism's totalizing cultural
power. But let's not forget that neoliberalism's totalizing cultural power is also a source of weakness. Potential for resistance
is everywhere, scattered throughout our everyday lives in enterprise culture. Our critical toolbox can help us identify these potentialities
and navigate and engage our conjuncture in ways that tear open up those new worlds we desire.
In other words, our critical perspective can help us move through the world with what Henry Giroux calls educated hope. Educated
hope means holding in tension the material realities of power and the contingency of history. This orientation of educated hope knows
very well what we're up against. However, in the face of seemingly totalizing power, it also knows that neoliberalism can never become
total because the future is open. Educated hope is what allows us to see the fault lines, fissures, and potentialities of the present
and emboldens us to think and work from that sliver of social space where we do have political agency and freedom to construct a
new world. Educated hope is what undoes the power of capitalist realism. It enables affirmative speculation (such as discussed in
Chapter 5), which does not try to hold the future to neoliberal horizons (that's cruel optimism!), but instead to affirm our commonalities
and the potentialities for the new worlds they signal. Affirmative speculation demands a different sort of risk calculation and management.
It senses how little we have to lose and how much we have to gain from knocking the hustle of our lives.
Against De-democratization: Organizing and Collective Coverning
We can think of educated hope and affirmative speculation as practices of what Wendy Brown calls "bare democracy" -- the basic
idea that ordinary' people like you and me should govern our lives in common, that we should critique and try to change our world,
especially the exploitative and oppressive structures of power that maintain social hierarchies and diminish lives. Neoliberal culture
works to stomp out capacities for bare democracy by transforming democratic desires and feelings into meritocratic desires and feelings.
In neoliberal culture, utopian sensibilities are directed away from the promise of collective utopian sensibilities are directed
away from the promise of collective governing to competing for equality.
We have to get back that democractic feeling! As Jeremy Gilbert taught us, disaffected consent is a post-democratic orientation.
We don't like our world, but we don't think we can do anything about it. So, how do we get back that democratic feeling? How do we
transform our disaffected consent into something new? As I suggested in the last chapter, we organize. Organizing is simply about
people coming together around a common horizon and working collectively to materialize it. In this way, organizing is based on the
idea of radical democracy, not liberal democracy. While the latter is based on formal and abstract rights guaranteed by the state,
radical democracy insists that people should directly make the decisions that impact their lives, security, and well-being. Radical
democracy is a practice of collective governing: it is about us hashing out, together in communities, what matters, and working in
common to build a world based on these new sensibilities.
The work of organizing is messy, often unsatisfying, and sometimes even scary. Organizing based on affirmative speculation and
coalition-building, furthermore, will have to be experimental and uncertain. As Lauren Berlant suggests, it means "embracing the
discomfort of affective experience in a truly open social life that no
one has ever experienced." Organizing through and for the common "requires more adaptable infrastructures. Keep forcing the existing
infrastructures to do what they don't know how to do. Make new ways to be local together, where local doesn't require a physical
neighborhood." 5 What Berlant is saying is that the work of bare democracy requires unlearning, and detaching from, our
current stories and infrastructures in order to see and make things work differently. Organizing for a new world is not easy -- and
there are no guarantees -- but it is the only way out of capitalist realism.
Getting back democratic feeling will at once require and help us lo move beyond the biopolitics of disposability and entrenched
systems of inequality. On one hand, organizing will never be enough if it is not animated by bare democracy, a sensibility that each
of us is equally important when it comes to the project of determining our lives in common. Our bodies, our hurts, our dreams, and
our desires matter regardless of our race, gender, sexuality, or citizenship, and regardless of how r much capital (economic,
social, or cultural) we have. Simply put, in a radical democracy, no one is disposable. This bare-democratic sense of equality must
be foundational to organizing and coalition-building. Otherwise, we will always and inevitably fall back into a world of inequality.
On the other hand, organizing and collective governing will deepen and enhance our sensibilities and capacities for radical equality.
In this context, the kind of self-enclosed individualism that empowers and underwrites the biopolitics of disposability melts away,
as we realize the interconnectedness of our lives and just how amazing it feels to
fail, we affirm our capacities for freedom, political intervention, social interconnection, and collective social doing.
Against Dispossession: Shared Security and Common Wealth
Thinking and acting against the biopolitics of disposability goes hand-in-hand with thinking and acting against dispossession.
Ultimately, when we really understand and feel ourselves in relationships of interconnection with others, we want for them as we
want for ourselves. Our lives and sensibilities of what is good and just are rooted in radical equality, not possessive or self-appreciating
individualism. Because we desire social security and protection, we also know others desire and deserve the same.
However, to really think and act against dispossession means not only advocating for shared security and social protection, but
also for a new society that is built on the egalitarian production and distribution of social wealth that we all produce. In this
sense, we can take Marx's critique of capitalism -- that wealth is produced collectively but appropriated individually -- to heart.
Capitalism was built on the idea that one class -- the owners of the means of production -- could exploit and profit from the collective
labors of everyone else (those who do not own and thus have to work), albeit in very different ways depending on race, gender, or
citizenship. This meant that, for workers of all stripes, their lives existed not for themselves, but for others (the appropriating
class), and that regardless of what we own as consumers, we are not really free or equal in that bare-democratic sense of the word.
If we want to be really free, we need to construct new material and affective social infrastructures for our common wealth. In
these new infrastructures, wealth must not be reduced to economic value; it must be rooted in social value. Here, the production
of wealth does not exist as a separate sphere from the reproduction of our lives. In other words, new infrastructures, based on the
idea of common wealth, will not be set up to exploit our labor, dispossess our communities, or to divide our lives. Rather, they
will work to provide collective social resources and care so that we may all be free to pursue happiness, create beautiful and/or
useful things, and to realize our potential within a social world of living in common. Crucially, to create the conditions for these
new, democratic forms of freedom rooted in radical equality, we need to find ways to refuse and exit the financial networks of Empire
and the dispossessions of creditocracy, building new systems that invite everyone to participate in the ongoing production of new
worlds and the sharing of the wealth that we produce in common.
It's not up to me to tell you exactly where to look, but I assure you that potentialities for these new worlds are everywhere
around you.
What is this amazingly accurate indicator of a coming recession? The unemployment rate
trend. I first came across this idea on the Philosophical Economics blog ,
whose author has adopted the pseudonym Jesse Livermore, in honor of the 20th-century
investor.
This Livermore conducted a rigorous analysis in search of the perfect recession indicator.
He evaluated several potential signals, including real retail sales growth, industrial
production growth, real S&P 500 earnings-per-share growth, employment growth, real personal
income growth, and housing starts growth. While some of these indicators were promising, none
of them compared to the predictive ability of the unemployment rate trend.
Note that it's the unemployment rate trend that's the great predictor of a recession and not
the unemployment rate itself. The unemployment rate is a lagging indicator of a recession. In
other words, the rate goes up significantly only after a recession is in effect.
But before the unemployment rate moves significantly higher, the unemployment rate trend
must change from downward to upward. And that's what Livermore found was a great leading
indicator, or predictor, of an economic recession. This change in trend is determined by simply
seeing when the latest unemployment rate is higher than the 12-month simple moving average of
previous monthly unemployment rates.
So how well does this predictor work? Over the last 70 years, a change in the unemployment
rate trend predicted every recession that occurred. In two cases, the recession came
immediately after the change in the unemployment rate trend. In other cases, the trend changed
several months in advance of the start of a recession.
The U.S. hasn't experienced an economic recession since the Great Recession of 2008 and
2009. Unemployment rates remain low. However, the U.S. unemployment rate for January, which was
reported in early February, moved higher than the 12-month simple moving average of previous
monthly unemployment rates.
The subtle signal that has proven to be accurate at predicting the onset of a recession has
flashed. And if a recession is indeed on the way, the bull market will soon end.
One
drawback
Is there a catch? Yep. While the unemployment rate trend has been uncannily accurate at
indicating recessions, it also sometimes provides a false signal. In other words, the trend
changes but a recession doesn't occur.
This scenario happened as recently as September 2016. The unemployment rate rose above the
12-month simple moving average for previous unemployment rates for one month. A recession
didn't ensue, though, and the bull market kept on trucking.
Late last year, the S&P 500 ( ^GSPC ) tumbled 20% from its Oct. 3 intraday high
to its Dec. 24 intraday. And despite the market's sharp 17% rally from those lows, Bond king
Jeffrey Gundlach says we're in a bear market and that we could see new lows.
"A bear market has nothing to do with this 20% arbitrary thing," Gundlach, the CEO of $121
billion DoubleLine Capital, told Yahoo Finance in an exclusive interview. "It has to do with
something crazy happening first, and then the crazy thing gives it up. And yet more traditional
things continue to march on. But one by one they give it up." December's dip buyers will
sell at lower levels
The market has since been saved by the Fed's pivot to be "patient" on monetary policy and
the subsequent rally in the bond market, all of which has kept interest rates low. For now.
"If the long end of rates starts to rise, as I expect, and if we break through 3.50% on the
30-year, I think it's over," Gundlach added. "Because the competition from the bond market,
particularly against a climate of limiting one of the engines of stock price appreciation,
which is buybacks , is thought to be potentially in jeopardy."
Gundlach believes that investors who bought during December's dip will likely end up selling
at a lower point.
"... The CAPE aims to correct for those distortions. It smooths the denominator by using not current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting that when stocks are this expensive, a downturn may be at hand. ..."
"... is 36.1% higher ..."
"... Here's the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2 points (3.2% versus 2%). That's a reversal of long-term trends. ..."
"... Right now, earnings constitute an unusually higher share of national income. That's because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum. ..."
"... t's often overlooked that although profits grow in line with GDP, which by the way, is now expanding a lot more slowly than two decades ago, earnings per share ..."
"... The reason is dilution. Companies are constantly issuing new shares, for everything from expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are also challenging incumbents, raising the number of shares that divide up an industry's profits faster than those profits are increasing. Since total earnings grow with GDP, and the share count grows faster than profits, it's mathematically impossible for EPS growth to consistently rise in double digits, although it does over brief periods––followed by intervals of zero or minuscule increases. ..."
"... The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former. and that profits are bound to stagnate at best, and more likely decline. ..."
"... In an investing world dominated by hype, the CAPE is a rare truth-teller ..."
For the past half-decade, a controversial yardstick called the CAPE has been flashing red,
warning that stock prices are extremely rich, and vulnerable to a sharp correction. And over
the same period, the Wall Street bulls and a number of academics led by Jeremy Siegel of the
Wharton School, have been claiming that CAPE is a kind of fun house mirror that makes
reasonable valuations appear grotesquely stretched.
CAPE, an acronym "Cyclically-adjusted price-to-earnings ratio," was developed by economist
Robert Shiller of Yale to correct for a flaw in judging where stock prices stand on the
continuum from dirt cheap to highly expensive based on the current P/E ratio. The problem:
Reported earnings careen from lofty peaks to deep troughs, so that when they're in a funk,
multiples jump so high that shares appear overpriced when they're really reasonable, and when
profits explode, they can skew the P/E by creating the false signal that they're a great
buy.
The CAPE aims to correct for those distortions. It smooths the denominator by using not
current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for
inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous
periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting
that when stocks are this expensive, a downturn may be at hand.
The CAPE's critics argue that its adjusted PE is highly inflated, because the past decade
includes a portion of the financial crisis that decimated earnings. That period was so unusual,
their thinking goes, that it makes the ten-year average denominator much too low, producing
what looks like a dangerous number when valuations are actually reasonable by historical norms.
They point to the traditional P/E based on 12-month trailing, GAAP profits. By that yardstick
today's multiple is 19.7, a touch above the 20-year average of 19, though exceeding the
century-long norm of around 16.
I've run some numbers, and my analysis indicates that the CAPE doesn't suffer from those
alleged shortcoming, and presents a much truer picture than today's seemingly reassuring P/E.
Here's why. Contrary to its opponents' assertions, the CAPE's earnings number is not
artificially depressed. I calculated ten year average of real profits for six decade-long
periods starting in February of 1959 and ending today, (the last one running from 2/2009 to
2/2019). On average, the adjusted earnings number rose 22% from one period to the next. The
biggest leap came from 1999 to 2009, when the 10-year average of real earnings advanced
42%.
So did profits since then languish to the point where the current CAPE figure is
unrealistically big? Not at all. The Shiller profit number of $91 per share is 36.1%
higher than the reading for the 1999 to 2009 period, when it had surged a record 40%-plus
over the preceding decade. If anything, today's denominator looks high, meaning the CAPE of
almost 30 is at least reasonable, and if anything overstates what today's investors will reap
from each dollar they've invested in stocks.
Indeed, in the latest ten-year span, adjusted profits have waxed at a 3.2% annual pace,
slightly below the 3.6% from 1999 to 2009, but far above the average of 1.6% from 1959 to
1999.
Here's the problem that the CAPE highlights. Earnings in the past two decades have been
far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2
points (3.2% versus 2%). That's a reversal of long-term trends. Over our entire 60 year
period, GDP rose at 3.3% annually, and profits trailed by 1.3 points, advancing at just 2%. So
the rationale that P/Es are modest is based on the assumption that today's earnings aren't
unusually high at all, and should continue growing from here, on a trajectory that outstrips
national income.
It won't happen. It's true that total corporate profits follow GDP over the long term,
though they fluctuate above and below that benchmark along the way. Right now, earnings
constitute an unusually higher share of national income. That's because record-low interest
rates have restrained cost of borrowing for the past several years, and companies have managed
to produce more cars, steel and semiconductors while shedding workers and holding raises to a
minimum.
Now, rates are rising and so it pay and employment, forces that will crimp profits. I
t's often overlooked that although profits grow in line with GDP, which by the way, is now
expanding a lot more slowly than two decades ago, earnings per share grow a lot
slower, as I've shown, lagging by 1.3 points over the past six decades.
An influential study from 2003 by Rob Arnott, founder of Research Affiliates, and co-author
William J. Bernstein, found that EPS typically trails overall profit and economic growth by
even more, an estimated 2 points a year.
The reason is dilution. Companies are constantly issuing new shares, for everything from
expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are
also challenging incumbents, raising the number of shares that divide up an industry's profits
faster than those profits are increasing. Since total earnings grow with GDP, and the share
count grows faster than profits, it's mathematically impossible for EPS growth to consistently
rise in double digits, although it does over brief periods––followed by intervals
of zero or minuscule increases.
The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably
high profits are artificially depressing the former. and that profits are bound to stagnate at
best, and more likely decline. The retreat appears to have already started. The Wall
Street "consensus" Wall Street earnings forecast compiled by FactSet calls for an EPS decline
of 1.7% for the first quarter of 2017, and zero inflation-adjusted gains for the first nine
months of the year.
In an investing world dominated by hype, the CAPE is a rare truth-teller .
Oil climbed as Saudi Arabia was said to curtail some output from its Safaniyah offshore oil
field, the largest in the world.
Futures in New York rose as much as 2.2 percent Friday, pushing toward its biggest weekly
gain in a month. Saudi Arabia was said to trim supply from Safaniyah to repair a damaged power
cable, while Russia plans to accelerate the output cuts it agreed to with OPEC+.
... ... ...
Saudi Arabian Oil Co.'s Safaniyah field has the capacity to pump 1.2 million to 1.5 million
barrels of crude a day, and is a major component of the Arab Heavy grade. The cable was damaged
in an accident about two weeks ago and repairs are expected to be completed by early March,
people with knowledge of the matter said.
IEA is one-half EU marketing agency with the explisit goal to keep oil price low, and one
half a research organization. In different reports one role can be prevalent.
The U.S. Energy Information Administration (EIA) estimates that margins for U.S. Gulf Coast
refiners have declined to the lowest levels since late 2014, based on recent price trends in
certain grades of crude oil and petroleum products. https://www.eia.gov/petroleum/weekly/
Comment on Yahoo are absolutly idiotic. I have dount only a couple more or less reasonable
comment in the first 48. This level of incompetence and brainwashing is simply amazing.
The "call" on OPEC crude is now forecast at 30.7 million bpd in 2019, down from the IEA's
last estimate of 31.6 million bpd in January.
U.S. sanctions on Iran and Venezuela have choked off supply of the heavier, more sour crude
that tends to yield larger volumes of higher-value distillates, as opposed to gasoline. The
move has created disruption for some refiners, but has not led to a dramatic increase in the
oil price in 2019.
"In terms of crude oil quantity, markets may be able to adjust after initial logistical
dislocations (from Venezuela sanctions)", the Paris-based IEA said.
"Stocks in most markets are currently ample and ... there is more spare production capacity
available."
Venezuela's production has almost halved in two years to 1.17 million bpd, as an economic
crisis decimated its energy industry and U.S. sanctions have now crippled its exports.
Brent crude futures have risen 20 percent in 2019 to around $63 a barrel, but most of that
increase took place in early January. The price has largely plateaued since then, in spite of
the subsequent imposition of U.S. sanctions.
"Oil prices have not increased alarmingly because the market is still working off the
surpluses built up in the second half of 2018," the IEA said.
"In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than
Venezuela's current output. In quality terms, it is more complicated. Quality
matters."
dlider909, 7 hours ago Story will change in 30 days.
Robert, 7 hours ago ... ... ...
What this report fails to do is to pay the appropriate homage to American oilfield
roughnecks...
ralf
7 hours ago Nonsense. I see military action against Venezuela soon, just because of
our thirst for oil.
Talk about shale is like talk about Moon conquests, not supported by hard facts.
"... By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an "anti-poverty campaigner and tax expert". He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics . He is a member of the Progressive Economy Forum. Originally published at Tax Research UK ..."
"... Like much of political economy, this is a story of power. In the first instance this was professional power. The big firms did, as professional institutes developed, have the means to dominate them. They were in the capital cities where those institutes were usually based. They had the means to release partner time to manage those institutes' affairs. They had the motive to do so. That was ring-fencing their profit. The big firms, then, used their power to set the rules for their professions. ..."
"... Have been reading The Billion-Dollar Whale about the 1MDB mega-heist, facilitated by auditors and bank compliance officers at every step as the Malaysian people were fleeced of billions to pay for sickening rounds of parties, yachts, champagne baths, jewelry, gambling, and garish mansions. "Odious debt" if ever there were. ..."
"... Good topic to cover. The accounting firms are right up there with the ratings agencies as 'high priests' of capital whose blessing is required if your are to be welcome into the halls of power. ..."
A
Study in Professional Power: Why Do the Big 4 Accountants Survive? Posted on
February
13, 2019 by Yves Smith Yves here. While many
people go into "my eyes glaze over" mode when the topic of accountants comes up, you ignore them at your peril. In the US, boards
and executives escape liability if they can say they were acting on the advice of professionals. Lawyers are the main liability shields
for corporate bigwigs, but pliant accountants are also very helpful.
And why don't shareholders who've been hurt due to professionals signing off on crooked corporate conduct sue? They can't. As
we wrote in ECONNED:
Legislators also need to restore secondary liability. Attentive readers may recall that a Supreme Court decision in 1994 disallowed
suits against advisors like accountants and lawyers for aiding and abetting frauds. In other words, a plaintiff could only file
a claim against the party that had fleeced him; he could not seek recourse against those who had made the fraud possible, say,
accounting firms that prepared misleading financial statements. That 1994 decision flew in the face of sixty years of court decisions,
practices in criminal law (the guy who drives the car for a bank robber is an accessory), and common sense. Reinstituting secondary
liability would make it more difficult to engage in shoddy practices.
In other words, the only party that can sue an accounting firm for engaging in fraudulent conduct is his immediate client .who
almost certainly is in on the con. Lovely.
By Richard Murphy, a chartered accountant and a political economist. He has been
described by the Guardian newspaper
as an "anti-poverty campaigner and tax expert". He is Professor of Practice in International Political Economy at City University,
London and Director of Tax Research UK. He is a non-executive director of
Cambridge Econometrics . He is a member of the
Progressive Economy Forum. Originally published at
Tax Research UK
I was asked very recently why it was that the big 4 firms of accountants survive. This is an issue I have been considering with
Len Seabrooke and Saila Stausholm at Copenhagen Business School. The academic paper on the subject is in progress. Let me offer a
plain English perspective for now.
Like much of political economy, this is a story of power. In the first instance this was professional power. The big firms
did, as professional institutes developed, have the means to dominate them. They were in the capital cities where those institutes
were usually based. They had the means to release partner time to manage those institutes' affairs. They had the motive to do so.
That was ring-fencing their profit. The big firms, then, used their power to set the rules for their professions.
Leading the way at a technical level as well, in a profession lead from these firms and not by either government or academia,
these firms also innovated in ways that ring fenced their market. I suspect that this may have provided the strongest incentive for
the creation of consolidated accounts – which were not a universal requirement for group companies until the 1940s. When consolidated
accounts required that multinational groups be treated as single entities their auditors, who I strongly suspect sold its benefit
to governments who then made it a legal requirement, could in turn demand that they were the sole group auditor. The global spread
of a select few firms was guaranteed. The rise of the global firm was the consequence.
These firms succeeded. The firms then sold consultancy advising other companies to copy the success of their global company clients
by also becoming global using a structure that guaranteed market growth in auditing for the big accountants. The market for the big
audit firms was reinforced.
As this was happening in the 50s and 60s another phenomena was growing, which was the tax haven. Slowly at first, but steadily
as the British empire (in particular) receded, the opportunity to hide nefarious activity, as well as profits and so tax bills in
such places, grew. Did the big firms go there before their clients? Or did they have to go because some clients had already gone?
It's a question to be answered. But if the firms were to maintain their demand that they must be sole auditor, worldwide, at least
in name, then if the global entities they were helping spawn moved to tax havens then they too had to go there.
And they did not miss the opportunity. Already used to lobbying and forming opinion on legislation in the countries from which
they originated, and well aware of the coercive power this gave them over their clients, the governments of new tax havens must have
seemed easy pickings to the big accountants of the day. And so they were. Whole rafts of legislation were influenced by such firms
as they peddled in tax havens the secrecy that opposed the transparency they sold elsewhere. The opportunities must have seemed unlimited.
But the timeline has now reached the 70s, and life was not so good for accountants. Airlines failed back then, with people noticing
that their accounts gave no hint that they owned or used planes. In contrast, aeroplane engine makers were claiming that they had
value when the products they were developing at enormous cost for the time were unlikely to push anything into the sky. Accounts
were not providing a true and fair view.
In the face of significant threats to the profession from an outraged public (well, at least those parts losing money as a result
of these failings) the big firms reclaimed the initiative. Accounting standards – supposedly written in the public interest and for
the benefit of all stakeholders – were created and governments that were too trusting by half gave them the force of law. The power
of the big accountants was reinforced, rather than diminished, by the accounting debacles of that era. Now they could write the rules;
say they had the power of law; force them onto their clients and the rest of the profession; and in the process pull themselves ahead
of the competing pack. They could do that by advising on the very rules they had created; by claiming to be the only people who could
audit them; and by making sure that because some only applied to larger enterprises the knowledge of their use did not trickle down
into the profession as a whole.
And they exploited this to the full. The era of capital market liberalisation and globalisation simply provided greater opportunity
to do this, whilst the new and more relaxed ethics of this period promoted the use of tax havens in ways previously unforeseen, and
the firms jumped with both feet into this market as well, producing tax avoidance schemes by the bucket load.
And things only got better. Although the accountants failed miserably to deliver what they promised when accounting standards
were first developed, because they entirely ignored the needs of almost all users of accounts, their capture of the process was so
complete that when the European Union was looking for a set of single accounting standards they adopted the Big 4 created International
Financial Reporting Standards as quasi law, which has now led to their adoption in more than a hundred countries worldwide, with
a parallel process taking place in the USA, Japan and other influential markets. The ability of these firms to control the world's
view of capitalism appeared complete, and they reaped the rewards.
And then some cracks appeared. There was a global financial crisis, which accounts had not anticipated. And there was a global
loss of tax revenue, which accountants appear to have facilitated through tax havens. And rather annoying people pointed out both
failings. You would have thought that the fundamental failure of their product, in the form of accounting standards, and the fundamental
failure of their ethics, evidenced by their use of tax havens and sale of tax avoidance products, would have done for these firms.
Nothing, however, could be further from the truth, hence the question I was asked. How are they surviving?
Let me reiterate how we got here, because the clue is in the process.
They captured the profession, long ago.
Then they captured government, and used it to create laws that suited their purposes in influential countries like the USA
and UK.
They used this law to reinforce their own audit market.
And as a result they also created the image of the modern firm, which they then sold to aspiring rivals, who were required
to replicate it, and so provide yet more fee income to these firms.
In the process they captured the tax havens and their legislatures, and used them for their own purposes.
So complete was the capture that their accounting standards became de facto law. And when the EU wanted to extend that right
to create de facto law with regard to accounting standards, the big accountants were again given the chance to write the rules.
The result is that the big four are now integral to company law, auditing law, accounting law, the law of many tax havens, the
structure of the accounting profession and the structure of many of its clients. Their desire to protect their ability to make supernormal
profit has created a situation where the entire process of law surrounding companies has been captured for their benefit, and the
behaviour of whole markets has been distorted in their favour as a result.
But what they did to achieve this result was display an ability to innovate. Whenever under criticism, they delivered an alternative.
When their ethics were questioned, they produced a supposed new standard. When the market demand that they change, for example post
Enron, that's what they appeared to do, enough to keep people at bay. And all the time, chameleon like, they emerged from each threat
with their power reinforced because they are so integral to the process of corporate regulation that government has effectively abandoned
to them.
That is how they have survived. But that also suggests how the process is changed. Government has to reclaim this process.
It has to audit.
It has to create company law.
It has to say for whose benefit company law is created, and that is not the accountants any more.
And it has to determine who will write the alternatives. None of that will be easy. But with adequate investment it is entirely
possible. These firms have captured significant parts of the processes of capitalism for their own ends. If we are to still have
mixed economies, and I think we should, then this process of capture has to be disrupted, in the public interest. It is only by doing
so that the power of the Big 4 will be challenged. Nothing else will change it.
That's the issue we face. And since there is no challenge right now the Big 4 will go on. And on. Which is right now just as they
want it.
Have been reading The Billion-Dollar Whale about the 1MDB mega-heist, facilitated by auditors and bank compliance officers
at every step as the Malaysian people were fleeced of billions to pay for sickening rounds of parties, yachts, champagne baths,
jewelry, gambling, and garish mansions. "Odious debt" if ever there were.
"In the process they captured the tax havens and their legislatures, and used them for their own purposes." That is certainly
the case in Mauritius where the former deputy PM and finance minister, Xavier-Luc Duval, worked for KPMG in London and Port-Louis.
In the UK, Patricia Hewitt left the cabinet and Commons to head public policy and affairs for one of the Big Four.
It's not just the legislatures, the former CFO to the royal family, Sir Michael Peat,was senior partner at KPMG. So was his
great grandfather, a scion of the Barclay banking family and founder of Peat Marwick. Former KPMG employees hold and have held
senior regulatory positions in the UK. KPMG seems to be the go to firm.
2. Cape Town HQD and dual listed in Frankfurt and Joburg, retailer Steinhoff International has shed over 90% of its market
value due to an "accounting scandal" (with ordinary pensioners losing billions in the process).
3. The Guptas, through their companies and aided by their man Jacob Zuma as state president, brazenly looted state coffers
on a massive scale.
As the enablers-in-chief, KPMG is woven into the common thread running across all these scandals. Not to worry though, they've
thrown a few executives under the bus and are currently on a charm offensive reminding the public just how ethical a bunch they
all are in spite of providing cover for these nefarious activities and will surely emerge from this with their "power reinforced".
PS: Steinhoff has set up an "ethics hotline" run by who? KPMG, wonders truly never cease
I know Steinhoff well from my time at HSBC in Johannesburg and London, 2003 – 6. It had yet to become the plaything of Wiese.
KPMG is similar woven into UK scandals.
You are right to use the term "enabler in chief". It's the entire professional services industry. Law firms, too. The UK Big
Four are now setting up legal, advertising and corporate finance practices.
I was at the Blue Eagle, soon to be ABSA red in the rest of Africa, from 2014 – 6. A friend was fired from the nest after querying
why one of the Big Four was hired to manage its client on boarding remediation at a higher cost and on a longer timescale than
her team could do. The management wanted the Big Four as a firewall. Ironically, she joined one of the Big Four a few months later.
Her settlement, which included a gagging order, precluded her from working for six months.
This is a topic that gets raised now and them (more often recently) in the UK – that auditors/accountants should bear responsibility
for fraud etc., and should not be just mindless box tickers.
A question for those of us not in the know. With Neoliberalism you can say that it has an intellectual back-office with places
like the Chicago school of economics. Is there an intellectual back-office of sorts for accountancy that enable these Big Four
to justify their accountancy rules as well? Or do they get to make it up as they go along?
Having the government do audits will make things worse. In the US, the PCAOB is the Big Four's cartel enforcer. The PCAOB should
be dissolved and the law changed to facilitate suits against CPAs. Let the plaintiff's bar discipline the CPA profession.
Uncle Sam had the FED create stress tests. Why? To convince the public the FED had things under control and the banking system
is sound. Why would government audits be better than the stress tests?
Uncle Sam could break up the Big Four into the not so sweet 16. Will it? Or does the Big Four do exactly what Uncle Sam wants?
Are the "problems" we see, feature or bug?
Yes, the plaintiffs bar worked very well in my early days as a CPA. Particularly because CPAs, like other professionals, had
PERSONAL liability and could not hide behind the corporate wall. This is one of those things that worked very well in real life
but someone (if it wasn't economists it was persons of the same ilk) proved it was theoretically impossible. Hence, all professionals
are now corporations where before they weren't even allowed to be called a business. From the perspective of a professional accountant
with years of watching how the system works we are, ironically, failing because of accountability. We have a smoothly functioning
form of capitalism that manifests in "Heads I win, tails you lose". That fundamental principal has been ignored from the late
'70s to today at our extreme peril culminating in the GFC where it was taken to the extreme of "Heads I win, tails I win more
and you lose more.
Good topic to cover. The accounting firms are right up there with the ratings agencies as 'high priests' of capital whose
blessing is required if your are to be welcome into the halls of power.
For anyone interested, NN Taleb writes eloquently about two subjects which are germane: experts and skin in the game, for the
same reasons as the author of this piece. The Big Four are so-called experts and they have no skin in the game. This as Taleb,
makes us all fools who have been hoodwinked because failure to understand that abuses of these two issues is what has ruined capitalism
in our lifetimes. Like the frog put in a pot of water which is slowly heated, I watched this happen over my career. It is our
formerly functioning capitalist system that is the frog in the water.
Thanks for this. There have always been some accounting practices that were supposedly "Generally Accepted" that made me scratch
my head as they didn't seem to lead to any greater transparency, and in fact often quite the opposite.
Saudi Arabia planning to drop March crude output by more than a half a million barrels per
day below its initial pledge.
... ... ...
OPEC said on Tuesday it had reduced oil production almost 800,000 bpd in January to 30.81
million bpd under its voluntary global supply pact.
Saudi Arabia Energy Minister Khalid al-Falih told the Financial Times that the kingdom would
reduce cut production to about 9.8 million bpd in March to bolster oil prices.
Microsoft co-founder Bill Gates does not think the way
to increase U.S. tax
revenue is through policies like raising the tax rate on the wealthy to 70 percent – as
has been floated by some Democratic lawmakers like New York Rep. Alexandria Ocasio-Cortez.
During a podcast interview with
The Verge , Gates responded to a question about whether raising the top rate to 70 percent
in order to fund social programs – like infrastructure initiatives – appeals to him
by saying government can be more effective in running social programs, but that's not the best
way to raise revenue.
"You finally have some politicians who are so extreme that I'd say, 'No, that's even
beyond,'" Gates said. "You do start to create tax dodging and disincentives, and an incentive
to have the income show up in other countries and things."
Gates added that the country's richest people often don't pay the highest rate because their
wealth doesn't always show up as income, it can be in the value of their stock, for
example.
"So it's a misfocus," he added. "If you focus on that, you're missing the picture."
The billionaire businessman, however, does believe there are ways to make the current tax
code more progressive. Some of those ways include more progressive policies regarding the
estate tax, the tax on capital, or reforming FICA and Social Security taxes. Independent
Vermont Sen. Bernie Sanders recently released a proposal to expand the estate tax to a rate of
77
percent for those passing on assets in excess of $1 billion.
Bill Gates also called modern
monetary theory (MMT) – which asserts that because the government controls its own
currency, there is no need to worry about balancing the budget – "some crazy talk."
Ocasio-Cortez recently indicated she was open to supporting MMT.
Gates is one of the richest people in the world. He has said, despite the fact that he has
paid more in taxes than most, he should be
paying more .
Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an
unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten
supply of medium to heavy oil, traders and analysts said.
Heavier grades, mainly produced in the Middle East, Canada and Latin America, typically have
a high sulphur content and are usually cheaper than Brent, the benchmark for lighter oil in the
Atlantic Basin.
While U.S. politicians from both parties have given standing ovations for the
U.S. oil and gas industry , investors appear to be losing their enthusiasm. The so-called
shale revolution, the fracking miracle, may have resulted in record oil and gas production in
North America, but the real miracle -- in which shale companies make money fracking that oil
and gas -- has yet to occur.
This 20 year old satire looks like it was written yesterday...
Notable quotes:
"... In the past, the underworld was ill-equipped to handle the new breed of sinners flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales representatives, and vast hordes of pony-tailed entertainment-industry executives ..."
"... Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of Emotionally Manipulative Home Shopping Network Products. ..."
"... condemned TV-exercise-show personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced to exercise for centuries on end ..."
"... In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of verbal abuse ..."
"... "In life, I was a Salomon Brothers investment banker," one flame-blackened shade told reporters. "When I arrived here, they didn't know what to do with me. They put me in with those condemned to walk backwards with their heads turned all the way around on their necks, for the crime of attempting to see the future. But then I sent a couple of fruit baskets to the right people, and in no time flat, I secured a cushy spot for myself in the first circle of the Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a goddamn woman ever since." ..."
After nearly four years of construction at an estimated cost of 750 million souls,
Corpadverticus, the new 10th circle of Hell, finally opened its doors Monday.
Tenth Circle Added To Rapidly Growing Hell
The Blockbuster Video-sponsored circle, located in Nether Hell between the former eighth and
ninth levels of Malebolge and Cocytus, is expected to greatly alleviate the overcrowding
problems that have plagued the infernal underworld in recent years. The circle is the first
added to Hell in its countless-millennia history.
"A nightmarishly large glut of condemned spirits in recent years necessitated the expansion
of Hell," inferno spokesperson Antedeus said. "The traditional nine-tiered system had grown
insufficient to accommodate the exponentially rising numbers of Hellbound."
Adding to the need for expansion, Antedeus said, was the fact that a majority of the new
arrivals possessed souls far more evil than the original nine circles were equipped to handle.
"Demographers, advertising executives, tobacco lobbyists, monopoly-law experts retained by
major corporations, and creators of office-based sitcoms–these new arrivals represent a
wave of spiritual decay and horror the likes of which Hell has never before seen," Antedeus
said.
Despite the need for expansion, the plan faced considerable resistance, largely due to the
considerable costs of insuring construction projects within the Kingdom Of Lies. Opposition
also came from Hell purists concerned about the detrimental effect a tenth level would have on
the intricate numerology of Hell's meticulously arranged allegorical structure. In 1994,
however, funding was finally secured in a deal brokered between Blockbuster CEO Wayne Huizenga
and Satan himself.
Prior to the construction of the tenth circle, many among the new wave of sinners had been
placed in such circles as Hoarders and Squanderers, Sowers of Discord, Flatterers and Seducers,
Violent Against Art, and Hypocrites. Hell authorities, however, say that the new level, the
Circle of Total Bastards, located at the site of the former Well of Giants just above the
Frozen Lake at Hell's center, better suits their insidious brand of evil.
Frigax The Vile, a leading demonic presence, is one of the most vocal supporters of the new
circle.
" In the past, the underworld was ill-equipped to handle the new breed of sinners
flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales
representatives, and vast hordes of pony-tailed entertainment-industry executives
rollerblading and talking on miniaturized cell-phones at the same time. But now, we've finally
got the sort of top-notch Pits of Doom necessary to give such repellent abominations the
quality boilings they deserve."
Pausing to tear off the limbs of an Access Hollywood host, Frigax added, "We're all
tremendously excited about the many brand-new forms of torture and eternal pain this new
level's state-of-the-art facilities will make possible."
Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending
Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of
Emotionally Manipulative Home Shopping Network Products.
The Circle also features a Hall of Aerobics, where condemned TV-exercise-show
personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced
to exercise for centuries on end , covered in vomit and prodded with the distended ribs of
skeletal, anorexic demons, accompanied by an unending, ear-splittingly loud dance-remix version
of the 1988 Rick Astley hit "Together Forever."
In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated
Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of
verbal abuse from their former subservients as crows descend from trees to peck at their
eyes. In one of the deepest and most profane portions of the circle, unspeakable acts are said
to be committed with a mail-order Roly-Kit.
"In life, I was a Salomon Brothers investment banker," one flame-blackened shade told
reporters. "When I arrived here, they didn't know what to do with me. They put me in with those
condemned to walk backwards with their heads turned all the way around on their necks, for the
crime of attempting to see the future. But then I sent a couple of fruit baskets to the right
people, and in no time flat, I secured a cushy spot for myself in the first circle of the
Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and
transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a
goddamn woman ever since."
His face contorted in the Misery of the Damned, a Disney lawyer said: "It's hell
here–there are no executive lounges, I can't get any decent risotto, and the suit I have
to wear is a cheap Brooks Brothers knock-off. I'm beeped every 30 seconds, and there's no way
to return the calls. Plus, I'm being boiled upside down in lard while jackals gnaw at the soles
of my feet. If I could just reach the fax machine on that nearby rock, I could contact some
well-placed associates and work something out, but it's just out of my grasp, and it's out of
ink and constantly blinking the message, 'Replace Toner Cartridge, Replace Toner Cartridge,
Replace Toner Cartridge.'"
He then resumed screaming in agony.
Grogar The Malefic, a Captain in Hell's elite Demon Corps and supervisor in charge of
admissions for the new circle, said Hell's future looks bright, thanks to the new circle.
"Things are definitely looking up," Grogar said. "We're now far better equipped, and we're
ready to take on the most Unholy Atrocities humanity has to offer."
"We're really on the grow down here," Grogar added. "This is an exciting time to be in
Hell."
No trade deal can dictate our relationship with China
By Lawrence H. Summers - Washington Post
As the United States and China continue to joust over trade and technology, the U.S.
policy debate contrasts two views of the primary problem.
A first view expressed often in President Trump's tweets locates the key issue in the
bilateral trade deficit that the United States chronically runs with China. On this theory of
the problem, a solution is relatively easy: The Chinese could rearrange their imports of
soybeans, fossil fuels and other products so more of them come from the United States, while
countries now supplying China could export instead to nations now importing from the United
States. This is what the Chinese keep offering since it means almost no real change in their
economy. Neither levels of employment, output or total trade deficits and surpluses are
likely to change much in either the United States or China.
A second view, held by more serious alarmists about the U.S.-China relationship, such as
U.S. Trade Representative Robert E. Lighthizer, emphasizes problematic Chinese practices in
key technological sectors. These range from theft of U.S. technologies to requirements that
U.S. firms wishing to do business in China -- chiefly in the development of key technologies,
such as artificial intelligence -- must form joint ventures with Chinese firms, especially
those with connections to the Chinese government.
Such technological alarmists in and out of the administration hold that we can wall off
U.S. technologies with sufficiently aggressive policies so China cannot steal them, or that
we can pressure China to the point where it will give up government efforts at industrial
leadership. Neither of these prospects is realistic.
In many ways, U.S. concerns over China and technology parallel concerns over the Soviet
Union in the post-Sputnik missile gap period just before President John F. Kennedy's election
in 1960. Or over Japan in the late 1980s and early 1990s, when it was often joked that "the
Cold War is over and Japan won."
When atomic weapons were our most sensitive military secret, their creation required
extensive sophisticated infrastructure. Yet the United States and Russia essentially had no
normal interchange, so we were able to maintain a lead of three or four years with respect to
both fission and fusion weapons.
Technology for artificial intelligence in development today, however, can be operated on
widely available equipment. And there are hundreds of thousands of Chinese citizens studying
in the United States or working for U.S. companies that develop such technology. Keeping U.S.
knowledge out of Chinese hands for substantial lengths of time is impracticable short of a
massive breaking of economic ties.
Nor is it likely for the Chinese government to halt its support of technology development.
How would the United States react if other countries demanded that we close down DARPA, the
Defense Department's advanced research agency, because it represented unfair competition? Or
if trading partners argued that U.S. support for private clean-energy companies, such as the
subsidies provided by the Obama administration, was an unfair trade practice? Much of our
current information technology and communications infrastructure comes directly or indirectly
out of Bell Labs, which was financed out of the profits of a government-regulated and
-protected monopoly. Would the United States have responded constructively to demands from
other countries to dismantle the Bell system?
A focus on resisting the Chinese economic threat will likely not only be ineffective but
may also be counterproductive if it diverts private and public energy from more productive
pursuits. I remember well from the early Clinton administration that the great symbol of
efforts to constrain unfair Japanese practices was Kodak's case against Fuji, the Japanese
photographic film company that attracted massive attention from Kodak's senior management and
U.S. policymakers. Perhaps if Kodak had instead focused on the digital photography ideas its
scientists had developed, it would still be a significant company.
Where we can mobilize international support, we should, of course, push China to live up
to its trade obligations and seek to modify rules in the World Trade Organization where they
do not cover problematic practices. But in reality, our competitive success over the next
generation will depend much more on what happens in our economy and society than at any
international negotiating table.
Will our national investment in applied scientific research continue to languish to the
point where even the most brilliant young scientists cannot get their first research grants
until they are in their 40s? Will public officials who surely know better continue to allow
creationism to be taught as serious science in U.S. public schools in a century with so much
progress in life sciences? Will public policy concern itself with the strength and
competitiveness of U.S. information technology companies as well as with their marketing
practices? Will a national effort be made to improve the dismal performance of U.S. students
at every level in international comparisons of mathematical and scientific achievement?
These questions and others like them, much more than any trade negotiation, will determine
how the United States competes over the next generation. The Russian and the Japanese
challenges pushed us forward as a nation in very constructive ways. So can the Chinese
challenge if we seize the opportunity it represents.
Lawrence Summers is a professor at and past president of Harvard University.
"... Unfettered individual creativity may have fostered some great – if fetishised – art, as well as rapid mechanical and technological developments. But it has also encouraged unbridled competition in every sphere of life, whether beneficial to humankind or not, and however wasteful of resources. ..."
"... At its worst, it has unleashed quite literally an arms race, one that – because of a mix of our unconstrained creativity, our godlessness and the economic logic of the military-industrial complex – culminated in the development of nuclear weapons. We have now devised the most complete and horrific ways imaginable to kill each other. We can commit genocide on a global scale ..."
"... Those among the elites who understand that neoliberalism has had its day are exploiting the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed and the maintenance of their privilege by sowing discord and insinuating dark threats. ..."
"... The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive because they are rooted in truths about neoliberalism's failure. But as critics, they are disingenuous. They have no solutions apart from their own personal advancement in the existing, failed, self-sabotaging system. ..."
"... This trend – what I have previously ascribed to a group I call the "dissenters" – understands that radical new thinking is required. But given that this group is being actively crushed by the old neoliberal elite and the new authoritarians, it has little public and political space to explore its ideas, to experiment, to collaborate, as it urgently needs to. ..."
Ok neoliberalism is bad and is collapsing. We all understadn that. The different in opinions
here is only in timeframe of the collapse and the main reason (end of cheap oil, WWIII, etc).
But so far no plausible alternative exists. Canwe return to the New Deal, if top management
betrayed the working class and allied with capital owners in a hope later to became such
capital owners themselves (and many did).
The experience of the USSR tells as that each Nomenklatura (technocratic elite with the goal
of "betterment" of people) degrade very quickly (two generations were enough for Bolshevik's
elite for complete degradation) and often is ready switch sides for the place in neoliberal
elite.
So while after 2008 neoliberalism exist in zombie states (which is more bloodthirsty then
previous) they issue of successor to neoliberalism is widely open.
In one sense, their diagnosis is correct: Europe and the [neo]neoliberal tradition are
coming apart at the seams. But not because, as they strongly imply, European politicians are
pandering to the basest instincts of a mindless rabble – the ordinary people they have so
little faith in.
Rather, it is because a long experiment in Neoliberalism has finally run its course.
Neoliberalism has patently failed – and failed catastrophically.
... ... ...
Neoliberalism, like most ideologies, has an upside. Its respect for the individual and his
freedoms, its interest in nurturing human creativity, and its promotion of "universal values"
over tribal attachment have had some positive consequences.
But neoliberal ideology has been very effective at hiding its dark side – or more
accurately, at persuading us that this dark side is the consequence of neoliberalism's
abandonment rather than inherent to the neoliberal's political project.
The loss of traditional social bonds – tribal, sectarian, geographic – has left
people today more lonely, more isolated than was true of any previous human society. We may pay
lip service to universal values, but in our atomised communities, we feel adrift, abandoned and
angry.
Humanitarian resource grabs
The neoliberal's professed concern for others' welfare and their rights has, in reality,
provided cynical cover for a series of ever-more transparent resource grabs. The parading of
neoliberalism's humanitarian credentials has entitled our elites to leave a trail of carnage
and wreckage in their wake in Afghanistan, Iraq, Libya, Syria and soon, it seems, in Venezuela.
We have killed with our kindness and then stolen our victims' inheritance.
Unfettered individual creativity may have fostered some great – if fetishised
– art, as well as rapid mechanical and technological developments. But it has also
encouraged unbridled competition in every sphere of life, whether beneficial to humankind or
not, and however wasteful of resources.
At its worst, it has unleashed quite literally an arms race, one that – because of
a mix of our unconstrained creativity, our godlessness and the economic logic of the
military-industrial complex – culminated in the development of nuclear weapons. We have
now devised the most complete and horrific ways imaginable to kill each other. We can commit
genocide on a global scale .
Meanwhile, the absolute prioritising of the individual has sanctioned a pathological
self-absorption, a selfishness that has provided fertile ground not only for capitalism,
materialism and consumerism but for the fusing of all of them into a turbo-charged
neoliberalism. That has entitled a tiny elite to amass and squirrel away most of the planet's
wealth out of reach of the rest of humanity.
Worst of all, our rampant creativity, our self-regard and our competitiveness have blinded
us to all things bigger and smaller than ourselves. We lack an emotional and spiritual
connection to our planet, to other animals, to future generations, to the chaotic harmony of
our universe. What we cannot understand or control, we ignore or mock.
And so the neoliberal impulse has driven us to the brink of extinguishing our species and
possibly all life on our planet. Our drive to asset-strip, to hoard resources for personal
gain, to plunder nature's riches without respect to the consequences is so overwhelming, so
compulsive that the planet will have to find a way to rebalance itself. And if we carry on,
that new balance – what we limply term "climate change" – will necessitate that we
are stripped from the planet.
Nadir of a dangerous arrogance
One can plausibly argue that humans have been on this suicidal path for some time.
Competition, creativity, selfishness predate neoliberalism, after all. But neoliberalism
removed the last restraints, it crushed any opposing sentiment as irrational, as uncivilised,
as primitive.
Neoliberalism isn't the cause of our predicament. It is the nadir of a dangerous arrogance
we as a species have been indulging for too long, where the individual's good trumps any
collective good, defined in the widest possible sense.
The neoliberal reveres his small, partial field of knowledge and expertise, eclipsing
ancient and future wisdoms, those rooted in natural cycles, the seasons and a wonder at the
ineffable and unknowable. The neoliberal's relentless and exclusive focus is on "progress",
growth, accumulation.
What is needed to save us is radical change. Not tinkering, not reform, but an entirely new
vision that removes the individual and his personal gratification from the centre of our social
organisation.
This is impossible to contemplate for the elites who think more neoliberalism, not less, is
the solution. Anyone departing from their prescriptions, anyone who aspires to be more than a
technocrat correcting minor defects in the status quo, is presented as a menace. Despite the
modesty of their proposals, Jeremy Corbyn in the UK and Bernie Sanders in the US have been
reviled by a media, political and intellectual elite heavily invested in blindly pursuing the
path to self-destruction.
Status-quo cheerleaders
As a result, we now have three clear political trends.
The first is the status-quo cheerleaders like the European writers of neoliberalism's latest
– last? –
manifesto . With every utterance they prove how irrelevant they have become, how incapable
they are of supplying answers to the question of where we must head next. They adamantly refuse
both to look inwards to see where neoliberalism went wrong and to look outwards to consider how
we might extricate ourselves.
Irresponsibly, these guardians of the status quo lump together the second and third trends
in the futile hope of preserving their grip on power. Both trends are derided indiscriminately
as "populism", as the politics of envy, the politics of the mob. These two fundamentally
opposed, alternative trends are treated as indistinguishable.
This will not save neoliberalism, but it will assist in promoting the much worse of the two
alternatives.
Those among the elites who understand that neoliberalism has had its day are exploiting
the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed
and the maintenance of their privilege by sowing discord and insinuating dark threats.
The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive
because they are rooted in truths about neoliberalism's failure. But as critics, they are
disingenuous. They have no solutions apart from their own personal advancement in the existing,
failed, self-sabotaging system.
The new authoritarians are reverting to old, trusted models of xenophobic nationalism,
scapegoating others to shore up their own power. They are ditching the ostentatious,
conscience-salving sensitivities of the neoliberal so that they can continue plundering with
heady abandon. If the ship is going down, then they will be gorging on the buffet till the
waters reach the dining-hall ceiling.
Where hope can reside
The third trend is the only place where hope can reside. This trend – what I have
previously ascribed to a group I call the "dissenters" – understands that radical new
thinking is required. But given that this group is being actively crushed by the old neoliberal
elite and the new authoritarians, it has little public and political space to explore its
ideas, to experiment, to collaborate, as it urgently needs to.
Social media provides a potentially vital platform to begin critiquing the old, failed
system, to raise awareness of what has gone wrong, to contemplate and share radical new ideas,
and to mobilise. But the neoliberals and authoritarians understand this as a threat to their
own privilege. Under a confected hysteria about "fake news", they are rapidly working to snuff
out even this small space.
We have so little time, but still the old guard wants to block any possible path to
salvation – even as seas filled with plastic start to rise, as insect populations
disappear across the globe, and as the planet prepares to cough us out like a lump of infected
mucus.
We must not be hoodwinked by these posturing, manifesto-spouting liberals: the philosophers,
historians and writers – the public relations wing – of our suicidal status quo.
They did not warn us of the beast lying cradled in our midst. They failed to see the danger
looming, and their narcissism blinds them still.
We should have no use for the guardians of the old, those who held our hands, who shone a
light along a path that has led to the brink of our own extinction. We need to discard them, to
close our ears to their siren song.
There are small voices struggling to be heard above the roar of the dying neoliberal elites
and the trumpeting of the new authoritarians. They need to be listened to, to be helped to
share and collaborate, to offer us their visions of a different world. One where the individual
is no longer king. Where we learn some modesty and humility – and how to love in our
infinitely small corner of the universe.
Jonathan Cook won the Martha Gellhorn Special Prize for Journalism. His books include
"Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East"
(Pluto Press) and "Disappearing Palestine: Israel's Experiments in Human Despair" (Zed Books).
His website is www.jonathan-cook.net .
With the growing movement towards nuclear war, we have indeed reached the nadir. It is
important to see how humanity got here, for the signs are ominous.
The pattern of history is clear. Power (manifested as interest) has been present in every
conflict of the past – no exception. It is the underlying motivation for war.
Other
cultural factors might change, but not power. Interest cuts across all apparently unifying
principles: family, kin, nation, religion, ideology, politics – everything. We unite
with the enemies of our principles, because that is what serves our interest. It is power,
not any of the above concepts, that is the cause of war.
Maybe it is just me but I didn't see any actual solution or much of anything in his third
group. You know, the one with all the "correct" answers. All I saw was that it was a glorious
vision without all the failings of the other two while rejecting all the badthink.
Every major tragedy in human history starts out with people thinking they have a system
better than all the previous that ever occurred. It too soon becomes a religion that needs to
defend itself by executing all the blasphemers.
Maybe it is just me but I didn't see any actual solution or much of anything in his
third group. You know, the one with all the "correct" answers. All I saw was that it was a
glorious vision without all the failings of the other two while rejecting all the
badthink.
Exactly.
I've been waiting for the author, or some from his "group", to post here at least a LINK
to that solution, even a suggestion, of theirs. Hell, even the proper analysis of what's not
right. A foundation of sort.
So far, as you said, nothing.
Anon[248], February 3, 2019 at 5:29 am GMT
Levy another Jewish "intellectual" shilling for globalization and open borders - for Western nations only, to hasten their
demise. What else is new?
"... Living standards are more than a house with indoor plumbing automatic heat, and lights at the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or riding. ..."
Have you ever been to
Kansas? Might as well move to Mexico, or Puerto Rico.
Kansas has gotten worse because of cost cutting. Cost cutting means living costs are less
because the standard of living is less.
Living standards are more than a house with indoor plumbing automatic heat, and lights at
the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or
riding.
It tried to be connected to the world. If the politics were say 1870, they would want 600kph
high speed train service so a day trip to a city like St Louis or Chicago was
reasonable.
The US military-industrial complex is rejoicing at the prospect of money
rained down as a result of this withdrawal from the INF treaty. But in Europe (with the
exception of Romania and Poland), nobody is too keen to welcome US missiles that have no
defense against Russian hypersonic weapons. NATO's trans-Atlantic arms lobby will try to push
as many European countries as possible towards a new Cold War, with US weapons deployed and
aimed at Moscow. It will be fun to see the reactions of European citizens facing the prospect
of being annihilated by Russian missiles simply to please the CEOs and shareholders of Lockheed
Martin and Raytheon. No doubt there will be some European politicians in countries like Poland
keen to scream about the "Russian threat", ready to throw tens of billions worth of Polish
taxpayers' money into useless and ineffective projects for the purposes of pleasing their
American friends.
Are US generals even aware of how idiotic it is for the US to withdraw from the INF for
Washington? Moscow is already ahead in the development of such systems, both land-based but
above all sea- and air-launched, without forgetting the hypersonic variants of its conventional
or nuclear missiles. Washington has a huge gap to close, exacerbated by the fact that in spite
of heavy spending over many years, there is little to show for it as a result of massive
corruption in the research-and-development process. This is not to mention the fact that there
are few European countries willing to host offensive missile systems aimed at Russia. In
reality, there is little real advantage for Washington in withdrawing from the INF treaty,
other than to enrich arms manufacturers. It diminishes US military options strategically while
expanding those of Beijing and Moscow, even as the latter oppose Washington's unilateral
withdrawal from the treaty.
The hope of expanding the INF treaty to include the US, Russia, China and the EU appears
slim due to Washington's intransigence. Washington only aims to increase expenditure for the
development of weapons prohibited by the treaty, and in strategic terms, improbably hopes to
find some Asian and European countries willing to host these systems aimed against China and
Russia.
The world is certainly more dangerous following Washington's decision, heading in a
direction where there are less and less rules while there are more nuclear powers. For decades,
the United States has been trying to achieve nuclear supremacy by overcoming the limitations of
MAD, whereby Washington would be able to carry out a decapitating nuclear first strike without
worrying about an opponent's ability to launch a retaliatory second strike. It is precisely
this type of thinking that is bringing humanity closer to the brink of destruction from a
nuclear accident or miscalculation. The miniaturization of nuclear warheads and the apparently
limited nature of "tactical nukes" further encourages the justification for using such
weapons.
Moscow's decision in 2007 to develop state-of-the-art weapons and focus on new technologies
like hypersonic missiles guarantees that Russia and her allies have an effective deterrent
against the attempts of the US to alter the nuclear balance of power, which otherwise threatens
the future of humanity.
The withdrawal from the INF treaty is another worrying sign of the willingness of the US to
push the world to the brink of catastrophe, simply for the purposes of enriching the CEOs and
shareholders of it arms manufacturers through a nuclear arms race.
Along with the USA there is a group La countries (and Canada) with the specific goal of "regime change" in Venezuela. Much
like multinational forces in Iraq. From Wikipedia: ... established following the Lima Declaration on 8 August 2017 in the Peruvian
capital of Lima, where representatives of 12 countries met in order to establish a peaceful exit to the crisis in Venezuela.[1]
Among other issues, the now 14-country group demands the release of political prisoners, calls for free elections, offers
humanitarian aid and criticizes the breakdown of democratic order in Venezuela under the Bolivarian Government of Venezuela.
Notable quotes:
"... Not everyone agreed that Guaido and his Popular Will party should be the one to be pushed forward as "Interim President" but the moment it happened, this forced the opposition to immediately unify behind him, based on the no turning back momentum created : ..."
"... The results of that fateful decision are still being played out in the streets, and on the international stage as countries line up for and against Maduro (China, Russia and Turkey among Maduro supporters, with the US and European countries backing Guaido as legitimate leader). ..."
"... However, the WSJ report closes with crucial bombshell information regarding what it took for the opposition to cross that line, and for Guaido to step out in confidence. What was the key factor in the final push? First, Canada and US allies in Latin America initiated something dramatic... ..."
"... But most importantly, Washington came calling at a key moment the opposition was fractured and still indecisive and divided , in what is a central revelation concerning the anti-Maduro movement's calculations : ..."
"... And there it is -- a stunning mainstream media admission that the political drama and crisis now unfolding in Venezuela, now quickly turning into a global geopolitical pressure spot and conflagration -- was pushed forward and given assistance directly from the White House from the very beginning . ..."
A new WSJ report asks what the Hell is going on? in Venezuela and provides new information
behind
How a Small Group Seized Control of Venezuela's Opposition to make the extremely risky move
of pushing forward 35-year old opposition leader and National Assembly head Juan Guaido to
declare himself "Interim President" -- precipitating the crisis that's seen the noose tighten
around President Nicolas Maduro's rule as over a dozen countries led by the US have declared
him "illegitimate".
For starters, the report paints current events as having started with a "big gamble" that
was largely unplanned and unexpected within even the political opposition itself, and which
further had the hidden hand of the White House and State Department behind it from the very
beginning, pushing the opposition forward at the most critical juncture . Outlining the past
difficulties of Venezuela's "notoriously fractious opposition" and the deep divide over the
question of whether to enter direct negotiations or take more aggressive action to undermine
Maduro,
the WSJ describes :
When Juan Guaidó declared himself Venezuela's interim president on Jan. 23 in front
of a crowd of 100,000 people under a broiling sun, some leading opposition figures had no
idea he would do so, say people who work with Mr. Guaidó and other top leaders . That
included a few standing alongside him. A stern look of shock crossed their faces. Some
quietly left the stage.
"What the hell is going on?" one member of a group of politicians wrote to the others in a
WhatsApp group chat. "How come we didn't know about this."
The plan was so risky -- especially to Guaido personally as he had been arrested and
briefly detained after his vehicle was rushed by secret police only less than two weeks
prior -- that the final decision of public confrontation with the Maduro regime was left
entirely up to him in the hours leading up to the Jan.23 rally.
Not everyone agreed that Guaido and his Popular Will party should be the one to be pushed
forward as "Interim President" but the moment it happened, this forced the opposition to
immediately unify behind him, based on the no turning back
momentum created :
Mr. Guaidó himself only agreed to act the day before he declared himself interim
president, his aides said. Some politicians -- including those in the traditional Democratic
Action Party, the largest opposition party -- weren't told of the plan .
"We didn't want them to mess it up," said one opposition leader who knew of the
strategy.
The results of that fateful decision are still being played out in the streets, and on the
international stage as countries line up for and against Maduro (China, Russia and Turkey among
Maduro supporters, with the US and European countries backing Guaido as legitimate leader).
The high stakes maneuver "was largely devised by a group of four opposition leaders -- two
in exile, one under house arrest and one barred from leaving the country" and was predictably
immediately denounced by Maduro "as part of a U.S.-backed coup to overthrow his government."
But as the WSJ concludes, "The act of political skulduggery paid off. The crowd reacted
ecstatically to Mr. Guaidó, and one nation after another recognized him within hours."
Among the "plotters" included Guaido's political mentor Leopoldo López, now under house
arrest in Caracas, and Edgar Zambrano, vice president of the National Assembly of power allied
opposition party Democratic Action.
Zambrano related to the WSJ that the risk was so high that
in the end the "final decision" to pull the trigger laid with Guaido:
Mr. Zambrano, one of the opposition leaders who appeared surprised on stage on Jan. 23,
said the possibility of Mr. Guaidó assuming the presidency had been discussed in the
weeks before, but that the final decision was in the hands of the young leader because of the
risks it entailed .
However, the WSJ report closes with crucial bombshell information regarding what it took for
the opposition to cross that line, and for Guaido to step out in confidence. What was the key factor in the final push? First, Canada and US allies in Latin America
initiated something dramatic...
A breakthrough came on Jan. 4, when the Lima Group of 14 Latin American countries and
Canada issued a letter calling on Mr. Maduro to hand over power to the National Assembly. The
near-bellicose nature of the letter surprised opposition leaders, reinforcing the idea they
should take action .
But most importantly, Washington came calling at a key moment the opposition was fractured
and still indecisive and divided , in what is a central revelation concerning
the anti-Maduro movement's calculations :
When Mr. Guaidó should try to assume the interim presidency was up for debate. Some
argued that it should happen before Mr. Maduro took the oath. Others proposed creating a
commission to challenge Mr. Maduro's claim to office.
As late as Jan. 22, the day before it happened, Mr. Guaidó wasn't fully convinced .
He came around after Vice President Mike Pence called to assure that, if he were to invoke
the Venezuelan constitution in being sworn in as the country's rightful leader, the U.S.
would back the opposition.
And there it is -- a stunning mainstream media admission that the political drama and crisis
now unfolding in Venezuela, now quickly turning into a global geopolitical pressure spot and
conflagration -- was pushed forward and given assistance directly from the White House from the
very beginning .
Guaido: "Gee I can't wait for all that Western oil money to fill up meh pockets.
EhhhrrMMMmm I can't wait to sell out the Venezuelan people to the FED, BoE and ECB. D'oh-
where'd my CIA handler go?"
Also, lol at the Journal for this gem " The act of political skulduggery paid off. The
crowd reacted ecstatically to Mr. Guaidó, and one nation after another recognized him
within hours. " Translation: "Wow- we're SO surprised that the Western vassal states all
followed their master's lead by kowtowing in quick succession! Gee whiz- mind BLOWN!"
The WSJ has provided the "House" plausible deniability, will the "House" take it, or will
the minions sabotage? Stay tuned folks, as we discover who's honorable, who's courageous, and
who's pragmatic...
Further proof this guy is a treasonous little bitch that needs to be arrested and
prosecuted by the Supreme Tribunal Court of Venezuela. He's a traitor to ALL Venezuelans by
colluding with foreign powers to overthrow his elected president.
Lets be honest, sending in the US military was the first choice and all the rest of this
has been setting the stage. It's been 2 years, time for Trump to start a war, by the
prevailing MIC schedule.
Oh please. Maduro the elected president? He won his election after blocking the opposition
parties to take part. Please read the Venezuelan Constitution before commenting. Not any
election is valid or democratic. Maduro should be in jail. Guaido is asking for new and fair
elections. ... OOOOH how undemocratic!!! I am against foreign intervention, but in this case
the 3 million Venezuelan real refugees (10% of the Venezuelan population and not organised
political caravans trying to reach the USA) in neighbour countries tips my view. Therefore I
support the constitutional president Guaido and any help the international community can give
him.
Idiot . The opposition boycotted the election as they couldn't win. International
observers (usa wouldn't come) say it was fairer than usa elections lol. Sure maduro isn't a
saint. He also gave out prizes to collect after voting . But that's not bribing people could
vote for anyone and still collect a few foods in a bag
That a boy Trumpy! You got the right FukWits on the job. Bibi and Sheldon are jumping for
joy with the addition of Abrams. Now you got your Zio dream team. BoltON, PompAss, and
Abram's. Just think what a murderous war mongering team for IsraHell you could have if ya
rolled **** Chenney in the mix. Now there's someone who won't **** around getting a Zio war
going.
Cheney , the virtue less, honor less, 2 time OUI conviction,electricians apprentice , went
as far as helping to murder 3,000 Americans . All so he could impress his societal status
ambitious wife . A Rumsfeld ass kissing loser . Spineless goy are 50% of the problem .
Guaido is obviously an agent of the CIA. This fact does not absolve Maduro of his crimes.
But it does show that the US is balls deep in the Venezuela problem.
A historic interfaith covenant was signed in the Middle East on Monday, and the mainstream
media in the United States has been almost entirely silent about it.
Sheikh Ahmed al-Tayeb is considered to be the most important imam in Sunni Islam, and he
arrived at the signing ceremony in Abu Dhabi with Pope Francis
"hand-in-hand in a symbol of interfaith brotherhood" . But this wasn't just a ceremony for
Catholics and Muslims. According to
a British news source , the signing of this covenant was done "in front of a global
audience of religious leaders from Christianity, Islam, Judaism and other faiths"...
The pope and the grand imam of al-Azhar have signed a historic declaration of fraternity,
calling for peace between nations, religions and races, in front of a global audience of
religious leaders from Christianity, Islam , Judaism and other faiths.
Pope Francis
, the leader of the world's Catholics, and Sheikh Ahmed al-Tayeb, the head of Sunni Islam's
most prestigious seat of learning, arrived at the ceremony in Abu Dhabi hand-in-hand in a
symbol of interfaith brotherhood.
In other words, there was a concerted effort to make sure that all of the religions of the
world were represented at this gathering.
According to
the official Vatican website , a tremendous amount of preparation went in to the drafting
of this document, and it encourages believers from all religions "to shake hands, embrace one
another, kiss one another, and even pray" with one another
The document, signed by Pope Francis and the Grand Imam of al-Azhar, Ahmed el-Tayeb, was
prepared "with much reflection and prayer", the Pope said. The one great danger at this
moment, he continued, is "destruction, war, hatred between us." "If we believers are not able
to shake hands, embrace one another, kiss one another, and even pray, our faith will be
defeated", he said. The Pope explained that the document "is born of faith in God who is the
Father of all and the Father of peace; it condemns all destruction, all terrorism, from the
first terrorism in history, that of Cain."
There is a lot of language about peace in this document, but it goes way beyond just
advocating for peace.
Over and over again, the word "God" is used to simultaneously identify Allah and the God of
Christianity. Here is just one example
We, who believe in God and in the final meeting with Him and His judgment, on the basis of
our religious and moral responsibility, and through this Document, call upon ourselves, upon
the leaders of the world as well as the architects of international policy and world economy,
to work strenuously to spread the culture of tolerance and of living together in peace; to
intervene at the earliest opportunity to stop the shedding of innocent blood and bring an end
to wars, conflicts, environmental decay and the moral and cultural decline that the world is
presently experiencing.
On top of that, the document also boldly declares that "the diversity of religions" that we
see in the world was "willed by God"
Freedom is a right of every person: each individual enjoys the freedom of belief, thought,
expression and action. The pluralism and the diversity of religions, colour, sex, race and
language are willed by God in His wisdom, through which He created human beings. This divine
wisdom is the source from which the right to freedom of belief and the freedom to be
different derives. Therefore, the fact that people are forced to adhere to a certain religion
or culture must be rejected, as too the imposition of a cultural way of life that others do
not accept;
In essence, this is saying that it is the will of God that there are hundreds of different
religions in the world and that they are all acceptable in His sight.
We know that the elite want a one world
religion , but to see the most important clerics from both Catholicism and Islam make such
a dramatic public push for it is absolutely stunning.
You can find the full text of the covenant that they signed
on the official Vatican website . I have also reproduced the entire document below...
* * *
INTRODUCTION
Faith leads a believer to see in the other a brother or sister to be supported and loved.
Through faith in God, who has created the universe, creatures and all human beings (equal on
account of his mercy), believers are called to express this human fraternity by safeguarding
creation and the entire universe and supporting all persons, especially the poorest and those
most in need.
This transcendental value served as the starting point for several meetings characterized by
a friendly and fraternal atmosphere where we shared the joys, sorrows and problems of our
contemporary world. We did this by considering scientific and technical progress, therapeutic
achievements, the digital era, the mass media and communications. We reflected also on the
level of poverty, conflict and suffering of so many brothers and sisters in different parts of
the world as a consequence of the arms race, social injustice, corruption, inequality, moral
decline, terrorism, discrimination, extremism and many other causes.
From our fraternal and open discussions, and from the meeting that expressed profound hope
in a bright future for all human beings, the idea of this Document on Human Fraternity was
conceived. It is a text that has been given honest and serious thought so as to be a joint
declaration of good and heartfelt aspirations. It is a document that invites all persons who
have faith in God and faith in human fraternity to unite and work together so that it may serve
as a guide for future generations to advance a culture of mutual respect in the awareness of
the great divine grace that makes all human beings brothers and sisters.
DOCUMENT
In the name of God who has created all human beings equal in rights, duties and dignity, and
who has called them to live together as brothers and sisters, to fill the earth and make known
the values of goodness, love and peace;
In the name of innocent human life that God has forbidden to kill, affirming that whoever
kills a person is like one who kills the whole of humanity, and that whoever saves a person is
like one who saves the whole of humanity;
In the name of the poor, the destitute, the marginalized and those most in need whom God has
commanded us to help as a duty required of all persons, especially the wealthy and of
means;
In the name of orphans, widows, refugees and those exiled from their homes and their
countries; in the name of all victims of wars, persecution and injustice; in the name of the
weak, those who live in fear, prisoners of war and those tortured in any part of the world,
without distinction;
In the name of peoples who have lost their security, peace, and the possibility of living
together, becoming victims of destruction, calamity and war;
In the name of human fraternity that embraces all human beings, unites them and renders them
equal;
In the name of this fraternity torn apart by policies of extremism and division, by systems
of unrestrained profit or by hateful ideological tendencies that manipulate the actions and the
future of men and women;
In the name of freedom, that God has given to all human beings creating them free and
distinguishing them by this gift;
In the name of justice and mercy, the foundations of prosperity and the cornerstone of
faith;
In the name of all persons of good will present in every part of the world;
In the name of God and of everything stated thus far; Al-Azhar al-Sharif and the Muslims of
the East and West, together with the Catholic Church and the Catholics of the East and West,
declare the adoption of a culture of dialogue as the path; mutual cooperation as the code of
conduct; reciprocal understanding as the method and standard.
We, who believe in God and in the final meeting with Him and His judgment, on the basis of
our religious and moral responsibility, and through this Document, call upon ourselves, upon
the leaders of the world as well as the architects of international policy and world economy,
to work strenuously to spread the culture of tolerance and of living together in peace; to
intervene at the earliest opportunity to stop the shedding of innocent blood and bring an end
to wars, conflicts, environmental decay and the moral and cultural decline that the world is
presently experiencing.
We call upon intellectuals, philosophers, religious figures, artists, media professionals
and men and women of culture in every part of the world, to rediscover the values of peace,
justice, goodness, beauty, human fraternity and coexistence in order to confirm the importance
of these values as anchors of salvation for all, and to promote them everywhere.
This Declaration, setting out from a profound consideration of our contemporary reality,
valuing its successes and in solidarity with its suffering, disasters and calamities, believes
firmly that among the most important causes of the crises of the modern world are a
desensitized human conscience, a distancing from religious values and a prevailing
individualism accompanied by materialistic philosophies that deify the human person and
introduce worldly and material values in place of supreme and transcendental principles.
While recognizing the positive steps taken by our modern civilization in the fields of
science, technology, medicine, industry and welfare, especially in developed countries, we wish
to emphasize that, associated with such historic advancements, great and valued as they are,
there exists both a moral deterioration that influences international action and a weakening of
spiritual values and responsibility. All this contributes to a general feeling of frustration,
isolation and desperation leading many to fall either into a vortex of atheistic, agnostic or
religious extremism, or into blind and fanatic extremism, which ultimately encourage forms of
dependency and individual or collective self-destruction.
History shows that religious extremism, national extremism and also intolerance have
produced in the world, be it in the East or West, what might be referred to as signs of a
"third world war being fought piecemeal". In several parts of the world and in many tragic
circumstances these signs have begun to be painfully apparent, as in those situations where the
precise number of victims, widows and orphans is unknown. We see, in addition, other regions
preparing to become theatres of new conflicts, with outbreaks of tension and a build-up of arms
and ammunition, and all this in a global context overshadowed by uncertainty, disillusionment,
fear of the future, and controlled by narrow-minded economic interests.
We likewise affirm that major political crises, situations of injustice and lack of
equitable distribution of natural resources – which only a rich minority benefit from, to
the detriment of the majority of the peoples of the earth – have generated, and continue
to generate, vast numbers of poor, infirm and deceased persons. This leads to catastrophic
crises that various countries have fallen victim to despite their natural resources and the
resourcefulness of young people which characterize these nations. In the face of such crises
that result in the deaths of millions of children – wasted away from poverty and hunger
– there is an unacceptable silence on the international level.
It is clear in this context how the family as the fundamental nucleus of society and
humanity is essential in bringing children into the world, raising them, educating them, and
providing them with solid moral formation and domestic security. To attack the institution of
the family, to regard it with contempt or to doubt its important role, is one of the most
threatening evils of our era.
We affirm also the importance of awakening religious awareness and the need to revive this
awareness in the hearts of new generations through sound education and an adherence to moral
values and upright religious teachings. In this way we can confront tendencies that are
individualistic, selfish, conflicting, and also address radicalism and blind extremism in all
its forms and expressions.
The first and most important aim of religions is to believe in God, to honour Him and to
invite all men and women to believe that this universe depends on a God who governs it. He is
the Creator who has formed us with His divine wisdom and has granted us the gift of life to
protect it. It is a gift that no one has the right to take away, threaten or manipulate to suit
oneself. Indeed, everyone must safeguard this gift of life from its beginning up to its natural
end. We therefore condemn all those practices that are a threat to life such as genocide, acts
of terrorism, forced displacement, human trafficking, abortion and euthanasia. We likewise
condemn the policies that promote these practices.
Moreover, we resolutely declare that religions must never incite war, hateful attitudes,
hostility and extremism, nor must they incite violence or the shedding of blood. These tragic
realities are the consequence of a deviation from religious teachings. They result from a
political manipulation of religions and from interpretations made by religious groups who, in
the course of history, have taken advantage of the power of religious sentiment in the hearts
of men and women in order to make them act in a way that has nothing to do with the truth of
religion. This is done for the purpose of achieving objectives that are political, economic,
worldly and short-sighted. We thus call upon all concerned to stop using religions to incite
hatred, violence, extremism and blind fanaticism, and to refrain from using the name of God to
justify acts of murder, exile, terrorism and oppression. We ask this on the basis of our common
belief in God who did not create men and women to be killed or to fight one another, nor to be
tortured or humiliated in their lives and circumstances. God, the Almighty, has no need to be
defended by anyone and does not want His name to be used to terrorize people.
This Document, in accordance with previous International Documents that have emphasized the
importance of the role of religions in the construction of world peace, upholds the
following:
– The firm conviction that authentic teachings of religions invite us to remain
rooted in the values of peace; to defend the values of mutual understanding, human fraternity
and harmonious coexistence; to re-establish wisdom, justice and love; and to reawaken
religious awareness among young people so that future generations may be protected from the
realm of materialistic thinking and from dangerous policies of unbridled greed and
indifference that are based on the law of force and not on the force of law;
– Freedom is a right of every person: each individual enjoys the freedom of belief,
thought, expression and action. The pluralism and the diversity of religions, colour, sex,
race and language are willed by God in His wisdom, through which He created human beings.
This divine wisdom is the source from which the right to freedom of belief and the freedom to
be different derives. Therefore, the fact that people are forced to adhere to a certain
religion or culture must be rejected, as too the imposition of a cultural way of life that
others do not accept;
– Justice based on mercy is the path to follow in order to achieve a dignified life
to which every human being has a right;
– Dialogue, understanding and the widespread promotion of a culture of tolerance,
acceptance of others and of living together peacefully would contribute significantly to
reducing many economic, social, political and environmental problems that weigh so heavily on
a large part of humanity;
– Dialogue among believers means coming together in the vast space of spiritual,
human and shared social values and, from here, transmitting the highest moral virtues that
religions aim for. It also means avoiding unproductive discussions;
– The protection of places of worship – synagogues, churches and mosques
– is a duty guaranteed by religions, human values, laws and international agreements.
Every attempt to attack places of worship or threaten them by violent assaults, bombings or
destruction, is a deviation from the teachings of religions as well as a clear violation of
international law;
– Terrorism is deplorable and threatens the security of people, be they in the East
or the West, the North or the South, and disseminates panic, terror and pessimism, but this
is not due to religion, even when terrorists instrumentalize it. It is due, rather, to an
accumulation of incorrect interpretations of religious texts and to policies linked to
hunger, poverty, injustice, oppression and pride. This is why it is so necessary to stop
supporting terrorist movements fuelled by financing, the provision of weapons and strategy,
and by attempts to justify these movements even using the media. All these must be regarded
as international crimes that threaten security and world peace. Such terrorism must be
condemned in all its forms and expressions;
– The concept of citizenship is based on the equality of rights and duties, under
which all enjoy justice. It is therefore crucial to establish in our societies the concept of
full citizenship and reject the discriminatory use of the term minorities which engenders
feelings of isolation and inferiority. Its misuse paves the way for hostility and discord; it
undoes any successes and takes away the religious and civil rights of some citizens who are
thus discriminated against;
– Good relations between East and West are indisputably necessary for both. They
must not be neglected, so that each can be enriched by the other's culture through fruitful
exchange and dialogue. The West can discover in the East remedies for those spiritual and
religious maladies that are caused by a prevailing materialism. And the East can find in the
West many elements that can help free it from weakness, division, conflict and scientific,
technical and cultural decline. It is important to pay attention to religious, cultural and
historical differences that are a vital component in shaping the character, culture and
civilization of the East. It is likewise important to reinforce the bond of fundamental human
rights in order to help ensure a dignified life for all the men and women of East and West,
avoiding the politics of double standards;
– It is an essential requirement to recognize the right of women to education and
employment, and to recognize their freedom to exercise their own political rights. Moreover,
efforts must be made to free women from historical and social conditioning that runs contrary
to the principles of their faith and dignity. It is also necessary to protect women from
sexual exploitation and from being treated as merchandise or objects of pleasure or financial
gain. Accordingly, an end must be brought to all those inhuman and vulgar practices that
denigrate the dignity of women. Efforts must be made to modify those laws that prevent women
from fully enjoying their rights;
– The protection of the fundamental rights of children to grow up in a family
environment, to receive nutrition, education and support, are duties of the family and
society. Such duties must be guaranteed and protected so that they are not overlooked or
denied to any child in any part of the world. All those practices that violate the dignity
and rights of children must be denounced. It is equally important to be vigilant against the
dangers that they are exposed to, particularly in the digital world, and to consider as a
crime the trafficking of their innocence and all violations of their youth;
– The protection of the rights of the elderly, the weak, the disabled, and the
oppressed is a religious and social obligation that must be guaranteed and defended through
strict legislation and the implementation of the relevant international agreements.
To this end, by mutual cooperation, the Catholic Church and Al-Azhar announce and pledge to
convey this Document to authorities, influential leaders, persons of religion all over the
world, appropriate regional and international organizations, organizations within civil
society, religious institutions and leading thinkers. They further pledge to make known the
principles contained in this Declaration at all regional and international levels, while
requesting that these principles be translated into policies, decisions, legislative texts,
courses of study and materials to be circulated.
Al-Azhar and the Catholic Church ask that this Document become the object of research and
reflection in all schools, universities and institutes of formation, thus helping to educate
new generations to bring goodness and peace to others, and to be defenders everywhere of the
rights of the oppressed and of the least of our brothers and sisters.
In conclusion, our aspiration is that:
this Declaration may constitute an invitation to reconciliation and fraternity among all
believers, indeed among believers and non-believers, and among all people of good will;
this Declaration may be an appeal to every upright conscience that rejects deplorable
violence and blind extremism; an appeal to those who cherish the values of tolerance and
fraternity that are promoted and encouraged by religions;
this Declaration may be a witness to the greatness of faith in God that unites divided
hearts and elevates the human soul;
this Declaration may be a sign of the closeness between East and West, between North and
South, and between all who believe that God has created us to understand one another,
cooperate with one another and live as brothers and sisters who love one another.
This is what we hope and seek to achieve with the aim of finding a universal peace that all
can enjoy in this life.
It's not One World Religion, for crying out loud. It's actually a great statement. The
Pope is trying to protect Christians living in Muslim or Jewish lands and the Iman Muslims
living in Christian or Jewish lands. If there were a Rabbi signing it, he would have wanted
to protect Jews living in Christian lands (and possibly Muslim lands but frankly I think Jews
are happy to have all Mideast Jews driven to Israel so I don't think they currently care much
about that).
One World Religion requires the same religion for everyone. Secular humanism is the One
World Religion. It is sold as actually not being a religion, the better to fool the masses.
But it is entirely a religion. And the Beast will rise from Secular Humanism, as will the
Mark of the Beast.
Christianity will definitely not be part of the One World Religion.
"... Last night, President Trump reserved a few minutes of his State of the Union address to praise his tax reform law, which turned a year old last month. To promote its passage, Mr. Trump and his congressional allies promised Americans that drastically lowered corporate tax rates would bring home large sums of capital that had been stashed overseas and finance a surge of domestic investment. ..."
"... Why would any multinational corporation pay America's 21 percent tax rate when it could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens, particularly when there are few restrictions on how money can be moved around a company and its foreign subsidiaries? ..."
"... For starters, the law's repatriation deal did prompt a brief surge in offshore profits returning to the United States. But the total sum returned so far is well below the trillions many proponents predicted, and a large chunk of the returned funds have been used for record-breaking stock buybacks, which don't help workers and generate little real economic activity. ..."
"... Bottom line: the Trump tax cut is a giveaway to corporations that doesn't promote investment here ..."
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the new
"global minimum" loophole to pay half of that?
By Brad Setser
Last night, President Trump reserved a few minutes of his State of the Union address
to praise his tax reform law, which turned a year old last month. To promote its passage, Mr.
Trump and his congressional allies promised Americans that drastically lowered corporate tax
rates would bring home large sums of capital that had been stashed overseas and finance a
surge of domestic investment.
"For too long, our tax code has incentivized companies to leave our country in search of
lower tax rates," he said, pitching voters in the fall of 2017. "My administration rejects
the offshoring model, and we have embraced a brand-new model. It's called the American
model."
The White House argued they wanted a system that "encourages companies to stay in America,
grow in America, spend in America, and hire in America." Yet the bill he signed into law
includes a sweetheart deal that allows companies that shift their profits abroad to pay tax
at a rate well below the already-reduced corporate income tax -- an incentive shift that
completely contradicts his stated goal.
Why would any multinational corporation pay America's 21 percent tax rate when it
could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens,
particularly when there are few restrictions on how money can be moved around a company and
its foreign subsidiaries?
These wonky concerns were largely brushed aside amid the political brawl. But now that a
full year has passed since the tax bill became law, we have hard numbers we can evaluate.
For starters, the law's repatriation deal did prompt a brief surge in offshore profits
returning to the United States. But the total sum returned so far is well below the trillions
many proponents predicted, and a large chunk of the returned funds have been used for
record-breaking stock buybacks, which don't help workers and generate little real economic
activity.
And despite Mr. Trump's proud rhetoric regarding tax reform during his State of the Union
address, there is no wide pattern of companies bringing back jobs or profits from abroad. The
global distribution of corporations' offshore profits -- our best measure of their tax
avoidance gymnastics -- hasn't budged from the prevailing trend.
Well over half the profits that American companies report earning abroad are still booked
in only a few low-tax nations -- places that, of course, are not actually home to the
customers, workers and taxpayers facilitating most of their business. A multinational
corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary
and then funnel income to its Bermudian subsidiary -- taking advantage of Bermuda's corporate
tax rate of zero.
Where American Profits Hide
[Graph]
No major technology company has jettisoned the finely tuned tax structures that allow a
large share of its global profits to be booked offshore. Nor have major pharmaceutical
companies stopped producing many of their most profitable drugs in Ireland. And Pepsi, to
name just one major manufacturer, still makes the concentrate for its soda in Singapore, also
a haven.
Eliminating the complex series of loopholes that encourage offshoring was a major talking
point in the run-up to the 2017 tax bill, but most of them are still in place. The craftiest
and largest corporations can still legally whittle down their effective tax rate into the
single digits. (In fact, the new law encourages firms to move "tangible assets" -- like
factories -- offshore).
Overall, the Tax Cuts and Jobs Act amounted to a technocratic sleight of hand -- a scheme
set to shift an even greater share of the federal tax burden onto the shoulders of American
families. According to the Treasury Department's tally for fiscal year 2018, corporate income
tax receipts fell by 31 percent, an unprecedented year-over-year drop in a time of economic
growth (presumably a time when profits and government revenue should rise in tandem).
These damning results, to be sure, don't make for a good defense of what came before the
new law. In theory under the old system, American-based firms still owed the government a cut
of their global profits. In practice, large firms could indefinitely defer paying this tax
until the funds could be repatriated -- usually when granted a tax holiday by a friendly
administration.
Over a generation, this political dance was paired with rules that made it relatively easy
for firms to transfer their most prized intellectual property -- say, the rights to popular
software or the particular mix of ingredients for a hot new drug -- to their offshore
subsidiaries. Taken together, they created a tax nirvana of sorts for multinational
corporations, particularly in intellectual-property-intensive industries like tech and
pharmaceuticals. But it wasn't enough.
For their next trick, the companies worked with their political allies to favorably frame
the 2017 tax debate. When he was the House speaker, Paul Ryan was fond of talking about $3
trillion in "trapped" profits abroad. But those profits weren't actually, physically, sitting
in a few tax havens.
Dwarf Economies, Giant American Profits
[Graph]
They were largely invested in United States bank accounts, securities and bonds issued by
the Treasury or other companies headquartered in the States. As Adam Looney -- a Brookings
Institution fellow and former Treasury Department official -- has explained, companies that
needed to finance a new domestic investment could simply issue a bond effectively backed by
its offshore cash. (For instance, Apple could bring its "trapped" funds onshore by selling a
bond to Pfizer's offshore account, or vice versa.)
Put plainly, they got the best of both worlds: Uncle Sam could tax only a small slice of
their books while they traded with one another based on the size of the entire pie.
The scale of the tax shifting has become so immense that some economists believe curbing
it could raise reported G.D.P. by well over a percentage point -- something Mr. Trump, who's
been absorbed by opportunities to brag about the economy, should notionally welcome.
President Trump's economic advisers and the key architects of the bill on Capitol Hill
must have known their reform wasn't going to end business incentives that hurt American
workers. Honest reform would have meant closing corporate loopholes -- a move they originally
promised to make.
Should the opportunity present itself, perhaps to the next president, there are a couple
of viable options for a fundamental tax overhaul that wouldn't require reinstating the 35
percent corporate tax rate.
One of several possibilities is to return to a system of global taxation without the
deferrals that enabled empty repatriations. That would mean profits sneakily booked tax-free
in Bermuda would be taxed every year at 21 percent. Profits booked in Ireland -- or other
low-tax nations -- would be taxed at the difference between Ireland's rate and America's
rate.
It's an approach that would protect small and midsize American companies while cracking
down on bad corporate actors with enough fancy accountants and lawyers to rig the game to
their advantage. And it would be far better than the fake tax reform passed a year ago.
This is very good from the essential Brad Setser, our leading expert on international
trade and money flows. Bottom line: the Trump tax cut is a giveaway to corporations that
doesn't promote investment here 1/
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the
new "global minimum" loophole to pay half of that?
2:14 PM - 6 Feb 2019
@Brad_Setser also gets at something I've been trying to explain: corporate cash "overseas"
isn't really a stash of money that can be brought home, it's an accounting fiction that lets
them avoid taxes, with no real consequences for investment 2/
And this chart, showing the predominance of tax avoidance in overseas "investment", is a
classic 3/
DUBAI/LONDON (Reuters) - Saudi Arabia, the world's top oil exporter, cut its crude output in
January by about 400,000 barrels per day (bpd), two OPEC sources said, as the kingdom follows
through on its pledge to reduce production to prevent a supply glut.
Riyadh told OPEC that the kingdom pumped 10.24 million bpd in January, the sources said.
That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper
than targeted under the OPEC-led pact to balance the market and support prices.
The Organisation of the Petroleum Exporting Countries, Russia and other non-OPEC producers -
an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from Jan.
1.
The agreement stipulated that Saudi Arabia should cut output to 10.311 million bpd, but
energy minister Khalid al-Falih has said it will exceed the required reduction to demonstrate
its commitment.
Crude shipments to the U.S. from OPEC and its partners fell to 1.41 million barrels a day in
January, the lowest in five years, according to data from cargo-tracking and intelligence
company Kpler. Shrinking Iraqi imports and deep output cuts by Saudi Arabia fueled the
decline
If Trump runs of the defense of neoliberalism platform he will lose. But Trump proved to be a bad, superficial politician,
Republican Obama so to speak, so he may take this advice from his entourage. Trump proved to be a puppet of MIC and
Israel, his tax cuts had shown that he is a regular "trickle down" neoliberal. So he attraction to voters is down
substantially. Now
Polling is unambiguous here. If you define the "center" as a position
somewhere between those of the two parties, when it comes to economic issues the public is overwhelmingly left of center; if anything,
it's to the left of the Democrats. Tax cuts for the rich are the G.O.P.'s defining policy, but two-thirds of voters believe that taxes
on the rich are actually too low, while only 7 percent believe that they're too high. Voters support Elizabeth Warren's proposed tax
on large fortunes by a three-to-one majority. Only a small minority want to see cuts in Medicaid, even though such cuts have been central
to every G.O.P. health care proposal in recent years.
Notable quotes:
"... Insiders have suggested that Trump plans to explicitly run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie Sanders in 2020. ..."
"... Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages. People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot afford to feed their families. ..."
"... As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable. ..."
"... In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom. This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant economic class - under the rug. In a 1986 interview, Bernie elaborated: ..."
"... All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy as well. ..."
"... The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist class politics to the national stage three years ago, people were willing to listen. ..."
Trump Is Right to Be Afraid of Socialism
BY MEAGAN DAY
... I think he's scared," said Ocasio-Cortez of Trump's socialism remarks. "He sees that everything is closing in on him. And
he knows he's losing the battle of public opinion when it comes to the actual substantive proposals that we're advancing to the
public." Given the remarkable popularity of proposals like Bernie's Medicare for All and tuition-free college and Ocasio-Cortez's
70 percent top marginal tax rate, she's probably onto something.
Insiders have suggested that Trump plans to explicitly
run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie
Sanders in 2020. That would be a smart move, since Bernie is the most popular politician in America and could very well be
Trump's direct contender in the general election, if he can successfully dodge attacks from the establishment wing of the Democratic
Party in the primary.
Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism
from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President
Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when
they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire
with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages.
People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot
afford to feed their families.
As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism
for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable.
In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom.
This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically
means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive
reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant
economic class - under the rug. In a 1986 interview, Bernie elaborated:
All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by
democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means
that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average
working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank
or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy
as well.
For more than four decades, Bernie made these points to relatively small audiences. In 2016, everything changed, and he now
makes them to an audience of millions.
The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring
up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism
was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent
chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist
class politics to the national stage three years ago, people were willing to listen.
Bernie has been so successful at changing the conversation that the President now feels obligated to regurgitate Cold War nostrums
about socialism and unfreedom to a new generation.
Good, let him. Each apocalyptic admonition is an opportunity for Bernie, and the rest of us socialists, to articulate a different
perspective, one in which freedom and democracy are elusive at present but achievable through a society-wide commitment to economic
and social equality. We will only escape "coercion, domination, and control" when we structure society to prioritize the well-being
of the many over the desires of the greedy few.
Mr. Bill said in reply to anne... February 06, 2019 at 03:29 PM
A lot of the opinion part of what Paul Krugman says, in this article, maybe, doesn't ring quite true, although I don't dispute
the facts.
Poll after poll show that 75% of us agree on 80% of the issues, regardless of which political tribe we identify with.
I tend to think that the real problem is that neither the GOP, which represents the top 1% of the economically comfortable, nor the
Democrats who represent the top 10%, are representative of the majority of Americans.
Frantically trying to slice and dice the electorate into questionably accurate tranches, ignores the elephant in the room, Paul.
As neocolonial empire of it s own (albeit the one that is vassal of the USA) yes it does,
especially in xUSSR state where EU wants to capture the makets. Ukraine is a nice example
here.
Does the European Union generate external instability?
The historic achievement of peace within a Europe of universal norms is belied by the external
instability engendered by violent and incoherent interventions.
By Branko Milanovic
The European Union is justly admired for making war among its members impossible. This is no
small achievement in a continent which was in a state of semi-permanent warfare for the past
two millennia.
It is not only that we cannot even imagine the usual 19th and 20th century antagonists, such
as France and Germany, going to war ever again. The same is true of other, lesser-known
animosities which have led periodically to bloodlettings: between Poles and Germans, Hungarians
and Romanians, Greeks and Bulgarians. Unthinkable is also the idea that the United Kingdom and
Spain could end up, regarding Gibraltar, in a reprise of the Falklands/Malvinas war.
Destabilised
But creating geopolitical stability internally has not, during the last two decades, been
followed by external geopolitical stability along the fringes of the union. Most of the big EU
member states (UK, Poland, Italy, Spain) participated, often eagerly, in Operation Iraqi
Freedom, which led to the deaths of some half a million people, destabilised the middle east
even further and produced Islamic State.
Then, seemingly not having learned from this fiasco, France and Italy spearheaded another
regime change, this time in Libya. It ended in anarchy, another civil war, two competing
governments and a UN Security Council deadlocked for years to come -- since it is clear that
China and Russia will not in the foreseeable future vote to allow another western military
intervention.
The wars along the long arc from Libya to Afghanistan, in which EU powers participated, were
the proximate cause of large refugee flows a few years ago, which continue even now. (As I have
written elsewhere, the underlying cause of migration is the large gap in incomes between
Europe, on the one hand, and Africa and the 'greater middle east', on the other, but the sudden
outbursts were caused by wars.)
The next example of generating instability was Ukraine, where the then government of Viktor
Yanukovych, having only postponed the signing of an EU agreement, was driven out of power in
2014 in a coup-like movement supported by the union. It is sure that a reasonable
counterfactual, with the same EU-Ukraine agreements being signed and without a war in eastern
Ukraine and with Crimea still part of Ukraine, would have been much preferable to the current
situation, which threatens to precipitate a war of even much greater dimensions.
Finally, consider Turkey, in an association agreement with the European Economic Community
since 1963, and thus in a membership-awaiting antechamber for more than half a century. The
initial period in power of Recep Tayyip Erdoğan was marked by pro-European policies, a
desire to create an 'Islamic democracy', in the mould of the Christian democracies of Italy and
Germany, and civilian control over the army. But realisation that, because of its size and
probably because of its dominant religion, Turkey would never be recognised as part of Europe
led Erdoğan, gradually, to move in an altogether different direction -- with an almost
zero chance that he would come back to his original pro-European stance.
The endless waiting period, with similarly protracted negotiations over what are now 35
chapters which need to be agreed between candidate countries and all 28 (or soon 27) members,
is what lies behind the frustration with the EU in the Balkans. Long gone are the days when
Greece could become a member after a couple of months (if that) of negotiations and an
agreement between the French president, Valéry Giscard d'Estaing, and the German
chancellor, Helmut Schmidt. The European bluff -- it neither has the stick nor the carrot --
albeit long hidden behind the veil of negotiations, was recently called by the Kosovo
leadership, when it engaged in a trade war with Serbia. The EU could express its 'regrets' but
it was squarely ignored. In the past, nether Kosovo nor any other Balkan state would have dared
to defy Europe so openly.
Slow and hesitant
It all means that Europe needs a much better thought-out external policy with respect to its
neighbours. There are already some signs that it is moving in that direction but it is doing so
too slowly and hesitantly. A multilateral compact with Africa is needed to regulate migration
from a continent with the fastest rising population and lowest incomes. Much more European
investment -- in hard stuff, not conferences -- is needed. Rather than complaining about
China's Belt and Road initiative, Europe should imitate it -- and, if it desires to counteract
Chinese political influence, invest its own money to make more African friends. A similar set
of much more proactive policies is required within the framework of the Mediterranean
initiative, while military options in the region should be forsworn no less clearly than they
are within the union.
When it comes to the potential members, as in the Balkans or the western republics of the
former Soviet Union, interminable talks should be replaced by either special association with
no expectation of EU membership or clearer, time-limited negotiations leading to membership.
Both would manage expectations better and avoid the build-up of resentment and frustration.
The most important challenge is the relationship with Turkey. The EU does not have a
blueprint for a Turkey after Erdoğan; nor can it offer anything to the Turkish secular
opposition, as it is not clear within itself whether it wants Turkey in or out. It should be
rather obvious that a European Turkey, with its vast economic potential and influence in the
middle east, would be a huge economic and strategic asset. Such a Turkey would also behave
differently in Syria and in Anatolia, because it would have an incentive to follow European
rules.
This rethinking of the EU's neighbourhood policy thus calls, in short, for three things:
greater economic aid to Africa, no support for wars or regime change, and much clearer rules
and time-limits for membership talks.
Perhaps, you ascribe to the EU successes that it did not create.
The formation of the EU is not the vehicle that created, nor sustained, the uneasy peace.
I suggest it was the resolution of WW2 that has determined the current state of
tolerance.
I fear that the formation of the EU, in the end, will be the cause of a re-instigation of
the age old skirmishes that have plagued the world, as you say, for two millennia.
The destruction of the Middle East by the West, not just the EU but the US, is a
foolishness of biblical proportions.
The EU's disposition of Greece and Brexit are red flags that the EU is an unsustainable
contrivance that will eventually, come undone. The mercantilist wars between France, England,
Spain, Germany, Italy, etc, may rise again. Hopefully, I'm wrong.
"... Nixon and Kissinger, according to the notes kept by CIA Director Richard Helms, wanted to 'make the economy scream' in Chile; they were 'not concerned [about the] risks involved'. War was acceptable to them as long as Allende's government was removed from power. The CIA started Project FUBELT, with $10 million as a first installment to begin the covert destabilisation of the country. ..."
"... Emboldened by Western domination, monopoly firms act with disregard for the law. ..."
"... Unable to raise money from commodity sales, hemmed in by a broken world agricultural system and victim of a culture of plunder, countries of the Global South have been forced to go hat in hand to commercial lenders for finance. ..."
"... Impossible to raise funds, trapped by the fickleness of international finance, governments are forced to make deep cuts in social spending. Education and health, food sovereignty and economic diversification – all this goes by the wayside. International agencies such as the IMF force countries to conduct 'reforms', a word that means extermination of independence. Those countries that hold out face immense international pressure to submit under pain of extinction, as the Communist Manifesto (1848) put it. ..."
"... The migration out of Venezuela is not unique to that country but is now merely the normal reaction to the global crisis. Migrants from Honduras who go northward to the United States or migrants from West Africa who go towards Europe through Libya are part of this global exodus. ..."
"... Venezuela has faced harsh US sanctions since 2014, when the US Congress started down this road. The next year, US President Barack Obama declared Venezuela a 'threat to national security'. The economy started to scream. ..."
"... This is what the US did to Iran and this is what they did to Cuba. The UN says that the US sanctions on Cuba have cost the small island $130 billion. Venezuela lost $6 billion for the first year of Trump's sanctions, since they began in August 2017 ..."
On 15 September 1970, US President Richard Nixon and National Security Advisor Henry
Kissinger authorised the US government to do everything possible to undermine the incoming
government of the socialist president of Chile, Salvador Allende. Nixon and Kissinger,
according to the notes kept by CIA Director Richard Helms, wanted to 'make the economy scream'
in Chile; they were 'not concerned [about the] risks involved'. War was acceptable to them as
long as Allende's government was removed from power. The CIA started Project FUBELT, with $10
million as a first installment to begin the covert destabilisation of the country.
CIA memorandum on Project FUBELT, 16 September 1970.
... ... ...
US business firms, such as the telecommunication giant ITT, the soft drink maker Pepsi Cola
and copper monopolies such as Anaconda and Kennecott, put pressure on the US government once
Allende nationalised the copper sector on 11 July 1971. Chileans celebrated this day as the Day
of National Dignity (Dia de la Dignidad Nacional). The CIA began to make contact with sections
of the military seen to be against Allende. Three years later, on 11 September 1973, these
military men moved against Allende, who died in the regime change operation. The US 'created
the conditions' as US National Security Advisor Henry Kissinger put it, to which US President
Richard Nixon answered, 'that is the way it is going to be played'. Such is the mood of
international gangsterism.
Phone Call between Richard Nixon (P) and Henry Kissinger (K) on 16 September 1973.
... ... ...
Chile entered the dark night of a military dictatorship that turned over the country to US
monopoly firms. US advisors rushed in to strengthen the nerve of General Augusto Pinochet's
cabinet.
What happened to Chile in 1973 is precisely what the United States has attempted to do in
many other countries of the Global South. The most recent target for the US government –
and Western big business – is Venezuela. But what is happening to Venezuela is nothing
unique. It faces an onslaught from the United States and its allies that is familiar to
countries as far afield as Indonesia and the Democratic Republic of Congo. The formula is
clichéd. It is commonplace, a twelve-step plan to produce a coup climate, to create a
world under the heel of the West and of Western big business.
Step One: Colonialism's
Traps.
Most of the Global South remains trapped by the structures put in place by colonialism.
Colonial boundaries encircled states that had the misfortune of being single commodity
producers – either sugar for Cuba or oil for Venezuela. The inability to diversify their
economies meant that these countries earned the bulk of their export revenues from their
singular commodities (98% of Venezuela's export revenues come from oil). As long as the prices
of the commodities remained high, the export revenues were secure. When the prices fell,
revenue suffered. This was a legacy of colonialism. Oil prices dropped from $160.72 per barrel
(June 2008) to $51.99 per barrel (January 2019). Venezuela's export revenues collapsed in this
decade.
Step Two: The Defeat of the New International Economic Order.
In 1974, the countries of the Global South attempted to redo the architecture of the world
economy. They called for the creation of a New International Economic Order (NIEO) that would
allow them to pivot away from the colonial reliance upon one commodity and diversify their
economies. Cartels of raw materials – such as oil and bauxite – were to be built so
that the one-commodity country could have some control over prices of the products that they
relied upon. The Organisation of Petroleum Exporting Countries (OPEC), founded in 1960, was a
pioneer of these commodity cartels. Others were not permitted to be formed. With the defeat of
OPEC over the past three decades, its members – such as Venezuela (which has the world's
largest proven oil reserves) – have not been able to control oil prices. They are at the
mercy of the powerful countries of the world.
Step Three: The Death of Southern
Agriculture.
In November 2001, there were about three billion small farmers and landless peasants in the
world. That month, the World Trade Organisation met in Doha (Qatar) to unleash the productivity
of Northern agri-business against the billions of small farmers and landless peasants of the
Global South. Mechanisation and large, industrial-scale farms in North America and Europe had
raised productivity to about 1 to 2 million kilogrammes of cereals per farmer. The small
farmers and landless peasants in the rest of the world struggled to grow 1,000 kilogrammes of
cereals per farmer. They were nowhere near as productive. The Doha decision, as
Samir Amin wrote , presages the annihilation of the small farmer and landless peasant. What
are these men and women to do? The production per hectare is higher in the West, but the
corporate take-over of agriculture (as Tricontinental: Institute for Social Research Senior
Fellow P. Sainath shows) leads to increased hunger as it pushes peasants off their land and
leaves them to starve.
Step Four: Culture of Plunder.
Emboldened by Western domination, monopoly firms act with disregard for the law. As
Kambale Musavuli and I write of the Democratic Republic of Congo, its annual budget of $6
billion is routinely robbed of at least $500 by monopoly mining firms, mostly from Canada
– the country now leading the charge against Venezuela. Mispricing and tax avoidance
schemes allow these large firms (Canada's Agrium, Barrick and Suncor) to routinely steal
billions of dollars from impoverished states.
Step Five: Debt as a Way of Life.
Unable to raise money from commodity sales, hemmed in by a broken world agricultural system
and victim of a culture of plunder, countries of the Global South have been forced to go hat in
hand to commercial lenders for finance. Over the past decade, debt held by the Global South
states has increased, while debt payments have ballooned by 60%. When commodity prices rose
between 2000 and 2010, debt in the Global South decreased. As commodity prices began to fall
from 2010, debts have risen.
The IMF points out that of the 67 impoverished countries that they
follow, 30 are in debt distress, a number that has doubled since 2013. More than 55.4% of
Angola's export revenue is paid to service its debt. And Angola, like Venezuela, is an oil
exporter. Other oil exporters such as Ghana, Chad, Gabon and Venezuela suffer high debt to GDP
ratios. Two out of five low-income countries are in deep financial distress.
Step Six:
Public Finances Go to Hell.
With little incoming revenue and low tax collection rates, public finances in the Global
South has gone into crisis. As the UN Conference on Trade and Development points out, 'public
finances have continued to be suffocated'. States simply cannot put together the funds needed
to maintain basic state functions. Balanced budget rules make borrowing difficult, which is
compounded by the fact that banks charge high rates for money, citing the risks of lending to
indebted countries.
Step Seven: Deep Cuts in Social Spending .
Impossible to raise funds, trapped by the fickleness of international finance, governments
are forced to make deep cuts in social spending. Education and health, food sovereignty and
economic diversification – all this goes by the wayside. International agencies such as
the IMF force countries to conduct 'reforms', a word that means extermination of independence.
Those countries that hold out face immense international pressure to submit under pain of
extinction, as the Communist Manifesto (1848) put it.
Step Eight: Social Distress Leads
to Migration.
The total number of migrants in the world is now at least 68.5 million. That makes the
country called Migration the 21st largest country in the world after Thailand and ahead of the
United Kingdom. Migration has become a global reaction to the collapse of countries from one
end of the planet to the other. The migration out of Venezuela is not unique to that country
but is now merely the normal reaction to the global crisis. Migrants from Honduras who go
northward to the United States or migrants from West Africa who go towards Europe through Libya
are part of this global exodus.
Step Nine: Who Controls the Narrative?
The monopoly corporate media takes its orders from the elite. There is no sympathy for the
structural crisis faced by governments from Afghanistan to Venezuela. Those leaders who cave to
Western pressure are given a free pass by the media. As long as they conduct 'reforms', they
are safe. Those countries that argue against the 'reforms' are vulnerable to being attacked.
Their leaders become 'dictators', their people hostages. A contested election in Bangladesh or
in the Democratic Republic of Congo or in the United States is not cause for regime change.
That special treatment is left for Venezuela.
Step Ten: Who's the Real President?
Regime change operations begin when the imperialists question the legitimacy of the
government in power: by putting the weight of the United States behind an unelected person,
calling him the new president and creating a situation where the elected leader's authority is
undermined. The coup takes place when a powerful country decides – without an election
– to anoint its own proxy. That person – in Venezuela's case Juan Guaidó
– rapidly has to make it clear that he will bend to the authority of the United States.
His kitchen cabinet – made up of former government officials with intimate ties to the US
(such as Harvard University's Ricardo Hausmann and Carnegie's Moisés Naím)
– will make it clear that they want to privatise everything and sell out the Venezuelan
people in the name of the Venezuelan people.
Step Eleven: Make the Economy Scream.
Venezuela has faced harsh US sanctions since 2014, when the US Congress started down this
road. The next year, US President Barack Obama declared Venezuela a 'threat to national
security'. The economy started to scream. In recent days, the United States and the United
Kingdom brazenly stole billions of dollars of Venezuelan money, placed the shackles of
sanctions on its only revenue generating sector (oil) and watched the pain flood through the
country.
This is what the US did to Iran and this is what they did to Cuba. The UN says that
the US sanctions on Cuba have cost the small island $130 billion. Venezuela lost $6 billion for
the first year of Trump's sanctions, since they began in August 2017. More is to be lost as the
days unfold. No wonder that the United Nations Special Rapporteur Idriss Jazairy says that
'sanctions which can lead to starvation and medical shortages are not the answer to the crisis
in Venezuela'. He said that sanctions are 'not a foundation for the peaceful settlement of
disputes'. Further, Jazairy said, 'I am especially concerned to hear reports that these
sanctions are aimed at changing the government of Venezuela'. He called for 'compassion' for
the people of Venezuela.
Step Twelve: Go to War.
US National Security Advisor John Bolton held a yellow pad with the words 5,000 troops in
Colombia written on it. These are US troops, already deployed in Venezuela's neighbour. The US
Southern Command is ready. They are egging on Colombia and Brazil to do their bit. As the coup
climate is created, a nudge will be necessary. They will go to war.
None of this is inevitable. It was not inevitable to Titina Silá, a commander of the
Partido Africano para a Independència da Guiné e Cabo Verde (PAIGC) who was
murdered on 30 January 1973. She fought to free her country. It is not inevitable to the people
of Venezuela, who continue to fight to defend their revolution. It is not inevitable to our
friends at CodePink: Women for Peace, whose Medea Benjamin walked into a meeting of the
Organisation of American States and said – No!
by Tyler Durden
Wed, 02/06/2019 - 19:44 251 SHARES
Jeffrey Epstein, the disgraced New York financier who served 13 months in prison for
soliciting an underaged girl for prostitution, has served his time, and despite all of the
negative press surrounding his "Lolita Express" and the many celebrities and politicians -
including former
President Bill Clinton and disgraced actor Kevin Spacey - who have reportedly traveled to
his "orgy island", he will likely live out his life as a free man (unless new offenses are
committed).
But thanks to a series published by the Miami Herald last year that
delved into how prosecutors worked with powerful defense attorneys to ensure Epstein received
such a lenient sentence. The expose shed a light on the role played by Alex Acosta, who went on
to become Trump's Secretary of Labour, in handing down the light sentence. Acosta was the US
Attorney for the Southern District of Florida at the time Epstein's sentence was handed
down.
Now, thanks to those stories, the DOJ has reportedly opened an investigation into the
conduct of DOJ attorneys in the case, and whether they committed "professional misconduct" in
their working relationship with Epstein's attorneys.
The probe was opened in response to a request lodged by Sen. Ben Sasse, a a Nebraska
Republican and member of the Senate Judiciary Committee, who raised questions about the case
after reading the Herald's stories about how Acosta and other DOJ attorneys worked with defense
attorneys to cut a lenient plea deal for Epstein back in 2008, per the Herald.
At the time, the FBI was run by Robert Mueller.
Though the reasons for the lenient deal could be rooted in the natural advantages of the
wealthy, one Twitter user who did a deep dive into a cache of redacted FBI Vault documents
released last year raised the possibility that Epstein could have been an informant for the
FBI, providing information on executives from failed investment bank Bear Stearns in exchange
for the lenient sentence (though there's nothing in his guilty plea that suggested he provided
information).
To be sure, records show that Epstein passed a polygraph test showing that he didn't know
any of the girls he solicited were under the age of 18 at the time. Also, the case has taken on
renewed importance since opposition research shops
tried to link President Trump to Epstein during the campaign.
While that hasn't been conclusively proven, it could have been part of a separate agreement
that has yet to be disclosed.
It is very sad that FBI has decided to just prosecute this EVIL MAN and Child Pedophilia
enabler, just because Muller is investigating Trump. They are all in on it. They are
sick.
If I was one of the victims or the mother, I would do anything to destroy this man. Yes, I
know that Catholic church is also as guilty. But this sick faced Epstein with his evil smile,
has ruined many lives for his famous clients.
Child pedophilia is a disease wired in the brain and the only way to get rid of them, is
to execute them. There is no other solution. Imagine about the father who walked into his
house and witnessed his son getting raped by his sitter (man).
From a personal experience, when a burglar came to rub our house "As a minor not even a
teenage, I woke up with this stranger molesting me.". I had no idea what he was doing, but
that event gave me insomnia for the rest of my life.
So did Epstein provide the FBI with information for prosecutions? Doesn't seem like it.
Epstein knows the Clintons, Prince Andrew, Trump, and many others and they pressured the govt
to back off. Without any facts, the FBI cooperation story is just spin. His connected friends
have a lot to lose if he talks. I doubt that Mr. Epstein will live a long life.
Remember all those people on Clinton team who were interviewed by the FBI and granted
immunity? I remember. The crowd here was excited - oh, they are going to indict her today,
oh, they are going to drag her off tomorrow first thing... Turned out, all those immunities
were granted to protect them from future prosecutions.
Nothing may come out of this. Nothing, perhaps, will ever come out of this. The victim of
all these witch hunting is sitting in the President's chair; and when he is not interested in
getting justice for himself, or to uphold justice for the people, why should I worry about
justice for this world?
Failed Bureau of Investigation. Once a political organization, always a political
organization. I feel for the rank and file who's lives are determined by a few!
If this happened, if they focused on just WHAT THE **** HAPPENED in the Epstein case, I
might be a believer in our justice system. Even if it was just a minute. It could sweep up
Trump. It could flush the Clintons straight to hell.
"... Who provided former British spy Christopher Steele with the salacious and unverified information in the dossier? That's one question I'd like clarity on ..."
"... And it would also be interesting to hear from Sergei Millian, who is widely reported to be an unwitting source of information contained in the dossier, which was compiled by former British spy Christopher Steele. ..."
"... There is a reason why Republicans did not do so when they controlled the house. Think Uniparty! The Dems and Reps are two faces of the same party! The Uniparty did not want this to happen! Now that the Reps are minority, they can act like Reps because majority Dems won't grant their request! See how that works!!!! ..."
"... Think Uniparty! Then everything will suddenly start to make sense to you! ..."
"... Democrat politicians are lying to the people who care about MUH RUSSIA. These politicians don't care about it. They never did. From the start it was nothing more than a way to keep a certain powerful faction of their party in line by dangling MUH RUSSIA keys in front of them. ..."
"... They can't stop because the mindless rage monsters they whipped up (aka the shrieking base of the ever-growing left wing of the Party that lives on Cuntbook and Twatter) will turn on them if they do ..."
Making matters more interesting, Republicans today also put forward a motion to subpoena
around a dozen witnesses. Those people, including officials involved in the FBI's Russia
investigation as well as people likely to be familiar with the compilation of the Steele
dossier. Of course, those people may not say what the Democrats want to hear so the Democrats
rejected the motion.
It's actually a brilliant idea – we need more interviews. I think the Republicans
should pounce on this opportunity to question these witnesses. Hopefully, they will ask some
poignant questions we still don't have answers to.
Who provided former British spy Christopher Steele with the salacious and unverified
information in the dossier? That's one question I'd like clarity on.
"Since the Democrats previously sought testimony from these individuals, such as James
Baker and Sergei Millian, we assume they still want to speak to them," said Jack Langer,
spokesman for committee Republican Rep. Devin Nunes.
"It's even possible some witnesses can help explain the 'more than circumstantial
evidence' of Trump-Russia collusion that the Democrats claimed to have found two years ago
but, inexplicably, never revealed to Committee Republicans or anyone else."
James Baker is the former FBI General Counsel who was close friends with former FBI
Director James Comey. Baker is now the subject of a leak investigation. He reportedly accepted
documents from Perkins Coie, the law firm used by the Democratic National Committee and the
Hillary Clinton campaign to pay for the unverified dossier.
And it would also be interesting to hear from
Sergei Millian, who is widely reported to be an unwitting source of information contained
in the dossier, which was compiled by former British spy Christopher Steele.
These witnesses would surely have some interesting information to share if they were under
questioned by the committee. I'm not sure it's information that would benefit Schiff's claim
that there was collusion between the Trump campaign and Russia. But I'm certain it would shed
light on what really happened with the dossier and the internal machinations of the FBI's probe
into the campaign.
Read the press release below from the House Intelligence
Committee:
Republicans on the House Permanent Select Committee on Intelligence issued the following
statement today on sending the transcripts of interviews from the committee's Russia
investigation to the Special Counsel's office.
Republicans are happy the Democrats are joining us in reiterating what the Republican-led
committee already voted to do in September 2018 -- make all the transcripts available to the
executive branch, including the Special Counsel's office, as part of the process of
publishing them for the American people to see.
In light of the unacceptable delay in the Director of National Intelligence's
declassification review, we hope the Democrats will now join us in further increasing
transparency by voting to immediately publish all the unclassified transcripts that we
previously sent to the executive branch.
Additionally, we call on our Democratic colleagues to grant our request to subpoena
numerous witnesses whose testimony the Democrats had previously sought in connection with the
committee's Russia investigation.
... Republicans today also put forward a motion to subpoena around a dozen witnesses.
Those people, including officials involved in the FBI's Russia investigation as well as
people likely to be familiar with the compilation of the Steele dossier. ...
It's a damn shame they didn't make that motion a month ago when they were in the majority
on the committee.
There is a reason why Republicans did not do so when they controlled the house. Think
Uniparty! The Dems and Reps are two faces of the same party! The Uniparty did not want this
to happen! Now that the Reps are minority, they can act like Reps because majority Dems won't grant
their request! See how that works!!!!
This is how deep state protects it crime family members Rep and Dems! Think Uniparty! Then everything will suddenly start to make sense to you!
freedommusic
Attorney General and Secretary of Homeland Security Submit Joint Report on Impact of Foreign Interference on Election and
Political/Campaign Infrastructure in 2018 Elections
Although the specific conclusions within the joint report must remain classified, the Departments have concluded there is
no evidence to date that any identified activities of a foreign government or foreign agent had a material impact on the
integrity or security of election infrastructure or political/campaign infrastructure used in the 2018 midterm elections for
the United States Congress.
So no Russian interference in the 2018 election. What about any domestic interference? I don't see that mentioned...
deepelemblues
MUH RUSSIA has been a never-ending chain of diminishing returns for two and three quarter years
Democrat politicians are lying to the people who care about MUH RUSSIA. These politicians don't care about it. They
never did. From the start it was nothing more than a way to keep a certain powerful faction of their party in line by
dangling MUH RUSSIA keys in front of them. Jingle-jangle, jingle-jangle...
They can't stop because the mindless rage monsters they whipped up (aka the shrieking base of the ever-growing left
wing of the Party that lives on Cuntbook and Twatter) will turn on them if they do with a tantrum of historic
proportions
Your average black Democrat voter don't care about this MUH RUSSIA ********
Your average hispanic Democrat voter don't care about this MUH RUSSIA ********
Your average white Democrat voter don't care about this MUH RUSSIA ********
Only the hyperpoliticized REEEEEEEEEEEEEEEEEEEEE machines whose entire lives are wrapped up in DUH STRUGGLE care about
this MUH RUSSIA ********
TeraByte
I can only refer to history
https://en.wikipedia.org/wiki/Proscription
In the Roman Empire enemies of the state were blacklisted and they simply vanished.
The Sum of Some Global Fears
Setting the table for a smorgasbord recession.
By Paul Krugman
The last global economic crisis, for all its complex detail, had one big, simple cause: A
huge housing and debt bubble had emerged in both the United States and Europe, and it took the
world economy down when it deflated.
The previous, milder recession, in 2001, also had a single cause: the bursting of a bubble
in technology stocks and investment (remember Pets.com?).
But the slump before that, in 1990-91, was a messier story. It was a smorgasbord recession
-- a downturn with multiple causes, ranging from the troubles of savings and loan institutions,
to a glut of office buildings, to falling military spending at the end of the Cold War.
The best guess is that the next downturn will similarly involve a mix of troubles, rather
than one big thing. And over the past few months we've started to see how it could happen. It's
by no means certain that a recession is looming, but some of our fears are beginning to come
true.
Right now, I see four distinct threats to the world economy. (I may be missing others.)
China: Many people, myself included, have been predicting a Chinese crisis for a long time
-- but it has kept not happening. China's economy is deeply unbalanced, with too much
investment and too little consumer spending; but time and again the government has been able to
steer away from the cliff by ramping up construction and ordering banks to make credit
ultra-easy.
But has the day of reckoning finally arrived? Given China's past resilience, it's hard to
feel confident. Still, recent data on Chinese manufacturing look grim.
And trouble in China would have worldwide repercussions. We tend to think of China only as
an export juggernaut, but it's also a huge buyer of goods, especially commodities like soybeans
and oil; U.S. farmers and energy producers will be very unhappy if the Chinese economy
stalls.
Europe: For some years Europe's underlying economic weakness, due to an aging population and
Germany's obsession with running budget surpluses, was masked by recovery from the euro crisis.
But the run of good luck seems to be coming to an end, with the uncertainty surrounding Brexit
and Italy's slow-motion crisis undermining confidence; as with China, recent data are ugly.
And like China, Europe is a big player in the world economy, so its stumbles will spill over
to everyone, the U.S. very much included.
Trade war: Over the past few decades, businesses around the world invested vast sums based
on the belief that old-fashioned protectionism was a thing of the past. But Donald Trump hasn't
just imposed high tariffs, he's demonstrated a willingness to violate the spirit, if not the
letter, of existing trade agreements. You don't have to be a doctrinaire free-trader to believe
that this must have a depressing economic effect.
For now, corporate leaders reportedly believe that things won't get out of hand, that the
U.S. and China in particular will reach a deal. But this sentiment could turn suddenly if and
when business realizes that the hard-liners still seem to be calling the shots.
The shutdown: It's not just the federal workers not getting paid. It's also the contractors,
who will never get reimbursed for their losses, the food stamp recipients who will be cut off
if the stalemate goes on, and more. Conventional estimates of the cost of the shutdown are
almost surely too low, because they don't take account of the disruption a nonfunctioning
government will impose on every aspect of life.
As in the case of a trade war, business leaders reportedly believe that the shutdown will
soon be resolved. But what will happen to investment and hiring if and when corporate America
concludes that Trump has boxed himself in, and that this could go on for many months?
So there are multiple things going wrong, all of which threaten the economy. How bad will it
be?
The good news is that even taking all these negatives together, they don't come close to the
body blow the world economy took from the 2008 financial crisis. The bad news is that it's not
clear what policymakers can or will do to respond when things go wrong.
Monetary policy -- that is, interest rate cuts by the Federal Reserve and its
counterparts abroad -- is normally the first line of defense against recession. But the Fed has
very limited room to cut, because interest rates are already low, and in Europe, where rates
are negative, there's no room at all.
Fiscal policy -- temporary hikes in government spending and aid to vulnerable workers -- is
the usual backup to monetary easing. But would a president who's holding federal workers
hostage in pursuit of a pointless wall be willing to enact a sensible stimulus? And in Europe,
any proposal for fiscal action would probably encounter the usual German nein.
Finally, dealing effectively with any kind of global slump requires a lot of international
cooperation. How plausible is that given who's currently in charge?
Again, I'm not saying that a global recession is necessarily about to happen. But the risks
are clearly rising: The conditions for such a slump are now in place, in a way they weren't
even a few months ago. Reply
Tuesday, January 29, 2019 at 11:07 AM
As Karl Marx wrote in the middle of the nineteenth century: Imbalances in pre-capitalist
economies do not produce aggregate demand crises and collapses. Why don't they? Because
Pharaoh can always command that another pyramid be built, the king can always set out on
another crusade, and the bishop can always build another cathedral. The expenditures that
provide employment for those not producing the consumption-goods-in-demand only have to make
profit-and-loss sense under the capitalist mode of production. Capitalist economies suffer
Hayek-Minsky crises when deluded financial markets suddenly recognize that they have been
over optimistic, have over invested, and need to shift investment-goods production back down
not to normal but way below normal. And the collapse comes as near-universal bankruptcy and
financial disruption prevents any such smooth expenditure-shifting. That Hayek-Minsky
overinvestment crisis is what Paul Krugman, I, and other China-pessimists have been fearing
for two decades now. But perhaps socialism with Chinese characteristics is insufficiently
capitalist for that Hayek-Minsky logic to apply, and Paul and I and others should have been
paying more attention to Uncle Karl. * **
Let us get Delong to write about a public banking system, not-for-profit, that provides
basic banking services to account holders and has the credit-creating privilege to fund
mortgages, durable goods lending, educational support lending with the goal of supporting
medium term basic consumption needs of the population while even offering to pay a good
interest on the monies held in these personal accounts.
He needs to think more about why credit creation by the public's government cant
supplement the private wielding of this privilege (held by banks now, which he ponts out is a
source of instability of great risk) as done in the US type countries.
The Chinese have moved to a mixed view, coming from one pole; we can have a mix too?
I'd suspect we would do it better because of our form of government and freedoms. We need
more people like him thinking about this mix. And more people like Bernie Sanders who
mobilizes such discussions into public discourse.
The state must control the commanding heights of the credit system
And use that control for the common good
Btw
The citizenry needs a place to store money form
Wealth against devaluation
Nothing more nothing less
A rate of real interest equal to the rate of change in labor productivity should
be.limited to stored income directly from labor earnings
Not earning on earnings
Or the Pharoah can increase military spending. Like Rome. A corruption of the human
conscience that lasted for over one thousand years, compared to our puny 250 years.
I am a critic of Dr. De Long, with a memory of his ambition exceeding his reasoning. In his
former life, he was a China dove, selling the neoliberal nostrum of free trade at the
pinnacle of power.
A Walmartian apologist without the requisite wisdom.
Part of their criticism of China was its alleged overinvestment in "pyramids" in the form of
ghost cities, empty buildings, and fast trains without passengers.
Turns out that even if true, that was a pretty clever economic plan.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
[ Chinese monetary and fiscal policy are primarily directed rather than general. So that a
region, urban or rural, or class of companies or class of households will be the focus. China
is presently building entire cities...
As for building pyramids, building usually anticipates use so that a project may take time
to be well "occupied" or "utilized" but as I track projects the use comes and comes. The
Chinese are just now completing a global positioning system and while the system adds to that
of the United States use is increasing dramatically in China and beyond. This year there will
be between 2 and 3 satellite launches weekly on average, but the Chinese anticipate need.
]
Yes
Building for future use that will come in time
The discount in the delay only applies if superior sides of finds are passed over
Ie if there's slack the opportunity cost is
Not a real cost
Every development system faces an unknowable path of innovation and pattern development
Vieeeing development at the firm level is never optimal.
Yes full best use utilization earlier is
Improving outcomes and clearly a constant goal of development
But real cost is measured by alternative projects not actual built because the chosen project
crowds it out
With slack this can be avoided by increasing use of existing but unde utlized productive
factors
Notice the causal circle here
Better utilization all the way around
In a a system with unknown unknowns
And real time planning constraints
We just do the best we can 24/7/365
Were Chinese planners to work according to demonstrated present need alone, most of Chinese
infrastructure would not be built. Planning means anticipation for the Chinese and I can
assure any reader who has not been to, say, Shanghai that the supposed pyramids that have
been built are repeatedly proven useful to essential.
I remember an especially fierce typhoon approaching the southern coast of China west of
Hong Kong not long after new rail lines had been completed. The Chinese emergency authorities
evacuated some 4 million people in 24 hours to avoid the storm and there was no difficulty.
The return was also smooth and fast.
Article after article in the Western press about China will argue that projects are
"pyramids," and far too expensive, in the building and in use, even for pyramids, and Chinese
planners seldom respond, but later a high-speed rail system extending from Hong Kong to
Beijing will come to be so well traveled that there will be complaints in the Hong Kong press
about all those bustling "mainland" commuters (880,000 passengers in the opening 2 weeks).
The bridge-tunnel system extending across the bay from Hong Kong to Macao? Well, the
Chinese want an urban area extending from Hong Kong to Macao...
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the chinese officials have done.
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the Chinese officials have done.
[ What the Chinese have done is create moderately prosperous lives for hundred of millions
of people, so in a sense stuff has been buried and dug up but this was wildly productive
stuff. Forty-two years of real GDP growth at 9.5% yearly and per capita GDP growth at 8.4%
yearly with the "slow" GDP growth of 2018 at 6.6%.
Life expectancy increased by 11 years from 1977 through 2016, and was 7.7 years higher
than that in India in 2016 and within 2.4 years of that in the United States. ]
I think what you meant to say that American capitalists made a deal with a communist
dictatorship to undermine the labor movement in the Western economies, resulting in a
transfer of wealth from the Western middle class to the Chinese peasantry and the
capitalists. Labor arbitrage.
You always claim that the pittance to the peasants justifies the destruction of American
labor. You are a neoliberal apologist of the worst kind. You must have tenure.
Conjecture China should still be developing at 9 percent...
[ This must be explained. After all, what about India or Brazil or South Africa or
Indonesia or Mexico or Nigeria...?
Chinese planners projected yearly growth at 6.5% through this current 5 year period. The
gains that are being aimed for take more application of technology, more advanced technology,
and specific programs for the poorer regions. ]
And the chinese may have acknowleged the need to move a bit more slowly, urbanization brings
environmental issues that ought to be balanced and rapid change threatens a much needed
balance.
And perhaps they are getting more stable, so to speak, in anticipation of inroducing a
retirement earning system, like our social security system. I assume they will do this as it
is one way to boost consumerism and reconcile the ageing society pressures (fewer next
generation people to take care of the elderly as they ply their urban lives means the old
needs an income stream to buy services). So they need to take care more not to dissipate
resources wastefully or public sentiments until they are ready - so going a but more slowly
might help.
Also, in thinking about the rate of Chinese growth slowing from a 42 year average of 9.5% to
6.5%, the emphasis that is being placed in China on clean or green growth might slow the rate
at least in transition years. I think that Dean Baker wrote on this growth characteristic a
few years ago and I will find the paper.
Make no mistake however, green growth is being emphasized through China.
Simply accelerate the green transition in as much as its about new and different machines.
[ Agreed, which is just what China is now doing in regard to electric vehicles. This year
will be a fine test of how fast China and grow as a greening economy, for President Xi is
going to publish a paper this week focusing on just how necessary green growth is for
China.
I have the paper from Dean Baker, but an unconvinced that a green transition for an
economy means slower growth:
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture.
And to your other point, they measure each project at a firm level (would a private
company be making a profit from this?) and miss the projects effect on the larger
economy.
And to make them (our economists) look even worse, even by their own measures most of
these projects are quite successful.
Maybe they should be looking at China and trying to learn something. Wait, hasn't someone
been saying that?
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture....
Oh they are looking at China and learning plenty about how a dictatorship can control the
population and repress opposition. I cannot believe the ignorant, glowing discussion of
Chinese fascism on this site in defense of disproven economic principles, actually quoting
Marx, the disprover.
A sense of what green infrastructure development has meant in urban China comes from American
company 3M recording a revenue decline because the sales of masks to protect against smog in
Chinese cities has fallen so steeply. Turning coal use to natural gas, makes lots and lots of
difference...
The stats should put a value on pollution reduction
[ That has been a thought for years and years, but has gone nowhere. I am interested in
what is counted in GDP, with a green emphasis being reflected by other data. Weighing turtles
against shovels is of no consequence. ]
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments....
[ Not company by company control, but control of investment direction coupled with
monitoring of company performance. China has been increasingly emphasizing the importance of
advanced technology investment (research and development).
The United States years ago blocked China from participation in the International Space
Station program. China then began to develop a space station of its own and is already
offering access internationally. China just sent a satellite and rocket and lander and rover
to explore the far side of the moon. The intent late this year is to land again on the moon
and this time to retrieve samples of the crust and return them to earth. ]
Returning to earth, there is scarcely a day when the Chinese leadership does not call
attention to the severe poverty ending programs that will hopefully have set an economic
floor for Chinese through the entire country. That means infrastructure through the poorer
regions of the country or those regions that are considered economically viable with
assistance. As for pyramids, that means building houses and all that is necessary for housing
to be viable from roads and power and communications to schools and health care facilities
and investing in jobs.
Yes simply expanding payments to households will increase GDP
How much real how much just nominal is a good question
Tra Dr could go put of wack of course
But so what
China is a developing nation
Short run
Trade deficits are not a problem at full tilt domestic production
"Fauxcahontas " is never going to live this one down.
In a report published Tuesday night, just before President Trump started his State of the
Union,
the Washington Post revealed that it had discovered a document where 2020 Democratic
presidential contender Elizabeth Warren, who was exposed by a DNA test that backfired late last
year for having a negligible amount of Native American heritage, listed her race as "American
Indian" on a registration card for the Texas State Bar in the mid-1980s.
The card lists Warren's name, gender and the address for the University of Texas law school
in Austin, where she was working at the time. On the line for "race," Warren wrote: "American
Indian." Meanwhile, lines for "National Origin" and "Physical handicap" were left blank.
As
WaPo explains, "the card is significant" because, for the first time, it shows that Warren
"directly claimed the identity."
One spokeswoman said Warren was sorry for "not more mindful of this" (presumably referring
to the risks that this would all blow up in her face later in life), when she was younger, and
for falsely identifying as a Native American for more than two decades.
"I can't go back," Warren told WaPo.
According to WaPo, the card, dated April 1986, is the first document to surface showing
Warren claiming Native American heritage in her own handwriting. Her office didn't deny the
authenticity of the document.
WaPo explained that it found the card through an open-records request.
Using an open records request during a general inquiry, for example, The Post obtained
Warren's registration card for the State Bar of Texas, providing a previously undisclosed
example of Warren identifying as an "American Indian."
The card was filled out by Warren after she was admitted to the Texas bar. Her reasons for
joining the bar are unclear: Though, at the time, she was doing legal work on the side, the
work wasn't anything that required her to be admitted to the bar. The date on the card
coincided with her fist self-identified listing as a "minority" by the Association of American
Law Schools, where she reported herself as a minority in the directory every year beginning in
1986 (the year the Association started listing minority law professors). Her name dropped off
that list in 1995.
Warren also famously had her ethnicity changed to Native American from "White" in December,
1989 while working at UPenn, two years after she was hired. She also listed her ethnicity as
Native American when she started working at Harvard Law School in 1995.
In a sign that Warren's listing herself as Native American may have been more an act of
self-delusion than an attempt to give herself a leg up in the world of academia, the card
explicitly states that "the following information is for statistical purposes only and will not
be disclosed to any person or organization without the express written consent of the
attorney."
Back in October, Warren's decision to release her DNA test results revealed that she had a
negligible level of Native American heritage (possibly as little as 1/1,024 Native) while the
stunt - which backfired spectacularly - angered leaders of the Cherokee nation, who, as WaPo
explained, typically exercise tight control over the process of connecting individuals with the
tribe. Warren's apology for that incident hasn't been uniformly accepted, and there are still
some who want to see a more thorough apology from Warren.
Whether this is enough to sink her primary bid remains to be seen. But one thing is for
sure: We imagine President Trump will be weighing in with some more prospective campaign
materials.
When you overemphasize and exaggerate identity politics beyond all reason, you're bound to
get plenty of people playing these angles. She's already benefited from it, so too *******
bad.
Obama graduated from Columbia University in 1983 with a degree in political science and
graduated magna cum laude from Harvard Law School in 1991.
Trump graduated from the undergraduate school of finance and commerce at Penn
(Wharton school), but he did not graduate at the top of his class or with honors. He did NOT
graduate at the top of his class at Wharton undergrad or grad, as the Liar in Chief has
frequently quipped. It is believed he was in the bottom third of the undergraduate class.
It is illegal under federal law to release any former student's records to
reporters or members of the public without that person's specific, written permission. Obama
hasn't released them, but neither have other presidential candidates released their college
records.
Trump has not released his records from Penn either. But of course he is your Orange
Geezus, so this is an inconvenient truth for you
The U.S. and its allies have decided to throw their weight behind yet another coup attempt
in Venezuela. As usual, they claim that their objectives are democracy and freedom. Nothing
could be farther from the truth...
On January 23rd, 2019 Venezuela's opposition leader Juan Guaidó declared himself
acting president, and called on the armed forces to disobey the government. Very few had ever
heard of this man -- he had never actually run for president. Guaidó is the head of
Venezuela's national assembly; a position very similar to speaker of the house.
Within minutes of this declaration U.S. president Donald Trump took to twitter and
recognized Guaidó as interim president of Venezuela; writing off the administration of
Nicolas Maduro as "illegitimate". U.S. Secretary of State Mike Pompeo followed by urging
Venezuela's military to "restore democracy", affirming that the US would back Mr Guaidó
in his attempts to establish a government. They also promised
20 million dollars in "humanitarian" aid . To put this into context, Trump is on record
saying he was " Not
Going to Rule Out a Military Option " in Venezuela.
This is roughly the equivalent of Nancy Pelosi or Mitch Mcconnell declaring themselves
president, calling on the military to overthrow Trump, and having China pledge to fund and
assist the effort.
Now if you happen to be in the camp that wouldn't actually mind seeing Donald Trump forcibly
removed from office, I would encourage you to imagine replacing Trump's name with Obama, Bush,
Merkel or Macron.
You know there have been a lot of protests in France, and the Yellow Vests have demanded
that Macron step down Why don't we restore democracy in Paris?
Let's get this straight. Trump is an illegitimate president and should be removed from
office (because of Russian interference), but you're perfectly comfortable with that same
illegitimate president toppling foreign governments via twitter?
Though support for Guaidó was quickly parroted by Washington's most dependable
allies, and lauded by virtually every western media outlet, the Venezuelan military responded
by condemning the coup, and reconfirmed
their loyalty to Maduro .
That same day Pompeo announced that Elliott Abrams -- the man who oversaw regime change wars
in Nicaragua and El Salvador , was
deeply involved in the Iran Contra scandal, and who was an architect of both the Iraq war and
the 2002 coup attempt in Venezuela (which culminated in the kidnapping of Maduro's predecessor
Hugo Chavez) -- would be in charge of the effort to "restore democracy and prosperity to their
country".
So why do you suppose Washington really wants regime change in Venezuela? You'd have to be
pretty naive to buy the "democracy and prosperity" drivel.
They talk about how the Venezuelan economy is in shambles, but by their own admission (
and according to the U.N. ) U.S. sanctions have played a significant role in creating that
situation.
"With respect to Libya I'm interested in Libya if we take the oil. If we don't take the
oil no interest. We have to have Look, if we have wars, we have to win the war. What we do is
take over the country and hand the keys to people who don't like us. I'll tell you what Iraq,
100% Iran takes over Iraq after we leave, and what really happens with Iraq is they want the
oil fields. And I have it on very good authority that Iran probably won't even be shooting a
bullet because they are getting along better with the Iraqi leaders better than we are. After
all of those lives, and after all of the money we spent. And if that's going to happen we
take the oil."
Maduro's predecessor Hugo Chavez nationalized the oil industry and used the proceeds to fund
his socialist vision for the country. Now you could make the case that this vision was flawed,
and horribly mismanaged, however he had strong public support for this mandate; so much support
in fact, that when U.S. backed coup plotters kidnapped Hugo Chavez in 2002 crowds took to the
streets en mass and he was quickly reinstated.
Which brings us back to Juan Guaidó. There's not much information available on Mr.
Guaidó, but if you look up the man who tapped him to lead the opposition party Voluntad
Popular you'll find Washington's fingerprints all over the place. Leopoldo Lopez, the founder
of Voluntad Popular,
orchestrated the protests in 2002 that led up to the kidnapping of Hugo Chavez .
Compared to who? Which paragon of good governance will we refer to as the model? Trump?
Theresa May? Angel Merkel? Macron? Take your time.
This isn't democracy, it's a neo-colonial power grab. Juan Guaidó never ran for the
office he claimed, and the fact that he directly colluded with a foreign nation to overthrow
the man who was elected president marks him as a traitor.
Juan Guaidó is a puppet. If installed, he will serve the interests who bought his
ticket. Venezuela's oil industry will be privatized, and the profits will be sucked out of the
country by western corporations.
What's happening in Venezuela right now is a replay of the 1973 U.S. backed coup in Chile,
where the democratically elected president of Chile, Salvador Allende, was overthrown, and
replaced with the military dictatorship of Pinochet. Pinochet murdered over 3000 political
opponents during his rule, and tortured over 30,000, but he was friendly to American business
interests so Washington looked the other way.
One could make the case that Maduro is incompetent. One could make the case that his
economic theories are trash. (The same can be said for the haircuts in suits calling for his
removal.) But the reality of the matter is that unless you happen to be a Venezuelan citizen,
how Venezuela is governed is actually none of your business.
Given how things turned out in Iraq, Afghanistan, Libya, Syria, and Ukraine you'd think
people would get the hint. When it comes to spreading democracy, you suck. U.S. regime change
operations have left nothing but chaos, death and destruction in their wake. If you want to
make the world a better place, maybe, just maybe, you should start at home.
Venezuelan officials have announced the seizure of a large shipment of American weapons
which they say were bound for anti-Maduro "terrorist groups" . This comes following US national
security advisor John Bolton's pledge to deliver "humanitarian aid" into the country, covertly
if need be, despite embattled President Nicolas Maduro's vow to prevent such unauthorized
shipments from entering.
CLEVELAND -- In a devastatingly sad overestimation of his influence in the professional
world, local father Bruce Tenety, 54, expressed the heartbreaking belief Monday that his
connections could help his son Justin, a recent college graduate, find a job. "You know, I
actually have a friend in the media business, and if you shoot him an email and meet up for
coffee, he just might be able to hook you up with something," said Tenety, who depressingly
appeared to be under the impression that this tenuous contact from a conference he attended
three years ago would not only remember his name, but would also be willing to extend an offer
of employment to a 23-year-old he knows nothing about.
"I also know a guy who works at a PR firm in Mayfield Heights. Old Gary definitely owes me
one from back in the day.
Hell, you could probably call him up right now and get an interview this week. Just tell him
you're Bruce's kid."
At press time, sources confirmed Tenety had noticed his name was suspiciously absent from
the references section on his son's most recent job application.
"Stocks have reached a permanently high plateau", "subprime is contained", "there's no
icebergs this far south" and now "The Fed's balance sheet is not the threat that people seem to
think it is."
Man's ability to willfully ignore 'downside possibilities' and remain cognitively dissonant
far longer than logic (or their pocketbook) should allow seems to know no bound and none other
than
The Federal Reserve's Bill Dudley just unleashed what could be the piece de resistance of
"nothing to see here, move along" agitprop.
Great Picture' Cowboying a Nuke while discussing confidence in the FED, quite appropo'
!
TRUTH @ 9:00; Plus this week, Friday will be Huge !
Should a seated President jail someone that attempted his Assassination, or a Former
President that planned to Nuke the Yellowstone Super Volcano Caldera, or someone that sold
email password to China and CC copied all 'to and from' messages including those highly
Confidential, or blame a former President for planning 911 False Flag attack, or expose
Planned Parenthoods first Amputating tongues for silently shipping in bulk, or expose
Democrat history of Decades of Projecting blame while committing War Crimes, or end 19 Year
War in Afghanistan ( Longest War ) then Syria against Last Night's Congressional Vote to keep
status quo, or 'take a knee' and quit being President !
"... By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha. Twitter: @asymptosis. Originally published at Evonomics ..."
"... And they're dead wrong that there's no difference between the two. Buybacks steal money not so much from corporate wages, but much more obviously and explicitly: from taxes that contribute to our common public purse. ..."
"... noblesse oblige ..."
"... Given the legal ability of corporate managers to use corporate funds to actively manipulate stock prices for their private benefit, how many of those corporate managers use their 'omniscience' to goose their private benefits and just how closely has the SEC been watching for insider trading? Martha Stewart learned her lesson in a show trial for our entertainment, but are we really supposed to believe she is the only person making use of inside knowledge to do a little private stock dealing? ..."
"... Our Society gives a special place to business enterprise on the theory that it benefits us all through innovation in products, their production, and distribution, and that business provides a livelihood for our people. Corporations receive disproportionate benefits protecting them from risk in their ventures. Stock buybacks and financial manipulations undermine the creative impetus [such as there were] that once drove corporate management, or more accurately they redirect that 'creative impetus' toward schemes for most efficiently looting what past managers built. ..."
The Real
Reason Stock Buybacks Are a Problem Posted on February 5,
2019 by Yves
Smith Yves here. Even though this article on stock buybacks by Steve Roth, cross posted
below after this lenghty introduction, makes an important central point, I believe it is
missing the forest for the trees. Roth acts as if stock buybacks are merely an alternative to
dividends (or investing or paying workers more). It's far worse than that. Since the crisis,
many companies have been borrowing to buy back stock. And why is that? Duh, because executives
have big time incentives to goose the stock price, and stock buybacks have become a socially
acceptable way to manipulate share prices.
We have from time to time published the work of William Lazonick, who has made a much more
comprehensive critique of stock buybacks, with considerable underlying data. It's great to see
his ideas finally going mainstream with the publication of an op-ed in the
New York Times by Chuck Schumer and Bernie Sanders (odd couples like that tell you the
tectonic plates are moving), and more important, their plan to introduce legislation to curb
buybacks. As they sketched out:
Our bill will prohibit a corporation from buying back its own stock unless it invests in
workers and communities first, including things like paying all workers at least $15 an hour,
providing seven days of paid sick leave, and offering decent pensions and more reliable
health benefits.
In other words, our legislation would set minimum requirements for corporate investment in
workers and the long-term strength of the company as a precondition for a
corporation entering into a share buyback plan. The goal is to curtail the overreliance on
buybacks while also incentivizing the productive investment of corporate capital.
As you'll see, this is actually a modest proposal, although forcing companies to take care
of workers before they engage in share price manipulation is an important reordering of
priorities.
By way of contrast, here is the key section of a 2018 post by Lazonick, who also gives
credit to the Congresscritters who have been dogging this abuse for some time:
For the Republican corporate tax cut to result in job creation, Congress must follow it up
with legislation to rein in these distributions to shareholders. There is a straightforward
and practical way to accomplish this objective: Congress should ban corporations from doing
stock buybacks, more formally known as open-market stock repurchases. As if more evidence
were needed, here are three reasons to expect that corporations will use the Republican tax
break to do stock buybacks.
First, the stock-based
compensation of senior executives incentivizes them to do distributions to shareholders.
Annual mean remuneration of CEOs of the same 475 companies listed on the S&P 500 from
2007 through 2016 ranged from $9.4 million in 2009, when the stock market was in the dumps,
to $20.1 million in 2015, when the stock market was booming. The vast majority of this total
remuneration, ranging from 53 percent in 2009 to 77 percent in 2015, was in the form of
realized gains from stock-based options and awards.
Second, for more than three decades, executives of major U.S. corporations have preached,
conveniently masking their self-interest, that the paramount responsibility of their
companies is to " create value " for shareholders.
Most recently, from 2007 through 2016, stock repurchases by 461 companies on listed on the
S&P 500 totaled $4 trillion, equal to 54 percent of profits. In addition, these companies
declared $2.9 trillion in dividends, which were 39 percent of profits. Indeed, top corporate
executives are often willing to incur debt, lay off employees, cut wages, sell assets, and
eat into cash reserves to "maximize shareholder value."
Third, in recent years hedge fund activists have ramped up the pressure on companies to do
buybacks. With their immense war chests of billions of dollars of assets under management,
these corporate
predators have used the proxy voting system, " wolfpack " collaboration
among hedge funds, and direct engagement with management, which was once illegal, to
participate in the looting of the U.S. business corporation.
Repurchases done on the open market, which constitute the vast majority of all buybacks,
are nothing but manipulation of the stock market. So why are companies allowed to do them?
Because of the 1980 election of Ronald Reagan as president on a platform of market
deregulation. In November 1982, after Reagan had appointed Wall Street banker John Shad as
chairman of the Securities and Exchange Commission (SEC), the agency adopted
Rule 10b-18 , which permits a company to do buybacks that can amount to hundreds of
millions of dollars per day, trading day after trading day, without fear of being charged
with stock-price manipulation. Rule 10b-18, which remains in force 35 years later, is a
license to loot the U.S. business corporation.
The argument for rescinding Rule 10b-18 is overwhelming. As research I've done with the
Institute for New Economic Thinking documents, buybacks wreak immense damage on households,
companies, and the economy. The profits that major corporations reinvest in productive
capabilities form the
foundation for a prosperous middle class. Buybacks deprive companies of that investment
capital, instead serving as a prime mode of making the richest households richer while
eroding middle-class employment opportunities.
Moreover, the justification for buybacks rests on the faulty
ideology that, for the sake of economic efficiency, companies should be run to "maximize
shareholder value." Agency theory, the academic thinking that underpins this ideology,
assumes that only
shareholders take the risk of investing in the productive capabilities of companies. In
fact, public shareholders do not as a rule provide financial capital to companies. They
simply buy and sell
outstanding shares. The true investors in productive capabilities are "households as
workers," whose skills and efforts generate the company's innovative products, and
"households as taxpayers," who devote a portion of their incomes to fund public investments
in infrastructure and knowledge that companies need to be competitive.
Finally, the insidious Rule 10b-18 that for more than three decades has encouraged massive
stock-market manipulation is just an ill-considered SEC regulation, adopted as part of Reagan
"voodoo economics." The justification for Rule 10b-18 has never been debated, nor have its
provisions been legislated, by Congress. That may, however, finally be changing. A number of
U.S. senators, including Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.),
Brian Schatz (D-Hawaii),
and Cory Booker (D-N.J.),
have voiced criticisms of buybacks, as has former Vice President Joseph Biden
.
The most persistent challenge to this corrupt practice has come from Sen. Tammy Baldwin (D-Wis.), who in
2015 wrote
two highly critical letters to
former SEC Chairman Mary Jo White, and who has recently challenged the
prescription drug lobby group PhRMA to reconcile its claim that the pharmaceutical companies
need high drug prices to fund research and development with the fact that the major companies
spend virtually all their profits on buybacks and dividends.
It has hit the point where the biggest buyers of US stocks in aggregate are the companies
that once issued them. This is not how a well functioning economy operates.
By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a
student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha.
Twitter: @asymptosis. Originally published at Evonomics
Bernie Sanders and Chuck Schumer's New York Times op-ed, " Limit Corporate
Stock Buybacks ," has thrown internet gasoline on the buyback debate. The left is waving
the flag, and the right is trying to tear it down.
The core Sanders/Schumer argument: buybacks extract money from firms, money that could be
used to pay workers more, and fund productive investment (including worker training and
upskilling).
The counterargument: how are buybacks any different from dividend distributions that way?
Both transfer cash from firms to households. We don't hear people complaining about dividend
distributions stealing money from workers and investment.
That counterargument is absolutely right, even while it's completely wrong. Because both
sides miss the overwhelming effect of stock buybacks (vs dividends). Buybacks are a massive tax
dodge for shareholders.
Imagine Megacorp wants to transfer a billion dollars to its shareholders (notably including
the huge shareholders in its C suite and on its corporate board). Whether they distribute
dividends or buy back shares, either way Megacorp has a billion dollars less on its balance
sheet. Its book value drops by $1B.
But what happens on the household, shareholder side? With a dividend distribution it's
simple; households get $1B in taxable dividend income. With a buyback, households that sell
shares also receive $1B in cash, but they give up their shares, which obviously have value.
That's where the (perfectly legal) tax avoidance lies -- perhaps best explained by
example:
Suppose the average shareholder's shares were purchased for $20 each. That's the
shareholders' tax basis. If Megacorp pays $25 a share (for 40M shares), the shareholders who
sell have cap gains of $5 a share -- $200M in taxable income -- versus $1B if the same cash is
paid out via dividends.
Dividends and long-term cap gains in the U.S. are currently taxed using the same rates and
brackets: 15% if your income is above $38K, 20% if it's above $425K. If Megacorp chooses a $1B
stock buyback, our imagined shareholders pay $40M in taxes (at the 20% rate), versus $200M in
taxes on a dividend distribution.
Neither of these has any effect on corporate taxes, by the way. C-corporation profits (as
opposed to S corporations and other "pass-throughs") are taxed at the corporate level, whether
they get distributed or not, and no matter which distribution method is used.
There are other important problems with buybacks, mainly having to do with boards' and C
suites' greater discretion over the timing and amounts of buybacks, and the potential for
self-dealing price manipulation. (Contra Schumer and Sanders' odd bank-shot approach to this problem,
we could just repeal Rule 10B-18 .)
But the right is right: Buybacks are no more pernicious than dividends in "stealing money"
from firms, that could otherwise be used for worker pay and productive investment.
And they're dead wrong that there's no difference between the two. Buybacks steal money
not so much from corporate wages, but much more obviously and explicitly: from taxes that
contribute to our common public purse.
There is another consideration – back when marginal taxes at the highest bracket
were much higher, one of the limits of executive compensation was the fact that even if they
engaged in such behvaiour, most of this would be taxed away.
1. A straight up ban on stock buybacks, as they seem to be mainly an instrument for
maximizing executive compensation by boosting EPS and share price, which are common metrics
used to pay executives. They also result in debt from buybacks and less capital for actually
meaningful investments.
2. The "Carried Interest" loophole should be immediately eliminated. This will also
discourage "vulture private equity" as well, a social drain on society.
3. Taxes should be steeply progressive. This is to act as a deterrence against rent
seeking. Perhaps the standard deduction could be increased even for ordinary working class
citizens. Capital gains should be taxed at a comparable rate to labour or even higher (as the
top 10% control 85% of stocks anyways).
4. A special high net worth enforcement unit should be set up in tax collection agencies
around the world. This is to identify and catch high net worth individuals who engage in tax
evasion and possibly aggressive tax planning as well.
5. Tax incentives should encourage corporations to invest in things that are actually
productive, such as R&D, capital expenditures, and employee training. One key issue is
that company executives know that share buybacks are the easiest way to maximize executive
compensation and that they will often only be there for a few years. Competing through a
superior product/service, developing R&D, good corporate culture, etc, is "hard" for
executives and may not lead to a return. Plus it is often short term pain, long term
gain.
6. Corporate governance clearly needs reform and I think that we may need something far
more independent on boards than what is currently there. Often executives have a bias towards
voting for high compensation knowing that they will someday face similar boards. They also
tend to support management or be appointed to be "yes people" as opposed to be
independent.
The biggest issue though is that our society's rich have no sense of noblesse
oblige anymore. Their goal is to maximize their own compensation at society's expense.
Tools like shareholder buybacks and private equity are just a cover for those objectives.
If we want to get fussed over taxes and tax evasion, domestic stock buybacks, capital
gains taxes, and dividend taxes seem like small potatoes compared to the games international
corporations play to realize their profits in countries that don't tax them.
I fail to see the monstrous tax dodge because the analysis fails to consider the integral
of tax payments over the life of the stock.
Whomever sold the current shareholders their stock at $20 must have paid capital gains on
that sale , unless it IPO'd at 20.
So there are effectively two cases. The first is that it IPO'd at 20. In this case, the
shareholders put in the first 800M, and it doesn't seem unfair to tax them only on the
additional 200M the company made.
The second is that it IPO'd at zero. Then the total amount of capital gains tax as it
changed hands up to $20 (where current shareholders bought it) is on $800M. So again, taxing
only $200M doesn't seem unfair.
For ipo prices between 0 and 20 you just have a combination of the two arguments.
One might conclude that the dividend tax double-taxes early share gains.
Why capital gains tax should be less than income tax makes no sense or obvious fairness.
You might want to argue that dividend double-taxation isn't such a bad thing and effectively
compensates for a low capital gains rate.
But the buyback isn't per se a tax dodge any more than the capital gains tax in the first
place. And it would probably be conceptually cleaner just to raise the capital gains
rate.
I didn't address this, and should have. He really is making a mountain out of a
molehill.
Only about 1/4 of US stocks are held by taxable investors (the households he mentions).
Retirement accounts including public and private pension funds, foundations, endowments, and
foreign investors are all tax exempt. So any of them could have been the seller to the
taxable household back in the day.
You could argue that dividends get taxed at current rate, whereas capital gains from
selling shares taxes at the rate at the time of the sale. Ergo, shareholders can wait for a
decrease in capital gains taxes to sell and functionally dodge the taxes they would have paid
if they received a dividend. However, it's still a weak argument as the capital gains rate
could easily go up, and/or the value of the stock itself could fall for some other, unrelated
reason. Yves' and Lazonick's critiques are much more relevant.
It's laudable and important to force companies to properly compensate workers before
initiating stock buybacks. This won't solve he problem of using funds for buybacks instead of
capital investments, R&D etc. To accomplish that we also need to un-Bork anti-trust law
and actually have companies that are honestly competing with each other.
To what extent have stock buybacks enabled corporate managers to leverage income streams
in the corporations they 'manage' to increase corporate debt through bond issues? What
happens to a corporation when it's revenue streams are impacted by ups-and-downs of the
economy? Hasn't Professor Hudson gone on at length describing the instability such debt
creates for a business? Dividends can move up-and-down with revenue streams, but bonds must
be paid or there is a corporate cash flow problem. For a small business that means bankruptcy
while for large corporate players I think that means takeover and merger further
consolidating our monopoly and monopsony bloated Corporations. After all these years of stock
buybacks and consolidation how much cash flow remains to leverage?
Given the legal ability of corporate managers to use corporate funds to actively
manipulate stock prices for their private benefit, how many of those corporate managers use
their 'omniscience' to goose their private benefits and just how closely has the SEC been
watching for insider trading? Martha Stewart learned her lesson in a show trial for our
entertainment, but are we really supposed to believe she is the only person making use of
inside knowledge to do a little private stock dealing?
Worry about stock buybacks now? Too little and I fear much too late. How many of our great
corporations are little more than Potemkin fronts for hollowed out shells of debt feeding a
massive transfer of the wealth our country built over many generations into the hands of the
obscenely wealthy?
Our Society gives a special place to business enterprise on the theory that it
benefits us all through innovation in products, their production, and distribution, and that
business provides a livelihood for our people. Corporations receive disproportionate benefits
protecting them from risk in their ventures. Stock buybacks and financial manipulations
undermine the creative impetus [such as there were] that once drove corporate management, or
more accurately they redirect that 'creative impetus' toward schemes for most efficiently
looting what past managers built.
The bottom line is that this preoccupation with the 'headline number' for the current month
as a single datapoint that is promoted by Wall Street and the Government for official economic
data is misleading.
The effective method of considering a heavily adjusted and revised data series like this is
with a trend analysis of at least seven to twelve observations, and more if you can get
them.
But, that makes for a much less interesting and convenient narrative.
And as for the median wage and income -- it is still too weak to sustain an economic
recovery.
Stocks were a bit weak today, despite all this fabulous economic data, having exhausted the
sugar rush that was spoonfed to them by their friendly neighborhood Federal Reserve.
Looks like pendulum moved in opposite direction and neoliberals (and first of all financial
oligarchy) might be crashed by the return of the New Deal style regulations as well as higher
taxes on incomes. the latter measure is popular even in the USA.
Notable quotes:
"... By Don Quijones of Spain, Mexico, and the UK, and an editor at Wolf Street. Originally published at Wolf Street ..."
"... The bill will face stiff opposition from the domestic banking sector as well as the European Commission, which in 2017, under pressure from Europe's banking lobbies, abandoned its own pledge to break-up too-big-to-fail lenders. ..."
"... Since the global financial crisis, big banks on both sides of the Atlantic have been fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units from their riskier investment banking units. ..."
By Don Quijones of Spain, Mexico, and the UK, and an editor
at Wolf Street. Originally published at
Wolf Street
On Friday, Italy's coalition government
unveiled new banking regulations that it hopes to pass in the coming months, including a
rule that would separate banks' commercial and investment arms. It would be the Italian
equivalent of the Glass-Steagall Act, the 1933 U.S. law that separated commercial banks that
took deposits, made loans, and processed transaction, from riskier investment banking
activities. The law was designed to protect deposits. Its repeal in 1999 led to the
consolidation of the U.S. banking sector, unfettered risk-taking by deposit-taking banks, and
arguably the Financial Crisis just eight years later.
... ... ...
The bill will face stiff opposition from the domestic banking sector as
well as the European Commission, which in 2017, under pressure from Europe's banking lobbies,
abandoned its own pledge to break-up too-big-to-fail lenders.
Since the global financial crisis, big banks on both sides of the Atlantic have been
fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units
from their riskier investment banking units. Such legislation would would make each entity
smaller. And that is not in the interests of the big banks, nor the ECB, which
hopes to breathe life into a new generation of trans-European super-banks by serving as
matchmaker to Europe's largest domestic lenders.
"And you could say in some respects this 'shadow behind the power' that makes money off war, period, no matter who's the belligerent,
makes money off that volatility now, especially with computers that are able to assist them in doing so, like currency manipulation,
for example, or just general speculation. And they don't care about what they're doing to the real economy, because they're raking
in the dough."
Lawrence Wilkerson, former chief of staff to Colin Powell
"There are those contentious and disorderly people, who engage in useless speculation and deceptive talk, and focus on divisive
points of dispute... All things are good to the pure of heart, but to these corrupt and disbelieving controversialists nothing
can be good, since both their minds and and their hearts are corrupted. They may say that they know God, but by their actions
they deny Him, being corrupt and disobedient, and of no use for any good purpose."
Titus 1:10,15-16
It is enlightening to see that even in the earliest of times there were those who made a trade out of controversy, and of spreading
hatred and fear. There are those now who seek to inflame controversy, for their own purposes and those of their paymasters. Nowhere
is this more apparent now than in our polarized political landscape, and most social discourse in the mainstream and on that modern
public forum, the Internet.
Even those who think of themselves as good can get caught up in it. It is one of the greatest of ironies, that we become what
we hate, because that is where we place our attention, and thereby our hearts..
There are sites and places that one can go to and be almost certain of a type of hateful and divisive focus, of easily provoked
anger, and contempt for others, of incivility and almost childlike tantrums, with sweeping generalizations, conclusions and condemnations.
They are 'playing to the mob' and venting their own disquiet hearts.
This is not the same as reform, or of the calling out of injustice to the light. This is the madness that makes a fog in the minds
and the hearts, which serves one to escape the pain of thinking.
Why do we go to these sites, and listen to them, and repeat their deceptive assertions, if not for the thrill of a temporary distraction?
And so often we excuse our participation, saying we only wish to 'inform' others, while poisoning the minds of our friends and our
children.
The weather started getting rough...
But if we are honest, we know that there is no good in this, no good fruits, because there is no love in them. It is difficult to
see at times, because deceit can be cleverly phrased and our emotions are powerfully engaging.
When in doubt always step back and ask, if not of yourself then of the Lord, where is the love in this, where is the fruitfulness
of good works? Is this serving good, or passionate anger of the self and its wrath?
By their actions they show what they are. And these produce nothing good, but only add to the destruction and confusion, for money,
or for the sick release of their own disturbed and disordered minds and hearts, with which they infect many.
Speaking of infections, the Fed's turn to dovishness has reignited the animal spirits of the Bubbleonians™.
Stocks continued moving hired, fueled by a renewed optimism of the 'Fed Put' which is another term for the official backstopping
of speculation in financial assets.
Follows the excerpt from his latest Gartman letter.
We remain positive of equities because of what we have said time and time again each
morning for the past several weeks and which needs to be re-said here this morning yet again
for nothing has changed: the Fed has indeed "changed" its monetary policies and this change
was made clear by Mr. Powell's comments of now more than a month ago and made clearer midweek
last week following the FOMC meeting .
In a flash, the US has scrapped the 1987 Intermediate-Range Nuclear Forces (INF) Treaty,
which safeguarded Europe and the world from a deadly US-Russia arms race. This is particularly
bad news for Europeans.
Russia must be feeling a lot like the Native Indians these days with regards to treaties
signed with the duplicitous Americans. For the second time in as many decades, the US has gone
back on its word, removing another pillar from the global arms reduction architecture.
The Trump administration, in its infinite wisdom, announced on the weekend it
would freeze US participation in the INF " for 180 days ," which, from a military perspective,
must be interpreted to mean forever. In the spirit of reciprocity, Vladimir Putin, expressing
regret that Russia " could not save " the Cold War treaty, said he would be forced to follow
suit.
The Russian leader emphasized, however, that Moscow would not deploy intermediate or smaller
range weapons " until the same type of American weapons " were placed in Europe or elsewhere in
the world.
This latest ratcheting up of tensions between Moscow and Washington was wholly avoidable
– that is, if avoiding confrontation is a goal of the US. Clearly, it is not. The
unpredictable hotheads now dictating foreign policy in the Trump administration, particularly
National Security Advisor John Bolton, a veteran hawk who the Washington Post recently
called a " serial arms control killer, " have somehow concluded that playing a game of
nuclear chicken on the European continent with Russia is the best way to resolve bilateral
issues.
The White House appears to be incensed over Russia's upgrade of a cruise missile, the
'9M729', which it claims exceeds the 500-km flight threshold set down by the treaty. The INF
treaty specifically banned the development, deployment, and testing of ground-based missiles
with a range between 500km and 5,500km (310-3,400 miles).
In fact, the development of this weapon has so irked the Trump administration that last year
the US Ambassador to NATO, Kay Bailey Hutchison, warned
Russia that if it did not halt its development NATO would be forced to " take out " the
missile. Although Hutchison later backtracked on the hyperbole, saying she did not mean to
suggest a preemptive strike on Russia, the remark nevertheless underscored the gravity of the
situation.
The obvious question is: does the US have legitimate grounds to be concerned over this
cruise missile, one of the latest in a series of new weapon systems to be
rolled out by the Russian military? Well, if they did have real cause for concern, they
deliberately missed several opportunities to examine the weapon firsthand. In fact, Moscow
invited US Secretary
of State Mike Pompeo to attend a public presentation where Russian military brass were on hand
to field queries about the missile. Yet the Americans snubbed the event, which could have
persuaded them to think twice before dumping a landmark arms control treaty.
On this point, it would have been refreshing to hear some impartial European voices weighing
in on the matter. After all, in the event of another arms race between the US and Russia, the
European continent will once again be forced to wear a large crosshairs on its back. Instead,
EU leaders predictably approached the issue from the American stance, parroting the narrative
that Russia, the perennial bogeyman, is in violation of the INF.
German Chancellor Angela Merkel, for example, without providing a shred of evidence,
said ,
"It is clear to us that Russia has violated this treaty the important thing is to keep the
window for dialogue open."
Immediately assuming Russia's guilt seems to be a non-starter for any sort of productive
negotiations.
What's behind America's madness?
In order to get a clearer picture of what exactly is motivating Washington's reckless
behavior, it is essential to remember that the Trump administration's withdrawal from the INF
is just the latest in a long string of aggressive moves against Russia . Indeed, this is not
the first time Washington has torn up an arms agreement with Moscow.
In 2002, the Bush administration terminated the 1972 Anti-Ballistic Missile Treaty (ABM
Treaty), which maintained something of a suicide pact between the Cold War nuclear rivals known
as 'mutually assured destruction'. From there it has been all downhill for bilateral
relations.
With the ABM Treaty swept away, the Bush and subsequent Obama administration proceeded to
unilaterally build – despite repeated offers from Moscow to cooperate on the system
– a US missile defense shield in Eastern Europe, just a stone's throw from the Russian
border. In May 2016, NATO announced its missile defense base in Romania was fully operational.
Following the announcement, Mikhail Ulyanov, head of the Russian Foreign Ministry's department
for arms control issues, warned that not only did the
US missile defense system threaten the strategic balance between nuclear powers, the launchers
in Romania could easily be re-fitted with offensive cruise missiles, thereby turning a shield
into a sword at a moment's notice.
In other words, Washington is now accusing Moscow of violating an arms control treaty that
it itself had most likely violated almost three years ago.
Pierre-Emmanuel Thomann, a geopolitics analyst from Paris 8 University, told RT this is the
desired outcome Washington was looking for, which already decided " beforehand to get out of
the treaty " irrespective of possible concessions from Moscow.
" The US already destabilized the nuclear balance when they decided to get out of the ABM
treaty in 2002, and when you look at a map the United States [is] putting missile defense
bases all around Eurasia, creating a feeling of encirclement in Russia and China ," Thomann
said.
This leads us to another possible reason why the Trump administration made the rash decision
to kill the INF treaty, and that is due to the huge strides made by the Chinese military of
late. Last year, as just one example, a Chinese firm reportedly completed the successful
launch of a supersonic missile, which the Chinese government said could compete on
international markets.
China, which is not bound by the conditions set down by the INF, has undergone breakneck
militarization ever since. Yes, the United States became an existential threat to Beijing when
the Obama administration announced the so-called '
pivot to Asia '. This disastrous doctrine saw a large chunk of US naval forces enter the
Pacific theater. Thus, Washington may be trying to bring the Chinese and Russians into some
sort of new three-way arms control treaty, but if that were true, it seems to be going about it
in the worst possible way.
Whatever the ultimate cause may be, the United States and its quest for global supremacy, in
cooperation with the European Union, which behaves like a powerless vassal state inside of the
'American empire', must assume a heavy part of the blame for the increasingly perilous state of
global relations today.
Konstantin Kosachev, head of the foreign affairs committee in the upper house of Russia's
parliament, adequately summed up the fate of the world following the latest US withdrawal from
yet another arms reduction pact.
" I 'congratulate' the whole world ," Kosachev told the Russian Senate.
" The United States has taken another step toward its destruction today. "
The greater the hawkishness, the greater the ignorance .
Notable quotes:
"... As one Washington Post headline observed at the time based on hard data : The less Americans know about Ukraine's location, the more they want to intervene . And now insert most any third world country targeted by Washington over the past few decades. ..."
"... What a pack of turds and this is supposed to be the political elite in this country ..."
As one Washington Post
headline observed at the time based on hard data : The less Americans know about Ukraine's
location, the more they want to intervene . And now insert most any third world country
targeted by Washington over the past few decades.
"The responses from members of Congress painted a shocking picture of ignorance,
hypocrisy"
Lets just stop at ignorance, that pretty much covers it. What a pack of turds and this is
supposed to be the political elite in this country. Would it even be possible to have an
intelligent conversation with this rabble? Would you want to try?
This latest ratcheting up of tensions between Moscow and Washington was wholly avoidable
– that is, if avoiding confrontation is a goal of the US. Clearly, it is not. The
unpredictable hotheads now dictating foreign policy in the Trump administration, particularly
National Security Advisor John Bolton, a veteran hawk who the Washington Post recently
called a " serial arms control killer, " have somehow concluded that playing a game of
nuclear chicken on the European continent with Russia is the best way to resolve bilateral
issues.
Is anyone else tired of the longest, least productive waste of war in American history ? What
have we achieved, where are we going with this ? More war.
We are being fed a fairy tale of war about what men, long dead, did. And the reason they did
it. America is being strangled by the burden of belief that now is like then.
By the patrician men and women administrators, posturing as soldiers like the WW2 army, lie
for self profit. Why does anyone believe them ? Korea, Vietnam, Iraq, each an economic
decision, rather than a security issue.
Capitalists need their options regulated and their markets ripped from their control by the
state. Profits must be subject to use it to a social purpose or heavily taxed. Dividends
executive comp and interest payments included
Well done! Much clearer than your usual. There are several distinct motivations for taxes. We
have been far enough from fairness to workers, for so long, that we need to use the tax
system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority, which matches both objectives. Wealth
tax is needed until we reverse the massive inequality supported by the policies of the last
40 years.
Carbon tax and the like are a different thing, use of the tax code to promote a particular
policy and reduce damage to the commons.
"...we need to use the tax system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority..."
Forgive me, but high marginal rates (which I hugely favor) don't "redistribute the
accumulated wealth" of the plutocrats. If such high marginal rates are ever enacted, they'll
apply only to the current income of such plutocrats.
You merged paragraphs, and elided the next one. The way I see it, high rates are a
prerequisite to prevent the reaccumulation of obscene wealth, and its diversion into
financial gambling.
But yes that would be a very slow way to redistribute what has already accumulated.
Didn't mean to misinterpret what you were saying, sorry. High rates are not only "a
prerequisite to prevent the reaccumulation of obscene wealth," they are also a reimposition
of fair taxation on current income (if it ever happens, of course).
Wealth tax is needed until we reverse the massive inequality supported by the policies of the
last 40 years. Carbon tax and the like are a different thing, use of the tax code to promote
a particular policy and reduce damage to the commons.
"
more wisdom as usual!
Although wealth tax will be unlikely, it could be a stopgap; could also be a guideline to
other taxes as well. for example, Elizabeth points out that billionaires pay about 3% of
their net worth into their annual tax bill whereas workers pay about 7% of their net worth
into their annual tax bill. Do you see how that works?
it doesn't? this Warren argument gives us a guideline. it shows us where other taxes
should be adjusted to even out this percentage of net worth that people are taxed for. Ceu,
during the last meltdown 10 years or so ago, We were collecting more tax from the payroll
than we were from the income tax. this phenomenon was a heavy burden on those of low net
worth. All this needs be resorted. we've got to sort this out.
and the carbon tax? may never be; but it indicates to us what needs to be done to make
this country more efficient. for example some folks, are spending half a million dollars on
the Maybach automobile, about the same amount on a Ferrari or a Alfa Romeo Julia
quadrifoglio, but the roads are built for a mere 40 miles an hour, full of potholes.
What good is it to own a fast car like that when you can't drive but 40 -- 50 miles an
hour? and full of traffic jams. something is wrong with taxation incentives. we need to get a
better grid-work of roads that will get people there faster.
Meanwhile most of those sports cars just sitting in the garage. we need a comprehensive
integrated grid-work of one way streets, roads, highways, and interstates with no traffic
lights, no stop signs; merely freeflow ramp-off overpass interchanges.
Jesus Christ said, in so many words, that a man's worth will be judged by his generosity and
his avarice.
" 24And the disciples were amazed at His words. But Jesus said to them again, "Children,
how hard it is to enter the kingdom of God! 25It is easier for a camel to pass through the
eye of a needle than for a rich man to enter the kingdom of God." 26They were even more
astonished and said to one another, "Who then can be saved?"
New York collected $2.3 billion less income-tax revenue than predicted for December and
January, a development that Governor Andrew Cuomo blamed on wealthy residents leaving for
second homes in Florida and other states that received more favorable treatment in the tax law
enacted by President Donald Trump and the Republican Congress.
The shortfall will require a new look at the $175 billion budget Cuomo submitted to the
legislature last month, he said. If the trend continues, the governor said it would affect
spending on high-expense items such as health, education, infrastructure and a planned
middle-class tax cut.
"There is no doubt that the budget we put forward is not supported by the revenue," the
Democratic governor said during a news conference in Albany. "If even a small number of
high-income taxpayers leave, it has a great effect on this tax base. You are relying on a very
small number of people for the vast amount of your tax dollars."
While acknowledging that stock market volatility is among several factors that may have
suppressed income-tax revenue in the past two months, the governor placed most of the blame on
Trump and the Republican-dominated Congress of 2017, which enacted a tax plan limiting federal
deductions on real estate and other local taxes.
Related: New York's Income-Tax Revenue Falls 'Abruptly' Under Forecast
"It was politically diabolical and also highly effective," Cuomo said. "And if your goal is
to help Republican states and hurt Democratic states this is the way to do it."
If you are dealing with Goldman Sachs that last thing is to expect moral behaviour from them. They are financial
preduitors and generally dealing with them for smaller clients is a very dangerous undertaking, if you ask me.
Notable quotes:
"... Three months ago, when the loan market was freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout loan from its books, saving the bank and the funds from potential losses. What was odd, is that Goldman was also serving as the underwriter to the company issuing the loans...while at the same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of its own client. ..."
"... Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to hedge-fund sharks who stand to reap major profits if the company collapses as a result of the incremental debt: according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now demanding at least $52 million - and potentially much more - from the bank. ..."
"... "I have never experienced this kind of egregious and immoral behavior from a bank in my entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an interview after his company filed the suit Wednesday in a state court in New York. Goldman, which until that moment had been retained by United Natural , vowed to vigorously fight the case, calling it "entirely without merit." ..."
"... Indeed, as Bloomberg notes, " again and again, the contracts have played strange roles in debt transactions, sometimes straining allies or encouraging unlikely alliances. " ..."
"... According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way that allowed hedge funds to reap a windfall from their CDS bets, as first reported by Bloomberg in October . United Natural said it initially heeded Goldman's advice, agreeing to the changes so it could complete the takeover of grocery chain Supervalu. ..."
"... Where things got complicated, is that Goldman enlisted the help of hedge funds that had been betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior banker to back it into a corner ..."
"I Have Never Experienced This Kind Of Immoral Behavior From A Bank In My Entire Life":
Goldman Slammed In Latest CDS Scandal
Not a month seems to pass any more without a major bank or hedge fund getting in hot water
for using CDS in a way that was never intended, and now it's Goldman's turn, again.
Three months ago, when the loan market was
freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout
loan from its books, saving the bank and the funds from potential losses. What was odd, is that
Goldman was also serving as the underwriter to the company issuing the loans...while at the
same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of
its own client.
Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant
of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to
hedge-fund sharks who stand to reap major profits if the company collapses as a result of the
incremental debt:
according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now
demanding at least $52 million - and potentially much more - from the bank.
Worse, the distributor of natural and organic foods, specialty foods is absolutely furious
at the bank that until recently was its strategic advisor:
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an
interview after his company filed the suit Wednesday in a state court in New York. Goldman,
which until that moment had been retained by United Natural , vowed to vigorously fight the
case, calling it "entirely without merit."
As hinted above, Wall Street's latest drama once again revolves around the increasingly
dysfunctional credit-default swaps market, where hedge funds and others wager on the ability of
companies to keep up with their borrowings, only the traditional role of CDS as bankruptcy
hedges has long ago given way to more "creative" applications. Indeed, as Bloomberg notes, "
again and again, the contracts have played strange roles in debt transactions, sometimes
straining allies or encouraging unlikely alliances. "
According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way
that allowed hedge funds to reap a windfall from their CDS bets, as first
reported by Bloomberg in October . United Natural said it initially heeded Goldman's
advice, agreeing to the changes so it could complete the takeover of grocery chain
Supervalu.
Where things got complicated, is that Goldman enlisted the help of hedge funds that had been
betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to
repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld
fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior
banker to back it into a corner.
In the beginning it was nothing but rainbows and roses: United Natural, which is a supplier
to Whole Foods, announced the $2.9 billion Supervalu acquisition in July, and with the market
soaring and credit and loan spreads near all time tights, not a cloud appeared on the horizon.
And, as so often happens, the company announced that Goldman Sachs would act as lead
underwriter to sell the billions in debt needed to fund the deal. But just a few months later,
as equities first tumbled and shortly thereafter credit markets - especially in the leveraged
loan market - froze up, the investment bank faced the prospect of being saddled with millions
in losses unless it found a way to offload the loan from its books.
Meanwhile, hedge funds were facing major losses too after having bet against Supervalu's
debt by loading up on CDS, but the company's sale threatened to create a situation known as an
orphaned CDS contract, a situation similar to the infamous McClatchy fiasco (one which we
profiled extensively in "
Orphan CDS, Manufactured Credit Events, Insufficient Deliverables: What The Hell Is Going On In
The CDS Market ?"). Because new debt being issued to purchase Supervalu would have paid
down the grocer's obligations, it could have made swaps linked to Supervalu effectively
worthless - referencing an entity with no significant borrowings - even as the default risk of
the purchaser, United Natural, soared. However, due to the specific nature of the CDS contract,
there was no continuity in tracking the referenced entity, as such those who were betting on a
Supervalu default would end up with nothing, even if the successor company did eventually file
for bankruptcy.
It is here that Goldman had an "epiphany", one which would kill two birds with one
stone.
The key was to restore the value of the roughly $470 million of net CDS wagers linked to
Supervalu's debt. While the cost of the Supervalu derivatives had plunged through most of last
year, by tweaking the loan docs to make Supervalu a co-borrower on the new financing, Goldman
sparked a surge in the value of the swaps.
That, along with several other concessions, not only rescued hedge funds from getting wiped
out on their SVU CDS, but more importantly, helped Goldman fill its order book for the loan and
eliminate its exposure risk.
And while Goldman was the clear winner here, helping a couple of millionaire credit PMs
avoid major losses for 2018 while avoiding taking a loss on its buyout loan exposure, United
Natural claims that Goldman left it exposed to a group of lenders whose interests are at odds
with its own and who are motivated to create roadblocks aimed at forcing a default so that they
can notch further gains in the CDS market.
That may be difficult to prove, especially since Goldman can claim that without the contract
fudge, the deal may never have been funded. Still, United Natural alleges that it never
received a final list of funds participating in the loans and, had it known, would've raised
concerns, even though without making the concessions to hedge funds, Goldman would have
struggled to place the deal.
United Natural meanwhile claims that it went along with the changes after warnings from
Stephan Feldgoise, who helps oversee Goldman's mergers business in the Americas. The bank
allegedly warned that if the company didn't adjust the terms, it might "scare off" investors,
trigger "blowback" from its own shareholders and "things would get ugly."
What Goldman apparently did not explain is that the one entity most on the hook - in terms
of both P&L and reputation - was Goldman. Which is why Feldgoise and Bank of America, to
co-lead arranger on the loan, are also named as defendants.
As Bloomberg concludes, it's another twist in Feldgoise's time at Goldman Sachs, which
ironically, included a stint as chairman of the firm's global fairness committee. Curiously, in
mid-2017, division chiefs announced he would be departing the bank, stepping down from his post
in senior management to become an advisory director. Yet he's still at the bank, now in a
heated battle with a client for whom he's handled various deals. That said, with the millions
in fees from the United Natural-Supervalu deal, at least Feldgoise's tenure at Goldman is
secure. Worst case, he can always get a job at one of the many hedge funds that made a killing
on SVU CDS thanks to the Goldman fudge.
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner
Well, Steve, perhaps you should have been paying more attention for the last 11 years.
The bank expects oil supply to tighten in the first quarter as top exporter Saudi Arabia
cuts production , but Citi's Ed Morse also forecasts a soft spot for demand in the opening
months of 2019. Further complicating matters are a series of geopolitical and market dramas
that will play out through the beginning of May.
This follows a three-month period that saw oil prices spike to nearly four-year highs as the
market braced for U.S. sanctions on Iran. Prices then tumbled more then 40 percent to 18-month
lows, blowing up long-held trading strategies and forcing drillers to rethink their 2019
budgets.
"The volatility every year is a good $20 to $25 a barrel between low and high," Morse said.
"December was kind of the nightmare for the world where the swings were $50 at a low, $86 at a
high and $68 for the average of Brent."
... ... ...
Citi expects Brent crude to continue rising into the mid-$60 range and hit $70 before year
end. That will be enough to keep in play another wild card: surging U.S. oil production.
The manufacturing economy that made America great in the 1950s is back (not). Unemployment
has been vanquished (not). We are "energy independent" (not). The once-again rising stock
market is proof-of-life for US business prospects (not). We have the best medical care and
higher ed in the world (cough cough). It would all come as a surprise to the people dining on
dog food with ketchup out in the flyover precincts - but they are not exactly the types to sit
around and listen to Don Lemon and Jeffrey Toobin dissect the speech post-game.
Following the new-ish tradition of a designated opposition respondent to the SOTU,
Democratic sore loser Stacy Abrams (Georgia Governor's race, 2018), will virtue-signal her
party's dedication to identity politics, concealing its dark connection to the Wall Street / K
Street grift machine, and to the Neocon war hawks so eager to manufacture failed states in
parts of the world that are too bothersome to try to get along with. I suppose she will try to
revive the Russian collusion angle, with a spin on how the Georgia election of 2018 was also
rigged by malign forces to prevent her victory.
Mostly though, Ms. Abrams will extol the wonders and marvels of free health care and free
college for all under the coming 2020 Democratic Party landslide, a comfy-cozy future of
women-led caring-and-sharing, plus the promise of punishing taxes-to-come on super-rich toffs
like Mr. Trump. The media will eat it up. Ms. Abrams will then be promoted as the next
vice-president. The party's strategy is to get every female voter in America on-board along
with its supplemental People-of-Color-and-LBGTQ army for a surefire electoral victory. I can
see that possibly working, but is it a good fate for the country to be literally divvied up
between a women's party and a men's party?
It's conceivable, in a nation that absolutely can't make sense of itself , that Mr. Trump's
annual report to congress will be as incomprehensible as this year's Superbowl halftime show
.
Even the weather in Atlanta was a complete mystery with Maroon 5's front man, Adam Levine,
capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper
Big Boi's triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant
ground sloth - an eight-year-old's idea of what it means to be important. Or maybe it was just
all code for two sides of the climate change debate.
You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness
lumbers down the aisle of congress's house on Tuesday night. I wouldn't be surprised if the
Democratic majority turns its backs on him during the always excruciating preliminaries and
then just walks out of the chamber. Don't expect the usual excessive rounds of applause from
the president's own party this time, either, in the big, half-empty room. They don't know what
to do about him at this point... or what to do with themselves, for that matter.
The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is
American Wonderfulness , so expect at least forty minutes of national self-esteem therapy,
which nobody will believe. Throw in another ten minutes of elevating sob stories about "special
guests" up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs
down the aisles. He must be good and goddam sick of all the guff shoveled at him for two
years.
Financial industry has inherent trend toward parasitism and gangsterism and as such should be
as tightly regulated as gambling. Probably even more. But under neoliberalism where financial
oligarchy a the ruling class this is a pipe dream. I do not see any significant countervailing
force other the far right nationalism. Far right nationalism has power to brake bankers spine,
but usually they allied with them (fascism)
Those that have been following events for several years know they are under attack by an
enemy that has no face and means to do them great harm. Nothing less than their sovereignty and
freedom is at stake.
Absolute control over people and resources is the ultimate goal.
...the bankers want to show up after the population has lost everything in a collapse,
to be their savior and gain control of everyone by offering resources in exchange for
compliance.
In the end these bankers are just people . They yield NO power other than a
cheap magi c trick called money. They are simply losers pulling levers behind the curtain .
They are terrified of real people. They are terrified of being exposed. They are worthless
conjurers of useless paper. Their power is a cheap spell. They always have known that once
people are aware of the trick, they are done. They are afraid of elevated souls. They are
afraid of the awakened. They are terrified of the big red pill that is coming for the masses. Game over.
When Hawaii congresswoman Tulsi Gabbard
announced her candidacy for the presidency on CNN last month, I had a feeling I'd be
writing about her a fair bit. Not because I particularly want her to be president, but because
I knew her candidacy would cause the narrative control mechanizations of the political/media
class to overextend themselves , leaving them open to attack, exposure, and the weakening of
their control of the narrative.
Mere
hours before her campaign officially launched, NBC News published an astonishingly blatant smear piece titled "Russia's
propaganda machine discovers 2020 Democratic candidate Tulsi Gabbard," subtitled "Experts who
track websites and social media linked to Russia have seen stirrings of a possible campaign of
support for Hawaii Democrat Tulsi Gabbard." One of the article's authors shared it on Twitter with the
caption, "The Kremlin already has a crush on Tulsi Gabbard."
The article reported that media outlets tied to the Russian government had been talking a
lot about Gabbard's candidacy, ironically citing as an example an RT article which
documented the attempts by the US mainstream media to paint Gabbard as a Kremlin agent. The
article's authors cited the existence of such articles combined with the existence of "chatter"
about Gabbard on the anonymous message board 8chan (relevant for God knows what reason) as
evidence to substantiate its blaring headline. Even more hilariously, the source for its weird
8chan claim is named as none other than Renee DiResta of the narrative control firm New
Knowledge, which was
recently embroiled in a scandal for staging a "false flag operation" in an Alabama Senate
race which gave one of the candidates the false appearance of being amplified by Russian
bots.
This pathetic, juvenile language from one of the authors of that astronomically awful NBC
News article gives you a sense of what they're trying to accomplish here. Smear campaign
fully underway https://t.co/jvl5pFRr0P
This article is of course absurd. As we
discussed recently , you will always see Russia on the same US foreign policy page as
anti-interventionists like Tulsi Gabbard, because Russia, like so many other nations, opposes
US interventionism. To treat this as some sort of shocking conspiracy instead of obvious and
mundane is journalistic malpractice. There are many, many very good reasons to oppose the war
agendas of the US-centralized empire, none of which have anything to do with having any loyalty
to or sympathies for the Russian government.
But we will continue to see this tactic used again and again and again against any and all
opposition to US-led interventionism for as long as the Russiagate psyop maintains its grip
upon western consciousness. And make no mistake, these smears have everything to do with
anti-interventionism and nothing to do with Russia. There will never, ever be an antiwar voice
who the political/media class and their centrist followers espouse as good and valid; they'll
never say "Ahh, finally, someone who hates war and also isn't aligned with Russia! We can get
behind this one!" That will never, ever happen, because it is the opposition to war and
interventionism itself which is being rejected, and in the McCarthyite environment of Russia
hysteria, tarring it as "Russian" simply makes a practical excuse for that rejection.
All the biggest conflicts in the world can be described as unipolarism vs multipolarism: the
unipolarists who support the global hegemony of the US-centralized empire at any cost, versus
the multipolarists who oppose that dominance and support the existence of multiple power
structures in the world. The governments of Russia, China, Iran and their allies are
predominantly multipolarist in their geopolitical outlook, and they tend to be more in favor of
non-interventionism, since unipolarity can only be held in place by brute force and aggression.
Unipolarists, therefore, can always paint western anti-interventionists as Russian assets,
since the Russian government is multipolarist and opposed to the interventionism of the
unipolarists.
The nonstop propaganda campaign to keep the coals of Russia hysteria burning white hot at
all times can therefore be looked at first and foremost as a psychological operation to kill
support for multipolarism around the world. It can of course be used to manufacture consent for
escalations against Russia, China, Syria, Venezuela, Iran etc as needed, but it can also be
used to attack the ideology of anti-interventionism itself by smearing anyone who opposes
unipolar oppression and aggression as an agent of a nefarious oppositional government.
The social engineers have succeeded in constructing a narrative control device which
encapsulates the entire agenda of the unipolar world order in a single bumper sticker-sized
talking point: "Russia opposes Big Brother, therefore anyone who opposes Big Brother is
Russian." This device didn't take an amazing intellectual feat to create; all they had to do
was recreate the paranoid insanity of the original cold war, and they already had a blueprint
for that. It was simply a matter of shepherding us back there.
After the fall of the Soviet Union, there emerged a popular notion of a " peace dividend " in which defense
spending could be reduced in the absence of America's sole rival and the abundant excess funds
used to take care of the American people instead. The only problem was that a lot of people had
gotten very rich and powerful as a result of that cold war defense spending, and it wasn't long
before they started circulating the idea of using America's newly uncontested might for a very
expensive campaign to hammer down a liberal world order led by the beneficent guidance of the
United States government. Soon the neoconservatives were pushing their unipolarist narratives in high levels
of influence with great effect, and shortly thereafter they got their " new Pearl
Harbor " in the form of the 9/11 attacks which justified an explosion in defense spending,
interventionism and expansionism, just as the neoconservative Project for a New American
Century had called
for . And the rest is history.
And now our collective consciousness is planted right back in the center of that paranoid,
hawkish political environment of the first cold war. The main difference now is of course that
Russia is nothing remotely like a superpower today, and that the establishment Russia narrative
is made entirely out of narrative, but the most important difference is that this time the
establishment narratives are not taking place within the hermetically sealed bubbles of major
news media corporations. People are able to communicate with each other and share information
far more easily than they were prior to the fall of the Berlin wall, and westerners are able to
easily access Russian media and anti-interventionist narratives if they want to.
Whoever controls the narrative controls the world, as I never tire of saying. This
difficulty in replicating the hermetically sealed media environment of the original cold war
poses a severe challenge for narrative control, and it is for this reason reason that there is
now so much skepticism of the establishment Russia narrative. It is also the reason for the
establishment's aggressive maneuvers to censor the internet, to demonize Russian media, and to
smear anti-interventionist perspectives.
But we can't keep living this way. We all know this, deep down. The people at the helm of
the unipolar world order are advancing an ecocidal world economy which is stripping the earth
bare and filling the air with poison while at the same time pushing more and more aggressively
against the multipolarist powers, one of which happens to have thousands of nuclear warheads at
its disposal. The unipolarity so enthusiastically promoted by the neoconservatives and their
fellow travelers has reached the end of the line after just a few short years, and now it's
time to dispense with it and try something else. They will necessarily smear us with everything
but the kitchen sink for saying so, but we are right and they are wrong. The state of the world
today proves this beyond a doubt.
* * *
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How come Poland's at 6% & Lithuania is at 29%? Don't they both import American LNG?
And how come Estonia is at 3%? Sounds like the Estonians import Russian gas. Bulgaria's at
37%. Now what were the assurances John McCain gave Sofia regarding alternative gas options to
Southstream? Please spell them out for me again, I'm pretty slow, you know!
What is so ridiculously ClusterFrack-Failed about this, is that BGR nixed a CNG Pipeline
Deal with RUS under pressure from the EU_EXECUTIVES.
Instead of Jobs and Transit Fee Income, BGR will have to stand in line and pay more for
CNG since TRK picked up the Pipeline. The Southeastern EUROZONE are STILL going to Import
that same RUS_CNG.
The project created controversy due to non-compliance with European Union competition and energy
legislation, in particular the Third Energy Package , which
stipulates the separation of companies' generation and sale operations from their
transmission networks.
It was seen as rival to the Nabucco pipeline project. Construction
of the Russian onshore facilities for the pipeline started in December 2012. The project
was cancelled by Russia in December 2014 following obstacles from Bulgaria and the EU, the
2014 Crimean
crisis , and the imposition of European sanctions on Russia. The project has been
replaced by proposals of Turkish Stream and Tesla pipeline .
There was no crime until the investigations started...
Special Counsel Robert Mueller's indictment of Roger Stone may be the most
peculiar document to emerge from the Trump–Russia "collusion" saga. It is an instant
classic in the Mueller genre: lots of heavy breathing, then sputtering anti-climax.
After a 20-page narrative about Russian cyber-ops, WikiLeaks' role as a witting
anti-American accomplice, and Trump supporters enthralled by thousands of hacked Democratic
emails and visions of the Clinton campaign's implosion, Stone, a comically inept hanger-on,
ends up charged with seven process crimes. No espionage, no conspiracy, no commission of any
crime until the investigations started.
This is not to say that obstruction of congressional investigations is trifling. Nor is it
to say the accused has a good chance of beating the case. Some of Stone's alleged lies were
mind-bogglingly stupid. Why deny written communications with people you've texted a zillion
times? Why deny conversations with interlocutors (such as Trump-campaign CEO Steve Bannon) who
have no reason to risk a perjury charge to protect you? And don't even get me started on the
witness-tampering count, which, if I were Mueller, I'd have hesitated to include for fear of
suggesting an insanity defense. ( Do it for Nixon? Pull a "Frank Pentangeli"? )
That said, the case is overcharged. The tampering count carries a 20-year penalty. Adding an
obstruction or false-statements count (five years each) would have given Stone (who is 66 years
old) prison exposure of up to 25 years. The most central "colluder" in the Mueller firmament to
be bagged so far, George Papadopoulos, was sentenced to a grand total of two weeks'
imprisonment. Surely a quarter-century of "potential" incarceration would have sufficed to give
prosecutors the "this is serious stuff" headline they crave while allowing for the more
representative sentence Stone will eventually receive -- who knows, maybe three weeks? But true
to form, Mueller instead included six of these five-year counts -- so the press can report that
Stone faces up to 50 years in the slammer.
This inflated portrait of Stone as a major criminal was further bloated by the scene of his
arrest : a well-armed battalion of FBI agents sent to apprehend him as the media, conveniently
on hand at 6 a.m., took it all in. But Stone is just a cameo. The big picture is the
overarching Trump–Russia investigation. It's still being inflated, too.
Prosecutors ordinarily do not write an elaborate narrative about crimes they cannot prove.
Here, though, Mueller uses Stone as the pretext to spell out the Big Collusion Scheme:
Candidate Donald Trump instructs Stone to coordinate with WikiLeaks on the dissemination of
Clinton dirt stolen by Russia; Stone directs his associate, Jerome Corsi, to have Corsi's man
in London, Ted Malloch, make contact with WikiLeaks chief Julian Assange, who is holed up at
the Ecuadorian embassy in London. Malloch must have succeeded, because next thing you know,
Corsi is reporting back to Stone: Our friends the Russian hackers have given WikiLeaks all this
damaging information on Hillary, including the Podesta emails; it will all be rolled out in
October, right before the election.
It's a sensational story. Only . . . it's just a story.
Mueller doesn't even pretend he can prove it. No shame in that: During a long investigation,
prosecutors always develop a theory of the case. Often, the hypothesis doesn't pan out. No
problem. You narrow your indictment down to what you can prove and call it a day. In Stone's
case, that would dictate omitting the ambitious collusion narrative and stripping down to a
two-page obstruction-of-Congress indictment. Instead, Mueller gives us the fever dream: Stone
as a key cog in the collusion wheel. Where reality intrudes, the prosecutors float suggestions
they cannot prove or leave out key details that blow up the narrative.
The special counsel could have contented himself with easy-to-prove false-statements charges
against Stone: lying about whether his WikiLeaks communications were documented in writing;
lying about whether he asked his friend Randy Credico to pass a request for specific Hillary
Clinton information to Assange; lying about whether he ever told the Trump campaign about his
WikiLeaks conversations with Credico.
But no, Mueller strains to accuse Stone of falsely denying that he had a second WikiLeaks
"intermediary" -- whom the indictment indicates was Jerome Corsi , Stone's Infowars associate.
Depending on how charitable you want to be, this claim is either risibly weak, flatly wrong, or
dependent on a distortion of the word "intermediary." To repeat, the "intermediary" thread adds
nothing to the case against Stone. It is a pretext for weaving the collusion narrative without
having to prove it.
To amplify the indictment a bit with reporting by the Daily
Caller 's Chuck Ross , Credico -- a left-wing comedian and radio host -- got access to
Assange through a radical lawyer, Margaret Ratner Kunstler , who has
done work for WikiLeaks. That apparently did not happen until shortly before August 25, 2016,
when Assange appeared as a guest on Credico's radio show. According to the indictment, Credico
first texted Stone about Assange's imminent appearance on August 19.
Prosecutors, however, suggest that Stone had a line into Assange and WikiLeaks starting at
least two months earlier. "By in or around June and July 2016," goes the slippery allegation,
Stone was telling Trump officials he had information that WikiLeaks possessed damaging Hillary
Clinton documents. In Mueller's telling, this makes Stone seem like a potentially valuable
WikiLeaks insider when, on July 22, WikiLeaks began publishing thousands of DNC emails.
Immediately, a "senior Trump campaign official was directed to contact STONE about any
additional releases and what other damaging information [WikiLeaks] had regarding the Clinton
campaign."
If not from Credico, from whom, pray tell, did Stone learn what WikiLeaks was up to? Who is
the other intermediary?
In truth, he didn't need one. He had two sources of information about WikiLeaks -- neither
of them Corsi, neither of them sensibly thought of as an "intermediary." These sources go
unmentioned in the indictment. Worse, while the prosecutors finger Corsi as Stone's hidden
"intermediary," their evidence does not support this claim -- and they know it, so they fudge
it.
Let's start with the two sources Mueller omits.
Turns out it is not just Stone who was alerted long before the Democratic convention that
WikiLeaks might have damaging information on Clinton. Everyone on the planet who cared to be
informed about such things knew. On June 12, 2016, in an
interview that was widely
reported , Assange said that WikiLeaks planned to expose documents relating to Hillary
Clinton that could affect the 2016 election. Was Stone, the self-styled dark-politics devotee,
pressing sources for an entrée into WikiLeaks? Sure he was. But that doesn't mean he had
one. And he didn't need one in order to direct the Trump campaign's attention to WikiLeaks;
Assange was calling the world's attention to himself.
The second omitted source? It was James Rosen, then a top reporter at Fox News -- though
Rosen seems to have had no idea he was playing that role. To understand what happened, we need
to consider the July 25 Stone–Corsi email that the indictment treats like a smoking gun
-- but consider it in the context of an earlier July 25 email that the indictment fails to
include.
As noted above, on July 22, someone very high up in the Trump campaign -- perhaps the
candidate himself, though we are not told -- ordered a top campaign official to reach out to
Stone. Just three days later, Stone sent Corsi an email with the subject line "Get to
[Assange]." Stone exhorted Corsi to try to reach the WikiLeaks leader "at Ecuadorian Embassy in
London and get the pending emails . . . they deal with the [Clinton] Foundation allegedly "
(emphasis added).
So why did Stone believe WikiLeaks had Clinton Foundation documents? Well, Stone is
acquainted with Charles Ortel , an
investor who dabbles in investigative journalism and has focused intently on the Clinton
Foundation. Ortel has occasional correspondence with James Rosen. In an email exchange on July
25, Rosen told Ortel, "Am told WikiLeaks will be doing a massive dump of HRC emails related to
the CF [i.e., the Clinton Foundation] in September." Ortel proceeded to forward this email to
Stone. Only after seeing Rosen's email did Stone contact Corsi to say that Assange "allegedly"
had Clinton Foundation emails that Corsi should try to acquire.
Obviously, Stone did not need a WikiLeaks intermediary to give him a heads-up about a
possible Clinton Foundation dump. He happened upon that information indirectly from a member of
the press (Rosen), through an acquaintance (Ortel). And he did not need Corsi as an
intermediary -- Stone is the one who alerted Corsi, not the other way around.
The indictment says that, shortly after receiving Stone's July 25 email imploring him to
make contact with Assange, Corsi forwarded it to a "supporter of the Trump campaign" in the
United Kingdom -- reported by Chuck Ross to be Ted Malloch, a London-based American who used to
be a business professor at
Oxford and has ties to British populists. Subsequently, on Sunday July 31, Stone emailed
Corsi to "call me MON," stressing that Corsi's associate should "see [Assange]."
Well, did that happen? Did Corsi's man Malloch make contact with WikiLeaks?
If you read nothing but Mueller's indictment, you assume he must have. After all, the next
thing we are told about is Corsi's email report to Stone on Tuesday, August 2. Corsi (then
vacationing in Italy) wrote: "Word is friend in embassy [i.e., Assange] plans 2 more dumps, one
shortly after I'm back [which was to be in mid August]. 2nd in Oct. Impact planned to be very
damaging." Corsi added:
Time to let more than [Podesta] to be exposed as in bed w enemy if they are not ready to
drop HRC [Clinton]. That appears to be game hackers are now about. Would not hurt to start
suggesting HRC old, memory bad, has stroke -- neither he nor she well. I expect that much of
next dump focus, setting stage for foundation debacle.
The implication is clear: Malloch must have reached Assange, gotten the critical
information, and passed it along to Corsi so it could be communicated to Stone and the Trump
campaign. Corsi is the intermediary! Coordination! Collusion!
But Mueller is hiding the ball again. The indictment makes no mention of the facts that
Malloch
denies knowing anything about WikiLeaks , that Corsi denies having any sources with inside
knowledge about WikiLeaks, and that prosecutors appear to accept these denials.
So how did Corsi get the "2 more dumps" of information (or gossip) that he dished to Stone?
He made it up -- or, more benignly, he claims to have figured it out on his own. Reportedly , Mueller's prosecutors were as
frustrated as they were incredulous over Corsi's unlikely claim. But they don't have a better
explanation. In the negotiations over a plea offer (on a charge of lying to investigators),
which Corsi has resisted, Mueller's prosecutors drafted an agreed-upon "
Statement of the Offense ." In it, Corsi was to admit that "his representations to [Stone],
beginning in August 2016, that he had a way of obtaining confidential information from
[WikiLeaks] were false."
Corsi is another strange character in this drama. He is a notorious bomb-thrower, and his
memory is spotty. But one can understand why the special counsel seems to accept his story
about not having a WikiLeaks source: His information was spectacularly wrong. He surmised that
Assange would release information that Mrs. Clinton and her husband, former president Bill
Clinton, had serious medical problems; this would be a prelude to devastating disclosures about
the Clinton Foundation. Corsi's fever dream never came true, either.
But how can Corsi have been Stone's intermediary to WikiLeaks if he had no way of obtaining
confidential information from WikiLeaks?
Stone, meantime, points out that neither he nor Corsi made reference to Podesta's emails. He
denies any awareness that Assange had them, and plausibly contends that the reference to
Podesta in his conversation with Corsi (and in his later tweet on August 21 that "the Podesta's
[ sic ] in the barrel" was coming) related to a lobbying company started by John Podesta and
his brother Tony. That company had done work for the same Kremlin-backed Ukrainian political
party served by Paul Manafort -- Trump's campaign manager, and Stone's former business partner.
It was at the very time when Stone and Corsi were discussing WikiLeaks and Podesta that a July
31 New
York Times exposé appeared, outlining Manafort's lobbying entanglements with these
Ukrainians. Tellingly, Mueller does not contend that Stone's denial of foreknowledge about
WikiLeaks' Podesta dump is false.
Again, understand: It is not just that Mueller can't prove Corsi was Stone's intermediary.
Mueller has no need to try to prove it. He has an overwhelming obstruction and
witness-tampering case against Stone without it. The indictment's "intermediary" plot line is
just a device for prosecutors to spin the Trump–Russia–WikiLeaks collusion yarn.
They are careful not to plead it in a conspiracy count; just an "introductory" narrative -- no
formal charge, no burden to prove it, and no need to reveal stubborn facts that undermine it.
Since it is superfluous to the process charges against Stone, he may not even challenge it.
Maybe he will plead guilty, and the narrative will stand as the government's unrebutted version
of events.
And this is just the indictment of a bit player. Makes you look forward to the special
counsel's final report, no?
Mueller is famous for charging crimes that do not exist. The plurality of this cases are
overturned on appeal. For those of you who wonder that is 75% plus.
That alone begs the question of why he has not been disbarred.
Money quote: " neoliberalism is the fight of finance to subdue society at large, and to
make the bankers and creditors today in the position that the landlords were under
feudalism."
Notable quotes:
"... ... if you take the Bible literally, it's the fight in almost all of the early books of the Old Testament, the Jewish Bible, all about the fight over indebtedness and debt cancellation. ..."
"... neoliberalism is the fight of finance to subdue society at large,and to make the bankers and creditors today in the position that the landlords were under feudalism. ..."
"... They call themselves free marketers, but they realize that you cannot have neoliberalism unless you're willing to murder and assassinate everyone who promotes an alternative ..."
"... Just so long as you remember that most of the strongest and most moving condemnations of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah, Jeremiah, Micah, the Gospels, Letter of James, etc. ..."
"... The history of Jewish banking after the fall or Rome is inextricable from cultural anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from most aspects of social life. The Jewish lending of money on interest to gentiles was both necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish money lenders were essential to and yet ostracized within European economies for centuries. ..."
"... Now Christianity has itself long given up on the tradition teaching against usury of course. ..."
"... In John, for instance most of the references to what in English is translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to the ruling elite among the southern tribe in bed with the Romans. ..."
Just finished reading the fascinating
Michael Hudson interview I linked to on previous thread; but since we're discussing Jews
and their religion in a tangential manner, I think it appropriate to post here since the
history Hudson explains is 100% key to the ongoing pain us humans feel and inflict. My
apologies in advance, but it will take this long excerpt to explain what I mean:
"Tribes: When does the concept of a general debt cancellation disappear historically?
"Michael: I guess in about the second or third century AD it was downplayed in the Bible.
After Jesus died, you had, first of all, St Paul taking over, and basically Christianity was
created by one of the most evil men in history, the anti-Semite Cyril of Alexandria. He
gained power by murdering his rivals, the Nestorians, by convening a congress of bishops and
killing his enemies. Cyril was really the Stalin figure of Christianity, killing everybody
who was an enemy, organizing pogroms against the Jews in Alexandria where he ruled.
"It was Cyril that really introduced into Christianity the idea of the Trinity. That's
what the whole fight was about in the third and fourth centuries AD. Was Jesus a human, was
he a god? And essentially you had the Isis-Osiris figure from Egypt, put into Christianity.
The Christians were still trying to drive the Jews out of Christianity. And Cyril knew the
one thing the Jewish population was not going to accept would be the Isis figure and the
Mariolatry that the church became. And as soon as the Christian church became the
establishment rulership church, the last thing it wanted in the West was debt
cancellation.
"You had a continuation of the original Christianity in the Greek Orthodox Church, or the
Orthodox Church, all the way through Byzantium. And in my book And Forgive Them Their Debts,
the last two chapters are on the Byzantine echo of the original debt cancellations, where one
ruler after another would cancel the debts. And they gave very explicit reason for it: if we
don't cancel the debts, we're not going to be able to field an army, we're not going to be
able to collect taxes, because the oligarchy is going to take over. They were very explicit,
with references to the Bible, references to the jubilee year. So you had Christianity survive
in the Byzantine Empire. But in the West it ended in Margaret Thatcher. And Father
Coughlin.
"Tribes: He was the '30s figure here in the States.
"Michael: Yes: anti-Semite, right-wing, pro-war, anti-labor. So the irony is that you have
the people who call themselves fundamentalist Christians being against everything that Jesus
was fighting for, and everything that original Christianity was all about."
Hudson says debt forgiveness was one of the central tenets of Judaism: " ... if
you take the Bible literally, it's the fight in almost all of the early books of the Old
Testament, the Jewish Bible, all about the fight over indebtedness and debt
cancellation. "
Looks like I'll be purchasing Hudson's book as he's essentially unveiling a whole new,
potentially revolutionary, historical interpretation.
@ karlof1 with the Michale Hudson link....thanks!!
Here is the quote that I really like from that interview
"
Michael: No. You asked what is the fight about? The fight is whether the state will be taken
over, essentially to be an extension of Wall Street if you do not have government planning.
Every economy is planned. Ever since the Neolithic (era), you've had to have (a form of)
planning. If you don't have a public authority doing the planning, then the financial
authority becomes the planners. So globalism is in the financial interest –Wall Street
and the City of London, doing the planning, not governments. They will do the planning in
their own interest. So neoliberalism is the fight of finance to subdue society at
large,and to make the bankers and creditors today in the position that the landlords were
under feudalism.
"
karlof1, please email me as I would like to read the book as well and maybe we can share a
copy.
And yes, it is relevant to Netanyahoo and his ongoing passel of lies because humanity has
been told and been living these lives for centuries...it is time to stop this shit and grow
up/evolve
@13 / 78 karlof1... thanks very much for the links to michael hudson, alastair crooke and the
bruno maraces articles...
they were all good for different reasons, but although hudson is being criticized for
glossing over some of his talking points, i think the main thrust of his article is very
worthwhile for others to read! the quote to end his article is quite good "The question is,
who do you want to run the economy? The 1% and the financial sector, or the 99% through
politics? The fight has to be in the political sphere, because there's no other sphere that
the financial interests cannot crush you on."
it seems to me that the usa has worked hard to bad mouth or get rid of government and the
concept of government being involved in anything.. of course everything has to be run by a
'private corp' - ie corporations must run everything.. they call them oligarchs when talking
about russia, lol - but they are corporations when they are in the usa.. slight rant..
another quote i especially liked from hudson.. " They call themselves free marketers,
but they realize that you cannot have neoliberalism unless you're willing to murder and
assassinate everyone who promotes an alternative ." that sounds about right...
@ 84 juliania.. aside from your comments on hudsons characterization of st paul "the
anti-Semite Cyril of Alexandria" further down hudson basically does the same with father
coughlin - https://en.wikipedia.org/wiki/Charles_Coughlin..
he gets the anti-semite tag as well.. i don't know much about either characters, so it's
mostly greek to me, but i do find some of hudsons views especially appealing - debt
forgiveness being central to the whole article as i read it...
it is interesting my own view on how money is so central to the world and how often times
I am incapable of avoiding the observation of the disproportionate number of Jewish people in
banking.. I guess that makes me anti-semite too, but i don't think of myself that way.. I
think the obsession with money is killing the planet.. I don't care who is responsible for
keeping it going, it is killing us...
Just so long as you remember that most of the strongest and most moving condemnations
of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah,
Jeremiah, Micah, the Gospels, Letter of James, etc.
The history of Jewish banking after the fall or Rome is inextricable from cultural
anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from
most aspects of social life. The Jewish lending of money on interest to gentiles was both
necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish
money lenders were essential to and yet ostracized within European economies for
centuries.
Now Christianity has itself long given up on the tradition teaching against usury of
course.
I too greatly admire the work of Hudson but he consistently errs and oversimplifies
whenever discussing the beliefs of and the development of beliefs among preNicene followers
of the way (as Acts puts is) or Christians (as they came to be known in Antioch within
roughly eight or nine decades after Jesus' death.) Palestinian Judaism in the time of Jesus
was much more variegated than scholars even twenty years ago had recognized. The gradual
reception and interpretation of the Dead Sea Scrolls in tandem with renewed research into
Phili of Alexandria, the Essenes, the so-called Sons of Zadok, contemporary Galilean zealot
movements styles after the earlier Maccabean resistance, the apocalyptism of post exilic
texts like Daniel and (presumably) parts of Enoch--all paint a picture of a highly diverse
group of alternatives to the state-Church once known as Second Temple Judaism that has been
mistaken as undisputed Jewish "orthodoxy" since the advent of historical criticism.
The
Gospel of John, for example, which dates from betweeen 80-120 and is the record of a much
earlier oral tradition, is already explicitly binitarian, and possibly already trinitarian
depending on how one understands the relationship between the Spirit or Advocate and the Son.
(Most ante-Nicene Christians understood the Spirit to be *Christ's* own spirit in distributed
form, and they did so by appeal to a well-developed but still largely under recognized strand
in Jewish angelology.)
The "theological" development of Christianity occurred much sooner
that it has been thought because it emerged from an already highly theologized strand or
strands of Jewish teaching that, like Christianity itself, privileged the Abrahamic covenant
over the Mosaic Law, the testament of grace over that of works, and the universal scope of
revelation and salvation as opposed to any political or ethnic reading of the "Kingdom."
None
of these groups were part of the ruling class of Judaean priests and levites and their
hangers on the Pharisees.
In John, for instance most of the references to what in English is
translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to
the ruling elite among the southern tribe in bed with the Romans.
So the anti-Judaism/Semiti
of John's Gispel largely rests on a mistranslation. In any event, everything is much more
complex than Hudson makes it out to be. Christian economic radicalism is alive and well in
the thought of Gregory of Nysa and Basil the Great, who also happened to be Cappadocian
fathers highly influential in the development of "orthodox" Trinitarianism in the fourth
century.
I still think that Hudson's big picture critique of the direction later Christianity
took is helpful and necessary, but this doesn't change the fact that he simplifies the
origins, development, and arguably devolution of this movement whenever he tries to get
specific. It is a worthwhile danger given the quality of his work in historical economics,
but still one has to be aware of.
Technological superiority is a weapon and the USA know how to use it.
Notable quotes:
"... Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others. ..."
"... Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program. "American chips in many ways form the backbone of China's tech economy," Shah said. ..."
"... The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative. But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well. ..."
"... "Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn in 2012." ..."
"... If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion worth of Chinese goods will increase from 10% to 25% on January 1, 2019. ..."
"... While US has the upper hand on semis, a trade embargo on semis will (1) slows down China's move towards achieving Made in China 2025, (2) at the same time give China the impetus to rush ahead will all resources available to achieve the originally omitted goal of being self-sufficient in tech skills and technology, and (3) seriously hurt companies like Intel, AMD, Micron, and Qualcom as a huge percentage of their businesses are with China, and with that portion of their business gone, all these companies will end up in a loss and without the needed financial resources to invest into new technology in the near future. ..."
As trade tensions run hot between the U.S. and China, President Trump might have one key advantage in the trade war, according
to Nomura.
Analyst Romit Shah explained that China's dependence on U.S.-made advanced microchips could give Trump the upper hand.
"We believe that as China-U.S. tensions escalate, U.S. semiconductors give Washington a strong hand because the core components
of Made in China 2025 (AI, smart factories, 5G, bigdata and full self-driving electric vehicles) can't happen without advanced microchips
from the U.S.," Shah said in a note to clients.
BEIJING, CHINA – NOVEMBER 9, 2017: US President Donald Trump (L) and China's President Xi Jinping shake hands at a press conference
following their meeting at the Great Hall of the People in Beijing. Artyom Ivanov/TASS (Photo by Artyom Ivanov\TASS via Getty Images)
Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which
include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others.
One of Made in China 2025's main goals is to become semiconductor self sufficient. China hopes that at least 40% of the semiconductors
used in China will be made locally by 2020, and at least 70% by 2025. "Made in China 2025 made abundantly clear China's commitment
to semiconductor self-sufficiency. Made in China 2025 will upgrade multiple facets of the Chinese economy," Shah said.
According to Nomura's estimates, China is currently about 3 to 5 years behind the U.S. in dynamic random-access memory (DRAM)
chip production. However, Shah explained that if the trade war persists, the consequences could set Chinese chip production behind
by 5 to 15 years.
Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program.
"American chips in many ways form the backbone of China's tech economy," Shah said.
Consequences for U.S.
The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative.
But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well.
One concern centers around intellectual property theft. The Department of Justice (DOJ) has been working hard to punish China
for allegedly attempting to commit espionage. For example, the DOJ believes China was attempting to spy on the U.S. through Huawei
and asked U.S. allies to drop
the Chinese tech equipment maker.
However, while many U.S. chipmakers, such as Advanced Micro Devices (
AMD ), Qualcomm (
QCOM ) and Micron (
MU ), expressed gratitude that the DOJ was intervening
to prevent intellectual property theft, the companies are also concerned that it could spark retaliation from their Chinese business
partners and result in loss of access to the Chinese market. "Joint ventures, IP sharing agreements and manufacturing partnerships
are the price of admission into China, and thus far, companies are playing ball," Shah explained.
Shah essentially calls the Chinese tariffs a double-edged sword. While tariffs will hurt the Chinese if they can't have access
to freely source U.S. chips, it could also hurt U.S. chipmakers if they lose their business in China. According to Shah's research,
"Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated
circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn
in 2012."
Trump
and China's President Xi Jinping are scheduled to meet at the G20 summit in Buenos Aires, Argentina, on Thursday for a two-day
meeting. If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion
worth of Chinese goods will increase from 10% to 25% on January 1, 2019.
"China could source equipment from Europe and Japan; however, we believe there are certain mission-critical tools that can only
be purchased from the U.S. We believe that U.S.-China trade is the biggest theme for U.S. semis and equipment stocks in 2019. Made
in China 2025 can't happen without U.S. semis, and U.S. semis can't grow without China. We hope this backdrop drives resolution,"
Shah said.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter:
@heidi_chung .
R
While US has the upper hand on semis, a trade
embargo on semis will (1) slows down China's move towards achieving Made in China 2025, (2) at the same time give China the impetus
to rush ahead will all resources available to achieve the originally omitted goal of being self-sufficient in tech skills and
technology, and (3) seriously hurt companies like Intel, AMD, Micron, and Qualcom as a huge percentage of their businesses are
with China, and with that portion of their business gone, all these companies will end up in a loss and without the needed financial
resources to invest into new technology in the near future.
Apart from semis, China holds the throat of the US in the supply of
rare earth (used in semis, military weaponry, ans astronomical), as well as antibiotics..
"... The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. ..."
From Encyclical Letter Laudato Si' of the Holy Father Francis, On Care For Our Common Home:
The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated
and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively
approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental
method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find
itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature,
but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a
matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on
things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us.
Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational.
This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers
and experts in technology. It is based on the lie that there is an infinite supply of the earth's goods, and this leads to the
planet being squeezed dry beyond every limit. It is the false notion that "an infinite quantity of energy and resources are available,
that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily
absorbed"
"The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance
in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the
real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons
of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems,
and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market
growth.
They are less concerned with certain economic theories which today scarcely anybody dares defend, than with their actual
operation in the functioning of the economy. They may not affirm such theories with words, but nonetheless support them with their
deeds by showing no interest in more balanced levels of production, a better distribution of wealth, concern for the environment
and the rights of future generations. Their behavior shows that for them maximizing profits is enough. Yet by itself the market
cannot guarantee integral human development and social inclusion. At the same time, we have "a sort of 'superdevelopment' of a
wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation", while
we are all too slow in developing economic institutions and social initiatives which can give the poor regular access to basic
resources. We fail to see the deepest roots of our present failures, which have to do with the direction, goals, meaning and social
implications of technological and economic growth."
This is a classic, textbook example of financial astrology... You probably should read it in full to appreciate the depth of junk
science here. But this is financial casino my friends, and they try to entice you with naked girls and drinks...
A gain in January has foretold an annual gain 87 percent of the time with only 9 major errors going back to 1950, according
to the Stock Trader's Almanac.
The S&P 500 was up 7.9 percent in January, its best performance for the first month of the year since 1987.
Some market pros are skeptical of the January barometer, but Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, says
it makes sense because that's when Wall Street expectations are reset for the year.
Stocks had their best January gains in more than 30 years, and that should mean 2019 will be a pretty good year for the
market.
That's what the widely watched January barometer tells you - as goes January, so goes the year. According to Stock Trader's Almanac,
going back to 1950, that metric of January's performance predicting the year has worked 87 percent of the time with only nine major
errors, through 2017. In the years January was positive, going back to 1945, the market ended higher 83 percent of the time, according
to CFRA.
But the indicator also signaled a positive year last year, and the market suffered an unusual late-year sell-off, wiping out all
of the gains. The S&P 500 ended 2018 down 6.6 percent, despite rising 5.6 percent in January. But the S&P also defied history with
a terrible December decline of 9.6 percent , the biggest loss for the final month of the year since 1931.
This January, the S&P 500 was up 7.9 percent. The best January performance since 1987, when it rose 13.2 percent. It was its best
overall month since October 2015.
Some market pros worry the sharp snapback in stocks since the late December low means January could be stealing the gains from the
rest of the year. Some also believe there could be another test at lower levels in the not too distant future. Yet, Wall Street forecasters
have a median target of 2,950 for the S&P 500 at year end, a big leap from the current 2,704.
"I'm still struck between the contrast of a year ago and now," said James Paulsen, chief investment strategist at Leuthhold Group.
"We came in last year with nothing but optimism. At this point last year, we had synchronized global growth, confidence had spiked
to record post-war highs, and everyone knew we had this steroid-induced earnings boost coming. The thought was how could stocks lose,
and of course they did."
The market has sprung back from December's low, with the S&P gaining 15 percent since Dec. 26.
"This year, we came in with nothing but bad news - the economy was slowing down. ... The rest of the world is slowing. We have trade
wars. We have the shutdown, and analysts are revising earnings lower," Paulsen added. "We're worried about a recession and a bear
market. It's strikingly different, and yet it's kind of like how can stocks win, but they are and I think they will."
Strategists also point to the differences in the way the market traded in each January. This January has been full of volatile swings,
with ultimately larger gains than losses. Last year, the market was at the end of a long smooth glide path higher.
Last year didn't work
Stocks did well through most of January 2018, but by the end of the month, a correction started. "On January 30, in 2018, it was
the first 1 percent decline in 112 days. That was basically the start of the fall off the cliff. In terms of percent gains, this
January is similar to last, but in terms of where we've come from, it's very different. That was one of the calmest advances in history,"
said Frank Cappelleri, executive director at Instinet.
Cappelleri said it's important to put this year's market move in context, when considering the January barometer. "You have one of
the biggest snapbacks after a very bad December, so the odds were in the market's favor to do better than that. I think maybe you
have to look where we are now. You're up 15, 20 percent from the low depending on where you look. Are we going to go up that much
more for the rest of the year?" he said.
Paulsen sees the gains continuing, after a possible pause. "I think it's going to continue to be a fairly good year, and I think
we probably go up and get close to the highs or 3,000 on the S&P, and I'm not expecting hardly anything on the economy, and earnings
are going to be weak, if not flat or maybe down," Paulsen said.
He said the slowing economy and a potential U.S.-China trade deal could push the dollar down and that would be a positive for stocks.
At the same time, the Fed has paused in interest rate hikes and may even stop its balance sheet unwind.
Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, said there's another set of statistics that are in the market's favor
for a positive 2019, though they also failed last year. He said for the years when the S&P 500 was positive in the first five days
of the year, plus gained during the Santa rally period, and was up for the month of January, the S&P 500 had a positive year 27 out
of 30 times. It also had an average gain of 17.1 percent in those years, since 1950.
Nick 29 minutes ago
Job growth is solid. Unemployment remains near all time lows even while labor force participation increases. Wage growth outpaced
inflation last year. The economy is humming right along...its just the liberal media wants to bombard us with articles claiming
the Trump recession is imminent.
I'm surprised they actually published an article sayings its going to be a good year.
Parade of eminent astrologists ;-) Those financial prostitutes of casino capitlism, aka financial analysts most often are wrong
year after year, but still have a solid coverage by the neoliberal media due to the shire wieght of the companies they represent. This
bets are not connected with some kind of possible financial loss so they just talking up this firms portfolio, which of course is heavily
tilted in favor of stocks. God even Vanguard retirement 2015 fund has 40% in stock, while formula 100-age would give you less then 35%.
If this is bullish bias I do not know what is. Of course, they play with "other people money" and commissions are everything...
Notable quotes:
"... Their guesses about a great market in 2018 was kind of a miss. But they only had like 340 days so far. They still have 25 days left to turn in around. ..."
"... These guys are seldom right. I've been tracking these predictions more closely since 2014, usually 12-15 of the large financial institutions. Last year's average consensus was the SP at 2874. We closed Tuesday (Dec 4) at 2700. ..."
"... The average of the figures cited in the article is 3068. I think that is wishful thinking considering the slow downs in many sectors, slowing GDP and a flattening yield curve. ..."
"... With regard to upside potential, these all sound wildly optimistic to me. Ten years of printing money out of thin air and exploding deficits does not a future robust economy make, IMO. ..."
"... They cannot say 2500 cause people will not invest (and no commissions); they have to say equal or higher than today. To me it is screaming between the lines the index will hit 2500. ..."
"... So all of them predict the S&P will be higher then it is today even though many are saying we are already in a Bear Market...these people only make money if the market goes up so don't trust them! ..."
Morgan Stanley (Target: 2,750; EPS: $176) -- Beware tightening financial conditions and decelerating growth. (Price
target as of December 17)
Bank of America (Target: 2,900; EPS: $170) -- 'Wildcards' will make for more volatility. (Price target as of November
20)
Jefferies (Target: 2,900; EPS: $173) -- It's a 'mature, not end of, cycle.' (Price target as of December 9)
Oppenheimer (Target: 2,960; EPS: $175) -- Negative sentiment is 'setting the stage for upward surprises' (Price target
as of December 31)
Goldman Sachs (Target: 3,000; EPS: $173) -- Get defensive. (Price target as of December 14)
David
Kostin, chief equity strategist at Goldman Sachs, has a main message for investors going into 2019: Start getting defensive.
Barclays (Target 3,000; EPS $176) -- Growth will revert to trend. (Price target as of November 19)
Wells Fargo Securities (Target: 3,079*; EPS: $173) -- Sell-off will create 'double-digit opportunity' (*Note: Harvey
reduced his price target for 2019 to 2,665 and expected EPS to $166 as of December 21)
Citi (Target: 3,100; EPS: $172.50) -- Bearish sentiment makes for bullish outcomes. (*Levkovich
reduced his S&P 500 price
target for the year-end 2019 to 2,850 as of December 31, 2018)
JP Morgan (Target 3,100; EPS $178) -- A pain trade to the upside. (Price target as of December 7)
BMO (Target 3,150; EPS $174) -- Take a longer-term perspective. (Price target as of November 16)
UBS (Target: 3,200; EPS $175) -- A rough 2018 should make for a better 2019. (Price target as of November 13)
Deutsche Bank (Target: 3,250; EPS: $175) -- A while to "regain its prior peak." (Price target as of November 19)
Credit Suisse (Target: 3,350*; EPS $174) -- Bet on multiples expanding. (*Golub
reduced his S&P 500 price target
for the year-end 2019 to 2,925 as of December 18, 2018)
Joseph, 2 months
ago
So their best guess is a relatively flat to roughly a 20% gain...thanks for narrowing it down. Their guesses about a great market in 2018 was kind of a miss. But they only had like 340 days so far. They still have 25 days
left to turn in around.
M 2 months ago
These guys are seldom right. I've been tracking these predictions more closely since 2014, usually 12-15 of the large financial
institutions. Last year's average consensus was the SP at 2874. We closed Tuesday (Dec 4) at 2700.
We will need a 7% Santa Claus
rally to get there.
In 2017 the consensus was 2367; the year closed at 2673.
2016 was very close with a predicted average of 2223
and a close of 2238.
However, the market was far behind until the post-election rally.
The average of the figures cited in the article is 3068. I think that is wishful thinking considering the slow downs in
many sectors, slowing GDP and a flattening yield curve. I'll take 3068, but not going to bet a lot of money on it.
Omnipotent, 2 months ago
With regard to upside potential, these
all sound wildly optimistic to me. Ten years of printing money out of thin air and exploding deficits does not a future robust
economy make, IMO.
Linda, 2 months ago
Wall Street Strategists predicted G20 China meeting was the best news for markets and were looking for strong upside , market
tanked 800 points 2 days after. Enough said .
Gilad, 2 months ago
They cannot say 2500 cause people will not invest (and no commissions); they have to say equal or higher than today. To me it
is screaming between the lines the index will hit 2500.
PathFinder ofWhatis, 2 months ago
Not a single prediction says the market will finally have a Bear Market decline of 20%.... even after a 10 year Bull Market?
Is that called Group Think?
Todd2 months ago
So all of them predict the S&P will be higher then it is today even though many are saying we are already in a Bear Market...these
people only make money if the market goes up so don't trust them!
"... Big tech companies have bullied competitors and outrun ethical standards in an effort to "own the world," Jean Case, the CEO of the Case Foundation and a former senior executive at AOL, told Yahoo Finance this week. "Many of those big companies are crowding out new innovations of young upstarts. That's not healthy," she said, in response to a question about Google and Facebook. ..."
Big tech companies have bullied competitors and outrun ethical standards in an
effort to "own the world," Jean Case, the CEO of the Case Foundation and a former
senior executive at AOL, told Yahoo Finance this week.
"Many of those big companies are crowding out new innovations of young upstarts.
That's not healthy," she said, in response to a question about Google and
Facebook.
"On the technology side, look, things have changed so fast," Case said. "I think
we just haven't kept pace with some of the ethics policies and frameworks that we
need to put around this stuff...used by millions of millions before thought is
given to implications."
Case made the comments in a conversation that aired on Yahoo Finance on Thursday
at 5 p.m. EST in an episode of "
Influencers
with Andy Serwer
," a weekly interview series with leaders in business,
politics, and entertainment. In addition to her comments on big tech, Case
explained why a woman can be elected president, what National Geographic has done
to thrive amid media industry tumult, and how it felt at AOL in the heady early
days of the internet.
"... My 95 year old aunt here in NL lived thru the NAZI occupation. She said its sad that the nice decent Americans of 1945 have now become like the people we fought. ..."
The launch of INSTEX -- "Instrument in Support of Trade Exchanges" -- by France, Germany, and the UK
this week
to allow "legitimate trade" with Iran, or rather effectively sidestep US sanctions and bypass SWIFT after Washington was able
to pressure the Belgium-based financial messaging service to cut off the access of Iranian banks last year, may be too little too
late to salvage the Iran nuclear deal .
Tehran will only immediately press that more than just the current "limited humanitarian" and medical goods can be purchased on
the system, in accordance with fulfilling the EU's end of the 2015 JCPOA -- something which EU officials have promised while saying
INSTEX will be "expansive" -- while European companies will likely continue to stay away for fear of retribution from Washington,
which has stated it's "closely following" reports of the payment vehicle while reiterating attempts to sidestep sanctions will "risk
severe consequences" .
As a couple of prominent Iranian academics
told Al Jazeera this week: "If [the mechanism] will permanently be restricted to solely humanitarian trade, it will be apparent
that Europe will have failed to live up to its end of the bargain for Iran ," said political analyst Mohammad Ali Shabani. And another,
Foad Izadi, professor at the University of Tehran, echoed what is a common sentiment among Iran's leaders: "I don't think the EU
is either willing or able to stand up to Trump's threat," and continued, "The EU is not taking the nuclear deal seriously and it's
not taking any action to prove to Iran otherwise... People are running out of patience."
But Iranian leadership
welcomed the new mechanism as merely a small first step: "It is a first step taken by the European side... We hope it will cover
all goods and items," Iranian Deputy FM Abbas Araqchi told state TV, referencing EU promises to stick to its end of the nuclear deal.
The European side also acknowledged it as a precondition to keeping the nuclear deal alive, which EU leaders sea as vital to their
security and strategic interests : "We're making clear that we didn't just talk about keeping the nuclear deal with Iran alive, but
now we're creating a possibility to conduct business transactions," German Foreign Minister Heiko Maas
told reporters on
Thursday . "This is a precondition for us to meet the obligations we entered into in order to demand from Iran that it doesn't
begin military uranium enrichment," Maas said.
What is INSTEX?
A "special purpose vehicle" that will allow European businesses to trade with Iran, despite strict US sanctions.
According to media reports, INSTEX will be based in Paris and will be managed by German banking expert Per Fischer, a former
manager at Commerzbank. The UK will head the supervisory board.
The European side intends to use the channel initially only to sell food, medicine and medical devices in Iran. However,
it will be possible to expand it in the future. --
DW.com
Technically US sanctions allow some limited humanitarian trade and limited goods; however the White House's "maximum pressure"
campaign on Iran has still scared away European giants like Seimens, Maersk, Total, Daimler, Peugeot, Renault, and others.
This brings up the central question of whether skittish European countries will actually return to doing business with Iran, the
entire purpose on which the new mechanism rests. The dilemma was summarized at the start of this week by outspoken Iran hawk Sen.
Tom Cotton (R-Ark.), who told the AP
"The choice is whether to do business with Iran or the United States." He warned, "I hope our European allies choose wisely."
Thus far a number of analysts and observers have remained far less optimistic than the European sponsors of INSTEX. One particular
interview with geopolitical analyst and journalist Luc Rivet, cited in Russian media, outlines
the likelihood for failure of the new payment
vehicle : "I don't know what companies will make use of that mechanism to sell to Iran," Rivet said, noting that countries still
consider it "dangerous" to be caught working with Iran.
Addressing the current restriction of INSTEX facilitating medical and pharmaceutical goods transactions, he continued:
Who produces this equipment? You think that Siemens will sell to Iran? Never, because they sell to America many other things
as well And Siemens is afraid of losing the American market.
No matter if a handful of companies resume or continue business with Iran he explained that an "incredible number of companies"
won't. He added: "It's much easier for Chinese and Russian companies to make deals with Iran. The Europeans are scared in an incredible
way. The companies are afraid by ricochet of being in the eye of the storm with the Americans."
He concluded, "That's very dangerous for European companies," and repeated, "I don't know anybody who will dare to go with this
Instex system."
And the New York Times in asking the same question --
But Will Anyone Use
It? -- concludes similarly that "given that most large companies have significant business in the United States, very few --
if any -- are likely to use the trading mechanism for fear of incurring Washington's wrath."
However, the test will be whether or not a steady trickle of small companies gives way to bigger companies. The NYT report
continues :
But the financial mechanism could make it easier for smaller companies with no exposure in the United States to trade with
Iran and could promote trade in medicine and food, which are not subject to sanctions. European diplomats say that, in the beginning,
the concentration will be on goods that are permitted by Washington, to avoid an early confrontation .
But much could also depend on just how fierce the White House reaction will be. If the past months' Trump administration rhetoric
is any indicator, it will keep large companies scared and on the sidelines.
Europe has had double the tariffs on American cars than we had for theirs. It's time for us to quadruple the tariff on European
cars, to make up for the tariff imbalance that Europe has taken advantage of for decades.
Before World War II the question was, "Who will stand up to the demands of Germany?" Now the question is, "Who will stand up
to the demands of the United States?" It is clear that as far as means and methods are concerned Washington flies the swastika.
History has come full circle.
The following quote from J. R. R. Tolkien makes the point, "Always after a defeat and a respite," says Gandalf, "the shadow
takes another shape and grows again." The irony of our times is that the shadow has moved from Germany to the US.
Consternation and craven refusal to confront the reality of our times is again in vogue. We are walking towards madness crying,
"Let the other fellow fix this!"
My 95 year old aunt here in NL lived thru the NAZI occupation. She said its sad that the nice decent Americans of 1945
have now become like the people we fought.
Jason Raimondo's hopes that the tide slowly was turning against the War
Party with Trump's appointment of Tillerson are dashed for good with the appointments of
Abrams, Bolton and Pompeo. The thugs for Wall Street have taken DC.Trump might as well go
home. Raimondo wrote of Abrams in 2017 in "The End of Globalism":
Excerpt:
Oh yes, the times they are a changin', as Bob Dylan once put it, and
here's the evidence :
"Secretary of State Rex Tillerson has ordered his department to redefine its mission and
issue a new statement of purpose to the world. The draft statements under review right now are
similar to the old mission statement, except for one thing – any mention of promoting
democracy is being eliminated."
All the usual suspects are in a tizzy .
Elliott Abrams , he of Contra-gate fame , and one of the purest of
the neoconservative ideologues , is cited in the
Washington Post piece as being quite unhappy: "The only significant difference is the
deletion of justice and democracy. We used to want a just and democratic word, and now
apparently we don't."
Abrams' contribution to a just and democratic world is well-known : supporting a
military dictatorship in El Salvador during the 1980s that slaughtered thousand s, and then
testifying before Congress that massive human rights violations by the US-supported regime were
Communist "propaganda." US policy, of which he was one of the principal architects, led to the
lawlessness that now plagues that country, which has a higher murder rate than Iraq: in Abrams'
view, the Reagan policy of supporting a military dictatorship was "a fabulous achievement." The
same murderous policy was pursued in
Nicaragua while Abrams was Assistant Secretary of State for Human Rights and Humanitarian
Affairs, as the US tried to overthrow a democratically elected government and provoked a civil
war that led to the death of many thousands . In Honduras
and Guatemala
, Abrams was instrumental in covering up heinous atrocities committed by US-supported
regimes.
And, now, Venezuela. The economic hit man has arrived.
" 'I spent 33 years and four months in active military service and during that period I
spent most of my time as a high class muscle man for Big Business, for Wall Street and the
bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and
especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a
decent place for the National city Bank boys to collect revenues in. I helped in the raping of
half a dozen Central American republics for the benefit of Wall Street. I helped purify
Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light
to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras
right for the American fruit companies in 1903. In China in 1927 I helped see to it that
Standard Oil went on its way unmolested." --
Smedley Butler
The plan might be is to unleash Venezuelan civil war and install pro-US regime by force, using uprising as a ram to depose the
current governmnet. Which looks somewhat neoliberal to me with some deals with foreign companies what probably harm long
term Venezuelan interests, so it might be credible to attach it for corruption like they did with Yanukovich. With full
understanding that the next. more neoliberal Venezuelan government will be even more corrupt and top 1% oriented.
In other work Venezuela looks like Ukraine in 2014 but with oil as a huge price. Discontent with the current government
is real and can be exploited.
Notable quotes:
"... A Venezuelan civil war would result in mass death and even more economic misery!" CashMcCall, 2 hours ago Ron Paul used to be the darling of ZH. But with Trumptards, now RP is discredited because he doesn't support Trump's Tariffs, bullying, economic sanctions, weaponizing the dollar reserve, bombing Syria, or any of the rest of the Trump bullying **** head garbage. ..."
"It's ironic that a president who has spent the first two years in office fighting charges
that a foreign country meddled in the US elections would turn around and not only meddle in
foreign elections but actually demand the right to name a foreign country's president!
" According to press reports, Vice President Mike Pence was so involved in internal
Venezuelan affairs that he actually urged Guaido to name himself president and promised US
support. This is not only foolish, it is very dangerous.
A Venezuelan civil war would result in
mass death and even more economic misery!" CashMcCall, 2 hours ago Ron Paul used to be the
darling of ZH. But with Trumptards, now RP is discredited because he doesn't support Trump's
Tariffs, bullying, economic sanctions, weaponizing the dollar reserve, bombing Syria, or any of
the rest of the Trump bullying **** head garbage.
The Thrust of Trumptards is the ruder the US Acts the better. Bullying everyone is the way
to doe it. Trump is a punk, a draft dodging punk and he is wrecking the country.
But his self dealing is the underlying root. His phony work vacations. He fills rooms at
Trump resorts with secret service. Last year alone Trump Organization was paid half a billion
dollars for these phony work vacations.
Trump claims he works for free. But he donates his salary and deducts the full amount off
his taxes. He is being paid Trumptards. He is a self dealer. He is a slime and a con artist.
That is all Trump is.
The US' recent multidimensional asymmetric offensive against all manner of Russian interests
isn't the random symptom of psychotic Russophobia that it's being presented as, but is part of
a comprehensive strategy for pressuring Moscow to abandon its close cooperation with China
& Iran in exchange for a "New Détente", a scenario that shouldn't be ruled out if
Trump gets his way during the upcoming meeting with President Putin.
Many people are struggling to find any rhyme or reason behind the US' anti-Russian moves
over the past couple of years, especially the ones that Trump was supposedly forced into by the
"deep state" out of the mistaken belief that it would relieve the fake news-driven Russiagate
pressure on his administration, but the answer to it all is a lot simpler than it appears. The
fact of the matter is that everything that's happening is intentional and part of a
comprehensive strategy for getting Russia to abandon its close cooperation with China &
Iran in response to the US' multidimensional asymmetric offensive against its interests,
although it's proven itself to be a failed plan that requires urgent reform. Whether it's the
West's "Russian propaganda" witchhunt or the
Skripal chemical weapons false flag scandal
, every single anti-Russian move that's been undertaken in the last few years is designed to
advance this objective.
Taking Apart The Multipolar TriangleIran:
There was
crediblespeculation right after Trump's
2016 victory that his administration would try to split the Russian-Chinese-Iranian
multipolar triangle in Eurasia, and that's exactly what the President and his team are trying
to do, albeit in a different fashion than what people might have expected. Trump rightly calculated
that Obama's unprecedented outreach to Iran through the 2015 nuclear deal was being taken
advantage of by Tehran and that the Islamic Republic never had any serious intentions in
agreeing to the tacit
quid-pro-quo being offered at the time to replace Saudi Arabia as America's preferred
regional partner. Accordingly, he decided to pivot away from his predecessor's policy and use
nothing but "muscular means" to coerce Iran into
submitting to the US' military might, which is a work in progress and one that will
certainly be made all the more difficult by Tehran's mastery of asymmetrical
responses.
China:
As for China, Trump also learned from the mistake of his predecessor who at one time offered
the People's Republic a global partnership through the so-called " G-2 "
or "
Chimerica " concept but was rebuffed by a Beijing that's both too proud to share world
leadership with America and also reluctant into being tricked to take on responsibilities that
it didn't agree to or anticipate at the time.
It wasn't coincidental that the G-2's failure was soon thereafter followed up by China's
announcement of its One Belt One Road (OBOR) global vision of New Silk Road connectivity in
order to economically reform the structural basis for the "Washington Conesus" and consequently
facilitate the emerging
Multipolar World Order .
Trump's Kraken -like answer to
this challenge was to continue with Obama's Hybrid War policy in targeting the most
vulnerable "Global South" transit states for China's transnational infrastructure
megaprojects simultaneously with the commencement of a
trade war against the People's Republic.
Russia:
Iran's full-blown ideological resistance to striking a "deal with the devil" and China's
unflinching commitment to challenging the US' unipolar dominance of the world mean that there's
no realistic chance that either of them will budge from their previous refusals to abandon the
other in exchange for an alleviation of American pressure on their countries, thereby pointing
Trump in Russia's direction because he considers it to be the "weakest link" in this multipolar
arrangement.
After all, Russia has always insisted with total sincerity that it wants nothing more than
an equal relationship with what it still continues to call its "Western partners", which
logically entails them respecting the country's so-called "sphere of influence" in the former
Soviet space. Previous US administrations smacked away Russia's olive branch every time it was
offered, but Trump seemed to actually be interested in cutting a deal with Moscow before the
"deep state" intervened to stop him.
The "Deep State's" Folly
Ironically, that move might go down in history as the last possible chance that the US had
to realistically bring Russia back into the "Washington Consensus" by peaceful means, as Moscow
signaled that it was prepared to enter into a so-called "New Détente" with Washington
that would have obviously involved mutual "concessions/compromises". That "lost opportunity"
might never be regained because Russia's resolve has since hardened after feeling betrayed by
Trump and subject to his administration's humiliating punishments for not submitting to America
without any preconditions ("mutual concessions/compromises"), which is what the "deep state"
wanted after making the massive error of judgement in convincing themselves through
"groupthink" that President Putin would follow in Yeltsin's footsteps and surrender if the
powerful "oligarchic" class put enough pressure on him to do so in exchange for lifting the
sanctions. That ship has sailed and what's happening now is a combination of scorn and
strategy.
The US will never forgive President Putin for refusing to bow down to the Obama-era
liberal-globalist "deep state" that sabotaged Trump's outreach plan, which is why it's getting
so nasty in carrying out witch hunts against Russian media and expelling the country's
diplomats on unproven pretexts. For the "deep state", this is "personal", though while Trump
seems to understand the "effectiveness" of "playing dirty" as a form of psychological warfare
against the Russian leadership, he's never publicly swayed from his campaign pledge to cut a
deal with Russia if it was possible (i.e. the "deep state" lets him or he goes around their
backs). It's with this backdrop in mind that Trump invited
President Putin to the White House for a forthcoming meeting that will presumably be about
"ironing out their differences" and advancing the presumably mutual goal of a so-called "New
Détente", albeit not on the one-sided unconditional terms that the "deep state" is
obsessed with.
Describing The "New Détente"
Trump realized that Russia is digging in its heels by deepening its partnerships with China
and Iran in response to the "deep state's" multidimensional asymmetric aggression and that this
policy has been nothing but counterproductive to America's predominant New Cold War interest in
"containing" China. Furthermore, the President seems to have convinced the "patriotic" and
"pragmatic" elements of the "deep state" that this is the case and that it's impossible for
America to make any tangible progress in stopping the Silk Road if it has to multitask between
"containing" China, Iran, and Russia in vastly different theaters and with completely different
methods. It's much better, the billionaire businessman likely reckoned, to walk back some of
his administration's unnecessarily aggressive moves in Europe and perhaps elsewhere as part of
his country's "mutual concessions/compromises" with Russia for a "New Détente" than to
continue with this completely failed policy of pressure.
What the US wants from Russia in exchange is simple, and it's that it expects Moscow to
scale back its strategic partnerships with Tehran & Beijing and to not interfere with
Washington's "containment" campaigns against both of them. Russia is already passively
allowing the US and its allies to "contain" Iran in Syria out of self-interested prudence
in preventing
World War III , but it has yet to pull back from its Silk Road relationship with China.
It's unclear exactly how the US envisions Russia doing this in a "plausibly deniable" way that
mirrors the Iranian approach and avoids provoking a hostile reaction from China, but whatever
it is that Washington has in mind, it hopes that Moscow will agree to it so that President
Putin can forget about international drama and completely focus on fulfilling the
comprehensive domestic reform agend a that he plans to carry out during his fourth and final term.
It's impossible to speculate on whether Russia is even interested in such a scenario at this
point in time given all that's transpired between it and the West in the past year alone, but
playing "devil's advocate" for a moment, there might be another enticing reason aside from the
domestic one why Moscow might decide to "play ball". The increasing polarization of the world
economic system into globalization-spreading China and protectionist-espousing America is
broadly returning International Relations to its Old Cold War-era bipolarity in advance of its
eventual transition to multipolarity, and it's here where Russia could play a pivotal role in
leading a new Non-Aligned Movement ( Neo-NAM )
that helps other countries "
balance " their relations with both superpowers. The US might begrudgingly be forced under
the current circumstances and the objective limits of its power to accept the relative
curtailment of its influence over some countries by Russia so long as Moscow fulfills a similar
role vis-à-vis them and China.
The Great Unknown
It's a risky gamble because a Russian-led Neo-NAM could just as easily tilt the strategic
balance of global influence in the New Cold War towards China as it could towards America, but
Washington is wagering that Moscow might conclude that its self-interest could best be
protected by maintaining "harmony" between the two superpowers in Eurasia, thus enabling the US
to focus more on destabilizing the Silk Road through Hybrid Wars in Africa and the parts of the
supercontinent not covered by this "balancing bloc". Russia's low-cost but high-impact
"balancing" investments could yield enormous dividends for its influence, while any prospective
de-escalation in Europe due to the "New Détente" would free up the country's resources
to focus more on carrying out President Putin's ambitious domestic reform agenda and delivering
on the campaign promises that he made his countrymen in order to
sustainably guarantee his legacy .
Concluding Thoughts
To reiterate what was just written, there is no way to know for certain whether the US'
latest gambit in trying to reach a "New Détente" with Russia will succeed or not, but it
needs to be recognized that the multidimensional asymmetric aggressions that it's waged against
its rival's interests will eventually take their financial toll and that President Putin might
find it increasingly challenging to execute his comprehensive reform agenda on the home front
unless he cuts some kind of deal. This doesn't imply that Russia is at risk of "selling out" to
the US, but just that President Putin is accountable first and foremost to his people and then
only secondly to his country's international partners.
If the Kremlin concludes that Russia's interests would best be advanced through engaging in
a series of "mutual concessions/compromises" with the US as part of a "New Détente",
then it won't hesitate to make that move; likewise, if the savvy Russian leader recognizes that
he's being "taken for a ride" by Trump and that his "counterpart" is offering him a lopsided
deal that's doomed to make his country America's "junior partner" in Eurasia, then he won't
think twice about walking away with no "deal". Ultimately, everything depends on whatever deal
Trump puts on the table and whether he can convince President Putin that his newfound
truce with the
neoconservatives translates into being able to get the "deep state" to abide by the terms
of any prospective agreement.
If Russia is swayed by the carrot-and-stick combination of the Trump Administration's
possibly sincere commitment to a "New Détente" in exchange for an alleviation of
multisided and sometimes humiliating pressure against it, then the geopolitical implications
would be profound since Moscow would be ascending into the perfect position for "balancing"
Eurasian affairs . It wouldn't just have China's tacit support for this initiative but
America's too because each superpower would appreciate Moscow becoming a "balancing" force
vis-à-vis the other and freeing them up to focus on their rival in other areas of
concern, mostly in Africa. As such, Russia could count on being courted by both of them and
finally fulfilling its grand strategic goal to "balance" Eurasia, though provided that this
speculative deal goes through in the first place and is actually respected by the US
afterwards.
Just one more to a long list of Trump appointments. I believe Trump is some kind of pervert, like the ones that like
to get whipped, only Trump likes to get stabbed in the back. XXX , 34 minutes ago
He does what Sheldon and Bibi tell him.
You think you're so ******* smart, but this some how eludes you?
YYY, 3 hours ago (Edited)
Donald Trump's House of Cons, Clowns, Crappolas, Criminals, and Conspirators:
"... Sections of the Chinese regime responded belligerently to the accusations. An editorial in the state-owned Global Times ..."
"... The editorial asked: "Assuming China is so powerful that it has stolen technological information for over a decade that is supposedly worth over a trillion in intellectual property, as the US has indicated, then how is it that China still lags behind the US in so many fields, from chips to electric vehicles, and even aviation engines?" ..."
Further escalating its economic and strategic offensive to block China from ever
challenging its post-World War II hegemony, the US government yesterday unveiled its fifth
set of economic espionage charges against Chinese individuals since September.
As part of an internationally-coordinated operation, the US Justice Department on Thursday
published indictments of two Chinese men who had allegedly accessed confidential commercial
data from US government agencies and corporate computers in 12 countries for more than a
decade.
The announcement represents a major intensification of the US ruling class's confrontation
against China, amid a constant build-up of unsubstantiated allegations against Beijing by
both the Republican and Democrat wings of Washington's political establishment.
Via salacious allegations of "hacking" on a "vast scale," every effort is being made by
the ruling elite and its media mouthpieces to whip up anti-China hysteria.
The indictment's release was clearly politically timed. It was accompanied by a global
campaign by the US and its allies, accusing the Chinese government of an illegal cyber theft
operation to damage their economies and supplant the US as the world's "leading
superpower."
US Secretary of State Mike Pompeo and Homeland Security Secretary Kirstjen Nielsen
immediately issued a statement accusing China of directing "a very real threat to the
economic competitiveness of companies in the United States and around the globe."
Within hours, US allies around the world put out matching statements, joined by
declarations of confected alarm by their own cyber-warfare and hacking agencies.
The Washington Post called it "an unprecedented mass effort to call out China for
its alleged malign acts." The coordination "represents a growing consensus that Beijing is
flouting international norms in its bid to become the world's predominant economic and
technological power."
The Australian government, the closest ally of the US in the Indo-Pacific region, was in
the forefront. Foreign Affairs Minister Marise Payne and Home Affairs Minister Peter Dutton
explicitly accused the Chinese government and its Ministry of State Security (MSS) of being
responsible for "a global campaign of cyber-enabled commercial intellectual property
theft."
Geoffrey Berman, the US attorney for the Southern District of New York, called the Chinese
cyber campaign "shocking and outrageous." Such pronouncements, quickly emblazoned in media
headlines around the world, destroy any possibility of anything resembling a fair trial if
the two men, named as Zhu Hua and Zhang Shilong, are ever detained by US agencies and brought
before a court.
The charges themselves are vaguely defined. Federal prosecutors in Manhattan accused the
men of conspiracy to commit computer intrusions, wire fraud and aggravated identity theft.
Zhu and Zhang acted "in association with" the MSS, as part of a hacking squad supposedly
named "APT1o" or "Stone Panda," the indictment said.
FBI Director Christopher Wray called a news conference to issue another inflammatory
statement against China. Pointing to the real motivations behind the indictments, he
declared: "China's goal, simply put, is to replace the US as the world's leading superpower,
and they're using illegal methods to get there."
Coming from the head of the US internal intelligence agency, this further indicates the
kinds of discussions and planning underway within the highest echelons of the US political
and military-intelligence apparatus to prepare the country, ideologically and militarily, for
war against China.
Washington is determined to block President Xi Jinping's "Made in China 2025" program that
aims to ensure China is globally competitive in hi-tech sectors such as robotics and chip
manufacture, as well as Beijing's massive infrastructure plans, known as the Belt and Road
Initiative, to link China with Europe across Eurasia.
The US ruling class regards these Chinese ambitions as existential threats because, if
successful, they would undermine the strategic position of US imperialism globally, and the
economic dominance of key American corporations.
Yesterday's announcement seemed timed to fuel tensions between Washington and Beijing,
after the unprecedented December 1 arrest of Meng Wanzhou, the chief financial officer of
Chinese telecommunications giant Huawei, in Canada at the request of the US.
Last weekend, US Vice President Mike Pence again accused China of "intellectual property
theft." These provocations came just weeks after the US and Chinese administrations agreed to
talks aimed at resolving the tariff and trade war launched by US President Donald Trump.
The Trump administration is demanding structural changes to China's state-led economic
model, greater Chinese purchases of American farm and industrial products and a halt to
"coercive" joint-venture licensing terms. These demands would severely undermine the "Made in
China 2025" program.
Since September, US authorities have brought forward five sets of espionage allegations.
In late October, the Justice Department unsealed charges against 10 alleged Chinese spies
accused of conspiring to steal sensitive commercial secrets from US and European
companies.
Earlier in October, the US government disclosed another unprecedented operation, designed
to produce a show trial in America. It revealed that a Chinese citizen, accused of being an
intelligence official, had been arrested in Belgium and extradited on charges of
conspiring to commit "economic espionage" and steal trade secrets.
The extradition was announced days after the Pentagon released a 146-page document, titled
"Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain
Resiliency of the United States," which made clear Washington is preparing for a total war
effort against both China and Russia.
Trump, Pence and Wray then all declared China to be the greatest threat to America's
economic and military security. Trump accused China of interfering in the US mid-term
elections in a bid to remove him from office. In a speech, Pence said Beijing was directing
"its bureaucrats and businesses to obtain American intellectual property -- the foundation of
our economic leadership -- by any means necessary."
Whatever the truth of the spying allegations against Chinese citizens -- and that cannot
be assumed -- any such operations would hardly compare with the massive global intrigue,
hacking, regime-change and military operations directed by the US agencies, including the
National Security Agency (NSA) and its "Five Eyes" partners.
These have been exposed thoroughly by NSA whistleblower Edward Snowden and WikiLeaks
founder Julian Assange. Leaked documents published by
WikiLeaks revealed that the CIA has developed "more than a thousand hacking systems, trojans,
viruses and other 'weaponized' malware," allowing it to seize control of devices, including
Apple iPhones, Google's Android operating system, devices running Microsoft Windows, smart
TVs and possibly the control of cars and trucks.
In an attempt to broaden its offensive against China, the US government said that along
with the US and its Five Eyes partners, such as Britain, Canada and Australia, the countries
targeted by the alleged Chinese plot included France, Germany, Japan, Sweden and
Switzerland.
Chinese hackers allegedly penetrated managed services providers (MSPs) that provide
cybersecurity and information technology services to government agencies and major firms.
Finance, telecommunications, consumer electronics and medical companies were among those said
to be targeted, along with military and US National Aeronautics and Space Administration
laboratories.
Sections of the Chinese regime responded belligerently to the accusations. An editorial in
the state-owned Global Times branded them "hysterical" and a warning sign of a
"comprehensive" US attack on China.
The editorial asked: "Assuming China is so powerful that it has stolen technological
information for over a decade that is supposedly worth over a trillion in intellectual
property, as the US has indicated, then how is it that China still lags behind the US in so
many fields, from chips to electric vehicles, and even aviation engines?"
The Global Times declared that "instead of adhering to a low-profile strategy,
China must face these provocations and do more to safeguard national interests."
The promotion of Chinese economic and militarist nationalism by a mouthpiece of the
Beijing regime is just as reactionary as the nationalist xenophobia being stoked by the
ruling elite of American imperialism and its allies. The answer to the evermore open danger
of war is a unified struggle by the international working class to end the outmoded
capitalist profit system and nation-state divisions and establish a socialist society.
ANY rational person would think : a nation like USA TODAY which can name a different ENEMY
every other week is clearly SICK, led by sociopaths. China ? Russia, Iran, North Korea ?
Venezuela ? ( all fail to live up to the high moral standards of " OUR democracy " ?)
How are any of these countries a greater threat to YOU than the local Democratic or
Republican party hacks ?
If YOU think that so many people hate you , would it not make sense to ask if there is
perhaps something wrong with YOU ?
The first question to ask is: do those suckers need stocks at all?
That's all nice. But what if we are facing 2008 style event in a year or two?
The question here is why you need to risk retirement money in the casino? And stock market including all stock funds is a casino.
No questions about it.
Why if you are really close to, say, 65 it is necessary to take additional risk.
If you have enough money this is stupid (pure greed is often punishable, at least accounting to teaching of Prophets). You probably
can benefit from reading Other People's Money: The Real Business of Finance by John Kay first. Before jumping into this water.
If you don't -- you need to be twice more careful -- please remember that such people most often are victims of grave own errors,
and/or fraud. So the cure might be worse then the disease. May be relocation to cheaper state and cutting some expenses (one car instead
of two, one bedroom instead of two bedroom, etc) is a safer solution then gambling.
In any case, if you keep money in the stock fund despite your age (I think around 17% of old Americans have all their retirement
savings in stock funds, or individual stocks ;-) and another financial bubble burst again (and this is a guaranteed event under neoliberalism)
recovery might take much longer then you expect, and you might need to take losses to make ends meet.
So the really important question here is not what funds you need to select from a thousand of names (there are more mutual funds
then stocks, I think). That's just another variety of gambling.
They real question is whether you need to play this game or not.
What if the current decline is not just a blip is a warning that more substantial trouble lies ahead?
Neoliberal with its hypertrophied and parasitic finance industry tend to produce Minsky moments (called bubble burst for non-specialists)
with surprising regularity: savings and loan crisis (1986-1995), dot-com bubble (2000-2002), Great recession (2008-?), so there is no
guarantee that we will not have yet another similar event in the next couple of years.
Target date funds might be a safer bet if you are old and still really want to play in a casino in hope to compensate inadequate
size on your retirement portfolio. For example, its Vanguard Target Retirement 2015 Fund (VTXVX) contains 40% stocks. While classic
100-your age allocation formula for 65-year person imply 35% stocks allocation. So you see that even Vanguard is a little bit too aggressive
here.
Also if you bought S&P500 at its 2000 peak (around 1500) your return for 18 years would still be 2.5% (4.5% with dividend reinvested).
So if you are much younger then 65 it is important to compare long-term record with S&P500 and age and track record of the manager (change
of the manager in an actively managed fund often badly affects that fund performance).
Start with low costs. Cheaper funds actually tend to beat their competitors even before expenses. SEE ALSO:
The 27 Best Mutual Funds in 401(k) Retirement Plans Buy funds the managers own. If the manager(s) of a fund won't invest
in the fund themselves, why should you? Look in the prospectus for managers who put at least $1 million in their fund, as the managers
of the five recommended funds in this article have done.
Chose funds that have a good corporate culture. Does the fund firm consider you a customer to be fleeced or a partner in investing?
Figuring this out is difficult, but low costs and manager investment are two indicators. My favorite big firms are
Vanguard ,
American Funds and
T. Rowe Price .
Consider long-term, risk-adjusted returns. You can do this by looking at Morningstar's star ratings, Sharpe ratios, alphas or
Sortino ratios. All of these provide measures of risk-adjusted returns. They're all slightly different, but higher is always better.
Reduce your risk. I think the market will remain highly volatile in 2019. Standard deviation, a measure of volatility, is an excellent
predictor of how a fund will behave in unstable markets. The higher a fund's standard deviation, the more volatile it has been. It's
my favorite risk metric. Downside capture, which measures how a fund has done in bad markets, is also worth a close look.
Following are my picks for 2019 among actively managed stock funds. It's no accident that they're all either value funds or foreign
funds. My strong hunch is that a bear market next year will lead to a change in leadership among stock sectors, as is often the case
during and after a selloff. Look for growth stocks' decade-long dominance over value stocks to end, and
value
stocks to outperform . Likewise, I think foreign stocks will finally begin to outperform domestic stocks.
"... In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale." ..."
"... Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the WSJ found that company forecasts seemed to be misleading. ..."
"... Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward, projecting enormous growth numbers that have not panned out. ..."
Of course, that is largely just a reflection of the sharp decline in oil prices. But the share prices of most oil and gas companies
are also largely based on oil price movements. So, the steep slide in oil prices in the final two months of 2018 led to disaster
for investors in energy stocks.
"The stock market went to hell in December. And when it got there, it found that the energy sector had already moved in, signed
a lease and decorated the place," Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis
(IEEFA), wrote in a
commentary
.
The energy sector was at or near the bottom of the S&P 500 for the second year in a row, Sanzillo pointed out. And that was true
even within segments of the oil and gas industry. For instance, companies specializing in hydraulic fracturing fell by 30 percent,
while oil and gas supply companies lost 40 percent. "The fracking boom has produced a lot of oil and gas, but not much profit," Sanzillo
argued.
Looking forward, there are even larger hurdles, especially in the medium- to long-term. Oil demand growth is flat in developed
countries and slowing beginning to slow in China and elsewhere. The EV revolution is just getting started.
The last great hope for the oil industry is to pile into
petrochemicals
, as oil demand for transportation is headed for a peak. But profits in that sector could also prove elusive. "The industry's rush
to invest in petrochemicals to maintain demand for oil and gas is likely to continue, but the profit potential in this sector is
more limited than oil and gas exploration, and is likely to keep the energy sector at or near the bottom of the S&P 500," Sanzillo
concluded.
In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts
and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale."
Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their
wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production
data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the
WSJ found that company forecasts seemed to be misleading.
"Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear
to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins
in Texas and North Dakota," reporters for the
WSJ wrote . "Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast
for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm."
Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less
productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward,
projecting enormous growth numbers that have not panned out.
The upshot is that shale companies will have to step up spending in order to hit the promised production targets. However, so
many of them have struggled to turn a profit, and the recent downturn in oil prices has put even more pressure on them to rein in
costs.
That raises questions about the production potential not just from individual shale companies, but also from the U.S. as a whole.
Was it conspiracy or idiocy that led to the failure of U.S. intelligence agencies to detect
and prevent the Sept. 11, 2001, attacks on the World Trade Center and Pentagon headquarters?
That's one of the questions at the heart of "The Watchdogs Didn't Bark: The CIA, NSA, and the
Crimes of the War on Terror," by John Duffy and Ray Nowosielski. In their careful and thorough
investigation of the events leading up to the attacks, the authors uncover a story about the
Central Intelligence Agency's neglect, possible criminal activities and a cover-up that may
have allowed al-Qaida to carry out its plans uninhibited by government officials.
In the latest installment of "Scheer Intelligence," the journalists tell Truthdig Editor in
Chief Robert Scheer how an interview with Richard Clarke, the counterterror adviser to
Presidents Bill Clinton and George W. Bush, led them to a jaw-dropping revelation regarding two
hijackers involved in the infamous attacks. As it turns out, Khalid Muhammad Abdallah
al-Mihdhar and Nawaf al-Hazmi, two men linked to al-Qaida, were staying at an FBI informant's
home in San Diego in 2000, and they were being tracked by the National Security Agency. Despite
knowledge of the men's ties to the terrorist organization responsible for 9/11, neither was
investigated by the FBI. Clarke and others believe that this may have had to do with a CIA
attempt to turn the two men into agency informants.
"When we sat down with Clarke he told us he couldn't see any other explanation but that
there was an op [and] that it never made it to the White House because it would have had to
go through him," says Nowosielski.
"And his friend [then CIA Director] George Tenet was responsible for malfeasance and
misfeasance in the runup to 9/11."
Once the plans for the 9/11 attack must have become clear to the CIA, why didn't the agency
prevent it from taking place? Duffy and Nowosielski come to the simple, shocking conclusion
that because the CIA is prohibited from operating on U.S. soil, those involved in the operation
chose to avoid prosecution rather than come clean.
In a well-documented case study that touches senior government officials, including current
special counsel Robert Mueller and other high-level individuals, crucial questions arise about
who is responsible for allowing "a plot that resulted in 3,000 murders" and led to ongoing U.S.
military entanglements in the Middle East to move forward.
However, our country's recent crimes and the people behind them, including President Bush,
are currently being "whitewashed" by our national obsession with Donald Trump, the authors
warn.
"All the crimes of the war on terror, the torture, Abu Ghraib, it's all just gone -- the
unnecessary invasion of the war in Iraq, it's all just sort of under the rug now because of
Trump," Duffy says.
Listen to their discussion to learn more about the stunning investigation into the tragedy
that changed the course of our nation's history and the Americans who could have thwarted the
attacks but decided to cover their own backs instead. You can also read a transcript of the
interview below the media player .
RS : Hi, this is Robert Scheer with another edition of "Scheer Intelligence," where the
intelligence comes from my guests. And the title is really appropriate for the book we're going
to talk about today, "The Watchdogs Didn't Bark: The CIA, NSA, and the Crimes of the War on
Terror." And the authors are John Duffy and Ray Nowosielski. And they are investigative
reporters, and the watchdogs here are the people in our intelligence agencies that are supposed
to be protecting the nation. And this book cuts very deeply into the unsolved mystery of how
9/11 happened. Why weren't we better prepared to prevent it? It's one of the most important
events in American history; it certainly has shaped our lives in terms of a surveillance state,
our rights and everything else, up to the present. And this book, I think, represents the most
exhaustive and well-documented effort to get to the bottom of the whole thing. You're very
careful in what you do and do not assert about 9/11, what we don't know about it, and
particularly the role of George Tenet, who was then head of the CIA, and the role of the CIA in
-- what is the right word? -- obscuring the story, even keeping information from the White
House, from the FBI. So give me the gist of the book.
RN : This is Ray. The book is largely about looking at this case study of the failure
leading up to 9/11, the people who were involved in that failure, how that came about, and how
they were successful, to the present day, in managing to obscure the public from really fully
understanding that this was, in the words of one of our sources, really just a handful of
people. And the most jarring thing is that they're still, in some cases, working today in I
guess Trump's CIA. And we sort of document through the second half of the book what damage was
done to America because they remained in their positions.
JD: This is John. And intelligence was gathered around the time of the millennium that led
people in the Bin Laden unit at the CIA to monitor a meeting in Malaysia that was a gathering
of these al-Qaida figures. In monitoring this --
RS : That was in the year 2000, right?
JD : Yes. Right at the outset of the year. In monitoring this meeting, they became aware of
the fact that one of the attendees had a multiple-entry visa to the United States. That man's
name was Khalid al-Mihdhar. He would eventually be on the plane that crashed into the Pentagon;
he was one of the hijackers. So this starts the whole thing there, the fact that the CIA
becomes aware of this information; the Bin Laden unit, counterterror center, and then all the
way up to George Tenet are aware of this information. There's a lot of ins, outs, and
what-have-yous about where that information goes, but it ultimately does not go over to the
FBI's counterterror division in New York, much to the protest of the FBI agents who were
detailed to the CIA's Bin Laden unit. And it did not make it to the White House counterterror
czar, Richard Clarke, who very much finds this to be, like, the crux of the whole story -- the
fact that this information was kept from his office for basically a year and eight months, up
until the success of the attacks. The crux is there, that they had this information, these guys
were coming into the country, they had just left the terror planning summit, and this
information was being held close by the Bin Laden unit, by the counterterror center, and by
George Tenet. The reason for that is unknown; the speculation that Richard Clarke has was that
George Tenet and these people in the Bin Laden unit and counterterror center thought having
these al-Qaida people in the United States, they could possibly go through Allied proxies in
the Saudi intelligence to try to get close to these guys, monitor them, potentially find out
information from them or even try to flip them. That's Richard Clarke's speculation as to why
this was kept from him for so long. Ultimately, the attack was successful; that they all just
did their best to bury all this and, you know, hope no one noticed.
RS : Let me just start off with something that was confusing to me in reading your book.
Because the FBI generally comes off looking pretty good in your book, and the real problem is
with the CIA, and to a lesser degree, with the NSA. And in the San Diego story, and this is
covered in the 9/11 Commission Report and others, the two San Diego guys -- they are staying at
the home of an FBI informant at first. So when you say the FBI was not informed, weren't some
of these calls actually made from the home of an FBI asset?
RN : It's interesting when you know, A, that according to our NSA sources they were able to
be pinged every time that Mihdhar and Hazmi, the two hijackers, called from that house that you
mentioned in San Diego, back to Yemen. That somebody in the NSA was getting an alert as that
was happening each time, and was aware of those connections. But that the house that was being
used for the phone call was that of an FBI informant, Abdussattar Shaikh. And Abdussattar was
somebody the FBI recruited who was inside a popular mosque in San Diego, and who they thought
might be able to feed them warnings of anybody who might be a radical Muslim terrorist. And
Abdussattar claims that he simply missed the warning signs of the two tenants that he had in
his home. I mean, it's kind of interesting. He's also, he's not just an FBI informant, he's
also a Saudi, which kind of points to Richard Clarke's conjecture, which he first laid out to
us when we sat down in his office in 2009. And that was that once the CIA monitored the meeting
in Malaysia, knew that these two guys were connected to Bin Laden and were of interest, and saw
that they were heading to the United States, in Clarke's words, they might well have thought
that the best way to try to recruit these guys to feed information was not to send a blue-eyed,
blonde-haired, American CIA agent to go to meet them. But, instead, to use our partners in
Saudi Arabia and Saudi intelligence -- which George Tenet, the head of the CIA, happened to be
very close with -- to try to recruit them. So I actually focus more on the fact that this guy
was introduced to this house by a gentleman who's been determined to be a Saudi agent, a guy
named Omar al-Bayoumi, and that this guy then was perhaps working dually for Saudi intel and as
an FBI asset. And everyone sort of focuses on, oh, Abdussattar Shaikh was an FBI asset, so that
seems to put blame at the feet of the FBI. Could be; could be, but I would also focus on that
Saudi angle, because it recurs so often.
RS : Well, it also goes to the question of the efficiency of the surveillance society.
Because after all, these phone calls could be intercepted. You know, they did; they could
follow this trail. And phone calls are being made back to a suspect residence in Yemen and so
forth, from the home of an FBI recruit. And I'm just wondering, there's been a lot of
discussion, some of the people that you quote in your book have made this point -- you collect
this haystack of information that doesn't lead you to the needle in the haystack. And so here
these phone calls were, clearly could be intercepted. They didn't require any special act of
Congress or anything else. This was not a case of their arms being tied, the intelligence
agencies. But they're not even looking at their own data. Isn't that the takeaway from the
first part of this story? These guys are acting suspiciously in San Diego, they have a
suspicious background, they've participated in a suspicious conference, they're staying at the
home of an FBI informant, and they're making calls that would basically outline what was going
to happen in this disastrous attack -- and no one noticed. Or the ones who noticed didn't tell
other people.
JD : I think what is likely to have happened there is, so those calls were going back, and I
think it was about seven or eight calls. And Khalid al-Mihdhar's wife still lived at that
house, and he was calling her from San Diego. So I don't think any deep operational details
were being discussed in those calls, but that doesn't really matter; the fact that they're
calling that home from America is a big deal. And how that would work at the NSA is there's
someone who is tasked all day with basically monitoring the electronic signals going into and
out of this house in Yemen, and when they see this coming in from the United States, that
should ring a really big alarm bell. Now, that person working that desk would have to seek
approval from the chop chain, which are these NSA managers. In order for anything to happen
with that information, it has to get passed up and then brought to a FISA court, brought to the
FBI. And if these managers within the NSA basically say, don't worry about it, sit on it, just
collect it, sit on it -- and if they don't allow any action, then there will be no action. And
it's just going to stay housed right there, in that particular data stovepipe at the NSA. If
Richard Clarke's speculation is true, that there was this attempt to recruit these guys in the
U.S. with Saudi proxies, part of that plan would have been George Tenet speaking to someone at
the NSA, or one of George Tenet's people speaking to someone at the NSA. Basically saying, hey,
before you go out getting any FISA warrants or chasing anything down regarding this specific
house, come to us first. So if there is some operation going on, it would stand to reason that
part of that operation would be not allowing these pings at this particular desk to turn into
any action.
RS : For people listening, let me make clear, this is an incredibly detailed, researched
book, which relies very heavily on intelligence veterans. No one less so than Richard Clarke,
who's come up so far; another is former colonel Larry Wilkerson, obviously a key person. And
what is very dramatic in your book is, where your story really comes to life for you guys as
journalists, is when Richard Clarke -- you say you go in there to interview him, and you tell
your crew, put the sound on as we go in. And you go in, and you think you're going to have to
ask a lot of questions to get -- and for people who don't know, Richard Clarke ever since the
early '70s was a major figure in the intelligence community. And at this point, when you're
talking to him, he's been around the block, he's seen everything. And he was a close friend of
George Tenet, who was head of the CIA; they considered themselves allies. And you're going in
to get this interview, and you think you're going to have to weasel information out of him. And
he just hits you over the head with an assertion that, really, is the thrust of this book. So
why don't you take us to that moment?
RN : What we discovered on the day that we walked into Richard Clarke's conference room was
that he'd been ready for probably about a year to talk about this, and no major journalists had
called him up to ask him about this subject. Nobody had ever asked him. So going back, you
know, he started in the Reagan State Department; he worked under George H.W.; Clinton, when
these Al Qaeda terrorist attacks began in the early nineties, recognized that there needed to
be a new position within his Cabinet, and he called it the counterterror czar, the
counterterror adviser. And he created that position for Richard Clarke. As you mentioned,
Clarke was close friends with George Tenet, who also was sort of on the National Security
Council under Clinton early on, and then got named the head of the CIA in the midst of
Clinton's first term. George W. Bush and company come in, early 2001; as it turned out, nine
months ahead of this ticking clock towards 9/11. And Richard Clarke is told that he's
essentially being demoted. He's still going to be the counterterror advisor, but it's not a
Cabinet-level position. And so now he's kind of essentially going through the extra layer of
Condoleezza Rice. But George Tenet still very much has Bush's ear. And that's kind of the back
story there; then after, you know, on 9/11 Richard Clarke by nearly all accounts was running
the response that morning, on that critical day; he was the top man for counterterror. Over
time, he starts to get rubbed the wrong way by the fact that the Bush administration
inexplicably is not really terribly still concerned about Al Qaeda after 9/11. But then Clarke
leaves, and he writes a bestselling book. And he testifies before the 9/11 commission and
becomes the only person to apologize to the families, to admit that there was a failure at all.
But cut to a few years down the line, and he releases another book in 2008 that doesn't become
a bestseller. And it's called "Your Government Failed You." And it includes a section on
Mihdhar and Hazmi that he calls "Straining Credulity," in which he says that he does not
believe in conspiracy theories, but in this one particular case, he's weighed it every which
way and he can't see another way to explain it but by. But he sort of saved us speculation, and
so we saw that part in his book and we thought, well, we've been itching -- we'd collected
enough info by that time, and talked with enough people, that we thought: something happened
here with these two hijackers that flew over to the U.S. Something happened when they arrived.
And the big question was, if this was an operation by the CIA, did they let Clinton know? Did
they then let Bush know when he came in? What was the deal there? And Richard Clarke would be
the man in a position to answer that. And so you're right, that's where our journey really --
that's where we launched. Because we'd been looking into it for a few years, but when we sat
down with Clarke, that was when he told us he couldn't see any other explanation but that there
was an op, that it never made it to the White House because it would have had to go through
him. And his friend George Tenet was responsible for malfeasance and misfeasance in the runup
to 9/11.
JD : And he also, in part of that description, said that a lot of the CIA reports that would
have, any other day, come directly to his computer -- when he flicked it on in the morning, it
would be right there waiting for him -- just on this specific case with these two individuals,
he was removed from the chain of information. And so he felt that he was getting minutiae
concerning terrorism from around the world in, like, tiny micro-detail on everything except
this, and that must have meant he was intentionally pulled out of the chain by someone. And
that that would have taken high-level order. And when asked, you know, how high level, he said
that it must have come from the director, referring to George Tenet.
RS : So let's cut to the chase here. There's an old caution, don't attribute to conspiracy
what can be explained by ordinary stupidity. Or laziness, or incompetence. Is this a case where
George Tenet, the admired at that time head of the CIA, was just incompetent, stupid,
indifferent? Is there something more at work? Did the CIA welcome such an attack as a boon for
the military-industrial complex, as some people allege? What's going on here? How could this
major tragedy event be visited upon the United States, the head of our intelligence agency
knows that there are these suspect characters there, and he doesn't bother to tip off the FBI,
let alone the White House? And after all, the FBI is in charge of domestic surveillance;
they're the ones that have to go arrest these guys, you know, at least confront them, see what
they're doing. I have to tell people listening to this, this is a very careful, indeed
conservative, in the best sense of the word, book. This is not a book you can just dismiss by
saying it's got some wild, interesting theory. No -- you err, I would say, on the side of
caution, in a way.
JD : We err on the side of caution all the time, and we're not going to try to say something
that we can't really, really defend. If we start from a position that there's some level of
merit to what Clarke is suggesting, that there is this operation going on to try to monitor
these hijackers domestically by the CIA, as opposed to handing it off to the FBI -- presuming
he's right on that, there is this --
RS : Can I just add a little note that Wilkerson actually goes further.
JD : Wilkerson later suggests that he heard it mentioned after the fact, in about 2003 or
2004, when he is at the CIA. The invasion of Iraq has begun, and they're waiting for updated
satellite information, everyone's kind of standing around just kind of BS'ing. And he basically
overhears a conversation about how, oh man, Tenet tried to flip these guys in the U.S. and then
had to hide it because it all went wrong, and it would have come back to bite him. And yeah,
Wilkerson basically claims to have overheard high-level people speaking about that, just sort
of in a B.S. session.
RN : Well, and not really, not overheard; it's more like, he claimed multiple, very
high-level under Tenet sources, that he was close with at that time, who were in these "yak-yak
sessions," that he calls them. And they each claimed to be aware of the reality of this,
supposedly.
JD : You're asking, like, how nefarious it is. In the first period of all this, presuming
that it's true, presuming that there's this operation going on to try to flip these guys or
follow them or whatever, gather information on them domestically, you can imagine that, OK,
they're going to have some sort of setup in which to monitor these guys, or they're using Saudi
proxies perhaps, or other proxies, and they're following them. Then we get to this point where,
well, the attack succeeds on September 11, so how the heck does that happen? If you have this,
if you're monitoring these guys and then they do this, where does the ball get dropped? And our
book does go into that a bit, and we definitely say, like, there's this moment where they must
have said: OK. This isn't working, it's not happening, there has got to be a point where they
say, abandon ship. But what do they do? How do they abandon ship? They need to somehow turn
this over to the FBI to wrap it up for them. And the way they seem to do this is not by being
honest and saying, hey, we were trying to do this and it didn't work, but here's the
information -- go get 'em. They definitely don't do that.
RS : The "trying to do this" -- you mean to turn these terrorists into agents for
themselves? --
JD : So what I'm saying is, if at some point when it's not working, when the flip hasn't
happened, when whatever goal they set for themselves, when they haven't achieved it, a time
must come for them to wrap up this operation. A time must -- you can't just let them go all the
way and succeed in their attack, you would think.
RN : But I think what you're asking is the intention of the operation, which would seem --
well, the CIA was created in order to prevent future Pearl Harbors. So I guess, giving them the
benefit of the doubt, the intention of the operation would theoretically have been to monitor
these guys so as to figure out what they're doing here in the U.S.
JD : Yes, yes. We're giving them the benefit of the doubt there. And then we look at the
emails and cable traffic we can find in that summer, and we watch as -- there's no search for
these guys, there's no FBI search for these guys until August 23rd of 2001. And that's the
point where, surreptitiously, someone stationed at Alec Station, the Bin Laden unit, CIA, who's
going through old cable traffic, goes: Oh my gosh! I found a cable that these guys came to the
United States. And she alerts the FBI, and the FBI begins their domestic search. I guess what
I'm suggesting is, a time would have come when they, when whoever is running this operation at
the CIA, whatever the architecture of that operation looks like, they would have seen these
things happening. They would have seen the connections they were making with these other guys
coming to the United States. And a time would have come for them to say: OK. We have to pass
this off to the FBI to shut it down. And it does --
RS : But wait a minute. When you say OK, and they've seen things -- they see people who are
identified as terrorists, part of this terrorist network, traces back to Al Qaeda. And they are
learning about airplanes and how to fly them, and flight paths, and everything. And you're
telling me that they say, well, you know, maybe we're not going to actually recruit them, maybe
we're -- we better do something. Why aren't they saying, holy cow, these guys can do great
damage to this country! We got to call, what, the local San Diego police, at least, to get them
to check them out! No?
RN : OK, so these guys arrive in early 2000. What happens in October 2000? The U.S.S. Cole
is attacked in Yemen. FBI agents working that from top levels of the New York office of the FBI
find a very direct connection not only to Al Qaeda, but to that same planning meeting that the
CIA monitored. The same one where Mihdhar and Hazmi were at that planning meeting. So not only
do you have an inclination -- oh, these guys are Al Qaeda, they're probably not here to, in the
words of one person, go to f'ing Disneyland. They're here for something nefarious -- but now,
after October 2000, for the entire year up to 9/11, the CIA has the knowledge that these two
individuals that were at this meeting, that the meeting spawned the U.S.S. Cole attack, which
killed 17 dead servicemen. So I think at that point, yeah, calling the local San Diego police
would probably make a lot of sense.
RS : OK, and what about the FBI informant who was their link in San Diego? Why isn't he
telling anyone, or why doesn't the FBI know?
JD : You have to be careful to separate what's going on at different agencies. An FBI
informant's not necessarily reporting to the CIA, and the CIA informant's not reporting to the
FBI. And then you also have to understand that the FBI has national headquarters and then a
bunch of different field offices throughout the country. And you have field office reports
coming in, like the Phoenix memo from Ken Williams mentioning that there's these, all these
Muslim guys trying to learn to fly. You've got what Coleen Rowley exposes out of Minnesota,
when they bust Zacarias Moussaoui, and how they're trying to get into his laptop, and they're
being hampered by FBI headquarters. So I mean, you don't know what came from Abdussattar. But I
don't want to move too far into the weeds and off the general thrust of your original question.
And I think what you come down to is a fork in the road. At some point, either the CIA running
this operation has to wrap it up, or this major attack is going to succeed. If you ask
yourself, well, why didn't they wrap it up -- because obviously they didn't, and the attack did
succeed–so if you ask yourself why didn't they, there's one potential answer, which is
that they were afraid of being prosecuted. Because they had been running an illegal operation
in the United States. So their own fear for their own lives, freedom, careers, all that
stuff–
RS : For people who don't understand the law, you have to explain, the CIA was prevented
from running this kind of operation domestically. This is supposed to be up to the FBI.
JD : It is a crime for them to operate within the United States.
RN : And what Richard Clarke told us, we don't know how much of the information, like the
Phoenix memo and these other things that Duffy just mentioned, got to George Tenet. But what we
do know, the existence of Mihdhar and Hazmi in this country should have made it to him by that
point. Because his own CIA counterterror office had informed the FBI in August, and a search
had begun. So that information should have been in Tenet's head. We know that he was briefed
about Zacarias Moussaoui acting weird at a flight school in Minnesota. And he comes to the --
oh, man --
JD : September 4th principals meeting.
RN : -- September 4th principals meeting in the White House. Clarke has been pushing the
entire Bush administration, the entire eight, nine months, to be able to brief them on Al Qaeda
and make the case for why the administration should take this seriously. And he's finally got
that meeting, and George Tenet is sitting there, and he doesn't say a word. And he was later
asked by investigators why not, and he gave this really bizarre non-answer, which was just
like: it just wasn't the right time, right place, I just can't take you any further than that.
And they let him get away with leaving it at that, but Richard Clarke says the reason he
doesn't tell us at that point, he believes, is because Clarke would have had him brought up on
charges that day for malfeasance and misfeasance in withholding that information. Because
remember, that would also make his people culpable for the Cole, because they would have known
about the planning session for the Cole nine months before that one happened, too. So it looks
like --
JD : And then they would have been guilty of obstruction of justice for all of the hiding of
these figures once the FBI investigation into the Cole happened. So they have a long list of
things they become guilty of should they just turn this over and say, like: Ah, hey guys,
there's these guys, you should probably go do something about it. Now, that's one explanation.
Other people have other explanations. But as I said, we don't make accusations that we cannot
really, firmly back up. So this time, that's pretty much the one we typically go with.
RS : Two people in your book who take it further are Richard Clarke and Larry Wilkerson. Two
of the most highly experienced, knowledgeable individuals to come out of our whole military
intelligence complex. And they, put it in human terms, they say they don't know how these
people sleep at night. Wilkerson, even more than Clarke, suggests that these people could have
prevented 9/11, and knew about it. Now, I just want to ask you about one other person. Again,
the book is devastating; it's called "The Watchdogs Didn't Bark: The CIA, NSA, and the Crimes
of the War on Terror," John Duffy and Ray Nowosielski. But let me push it one step further to
the contemporary moment. The book is kind of easy on the FBI. But the fact is the FBI was
really the agency that should have been following these terrorists when they're in the United
States. But one guy who comes up in current making of history, and who was head of the FBI at a
critical point, is Mueller, who's now running the Russian, interference in our election
investigation. What was his role? I'd like to conclude on that, because he's a major figure
right now, the head of this special investigation. What was his role in this?
RN : I mean, it is important to remember that the guy came in, I think it was maybe 10 days
before 9/11, and took over the FBI. So he was, among the CIA, NSA, and FBI, he was able to be
the only one at the leadership helm in the post-9/11 days and months who you couldn't really
lay any culpability at his door for any kind of failure. Remember, the CIA director George
Tenet, he's right at the table with the President; he's a Cabinet-level guy. The FBI director,
it's not the same way. The FBI director reports to the Attorney General in the Department of
Justice, and the Attorney General gets the direct seat. We make the case in the book that when
George Tenet, in the week after 9/11, made the big play, the big power grab for the CIA, what
we call the wish list of every CIA director accumulated over the whole history of the agency,
and essentially puts it out there to Bush and says, these are the powers we need now to make
sure this kind of thing doesn't happen -- he gets his green light. Mueller, on the other hand
-- well, a couple things happen. For one thing, the stories–the CIA is better at keeping
their skeletons hidden, for a while. So the first stories that come out that start to paint a
picture of blame regarding 9/11, they're all pointing towards the FBI. Coleen Rowley comes out,
and she points a finger at Mueller in May of 2002, and that sort of gets the ball rolling on
the "it was the FBI's fault" story, which really didn't get corrected for quite a number of
years. So our sources tell us Mueller was playing defense, he was willing to kind of go along
as the Bush administration pushed that–we kind of know what happened here, so we don't
need to investigate this much further; you should be putting your FBI resources towards
preventing future attacks. And I can certainly understand why a man like Robert Mueller in that
position would say, would not want to be the guy that missed the next one. So from what we can
tell, and from what our sources told us, it does seem that he sort of wrapped up the 9/11
investigation, or just ended it midway. But what was happening was, we talked with Pat DeMoro
-- he was one of our sources -- and he took us inside, he ran the 9/11 criminal investigation;
remember, this was a crime, right. At least 19 guys, probably a lot more, were involved in a
plot that resulted in 3,000 murders. So he was investigating that, and he was finding over
about a two-year period, there would be leads that would point towards Saudi facilitators to
the hijackers, Saudi helpers, Saudi royal money coming over. And every time he found these, he
had to report them up to Bob Mueller. Bob Mueller would theoretically report them to the
Attorney General, who would theoretically report them to Bush. And yet the end result of this
was that Bush invades Iraq, and the U.S. public never heard about these Saudi connections
until, officially, until just a couple of years ago, really.
JD : And you have said that our book comes off pretty light on the FBI, and I think the
crucial difference to make clear is that most of the people we're talking about within the FBI
are from particularly one field office. We're talking about John O'Neill's people out of New
York, who are counterterror investigators. That's most of the people we're dealing -- we're
not, we mention a few other people from FBI headquarters, but we don't necessarily mention them
in the best light. And one of the big failures of the FBI is the search to find al-Mihdhar and
al-Hazmi, once they are made aware that they're in the country a couple weeks before 9/11. And
that is a huge story there, and we could only write so much book. So we don't want to just sit
here and say, like, oh, the FBI is great and did everything right; we focus specifically on a
handful of people who did do their damnedest to unearth the conspirators behind the Cole
attack, and to pass information about the presence of al-Mihdhar and al-Hazmi over to FBI
investigators in New York in the runup to 9/11. So we don't want to necessarily sit here and
say the FBI was perfect and did everything right; we're talking about a handful of
individuals.
RS : And as you've just indicated, your style and the character of this book is quite
scholarly. It's very thoughtful, it's incredibly well documented. And you got people really on
the inside, in the know, to trust you and to talk honestly about it. You've done the gumshoe
journalism, you took 10 years, you checked every record. What has been the critical
response?
RN : Well, we should have put Trump's picture on the cover. [Laughs] I think that would have
helped.
RS : That's a pretty profound observation, in a way. Because there's a whole bunch of people
now who think all of our troubles in this country started and will end with Trump. And it
really whitewashes everybody else.
JD : It's whitewashing a lot of people. There's, all of a sudden people who a few years ago
we were like, this is the worst person on earth! -- like George W. Bush, is now just being
embraced by Democrats as some, like, affable guy. All the crimes of the war on terror, the
torture, Abu-Ghraib, it's all just gone -- the unnecessary invasion of the war in Iraq, it's
all just sort of under the rug now because of Trump.
RS : Yeah, those were the adults watching the store. Everybody is angry that Trump doesn't
have adults watching the store, and now he just got in trouble with his Secretary of Defense,
pushing him out, and now that guy is whitewashed, right? He was considered a mad dog at one
point. So you're right; your book has run into a head storm of indifference to anything that
happened before Trump. But I'm asking a very pointed question. What happens? You guys spent
over 10 years on this, right?
RN : Yeah. And you know, our goal was not to get famous. [Laughs] We really did want
accountability for this small group of people that we thought, these people cannot stay in the
CIA, right? We're not going to keep letting them run the War on Terror, are we? And maybe if
people just know about this, or if we can just prove it–if we talk with enough insiders,
if we get enough documents together, if we write a book. It turns out, no. There's going to be
no accountability, and they're going to, the few that remain now at high levels of the CIA are
going to continue to do what they do, and no one's going to know about it except for folks that
listen to your show, so thank you.
RS : Well, they're going to write the history. I mean, the amazing thing–you think of
a movie like "Zero Dark Thirty," you know; and you quote John Kiriakou in your book, and he was
in the CIA; he was actually very successful in being involved with the capture of the highest
person connected with al-Qaida, and so forth. And they spun a myth that the torture worked, and
you needed torture, and blah blah blah. And it basically went unchallenged. So these people who
either lied, or just lied by not talking, even to the FBI or the White House -- they get to
control the narrative. And then a book like yours comes out, and -- I'm asking a very serious
question. What has been the response of The New York Times, The Washington Post?
JD : [Laughing] We're still waiting to hear what The Washington Post and The New York Times
think. We've gotten a lot of praise from people who have read it, but we're not getting any
really major national or international reviews. Well, one thing we like to do, you mentioned
"Zero Dark Thirty." And the main character, played by Jessica Chastain, is sort of an
amalgamation of a handful of people who did work at the CIA, most prominently a woman by the
name of Alfreda Bikowsky, who is mentioned very prominently in our book. We want people to know
her name, Alfreda Bikowsky, because it's a name that was sort of an open secret in the media
in, you know, New York, Washington, for many, many years. Her involvement goes from the
pre-9/11 period there at Alec Station through torture and drone killings, and we want to make
sure that her name gets out there so she can't hide in the shadows.
RN : Her name was never mentioned in any media until it came out on our website. It was 11
years, 10 months from the first alleged crime she'd committed that we documented, until her
name came out on our website.
JD : We just like to throw her name out there every once in a while, and make sure more and
more people hear it.
RS : Ah, that should be enough to inspire people to get a copy of "The Watchdogs Didn't
Bark: The CIA, NSA, and the Crimes of the War on Terror." It's written by John Duffy and Ray
Nowosielski. It's a very, very important book. This is the yeoman journalistic work on the
story, and it's informed by people on the inside who really witnessed it, and were shocked by
what they saw, high-level people. So I recommend the book. I want to thank you guys for coming
on. OK, that's it for this edition of Scheer Intelligence. Our engineers at KCRW are Kat Yore
and Mario Diaz. Our producers are Joshua Scheer and Isabel Carreon. I'm Robert Scheer, and
we're doing this broadcast from the University of Southern California Annenberg School for
Communication and Journalism, where Sebastian Grubaugh, as he often does, has made the show
work, and I want to thank him.
"... The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." ..."
"... What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100% certainty that some, if not all, the ministers there are criminals. ..."
"... That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the whole shebang is protected by the host's police force is even less so ..."
Convicted criminals. Such as disgraced former CIA boss,
David Petraeus, who's just been handed a $100,000
(Ł64,000) fine and two years' probation for leaking classified information.
Petraeus now works for the vulturous private equity firm KKR, run by Henry Kravis, who does arguably Bilderberg's best impression
of Gordon Gecko out of Wall Street. Which he cleverly combines with a pretty good impression of an actual gecko.
... ... ...
"Can I go now?" Another no. So I continued my list of criminals. I moved on to someone closer to home:
René Benko, the Austrian real estate baron, who had a conviction
for bribery upheld recently by the supreme court. Which didn't stop him making the cut for this year's conference. "You know Benko?"
The cop nodded. It wasn't easy to see in the glare of the searchlight, but he looked a little ashamed.
... ... ...
I decided to reward their vigilance with a chat about HSBC. The chairman of the troubled banking giant, Douglas Flint, is a regular
attendee at Bilderberg, and he's heading here again this year, along with a member of the bank's board of directors, Rona Fairhead.
Perhaps most tellingly, Flint is finding room in his Mercedes for the bank's busiest employee: its chief legal officer, Stuart Levey.
A Guardian editorial this week branded HSBC "a bank beyond shame" after it announced plans to cut 8,000 jobs in the UK, while
at the same time threatening to shift its headquarters to Hong Kong. And having just been forced to pay Ł28m in fines to Swiss regulators
investigating money-laundering claims. The big question, of course, is how will the chancellor of the exchequer,
George Osborne, respond to all this? Easy – he'll
go along to a luxury Austrian hotel and hole up with three senior members of HSBC in private. For three days.
High up on this year's conference agenda is "current economic issues", and without a doubt, one of the biggest economic issues
for Osborne at the moment is the future and finances of Europe's largest bank. Luckily, the chancellor will have plenty of time at
Bilderberg to chat all this through through with Flint, Levey and Fairhead. And the senior Swiss financial affairs official, Pierre
Maudet, a member of the Geneva state council in charge of the department of security and the economy. It's all so incredibly convenient.
Let's see, maybe because we have read over their leaked documents from the 1950s in which they discussed currency manipulation
and GATT. Everything they have discussed in their meetings over the past decades has almost come to fruition. There are elected
officials meeting with criminals such as HSBC. Did you even read the article? If you did, and you are not het up or whatever you
call it, then you are of a peasant mentality, and there is no use talking to you.
The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." I won't
be looking for your response because you have confirmed that you do not matter.
Carpasia -> MickGJ 12 Jun 2015 10:52
Thank you for your comment, my good man. Hatred is human, and helps us all to avoid pain, for pain, especially unnecessary
pain, is allowed to be hated by the agreement of all, if nothing else is. I would hate to be beaten by Nazis. Thus, I would avoid
going to a place where that could occur. That is how hatred works for me. It is the only way it can work, and not be pernicious
to the self and others.
I distrust the international order as it is the means, harnessed by money, whether corporate or state or individual or monarchical,
by which this world is being destroyed. Could things have been better? Jesus is on one end of the spectrum, and Lord Acton on
the other, of the spectrums of viewpoints from which that could be properly assessed.
If the corruption at the heart of the international
order is not regulated properly, this world will come to an end, not the end of the world itself, but the end of the world as
we know it. This is happening now. The world is finite.
I am not a xenophobe. In my experience, the people that are most likely to hurt me, and thus deserve fear, are those closest.
Perhaps that is a cynical way of describing it, but anyone who thinks honestly about it would accede to the notion that it is
the people who "love" us that hurt us the most, for we agree too be vulnerable to them. It is the matrix of love.
As for Austria and Bavaria, I have visited both places and they were, both, the cleanest locales I have ever seen, with Switzerland
having to be mentioned in the same breath, of course.
I take a certain liberty in writing. I am not damning the human race, or strangers to me. If I did not entertain, but caused
offence, I apologize to you. I do not possess omniscience, and my words will have to speak for themselves.
Thank you, again.
DemonicWarlordSlayer 12 Jun 2015 08:02
"How Geo Bush's Grandfather Helped Hitler's Rise to Power" in the UK Guardian >
"Did Geo H W Bush Coordinate a JFK Hit Team" at Veterans Today >
"9/11 Conspiracy Solved, Names, Connections, Details" on youtube....dot-to-dot of the
Demonic Warlord's Crimes Against Humanity....end feudalism.
Carpasia 12 Jun 2015 07:09
Excellent article.
I visited Austria once, and I know of what he speaks. It was the one place I have ever visited that I thought I would be jailed
if I littered. I was wandering at the time, but I tentatively had a meal of chicken and departed henceforth.
Austrians are an interesting lot, to be sure. That they are perfect goes without saying. Their main virtue is that they do
not travel, and that strangers, which we call tourists these days, are not welcomed. If only we were all like that, the world
would be a far better place.
Austrians do everything well, including crime. Some of the greatest crimes in the world have been committed by Austrians, but
their crimes did not include not having their papers.
During World War 2, and I pass over Hitler, the German machine of death had an unusually high proportion of Austrians in commanding
roles assisting it. It can not be explained away by saying they were some kind of faux Germans, and so it matters not. Indeed,
if anything, Germans are faux Austrians, looked at in the broad brush of history. Men of many nations joined the Germans and adorned
themselves with the Death's Head, but many Austrians might as well have tattooed it onto their foreheads. I know of what I speak,
for I read on it, and will justify if questioned.
Reinhard Heydrich is an epitome of this, in the true sense of the word. Kurt Waldheim was another, too young too rise too far
before the Ragnarok of May of 1945, but government of the world was not out of his reach, a man who had materially assisted the
transportation of the Jews of Thessaloniki to the gas chambers of Auschwitz and, when challenged, was unrepentant, not as a racist,
but as something worse even, as a man whose great virtue was that he followed orders. It is order that the Austrians value over
everything. Even crime is ordered.
In the common-law west we think criminals are disordered beasts to be locked up. We do not give them papers. They are registered
only to warn us of their existence, and we do not like to let them travel, as much as we could benefit by their absence, because
we think they flee to license, and we think it wrong to inflict them upon innocents abroad. In Austria, the criminal is the man
with no papers. If he has papers, all is well, and he is no criminal, whatever he has done.
colingorton 12 Jun 2015 03:19
What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that
there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100%
certainty that some, if not all, the ministers there are criminals.
That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the
whole shebang is protected by the host's police force is even less so.
How far can all this mutual back scratching go? It seems that the only alternative left is far too drastic, but there really
seems to be no place for a legal alternative, does there?
"... Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating" impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community via exclusion ..."
"... In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why now? 3. Why do so many voters turn to far-right nationalist movements? ..."
"... Frankly, "crony capitalism" has always been the primary one, as even Adam Smith noted ..."
"... Communities have become politically disempowered in large part because they have become economically disempowered. ..."
The wave of populist nationalism that has been sweeping through Western democracies
in the past two years is "a cry for help from communities who have seen growth bypass them."
So said Raghuram Rajan, the former governor of the Reserve Bank of India, during a keynote address he gave at the Stigler Center's
conference on the political
economy of finance that took place in June.
Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating"
impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites
following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community
via exclusion.
In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why
now? 3. Why do so many voters turn to far-right nationalist movements?
"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways,
the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people in
industrial countries used to believe that their children would have a better future than their already pleasant present. Today this
is no longer true." ...
There's quite a bit more. I don't agree with everything he (Raghuram) says, but thought it might provoke discussion.
The understanding of exploitation of wage earning production workers is a better base then the 18th century liberal ideal of equality
Exploitation and oppression are obviously not the same even if they make synergistic team mates more often then not.
So long as " them " are blatantly oppressed it's easy to forget you are exploited. Unlike oppression exploitation can be so
stealthy.
So not part of the common description of the surface of daily life
Calls for equality must include a careful answer to the question "Equal with who ? "
Unearned equality is not seen as fair to those who wanna believe they earned their status. Add in the obvious : to be part
of a successful movement aimed at exclusion of some " thems " or other is narcotic
Just as fighting exclusion can be a narcotic too for " thems "
But fighting against exclusion coming from among a privileged rank among the community of would be excluders.
That is a bummer. A thankless act of sanctimony. Unless you spiritually join the " thems"
Now what have we got ?
Jim Crow thrived for decades it only ended when black arms and hands in the field at noon ...by the tens of millions were no
longer necessary to Dixie
"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways,
the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people
in industrial countries used to believe that their children would have a better future than their already pleasant present. Today
this is no longer true." ...
I thought this sort of thinking was widely accepted only in 2016 we were told by the center left that no it's not true.
"Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating"
impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites
following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community
via exclusion."
Instead the center left is arguing that workers have nothing to complain about and besides they're racist/sexist.
'"These communities have become disempowered partly for economic reasons but partly also because decision-making has increasingly
been centralized toward state governments, national governments, and multilateral [agreements]," said Rajan. In the European
Union, he noted, the concentration of decision-making in Brussels has led to a lot of discontent.'
I'd suggest that this part is not true. Communities have become politically disempowered in large part because they have
become economically disempowered. A shrinking economy means a shrinking tax base and less funds to do things locally. Even
if the local government attempts to rebuild by recruiting other employers, they end up in a race to the bottom with other communities
in a similar situation.
I'd also suggest that the largest part of the "discontent" in the EU is not because of any "concentration of decision-making",
but because local (and regional, and national) politicians have used the EU as a convenient scapegoat for any required, but unpopular
action.
"... As our society rushes toward technological ataraxia , it may do us some good to ponder the costs of what has become Silicon Valley's new religious covenant. For the enlightened technocrat and the venture capitalist, God is long dead and buried, democracy sundered, the American dream lost. These beliefs they keep hush-hushed, out of earshot of their consumer base. Best not to run afoul of the millions of middle-class Americans who have developed slavish devotions to their smartphones and tablets and Echo Dots, pouring billions into the coffers of the ballooning technocracy. ..."
"... The problem with Silicon Valley elites is a bit simpler than that. They are all very smart, but their knowledge is limited. They know everything about electronics, computers, and coding, but know little of history, philosophy, or the human condition. Hence they see everything as an engineering problem, something with an optimal, measurable solution. ..."
"... As Tucker Carlson is realizing, Artificial Intelligence eliminating around 55% of all jobs (as the Future of Employment study found) so that wealthy people can have more disposable income to demand other services also provided by robots is madness. This is religious devotion either to defacto anarcho-capitalism, transhumanism, or both. ..."
"... @TheSnark -- valid observation: The Silicon Valley elites " know everything about electronics, computers, and coding, but know little of history, philosophy, or the human condition." Religion is not an engineering issue. Knowing a little about history, philosophy, human condition would help them to understand that humans need something for their soul. And the human soul is not described by boolean "1"s or "0"s ..."
"... Zuckerberg's comment about the Roman Empire is bizzare.to say the least. Augustus didn't create "200 years of peace". The Roman Empire was constantly conquering its neighbors. And of the first 5 Roman Emperors, Augustus was the only one who defintly died of natural causes ..."
"... This time period was an extremely violent time period. The fact that Zuckerberg doesn't realize this, indicates to me that while he is smart at creating a business, he is basically a pseudo-intellectual ..."
They've rejected God and tradition in favor of an egoistic radicalism that sees their fellow man as expendable.
As our society rushes toward technological ataraxia , it may do us some good to ponder the costs of what has become
Silicon Valley's new religious covenant. For the enlightened technocrat and the venture capitalist, God is long dead and buried,
democracy sundered, the American dream lost. These beliefs they keep hush-hushed, out of earshot of their consumer base. Best not
to run afoul of the millions of middle-class Americans who have developed slavish devotions to their smartphones and tablets and
Echo Dots, pouring billions into the coffers of the ballooning technocracy.
While Silicon Valley types delay giving their own children screens, knowing full well their deleterious effects on cognitive and
social development (not to mention their addictive qualities), they hardly bat an eye when handing these gadgets to our middle class.
Some of our Silicon oligarchs have gone so far as to call these products "demonic," yet on they go ushering them into schools, ruthlessly
agnostic as to whatever reckoning this might have for future generations.
As they do this, their political views seem to become more radical by the day. They as a class represent the junction of meritocracy
and the soft nihilism that has infiltrated almost every major institution in contemporary society. By day they inveigh against guns
and walls and inequality; by night they decamp into multimillion-dollar bunkers, safeguarded against the rest of the world, shamelessly
indifferent to their blatant hypocrisy. This cognitive dissonance results in a plundering worldview, one whose consequences are not
yet fully understood but are certainly catastrophic. Its early casualties already include some of the most fundamental elements of
American civil society: privacy, freedom of thought, even truth itself.
Hence a recent
New York Times profile of Silicon Valley's anointed guru, Yuval Harari. Harari is an Israeli futurist-philosopher whose apocalyptic
forecasts, made in books like Homo Deus: A Brief History of Tomorrow , have tantalized some of the biggest names on the political
and business scenes, including Barack Obama, Bill Gates, and Mark Zuckerberg. The Times portrays Harari as gloomy about the
modern world and especially its embrace of technology:
Part of the reason might be that Silicon Valley, at a certain level, is not optimistic on the future of democracy. The more
of a mess Washington becomes, the more interested the tech world is in creating something else, and it might not look like elected
representation. Rank-and-file coders have long been wary of regulation and curious about alternative forms of government. A separatist
streak runs through the place: Venture capitalists periodically call for California to secede or shatter, or for the creation
of corporate nation-states. And this summer, Mark Zuckerberg, who has recommended Mr. Harari to his book club, acknowledged a
fixation with the autocrat Caesar Augustus. "Basically," Mr. Zuckerberg told The New Yorker, "through a really harsh approach,
he established 200 years of world peace."
Harari understands that liberal democracy is in peril, and he's taken it upon himself to act as a foil to the anxieties of the
elite class. In return, they regale him with lavish dinner parties and treat him like their maharishi. Yet from reading the article,
one gets the impression that, at least in Harari's view, this is but a facade, or what psychologists call "reaction formation." In
other words, by paying lip service to Harari, who is skeptical of their designs, our elites hope to spare themselves from incurring
any moral responsibility for the costs of their social engineering. And "social engineering" is not a farfetched term to use. A portion
of the Times article interrogates the premise of Aldous Huxley's dystopian 1932 novel Brave New World , which tells
the story of a totalitarian regime that has anesthetized a docile underclass into blind submission:
As we boarded the black gull-wing Tesla Mr. Harari had rented for his visit, he brought up Aldous Huxley. Generations have
been horrified by his novel "Brave New World," which depicts a regime of emotion control and painless consumption. Readers who
encounter the book today, Mr. Harari said, often think it sounds great. "Everything is so nice, and in that way it is an intellectually
disturbing book because you're really hard-pressed to explain what's wrong with it," he said. "And you do get today a vision coming
out of some people in Silicon Valley which goes in that direction."
Here, Harari divulges with brutal frankness the indisputable link between private atheism and political thought. Lacking an immutable
ontology, man is left in the desert, unmoored from anything to keep his insatiable passions in check. His pride entices him into
playing the role of God.
At one point in the article, Harari wonders why we should even maintain a low-skilled "useless" class, whose work is doomed to
disappear over the next several decades, replaced by artificial intelligence. "You're totally expendable," Harari tells his audience.
This is why, the Times says, the Silicon elites recommend social engineering solutions like universal income to try and mitigate
the more unpleasant effects of that "useless" class. They seem unaware (or at least they're incapable of admitting) that human nature
is imperfect, sinful, and can never be perfected from on high. Since many of the Silicon breed reject the possibility of a
timeless, intelligent metaphysics (to say nothing of Christianity), such truisms about our natures go over their heads. Metaphysics
aside, the fact that our elites are even thinking this way to begin with -- that technology may render an entire underclass "expendable"
-- is in itself cause for concern. (As Keynes once quipped, "In the long run we are all dead.")
Harari seems to have a vendetta against traditions -- which can be extrapolated to the tradition of Western civilization writ
large -- for long considering homosexuality aberrant. He is quoted as saying, "If society got this thing wrong, who guarantees it
didn't get everything else wrong as well?" Thus do the Silicon elites have the audacity to shirk their entire Western birthright,
handed down to them across generations, in the name of creating a utopia oriented around a modern, hyper-individualistic view of
man.
When man abandons God, he begins to channel his religious desire, more devouring than even his sexual instinct, into other worldly
outlets. Thus has modern liberalism evolved from a political school of thought into an out-and-out ecclesiology, one that perverts
elements of Christian dogma into technocratic channels. (Of course, one can debate whether this was liberalism's intent in the first
place.) Our elites have crafted for themselves a new religion. Humility to them is nothing more than a vice.
The reason the elites are entertaining alternatives to democracy is because they know that so long as we adhere to constitutional
government -- our American system, even in its severely compromised form -- we are bound to the utterly natural constraints hardwired
by our framers (who, by the way, revered Aristotle and Jesus). Realizing this, they seek alternative forms in Silicon Valley social
engineering projects, hoping to create a regime that will conform to their megalomaniacal fancies.
If there is a silver lining in all this, it's that in the real word, any such attempt to base a political regime on naked ego
is bound to fail. Such things have been tried before, in our lifetimes, no less, and they have never worked because they cannot work.
Man should never be made the center of the universe because, per impossible, there is already a natural order that cannot
be breached. May he come to realize this sooner rather than later. And may Mr. Harari's wildest nightmares never come to fruition.
Paul Ingrassia is a co-host of the Right on Point podcast. To listen to his podcast, click
here .
"in the real word, any such attempt to base a political regime on naked ego is bound to fail. Such things have been tried before,
in our lifetimes, no less, and they have never worked because they cannot work."
But they can create hells on earth for many decades, in which millions are consumed, until played out.
As Kipling so aptly put it, in the final stanzas of a poem:
As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
"The reason the elites are entertaining alternatives to democracy is because they know that so long as we adhere to constitutional
government -- our American system, even in its severely compromised form -- we are bound to the utterly natural constraints hardwired
by our framers (who, by the way, revered Aristotle and Jesus)."
Um, you do know that one of the gravest dangers the founders feared was democracy? And the bulwarks they put in place are all
meant to constraint majority rule? Now, if the argument you are making that the elites have so corrupted the hoi polloi that only
rule by a minority of REAL AMERICANS can save us, say so, don't do the idiotic dodge of invoking democratic arguments while obviously
advocating minority rule.
The problem with Silicon Valley elites is a bit simpler than that. They are all very smart, but their knowledge is limited.
They know everything about electronics, computers, and coding, but know little of history, philosophy, or the human condition.
Hence they see everything as an engineering problem, something with an optimal, measurable solution.
As a result, they do not even understand the systems they have built; witness Zuckerberg struggling to get Facebook under control.
If they go the way the author fears it will be by accident, not design. Despite their smarts, they really don't know what they
are doing in terms of society.
As Tucker Carlson is realizing, Artificial Intelligence eliminating around 55% of all jobs (as the Future of Employment study
found) so that wealthy people can have more disposable income to demand other services also provided by robots is madness. This
is religious devotion either to defacto anarcho-capitalism, transhumanism, or both.
They're literally selling out human existence for their own myopic short-term gain, yet have a moral superiority complex.
I suppose the consensus is that the useless class gets welfare depending on their social credit score. Maybe sterilization will
lead to a higher social credits score. Dark days are coming.
@TheSnark -- valid observation: The Silicon Valley elites " know everything about electronics, computers, and coding, but
know little of history, philosophy, or the human condition." Religion is not an engineering issue. Knowing a little about history,
philosophy, human condition would help them to understand that humans need something for their soul. And the human soul is not
described by boolean "1"s or "0"s
Western Culture is struggling to adapt to the new communication technologies that inhabit the Internet. That the developers of
these technologies see themselves as gods of a sort is entirely consistent with human history and nature.
The best historical example of how new communication technology can change society occurred about 500 years ago, when the printing
press was developed in Europe. A theologian and professor named Martin Luther (Perhaps you have heard of him?) composed a list
of 95 discussion questions regarding the then-current activities of The Church. That list, known as the "95 Theses" was posted
on the chapel door in Wittenburg, Germany. Before long, the list was transcribed and published. The list, and many responses,
were distributed throughout Europe. The Protestant Reformation was sparked.
The Press and Protestant Reformation it launched remains a primary foundation of today's Western Culture. It has initiated
much violence, much dissension, war with millions of deaths, The Enlightenment, and much else. The printing press ushered in the
modern era.
Just as the printing press enabled profound change in the world 500 years ago, The Internet is prompting similar disruption
today. I think we are in the early stages, and estimate that our great great grandchildren will be among the first to fully appreciate
what has been gained and lost as a result of this technology.
So the arrogance of religious believers convinced that they know "the TRUTH!", are the only ones to do so, and are justified in
forcing non-believers to act as "God says!" is to be completely ignored?
Methinks we're seeing a huge case of projection here .
The problem is also that once those religious foundations are gone, they don't come back easily. How can you talk to an atheist/muslim/buddhist
who doesn't even believe that lying is always sin? People in the west have started to think that all our nice freedoms and comfort
have magically come from the heart of humans, that we are all somehow equal and want the same things but the bible tells us the
real story: The heart is deceitful above all things, and desperately wicked.
Then we have religions who fundamentally do not even view death as a problem. Now this is where we enter the danger zone. In
the west we have lived on such a good, superior Christian foundation we seem to have forgotten how truly horrible and inferior
the alternatives are. Suddenly you get people who endorse cannibalism and child sacrifice again, I have seen this myself. How
do you even explain to somebody that this is wrong when he fundamentally disagrees on the morality of killing?
People don't understand that Christian morality was hard fought for, they refuse to understand that human beings do not have
a magical switch that makes them disapprove of murder.
Thousands were burned alive in England just for wanting to read the bible. It is like a technological innovation. We found
a trick in the human condition, we discovered the truth about humanity. Now these coddled silicon valley people who have grown
up in a Christian society with Christian morality and protections in their arrogance think that Christian behavior is the base
of human morality anyway and needs no protection. Thanks to them in no small part the entire world is currently doing its utmost
to reject the reality of the bible. We see insane propositions that say we should not judge people. Or that everyone is equal.
Of course the bible never says that with the meaning they imply, but it was coopted beautifully for their own evil agenda. Yes
evil, did I mention that our technocratic genius overlords don't believe in that either?
How can you talk with somebody that has rejected the most base truths of human life. How can you say a murderer is equal to
a non-criminal? You must understand that these new age fake Christians truly think like this, they truly believe that everyone
is equal. You can't allow yourself to think that 'oh they just mean we are all equal like.. on a human level, in our humanity'.
Nono, I made the mistake to be too charitable with them. They actually think we are all equal no matter what. I found it hard
to believe that we have degenerated so much, I have been in a quasi state of shock for a long time over this.
Zuckerberg's comment about the Roman Empire is bizzare.to say the least. Augustus didn't create "200 years of peace". The
Roman Empire was constantly conquering its neighbors. And of the first 5 Roman Emperors, Augustus was the only one who defintly
died of natural causes
This time period was an extremely violent time period. The fact that Zuckerberg doesn't realize this, indicates to me that
while he is smart at creating a business, he is basically a pseudo-intellectual
Newly elected Representative Alexandria Ocasio-Cortez recently
said that Modern Monetary Theory (MMT) absolutely needed to be "a larger part of our
conversation." Her comment shines a spotlight on MMT. So what is it? According to Wikipedia , it is:
"a macroeconomic theory that describes the currency as a public monopoly and unemployment as
the evidence that a currency monopolist is restricting the supply of the financial assets
needed to pay taxes and satisfy savings desires."
It is uncontroversial to say that the Federal Reserve has a monopoly on the dollar. So let's
look at the second proposition. Unemployment, MMT holds, is evidence that the supply of dollars
is restricted.
In other words, more money causes more employment!
This does not sound very different from what the New Keynesians say. Keith analyzed former
Fed Chair Janet Yellen's seminal paper on the economics of labor for
Forbes :
"Here is their [Yellen and co-author Ackerloff] tenuous chain of logic:
Disgruntled employees don't work hard, and may even sabotage machinery.
So companies must overpay to keep them from slacking.
Higher pay per worker means fewer workers, because companies have a finite budget.
Yellen concludes -- you guessed it:
inflation provides corporations with more money to hire more people."
As a footnote, MMT is referred to as neo-Chartalism, and there is some evidence that Keynes
was influenced by Chartalism (which goes back to at least
1905).
On Thursday, Marketplace published a piece on
MMT . Things are heating up for this hot new (old) idea. Marketplace presented a "bathroom
sink" model of the economy (yes, really!)
To wrap your brain around this concept, picture a bathroom sink. Think of the government and
its ability to create more money whenever it needs to as the faucet and that bucket area of the
sink where the water goes as the economy.
The government controls how much money, or water, is flowing into the economy. It spends
money into the economy by building interstates or paying farm subsidies or funding
programs.
"And so as those dollars reach the economy, they begin to fill up that bucket, and what you
want to do is be very mindful about how full that bucket is getting or you're going to get an
inflation problem," [Bernie Sanders economic advisor Stephanie] Kelton said.
Inflation is where the sink overflows. If that happens, Kelton said there are two ways to
fix it: "You can slow the flow of dollars coming into that bucket. That means the government
then has to start slowing it's [sic] rate of spending, or you can open up the drain and let
some of those dollars out of the economy. And that's what we do when we collect taxes."
This sounds a lot like the Quantity Theory of Money (QTM). This view often paints a picture
of pouring water into a container. The higher the water level, the higher the general price
level.
QTM by itself does not promote the idea that more money causes more employment. Only that
more money causes more rising prices. But Keynes did. And the New Keynesians like Yellen
do.
So what makes MMT unique?
According to Stephanie Kelton, in the Marketplace article:
"If you control your own currency and you have bills that are coming due, it means you can
always afford to pay the bills on time," Kelton said. "You can never go broke, you can never be
forced into bankruptcy. You're nothing like a household."
Keynes taught us about government deficits to bolster employment and government deficits to
respond to a crisis. MMT teaches us how to get to the next level. The voters want free goodies.
Traditional economics says "there ain't no such thing as a free lunch."
MMT says "oh yes there is!"
At least until you get to too much inflation . The Monetarists would agree, don't print too
much money or you get too much inflation . Much of the gold community also agrees. If you print
too much money, then you get skyrocketing inflation .
Never mind that this prediction was proven wrong in the post-2008 policy response. We want
to highlight that the Keyesians, the Monetarists, the MMTers, and even many Austrians largely
agree. The problem with too much money printing is too much inflation . They quibble about what
is too much, but they agree on the "bathroom sink" model of the economy.
In the words of early 20 th century physicist Wolfgang Pauli, QTM "is not even
wrong ."
We define inflation as the counterfeiting of credit. That is, fraudulently taking money from
a saver. It is called borrowing , but the borrower hasn't got the means or intent to repay.
Additionally, when everyone thinks that the government's debt paper is money , the saver
doesn't even know or consent to the borrowing.
There are lies, damnlies, and statistics. Then there are a few pugnacious, in your face,
gaslighting make-you-believe-in-unreality cargo cults. We will explore this in full, below.
During World War II, the US military set up operations on certain Pacific islands. They
built landing strips, where they landed planes bringing in supplies and men. They hired the
local tribesmen as labor, and paid them stuff that was ordinary to Americans, but wondrous to
the islanders. Like canned food. The islanders really looked forward to when a plane would
land, and they would get some cargo.
After the war, the US military pulled up stakes and left. But the islanders still wanted the
cargos. So they set up these elaborate charades, with tiki torches instead of flashlights, and
coconut shell mockup headphones. They went through the motions that they thought the Americans
did. To try to bring back the cargos.
Huh. What does that remind you of? An elaborate charade, with bogus props, going through the
motions of a civilization they don't understand to try to produce desired results -- free
goodies?
Modern Monetary Theory is a cargo cult.
It's ironic that the name includes the word modern . If we said that a pile of greasy rags
sealed in a dark closet would spontaneously generate rats, would you call that a modern theory?
If we said that sickness is caused by bad humors, and the cure is bloodletting by leaches,
would you say this is modern ? How about the idea that the Sun and the planets orbit the Earth.
Is this modern , too?
Not only are these not modern -- they are, in fact, old ideas that were tossed into the
garbage heap -- they are not theories either. A theory is an explanation of reality, which
integrates many observed facts and contradicts none. Modern Monetary Theory is neither modern
nor a theory .
MMT is not an attempt to explain reality, but to deny it.
Even a child understands something. Even people in the ancient world understood it, too. If
you lend a bushel of wheat to your neighbor, and he does not repay it, you suffer a loss. You
are worse off, compared to before. And so is the borrower (who at the least ruins his
credit).
MMT is based on denying this universal truth. Common sense says that if Peter lends to Paul,
and Paul does not repay, then Peter is impoverished. Common sense says that Peter would not
lend to Paul if he knew that Paul would renege on his obligation.
MMT says that a modern economy has a modern currency, which is just the state's paper. And
in a modern economy, the modern state can print more with no concerns other than "overflowing
the bathroom sink". Get that, the only concern is prices could rise too fast. And so long as
this does not occur, then the state can get away with it. Only, there is nothing to get away
with. It's perfectly fine.
In a cargo cult, the people did not recognize the difference between fake coconut shell
headphones, and real headphones. Or flashlights and tiki torches. So they made crude copies as
best they could. They went through the motions to summon the sky gods to come down to earth,
with cargo.
Let's look at the mental gymnastics. They imbued magical -- that is outside the principle of
cause and effect -- characteristics to their props. Failing to understand that airplanes are
created by men, and that it takes a great deal of planning (not to mention wealth) to fly a
plane full of cargo from America to the middle of the Pacific, they imagined that, somehow, the
act of using the headphones and the flashlights caused the plane and its cargo to come. The
headset is tokenized, viewed as a magical talisman.
What a cargo cult does to headphones, MMT does to money. First, the cargo cult substitutes
coconut shells held together with twisted vine for headphones. What they wear when attempting
to summon the sky gods is not a headset, but a surrogate. MMT (as does Keynesianism and
Monetarism) substitutes government debt paper for money.
As an aside, even a gold-redeemable certificate is not money. Think about it. You can bring
this piece of paper to the teller window. You push it across the counter. The teller pushes
back the gold coin. If the word for the paper is money, then what is the word for the gold for
which it redeems?
Anyways, modern monetary systems use irredeemable paper. It's not gold-redeemable, but even
worse. And they treat this paper as if it were money .
And it goes even farther. Previous theories felt the need to at least pay lip service to
repaying debt. They couldn't quite get to the point of openly admitting that the debt is never
to be repaid. Keynes famously quipped that, "in the long run, we are all dead," creating
ambiguity about the intention to repay. Monetarists generally promote the idea that if the
economy grows fast enough, the debt will shrink as a proportion of GDP.
The Keynesians don't have the intention to repay. And the Monetarists don't look at
Marginal
Productivity of Debt , which would show them that their idea isn't working. But they don't
go as far as the MMT'ers.
MMT says that the government is unlike deadbeat-debtor Paul. There is no need for the
government to repay. It's the same as the cargo cult. The cargo cult has no concept for
capital. The islanders do not produce in excess of what they consume, accumulating tools and
technology to increase their productivity. They subsist, and assume that this is how the world
works.
MMT has no concept for capital either. It puts blinders on, declaring that consumer prices
are the only thing to measure. The only risk is if they rise too fast. And the MMT'ers refuse
to see anything else.
In our discussion of Yield Purchasing Power , we
introduced a farmer who sells off the back 40 (acres), chops down the apple orchard to sell the
fruitwood, tears down the old barn to sell the planks, and even dismantles the tractor. And why
does he do this? He gets cash in exchange. And the cash is far in excess of his crop yield. Why
struggle and sweat to produce $20,000 a year by growing food, when you can sell off the piece
of the farm for $20,000,000.
The monetary system incentivizes the farmer to trade productive capital for paper credit
slips. The incentive is that this paper has a greater purchasing power than what he can earn by
operating the farm. He can trade his farm for far more groceries, than the food he could grow
on it.
This is the same old game. But MMT gives it a new name -- and asserts a bolder defense.
MMT'ers don't want to see, and they want you not to see, that the lender gives up good capital
but the borrower is just consuming it.
MMT justifies the naked consumption of capital.
Supply and Demand Fundamentals
The prices of the metals rose this week, especially on Friday. The exchange rate of gold
went up twenty two US dollars, and that of silver 41 US cents.
As we will discuss below, we think that there is a rethinking of gold occurring in the
market. And we don't just mean celebrities like Sam Zell buying gold for the first time.
There is a sense of déjà vu. Starting in mid-2004, the Fed went on one of its
rate-hiking sprees. It did not manage to get as high as the previous peak of 6.5%, set prior to
the previous crisis. In 2006, this rate topped out at 5.25%. In both the crisis of 2001, and
the crisis of 2008, the Fed had begun cutting rates before the official indication of recession
, and the cuts occurred more rapidly than the preceding hikes.
The cuts were too little and/or too late to avert disaster.
The problem is that during the period of low rates, firms are incentivized to borrow. They
finance projects which generate a low rate of return. These projects would not be financed, but
for the even-lower cost of borrowing. When rates rise, it does not increase the rate of return
produced by marginal projects (likely the opposite). So borrowers are squeezed.
The Fed eventually comes along with its fix -- even lower rates. While this is too late to
save firms that are teetering into default, it does enable the next wave of borrowing for
even-poorer-projects.
And now, here we are. Since its first tepid hike in December 2005, the Fed has been hiking
for just over three years so far. It has hit a rate well under half of the peak of 2006-2007.
The president has publicly urged the Fed to reverse policy course. And the Fed said it is
listening to the market, and may have paused hiking for now.
Meanwhile, the Fed Funds rate may be lower than the previous peak but it is much higher than
it was from the end of 2008 through the end of 2015. For seven years, it was basically zero.
Nobody knows how many dollars' worth of projects were financed that were only justified, only
possible, due to this zero interest-rate policy. But it was surely a lot (we would guess at
least trillions).
And now the rate is up to 2.25%. Many of those projects are no longer justified, and can no
longer service the debt that finances them.
And none of this is a secret. It is well known to the borrowers, of course. And their
creditors. And the Fed. And hedge funds and other sophisticated speculators. And not just in
general theory, but lists of specific companies and the rollover dates of their bond
issues.
Rollover is key to this. After decades of falling interest, everyone has learned the game of
using short-term financing. But the risk is that it must be rolled over. And when it is rolled,
the previous low-rate is replaced with the higher, current rate. And that's when we find out
which businesses can still pay.
So what will the Fed do? The next programs will have a new name, but the Fed must lower the
cost of capital if it wants to keep the game going.
Is this time going to be the total collapse of the dollar? We don't believe so, as there is
still a lot of capital remaining and more is flooding in as people abandon the
dollar-derivative currencies. So we think of it as déjà vu, the Fed is likely to
do something similar to last time.
And that is an environment where even the non-goldbugs see clear and compelling arguments
for owning gold.
It could be that the timing is not now. It could be that it will take months or years to
arrive at this point. We make no predictions of timing. However, we note that the Monetary
Metals Gold Fundamental Price has been in a rising trend since mid-October. Its low was on
October 9 ($1,266).
Silver is similar, but a bit different. The low in its fundamental occurred in late November
($14.37). But it's up like a rocket since then, now about two bucks higher.
We are at an interesting point.
Let's take a look at the only true picture of the supply and demand fundamentals of gold and
silver. But, first, here is the chart of the prices of gold and silver.
"... The Trump administration's $1.5 trillion in tax cuts appears to have not made any major impact on businesses' capital investment or hiring plans, according to a new survey. ..."
"... "A large majority of respondents, 84%, indicate that one year after its passage, the corporate tax reform has not caused their firms to change hiring or investment plans," NABE President Kevin Swift said in a release. "Fewer firms increased capital spending compared to the October survey responses, but the cutback appeared to be concentrated more in structures than in information and communication technology investments." ..."
"... The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50% of respondents reporting increased investments at their companies, and 20% saying they redirected hiring and investments to the US from abroad. ..."
The Trump administration's $1.5 trillion in tax cuts
appears to have not made any major impact on businesses' capital investment or hiring plans,
according to a new survey.
A quarterly poll from the National Association for Business Economics
published Monday found that some companies reported accelerating investments because of
lower corporate taxes, but a whopping 84% of respondents said they had not changed their plans.
That's up slightly from 81% in the previous survey published in October,
Reuters reports.
The White House had said the massive stimulus package, which cut the corporate tax rate to
21% from 35%, would boost business spending and job growth. The tax cuts that came into effect
in January 2018 were the biggest overhaul of the U.S. tax code in more than 30 years.
"A large majority of respondents, 84%, indicate that one year after its passage, the
corporate tax reform has not caused their firms to change hiring or investment plans," NABE
President Kevin Swift said in a release. "Fewer firms increased capital spending compared to
the October survey responses, but the cutback appeared to be concentrated more in structures
than in information and communication technology investments."
The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50%
of respondents reporting increased investments at their companies, and 20% saying they
redirected hiring and investments to the US from abroad.
An analysis of how S&P 500 firms were reacting to the tax cut by researchers at the
University
of Michigan found that 4% of the sample said in Q1 of 2018 they would pay some of their tax
savings back to workers, and 22% mentioned in earnings conference calls they would increase
investment because of the tax cuts.
Though for small businesses, a new survey from the
National Federation of Independent Business released earlier this month found 61% of owners
reported making capital investments, unchanged from last month but 5 points higher than in
August. In December, 35% of small-business owners reported increasing employee compensation and
24% reported planned increases in the next few months.
Tell me who is your friend and I will tell who you are. With friends like Pompeo and
Bolton...
Notable quotes:
"... Trump-bashing Iraq war architect Elliott Abrams to lead US regime change in Venezuela ..."
"... Abrams is already not well-liked in El Salvador and Nicaragua, so I can't imagine the Venezuelans welcoming him with open arms. ..."
"... Elliot Abrams, George W. Bush lackey and arch-Neocon: (1) senior fellow for Middle Eastern studies at Council on Foreign Relations (2) core member of Project for the New American Century (PNAC) along with such greats as Paul Wolfowitz, Donald Rumsfeld, Richard Perle, and John Bolton. ..."
Ever since the Trump administration announced that it was
no longer recognizing the legitimacy of the elected government of Venezuela I've been
arguing with people on social media about this president's brazen coup attempt in that
country.
The people arguing with me in favor of Trump's interventionism are almost exclusively Trump
supporters, with leftists and antiwar libertarians more or less on my side with this issue and
rank-and-file centrists mostly preferring to sit this one out except to periodically mumble
something about it being a distraction from the Mueller investigation.
... ... ...
this one is easily the most common and most stupid of all the arguments i've been receiving.
i'm not familiar enough with pro-trump punditry to be able to describe how the maga crowd got
it into their heads that attacking venezuela has something to do with fighting socialism, but
it's clear from my interactions over the last couple of days that that is the dominant
narrative they've got swirling around in their collective consciousness. most of my arguments
on this issue have either begun as or very quickly spun into an attempt to turn the debate
about us interventionism in yet another south american nation into a debate about socialism vs
capitalism.
Which is of course absurd. The campaign to topple Venezuela's government has nothing to do
with socialism, it's about oil and regional hegemony. The US has long treated South America as
its personal supply cabinet and destroyed anyone who tried to challenge that, and the fact that
Venezuela has
the most confirmed oil reserves of any nation on the planet makes it all the more central
in this agenda. Yes, the fact that large sectors of its economy are centrally planned means
there are fewer hooks for the corporatocracy to find purchase to manipulate it with, but that
just helps explain why the US is targeting it with more aggressive measures, it doesn't excuse
the aggressive targeting. Venezuela does not belong to the United States, and attempting to
control what happens with its resources, its economy and its government is an obscene violation
of its national sovereignty.
Trying to turn a clean-cut debate about US interventionism into a debate about socialism is
like if your family found out that your sister had just been raped, and you all started
bickering about the pros and cons of feminism instead of focusing on the crime that had just
happened to your loved one. It wouldn't matter what kind of economic system Venezuela had;
trying to overthrow its government is not okay. The narrative that this has something to do
with championing capitalism is just a hook used to get Trump's base on board with another
unconscionable foreign entanglement.
... ... ...
Oh yes it is interventionism.
Crushing economic sanctions ,
CIA covert ops , illegally occupying embassies ,
and a
campaign to delegitimize a nation's entire government are absolutely interventionism, and
that is happening currently . It's stupid to make "boots on the ground" your line in the sand
when, for example, vast amounts of US resources can easily be poured into fomenting a "civil"
war that could kill hundreds of thousands and displace millions as we saw with Syria. And from
today's news about the Trump administration's appointment of bloodthirsty psychopath Elliot
Abrams as the special envoy to Venezuela, it's very reasonable to expect things to get a whole
lot bloodier. Modern warmongering isn't limited to the form of "boots on the ground", and
making that your litmus test is leaving yourself open to all the same disasters ushered in by
the Obama administration.
... ... ...
Again, that's not the argument. The argument is whether it's okay for the US government and
its allies to violate Venezuela's sovereignty with starvation sanctions, CIA covert ops, an
active campaign to delegitimize its government, and possibly much worse in the future in order
to advance the agenda of overthrowing its political system.
Of course there are people in Venezuela who don't like their government; that's true in your
own country too. That doesn't make it okay for a sprawling imperialist power to intervene in
their political affairs. You'd think this would be obvious to everyone, but over and over again
I run into people conflating Venezuelans sorting out Venezuelan domestic affairs with the
US-centralized empire actively meddling in those affairs.
The US government doesn't give a shit about the Venezuelan people; if it did it wouldn't be
crushing them with starvation sanctions. It isn't about freedom, and it isn't about democracy.
The US backs 73 percent of the world's dictatorships because those dictators facilitate the
interests of the US power establishment , and a leaked State Department memo in 2017 spelled
out the way the US government coddles US allies who violate human rights while attacking
nonconforming governments for those same violations as a matter of policy. Acting like Trump's
aggressions against Venezuela have anything to do with human rights while he himself remains
cuddly with the murderous theocracy of Saudi Arabia in the face of intense political pressure
is willful ignorance at this point, and it's inexcusable.
5. "You don't understand what's going on there! I talk to Venezuelans online!"
Do you now?
First of all, this common argument is irrelevant for the reasons already discussed here;
sure there are Venezuelans who don't like their government, but their existence doesn't justify
US interventionism. Secondly, it's a known fact that online trolls will be employed to help
manufacture support for all sorts of geopolitical agendas, from Israel's shill army to the MEK
terror cult's anti-Iran troll farm to the Bana Alabed psyop for Syria. And here's this example,
just for your information, of a Twitter account talking about how much fun she's having in
Paris and then a few days later claiming she's in Venezuela waiting in "5+ hour queues to buy a
loaf of bread."
Be skeptical of what strangers on social media tell you about what's happening inside a
nation that's been targeted by the empire, please.
And that's about it for this article. Let's all try and talk about this thing with a little
more intelligence and sanity, please.
* * *
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I'm surprised ZH hasn't posted anything about this yet! Abrams is already not well-liked
in El Salvador and Nicaragua, so I can't imagine the Venezuelans welcoming him with open
arms.
Elliot Abrams, George W. Bush lackey and arch-Neocon: (1) senior fellow for Middle Eastern studies at Council on Foreign Relations
(2) core member of Project for the New American Century (PNAC) along with such
greats as Paul Wolfowitz, Donald Rumsfeld, Richard Perle, and John Bolton.
Elliott Abrams was born into a Jewish family [6] in New York in 1948.
His father was an immigration lawyer. Abrams attended the
Little Red School House in New
York City, a private high school whose students at the time included the children of many of
the city's notable left-wing activists and artists. [7] Abrams'
parents were Democrats .
[7]
British Playwright Harold Pinter says 1980s chaos in Nicaragua was for to protect "Casino"
interests - - https://www.wsws.org/en/articles/2005/12/pint-d09.html
- Jews control the casinos in Central America (think Meyer Lansky in Cuba) - throughout the
80's, our media warned us of a communist threat in Central America -- there was no goddam
threat -0 our media was protecting Jewish interests in Central America -- Eliott Abrams was one of the ringmasters back then
in the Central American conflict ...
that oil belongs to the usa fair and square. the dictator maduro stole it from exxon. the
usa is jusr returning the oil to its rightful owner. you christian people out to understand
that concept.
"... According to Oreshkin, the US should stop trying to blame the troubles of "open societies" on someone else, but look for the root of its problems at home. ..."
"... "Look at what is happening in America. Over the past 30 years real income of the middle class and below haven't grown almost at all. The expenses for healthcare and education have risen trifold, even taking inflation in account," Oreshkin told RT during a press conference in Davos. " Naturally, it has led to the growth of dissent in America, becoming one of the factors in Donald Trump, with all his peculiar rhetoric, becoming the president ." ..."
"... The Russian then hit the bullseye: "the problems are within the US. An external enemy, which impedes them and causes all the trouble in the US – whether Russia or China – is just substitution of concepts. " ..."
"... "Until every country realizes that the problems exist, above all, in themselves and not in some external forces, such mindset will persist and we'll continue to hear such statements," Oreshkin added, yet we are confident that anyone who relayed his important message would be dubbed a Kremlin agent and branded fake news ..."
Yet while Soros' aggressive
3295-word attack on China took many by surprise, what was just as notable was China's
response to Soros' scathing criticism: there was none.
In fact, China made it quite clear that in its opinion, Soros is no longer relevant saying
that " statements by certain people, which portray black as white and distort facts, are
completely pointless and not worthy of even a rebuttal. "
Of course, the best way for Beijing to respond to Soros' damning insinuations and
accusations is merely to ignore them, while implicitly stating that Soros is not only senile
but ideologically motivated and "distorting the facts", in short: not even worthy of a
rebuttal.
That said, Soros took aim not only at China, but also Russia, saying "I've been
concentrating on China, but open societies have many more enemies, Putin's Russia foremost
among them."
And unlike China, Russia's response to Soros' remarks was somewhat more explicit, with
Russia's Minister for Economic Development Maksim Oreshkin saying that " Washington should
focus on actually fixing its domestic problems instead of searching for external enemies to
blame them on ."
According to Oreshkin, the US should stop trying to blame the troubles of "open societies"
on someone else, but look for the root of its problems at home.
"Look at what is happening in America. Over the past 30 years real income of the middle
class and below haven't grown almost at all. The expenses for healthcare and education have
risen trifold, even taking inflation in account," Oreshkin told
RT during a press conference in
Davos. " Naturally, it has led to the growth of dissent in America, becoming one of the factors
in Donald Trump, with all his peculiar rhetoric, becoming the president ."
The Russian then hit the bullseye: "the problems are within the US. An external enemy,
which impedes them and causes all the trouble in the US – whether Russia or China –
is just substitution of concepts. "
The official warned that such an approach – expressed by Soros and other figures of
the US elite – sows nothing but confrontation, which ultimately harms the US itself end
impedes economic growth worldwide.
"Until every country realizes that the problems exist, above all, in themselves and not in
some external forces, such mindset will persist and we'll continue to hear such statements,"
Oreshkin added, yet we are confident that anyone who relayed his important message would be
dubbed a Kremlin agent and branded fake news.
"... In January 2009, as the financial crisis was still unfolding, there was a widespread fear at the annual Davos meeting that the bonanza was about to end. But as concerns over an immediate social backlash receded somewhat and the vast accumulation of wealth on the heights of society continued, thanks to the massive injection of cheap money by the US Fed and other major central banks, it appeared that all was still for the best in the best of all possible worlds. ..."
"... As the Guardian ..."
"... Financial Times ..."
"... The "Davos people" gave their answer to this reform agenda when they handed the platform for the keynote address to the newly installed extreme right wing and fascistic president of Brazil, the former military commander, Jair Bolsonaro, after giving it to another right-wing authoritarian Donald Trump the previous year. ..."
"... Bolsonaro's remarks were music to their ears as he set out his agenda for a "new Brazil" by creating new market opportunities, lower taxes on business and a "much-needed overhaul" of the country's pension system. And they would have been mindful that these measures come with a commitment for the suppression of the working class. ..."
"... The red-carpet treatment for Bolsonaro sent a message to the working class the world over: this is how your demands will be met. ..."
"... In the lead up to the meeting, David Lipton, the deputy managing director of the International Monetary Fund issued a warning that "history suggests" an economic downturn "somewhere over the horizon." ..."
This year's gathering of the global elites at the World Economic Forum's annual meeting in
Davos, Switzerland, is perhaps best summed up in the phrase: The chickens are coming home to
roost.
For almost five decades, the WEF has been at the centre of the promotion of the free market
policies that have funnelled trillions of dollars into the hands of the world's wealthiest
individuals and led to the widening of social inequality to historically unprecedented levels
-- an institutionalised process that accelerated to new levels after the meltdown of 2008.
In January 2009, as the financial crisis was still unfolding, there was a widespread
fear at the annual Davos meeting that the bonanza was about to end. But as concerns over an
immediate social backlash receded somewhat and the vast accumulation of wealth on the heights
of society continued, thanks to the massive injection of cheap money by the US Fed and other
major central banks, it appeared that all was still for the best in the best of all possible
worlds.
No longer. Social anger and the class struggle are intensifying around the world. As the
Guardian columnist Aditya Chakrabortty commented, the Davos billionaire is now
experiencing a new and unsettling emotion: fear. As they face a world order crumbling
before them, the Davos plutocrats are "terrified" and "whatever dog-eared platitudes they may
recycle for the TV cameras, what grips them is the havoc far below."
Surrounding the Davos gathering, there were attempts to introduce a course correction. In a
column produced for the meeting, Financial Times economics commentator Martin Wolf
pointed to the responsibility of the global elites for the elevation of populist and
authoritarian political leaderships and insisted that law-governed democracies had to be made
to work better. "Davos people," he concluded, "please note: this is your clear
responsibility."
The international charity Oxfam issued a report showing that 26 billionaires held as much
wealth as the bottom 50 percent of the world's population, some 3.8 billion, that wealth
accumulation at the top was increasing at the rate of $2.5 billion per day and called or a new
"human economy" to be financed through increased wealth taxes.
The "Davos people" gave their answer to this reform agenda when they handed the platform
for the keynote address to the newly installed extreme right wing and fascistic president of
Brazil, the former military commander, Jair Bolsonaro, after giving it to another right-wing
authoritarian Donald Trump the previous year.
Bolsonaro's remarks were music to their ears as he set out his agenda for a "new Brazil"
by creating new market opportunities, lower taxes on business and a "much-needed overhaul" of
the country's pension system. And they would have been mindful that these measures come with a
commitment for the suppression of the working class.
As the Davos summit opened, the WSWS noted that the present regime of the world capitalist
order, dominated and controlled by the global billionaires and their financial markets, was as
incapable of any reform as pre-1789 France or the pre-1917 czarist autocracy in Russia both of
which responded to social opposition with increased repression. The red-carpet treatment
for Bolsonaro sent a message to the working class the world over: this is how your demands will
be met.
... ... ...
Hanging over the entire gathering was the worsening global economic outlook and the
consequences of even a minor downturn under conditions of deepening trade conflicts, above all
the US trade war against China, the palpable breakdown of long established political structures
and the rising tide of social anger and class struggle.
In the lead up to the meeting, David Lipton, the deputy managing director of the
International Monetary Fund issued a warning that "history suggests" an economic downturn
"somewhere over the horizon."
But under conditions of deepening distrust in government institutions there was no guarantee
that the regulatory regimes put in place after the finance crisis "will be sufficient to keep a
'garden variety' recession from becoming another full-blown systemic crisis."
Another warning came in the form of a letter written by billionaire investor Seth Klarman,
which, the New York Times reported, was passed around amid the Davos attendees. Its
central focus was on the impact of rising class struggles. "It can't be business as usual amid
constant protests, riots, shutdown and escalating social tensions," he wrote. Citing the
"yellow vest" movement in France, he continued on this theme: "Social cohesion is essential for
those who have capital to invest."
Klarman is among those who are aware that the measures taken by financial authorities over
the past decade to combat the effects of the financial crisis are contributing to the creation
of a new one as debt levels rise. "The seeds of the next major financial crisis may well be
found in today's sovereign debt levels," he wrote. "There is no way to know how much debt is
too much, but America will inevitably reach an inflection point whereupon a suddenly a more
skeptical market will refuse to continue to lend to us at rates we can afford."
And such a crisis will have immediate political effects, as Klarman and others recognise.
"It's not hard to imagine worsening social unrest among a generation," he wrote," that is
falling behind economically and feels betrayed by a massive national debt without any obvious
benefit to them."
But a social order in which, as Oxfam reports, 82 percent of all the wealth created in 2017
went to the top global 1 percent is organically incapable of responding to deepening opposition
other than with repression, underscoring the analysis of the International Committee of the
Fourth International that present political situation is above all characterised by revolution
versus counter-revolution.
A FRIEND OF mine, who runs a large television production company in the car-mad city of Los
Angeles, recently noticed that his intern, an aspiring filmmaker from the People's Republic of
China, was walking to work.
WHEN HE OFFERED to arrange a swifter mode of transportation, she declined. When he asked
why, she explained that she "needed the steps" on her Fitbit to sign in to her social media
accounts. If she fell below the right number of steps, it would lower her health and fitness
rating, which is part of her social rating , which is monitored by
the government. A low social rating could prevent her from working or traveling abroad.
China's social rating system, which was announced by the ruling Communist Party in 2014,
will
soon be a fact of life for many more Chinese.
By 2020, if the Party's plan holds, every footstep, keystroke, like, dislike, social media
contact, and posting
tracked by the state will affect one's social rating.
Personal "creditworthiness" or "trustworthiness" points will be used to reward and punish individuals
and companies by granting or denying them access to public services like health care, travel,
and employment, according to a plan released last year by the municipal government of Beijing.
High-scoring individuals will find themselves in a "green channel," where they can more easily
access social opportunities, while those who take actions that are disapproved of by the state
will be "unable to move a step."
Big Brother is an emerging reality in China. Yet in the West, at least, the threat of
government surveillance systems being integrated with the existing corporate surveillance
capacities of big-data companies like Facebook, Google, Microsoft, and Amazon into one gigantic
all-seeing eye appears to trouble very few people -- even as countries like
Venezuela have been quick to copy the Chinese model.
Still, it can't happen here, right? We are iPhone owners and Amazon Prime members, not
vassals of a one-party state. We are canny consumers who know that Facebook is tracking our
interactions and Google is selling us stuff.
Yet it seems to me there is little reason to imagine that the people who run large
technology companies have any vested interest in allowing pre-digital folkways to interfere
with their 21st-century engineering and business models , any more than
19th-century robber barons showed any particular regard for laws or people that got in the way
of their railroads and steel trusts.
Nor is there much reason to imagine that the technologists who run our giant consumer-data
monopolies have any better idea of the future they're building than the rest of us do.
Facebook, Google, and other big-data monopolists already hoover up behavioral markers and
cues on a scale and with a frequency that few
of us understand . They then analyze, package, and sell that data to their partners.
A glimpse into the inner workings of the global trade in personal data was provided in early
December in a 250-page report released by a British parliamentary committee that included
hundreds of emails between high-level Facebook executives. Among other things, it showed how
the company engineered sneaky ways to obtain
continually updated SMS and call data from Android phones . In response, Facebook
claimed that users must
"opt-in" for the company to gain access to their texts and calls.
The machines and systems that the techno-monopolists have built are changing us faster than
they or we understand. The scale of this change is so vast and systemic that we simple humans
can't do the math -- perhaps in part because of the way that incessant smartphone use has
affected our ability to pay attention to anything longer than 140 or 280 characters.
As the idea of a "right to privacy," for example, starts to seem hopelessly old-fashioned
and impractical in the face of ever-more-invasive data systems -- whose eyes and ears, i.e.,
our smartphones, follow us everywhere -- so has our belief that other individual rights, like
freedom of speech , are somehow sacred.
Being wired together with billions of other humans in vast networks mediated by thinking
machines is not an experience that humans have enjoyed before. The best guides we have to this
emerging reality may be failed 20th-century totalitarian experiments and science fiction. More
on that a little later.
The speed at which individual-rights-and-privacy-based social arrangements collapse is
likely to depend on how fast Big Tech and the American national security apparatus consummate a
relationship that has been growing ever closer for the past decade. While US surveillance
agencies do not have regular real-time access to the gigantic amounts of data collected by the
likes of Google, Facebook, and Amazon -- as far as we know, anyway -- there is both anecdotal
and hard evidence to suggest that the once-distant planets of consumer Big Tech and American
surveillance agencies are fast merging into a single corporate-bureaucratic life-world, whose
potential for tracking, sorting, gas-lighting, manipulating, and censoring citizens may result
in a softer version of China's Big Brother.
These troubling trends are accelerating in part because Big Tech is increasingly beholden to
Washington, which has little incentive to kill the golden goose that is filling its tax and
political coffers. One of the leading corporate spenders on lobbying services in Washington,
DC, in 2017 was Google's parent company, Alphabet, which, according to the Center for
Responsive Politics, spent more than $18
million . Lobbying Congress and government helps tech companies like Google win large
government contracts. Perhaps more importantly, it serves as a shield against attempts to
regulate their wildly lucrative businesses.
If anything, measuring the flood of tech dollars pouring into Washington, DC, law firms,
lobbying outfits, and think tanks radically understates Big Tech's influence inside the
Beltway. By buying The Washington Post , Amazon's Jeff Bezos took direct control of
Washington's hometown newspaper. In locating one of Amazon's two new headquarters in nearby
Northern Virginia, Bezos made the company a major employer in the area -- with 25,000 jobs to
offer.
Who will get those jobs? Last year, Amazon Web Services announced the opening of the new AWS
Secret Region, the result of a 10-year, $600 million contract the company won from the CIA in
2014. This made Amazon the sole provider of cloud services across "the full range of data
classifications, including Unclassified, Sensitive, Secret, and Top Secret," according to an
Amazon corporate press release.
Once the CIA's Amazon-administered self-contained servers were up and running, the NSA was
quick to follow suit, announcing its own integrated big-data project. Last year the agency
moved most of its data into a
new classified computing environment known as the Intelligence Community GovCloud, an
integrated "big data fusion environment," as the news site NextGov described it, that allows
government analysts to "connect the dots" across all available data sources, whether classified
or not.
The creation of IC GovCloud should send a chill up the spine of anyone who understands how
powerful these systems can be and how inherently resistant they are to traditional forms of
oversight, whose own track record
can be charitably described as
poor .
Amazon's IC GovCloud was quickly countered by Microsoft's secure version of its Azure
Government cloud service, tailored for the use of 17 US intelligence agencies. Amazon and
Microsoft are both expected to be major bidders for the Pentagon's secure cloud system, the
Joint Enterprise Defense Initiative -- JEDI -- a winner-take-all contract that will likely be
worth at least $10 billion.
With so many pots of gold waiting at the end of the Washington, DC, rainbow, it seems like a
small matter for tech companies to turn over our personal data -- which legally speaking, is
actually their data -- to the spy agencies that guarantee their profits. This is the threat
that is now emerging in plain sight. It is something we should reckon with now, before it's too
late.
IN FACT, BIG tech and the surveillance agencies are already partners...
...
THE FLIP SIDE of that paranoid vision of an evolving American surveillance state is the
dream that the new systems of analyzing and distributing information may be forces for good,
not evil. What if Google helped the CIA develop a system that helped filter out fake news, say,
or a new Facebook algorithm helped the FBI identify
potential school shooters before they massacred their classmates? If human beings are
rational calculating engines, won't filtering the information we receive lead to better
decisions and make us better people?
Such fond hopes have a long history. Progressive techno-optimism goes back to the origins of
the computer itself, in the correspondence between Charles Babbage, the 19th-century English
inventor who imagined the "difference engine" -- the first theoretical model for modern
computers -- and Ada Lovelace, the brilliant futurist and daughter of the English Romantic poet
Lord Byron.
"The Analytical Engine," Lovelace wrote, in one of her notes on Babbage's work, "might act
upon other things besides number, where objects found whose mutual fundamental relations could
be expressed by those of the abstract science of operations, and which should be also
susceptible of adaptations to the action of the operating notation and mechanism of the engine.
Supposing, for instance, that the fundamental relations of pitched sounds in the science of
harmony and of musical composition were susceptible of such expression and adaptations, the
engine might compose elaborate and scientific pieces of music of any degree of complexity or
extent."
This is a pretty good description of the principles of digitizing sound; it also eerily
prefigures and predicts the extent to which so much of our personal information, even stuff we
perceive of as having distinct natural properties, could be converted to zeros and ones.
The Victorian techno-optimists who first envisioned the digital landscape we now inhabit
imagined that thinking machines would be a force for harmony, rather than evil, capable of
creating beautiful music and finding expressions for "fundamental relations" of any kind
according to a strictly mathematical calculus.
The idea that social engineering could help produce a more efficient and equitable society
was echoed by early 20th-century American progressives. Unlike 19th- and early 20th-century
European socialists, who championed the organic strength of local communities, early
20th-century American progressives like Herbert Croly and John Dewey put their faith in the
rise of a new class of educated scientist-priests who would re-engineer society from the top
down according to a strict utilitarian calculus.
The lineage of these progressives -- who are not identical with the "progressive" faction of
today's Democratic Party -- runs from Woodrow Wilson to champions of New Deal bureaucracy like
Franklin D. Roosevelt's secretary of the interior, Harold Ickes. The 2008 election of Barack
Obama, a well-credentialed technocrat who identified
very strongly with the character of Spock from Star Trek , gave the old-time
scientistic-progressive religion new currency on the left and ushered in a cozy relationship
between the Democratic Party and billionaire techno-monopolists who had formerly fashioned
themselves as government-skeptical libertarians.
"Amazon does great things for huge amounts of people," Senate minority leader Chuck Schumer
told Kara Swisher of Recode in a
recent interview , in which he also made approving pronouncements about Facebook and
Google. "I go to my small tech companies and say, 'How does Google treat you in New York?' A
lot of them say, 'Much more fairly than we would have thought.'"
But the cozy relationship between mainstream Democrats and Silicon Valley hit a large-sized
bump in November 2016, when Donald Trump defeated Hillary Clinton -- in part through his
mastery of social media platforms like Twitter. Blaming the election result on Russian bots or
secret deals with Putin betrayed a shock that what the left had regarded as their cultural
property had been turned against them by a right-wing populist whose authoritarian leanings
inspired fear and loathing among both the technocratic elite and the Democratic party base.
Yet in the right hands, progressives continued to muse, information monopolies might be
powerful tools for re-wiring societies malformed by racism, sexism, and transphobia. Thinking
machines can be taught to filter out bad information and socially negative thoughts. Good
algorithms, as opposed to whatever Google and Facebook are currently using, could censor
neo-Nazis, purveyors of hate speech, Russian bots, and transphobes while discouraging voters
from electing more
Trumps .
The crowdsourced wisdom of platforms like Twitter, powered by circles of
mutually credentialing blue-checked "experts," might mobilize a collective will to justice,
which could then be enforced on retrograde institutions and individuals
. The result might be a better social order, or as data scientist Emily Gorcenski put it ,
"revolution."
The dream of centralized control over monopolistic information providers can be put to more
prosaic political uses, too -- or so politicians confronted by a fractured and tumultuous
digital media landscape must hope. In advance of next year's elections for the European
Parliament, which will take place in May, French President Emmanuel Macron signed a deal with
Facebook in which officials of his government will meet regularly with Facebook executives to
police
"hate speech."
The program, which will continue through the May elections, apparently did little to
discourage fuel riots by the " gilets jaunes ," which have set Paris and other French cities
ablaze, even as a claim that a
change in Facebook's local news algorithm was responsible for the rioting was quickly
picked up by French media figures close to Macron.
At root, the utopian vision of AI-powered information monopolies programmed to advance the
cause of social justice makes sense only when you imagine that humans and machines "think" in
similar ways. Whether machines can "think," or -- to put it another way, whether people think
like machines -- is a question that has been hotly debated for the past five centuries. Those
debates gave birth to modern liberal societies, whose foundational assumptions and guarantees
are now being challenged by the rise of digital culture.
...
THE ORIGIN OF the utilitarian social calculus and its foundational account of thinking as a
form of computation is social contract theory. Not coincidentally, these accounts evolved
during the last time western societies were massively impacted by a revolution in
communications technology, namely the introduction of the printing press , which brought both
the text of the Bible and the writings of small circles of Italian and German humanists to all
of Europe. The spread of printing technologies was accompanied by the
proliferation of the simple hand mirror , which allowed even ordinary individuals to gaze
at a "true reflection" of their own faces, in much the same way that we use iPhones to take
selfies.
Nearly every area of human imagination and endeavor -- from science to literature to
painting and sculpture to architecture -- was radically transformed by
the double-meteor-like impact of the printing press and the hand mirror , which together
helped give rise to scientific discoveries, great works of art, and new political ideas that
continue to shape the way we think, live, and work.
The printing press fractured the monopoly on worldly and spiritual knowledge long held by
the Roman Catholic Church, bringing the discoveries of Erasmus and the polemics of Martin
Luther to a broad audience and fueling the Protestant Reformation, which held that ordinary
believers -- individuals, who could read their own Bibles and see their own faces in their own
mirrors -- might have unmediated contact with God. What was once the province of the few became
available to the many, and the old social order that had governed the lives of Europe for the
better part of a millennium was largely demolished.
In England, the broad diffusion of printing presses and mirrors led to the bloody and
ultimately failed anti-monarchical revolution led by Oliver Cromwell. The Thirty Years' War,
fought between Catholic and Protestant believers and hired armies in Central and Eastern
Europe, remains the single most destructive conflict, on a per capita basis, in European
history, including the First and Second World Wars.
The information revolution spurred by the advent of digital technologies may turn out to be
even more powerful than the Gutenberg revolution; it is also likely to be bloody. Our inability
to wrap our minds around a sweeping revolution in the way that information is gathered,
analyzed, used, and controlled should scare us. It is in this context that both right- and
left-leaning factions of the American elite appear to accept the merger of the US military and
intelligence complex with Big Tech as a good thing, even as centralized control over
information creates new vulnerabilities for rivals to exploit .
The attempt to subject the American information space to some form of top-down,
public-private control was in turn made possible -- and perhaps, in the minds of many on both
the right and the left, necessary -- by the collapse of the 20th-century American institutional
press. Only two decades ago, the social and political power of the institutional press was
still so great that it was often called "the Fourth Estate" -- a meaningful check on the power
of government. The term is rarely used anymore, because the monopoly over the printed and
spoken word that gave the press its power is now gone.
Why? Because in an age in which every smartphone user has a printing press in their pocket,
there is little premium in owning
an actual, physical printing press . As a result, the value of "legacy" print brands has
plummeted. Where the printed word was once a rare commodity, relative to the sum total of all
the words that were written in manuscript form by someone, today nearly all the words that are
being written anywhere are available somewhere online. What's rare, and therefore worth money,
are not printed words but fractions of
our attention .
The operative, functional difference between today's media and the American media of two
decades ago is not the difference between old-school New York Times reporters and new-media
bloggers who churn out opinionated "takes" from their desks. It is the difference between all
of those media people, old and new, and programmers and executives at companies like Google and
Facebook. A set of key social functions -- communicating ideas and information -- has been
transferred from one set of companies, operating under one set of laws and values, to another,
much more powerful set of companies, which operate under different laws and understand
themselves in a different way .
According to Section 230 of the Communications Decency Act, information service providers
are protected
from expensive libel lawsuits and other forms of risk that publishers face. Those protections
allowed Google and Facebook to build their businesses at the expense of "old media" publishers,
which in turn now find it increasingly difficult to pay for original reporting and writing.
The media once actively promoted and amplified stories that a plurality or majority of
Americans could regard as "true." That has now been replaced by the creation and
amplification of extremes . The overwhelming ugliness of our public discourse is not
accidental; it is a feature of the game, which is structured and run for the profit of
billionaire monopolists, and which
encourages addictive use .
The result has been the creation of a socially toxic vacuum at the heart of American
democracy, from which information monopolists like Google and Facebook have sucked out all the
profit, leaving their users ripe for top-down surveillance, manipulation, and control.
TODAY, THE PRINTING press and the mirror have combined in the iPhone and other personal
devices, which are networked together. Ten years from now, thanks to AI, those networks, and
the entities that control them -- government agencies, private corporations, or a union of both
-- may take on a life of their own.
Perhaps the best way to foresee how this future may play out is to look back at how some of
our most far-sighted science fiction writers have wrestled with the future that is now in front
of us.
...
Yet even classic 20th-century dystopias like Aldous Huxley's Brave New World or George
Orwell's 1984 tell us little about the dangers posed to free societies by the fusion of big
data, social networks, consumer surveillance, and AI.
Perhaps we are reading the wrong books.
Instead of going back to Orwell for a sense of what a coming dystopia might look like, we
might be better off reading We , which was written nearly a century ago by the Russian novelist
Yevgeny Zamyatin. We is the diary of state mathematician D-503, whose experience of the highly
disruptive emotion of love for I-330, a woman whose combination of black eyes, white skin, and
black hair strike him as beautiful. This perception, which is also a feeling, draws him into a
conspiracy against the centralized surveillance state.
The Only State, where We takes places, is ruled by a highly advanced mathematics of
happiness, administered by a combination of programmers and machines. While love has been
eliminated from the Only State as inherently discriminatory and unjust, sex has not. According
to the Lex Sexualis, the government sex code, "Each number has a right towards every other
number as a sex object." Citizens, or numbers, are issued ration books of pink sex tickets.
Once both numbers sign the ticket, they are permitted to spend a "sex hour" together and lower
the shades in their glass apartments.
Zamyatin was prescient in imagining the operation and also the underlying moral and
intellectual foundations of an advanced modern surveillance state run by engineers. And if 1984
explored the opposition between happiness and freedom, Zamyatin introduced a third term into
the equation, which he believed to be more revolutionary and also more inherently human:
beauty. The subjective human perception of beauty, Zamyatin argued, along lines that Liebniz
and Searle might approve of, is innately human, and therefore not ultimately reconcilable with
the logic of machines or with any utilitarian calculus of justice.
...
Against a centralized surveillance state that imposes a motionless and false order and an
illusory happiness in the name of a utilitarian calculus of "justice," Basile concludes,
Zamyatin envisages a different utopia: "In fact, only within the 'here and now' of beauty may
the equation of happiness be considered fully verified." Human beings will never stop seeking
beauty, Zamyatin insists, because they are human. They will reject and destroy any attempt to
reorder their desires according to the logic of machines.
A national or global surveillance network that uses beneficent algorithms to reshape human
thoughts and actions in ways that elites believe to be just or beneficial to all mankind is
hardly the road to a new Eden. It's the road to a prison camp. The question now -- as in
previous such moments -- is how long it will take before we admit that the riddle of human
existence is not the answer to an equation. It is something that we must each make for
ourselves, continually, out of our own materials, in moments whose permanence is only a
dream.
People do not understand that Facebook is actually a surveillance company. Everything else is
a side business. From comments: "Facebook basically steals ad revenue from idiot companies who
think the clicks are real. THEYRE NOT. Bots clicking on your ad does nothing for your
business!!
The team detailed their findings in a 70-page report published on their website.
Facebook has been lying to the public about the scale of its problem with fake accounts,
which likely exceed 50% of its network. Its official metrics -- many of which it has stopped
reporting quarterly -- are self-contradictory and even farcical. The company has lost control
of its own product.
Ultimately, this is just the latest sign that Facebook - formerly one of the world's most
successful companies - is doomed to go the way of CompuServe and AOL.
PlainSite is a project launched by the Think Computer Corporation and Think Computer
Foundation which aims to make "data accessible to the public free of charge" and "lets ordinary
citizens impact the law- making process," according to Bloomberg. Aaron Greenspan recently told
his story about how he fit into the history of Facebook's founding at Harvard on a podcast .
Facebook's fraudulent numbers hurt its customers (advertisers) by overstating the
effectiveness of Facebook's product, the company said.
Fake accounts affect Facebook at its core in numerous ways:
Its customers purchase advertising on Facebook based on the fact that it can supposedly
target advertisements at more than 2 billion real human beings. To the extent that users
aren't real, companies are throwing their money down the drain.
Fake accounts click on advertising at random, or "like" pages, to throw off antifraud
algorithms. Fake accounts look real if they do not follow a clear pattern. This kind of
activity defrauds advertisers, but rewards Facebook with revenue.
Fake accounts often defraud other users on Facebook, through scams, fake news, extortion,
and other forms of deception. Often, they can involve governments
" Zuckerberg's creation is a reflection of his own flaws. It is a mirror of his own
personality and the insecurity and endless need of approval he has sought his whole life
leading to its creation. It is Zuckerberg made virtually. It is not a success nor is it a
triumph, it is a window into a flawed psyche. It spreads as an infection because it is."
Q: I am 62. Last year, I got a Social Security calculation showing that when I am
66-plus-years-old, I will receive $400-plus in Social Security benefits per month. Because of
my health, I started to work only three days a week. Will this reduce the amount of my
benefits? If l decide to quit my job, but not apply for my Social Security benefits until I'm
66-plus, will it reduce my monthly Social Security benefits?
A: Social Security calculates your monthly benefit by taking your highest 35 years of
earnings and your age, says Rick Fingerman, a managing partner with Financial Planning
Solutions. "So, if you stop working before your full retirement age or FRA, as you suggest, you
could see a lower benefit if you do not have 35 years of higher earnings already."
The same answer applies if you quit your job altogether at 62 and wait until 66 to collect,
he says.
One option, says Fingerman, could be if you were going to wait until your FRA and you have a
spouse that is already collecting on their own benefit. "You might receive a higher monthly
benefit on their record as you would get 50% of what they are receiving, which could be more
than the $400 a month under your own benefit," he says.
Of course, nobody can predict exactly how long they'll live -- the average man and woman
turning 65 today can expect to live until age 84 and 86, respectively, according to the Social
Security Administration. However, if you're facing health issues and don't expect to live that
long, it may be wiser to claim as early as possible rather than waiting until you have only a
few years left to enjoy your benefits.
... ... ...
Your
full retirement age (FRA) is the age at which you'll receive 100% of the benefits to which
you're entitled. So if your FRA is 67, and you wait until then to claim, you'd receive $1,300
per month. If you claim at 62, your benefits will be cut by 30% -- leaving you with just $910
per month.
... ... ...
If you wait until your FRA to claim, you'll receive 100% of your entitled benefits. But if
you wait beyond that age, you'll receive a bonus on top of your full amount to make up for all
the months you weren't receiving benefits at all. If your FRA is, say, 67 and you wait to claim
benefits until 70, you'll receive a 24% bonus over your full amount. So if you would have
received $1,300 per month by claiming at 67, you'd receive $1,612 by waiting until 70. (Keep in
mind, too, that this bonus maxes out at age 70, so there's no additional benefit to waiting to
claim until after that age.)
This can be a lifesaver for those who are
seriously behind on saving for retirement . If you're going to rely on Social Security to
make ends meet, it's in your best interest to maximize those benefits.
The amount you receive in benefits will be locked in once you claim. If you delay and
receive that boost, you'll continue receiving that boost for the rest of your life. Likewise,
if you claim early and your benefits are reduced, you'll receive those smaller checks for life.
So delaying can play out in your favor if you spend several decades in retirement -- the longer
you live, the more you will receive over your lifetime.
While delaying claiming benefits by a few years will result in bigger checks, you may not
actually receive more over a lifetime than you would if you had claimed earlier. Although
you're receiving more each month, that's just to make up for the years you weren't receiving
any benefits at all. If you don't reach your "break even age" -- or the age at which you've
received more over a lifetime by waiting to claim than you would have received by claiming
early -- it may not be worth it to wait.
For example, say your FRA is 67. If you claim early at 62, you'd receive $910 per month (or
$10,920 per year), and if you delay until 70, you'd receive $1,612 per month ($19,344 per
year). Here's how much you'd have received in total benefits at different ages:
Age at Death
Total Lifetime Benefits When Claiming at 62
Total Lifetime Benefits When Claiming at 70
70
$87,360
N/A
75
$141,960
$96,720
80
$196,560
$193,440
85
$251,160
$290,160
Source: Author's calculations
So in this scenario, you'll have to live past age 80 in order to "break even" and earn more
in lifetime benefits by delaying rather than claiming early. That can be a good thing if you
expect to live a long time, but if you don't expect to live past 80, it may be more
advantageous to claim earlier rather than later.
"... To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. ..."
"... In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively boost the rate of productivity and GDP growth and provide workers with substantially higher pay. ..."
"... (irrational) confidence level is an important economic factor. ..."
"... What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have in practice not been a main factor in this. ..."
"... Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351. ..."
"... "The evidence is not consistent with the idea that central banks can control economies with interest rates." ..."
"... A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do that. ..."
(This piece was originally posted on my Patreon page .)
Jim Tankersley had a nice piece
in the New York Times last week pointing out that the tax cut pushed through by the Republicans in 2017 is leading to a sharp drop
in tax revenue. While this was widely predicted by most analysts, it goes against the Trump administration's claims that the tax
cut would pay for itself.
Looking at full-year data for calendar year 2018, Tankersley points out that revenue was $183 billion (5.6 percent) below what
the Congressional Budget Office (CBO) had projected for the year before the tax cut was passed into law. This is a substantial falloff
in revenue by any standard, but there are two reasons the picture is even worse than this falloff implies.
The first is that we actually did see a jump in growth in 2018 pretty much in line with what the Trump administration predicted.
The tax cut really did stimulate the economy. It put a lot of money in the economy (mostly going to those at the top) and people
spent much of this money. The result was that the growth rate accelerated from around 2.0 percent the prior three years to over 3.0
percent in 2018. (We don't have 4 th quarter data yet, which may be delayed by the shutdown, but growth should be over
3.0 percent.)
The jump in growth in 2018 means that the drop in revenue was not due to the economy being weaker than expected, it was due to
the fact that the tax rate had fallen by a larger amount than the boost to growth. In fairness to the Trump administration, they
had also projected a falloff
in revenue due to the tax cut in 2018, but not one that was as large as what we saw.
... ... ...
To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment
in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. It is likely to be even weaker
in the fourth quarter due to the drop in world oil prices (less oil drilling), although we won't get these data until the shutdown
is over. In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively
boost the rate of productivity and GDP growth and provide workers with substantially higher pay.
In this context, the deficits from the Trump tax cut are a problem. If the economy is bumping up against its limits and the labor
market is close to full employment, it means a much larger share of output is going to the consumption of the wealthy. That both
means less private consumption for everyone else, and it makes it more difficult to have major initiatives that involve substantial
spending, such as a Green New Deal or Medicare for All.
The long and short is that the revenue data for 2018 looks pretty bad on its face. It looks even worse on a closer examination.
...and perhaps this funny (American?) idea - that economics only exist in order to have some ''Boom'' going -- forever -- and
ever - (which everybody knows is NOT possible) - is the root of US problem??!
Deficits are not a problem, period. They are a benefit because they keep the boom going, just as lower interest rates forestall
a recession. Keynes pointed this out 80 years ago: "Thus the remedy for the boom is not a higher rate of interest but a lower
rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing
booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom."
The General Theory of Employment, Interest and Money, p. 322.
Keeping us out of a recession/slump ought to be the focus of economic policy, not hypothetical questions about the economy
"bumping up against its limits" which anti-Keynesians have been obsessed with for years.
Keeping out of bubbles is what keeps us out of slumps (in most cases). The usual pattern is that as conditions improve people
put confidence where it does not belong and extend leverage, then financial collapse makes things look bad for everyone - the
general (irrational) confidence level is an important economic factor.
Interest rates have an effect on speculation - when rates are low people have to turn to riskier things to make money, and
leverage is cheap. Stock prices were very low in 1981 because interest rates were very high and they are very high now partly
because interest rates have been very low. The effect on speculation may be a valid reason to raise rates - of course the imaginary
threat of inflation is not.
But history indicates it is not a huge effect. The Fed did raise discount rate through 1928 and 1929 up to 6% and this did
not seem to slow the development of the stock-market bubble. It is unlikely that the Fed can kill a bubble or boom now by raising
at much lower levels. The housing bubble of 2006 was a matter of bad regulation. The Fed was involved in encouraging and then
disregarding the bubble, but not by manipulating interest rates. Greenspan was always a cheerleader of deregulation.
"Moreover, even if over-investment in this sense was a normal characteristic of the boom, the remedy would not lie in clapping
on a high rate of interest which would probably deter some useful investments and might further diminish the propensity to consume,
but in taking drastic steps, by redistributing incomes or otherwise, to stimulate the propensity to consume.
"It may, of course, be the case -- indeed it is likely to be -- that the illusions of the boom cause particular types of capital-assets
to be produced in such excessive abundance that some part of the output is, on any criterion, a waste of resources; -- which sometimes
happens, we may add, even when there is no boom. It leads, that is to say, to misdirected investment." The General Theory p.321
"Thus an increase in the rate of interest, as a remedy for the state of affairs arising out of a prolonged period of abnormally
heavy new investment, belongs to the species of remedy which cures the disease by killing the patient." The General Theory p.323.
Causing a recession in order to kill a bubble is madness.
I am not recommending killing a boom or bubble with interest rates. On the contrary I am always recommending against relying
on manipulating interest rates to regulate the economy, whether it is to prevent inflation, real or imaginary, or to stimulate
the economy in case of recession. While Keynes conjectured that interest rates could have effects, he certainly was very clear
in not expecting that they would be sufficient to control the business cycle - see pp. 319-320, the end of Ch. 12 and ch. 24.
What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent
financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have
in practice not been a main factor in this.
"While Keynes conjectured that interest rates could have effects, he certainly was very clear in not expecting that they would
be sufficient to control the business cycle"
Really? Then why did he include "Interest" in the title of his magnum opus?
Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting
at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to
curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351.
Further, he railed against using high interest rates to limit the boom: "The austere view, which would employ a high rate of
interest to check at once any tendency in the level of employment to rise appreciably above the average of, say, the previous
decade, is, however, more usually supported by arguments which have no foundation at all apart from confusion of mind." The General
Theory, p. 327-8.
The rate of interest is critical to economic growth which is why the Fed's role is so important.
The evidence is consistent with what Keynes said about high interest rates - the high rates in the 70's to 80's failed to prevent
inflation but caused unemployment to go to 10.8%. The Fed failed utterly in both of its two objectives during that time. Since
2008 record low rates have not produced the claimed boost in investment and growth. This is especially obvious in Europe and Japan
where conditions are worse than in the US despite negative interest rates. This is also consistent with Keynes' expectation that
interest rates would not be sufficient to overcome variations in the perceived marginal efficiency of capital. The evidence is
not consistent with the idea that central banks can control economies with interest rates, or even that their actions are always
constructive. That idea was not Keynes'.
"The evidence is not consistent with the idea that central banks can control economies with interest rates."
That is a bridge too far, and Keynes disagrees:
"There is, indeed, force in the argument that a high rate of interest is much more effective against a boom than a low rate
of interest against a slump." The General Theory, p. 320.
Slowing a boom with higher interest rates is indeed feasible and that has been Fed doctrine for decades. Obviously, higher
interest rates reduce consumption and investment so growth must slow. The high inflation of the 1970s was due to the OPEC oil
shocks, not excessively rapid growth of the economy. In fact, growth had been faster in the 1960s with much lower inflation.
I understand why this economic discussion focuses only on interest rates but it leaves out a larger issue. That fact that,
on CNBC and elsewhere, financial analysts obsess over interest rates, taxes, and the price of oil in relation to the market illustrates
the cluelessness of the financial community. They all applaud "deregulation" without ever specifying which regulations. Do they
mean all regulations?
Trump's deregulation of methane emissions, for example, will create future costs that are exponentially larger than any immediate
savings to frackers and oil companies. That's just one example. Trump's environmental deregulatory agenda is stupidity writ large.
A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some
point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do
that. Eventually, probably sooner than expected, a tipping point will be reached when mass realization of the threat climate
change poses to our survival generates a mass panicked exit from petroleum assets which will create a financial crash that dwarfs
what we saw in 2008.
Do you remember "Limits to Growth"? Doomsday scenarios have been around for a long time especially in regard to the national
debt which supposedly will cause the collapse of our economy sometime soon. I am skeptical about that.
[Video] He views housing prices as a leading indicator, but he is not ready to forecast
slowdown yet. Yes Home
Sales Sank 6.4% in December . No, a recession isn't about to hit. The International Monetary
Fund still thinks the global economy will grow
a respectable 3.5% this year . By with the recent downgrade risks are higher and probably
highest since 2010.
As for 2019 he said we are always at risk entering the recession. He thinks that as in June
there will be the longest recession, that might be time for a recession including in housing
market. Inverted curve is a sign of such comes are coming.
Housing market is closing down and that can lead to recession, but he is not giving it
probability higher that 50 for this year. He also mentions that real interest rate of short end
there are not much above inflation.
Yale Economics Professor and Nobel Laureate Robert Shiller spoke with Yahoo Finance at
Davos, telling Editor-in-Chief Andy Serwer: "People are starting to think housing is expensive,
and that could lead to a turnaround and a drop in home prices. But I'm not ready to forecast
that yet."
Interesting discussion... He said tariff might not work as expected. He does not think
recession in probable in 2018 but later it might became inveitable
14% are functionally illiterate. Those people are at he bottom and will stay at the
bottom.
David Rubenstein, Co-Founder and Co-Executive Chairman of The Carlyle Group, sits down for a
one on one with Yahoo Finance editor-in-chief Andy Serwer at the World Economic Forum's annual
meeting in Davos, Switzerland. They discuss U.S.-China relations, Alexandria Ocasio-Cortez,
income inequality, the government shutdown, and more.
Speaking at a panel discussion on the first day of the
World Economic Forum (WEF) , Dalio said: "The US, Europe, China – all of those will
experience a greater level of slowing, probably a greater level of disappointment.
"I think there's a reasonable chance that by end of that, monetary policy and fiscal policy
will have to become easier relative to what is now discounted in the markets.
He added: " What scares me the most longer-term is that we have limitations to monetary
policy, which is our most valuable tool, at the same time as we have greater political and
social antagonism.
"So the next downturn worries me the most. There are a lot of parallels with the late
1930s.
"In 1929-1932 we had a debt crisis, and interest rates hit zero. Then there was a lot of
printing of money and purchases of financial assets which drives financial assets higher.
"It creates also a polarity, a populism and an antagonism. We also had at that time the
phenomenon of a rising power, like China, dealing with conflict with an existing power.
"These types of political issues are now very connected to economic issues in policy."
Asked at the summit
in Switzerland about increasing debt levels and signs of a global slowdown, Dalio said the
world economy was in the later stages of a short-term debt cycle.
He said there had been an "inappropriate, mistaken desire to tighten monetary policy at a
level that was faster than what the capital markets could handle."
He said: "W hen we cut corporate taxes and made interest rates low enough that it was
attractive enough to buy financial assets, particularly by companies having mergers and
acquisitions, that caused a lot of growth in corporate debt. And that growth in corporate debt
was used to finance the purchases. That is going to be less."
He suggested a slowdown could increase the link between politics and economic policy, and
predicted increased debate over a 70% income tax rate next year.
yesterday How does he on
one hand say that the Fed has little room to lower rates in case of a downturn and at the
same time blame the Fed for raising rates in order to prepare for such an eventuality?
Seriously, I'm asking. I'm not wagging my finger at him, because I sure don't pretend to
know more than he does. I asking somebody to further explain, because I don't get it. I'm
raising my hand in class. Anybody? 2 days ago democracy has become a slave
for finance - that is what an actual worry is brought in by fitting words - 26 people own
more than 4billion other people 2 days ago The rich have to pay higher
marginal tax rates. Period. "To those who are given much, much is expected." - Former NY
governor Elliott Spitzer. yesterday Of course. If we
had been unable to loosen monetary policy after Bush crashed the economy, we would have
been in the 2nd great depression. Trump is hurtling us towards the next economic disaster,
but without the tools to dig out. And his comments that the fed is raising interest rates
too fast is counter productive (like everything else Trump does). 2 days ago How He hedging when people
panic about his bias comment ??
Remember ... He is a Hedge Fund manager , makes money from panic and quick market moves
!
enough said ...
I
yesterday So what does all that mean for the economy and stock market? With a growing
disparity in distribution of income something needs to change before we start to see social
and political upheaval. The top 1% to 5% can't get 80% of all the wealth.
"... the Davos crew is trying to combat populism, according to The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is. ..."
"... The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying to set an agenda for the world. ..."
"... It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations, the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them. ..."
"... Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all. ..."
"... It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic, but Trump's version so far has been mostly fake. ..."
"... Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism. They are quite different critters and they don't have a lot to do with each other though they agree on a few things. ..."
"... People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing ..."
"... Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism. ..."
"... Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich. ..."
"... The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really like them very much, think they are classless brutes, barbarians, racists, bigots, etc. ..."
"... They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital. ..."
"... He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration. He has no ideology, he will use whatever helps him. ..."
"... Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different, he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's all very confusing. ..."
"... But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism! ..."
Let's see, cattle ranchers are against vegetarianism, coal companies are against restricting CO2 emissions, and the Davos crew
is trying to combat populism, according to
The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is.
Yeah, we get that rich people don't like the idea of movements that would leave them much less rich, but is it helpful to their
cause to tell us that they are devoting their rich people's conference to combating them? The real incredible aspect of Davos
is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying
to set an agenda for the world.
It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations,
the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich
people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them.
And the fact that so many Americans -(and especially American workers) still mistake Von Clownstick as a so called ''Populist''
- and being on their side - is... unbearable!
He IS in fact a rigthwing populist of a sort. That's what rightwing populism in the US looks like, and what it's always looked
like. Bunch of crap huh? Gimme Marie Le Pen any day.
"The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is
quite explicitly about rich people trying to set an agenda for the world." \
Agreed - like how people almost worship British Royals.. or American celebrities... and yet, unfortunately, isn't it true that
the greedmongers at Davos are not "trying," but rather "largely succeeding" at setting said world agenda?
Nothing to see here, folks, move right along . . .
Davos and TED Talks. One entertains the rich, the other the smart. The skiing is better at Davos, the ideas are better at a
TED Talk. Just remember, most of the rich aren't smart and most of the smart aren't rich. So it's all rather silly, 'though it's
easier to get rich if you're smart than it is to get smart if you're rich. Don't ask me how I know that, but I'll tell you, if
you have an ounce of human kindness in you, learning the second half of that lesson is more painful than the first.
None of this would be half as much fun outside the glare of publicity, or if not heavily spiced with the envy of the excluded.
Ishi--I don't disagree with you. Just not as stupid as the Davos drivel. Perhaps I should have said 'less bad' ideas, but I
liked the cadence of 'better' and 'better.' Gotta have cadence if you want to get the People Marching.
Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent
living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all.
Firstly we have to treat the so called ''Populists'' as a conspiracy against labor - because they pretended in the utmost conspirational
way to be on labors side.
While It always was as clear as mud that Davos was a Party of the Rich!
It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to
leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic,
but Trump's version so far has been mostly fake.
You guys need to read up. Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism.
They are quite different critters and they don't have a lot to do with each other though they agree on a few things.
That's basically my take, too. The term is purposely misused by the propagandists to get normal people thinking "Populism"
must be something they don't like. People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing.
[and even "brainwashing" is an orwellian term! Brain-NUMBING, maybe... but nothing's getting cleaned, that's for sure]
Nope US rightwing populism has often looked a lot like Trump's crap. I mean some of it was better. I have a soft spot for Huey
Long. But in the US, rightwing populism just helps the rich mostly and it tends to be fascist.
''The term is purposely misused by the propagandists to get normal people thinking "Populism" must be something they don't
like'' You mean some con-artists have conned people who liked the term ''Populism'' into liking idiocy - racism and nationalism?.
Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are
NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism.
Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but
in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich.
The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really
like them very much, think they are classless brutes, barbarians, racists, bigots, etc.
But the rich allow them because they think they can control them and not let them get out of hand. This is what happened in
Germany. This is what often happens actually.
In a sense, rightwing populism IS fake populism because it pretends to be for the people while often fucking them over with
rightwing class rule via fascism. It's still populism, it's just not for the people. It's fraudulent, iike most rightwing bullshit.
- AND! -
to suggest - or imply? - that the type of ''Populism'' Trump -(and other so called ''Populists) represent - IS to ''leave the
Davos Crowd much less rich'' -
could be the funniest thing ever written on this blog?
They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about
rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital.
He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy
to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration.
He has no ideology, he will use whatever helps him.
and to makes sure not to be misunderstood - I also think Davos is ''pathetic'' and ''hypocritical'' - and everything
else one wants to throw at it -
BUT as one of my favorite American Philosophers said:
"Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity."
And I think he meant the current ''Populists'' of this planet! -(and lets include especially the Brazilian one too)
But isn't it GREAT- that also ''the rich'' are starting to battle morons and a...holes like Baron von Clownsticks -(or the
nationalistic idiots in the UK - or the Neo Nazis in Germany?) -
For I while I thought I was left ALL alone in order to battle the type of ''Populism''- which is nothing else than the sick
racist phantasies of some nationalistic a...holes?
Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different,
he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist
and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's
all very confusing.
But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism!
Billionaire Michael Dell, chief executive officer of the eponymous technology giant, rejected a suggestion by U.S. Representative
Alexandria Ocasio-Cortez of a 70-percent marginal tax rate on the wealthiest Americans.
"No, I'm not supportive of that," Dell said at a Davos panel on making digital globalization inclusive. "And I don't think it
will help the growth of the U.S. economy. Name a country where that's worked."
She may not be in Davos, but the New York representative's influence is being felt on the slopes of the Swiss Alps. Three weeks
after Ocasio-Cortez floated the idea in an interview on "60 Minutes" to raise the top marginal tax rate on Americans' income of more
than $10 million to 70 percent, it was a hot topic at the gathering of the global financial and political elite.
... ... ...
"My wife and I set up a foundation about 20 years ago and we would've contributed quite a bit more than a 70 percent tax rate
on my annual income," Dell said. "I feel much more comfortable with our ability as a private foundation to allocate those funds than
I do giving them to the government."
Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology who was on the panel with Dell, said such a rate worked
in the U.S. after World War II. But other executives were opposed, including Salesforce.com Inc. Co-Chief Executive Officer Keith
Block.
... ... ...
Billionaire investor Ray Dalio suggested that the idea may have legs in the run-up to the U.S. presidential election. Discussing
the outlook for a slowing world economy Tuesday, Dalio said that next year will see "the beginning of thinking about politics and
how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger
role." He didn't mention Ocasio-Cortez by name.
Currently in the U.S., the top marginal tax rate is 37 percent, which takes effect on income of more than $510,300 for individuals
and $612,350 for married couples, according to the Tax Foundation.
The fortunes of a dozen attendees at the World Economic Forum in 2009 have soared by a combined $175 billion, a Bloomberg analysis
found. The same cannot be said for people on the other end of the social spectrum: A report from Oxfam on Monday revealed that the
poorest half of the world saw their wealth fall by 11 percent last year.
Under neoliberalism 301K investors are overinvested in stock market essentially feeding Wall Street sharks. The net result even
in case of investing strictly in S&P500 are not that great. From 2000 to 2019 S&P rose from approximately 1400 to 2600 or 1200
points in 18 years. That's around 4.7% per year. Adding dividends that's around 6%. As you add money each year for this 18 years period you will realize only half of this return or 3% a year which is close to 30 years bond return (they are tax free, unlike S&P500) and barely beats inflation.
401K was an ingenious design to enrich Wall Street the staple on neoliberal attack on middle class
Notable quotes:
"... Samuelson was responding to my recent publications advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those related to housing prices and occupational incomes – that ordinary people face. He said that these markets could, if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to protect themselves. ..."
Advising people simply to hold the market is advising them to
free-ride on the wisdom of others who do not follow such a strategy. If
everyone
followed Bogle's advice,
market prices would turn into nonsense and would provide no direction to economic activity.
3
I remember exactly when I began to appreciate the complexity of
the moral issues money management entails: October 8, 2009. I received a phone call from the eminent MIT economist
Paul Samuelson, who had been my teacher when I was a graduate student in the early 1970s. He was 94 years old at
the time, and two months later he died. I was so impressed by the call that I took notes on it in my diary.
Samuelson was responding to my recent publications
advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those
related to housing prices and occupational incomes – that ordinary people face. He said that these markets could,
if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to
protect themselves.
He then brought up the example of Bogle, who "gave up a billion
dollars for a concept," Samuelson said. "He could easily have cashed this in," but he didn't. "The miracle that
was Vanguard came from Bogle's principles."
I thought he was right. In the long run, markets reward
principled people. But there is still need for an expanded set of risk markets, because these markets can – and do
– carry out useful functions, including risk management, incentivization, and orienting business.
The problem is that attention to these markets requires
intelligent and hard-working people to help others in their investing. Theirs is not a zero-sum game, for they
help direct resources to better uses. And these people must be paid. Even Vanguard, which now has a number of
different index funds, hires investment managers and charges a management fee, albeit a low one.
Not every fund needs a low fee. We live in a world where
constant and rapid change and innovation require more attention, and attention is costly. While many financial
managers are at times unscrupulous, a higher management fee is not always a sign that something is wrong.
But Bogle is still a hero of mine, because he provided an
honest product and was motivated by a sincere desire to help people. And he should be a hero to all, because he
showed that markets eventually recognize integrity.
A new, updated data
set is now available on a psychological phenomenon that has been labeled "Trump Anxiety
Disorder" or "Trump Hypersensitive Unexplained Disorder," and it says that the phenomenon only
got worse in 2018.
The disorder
is described as a specific type of anxiety in which symptoms "were specific to the election
of Trump and the resultant unpredictable sociopolitical climate," and according to the 2018
surveys Americans are feeling significantly more stressed by the future of their country and
the current political environment than they were last year.
"As the possibility of a Hillary Clinton victory began to slip away -- and
the possibility of a Donald
Trump presidency became more and more certain -- the contours of the new age of American
anxiety began to take
shape . In a 2017 column, Washington Post columnist Dana Milbank
described this phenomenon as "Trump Hypertensive Unexplained Disorder": Overeating.
Headaches. Fainting. Irregular heartbeat. Chronic neck pain. Depression. Irritable bowel
syndrome. Tightness in the chest. Shortness of breath. Teeth grinding. Stomach ulcer.
Indigestion. Shingles. Eye twitching. Nausea. Irritability. High blood sugar. Tinnitus.
Reduced immunity. Racing pulse. Shaking limbs. Hair loss. Acid reflux. Deteriorating vision.
Stroke. Heart attack. It was a veritable organ recital.
Two years later, the physiological effects of the Trump administration aren't going away.
A growing body of research has tracked the detrimental impacts of Trump-related stress on
broad segments of the American population, from
young adults to
women , to racial
and LGBT communities .
Credit Suisse came out today with a doozy of a 90-page "study" looking at global debt
levels. A shout out like this in the report does nothing to engender confidence in risk assets:
"Defaults are likely to rise in segments of the corporate debt markets once economic growth
weakens more markedly or if monetary policy tightens further; in such a situation, an unwinding
of positions could generate significant market stress due to illiquidity."
Credit Suisse Chairman Urs Rohner suggests on the first page of the report that a full-scale
global debt blowup is unlikely. But the overall scope of the report is bearish to stocks, trust
this writer who read the study in its entirety.
"While we don't presently observe conditions to look for a 'buying opportunity' or a
'bottom' from a full-cycle standpoint, we do observe conditions that are permissive of a
scorching market rebound, even if it only turns out to be the 'fast, furious, prone to
failure' variety. We wouldn't dream of removing our safety nets against a market decline that
I continue to expect to draw the S&P 500 toward the 1000 level by the completion of this
cycle. Still, we've prepared for the possibility of unusual volatility here, most likely
including one or more daily moves in the range of 4-6%, potentially to the upside. Yes, that
means one or more daily moves on the order of 100-150 points on the S&P 500 and 900-1300
points on the Dow. You think I'm kidding."
– John P. Hussman, Ph.D., Interim comment, Pre-open, 12/26/18
In recent days, we've heard a number of analysts gushing that the S&P 500 is vastly
cheaper than it was only a few months ago. It's worth noting that they're actually referring to
an index that is now less than 10% below the steepest speculative extreme in history. The chart
below puts current valuations into perspective, using our Margin-Adjusted P/E, which is better
correlated with actual subsequent 10-12 year market returns than the price/forward operating
earnings ratio, the Shiller CAPE, the Fed Model, and a wide range of alternative valuation
measures that Wall Street uses to reassure investors that valuations are anything less than
obscene.
As market conditions currently stand, valuations remain extreme and market internals remain
negative. So aside from the likelihood of a knee-jerk market spike on any variant of the word
"deal," we continue to be in a trap-door situation with respect to market risk. Though we did
take the edge off of our negative outlook to allow for a scorching relief rally, my present
view is that the overall function of that relief rally has been served.
...
One of the more cringe-worthy features of the behavior of investment professionals here is
the spectacle of Wall Street analysts touting the "reasonableness" of valuations on the basis
of year-ahead earnings expectations that they themselves are responsible for fabricating. Just
as in 2000 and 2007, instead of the investment profession acting as a historically-informed
buffer to defend investors against reckless speculation, extrapolative projections like these
are actually endorsed and encouraged by the very people who should know better. The chart below
is thanks to TopDownCharts .
...though we're inclined to wait for more data, and to look for greater deterioration before
identifying a recession, it's important to remember how quickly the data can shift. The amount
of time between the peak in economic confidence and the beginning of a recession is usually
very short. In general, a uniform deterioration in financial, employment and economic
confidence measures, even compared with 6 months earlier, strongly amplifies the risk of a
recession, and there's not much lead time at all. Put simply, we want to have a reliable set of
confirming evidence, but it's also important to remember how quickly that evidence can emerge
.
Questions we hear a lot
Given the volatility of the financial markets in recent months, my sense is that the best
comments to offer are those that relate to these questions:
Bull market or bear
market?
My impression is that the recent bull market peaked on September 20, 2018, which is also
when we observed the largest preponderance of historically useful top signals we've ever seen.
As I noted at the time, the only other point that came close was March 24, 2000, the date of
the 2000 bubble peak. Still, the primary usefulness of a bull/bear label is to emphasize the
potential for steep market losses over the completion of the cycle. As long as one recognizes
that risk, there's no need for labels.
It's probably better to recognize that the market remains hypervalued and that market
internals remain unfavorable. If internals improve at high valuations, our outlook is likely to
shift to something that might be described as "constructive with a safety net." If they improve
at substantially lower valuations, we're likely to move to an unhedged or aggressive stance.
For now, there's so much downside risk that we'd view an improvement in internals as a "bear
market rally," but whatever one might call it, we'd likely be constructive with a safety net.
Even that, I suspect, is likely to emerge from lower levels.
Buy stocks or buy bonds?
My impression is that neither provides much prospect for meaningful returns, and 10% off the
most obscene valuations in U.S. history isn't what I'd call a "bargain." With the yield curve
as flat as we currently observe, the main reason to own bonds is based on the likelihood of a
decline in yields in the event of economic weakness. There's some potential for that, but I'd
lean toward a mix of Treasury bills, modest bond market durations, high credit-quality, and
hedged equity. Our estimated return/risk profile for precious metals shares is also fairly
strong here, but given the volatility of those shares, I'd characterize that as a constructive
situation rather than an aggressive one. None of these is without risk.
Recession or
continued expansion?
We're seeing a good deal of weakness in our leading measures, and a lot of the regional
purchasing managers indices and Fed surveys are deteriorating as well, but we don't have a
sufficient basis for an outright recession warning. This expansion is very long in the tooth,
unemployment is quite low, and the underlying structural growth factors are dismal. So my sense
is we're far closer to a recession than to 4% real GDP growth "as far as the eye can see."
Given the other factors already in place, be particularly watchful for an ISM Purchasing
Managers Index below 50, a move above 4% in unemployment, and a slowdown in employment growth
below about 1.4% year-over-year. A decline in aggregate hours worked versus 3-months earlier
along with a steep drop in consumer confidence, particularly about 20 points below its 12-month
average, would all be strong confirming evidence of an economic downturn.
More rate hikes
or a new round of QE?
On December 19, Fed Chair Jerome Powell observed "We've reached the bottom end of the range
of what the Committee believes might be neutral." I think that is exactly right. As I observed
in the December comment, the combination of low structural economic growth and modest inflation
pressure is fairly consistent with the current level of short-term interest rates. Long-term
rates would normally be higher in the context of current data, but given the deterioration in
leading economic measures (remember, payroll employment and the unemployment rate are two of
the most lagging economic measures available), there's little compelling upward pressure.
Don't take hope in Fed intervention to support the market, other than knee-jerk reactions.
First, remember that the Fed eased persistently throughout the 2000-2002 and 2007-2009
collapses with no effect. When investors are inclined toward risk-aversion, safe liquidity is a
desirable asset, not an inferior one. My view is that it's essential to monitor market
internals directly. We don't disclose the details of our own measures, but I've discussed
uniformity, divergence, breadth, leadership, price-volume sponsorship, credit spreads, and
other factors often enough that the central concept should be clear: when investors are
inclined toward speculation, they tend to be indiscriminate about it.
If and when internals improve, virtually anything the Fed does will likely be associated
with market gains. If internals continue to indicate risk-aversion among investors, then those
knee-jerk "clearing rallies" would best be used as opportunities to sell marginal stock
holdings and tighten up hedges.
My impression is that Jerome Powell is highly aware of how loose the cause-and-effect links
are between monetary policy and the real economy. But apart from noting that the Fed's
workhorse economic model estimates only a 0.2% change in the unemployment rate after 3 years in
response to each $500 billion in asset purchases, there's nothing in his past speeches that
indicates an intellectual opposition to QE. It's not at all clear that the Fed recognizes its
role in creating repeated cycles of bubble and collapse. So we have to allow for another round
of QE in response to the next recession. Again, the appropriate response on our part will be to
align ourselves with market internals. A favorable shift would likely encourage a constructive
or aggressive investment outlook, particularly if valuations have retreated substantially at
that point.
Inflation or deflation?
One of the key features of the recent speculative episode has been yield-seeking speculation
by investors starved for safe yields. In response, Wall Street and corporate America provided
more "product" in the form of low-grade covenant-lite debt. Indeed, the median rating on U.S.
corporate debt now stands just one notch above junk. In an economic decline, one should expect
a disruptive wave of defaults, with far lower recovery rates than in previous economic
cycles.
Now, defaults tend to be deflationary, so what you tend to see is an upward spike in the
yields on junk bonds and corporate debt but a downward trend in the yields of securities viewed
as being without credit risk, which has historically included Treasury securities. The question
is what happens when we begin to run trillion dollar deficits.
In the event of a deflationary economic decline, even one where defaults are higher as a
result of all the yield-seeking and low-grade debt issuance of recent years, another round of
QE seems likely. Our response to that prospect is simple – we'll take our cue from market
internals, particularly given that the entire net total return of the S&P 500 since 2007
occurred when our measures of internals have been favorable, and most of the 2007-2009 collapse
occurred when they were not. As I've regularly noted, our problem during the recent half-cycle
had nothing to do with valuations or market internals, but with our bearish response to
"overvalued, overbought, overbullish" syndromes.
Meanwhile, it's also important to allow for an inflationary economic decline, which would
result from a public loss of faith in the ability of the government to run a stable debt/GDP
relationship. In that event, all bets on QE are off, and the country will just face a difficult
situation, as it has periodically faced before.
The best indicator of inflation is inflation. It's difficult to forecast inflation with
macroeconomic variables, because large shifts in inflation are typically linked to discrete
events that provoke a loss of confidence in price stability itself, like the trifecta of Great
Society deficits, Nixon closing the gold window, and an oil embargo, or the combination of
money printing and a supply shock, like using deficit finance to pay striking workers in the
Ruhr. Not surprisingly, we'll infer that shift in confidence from uniformity in the behavior of
inflation-sensitive asset prices.
There's no economic factor that predicts the rate of inflation better than the rate of
inflation itself (and related uniformity in the behavior of inflation-sensitive securities
including precious metals, exchange rates, bond prices, commodities, TIPS, and related
securities). Just like a shift in market internals, it may be difficult to predict, but it's
fairly easy to align yourself with it.
I know that many observers are quietly repeating Milton Friedman's phrase that "inflation is
always and everywhere a monetary phenomenon." The problem is, you won't reliably see that in
the data. As a former economics professor, I get it. The quiet job of the economics profession
is to indoctrinate teenagers with purely theoretical models by showing them line-drawings.
Nobody ever asks them to spend time staring at actual numbers.
So they become adults – and sometimes even Fed governors – who take theoretical
diagrams as reality, for example, the notion that the Phillips curve is a relationship between
unemployment and general price inflation, when there's utterly no evidence for it. In fact, as
I've regularly argued, when you actually look at A.W. Phillips' data (a century of British
unemployment and wage data during a period of stable general prices under the gold standard),
the Phillips Curve is actually a relationship between unemployment and real wage inflation.
Of course, money creation and general price inflation are undoubtedly linked when money
creation hits the pace of the Weimar Republic or Zimbabwe. But for the U.S., there's no
economic factor that predicts the rate of inflation better than the rate of inflation itself
(and related uniformity in the behavior of inflation-sensitive securities including precious
metals, exchange rates, bond prices, commodities, TIPS, and related securities). Just like a
shift in market internals, it may be difficult to predict, but it's fairly easy to align
yourself with it.
Somebody explain to me why you pay 2 x sales for the S&P 500 when the risks on
economic growth are on the downside. Please explain Wall Street. Please explain how this is
cheap when the price to sales ratio is in bubble territory.
In the America of today social justice warriors virtue signaling their tolerance for others
have been repeatedly and quite often exposed for the bigots, sexists, and racists that they
really are.
DFGTC
"Those whom the gods are about to destroy, they first make mad ..."
while we are waiting for the final FINAL report of the endless interminable Mueller
investigation, perhaps best to review the Mueller report of Feb. 16 2018, and the conclusions
it drew: it identified 13 Russian nationals who were part of an organized effort based in the
Internet Research Agency. Those 13 Russians were named and indicted; if they step foot in any
Western space, they will be arrested and charged.
Oh, and the Americans? none named, none charged, none involved, concludes the Mueller
team. This likely presages the wet firecracker of the Mueller final report, and its look into
the media echo chamber's bottomless rumour mill.
just as good as you , 1 week ago
You seem to have forgotten the 33 indictments of 'Americans'. You seem to have forgotten
the 4 guilty pleas, and the 7 jail terms.
Yada yada yada.
Moseby1 , 1 week ago
Who do you think you're kidding?
Paul Manafort
Rick Gates
George Papadopoulos
Michael Flynn
Michael Cohen
Richard Pinedo
Alex Van Der Zwaan
Konstantin Killmnik
Kudos. I was just getting tired of typing the list, hence the "Yada yada yada".
Thanks.
Andy_Waxman1 , 1 week ago
Some of it happened pre-campaign, some of it is seriously dumb (Manafort not reporting
that he had a contract with the Ukraine), but much is Crimes of the Investigation - that is,
a crime caused by investigation. 'You told us you met with him Tuesday, but you met with him
Friday, you lied to the FBI, federal crime!' Like John Kelly. The actual meeting wasn't a
crime, though. Someone else tried to dangle a poll, "most of which was public," said the NYT.
Double dumb.
At this point the Collusion Narrative is like the Pee Tape, waaaaay more Liberal
Wishful Fantasy than proof. So far, there's no there there. Just endless breathless NYT CNN
and Globe headlines. 'Nuclear war this weekend with NK!' Remember that one? Right wing
Birthers were fringe. Left wing Haters are MSM. Big hat, no cattle. Waiting for Bob M.
A nice example of checkbook journalism... Previously there were a difference between a
Professor and a prostitute. Now it completely disappeared.
Notable quotes:
"... I canceled my subscription to the Globalist and Mail it'll expire at the end of this month but I must say, I'm going to miss reading all the comedy I
have found in this paper, particularly in its comment sections. ..."
"... At this point I think it would be much worse if Trump isn't a Russian agent. At least being a Russian agent would make the ruination of the US a valid goal. If he truly isn't an agent, he's just ruining the US for the fun of it? ..."
"... Trump is not an enemy of America. He is America at its strongest and most sinister form, just the way Wall Street likes it. If Americans want a better society, they'd better stop asking to be led by grifters and take the lead themselves. ..."
Jared Yates Sexton is an associate professor at Georgia Southern University. He is the
author ofThe People Are Going to Rise Like the Waters Upon Your Shore: A Story of
American Rage.
This is, above all, a very real and very dangerous crisis. The time to wring our hands and
hide behind faith and disbelief are over. To fully counter this possible betrayal we must look
it dead in the face and begin to change our perception of what is feasible.
Mr. Trump has
capitalized on the good faith of the American people. In order to start healing, we must accept
that, with this administration, with this group, with this movement that Mr. Trump embodies,
almost anything is possible.
Opiedog , 3 days ago
What you are witnessing is the decline in American influence and might. This is very
similar to the decline of the Roman Empire. Slow degradation of social norms. Donald is not
the cause of this but we are in real time witnessing the decline of America.
Ramsey0 , 6 days ago
I canceled my subscription to the Globalist and Mail it'll expire at the end of this month
but I must say, I'm going to miss reading all the comedy I have found in this paper, particularly
in its comment sections.
dbns , 1 week ago
At this point I think it would be much worse if Trump isn't a Russian agent. At least
being a Russian agent would make the ruination of the US a valid goal. If he truly isn't an
agent, he's just ruining the US for the fun of it?
MG-TD , 1 week ago
Where is James Bond when you need him?
Unlimited reader , 6 days ago
I'm waiting eagerly for Bruce Willis to show up and save the USA
Globu , 1 week ago
Why the surprise? Mr. Trump is the very embodiment of the same cutthroat capitalism that
has defined America since colonization, slavery and the Trail of Tears.
Trump is not an enemy of America. He is America at its strongest and most sinister form, just
the way Wall Street likes it. If Americans want a better society, they'd better stop asking
to be led by grifters and take the lead themselves.
M. Gavin , 1 week ago
One can see why this is in the Opinion section. It's melodramatic, devoid of facts, offers
no reliable sources, fails to demonstrate motives, etc., etc. It's less obvious why the Globe
would publish it at all, because "news" like this we can get listening to the barber.
tinman1957 , 1 week ago
This guy isn't offering any news or opinion of concern he is just venting his hatred.
Andrew Smith , 1 week ago
The author is an associate professor of creative writing at a community college and it
shows.
Globu , 1 week ago
"Special to the Globe" always translates to chequebook journalism.
wellworn , 6 days ago
He is an associate professor of Writing and Linguistics; there is nothing in the profile
to suggest "creative" writing. I suspect that you creatively included the word to discredit
the very plausible premise that trump is an agent working for Russia; he certainly is not
working for the United States of America.
Personally I believe trump should be thoroughly investigated by the House committee to
look at his tax returns and banking records to determine how much money trump and company
have earned from Russian sources.
wglenm , 1 week ago
Who chooses the opinion pieces for this newspaper? This article is a completely one sided
joke.
just as good as you , 1 week ago
It IS - as you admit - an OPINION.
bdtaylor , 1 week ago
if Trump is such a boob, m_oron, rube and nitwitt that CNN and MSNBC make him out to be,
then how has he managed to fool the most sophisticated surveillance network in the world:
namely the CIA and NSA. if Trump was a Russian "Manchurian" candidate, does anyone actually
think the CIA and NSA wouldn't have figured that out 2 years ago?
All we have are platitudes and no real evidence. Is their a bunch of corrupt people and
dealing around Trump, yup (Michael Cohen, Maniford and probably others) is their actual
Russian "conspiracy" NOPE.
This entire RussiaGate conspiracy was started by Robby Mook and John Podesta of the DNC
(with the support of Clinton) to justify the embarrassment of losing to Trump in 2016.
Imagine losing to Trump a complete political novice that Hillary outspent 2.5x (she spent
almost $1Bil USD and still LOST).
Turn on your critical thinking and this entire RussiaGate is one big joke.
"... Checking facts and adding context is what journalists are paid to do. It's in the first line of the job description. Yet, amazingly, almost nobody in the American media did that. ..."
"... That's a shame, because there was a lot to check. The full video of what happened on Friday in Washington is well over an hour long. The four minutes that made Twitter don't tell the story, but instead distorted the story. A longer look shows that the boys from Covington Catholic in Kentucky weren't a roving mob looking for a fight. They were, in fact -- and it shows it on the tape -- standing in place waiting to be picked up by a bus. ..."
"... As they waited there, members of a group called the Black Hebrew Israelites, a black supremacist organization, began taunting them with racial epithets. Nathan Phillips, the now-famous American Indian activist, also approached them, pounding his drum. The footage seems to suggest the boys were unsure whether Phillips was hostile or taking their side against the Black Hebrew Israelites. But in any case, there is no evidence at all that anyone said, "build a wall." ..."
"... So, what really happened on Friday? Watch and decide for yourself. There's plenty of video out there, and some of it is fascinating. What we know for certain at this point is that our cultural leaders are, in fact, bigots. They understand reality on the basis of stereotypes. When the facts don't conform to what they think they know, they ignore the facts. They see America not as a group of people or of citizens, but as a collection of groups. Some of these groups, they are convinced, are morally inferior to other groups. They know that's true. They say it out loud. That belief shapes almost all of their perceptions of the world. ..."
Once footage emerged of the entire incident, however, it became clear that the left had
gotten it completely wrong ; Phillips had approached the teens - many wearing MAGA hats, while
a group of Black Israelites considered to be a hate group by the Anti-Defamation League hurled
racial insults at the students.
After the truth emerged, famous liberals who were previously frothing at the mouth went on a
mad scramble to delete their tweets full of hate, slander and disinformation . The internet
never forgets, however, and neither does Tucker Carlson:
If you were on social media over the weekend, you probably saw the video. It was
shot Friday afternoon , on the steps of the Lincoln Memorial. It seemed to show a group
of teenage boys taunting an elderly American Indian man who was holding a drum.
The young men
had come to Washington from a Catholic school in Kentucky to demonstrate in the March for
Life . Some of them wore "Make America Great Again" hats. They seemed menacing. Within
hours, the video was being replayed by virtually every news outlet in America. The American
Indian man with the drum in the video is called Nathan Phillips. He described the young men
he encountered, the ones in the hats, as aggressive and threatening -- essentially shock
troops for Donald Trump.
"I heard them saying, 'Build that wall. Build that wall,'" Phillips said. "This is
indigenous land. We're not supposed to have walls here."
It's hard to remember the last time the great American meme machine produced a clearer
contrast between good and evil -- it was essentially an entire morality play shrunk down to
four minutes for Facebook.
On one side, a noble tribal elder, weather-beaten, calm and wise. He looks like a living
icon. You could imagine a single tear sliding slowly down his cheek at the senselessness of
it all.
On the other side, you had a pack of heedless, sneering young men from the south, drunk on
racism and white privilege. The irony is overwhelming: The indigenous man's land had been
stolen by the very ancestors of these boys in MAGA hats. Yet they dare to lecture him about
walls designed to keep people who look very much like him out what they were calling "their"
country.
It was infuriating to a lot of people. At the same time, it was also strangely comforting
to the people who watched it from Brooklyn and L.A. The people who run this country have long
suspected that middle America is a hive of nativist bigotry. And now they had proof of that.
It was cause for a celebration of outrage. There's nothing quite as satisfying as having your
own biases confirmed.
But did the video really describe what happened? That should have been the first question
journalists asked. Checking facts and adding context is what journalists are paid to do. It's
in the first line of the job description. Yet, amazingly, almost nobody in the American media
did that.
That's a shame, because there was a lot to check. The full video of what happened on
Friday in Washington is well over an hour long. The four minutes that made Twitter don't tell
the story, but instead distorted the story. A longer look shows that the boys from Covington
Catholic in Kentucky weren't a roving mob looking for a fight. They were, in fact -- and it
shows it on the tape -- standing in place waiting to be picked up by a bus.
As they waited there, members of a group called the Black Hebrew Israelites, a black
supremacist organization, began taunting them with racial epithets. Nathan Phillips, the
now-famous American Indian activist, also approached them, pounding his drum. The footage
seems to suggest the boys were unsure whether Phillips was hostile or taking their side
against the Black Hebrew Israelites. But in any case, there is no evidence at all that anyone
said, "build a wall."
So, what really happened on Friday? Watch and decide for yourself. There's plenty of video
out there, and some of it is fascinating. What we know for certain at this point is that our
cultural leaders are, in fact, bigots. They understand reality on the basis of stereotypes.
When the facts don't conform to what they think they know, they ignore the facts. They see
America not as a group of people or of citizens, but as a collection of groups. Some of these
groups, they are convinced, are morally inferior to other groups. They know that's true. They
say it out loud. That belief shapes almost all of their perceptions of the world.
It's not surprising, then, that when a group of pro-life Catholic kids who look like
lacrosse players and live in Kentucky are accused of wrongdoing, the media don't pause for a
moment before casting judgment. Maggie Haberman of the New York Times suggested the boys
needed to be expelled from school. Ana Navarro of CNN called the boys racists and "asswipes"
and then went after their teachers and parents.
Others called for violence against them . CNN legal analyst Bakari Sellers suggested one
of the boys should be, "punched in the face." Former CNN contributor Reza Aslan agreed. Aslan
asked on Twitter, "Have you ever seen a more punchable face than this kid's?" Longtime CNN
contributor Kathy Griffin seemed to encourage a mob to rouse up and hurt these boys,
tweeting, "Name these kids. I want names. Shame them. If you think these effers wouldn't dox
you in a heartbeat. Think again." She repeated her demand again later: "Names please. And
stories from people who can identify them and vouch for their identity. Thank you."
Hollywood film producer Jack Morrissey tweeted that he wanted the boys killed: "MAGA kids
go screaming, hats first, into the woodchipper." He paired that with a graphic photo. Actor
Patton Oswalt linked to personal information about one of the boys, in case anyone wanted to
get started on that project. Meanwhile, Twitter, which claims to have a policy against
encouraging violence, stood by silently as all this happened.
But in case you think the response was entirely from the left, you should know that the
abuse was bipartisan. This wasn't just left versus right. It was the people in power
attacking those below them as a group. Plenty of Republicans in Washington were happy to
savage the Covington kids, probably to inoculate themselves from charges of improper thought.
Bill Kristol asked his Twitter followers to consider "the contrast between the calm dignity
and quiet strength of Mr. Phillips and the behavior of MAGA brats who have absorbed the
spirit of Trumpism."
So what's actually going on here? Well, it's not really about race. In fact, most of the
stories about race really aren't about race. And this is no different. This story is about
the people in power protecting their power, and justifying their power, by destroying and
mocking those weaker than they are.
And then when the actual facts emerged, Kristol quietly deleted his tweet. He never
apologized, of course. He hasn't apologized for the Iraq war, either. There's no need. People
keep giving him money.
The National Review, meanwhile, ran a story entitled, "The Covington Students Might As
Well Have Just Spit on the Cross." That story has since been pulled too, but not before the
author admitted he never even bothered to watch all the videos. He knew what he knew. That
was enough.
What was so interesting about the coverage of Friday's video was how much of it mentioned
something called "privilege." Alex Cranz, an editor at Gizmodo, for example, wrote, "From
elementary school through college, I went to school with sheltered upper middle-class white
boys who could devastate with a smirk. A facial gesture that weaponized their privilege.
Infuriatingly you can't fight that effing smirk with a punch or words. We saw that as Trump
smirked his way through the election and we'll see it as that boy from Kentucky's friends,
family, and school protect him. I effing hate that smirk. It says 'I'm richer, I'm white, and
I'm a guy.'"
What's so fascinating about all these attacks is how inverted they are. These are high
school kids from Kentucky. Do they really have more privilege than Alex Cranz from Gizmodo?
Probably not. In fact, probably much less. They're far less privileged than virtually
everyone who called for them to be destroyed, based on the fact that they have too much
privilege.
Consider Kara Swisher, for example, an opinion columnist at the New York Times. Swisher
went to Princeton Day School and then Georgetown, then got a graduate degree at Columbia.
She's become rich and famous, in the meantime, by toadying for billionaire tech CEOs. She's
their handmaiden. Nobody considers her very talented. And yet she's somehow highly
influential in our society. Is she more privileged than the boys of Covington Catholic in
Kentucky? Of course she is. Maybe that's why she feels the need to call them Nazis, which she
did, repeatedly.
So what's actually going on here? Well, it's not really about race. In fact, most of the
stories about race really aren't about race. And this is no different. This story is about
the people in power protecting their power, and justifying their power, by destroying and
mocking those weaker than they are.
Why? It's simple. Our leaders haven't improved the lives of most people in America. They
can't admit that because it would discredit them. So, instead they attack the very people
they've failed. The problem, they'll tell us, with Kentucky, isn't that bad policies have
hurt the people who live there. It's that the people who live there are immoral because
they're bigots. They deserve their poverty and opioid addiction. They deserve to die
young.
That's what our leaders tell themselves. And now, that's what they're telling us. Just
remember: they're lying.
The International Monetary Fund just uncorked a sobering outlook on the global
economy and asset markets for the elite billionaires huddled up in Davos,
Switzerland for the World Economic Forum to ponder.
In its latest World Economic Update report, the IMF said Monday the global
economy is projected to grow at a meager 3.5% this year and only accelerate to
3.6% in 2020. The outlooks for 2019 and 2020 are 0.2 percentage point and 0.1
percentage point below the IMF's projections issued in October.
Hat tips to the ongoing U.S. trade war with China, tightening financial
conditions globally and more volatile risk asset markets.
The finer points:
The IMF pretty much had nothing good to say on
the outlooks for developed and emerging markets. Although that is nothing unusual
for the IMF -- who often takes a cautious stance on its outlooks for economies and
financial markets -- it may give many investors a wake up call amid a somewhat hot
start to the stock market in 2019.
Of note, U.S. growth is seen slowing to 2.5% in 2019 and dipping to 1.9% in 2020
at the hands of the unwinding of fiscal stimulus (see Trump tax cuts), higher
interest rates and the U.S. trade war with China. The IMF tossed the U.S. a bone
by noting the pace of expansion is above the country's estimated potential growth
in both years.
As for Europe, the IMF is now more bearish on growth compared to its October
outlook. Growth for emerging and developing Europe in 2019 is forecast to cool to
0.7% (from 3.8% in 2018) and then bounce to 2.4% in 2020. Previously, the IMF was
looking for growth of 2% and 2.8% in 2019 and 2020, respectively. Lackluster
growth in Italy, France and Germany as well as policy tightening in Turkey are
the main culprits for the IMF's European growth downgrade.
Growth in emerging and developing Asia is expected to drop from 6.5% in 2018 to
6.3% in 2019 and reach 6.4% in 2020, said the IMF. The IMF expects growth in
China to be 6.2% both in 2019 and 2020 versus 6.6% in 2018.
Interestingly, the IMF incorporates the impact of continued tariffs by the U.S.
on China and vice versa in its baseline forecast. In other words, the
organization does not expect there to be a trade truce between the countries on
their self-imposed March 1 deadline.
For the investors out there:
For those bulls that have returned
to beaten up stocks in January, the IMF does its best to squash the hopium
infiltrating your brains. "A range of catalyzing events in key systemic economies
could spark a broader deterioration in investor sentiment and a sudden, sharp
repricing of assets amid elevated debt burdens. Global growth would likely fall
short of the baseline projection if any such events were to materialize and
trigger a generalized risk-off episode," cautioned the IMF.
China's growth slowdown is also a risk that the IMF suggests investors don't
fully appreciate.
"As seen in 2015–16, concerns about the health of China's economy can trigger
abrupt, wide reaching sell-offs in financial and commodity markets that place its
trading partners, commodity exporters, and other emerging markets under
pressure," the IMF pointed out.
The bottom line:
The IMF isn't exactly super plugged into global
asset markets in the same vein as forecasters at Goldman Sachs and Morgan
Stanley. But their latest assessment of the global economy and risk markets
offers up a good counterbalance to the enthusiasm that has begun to creep back
into financial markets after the October 2017 through December 2018 rout.
Happy trading, folks.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on
Twitter
"... Currently, the S&P 500 (as of 1/18/19) is trading at 2,670 with Q4-2018 trailing reported earnings estimated to be $139.50. ( S&P Data ) This puts the 10-year average trailing P/E ratio of the S&P at a rather lofty 28.86x. ..."
I'm referring to what many retirees are most afraid of: Running out of money before they
die. An Allianz Life
survey found that far more retirees are afraid of outliving their money than they are of
dying -- 61% to 39%. This ever-present background fear is especially rearing its ugly head
right now, given the bear market that too many came out of nowhere.
Retirement planning projections made at the end of the third quarter, right as the stock
market was registering its all-time highs, now need to be revised.
The reason not to give up hope is that the stock market typically recovers from bear
markets in a far shorter period of time than most doom and gloomers think. Consider what I
found when measuring how long it took, after each of the 36 bear markets since 1900 on the
bear market calendar maintained by Ned Davis Research Believe it or not, the average recovery
time was 'just' 3.2 years."
Mark correctly used total return numbers in his calculations, however, while his data is
correct the conclusion is not.
Here is why.
While Mark is discussing the recovery of bear markets (getting back to even) it is based on
a "buy and hold" investing approach.
However, Mark's error is that he is specifically discussing "retirees" which are
systematically withdrawing capital from their portfolios, paying tax on those withdrawals (from
retirement accounts) and compensating for adjustments to the cost of living (not to mention
spiraling "health care" costs.)
These are the same problems which plague most of the "off the shelf" financial plans
today:
Faulty assumptions based on average historic rates of returns rather than variable rates
of return, and;
Not accounting for the current level of market valuations at the outset of the planning
process.
To explain the problems with both Mark's assumptions, and the vast majority of financial
plans spit out of computer programs today, let's turn to some previous comments from
Michael Kitces.
"Given the impact of inflation, it's problematic to start digging into retirement
principal immediately at the start of retirement, given that inflation-adjusted spending
needs could quadruple by the end of retirement (at a 5% inflation rate). Accordingly, the
reality is that to sustain a multi-decade retirement with rising spending needs due to
inflation, it's necessary to spend less than the growth/income in the early years, just to
build enough of a cushion to handle the necessary higher withdrawals later!
For instance, imagine a retiree who has a $1,000,000 balanced portfolio, and wants to plan
for a 30-year retirement, where inflation averages 3% and the balanced portfolio averages 8%
in the long run. To make the money last for the entire time horizon, the retiree would start
out by spending $61,000 initially, and then adjust each subsequent year for inflation,
spending down the retirement account balance by the end of the 30th year."
Michael's assumptions on expanding inflationary pressures later in retirement is correct,
however, they don't take into account the issue of taxation. So, let's adjust Kitces' chart and
include not only the impact of inflation-adjusted returns but also taxation. The chart below adjusts the 8% return structure for inflation at 3% and also adjusts the
withdrawal rate up for taxation at 25%. By adjusting the annualized rate of return for the impact of inflation and taxes, the life
expectancy of a portfolio grows considerably shorter. While inflation and taxes are indeed important to consider, those are not the biggest threat
to retiree's portfolios.
There is a massive difference between 8% "average" rates of return and 8% "actual"
returns.
The Impact Of Variability
Currently, the S&P 500 (as of 1/18/19) is trading at 2,670 with Q4-2018 trailing
reported earnings estimated to be $139.50. (
S&P Data ) This puts the 10-year average trailing P/E ratio of the S&P at a rather
lofty 28.86x.
We also know that forward returns from varying valuation levels are significantly varied
depending on when you start your investing. As shown in the chart below, from current valuation
levels, forward returns from the market have been much closer to 2% rather than 8%.
As evidenced by the graph, as valuations rise future rates of annualized returns fall. This
should not be a surprise as simple logic states that if you overpay today for an asset, future
returns must, and will, be lower.
Math also proves the same. Capital gains from markets are primarily a function of market
capitalization, nominal economic growth plus the dividend yield. Using the Dr. John Hussman's
formula we can mathematically calculate returns over the next 10-year period as follows:
(1+nominal GDP growth)*(normal market cap to GDP ratio / actual market cap to GDP
ratio)^(1/10)-1
Therefore, IF we assume that
GDP maintains, 4% annualized growth indefinitely
Which means recessions have been eliminated, AND
Current market cap/GDP stays flat at 1.25, AND
The current dividend yield remains at 2%:
We would get forward returns of:
(1.04)*(.8/1.25)^(1/30)-1+.02 = 4.5%
But there's a "whole lotta ifs" in that assumption.
More importantly, if we assume that inflation remains stagnant at 2%, as the Fed hopes, this
would mean a real rate of return of just 2.5%.
This is far less than the 8-10% rates of return currently promised by the Wall Street
community. It is also why starting valuations are critical for individuals to understand when
planning for the accumulation phase of the investment life-cycle.
Let's take this a step further. For the purpose of this article, we went back through
history and pulled the 4-periods where trailing 10-year average valuations (Shiller's CAPE)
were either above 20x earnings or below 10x earnings. We then ran a $1000 investment going
forward for 30-years on a total-return, inflation-adjusted, basis.
At 10x earnings, the worst performing period started in 1918 and only saw $1000 grow to a
bit more than $6000. The best performing period was actually not the screaming bull market that
started in 1980 because the last 10-years of that particular cycle caught the "dot.com" crash.
It was the post-WWII bull market that ran from 1942 through 1972 that was the winner. Of
course, the crash of 1974, just two years later, extracted a good bit of those returns.
Conversely, at 20x earnings, the best performing period started in 1900 which caught the
rise of the market to its peak in 1929. Unfortunately, the next 4-years wiped out roughly 85%
of those gains . However, outside of that one period, all of the other periods fared worse than
investing at lower valuations. (Note: 1993 is still currently running as its 30-year period
will end in 2023.)
The point to be made here is simple and was precisely summed up by Warren Buffett:
"Price is what you pay. Value is what you get."
This idea becomes much clearer by showing the value of $1000 invested in the markets at both
valuations BELOW 10x trailing earnings and ABOVE 20x. I have averaged each of the 4-periods
above into a single total return, inflation-adjusted, index, Clearly, investing at 10x earnings
yields substantially better results.
Not surprisingly, the starting level of valuations has the greatest impact on your future
results.
But, most importantly, starting valuations are critical to withdrawal rates
When we adjust the spend down structure for elevated starting valuation levels, and include
inflation and taxation, a much different, and far less favorable, financial outcome emerges
– the retiree runs out of money not in year 30, but in year 18.
"And, if you're retired and withdrawing from your portfolio, the 'sequence-of-return' risk
– the problem of the early years of withdrawals coinciding with a declining portfolio
– can upend your entire retirement. That's because a portfolio in distribution that
experiences severe declines at the beginning of the distribution phase, cannot recover when
the stock market finally rebounds. Because of the distributions, there is less money in the
portfolio to benefit from stock gains when they eventually materialize again.
I showed that risk in a previous
article where I created the following chart representing three hypothetical portfolios
using the '4% rule' (withdrawing 4% of the portfolio the first year of retirement and
increasing that withdrawal dollar value by 4% every year thereafter). I cherry-picked the
initial year of retirement, of course (2000), so that my graphic represents a kind of worst
case, or at least a very bad case, scenario. But investors close to retirement should keep
that in mind because current stock prices are historically high and bond yields are
historically low. That means the prospects for big investment returns over the next decade
are dim and that increasing stock exposure could be detrimental to retirement plans once
again. In my example, decreasing stock exposure benefits the portfolio in distribution phase,
and that could be the case for retirees now."
As John correctly notes, there is a case for owning stocks in a retirement portfolio, just
maybe not as much as your "run of the mill" financial plan suggests. To wit:
"Returns from cash and bonds may not keep up with inflation, after all. But stock returns
might fall short too. And if stocks do lag, they probably won't do so with the limited
volatility that bonds tend to deliver, barring a serious bout of inflation. So, if you're
within a decade of retirement, it may be time to think hard about how much stock exposure is
enough. The answer might be less than you think for a portfolio in distribution phase."
Questions Retirees Need To Ask About Plans
Importantly, what this analysis reveals, is that "retirees" SHOULD be worried about bear
markets. Taking the correct view of your portfolio, and the risk being undertaken, is critical
when entering the retirement and distribution phase of the portfolio life cycle.
More importantly, when building and/or reviewing your financial plan – these are the
questions you must ask and have concrete answers for:
What are the expectations for future returns going forward given current valuation
levels?
Should the withdrawal rates be downwardly adjusted to account for potentially lower
future returns?
Given a decade long bull market, have adjustments been made for potentially front-loaded
negative returns?
Has the impact of taxation been carefully considered in the planned withdrawal rate?
Have future inflation expectations been carefully considered?
Have drawdowns from portfolios during declining market environments, which accelerates
principal bleed, been considered?
Have plans been made to harbor capital during up years to allow for reduced portfolio
withdrawals during adverse market conditions?
Has the yield chase over the last decade, and low interest rate environment, which has
created an extremely risky environment for retirement income planning been carefully
considered?
What steps should be considered to reduce potential credit and duration risk in bond
portfolios?
Have expectations for compounded annual rates of returns been dismissed in lieu of a plan
for variable rates of future returns?
If the answer is "no" to the majority of these questions then feel free to contact one of the CFP's
in our office who take all of these issues into account.
With debt levels rising globally, economic growth on the long-end of the cycle, interest
rates rising, valuations high, and a potential risk of a recession, the uncertainty of
retirement plans has risen markedly. This lends itself to the problem of individuals having to
spend a bulk of their "retirement" continuing to work.
Two previous bear markets have devastated the retirement plans of millions of individuals in
the economy today which partly explains why a large number of jobs in the monthly BLS
employment report go to individuals over the age of 55.
So, not only should retirees worry about bear markets, they should worry about them a
lot.
The insidious and hidden tax - inflation. Retirement is mostly fantasy - it is always
being one step away from poverty. Even after decades of sacrifice and saving.
the nikkei topped out in 1989 and still hasn't recovered nearly 30 years later. most old
farts, including family members, aren't balanced, they are almost totally in stocks because
they believe that the fed guarantees the s&p only goes up. if someday it doesn't, too bad
for them.
The only way to retire [ unless you are very wealthy ] from the system is to adopt a
self-reliant lifestyle where your cost of living is way down. A single adult, in fair
condition, living a self reliant lifestyle can live comfortably on 15k per year. Thats
assuming no debt. To do that privately, you'll need about 400-600k, the right piece of land [
paid for ], and a whole mess of specific skills.
You wont be laying on your ***. This isnt your father's retirement of leisure. This is a
shifting of focus away from contribution / compensation through the system and towards
independence and literal "Self" reliance.
bull, bear who gives a ****? Only an idiot eats up the seed capital in pensions. All that
does is set down a death date you better follow thru with- With a bullet if neccesary.
Did they pick only companies that existed and survived the 30-year duration, in which case
they may not be representative of the market? Or did they use index, in which case there is
no complementary aggregate P/E ratio to account for dividends - or did they ignore dividends
altogether?
Very easy to calculate amortization of a retirement boodle. Just go online to a mortgage
amortization calculator. 1) Put in the initial amount of the retirement stake (= the amount
of a mortgage to be paid off, e.g. $1 million) 2) Punch in the projected interest rate (= the
interest on the mortgage). This will be the amount the retirement boodle pays in
interest/dividends over time as it's being drawn upon 3) Punch in the number of years the
retirement principle will have to pay out (= the number of years the mortgage is for). Crunch
these with the calculator provided and you'll get the amount the account will pay out each
month (= monthly payment of a mortgage with interest). Simple and free. The only uncertain
thing is the interest/dividend rate of the account. But one can be conservative (Say 2-3%)
and still get a very accurate monthly payout figure.
Also, nothing personal, but why should I take investment advice from someone who is still
working or paid to give it? I could never figure that one out.
If I were an investment genius, I would be rich, retired long before reaching age 65, and
avoiding people who need investment advice.
Retirees shouldn't worry about bear markets because retirees should never be in the equity
market in the first place. Especially during the times of rate normalization, where
sell-siders view every utterance by the Fed as 'dovish', and algos need ultra-volatility to
keep in business.
Assume $1 million in savings and Social Security of $25,000/yr based on a life of very
decent wages. At 4%, very easy to earn during normalized rates from fixed income, that's
$65,000/yr with NO principal reduction. Paltry for NYC or CA, but very decent for a
comfortable life almost everywhere else for an old person with no debts.
""Overall, between bank accounts and retirement savings, the median American household
currently holds about $11,700 , according to MagnifyMoney. Almost 30 percent of households
have less than $1,000 saved, MagnifyMoney finds, though the amount varies drastically by
age.Aug 28, 2018""
The article says, " For instance, imagine a retiree who has a $1,000,000 balanced portfolio, and wants to
plan for a 30-year retirement . . . "
It's not aimed at the median American household. The median American household doesn't
have a financial advisor, portfolio, or any hope for a retirement that goes beyond a $1,800 a
month Social Security check.
and to make matters worse it is becoming more and more difficult to find a reasonably
priced canned cat food that can substituted as a Decent Liver Pate. We have a high net worth
Bridge Owners party next week and the stuff we tried last month pulled the bridges right out
of their mouths.
You proved his point. You would be very concerned if you knew the true Money Power Monopolist Game of
Thrones.
===============
"Modern slaves are not in chains, they are in debt."
~Anonymous
"Let the American people go into their debt-funding schemes and banking systems, and from
that hour their boasted independence will be a mere phantom."
~William Pitt, (referring to the inauguration of the first National Bank in the United States
under Alexander Hamilton).
"The new law will create inflation whenever the trusts want inflation. From now on
depressions will be scientifically created."
~Congressman Charles A. Lindbergh, after the passage of the Federal Reserve act 1913.
"The one aim of these financiers is world control by the creation of inextinguishable
debt."
~Henry Ford
"Retirement" is a fairly new fad- prior to the 1950s it was unheard of - expect that fad
to end some point soon. The whole concept resembles a Pyramid Scheme- as long as there are
enough people at the bottom supporting those at the top everything is OK- the problem occurs
when there are not enough at the bottom contributing to support those above them - which we
have now.
the answer is simple; the math of a distribution portfolio is vastly different than that
of a portfolio NOT making withdrawals.....depending on the amount being withdrawn the
recovery point will take longer if at all.
just keep dry powder ready for when FERAL Reserve jacks discount rate up in the teens, the
geezers will make it back fast. I do not doubt I will see rates in CDs at 10%. They have to
drain 4.4 trillion of gravy from the system to protect what they stole in 2008 or inflation
will get it fast.
"... The whole affair is psyop, we know that already ..."
"... Stranger and stranger British press is saying that they did CPR on both victims at the scene of their collapse; being a trained nurse one of the first things they would have done is to have taken their pulse and other vitals and miraculously managed to do this and not become contaminated. Methinks something doth stink! ..."
"... Before any free-trade agreement can be reached with the United States, the Queen must issue a written apology to President Trump for attempting to overthrow his government. ..."
The case of poisoned double-agent Sergei Skripal just got weirder after it was revealed that
the first responder to the scene was the Chief Nursing Officer for the British Army after he
daughter spotted Skripal and his daughter collapsed on a bench at the Maltings shopping center
in Salisbury on March 5 of last year.
According to
Spire FM , 16-year-old Abigail McCourt spotted the poisoned Russians while "out celebrating
her brother's birthday," and then quickly alerted her mother - Alison McCourt. The two McCourts
gave first aid to the Skripals until paramedics arrived.
Colonel McCourt - who was decorated
for her efforts to fight Ebola in Sierra Leone, proposed her daughter as a candidate for the
Lifesaver Award at Spire FM's Local Hero Awards.
"As a qualified nurse it was a fairly routine situation for me but my daughter was amazing.
Her prompt actions, spotting them in difficulty, and the way she assisted me to put Yulia
Skripal in the recovery position had a significant impact on the outcome of the two victims , "
said Alison of her daughter.
The coincidence - kept under wraps for nearly a year , is sure to give skeptics plenty of
new ammunition to refute the official narrative that Russia attempted to kill Skripal 10 years
after the voluntarily gave him up in a spy exchange with the UK.
... ... ...
Christopher Steele connection walked back
In an embarrassing walkback of a story from March 2018, The Telegraph now says that the
Kremlin laid a "false trail" linking Sergei Skripal to Christopher Steele - the former MI6 spy
who crafted the infamous anti-Trump "Steele Dossier" paid for by Hillary Clinton's
campaign.
The Telegraph understands that Col Skripal moved to Salisbury in 2010 in a spy swap and
became close to a security consultant employed by Christopher Steele, who compiled the Trump
dossier.
The British security consultant, according to a LinkedIn social network account that was
removed from the internet in the past few days, is also based in Salisbury.
On the same LinkedIn account, the man listed consultancy work with Orbis Business
Intelligence, according to reports. -
Telegraph
On Sunday that entire connection - which implied that Skripal was somehow involved with the
Steele Dossier, was
blamed on Russia .
Russian intelligence created a false trail linking the double agent Sergei Skripal to the
former MI6 officer behind the Trump dossier before carrying out the Salisbury nerve agent
attack, the Telegraph has been told.
Well-placed sources now believe that the plot to kill Col Skripal may have included a
'black ops' attempt to sow doubt on the veracity of the explosive dossier that claims Donald
Trump received Kremlin backing.
The year before the attempted assassination of Col Skripal, a mysterious post on LinkedIn
suggested his MI6 handler, who is not being named, worked as a "senior analyst" at Orbis
Business Intelligence, the firm that produced the Trump dossier.
...
But a number of sources have told The Telegraph that the LinkedIn profile is false - if it
ever properly existed at all - and that Skripal's MI6 handler never worked for Orbis.
It is now suspected that the LinkedIn profile was created by the GRU, the Russian military
intelligence unit which tried to kill Col Skripal with novichok nerve agent. -
Telegraph
"By creating this link, they are suggesting that MI6 are involved with the dossier or
Skripal or both. It adds to the confusion and acts as a wedge between the White House and
Downing Street. It is exactly the kind of operation the Russians would order to sow confusion,"
said the Telegraph 's "well placed source."
"An internet hyperlink to the LinkedIn page appeared in an obscure blog posting in January
2017 - more than a year before the Salisbury attack - but the actual LinkedIn page itself has
never been visible ," the Telegraph writes.
In other words, The Telegraph wrote an entire story in March of last year based on nothing
more than "an internet hyperlink to the LinkedIn page" without actually having viewed the
profile now blamed on a Russian black op.
But there was another possibility - one that is utterly ludicrous and now disproved - that
was none the less championed by conspiracy theorists. Namely, that the death of Col Skripal
was not ordered by the Kremlin at all - but carried out by British agents to silence the
former Russian intelligence officer.
The reason was simple. Col Skripal - so the theory went - had helped provide information
to Christopher Steele, a former senior MI6 officer, who authored an extraordinary dossier on
Donald Trump, alleging that the soon-to-be president was effectively a puppet of Putin. The
dossier claimed that the Kremlin had been "cultivating, supporting and assisting Trump for at
least five years".
Oddly, however, a British spy named Pablo Miller was claimed by Russian media in 2007 as the MI6 agent
who recruited Skripal in 1995. Miller apparently works (or worked) for Orbis - though it is
unclear whether he is the same person noted in the original Telegraph report.
So - the British Army's head nurse was the first one to provide assistance to the dying
Russians, while Skripal's link to Christopher Steele is now thought to be part of a Russian
plot to discredit the Steele Dossier. Fascinating.
Fascinating??? Too much fantasy in this piece of fiction. The author seems uninterested in
going beyond trying to make it look like a fantasy James Bond. Surely someone can give the
'patient in difficulty' symptoms. Good grief, to categorize this fantasy story cooked up by
British Intel and hard-sell journalists, as NEWS. Is this the drivel we have to expect from
journalism schools?
M eye 6 is complicit in the Steele Dossier on Fake Russian collusion, Trying to cover a
big black eye from a so called British ally to USA that tried to run a coup on a sitting
president...
We always knew Pablo Miller worked for Orbis, Steele's consultancy, and was skripals
handler,
the article brings out the the nurses daughter sad Yulia Skripal was not breathing, was
dead, neither suffered any contact problems, unlike the policeman who was first on the scene
on the old story.
The 'actor based reality,' which has always been a tool for TPTB to use the fair and
balanced press to divide the public at large, utilizes much more than vast corps of
characters, writers, producers and directors as the psyops event coordinators executing
preplanned large scale operations to steer our perception with proven mind control tactics.
But, they're tactics have become so simple to spot by researchers as the templates are
basically similar and the plots of they're fake large scale events have become mind numbingly
ridiculous for any body paying attention to even the smallest amount of detail exposed in
these hoaxed
Wow, (((THEY))) sure LOVE gaslighting us. This mess of an attempt at an article shows how
******* stupid they really think we are. Even their warped version of one alternate theory
fits their ******** narrative. ******* absurd.
Porton Down is 8 miles...10 miles away? .. staff live in Salisbury...numbers of medical
staff deployed at PD and area will be large...Interesting is all.
Stranger and stranger British press is saying that they did CPR on both victims at the
scene of their collapse; being a trained nurse one of the first things they would have done
is to have taken their pulse and other vitals and miraculously managed to do this and not
become contaminated. Methinks something doth stink!
British authorities have refined to a whole new level offering bald faced lies and patent
absurdities with a dignified stiff upper lip. I have it from a highly placed source that
envious American and Israeli official and unofficial liars have been practicing posturing as
dignified and putting glue on their upper lips.
It's all a coincidence. In fact the word coincidence is an exaggeration. Because the
coincidences are happening more and more. Which makes them no longer a coincidence.
The previous alleged first responder was a policeman who became dangerously ill because
the novichok was so potent but strangely, this woman and her daughter suffered no ill
effects. I can only guess that due to her work with the British Army, she and her daughter
had fortunately and coincidentally been innoculated with a novichok antidote.
The house was on lockdown forever. Even if you are a trained nurse, doctor, emt, you are
out in a park with your family. What equipment are you carrying to defeat the effects of a
biological weapon??? And they weren't affected. Simply amazing.
Before any free-trade agreement can be reached with the United States, the Queen must
issue a written apology to President Trump for attempting to overthrow his government.
One week ago, when we discussed why the Fed now finds itself trapped by the slowing economy
on one hand, and the market's response to the Fed's reaction to the slowing economy (namely the
market's subsequent sharp rebound, only the third time since 1938 that we've seen a V-shape
recovery of this magnitude when the market dropped down more than ~10% and spiked +10% in the
subsequent period), we said that the "obvious problem" is that the Fed is cutting because the
economy is indeed entering a recession, even as market have already rebounded by over 10% from
the recent "bear market" low factoring in a the economic response to an easier Fed, effectively
cutting the drop in half expecting the Fed to react precisely to this drop, while ignoring the
potential underlying economic reality (the one confirmed by the bizarrely low neutral rate,
suggesting that the US economy is far weaker than most expect).
Ultimately, what this all boils down to as
Bank of America explained yesterday , is whether the economy is entering a recession, or -
somewhat reflexively - whether the suddenly dovish Fed, trapped by the market, has started a
chain of events that inevitably ends with a recession. The historical record is ambivalent: as
Bloomberg notes, similar to 1998 and 1987, the S&P fell into a bear market last month (from
which it immediately rebounded) following a Fed rate hike. The difference is that in the
previous two periods, the Fed cut rates in response to market crises - the collapse of
Long-Term Capital Management in 1998 and the Black Monday stock crash in 1987 - without the
economy slipping into a recession. In comparison, the meltdown in December occurred without a
similar market event.
And yet, a meltdown did occur, and it has a lot to do with confusing messaging by the Fed,
which did a 180-degree U-Turn when in the span of just two weeks, the Fed chair went from
unexpectedly hawkish during the December FOMC press conference (which unleashed fire and
brimstone in the market), to blissfully dovish when he conceded at the start of January that
the Fed will be "patient" and the balance sheet unwind is not on "autopilot."
But it wasn't just the Fed's messaging in a vacuum that prompted the sharp December drop: it
is also the fact that the Fed and the market continue to co-exist in a world of perilous
reflexivity, a point made - in his typical post-modernist, James Joyceian, Jacque Lacanian
fashion - by Deutsche Bank's credit strategist Aleksandar Kocic, who writes that
"the underlying ambiguities of the market's interpretation of economic conditions are an
example of financial parallax – the apparent disorientation due to displacement caused
by the change in point of view that provides a new line of sight" (or, said much more simply,
the Market reacts to the Fed, and the Fed reacts to the market in circular, co-dependant
fashion).
Yet while there is nothing new in the reflexive nature of the coexistence between the Fed
and market, this process appeared to short-circuit in Q4. So "where is the problem and what are
the sources of misunderstanding" asks Kocic, and answer by taking "the timeline from November
of last year as the onset of the subverted perspective and the beginning of the
self-referential circularity" (as we have said before, Kocic takes a certain delight in using
just a few extra words than is necessary for the attention spans of most traders, even if
liberal majors find a particular delight in his narrative). Anyway, continuing the Kocic
narrative of where the reflexivity between the Fed and market broke down, in the chart below
the Deutsche Bank strategist shows two snapshots of the swaps curve from November and
January.
As we noted repeatedly over the past 4 weeks, while the long end has largely experienced a
parallel shift lower, Kocic correctly points out that "the biggest drama has occurred in the
belly of the curve which has inverted through the five-year horizon", yet where Kocic's view
differs is that according to him, this is not indicative of a risk off trade but is instead "a
radical repricing of the Fed." Meanwhile, according to the DB strategist, the inversion of the
front end is the main source of the reinforcing loop "as it brings in the uncomfortable mode of
what we think is a misidentified alarm and incorrect interpretation of its economic
significance."
To make his point, Kocic looks at the previous episodes of curve flattening during the past
two tightening cycles.
As DB notes, unlike the past two episodes of Fed tightening, when rate hikes were
responsible for bear inversions, the last three months represent a bull inversion. In other
words, "the recent flattening and inversion of some sectors of the curve has been driven by a
decline in long rates that outpaced the decline in short rates."
As others have observed, this departure from history highlights a potential flaw in the
logic behind the connection between inversion and recession, Kocic writes, and explains:
If excessive Fed tightening is the likely trigger of the next recession, then the
underlying logic and causality must go as follows. The Fed continues to hike until it becomes
restrictive and the economy begins to contract which eventually forces the Fed to reverse its
direction. The former causes curve inversion and a tightening of financial conditions through
a decline in the stock market and wider credit spreads together with an economic slowdown.
The Fed then begins to cut rates in order to counter the effect of excessive tightening and
the curve re-steepens.
Simple enough, and also extremely problematic, because as we explained
last weekend , it's not the Fed tightening that is the recession catalyst: it is when the
Fed begins cutting rates that one should be worried as all three prior recessions followed
within 3 months of the first rate cut after a hiking cycle:
... while many analysts will caution that it is the Fed's rate hikes that ultimately
catalyze the next recession and the every Fed tightening ends with a financial "event", the
truth is that there is one step missing from this analysis, and it may come as a surprise to
many that the last three recessions all took place with 3 months of the first rate cut after
a hiking cycle !
If that wasn't bad enough, Kocic notes that if " this were how things work, the recent
market dynamics would be consistent with the US economy already being in a recession" and
explains that "with rates already rallying, the implication is that the Fed deliberately and
mistakenly continued to hike. This is the territory of a serious policy mistake."
In other words, bull inversion and rate hikes would indicate that the Fed was totally
detached from the realities of the market.
Yet after laying out this scenario, one which the market was obsessed with for much of
December, Kocic counters that a closer look at the recent repricing "suggests that this
narrative of a policy mistake may be misleading and market dynamics reveal something very
different from a recessionary market mode" and further claims that what happened fits with the
Fed sticking to the script of market normalization as a priority to wit:
this interpretation runs contrary to the recent response from the Fed, in which they have
shown an unmistakable attention to detail with a thorough understanding of the complexity of
the situation with all the risks associated with the stimulus unwind. The Fed has also gone
to great lengths throughout this normalization process to prepare the markets for its exit
and take care not to generate additional problems along the way. The well-telegraphed unwind
of the balance sheet, which has come under increasing scrutiny over the past month is just
one example of the Fed understanding the potential pitfalls of providing too little
guidance.
Kocic then goes on to further claim that the market reaction is "a clear demonstration that
the Fed is on track with the normalization of the rates market", and thatr "by sticking to its
script, the Fed has forced another leg of normalization. The two aspects of this are shown both
in the decline of the correlations back into negative territory as well as the migration of
volatility to the front end of the curve, both corresponding to the pre-2008 curve
functioning."
Why does Kocic take such a contrarian view, at least relative to the broader market?
Because, as he explains, "if bear steepeners and bull flatteners were to continue to be the
dominant curve modes, monetary policy shocks are at risk of being amplified, and the potential
for a disruptive unanchoring of the back end of the curve, with its hazardous ramifications for
risk assets and credit in particular, is heightened."
This is why normalization requires front-loading monetary policy shocks and focusing on
the front end with the fed funds rate remaining the primary policy tool, while –
despite some calls to the contrary – the balance sheet unwind should remain predictable
and controlled.
Whether Kocic is correct or not we will know shortly, perhaps as soon as March, when the Fed
- which as we discussed previously remains a hostage
to markets - will be pressed to halt its balance sheet reduction, and which would
immediately crush Kocic's theory that the Fed is purposefully normalizing instead of simply
being forced to react to the market's every whim.
In any case - accuracy of the DB strategist notwithstanding - the bigger problem, and this
goes back to our point from last week, is that no matter what the Fed does at this point, its
actions will almost certainly precipitate the very recession it hopes to avoid.
Why? The following chart from SocGen answers that question in grandiose simplicity: because
it is not the curve flattening that is the recession catalyst - it is sharp curve steepening,
whether bull or bear-driven, that precedes the immediate onset of the recession.
And once the steepener trade finally takes off, Kocic's variant perception that " recent
market dynamics would be consistent with the US economy already being in a recession" would be
spot on: at that point, the bond market would finally admit that everything that happened ever
since the Fed though it could normalize has been one massive mistake.... just as Ben Bernanke
predicted admitted in May 2014, when he said that there would be "
no rate normalization during my lifetime ." Tags Business Finance
it is not a problem to raise rate and shrink sheet. they pumped trillons of dollar into
market is the problem. they pumped the biggest bubble in human history. they are evils
Robert Snefjella says:
January 20, 2019 at 4:21 pm GMT 200 Words
@Erebus Going from memory, in Hellyer's book The Money Mafia, his impression was that
Bouey's decision was taken without real political understanding or guidance. Noteworthy was an
attempt in recent years to restore that Bank of Canada fund-emission function via the court
system. The attempt failed. The lawyer representing the group making the effort, Rocco Galati,
indicated that the media in Canada had received pressure not to cover the story. The government
of Canada at the time the court case was initiated was under Harper Conservative rule.
As to how astute Trudeau was, or how much practical influence he had when it came to
national financial matters, I don't know. There was a lot of economic flux at the time
involving the US dollar, oil, high inflation and gold. There was a big jump in Canadian
interest rates around 1974. In any case, the emission of funds directly for productive purpose,
without taxation and borrowing, is a beneficent unacknowledged elephant in the economic
policy-options room.
If there's one thing everyone in today's Washington can agree on, it's that whenever an
official or someone being paid by the government says something truly outrageous or dangerous,
there should be consequences, if only a fleeting moment of media fury.
With one notable exception: Arguing that the US should be quietly working to promote the
violent disintegration and carving up of the largest country on Earth.
Because so much of the discussion around US-Russian affairs is marked by hysteria and
hyperbole, you are forgiven for assuming this is an exaggeration. Unfortunately it isn't.
Published in the Hill under the dispassionate title "Managing
Russia's dissolution," author Janusz Bugajski makes the case that the West should not only
seek to contain "Moscow's imperial ambitions" but to actively seek the dismemberment of Russia
as a whole.
Engagement, criticism and limited sanctions have simply reinforced Kremlin perceptions
that the West is weak and predictable. To curtail Moscow's neo-imperialism a new strategy is
needed, one that nourishes Russia's decline and manages the international consequences of its
dissolution.
Like many contemporary cold warriors, Bugajski toggles back and forth between overhyping
Russia's might and its weaknesses, notably a lack of economic dynamism and a rise in ethnic and
regional fragmentation. But his primary argument is unambiguous: That the West should actively
stoke longstanding regional and ethnic tensions with the ultimate aim of a dissolution of the
Russian Federation, which Bugajski dismisses as an "imperial construct."
The rationale for dissolution should be logically framed: In order to survive, Russia
needs a federal democracy and a robust economy; with no democratization on the horizon and
economic conditions deteriorating, the federal structure will become increasingly
ungovernable...
To manage the process of dissolution and lessen the likelihood of conflict that spills
over state borders, the West needs to establish links with Russia's diverse regions and
promote their peaceful transition toward statehood.
Even more alarming is Bugajski's argument that the goal should not be self-determination for
breakaway Russian territories, but the annexing of these lands to other countries . "Some
regions could join countries such as Finland, Ukraine, China and Japan, from whom Moscow has
forcefully appropriated territories in the past."
It is, needless to say, impossible to imagine anything like this happening without sparking
a series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would
directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear
warheads.
So who is Janusz Bugajski, and who is he speaking for?
The author bio on the Hill's piece identifies him as a senior fellow at the Center for
European Policy Analysis, a Washington, D.C. think-tank. But CEPA is no ordinary talk shop:
Instead of the usual foundations and well-heeled individuals, its financial backers seem to be mostly arms of the US
government, including the Department of State, the Department of Defense, the US Mission to
NATO, the US-government-sponsored National Endowment for Democracy, as well as as veritable
who's who of defense contractors, including Raytheon, Bell Helicopter, BAE Systems, Lockheed
Martin and Textron. Meanwhile, Bugajski chairs the South-Central Europe area studies program at
the Foreign Service Institute of the US Department of State.
To put it in perspective, it is akin to a Russian with deep ties to the Kremlin and
arms-makers arguing that the Kremlin needed to find ways to break up the United States and, if
possible, have these breakaway regions absorbed by Mexico and Canada. (A scenario which alas is
not as far-fetched as it might have been a few years ago; many thousands in California now
openly talk of a "Calexit," and many more in Mexico of a reconquista .)
Meanwhile, it's hard to imagine a quasi-official voice like Bugajski's coming out in favor
of a similar policy vis-a-vis China, which has its own restive regions, and which in
geopolitical terms is no more or less of a threat to the US than Russia. One reason may be that
China would consider an American call for secession by the Tibetans or Uyghurs to be a serious
intrusion into their internal affairs, unlike Russia, which doesn't appear to have noticed or
been ruffled by Bugajski's immodest proposal.
Indeed, just as the real scandal in Washington is what's legal rather than illegal, the real
outrage in this case is that few or none in DC finds Bugajski's virtual declaration of war
notable.
But it is. It is the sort of provocation that international incidents are made of, and if
you are a US taxpayer, it is being made in your name, and it should be among your outrages of
the month.
Putin knows that if he ignores the West and provides strong path for Russia growth,
re-building economy, manufacturing and military; building international relationships - it
will strengthen the country in a horror of it's enemies.
While others panicked over drop in oil prices - Putin was making adjustments to weather
out the storm. While many nations were taking out massive development loans [advised by city,
chase, goldman, etc] - Russia balanced the budget. While US government is in mayhem over
protecting the border [seems like no brainer] - Putin continues with strong central policy.
And the US sanction that crushed so many countries - appears to have limited effect [slowing
down some growth].
This author, Bugajski, [MI5 agent] wrote countless self-promoting books. Russia will never
want to fight a war with NATO [their customers]. Britain and France already lost that war.
Russia is just waiting for EU and NATO to collapse over money disagreement. Because they were
all happy as long as US was paying for all of it. Not anymore. Standby for Collapse of EU and
NATO show coming soon.
The Russian Confederation of Labour (KTR) says that the average life expectancy for men is
actually less than 65-years-old in over 60 regions in Russia. "KTR does not support such
decisions and declares its intention to launch a broad public campaign against their
implementation," the organization said in a statement .
You start off with "Putin is a cuck" which may or may not be a fact but if you actually
read the article it clearly states "President Medvedev" and raising the retirement age
from...wait for it... 60 to 63?? Really??
Most west european countries have a retirment age of around 65 years. In scandinavic
countries they are going to increase to 67. They realized that importing rapefugees is not
going to solve the demographic crisis.
The breakup of the USSR was due to confluence of factors such as rise of neoliberalism,
stagnation of oversentlised USSR economy, emergence of internat communications and personal
computers which weakened official propaganda power, creation of fifth column within the USSR due
to bad timing and execution of Gorbachev's reforms (Presetoyka was essentially the idea of
repeating NEP on a new level), and extremely weak abilities of Gorbachov as a politician, growth
of nationalism (well financed from theWest), degeneration of Bolshevik's elute and emergence of
multiple neoliberal turncoats (Yeltsin, Gaidar, Yakovlev, etc). but dissolution of the USSR
probably case as a surporse.
But after the dissolution CIA-Mossad-MI6 jumped into the dame with the explicit goal to
destruction of Russian economy, asset stripping (Browder probably is connected to MI6), Harvard
mafia probably also was somehow connected to CIA, and disintegration of the country (Chechnya
insurrection was supported by the USA, Britain and their vassals in Persian gulf).
This is an interesting lesson for future reformers: the presence of CIA-Mossad-MI6 on the
world scene changes the result of almost any forceful overthrow of the government, especially if
it was done with the goal of neoliberalization, imposing a huge cost on the population. Ukraine
is one recent example (the standard of living dropped probably 300 or so). Libya is another.
This particular neocon writing in his official capacity of a MIC lobbyist (that is what all
neocons are), so his views are interesting only as an example of a dangerous trend.
Like
many contemporary cold warriors, Bugajski toggles back and forth between overhyping Russia's
might and its weaknesses, notably a lack of economic dynamism and a rise in ethnic and regional
fragmentation. But his primary argument is unambiguous: That the West should actively stoke
longstanding regional and ethnic tensions with the ultimate aim of a dissolution of the Russian
Federation, which Bugajski dismisses as an "imperial construct."
Even more alarming is Bugajski's argument that the goal should not be
self-determination for breakaway Russian territories, but the annexing of these lands to other
countries . "Some regions could join countries such as Finland, Ukraine, China and Japan, from
whom Moscow has forcefully appropriated territories in the past."
It is, needless to say, impossible to imagine anything like this happening without sparking a
series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would
directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear
warheads.
So who is Janusz Bugajski, and who is he speaking for?
The author bio on the Hill's piece identifies him as a senior fellow at the Center for
European Policy Analysis, a Washington, D.C. think-tank. But CEPA is no ordinary talk shop:
Instead of the usual foundations and well-heeled individuals, its financial backers seem to be mostly arms of the US
government, including the Department of State, the Department of Defense, the US Mission to NATO,
the US-government-sponsored National Endowment for Democracy, as well as as veritable who's who
of defense contractors, including Raytheon, Bell Helicopter, BAE Systems, Lockheed Martin and
Textron. Meanwhile, Bugajski chairs the South-Central Europe area studies program at the Foreign
Service Institute of the US Department of State.
To put it in perspective, it is akin to a Russian with deep ties to the Kremlin and
arms-makers arguing that the Kremlin needed to find ways to break up the United States and, if
possible, have these breakaway regions absorbed by Mexico and Canada. (A scenario which alas is
not as far-fetched as it might have been a few years ago; many thousands in California now openly
talk of a "Calexit," and many more in Mexico of a reconquista .)
The breakup of the USSR was planned also. It was followed by the formation of oligarchs, IMF
loans, and asset stripping. The economic advice and help Russia received from the west almost
accomplished the goal of breaking up Russia.
Russia is well aware that war with NATO cannot be avoided in the long run. One only has to
talk to Russians to see that they understand they are in a Cold war that they have to survive.
From their view they did not seek this confrontation. They truly thought they would be embraced
by the West after the fall and a new relationship benefiting both sides could have emerged. So
now Russia has to turn to China and prepare for a future war within a decade with NATO!
Disgusting projection of US imperialism. The elite never forgave Putin for throwing US
Rothschild elites out of Russia so they could no longer plunder Russias extensive wealth under
Yeltsin..
Let's see what happens when neocunts start that hot war, how Americans then feel about
Russia
We truly have dumbfucks in this country who love the thought of other as enemy other than
THEMSELVES. They never ONCE consider that in demonizing another countries leader, they are
demonizing a whole nation of peoples too. I wonder how Americans would feel if constant
demonizing and threats coming their way, with also say regime change in Mexico to provoke
them?
US neocons are psychopaths that care nothing for Americans. What they do to others in regime
change they will do to us. Oh, wait. They already have #9/11
Published in the Hill under the dispassionate title "Managing
Russia's dissolution," author Janusz Bugajski makes the case that the West should not
only seek to contain "Moscow's imperial ambitions" but to actively seek the dismemberment of
Russia as a whole.
If that is the intended goal then wouldn't it be accurate to state that America, or at least
its government, has imperial ambitions?
The rationale for dissolution should be logically framed: In order to survive, Russia
needs a federal democracy and a robust economy; with no democratization on the horizon and
economic conditions deteriorating, the federal structure will become increasingly
ungovernable...
Russia already tried "democracy" and the end result spelled disaster for their country.
Minorities were put on a pedestal while their economy was in shambles, all the while the
oligarchs, who were mostly Jewish, made a fortune plundering their natural resources. Sound
familiar?
Some regions could join countries such as Finland, Ukraine, China and Japan, from whom
Moscow has forcefully appropriated territories in the past."
The hypocrisy in this statement is breathless. Is America going to return Alaska to Russia?
Allow Hawaii to once again be an autonomous entity? Cease the illegal occupation of countries
throughout the Middle East? Remove their Neo-Nazi stooges from Ukraine?
It is, needless to say, impossible to imagine anything like this happening without
sparking a series of conflicts that could mirror the Yugoslav Wars. Except in this version
the US would directly culpable in the ignition of the hostilities, and in range of 6,800
Serbian nuclear warheads.
The idea seems to be to stoke regional tensions in order to provoke Russia and start a
conflict where the surrounding countries are put on the front lines while being provided with
logistics from the outside, meaning the US. Washington could then play up the plausible
deniability angle, even while technology from Lockheed Martin, Raytheon and other Western
contractors is primarily being used against the Russians.
Russia is not a direct threat to Western nations, only to their (((governments))), because
during any attempted implementation of a JWO (as in the EU for example), Russia will serve as a
reminder to all Western peoples - especially white people - as to what their nations once were:
independent, sovereign and self-determined. Russia prevented ISISrael from taking over Syria,
thwarted their Oded Yinon plan and threw out their oligarchs, so World Judaism is using America
as their bludgeon against the Russian Federation while preventing us from forming an
alliance.
74 years after Nazi Germany miscalculated Russian resolve some idiot dreams of carving
Russia up like it's a Thanksgiving turkey and some people actually take him seriously. Yeah,
good luck with that.
6 hours ago Bug-aj-ski - neocon shrill writing for and paid by the MIC it looks like
from the sponsors of this think tank
"Cultivating new sources of competitive advantage for U.S. strategy."
no list of sponsors tho I can see from the website - real MIC platform it sounds like from the
article
6 hours ago Yep, it's a Zbigniew Brzezinski memorial. The money seems to come mostly from the
MIC and the usual Cold War think tanks, like the Harry and Lynde Bradley Foundation. 5 hours ago
These necons need to remember that chess is the national passtime of Russians, while making
mudpies is the what they do in the West. These "think-tanks" are very childish. 3 hours ago 9
hours ago here's where some of it started/got turbocharged:
https://www.lrb.co.uk/v41/n02/seymour-m-hersh/the-vice-presidents-men
LA_Goldbug 10 hours ago The only way I can understand this twat is to think that he is just
earning his shekels. He knows what the Party Line is in DC requires and is writing accordingly. I
just checked a bit of his BS and this one is definitely written for the uninformed or deeply
indoctrinated Western sheep.
"Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a
corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the
discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia. With
Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to take
stock of Ukraine's achievements since those fateful days in Kyiv's Independence Square."
You need to be brain dead to think it was peaceful !!!!
"... Mispricing risk is the new normal, apparently. The assumption is that the stock market is now in hand and will be fine -- unless something startles it. ..."
We will be getting more individual company financial results now that we are in the
reporting period again. These may help to sway the markets in some direction, or not.
Mispricing risk is the new normal, apparently. The assumption is that the stock market
is now in hand and will be fine -- unless something startles it.
Stocks and Precious Metals Charts -
Who Could See It
Coming?
- Dead Reckoning the Minsky Moment
"
In particular, over a protracted period of good times, capitalist economies tend to
move from a financial structure dominated by hedge finance units to a structure in
which there is large weight to units engaged in speculative and Ponzi finance."
Hyman Minsky,
The Financial Instability Hypothesis
"Twenty-five years ago, when most economists were extolling the virtues of financial
deregulation and innovation, a maverick named Hyman P. Minsky maintained a more
negative view of Wall Street; in fact, he noted that bankers, traders, and other
financiers periodically played the role of arsonists, setting the entire economy
ablaze. Wall Street encouraged businesses and individuals to take on too much risk, he
believed, generating ruinous boom-and-bust cycles. The only way to break this pattern
was for the government to step in and regulate the moneymen.
Many of Minsky's colleagues regarded his 'financial-instability hypothesis,' which he
first developed in the nineteen-sixties, as radical, if not crackpot. Today, with the
subprime crisis seemingly on the verge of metamorphosing into a recession, references
to it have become commonplace on financial web sites and in the reports of Wall Street
analysts. Minsky's hypothesis is well worth revisiting."
John Cassidy,
The Minsky Moment
, The New Yorker, 4 February 2008.
"The period of financial distress is a gradual decline after the peak of a speculative
bubble that precedes the final and massive panic and crash, driven by the insiders
having exited but the sucker outsiders hanging on hoping for a revival, but finally
giving up in the final collapse."
Charles Kindelberger,
Manias, Panics, and Crashes: A History of Financial Crises
"The sense of responsibility in the financial community for the community as a whole is
not small. It is nearly nil. Perhaps this is inherent. In a community where the
primary concern is making money, one of the necessary rules is to live and let live.
To speak out against madness may be to ruin those who have succumbed to it. So the
wise in Wall Street [and in the professional and credentialed class] are nearly always
silent."
John Kenneth Galbraith,
The Great Crash of 1929
"People who lost jobs -- and those are in the millions in 2008, 2009, and 2010 -- have
now gotten jobs, that's true, but the jobs they've gotten have lower wages, have less
security and fewer benefits than the ones they lost, which means they can't spend money
like we might have hoped they would if they had got the kinds of jobs they lost, but
they didn't...
The big tax cut last December, 2017, gave an awful lot of money to the richest
Americans and to big corporations. They had no incentive to plow that into their
businesses, because Americans can't buy any more than they already do. They're up to
their necks in debt and all the rest.
So what they did was to take the money they saved from taxes and speculate in the stock
market, driving up the shares and so forth. Naive people thought that was a sign of
economic health. It wasn't. It was money bidding up the price of stock until the
underlying economy was so far out of whack with the stock market that now everybody
realizes that and there's a rush to get out and boom, the thing goes down."
Bubbles most often resolve their imbalances irresponsibly and jarringly, with a correction
that is sharp and destructive. It is often triggered by some seemingly trivial event,
especially if its predatory mispricing of risk has been allowed to fester for an extended
period of time.. How can this be?
Credit cycles explain bubbles in modern finance, but the elite protect themselves and
their banks from the effects. Hence, only the middle and working class loses. And this has
been the case for many years now. Hence the growing unrest abroad, and the decisions by
the electorate at home that seem to puzzle and provoke the very comfortable 'credentialed'
class.
The reason for this is quite easy to understand. Those who benefit the most from the
bubble both actively and passively help sustain it. They are reluctant to surrender any
potion of their enormous advantage and personal gains, even if it might be better for them
in the long term.
They do not consider the damage that may be done to the underlying social fabric that
supports and protects their wealth. Contrary to all of the familiar assumptions, they are
not acting rationally or prudently, even for themselves. Their focus is short term and
short-sighted. They are drunk on their own success.
The interpreters and creators of the prevailing narrative are themselves beneficiaries of
the bubble economy, and will go to great lengths to misdirect the public discussion from
any root causes, and often from its very existence. They will distract the public with
inflammatory issues, economic fear, stage-managed spectacles, and manufactured
complexity. And finally, in the extremes of their shamelessness, they will seek to blame
the victims for their lack of sophistication and the government for its efforts to
restrain their predatory frauds.
This enables the cycle of boom and bust to repeat and worsen beyond all reasonable
expectations.
The lesson from history is that a system based on the ascendant greed of powerful insiders
is rarely rational and self-correcting, and is often spectacularly self-destructive. And
those with the most power, in their wonderful self-delusion, simply do not care until it
is too late. They are blinded by the moment, in their competition with each other, and
the insatiable nature of greed itself. 'Enough' is not in their reckoning.
To this end governments are fashioned, and people organize themselves from the damage that
can be done to society as a whole by a few. Unfortunately people forget, and it seems
that at least once every generation or so the madness slips loose its restraints, and this
sad lesson from history repeats.
And so once again the world must face its rendezvous with destiny.
The box scores for today's market action are shown in the graphs below.
Apparently rough weather is heading towards the east coast. The local grocery store was a
nuthouse even in the early afternoon. I am making some chicken soup for myself and Dolly.
Even if I could coax her out of her fuzzy blanket and pillows, Dolly would offer limited
assistance. She is clearly just in it for the chicken.
Declassified documents show security assurances against NATO expansion to Soviet leaders
from Baker, Bush, Genscher, Kohl, Gates, Mitterrand, Thatcher, Hurd, Major, and Woerner
U.S. Secretary of State James Baker's famous "not one inch eastward" assurance about NATO
expansion in his meeting with Soviet leader Mikhail Gorbachev on February 9, 1990, was part of
a cascade of assurances about Soviet security given by Western leaders to Gorbachev and other
Soviet officials throughout the process of German unification in 1990 and on into 1991 ,
according to declassified U.S., Soviet, German, British and French documents posted today by
the National Security Archive at George Washington University ( http://nsarchive.gwu.edu ).
The documents show that multiple national leaders were considering and rejecting Central and
Eastern European membership in NATO as of early 1990 and through 1991 , that discussions of
NATO in the context of German unification negotiations in 1990 were not at all narrowly limited
to the status of East German territory, and that subsequent Soviet and Russian complaints
about being misled about NATO expansion were founded in written contemporaneous memcons and
telcons at the highest levels.
The documents reinforce former CIA Director Robert Gates's criticism of "pressing ahead with
expansion of NATO eastward [in the 1990s], when Gorbachev and others were led to believe that
wouldn't happen. "
[1] The key phrase, buttressed by the documents, is "led to believe."
President George H.W. Bush had assured Gorbachev during the Malta summit in December 1989
that the U.S. would not take advantage ("I have not jumped up and down on the Berlin Wall") of
the revolutions in Eastern Europe to harm Soviet interests; but neither Bush nor Gorbachev at
that point (or for that matter, West German Chancellor Helmut Kohl) expected so soon the
collapse of East Germany or the speed of German unification.
[2]
The first concrete assurances by Western leaders on NATO began on January 31, 1990 , when
West German Foreign Minister Hans-Dietrich Genscher opened the bidding with a major public
speech at Tutzing, in Bavaria, on German unification. The U.S. Embassy in Bonn (see Document 1)
informed Washington that Genscher made clear "that the changes in Eastern Europe and the German
unification process must not lead to an 'impairment of Soviet security interests.' Therefore,
NATO should rule out an 'expansion of its territory towards the east , i.e. moving it closer to
the Soviet borders.'" The Bonn cable also noted Genscher's proposal to leave the East German
territory out of NATO military structures even in a unified Germany in NATO.
[3]
https://nsarchive.gwu.edu/briefing-book/russia-programs/2017-12-12/nato-expansion-what-gorbachev-heard-western-leaders-early
falconflight 13 hours ago It was a horrible betrayal of a promise that should have been greatly
enhanced by promoting free enterprise concepts, and personal freedoms propaganda (Not lies),
and even economic assistance where reasonable. A historical opportunity lost. Those powerful
Kremlinologists couldn't pivot, it was easier to continue to treat Russia as an existential
adversary and in certain circumstances, purposely attempt to humiliate them, such as in
Serbia.
It takes two to tango. The defense contractors can jaw jaw and spread around loads of
cash but without someone in power having the same views war doesn't happen. You don't buy
politicians they willingly sell you their services at top dollar if the cause is right.
Too
many people with big ego's and tiny dicks proving their manhood by sending in the military to
kill and maiming or piling on sanctions to slowly starve any country that stands in the way of
the one indispensable nation on the planet.
Politicians and their sanctions are like the fabled
neutron bomb. Very little physical damage but huge death and suffering.
Iraq is a perfect
example. Sanctions killed far more than than bombs and bullets.
DEDA CVETKO 13 hours ago
Is The Violent Dismemberment Of Russia Official US Policy?
Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a
corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the
discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia.
With Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to
take stock of Ukraine's achievements since those fateful days in Kyiv's Independence
Square."
Talk about Orwellian double speak. Only Russiagaters would eat that **** up in their stupidity
.
pparalegal 10 hours ago (Edited)
Oligarchs, corporations and want to be psychopathic rulers
East and West run the political/ think tank know-it-all class. All profit by it. Governments
start wars, not people.
I am still waiting for an explanation of how the mythical beast New Russia will own the USA
and what they will do with it after that. If we don't bomb the s**t out of some third country
because we can. I am much more concerned about the in house mad cows we have elected to boss the
American public and take the gold out of my teeth for the greater good..
Helg Saracen 10 hours
ago (Edited)
I'm just curious. How many real estate over the past 15 years has been bought by the
Chinese in New York, Chicago and California? How many brands, businesses were bought by the
Chinese from the Americans? How many were "borrowed" technology? And how many Russians bought
(rich Jews from Russia cannot be taken into account, they came to their relatives, well, they
bought a little of everything)? :( 30 years ago, the USSR was communist, and the US was
capitalist, now Russia has become capitalist, and the USA (I don't even know how to say) has
become an elite club for financial bandits manipulating sheep under the name "American Nation".
Mantis964 6 hours ago
and the USA (I don't even know how to say) has become an elite club for
financial bandits manipulating sheep under the name "American Nation".
Washington Post Forgets to Mention, Scott Walker Misled Fifth Graders About Taxes
By Dean Baker
The Washington Post had an article * about how Republicans and right-wingers have become
obsessed with trying to attack Alexandria Ocasio-Cortez, the newly elected representative
from Brooklyn. At one point it refers to former Wisconsin governor Scott Walker's attack on
Ocasio-Cortez's position advocating a high marginal tax rate on high income individuals.
"Former Wisconsin governor Scott Walker, a Republican who was defeated in November, on
Tuesday mocked Ocasio-Cortez for her tax proposal and suggested it was an elementary-school
understanding of the issue. 'Even 5th graders get it,' he tweeted."
While the piece noted part of Ocasio-Cortez's response, that rich people are the one's
with the money, it left out the more important part, Walker misled the fifth graders he
refers to in his tweet. In his tweet, Walker confuses a marginal tax rate with an average tax
rate
"Explaining tax rates before Reagan to 5th graders: 'Imagine if you did chores for your
grandma and she gave you $10. When you got home, your parents took $7 from you.' The students
said: 'That's not fair!' Even 5th graders get it."
Ocasio-Cortez correctly pointed out in her reply that the $10 the students earned for
doing chores for their grandma would not be taxed because the 70 percent tax rate she
proposes would only apply to incomes above $10 million.
"Explaining marginal taxes to a far-right former Governor:
"Imagine if you did chores for abuela & she gave you $10. When you got home, you got
to keep it, because it's only $10.
"Then we taxed the billionaire in town because he's making tons of money underpaying the
townspeople."
Ocasio-Cortez is right on this point and Walker is wrong. He either does not understand
how our income tax system works or is deliberately lying to advance his agenda. Either way,
the Post should have pointed out that Walker was wrong.
Many people are confused about the concept of a marginal tax rate (the higher tax rate
only appears to the income above a cutoff). Opponents of high marginal taxes on the rich try
to take advantage of this confusion in the way Scott Walker did with his class of fifth
graders. It is the media's responsibility to try to inform people about how the tax system
works and to expose politicians who misrepresent the issue.
That's funny in a sad sort of way. Dean has his hands full. There is no explaining the
stupidity of politicians, media, and ordinary people in the US these days.
100% tax, no economy, so no revenue.
0% tax, no revenue.
So, maximum revenue is somewhere between those.. and the 70% top rate is clearly above
that.. so we have to lower the top rate.
Let's unwrap the lies.
1) At 100% top rate, there is no economy.
WRONG! Ignores brackets, marginal rates, deductions, effective rates... Even at 90% top rate,
the rich were averaging 40% effective.
2) The goal of taxation is maximum revenue. NO!!! The tax code should be viewed as a tool
to keep the right amount of money, actively circulating in the economy. As such, is not only
about getting back out the money the government adds, but also about limiting how much the
rich take out.
3) Even if we assumed there is some taxation rate that hurts the economy, there was no
evidence presented to say we were above that point.
OF course, it is point #2 (limiting how much money the rich take from the economy) that the
Laffer Curve was created to destroy. And destroy it did, which is why we've been going into
debt at 3x the sustainable rate.
I would add that there is plenty of historical evidence ("90% destroys all incentives!"
"70% destroys all incentives!"..."39.5% destroys...") to conclude that the plutocrats believe
that all taxation is theft.
People on the left need to realize that high top rates are NOT to take money from the rich.
They will spend or invest in ways that lets them avoid taxes.
High top rates are needed to get the rich to spend and capital invest, to reverse the
structural imbalances.
That spending and investing creates demand, jobs, wages, lifting the poor into the middle
class.
The extra revenue comes from that growth in the middle class as the poor go from 0%
effective rate to 10-15% effective rate.
Agree - but it also changes the incentives for corporations and CEOs. By taxing away huge
windfalls for CEOs it allows corporations to set a max wage around 15-20M. This means instead
of the 700M to 1B salaries of big corps going to one guy, they pay their mid managers more
and their line staff more. It means they invest more in R&D. I agree with you - just an
supporting argument.
Does William Cohan's New York Times Tirade Against Low Interest Rates Make Any Sense?
By Dean Baker
It doesn't as far as I can tell. Cohan has been on a rant * for years about how high risk
corporate bonds are going to default in large numbers and then ... something. It's not clear
why most of us should care if some greedy investors get burned as a result of not properly
evaluating the risk of corporate bonds. No, there is not a plausible story of a chain of
defaults leading to a collapse of the financial system.
But even the basic proposition is largely incoherent. Cohan is upset that the Federal
Reserve has maintained relatively low, by historical standards,interest rates through the
recovery. He seems to want the Fed to raise interest rates. But then he tells readers:
"After the fifth straight quarterly rate increase, Mr. Trump, worried that the hikes might
slow growth or even tip the economy into recession, complained that Mr. Powell would 'turn me
into Hoover.' On January 3, the president of the Federal Reserve Bank of Dallas said the Fed
should assess the economic outlook before raising short-term interest rates again, a signal
that the Fed has hit pause on the rate hikes. Even Mr. Powell has signaled he may be turning
more cautious."
It's not clear whether Cohan is disagreeing with the assessment of the impact of higher
interest rates, not only by Donald Trump, but also the president of the Dallas Fed, Jerome
Powell, and dozens of other economists.
Higher interest rates will slow growth and keep people from getting jobs. The people who
would be excluded from jobs are disproportionately African American, Hispanic, and other
disadvantaged groups in the labor market. Higher unemployment will also reduce the bargaining
power of tens of millions of workers who are currently in a situation to secure real wage
increases for the first time since the recession in 2001.
If Cohan had some story of how bad things would happen to the economy if the Fed doesn't
raise rates then perhaps it would be worth the harm done by raising rates, but investors
losing money on corporate bonds doesn't fit the bill.
Look at financial fraud and smoke and mirrors in the current USA "casino capitalism" as
another example of the same. People do believe the insane valuations of tech firms like Apple,
Facebook, Google and Amazon despite dot-com bubble. A lot of people put hard earned money in
stock of those companies in wane hope to get out before the bubble pops.
"war is a racket" as the saying goes. it's usually less about actual capability than it is
keeping all the usual suspects latched firmly on the "military industrial" teat. it's
basically the world's largest welfare program disguised as "national defense" and - coupled
with financial fraud/smoke and mirrors - what props up the sad remnants of the US. unless
people believe the insane overvaluation of tech firms like facebook and amazon for another
generation.
it is also - like you and others have mentioned - an offensive system allowing for
first-strike capability and not feasible for many reasons (not the least of which is the
sheer amount of "space junk" floating around in orbit.) all it takes is one
russian/chinese/belgian/? missile getting through anyway...unless these idiots still agree
with bush sr's idea of "acceptable losses of entire cities".
Today I participated in a nice web-based program started by the Central Bank of Russia (it
will be posted soon). An economist is being interviewed by another, and then the one who has
been interviewed becomes in his/her turn the interviewer of yet a third one. My friend Shlomo
Weber, the head of the New School of Economics interviewed me, and then I interviewed
Professor Natalya Zubarevich, from the Lomonosov Moscow State University and a noted scholar
of Russian regional economics.
Just a couple of days ago Natalia gave a very well-received talk at the Gaidar Forum in
Moscow on (what one might call) "unhealthy convergence" of Russian regions. In fact, Natalia
shows that most recently regional per capita GDPs have started a mild convergence, but that
this is due first to low growth rate of most of them and the economy as a whole, and to the
redistribution mechanism (mostly of the oil rent) between the regions. A healthy convergence,
Natalia says, would be the one where economic activity, and especially small and medium size
private businesses, were much more equally distributed across some ninety subjects of the
Russian Federation. She also had very interesting insights into the excessive
"verticalization" of economic power and decision-making in Russia, and the economic growth of
Moscow (much faster than of any other part of Russia) driven by centralization of that power,
and concentration of large state-owned or state-influenced enterprises as well as bureaucracy
in Moscow.
What most attracted my attention during Natalia's presentation at the Gaidar Forum was her
description of the current period of low growth rates in Russia as zastoi, or stagnation.
Now, zastoi has a very special political meaning in Russian because it was a disparaging term
used in the Gorbachev era, and by Gorbachev himself, to define the Brezhnevite period of
declining growth rates, lack of development perspectives, unchanging bureaucracy, and general
demoralization and malaise.
But I asked Natalia the following question. Looking over the past 150 years of Russian
history (and I think it is hard to go further back), were not really the best periods for
ordinary people exactly the periods of zastoi: incomes rose by little for sure, but the state
repression was weak, there were no wars, and probably if you look at violent deaths per
capita per year, the lowest number of people died precisely during the periods of zastoi. So
perhaps that zastoi is not so bad.
Natalia said, "I know I lived through the Brezhnevite period. Many people were
demoralized; but I used it to study. I never read so many books and learned so much as then
-- you could do whatever you wanted because your actual job really did not matter much."
(Even art, as I saw in the Tretyakovska Gallery, even if some of these paintings were never
exhibited in the official museums, seems to have done well during the Brezhnevite zastoi. And
as the recent film, which I have not seen, but read the reviews, Leto, appears to indirectly
argue as well.)
The best growth periods, as Natalia said, and as is generally accepted by economic
historians were the 1950s up to about 1963-65, and then the period of the two first Putin's
terms. In both cases, the growth spurs came as a ratchet effect to the previous set of
disasters: in the Khrushchev period, to the apocalypse of the Second World War, in the Putin
period, as a reaction to the Great Depression under Yeltsin during the early transition.
So this then made us think a bit back into the past (say, going back to 1905) and put
forward the following hypothesis: that Russian longer-term economic growth is cyclical. The
cycle has three components. First a period of utter turbulence, disorder, war, and huge loss
of income (and in many cases of life as well), followed by a decade or so of efflorescence,
recovery and growth, and finally by the period of "calcification" of whatever (or whoever)
that worked in that second period -- thus producing the zastoi or stagnation.
I do not know if this is something specific to the Russian economic history. It made me
think of Naipaul's observation on successful and unsuccessful countries. The history of the
former consists of a number of challenges and setbacks indeed, but certain things are solved
forever, and then new challenges appear. Take the United States: the Indian challenge and
then the independence from Britain were not easy to overcome/acquire, but eventually, they
were and they never came back; then the Civil War and the Emancipation; then the Great
Society etc. But unsuccessful countries, according to Naipaul (and he had, I think, Argentina
in mind) always stay within the circular history. The same or similar events keep on
repeating themselves forever without any upward trend -- and no single challenge is forever
overcome. In each following cycle everything simply repeats itself.
The challenges for Russia today is, I think, to break this cycle.
Russia's PL-19 Nudol, a system U.S. military
intelligence assesses will be focused primarily on anti-satellite missions, was successfully
tested twice in 2018. The weapon, which was fired from a mobile launcher, was last tested on
Dec. 23 and marked the seventh overall test of the system, according to one of the people who
spoke on the condition of anonymity.
The Russian anti-satellite weapon is expected to target communication and imagery satellites
in low Earth orbit, according to the other person, who also spoke on condition of anonymity.
For reference, the International Space Station and the Hubble Space Telescope travel in low
Earth orbit.
While anti-satellite missiles are by no means new, the latest revelation comes less than a
year after Putin touted his nation's growing military arsenal.
"I want to tell all those who have fueled the arms race over the last 15 years, sought to
win unilateral advantages over Russia, introduced unlawful sanctions aimed to contain our
country's development: You have failed to contain Russia," Putin said during a national address
in March.
A recently unclassified report from the National Air and Space Intelligence Center, or
NASIC, explained how the U.S. advantage above the Earth's atmosphere is eroding to "an emergent
China and a resurgent Russia."
The NASIC report said there number of foreign intelligence and imaging satellites "has
tripled" to 300 in orbit in the last two decades. The U.S. itself has 353 of its own space
assets in orbit for those purposes. In response, military superpowers have poured funding into
researching and developing anti-satellite weapons.
Missiles are the most high-profile, physical manifestation of anti-satellite weapons. Frank
Slazer, the vice president of space systems at the Aerospace Industries Association, told CNBC
about how those missiles may be physically effective, but are likely not the "first line of
approach on this."
"You'd much rather jam the satellite, blind it [with a laser], or take over its control
systems with a cyberattack," Slazer said. "Kinetic impacts could cause problems for other
nations, besides the one you are attacking, and possibly for your own system's for many years
afterwards."
Both Slazer and the NASIC report pointed to the example of China's anti-satellite test in
2007. China fired an anti-satellite missile at one of its own, discarded weather satellites.
The test was successful, but the satellite shattered into thousands of pieces, which continue
to zip around in an orbital cloud of deadly debris.
"A huge percentage of the debris in low earth orbit is still attributable to that one test,"
Slazer said.
As far as the U.S. military's ability to defend against anti-satellite weapons, the assets
and capabilities in orbit "are the same as they have been for awhile," Tommy Sanford, director
of the Commercial Spaceflight Federation, told CNBC.
Sanford contends that there has not been much in the way of progress when it comes to
defending U.S. space-based assets. Sanford gave the example of using networks of smaller and
cheaper satellites, like cubesats and nanosats, to offer "effective platforms to augment and
support missions carried out by the DoD's larger exquisite satellites."
"The idea behind a distributed architecture for space support is – instead of having
one exquisite target – you'd have a system which could presumably survive some loss of
its elements and still be able to provide function," Slazer said.
First, a quick précis of what is under discussion. The Obama stimulus package was
less than half as big as it needed to be, meaning unemployment was at 10 percent in November
2010, sending Democrats to a massive defeat in the midterms. Obama's foreclosure policy was a
monumental catastrophe which crushed the wealth of middle-class homeowners -- particularly
African-American ones -- to save the banks from their own fraudulent schemes. His corporate
crime policy amounted to a near-halt of prosecutions of top white-collar crime, again largely
to protect the banks.
Obama's health-care reform, while a step forward in some ways, was poorly designed and
failed to stop skyrocketing cost growth. His climate policy was timid and inexcusably slow --
while at the same time he enabled enormous growth of U.S. oil and gas drilling. He also made
excuses for torture and largely embraced the Bush security apparatus -- even extending it in
places, like dragnet surveillance and assassinating American citizens.
Obama apologists typically deal with these problems in one of three ways. One strategy is to
ignore them in favor of his positive record, which to be fair is pretty substantial. Jonathan
Chait points to the stimulus, some moderate corporate regulation (Dodd Frank), and modest tax
hikes on the rich as evidence he is basically just like FDR. Another strategy is slanted
arithmetic: Michael Grunwald says the stimulus was as big as the New Deal in inflation-adjusted
dollars, which is true but leaves out overall economic size, which is far more telling since
the point of that spending was to restore full employment at the time it was passed. The
Recovery Act spending was 5.7 percent of 2008 output, while the New Deal was 40 percent of 1929
output. A final strategy is just to point at Obama's popularity among Democrats (95 percent
approval) as speaking for itself, as former administration staffer Jon Favreau does here.
I would guess that of the three, this final strategy will be the one that actually prevents
any very searching debate over Obama's failures. Bringing that topic up online always creates
an instant snarling fight between critics and the vastly more numerous legions of die-hard
Obama partisans. For a candidate to do it would distract from their upcoming campaign and
likely polarize Democratic loyalists against whatever a critic was saying, regardless of
content. Even Bernie Sanders has become hesitant to obliquely criticize the Democratic Party as
such, because of the instant backlash from Obama fans.
However, that's not the end of the story. The very terrain of political and policy debate
among Democrats in 2019 is a tacit admission that the Obama presidency was a wrong turn to a
great degree. Instead of building on the clearly lousy ObamaCare exchange model, most
presidential candidates so far have endorsed Medicare-for-all, or at least the idea of
expanding Medicare and Medicaid. Elizabeth Warren wants to give workers 40 percent of corporate
board seats -- which is hugely more radical than anything Obama ever did or proposed. Kirsten
Gillibrand supports universal paid leave and postal banking, instead of Medicare and Social
Security cuts to reduce the deficit.
Cory Booker is talking about a quasi-social wealth fund for children, instead of tax cuts
for companies who hire domestically. Kamala Harris is proposing big income boosts for the
working and middle class. Even Joe Biden is considering free college.
The turn away from Obama-style policy can also be seen in what gets attention now. The new
hotness in tax policy is Alexandria Ocasio-Cortez's 70 percent top marginal tax rate -- over 30
percentage points above its highest rate during the Obama years. Instead of a disastrous "all
of the above" energy policy, Democrats are debating how to slash domestic oil and gas
production with a Green New Deal.
Politically, most Democrats have quietly abandoned Obama's asinine notion that America is
crying out for a return to bipartisanship -- in favor of the clearly correct view that
defeating Republicans is what matters. Even the Democratic rank and file have ditched their
traditional attachment to compromise, apparently radicalized by the ongoing disaster of the
Trump presidency.
So while nobody is likely to want to hash out Obama's indefensible handouts to bankers or
drill-baby-drill energy policy over the next two years, the political debate will still proceed
as if everyone agrees they were a bad idea. Because they were.
Three Bernie Sanders Bills to Arrest the Highway Robbery in the Prescription Drug
Market
Allowing foreign imports, authorizing Medicare bargaining, or setting prices at what other
nations pay -- all good options
By DEAN BAKER
The prescription drug market in the United States is an incredible mess. From an economic
standpoint, everything is wrong. Drugs that would sell for a few hundred dollars in a free
market often sell for tens or even hundreds of thousands of dollars because we give their
manufacturers patent monopolies. This leads to the sort of distortions and inefficiency that
would be expected from tariffs as high as many thousands percent.
From a heath perspective the situation is no better. The huge markups give drug companies
enormous incentive to misrepresent the safety and effectiveness of their drugs and to push
them for uses where they may not be appropriate. This is a big part of the story of the
opioid epidemic.
Cumulatively, it is a huge deal in both economics and health. We spent more than $430
billion (2.2 percent of GDP) on prescription drugs last year. These drugs likely would have
cost less than $80 billion in a free market. The difference of $350 billion is almost five
times the annual federal budget for food stamps. This is real money.
This is the backdrop for three bills proposed last week by Senator Bernie Sanders, along
with Representatives Elijah Cummings and Ro Khanna, to address the high and rapidly rising
cost of prescription drugs. The three measures provide alternative paths for reducing drug
prices.
The first one, "The Prescription Drug Price Relief Act," would end the patent monopoly for
any drug that sold for a price exceeding the median price in five other major countries:
Canada, the United Kingdom, France, Germany, and Japan. This would allow large savings since
drug prices in these countries are roughly half as much as in the United States. Drug
companies would have a choice of either lowering their prices or losing their patent
monopoly.
In the latter case, the competition is likely to push the price well below the levels in
the five countries. While these nations do regulate drug prices, patent monopolies still let
the companies charge a price that is far higher than the price that would exist in a
competitive market with generic competition.
The second bill is "The Medicare Drug Price Negotiation Act." This bill would allow
Medicare to negotiate collectively for the drugs purchased through Medicare prescription drug
insurance. Since this program spends roughly $100 billion annually on drugs, it should have
serious bargaining power.
Anyone designing a rational drug insurance program would have required negotiation when
the program was created, but rational design was not necessarily the top priority at the time
this program was enacted.
Anyone designing a rational drug insurance program would have required negotiation when
the program was created, but rational design was not necessarily the top priority at the time
this program was enacted. Representative Billy Tauzin, who headed the Energy and Commerce
Committee, which structured the Medicare prescription drug legislation, resigned immediately
after the bill was signed into law to become head of the pharmaceutical industry's trade
association.
The third bill, "The Affordable and Safe Prescription Drug Importation Act," is also an
effort to take advantage of the fact that drugs are so much cheaper in other countries than
in the United States. This bill would allow people to freely import drugs from other wealthy
countries that have safety standards that are comparable to those in the United States.
This bill both highlights the sharp differences in prices between the United States and
other countries and calls out one of the big lies used to justify these differences. Allies
of the drug industry often claim that we cannot count on getting safe drugs from other
countries, implying that countries like Canada and Germany do not protect their populations
from unsafe drugs.
This is, of course, absurd. The standards in these countries are every bit as high as in
the United States. And, if we think the quality of imported drugs is a problem, we all should
already be very worried because many of the drugs and ingredients in drugs sold in the United
States are already imported, largely from China. So the idea that we can't be assured of the
safety of imported drugs is simply an industry talking point, not a real concern.
Which of these paths for reducing drug costs is best? Importation is probably the most
far-reaching, since it should quickly bring our prices down to the level of other wealthy
countries. As a practical matter, however, progressives should back anything that moves the
debate forward.
We really need to turn the industry on its head, paying for research upfront and then
having drugs sold in a free market, like paper plates and shovels. It is absurd to pay for
research that has already been done, at the point when people are suffering from serious
conditions jeopardizing their health or their life.
No one thinks it makes sense to pay firefighters based on the value of their work when
they come to our burning house with our families inside, yet this is essentially how we pay
for drug research under the patent monopoly system. In fact, the story is even worse with
drugs, since typically we have a third party payer (either an insurance company or the
government) who we are trying to get pick up most of the tab.
These bills would not fully solve the problem, but each would be a big step in the right
direction. Sanders, Cummings, and Khanna have done a great service in pushing them
forward.
"No one thinks it makes sense to pay firefighters based on the value of their work ..."
We value fire fighters as worthless, by not paying most fire fighters in the US.
After all, requiring the people saving your life to be paid kills jobs, so we end up with
unpaid life savvers.
We should appply the same principle to people providing life saving food, the people
building the roads needed to deliver life savings, the people making the vehicles used by
those providing life saving services.
In fact, no one should be paid to work! Thats free lunch economics!
Sarcastic, yes.
Dean Baker meantioned nothing about costs, which are always labor costs.
Look, Keynes argued that when there were unemployed workers, and capital is scarce,
government should tax and spend to pay workers to build capital.
For drugs, paying unemployed researchers to build capital, eg, life saving drugs, then
taxing the drugs produced to repay the cost of developing the drugs, with so many new drugs
developed, the private capital in drug factories, etc will produce so many drugs that drug
prices fall to total labor costs per unit, plus the drug tax.
We know there are unemployed drugresearchers because NIH always runs out of money to pay
all thre recent collage grads seeking grants to fund their hoped for job as a researcher.
The stock market has staged a rebound in January, but Morgan Stanley sees a number of
bearish indicators. Indeed, they estimate that odds of the U.S. economy slipping into a
recession are now the highest since the financial crisis of 2008, and they project that the
S&P 500 Index (SPX) ultimately will settle back to a value of 2,400 in 2019, revisiting the
recent lows seen in December and more than 18% below the record high set in September 2018. "We
expect upcoming negative data will prove 2600-2650 [on the S&P 500] to be a good sale
before a proper retest of the December lows," Morgan Stanley says in the latest Weekly Warm-Up
report from their U.S. equity strategy team headed by Michael Wilson.
Robert Samuelson Ignores Role of Hedge Fund Magnate Eddie Lampert in Sears Decline
By Eileen Appelbaum
In today's column, * Robert Samuelson attributes Sears bankruptcy and possible
liquidation- the final chapter in a saga that has already cost 200,000 workers their jobs
– to the department store chain's inability to adapt to competition with big box stores
and the Internet. Apparently, he has never heard of Eddie Lampert and his ESL hedge fund,
which took over Sears and Kmart in 2006 and ran the company, now known as Sears Holdings as
an ATM for himself and his investors. Lampert may not have known anything about retailing,
but as Sears' CEO he had no qualms about monetizing it assets for his own and his wealthy
investors' benefit – including Treasury Secretary Steve Mnuchin who was an investor in
his hedge fund and served on the Sears board for 12 years as the retailer spiraled
downward.
In its most egregious act of financial engineering, Lampert's hedge fund setup a real
estate company, Seritage Growth Properties, with Lampert as Chairman of Seritage's board. In
2015, Lampert as CEO of Sears sold 266 Sears and Kmart stores located on prime real estate to
Seritage, where he was Chairman of the Board. Seritage shuttered stores and developed the
real estate into high-priced new developments - offices for the burgeoning high tech sector
in Santa Monica, a luxury shopping center in Aventura, Florida. Sears creditors are in court
over this self-dealing by Lampert, claiming he cheated them out of $2.6 billion.
If Samuelson took the time to read his own newspaper, he could have learned about the
business model of investment funds – private equity and hedge funds – that take
over Main Street companies from Peter Whoriskey's investigative reporting on the bankruptcy
of Marsh, a major mid-West grocery chain. Amazon, Walmart and the Internet certainly pose a
challenge, but the inability of companies to respond can be laid squarely at the feet of
investment funds that load the companies they own with unsustainable levels of debt and that
take resources out of the company by selling off its real estate.
As I show ** in a comparison of the largest supermarket chain in America, the very
successful publicly traded Kroger's, and the second largest, floundering private equity owned
Albertsons, large, iconic retail companies can respond to competitive challenges when they
control their own resources, own their own real estate, and keep their debt levels
manageable.
Samuelson attributes the demise of Sears to changes in capitalism and competition without,
apparently, having ever heard of hedge funds and private equity funds that take over the
management of companies and run them in the interests of investors in their funds, with
little regard for the companies' ability to compete or its workers.
Perhaps the Washington Post should set as a minimum requirement for its columnists that
they actually read the newspaper.
Montgomery-Ward, the original mail-
order 'dry goods' store (1872-2001)
Wikipedia: Montgomery Ward was founded by Aaron Montgomery Ward in 1872. Ward had
conceived of the idea of a dry goods mail-order business in Chicago, Illinois, after several
years of working as a traveling salesman among rural customers. He observed that rural
customers often wanted "city" goods, but their only access to them was through rural
retailers who had little competition and did not offer any guarantee of quality. Ward also
believed that by eliminating intermediaries, he could cut costs and make a wide variety of
goods available to rural customers, who could purchase goods by mail and pick them up at the
nearest train station. ...
Bankruptcy in 2000; Full liquidation in 2001
namesake retailer launched in 2004
after purchase of trademarks
Donald Trump may or not be on the Russian government's payroll.
He may or may not have been blackmailed by Vladimir Putin.
He may or may not have actively colluded with Russia during the 2016 campaign.
But there's one thing we know for sure: Donald Trump has been compromised by Russia.
Every day that he remains president will mean that he is putting Russia's interests ahead
of America's.
The latest revelations that emerged this weekend in the Trump/Russia investigation only
bolstered this notion. First, via The New York Times, we found out that the FBI opened a
counterintelligence investigation after he fired FBI Director Jim Comey to determine if he
was working on behalf of the Russian government. Then, the next day, The Washington Post
revealed that Trump has gone to "extraordinary lengths" to keep the substance of his talks
with Russia's president, Vladimir Putin, hidden from his own aides, "including on at least
one occasion taking possession of the notes of his own interpreter and instructing the
linguist not to discuss what had transpired with other administration officials." ...
(Note: This is from Globe opinion write Michael A. Cohen
not Donald Trump's former lawyer Michael D. Cohen.)
"Instead, the Chinese government has been piling on loans to businesses and state-owned
enterprises, pushing the SOEs to spend more, and so on. Basically it has kept investment
going despite low returns. Yet this process has to have some limits – and when it hits
the (great) wall, it's hard to see how consumption can rise fast enough to take up the
slack."
Proof Krugman has been corrupted by free lunch economics!
If interest on savings is very low, returns on capital investment should be very low.
The lower limit on returns to capital is the real interest rate on savings. In China,
inflation makes interest on savings negative. So, returns on investment can be negative, just
less negative than interest on savings.
The only way investment can be funded is by workers spending less on consumption than they
earn working or from other sourcees. If workers are investing a lot, they have individually
decided they should not consume more, because there is no shortage of goods andd services to
buy in China.
This is a very different situation than in the US where 90% of the population has too
little money to buy what they want or need, and thus they borrow money to pay for
consumption. Wages are too low in the US to fund investment so a great deal of scarcity
exists in the US of several consumption goods which result in rapid inflation in the prices
of those goods, and thus very high returns to capotal even as interest on savings are kept
artificially low in order to allow for high defaults on bad consumer debt, consumer debt
needed to pay the high inflated price of selected scarce consumption goods due to under
investment.
In China, workers earn so much more than they are accustomed to consume they have
investing in housing so housing costs are very low, and housing exists in excess.
In the US, workers earn less than they need to consume, so hiusing is extremely scarce and
consumption prices have inflated at high rates.
Now, while China uses Keynes and sees excess housing as a good thing, the US uses free
lunch economics and sees scarce housing as a good thing because housing inflation "creates
wealth".
China has embraced private capital in many ways much more than the US since the 80s, with
returns to private capital falling to very low levels, while in the US, building capital is
thwarted to generate capital scarcity and high rates of capital price inflation. To "create
wealth" from capital scarcity.
"[W]hile in the US, building capital is thwarted to generate capital scarcity and high rates
of capital price inflation. To 'create wealth' from capital scarcity."
Alternatively, in the U.S. there is a combination of excess of capital and insufficient
investment alternatives (due to growing income and wealth inequality and excessive market
power, anti-competitive business practices and insufficient anti-trust enforcement) that
causes investors to chase unproductive returns and unrealistically bid-up asset prices.
Name the excess capital from paying too much to workers to build capital assets.
The only thing that I can think of that might be true is too much paying of workers to
create TV shows, movies, and computer games.
Except, in this media sector, big companies buying competitors along with buying back
shares of their stocks with profits is spawning ever more competitors. As much as Comcast
tries to eliminate competition, investors keep paying workers to build new streaming services
with content only the new companies have by paying more workers to produce TV and movies.
But this is standard economic theory: technology cuts costs, which cuts prices which
increases demand so the workers eliminated by technology get retasked producing more, but the
more is so much more, more workers are needed. The equilibrium is reached when long term
revenue just barely pays for all the workers long term.
You might object to everyone consuming more media content because you are like Miltion
Friedman a classic Jew stereotype puritian who believes the mmasses must work more and suffer
by consuming less, so you can be an elite preaching values you will not embrace for
yourself.
Ie, you did not state: "I am paid too much which is a sign of too many workers being paid
too much due to too much investment driving up wages".
Please send me $1000 a month for the rest of my life as debt. Then collect your money,
debt, after I'm dead. After all, your debt does not need to be repaid by my working for
income and not consuming using all or more of my income!
Or you believe the Venezuela economic policy is fantastic and should be adopted in the US,
because Trump and the GOP were not creating structural long term borrowing and spending fast
enough 2017-2018?
Yes the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But the techniques that got them this far
Are still solid
And with augmentation
Can continue high speed expansion of the production system and urbanization
Price regulation could and should be
CO ordinated with a mark up market
Land lots market value zeroed out
thru a 100 % George tax
And corporate debt placed in special investment vehicles and managed uniformly
Thru a universal default insurance system.
Run by a state default insurance agency
Imagine conservatives electing representatives to Congress who hiked the "gas tax" and then
offered lots more money to States that had elected legislatures that hiked their gas tax to
generate the matching funds to get Federal gas tax funds that were spent on transportation.
"Gas taxes" are not limited to fuel, but include fees on tires, which cost based on wear
on roads, ie, a big rig uses big costly ties that last maybe 25,000 miles so the more use of
the road the more tax paid. But increasingly cars have high cost performance tires. Then
there are use taxes based on the size plus load of the vehicle. A very high tax rate on
fossil fuels will eliminate their use requiring moving to a fee based on miles driven and
capacity of the vehicle, maybe by open road tolling.
But as transportation is a living cost, living costs need to be increased in Trumpland to
create the coastal economies Trump lives in and builds his resorts in. Economies with high
living costs to pay the high wages of all the workers who moved from low living cost
conservative places to high living cost liberal places.
So, all capital assets must be consumed in an average of 3 years? A ten year old house would
need to be burned down. Steeet torn up after five years returned to farm or forest land?
Average useful life of assets is probably 30 years, but at that point they still have a
minimum of 10% of cost in residual value, and paying workers to invest in existing capital at
3-5% annually will maintaiin the asset value of over half of assets for centuries. Spending
another 2% will replace all of the other half. So, spending 10% of GDP will increase capital
assets by 3% easy every year, which 70/3 means doubling total assets every 25 years.
Your 40% would mean doubling assets every 70/35% or two years.
Assuming assets keep increasing GDP becyond the addition to GDP from building productive
assets.
Note, cars are productive assets, ie, a car gets you to work. A house with utilities frees
up probably 5 hours a day to be used working for others. Try being homeless or living in a
tar paper shack with nothing but a pot belly stove and water from a pond half a mile away.
The capital asset like a house includes roads, running water and sewage, and fuel to cook and
heat with zero labor, which are paid for for with $100 in labor for a family unit up to 4,
more or less. Paying $100 a week frees up at least 25 hours of unpaid household labor,
collecting/cutting wood for energy, walking to the pond to fetch water, walking along a trail
to work and shop.
Yes, the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But, the techniques that got them this far
Are still solid
And with augmentation
Can continue high-speed expansion of the production system and urbanization
Price regulation could and should be
Coordinated with a markup market ...
[ Important criticism and agreed. Prominent Western economists have usually been unwilling
to look to the structure of the Chinese economy and specific techniques that have been used
to spur development. ]
Brad DeLong has been wrong about China since 1980, Jeffrey Sachs and Stanley Fischer since
1990, Paul Krugman since 2011... The problem is that they simply never look at the Chinese
institutions that have driven 9.5% yearly growth in GDP and 8.5% yearly growth in per capita
GDP these 42 years. Suddenly, then, Krugman decides that what has driven Chinese growth is of
no consequence because China has (gasp) too few people.
Imagine a China of too few people, and I could care less about the age ratios, which I
have and which are of no concern relative to productivity growth which is just what China is
focusing on.
"On one side, China's problems are real. On the other, the Chinese government –
hindered neither by rigid ideology nor by anything resembling a democratic political process
– has repeatedly shown its ability and willingness to do whatever it takes to prop up
its economy. It's really anyone's guess whether this time will be different, or whether
Xi-who-must-be-obeyed can pull out another recovery."
By God, Jeeves, I think he's got it.
Tonight's music recommendation is the Jefferson Airplane.
The Wall Street Journal
continues to counter the liberal
mainstream media's Trump Derangement Syndrome , dropping uncomfortable truth-bombs and
refusing to back off its intense pressure to get to the truth and hold those responsible,
accountable (in a forum that is hard for the establishment to shrug off as 'Alt-Right' or
'Nazi' or be 'punished' by search- and social-media-giants) .
And
once again Kimberley Strassel - who by now has become the focus of social media attacks for
her truth-seeking reporting - does it again. Confirming what
we detailed yesterday - that The Justice Department was fully aware that the notorious
Steele Dossier was connected to Hillary Clinton and might be biased, a crucial detail which was
omitted just weeks later from the Foreign Intelligence Surveillance Act (FISA) warrant used to
spy on the Trump campaign - Strassel makes the aggressive and correct statement that the
Justice Department official's testimony raises new doubts about the bureau's honesty.
Via The
Wall Street Journal,
Everybody knew.
Everybody of consequence at the Federal Bureau of Investigation and Justice Department
understood fully in the middle of 2016 - as the FBI embarked on its counterintelligence probe
of Donald Trump - that it was doing so based on disinformation provided by Hillary Clinton's
campaign.
That's the big revelation from the transcript of the testimony Justice Department official
Bruce Ohr gave Congress in August. The transcripts haven't been released, but parts were
confirmed for me by congressional sources. Mr. Ohr testified that he sat down with dossier
author Christopher Steele on July 30, 2016, and received salacious information the opposition
researcher had compiled on Mr. Trump. Mr. Ohr immediately took that to the FBI's then-Deputy
Director Andy McCabe and lawyer Lisa Page. In August he took it to Peter Strzok, the bureau's
lead investigator. In the same month, Mr. Ohr believes, he briefed senior personnel in the
Justice Department's criminal division: Deputy Assistant Attorney General Bruce Swartz, lawyer
Zainab Ahmad and fraud unit head Andrew Weissman. The last two now work for special counsel
Robert Mueller.
More important, Mr. Ohr told this team the information came from the Clinton camp and warned
that it was likely biased, certainly unproven.
"When I provided [the Steele information] to the FBI, I tried to be clear that this is
source information," he testified.
"I don't know how reliable it is. You're going to have to check it out and be aware. These
guys were hired by somebody relating to -- who's related to the Clinton campaign, and be
aware."
He said he told them that Mr. Steele was "desperate that Donald Trump not get elected," and
that his own wife, Nellie Ohr, worked for Fusion GPS, which compiled the dossier. He confirmed
sounding all these warnings before the FBI filed its October application for a surveillance
warrant against Carter Page. We broke some of this in August, though the transcript provides
new detail.
The FBI and Justice Department have gone to extraordinary lengths to muddy these details,
with cover from Democrats and friendly journalists.
A January 2017 memo from Adam Schiff, the House Intelligence Committee's top Democrat,
flatly (and incorrectly) insisted "the FBI's closely-held investigative team only received
Steele's reporting in mid-September."
A May 2018 New York Times report repeated that claim, s aying Mr. Steele's reports didn't
reach the "Crossfire Hurricane team," which ran the counterintelligence investigation, until
"mid-September."
This line was essential for upholding the claim that the dossier played no role in the
unprecedented July 31, 2016, decision to investigate a presidential campaign. Former officials
have insisted they rushed to take this dramatic step on the basis of a conversation involving a
low-level campaign aide, George Papadopoulos, which took place in May, before the dossier
officially came into the picture. And maybe that is the case. Yet now Mr. Ohr has testified
that top personnel had dossier details around the time they opened the probe.
The Ohr testimony is also further evidence that the FBI misled the Foreign Intelligence
Surveillance Court in its Page warrant application. We already knew the bureau failed to inform
the court it knew the dossier had come from a rival campaign. But the FISA application
additionally claimed the FBI was "unaware of any derogatory information pertaining" to Mr.
Steele, that he was "reliable," that his "reporting" in this case was "credible," and that the
FBI only "speculates" that Mr. Steele's bosses "likely" wanted to "discredit" Mr. Trump.
Speculates? Likely? Mr. Ohr makes clear FBI and Justice officials knew from the earliest
days that Mr. Steele was working for the Clinton campaign, which had an obvious desire to
discredit Mr. Trump. And Mr. Ohr specifically told investigators that they had every reason to
worry Mr. Steele's work product was tainted.
Strassel concludes succinctly - and ominously for anyone who still believes that 'we, the
people' have any freedom left, that the testimony has three other implications.
First, it further demonstrates the accuracy of the House Intelligence Committee
Republicans' memo of 2018 - which noted Mr. Ohr's role and pointed out that the FBI had not
been honest about its knowledge of the dossier and failed to inform the court of Mrs. Ohr's
employment at Fusion GPS.
Second, the testimony also destroys any remaining credibility of the Democratic response,
in which Mr. Schiff and his colleagues claimed Mr. Ohr hadn't met with the FBI or told them
anything about his wife or about Mr. Steele's bias until after the election.
And third, the testimony raises new concerns about Mr. Mueller's team . Critics have noted
Mr. Weissman's donations to Mrs. Clinton and his unseemly support of former acting Attorney
General Sally Yates's obstruction of Trump orders. It now turns out that senior Mueller
players were central to the dossier scandal. The conflicts of interest boggle the mind.
And Strassel concludes unequivocally, the Ohr testimony is evidence the FBI itself knows how
seriously it erred. The FBI has been hiding and twisting facts from the start.
Correct me if I'm wrong but let's see if I've got this right. The so-called "information"
looked like ****, smelled like **** and tasted like **** and the world's premier
investigative organization took that ****, knowing full well it was shitty, to the FISA Court
to begin their treasonous pursuit of an American president contrary to the Constitution they
vowed to protect. And they're still at it today because they can't admit their actions are
far more illegal than what they falsely allege Trump did. Did I miss anything?
So general Flynn gives a few questionable statements to the FBI and he's prosecuted.
Hillary gives a whole ******* false dossier to the FBI and the whole FBI and Justice
Department lick her *******?
The general statute of limitations for noncapital federal crimes is five years. (18 U.S.C.
§ 3282.) This statute of limitations applies to perjury, filing a false bankruptcy form,
embezzlement, bribery, and destroying records, and all other bankruptcy crimes.
And those conflicts of interest have pretty much been public knowledge for over a year.
Yet nothing is done and the Mewliar ****-show just keeps chugging along. When you look at it
objectively there is really one primary reason for that . . . because the MSM (other than the
WSJ) refuses to cover those conflict of interest issues (among many other issues that would
be detrimental to the 'Russian collusion' investigation). Enemy of the people indeed.
I am not sure if it can happen as these agency's control and power is greater than rule of
law but to really get back to the original principles of our constitution, we have to do away
with just about all of them. Those trator Clintonite, Bushites and Obamaite clans were
hellbent on destroying this country and they sure have done a good job of it. One more
globalist presidents and that is it; adios gringos.
The FBI did not err. The FBI did nothing wrong. People within the FBI broke laws. People
within the FBI committed fraud, abuse of power under color of authority. Lets not let these
rotten apples hide behind the facad of the FBI
********. Many rank and file FBI agents knew what was going and did and said nothing. They
are sworn to uphold the Constitution not to obey every **** sucker in their chain of command.
They all put their personal ease and comfort ahead of doing the right and leagal thing.
Shitcan the lot of them.
"... On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the consumer is still strong and healthy. ..."
During an interview with FOX Business earlier this month, Dimon told FOX Business' Maria Bartiromo that while it didn't look like
a recession was imminent, there will eventually be a meaningful slowdown.
"There will be a recession one day. So when people say, 'Is there going to be a recession?' Yeah, I don't know when it's going
to be, but there will be one and something will trigger it and it will be a little bit different than the last one," he said.
On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the
consumer is still strong and healthy.
For the fourth quarter, the largest U.S. bank by assets reported lower-than-expected profit despite gains from higher interest
rates and a bump within its loan sector. Losses were driven by market volatility, global growth worries and an ongoing trade war
between the U.S. and China.
Ryan S 8 hours ago
Yes the pending recession will cause many debt bubbles to burst and not just isolated primarily to banking and housing sector.
Think of what happens to the college/university system when student can no longer get loans for subsidized rates. A house
or vehicle can serve as an asset to be used as collateral to control rate ceilings. However, there is no collateral in Billy
and Genie's BA History degree. Good luck to all these ivory tower universities when your funding dries up and nobody can afford
your way overpriced programs. Anubis 9 hours ago I have read Americans
hold over 50 trillion in debt yet over half the population has only $1,000 in savings.
Bob 9 hours ago
Why is the US increasing deficit spending doing a good economy???? Reply
s 8 hours ago
Why does no one ask....why does higher education cost so much compared to other costs? The rate of increases in higher education
is never challenged by anyone. It is automatically assumed good. People are so blind and accepting.
Bart 7 hours ago
"At some point in the future we will have a recession and it will be a little bit different from the last recession." He is
paid $28,500,000.00 a year and sounds like my car mechanic.
buddhist 8 hours ago
Same like it was in 2007. Everything in the world was fine until Lehmann declared bankruptcy and hell started to break. May
be this time around it's Deutsche bank's turn.
Sam 5 hours ago
Signs of the economy slowing are everywhere. Company earnings are down and layoffs are increasingly more common. Min wage jobs
might be plentiful right now, but that will change in less than a year. Better hold on and you better keep your job. Next recession
will eliminate a lot of jobs. Those over 40 - forget it.
Chinas Love 8 hours ago
The next recession will occur when the US government hit over $25 Trillion in debt thus surpassing out total GDP thus making
the US bankrupt or Trump enacts the remaining $600 billion of the $820 Billion in tariffs on China and the rest of the world
because China trade deficit has grown under his watch to historic levels each each!
The Zionist Plan for the Middle East, also known as the Yinon Plan, is an Israeli
strategic plan to ensure Israeli regional superiority. It insists and stipulates that Israel
must reconfigure its geo-political environment through the balkanization of the surrounding
Arab states into smaller and weaker states.
The reach of a "Greater Israel", as described in the Yinon plan.
When viewed in the current context, the war on Iraq, the 2006 war on Lebanon, the 2011 war
on Libya, the ongoing war on Syria, not to mention the process of regime change in Egypt,
must be understood in relation to the Zionist Plan for the Middle East. The latter consists
in weakening and eventually fracturing neighboring Arab states as part of an Israeli
expansionist project.
"Greater Israel" consists in an area extending from the Nile Valley to the Euphrates.
Israeli strategists viewed Iraq as their biggest strategic challenge. This is why Iraq was
outlined as the centerpiece to the balkanization of the Middle East and the Arab World. In
Iraq, on the basis of the concepts of the Yinon Plan, Israeli strategists have called for the
division of Iraq into a Kurdish state and two Arab states, one Shiite and the other
Sunni.
The Atlantic, in 2008, and the U.S. military's Armed Forces Journal, in 2006, both
published widely circulated maps that closely followed the outline of the Yinon Plan. Aside
from a divided Iraq, the Yinon Plan calls for a divided Lebanon, Egypt, and Syria. The Yinon
Plan also calls for color revolutions (Arab Spring) North Africa and forecasts it as starting
from Egypt and then spilling over into Sudan, Libya, and the rest of the region.
"Greater Israel" requires the breaking up of the existing Arab states into small states.
The plan operates on two essential premises. To survive, Israel must
become an imperial regional power, and
must effect the division of the whole area into small states by the dissolution of all
existing Arab states.
Small here will depend on the ethnic or sectarian composition of each state. Consequently,
the Zionist hope is that sectarian-based states become Israel's satellites and, ironically,
its source of moral legitimation This is not a new idea, nor does it surface for the first
time in Zionist strategic thinking. Indeed, fragmenting all Arab states into smaller units
has been a recurrent theme.
Viewed in this context, the war on Syria is part of the process of Israeli territorial
expansion. Israeli intelligence working hand in glove with the US, Turkey and NATO is
directly supportive of the Al Qaeda terrorist mercenaries inside Syria.
The Zionist Project also requires the destabilization of Egypt, the creation of factional
divisions within Egypt as instrumented by the "Arab Spring" leading to the formation of a
sectarian based State dominated by the Muslim Brotherhood.
"... Blame it on the robots if you must -- it's an easy out for those struggling to understand what's happened already, and what's going to happen next. The trouble is, it's not very useful for everyone else. ..."
"The funny thing is, we've always been quite bad at knowing how to attribute market
volatility, which long predates algorithm trading.
The start of a much-shared satirical Wall Street Journal article from the 1990s sums it up:
'The market rallied early this morning for reasons nobody understands and nobody predicted.
CNBC analysts confidently asserted it had something to do with the Senegalese money supply, but
others pointed to revised monthly figures showing a poor tuna haul off the Peruvian coast.'
A
separate question, of course, is whether all this market volatility can or should be ascribed
to algorithm training as it has been.
Despite recent relative placidity, markets have always
been volatile.
The last three months' ups-and-downs may have been choppy, but they're by no
means historic. It may also be true that we're simply talking more about the most minute market
moves.
Blame it on the robots if you must -- it's an easy out for those struggling to
understand what's happened already, and what's going to happen next. The trouble is, it's not
very useful for everyone else."
"... Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3 percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil production this year is forecast to drop by another 4.7 percent from last year to reach in 2019 its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show. ..."
"... However, the Norwegian oil regulator warned that "resource growth at this level is not sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is essential that more profitable resources are proven in the next few years." ..."
"... The industry's problem is that after Johan Sverdrup and Johan Castberg there haven't been major discoveries. ..."
Despite cost controls, increased efficiency, and higher activity offshore Norway, oil
production at Western Europe's largest oil producer fell in 2018 compared to 2017 and is
further expected to drop this year to its lowest level since 1988.
Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3
percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the
Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil
production this year is forecast to drop by another 4.7 percent from last year to reach in 2019
its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show.
As bad as it sounds, this year's expected low production is not the worst news for the
Norwegian Continental Shelf (NCS) going forward.
Oil production is expected to jump in 2020 through 2023, thanks to the start up in late 2019
of Johan
Sverdrup -- the North Sea giant, as operator Equinor calls it. With expected resources of
2.1 billion -- 3.1 billion barrels of oil equivalent, Johan Sverdrup is one of the largest
discoveries on the NCS ever made. It will be one of the most important industrial projects in
Norway in the next 50 years, and at its peak, the project's production will account for 25
percent of Norway's total oil production, Equinor says.
The worst news for Norway's oil production, as things stand now, is that after Johan
Sverdrup and after Johan Castberg
in the Barents Sea scheduled for first oil in 2022, Norway doesn't have major oil discoveries
and projects to sustain its oil production after the middle of the 2020s.
The NPD
started warning last year that from the mid-2020s onward, production offshore Norway will
start to decline "so making new and large discoveries quickly is necessary for maintaining
production at the same level from the mid-2020s."
In the report this week, NPD Director General Bente Nyland said:
"The high level of exploration activity proves that the Norwegian Shelf is attractive.
That is good news! However, resource growth at this level is not sufficient to maintain a
high level of production after 2025. Therefore, more profitable resources must be proven, and
the clock is ticking".
Norwegian oil production in 2018 was expected to drop compared to the previous year, but the
decline "proved to be greater than expected," the NPD said, attributing part of the production
fall to the fact that some of the newer fields are more complex than previously assumed, and
certain other fields delivered below forecast, mainly because fewer wells were drilled than
expected.
In October 2018, Germany's Wintershall
warned that its Maria oil and gas field off Norway was not fully meeting expectations due
to issues with water injection. Those issues haven't been solved yet, NPD's Nyland told
Reuters this week.
Exploration activity in Norway considerably increased in 2018 compared to 2017, with 53
exploration wells spud, up by 17 wells compared to the previous year. Based on company plans,
this year's exploration activity is expected to remain high and around the 2018 number of wells
spud, the NPD says.
The key reasons for higher exploration activity have been reduced costs, higher oil prices
lifting exploration profitability, and new and improved seismic data on large parts of the
Shelf, the NPD noted.
However, the Norwegian oil regulator warned that "resource growth at this level is not
sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is
essential that more profitable resources are proven in the next few years."
Norway still holds a lot of oil under its Shelf, and those remaining resources could sustain
its oil and gas production for decades to come. The industry's problem is that after Johan
Sverdrup and Johan Castberg there haven't been major discoveries.
According to the NPD's resource estimate, nearly two-thirds of the undiscovered resources
lie in the Barents Sea.
"Therefore, this area will be important for maintaining production over the longer term,"
the regulator said.
Operators on the NCS have made great efforts to try to make even smaller discoveries
profitable by hooking them to existing platforms and production hubs. However, these smaller
finds alone can't offset maturing production -- Norway needs major oil discoveries, and it
needs them soon , considering that the lead time from discovery to production is several
years.
"... Good article. It accurately spells it out about the contempt and disrespect that America has of other countries, and the coercive tactics that America often applies to them. ..."
"... It really goes back to what Marine corps Major General Smedley Butler once reflected on, in 1933, about the U.S.,. He said: "I spent thirty-three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism". Apparently, that is how other countries see us operating as too. ..."
For another example I turn to U.S. Ambassador to Germany, Richard Grenell, who just sent a
letter to both Uniper and BASF to stop work on the Nordstream 2 pipeline or else face
further U.S. sanctions.
The Bild report raised the ire of some German politicians in Berlin. Fabio De Masi, a top
Left Party MP, demanded that the government reprimand Grenell, saying
: "The US Ambassador seems to make an impression that he is a viceroy of the Washington
emperor.
This is the real face of Trumpian diplomacy. Stop acting in your own best interest or we'll
bankrupt you.
The situation at this point is pretty clear. While our military strength is formidable it is
not, however, a blank check to enforce political edicts anymore.
In a world where U.S. prosperity is dependent on the prosperity of the entire world,
threatening financial ruin is just as much of a bluff as threatening physical ruin.
And we're seeing that bluff being called a lot. Country after country are now simply showing
U.S. strongmen like Pompeo, Bolton, Mattis and even Trump himself, the door and there is little
to no real response from them.
Trump tried to scare Erdogan into submission with sanctions and a collapse of the lira
last year. When it didn't work, Erdogan knew where his allies were. He acted accordingly,
siding with Putin's energy security for Turkey rather than a mercurial U.S.
India did the same thing over the purchase of Russian S-400 missile defense systems. They
said some nice things, invited us to talks and then sent us packing without a deal.
Germany refuses to yield on Nordstream 2.
Qatar was the first to pull out of the Syrian conflict and then turned around and
negotiated a major exploration and development deal with Iran in the North Pars gas
field.
Even Japan is in constant talks with Russia about working out their differences
officially (again, against U.S. wishes) and sign a peace treaty. Japan needs Russian energy
badly and Putin is patient enough to wait Prime Minister Shinzo Abe out while calling out his
hypocrisy.
Good article. It accurately spells it out about the contempt and disrespect that America
has of other countries, and the coercive tactics that America often applies to them.
It
really goes back to what Marine corps Major General Smedley Butler once reflected on, in
1933, about the U.S.,. He said: "I spent thirty-three years and four months in active
military service as a member of this country's most agile military force, the Marine Corps. I
served in all commissioned ranks from Second Lieutenant to Major-General. And during that
period, I spent most of my time being a high class muscle-man for Big Business, for Wall
Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism".
Apparently, that is how other countries see us operating as too.
Something has changed in U.S. politics. And it may finally signal something changing for the
better. Since the announcement (but no real follow through) to end our military involvement in
Syria what passes for our statesmen - John Bolton and Secretary of State Mike Pompeo - have
been ignored, mocked or both.
Bolton attempted to box Trump in on not leaving Syria while Israel chest-thumped about how
they will not yield an inch to Iran. Turkish President Erdogan publicly lambasted him with no
response from President Trump.
Or anyone else for that matter.
When was the last time you heard of a major U.S. political figure go overseas and be refused
a meeting with a foreign head of state, publicly upbraided and sent home like an irrelevant
flunkie?
I can't think of one.
Bolton came into the Middle East and made demands like he was the President which Bolton
knew were clearly red lines for Erdogan -- guaranteeing the safety of the Syrian Kurds.
And he did this from Jerusalem.
The insult couldn't be plainer. The lack of Bolton's self-awareness and understanding of the
situation was embarrassing. And it left Erdogan the perfect opportunity to call out the Trump
Administration's policies as beholden to a foreign power, Israel.
Well yes and I held a conference with resolutions in my backyard over some beers and it
resulted in calling out the occupation as the spoils of war. The Syrians will just have to
suck it up. Everyone else who pays attention to the bleating of ****** morons at the UN
should realize the backyard beer occupation resolution trumps all.
" The lack of Bolton's self-awareness and understanding of the situation was embarrassing.
And it left Erdogan the perfect opportunity to call out the Trump Administration's policies
as beholden to a foreign power, Israel. "
This fits into my theory regarding Trump as a good boss. He obviously could not avoid
hiring Bolton, as Trump's balancing act goes on. Bolton is an old PNAC petty
potentate,
and he obviously believes that triumphalist drivel from 2000. So, Bolton obviously
thought he could deke around Trump and defy him and walked right into this act
of political suicide.
He'l be fired when the time is right. He's too connected to get beat up like Sessions.
Trump will have to lever Bolton out using his own mustache and with the appropriate
backing. That's going to easier now that Bolton danced a jig in Jerusalm.
At this point, deja vu mind-set returns to teach a powerful lesson. Having once witnessed a
major historical reversal, one knows that historical determinism isan illusion -- opium for
people on the edge of a nervous breakdown.
Machiavelli insisted that surrender is a bad idea because we never know what surprises
fortune may have in store for us. In Machiavelli's view, there are "good times" and "bad times"
in politics, and the good ruler is not one who can fend off the "bad times" so much, as one who
has accumulated enough goodwill among citizens to help him ride out those bad times.
The argument of this short book is that European Union is going through a really bad time
today, torn apart by numerous crises that damage confidence in the future of the project among
citizens across the continent. So the disintegration of the union is one of the most likely
outcomes.
For A. Roy, a writer has the responsibility to take sides overtly.
In these violent diatribes, she tears the masks of the `missionaries to redeem the wretched'
and of those preaching privatization and globalization as the one and only solution for the
whole world's economic problems.
The hypocrisy of globalization
For A. Roy, globalization has nothing to do with the eradication of poverty. It will not pull
the Third World out of the stagnant morass of illiteracy, religious bigotry or
underdevelopment. In India, 70 % of the population still has no electricity and 30 % is still
illiterate.
Globalization means crudely and cruelly `Life is Profit'. `Its realm is raw capital, its
conquest emerging markets, its prayers profits, its borders limitless, its weapons
nuclear.'
Privatization (of agriculture, seeds, water supply, electricity, power plants, commodities,
telecommunications, knowledge) consists only in the transfer of productive public assets from
the State to private interests (transnational corporations).
The globalization's economic agenda `munches through the economies of poor countries like a
cloud of locusts.' One example: by hugely subsidizing their farm industries, the rich
countries put impoverished subsistence farmers in the Third World out of business and chase
them into the cities.
The hypocrisy of the war against terrorism
For A. Roy, the rich countries are the real worshippers of the cult of violence. They
manufacture and sell almost all the world's weapons and possess the largest stockpile of
weapons of mass destruction (chemical, biological, nuclear).
At the head of ICAT (The Coalition Against Terror) stays a country which spends mind-boggling
military budgets to fight a few bunches of manipulated terrorists created by the hegemon
himself. It committed `the most of genocides, ethnic cleansing, and human rights violations.
It sponsored, armed and financed untold numbers of dictators and supports military and
economic terrorism.' Its aim is full spectrum dominance.
But, as Paul Krugman remarked, the replacement of the Cold War issue by the (manipulated)
terrorism one as a justification for massive military spending was (and is) a very big
failure.
Arundhati Roy's bitter and angry texts are a must read for all those who want to
understand the world we live in.
Arundhati Roy bristles at being called a "writer-activist" (too much like sofa-bed, she
says), but the rest of us should be grateful that the author of "The God of Small Things" is
taking on the establishment, here and in India.
Part of Mrs. Roy's greatness is that she is not colored by the partisan debates that
influence the dialogue on issues such as globalization in America. She is an
equal-opportunity critic, taking on Clinton and Bush. Although other authors pledge no
allegiance to either side of the aisle, Roy has a fresh perspective, and has a take on
globalization that I haven't found in works by American authors.
This book is set up as a collection (a rather random collection) of several essays. The first
essay gives a wonderful perspective of globalization (ie. the expansion of American business
interests) from a foreign perspective. She examines the impact of the global economic
movement on the actual people being affected by it at the lowest level. She reveals the
influence of the privatization of the electric industry through the eyes of India's poorest
citizens.
The second essay goes in-depth into politics in India, primarily addressing the enormous
number of dams being built in the country, and the impacts (economic, environmental, social)
that they will have. Mrs. Roy explicitly recounts how Enron scammed the Indian government
into building new power generators, and how this will cost India hundreds of millions per
year while lining the pockets of American business interests.
Critics will say that "Power Politics" is devoid of hard facts and analysis, but there can be
no doubt that this book is worth a read. She may lack the economic background of Stiglitz,
but her passion and style, in addition to her ability to articulate the important issues in
the globalization debate in a readable manner, will be appreciated by anyone with an interest
in global economic expansion.
"... I watched Greg Hunter's show on this. Very disturbing because of it's currency. This backdoor off-the-books financing of whatever they want is as she says, the introduction of free fascism in the US. ..."
"... Deep State is REAL: https://www.youtube.com/watch?v=LLTzpDFGWjI ..."
Investment advisor and former Assistant Secretary of Housing Catherine Austin Fitts says it
looks like a "global recession is coming."
Is that going to cause the debt reset we've been hearing about for years? Fitts says, " Make
no mistake about it, there is no reason for the federal government to default or monkey with
any debt because they can literally print the currency..."
" The question is how do they make sure whatever they are printing really holds any kind
of store of value. I think the reason you are seeing them reengineer the federal bureaucracy
and financial transactions infrastructure is because they want much greater and tighter
control to do whatever they do, and that includes to continue to debase the currency. They
could do this (reset) entirely by debasing the currency...
What we are watching . . . is essentially a coup. We had a financial coup, and now we are
watching a legal coup to consolidate that financial coup. I would keep my eye on the
fundamental governance structure of the U.S. The important thing is not what they do. The
important thing is who controls no matter what they do. Now, we have created a mechanism for
them to control entirely in secret and create policies entirely in secret, including around
the back of a U.S. President... It's pirating by the 'just do it' method. I said to someone
the other day, what is it about secret money for secret private armies that you don 't
understand? "
$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore
and Catherine Austin Fitts in 2017 has now become a national security issue.
The federal government is not talking or answering questions, even though the DOD recently
failed its first ever audit. Fitts says, "This is basically an open running bailout..."
"Under this structure, you can transfer assets out of the federal government into private
ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You
can't even know who is doing it. I'm telling you they just took the United States government,
they just changed the governance model by accounting policy to a fascist government. If you
are an investor, you don't know who owns those assets, and there is no evidence that you
do...
If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected
President..."
"The President cannot fix this. We need to fix this...
This is Main Street versus Wall Street. This is honest books versus dirty books. If you
want the United States in 10 years to resemble anything what it looked like 20 years ago, you
are going to have to do it, and there is no one else who can do it. You have to first get the
intelligence to know what is happening."
Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report."
"If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
She's referring to FASB standards, but those dont sound like a Constitutional Amendment to
me.
Article i, Section 9, paragraph 7: "No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law; and a regular Statement and Account of the
Receipts and Expenditures of all public Money shall be published from time to time."
Perhaps when $20+ trillion are involved, the Constitution be damned, I suppose. Or perhaps
the govt boys will claim the $20T didn't come from an appropriation but instead from their
own "industrious" activities...you know, like drug and gun running, and human trafficking
perhaps?
I watched Greg Hunter's show on this. Very disturbing because of it's currency. This
backdoor off-the-books financing of whatever they want is as she says, the introduction of
free fascism in the US.
One of the smartest women out there. Huge fan here. She almost got snuffed for blowing the
whistle at HUD (two sets of books and all). It's only recently that she's come out and said
that there's no such thing as the "money being lost". It's digital and 100% traceable.
Fitts is correct and her approach is sound. Money flows are traceable. The problem is more
complicated, though. As Enron proved and the Parmalat scandal cemented, the CRONY CUT is
fatal. The Auditors gave up fiduciary duties for FIDOCIARIES riches. They rolled over and played
dead.
They've already tried to off her. They broke her financially and she bounced back. She
made a lot of enemies but luckily she has some good friends in high places too. Watch a few
Vids about what they did to her after she blew the whistle at HUD. She's lucky to be above
ground.
Her extensive studies and reports that follow crack cocaine being dumped into various
areas the subsequent drug related violence and BS "WOD" response and then what happened to
the real estate, as in, WHO WINDS UP BUYING block after block after block of blighted
buildings is absolutely fascinating . She should have gotten more recognition for those
exhaustive studies.
There's a VERY LARGE HAND at work there...for profit.
Free market is possible only under strict government regulation. Without government regulation free market quickly
deteriorates into the law of jungles. Such a paradox ;-)
And if financial oligarchy gets to power as they got via coup d'état in the USA in late 7th, it is only a matter of time before
the society collapses. They are very destructive to the society at large. Probably more so then organized crime. But wait. They
actually can be viewed as special type of organized prime as is "The best way to rob the bank is to own it".
Notable quotes:
"... Idiots on here are always going on about how we don't got capitalism, if we only had capitalism, we don't got free markets, if only we had free markets, then everything would be hunky-dory. Without any proof, of course, because there never was and never will be a "free" "market." The US has plenty capitalism. And everything sucks. And they want more. Confused, stupid, disingenuous liars. ..."
"... Free markets are crookedness factories. As a PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no free market! It's all crooked!" ..."
Idiots on here are always going on about how we don't got capitalism, if we only had
capitalism, we don't got free markets, if only we had free markets, then everything would be
hunky-dory. Without any proof, of course, because there never was and never will be a "free"
"market." The US has plenty capitalism. And everything sucks. And they want more. Confused,
stupid, disingenuous liars.
Look, what you call "capitalism" and "free markets" just means scams to make rich people
richer. You read some simple-minded description of some pie-in-the-sky theory of some perfect
world where rational actors make the best possible decisions in their own interest without
any outside interference, and you actually think you are reading a description of something
real.
I'll tell you what's real. Crookedness. Free markets are crookedness factories. As a
PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no
free market! It's all crooked!"
"Goldman cuts 10-year Treasury yield target for 2019 to 3%"
By Sunny Oh...Jan 8, 2019...10:45 a.m. ET
"Goldman Sachs has rolled back its call for much higher rates in U.S. government bonds in
the U.S., though it still expects a gradual climb from the current muted levels in the
Treasury market.
In a Tuesday note, Goldman Sachs said they expect the 10-year yield TMUBMUSD10Y, +0.06% to
hit 3% by year-end, a 50 basis point cut from their forecast of 3.5%. Since last week, the
benchmark bond yield has steadily risen to 2.710% Tuesday, after hitting an 11-month low of
2.553% last Thursday, according to Tradeweb data.
"... However, despite the signs, Goldman Sachs assumes the indicators are wrong and that "recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just below 2,600. ..."
Confidence in continued economic growth has been waning. A huge majority of chief financial officers
around the world say a recession will happen by the end of 2020. Most voters think one will hit by the end
of this year.
Now the Goldman
Sachs economic research team says that the
market shows a roughly 50% chance of a recession over the next year, according to
Axios.
Goldman Sachs looked at two different measures: the yield curve slope and credit spreads.
The former refers to a graph of government bond interest rates versus the years attaining
maturity requires. In a growing economy, interest rates are higher the longer the investment
because investors have confidence in the future. A frequent sign of a recession is the
inversion of the slope, when investors are uncertain about the future, so are less willing to
bet on it.
Credit spreads compare the interest paid by government bonds, which are considered the
safest. Corporate bonds, which are riskier, of the same maturity have to offer higher interest
rates. As a recession approaches, credit spreads tend to expand, as investors are more worried
about companies defaulting on their debt.
However, despite the signs, Goldman Sachs assumes the indicators are wrong and that
"recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank
has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just
below 2,600.
The other three recessions were each caused by derangements in financial markets. After the
savings-and-loan crisis of 1991-1992 came the bursting of the dot-com bubble in 2000-2002,
followed by the collapse of the subprime mortgage market in 2007, which triggered the global
financial crisis the following year.
... ... ...
At the same time, the gap between short and long-term interest rates on safe assets,
represented by the so-called yield curve, is unusually small, and short-term nominal interest
rates are unusually low. As a general rule of thumb, an inverted yield curve – when the
yields on long-term bonds are lower than those on short-term bonds – is considered a
strong predictor of a recession. Moreover, after the recent stock-market turmoil, forecasts
based on John Campbell and Robert J. Shiller's
cyclically adjusted price-earnings (CAPE) ratio put long-run real (inflation-adjusted)
buy-and-hold stock returns at around 4% per year, which is still higher than the average over
the past four decades.
... ... ...
Needless to say, the particular nature and form of the next financial shock will be
unanticipated. Investors, speculators, and financial institutions are generally hedged against
the foreseeable shocks, but there will always be other contingencies that have been missed. For
example, the death blow to the global economy in 2008-2009 came not from the collapse of the
mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed
securities.
Likewise, the stubbornly long downturn of the early 1990s was not directly due to the
deflation of the late-1980s commercial real-estate bubble. Rather, it was the result of failed
regulatory oversight, which allowed insolvent savings and loan associations to continue
speculating in financial markets. Similarly, it was not the deflation of the dot-com bubble,
but rather the magnitude of overstated earnings in the tech and communications sector that
triggered the recession in the early 2000s.
having just ruled out what could very well be the only solution, all in the cause of
independence.
"One can appreciate why central bankers don't want to get gamed into some of the nuttier
monetary policies that have been proposed, for example "helicopter money" (or more targeted
"drone money") whereby the central bank prints currency and hands it out to people. Such a
policy is, of course, fiscal policy in disguise, and the day any central bank starts doing it
heavily is the day it loses any semblance of independence. Others have argued for raising
inflation targets, but this raises a raft of problems, not least that it undermines decades
of efforts by central banks to establish the credibility of roughly 2% inflation."
I am reminded of Paul's advice to the day care coop, that they could not trade chits for
hours simply because they didn't have enough chits to allow for savings, so make more and
distribute them. At least, that's how I remember it.
The Fed failed to get growth going after the last recession...despite a long stream of rosy
forecasts. So what do elites propose for the next recession? More Fed action...and why not?
Low interest rates goose the markets, lining the pockets of the banksters who own the Fed.
Like Vietnam, Iraq, Afghanistan and the other pointless and futile military adventures,
when the going gets tough, you can count on elites to double down with failed economic
policies (that just happen to enrich them.)
At some point, policy simply becomes to "hold it together".
What do you think the goals of the policy in Iraq, Afghanistan are?
Oh sure, Bush Jr went in thinking we could set a pro-west democracy, ignoring the experts
that said it would be impossible since the people don't want pro-west. If they have
democracy, they are going to vote to disband the democracy and hand power to the
theocracy.
Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran.
As for the Fed not getting growth, same principal... at least they have prevented the
house of cards that is the massive household and business debt from cascade defaulting into
global depression.
Back in Bernanke's day, every Fed speech included comments on "structural imbalances that
need to be addressed with fiscal policy", and every time he was dismissed as "the rich that
fund the political campaigns will never allow it".
Going back to Point's OP. Once they have taken away the screw driver, the hammer becomes
the only way to put in a screw.
BTW nobody knows the terms of the deal Big Oil negotiated with Iraqi leaders to get a lock on
cheap oil in southern Iraq. It was so bad that the Iraqi parliament never approved it. I
assume that Big Oil pays $5/barrel or less to Iraqi leaders' bank account in tax havens.
IOW...total corruption embraced by Republicans and Democrats alike.
"Answer: 1) Avoid admitting defeat. 2) Enrich the military/security oligopolies."
Nope.
To prevent Iran, with Russian aid, from advancing their goal of unifying the Islamic
world.
The goal is to keep the middle east divided and fighting itself so that it can't unify
against the west.
We can argue whether or not that is "good policy" or "moral policy", but that is the
policy.
Our friends in the region, like Saudi Arabia and Turkey are the countries that are content
to keep the middle east divided.
Iraq too, under Saddam Hussein... right up until he saw the collapse of the USSR and a
weakened Iran as an opportunity to unite the middle east under his control. Once he decided
to try to "unite the middle east" instead of being a tool for keeping it divided, he became
just another part of the problem.
Ridiculous. Total lack of understanding: Islamic world will never unite behind Iran. Iran is
Shi'a.
Of course, the knuckleheads running American foreign policy didn't understand that in
2003...and probably still don't understand, so I'll cut Darrell in Phoenix a little slack,
because his ignorance is shared by many elites.
Just how will Iran, who was the safest Islamic country until US and Saudis got mad at them
and stirred up Baluch and MEK terrorism, unify the Salafists who are Sunni supported by GCC
emirs and royals?
Stop making up motives that make no sense at all:
"Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran."
Note Russia has its own issues with Chechen and other Islamist terror!
Your excuses are almost as wild as the things Feith and Cheney made up about Iraq in
2002!
ABU DHABI (Reuters) - United Arab Emirates Energy Minister Suhail al-Mazrouei said on
Saturday the average oil price in 2018 was $70 a barrel.
The Organization of the Petroleum Exporting Countries and other leading global oil producers
led by Russia agreed in December to cut their combined oil output by 1.2 million barrels per
day to balance the oil market starting from January.
"Today we look at an average year of around $70 for Brent," Mazrouei told an industry news
conference in Abu Dhabi, adding that this level would help encourage global oil investments. An
energy ministry spokesman said the minister was referring to the average oil price in 2018.
I especially like the phase "This directive was particularly surprising in the context of
Canada's free market economy" That's really deep understanding of the situation ;-) . It is so
difficult to understand that Canada as a large oil producer, needs higher oil prices and it does
not make sense from the point of market economy to pollute the environment and at the same time
lose money in the process ?
Notable quotes:
"... Alberta's oil production has been cut 8.7 percent according to the mandate set by the province's government under Rachel Notley with the objective of cutting out around 325,000 barrels per day from the Canadian market. ..."
"... So far, the government-imposed productive caps have been extremely successful. In October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian Select (WCS) was trading at a whopping $50 per barrel less than United States benchmark oil West Texas Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has diminished by a dramatic margin to a difference of just under $13 per barrel. ..."
"... The current production caps in Canada are only intended to last through the middle of this year, at which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000 barrels per day fewer than the numbers from November 2018's production rates. ..."
In an attempt to combat a ballooning oil glut and dramatically plummeting prices, the
premier of Alberta Rachel Notley introduced an unprecedented measure at the beginning of
December when she is mandating that oil companies in her province cut production. This
directive was particularly surprising in the context of Canada's free market economy, where oil
production is rarely so directly regulated.
Canada's recent oil glut woes are not due to a lack of demand, but rather a severe lack of
pipeline infrastructure. There is plenty of demand, and more than enough supply, but no way to
get the oil flowing where it needs to go. Canada's pipelines are running at maximum capacity,
storage facilities are filled to bursting, and the pipeline bottleneck has only continued to
worsen .
Now, in an effort to alleviate the struggling industry, Alberta's oil production has been
cut 8.7 percent according to the mandate set by the province's government under Rachel Notley
with the objective of cutting out around 325,000 barrels per day from the Canadian
market.
Even before the government stepped in, some private oil companies had already self-imposed
production caps in order to combat the ever-expanding glut and bottomed-out oil prices. Cenovus
Energy, Canadian Natural Resource, Devon Energy, Athabasca Oil, and others announced
curtailments that totaled around 140,000 barrels a day and Cenovus Energy, one of Canada's
major producers, even went so far as to plead with the government to impose production caps
late last year.
So far, the government-imposed productive caps have been extremely successful. In
October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian
Select (WCS)
was trading at a whopping $50 per barrel less than United States benchmark oil West Texas
Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has
diminished by a dramatic margin to a difference of just under $13 per barrel.
While on the surface this would seem to be a roundly glowing review of the production caps
in Alberta, production cuts are not a long-term solution for Canada's oil glut woes. The
current production caps in Canada are only intended to last through the middle of this year, at
which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000
barrels per day fewer than the numbers from November 2018's production rates. The cuts are
a just a treatment, not a cure, for oversupply in Alberta. The problem needs to be addressed at
its source--the pipelines.
Unfortunately, the pipeline shortage in Alberta has no quick and easy fix. While there are
multiple major pipeline projects underway, the two largest, the Keystone XL pipeline and the
Trans Mountain pipeline, are stalled indefinitely thanks to legal woes and seemingly endless
litigation. The Enbridge Line 3 pipeline, intended to replace one of the region's already
existing pipelines, is currently under construction and
projected to be up and running by the end of the year, but will not go a long way toward
fixing the bottleneck.
Even if the Albertan government re-evaluates the present mid-2019 expiration date for the
current stricter production cuts, extending the production caps could have enduring negative
consequences in the region's oil industry. Keeping a long-term cap on production in Alberta
would potentially discourage investment in future production as well as in the infrastructure
the local industry so sorely needs. According to some
reporting , the cuts will not be able to control the gap between Canadian and U.S. oil for
much longer anyway, just another downside to drawing out what should be a short-term solution.
The government will need to weigh the possible outcomes very carefully as the expiration date
approaches, when the and the pipeline shortage is still a long way from being solved and the
price of oil remains dangerously variable.
The president says he will bring the troops home from Syria and Afghanistan. Now, because of
their pathological hatred of Trump, mainstream Democrats are hysterical in their
opposition.
If anyone else were president, the "liberals" would be celebrating. After all, pulling
American soldiers out of a couple of failing, endless wars seems like a "win" for progressives.
Heck, if Obama did it there might be a ticker-tape parade down Broadway. And there should be.
The intervention in Syria is increasingly aimless, dangerous and lacks an end state.
Afghanistan is an unwinnable war – America's longest – and about to end in outright
military
defeat . Getting out now and salvaging so much national blood and treasure ought to be a
progressive dream. There's only one problem: Donald Trump. Specifically, that it was Trump who
gave the order
to begin the troop withdrawals.
Lost in the haze of their pathological hatred of President Trump, the majority of mainstream
liberal pundits and politicians can't, for the life of them, see the good sense in extracting
the troops from a couple Mideast quagmires. That or they can see the positives, but, in their
obsessive compulsion to smear the president, choose politics over country. It's probably a bit
of both. That's how tribally partisan American political discourse has become. And, how
reflexively hawkish and interventionist today's mainstream Democrats now are. Whither the
left-wing antiwar movement? Well, except for a few diehards out there, the movement seems to
have been buried long ago with
George McGovern .
Make no mistake, the Democrats have been tacking to the right on foreign policy and
burgeoning their tough-guy-interventionist credentials for decades now. Terrified of being
painted as soft or dovish on martial matters, just about all the "serious" baby-boomer Dems
proudly co-opted the militarist line and gladly accepted campaign cash from the corporate arms
dealers. Think about it, any Democrat with serious future presidential aspirations back in 2002
voted for the Iraq War – Hillary, Joe Biden, even former peace activist John Kerry! And,
in spite of the party base now moving to the left, all these big name hawks – along with
current Senate Minority Leader Chuck Schumer – are still Democratic stalwarts. Heck, some
polls
list Biden as the party's 2020 presidential frontrunner.
More disturbing than the inconsistency of these political hacks is the vacuousness of the
supposedly liberal media. After Trump's announcement of troop withdrawals, just about every
MSNBC host slammed the president and suddenly sounded more hawkish than the clowns over at Fox
News. Take Rachel Maddow. Whatever you think of her politics, she is – undoubtedly
– a brilliant woman. Furthermore, unlike most pundits, she knows a little something about
foreign policy. Her 2012 book, Drift: The
Unmooring of American Military Power was a serious and well-researched critique of
executive power and the ongoing failure of the wars on terror. Drift was well reviewed by
regular readers and scholars alike.
Enter Donald Trump. Ever since the man won the 2016 election, Maddow's nightly show has been
dominated the hopeless dream of Russia-collusion and a desire for Trump's subsequent
impeachment. Admittedly, Maddow's anti-Trump rhetoric isn't completely unfounded – this
author, after all, has spent the better part of two years criticizing most of his policies
– but her zealousness has clouded her judgment, or worse. Indeed, that Maddow, and her
fellow "liberals" at MSNBC have now
criticized the troop withdrawals and even paraded a slew of
disgraced neoconservatives – like Bill Kristol – on their shows seems final proof
of their descent into opportunistic hawkishness.
One of the most disturbing aspects of this new "liberal" hawkishness is the pundits' regular
canonization of Jim Mattis and the other supposed "adults"
in the room . For mainstream, Trump-loathing, liberals the only saving grace for this
administration was its inclusion of a few trusted, "grown-up" generals in the cabinet. Yet it
is a dangerous day, indeed, when the supposedly progressive journalists deify only the military
men in the room. Besides, Mattis was no friend to the liberals. Their beloved President Obama
previously canned "mad-dog" for his excessive bellicosity towards Iran. Furthermore, Mattis
– so praised for both his judgment and ethics – chose an interesting issue for
which to finally fall-on-his-sword and resign. U.S. support for the Saudi-led starvation of
85,000 kids in Yemen: Mattis could deal with that. But a modest disengagement from even one
endless war in the Middle East: well, the former SECDEF just couldn't countenance that. Thus,
he seems a strange figure for a "progressive" network to deify.
Personally, I'd like to debate a few of the new "Cold Warriors" over at MSNBC or CNN and ask
a simple series of questions: what on the ground changed in Syria or Afghanistan that has
suddenly convinced you the US must stay put? And, what positivist steps should the military
take in those locales, in order to achieve what purpose exactly? Oh, by the way, I'd ask my
debate opponents to attempt their answers without uttering the word Trump. The safe money says
they couldn't do it – not by a long shot. Because, you see, these pundits live and die by
their hatred of all things Trump and the more times they utter his name the higher go the
ratings and the faster the cash piles up. It's a business model not any sort of display of
honest journalism.
There's a tragic irony here. By the looks of things, so long as Mr. Trump is president, it
seems that any real movement for less interventionism in the Greater Middle East may come from
a part of the political right – libertarians like Rand Paul along with the president's
die hard base, which is willing to follow him on any policy pronouncement. Paradoxically, these
folks may find some common cause with the far left likes of Bernie Sanders and the
Ocasio-Cortez crowd, but it seems unlikely that the mainstream left is prepared to lead a new
antiwar charge. What with Schumer/Pelosi still in charge, you can forget about it. Given the
once powerful left-led Vietnam-era protest movement, today's Dems seem deficient indeed on
foreign policy substance. Odds are they'll cede this territory, once again, to the GOP.
By taking a stronger interventionist, even militarist, stand than Trump on Syria and
Afghanistan, the Democrats are wading into dangerous waters. Maybe, as some say, this president
shoots from the hip and has no core policy process or beliefs. Perhaps. Then again, Trump did
crush fifteen Republican mainstays in 2015 and shock Hillary – and the world – in
2016. Indeed, he may know just what he's doing. While the Beltway,
congressional-military-industrial complex continues to support ever more fighting and dying
around the world, for the most part the American people do not . Trump, in fact, ran on a
generally anti -interventionist platform, calling the Iraq War "dumb" and not to be repeated.
The president's sometimes earthy – if coarse – commonsense resonated with a lot of
voters, and Hillary's hawkish establishment record (including her vote for that very same Iraq
War) didn't win her many new supporters.
Liberals have long believed, at least since McGovern's 1972 trouncing by Richard Nixon, that
they could out-hawk the Republican hawks and win over some conservatives. It rarely worked. In
fact, Dems have been playing right into bellicose Republican hands for decades. And, if they
run a baby-boomer-era hawk in 2020 – say Joe Biden – they'll be headed for another
shocking defeat. The combination of a (mostly, so far) strong economy and practical policy of
returning US troops from unpopular wars, could, once again, out weigh this president's other
liabilities.
Foreign policy won't, by itself, tip a national election. But make no mistake, if the clowns
at MSNBC and "liberal" hacks on Capitol Hill keep touting their newfound militarism, they're
likely to emerge from 2020 with not only smeared consciences, but four more years in the
opposition.
* * *
Danny Sjursen is a US Army officer and regular contributor to Antiwar.com He served combat tours with reconnaissance units in Iraq
and Afghanistan and later taught history at his alma mater, West Point. He is the author of a
memoir and critical analysis of the Iraq War, Ghostriders of
Baghdad: Soldiers, Civilians, and the Myth of the Surge . Follow him on Twitter at
@SkepticalVet .
[ Note: The views expressed in this article are those of the author, expressed in an
unofficial capacity, and do not reflect the official policy or position of the Department of
the Army, Department of Defense, or the U.S. government.]
A the politicians carry their recordsike a ball and chain. Trump had no legislative
baggage so in comparison he looked ok. There may be a chance that some plan to allow e
wrything to sink to near chaos is happening, with that risk of a slip up being total
collapse. It would appear total collapse is likely absent some very well thought out plan by
a lot of people who appear to be morons
In the US the neocons switch between parties like changing underwear. Now that the
republicans are soiled they'll wear democrats instead, lobby for more war until they're good
and soiled, and switch when republican populism is back on the rise (like during the Bush
years, and then Obama).
We all know it. If libtards didn't hate America, they wouldn't be trying so hard to change
it.
Remember the happy white culture middle class America of 1955? Libtards hate it with a
passion that can only be an obsession. The first thing libtards started whining about in the
1950's was the the poor 'oppressed' negroes weren't allowed to burp and fart at the same
lunch counter as the evil white man. We foolishly caved in to that first step of liberal
stupidity and look where we are today. Mall shootings in Chicongo and New Jersey.
Everytime the (((media))) shows you these violent examples, just remember how we got
here.
Compromising with liberals is nothing more than a highway to hell, paved with compromise
and liberal 'good intentions'.
Now we have Donald Trump who is willing to tell the liberal idiots to shove their fake
altruism and egalitarianism up their collective asses. This chance of a lifetime for our
children may never come again.
I voted for McGovern. I think that was the first time I voted. Now I can't stand either
political Parties. I saw the games the Republicans pulled with the Massachusetts Caucus and
Convention when I was an alternate delegate for Ron Paul. There is no trick dirty enough for
either Party to pull. They are without a moral compass.
Bring 'some' troops home is just a political maneuver not a policy change. How can you
tell?
Trump is an imperialist. That's why he fired Bannon.
And that's why Trump moved drones attacks operations from the military to the CIA.
There's no evidence that Trump is ending US intervention anywhere.
Now check this out when the President is Democrat.
52%
of Republicans disprove withdrawing troops: Americans widely support President Obama's
recent decision to withdraw nearly all U.S. troops from Iraq by the end of the year, with 75%
approving. That includes the vast majority of Democrats and independents. Republicans,
however, are slightly more likely to disapprove than approve.
The Republican position went from 50% supporting withdrawal with Obama to 70% under Trump.
A change for sure, but not nearly as dramatic as the Democrats which have completely changed
their positions i.e. their position has nothing to do with principles what-so-ever.
@Escrava Isaura: " Trump is an imperialist. That's why he fired Bannon. "
Not so sure of the connection there.
But America is an imperial nation (both major parties have supported this for years) and
the problem now is that its imperialism is on an irreversible trajectory which will bring it
to an end. As one might expect, they are trying to keep it alive but that will only delay the
inevitable. What we don't know is whether it will end with a whimper or a big bang.
Feral, yes; rabid, absolutely; smart... not so much. Why is anyone surprised? The DemoRats
have never been a party dedicated to peace; the only ones thinking that are the walking
bong-holes who assuage their cognitive dissonance by telling themselves that. Both the
demorats and their willing accomplices 'across the aisle' have led us into constant war for
nearly eight decades. Lilliputian Big enders and Little enders all.
Yup. It's always about the money. As Fitts would say, that screeching you hear is the cash
flow drying up for the rentiers. The murdering of women and children be damned. Hillary's
demonic cackle is but the grotesque cherry on top: https://www.youtube.com/watch?v=Fgcd1ghag5Y
"Russian Orthodox Church says smartphones a harbinger of the Antichrist"
"MOSCOW (AP) -- The head of the Russian Orthodox Church says the data-gathering capacity
of devices such as smartphones risks bringing humanity closer to the arrival of the
Antichrist.
In an interview shown Monday on state TV, Patriarch Kirill said the church does not oppose
technological progress but is concerned that "someone can know exactly where you are, know
exactly what you are interested in, know exactly what you are afraid of" and that such
information could be used for centralized control of the world.
"Control from one point is a foreshadowing of the coming of Antichrist, if we talk about
the Christian view. Antichrist is the person who will be at the head of the world wide web
that controls the entire human race," he said."
Voters around the world revolt against leaders who won't improve their lives.
Newly-elected Utah senator Mitt Romney kicked off 2019 with an op-ed in the Washington Post
that savaged Donald Trump's character and leadership. Romney's attack and Trump's response
Wednesday morning on Twitter are the latest salvos in a longstanding personal feud between the
two men. It's even possible that Romney is planning to challenge Trump for the Republican
nomination in 2020. We'll see.
But for now, Romney's piece is fascinating on its own terms. It's well-worth reading. It's a
window into how the people in charge, in both parties, see our country.
Romney's main complaint in the piece is that Donald Trump is a mercurial and divisive
leader. That's true, of course. But beneath the personal slights, Romney has a policy critique
of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian
civil war. Romney doesn't explain how staying in Syria would benefit America. He doesn't appear
to consider that a relevant question. More policing in the Middle East is always better. We
know that. Virtually everyone in Washington agrees.
Corporate tax cuts are also popular in Washington, and Romney is strongly on board with
those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year
ago.
That's not surprising. Romney spent the bulk of his business career at a firm called Bain
Capital. Bain Capital all but invented what is now a familiar business strategy: Take over an
existing company for a short period of time, cut costs by firing employees, run up the debt,
extract the wealth, and move on, sometimes leaving retirees without their earned pensions.
Romney became fantastically rich doing this.
Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the
private equity model. Our ruling class sees nothing wrong with it. It's how they run the
country.
Mitt Romney refers to unwavering support for a finance-based economy and an internationalist
foreign policy as the "mainstream Republican" view. And he's right about that. For generations,
Republicans have considered it their duty to make the world safe for banking, while
simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those
goals enthusiastically.
There are signs, however, that most people do not support this, and not just in America. In
countries around the world -- France, Brazil, Sweden, the Philippines, Germany, and many others
-- voters are suddenly backing candidates and ideas that would have been unimaginable just a
decade ago. These are not isolated events. What you're watching is entire populations revolting
against leaders who refuse to improve their lives.
Something like this has been in happening in our country for three years. Donald Trump rode
a surge of popular discontent all the way to the White House. Does he understand the political
revolution that he harnessed? Can he reverse the economic and cultural trends that are
destroying America? Those are open questions.
But they're less relevant than we think. At some point, Donald Trump will be gone. The rest
of us will be gone, too. The country will remain. What kind of country will be it be then? How
do we want our grandchildren to live? These are the only questions that matter.
The answer used to be obvious. The overriding goal for America is more prosperity, meaning
cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones,
or more Amazon deliveries of plastic garbage from China are going to make us happy? They
haven't so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide
are depopulating large parts of the country. Anyone who thinks the health of a nation can be
summed up in GDP is an idiot.
The goal for America is both simpler and more elusive than mere prosperity. It's happiness.
There are a lot of ingredients in being happy: Dignity. Purpose. Self-control. Independence.
Above all, deep relationships with other people. Those are the things that you want for your
children. They're what our leaders should want for us, and would want if they cared.
But our leaders don't care. We are ruled by mercenaries who feel no long-term obligation to
the people they rule. They're day traders. Substitute teachers. They're just passing through.
They have no skin in this game, and it shows. They can't solve our problems. They don't even
bother to understand our problems.
One of the biggest lies our leaders tell us that you can separate economics from everything
else that matters. Economics is a topic for public debate. Family and faith and culture,
meanwhile, those are personal matters. Both parties believe this.
Members of our educated upper-middle-classes are now the backbone of the Democratic Party
who usually describe themselves as fiscally responsible and socially moderate. In other words,
functionally libertarian. They don't care how you live, as long as the bills are paid and the
markets function. Somehow, they don't see a connection between people's personal lives and the
health of our economy, or for that matter, the country's ability to pay its bills. As far as
they're concerned, these are two totally separate categories.
Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet
reach a strikingly similar conclusion. The real problem, you'll hear them say, is that the
American family is collapsing. Nothing can be fixed before we fix that. Yet, like the
libertarians they claim to oppose, many social conservatives also consider markets sacrosanct.
The idea that families are being crushed by market forces seems never to occur to them. They
refuse to consider it. Questioning markets feels like apostasy.
Both sides miss the obvious point: Culture and economics are inseparably intertwined.
Certain economic systems allow families to thrive. Thriving families make market economies
possible. You can't separate the two. It used to be possible to deny this. Not anymore. The
evidence is now overwhelming. How do we know? Consider the inner cities.
Thirty years ago, conservatives looked at Detroit or Newark and many other places and were
horrified by what they saw. Conventional families had all but disappeared in poor
neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule.
Crime and drugs and disorder became universal.
What caused this nightmare? Liberals didn't even want to acknowledge the question. They were
benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready
explanation for inner-city dysfunction and it made sense: big government. Decades of
badly-designed social programs had driven fathers from the home and created what conservatives
called a "culture of poverty" that trapped people in generational decline.
There was truth in this. But it wasn't the whole story. How do we know? Because virtually
the same thing has happened decades later to an entirely different population. In many ways,
rural America now looks a lot like Detroit.
This is striking because rural Americans wouldn't seem to have much in common with anyone
from the inner city. These groups have different cultures, different traditions and political
beliefs. Usually they have different skin colors. Rural people are white conservatives,
mostly.
Yet, the pathologies of modern rural America are familiar to anyone who visited downtown
Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A
terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You'd
think our ruling class would be interested in knowing the answer. But mostly they're not. They
don't have to be interested. It's easier to import foreign labor to take the place of
native-born Americans who are slipping behind.
But Republicans now represent rural voters. They ought to be interested. Here's a big part
of the answer: male wages declined. Manufacturing, a male-dominated industry, all but
disappeared over the course of a generation. All that remained in many places were the schools
and the hospitals, both traditional employers of women. In many places, women suddenly made
more than men.
Now, before you applaud this as a victory for feminism, consider the effects. Study after
study has shown that when men make less than women, women generally don't want to marry them.
Maybe they should want to marry them, but they don't. Over big populations, this causes a drop
in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably
follow -- more drug and alcohol abuse, higher incarceration rates, fewer families formed in the
next generation.
This isn't speculation. This is not propaganda from the evangelicals. It's social science.
We know it's true. Rich people know it best of all. That's why they get married before they
have kids. That model works. But increasingly, marriage is a luxury only the affluent in
America can afford.
And yet, and here's the bewildering and infuriating part, those very same affluent married
people, the ones making virtually all the decisions in our society, are doing pretty much
nothing to help the people below them get and stay married. Rich people are happy to fight
malaria in Congo. But working to raise men's wages in Dayton or Detroit? That's crazy.
This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our
mindless cultural leaders act like it's still 1961, and the biggest problem American families
face is that sexism is preventing millions of housewives from becoming investment bankers or
Facebook executives.
For our ruling class, more investment banking is always the answer. They teach us it's more
virtuous to devote your life to some soulless corporation than it is to raise your own
kids.
Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our
first duty is to shareholders, above our own children. No surprise there. Sandberg herself is
one of America's biggest shareholders. Propaganda like this has made her rich.
We are ruled by mercenaries who feel no long-term obligation to the people they rule.
They're day traders. Substitute teachers. They're just passing through. They have no skin in
this game, and it shows.
What's remarkable is how the rest of us responded to it. We didn't question why Sandberg was
saying this. We didn't laugh in her face at the pure absurdity of it. Our corporate media
celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: "Lean
In." As if putting a corporation first is empowerment. It is not. It is bondage. Republicans
should say so.
They should also speak out against the ugliest parts of our financial system. Not all
commerce is good. Why is it defensible to loan people money they can't possibly repay? Or
charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect
400 percent annual interest.
We're OK with that? We shouldn't be. Libertarians tell us that's how markets work --
consenting adults making voluntary decisions about how to live their lives. OK. But it's also
disgusting. If you care about America, you ought to oppose the exploitation of Americans,
whether it's happening in the inner city or on Wall Street.
And by the way, if you really loved your fellow Americans, as our leaders should, if it
would break your heart to see them high all the time. Which they are. A huge number of our
kids, especially our boys, are smoking weed constantly. You may not realize that, because new
technology has made it odorless. But it's everywhere.
And that's not an accident. Once our leaders understood they could get rich from marijuana,
marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or
decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana
industry. His fellow Republicans seem fine with that. "Oh, but it's better for you than
alcohol," they tell us.
Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who's
been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want
that for your kids? Of course not. Then why are our leaders pushing it on us? You know the
reason. Because they don't care about us.
When you care about people, you do your best to treat them fairly. Our leaders don't even
try. They hand out jobs and contracts and scholarships and slots at prestigious universities
based purely on how we look. There's nothing less fair than that, though our tax code comes
close.
Under our current system, an American who works for a salary pays about twice the tax rate
as someone who's living off inherited money and doesn't work at all. We tax capital at half of
what we tax labor. It's a sweet deal if you work in finance, as many of our rich people do.
In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He
paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners,
the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But
for everyone else, it's infuriating.
Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on
the principles of the free market. Please. It's based on laws that the Congress passed, laws
that companies lobbied for in order to increase their economic advantage. It worked well for
those people. They did increase their economic advantage. But for everyone else, it came at a
big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids
don't hate you. They hate each other.
That happens in countries, too. It's happening in ours, probably by design. Divided
countries are easier to rule. And nothing divides us like the perception that some people are
getting special treatment. In our country, some people definitely are getting special
treatment. Republicans should oppose that with everything they have.
What kind of country do you want to live in? A fair country. A decent country. A cohesive
country. A country whose leaders don't accelerate the forces of change purely for their own
profit and amusement. A country you might recognize when you're old.
A country that listens to young people who don't live in Brooklyn. A country where you can
make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as
important as the west side of Los Angeles. A country where environmentalism means getting
outside and picking up the trash. A clean, orderly, stable country that respects itself. And
above all, a country where normal people with an average education who grew up in no place
special can get married, and have happy kids, and repeat unto the generations. A country that
actually cares about families, the building block of everything.
What will it take a get a country like that? Leaders who want it. For now, those leaders will
have to be Republicans. There's no option at this point.
But first, Republican leaders will have to acknowledge that market capitalism is not a
religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool
to worship it. Our system was created by human beings for the benefit of human beings. We do
not exist to serve markets. Just the opposite. Any economic system that weakens and destroys
families is not worth having. A system like that is the enemy of a healthy society.
Internalizing all this will not be easy for Republican leaders. They'll have to unlearn
decades of bumper sticker-talking points and corporate propaganda. They'll likely lose donors
in the process. They'll be criticized. Libertarians are sure to call any deviation from market
fundamentalism a form of socialism.
That's a lie. Socialism is a disaster. It doesn't work. It's what we should be working
desperately to avoid. But socialism is exactly what we're going to get, and very soon unless a
group of responsible people in our political system reforms the American economy in a way that
protects normal people.
If you want to put America first, you've got to put its families first.
Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2,
2019.
"... America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." ..."
"... He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." ..."
"... The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president. ..."
"... The Two-Income Trap: Why Middle-Class Parents Are Growing Broke ..."
"... Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." ..."
"... "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" ..."
"... Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." ..."
"... Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. ..."
"... Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. ..."
"... "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." ..."
"... Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." ..."
"... But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. ..."
"... Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. ..."
"... Hillbilly Elegy ..."
"... Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." ..."
"All I'm saying is don't act like the way things are is somehow ordained by God."
Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged
monologue on his show that was, in essence, an indictment of American capitalism.
America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking
marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families
is not worth having. A system like that is the enemy of a healthy society."
He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate
the forces of change purely for their own profit and amusement."
The monologue was stunning in itself, an incredible moment in which a Fox News host stated that for generations, "Republicans
have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars." More
broadly, though, Carlson's position and the ensuing controversy reveals an ongoing and nearly unsolvable tension in conservative
politics about the meaning of populism, a political ideology that Trump campaigned on but Carlson argues he may not truly understand.
Moreover, in Carlson's words: "At some point, Donald Trump will be gone. The rest of us will be gone too. The country will remain.
What kind of country will be it be then?"
The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher
wrote of Carlson's monologue,
"A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would
be the first affirmative vote I've ever cast for president." Other conservative commentators scoffed. Ben Shapiro wrote in
National Review that Carlson's monologue sounded far more like Sens. Bernie Sanders or Elizabeth Warren than, say, Ronald Reagan.
I spoke with Carlson by phone this week to discuss his monologue and its economic -- and cultural -- meaning. He agreed that his
monologue was reminiscent of Warren, referencing her 2003
bookThe Two-Income Trap: Why Middle-Class Parents Are Growing Broke . "There were parts of the book that I disagree
with, of course," he told me. "But there are parts of it that are really important and true. And nobody wanted to have that conversation."
Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank
fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any
policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites
-- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people."
But whether or not he likes it, Carlson is an important voice in conservative politics. His show is among the
most-watched television programs in America. And his raising questions about market capitalism and the free market matters.
"What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put
these policies into effect, what will you have in 10 years?"
Populism on the right is gaining, again
Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald
Trump, whose populist-lite
presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless
you figure out how to put the flames out, it will consume it."
Populism is a rhetorical approach that separates "the people" from elites. In the
words of Cas
Mudde, a professor at the University of Georgia, it divides the country into "two homogenous and antagonistic groups: the pure people
on the one end and the corrupt elite on the other." Populist rhetoric has a long history in American politics, serving as the focal
point of numerous presidential campaigns and powering William Jennings Bryan to the Democratic nomination for president in 1896.
Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative,
thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment.
When right-leaning pundit Ann Coulter
spoke with Breitbart Radio about Trump's Tuesday evening Oval Office address to the nation regarding border wall funding, she
said she wanted to hear him say something like, "You know, you say a lot of wild things on the campaign trail. I'm speaking to big
rallies. But I want to talk to America about a serious problem that is affecting the least among us, the working-class blue-collar
workers":
Coulter urged Trump to bring up overdose deaths from heroin in order to speak to the "working class" and to blame the fact
that working-class wages have stalled, if not fallen, in the last 20 years on immigration. She encouraged Trump to declare, "This
is a national emergency for the people who don't have lobbyists in Washington."
Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax.
These sentiments have even pitted popular Fox News hosts against each other.
Sean Hannity warned his audience that New York Rep. Alexandria Ocasio-Cortez's economic policies would mean that "the rich people
won't be buying boats that they like recreationally, they're not going to be taking expensive vacations anymore." But Carlson agreed
when I said his monologue was somewhat reminiscent of Ocasio-Cortez's
past comments on the economy , and how even a strong economy was still leaving working-class Americans behind.
"I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home
an ever-expanding proportion of the money is not a recipe for a stable society. It's not."
Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent
a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that
labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and
figure out how to protect average people from these remarkably powerful forces that have been unleashed."
"I think populism is potentially really disruptive. What I'm saying is that populism is a symptom of something being wrong," he
told me. "Again, populism is a smoke alarm; do not ignore it."
But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current
state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are
its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson
railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation
of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left.
Carlson's argument that "market capitalism is not a religion" is of course old hat on the left, but it's also been bubbling on
the right for years now. When National Review writer Kevin Williamson
wrote
a 2016 op-ed about how rural whites "failed themselves," he faced a massive backlash in the Trumpier quarters of the right. And
these sentiments are becoming increasingly potent at a time when Americans can see both a booming stock market and perhaps their
own family members struggling to get by.
Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense
of unchosen obligations one might have towards one's kin.
At the Federalist, writer Kirk Jing
wrote of Carlson's
monologue, and a
response
to it by National Review columnist David French:
Our society is less French's America, the idea, and more Frantz Fanon's "Wretched of the Earth" (involving a very different
French). The lowest are stripped of even social dignity and deemed
unworthy of life . In Real America, wages are stagnant, life expectancy is crashing, people are fleeing the workforce, families
are crumbling, and trust in the institutions on top are at all-time lows. To French, holding any leaders of those institutions
responsible for their errors is "victimhood populism" ... The Right must do better if it seeks to govern a real America that exists
outside of its fantasies.
J.D. Vance, author of
Hillbilly Elegy
, wrote that the [neoliberal] economy's victories -- and praise for those wins from conservatives -- were largely meaningless
to white working-class Americans living in Ohio and Kentucky: "Yes, they live in a country with a higher GDP than a generation ago,
and they're undoubtedly able to buy cheaper consumer goods, but to paraphrase Reagan: Are they better off than they were 20 years
ago? Many would say, unequivocally, 'no.'"
Carlson's populism holds, in his view, bipartisan possibilities. In a follow-up email, I asked him why his monologue was aimed
at Republicans when many Democrats had long espoused the same criticisms of free market economics. "Fair question," he responded.
"I hope it's not just Republicans. But any response to the country's systemic problems will have to give priority to the concerns
of American citizens over the concerns of everyone else, just as you'd protect your own kids before the neighbor's kids."
Who is "they"?
And that's the point where Carlson and a host of others on the right who have begun to challenge the conservative movement's orthodoxy
on free markets -- people ranging from occasionally mendacious bomb-throwers like Coulter to writers like
Michael Brendan Dougherty -- separate
themselves from many of those making those exact same arguments on the left.
When Carlson talks about the "normal people" he wants to save from nefarious elites, he is talking, usually, about a specific
group of "normal people" -- white working-class Americans who are the "real" victims of capitalism, or marijuana legalization, or
immigration policies.
In this telling, white working-class Americans who once relied on a manufacturing economy that doesn't look the way it did in
1955 are the unwilling pawns of elites. It's not their fault that, in Carlson's view, marriage is inaccessible to them, or that marijuana
legalization means more teens are smoking weed (
this probably isn't true ). Someone,
or something, did this to them. In Carlson's view, it's the responsibility of politicians: Our economic situation, and the plight
of the white working class, is "the product of a series of conscious decisions that the Congress made."
The criticism of Carlson's monologue has largely focused on how he deviates from the free market capitalism that conservatives
believe is the solution to poverty, not the creator of poverty. To orthodox conservatives, poverty is the result of poor decision
making or a
lack of virtue that can't be solved by government programs or an anti-elite political platform -- and they say Carlson's argument
that elites are in some way responsible for dwindling marriage rates
doesn't make sense .
But in French's response to Carlson, he goes deeper, writing that to embrace Carlson's brand of populism is to support "victimhood
populism," one that makes white working-class Americans into the victims of an undefined "they:
Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes -- civil rights, women's
rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual
revolution, etc. -- and turns the negative or challenging aspects of those changes into an angry tale of what they are
doing to you .
And that was my biggest question about Carlson's monologue, and the flurry of responses to it, and support for it: When other
groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family
dysfunction, the response from many on the right has been, shall we say,
less than
enthusiastic .
Really, it comes down to when black people have problems, it's personal responsibility, but when white people have the same
problems, the system is messed up. Funny how that works!!
Yet white working-class poverty receives, from Carlson and others, far more sympathy. And conservatives are far more likely to
identify with a criticism of "elites" when they believe those elites are responsible for the
expansion of trans
rights or creeping secularism
than the wealthy and powerful people who are investing in
private prisons or an expansion
of the
militarization of police . Carlson's network, Fox News, and Carlson himself have frequently blasted leftist critics of market
capitalism and efforts to
fight
inequality .
I asked Carlson about this, as his show is frequently centered on the turmoils caused by "
demographic change
." He said that for decades, "conservatives just wrote [black economic struggles] off as a culture of poverty," a line he
includes in his monologue .
He added that regarding black poverty, "it's pretty easy when you've got 12 percent of the population going through something
to feel like, 'Well, there must be ... there's something wrong with that culture.' Which is actually a tricky thing to say because
it's in part true, but what you're missing, what I missed, what I think a lot of people missed, was that the economic system you're
living under affects your culture."
Carlson said that growing up in Washington, DC, and spending time in rural Maine, he didn't realize until recently that the same
poverty and decay he observed in the Washington of the 1980s was also taking place in rural (and majority-white) Maine. "I was thinking,
'Wait a second ... maybe when the jobs go away the culture changes,'" he told me, "And the reason I didn't think of it before was
because I was so blinded by this libertarian economic propaganda that I couldn't get past my own assumptions about economics." (For
the record, libertarians have
critiqued Carlson's
monologue as well.)
Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an
economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a
function or raw nature."
And clearly, our market economy isn't driven by God or nature, as the stock market soars and unemployment dips and yet even those
on the right are noticing lengthy periods of wage stagnation and dying little towns across the country. But what to do about those
dying little towns, and which dying towns we care about and which we don't, and, most importantly, whose fault it is that those towns
are dying in the first place -- those are all questions Carlson leaves to the viewer to answer.
What Should You Do About a Falling Stock Market?
Nothing https://nyti.ms/2RncIvF
NYT - Neil Irwin - Jan 3
Millions of investors will receive year-end statements from their brokerages and
retirement plan managers in the coming weeks, and the great majority of them will have
unpleasant news: losses.
The S&P 500 finished the year down 6.2 percent, with the steepest declines recorded in
the fourth quarter.
With Apple's announcement of disappointing sales in China on Wednesday, the bad times for
stocks continued in the first week of the new year. While most economic data has remained
strong, there are some rumblings that 2019 may be quite a bit rougher than 2018. Corporate
executives are becoming more pessimistic, according to surveys, and Americans are conducting
Google searches for the word "recession" at the highest rate since the last one just ended in
2009.
If it all makes you want to flee -- or at least shift your 401(k) into cash -- that's
understandable. It's also a bad idea.
The sensible response to this unnerving series of developments is to do pretty much
anything else. Read a book. Go for a walk. Take up knitting. Or just do nothing at all, like
take a nap.
If you are a long-term investor (and any money you have tied up in the stock market should
be intended for the long term to begin with), tumult like that of the last few months isn't
something that should cause panic. Rather, it's the price you pay for enjoying returns that,
over long time horizons, are likely to be substantially higher than those for cash or
bonds.
That's true if this episode turns out to be a false alarm for the overall economy, as is a
distinct possibility. But it's also true even if this does turn out to be the start of a
prolonged period of economic and market distress -- especially if you are still in the phase
of your life of contributing to a retirement plan or otherwise accumulating savings.
The recent pessimistic tone in markets is getting way ahead of the evidence. Nothing so
far in either the economic data or the market indicators that most reliably predict economic
swings suggests there will be anything worse than a modest slowdown in economic growth in
2019.
Businesses are still expanding and adding jobs. The yield on two-year Treasury bonds has
fallen in the last three months, but it would have fallen a lot more if the bond market --
which tends to be closely tied to the direction of the overall economy -- had been predicting
an imminent recession.
Moreover, an investor who moved money into cash now would be doing so just as the
valuation of stocks was becoming more favorable -- buying high and selling low, not the way
great fortunes are made. That's especially true when you factor in the drop in longer-term
interest rates, which makes shares particularly appealing relative to bonds.
In early November, investing $100 in stocks would buy you about $4.64 worth of corporate
earnings, versus the $3.21 in interest you would could receive by investing in 10-year
Treasury bonds. Now, stocks offer $5.25, while bonds offer only $2.61.
But most important, even if the economic road ahead really is as bumpy as some in markets
seem to fear, you're probably not going to be successful at timing those swings just
right.
Of course, if you had a perfect ability to predict how far the market would fall and when
it would bottom out, it would make sense to move money in and out. You do not.
There is a wide range of evidence that people are pitiful at timing the market. Even
supposed investment experts lack that prescience.
Even if you turned out to be right about a continuing tumble in 2019, the great risk would
be that whenever the rebound began, you would be caught out of position, unable to take
advantage.
Suppose you were clever enough to recognize at the start of December 2007 that a major
recession was about to take place, and you moved your money out of stocks.
Yes, you would have saved yourself from steep losses in 2008 and early 2009. But you have
to ask yourself: Would I have also had the courage to put money back in while the economy was
still in horrendous shape in 2009, with double-digit unemployment and a banking system in
tatters?
If not then, when would you have moved money back in? People who simply left their savings
fully invested in the stock market in December 2007 have now made a 134 percent return on
that money. Would you have done better than that, or would you have missed out on a big chunk
of those gains out of the same caution that led you to pull money out of stocks to begin
with?
People who did not panic in the fall of 2008 -- the most panic-worthy time in most of our
lifetimes -- and kept putting their retirement funds into stocks did indeed incur steep
losses over the ensuing months. But their newly invested funds were being put into stocks at
the most favorable valuations in a generation, and thus enjoyed the full benefit of the
rebound when it eventually came.
A truism of economic and financial cycles is that by the time it feels like the coast is
clear and putting money into riskier investments is completely safe, the real money has
already been made. People who looked at the economic chaos of early 2009 and stuck to their
guns have ended up far better off than those who, convinced that a double-dip downturn was
imminent, waited for years to get in.
This equation changes, of course, if we're talking about money needed imminently as
opposed to longer-term savings, such as for retirement. The economy looks stable now, but
that could change -- it's still possible that markets and C.E.O.s know something about the
future that isn't clear in the data yet.
But that's more of a fundamental argument about how your assets should be allocated. If an
18 percent drop in stocks is enough to cause you to change your entire investment strategy,
that money shouldn't have been in stocks to begin with.
The entire point of investing in stocks is that you get greater long-term expected returns
in exchange for tolerating bigger ups and downs. Episodes like those of the last few weeks
are, in effect, the price you pay for returns that are substantially higher than bonds or
cash over longer periods.
Just as there are no free lunches, there are no excess returns without some volatility and
risk.
As individual investors, we cannot control volatility. What we can control is our own
mind-set and reaction, and the more level your head, the better your long-term results are
likely to be.
---
Others would advise you to use the '120 - Yer Age' rule:
At age 70, keep 120-70 (50%) of yer assets in equities,
50% in bonds. The main point to this might be, if yer 30, keep 90% of them in equities.
(Not so long ago, apparently, this was the
'100 - Yer Age' rule, if that tells you anything.)
Such rules reflect the idea that stock markets
*always* recover over time, assuming you have
enough time available to wait.
Stocks were going up too quickly for too long, becoming overpriced.
The longer that happens, and the more overpriced they get, the bigger the drop when it
corrects.
So, you let stock prices fall back to a normal P/E ratio.
Anti-greenspan. Greenspan thought bubbles good, and the clean-up easy. Wrong. Bubbles are
bad. Volker was correct. Take away the punch bowl just as the party is getting
started.
This is more reassuring. DeLong's article "What Will Cause the Next US Recession?" leads with
"Three of the last four US recessions stemmed from unforeseen shocks in financial markets..."
As long as DeLong can get away with saying those crises were the results of unforeseen causes
then economists still really do not know what they are talking about and we would be better
off listening to readers of hand palms and tea leaves.
Like Generals fighting the last war, Dr. Summers ?
"The critical challenge for monetary and fiscal policy will be to maintain sufficient
demand amid immense geopolitical uncertainty, increasing protectionism, high accumulated debt
levels, and structural and demographic factors leading to increased private saving and
reduced private investment"
Perhaps the critical challenge, and the tone of the next recession, is less demand. After
all, recessions area always caused by a change in consumer taste more than demand.
I think this is still the wrong tack, as it gets too close to the wrong headed Modern Money
Theory where the ignorant think money can be dumped into the economy, in near infinite
amounts, without regard for taxation, with no side-effects.
I think the better tack is to attack it as a cash-flow issue. The rich are taking money
out of active circulation, and lending it back into the economy. This is why debt is
exploding at an unsustainable rate.
We need to use the tax code to force the rich to spend or capital invest their income back
into the economy.
Observations of the 1950-1960s tax code show that the rich didn't actually pay a higher
effective rate. They used loopholes.
RIGHT!!! Those loopholes were created as the carrot to get the rich to spend or
invest.
Don't phrase it as "We need to raise taxes to fund..." It smacks of "take from workers and
give to lazy".
We need to phrase it as "We need to tax to force the rich to spend or invest."
The spending and investing increases total economic activity. The poor become middle
class, going from paying little-to-no tax to paying 20-30% effective rates.
AND, it is that lifting of the poor into the middle class that creates the extra tax
revenue to fund needed social and infrastructure spending.
The solution is to put the Federal government on GAAP bookkeeping. An income and expense
ledger. And asset and liabilty ledger.
State and local government sorta do this, ie, they balance income and expense except for
capital expense funded with bonds.
What is not done is the listing of all assets offset by debt, etc, and shareholder
equity.
For NYC vs smallville KS, the liabilities of NYC would be tens of billions and svKS zero,
but the assets of NYC multiples of liabilities vs a few thousand in asset value for that debt
free small town.
Given Adam Smith, the assets of a government should include its people as they are the
biggest wealth "of nations". The better educated, skilled, more productive, substantially
derermined by investing in education, health, etc, the greater the asset value, the greater
the wealth.
But just limiting debt to bonds tied to new assets, bonds for roads, schools, etc. Taxing
the assets to pay off the bonds while taxing the people for current consumption is
prudent.
Track refers to trains or roads, meaning one of limited options.
Tack is a sailing term used to describe how you get a sailboat to go upwind by not going
directly in the direction you want, but rather at an angle.
I am concerned with the money supply.
Currently, 10% of GDP leaks out via structural imbalances, replaced by debt increasing at
3x the rate of population(1%ish) and inflation(2%ish).
The OP Krugman tacks the tack (or is it track, becasue of limited options?) that we should
just keep doing that. He is saying we should ignore the massive deficits, and wealth transfer
to the rich that the interest on that debt creates.
I believe this the wrong tack (or is it track?), instead thinking we should attack and
reverse the trade imbalances such that the debt is no longer necessary.
You are still misunderstand the problem, viewing the macroeconomy through a microeconomic
lens.
You want the federal government to start acting "responsible", ignoring the lessons of the
1800s that the rich would soon suck all the money out of the economy, creating a
depression.
You get blood out of a turnip by first putting blood into a turnip.
You get money out of an economy (as the trade does $500+B a year and the rich are doing
$1T+ a year) but first putting money in ($1.5T+ new debt a year).
You think we can stop putting blood into the turnip... I mean stop putting money into the
economy, without first stopping the giant drain of blood... dang it... I mean money out of
the economy.
In reality, there appear to be 2 options. 1) Keep putting money in and taking it out. 2)
Stop taking it out so that we can stop putting it in.
Your option of "just stop putting money in, without first addressing the drains" is sure
to lead to collapse.
The Trump Tax Cut: Even Worse Than You've Heard
Skeptical reporting has still been too favorable.
By Paul Krugman
The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big
promises about soaring investment and wages, and also assured everyone that it would pay for
itself; none of that has happened.
Yet coverage actually hasn't been negative enough. The story you mostly read runs something
like this: The tax cut has caused corporations to bring some money home, but they've used it
for stock buybacks rather than to raise wages, and the boost to growth has been modest. That
doesn't sound great, but it's still better than the reality: No money has, in fact, been
brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent
of Americans will end up poorer thanks to that cut.
Let me explain each point in turn.
First, when people say that U.S. corporations have "brought money home" they're referring to
dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge
briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of
those subsidiaries to the home companies; these transactions also showed up as a reduction in
the measured stake of the parents in the subsidiaries, i.e., as negative direct investment
(Figure 1).
Figure 1 *
But these transactions are simply rearrangements of companies' books for tax purposes; they
don't necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides
to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company.
This will produce the kind of simultaneous and opposite movement in dividends and direct
investment you see in Figure 1. But the company's overall balance sheet – which always
included the assets of MM Ireland – hasn't changed at all. No real resources have been
transferred; MM USA has neither gained nor lost the ability to invest here.
If you want to know whether investable funds are really being transferred to the U.S., you
need to look at the overall balance on financial account – or, what should be the same
(and is more accurately measured), the inverse of the balance on current account. Figure 2
shows that balance as a share of GDP – and as you can see, basically nothing has
happened.
Figure 2
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows
to America.
The tax cut did, however, have one important international effect: We're now paying more
money to foreigners.
Bear in mind that the one clear, overwhelming result of the tax cut is a big break for
corporations: Federal tax receipts on corporate income have plunged (Figure 3).
Figure 3
The key point to realize is that in today's globalized corporate system, a lot of any
country's corporate sector, our own very much included, is actually owned by foreigners, either
directly because corporations here are foreign subsidiaries, or indirectly because foreigners
own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to
foreign nationals – which means that a third of the tax cut flowed abroad, rather than
staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut
probably made America poorer, not richer.
And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent ** of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit.
Meanwhile, since the tax cut isn't paying for itself, it will eventually have to be paid for
some other way – either by raising other taxes, or by cutting spending on programs people
value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent
than the benefit of the original tax cut. So it's a near-certainty that the vast majority of
Americans will be worse off thanks to Trump's only major legislative success.
As I said, even the mainly negative reporting doesn't convey how bad a deal this whole thing
is turning out to be.
(Bloomberg) -- Jeffrey Gundlach said yet again that the U.S. economy is gorging on debt.
Echoing many of the themes from his annual "Just Markets" webcast on Tuesday, Gundlach took
part in a round-table of 10 of Wall Street's smartest investors for Barron's. He highlighted
the dangers especially posed by the U.S. corporate bond market.
Prolific sales of junk bonds and significant growth in investment grade corporate debt,
coupled with the Federal Reserve weaning the market off quantitative easing, have resulted in
what the DoubleLine Capital LP boss called "an ocean of debt."
The investment manager countered President Donald Trump's claim that he's presiding over the
strongest economy ever. The growth is debt-based, he said.
Gundlach's forecast for real GDP expansion this year is just 0.5 percent. Citing numbers
spinning out of the USDebtClock.org website, he pointed out that the U.S.'s unfunded
liabilities are $122 trillion -- or six times GDP.
"I'm not looking for a terrible economy, but an artificially strong one, due to stimulus
spending," Gundlach told the panel. "We have floated incremental debt when we should be doing
the opposite if the economy is so strong."
Stock Bear
Gundlach is coming off another year in which his Total Return Bond Fund outperformed its
fixed-income peers. It returned 1.8 percent in 2018, the best performance among the 10 largest
actively managed U.S. bond funds, according to data compiled by Bloomberg.
Gundlach expects further declines in the U.S. stock market, which recently have steadied
after reeling for most of December since the Great Depression. Equities will be weak early in
the year and strengthen later in 2019, effectively a reversal of what happened last year, he
said.
"So now we are in a bear market, which isn't defined by me as stocks being down 20 percent.
A bear market is determined by the way stocks are acting," he said.
Rupal Bhansali, chief investment officer of International & Global Equities at Ariel
Investments, picked up on Gundlach's debt theme in the Barron's cover story. Citing General
Electric's woes, she urged investors to focus more on balance-sheet risk rather than whether a
company could beat or miss earnings. Companies with net cash are worth looking at, she
said.
Did Krugman just issue a veiled warning to Pelosi, Schumer, and Clinton Democrats? Did he see
this as a teaching moment for them? Has he turned from unabashed megaphone for establishment
Democrats to an honest broker, willing to explain economics to Demcoratic Big Money
parasites? Could be... If so, this might be a turning point for Krugman from partisan hack to
honest broker!
As always, Robert Reich pulls fewer punches: "Do not ever underestimate the influence of
Wall Street Democrats, corporate Democrats, and the Democrats' biggest funders. I know. I've
been there.
In the 2018 midterms, according to the nonpartisan Center for Responsive Politics, big
business made more contributions to Democrats than to Republicans. The shift was particularly
noticeable on Wall Street. Not since 2008 have donors in the securities and investment
industry given a higher percentage to Democratic candidates and committees than to
Republicans.
The moneyed interests in the Democratic party are in favor of helping America's poor and
of reversing climate change – two positions that sharply distinguish them from the
moneyed interests in the Republican party.
And maybe, just maybe, Krugman, in a veiled warning to Democrats enamored with Trump's tax
cuts, has decided to trump partisan loyalty with economic reality...as any decent economist
should do.
EMichael and kurt will be disappointed, very disappointed that Krugman sided with AOC over
corrupt, sclerotic, corporate Democrats...
There is no reason to think that mainstream liberals would not just go along with whatever
direction the liberal establishment takes. OTOH, there is a major difference in the context
between the rank and file of mainstream liberals and the actual liberal establishment itself.
Mainstream liberals just want to fit in and win elections. They are concerned with
electability and the constraints of legislative process. There is nothing wrong with that. It
is the role of the rank and file.
However, AOC is correct. It is radicals that bring about all significant change.
Mainstream radical is an oxymoron. After radicals cause change then it is no longer radical,
but it becomes mainstream instead.
In contrast, the liberal establishment is also concerned with electability because that is
what they do for a living, either get elected or ride along on the coattails of the elected,
but they are elites and elitists not to be separated from the status quo economic
establishment without considerable consternation. However, the elitists' trepidation over
being separated from their wealthy elite supporters would be greatly reduced by severe limits
on private campaign financing. Still, it would be a rare elected official that would rather
eat in a soup kitchen than a five-star restaurant both for the good food and for the good
company. In both regards though that depends upon what your definition of "good" is.
"Mainstream liberals just want to fit in and win elections..." And they are precisely they
kind of "go-along to get along types" who let bad things happen...and then pretend to not
understand what went wrong...Vietnam, Iraq, GWOT, Glass-Steagall repeal, trade
liberalization/offshoring profits, banksters who go Scot free after bringing the economy
down. The list goes on.
There are leaders, followers, and radicals. One can choose to be any one or two or those they
want, but no more than two. It is not very rewarding to be a radical from the back of the
line unless there is also a radical to follow at the front of the line. Leaders that are also
followers inherit the status quo and guard it like it was their own because it is. Radical
leaders rarely succeed, but often die young.
Trump is a bad example of a leader, but he follows his nose at least rather than just the
status quo. Trump has a nose for trouble and he cannot resist its stench any more than a
jackal or hyena can resist rotting carrion. Fortunate for Trump the US has a long history of
stockpiling trouble for future consumption that reaches all the way back to colonial times.
Trump likes to think that orange is the new black, but the old black, brown, and red are
still around and neither yellow nor orange can take their place.
The majority of people are just plain old followers. If people think that there is chaos
in the world already, just imagine what it would be like if most people were not just plain
old followers. The status quo always has the advantage of the natural force of inertia.
"...banksters who go Scot free after bringing the economy down. The list goes on."
Because you believe in government as done by Putin, Maduro, Saddam, Saudi Arabia, etc:
jail, torture, kill enemies by the people in power being the law.
You reject the US Constitution where voters are allowed to elect Republicans who legalize
fraud and theft by deception based on voters wanting the free lunch of easy credit requiring
bankers have no liability for the bad loans from easy credit. You reject the US Constitution
prohibition on retroactive laws criminalizzing legal actions.
Only if you were leading protests in the 90s in opposition to laws making credit easy for
below $80,000 workers whether buying houses or trucks/SUV.
Only if you were picketing real estate agents and car dealers from 2001 to 2005 to keep
out customers, you were not doing enough to stop easy credit.
The GOP was only dellivering what voters wanted, stuff they could not afford paid for by
workers saving for their retirement.
Elections have consequences.
The elections from 1994 to 2004 were votes for free lunch economics. The GOP promised and
delivered free lunch economic policies.
In 2005, voters on the margins realized tanstaafl, and in 2006 elected Pelosi to power,
and Pelosi, representing California knows economies are zero sum, so she increased costs to
increase general welfare. One of the costs was reccognizing the costs, and benefits, of the
US Constitution.
In 2008, she did not try to criminalize past action, and when she could not get the votes
to punish the bankers who bankrupted the institutions they ran by prohibiting bonuses in the
future,, she insread delivered the best deal possible for the US Constitutional general
welfare.
I think Bernie wanted all voters who voted GOP to lose their jobs, or maybe he simply
believes in free lunch economist claims that welfare payments in Ohio and Michigan are higher
than union worker incomes.
Maybe he thinks bankruptcy court nationalize businesses, not liquidate them.
Or maybe he figured the solution was a 21st Century Great Depression which would elect a
socialist instead of a capitalist FDR, and he would get to run all the automakers, all the
food industry, and employ all the workers deciding what they can buy?
I can never figure out how the economy would work if Bernie were running it. He talks
about Europe, but never advocates the cost of EU economy that is part of EU law: the VAT. All
EU members must have a VAT that is a significant cost to every person in the EU.
Free lunch economics is when you promise increased benefits with no costs, or lower
costs.
Free lunch Trump and free lunch Bernie differ only in their winners, but their losers are
always the same.
When progressives argue for unlimited increases in debt just like Reagan, they are
rejecting the pokicies of FDR, Keynes, the US when the general welfare increased most by
increasing assets faster than debt.
"'elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing." Which is why so many liberal
establishment politicians...per Reich...pay only lip service to real campaign finance reform.
Being parasites, they feed off of their hosts and dare not disrupt the gravy train.
"elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing."
So, the wealthy liberal elites who pay no taxes by cleverly paying all revenue to workers
need to be punished because they pay too much to too many workers?
Warrren Buffett has never paid much in taxes even when tax rates on corporations were over
50% and individuals reached over 70%. Money paid to workers, directly or indirectly, was and
still is the number one tax dodge.
Unless you go to a sales tax aka VAT which taxes all revenue, expecially business income
paid to workers.
VAT is an income tax with zero tax dodges aka loopholes aka deductions.
""'elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing." Which is why so many liberal
establishment politicians...per Reich...pay only lip service to real campaign finance reform.
Being parasites, they feed off of their hosts and dare not disrupt the gravy train."
In your view, its the poor who create high paying jobs?
It's wrong to listen to people who convince rich people to give their money to people
paying US workers to build factories, wind farms, solar farms battery factories,
transportation systems, vehicles, computer systems in the US?
Instead Democrats should listen to people who have never created long term paying jobs,
but only pay elites who run campaigns using mostly unpaid workers, or workers paid only a few
months every few years? Like Bernie does?
When it comes to how to run a "Green New Deal", I want the policy crafted by someone who
listens to Elon Musk, Bill Gates, Jeff Bezos, and the CEOs of California energy corporations,
tech companies, who are commited to consuming more and more energy that requires no fossil
fuels. Listening to Home Depot and Walmart building managers and retail sales managers should
be a priority. All these guys both focus on paying more workers, and selling more to workers
paid more.
AOC and Bernie seem to listen to the Lamperts who are destroying the value of companies
like Sears by "taxing" both the customers, workers, and owners, by giving money to people who
don't work to produce anything.
I make going to RealClearPolicy, Politics, etc a daily practice to see how bad
progressives are at selling their policies, making it easy for find all sorts of costs,
without any benefits to anyone.
The New Deal was not about taking money from the rich and giving it to the poor. The New
Deal was about paying workers more.
In 1930, half the population still lived on farms. (They might work off the farm, but they
were farmworkers first.) The problem for farmers is Europe had recovered from the war and was
no longer sending gold to the US to secure loans to buy food, but instead repaying the loans
by shipping high value food to the US, wine, cheese, etc, and that meant too much food drove
prices down, which meant farmworkers earned less and less.
One of the first laws set minimum prices for food, enforced by destroying crops, or
government overpaying for food like milk, cheese, bread, which the government gave away to
the poor who could never buy this food. It was not about giving food away, but about paying
workers, the farmers, ranchers, etc. Giving the food to the poor who could not afford to buy
food was simply to avoid the attacks on FDR for destroying good food to drive up farmer pay.
Which was the truth.
FDR talked about creating a healthy workforce to make America great, then about building a
healthy soldier. Ike in the 50s and JFK in the 60s campaigned on creating healthy soldiers.
And smart, educated soldiers and workers.
The policies of liberals was about better workers, richer workers.
Conservatives since Reagan has been about cutting the costs of workers. Sold based on
consumers benefiting from lower cost workers, because consumees are never workers, workers
never consumers, because if workers equal consumers, economics must be zero sum.
By attracting the intense ire of the GOP, AOC activates the negative polarization of lib
pundits and makes them look for ways to defend left policy items they'd attack in any other
scenario. It's very effective at pushing the discourse forward.
"But the Democrats' moneyed interests don't want more powerful labor unions. They are not in
favor of stronger antitrust enforcement against large corporations."
So, you think beef at $10 plus per pound, salad greens at $5 plus per pound, a fast food
meal at $10 plus, is a winning issue for Democrats?
Or by powerful labor unions, you mean for only white male blue collar factory workers,
long haul white truckers, white construction workers?
Making all work pay enough to reach middle class status at the low end will not happen by
unions because many parts of the US, and workers, and jobs, will oppose unions. Instead,
labor laws and enforcement to lift wages and working conditions rapidly in conservative
regions are required.
Better to get the minimum wage in Indiana and Kansas to $10 than in California to $15.
More important to get farm workers fully covered by Federal law like factory workers, with
exemptions only for farmer family members.
Raising incomes in low living cost regions will not raise prices much nationally, but
increase living standards among the most disadvantaged who feel "left behind".
Automatic increases annually of 10% for 7 years, then indexed by cpi.
Constantly emphasizing this minimum is way below what the low wage is in SF, NYC, LA, but
the goods produced will be bought and thus wages paid mostly by high income liberal elites.
Conservatives sticking it to liberals!
Wow... you need to do a lot better at shopping sales. I wait for sales and then buy burger
at $2.50, crud cuts at $3-4, and can frequently get t-bone and ribeye for under $5.
BUT, on the larger scale, what is the difference if I pay $1 a pound for burger and earn
$20K a year, or I pay $3 for burger and earn $60K a year?
Inflation punishes savers? Really? What is the difference if I earn 3% at 2% inflation or
1% at 0% inflation? The answer is, none.
"In that case, however, why do we care how hard the rich work? If a rich man works an extra
hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income
of everyone else doesn't change, does it? Ah, but it does – because he pays taxes on
that extra $1000. So the social benefit from getting high-income individuals to work a bit
harder is the tax revenue generated by that extra effort – and conversely the cost of
their working less is the reduction in the taxes they pay."
This is not right. Heck, it's not even wrong.
Say the $1000 is for a surgery. The social benefit is the tax they pay on it? The surgery
itself is irrelevant?
Krugman confuses the flow of money, which supports and correlates with production, with
the actual production, the real "social benefit".
If you invent a widget that everyone on earth is willing to pay $1 over cost to get,
congratulations, you just earned $7 billion.
Now, does that mean you get to consume $7 billion worth of stuff other people produce? I
think so.
Or, does it mean you get to trap the world in $7 billion of debt servitude from which it
is impossible for them to escape, because you are hoarding, and then charging interest on,
the $7 billion they need to pay back their debts.
The key is to understand that money is created via debt. Money has value because people
with debt need to get it to repay their debts.
If we all decide BitCoin is worthless, then BitCoin is worthless. It has no fundamental
usefulness.
If we all decide money is worthless, then a bunch of people with debt will gladly take it
off our hands so that they can repay their debt. Heck, they may even trade us stuff to get
the debt... which is why money is NOT worthless.
If $1 per day make everyone live better with no added climate change, PLUS paid an extra $7
billion per day to production workers, service workers, that would be good, or bad?
Say, the $7 billion in wages was to sing and dance so no matter where in the world he was,
he was entertained by song and dance?
Economies are zero sum. Every cost has an equal benefit aka income or consumption. Work
can't exist without consumption, consumption without work.
"If $1 per day make everyone live better with no added climate change, PLUS paid an extra $7
billion per day to production workers, service workers, that would be good, or bad?"
Obviously, good. Which is what I say in my post.
"Money is merely work in the past or future."
Money is other peoples' debt. They have borrowed money into existence and then spent it
into the economy, AND they have pledged to do work in the future, to get the money back so
they can repay the debt.
That "doing work in the future to get the money back" is only possible if the people with
the money actually spend it back into the economy.
The problem is that the people in debt also agreed to pay interest, and the people with
the money want to keep collecting the interest... so keep holding the money... making it
absolutely impossible for those with debt to pay it back.
I'm saying is that there is obligation on both sides. There is obligation on the part of
people with debt to produce goods and services and sell them for money to repay their debts,
AND for that to be possible, there is obligation on those with money to actually spend the
money...
Contrary to CONservative opinion, money is not created by work, it is earned by selling,
and that means for the economy to function, there has to be spending.
We need a tax code with very high top rates, but deductions for spending and capital
investing... not to take from the rich, but rather to force them to spend and invest to get
deductions.
Elizabeth Warren and Her Party of Ideas She's what a serious policy intellectual looks like in 2019. By Paul Krugman
Almost 40 years have passed since Daniel Patrick Moynihan -- a serious intellectual turned influential politician -- made
waves by declaring, "Of a sudden, Republicans have become a party of ideas." He didn't say that they were good ideas; but the
G.O.P. seemed to him to be open to new thinking in a way Democrats weren't.
But that was a long time ago. Today's G.O.P. is a party of closed minds, hostile to expertise, aggressively uninterested in
evidence, whose idea of a policy argument involves loudly repeating the same old debunked doctrines. Paul Ryan's "innovative"
proposals of 2011 (cut taxes and privatize Medicare) were almost indistinguishable from those of Newt Gingrich in 1995.
Meanwhile, Democrats have experienced an intellectual renaissance. They have emerged from their 1990s cringe; they're no longer
afraid to challenge conservative pieties; and there's a lot of serious, well-informed intraparty debate about issues from health
care to climate change.
You don't have to agree with any of the various Medicare for All plans, or proposals for a Green New Deal, to recognize that
these are important ideas receiving serious discussion.
The question is whether our media environment can handle a real party of ideas. Can news organizations tell the difference
between genuine policy wonks and poseurs like Ryan? Are they even willing to discuss policy rather than snark about candidates'
supposed personality flaws?
Which brings me to the case of Elizabeth Warren, who is probably today's closest equivalent to Moynihan in his prime.
Like Moynihan, she's a serious intellectual turned influential politician. Her scholarly work on bankruptcy and its relationship
to rising inequality made her a major player in policy debate long before she entered politics herself. Like many others, I found
one of her key insights -- that rising bankruptcy rates weren't caused by profligate consumerism, that they largely reflected
the desperate attempts of middle-class families to buy homes in good school districts -- revelatory.
She has also proved herself able to translate scholarly insights into practical policy. Full disclosure: I was skeptical about
her brainchild, the Consumer Financial Protection Bureau. I didn't think it was a bad idea, but I had doubts about how much difference
a federal agency tasked with policing financial fraud would make. But I was wrong: Deceptive financial practices aimed at poorly
informed consumers do a lot of harm, and until President Trump sabotaged it, the bureau was by all accounts having a hugely salutary
effect on families' finances.
And Warren's continuing to throw out unorthodox policy ideas, like her proposal that the federal government be allowed to get
into the business of producing some generic drugs. This is the sort of thing that brings howls of derision from the right, but
that actual policy experts consider a valuable contribution to the discussion.
Is there anyone like Warren on the other side of the aisle? No. Not only aren't there any G.O.P. politicians with comparable
intellectual heft, there aren't even halfway competent intellectuals with any influence in the party. The G.O.P. doesn't want
people who think hard and look at evidence; it wants people like, say, the "economist" Stephen Moore, who slavishly reaffirm the
party's dogma, even if they can't get basic facts straight.
Does all of this mean that Warren should be president? Certainly not -- a lot of things determine whether someone will succeed
in that job, and intellectual gravitas is neither necessary nor sufficient. But Warren's achievements as a scholar/policymaker
are central to her political identity, and clearly should be front and center in any reporting about her presidential bid.
But, of course, they aren't. What I'm seeing are stories about whether she handled questions about her Native American heritage
well, or whether she's "likable."
This kind of journalism is destructively lazy, and also has a terrible track record. I'm old enough to remember the near-universal
portrayal of George W. Bush as a bluff, honest guy, despite the obvious lies underlying his policy proposals; then he took us
to war on false pretenses.
Moreover, trivia-based reporting is, in practice, deeply biased -- not in a conventional partisan sense, but in its implicit
assumption that a politician can't be serious unless he (and I mean he) is a conservative, or at most centrist, white male. That
kind of bias, if it persists, will be a big problem for a Democratic Party that has never been more serious about policy, but
has also never been more progressive and more diverse.
This bias needs to be called out -- and I'm not just talking about Warren. Consider the contrast between the unearned adulation
Ryan received and how long it took conventional wisdom to recognize that Nancy Pelosi was the most effective House speaker of
modern times.
Again, I'm not arguing that Warren should necessarily become president. But she is what a serious policy intellectual looks
and sounds like in 2019. And if our media can't recognize that, we're in big trouble.
Warren's point is: "the generals, 'adults' to the neocons and media, have to express in clear terms what is 'winning', how we
the unwashed know it is winning and what cost and time to 'win'.
No more deferring to neocon pundits and appeal to generals' authority for insanities like Syria and Libya!
Sort of like what the TDS'ers are saying about the border wall only for the immense pentagon waste machine.
Skeptical about the war mongers, Warren may not be an adult any more........
... Afghanistan has long been called the "graveyard of empires" -- for so long that it is unclear who coined that disputable
term.
In truth, no great empires perished solely because of Afghanistan. Perhaps a better way to put it is that Afghanistan is the
battleground of empires. Even without easily accessible resources, the country has still been blessed -- or cursed, more likely
-- with a geopolitical position that has repeatedly put it in someone or other's way. ...
Were they really "going broke"? They could print unlimited amounts of money.
Or was it that no one was bothering to work?
Or was it that the oligarchs realized they could get richer if they could fire people rather than under a system where they
had to employ everyone?
I had a co-worker that grew up in the Soviet Union. From his point of view, one day you had a guaranteed job and the pay was
going to be low no matter how hard you worked, so no one actually worked much. The next day you could be fired if you didn't work.
So people actually started to work. Output increased, their pay didn't go up, but the oligarchs were able to get a lot richer.
"Were they really "going broke"? They could print unlimited amounts of money."
Sounds like you're being argumentative.
The U.S.S.R. couldn't afford the invasion of Afghanistan. It cost a lot so it reduced their ability to spend on other priorities,
like aid to allied states. The Warsaw PACT countries began to fall away and then it snowballed.
If by "argument" we mean using logical statements to support a conclusion, then YES, I'm being argumentative. Not if you mean,
disagreeing just to be a jerk.
On an economics site, even if no where else, we have to view the economy from two sides... supply and demand.
Work produces supply and money supplies demand.
Was the USSR's problem on the supply side or the money side? Saying "went bankrupt" implies the problem was on the money side.
My view of state socialism, or any system where you can't be fired, is that it creates supply side problems. If you can't be
fired, there is no motivation to work hard.
I think it a HIGHLY important distinction, and one that we must use to keep progressive liberalism on the right track. (or
is it tack?)
Margaret Thatcher's quote "The problem with socialism is that you run out of other peoples' money to spend." is ignorant on
its face. As soon as government spends the money, it is someone else's again, ready to be taxed away again.
This "The USSR went bankrupt" reinforces the false view of socialism's flaws.
This feeds into the "We can't afford it" bulldung when we try to talk about things like Medicare for All.
Did the USSR collapse because they ran out of other peoples' money (went bankrupt)? OR, was production really low because people
couldn't be fired, so didn't bother to work hard? Did the oligarchs decided to end socialism and move to capitalism, so that they
could fire people, to motivate them to work harder, to increase production?
It is HUGELY important distinction for creating a successful progressive economy.
Pro-union? I'm all for it if it is about getting a bigger share of revenue for the workers via collective bargaining. BUT,
does that include making it hard to impossible to fire terrible workers? If so, does that hurt total production? If so, then it
has the same fatal flaw of state socialism.
Guaranteed Job: An idea that if you don't have a private sector job, you show up at a government employment office, do whatever
work is assigned, and get a check. However, since you can't be fired from the guaranteed job, there is absolutely no motivation
to actually do the assigned work. Then, there becomes no motivation to get a private sector job where you actually do have to
work.
Universal Basic Income: Until we reach the level of automation seen in Wall-E, stuff is still going to need to be done, by
someone. UBI makes people not want to do it.
+++++
On the flip side...
For Medicare for All, it is work that is already being done. All we're talking about is if we hand the money to the government
to manage the risk-pooling, or we hand the money over to for-profit insurance companies.
The "how can we afford it?" argument is based on the idea that the USSR went bankrupt from spending too much of "other peoples'
money".
However, if properly viewed as a labor issue, then "How can we afford it?" becomes obvious. We just use some of the money people
are already spending on healthcare.
Any apparent agreement between Liz Warren and Trump can be chalked up to coincidence. Liz Warren's opposition to the US always-war
is a feature, not a bug.
The MIC is an unregulated pox on American history.
War would not end if the USA slashed defense spending. All that would change is that other countries would colonize the USA
instead of the USA colonizing other countries.
You can chose to be the predator, or you can chose to be the prey, but you can't chose to not participate.
For many readers especially on this comes as no surprise, as you are well aware of the
octopus that wraps its tentacles around the globe. But it may surprise you how active In-Q-Tel
is and how chummy they are with the rest of the VC community. It's as if they are just another
VC, but with another purpose. Let's look at some of the stats, from Crunchbase:
Here's a list of recent investments
If you dig back you won't see Google or Facebook on there – which is company policy
for retail consumer investments that can impact the public (it's kept secret behind an NDA).
Here's how it works – In-Q-Tel may invest in your startup but there's a big catch. First,
you have to sign an NDA which is enforced strongly – that you are not to disclose your
partner. Second, you must agree to 'cooperation' when it comes to information sharing now or
down the road, such as location data on people using Facebook, Google, or other systems –
perhaps only to feed it into a big data brain at Palantir. Or perhaps for more street level
surveillance. The surveillance is known by fact, not conspiracy theory – but by fact
– due to the disclosure of classified documents by Edward Snowden. If it were not for
Snowden, we could only guess about this. The name of the main program is
PRISM but there are many others.
But for others, it may come as a surprise that not only the CIA has its own VC fund, but
that it sits on many corporate boards alongside many Wall St. firms and other VCs.
And of course, they always do well.
Let's consider the doors they opened for Google, or in the case of Google it was more like
the doors that were closed. Google was not the best search engine, it was not superior
technology – it wasn't even really very good. It just became a monopoly and crushed the
competition. Many wonder how they were able to do it, and that this is part of the Entrepreneur
"Magic" that few have. Well we can say in the case of Google there was no Magic they had a
helping hand from a friend in the deep shadows. Google wanted to become huge – the CIA
wants information (they always do, so we don't use the past tense 'wanted'). So it was a cozy
and rational partnership – in exchange for making the right handshakes at the right time,
allowing Google to become a global behemoth, all they needed to do was share a little
information about users. Actually, a lot of information. No harm in that, right?
But in doing so Google violated itself as well as prostituted its model and its users.
Google still does this and is not nearly as flagrant as its brother Facebook, however Google
shares more detailed 'meta data' which is actually more useful to Echelon systems like Palantir
that rely on big data, not necessarily photos of what you ate for breakfast (but that can be
helpful too, they say).
The metaphor is making a deal with the devil; you get what you want but it comes at a price.
And that's the price users pay to Google – they get service 'free' but at a huge cost,
their privacy. Of course – this is all based on the concept of Freedom which really does
exist in USA. You don't have to use Google – there are many alternatives like the rising
star Duck Duck Go :
But who cares about privacy; only criminals, hackers, programmers, super wealthy (UHNWI) and
a few philosophers.
Google remains the dominant search platform and much more. Google exploits niche by niche
even competing with Amazon's Alexa service.
Two decades ago, the US intelligence community worked closely with Silicon Valley in an
effort to track citizens in cyberspace. And Google is at the heart of that origin story. Some
of the research that led to Google's ambitious creation was funded and coordinated by a
research group established by the intelligence community to find ways to track individuals
and groups online. The intelligence community hoped that the nation's leading computer
scientists could take non-classified information and user data, combine it with what would
become known as the internet, and begin to create for-profit, commercial enterprises to suit
the needs of both the intelligence community and the public. They hoped to direct the
supercomputing revolution from the start in order to make sense of what millions of human
beings did inside this digital information network. That collaboration has made a
comprehensive public-private mass surveillance state possible today.
There you have it – Google is the child of the digital revolution of the surveillance
state. Why spy, when you can collect data electronically and analyze with machine learning?
The new spy is the web bot.
And the investors in Google did well – so that's the investing story that matters
here. It pays well to have friends in high places, and in dark places. Of all the investments
In-Q-Tel made, almost all of them have done very well. That doesn't mean that Palantir is going
to grow to the size of Google, but it does provide natural support should a company backed by
In-Q-Tel run into problems.
By the time Facebook came out, digital surveillance was already in the n-th generation of
evolution, and they really stepped up their game. In the creepiest examples, Facebook doesn't
necessarily (and primarily) collect data on Facebook users – it does this too. But that's
just a given – you don't need to perform surveillance on someone who gives all their data
to the system willingly – you always know where they are and what they are doing at any
given moment. The trick is to get information about those who may try to hide their activities,
whether they are real terrorists or just paranoid geniuses.
How does Facebook do this? There are literally hundreds of programs running – but in
one creepy example, Facebook collects photos that users take to analyze the environment
surrounding. Incidentally, the location data is MUCH MORE accurate than you see on the retail
front end. So you get the newspaper and see a gift in your mailbox for your birthday –
you take a photo because the ribbons are hanging out. What shows up in the background? All
kinds of information. What the neighbor is doing. License plate of the car driving by. Trash
waiting to be picked up by the street. A child's toy left by the sidewalk. You get the picture.
Facebook users have been turned into sneaky little digital spies! While they are walking around
with their 'smartphones' (should be called 'dumbphones') scrolling their walls and snapping
photos away – they are taking photos of you too. That means, Facebook collects data for
the CIA about users who don't have Facebook accounts. This is the huge secret that the
mainstream media doesn't want to tell you. Deleting your Facebook account will do nothing
– every time you go out in public you are being photographed, video recorded, and more
– all going into big data artificial intelligence for analysis.
But here's the best part. You own it! The CIA may have a bad reputation but it is part of
the US Government, and thus – profits go back to the Treasury (those which are declared)
or at least they are supposed to. Considering this, why is there a stigma about even talking
about In-Q-Tel when in fact we should be more involved in any US Government operation when it
is technically owned by the people and funded by taxpayers? Meaning, do taxpayers have rights
to know what goes in in taxpayer funded entities, like In-Q-Tel? The big difference between
In-Q-Tel and the CIA is that In-Q-Tel functions just like any other VC – they disclose
most of their investments, they attend conferences, they accept business plans. You can
literally submit your idea to In-Q-Tel and get funding. Of course, like any VC there's a very
small chance of being funded.
So what's an investor's take on this story? In-Q-Tel is not Freddie Mac there is nor a
quasi-government entity; it's not an NGO and there is no implicit guarantee that In-Q-Tel's
deals will do any better than Andreessen
Horowitz .
However, their deals do very well. Companies they fund not only have the backing of the CIA
explicitly, it's not only about business – it's about national security! Under that
guise, it's no wonder that companies like Google and Facebook rocket to the top.
We are not suggesting that investors double down on In-Q-Tel bets. We are only suggesting
that at a minimum, we follow what they do. It's a data point – a good source of
information. And the best part is that it's public.
Their most recent investment is in a virtual reality company in Boca Raton, FL called
Immersive Wisdom:
Immersive Wisdom® is an enterprise software platform that allows users to
collaborate in real-time upon diverse data sets and applications within a temporal and
geospatially-aware Virtual, Mixed, and Augmented Reality space. Immersive Wisdom is
hardware-agnostic and runs on VR, AR, as well as 2D displays. Regardless of geographic
location , multiple users can be together in a shared virtual workspace, standing on maps,
with instant access to relevant information from any available source. Users can
simultaneously, and in real time, visualize, fuse, and act upon sensor inputs, cyber/network
data, IoT feeds, enterprise applications, telemetry, tagged assets, 3D Models, LiDAR, imagery
and UAV footage/streaming video, providing an omniscient, collaborative view of complex
environments. Immersive Wisdom also acts as a natural human interface to multi-dimensional
data sets generated by AI and machine learning systems. The platform includes a powerful SDK
(Software Developer Kit) that enables the creation of customer-specific workflows as well as
rapid integration with existing data sources/applications.
Cool stuff for sure – but it's in early stages. Pre IPO Swap suggests real Pre IPO
'unicorns' not because of size, but because of the right mix of risk and reward. https://preiposwap.com/pitch "
style="color:#0d2e46; text-decoration:underline">See why we think so in our pitch.
In any analysis, it's worth watching In-Q-Tel, which is a top source of funding and
investment data we watch on www.preiposwap.com/ ">https://
www.preiposwap.com/ "
style="color:#0d2e46; text-decoration:underline">Pre IPO Swap.
"According to two former administration officials."
NYT.
Fake News
57 minutes ago
The "exit interview" said nothing about "Not Up To Role Of President." That was a quote at the
start of the article attributed to "people."
People say.
Yes, they do.
1 hour ago
Ummm. That would be Senator Dianne DEEP STATE Feinstein, former chair of the Senate
Intelligence Committee and, therefore, Democrat doppelganger for DEEP STATE kingpin John O.
Brennan.
"It's a loss, there's no question," said Sen. Dianne Feinstein (D-CA).
1 hour ago
Kidbuck has served under enough Marine officers to know that most of them lie to cover their
own *** as if it's second nature.
1 hour ago
That's probably true in all US military branches.
This is probably one major reason why US have lost all wars, since WWII.
1 hour ago
I think you get the US and Deep State confused, The US military goes in and wipes out
countries military and Deep state comes in with al queda and isis after their military is gone,
For ex...Iraq had the 4th largest army in world at time and didnt last 3 weeks. A lot of people
know now these wars were based on lies...
48 minutes ago
In the Army, few rise above the rank of Captain unless they proven themselves to be ***
kissers. To reach full bird Colonel, they have proven themselves to be totally loyal to the
military machine. To wear the stars and breath the rarified air of the Generals, you have become
among the best boot lickers on earth, and looking forward to retirement and some lucrative
figurehead job with one of the defense contractors you have been sucking up to. Always remember,
gaining rank in peacetime is slow & difficult, but war offers lots of opportunities to climb
the ladder much faster.
1 hour ago
"everyone has been picked by Trump. "
Technically, but not exactly true.
It's more closer to the truth that everyone was recommended by the Dark State's Gatekeeper,
Kelly.
Once, Chump hired Kelly as his Chief of Staff, a long time MIC, pentagon swamp creature, Chump
got boxed in.
34 minutes ago (Edited)
Priebus was hardly better. And what kind of leader is Trump if he lets himself be manipulated
like this?
It's just excuse after excuse with that guy.
2 hours ago
"Military people," said Kelly "don't walk away."
Which is why such people agitate for war.... Self-justificating war monger like Matthis. Just
another Deep-State tool.
Thank you for your service and don't let the door hit your desk-jockey arse on the way
out.
The real "adults" actively pursue peace, they don't look to keep the monthly drone body-count
ticking over.
1 hour ago
Generals by definition are "war mongers".
1 hour ago
"Which is why such people agitate for war.... Self-justificating war monger like Matthis.
Just another Deep-State tool."
That's right. They are willing Dark State war tools. In fact, they are the DARK STATE.
One of the most sought-after visa programs in the U.S., the H-1B, could see some significant
changes in 2019, according
to President Trump , including a potential path to citizenship for recipients of the
non-immigrant visa.
The H-1B visa program allows U.S. employers to hire graduate-level workers in specialty occupations, like IT,
finance, accounting, architecture, engineering, science and medicine. Any job that requires
workers to have at least a bachelor's degree falls under the H-1B for specialty
occupations.
Each year, the U.S. Citizenship and Immigration Services (USCIS) allots about 85,000 of the
H-1B visas -- 65,000 for applicants with a bachelor's degree or equivalent, and 20,000 for
those with a master's degree or higher.
As of April 2017, when Trump signed an executive order -- "Buy American and Hire American"
-- it's become more difficult for U.S. companies to hire people via H-1B. It directs the
Department of Homeland Security to only grant the visas to the "most-skilled or highest-paid
beneficiaries."
Here's a look at the American companies (and industries) that benefited the most from the
program in 2017.
Cognizant: The IT services business had a whopping 3,194 H-1B initial petitions approved in
2017, the most of any U.S. company by almost 600.
Amazon: In 2017, the e-commerce behemoth hired 2,515 employees via
the H-1B visa program, according to data compiled by the
National Foundation for American Policy . That was about a 78 percent increase from 2016,
or 1,099 more employees.
Microsoft: Microsoft hired 1,479 workers through H-1B in 2017, the second most of U.S.
companies -- an increase in 334 employees from the year prior, or close to 29 percent.
IBM: In 2017, IBM employed about 1,231 workers through the H-1B visa program.
Intel: The California-based company employed 1,230 workers through H-1B in 2017, 200 more
workers -- or a 19 percent increase -- compared to 2016.
Google: The search engine giant had 1,213 H-1B initial petitions approved for fiscal year
2017, a 31 percent increase of about 289 from 2016.
If China Is Suffering So Much Because of Trump's Trade War, Why Is Its Surplus Up So
Much?
By Dean Baker
Donald Trump has made his tariffs against China and other countries a big part of his
agenda as president. He even went so far as to dub himself "Tariff Man" on Twitter.
The media have been quick to assume that Tariff Man is accomplishing his goals, especially
with regard to China. It is standard for news articles, like this one, to assert that China's
economy is suffering in large part because of Trump's tariffs.
In fact, through the first ten months of 2018 China's trade surplus * with the United
States on trade in goods has been $344.5 billion. This is up 11.5 percent from its surplus in
the same months last year.
The tariffs surely are having some effect, and China's surplus would almost certainly be
larger if they were not in place. But it is difficult to believe that China's $13.5 trillion
dollar economy (measured at exchange rate values) could be hurt all that much by somewhat
slower growth in its trade surplus with the United States. (For arithmetic fans, the surplus
is equal to 2.5 percent of China's GDP. We are talking about slower growth in this
surplus.)
It is worth noting that we will not be getting new trade data until the government
shutdown is over since the Census Bureau is one of the government agencies without funding
for fiscal year 2019.
I posted an NYT piece the other day
that described an automobile-headlight
manufacturer in Michigan who was struggling
to get LED bulbs from China, where they were
usually in plentiful supply, So, he was just
*trying* to stockpile some inventory.
Trump Has Promised to Bring Jobs Back. His Tariffs Threaten to Send Them Away.
By Peter S. Goodman
For EBW Electronics, the biggest hit has come through increased costs for components,
including transistors, resistors and capacitors. Across the breadth of the factory, workers
in blue lab coats slot these nibs of metal into circuit boards and then attach LED lights,
most of these items imported from China.
These components are produced at enormous scale in China. Even with tariffs on Chinese
imports, American factories have no incentive to make them, because profit margins are tiny,
and the costs are vast.
"Nobody in this country wants to make these things," said Mr. Steeby, the EBW president,
echoing a contention heard widely here.
The company has filed for exemptions from the tariffs, but has yet to hear back from the
federal government. And EBW has encountered stiff resistance in passing on the extra costs to
its customers, though it is obliged to continue delivering lights to major auto manufacturers
at agreed-upon prices, or pay fines for interfering with production.
"We're the monkey in the middle," said Mr. LeBlanc, the EBW chairman.
If Mr. Trump follows through on threats to raise tariffs to 25 percent, EBW and its 230
employees could face dire circumstances.
"At 25 percent, we are not making money," Mr. Steeby said. "There's a threat that you
cease to exist, or there's a threat that jobs move to Mexico."
In an era of anxiety over global competition, EBW has engaged Chinese suppliers to produce
a crucial commodity -- American paychecks. Now, Mr. Trump's tariffs have put jobs at
risk.
"There's no intelligence to the way this is being done," Mr. Steeby said. "The tariffs are
designed to hurt China, but they are being paid by American companies."
Of course, the Mr. Steeby, President of EBW Electronics, is without question, honest and
trustworthy. Like a boy scout, he would never lie. What he said should be taken as the gospel
truth, not a grain of salt.
I posted an NYT piece the other day
that described an automobile-headlight
manufacturer in Michigan who was struggling
to get LED bulbs from China, where they were
usually in plentiful supply, So, he was just
*trying* to stockpile some inventory.
[ There is no indication the company is stockpiling LED bulbs, and there is no indication
there is stockpiling as yet through the economy. ]
[ No, the matter is important, and I am correct and do not care to be baited.
This is no data showing that American companies are stockpiling. American companies have
long operated with minimal inventory and a change would be dramatic. ]
Protectionist Measure to Help U.S. Corporations at the Expense of U.S. Workers Tops Trump
China Trade Agenda
By Dean Baker
Readers of this New York Times piece * on Robert Lighthizer, United States trade
representative, and his negotiations with China may have missed this point. The piece said
that one of Lighthizer's main goals was to stop China's practice of requiring that companies
like Boeing and GE, who set up operations in China, take Chinese companies as business
partners.
This is an effective way of requiring technology transfers, since the partners will become
familiar with the production techniques of the U.S. companies. This will enable them in
future years to be competitors with these companies.
If the U.S. government prohibits contracts that require this sort of technology transfer
it will make it more desirable to outsource some of their production to China. This will be
good for the profits of Boeing, GE, and other large companies but bad for U.S. workers. It
will also mean that we will be paying more for products in the future than would otherwise be
the case, since if Chinese companies would have been able to out-compete U.S. companies, it
presumably means that would be charging lower prices or selling a better product.
It is also worth noting that the basic concern expressed by Lighthizer and others assumes
that major U.S. corporations are unable to look out for themselves. They are not being forced
to enter in contracts with China. This problem arises because they decide to invest in China,
even with conditions requiring technology transfer.
We have a great story here where the government, and many analysts, think our largest
corporations lack the ability to look out for their best interest. By contrast, when it comes
to individual workers who are forced to sign away their right to have class action suits, or
individual investors who can be fleeced by the financial industry, the current position of
the government is that they can look out for themselves.
The NYT piece also does some inappropriate mind reading when it tells readers:
"Mr. Trump is increasingly eager to reach a deal that will help calm the markets, which he
views as a political electrocardiogram of his presidency."
The reporter/editor does not know that Trump is "increasingly eager" or that he "views"
the markets as "a political electrocardiogram of his presidency."
Good reporting says what politicians do and say. It does not report as fact their alleged
opinions.
As a people, we should look to the masters of mercantilism, Germany, and learn the lessons.
How are they dealing with the tendency of corporations to hire the gulag communists to
produce goods for sale in the advanced Western economies, like Germany and America.
Obviously, the communist government of China, which owns all production, has decided to not
buy from the capitalists, but prefers to sell to them, only. Whoops.
"... You should have come here in the 90's to see a shock of the Doctrine to face social trauma of "PGR"(Huge National Farms) workers (it's the electorate of PiS (Law and Justice)), Miners near Wałbrzych, workers of textile industry near łódź bereft of everything from day to day (literally). Even the contemporary visit might ensure you quite a thrill if you knew where to look. Most of the firms that would easily survive if given some protectionism were hostily taken over by a foreigner capital and shut down with their production instantly replaced by imported goods. ..."
"... I do remember his speeches well. Form the spectrum offered by the Chicago boys he chosen the hardest option. It was Michnik and Kuroń who opted for less "Chicago" direction. But they were in minority. The prevailing Zeitgeist of the period caused words "social", "common" to be treated as a curse and socially stigmatizing. ..."
"... For a better understanding what went wrong you may take example of railroad privatization and compare it to the Czech way. ..."
"... the global elite perspective is that a quick way to rid the globe of the problems we face is to kill off enough people so that the problem dissipates -- war, fraud, nationalism/racism used to point the finger at the other (making it easier for people to harm one another or look the other way (Arendt). ..."
"... Efficiency requires a variety of gains, returns, profits and fairness. Otherwise it is simply theft. And when all is accounted for there might not be any profit to be had in the real world. Only in the minds of the neoliberals. Efficiency is something that should be accounted for carefully so that no vital systems are harmed. ..."
The level of the naivety of Barkley Rosser is astounding.
Poland was a political project, the showcase for the neoliberal project in Eastern Europe and the USSR. EU was pressed to provide
large subsidies, and that marionette complied. The commenter ilpalazzo (above) is right that there has been " a tremendous development
in real estate and infrastructure mostly funded by the EU that has been a serious engine of growth." Like in Baltics and Ukraine,
German, French, Swedish and other Western buyers were most interested in opening market for their products and getting rid of
local and xUSSR competitors (and this supported and promoted Russophobia). With very few exceptions. University education system
also was partially destroyed, but still fared better than most manufacturing industries.
I remember talking to one of the Polish professors of economics when I was in Poland around 1992. He said that no matter how
things will develop, the Polish economy will never be allowed to fail as the USA is interested in propelling it at all costs.
Still, they lost quite a bit of manufacturing: for example all shipbuilding, which is ironic as Lech Wałęsa and Solidarity emerged
in this industry.
Eventually, Poland emerged as the major US agent of influence within the EU (along with GB) with the adamant anti-Russian stance.
Which taking into account the real state of Polish manufacturing deprived of the major market is very questionable. Later by joining
sanctions, they lost Russian agricultural market (including all apple market in which they have a prominent position).
But they have a large gas pipeline on their territory, so I suspect that like Ukraine they make a lot of money via transit
fees simply due to geographic. So they parochially live off rent -- that why they bark so much at North Stream 2.
Polish elite is a real horror show, almost beyond redemption, and not only in economics. I do not remember, but I think it
was Churchill who said " Poland is a greedy hyena of Europe." This is as true now as it was before WWII.
Gosh! I used to actively fight the commies here in the 80's. But then with Balcerowicz I almost regretted it. as to your words:
"Balcerowicz himself at one point advocated something pretty much like what came to pass, a gradual privatization and
maintaining most of the sociaal safety net while advocating shock monetary policies to bring inflation under control."
– They derail.
You should have come here in the 90's to see a shock of the Doctrine to face social trauma of "PGR"(Huge National Farms)
workers (it's the electorate of PiS (Law and Justice)), Miners near Wałbrzych, workers of textile industry near łódź bereft of
everything from day to day (literally). Even the contemporary visit might ensure you quite a thrill if you knew where to look.
Most of the firms that would easily survive if given some protectionism were hostily taken over by a foreigner capital and shut
down with their production instantly replaced by imported goods.
I do remember his speeches well. Form the spectrum offered by the Chicago boys he chosen the hardest option. It was Michnik
and Kuroń who opted for less "Chicago" direction. But they were in minority. The prevailing Zeitgeist of the period caused words
"social", "common" to be treated as a curse and socially stigmatizing.
For a better understanding what went wrong you may take example of railroad privatization and compare it to the Czech way.
Don't believe the official statistics, we have a huge part of our working poors here. Their voice will never be heard as they
live in a subsistence economy and the've got neither time nor power to shout struggling to survive..
One wonders why there is a need to revisit Klein's thesis to debunk parts of it in this moment?
And the point is so small in this article about Poland, that one wonders why a James Madison prof of econ does not have more
time to look at significant problems everywhere instead of parse the progressive beast?
In my lifetime, I have not witnessed a time where more of the political machinery has drifted to the right -- caught in the
headlights of what Chris Hedges calls the illusion of democracy in the decay of capitalism.
Its important to not forget Gina Haspel's contribution here and torture -- how torture (economic, physical, and social shock)
is implicated, vaulting her to the head of our top Spy agency --
It reminds me of a recent article from Arundhati Roy's, that the global elite perspective is that a quick way to rid the
globe of the problems we face is to kill off enough people so that the problem dissipates -- war, fraud, nationalism/racism used
to point the finger at the other (making it easier for people to harm one another or look the other way (Arendt).
China is wisely looking at the efficiency of state owned enterprises with a reluctance to privatize them. It will become very
clear now that everyone is sobering up from the collapse of the USSR that neoliberal capitalist efficiency (profits) can only
be made by socializing costs and externalizing everything that reduces their bottom line with answers like "That ain't mine."
If even the doofuses at Davos are looking at various forms of "capital" (social, political, civil, environmental, etc.) they
have begun to mitigate their global catastrophe.
Efficiency requires a variety of gains, returns, profits and fairness. Otherwise it is simply theft. And when all is accounted
for there might not be any profit to be had in the real world. Only in the minds of the neoliberals. Efficiency is something that
should be accounted for carefully so that no vital systems are harmed.
Barkley insists on a left-right split for his analysis of political parties and their attachment to vague policy tendencies
and that insistence makes a mess of the central issue: why the rise of right-wing populism in a "successful" economy?
Naomi Klein's book is about how and why centrist neoliberals got control of policy. The rise of right-wing populism is often
supposed (see Mark Blyth) to be about the dissatisfaction bred by the long-term shortcomings of or blowback from neoliberal policy.
Barkley Rosser treats neoliberal policy as implicitly successful and, therefore, the reaction from the populist right appears
mysterious, something to investigate. His thesis regarding neoliberal success in Poland is predicated on policy being less severe,
less "shocky".
In his left-right division of Polish politics, the centrist neoliberals -- in the 21st century, Civic Platform -- seem to disappear
into the background even though I think they are still the second largest Party in Parliament, though some seem to think they
will sink in elections this year.
Electoral participation is another factor that receives little attention in this analysis. Politics is shaped in part by the
people who do NOT show up. And, in Poland that has sometimes been a lot of people, indeed.
Finally, there's the matter of the neoliberal straitjacket -- the flip-side of the shock in the one-two punch of "there's no
alternative". What the policy options for a Party representing the interests of the angry and dissatisfied? If you make policy
impossible for a party of the left, of course that breeds parties of the right. duh.
Likbez,
Bruce,
Blowback from the neoliberal policy is coming. I would consider the current situation in the USA as the starting point
of this "slow-motion collapse of the neoliberal garbage truck against the wall." Neoliberalism like Bolshevism in 1945 has
no future, only the past. That does not mean that will not limp forward in zombie (and pretty bloodthirsty ) stage for another
50 years. But it is doomed, notwithstanding recently staged revenge in countries like Ukraine, Argentina, and Brazil.
Excessive financialization is the Achilles' heel of neoliberalism. It inevitably distorts everything, blows the
asset bubble, which then pops. With each pop, the level of political support of neoliberalism shrinks. Hillary defeat would
have been impossible without 2008 events.
At least half of Americans now hate soft neoliberals of Democratic Party (Clinton wing of Bought by Wall Street technocrats),
as well as hard neoliberal of Republican Party, which created the " crisis of confidence" toward governing neoliberal elite in
countries like the USA, GB, and France. And that probably why the intelligence agencies became the prominent political players
and staged the color revolution against Trump (aka Russiagate ) in the USA.
The situation with the support of neoliberalism now is very different than in 1994 when Bill Clinton came to power.
Of course, as Otto von Bismarck once quipped "God has a special providence for fools, drunkards, and the United States of America."
and another turn of the technological spiral might well save the USA. But the danger of never-ending secular stagnation is substantial
and growing. This fact was admitted even by such dyed-in-the-wool neoliberals as Summers.
This illusion that advances in statistics gave neoliberal access to such fine-grained and timely economic data, that now it
is possible to regulated economy indirectly, by strictly monetary means is pure religious hubris. Milton Friedman would
now be laughed out the room if he tried to repeat his monetarist junk science now. Actually he himself discarded his monetarist
illusions before he died.
We probably need to the return of strong direct investments in the economy by the state and nationalization of some assets,
if we want to survive and compete with China. Australian politicians are already openly discussing this, we still lagging because
of "walking dead" neoliberals in Congress like Pelosi, Schumer, and company.
But we have another huge problem, which Australia and other countries (other than GB) do not have: neoliberalism in the USA
is a state religion which completely displaced Christianity (and is hostile to Christianity), so it might be that the lemming
will go off the cliff. I hope not.
The only thing that still keeps neoliberalism from being thrown out to the garbage bin of history is that it is unclear what
would the alternative. And that means that like in 1920th far-right nationalism and fascism have a fighting chance against
decadent neoliberal oligarchy.
Previously financial oligarchy was in many minds associated with Jewish bankers. Now people are more educated and probably
can hang from the lampposts Anglo-Saxon and bankers of other nationalities as well ;-)
I think that in some countries neoliberal oligarchs might soon feel very uncomfortable, much like Soros in Hungary.
As far as I understood the level of animosity and suppressed anger toward financial oligarchy and their stooges including some
professors in economics departments of the major universities might soon be approaching the level which existed in the Weimar
Republic. And as Lenin noted, " the ideas could become a material force." This true about anger as well.
If the U.S. health care system was a country, it would have the fifth largest GDP on the entire planet.
At this point
only the United States, China, Japan and Germany have a GDP that is larger than the 3.5 trillion dollar U.S. health care
market.
If
that sounds obscene to you, that is because it is obscene.
We should want people to be attracted to the health care
industry because they truly want to help people that are suffering, but instead the primary reason why people are drawn to the
health care industry these days is because of the giant mountains of money that are being made.
Like
so many other things in our society, the health care industry is all about the pursuit of the almighty dollar, and that is just
wrong.
In order to keep this giant money machine rolling, the health care industry has to do an enormous amount of marketing. If you
can believe it, a study that was just published found that
at
least 30 billion dollars a year
is spent on such marketing.
Hoping to earn its share of the
$3.5
trillion
health care market, the medical industry is pouring more money than ever into advertising its products -- from
high-priced prescriptions to do-it-yourself genetic tests and unapproved stem cell treatments.
Spending on health care marketing nearly doubled from 1997 to 2016, soaring
to
at least $30 billion a year
, according to a study published Tuesday in JAMA.
This marketing takes many different forms, but perhaps the most obnoxious are the television ads that are endlessly hawking
various pharmaceutical drugs. If you watch much television, you certainly can't miss them. They always show vibrant, smiling,
healthy people participating in various outdoor activities on bright, sunny days, and the inference is that if you want to be
like those people you should take their drugs. And the phrase
"ask
your doctor"
is usually near the end of every ad
The biggest increase in medical marketing over the past 20 years was in "direct-to-consumer" advertising, including the TV
commercials that exhort viewers to "ask your doctor" about a particular drug.
Spending
on such ads jumped from $2.1 billion in 1997 to nearly $10 billion in 2016
, according to the study.
As a result of all those ads, millions of Americans rush out to their doctors to ask about drugs that they do not need for
diseases that they do not have.
But everyone will just keep taking those drugs, because that is what the doctors are telling them to do. But what most people
never find out is that the pharmaceutical industry goes to great lengths to get those doctors to do what they want. According
to
NBC News
, the big drug companies are constantly "showering them with free food, drinks and speaking fees, as well as paying
for them to travel to conferences".
It is a legal form of bribery, and it works.
When you go to most doctors, they will only have two solutions to whatever problem you have – drugs or surgery.
And since nobody really likes to get cut open, and since drugs are usually the far less expensive choice, they are usually the
preferred option.
Of course if doctors get off the path and start trying to get cute by proposing alternative solutions, they can get in big
trouble
really
fast
Today's medical doctors are not allowed to give nutritional advice, or the
American
Medical Association
will
come shut them down
, and even if they were, they don't know the right things to say, because they weren't educated
that way in medical college. So instead, M.D.s just sling experimental, addictive drugs at symptoms of deeper rooted
sicknesses, along with immune-system-destroying antibiotics and carcinogenic vaccines.
That's why any medicine that wrecks your health is easy to come by, just like junk food in vending machines. The money isn't
made off the "vending" products, the money is made off the sick fools who are repeat offenders and keep going back to the well
for more poison – it's called chronic sick care or symptom management. Fact: Prescription drugs are the
fourth
leading cause of death
in America, even when "taken as directed."
Switching gears, let's talk about hospitals for a moment.
When you go to the hospital, it is often during a great time of need. If you are gravely ill or if an accident has happened and
you think you might die, you aren't thinking about how much your medical care is going to cost. At that moment you just want
help, and that is a perfect opportunity for predators to take advantage of you.
Trending Articles
"A Soft Coup Against Donald Trump Is Underway" Declares
Turkey is going on the attack against John Bolton following his weekend antics in the Middle East, which most
recently
Just consider the example of 24-year-old Nina Dang. She broke her arm while riding her bicycle in San Francisco, and so she went
to the emergency room.
The hospital that Facebook CEO Mark Zuckerberg donated so much money to definitely fixed her arm,
but
later they broke her bank account when they hit her
with
a $24,000 bill
A bystander saw her fall and called an ambulance. She was semi-lucid for that ride, awake but unable to answer basic questions
about where she lived. Paramedics took her to the emergency room at Zuckerberg San Francisco General Hospital, where doctors
X-rayed her arm and took a CT scan of her brain and spine. She left with her arm in a splint, on pain medication, and with a
recommendation to follow up with an orthopedist.
A few months later,
Dang
got a bill for $24,074.50
. Premera Blue Cross, her health insurer,
would
only cover $3,830.79 of that
-- an amount that it thought was fair for the services provided. That left Dang
with
$20,243.71 to pay
, which the hospital threatened to send to collections in mid-December.
Most Americans assume that if they have "good health insurance" that they are covered if something major happens.
But as Dang found out, you can still be hit with crippling hospital bills even if you have insurance.
Today, medical debt is the number one reason why Americans declare bankruptcy. Because of the way our system is set up, most
families are just one major illness away from financial ruin.
And this kind of thing is not just happening in California. The median charge for a visit to the emergency room nationally is
well
over a thousand dollars
, and you can be billed
up
to 30 dollars
for a single pill of aspirin during a hospital stay.
Our health care system is deeply broken,
and it has been designed to squeeze as much money out of all of us as it
possibly can.
Unfortunately, we are stuck with this system for now.
The health care industry is certainly not going to reform itself,
and the gridlock in Washington is going to make a political solution impossible for the foreseeable future.
Most big
hospital ERs negotiate prices for care with major health insurance providers and are considered "in-network."
Zuckerberg San Francisco General has not done that bargaining with private plans, making them "out-of-network."
That leaves many insured patients footing big bills.
That's a tough
question considering we don't really know how much is flowing to the
military
industrial complex.
My guess healthcare spending is in second place.
U.S. shale industry could struggle if WTI remains below $60-$70 per barrel (differ by the
area and the spots). Investing in $50th range is just "hope" investmnet which is reling og
positive price dynamics, and below them is clear losses for produces, which means additional
junk bond issues.
... ... ...
But even as production held up, drilling activity indicated a sharper slowdown was underway.
The index for utilization of equipment by oilfield services firms dropped sharply in the fourth
quarter, down from 43 points in the third quarter to just 1.6 in the fourth – falling to
the point where there was almost no growth at all quarter-on-quarter.
Meanwhile, employment has also taken a hit. The employment index fell from 31.7 to 17.5,
suggesting a "moderating in both employment and work hours growth in the fourth quarter," the
Dallas Fed wrote. Labor conditions in oilfield services were particularly hit hard.
The data lends weight to comments made by top oilfield service firms from several months
ago. Schlumberger and Halliburton warned in the third
quarter of last year that shale companies were slowing drilling activity. Pipeline constraints,
well productivity problems and "budget exhaustion" was leading to weaker drilling conditions.
The comments were notable at the time, and received press coverage, but oil prices were still
high and still rising, and so was shale output. The crash in oil prices and the worsening
slowdown in the shale patch puts those comments in new light.
What does all of this mean? If oil producers are not hiring service firms and deploying
equipment, that suggests they are rather price sensitive. The fall in oil prices forced
cutbacks in drilling activity. Oilfield service firms in particular are bearing the brunt of
the slowdown. Executives from oilfield service firms told the Dallas Fed that their operating
margins declined in the quarter.
Baker huges reports a current US rig count decrease of 1% in the past two weeks. Several
companies I support in the Permian have stacked rigs and layed off workers. $50 bbl is the
magic number, the longer below that number the worse it will get.
Or it shows how much better the industry has gotten in response to production and prices.
It's like a capital intensive industry that doesn't waste capital drilling for something that
won't make them money. That's preservation of capital.
It doesn't take years or months to respond. It takes weeks.
Yes sure, the easiest datasets to follow in one place are at SRSrocco. Steve StAngelo,
kudos to him, has been onto this for years and has analyzed a lot of data from different
sources.
There are lots of other sources if you duck it (Google is, of course, much more of the
official narrative) but Steve has done a pretty good job of pulling a lot of information
together over many years and for free. Even the paid access business facilities don't have
much information (Surprise?).
The shale industry has been a kind of Ponzi scheme with OPM, entirely dependent on
constant new loans to keep production levels up with new wells, and has never made a profit.
I have often wondered, actually, to what extent the ESF (That is, USG) has supported the
industry as a means of attempting to put more pressure on RRRRUUUUUSSSSSIIIAAAAA!!!!!!! and
its energy income. Ultimately, unsuccessfully so, so perhaps this support might not last too
much longer?
Without subsidies from "someone", it's difficult to understand how an unprofitable
industry could have survived for so long. The Banks are not stupid. Wait, let me re-consider
that last remark!! But not in the way I meant
There is probably an optimum size of financial sector after which it easily go out of control
and start grabbing political power. So it is important to prohibit banksters to participate in
political activity of any kind or in lobbing. Lobbing by financial sector should be criminalized.
They also should be prohibited from hired any for government employee for 10 years after he/she
left this/her position in government (revolving door style of corruption).
The other interesting point is that taxes can server as powerful inhibitor of destructive
behaviour of financial sector. So the fight for the level of taxation of particular social groups
is the most important political fight in modern society.
Also some actions of banksters sho</blockquote>uld be criminalized with high duration
of jail term, just to create negative incentives for certain types of behavior. For example
selling insurance without adequate capital to cover loses. Also important is to criminalize
changing more then a minimum fees (say, 0.25% a year) in 401K accounts as well as provided
insufficiently diversified 401k portfolios.
This was a fascinating piece, very readable for those of us with minimal financial
education. However, since this is such a good explainer for the layman, I think it would be
very beneficial to explain how big a difference 1% in fees makes for an investor over a
lifetime. I know personally when I used to compare funds the difference between 1 and 2% in
fees seemed negligible. But then I saw that fantastic PBS Frontline on this topic
and saw how much that 1% could cost me over a lifetime! I now have everything that I
personally manage in index funds!
You can't really argue with what has been said, and all (of us) involved in the sector
know it is massive rip off.
While a free market advocate, I think a first step would be to introduce meaningful fee
caps on all state promoted or mandated saving arrangements (eg ISAS, and Pensions), on the
grounds that the market is skewed by the government intervention that creates the glut of
forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection
through fee caps. I'd say no more than 20 – 25bps should be permitted for all ISAS and
pension savings (DC or DB). Individual wealthy investors (investments of more than say
£5m?) can pay what they like.
>>The job of the finance sector is simply to manage existing resources. It creates
nothing.
This is a dubious assertion, but you clearly believe it. How then, can you in good
conscience, charge 1.25% (plus indirect costs for the funds you hold in client portfolios) to
manage people's money when you yourself admit you are adding no value?
(source: http://strubelim.com/wp/our-funds/ar-fund/
)
There are 6000 publicly traded companies. Some of them will have rising stock prices, some
falling. If a money manager can steer you to the rising ones, he is doing something of value.
It doesn't mean he created anything physical that didn't exist before. He's doing a service
for you that would otherwise have taken you some time and effort to do, and that's what you
pay for.
Yes, it's a different definition of value. The growth of financial services has been
outpacing the growth of other sectors to a monstrous scale, and that makes this distinction
important. It signals a kind of corruption that can only mean high inflation and decoupling
money from economic output.
I don't follow. How is financial services different from any other kind of services, in
the impact on inflation? Why not also actors, barbers, or any other service profession?
The growth of the financial sector might be explained by the fact that it is the industry
most able to exploit computers, and the first to do so on a large scale.
The corruption is, I think, a separate issue that is present whenever other people's money
is involved. Financial services and government are simply more involved that way than most
other industries, and have been all along, dating to long before the recent growth.
Corruption is not impossible in any industry, just more attractive when the numbers are
larger.
Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth
of the .01% radically different than Income from Labor, because all Taxes on Capital Gains
are deferred until taken and are not TAXED as ordinary income. The TAX CODE is responsible
for the corruption of our government because it has put real POWER, the Power of Wealth in
the hands of the .01%, to buy whatever it wants, while labor and the poor spend everything
they earn or are given , every single year to survive in a economic culture designed for the
benefit of the .01%, something no one will write about!
Change the TAX CODE and the Corruption of Society will end!
Barbers and actors being paid for their labor do not have the same impact on inflation as
a bank giving out loans and consumer credit at interest. It's not equivalent at all.
Corruption in financial industries is what this article is discussing. If it's a separate
issue, I'm confused as to the point of talking about this at all!
No, I wasn't, though I have heard that. My theory of markets, and human group behavior in
general, is a statistical approach. There are averages, distributions, and temporary
equilibriums, but the interesting parts are the outliers. I guess that is more of a quantum
flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group
behavior is cyclical.
"This argument hinges on everyone that purchases these services knowing their true
value."
In a literal sense, you are correct, it is an imperfect measure of value. However, I think
it is far and away the most reliable one we have as value is extremely subjective. I don't
think it is right or prudent for third, non cost bearing parties to preempt decisions made by
consenting adults, rather, I would accord them the dignity of free choice. There are many
things that consumers purchase that I do not understand, why anyone would pay a premium for a
fast car seems like a waste of money to me, for example. Why anyone would pay money to golf,
not to mention the huge cost in terms of time it takes to get through 18 holes, seems like a
waste of money to me. These are things that make no sense to me because I do not see the
value there. But, I recognize that people have various tastes and preferences, and I respect
that and presume that individuals know themselves and their own tastes and preferences better
than I (or someone else) does. Therefore, when someone values something that I do not
understand, I tend to believe it is a result of a difference in preference, rather than they
are too dumb to figure out what they like, or that they are "tricked" into buying something
and hence need protection delivered by those who fancy themselves as enlightened enough to
see the real truth. Nothing about this is unique to the financial industry, by the way.
"Countless services and products we rely on were funded by taxes to make them profitable.
They are "worthwhile" but apparently not "profitable" enough to invest in. Making money and
creating value aren't the same thing. Ideally, everyone decides what is worthwhile."
Apparently not enough people decided these services and products were worthwhile, so
politicians decided they were worthwhile and used the force and power of government to get
them done. Substituting preferences of politicians, spending other people's money for those
of millions of individuals spending their own money does not seem like an efficient way to
allocate resources.
"... The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson. ..."
"... The Troika and IMF doctrine of austerity and privatization ..."
ED: Thanks so much for coming on. As I mentioned already, the title of your book –
Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy –
is an apt metaphor. So parasitic finance capital is really what you're writing about. You
explain that it essentially survives by feeding off what we might call the real economy. Could
you draw out that analogy a little bit? What does that mean? How does finance behave like a
parasite toward the rest of the economy?
MH: Economists for the last 50 years have used the term "host economy" for a country that
lets in foreign investment. This term appears in most mainstream textbooks. A host implies a
parasite. The term parasitism has been applied to finance by Martin Luther and others, but
usually in the sense that you just talked about: simply taking something from the host.
But that's not how biological parasites work in nature. Biological parasitism is more
complex, and precisely for that reason it's a better and more sophisticated metaphor for
economics. The key is how a parasite takes over a host. It has enzymes that numb the host's
nervous system and brain. So if it stings or gets its claws into it, there's a soporific
anesthetic to block the host from realizing that it's being taken over. Then the parasite sends
enzymes into the brain. A parasite cannot take anything from the host unless it takes over the
brain.
The brain in modern economies is the government, the educational system, and the way that
governments and societies make their economic policy models of how to behave. In nature, the
parasite makes the host think that the free rider, the parasite, is its baby, part of its body,
to convince the host actually to protect the parasite over itself.
That's how the financial sector has taken over the economy. Its lobbyists and academic
advocates have persuaded governments and voters that they need to protect banks, and even need
to bail them out when they become overly predatory and face collapse. Governments and
politicians are persuaded to save banks instead of saving the economy, as if the economy can't
function without banks being left in private hands to do whatever they want, free of serious
regulation and even from prosecution when they commit fraud. This means saving creditors
– the One Percent – not the indebted 99 Percent.
It was not always this way. A century ago, two centuries ago, three centuries ago and all
the way back to the Bronze Age, almost every society has realized that the great destabilizing
force is finance – that is, debt. Debt grows exponentially, enabling creditors ultimately
to foreclose on the assets of debtors. Creditors end up reducing societies to debt bondage, as
when the Roman Empire ended in serfdom.
About a hundred years ago in America, John Bates Clark and other pro-financial ideologues
argued that finance is not external to the economy. It's not extraneous, it's part of the
economy, just like landlords are part of the economy. This means that if the financial sector
takes more revenue out of the economy as interest, fees or monopoly charges, it's because
finance is an inherent and vital part of the economy, adding to GDP, not merely siphoning it
off from producers to pay Wall Street and the One Percent. So our economic policy protects
finance as if it helps us grow, not siphons off our growth.
A year or two ago, Lloyd Blankfein of Goldman Sachs said that the reason Goldman Sachs'
managers are paid more than anybody else is because they're so productive. The question is,
productive of what? The National Income and Product Accounts (NIPA) say that everybody is
productive in proportion to the amount of money they make/take. It doesn't matter whether it's
extractive income or productive income. It doesn't matter whether it's by manufacturing
products or simply taking money from people, or simply by the fraud that Goldman Sachs,
Citigroup, Bank of America and others paid tens of millions of dollars in fines for committing.
Any way of earning income is considered to be as productive as any other way. This is a
parasite-friendly mentality, because it denies that there's any such thing as unearned income.
It denies that there's a free lunch. Milton Friedman got famous for promoting the idea that
there's no such thing as a free lunch, when Wall Street knows quite well that this is what the
economy is all about. It's all about how to get a free lunch, with risks picked up by the
government. No wonder they back economists who deny that there's any such thing!
ED: To get to the root of the issue, what's interesting to me about this analogy that we're
talking about is that we hear the term neoliberalism all the time. It is an ideology I that's
used to promote the environment within which this parasitic sort of finance capital can
operate. So could you talk a bit about the relationship between finance capital and
neoliberalism as its ideology.
MH: Today's vocabulary is what Orwell would call DoubleThink. If you're going to call
something anti-liberal and against what Adam Smith and John Stuart Mill and other classical
economists described as free markets, you pretend to be neoliberal. The focus of Smith, Mill,
Quesnay and the whole of 19th-century classical economics was to draw a distinction between
productive and unproductive labor – that is, between people who earn wages and profits,
and rentiers who, as Mill said, "get rich in their sleep." That is how he described landowners
receiving groundrent. It also describes the financial sector receiving interest and "capital"
gains.
The first thing the neoliberal Chicago School did when they took over Chile was to close
down every economics department in the country except the one they controlled at the Catholic
University. They started an assassination program of left wing professors, labor leaders and
politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor,
deregulated "free markets" stripping away social protections and benefits unless you have
totalitarian control. You have to censor any idea that there's ever been an alternative, by
rewriting economic history to deny the progressive tax and regulatory reforms that Smith, Mill,
and other classical economists urged to free industrial capitalism from the surviving feudal
privileges of landlords and predatory finance.
This rewriting of the history of economic thought involves inverting the common vocabulary
that people use. So, the idea of the parasitism is to replace the meaning of everyday words and
vocabulary with their opposite. It's DoubleThink.
Democratic vs. oligarchic government and their respective economic doctrines
ED: I don't want to go too far off on a tangent, but you mentioned the example of Chile's 1973
coup and the assassination of Allende to impose the Pinochet dictatorship. That was a
Kissinger/Nixon operation as we know, but what's interesting about that is Chile was
transformed into a sort of experimental laboratory to impose the Chicago school economic model
of what we now would call neoliberalism. Later in our conversation I want to talk a bit about
some recent laboratories we have seen in Eastern Europe, and now in Southern Europe as well.
The important point about neoliberalism is the relationship between totalitarian government and
this form of economics.
MH: That's right. Neoliberals say they're against government, but what they're really
against is democratic government. The kind of governments they support are pre-referendum
Greece or post-coup Ukraine. As Germany's Wolfgang Schäuble said, "democracy doesn't
count." Neoliberals want the kind of government that will create gains for the banks, not
necessarily for se the economy at large. Such governments basically are oligarchic. Once high
finance takes over governments as a means of exploiting the 99 Percent, it's all for active
government policy – for itself.
Aristotle talked about this more than 2,000 years ago. He said that democracy is the stage
immediately proceeding oligarchy. All economies go through three stages repeating a cycle: from
democracy into oligarchy, and then the oligarchs make themselves hereditary. Today, Jeb Bush
wants to abolish the estate tax to help the emerging power elite make itself into a hereditary
aristocracy. Then, some of the aristocratic families will fight among themselves, and take the
public into their camp and promote democracy, so you have the cycle going all over again.
That's the kind of cycle we're having now, just as in ancient Athens. It's a transition from
democracy to oligarchy on its way to becoming an aristocracy of the power elite.
ED: I want to return to the book in a second but I have to interject that one particular
economist hasn't been mentioned yet: Karl Marx. It's an inversion of Marx as well, because
Marx's labor theory of value was that that value ultimately is derived from labor. Parasitic
finance capital is the opposite of that. It may increase prices without value.
MH: Correct, but I should point out that there's often a misinterpretation of the context in
which the labor theory of value was formulated and refined. The reason why Marx and the other
classical economists – William Petty, Smith, Mill and the others – talked about the
labor theory of value was to isolate that part of price that wasn't value. Their purpose was to
define economic rent as something that was not value. It was extraneous to production, and was
a free lunch – the element of price that is charged to consumers and others that has no
basis in labor, no basis in real cost, but is purely a monopoly price or return to privilege.
This was mainly a survival of the feudal epoch, above all of the landed aristocracy who were
the heirs of the military conquers, and also the financial sector of banking families and their
heirs.
The aim of the labor theory of value was to divide the economy between excessive price
gouging and labor. The objective of the classical economists was to bring prices in line with
value to prevent a free ride, to prevent monopolies, to prevent an absentee landlord class so
as to free society from the legacy of feudalism and the military conquests that carved up
Europe's land a thousand years ago and that still underlies our property relations.
The concept and theory of economic rent
ED: That's a great point, and it leads me into the next issue that I want to touch on. You've
mentioned the term already a number of times: the concept of economic rent. We all know rent in
terms of what we have to pay every month to the landlord, but we might not think about what it
means conceptually. It's one of the fabrics with which you've woven this book together. One of
the running themes, rent extraction, and its role in the development of what we've now termed
this parasitic relationship. So, explain for laymen what this means – rent extraction
– and how this concept evolved.
MH: To put the concept of economic rent in perspective, I should point out when I went to
get my PhD over a half a century ago, every university offering a graduate economics degree
taught the history of economic thought. That has now been erased from the curriculum. People
get mathematics instead, so they're unexposed to the concept of economic rent as unearned
income. It's a concept that has been turned on its head by "free market" ideologues who use
"rent seeking" mainly to characterize government bureaucrats taxing the private sector to
enhance their authority – not free lunchers seeking to untax their unearned income. Or,
neoclassical economists define rent as "imperfect competition" (as if their myth of "perfect
competition" really existed) stemming from "insufficient knowledge of the market," patents and
so forth.
Most rent theory was developed in England, and also in France. English practice is more
complex than America. The military conquers imposed a pure groundrent fee on the land, as
distinct from the building and improvements. So if you buy a house from a seller in England,
somebody else may own the land underneath it. You have to pay a separate rent for the land. The
landlord doesn't do anything at all to collect land rent, that's why they call them rentiers or
coupon clippers. In New York City, for example, Columbia University long owned the land
underneath Rockefeller Center. Finally they sold it to the Japanese, who lost their shirt. This
practice is a carry-over from the Norman Conquest and its absentee landlord class.
The word "rent" originally was French, for a government bond (rente). Owners received a
regular income every quarter or every year. A lot of bonds used to have coupons, and you would
clip off the coupon and collect your interest. It's passively earned income, that is, income
not actually earned by your own labor or enterprise. It's just a claim that society has to pay,
whether you're a government bond holder or whether you own land.
This concept of income without labor – but simply from privileges that had been made
hereditary – was extended to the ideas of monopolies like the East India Company and
other trade monopolies. They could produce or buy goods for, let's say, a dollar a unit, and
sell them for whatever the market will bear – say, $4.00. The markup is "empty pricing."
It's pure price gouging by a natural monopoly, like today's drug companies.
To prevent such price gouging and to keep economies competitive with low costs of living and
doing business, European kept the most important natural monopolies in the public domain: the
post office, the BBC and other state broadcasting companies, roads and basic transportation, as
well as early national airlines. European governments prevented monopoly rent by providing
basic infrastructure services at cost, or even at subsidized prices or freely in the case of
roads. The guiding idea is for public infrastructure – which you should think of as a
factor of production along with labor and capital – was to lower the cost of living and
doing business.
But since Margaret Thatcher led Britain down the road to debt peonage and rent serfdom by
privatizing this infrastructure, she and her emulators other countries turned them into
tollbooth economies. The resulting economic rent takes the form of a rise in prices to cover
interest, stock options, soaring executive salaries and underwriting fees. The economy ends up
being turned into a collection of tollbooths instead of factories. So, you can think of rent as
the "right" or special legal privilege to erect a tollbooth and say, "You can't get television
over your cable channel unless you pay us, and what we charge you is anything we can get from
you."
This price doesn't have any relation to what it costs to produce what they sell. Such
extortionate pricing is now sponsored by U.S. diplomacy, the World Bank, and what's called the
Washington Consensus forcing governments to privatize the public domain and create such
rent-extracting opportunities.
In Mexico, when they told it to be more "efficient" and privatize its telephone monopoly,
the government sold it to Carlos Slim, who became one of the richest people in the world by
making Mexico's phones among the highest priced in the world. The government provided an
opportunity for price gouging. Similar high-priced privatized phone systems plague the
neoliberalized post-Soviet economies. Classical economists viewed this as a kind of theft. The
French novelist Balzac wrote about this more clearly than most economists when he said that
every family fortune originates in a great theft. He added that this not only was undiscovered,
but has come taken for granted so naturally that it just doesn't matter.
If you look at the Forbes 100 or 500 lists of each nation's richest people, most made their
fortunes through insider dealing to obtain land, mineral rights or monopolies. If you look at
American history, early real estate fortunes were made by insiders bribing the British Colonial
governors. The railroad barrens bribed Congressmen and other public officials to let them
privatize the railroads and rip off the country. Frank Norris's The Octopus is a great novel
about this, and many Hollywood movies describe the kind of real estate and banking rip-offs
that made America what it is. The nation's power elite basically begun as robber barons, as
they did in England, France and other countries.
The difference, of course, is that in past centuries this was viewed as corrupt and a crime.
Today, neoliberal economists recommend it as the way to raise "productivity" and make countries
wealthier, as if it were not the road to neofeudal serfdom.
The Austrian School vs. government regulation and pro-labor policies
ED: I don't want to go too far off on a tangent because we have a lot to cover specific to your
book. But I heard an interesting story when I was doing a bit of my own research throughout the
years about the evolution of economic thought, and specifically the origins of the so-called
Austrian School of Economics – people like von Mises and von Hayek. In the early 20th
century they were essentially, as far as I could tell, creating an ideological framework in
which they could make theoretical arguments to justify exorbitant rent and make it seem almost
like a product of natural law – something akin to a phenomenon of nature.
MH: The key to the Austrian School is their hatred of labor and socialism. It saw the danger
of democratic government spreading to the Habsburg Empire, and it said, "The one thing we have
to stop is democracy. Their idea of a free market was one free of democracy and of democratic
government regulating and taxing wealthy rentiers. It was a short step to fighting in the
streets, using murder as a "persuader" for the particular kind of "free markets" they wanted
– a privatized Thatcherite deregulated kind. To the rentiers they said: "It's either our
freedom or that of labor."
Kari Polanyi-Levitt has recently written about how her father, Karl Polanyi, was confronted
with these right-wing Viennese. His doctrine was designed to rescue economics from this school,
which makes up a fake history of how economics and civilization originated.
One of the first Austrian's was Carl Menger in the 1870s. His "individualistic" theory about
the origins of money – without any role played by temples, palaces or other public
institutions – still governs Austrian economics. Just as Margaret Thatcher said, "There's
no such thing as society," the Austrians developed a picture of the economy without any
positive role for government. It was as if money were created by producers and merchants
bartering their output. This is a travesty of history. All ancient money was issued by temples
or public mints so as to guarantee standards of purity and weight. You can read Biblical and
Babylonian denunciation of merchants using false weights and measures so see why money had to
be public. The major trading areas were agora spaces in front of temples, which kept the
official weights and measures. And much exchange was between the community's families and the
public institutions.
Most important, money was brought into being not for trade (which was conducted mainly on
credit), but for paying debts. And most debts were owed to the temples and palaces for pubic
services or tribute. But to the Austrians, the idea was that anything the government does to
protect labor, consumers and society from rentiers and grabbers is deadweight overhead.
Above all, they opposed governments creating their own money, e.g. as the United States did
with its greenbacks in the Civil War. They wanted to privatize money creation in the hands of
commercial banks, so that they could receive interest on their privilege of credit creation and
also to determine the allocation of resources.
Today's neoliberals follow this Austrian tradition of viewing government as a burden,
instead of producing infrastructure free of rent extraction. As we just said in the previous
discussion, the greatest fortunes of our time have come from privatizing the public domain.
Obviously the government isn't just deadweight. But it is becoming prey to the financial
interests and the smashers and grabbers they have chosen to back.
ED: You're right, I agree 100%. You encounter this ideology even in the political
sociological realm like Joseph Schumpeter, or through the quasi-economic realm like von Hayek
in The Road to Serfdom.
MH: Its policy conclusion actually advocates neo-serfdom. Real serfdom was when families had
to pay all their income to the landlords as rent. Centuries of classical economists backed
democratic political reform of parliaments to roll back the landlords' power (and that of
bankers). But Hayek claimed that this rollback was the road to serfdom, not away from it. He
said democratic regulation and taxation of rentiers is serfdom. In reality, of course, it's the
antidote.
ED: It's the inversion you were talking about earlier. We're going to go into a break here
in a minute but before we do I want to touch on one other point that is important in the book,
again the book, Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global
Economy, available from CounterPunch – very important that people pick up this book.
MH: And from Amazon! You can get a hard copy for those who don't want to read on
computers.
Finance as the new mode of warfare
ED: Yes, and on amazon as well, thank you. This issue that I want to touch on before we go to
the break is debt. On this program a couple of months ago I had the journalist John Pilger. He
and I touched on debt specifically as a weapon, and how it is used as a weapon. You can see
this in the form of debt enslavement, if you want to call it that, in postcolonial Africa. You
see the same thing in Latin America where, Michael, I know you have a lot of experience in
Latin America in the last couple of decades. So let's talk a little bit, if we could, before we
go to the break, about debt as a weapon, because I think this is an important concept for
understanding what's happening now in Greece, and is really the framework through which we have
to understand what we would call 21st-century austerity.
MH: If you treat debt as a weapon, the basic idea is that finance is the new mode of
warfare. That's one of my chapters in the book. In the past, in order to take over a country's
land and its public domain, its basic infrastructure and its mineral resources, you had to have
a military invasion. But that's very expensive. And politically, almost no modern democracy can
afford a military invasion anymore.
So the objectives of the financial sector – of Wall Street, the City of London or
Frankfurt in Germany – is to obtain the land. You can look at what's happening in Greece.
What its creditors, the IMF and European Central Bank (ECB) want are the Greek islands, and
they want the gas rights in the Aegean Sea. They want whatever buildings and property there is,
including the museums.
Matters are not so much different in the private sector. If you can get a company or
individual into debt, you can strip away the assets they have when they can't pay. A
Hayek-style government would block society from protecting itself against such asset stripping.
Defending "property rights" of creditors, such "free market" ideology deprives the rest of the
economy – businesses, individuals and public agencies. It treats debt writedowns as the
road to serfdom, not the road away from debt dependency.
In antiquity, private individuals obtained labor services by making loans to families in
need, and obliging their servant girls, children or even wives to work off the loan in the form
of labor service. My Harvard-based archaeological group has published a series of five books
that I co-edited, most recently Labor in the
Ancient World . Creditors (often palace infrastructure managers or collectors) would get
people into bondage. When new Bronze Age rulers started their first full year on the throne, it
was customary to declare an amnesty to free bond servants and return them to their families,
and annul personal debts as well as to return whatever lands were forfeited. So in the Bronze
Age, debt serfdom and debt bondage was only temporary. The biblical Jubilee law was a literal
translation of Babylonian practice that went back two thousand years.
In America, in colonial times, sharpies (especially from Britain) would lend farmers money
that they knew the farmer couldn't pay, then they would foreclose just before the crops came
in. Right now you have corporate raiders, who are raiding whole companies by forcing them into
debt, and then smashing and grabbing. You now have the IMF, European Central Bank and
Washington Consensus taking over whole countries like Ukraine. The tactic is to purposely lend
them the money that clearly cannot be repaid, and say, "Oh you cannot pay? Well, we're not
going to take a loss. We have a solution." The solution is to sell off public enterprises, land
and natural resources. In Greece's case, 50 billion euros of its property, everything that it
has in the public sector. The country is to be sold off to foreigners (including domestic
oligarchs working out of their offshore accounts). Debt leverage is thus the way to achieve
what it took armies to win in times past.
ED: Exactly. One last point on that as well. I want to get your comment on and we see this
in post-colonial Africa, especially when the French and the British had to nominally give up
control of their colonies. You saw debt become an important tool to maintain hegemony within
their spheres of influence. Of course, asset stripping and seizing control, smashing and
grabbing was part of that. But also it is the debt servicing payments, it is the cycle of debt
repayment and taking new loans on top of original loans to service the original loans –
this process this cycle is also really an example of this debt servitude or debt bondage.
MH: That's correct, and mainstream economics denies any of this. It began with Ricardo,
who's brothers were major bankers at the time, and he himself was the major bank lobbyist in
England. Right after Greece won its independence from Turkey, the Ricardo brothers made a
rack-renting loan to Greece at far below par (that is, below the face value that Greece
committed itself to pay). Greece tried to pay over the next century, but the terms of the loan
ended up stripping and keeping it on the edge of bankruptcy well into the 20th century.
But Ricardo testified before Parliament that there could be no debt-servicing problem. Any
country, he said, could repay the debts automatically, because there is an automatic
stabilization mechanism that enables every country to be able to pay. This is the theory that
underlines Milton Friedman and the Chicago School of monetarism: the misleading idea that debt
cannot be a problem.
That's what's taught now in international trade and financial textbooks. It's false
pleading. It draws a fictitious "What If" picture of the world. When criticized, the authors of
these textbooks, like Paul Samuelson, say that it doesn't matter whether economic theory is
realistic or not. The judgment of whether an economic theory is scientific is simply whether it
is internally consistent. So you have these fictitious economists given Nobel Prizes for
promoting an inside out, upside down version of how the global economy actually works.
ED: One other thing that they no longer teach is what used to be called political economy.
The influence of the Chicago School, neoliberalism and monetarism has removed classical
political economy from academia, from the Canon if you will. Instead, as you said, it's all
about mathematics and formulas that treat economics like a natural science, when in fact it
really should be more of a historically grounded social science.
MH: The formulas that they teach don't have government in them,. If you have a theory that
everything is just an exchange, a trade, and that there isn't any government, then you have a
theory that has nothing to do with the real world. And if you assume that the environment
remains constant instead of using economics to guide public and national policy, you're using
economics for the opposite of what the classical economists did. Adam Smith, Mill, Marx, Veblen
– they all developed their economic theory to reform the world. The classical economists
were reformers. They wanted to free society from the legacy of feudalism – to get rid of
land rent, to take money creation and credit creation into the public domain. Whatever their
views, whether they were right wingers or left wingers, whether they were Christian socialists,
Ricardian socialists or Marxian socialists, all the capitalist theorists of the 19th century
called themselves socialists, because they saw capitalism as evolving into socialism.
But what you now have, since World War I, is a reaction against this, stripping away of the
idea that governments have a productive role to play. If government is not the director and
planner of the economy, then who is? It's the financial sector. It's Wall Street. So the
essence of neoliberalism that you were mentioning before, is indeed a doctrine of central
planning. It states that the central planning should be done by Wall Street, by the financial
sector.
The problem is, what is the objective of central planning by Wall Street? It's not to raise
living standards, and it's not to increase employment. It is to smash and grab. That is the
society we're in now.
A number of chapters of my book (I think five), describe how the Obama administration has
implemented this smash and grab, doing the exact opposite of what he promised voters. Obama has
implemented the Rubin-omics [Robert Rubin] doctrine of Wall Street to force America into what
looks like a chronic debt depression.
ED: Exactly right. I couldn't agree more. Let's take a short break and we'll continue the
discussion. Again, I'm chatting with Michael Hudson about his new book, Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy.
The case of Latvia: Is it a success story, or a neoliberal disaster?
ED: I want to go back to some of the important issues that we introduced or alluded to in the
first part of our discussion. As I was mentioning to you off-air, a couple years ago I twice
interviewed your colleague Jeffrey Sommers, with whom you've worked and co-published a number
of papers. We talked a lot about many of the same issues that you and I are touching on.
Specifically Sommers – and I know you as well – did a lot of work in Latvia, a
country in the former Soviet space in Eastern Europe on the Baltic Sea. Your book has a whole
chapter on it, as well as references throughout the book.
So let's talk about how Latvia serves as a template for understanding the austerity model.
It is touted by technocrats of the financial elite as a major success story – how
austerity can work. I find it absurd on so many different levels. So tell us what happened in
Latvia, what the real costs were, and why neoliberals claim it as a success story.
MH: Latvia is the disaster story of the last two decades. That's why I took it as an object
lesson. You're right, it was Jeff Sommers who first brought me over to Latvia. I then became
Director of Economic Research and Professor of Economics at the Riga Graduate School of
Law.
When Latvia was given its independence when the Soviet Union broke up in 1991, a number of
former Latvians had studied at George Washington University, and they brought neoliberalism
over there – the most extreme grabitization and de-industrialization of any country I
know. Latvians, Russians and other post-Soviet countries were under the impression that U.S.
advisors would help them become modernized like the U.S. economy – with high living and
consumption standards. But what they got was advice to emulate American experience. It got
something just the opposite – how to enable foreign investors and bankers to carve it up,
dismantle its industry and become a bizarre neoliberal experiment.
You may remember the Republican presidential candidate Steve Forbes, who in 2008 proposed a
flat tax to replace progressive taxation. The idea never could have won in the United States,
but Latvia was another story. The Americans set the flat tax at an amazingly low 12 percent of
income – and no significant property tax on real estate or capital gains. It was a
financial and real estate dream, and created a classic housing and financial bubble.
Jeff and I visited the head of the tax authority, who told us that she was appointed because
she had done her PhD dissertation on Latvia's last land value assessment – which was in
1917. They hadn't increased the assessments since then, because the Soviet economy didn't have
private land ownership and didn't even have a concept of rent-of-location for planning
purposes. (Neither did Russia.)
Latvia emerged from the Soviet Union without any debt, and also with a lot of real estate
and a highly educated population. But its political insiders turned over most of the government
enterprises to themselves. Latvia had been a computer center and also the money-laundering
center of the Soviet leadership already in the late 1980s (largely as a byproduct of Russian
oil exports through Ventspils), and Riga remains the money-laundering city for today's
Russia.
Privatizing housing and other property led to soaring real estate prices. But this bubble
wasn't financed by domestic banks. The Soviet Union didn't have private banks, because the
government had simply created the credit to fund the economy as needed. The main banks in a
position to lend to Latvia were Swedish and other Scandinavian banks. They pounce on the
lending opportunities to opened up by an entire nation whose real estate had almost no tax on
it. The result was the biggest real estate bubble in the world, along with Russia's. Latvians
found that in order to buy housing of their own, they had to go deeply into debt. Assets were
only given to insiders, not to the people.
A few years ago there was a reform movement in Latvia to stop the economic bleeding. Jeff
and I brought over American property appraisers and economists. We visited the leading bank,
regulatory agencies. Latvia was going broke because its population had to pay so much for real
estate. And it was under foreign-exchange pressure because debt service on its mortgage loans
was being paid to the Swedish and foreign banks. The bank regulator told us that her problem
was that her agency's clients are the banks, not the population. So the regulators thought of
themselves as working for the banks, even though they were foreign-owned. She acknowledged that
the banks were lending much more money than property actually was worth. But her regulatory
agency had a solution: It was to have not only the buyer be obligated to pay the mortgage, but
also the parents, uncles or aunts. Get the whole family involved, so that if the first signer
couldn't pay the cosigners would be obligated.
That is how Latvia stabilized its banking system. But it did so by destabilizing the
economy. The result is that Latvia has lost 20 percent of its population over the past decade
or so. For much the same reasons that Greece has lost 20 percent of its population, with
Ireland in a similar condition. The Latvians have a joke "Will the last person who leaves in
2020 please turn off the lights at the airport."
The population is shrinking because the economy is being run by looters, domestic and
foreign. I was shown an island in the middle of the Daugava river that runs to the middle of
Latvia, and was sold for half a million dollars. Our appraisers said that it's worth half a
billion dollars, potentially. There are no plans to raise the property tax to recapture these
gains for the country – so that it can lower its heaviest labor taxes in the world,
nearly half each paycheck for income tax and "social security" spending so that finance and
real estate won't be taxed.
A few years ago, I was at the only meeting of INET (George Soros's group) that I was invited
to, and in the morning one of the lead talks was on how Latvia was a model that all countries
could follow to balance the budget. Latvia has balanced the budget by cutting back public
spending, reducing employment and lowering wage levels while indebting its population and
forcing to immigrate. The neoliberal strategy is to balance by selling off whatever remains in
the public domain. Soros funded a foundation there (like similar ones he started in other
post-Soviet countries) to get a part of the loot.
These giveaways at insider prices have created a kleptocracy obviously loyal to neoliberal
economics. I go into the details in my chapter. It's hard to talk about it without losing my
temper, so I'm trying to be reasonable but it's a country that was destroyed and smashed. That
was the U.S. neoliberal model alternative to post-Stalinism. It wasn't a new American economy.
It was a travesty.
Why then does the population continue to vote for these neoliberals? The answer is, the
neoliberals say, the alternative is Stalinism. To Latvians, this means exile, deportations and
memories of the old pro-Russian policy. The Russian-speaking parties are the main people
backers of a social democracy party. But neoliberals have merged with Latvian nationalists.
They are not only making the election over resentment against the Russian-speaking population,
but the fact that many are Jewish.
I find it amazing to see someone who is Jewish, like George Soros, allying with anti-Semitic
and even neo-Nazi movements in Latvia, Estonia, and most recently, of course, Ukraine. It's an
irony that you could not have anticipated deductively. If you had written this plot in a
futuristic novel twenty years ago, no one would have believed that politics could turn more on
national and linguistic identity politics than economic self-interest. The issue is whether you
are Latvian or are Russian-Jewish, not whether you want to untax yourself and make? Voting is
along ethnic lines, not whether Latvians really want to be forced to emigrate to find work
instead of making Latvia what it could have been: an successful economy free of debt. Everybody
could have gotten their homes free instead of giving real estate only to the kleptocrats.
The government could have taxed the land's rental value rather than letting real estate
valuation be pledged to pay banks – and foreign banks at that. It could have been a
low-cost economy with high living standards, but neoliberals turned in into a smash and grab
exercise. They now call it an idea for other nations to follow. Hence, the U.S.-Soros strategy
re Ukraine.
ED: That's an excellent point. It's a more extreme case for a number of reasons in Ukraine
– the same tendency. They talk about, "Putin and his gaggle of Jews." That's the idea,
that Putin and the Jews will come in and steal everything – while neoliberals plan to
appropriate Ukraine's land and other resources themselves. In this intersection between
economics and politics, Latvia, Lithuania, Estonia – the Baltic States of the former
Soviet Union – are really the front lines of NATO expansion. They were some of the first
and most pivotal countries brought into the NATO orbit. It is the threat of "Russian
aggression" via the enclave at Kaliningrad, or just Russia in general. That is the threat they
use to justify the NATO umbrella, and simultaneously to justify continuing these economic
policies. So in many ways Russia serves as this convenient villain on a political, military and
economic level.
MH: It's amazing how the popular press doesn't report what's going on. Primakov, who died a
few months ago, said during the last crisis a few years ago that Russia has no need to invade
Latvia, because it owns the oil export terminals and other key points. Russia has learned to
play the Western game of taking countries over financially and acquiring ownership. Russia
doesn't need to invade to control Latvia any more than America needs to invade to control Saudi
Arabia or the Near East. If it controls exports or access to markets, what motive would it have
to invade? As things stand, Russia uses Latvia it as a money laundering center.
The same logic applies to Ukraine today. The idea is that Russia is expansionary in a world
where no one can afford to be militarily expansionary. After Russia's disaster in Afghanistan,
no country in the world that's subject to democratic checks, whether it's America after the
Vietnam War or Russia or Europe, no democratic country can invade another country. All they can
do is drop bombs. This can't capture a country. For that you need major troop commitments.
In the trips that I've taken to Russia and China, they're in a purely defensive mode.
They're wondering why America is forcing all this. Why is it destroying the Near East, creating
a refugee problem and then telling Europe to clean up the mess it's created? The question is
why Europe is willing to keep doing this. Why is Europe part of NATO fighting in the Near East?
When America tells Europe, "Let's you and Russia fight over Ukraine," that puts Europe in the
first line of fire. Why would it have an interest in taking this risk, instead of trying to
build a mutual economic relationship with Russia as seemed to be developing in the 19th
century?
ED: That's the ultimate strategy that the United States has used – driving a wedge
between Russia and Europe. This is the argument that Putin and the Russians have made for a
long time. You can see tangible examples of that sort of a relationship even right now if you
look at the Nord Stream pipeline connecting Russian energy to German industrial output –
that is a tangible example of the economic relationship, that is only just beginning between
Russia and Europe. That's really what I think the United States wanted to put the brakes on, in
order to be able to maintain hegemony. The number one way it does that is through NATO.
MH: It's not only put the brakes on, it has created a new iron curtain. Two years ago,
Greece was supposed to privatize 5 billion euros of its public domain. Half of this, 2.5
billion, was to be the sale of its gas pipeline. But the largest bidder was Gazprom, and
America said, "No, you can't accept the highest bidder if its Russian." Same thing in Ukraine.
It has just been smashed economically, and the U.S. says, "No Ukrainian or Russian can buy into
the Ukrainian assets to be sold off. Only George Soros and his fellow Americans can buy into
this." This shows that the neoliberalism of free markets, of "let's everybody pay the highest
price," is only patter talk. If the winner in the rigged market is not the United States, it
sends in ISIS or Al Qaeda and the assassination teams, or backs the neo-Nazis as in
Ukraine.
So, we're in a New Cold War. Its first victims, apart from Southern Europe, will be the rest
of Europe. You can imagine how this is just beginning to tear European politics apart, with
Germany's Die Linke and similar parties making a resurgence.
The Troika and IMF doctrine of austerity and privatization
ED: I want to return us back to the book and some other key issues that you bring up that I
think are most important. One that we hear in the news all the time, and you write extensively
about it in the book, is the Troika. That's the IMF, the European Central Bank (ECB) and the
European Commission. It could be characterized as the political arm of finance capital in
Europe, one that imposes and manages austerity in the interest of the ruling class of finance
capital, as I guess we could call them. These are technocrats, not academically trained
economists primarily (maybe with a few exceptions), but I want you to talk a bit about how the
Troika functions and why it's so important in what we could call this crisis stage of
neoliberal finance capitalism.
MH: Basically, the Troika is run by Frankfurt bankers as foreclosure and collection agents.
If you read recently what former Greek finance minister Yanis Varoufakis has written, and his
advisor James Galbraith, they said that when Syriza was elected in January, they tried to
reason with the IMF. But it said that it could only do what the European Central Bank said, and
that it would approve whatever they decided to do. The European Central Bank said that its role
wasn't to negotiate democracy. Its negotiators were not economists. They were lawyers. "All we
can say is, here's what you have to pay, here's how to do it. We're not here to talk about
whether this is going to bankrupt Greece. We're just interested in in how you're going to pay
the banks what they're owe. Your electric companies and other industry will have to go to
German companies, the other infrastructure to other investors – but not from Russia."
It's much like England and France divided up the Near East after World War I. There's a kind
of a gentlemen's agreement as to how the creditor economies will divide up Greece, carving it
up much like neighboring Yugoslavia to the north.
In 2001 the IMF made a big loan to Argentina (I have a chapter on Argentina too), and it
went bad after a year. So the IMF passed a rule, called the No More Argentinas rule, stating
that the Fund was not going to participate in a loan where the government obviously can not
pay.
A decade later came the Greek crisis of 2011. The staff found that Greece could not possibly
pay a loan large enough to bail out the French, German and other creditors. So there has to be
a debt write-down of the principal. The staff said that, and the IMF's board members agreed.
But its Managing Director, Strauss-Kahn wanted to run for the presidency of France, and most of
the Greek bonds were held by French banks. French President Sarkozy said "Well you can't win
political office in France if you stiff the French banks." And German Chancellor Merkel said
that Greece had to pay the German banks. Then, to top matters, President Obama came over to the
G-20 meetings and they said that the American banks had made such big default insurance
contracts and casino gambles betting that Greece would pay, that if it didn't, if the Europeans
and IMF did not bail out Greece, then the American banks might go under. The implicit threat
was that the U.S. would make sure that Europe's financial system would be torn to pieces.
ED: And Michael, I just want to clarify, I guess it's sort of a question: about what you're
talking about here in terms of Geithner and Obama coming in: These would be credit default
swaps and collateralized debt obligations?
MH: Yes. U.S. officials said that Wall Street had made so many gambles that if the French
and German banks were not paid, they would turn to their Wall Street insurers. The Wall Street
casino would go under, bringing Europe's banking system down with it. This prompted the
European Central Bank to say that it didn't want the IMF to be a part of the Troika unless it
agreed to take a subordinate role and to support the ECB bailout. It didn't matter whether
Greece later could pay or not. In that case, creditors would smash and grab. This lead the some
of the IMF European staff to resign, most notably Susan Schadler, and later to act as whistle
blowers to write up what happened.
The same thing happened again earlier this year in Greece. Lagarde said that the IMF doesn't
do debt reduction, but would give them a little longer to pay. Not a penny, not a euro will be
written down, but the debt will be stretched out and perhaps the interest rate will be lowered
– as long as Greece permits foreigners to grab its infrastructure, land and natural
resources.
The staff once again leaked a report to the Financial Times (and maybe also the Wall Street
Journal) that said that Greece couldn't pay, there's no way it can later sell off the IMF loan
to private bondholders, so any bailout would be against the IMF's own rules. Lagarde was
embarrassed, and tried to save face by saying that Germany has to agree to stretch out the
payments on the debt – as if that somehow would enable it to pay, while its assets pass
into foreign hands, which will remit their profits back home and subject Greece to even steeper
deflation.
Then, a few weeks ago, you have the Ukraine crisis and the IMF is not allowed to make loans
to countries that cannot pay. But now the whole purpose is to make loans to countries who can't
pay, so that creditors can turn around and demand that they pay by selling off their public
domain – and implicitly, force their population to emigrate.
ED: Also, technically they're not supposed to be making loans to countries that are at war,
and they're ignoring that rule as well.
MH: That's the second violation of IMF rules. At least in the earlier Greek bailout, Strauss
Kahn got around the "No More Argentinas" rule by having a new IMF policy that if a country is
systemically important, the IMF can lend it the money even if it can't pay, even though it's
not credit-worthy, if its default would cause a problem in the global financial system (meaning
a loss by Wall Street or other bankers). But Ukraine is not systemically important. It's part
of the Russian system, not the western system. Most of its trade is with Russia.
As you just pointed out, when Lagarde made the IMF's last Ukrainian loan, she said that she
hoped its economy would stabilize instead of fighting more war in its eastern export region.
The next day, President Poroshenko said that now that it had got the loan, it could go to war
against the Donbass, the Russian speaking region. Some $1.5 billion of the IMF loan was given
to banks run by Kolomoisky, one of the kleptocrats who fields his own army. His banks send the
IMF's gift abroad to his own foreign banks, using his domestic Ukrainian money to pay his own
army, allied with Ukrainian nationalists flying the old Nazi SS insignia fighting against the
Russian speakers. So in effect, the IMF is serving as an am of the U.S. military and State
Department, just as the World Bank has long been.
ED: I want to interject two points here for listeners who haven't followed it as closely.
Number one is the private army that you're talking about – the Right Sector which is
essentially a mercenary force of Nazis in the employ of Kolomoisky. They're also part of what's
now called the Ukrainian National Guard. This paramilitary organization that is being paid
directly by Kolomoisky. Number two – and this relates back to something that you were
saying earlier, Michael – that IMF loan went to pay for a lot of the military equipment
that Kiev has now used to obliterate the economic and industrial infrastructure of Donbass,
which was Ukraine's industrial heartland. So from the western perspective it's killing two
birds with one stone. If they can't strip the assets and capitalize on them, at least they can
destroy them, because the number one customer was Russia.
MH: Russia had made much of its military hardware in Ukraine, including its liftoff engines
for satellites. The West doesn't want that to continue. What it wants for its own investors is
Ukraine's land, the gas rights in the Black Sea, electric and other public utilities, because
these are the major tollbooths to extract economic rent from the economy. Basically, US/NATO
strategists want to make sure, by destroying Ukraine's eastern export industry, that Ukraine
will be chronically bankrupt and will have to settle its balance-of-payments deficit by selling
off its private domain to American, German and other foreign buyers.
ED: Yes, that's Monsanto, and that's Hunter Biden on the Burisma board (the gas company).
It's like you said earlier, you wouldn't even believe it if someone would have made it up. It's
so transparent, what they're doing in Ukraine.
Financialization of pension plans and retirement savings
I want to switch gears a bit in the short time we have remaining, because I have two more
things I want to talk about. Referring back to this parasitical relationship on the real
economy, one aspect that's rarely mentioned is the way in which many regular working people get
swindled. One example that comes to my mind is the mutual funds and other money managers that
control what pension funds and lots of retirees invest in. Much of their savings are tied up in
heavily leveraged junk bonds and in places like Greece, but also recently in Puerto Rico which
is going through a very similar scenario right now. So in many ways, US taxpayers and
pensioners are funding the looting and exploitation of these countries and they're then
financially invested in continuing the destruction of these countries. It's almost like these
pensioners are human shields for Wall Street.
MH: This actually is the main theme of my book – financialization. Mutual funds are
not pension funds. They're different. But half a century ago a new term was coined: pension
fund capitalism, sometimes called pension fund socialism. Then we got back to Orwellian
doublethink when Pinochet came to power behind the natural alliance of the Chicago School with
Kissinger at the State Department. They immediately organized what they called labor
capitalism. n labor capitalism labor is the victim, not the beneficiary. The first thing they
did was compulsory setting aside of wages in the form of ostensible pension funds controlled by
the employers. The employers could do whatever they wanted with it. Ultimately they invested
their corporate pension funds in their own stocks or turned them over to the banks, around
which their grupo conglomerates were organized. They then simply drove the businesses with
employee pension funds under, wiping out the pension fund liabilities – after moving the
assets into their captive banks. Businesses were left as empty corporate shells.
Something similar happened in America a few years ago with the Chicago Tribune. Real estate
developer Sam Zell borrowed money, bought the Tribune, using the Employee Stock Ownership Plan
(ESOP) essentially to pay off the bondholders. He then drove/looted the Tribune into bankruptcy
and wiped out the stockholders. Employees brought a fraudulent conveyance suit.
Already fifty years ago, critics noted that about half of the ESOPs are wiped out, because
they're invested by the employers, often in their own stock. Managers give themselves stock
options, which are given value by employee purchases. Something similar occurs with pension
funds in general. Employee wages are paid into pension funds, which bid up the stock prices in
general. On an economy-wide basis, employees are buying the stock that managers give
themselves. That's pension fund capitalism.
The underlying problem with this kind of financialization of pensions and retirement savings
is that modern American industry is being run basically for financial purposes, not for
industrial purposes. The major industrial firms have been financialized. For many years General
Motors made most of its profits from its financial arm, General Motors Acceptance Corporation.
Likewise General Electric. When I was going to school 50 years ago, Macy's made most of its
money not by selling products, but by getting customers to use its credit cards. In effect, it
used its store to get people to use its credit cards.
Last year, 92% of the earnings of the Fortune 100 companies were used for stock buy-backs --
corporations buying back their stock to support its price – or for dividend payouts, also
to increase the stock's price (and thus management bonuses and stock options). The purpose of
running a company in today's financialized world is to increase the price of the stock, not to
expand the business. And who do they sell the stock to? Essentially, pension funds.
There's a lot of money coming in. I don't know if you remember, but George W. Bush wanted to
privatize Social Security. The idea was to spend all of its contributions – the 15+% that
FICA withholds from workers paychecks every month – into the stock market. This would
fuel a giant stock market boom. Money management companies, the big banks, would get an
enormous flow of commissions, and speculators would get rich off the inflow. It would make
billionaires into hundred-billionaires. All this would soar like the South Sea Bubble, until
the American population began to age – or, more likely, begin to be unemployed. At that
point the funds would begin to sell the stocks to pay retirees. This would withdraw money from
the stock market. Prices would crash as speculators and insiders sold out, wiping out the
savings that workers had put into the scheme.
The basic idea is that when Wall Street plays finance, the casino wins. When employees and
pension funds play the financial game, they lose and the casino wins.
ED: Right, and just as an example for listeners – to make what Michael was just
talking about it even more real – if we think back to 2009 and the collapse of General
Motors, it was not General Motors automotive manufacturing that was collapsing. It was GMAC,
their finance arm, which was leveraged on credit default swaps, collateralized debt obligations
and similar financial derivatives – what they call exotic instruments. So when Obama
comes in and claimed that he "saved General Motors," it wasn't really that. He came in for the
Wall Street arm of General Motors.
Obama's demagogic role as Wall Street shill for the Rubinomics gang
MH: That's correct. He was the Wall Street candidate, promoted by Robert Rubin, who was
Clinton's Treasury Secretary. Basically, American economic policies can run by a combination of
Goldman Sachs and Citigroup, often interchangeably.
ED: This was demonstrated very clearly in the first days of Obama taking office. Who does he
meet with to talk about the financial crisis? He invites the CEOs of Goldman Sachs and JP
Morgan, Bank of America, Citi and all of the rest of them. They're the ones who come to the
White House. It's been written about in books, in the New Yorker and elsewhere. Obama basically
says, "Don't worry guys, I got this."
MH: Ron Suskind wrote this. He said that Obama said, "I'm the only guy standing between you
and the pitchforks. Listen to me: I can basically fool them." (I give the actual quote in my
book.) The interesting thing is that the signs of this meeting were all erased from the White
House website, but Suskind has it in his book. Obama emerges as one of the great demagogues of
the century. He may be even worse than Andrew Jackson.
ED: So much of it is based on obvious policies and his actions. The moment he came to power
was a critical moment when action was needed. Not only did he not take the right action, he did
exactly what Wall Street wanted. In many ways we can look back to 2008 when he was championing
the TARP, the bailout, and all the rest of that. None of that would have been possible without
Obama. That's something that Democrats like to avoid in their conversations.
MH: That's exactly the point. It was Orwellian rhetoric. He ran as the candidate of Hope and
Change, but his real role was to smash hope and prevent change. By keeping the debts in place
instead of writing them down as he had promised, he oversaw the wrecking of the American
economy.
He had done something similar in Chicago, when he worked as a community organizer for the
big real estate interests to tear up the poorer neighborhoods where the lower income Blacks
lived. His role was to gentrify them and jack up property prices to move in higher-income
Blacks. This made billions for the Pritzker family. So Penny Pritzker introduced him to Robert
Rubin. Obama evidently promised to let Rubin appoint his cabinet, so they appointed the vicious
anti-labor Rahm Emanuel, now Chicago's mayor, as his Chief of Staff to drive any Democrat to
the left of Herbert Hoover out of the party. Obama essentially pushed the Democrats to the
right, as the Republicans gave him plenty of room to move rightward and still be the "lesser
evil."
So now you have people like Donald Trump saying that he's for what Dennis Kucinich was for:
a single payer healthcare program. Obama fought against this, and backed the lobbyists of the
pharmaceutical and health insurance sectors. His genius is being able to make most voters
believe that he's on their side when he's actually defending the Wall Street special interests
that were his major campaign contributors.
ED: That's true. You can see that in literally every arena in which Obama has taken action.
From championing so-called Obamacare, which is really a boon for the insurance industry, to the
charter schools to privatize public education and also become a major boon for Wall Street, for
Pearson and all these major education corporations. In terms of real estate, in the
gentrification, all the rest. Literally every perspective, every angle from which you look at
Obama, he is a servant of finance capital of investors, not of the people. And that's what the
Democratic Party has become, delivering its constituency to Wall Street.
A left-wing economic alternative
MH: So here's the problem: How do we get the left to realize this? How do we get it to talk
about economics instead of ethnic identity and sexual identity and culture alone? How do we get
the left to do what they were talking about a century ago – economic reform and how to
take the side of labor, consumers and debtors? How do we tell the Blacks that it's more
important to get a well paying job? That's the way to gain power. I think Deng said: "Black
cat, white cat, it doesn't matter as long as it catches mice." How do we say "Black president,
white president, it doesn't matter, as long as they give jobs for us and help our community
economically?"
ED: I think that's important and I want to close with this issue: solutions. One of the
things I appreciate in reading your book is that it is broken up into sections. The final
section, I think, is really important. You titled it: "There Is An Alternative." That is of
course a reference to Margaret Thatcher's TINA (There Is No Alternative). That ideology and
mindset took over the left, or at least the nominally left-wing parties. So you're saying that
there is an alternative. In that section you propose a number of important reforms. You argue
that they would restore industrial prosperity. Now, I'm not asking you to name all of them, to
run down the list, but maybe touch on a little bit of what you included, and why that's
important for beginning to build this alternative.
MH: There are two main aims that classical economists had 200 years ago. One was to free
society from debt. You didn't want people to have to spend their lives working off the debt,
whether for a home, for living or to get an education. Second, you wanted to fund industry, not
by debt but by equity. That is what the Saint-Simonians and France did. It's what German
banking was famous for before World War I. There was a debate in the English speaking
countries, especially in England saying that maybe England and the Allies might lose World War
I because the banks are running everything, and finance should be subordinated to fund
industry. It can be used to help the economy grow, not be parasitic.
But instead, our tax laws make debt service tax deductible. If a company pays $2 billion a
year in dividends, a corporate raider can buy it on credit and, if there's a 50% stock rate, he
can pay $4 billion to bondholders instead of $2 billion to stockholders. Over the past twenty
years the American stock market has become a vehicle for corporate raiding, replacing equity
with debt. That makes break-even costs much higher.
The other point I'm making concerns economic rent. The guiding idea of an economic and tax
system should be to lower the cost of living and doing business. I show what the average
American wage earner has to pay. Under the most recent federal housing authority laws, the
government guarantees mortgage loans that absorb up to 43% of family income. Suppose you pay
this 43% of income for your home mortgage, after the 15% of your wages set aside for Social
Security under FICA.
Instead of funding Social Security out of the general budget and hence out of what is still
progressive taxation, Congress has said that the rich shouldn't pay for Social Security; only
blue-collar workers should pay. So if you make over $115,000, you don't have to pay anything.
In addition to that 15% wage tax, about 20% ends up being paid for other taxes – sales
taxes, income taxes, and various other taxes that fall on consumers. And perhaps another 10%
goes for bank loans besides mortgages – credit card loans, student loans and other
debts.
That leaves only about 25% of what American families earn to be spent on goods and services
– unless they borrow to maintain their living standards. This means that if you would
give wage earners all of their food, all their transportation, all their clothing for nothing,
they still could not compete with foreign economies, because so much of the budget has to go
for finance, insurance and real estate (FIRE). That's why our employment is not going to
recover. That's why our living standards are not going to recover.
Even if wages do go up for some workers, they're going to have to pay it to the bank for
education loans, mortgage loans (or rent), bank debt and credit card debt, and now also for our
amazingly expensive and rent-extracting medical insurance and health care and medications. The
result is that if they try to join the middle class by getting higher education and buying a
home, they will spend the rest of their lives paying the banks. They don't end up keeping their
higher wages. They pay them to the banks.
ED: You don't have to tell me. I'm living that reality. Interestingly, in that final section
of your book you talk about alternatives, like a public banking option that many people have
discussed. You talk about the Social Security cap that you were just mentioning, and focus on
taxing economic rent. Some critics would suggest that these sorts of reforms are not going to
be able to salvage the capitalist model that is so ensconced in the United States. So I want to
give you a chance to sort of present that argument or maybe rebut it.
MH: I won't rebut that criticism, because it's right. Marx thought that it was the task of
industrial capitalism to free economies from the economic legacies of feudalism. He saw that
the bourgeois parties wanted to get rid of the "excrescences" of the industrial capitalist
marketplace. They wanted to get rid of the parasites, the landowners and usurious creditors.
Marx said that even if you get rid of the parasites, even if you socialize finance and land
that he dealt with in volume II and III of Capital, you're still going to have the Volume I
problem. You're still going to have the exploitation problem between employers and employees
– the labor/capital problem.
My point is that most academic Marxists and the left in general have focused so much on the
fight of workers and labor unions against employers that they tend to overlook that there's
this huge FIRE sector – Finance, Insurance, and Real Estate – tsunami is swamping
the economy. Finance is wrecking industry and government, along with labor. The reforms that
Marx expected the bourgeois parties to enact against rentiers haven't occurred. Marx was overly
optimistic about the role of industrial capitalism and industrialized banking to prepare the
ground for socialism.
This means that until you complete the task of freeing of society from feudalism –
corrosive banking and economic rent as unearned income – you can't solve the industrial
problems that Marx dealt with in Volume I. And of course even when you do solve them, these
problems of labor exploitation and markets will still exist.
ED: Yes, absolutely. Well we're out of time. I want to thank you for coming onto the
program. Listeners, you heard it. There's so much information to digest here. The book is
really brilliant, I think essential reading, required reading – Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy, available through
CounterPunch, as well as on Amazon. Michael Hudson professor of economics at University of
Missouri Kansas City, his work is all over the place. Find it regularly on CounterPunch, as
well as on his website michael-hudson.com. Michael Hudson thanks so much for coming on
CounterPunch Radio.
MH: It's great to be here. It's been a wonderful discussion.
The key point is that financial industry needs to be strictly regulated and suppressed, because after a cirtain point it stage
coup d'état, banksters come to power and turn the industry into cancer for the society with it uncontrolled parasitic growth.
Notable quotes:
"... In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector. In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and most corrupt. ..."
"... The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors. ..."
"... Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ. ..."
"... Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians. Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most, happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?) See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell their funds. In 2010, mutual fund companies paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups. ..."
"... One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets. ..."
"... As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public asset strip mining is one of the chief causes of the increasing profitability of the financial sector. ..."
Before I begin this article want to make the point that what I'm about to say doesn't apply to everyone in the industry. While
the average mutual fund, broker, wealth manager, and hedge fund charges high fees and delivers poor results it doesn't apply to everyone.
I know lots of good, honest hedge fund managers that charge reasonable fees. I know lots of wealth managers that act in their client's
best interest and don't gouge them on fees. Unfortunately these are the exceptions rather than the rule.
Over the past year or so, the issue of rising income inequality in the United States (and even worldwide) has come front and center.
Most of what I've read has focused on wages, union membership, unemployment, taxation, government subsidy, and executive pay issues.
There is one issue whose role I think is overlooked in the mainstream media: the role the financial sector plays in exacerbating
income inequality. In fact, I believe the financial sector is one of the prime causes, and at its current point is perhaps the greatest
parasite in human history. It is sucking wealth from the productive sectors of the economy at an unprecedented rate.
Before we go any further, I want to define the term "income inequality." When I use that term, I am referring to the fact that,
on average, the incomes and standard of living of American workers is not keeping pace with productivity. I'm also using the term,
in part, to explain why workers and executives in some parts of the economy are overpaid in relation to the benefits they provide.
What I am not doing is making a blanket statement that money should be taken away from successful, hardworking people and
given or "redistributed" to the lazy.
The Role of the Financial Sector
In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion
of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector.
In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and
most corrupt.
The problem is that the financial, insurance, and real estate (FIRE) sectors do not actually produce any goods or services. If
you go on Google Finance you'll see it divides the economy into ten sectors: energy, basic materials, industrials, cyclical consumer
goods, non-cyclical consumer goods, financials, healthcare, technology, telecommunications, and utilities.
The nine nonfinancial sectors all produce goods or services. For example, the energy sector companies drill for our oil and refine
it into gasoline (e.g., ExxonMobil); the basic materials sector mines our iron (BHP Billiton) and refines it into steel (Nucor);
the industrial sector produces the mining equipment (Caterpillar) used by the previously mentioned sectors; the cyclical consumer
goods sector produces our cars (Ford) or sells our everyday items (Wal-Mart); the non-cyclical consumer goods sector sells the things
we need no matter what, such as groceries (Safeway); the healthcare sector provides the medicines that heal us (Johnson & Johnson);
the technology sector gives us the computers and software we use (Apple); the telecommunications sector gives us the ability to communicate
(Verizon); and the utility sector gives us the power to run our homes and businesses (Duke Energy).
The financial sector? Well, according to Harvard professor Greg Mankiw, chief academic apologist for the financial sector, this
is what it's supposed to do:
Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy's investment resources.
They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow.
The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller
the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the
more money it siphons off from the productive sectors.
The graph below shows how the financial sector has grown since 1960. The figures are shown as a percentage of investment (using
both gross and net investment).
Graphic source: Jacobin Magazine
As you can see, the financial sector has almost doubled or tripled in size since 1960. That means it is extracting double or triple
the amount of money from the real economy!
Just how much?
I want to go through several areas of the economy to show you how the financial sector is extracting money and offering no benefit.
The Grift in Your Retirement Plan
I want to start with the industry I work in, wealth management. When I started my business, I was cognizant of how investors were
ill served by the traditional model of wealth management and vowed to run my business differently. Unfortunately, a vast majority
of the financial industry has built an unrivaled apparatus for extracting huge sums of money from retirees and mom-and-pop investors.
Say, you're sitting on your couch, watching TV and thinking about retirement. You just got part of your inheritance and think
investing it for the future would be a sensible idea. Imagine you haven't the slightest idea how to get started. Then a commercial
comes on with Tommy Lee Jones telling you how trustworthy Ameriprise is. Maybe you hear the reassuring voice of John Houseman pitching
Smith Barney, or you might see the iconic bull charging across the desert for Merrill Lynch.
Say you decide to go down to your local brokerage and meet with a financial advisor. His (or her) pitch sounds good, so you decide
to become a client.
The first problem is the guy you met. Remember how he told you he has his finger on the pulse of the market, he has access to
the best investment research, he is always taking continuing education classes, and he is always monitoring your portfolio? He isn't.
He could be a complete moron. He got hired (and survived and thrived) because he is a good salesman. Nothing less and nothing more.
He takes his orders on what to sell from the top -- the gaggle of people with their fingers in your retirement pie, helping themselves
to regular bites.
The first person behind the scenes telling our hapless salesman what to do is some sort of office, district, or regional manager.
This is manager is just like the salesman but with more ambition. Almost all of these guys were promoted from sales, and their job
is do an impersonation of Alec Baldwin from Glengarry Glen Ross, yelling at the underperformers ("Coffee is for closers!") to get
out there and sell the turd of the month. ("XYZ Mutual Fund Company just paid our firm $200M," this manager says, "so get out there
and sell their funds! And, Jones, if you don't gross $20,000 by the end of this month you're fired! Meeting adjourned.")
Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the
lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ.
Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians.
Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most,
happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical
methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?)
See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell
their funds. In 2010, mutual fund companies
paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups.
You, the investor, are usually charged somewhere around 1% to 1.5% of assets annually for this "service." I've seen clients charged
as much as 1.65% and I've come across firms advertising fees as high as 2% per year for clients with small account balances. For
large portfolios (typically $1M or more) the fees start going down and I've seen rates as low as .5% or less. These fees are split
up between your advisor, the district manager, and the firm itself. Keep in mind that these are fees before any investments have
been made!
So who actually makes the investments in stocks and bonds? It's the portfolio managers at the mutual fund companies. According
to the Investment Company Institute 2011 Fact Book (the ICI is a pro-mutual fund organization), the average mutual fund in
2010 charged 1.47% of assets annually. That's in addition to an average up-front sales charge of 1%.
Why so expensive? Well, the funds are towing a lot of dead weight. According to the ICI 2013 Fact Book, only 42% of mutual
fund employees were employed in fund management positions or fund administrative positions. The rest, 58%, were employed in either
investor servicing (34%) or sales and distribution (24%) job functions.
Like any good infomercial says, "But wait! There's more!" When you buy a stock or bond, you can't just go grab it off the shelf
like you are shopping at Wal-Mart. You need to go through a brokerage. A 1999 study by Chalmers, Edelen, and Kadlec found that the
average mutual fund incurs trading expenses of .78% per annum. A newer study in 2004 by Karceski, Livingston, and O'Neal found brokerage
commissions cost funds around .38% per annum, or .58% if you account for the effect trading large blocks of stock has on the bid-ask
spread.
But wait! There's more! Mutual funds and your average retail investor are relatively unsophisticated, so a new industry has popped
up to take advantage of them. It's called "high frequency trading" or HFT for short. These are powerful computers programmed to take
advantage of "dumb" traders in the market. These HFT firms place their computers physically next to the stock exchange computers
in the datacenters and buy access to market quotes milliseconds before they are made public. They use these and other advantages
to skim
profits from other legitimate investors (that is, people buying stocks because they want to own part of the underlying company).
All told, it's not uncommon to see investors incurring annual expenses of 2%, all the way up to 4% per year.
Institutions and the Rich Have the Same Problem
The problem isn't just limited to Joe Six-pack Retiree. Large institutional investors, such as pension funds, and "sophisticated"
rich investors get taken to the cleaners too.
Once upon a time someone came up with a great idea: Since an all-stock portfolio is volatile, why not "hedge" the portfolio and
sell some stocks short? If you bet that good stocks will go up (buying stocks in the good companies or going long) and bad stocks
will go down (selling the stock short) then you could limit volatility and maybe make some extra money. (You'd make money both when
the good stocks went up and the bad stocks went down). It was and is a pretty good idea when done correctly. Unfortunately, the term
"hedge fund," like the term "mutual fund," has lost its original meaning. The term hedge fund is now used to refer to any type of
pooled investment vehicle that is limited to select clients (usually rich, sophisticated investors and institutions, although the
rules vary worldwide).
The rule of thumb is that hedge funds charge a 2% per year management fee and keep 20% of all profits, the proverbial "2 and 20"
compensation. According to a
WSJ article , this
old adage isn't too far off; the average hedge fund charges 1.6% per year and keeps 18% of profits.
In 2012, hedge funds removed $50.5B from their investors' pockets. In fact, according to an article in Jacobin Magazine, the top
25 hedge fund managers make more money than the CEOs of all S&P 500 companies combined. Combined!
Have they earned it? Well, the answer seems to be no. I pulled the last four years of return data for two hedge fund indices:
the Barclays Hedge Fund Index and the Credit Suisse AllHedge Index. These two indices track thousands of hedge funds across the globe.
I compared them with the returns of the Vanguard Total World Stock Index Fund and the Vanguard Total World Bond Market Index Fund
as well as a 50/50 portfolio of the two Vanguard Funds. All returns shown are net of fees.
The Vanguard stock fund trounced both hedge fund indices, and the Credit Suisse index managed only to beat the returns of bonds
by .01%.
Right about now you will hear the howls of the "hedgies" complaining. I wasn't quite fair to the hedge funds. A lot, but not all,
of them are hedged so returns in down markets will be better and four years isn't a terribly long time to look at.
The two graphs below show the returns for the Credit Suisse index since 2004 and the maximum drawdowns (losses) since 2004.
First, over 10 years the returns for hedge funds are atrocious, only about 25% in total. They do have a point that the draw downs
are lower. The maximum losses experienced during the downturn only averaged about 25%. Fine, but the Vanguard Total Bond Market Index
had barely any draw downs during the crisis and returned over 50% during a similar time period.
Unfortunately, Vanguard does not have return data for any of its World Stock funds for a complete 2008 calendar year so I was
unable to get exact data for my 50/50 portfolio. But I'd be willing to bet it beats the hedge fund indices on a risk adjusted basis.
When you hear about underfunded pension plans, part of the blame lies with pension investment committees and their investments
in hedge funds. These funds, in aggregate, have not earned the fees they charge and have instead funneled the money of retirees into
the hands of a wealthy few.
I'm not alone in reaching this conclusion. Pension funds are slowly starting to see the light and
reducing their allocations to "alternative" investments, such as hedge funds, and
reallocating the capital to indexed products or negotiating with the funds for lower fees.
It's not just the traditional investment arena where the financial sector has run wild. Its unending quest for siphoning money
from the economy has spilled out into other areas.
Speculation in Commodities Costs Main Street Billions
Speculation by the financial sector in the commodities market is impacting the entire world. The passage of the Commodities Futures
Modernization Act (CFMA) has allowed big banks to engage in almost limitless speculation in the commodities market. Wall Street has
convinced everyone from individual investors to pension funds and endowments that they need to include commodities in their portfolios
for deworsification, I mean, diversification purposes. Between investors plowing more than $350B into the commodities market and
what appears to be outright manipulation of commodities prices, the financial sector has increased the costs of everything from wheat
to heating oil and aluminum to gasoline.
An executive for MillerCoors testified that manipulation of the aluminum market cost manufacturers over $3B. The World Bank estimated
that in 2010, 44 million people worldwide were pushed into poverty because of high food prices. The chief cause?
More than 100 studies
agree the cause is speculation in the commodities market. (Goldman Sachs made
$440M in 2012
from food market speculation.) For Americans who love their cars (and SUVs), the biggest impact might be felt at the gas pump where
experts estimate
that financial speculation has added anywhere from $1 to $1.50 to gas prices.
For more information on speculation in the commodities, I recommend Matt Taibbi's
excellent pieces, in-depth information at Better Markets , or some
of myarticles on commodities.
If you think it's bad enough that Wall Street is raising the price of your food, heating oil, gasoline, and Pepsi, then wait until
you get a load of one of the Street's other ingenious ideas for helping themselves to more of your money.
Corruption of Public Infrastructure
One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should
be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover
servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets.
The first and most obvious examples of this type of fraud (I choose to use the term "fraud" because I believe that is exactly
what these deals are) are government entities selling public, taxpayer-owned infrastructure, such as road, bridges, parking facilities,
and ports, to the private sector so that they can extract rent from the users. The deals are usually touted as saving taxpayers money
and letting the "more efficient" private sector better manage the asset. This is false. Many studies show private ownership of public
goods does not lead to any cost savings. A comprehensive econometric
study done in 2010 of all available public vs. private studies by Germa Bel, Xavier Fageda, Mildred E. Warner at the University
of Barcelona found no cost saving in privatizing public water or solid waste management services and infrastructure.
The case is no different when it comes to public roads. A
2007 paper by US PIRG found that
privatizing roads never benefits citizens. Financial firms were typically able to buy the assets on the cheap and then raise toll
rates while usually sneaking language into the agreements that prevented governments from building competing infrastructure. The
paper presented evidence that the Indiana Toll Road lease will cost taxpayers at least $7.5B.
One of the most egregious examples of the financial sector extracting rent is the
2009 sale of Chicago's parking meters
to a consortium led by Morgan Stanley. Shortly after the lease was finalized, rates at many parking meters increased (in some case
by quadruple the amount). The Chicago Inspector General found that the city was underpaid by almost $1B for the lease. Meanwhile,
in 2010 Morgan Stanley banked $58 million in profits from the parking meters. With
no way
out of the deal , the citizens of Chicago are now paying Morgan Stanley for the right to use assets they used to own!
The second way in which taxpayers are exploited by the financial sector is so-called public-private partnerships (also referred
to as PPP or P 3 ). There is no set definition for what constitutes a PPP arrangement, and it is possible some might be
beneficial in limited circumstances. I want to focus on one specific type of PPP that enriches the financial sector: when public
projects are privately financed. There is absolutely no reason for any government project to ever require paying "rent" to the financial
sector in the form of financing.
The United States federal government is the monopoly supplier of US dollars. It can add them to the economy at will through deficit
spending or remove them via taxation. There is no earthly reason for a public entity to be forced to depend on the private sector
to provide any type of financing. The only constraint on whether or not money should be spent is whether the economy is at full capacity
(full employment and full industrial capacity utilization) where the additional deficit spending may cause inflation.
State and local governments are unable to issue currency and therefore must depend on revenue raised via taxation, distributions
from the federal government, or money raised through bond issuance. Even then, studies have shown that PPPs are more expensive compared
to the state or local entity securing financing through the municipal bond market.
As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are
nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public
asset strip mining is one of the chief causes of the increasing profitability of the financial sector.
So far we've dealt with examples that are pretty easy to see. Everyone who owns a car knows that gas prices have been rising too
fast and food is more expensive. The citizens of Chicago know they are getting shafted on the parking meter deal since parking rates
have quadrupled. But there are hidden areas of the economy where the financial sector is ripping off the public too.
Interest Rate Manipulation
Do you know what LIBOR is? And what it's used for? A lot of financial types read my newsletters, so I'm sure some of you do. But
the average man or woman on the street likely does not.
LIBOR stands for London Interbank Offered Rate and is the average interest rate banks in London estimate that they would be charged
if they borrowed from other banks. This rate is used worldwide by mortgage lenders, credit card agencies, banks, and other financial
institutions to set interest rates. By some estimates, more than $350T in financial products, derivatives, and contracts are tied
to LIBOR.
In 2012, it was discovered that, since 1991, banks were falsely inflating or deflating the interest rates they reported. (Remember
banks essentially make up their own interest rates and report them with the results being essentially averaged and reported as LIBOR.)
The banks did this in order to profit from trades or to make themselves look more creditworthy than they were.
The Macquarie Group estimated that the
manipulation of LIBOR cost investors $176B. (Keep in mind this is an estimate coming from a financial firm, so it would be prudent
to assume it's on the low end.)
Andrew Lo, a finance professor at MIT, said the fraud "dwarfs by orders of magnitude any financial scam in the history of the
markets."
Food Stamps (SNAP) and Welfare (TANF)
I highly doubt any of my clients or readers are beneficiaries of the SNAP or "food stamps" program and are probably not very familiar
with it. While it is nominally a government program it has been corrupted by the big banks. Benefits are provided electronically
via debit cards (EBT cards). JP Morgan
has made over $500M
from 2004 to 2012 providing EBT benefits to 18 states. The banks then are free to reap fees from users for such things as cash
withdraws for TANF benefits, out of network ATM fees, lost card replacement fees, and even customer service calls.
I believe you can judge how profitable a service is to a company how much it spends on lobbying. In the case of JPMorgan, its
bribes, I mean campaign contributions to Agriculture Committee (SNAP is part of the Department of Agriculture) members increased
sharply after it entered the EBT market in 2004.
(Graphic source: GAI via data from CRP) Summary
A bloated and out-of-control financial sector does not add any value to society. Society benefits when the financial sector is
kept as small as possible.
The financial sector is a parasite that depends on its host organism, the productive sector of the economy, to fuel its profits.
The larger the financial sector grows, the more wealth it extracts from the productive sectors of the economy. With all due respect
to Matt Taibbi, Goldman Sachs isn't a vampire squid; the entire financial sector is the vampire squid with its tentacles reaching
into the pockets of citizens everywhere and sucking out money.
Quite a damning critique, and if I may step away from the main point I have to ask: why is it that some guys involved with
finance, Strubel as well as Auerback, Mosler and Ritholtz, talk like this while so many in the field do not? Does everyone involved
"know" all this but most simply choose to put on blinders?
Great Article about the .01% "Taker Class". This can all end by the 99% demanding a change to the TAX CODE! Yet another clear
indication of the manipulation of the "Giver Class" by government!
Its truly frightening to see how the public has been blindsided/mislead about the root causes of rapid income inequality. As
a social worker I am somwhat familiar with the SNAP benefit program Depressing to think JP Morgan Chase skimmed at least 500m
over an eight year period for SNAP and welfare benefits. I suppose this is the new age enclosure movement where Wall Street is
picking up public assets for pennies on the dollar and charging enormous rents..
The questions is.. what happens when it is used up?? A scorched wasteland of dysfunctional infrastruture/gated communites housing
a tiny elite protected from beggars, street criminals, and gang bandits??
Excellent article. Easy for a layperson to understand and covers a good portion of the pervasive, ongoing, worldwide financial
system theft. I worked for a stock brokerage firm years ago while studying for the series 7. Once I figured out they were all
just well-dressed telemarketers, I quit and found a more productive job. Remember 'dogs of the Dow' ?
A very well-written and eye-opening post – thanks, Ben. I think the formulation of this central point may be a little skewed,
though: " the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial
sector becomes the more money it siphons off from the productive sectors."
I think this formulation may be somewhat muddling the real-vs.-financial dichotomy that MMT revolves around. Sort of by definition,
the financial sector is 100 percent nominal – even when it posits ownership of real assets, it is really just money-valuing them,
applying the unit-of-account property of money. The ownership is an abstraction. The owner of a share of stock or a gold ETF has
no concrete interaction with the company or commodity in question. So, contrasting the total size of the financial sector to the
totality of real wealth available – for those members of society who do *not* receive income from the financial sector – leaves
me scratching my head. I'm not clear what is being measured. I know that profits flowing to the financial sector have exploded
from around two percent of total corporate profits in the 1950s to around forty percent now. This means it is over-charging for
its so-called services, but I think the real-economy effects are non-linear, and more complex than this.
Regarding the financial sector's growing tendency to siphon off money from the productive sectors – yes, they do this. But
it is up to the state, with its currency-issuing and taxing powers, to regulate how far this process goes and what happens next.
In a recent post, J.D. Alt took note of the ephemeral nature of the financial sector's nominal money-wealth. It is "fictitious
capital". Electronic poker chips. Just zeros and ones, really. As long as the plutocrats simply hoard them – use them to keep
score – the state can just replace them by increasing spending. I also tend to think that the consumption spending of the .01
percent is rather inelastic. They already have everything they want. Keynes' attitude was to let them live it up, up to a point,
and then tax the excess back when they die.
For me, the most important part of your post is the section on commodity speculation and infrastructure privatization. This
truly is a huge deal, a clear interaction with the real economy and a terrible crime, actually. Again, though, it is up to the
state to permit these outrages or ban them – we used to ban them but we stopped. So. One more big thank-you to the Big Dog, I
guess. To think – before Clinton, America actually based aid to poor children on their ages and their poverty rather than the
supposed moral imperfections of their parents. We even had no-fee food stamps.
Obviously, the other reason we can't just let the one percent play their casino games is that they eventually blow up the real
economy, as a totality, through financial crises and destabilization. And, due to all the fabulist monetary propaganda out there,
there is now a big reservoir of public opinion and political will *in favor* of financial collapse. The libertarians and other
Paul-Partiers think it would do us all good. And bring back the gold standard. And "End the Fed", and all the rest of that good
19th Century stuff. I'm not a ready-for-Hillary kind of guy in general, but is it possible to imagine a scarier idea than President
Rand?
While most of your specific criticisms are quite valid, I think your brush is a bit too broad. "The problem is that the financial,
insurance, and real estate (FIRE) sectors do not actually produce any goods or services. "
This is obviously false. I have many times used services provided by banks, credit unions, insurance companies, and real estate
brokers and agents. It would be practically impossible to find the right house to buy, to sell it for a fair price, to get the
loan necessary to buy it, or to protect myself and my family from a catastrophic loss without their services.
It is undoubtedly true that most of the volatility of the FIRE sector since 1990 is due to speculation and parasitical activities,
but there is undoubtedly also some growth of useful services that has facilitated growth of the other sectors, not detracted from
it. Thus it is not always true that "the smaller the financial sector is the more real wealth there is for the rest of society
to enjoy".
Bottom line, you have a good point. Excessively broad statements might be more dramatic, but if they are not true they don't
help your cause.
I have gotten real value from real estate brokers. Did you ever try to sell a house without one? Qualify the serious buyers
and deal with the lookie-loos? And the government paperwork!! I've always gotten my money's worth.
No, the fire doesn't care if you have insurance, but the insurance company will advise you on how to prevent fires and minimize
the damage. Paying an insurance company has protected me from paying the unaffordable high cost of the insured risks. The service
provided by insurance is not incident prevention, it is management of financial risk, and it does that very well. My claims have
been handled quickly and fairly. I had one unusual case where I thought the insurance company should have paid me more than their
original offer (the nation-wide blue book value of the car didn't reflect the unique situation in my State), and after discussion
they agreed with me and paid. I've been with them for over 40 years and I'm very happy with their services.
If you want your bank to create wealth for you, you're looking in the wrong place. Banks are good for storing and protecting
your money, and many will do that for you without fees, and even pay you interest. They'll let you use their computers to pay
your creditors, also without charge. They'll even give you short-term interest-free loans, and pay you cash rebates, if you use
their credit cards. I like my banks' services, too. And, of course, if you want to borrow money they will lend it to you and if
your payment is late they don't break your legs. They will make a profit, though. That's why they do it. You don't have to participate
if you don't want to.
Not every bank is Goldman Sachs, and not every insurance company is AIG. Those are good examples of companies that often serve
no useful purpose, but there are many others who do provide useful services at a reasonable cost.
Although I can be sympathetic of the no-value creation thesis in the financial industry, comparing the performance of hedge
funds with the recent performance of bonds is a no big no-no, because it assumes a negative correlation between equities and bonds.
If one look at the world markets in the last 100 years, that has been the exception rather than the rule.
And you forgot to mention the important roles of capital markets in deploying capital and financing companies through IPOs,
bond offers, etc.
You missed another big point, negative real interest rates. The Fed Funds Rate is currently 0%-0.25%, while real inflation
is much higher. (The CPI is not an accurate measure of inflation.) Big banks can profit by borrowing at 0% and buying stuff (bonds,
stocks, commodities, real estate, politicians, whatever).
On LIBOR, here's another interesting bit. Cities and states lost a TON of money on interest rate swaps with banks. What was
sold as a "hedge" wound up blowing up and costing a fortune.
This was a fascinating piece, very readable for those of us with minimal financial education. However, since this is such a
good explainer for the layman, I think it would be very beneficial to explain how big a difference 1% in fees makes for an investor
over a lifetime. I know personally when I used to compare funds the difference between 1 and 2% in fees seemed negligible. But
then I saw that fantastic PBS Frontline
on this topic and saw how much that 1% could cost me over a lifetime! I now have everything that I personally manage in index
funds!
You can't really argue with what has been said, and all (of us) involved in the sector know it is massive rip off.
While a free market advocate, I think a first step would be to introduce meaningful fee caps on all state promoted or mandated
saving arrangements (eg ISAS, and Pensions), on the grounds that the market is skewed by the government intervention that creates
the glut of forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection through fee caps. I'd
say no more than 20 – 25bps should be permitted for all ISAS and pension savings (DC or DB). Individual wealthy investors (investments
of more than say Ł5m?) can pay what they like.
>>The job of the finance sector is simply to manage existing resources. It creates nothing.
This is a dubious assertion, but you clearly believe it. How then, can you in good conscience, charge 1.25% (plus indirect
costs for the funds you hold in client portfolios) to manage people's money when you yourself admit you are adding no value?
I know this was for Ben, but there's a pretty simple answer to that question: They don't charge 1.25% because they create value,
they're charging a fee to access the profit created by companies they invest in. Say I told you that I knew a guy named Jimmy
who was going to make three bucks for every buck he gets, and I asked if you'd lend me a dollar to give to Jimmy with the promise
that he'd give me 1.50 cents of it. I'd want to keep 25 cents but you can have 1.25, and so you agree. I didn't create the 2 extra
dollars of value -- Jimmy did -- but I feel justified in asking for a cut because I gave you the tip about Jimmy's value creation
ability.
At least, that is my understanding of Ben's statement.
There are 6000 publicly traded companies. Some of them will have rising stock prices, some falling. If a money manager can
steer you to the rising ones, he is doing something of value. It doesn't mean he created anything physical that didn't exist before.
He's doing a service for you that would otherwise have taken you some time and effort to do, and that's what you pay for.
Yes, it's a different definition of value. The growth of financial services has been outpacing the growth of other sectors
to a monstrous scale, and that makes this distinction important. It signals a kind of corruption that can only mean high inflation
and decoupling money from economic output.
I don't follow. How is financial services different from any other kind of services, in the impact on inflation? Why not also
actors, barbers, or any other service profession? The growth of the financial sector might be explained by the fact that it is
the industry most able to exploit computers, and the first to do so on a large scale.
The corruption is, I think, a separate issue that is present whenever other people's money is involved. Financial services
and government are simply more involved that way than most other industries, and have been all along, dating to long before the
recent growth. Corruption is not impossible in any industry, just more attractive when the numbers are larger.
Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth of the .01% radically different than
Income from Labor, because all Taxes on Capital Gains are deferred until taken and are not TAXED as ordinary income. The TAX CODE
is responsible for the corruption of our government because it has put real POWER, the Power of Wealth in the hands of the .01%,
to buy whatever it wants, while labor and the poor spend everything they earn or are given , every single year to survive in a
economic culture designed for the benefit of the .01%, something no one will write about!
Change the TAX CODE and the Corruption of Society will end!
Barbers and actors being paid for their labor do not have the same impact on inflation as a bank giving out loans and consumer
credit at interest. It's not equivalent at all.
Corruption in financial industries is what this article is discussing. If it's a separate issue, I'm confused as to the point
of talking about this at all!
I don't think your explanation is correct. Why wouldn't I go directly to Jimmy in that case and cut out the middle man since
he is offering no value add? The fact is, the middle man, Ben, in this case, believes that he can identify superior companies
to invest his clients money in and earn a greater return. This is Ben's value add and why he charges 1.25%.
Golfer John is correct and that point, essentially, blows a hole in Ben's thesis here that the financial sector adds no value
because they only manage "existing resources". Steering capital to the good ideas that improve consumer wealth and generate a
return is a value add and the fact that millions of transactions like this happen voluntarily between consenting adults further
supports this.
Physics tells us that matter cannot be created or destroyed, so the same resources that are on this earth today are the same
ones that were here 10,000 years ago. So, in that sense, Apple is simply managing "existing resources" when they build the iphone,
Toyota simply managing "existing resources" when they build a car, and UPS and US Mail are merely moving "existing resources"
from one location to another when they make deliveries, must be no value add there right?
Asserting that the financial sector only manages existing resources, and then citing that as proof of no value add is simply
a non sequiter.
No, I wasn't, though I have heard that. My theory of markets, and human group behavior in general, is a statistical approach.
There are averages, distributions, and temporary equilibriums, but the interesting parts are the outliers. I guess that is more
of a quantum flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group behavior is cyclical.
Paul -- That's true, and a good analogy, except you're getting a bit reductive with the term "existing resources". I agree
that "no value" is a bit extreme, which is why I became more interested in the -type- of value.
John – My physics is flawed to the extent that the law of conservation of matter is flawed, this I admit. I am much more economist
than physicist though so better that I get my physics wrong and econ right! I see a lot of similarities between the two, as well
as crucial differences, but I don't want to get too off topic.
Briana – "No Value is a bit extreme"
I agree, and as the absurdly hyperbolic title* of this article states, the author takes it to an even greater extreme – namely
that the financial sector is actually a systematic destroyer of value (parasite) that is created by all of the other industries.
The crux of his assertion rests on that they only "manage existing resources" and also calling Greg Mankiw an apologist, neither
strikes me as an intellectually rigorous argument.
And interestingly, on his own firm's website, the author apparently contradicts the thesis of this article when advertising
his financial services and the fees he charges for his own value add. I can think of several explanations for this, none of which
are particularly flattering, others can draw their own conclusions.
*a worse parasite than all of the murderous dictatorial regimes in human history that have institutionalized the slaughter
and torture of millions? Really? I note this because it is so obviously false that it makes the rest of the content seem unserious
and shallow even if valid points exist. Acidic comments tend to preach to the already converted, but perhaps that is the goal
here.
Yeah, ok. I should know better, Paul. My brain tried to rationalize the argument by making it less extreme. The goal probably
was to mobilize the choir to go Occupy Wall Street for a few more months, haha.
Those valid points shouldn't be ignored because of the poorly handled hyperbole, though. The financial sector does have a great
capacity to act as a parasite by overvaluing their services and squandering wealth generated by other industries instead of reinvesting
it in worthwhile, valuable enterprises; or using that wealth to essentially 'gamble' or invent money that is not attached to any
real value (i.e. shorting or credit default swaps). As the fruits of these behaviors are becoming obvious, it gets harder to justify
policies that allow them to happen.
In many ways that is my point. You found those "valid points" obviously correct before reading the article, so it rang true
despite the extreme hyperbole. I did not find those points self-evidently true so this poorly constructed argument relying on
clearly false assumptions struck me as uncompelling.
For example, how does one "overvalue their services"? If one charges too much, no one is forced to buy. I may find Ben's management
fee of 1.25% to be overvaluing himself, but I have the option of not paying and instead going to less expensive alternatives.
Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?
I do not see anything inherently wrong with short selling. Indeed, the ability to short a stock is simply expressing a view
about its value, and leads to greater and more accurate price discovery. What is wrong with shorting a stock if one believes it
is overpriced relative to its instrinsic value? Is it not preferable that prices reflect underlying economic fundamentals rather
than being disconnected from such? Shorting puts downward pressure on prices, and helps prevent overvaluation.
Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance.
I'm not suggesting that you, here in the comments, need to write a paper elaborating on those, just that this article did a
poor job of pursuading, though again, I am coming to the realization that I am likely not the intended audience.
This discussion in the comments has actually been more fruitful than the article itself.
(Sorry for the late response, I've been away for a few days.)
"For example, how does one "overvalue their services"?"
This argument hinges on everyone that purchases these services knowing their true value. It's very simplistic to say that if
someone purchases it, that is the real value. It gets complicated when you take into account the psychological pressures of purchasing
behavior, such as "middle-price" preferences, "money you don't see is money you don't miss" and other tricks that are employed
to get people to pay higher prices.
"Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?"
Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile.
"I do not see anything inherently wrong with short selling."
Shorting is basically a bucket shop in disguise.
"Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance."
"This argument hinges on everyone that purchases these services knowing their true value."
In a literal sense, you are correct, it is an imperfect measure of value. However, I think it is far and away the most reliable
one we have as value is extremely subjective. I don't think it is right or prudent for third, non cost bearing parties to preempt
decisions made by consenting adults, rather, I would accord them the dignity of free choice. There are many things that consumers
purchase that I do not understand, why anyone would pay a premium for a fast car seems like a waste of money to me, for example.
Why anyone would pay money to golf, not to mention the huge cost in terms of time it takes to get through 18 holes, seems like
a waste of money to me. These are things that make no sense to me because I do not see the value there. But, I recognize that
people have various tastes and preferences, and I respect that and presume that individuals know themselves and their own tastes
and preferences better than I (or someone else) does. Therefore, when someone values something that I do not understand, I tend
to believe it is a result of a difference in preference, rather than they are too dumb to figure out what they like, or that they
are "tricked" into buying something and hence need protection delivered by those who fancy themselves as enlightened enough to
see the real truth. Nothing about this is unique to the financial industry, by the way.
"Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile."
Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources.
I agree with you on purchasing decisions. People should be free to determine value. I'm not saying people are always dumb,
but I do think they are manipulated. If you want to believe they are not, that is up to you, but apparently you've never seen
advertising. The financial industry advertises itself heavily, especially in consumer credit markets and insurance. But if we're
going to gauge something as nebulous as "true value", it requires a level of conscientiousness from everyone, and accepting whatever
people purchase as reflecting it's actual value is a quick way to guarantee abuse, especially when you have something like consumer
credit. If people are free to determine value, they should also be held to the consequences of their choices, which is currently
not the case in the financial industry and increasingly in the general population.
"Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources."
You mean like electricity, phone services, railroads, airlines, fortified wheat, water treatment, the internet, satellites,
healthcare.. the list could go on and on. It is less efficient (a word that really needs to be defined clearly, but I'll assume
I know what you mean!), and it happens because otherwise it wouldn't be possible, and yet it becomes widely adopted and lauded
none-the-less; progress, they say. Like I said, worthwhile and profitable are not 1-to-1 correlation, just as willingness to purchase
doesn't necessarily indicate true value.
I thought you might have some interesting opinion on the CDS as money creation I'm still trying to figure that one out!
"... Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're sucking the rest of us dry @rcbregman ..."
"... 'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body' ..."
"... This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection – cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world. ..."
"... To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth. ..."
"... But there is also a second way to make money. That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his power to claim economic benefit. ..."
"... For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large class of useless rentiers, well-described by the French economist Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley , from big pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere. ..."
"... It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements – not exactly leftist thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole. ..."
"... In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up. ..."
"... Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent. ..."
"... Even paragons of modern progress like Apple, Amazon, Google , Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose. ..."
"... Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger. ..."
"... Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US. ..."
"... Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box. ..."
"... The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts. ..."
"... One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier drains a country of its vitality. ..."
Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're
sucking the rest of us dry @rcbregman
'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body'.
This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection
– cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job
creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance
the whole world.
Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest
shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually
all agree that wealth is created primarily at the top.
So entrenched is this assumption that it's even embedded in our language. When economists talk about "productivity", what they
really mean is the size of your paycheck. And when we use terms like "
welfare
state ", "redistribution" and "solidarity", we're implicitly subscribing to the view that there are two strata: the makers and
the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.
In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders
are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we
hail as "successful" and "innovative" are earning their wealth at the expense of others. The people getting the biggest handouts
are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about
it. Even for politicians on the left, it's a non-issue.
To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means
tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout
app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.
But there is also a second way to make money.
That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase
your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his
power to claim economic benefit.
'From Wall Street to Silicon Valley, zoom in and you'll see rentiers everywhere.'
For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large
class of useless rentiers, well-described by the
French economist
Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend
the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking.
From Wall Street to Silicon Valley , from big
pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere.
There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard.
Countless people in the financial sector, for example, apply great ingenuity and effort to amass "rent" on their wealth. Even the
big innovations of our age – businesses like Facebook
and Uber – are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are
coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It's hardly surprising, then, that they feel wholly entitled
to their wealth.
It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll
start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the
International Monetary Fund and the
Bank for International Settlements – not exactly leftist
thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they
gobble it up whole.
In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating
anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however,
is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares,
then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you),
and if the shit hits the fan, let Uncle Sam mop it up.
The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies
that contribute to real prosperity) basically boils down to maximizing the total amount of debt. And debt, of course, is a means
of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw
is that many bankers should be earning a negative salary; a fine, if you will, for destroying more wealth than they create.
Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields
a similar revenue model.
Take
tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of
other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers.
One of the richest people in the world,
Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The
same goes for the Russian oligarchs who rose after the
Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent.
But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the
face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely
that makes us overlook their massive rent-seeking.
Take the pharmaceutical industry. Companies like
GlaxoSmithKline and
Pfizer regularly
unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture
medications that resemble what we've already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers,
and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the
result of a tiny pinch of innovation and fistfuls of rent.
Even paragons of modern progress like Apple, Amazon, Google
, Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries
and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid
paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose.
Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing
growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult
to compete with, because as they grow bigger, they only get stronger.
Aptly characterising this "platform capitalism" in an article,
Tom Goodwin writes : "Uber, the world's largest taxi company, owns no vehicles. Facebook, the world's most popular media owner,
creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider,
owns no real estate."
Facebook
Twitter
Pinterest 'Every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll.' Photograph: Regis Duvignau/Reuters
So what do these companies own? A platform. A platform that lots and lots of people want to use. Why? First and foremost, because
they're cool and they're fun – and in that respect, they do offer something of value. However, the main reason why we're all happy
to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook because
their friends are on Facebook.
Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for
free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg
has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with
free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an
astounding
64% of all online ad revenue in the US.
But don't Google and Facebook make anything useful at all? Sure they do. The irony, however, is that their best innovations only
make the rentier economy even bigger. They employ scores of programmers to create new algorithms so that we'll all click on more
and more ads.
Uber has
usurped the whole taxi sector just as
Airbnb has upended the hotel industry and Amazon has overrun the book trade. The bigger such platforms grow the more powerful
they become, enabling the lords of these digital feudalities to demand more and more rent.
Think back a minute to the definition of a rentier: someone who uses their control over something that already exists in order
to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody
who passed by pay. Today's tech giants are doing basically the same thing, but transposed to the digital highway. Using technology
funded by taxpayers, they build tollgates between you and other people's free content and all the while pay almost no tax on their
earnings.
This is the so-called innovation that has Silicon Valley gurus in raptures: ever bigger platforms that claim ever bigger handouts.
So why do we accept this? Why does most of the population work itself to the bone to support these rentiers?
I think there are two answers. Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who
was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it.
But in the modern economy, making rentierism work is a great deal more complicated. How many people can explain a
credit default swap
, or a collateralised debt obligation ? Or the revenue
model behind those cute Google Doodles? And don't the folks on Wall Street and in Silicon Valley work themselves to the bone, too?
Well then, they must be doing something useful, right?
Maybe not. The typical workday of Goldman Sachs' CEO may be worlds away from that of King Louis XIV, but their revenue models
both essentially revolve around obtaining the biggest possible handouts. "The world's most powerful investment bank," wrote the journalist
Matt Taibbi about
Goldman Sachs , "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything
that smells like money."
But far from squids and vampires, the average rich freeloader manages to masquerade quite successfully as a decent hard worker.
He goes to great lengths to present himself as a "job creator" and an "investor" who "earns" his income by virtue of his high "productivity".
Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is
twisted around to cloak funneling and exploitation as creation and generation.
However, it would be wrong to think that all this is part of some ingenious conspiracy. Many modern rentiers have convinced even
themselves that they are bona fide value creators. When current Goldman Sachs CEO
Lloyd Blankfein
was asked about the purpose of his job, his straight-faced answer was that he is "
doing God's
work ". The Sun King would have approved.
The second thing that keeps rentiers safe is even more insidious. We're all wannabe rentiers. They have made millions of people
complicit in their revenue model. Consider this: What are our financial sector's two biggest cash cows? Answer: the housing market
and pensions. Both are markets in which many of us are deeply invested.
Recent decades have seen more and more people contract debts to buy a home, and naturally it's in their interest if
house
prices continue to scale new heights (read: burst bubble upon bubble). The same goes for pensions. Over the past few decades
we've all scrimped and saved up a mountainous pension piggy bank. Now pension funds are under immense pressure to ally with the biggest
exploiters in order to ensure they pay out enough to please their investors.
The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts.
En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich
rent-seekers and the homeowners and retirees.
Don't get me wrong, most homeowners and retirees are not benefiting from this situation. On the contrary, the banks are bleeding
them far beyond the extent to which they themselves profit from their houses and pensions. Still, it's hard to point fingers at a
kleptomaniac when you have sticky fingers too.
So why is this happening? The answer can be summed up in three little words: Because it can.
Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he
had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely
in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised
within an inch of her life if she checks the wrong box.
The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon
a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks,
law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions
in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.
One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire.
Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier
drains a country of its vitality.
What innovation remains in a rentier economy is mostly just concerned with further bolstering that very same economy. This may
explain why the big dreams of the 1970s, like flying cars, curing cancer, and colonising Mars, have yet to be realised, while bankers
and ad-makers have at their fingertips technologies a thousand times more powerful.
Yet it doesn't have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies
tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society's biggest
freeloaders are at the very top of the pyramid. And we can more fairly distribute our earnings on land, oil, and innovation through
a system of, say, employee shares, or a
universal basic
income .
But such a revolution will require a wholly different narrative about the origins of our wealth. It will require ditching the
old-fashioned faith in "solidarity" with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders
of society's strongest. All we need to do is to give real hard-working people what they deserve.
And, yes, by that I mean the waste collectors, the nurses, the cleaners – theirs are the shoulders that carry us all.
This article published 10 years ago looks like it was written yesterday. The more things change in the USA casino
capitalism the more they stay the same
Now Trump tariffs will cause drop in consumption. What will follow it not very clear.
Hypertrophied growth of financial system is cancer. It is a parasitic institution much like cancer cells in human body.
Notable quotes:
"... The Federal Reserve made tragic policy errors most certainly with regard to interest rates. They were hampered by a lack of coordinated effort because of the official US policy focus on liquidation and non-interference, along with mass bank failures which rendered their attempts to reflate the money supply as largely futile. ..."
"... But good policies applied with vigor during a period of economic illness may be like forcing patients seriously ill with pneumonia to swim laps and run in marathons because you think such physical activity is inherently good and beneficial in itself at all times. ..."
"... Today it seems to us that the Fed and Treasury are trying to cure our current problems by filling the banks full of liquidity with the idea that it will eventually trickle down to the real economy through their toll gates. ..."
"... We believe this will not work. The financial system is rotten, and not only in its toxic and fraudulent assets. It is a weakened, rotten timber that will provide scant leverage for the rescue attempts. ..."
The 1920's were marked by a credit expansion, a significant growth in consumer debt, the
creation of asset bubbles, and the proliferation of financial instruments and leveraged
investments. The Federal Reserve expanded the money supply and the Republican government
pursued a laissez-faire approach to business.
This helped to create a greater wealth disparity, and saddled a good part of the public with
debts on consumables that were vulnerable to an economic contraction.
The bursting of the credit bubble triggered the stock market Crash of 1929. The Hoover
administration's response was guided by Secretary of the Treasury Andrew Mellon. As noted by
Herbert Hoover in his memoirs, "Mellon had only one formula: 'Liquidate labor, liquidate
stocks, liquidate the farmers, liquidate real estate.'"
Indeed, the collapse of consumption and credit, and the ensuing 'do nothing' policy of
liquidation by the government crippled the economy and drove unemployment up to the incredible
24% level at the climax of the liquidation and deleveraging.
Although some assets fared better than others, virtually everything was caught up in the
cycle of liquidation and everything was sold: stocks, bonds, farms, even long dated US
Treasuries, all of them collapsing into the bottom in late 1932.
The Federal Reserve made tragic policy errors most certainly with regard to interest rates.
They were hampered by a lack of coordinated effort because of the official US policy focus on
liquidation and non-interference, along with mass bank failures which rendered their attempts
to reflate the money supply as largely futile.
Thrifty management of the credit and monetary levels when the economy is balanced in the
manufacturing, service, export-import, and consumption distribution levels is a good policy to
follow.
But good policies applied with vigor during a period of economic illness may be like forcing
patients seriously ill with pneumonia to swim laps and run in marathons because you think such
physical activity is inherently good and beneficial in itself at all times.
Additionally, monetary expansion alone also does not work, as can be seen in the early
attempts by the Fed to expand the monetary base without policy initiatives to support expansion
and consumption. Hoover's administration raised the income tax and cut spending for a balanced
budget.
A combined monetary and government bias to stimulating consumption while restoring balance
and correcting the errors that fostered the credit bubble is the more effective course of
action.
Today it seems to us that the Fed and Treasury are trying to cure our current problems by
filling the banks full of liquidity with the idea that it will eventually trickle down to the
real economy through their toll gates.
We believe this will not work. The financial system is rotten, and not only in its toxic and
fraudulent assets. It is a weakened, rotten timber that will provide scant leverage for the
rescue attempts.
Better to cauterize the bleeds in the financial system and assume a 'trickle up' approach by
reaching the econmy through the individual rather than the individual through the banks.
Provide secure FDIC insurance to everyone to a generous degree , and let those banks who
must fail, fail. You will encourage reform and savings, we guarantee it. Stimulate work and
wages, and then consumption, and the financial system will follow.
While the financial system as it is constituted today remains the centerpiece of our
economy, we cannot sustainably recover since it is a source of recurring infection.
Globalists like to cite the introduction of the Smoot-Hawley tariffs as a major factor in
the development of the Great Depression. This appears to be largely unsubstantiated, and
attributable to a dogmatic bias to international trade as a panacea for failing domestic
demand.
In fact, before Smoot-Hawley both exports and imports were in a steep decline as consumption
collapsed around the world. If the US had declared itself open for free trade, to whom would
they sell, and who in the US would buy? Consumption was in a general collapse around the world.
Smoot Hawley did not help, but it also did not hurt because it was largely irrelevant.
It is a lesser discussed topic, but the US held the majority of the gold in the world in
1930 as the aftermath of their position as an industrial power in World War I and the expansion
that followed. Since the majority of the countries were on some version of the gold standard,
one could make a case that the US had an undue influence on the 'reserve currency of the world'
at that time, and its mistaken policies were transmitted via the gold standard to the rest of
the world.
The nations that exited the Great Depression the soonest, those who recovered more quickly
and experienced a shallower economic downturn, were those who stimulated domestic consumption
via public works and industrial policies: Japan, Germany, Italy, Sweden.
As a final point, we like to show this chart to draw a very strong line under the fact that
the liquidationist policy of the Hoover Administration caused most assets to suffer precipitous
declines. Certainly some fared better than others, such as gold which was pegged, and silver
which declined but not nearly as much as industrial metals and certainly financial instruments
like stocks which declined 89% from peak to trough.
FDR devalued the dollar by 40%, but he never followed Britain off the gold standard,
maintaining fictitious support by outlawing domestic ownership. As the government stepped away
from its liquidationist approach the economy gradually recovered and the money supply
reinflated, despite the carnage delivered to the US economy and the world, provoking the rise
of militarism and statist regimes in many of the developed nations.
There is a fiction that the economy never really recovered, and FDR's policies failed and
only a World War caused the recovery. In fact, if one cares to look at the situation more
closely, the recession of 1937 was a result of the aggressive military buildup for war in the
world, the diversion of capital and resources to non-productive goods and services, and of
course the general reversal of the New Deal by the US Supreme Court and the Republican minority
in Congress.
As an aside, it is interesting to read about the efforts of some US industrialists to foster
a fascist solution here in the US, as their counterparts and some of them had done in
Europe.
What finally put the world on the permanent road to recovery was the savings forced by the
lack of consumer goods during World War II and the rebuilding of Europe and Asia, devastated by
war, significantly aided by the policies of the Allied powers.
A Depression following a Crash caused by an asset bubble collapse is a terrible thing
indeed. But it does not have to be a prolonged ordeal.
Governments can and do make policy errors that prolong the period of adjustment, most
notably instituting an industrial policy that discourages domestic consumption and money supply
growth in a desire to obtain foreign reserves through exports.
From what we have seen thus far, we believe that the Russian experience in the 1990's is
going to be closer to what lies ahead for the US. Unless the US adopts an export driven, low
domestic consumption, high savings policy bias, non-productive military buildup and public
works, and discourages population growth we don't believe the Japanese experience will be
repeated.
Preventing the banking system from collapsing is a worthy objective. Perpetuating the
symptom of fraud and abuse and 'overreach' that was becoming pervasive in the system before the
collapse is not sustainable, instead leading to more frequent and larger collapses.
Balance will be restored, and a reversion to the means will occur, one way or the other. It
would be most practical to accomplish this in a peaceful, sustainable manner, with justice and
toleration.
"... "The entire US economy today is about the quick buck." ..."
"... " When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history giving us a grand total of over $15 trillion." ..."
Central banks are founded for one reason only: to save
[private] banks from bankruptcy, invariably at the cost of society at large. They'll bring down markets
and societies just to make sure banks don't go under. They'll also, and even, do that when
these banks have taken insane risks. It's a battle societies can't possibly win as long as
central banks can raise unlimited amounts of 'money' and shove it into private banks. Ergo:
societies can't survive the existence of a central bank that serves the interests of its
private banks.
For years critics of U.S. central-bank policy have been dismissed as Negative Nellies,
but the ugly truth is staring us in the face: Stock-market advances remain a game of
artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up.
As I've been saying for a long time: There is zero evidence that markets can make or sustain
new highs without some sort of intervention on the side of central banks. None. Zero. Zilch.
And don't think this is hyperbole on my part. I will, of course, present evidence.
In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one),
which was introduced following the initial announcement in November 2008. Every major
correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and
so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest
combined intervention effort in history. The sum: More than $5 trillion between 2016 and
2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the
European Central Bank and the Bank of Japan:
When did global central-bank balance sheets peak? Early 2018. When did global markets
peak? January 2018. And don't think the Fed was not still active in the jawboning business
despite QE3 ending. After all, their official language remained "accommodative" and their
interest-rate increase schedule was the slowest in history, cautious and tinkering so as not
to upset the markets.
With tax cuts coming into the U.S. economy in early 2018, along with record buybacks,
the markets at first ignored the beginning of QT (quantitative tightening), but then it all
changed. And guess what changed? Two things. In September 2018, for the first time in 10
years, the U.S. central bank's Federal Open Market Committee (FOMC) removed one little word
from its policy stance: "accommodative." And the Fed increased its QT program. When did U.S.
markets peak? September 2018.
[..] don't mistake this rally for anything but for what it really is: Central banks
again coming to the rescue of stressed markets. Their action and words matter in heavily
oversold markets. But the reality remains, artificial liquidity is coming out of these
markets. [..] What's the larger message here? Free-market price discovery would require a
full accounting of market bubbles and the realities of structural problems, which remain
unresolved. Central banks exist to prevent the consequences of excess to come to fruition and
give license to politicians to avoid addressing structural problems.
is it $15 trillion, or is it 20, or 30? How much did China add to the total? And for what?
How much of it has been invested in productivity? I bet you it's not even 10%. The rest has
just been wasted on a facade of a functioning economy. Those facades tend to get terribly
expensive.
Western economies would have shrunk into negative GDP growth if not for the $15-20 trillion
their central banks injected over the past decade. And that is seen, or rather presented, as
something so terrible you got to do anything to prevent it from happening. As if it's
completely natural, and desirable, for an economy to grow forever.
It isn't and it won't happen, but keeping the illusion alive serves to allow the rich to put
their riches in a safe place, to increase inequality and to prepare those who need it least to
save most to ride out the storm they themselves are creating and deepening. And everyone else
can go stuff themselves.
And sure, perhaps a central bank could have some function that benefits society. It's just
that none of them ever do, do they? Central banks benefit private banks, and since the latter
have for some braindead reason been gifted with the power to issue our money, while we could
have just as well done that ourselves, the circle is round and we ain't in it.
No, the Fed doesn't hide the ugly truth. The Fed is that ugly truth. And if we don't get rid
of it, it will get a lot uglier still before the entire edifice falls to pieces. This is not
complicated stuff, that's just what you're made to believe. Nobody needs the Fed who doesn't
want to pervert markets and society, it is that simple.
The word your looking for "abyss"
definition --
a catastrophic situation seen as likely to occur to the people with wealth that is built
upon "leverage."
Leverage results from using borrowed capital as a funding source when investing to expand
the firm's asset base and generate returns on risk capital. Leverage is an investment
strategy of using borrowed money -- specifically, the use of various financial instruments
or borrowed capital -- to increase the potential return of an investment. Leverage can also
refer to the amount of debt a firm uses to finance assets. When one refers to a company,
property or investment as "highly leveraged," it means that item has more debt than
equity.
"The entire US economy today is about the quick buck."
Even the stock market these days seems to be about the quick buck. In the US, the
average holding period for stocks has dropped from 8 years (1960), to 5 years (1970), to 2
years (1990), to 4 months (in the past few years).
The policies of the Fed (as well as the Board of Directors of the companies) are
evidently geared towards the short-term benefits of the owners who will be leaving in a few
months. The long-term health of the companies, the economy, and the overall society (mostly
non-owners) is evidently not so important to the Fed and the CEOs.
" When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort
in history giving us a grand total of over $15 trillion."
Those $15 trillion in assets being held by the central banks propped the global stock market capitalization up to around
$75 trillion. Short term thinking that gives short-term benefits. Take away the props and of course that sucker is going to
fall.
What were they thinking, the overweight patient with all of those systemic problems is going to be able to walk just
fine when the crutches are taken away?
"I don't care about Europe," declared US President Donald Trump this week during his White
House cabinet's first meeting of the new year.
The American president probably revealed more about the true nature of US-European relations
than he intended.
Trump was speaking
in the context of American military involvement with Europe, as well as trade and other issues.
He was reiterating the tedious mantra that the US is allegedly being "taken advantage of" by
European allies by not spending more on their military budgets.
It was the usual rambling, barely articulate fallacy from Trump who portrays the inherent
military profligacy of American corporate capitalism not as a destructive vice, but as a
supposed virtuous cause of "protection" for allies and the rest of the world. In short,
delusional American exceptionalism.
But it was Trump's bluntly stated contempt for European allies that was notable. In a quip
to a question about his reported unpopularity in Europe, the president said he didn't care what
Europeans think. A few seconds later, in a betrayal of his arrant egotistical state of mind,
Trump turned around and claimed that he would be popular if he stood in an election in
Europe!
Ironically, though, perhaps we should be grateful to Trump for his brash outspokenness. By
dissing Europe with such contemptuous disregard, he lays bare the true face of Washington's
relations with the old continent.
Past American presidents have been adept at presenting the transatlantic connection as a
putative "strategic partnership" – as most clearly manifested by the US-led NATO military
alliance. Trump's former Defense Secretary James Mattis, who resigned in protest over policies,
was of this conventional transatlantic mould. Mattis repeatedly talked up the importance of
maintaining strong bonds with allies.
However, decades of transatlantic rhetoric has often served to conceal the real relationship
between Washington and Europe. The reality is the Europeans are not partners. They are
vassals.
Successive European governments and the European Union have continually permitted their
countries to serve as bases for American military forces, including in the past, nuclear
weapons pointed at Russia. Those missiles may return to European soil, if the US walks away
from the Intermediate-range Nuclear Forces Treaty as it threatens to do under Trump.
The subordinate European governments have also dutifully facilitated American militarism by
affording a multilateral pseudo legal cover for Washington's imperialist wars. For example,
European nations sent troops to augment US wars in Afghanistan and Iraq thereby giving criminal
genocidal ventures a veneer of legitimacy.
Ironically, in his remarks to his cabinet this week Trump scoffed at European nations for
sending "only 100 troops" to Afghanistan and Iraq. He also mentioned Syria, illustrating how
rampantly arrogant US criminality is.
So, Trump is berating Europeans for not devoting more of their economic resources to match
the American pathological addiction to militarism; for not paying more for US military
occupation of European countries; and for not sending more troops to join in American overseas
criminal aggressions.
Previous American presidents would be a little more circumspect in disguising Washington's
tyrannical relationship with Europe. But Trump is too self-centered and boorishly transactional
in his view. The whole self-indulgent pretense of American chivalry and protection is shredded,
albeit unwittingly.
Trump told Europe this week he does not care a jot about the continent and supposed US
allies. With such contempt, European nations need to wake up to the reality of charting their
own independence from Washington, and in particular pursuing a genuine continental partnership
with Russia.
Washington's arrogance is perhaps most starkly expressed by the Trump administration
threatening European states with sanctions if they continue building the Nord Stream 2 gas
pipeline from Russia. Russia is a natural strategic partner for Europe, especially in terms of
economical supply of gas and oil fuel.
The issue of energy supply and demand epitomizes so much else about the relation between
Europe and Russia, and the US. The latter is something of an imposter and is foisting its
selfish interests on others, whether in energy trade or in military affairs. We have also seen
this with regard to Trump tearing up the Iran nuclear deal and punishing Europe for upholding
that international treaty.
Trump could not have stated the reality of American disregard for European interests any
more brazenly. He doesn't give a fig.
At the end of last year, the European Union voted to renew economic sanctions on Russia for
another six months. Those sanctions are based largely on anti-Russian ideological claims made
by Washington and its NATO partners over a host of spurious issues, including conflict in
Ukraine and the preposterous fantasy of Russia interfering in elections. Again, the vassal
position of Europe is revealed by the fact that it is European economies, not the American
economy, that have incurred self-defeating damage from the sanctions on Russia.
European governments need to adopt something of Trump's "America First" policy and begin
putting the interests of their people first. Europe must repudiate Washington's antagonism and
militarism towards Russia. Many of the incumbent European governments seem incapable of finding
the necessary political will to be independent from Washington. That is partly why there is
such a phenomenal rise in popular discontent with the European Union and establishment
politicians. The powers-that-be are unresponsive and unrepresentative of popular interests and
needs, creating further backlash to the establishment institutions.
Europe needs to stop being a lackey of Washington. After Trump's blatant contempt this week,
Europe has no excuse or justification to continue debasing itself as an American vassal.
"... At least in nature, "smart" parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour the host, killing it. That is what predatory finance is doing to today's economies. It's stripping assets, not permitting growth or even letting the economy replenish itself. ..."
"... MH: The financial sector is a rentier sector – external to the "real" economy of production and consumption, and therefore a form of overhead. As overhead, it should be a subtracted from GDP. ..."
"... In the name of saving "the market," the Fed and ECB therefore overruled the market. Today, over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks won't make loans without the government picking up the risk of non-payment. So bankers just pretend to be free market. That's for their victims. ..."
"... The "flight to security" is a move out of the stock and bond markets into government debt. Stocks and bonds may go down in price, some companies may go bankrupt, but national governments can always print the money to pay their bondholders. Investors are mainly concerned about keeping whatthey have – security of principal. They are willing to be paid less income in exchange for preserving what they have taken. ..."
"... But the way Wall Street administrators at the Treasury and Fed plan the crisis is for small savers to lose out to the large institutional investors. So the bottom line that I see is a slow crash. ..."
"... U.S. diplomats radically changed IMF lending rules as part of their economic sanctions imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the military coup shows how the IMF is simply a tool of President Obama's New Cold War policy. ..."
"... The main financial innovation by Apple has been to set up a branch office in Ireland and pretend that the money it makes in the Untied States and elsewhere is made in Ireland – which has only a 15 percent income-tax rate ..."
"... It would seem to be an anomaly to borrow from banks and pay dividends. But that is the "cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole, some 92 percent of earnings recently were used to pay dividends or for stock buybacks. ..."
Michael Hudson: The financial sector today is decoupled from industrialization. Its main
interface with industry is to provide credit to corporate raiders. Their objective isasset
stripping, They use earnings to repay financial backers (usually junk-bond holders), not to
increase production. The effect is to suck income from the company and from the economy to pay
financial elites.
These elites play the role today that landlords played under feudalism. They levy interest
and financial fees that are like a tax, to support what the classical economists called
"unproductive activity." That is what I mean by "parasitic."
If loans are not used to finance production and increase the economic surplus, then interest
has to be paid out of other income. It is what economists call a zero-sum activity. Such
interest is a "transfer payment," because it that does not play a directly productive function.
Credit may be a precondition for production to take place, but it is not a factor of
production as such.
The situation is most notorious in the international sphere, especially in loans to
governments that already are running trade and balance-of-payments deficits. Power tends to
pass into the hands of lenders, so they lose control – and become less democratic.
To return to my use of the word parasite, any exploitation or "free lunch" implies a host.
In this respect finance is a form of war, domestically as well as internationally.
At least in nature, "smart" parasites may perform helpful functions, such as helping their
host find food. But as the host weakens, the parasite lays eggs, which hatch and devour
the host, killing it. That is what predatory finance is doing to today's economies. It's
stripping assets, not permitting growth or even letting the economy replenish itself.
The most important aspect of parasitism that I emphasize is the need of parasites to control
the host's brain. In nature, a parasite first dulls the host's awareness that it is being
attacked. Then, the free luncher produces enzymes that control the host's brain and make it
think that it should protect the parasite – that the outsider is part of its own body,
even like a baby to be specially protected.
The financial sector does something similar by pretending to be part of the industrial
production-and-consumption economy. The National Income and Product Accounts treat the
interest, profits and other revenue that Wall Street extracts – along with that of the
rentier sectors it backs (real estate landlordship, natural resource extraction and
monopolies) – as if these activities add to Gross Domestic Product. The reality is that
they are a subtrahend, a transfer payment from the "real" economy to the Finance, Insurance and
Real Estate Sector. I therefore focus on this FIRE sector as the main form of economic overhead
that financialized economies have to carry.
What this means in the most general economic terms is that finance and property ownership
claims are not "factors of production." They are external to the production process. But they
extract income from the "real" economy.
They also extract property ownership. In the sphere of public infrastructure – roads,
bridges and so forth – finance is moving into the foreclosure phase. Creditors are trying
to privatize what remains in the public domains of debtor economies. Buyers of these assets
– usually on credit – build interest and high monopoly rents into the prices they
charge.
JR: What is your vision for the next few decades of the global economy?
MH: The financial overhead has grown so large that paying interest, amortization and fees
shrinks the economy. So we are in for years of debt deflation. That means that people have to
pay so much debt service for mortgages, credit cards, student loans, bank loans and other
obligations that they have less to spend on
goods and services. So markets shrink. New investment and employment fall off, and the economy
is falls into a downward spiral.
My book therefore
devotes a chapter to describing how debt deflation works. The result is a slow crash. The
economy just gets poorer and poorer. More debtors default, and their property is transferred to
creditors. This happens not only with homeowners who fall into arrears, but also corporations
and even governments. Ireland and Greece are examples of the kind of future in store for
us.
Financialized economies tend to polarize between creditors and debtors. This is the dynamic
that Thomas Piketty leaves out of his book, but his statistics show that all growth in income
and nearly all growth in wealth or net worth has accrued to the One Percent, almost nothing for
the 99 Percent.
Basically, you can think of the economy as the One Percent getting the 99 Percent
increasingly into debt, and siphoning off as interest payments and other financial charges
whatever labor or business earns. The more a family earns, for instance, the more it can borrow
to buy a nicer home in a better neighborhood – on mortgage. The rising price of housing
ends up being paid to the bank – and over the course of a 30-year mortgage, the banker
receives more in interest than the seller gets.
Economic polarization is also occurring between creditor and debtor nations. This
issplitting the eurozone between Germany, France and the Netherlands in the creditor camp,
against Greece, Spain, Portugal, Ireland and Italy (the PIIGS) falling deeper into debt,
unemployment and austerity – followed by emigration and capital flight.
This domestic and international polarization will continue until there is a political fight
to resist the creditors. Debtors will seek to cancel their debts. Creditors will try to
collect, and the more they succeed, the more they will impoverish the economy.
Background
JR: Let's talk about your history, why did you become an economist?
MH: I started out wanting to be a musician – a composer and conductor. I wasn't very
good at either, but I was a very good interpreter, thanks to working with Oswald Jonas in
Chicago studying the musical theories of Heinrich Schenker. I got my sense of aesthetics from
music theory, and also the idea of modulation from one key to another. It is dissonance that
drives music forward, to resolve in a higher key or overtone.
When I was introduced to economics by the father of a schoolmate, I found it as aesthetic as
music, in the sense of a self-transforming dynamic through history by challenge and response or
resolution. I went to work for banks on Wall Street, and was fortunate enough to learn about
how central mortgage lending and real estate were for the economy. Then, I became Chase
Manhattan's balance-of-payments economist in 1964, and got entranced with tracing how the
surplus was buried in the statistics – who got it, and what they used it for. Mainly the
banks got it, and used it to make new loans.
I viewed the economy as modulating from one phase to the next. A good interpretation would
explain history. But the way the economy worked was nothing like what I was taught in school
getting my PhD in economics at New York University. So I must say, I enjoyed contrasting
reality with what I now call Junk Economics.
In mainstream textbooks there is no exploitation. Even fraudulent banks, landlords and
monopolists are reported as "earning" whatever they take – as if they are contributing to
GDP. So I found the economics discipline ripe for a revolution.
JR: What is the difference between how economics is taught vs. what you learned in your
job?
MH: For starters, when I studied economics in the 1960s there was still an emphasis on the
history of economic thought, and also on economic history. That's gone now.
One can easily see why. Adam Smith, John Stuart Mill and other classical economists sought
to free their societies from the legacy of feudalism: landlordism and predatory finance, as
well as from the monopolies that bondholders had demanded that governments create as a means of
paying their war debts.
Back in the 1960s, just like today, university courses did not give any training in actual
statistics. My work on Wall Street involved National Income and Product Accounts and the
balance-of-payments statisticspublished by the Commerce Department every three months, as well
as IMF andFederal Reserve statistics. Academic courses didn't even make reference to accounting
– so there was no conceptualization of "money," for instance, in terms of the liabilities
side of the balance sheet.
New York University's money and banking course was a travesty. It was about helicopters
dropping money down – to be spent on goods and services, increasing prices. There was no
understanding that the Federal Reserve's helicopter only flies over Wall Street, or that banks
create money on its own computers. It was not even recognized that banks lend to customers
mainly to buy real estate, or speculate in stocks and bonds, or raid companies.
Economics is taught like English literature. Teachers explain the principle of "suspension
of disbelief." Readers of novels are supposed to accept the author's characters and setting. In
economics, students are told to accept just-pretend parallel universe assumptions, and then
treat economic theory as a purely logical exercise, without any reference to the world.
The switch from fiction to reality occurs by taking the policy conclusions of these
unrealistic assumptions as if they do apply to the real world: austerity, trickle-down
economics shifting taxes off the wealthy, and treating government spending as "deadweight" even
when it is on infrastructure.
The most fictitious assumption is that Wall Street and the FIRE sector add to
output, rather than extracting revenue from the rest of the economy.
JR: What did you learn in your work on the US oil industry?
MH: For starters, I learned how the oil industry became tax-exempt. Not only by the
notorious depletion allowance, but by offshoring profits in "flags of convenience" countries, in
Liberia and Panama. These are not real countries. They do not have their own currency, but use
U.S. dollars. And they don't have an income tax.
The international oil companies sold crude oil at low prices from the Near East or Venezuela
to Panamanian or Liberian companies – telling the producing countries that oil was not
that profitable. These shipping affiliates owned tankers, and charged very high prices to
refineries and distributors in Europe or the Americas. The prices were so high that these
refineries and other "downstream" operations marketing gas to consumers did not show a profit
either. So they didn't have to pay European or U.S. taxes. Panama and Liberia had no income tax.
So the global revenue of the oil companies was tax-free.
I also learned the difference between a branch and an affiliate. Oil wells and oil fields
are treated as "branches," meaning that their statistics are consolidated with the head office
in the United States. This enabled the companies to take a depletion allowance for emptying out
oil fields abroad as well as in the United States.
My statistics showed that the average dollar invested by the U.S. oil industry was returned
to the United States via balance-of-payments flows in just 18 months. (This was not a profit
rate, but a balance-of-payments flow.) That finding helped the oil industry get exempted from
President Lyndon Johnson's "voluntary" balance-of-payments controls imposed in 1965 when the
Vietnam War accounted for the entire U.S. payments deficit. Gold was flowering out to France,
Germany and other countries running payments surpluses.
The balance-of-payments accounting format I designed for this study led me to go to work for
an accounting firm, Arthur Andersen, to look at the overall U.S. balance of payments. I found
that the entire deficit was military spending abroad, not foreign aid or trade.
Junk Economics
JR: Why do you think there is a disconnect between academic economic theory and the way
that international trade and finance really works?
MH: The aim of academic trade theory is to tell students, "Look at the model, not at how
nations actually develop." So of all the branches of economic theory, trade theory is the most
wrongheaded.
For lead nations, the objective of free trade theory is to persuade other countries not to
protect their own markets. That means not developing in the way that Britain did under its
mercantilist policies thatmade it the first home of the Industrial Revolution. It means not
protecting domestic industry, as the United States and Germany did in order to catch up with
British industry in the 19 th century and overtake it in theearly 20 th
century.
Trade theorists start with a conclusion: either free trade or (in times past) protectionism.
Free trade theory as expounded by Paul Samuelson and others starts by telling students to
assume a parallel universe – one that doesn't really exist. The conclusion they start
with is that free trade makes everyone's income distribution between capital and labor similar.
And because the world has a common price for raw materials and dollar credit, as well as for
machinery, the similar proportions turn out to mean equality. All the subsequent assumptions
are designed to lead to this unrealistic conclusion.
But if you start with the real world instead of academic assumptions, you see that the world
economy is polarizing. Academic trade theory can't explain this. In fact, it denies that
today's reality can be happening at all!
A major reason why the world is polarizing is because of financial dynamics between creditor
and debtor economies. But trade theory starts by assuming a world of barter. Finally, when the
transition from trade theory to international finance is made, the assumption is that countries
running trade deficits can "stabilize" by imposing austerity, by lowering wages, wiping out
pension funds and joining the class war against labor.
All these assumptions were repudiated already in the 18 th century, when Britain
sought to build up its empire by pursuing mercantilist policies. The protectionist American
School of Economics in the 19 th century put forth the Economy of High Wages
doctrine to counter free-trade theory. None of this historical background appears in today's
mainstream textbooks. (I provide a historical survey in Trade, Development and
Foreign Debt , new ed., 2002. That book summarizes my course in international trade
and finance that I taught at the New School from 1969 to 1972.)
In the 1920s, free-trade theory was used to insist that Germany could pay reparations far
beyond its ability to earn foreign exchange. Keynes, Harold Moulton and other economists
controverted that theory. In fact, already in 1844, John Stuart Mill described how paying
foreign debts lowered the exchange rate. When that happens, what is lowered is basically wages.
So what passes for today's mainstream trade theory is basically an argument for reducing wages
and fighting a class war against labor.
You can see this quite clearly in the eurozone, above all in the austerity imposed on
Greece. The austerity programs that the IMF imposed on Third World debtors from the 1960s
onward. It looks like a dress rehearsal to provide a cover story for the same kind of
"equilibrium economics" we may see in the United States.
JR: Can the US pay its debts permanently? Does the amount of federal debt, $18 or $19
trillion even matter? Should we pay down the national debt?
MH: It is mainly anti-labor austerity advocates who urge balancing the budget, and even to
run surpluses to pay down the national debt. The effect must be austerity.
A false parallel is drawn with private saving. Of course individuals should get out of debt
by saving what they can. But governments are different. Governments create money and spend it
into the economy by running budget deficits. The paper currency in your pocket is technically a
government debt. It appears on the liabilities side of the public balance sheet.
When President Clinton ran a budget surplus in the late 1990s, that sucked revenue
out of the U.S. economy. When governments do not run deficits, the economy is
obliged to rely on banks – which charge interest for providing credit. Governments can
create money on their own computers just as well. They can do this without having to pay
bondholders or banks.
That is the essence of Modern Monetary Theory (MMT). It is elaborated mainly at the
University of Missouri at Kansas City (UMKC), especially by Randy Wray – who has just
published a number of books on money – and Stephanie Kelton, whom Bernie Sanders
appointed as head of the Senate Democratic Budget Committee.
If the government were to pay off its debts permanently, there would be no money –
except for what banks create. That has never been the case in history, going all the way back
to ancient Mesopotamia. All money is a government debt, accepted in payment of taxes
This government money creation does not mean that governments can pay foreign
debts. The danger comes when debts are owed in a foreign currency. Governments are unable to
tax foreigners. Paying foreign debts puts downward pressure on exchange rates. This leads to
crises, which often end by relinquishing political control to the IMF and foreign banks. They
demand "conditionalities" in the form of anti-labor legislation and privatization.
In cases where national economies cannot pay foreign debts out of current
balance-of-payments revenue, debts should be written down, not paid off. If they are not
written down, you have the kind of austerity that is tearing Greece apart today.
JR: You say that mainstream economic theory and academic study is pro-creditor? Why is
this the case?
MH: Thorstein Veblen pointed out that vested interests are the main endowers and backers of
the higher learning in America. Hardly by surprise, they promote a bankers'-eye view of the
world. Imperialists promote a similar self-serving worldview.
Economic theory, like history, is written by the winners. In today's world that means the
financial sector. They depict banks as playing a productive role, as if loans are made to help
borrowers earn the money to pay interest and still keep something for themselves. The pretense
is that banks finance industrial capital formation, not asset stripping.
What else would you expect banks to promote? The classical distinction between productive
and unproductive (that is, extractive) loans is not taught. The result has been to turn
mainstream economics as a public-relations advertisement for the status quo, which meanwhile
becomes more and more inequitable and polarizes the economy.
JR: What can be learned by studying the history of economic thought? What did Adam Smith
and the people in his era and those which followed him understand that would be useful to us
now?
MH: If you read Adam Smith and subsequent classical economists, you see that their main
concern was to distinguish between productive and unproductive economic activity. They wanted
to isolate unproductive rentier income, and unproductive spending and credit.
To do this, they developed the labor theory of value to distinguish value from price –
with "economic rent" being the excess of price over socially necessary costs of production.
They wanted tofree industrial capitalism from the legacy of feudalism: tax-like groundrent paid
to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had
insisted that governments create to sell off to pay the public debt. That was why the East
India Company and the South Sea Company were created with their special privileges.
Smith and his followers are applauded as the founding fathers of "free market" economics.
But they defined free markets in a diametrically opposite way from today's self-proclaimed
neoliberals. Smith and other classical economists urged markets free from economic
rent.
These classical reformers realized that progressive taxation to stop favoring
rentiers required a government strong enough to take on society's most powerful and
entrenched vested interests. The 19 th -century drive for Parliamentary reform in
Britain aimed at enabling the House of Commons to override the House of Lords and tax the
landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been
a fight by creditors to nullify democratic politics, most notoriously in Greece.
Today's neoliberals define free markets as those free for rent-seekers and
predatory bankers from government regulation and taxes.
No wonder the history of economic thought has been stripped away from the curriculum.
Reading the great classical economists would show how the Enlightenment's reform program has
been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo-
rentier economy that is bringing economic growth to a halt.
JR: Why does economic thought minimize the role of debt? I.e. I read Paul Krugman and he
says the total amount of debtisn't a problem, for example you can't find the internet bust in
GDP or the 1987 crash?
MH: When economists speak of money, they neglect that all money and credit is debt. That is
the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And
one party's money or savings is another party's debt.
Mainstream economic models describe a world that operates on barter, not on credit. The
basic characteristic of credit and debt is that it bears interest. Any rate of interest can be
thought of as a doubling time. Already in Babylonia c. 1900 BC, scribes were taught to c
alculate compound interest, and how long it took a sum to double (5 years) quadruple (10 years)
or multiply 64 times (30 years). Martin Luther called usury Cacus, the monster that absorbs
everything. And in Volume III of Capital and also his Theories of Surplus
Value , Marx collected the classical writings about how debts mount up at interest by
purely mathematical laws, without regard for the economy's ability to pay.
The problem with debt is not only interest. Shylock's loan against a pound of flesh was a
zero-interest loan. When crops fail, farmers cannot even pay the principal. They then may lose
their land, which is their livelihood. Forfeiture is a key part of the credit/debt dynamic. But
the motto of mainstream neoliberal economics is, "If the eye offends thee, pluck it out."
Discussing the unpayability of debt is offensive to creditors.
Anyone who sets out to calculate the ability pay quickly recognizes that the overall volume
of debts cannot be paid. Keynes that made point in the 1920s regarding Germany's inability to
pay reparations.
Needless to say, banks and bondholders do not want to promote any arguments explaining the
limits to how much can be paid without pushing economies into depression. That is what my
Killing the
Host is about. It is the direction in which the eurozone is now going, and the United
States also issuffering debt deflation.
Turning to the second part of your question, Krugman and others say that debt doesn't matter
because "we owe it to ourselves." But the "we" who owe it are the 99 Percent; the people who
are "ourselves" are the One Percent. So the 99 Percent Owe the One Percent. And they owe more
and more,thanks to the "magic of compound interest."
Krugman has a blind spot when it comes to understanding money. In his famous debate with
Steve Keen, he denied that banks create money or credit. He insists that commercial banks only
lend out deposits. But Keen and the Modern Monetary Theory (MMT) school show that loans
create deposits , not the other way around. When a banker writes a loan on his computer
keyboard, he creates a deposit as the counterpart.
Endogenous money is easily created electronically. That privilege enables banks to charge
interest. Governments could just as easily create money on their own computers. Neoliberal
privatizers want to block governments from doing this, so that economies will have to rely on
commercial banks for the money and credit they need to grow.
The mathematics of compound interest means that economies can only pay their debts by
creating a financial bubble – more and more credit to bid up asset prices for real
estate, stocks and bonds, enabling banks to make larger loans. Today's economies are obliged to
develop into Ponzi schemes to keep going – until they collapses\ in a crash.
JR: The models of the macroeconomy to forecast the future and to develop policy at
institutions like the IMF, often consider finance and banking as just another sector of
industry, like construction or manufacturing. How do these institutions consider their model of
the financial sector?
MH: The IMF acts as the collection agent for global bondholders. Its projections begin by
assuming that all debts can be paid, if economies will cut wages and wiping out pension funds
so as to pay banks and bondholders.
As long as creditors remain in control, they are quite willing to sacrifice the 99 Percent
to pay the One Percent. When IMF "stabilization" programs end up destabilizing their hapless
victims, mainstream media blame the collapse on the debtor country for not shedding enough
blood to impose even more austerity.
Economists often define their discipline as "the allocation of scarce resources among
competing ends." But when resources or money really become scarce, economists call it
a crisis and say that it's a question for politicians, not their own department. Economic
models are only marginal – meaning, small changes, not structural.
The only trend that does grow inexorably is that of debt. The more it grows, the
more it slows the "real" economy of production and consumption. So something must give: either
the economy, or creditor claims. And that does indeed change the structure of the economy. It
is a political as well as an economic change.
Regarding the second part of your question – how creditor institutions model the
financial sector – when they look at prices they only consider wages and consumer prices,
not asset prices. Yet most bank credit is tied to asset prices, because loans are made to buy
homes or commercial real estate, stocks or bonds, not bread and butter.
Not looking at what is obviously important requires a great effort of tunnel vision. But as
Upton Sinclair noted, there are some jobs – like being a central banker, or a New
York Times editorial writer – that require the applicant not to understand
the topic they are assigned to study. Hence, you have Paul Krugman on money and banking, the
IMF on economic stabilization, and Rubinomics politicians on bailing out the banks instead of
saving the economy.
If I can add a technical answer: The IMF does not recognize that the "budget problem"
– squeezing domestic currency out of the economy by taxing wages and industry – is
quite different from the "transfer problem" of converting this money into foreign exchange.
That distinction was the essence of the German reparations debate in the 1920s. It is a focus
of my history of theories of Trade, Development and
Foreign Debt .
Drawing this distinction shows why austerity programs do not help countries pay their
foreign debt, but tears them apart and induces emigration and capital flight.
JR: Does the financial sector add to GDP?
MH: The financial sector is a rentier sector – external to the "real" economy
of production and consumption, and therefore a form of overhead. As overhead, it should be a
subtracted from GDP.
JR: In the way that oil industry funded junk science on global warming denial, Wall
Street funds and endows junk economics and equilibrium thinking?
Falling on your face is a state of equilibrium. So is death – and each moment of
dying. Equilibrium is simply a cross section in time. Water levels 20 or 30 feet higher would
be another form of equilibrium. But to the oil industry, "equilibrium" means their earnings
continuing to grow at the present rate, year after year. This involves selling more and more
oil, even if this raises sea levels and floods continents. That is simply ignored as not
relevant to earnings. By the time that flooding occurs, today's executives will have taken
their bonuses and capital gains and retired.
That kind of short-termism is the essence of junk economics. It is tunnel-visioned.
What also makes economics junky is assuming that any "disturbance" sets in motion
countervailing forces that return the economy to its "original" state – as if this were
stable, not moving down the road to debt peonage and similar economic polarization.
The reality is what systems analysts call positive feedback: When an economy gets out of
balance, especially as a result of financial predators, the feedback and self-reinforcing
tendencies push it further and further out of balance.
My trade theory book traced the history of economists who recognize this. Once a class or
economy falls into debt, the debt overhead tends to grow steadily until it stifles market
demand and subjects the economy to debt deflation. Income is sucked upward to the creditors,
who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets
into deficit. And when governments are indebted, they becomemore subject to pressure to
privatization of public enterprise. Assets are turned over to monopolists, who further shrink
the economy by predatory rent seeking.
An economy going bankrupt such as Greece and having to sell off its land, gas rights, ports
and public utilities is "in equilibrium" at any given moment that its working-age population is
emigrating, people are losing their pensions and suffering.
When economists treat depressions merely as self-curing "business downturns," they are
really saying that no government action is required from "outside" "the market" to rectify
matters and put the economy back on track to prosperity. So equilibrium thinking isbasically
anti-government libertarian theory.
But when banks are subjected to "equilibrium" by writing down debts in keeping with the
ability of borrowers to pay, WallStreet's pet politicians and economic journalists call this a
crisis and insist that the banks and bondholders must be saved or there will be a crisis. This
is not a solution. It makes the problem worse and worse.
There is an alternative, of course. That is to understand the dynamics at work transforming
economic and socialstructures. That's what classical economics was about.
The post-classical revolution was marginalist. That means that economists only look at small
changes, not structural changes. That isanother way of saying that reforms are not necessary
– because reforms change structures, not merely redistribute a little bit of income as a
bandage.
What used to be "political economy" gave way to just plain "economics" by World War I. As it
became increasingly abstract and mathematical, students who studied the subject because they
wanted to make the world better were driven out, into other disciplines. That was my experience
teaching at the New School already nearly half a century ago. The discipline has become much
more tunnel-visioned since then.
Present state of financial world
JR: We see around the world something like 25% of all national debt is now has a yield
priced in negative interest rates? What does this mean? Do you see this continuing?
MH: On the one hand, negative interest rates reflect a flight to security by investors. They
worry that the debts can't be paid and that there are going to be defaults.
They also see that the United States and Europe are in a state of debt deflation, where
people and businesses have to pay banks instead of spending their income on goods and services.
So markets shrink, sales and profits fall, and the stock market turns down.
This decline was offset by the Federal Reserve and the European Central Bank trying to
re-inflate the Bubble Economy by Quantitative Easing – providing reserves to the banks in
exchange for their portfolio of mortgages and other loans. Otherwise, the banks would have had
to sell these loans in "the market" at falling prices.
In the name of saving "the market," the Fed and ECB therefore overruled the market. Today,
over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks
won't make loans without the government picking up the risk of non-payment. So bankers just
pretend to be free market. That's for their victims.
The "flight to security" is a move out of the stock and bond markets into government debt.
Stocks and bonds may go down in price, some companies may go bankrupt, but national governments
can always print the money to pay their bondholders. Investors are mainly concerned about
keeping whatthey have – security of principal. They are willing to be paid less income in
exchange for preserving what they have taken.
Here's the corner that the economy has backed itself into. The solution to most problems
creates new problems – blowback or backlash, which often turn out to be even bigger
problems. Negative interest rates mean that pension funds cannot invest in securities that
yield enough for them to pay what they have promised their contributors. Insurance companies
can't earn the money to pay their policyholders. So something has to give.
There will be breaks in the chain of payments. But the way Wall Street administrators at the
Treasury and Fed plan the crisis is for small savers to lose out to the large institutional
investors. So the bottom line that I see is a slow crash.
JR: Could there be a more symbiotic relationship with global financial institutions? For
money to have value, doesn't it need a functioning economy, rather than an
entirelyfinancialized one?
MH: Money is debt. It is a claim on some debtor. Government money is a claim by its
holder on the government, settled by the government accepting it as payment for tax debts.
Being a claim on a debtor, money does not necessarily need a functioning economy. It can be
part of a foreclosure process, transferring property to creditors. A financialized economy
tends to strip the economy of money, by sucking up to the creditor One Percent on top. That
is what happened in Rome, and the result was the Dark Age.
JR: In 2007/2008 we had a subprime crash and since 2014 we've had a commodities crash
where oil prices are low, is this because of what's going on in emerging market economies? Are
emerging market economies and China the next subprime?
MH: The current U.S. and Eurozone depression isn't because of China. It's because of
domestic debt deflation. Commodity prices and consumer spending are falling, mainly because
consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments,
student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social
Security and Medicare (actually, to enable the government to cut taxes on the higher income
brackets), as well income and sales taxes. After all this is paid, consumers don't have that
much left to spend on commodities. So of course commodity prices are crashing.
Oil is a special case. Saudi Arabia is trying to drive U.S. fracking rivals out of business,
while also hurting Russia. This lowers gas prices for U.S. and Eurozone consumers, but not by
enough to spur economic recovery.
JR: You've written that we're entering a financial cold war – the IMF and the US
have been very strict on debt repayment for loans from debtor nations, but in Ukraine they've
made an exception regarding Russia, could you discuss your recent writing on that?
MH: U.S. diplomats radically changed IMF lending rules as part of their economic sanctions
imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their
neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the
military coup shows how the IMF is simply a tool of President Obama's New Cold War policy.
The
aim was to enable the IMF to keep lending to the military junta even though Ukraine is in
default of its $3 billion debt to Russia, even though it refuses to negotiate payment, and even
though IMF money has been used to fund kleptocrats such as Kolomoisky to field his own army
against Russian speakers in Donbas. Ukraine has no foreseeablemeans of paying off the IMF and
other creditors, given its destruction of its export industry in the East. My articles on this
are on my website, michael-hudson.com
.
JR: Today's economy has some truly amazing technology from companies like Apple, but
Apple is also example of financial engineering, you outline this in your book, what financial
innovations havebeen associated with the story of Apple's stock?
MH: The main financial innovation by Apple has been to set up a branch office in Ireland and
pretend that the money it makes in the Untied States and elsewhere is made in Ireland –
which has only a 15 percent income-tax rate
The problem is that if Apple remits this income back to the United States, it will have to
pay U.S. income tax. It wants to avoid this – unless Wall Street can convince politicians
to declare a "tax holiday" would let tax avoiders bring all their foreign money back to the
United States "tax free." That would be a tax amnesty only for the very wealthy, not for the 99
Percent.
JR: This tax angle explains why Apple, almost the wealthiest company in the world, has
been urged by activist shareholders to borrow. Why should the richest company have to go into
debt?
MH: The answer is that Apple can borrow from U.S. banks at a low interest rate to pay
dividends on its stock, instead of paying these dividends by bringing its income back home and
paying the taxes that are due.
It would seem to be an anomaly to borrow from banks and pay dividends. But that is the
"cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole,
some 92 percent of earnings recently were used to pay dividends or for stock buybacks.
JR: What is the eventual outcome of all theses corporate buybacks to pump up share
prices?
MH: The problem with a company using its revenue simply to buy its own shares to support
their price (and hence, enable CEOs to increase their salaries and bonuses, and make more
capital gains on their stock options) is that the price fillip is temporary. Last year saw the
largest volume of U.S. stock buybacks on record. But since January 1, the market has fallen by
about 20 percent. The debts that companies took on to buy stocks remain in place; and the
earnings that companies used to buy these stocks are now gone.
Corporations did not use their income to invest in long-term expansion. The financial time
frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs
and financial managers simply want to take their money and run. That is the financial
mentality.
JR: What is the outcome of all theses corporate buybacks to pump up share
prices?
MH: When the dust settles, companies financialized in this way are left as debt-leveraged
shells. CEOs then go to their labor unions and threaten to declare bankruptcy if the unions
don't scale back their pension demands. So there is a deliberate tactic to force companies into
debt for short-term earnings and stock-price gains in the short term, and a more intensive
class war against present and past employees and pensioners as a longer-term policy.
JR: Why do business schools endorse of financialization? Reversing
short-termism?
MH: The financial sector is the major endower of business schools. They have become training
grounds for Chief Financial Officers. AtHarvard, Prof. Jensen reasoned that managers should aim
at serving stockholders, not the company as such. The result was an "incentive" system tying
management bonuses to the stock price. So naturally, CFOs used corporate earnings for stock
buybacks and dividend payouts that provided a short-term jump in the stock price.
The ideological foundation of today's business schools is that economic control should be
shifted out of government hands into those of financial managers – that is, Wall Street.
That is their idea of freeenterprise. Its inevitable tendency is to end in more centralized
planning by Wall Street than in Washington.
The aim of this financial planning is quite different from that of governments. As I wrote
in Killing the
Host : "The euro and the ECB were designed in a way that blocks government money
creation for any purpose other than to support the banks and bondholders. The financial sector
takes over the role of economic planner, putting its technicians in charge of monetary and
fiscal policy without democratic voice or referendums over debt and tax policies."
Financial planning always has been short-term. That is why planning should not be consigned
to banks and bondholders. Their mentality is extractive, and that ends up hit-and-run. What
passes for mainstream financial analysis is simply to add up how much is owed and demand
payment, not help the economy grow. To financial managers, economic prosperity and unemployment
is an "externality" – that is, not part of the equation that they are concerned with.
Future
JR: The story of Greece in recent years is relevant to our discussion because the
political party Syriza took over with ideas that were traditionally representing the left? Does
the body of traditional left ideas have the ability to solve some of the challenges regarding
financial warfare?
MH: The left and former Social Democratic or Labour parties have dome to focus on political
and cultural issues, not the economic policy that led to their original creation. What is
lacking is a focus on rent theory and financial analysis. Part of the explanation probably is
covert U.S. funding and sponsorship of Blair-type neoliberals.
The eurozone threatened Greece with domestic destabilization if it did not surrender to the
Troika's demands. Syriza's leaders worried that the ensuing turmoil would bring a right-wing
neo-Nazi group such as Golden Dawn into power, or a military dictatorship as a client oligarchy
for U.S. and German neoliberals.
So the political choice today is much like the 1930s, when the global economy also broke
down. The choice is between nationalism and populism on the right, or socialism reviving what
used to be left-wing politics.
JR: Could there be a debt write down? Isn't someone's debts another person's savings, i.e.
pension funds, 401k, retirement funds?
MH: The problem is indeed that one party's debt finds its counterpart in some other party's
savings. Not paying debts therefore involves annulling some other party's financial claims on
the debtor. What happens to the savings on the other side of the savings/debt balance
sheet?
JR: The political question is, who will lose first?
MH: The answer is, the least politically protected. The end game is "Big fish eat little
fish." Pension funds are in the front line of sacrifice, while government bondholders are the
most secure. Greek pensionsalready have been written down, and the savings of U.S. pension
funds, Social Security and other social programs are the first to be annulled.
The only way to achieve a fair debt cancellation is to write down the debts of the
wealthiest, not the most needy. That is the opposite of how matters are being resolved today.
That is why southern Europe is being radicalized over the debt issue.
JR: Will financialized economies implode? Leaving the non-financialized ones?
MH: The One Percent who hold most of the economy's savings are quite willing to plunge
society into depression to collect on their savings claims. Their greed is why we are in an
economic war much like Rome's Conflict of the Orders that shaped the Republic, and its century
of civil war between creditors and debtors, 133-29 BC.
Argentina has been imploding, just as Third World debtors were obliged to do when they
accepted IMF austerity programs and "conditionalities" for loans to keep their currencies from
depreciating. To avoid being forced to adopt such self-defeating and anti-democratic policies,
it looks like countries will have to move out of the U.S. and Eurozone orbit into that of the
BRICS. That is why today's financial crisis is leading to a New Cold War. It is as much
financial as it is military.
JR: How would you advise a politician to restore prosperity in the future?
MH: The problem is who to give advice to. Most politicians today – at least in the
United States – are proxies for their campaign contributors. President Obama is basically
a lobbyist for his Wall Street in the Democratic Party's Robert Rubin gang. That kind of
demagogue wouldn't pay any attention to policies that I or other economists would make. Their
job is not to make the economy better, but to defend their campaign contributors among the One
Percent at the economy's expense.
But when I go to China or Russia, here's what I advise (without much success so far, I
admit):
First, tax land rent and other economic rent. Make it the tax base. Otherwise, this rental
value will end up being pledged to banks as interest on credit borrowed to buy rent-yielding
assets.
Second, make banks into public utilities. Credit creation is like land or air: a monopoly
created by society. As organs of public policy they would not play the derivatives casino, or
make corporatetakeover loans to raiders, or falsify mortgage documents.
Third, do not privatize basic utilities. Public ownership enables basic services to be
provided at cost, on a subsidized basis, or freely. That will make the economy more
competitive. The cost of upgrading public infrastructure can be defrayed by basing the tax
system on economic rent, not wages.
Does it have to be this way ?
The Eurozone die is cast. Countries must withdraw from the euro so that governments can
create their own money once again, and resist creditor demands to carve up and privatize their
public domain.
For the United States, I don't see a concerted alternative to neoliberalism squeezing more
and more interest and rent out of the economy, making the present slump even deeper in
debt.
How won't debts be paid?
There are two ways not to pay debts: either by annulling or repudiating them, or by
foreclosure when creditors take or demand property in lieu of monetary payment.
The first way not to pay is to default or proclaim a Clean Slate. The most successful
example in modern times is the German Economic Miracle – the Allied Monetary Reform of
1948. That cancelled Germany's internal debts except for wages owed by employers, and minimum
working balances.
The United States Government has fought against creation of an international court to
adjudicate the ability of national economies to pay debts. If such a court is not
created, the global economy will fracture. That is occurring in what looks like a New Cold War
pitting the United States and its NATO satellites against the BRICS (China, Russia, South
Africa, Brazil and India) along with Iran and other debtors.
The US preferred policy is for countries to sell off whatever is in their public domain when
they lack the money to pay their debts. This is the "foreclosure" stage.
Short of these two ways of not paying debts, economies are submitting to debt deflation.
That strips income from producers and consumers, businesses and governments to pay creditors.
As the debtor economy weakens, the debt arrears mount up – often at rising interest rates
to reflect the risk of non-payment as creditors realize that there is no "business as usual'
way in which the debts can be paid.
Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to
buy out bondholders. This saves the latter from taking a loss – leaving the debtor
country with debts that are even harder to annul, because they are to foreign governments and
international institutions. That is why it is a very bad policy for countries to move from
owing money to private bondholders to owing the IMF or European Central Bank, whose demands are
unforgiving.
In the long term, debts won't be paid in the way that Rome's debts were not paid. The money
economy itself was stripped, and the empire fell into a prolonged Dark Age. That is the fate
that will befall the West if it continues to support the "rights" of creditors over the right
of nations and economies to survive.
This is a transcript from an interview on the
XE Podcast conducted by Justin Ritchie.
DeLong proves himself to be incoherent on
economic theory,, clearly bought into free lunch economics, perhaps not willing to outright
oppose current Fed policy because he would agree with Trump, but totally unwilling to admit
that tge only thing the Fed did do is prevent the massive foreclosures from asset prices
falling far below their debt.
Asset prices are high because too little labor is paid to build assets. Too much public
policy is devoted to anti-keynesian policy of preventing investments that increase investments,
investments always requiring paying workers to build long term assets which to a keynesian
generate merely enough returns over their useful life to pay the workers and little else.
High asset prices mean high inflation. Yet free lunch economists say paying twice labor
costs for something is not inflation, but paying labor costs for the same priced object is
extremely high inflation.
That is free lunch economics. Money for nothing, from nothing.
Paying workers kills jobs because it costs too much. Ie, building more factories in the US
and producing more would drive down prices and kill jobs. So, only not paying workers to create
scarcity and higher prices can't jobs be created.
Its a failed economic theory, yet DeLong can't simply say so.
What I like about Baker is that he is objective. Some people - like
EMichael and Kurt - will spin everything in favor of Dems and against Trump - sort of inverse
of Fox News and Republican pundits.
It's hard to trust them. They feel the ends justify the means, but when you start spreading
Fake News it's hard to keep track of the lies and propaganda. I don't think it works for
Republicans.
Steven Rattner's Charts in the NYT Don't Show What He Says They Show
Written by Dean Baker
Published: 31 December 2018
Steven Rattner used his NYT column to present a number of charts to show Donald Trump's
failures as president. While some, like the drop in enrollments in the health care exchanges,
do in fact show failure, others do not really make his case.
For example, he has a chart with a headline "paltry raise for the middle class." What his
chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the
recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their
pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This
is not a great story, but the picture under Trump is certainly better than under Obama. (This
wasn't entirely Obama's fault, since he inherited an economy in the toilet.)
The chart shows more rapid growth at the bottom of the pay latter and a modest downturn
under Trump for those at the top. By recent standards, this is not a bad picture, even if Trump
does not especially deserve credit for it. (He came in with an unemployment rate that was low
and falling.)
Rattner also presents as a bad sign projections for fewer Fed rate hikes. While one basis
for projecting fewer rate hikes is that the economy now looks weaker for 2019 than had been
thought earlier in the year (but still stronger than had been projected in 2016), another
reason is that inflation is lower than expected. Economists have consistently over-estimated
the impact that low unemployment would have on the inflation rate. With inflation coming in
lower than projected, there is less reason for the Fed to raise rates.
Contrary to what Rattner is implying, this is a good development. It means that the
unemployment rate can continue to fall and workers at the middle and the bottom of the pay
ladder can continue to see real wage gains.
Rattner also shows us how growth projections for the U.S. and the world have been lowered
since June of 2018. It's not clear how much Trump can be held responsible for growth in the EU
(trying blaming the European Commission's austerity drive) and the rest of the world, but his
argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018 is
actually up 0.1 percentage point from the June projection. More importantly, it is up from a
projection of 1.7 percent from January of 2017, the month Trump took office.
Then we have the chart showing the rise in the debt relative to GDP. While Rattner is right
that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio is
basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current
interest rate on its long-term bonds is 0.00 percent.)
If anyone is seriously concerned about the debt that the government is passing on to future
generations then it is also necessary to include the rents associated with patent and copyright
monopolies. These monopolies are alternative mechanisms to direct funding that the government
uses to pay for services (i.e. research and creative work).
To take the most important case, suppose the government were the replace the $70 billion
(0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry
conducts each year with direct funding of $70 billion. All research findings could then be
placed in the public domain and new drugs would sell at generic prices.
Rattner and his crew would count the $70 billion in addition spending as an addition to the
debt and deficit. However, when the industry is able to charge the public an extra $360 billion
(1.8 percent of GDP) a year in higher drug prices due to patent monopolies and related
protections, Rattner and company choose to ignore the burden. This sort of groundless debt fear
mongering deserves only ridicule; it is not serious economic analysis.
Trump has done many awful things as president and threatens to do many more. But this is not
a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his
performance without playing games with it.
Let's see, if the duration of equity is, what, 15 years? so it behaves like a 30 year bond
or so in terms of rate sensitivity, then roughly speaking a percent change in discount should
be about fifteen percent change in value. That would be four more rate hikes. Thus the value
of everything would be down about 15%.
Meanwhile, Roubini is talking about changes in output on the order of maybe 1% over a few
year time period (maybe with interim volatility)? He is talking about a change in yield,
which feeds back into value 1:1, for a 1% decline in the value of everything.
How is it that economists cannot do bond math comparisons to see what size matters and
what does not? Thus the ills of the market are the Fed, not the crazy potus.
Top 5 professional journals (T5) serve as gatekeepers for professional advancement of
academic economists: "strong evidence for the influence of the T5. Without doubt, publication
in the T5 is a powerful determinant of tenure and promotion in academic economics." https://www.ineteconomics.org/perspectives/blog/the-tyranny-of-the-top-five-journals
When this happens, acceptable research and discourse tend to get established and limited
… Chinese economists probably need not apply...as well as unorthodox views in the
US.
Michael Hudson describes the Orwellian approach of today's mainstream economics: "Viewing
the economic vocabulary as propaganda, I saw that we can understand how the words you hear as
largely propaganda words. They’ve changed the meaning to the opposite of what the
classical economists meant. But if you untangle the reversal of meaning and juxtapose a more
functional vocabulary you can better understand what ís actually happening." https://michael-hudson.com/2018/12/guns-butter-the-vocabulary-of-economic-deception/
"... Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to the younger workers saving for retirement buying stocks magically keep share prices rising? Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too many sellers? ..."
"... Hard core neoliberals have been pushing free lunch economics for several decades by erasing the connection between labor and money and real value. ..."
Why oh why can't Krugman explain economics, and especially how "voodoo" conservative free
lunch economics is.
First, why has Krugman self lobotomized and remove the economic basic axiom that
everything is about labor, especially money.
Money is labor, labor in the past or labor in the future. Eliminate work, ie, robots
completely replace all workers, then someone will tell their robot to build more robots and
tell those robots to do the same until everyone can be given as many robots as they want for
free to produce as much as the new own want, whether to consume or not, so no one will be
willing to pay anything for any thing.
So, until someone can explain how money has value without human labor, and "property" is
not the reason because I will order my robots to build an army to kill you if you refuse to
vacate the land I want as my own. And I'll build the biggest robot army to fight off any
"government" that tries to take the liberty I have gained with my robots eliminating any
requirement for me to work for what I consume or desire.
So, again, money is past or future labor, just as goods and capital are past labor, the
Fed merely ensures liquidity of labor IOUs, but if no one will pay workers to work with these
IOUs, no one will get a job no matter how many labor IOUs the Fed prints.
And it i give you labor IOUs, but no one will produce anything by work in exchange for
those labor IOUs, they are worthless. Like in Venezuela where you buy stuff paying in eggs or
fuel or other things produced by workers with capital, ie, labor.
And Trump never sees any value in money because he never works. He'll promise you money,
but if you believe he'll do any work to make his promise honest, you are a fool. And thats
true for pretty muchh all Hard core neoliberals these days.
Hard core neoliberals tell you to work more than the money paid in exchange for other working to
produce stuff for you in the future. First it was by pensions. But now they refuse. Then is
was by government IOUs, but now they are saying "nope" to redeeming the bonds.
Anyone think the businesses with skyhigh share prices are going to pay dividends, or buy
back shares at sky high prices when sellers exceed buyers?
Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too
many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought
stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to
the younger workers saving for retirement buying stocks magically keep share prices rising?
Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too
many sellers?
Hard core neoliberals have been pushing free lunch economics for several decades by erasing the
connection between labor and money and real value.
Hard core neoliberals see work as too costly, and paying workers to crushingly costly, but they
want others to give them both stuff and money. A free lunch.
And they cleverly created clever lines like, "cutting taxes puts money in yoour pockets"
and "costly givernment regulations kills jobs" and "we must cut costs to create jobs".
So, voters who just got told GM is cutting costs by eliminating 10,000 jobs and closing 5
factories listen to Trump promise to cut costs to bring back factories and jobs end up voting
for Trump???
So genious Krugman can't point out the lie Trump and the GOP are telling by simply
pointing outt to those workers they lost their job because of cost cutting.
Why can't workers understand that anytime a politician says "cut" he means "fire" or
"impoverish"???
Bad Faith, Pathos and G.O.P. Economics: On professionals who sold their integrity, and got
nothing in return.
By Paul Krugman
As 2018 draws to an end, we're seeing many articles about the state of the economy. What
I'd like to do, however, is talk about something different -- the state of economics, at
least as it relates to the political situation. And that state is not good: The bad faith
that dominates conservative politics at every level is infecting right-leaning economists,
too.
This is sad, but it's also pathetic. For even as once-respected economists abase
themselves in the face of Trumpism, the G.O.P. is making it ever clearer that their services
aren't wanted, that only hacks need apply.
What you need to know when talking about economics and politics is that there are three
kinds of economist in modern America: liberal professional economists, conservative
professional economists and professional conservative economists.
By "liberal professional economists" I mean researchers who try to understand the economy
as best they can, but who, being human, also have political preferences, which in their case
puts them on the left side of the U.S. political spectrum, although usually only modestly
left of center. Conservative professional economists are their counterparts on the center
right.
Professional conservative economists are something quite different. They're people who
even center-right professionals consider charlatans and cranks; they make a living by
pretending to do actual economics -- often incompetently -- but are actually just
propagandists. And no, there isn't really a corresponding category on the other side, in part
because the billionaires who finance such propaganda are much more likely to be on the right
than on the left.
But let me leave the pure hacks on one side for a moment, and talk about the people who at
least used to seem to be trying to do real economics.
Do economists' political preferences shape their research? They surely affect the choice
of subject: Liberals are more likely to be interested in rising inequality or the economics
of climate change than conservatives. And human nature being what it is, some of them --
O.K., of us -- occasionally engage in motivated reasoning, reaching conclusions that cater to
their politics.
I used to believe, however, that such lapses were the exception, not the rule, and the
liberal economists I know try hard to avoid falling into that trap, and apologize when they
do.
But do conservative economists do the same? Increasingly, the answer seems to be no, at
least for those who play a prominent role in public discourse.
Even during the Obama years, it was striking how many well-known Republican-leaning
economists followed the party line on economic policy, even when that party line was in
conflict with the nonpolitical professional consensus.
Thus, when a Democrat was in the White House, G.O.P. politicians opposed anything that
might mitigate the costs of the 2008 financial crisis and its aftermath; so did many
economists. Most famously, in 2010 a who's who of Republican economists denounced the efforts
of the Federal Reserve to fight unemployment, warning that they risked "currency debasement
and inflation."
Were these economists arguing in good faith? Even at the time, there were good reasons to
suspect otherwise. For one thing, those terrible, irresponsible Fed actions were pretty much
exactly what Milton Friedman prescribed for depressed economies. For another, some of those
Fed critics engaged in Donald Trump-like conspiracy theorizing, accusing the Fed of printing
money, not to help the economy, but to "bail out fiscal policy," i.e., to help Barack
Obama.
It was also telling that none of the economists who warned, wrongly, about looming
inflation were willing to admit their error after the fact.
But the real test came after 2016. A complete cynic might have expected economists who
denounced budget deficits and easy money under a Democrat to suddenly reverse position under
a Republican president.
And that total cynic would have been exactly right. After years of hysteria about the
evils of debt, establishment Republican economists enthusiastically endorsed a budget-busting
tax cut. After denouncing easy-money policies when unemployment was sky-high, some echoed
Trump's demands for low interest rates with unemployment under 4 percent -- and the rest
remained conspicuously silent.
What explains this epidemic of bad faith? Some of it is clearly ambition on the part of
conservative economists still hoping for high-profile appointments. Some of it, I suspect,
may be just the desire to stay on the inside with powerful people.
But there's something pathetic about this professional self-abasement, because the rewards
center-right economists long for haven't come, and never will.
It's not just that Trump has assembled an administration of the worst and the dimmest. The
truth is that the modern G.O.P. doesn't want to hear from serious economists, whatever their
politics. It prefers charlatans and cranks, who are its kind of people.
So what we've learned about economics these past two years is that many conservative
economists were, in fact, willing to compromise their professional ethics for political ends
-- and that they sold their integrity for nothing.
We All Have a Stake in the Stock Market, Right? Guess Again
By PATRICIA COHEN
Take a deep breath and relax.
The riotous market swings that have whipped up frothy peaks of anxiety over the last week
-- bringing the major indexes down more than 10 percent from their high -- have virtually no
impact on the income or wealth of most families. The reason: They own little or no stock.
A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent
of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual
retirement accounts, as well as trust funds, mutual funds and college savings programs like
529 plans.
"For the vast majority of Americans, fluctuations in the stock market have relatively
little effect on their wealth, or well-being, for that matter," said Edward N. Wolff, an
economist at New York University who recently published new research * on the topic....
What I could find says 401(k)s have $5.6T, IRAs have $2.5T, and when you add in pensions, the
total is $29 trillion. Not sure when those numbers are from.
Hard to know what part of that is stocks vs. bonds.
As of last April, US stock markets had $34 trillion and the rest of the world $44 trillion
equiv.
So, if IRA, 401(k) and retirement plans have almost as much wealth as the total of us
stocks, and that is 16% of all stocks... does that mean we
1) Americans own a lot more foreign stocks than foreigners own american stocks
or
2) 84% of retirement assets are bonds?
There is, what? $50 trillion is US debt, much of it backed by bonds.
So, $30 trillion retirement assets, $24.5T bonds and $5.5 trillion stocks... such that
$5.5T is 16% of $34T?
"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit."
Wildly unsubstantiated first sentence, though the rest seems likely true. Whether the bulk
went to tax cuts for domestic or foreign national or into the furnace, there was indeed some
sliver that actually went to the rest of us.
Efficiency of what, I might ask? Efficiency of shipping goods halfway around the world from
where people work for less in less safe environments is really the efficiency of theft by
capitalists, not the efficiency of production. Taking from the land and sea and dumping waste
into the land, sea, and air is the efficiency of theft by capitalists too, not the efficiency
of resource use. We are very efficient at making billionaires from externalized costs. We
continue to cheaply sell ourselves out because the price is right. Ask Paine what lies hidden
in the price?
I would prefer unhiding externalized costs and allocating domestic labor to pay those costs,
not with taxes, but with production of domestic goods and the elimination of pollutants and
managed use of limited resources. That's just me and entirely off the subject when it comes
to macroeconomics.
In any case, I am also for Paine's KLV full employment macroeconomics. If anything KLV
macro is more accessible both politically and intellectually than the kinds of price
movements that would be required to place environmentally sustainable caps on carbon
emissions or the commercial menhaden catch. A nominal interest rate for interbank lending
that was maintained by the Fed to persist at just the rate of inflation except for lower when
necessary to recover from a recession is not a terrible thing. The consequence of braking the
economy just to avoid hitting some inflation target is reckless driving. As we know the crash
victims are always labor.
You need to separate Paine's economics from his politics. He believes a peoples' party can
deliver that. It cannot. It will not. As efficiency goes out the door when a small,
unregulated group controls everything. Not to say our version of capitalism has anywhere near
the government regulation I think it needs to reach your(and my) goals. But it is light years
ahead of Paine's dreams.
Paine's economics are insightful and useful. Paine's politics are bifurcated. Paine is as
much for a progressive liberal democrat as he is for an enlightened communist dictator. Which
do you think has a greater chance of actually ever existing in this century?
I'm all in on Paine's economics, but I believe his politics make him an opponent to ever
coming up with progressive liberal democrats running the country.
All or nothing with him, and that makes it beyond hard to move towards that goal. Many in
here like that. I admire them for going through their life without once ever settling for
anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections.
I am largely in concurrence with you, but I do have some specific caveats.
At least in my part of the country Paine's far left politics are not representative of
anything that we come into contact with in public life. Your politics are bit left of us
here. I am the far left in these parts. Paine's more populous left side is barely represented
by any group in my reality. So, for me, Paine is a unique curiosity reminiscent of my
socialist friends from the 60's and early 70's for which I have seen no analog since the
introduction of Disco and double-knit leisure suits.
The EV crowd in general is a microcosm of nerdiness rather than a microcosm of well
informed constituencies of the US unrepresentative "democracy." There is nothing unsettling
about it. This crowd is as normal as the characters of "Big Bang Theory."
Republicans win elections because they get the most votes. The VA voter turnout for 2018
was almost 60%, well above 2014 and 2010 midterms which were just above 40%. Most people
think that Trump is the most politically divisive POTUS in history, but I think nothing in my
life has done more to unify the Democratic Party given they can curb their enthusiasm about
beating Trump in 2020 enough to not rip the party apart over who gets the spoils.
Turnout for POTUS election in VA has been above and sometimes well above 70% for every
POTUS election since 1975 except for 2000. Turnout for VA gubernatorial elections has been
between 40% and 50% for each election from 1997 up through 2017, but ran much higher before
motor voter stopped the purging of voter registration rolls. VA elects state legislators in
off years for statewide elections with just over 30% of voters showing up.
"...My point is that when you reduce the cost of doing business, or reduce the credit
worthiness of a borrower, you will see greater inefficiency.
Digging holes and filling them in is one way to spend money. Building a road or a building
is another.
Which would you prefer?"
[While I would prefer bridges to digging holes and filling them, my hesitation in
answering this question was with the assumption that lower interest rates generate more
wasteful investment, despite that I know it to be true in some contexts. Speculation is the
problem more than real projects by far. Diversity among investments can be a very good thing.
Failure in this context is just a consequence of innovation by trial and error, one of the
more efficient means. Besides, for private investment the risk spread limits useless
excursions, while the state needs conscious limits on pork perhaps, but pork is also a useful
medium of political exchange. Uncle's discretionary spending is a very small pot of
gold.]
" Many in here like that. I admire them for going through their life without once ever
settling for anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections."
The New Deal.
The Great Society.
Social Security. Medicare. Medicaid.
EMichael would have argued against all of them as overreaching.
His excuse for the Democrats was that past Presidents had large majorities in
Congress.
He would say the country is too conservative and racist. But they like those programs
now.
"Lower interest make business plans much easier. In doing so, risks are taken that should not
be taken, thus increasing inefficiency.
This is especially true when the planners carry absolutely no financial risk themselves on
a project."
[I understood what you were going for and do not doubt that you have specific instances for
which you are sure that is true. For a few years prior to 2008 then I am sure that was true,
but those "animal spirits" were drunk on more than just low interest rates. There was a
specific sequence of events that played out over a long period of time bringing the US
economy to the precipice of financial system euphoria over the infallibility of markets.
Lenders and borrowers and especially middlemen stared down into the abyss and then kept on
truckin'. Then we all heard a big splat!
Now is not then. Some future now may be then again if we forget about then, but it takes a
lot of stupid to get there, not just low interest rates. Taking a bit more risk, but without
the stupid is how we learn from failure to achieve greater success.
If either the dot.com splat or the mortgage splat were not clearly visible at least three or
four years before the splat then either you need a new prescription for your eye glasses or
you need to step out of that fog that you were living in.
"success through failure" has become a norm of American business, with the PotUS as the
perfect example.
He never got into the casino, steak, wine, water, university, etc. businesses with intent
on making money in those businesses. Heck, he barely breaks even on the condo and golf
businesses.
He creates the towers and golf resorts to promote the name, and promotes the name to be
able to lease it to doomed businesses which he starts with the intent of losing money on the
leasing of his name. I suspect the most profitable thing he's ever done was "realty tv" host
and having a book ghost-written in his name.
And yes, low interest rates DO create easy money, and much of it does find its way into
"success through failure" investments. Why would you loan money to a business that you know
was a scam just created to accumulate debt then go bust? Because you can securitize the debt
and sell it off to Main Street suckers to eat the loss.
Why else "success through failure". Well, I've worked for a company that dumped a lot of
money into a venture it knew was doomed long-term. Why? Because it intended to go IPO, and it
needed the (unprofitable) revenue from the doomed venture to pump its price in the IPO.
I think we'd all agree that "success through failure" is terrible and wish it would go
away. Problem is, it works.
Regarding "Success through failure" I was thinking in terms of the dot.com boom from which
sprang the broadband Internet and Amazon. Out there in Phoenix AZ where you and EMichael live
things must be really crazy. Back in 70's Phoenix was the yuppy Mecca. What happened?
True, not all of the dot.com was bad investment. Just most.
We got a lot of housing built during the housing boom too. Too bad most of it was
2000-3000 sqft McMansions on golf courses, 50 miles from any jobs.
"Out there in Phoenix AZ where you and EMichael live things must be really crazy."
1970 Phoenix metro had 1 million people. Today we're at 4.75 million.
Politics are a mess. Big money is pushing to constantly lower taxes, but now people are
pushing back wanting more funding for schools. Surprisingly, we've passed phased in $12
minimum wage and medical marijuana (recreational failed by less than 1%), and now have split
representation at the federal level indicating a move toward liberal.
And yet, we'll still very Republican in the state house and go highly conservative on many
other issues such as animal rights. A recent "green energy initiative" failed ugly.
So, to sum it up... Pretty Liberal, but Very CONservative, with a HUGE swing vote that
goes this-way-and-that in random directions and on different issues...
...but in general want low taxes, are hate big government...
...except on the things like Social Security, Medicare, Medicaid, Defense, education,
transportation, police, fire, courts, justice system, boarder security, anti-terrorism, and
the rest of stuff government actually spends almost all of its money on...
... but are all for getting rid of all the wasteful government that practically doesn't
really exist...
... and we definitely want religious freedom, as long as that religion is Christianity and
the freedom is to force their views onto others, and not allow other religions to have a
place in society.
No one notices that the biggest factor in the housing bubble was bush ordering the OCC to
take regulation of national banks out of the hands of the states.
The population increase? People would have to be somewhere, and unlike coastal California
with those stupid oceans, bays and mountains... Phoenix has plenty of open space.
2000-3000 sqft mcmansions 50 miles from jobs? Probably true. Without the housing bubble we
would have hit the wall on housing and caused massive rent spike a decade ago instead of a
few years ago. With that massive rent increase then instead of now, meaning that a decade ago
we would have seen the in-building of small apartments and condos that we are now
getting.
Net, we probably would have been better off with more in-building of smaller, multi-family
units instead of massive sprawl of McMansions.
Don't complain too much. The "massive sprawl of McMansions" is a sure sign of widespread
prosperity. Here in eastern Henrico County VA we have the massive sprawl of McCracker boxes
instead although not just crackers live in them. McMansions are usually on at least 1/2 acre
lots, while McCracker boxes are built so close together that most of the time there was not
room left for a driveway and people park on the street except that some of those streets are
actually the highways to the neighboring cracker box town. On street parking is just one sign
of poverty. There are also drug related shootings just like in the big city.
In eastern Henrico there are only a few small McMansion developments in prime real estate
overlooking the flood plain of the James River where there is any such high ground in eastern
Henrico near the river. Chesterfield County across the James River has the advantage of very
high ground near the James River at River's Bend, a.k.a, Meadowville, where there is plenty
room for a golf course and marina as well as loads of McMansions and high-end apartment
buildings. High and dry western Henrico County is where they build the McMansions along with
all the exclusive high end shopping. The "Sad-eyed Lady of the Lowlands" was probably sad
because her basement flooded whenever it rained:<)
I was adding a tad to the "inefficiencies" discussion caused by disconnecting loan
origination from loss risk.
I got my piece of the giant federal government giveaway needed to clean up the mess. In
2011 I bought a 1000 sqft condo for $48K that I now have leased out for a nice cash-flow
positive $600+ a month and true after-tax profit of about the same $600 a month (add $100 of
the payment that is principal reduction, then subtract 22% income tax on $500 a month ($700
profit - $200 depreciation)).
If you notice the purchase price doesn't match the depreciation, yeah, I've done over $20K
in additional capital improvements that increase the base including new roof, new HVAC,
replaced all aluminum windows and doors with high-E, gutted and replaced the kitchen and both
baths. Summer cooling bill was cut by more than half from ~$300 to ~$125 by the new windows
and doors and more efficient HVAC, increasing the monthly rent accordingly.
I've only been spending abut $400 of that $600 profit, letting the rest accumulate for
maintenance, repairs, upgrades.
Oh, I also save about $250 a month on the mortgage of my primary by locking in 3% interest
rate.
Not big deals in the grand scheme, but the boom->crash->rent squeeze worked out okay
for me personally.... for now.
To be perfectly honest, it is exactly those kinds of houses that the Phoenix market needs
a lot more of.
Switching from those to McMansions, then hardly any construction at all for 6 or 7 years,
is why there is such a crunch on housing, and skyrocketing rents and house prices now.
Even now they aren't building many of those small single family homes.
They are building redevelopment/in-fill condos in downtown/near ASU in Tempe and
apartments in the middle-burbs.
The Tax Cut and the Balance of Payments (Wonkish)
Lots of financial maneuvering, signifying nothing
By Paul Krugman
What tax cuts were supposed to do
A tax cut for corporations looks, on its face, like a big giveaway to stockholders, mainly
bypassing ordinary families: of stocks held by Americans, 84 percent are held by the
wealthiest 10 percent; * 35 percent of U.S. stocks are held by foreigners. **
The claim by tax cut advocates was, however, that the tax cut would be passed through to
workers, because we live in an integrated global capital market. There were multiple reasons
not to believe this argument in practice, but it's still worth working through its
implications....
The key point to realize is that in today's globalized corporate system, a lot of any
country's corporate sector, our own very much included, is actually owned by foreigners,
either directly because corporations here are foreign subsidiaries, or indirectly because
foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically
flow to foreign nationals – which means that a third of the tax cut flowed abroad,
rather than staying at home. This probably outweighs any positive effect on GDP growth. So
the tax cut probably made America poorer, not richer.
And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit....
Steven Rattner's Charts in the New York Times Don't Show He Says They Show
By Dean Baker
Steven Rattner used his New York Times column * to present a number of charts to show
Donald Trump's failures as president. While some, like the drop in enrollments in the health
care exchanges, do in fact show failure, others do not really make his case.
For example, he has a chart with a headline "paltry raise for the middle class." What his
chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the
recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their
pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This
is not a great story, but the picture under Trump is certainly better than under Obama. (This
wasn't entirely Obama's fault, since he inherited an economy that was failing.)
The chart shows more rapid growth at the bottom of the pay ladder and a modest downturn
under Trump for those at the top. By recent standards, this is not a bad picture, even if
Trump does not especially deserve credit for it. (He came in with an unemployment rate that
was low and falling.)
Rattner also presents as a bad sign projections for fewer Federal Reserve rate hikes.
While one basis for projecting fewer rate hikes is that the economy now looks weaker for 2019
than had been thought earlier in the year (but still stronger than had been projected in
2016), another reason is that inflation is lower than expected. Economists have consistently
over-estimated the impact that low unemployment would have on the inflation rate. With
inflation coming in lower than projected, there is less reason for the Fed to raise
rates.
Contrary to what Rattner is implying, this is a good development. It means that the
unemployment rate can continue to fall and workers at the middle and the bottom of the pay
ladder can continue to see real wage gains.
Rattner also shows us how growth projections for the U.S. and the world have been lowered
since June of 2018. It's not clear how much Trump can be held responsible for growth in the
EU (try blaming the European Commission's austerity drive) and the rest of the world, but his
argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018
is actually up 0.1 percentage point from the June projection. More importantly, it is up from
a projection of 1.7 percent from January of 2017, the month Trump took office.
Then we have the chart showing the rise in the debt relative to GDP. While Rattner is
right that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio
is basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current
interest rate on its long-term bonds is 0.00 percent.)
If anyone is seriously concerned about the debt that the government is passing on to
future generations then it is also necessary to include the rents associated with patent and
copyright monopolies. These monopolies are alternative mechanisms to direct funding that the
government uses to pay for services (i.e. research and creative work).
To take the most important case, suppose the government were the replace the $70 billion
(0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry
conducts each year with direct funding of $70 billion. All research findings could then be
placed in the public domain and new drugs would sell at generic prices.
Rattner and his crew would count the $70 billion in addition spending as an addition to
the debt and deficit. However, when the industry is able to charge the public an extra $360
billion ** (1.8 percent of GDP) a year in higher drug prices due to patent monopolies and
related protections, Rattner and company choose to ignore the burden. This sort of groundless
debt fear mongering deserves only ridicule; it is not serious economic analysis.
Trump has done many awful things as president and threatens to do many more. But this is
not a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his
performance without playing games with it.
E.J. Dionne Provides Classic Example of Liberals Missing the Boat
By Dean Baker
I often rail against liberals who wring their hands over the unfortunate folks who have
been left behind by globalization and technology. E.J. Dionne gave us a classic example * of
such hand-wringing in his piece today on the need to help the left behinds to keep them from
becoming flaming reactionaries.
For some reason, it is difficult for many liberals to grasp the idea that the bad plight
of tens of millions of middle class workers did not just happen, but rather was deliberately
engineered. Longer and stronger patent and copyright protection did not just happen, it was
deliberate policy. Subjecting manufacturing workers to global competition, while largely
protecting doctors, dentists, and other highly paid professionals was also a policy
decisions. Saving the Wall Street banks from the consequences of their own greed and
incompetence was also conscious policy.
I know it's difficult for intellectuals to grasp new ideas, but if we want to talk
seriously about rising inequality, then it will be necessary for them to try. (Yeah, I'm
advertising my - free - book "Rigged: How Globalization and the Rules of the Modern Economy
Were Structured to Make the Rich Richer" ** again.) Anyhow, let's hope that in 2019 we can
actually talk about the policies that were put in place to redistribute income upward and not
just pretend that Bill Gates and his ilk getting all the money was a natural process.
America is now the largest producer of oil in the world. For the U.S., this is great news as
the dream of energy independence grows and maybe one day we can tell OPEC to go take a
hike.
However, while the shale oil revolution has helped change the energy landscape forever, we
cannot take shale for granted. We can't just assume that the industry can withstand any price
and that production can keep rising despite the market conditions. We can't assume that shale
oil producers can match OPEC production cuts barrel for barrel.
We also can't assume OPEC, weakened by falling prices of late, won't strike back like they
did in 2014. That's when OPEC declared a production war on U.S. shale producers. The then de
facto head of the OPEC Cartel Ali al-Naimi spoke about market share rivalry with the United
States and said that they wanted a battle with the U.S. There were no winners in that
production war. Ali al-Naimi was sacked as he almost bankrupted Saudi Arabia. It took its toll
on U.S. producers as well, as many were forced into bankruptcy despite making significant
progress on efficiency and cost cutting.
With 2019 underway, OPEC, along with Russia, agreed to remove 1.2 million barrels per day
off the market for the first six months of the year. Early reports on OPEC compliance to the
agreed upon production cuts is overwhelming at a time when there are new questions about how
shale oil producers are faring after this recent oil price drop.
Private forecasters are showing that there are major cuts in Saudi exports and even signs
that OPEC production is falling sharply. Bloomberg News confirmed that by reporting "observed
crude exports from Saudi Arabia fell to 7.253 million barrels per day in December on lower
flows to the U.S. and China." Furthermore, other private trackers believe that the drop may be
the biggest in exports since Bloomberg began tracking shipments in early 2017. Oil saw another
boost after Bloomberg reported that OPEC oil production had the biggest monthly drop in two
years falling by 530,000 barrels a day to 32.6 million a day last month. It's the sharpest
pullback since January 2017.
Rewind to 2017, there was talk that shale oil producers would make up the difference and the
cut would not matter, but that was proven wrong. This time expect the same because it is likely
that shale oil producers may have to cut back as the sharp price drop has put them in a bad
position. The Wall Street Journal pointed out that, even now, some shale oil wells are not
producing as much oil as expected. This coupled with a large declining production rate in shale
swells means that they need capital to keep drilling to keep those record production numbers
moving higher. "Two-thirds of projections made by the fracking companies between 2014 and 2017
in America's four hottest drilling regions appear to have been overly optimistic, according to
the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in
Texas and North Dakota. Collectively, the companies that made projections are on track to pump
nearly 10% less oil and gas than they forecast for those areas, according to the analysis of
data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one
billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices.
Some companies are off track by more than 50% in certain regions" the Journal reported.
"While U.S. output rose to an all-time high of 11.5 million barrels a day, shaking up the
geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The
Journal's findings suggest current production levels may be hard to sustain without greater
spending, because operators will have to drill more wells to meet growth targets. Yet shale
drillers, most of whom have yet to consistently make money, are under pressure to cut spending
in the face of a 40% crude-oil price decline since October."
Of course, none of this matters if we see a prolonged slowdown in the global economy, Demand
may indeed turn out to be the great equalizer. Yet if growth comes back, say if we get a China
trade deal or if they ever reopen the U.S. government, we will most likely see a very tight
market in the new year. The OPEC cuts will lead to a big drawdown in supply and shale oil
producers will find it hard to match OPEC and demand growth barrel for barrel.
While Apple's profit warning was truly a shocker -- the first time in 16.5 years the company
had issued such a guidance release, according to Bespoke Research -- the forces pressuring
global equity markets today are more macro than micro. To put it simply: the yield curve looks
horrible. The table at the bottom of this report contains the details, but with a
near-inversion of the 12-month/10-year Treasury yield spread the market's demand for stocks is
understandably pressured.
In fact, over the course of 2018, Inhofe has made 57 individual stock trades, according to
Senate disclosure forms .
The value of these trades totaled somewhere between $1.72 million and $4.11 million. In 2017,
according to Inhofe's annual
report , he made another 52 trades.
Congress attempted to prevent legislators from insider trading with the 2012 STOCK
Act , which prohibits members and their staffs from exploiting insider information
discovered in the course of policy deliberations. But unlike corporate "insiders," members of
Congress are not required to establish arms-length trading plans --
nor has the House fully cooperated with efforts by the Securities and Exchange Commission
to investigate potential wrongdoing.
When compared to corporate insiders, members of Congress are exposed to a much broader array
of insider information which implicates a wide range of companies. Given that members of
Congress hold a unique position of public trust, Sens. Jeff Merkley, D-Ore., and Sherrod Brown,
D-Ohio, both potential Democratic presidential candidates, want to put a stop to all the
trading. Last week, they introduced
legislation that would permanently ban members of Congress and senior staff from trading
individual stocks.
"We should not be in the position of thinking about legislation in the context of personal
investment," Merkley told The Intercept in an interview. "As long as you own stocks, it's hard
to rule out of your mind. And the public sees it as a conflict of interest."
There's only one thing necessary to maintain the respect and affection of DC's ruling political and media class: affirm standard
precepts of US imperialism & militarism. You can work for Trump, or cheer menacing authoritarians, and you'll still be revered
as long as you do that:
Nikki Haley @NikkiHaley
Congratulations to Brazil's new President Bolsonaro. It's great to have another U.S.-friendly leader in South America, who
will join the fight against dictatorships in Venezuela and Cuba, and who clearly understands the danger of China's expanding influence
in the region.
(Previous comments from me that Pentagon officers
are not *necessarily* militarists not withstanding...)
Military Deletes New Year's Eve Tweet Saying It's
'Ready to Drop Something' https://nyti.ms/2RvcZwi
NYT - Matt Stevens and Thomas Gibbons-Neff - Dec. 31, 2018
The unified command responsible for the United States' nuclear strike capabilities drew
attention on Monday when it tweeted a message and video that threatened the possibility of
dropping a bomb.
In the tweet, which was posted as Americans prepared to celebrate New Year's Eve and was
deleted about three hours later, the United States Strategic Command said the nation was
"ready to drop something." A video that was part of the tweet showed a B-2 stealth bomber
soaring across the sky before releasing two GPS-guided bombs that exploded into a giant ball
of fire after hitting the ground below.
In the video, which was viewed more than 120,000 times, pulsing music beats in the
background as the words "STEALTH," "READY" and "LETHAL" flash across the screen in white
block letters.
"#TimesSquare tradition rings in the #NewYear by dropping the big ball...if ever needed,
we are #ready to drop something much, much bigger," the tweet said, adding the hashtags:
"#Deterrence #Assurance #CombatReadyForce #PeaceIsOurProfession." ...
A spokeswoman for the Strategic Command said the post "was part of our Year in Review
series meant to feature our command priorities: strategic deterrence, decisive response and
combat-ready force."
"It was a repost from earlier in the year, dropping a pair of conventional Massive
Ordnance Penetrators at a test range in the United States," she said in a statement that did
not elaborate.
About 30 minutes after the statement was issued, Stratcom apologized on Twitter, saying
that its "previous NYE tweet was in poor taste & does not reflect our values."
"We are dedicated to the security of America & allies," the new tweet added. ...
Obama was concocted in the darkest recesses of the elite. He was a deep-state test tube
presidential candidate.
BIC, Kissinger Associates, an occulted provenance, two comprehensively CIA connected
maternal grandparents, a June 8, 2008 meeting with HRC at a Bilderberg conference at the
Westfields Marriott in Chantilly, VA, while his press plane was ordered flown out of town
with all aboard except Barack Obama.
A ring on his wedding finger inscribed in Arabic. Tarmac reading material: "The Post
American World."
He was molded to do his level best to demolish the U.S., to deindustrialize it, strip mine
it, extinguish the middle class, serve it garnished to the People's Republic of China.
Tom_Collins 11 hours ago
Don't forget the fact that he refused to even investigate, much less prosecute both war
criminals and financial criminals. That effectively made those people and policies de-facto
above-the-law. As Glenn has written before, including in his book, we are now a nation of
men, not a nation of laws, and Obama is as much to blame for that as Bush, Cheney, their
lawyers and the Congress.
dkwilson 8 hours ago
I've always wondered why everyone forgets(?), or maybe no one knows... or maybe it's
convenient to omit the fact that Obama's first meaningful move as president was to attempt to
extract soldiers from the morass that is Syria. He sent Biden to the Pentagon to talk with
the corporate warlords there to take the overall temperature and find out how he could
achieve the pullout. But suddenly, that bell cow CIA media member, Bob Woodward, leaped off
the toilet on his yacht and "exposed" Obama's wants with a withering how could he, pro-war
attack (and some slick, "is Obama really a Muslim and, therefore, "anti Semite"
rhetoric).
It was as if someone took Obama into the WH's cinema room and showed him the untouched
version of the JFK assassination from every angle from which it was filmed. From that moment
forward, Barack Obama was never the same... in fact, he quickly became the Pentagon's "main
boy" water carrier. (It also seemed, Joe, I might be a Jesuit but I'm Jewish as hell, Biden
may have played a YUGE part in the play.)
But hey, why allow that little incident to get in the way of a tread worn, wholly
uniformed but somehow still effective anti-Obama narrative?
"On Thursday, Politico published a delightful story tracing how Donald Trump, American
president, got control of his own Tweet Machine. You see, up until 2013, he had a social
media manager named Justin McConney who would actually type and send each bit of, say, dating
advice to Robert Pattinson. The workflow for this was legitimately bonkers.
'Even as the mogul embraced digital media, he did so in the most analog way possible. He
had McConney print out his Twitter mentions, and he would use Sharpie pens to scribble
responses, which McConney would then type up and tweet out. After appearing at events, Trump,
who remained distrustful of anything he saw only on a screen, had McConney print out 8x10
glossy photos of him for his signoff before they were posted online.'
But one day, Trump got hold of the controls himself. In vintage fashion, he first used
them to praise someone for praising him on the teevee:
This prompted perhaps the greatest ever quote about Trumpian social media use. Certainly
it's the best from this news cycle.
"The moment I found out Trump could tweet himself was comparable to the moment in
'Jurassic Park' when Dr. Grant realized that velociraptors could open doors," recalled
McConney, who was the Trump Organization's director of social media from 2011 to 2017. "I was
like, 'Oh no.'"
A glimpse of the suburban grotesque, featuring Russian mobsters, Fox News rage addicts, a
caged man in a sex dungeon, and Dick Cheney....
A few months later, my boss called and started with, "Don't kill me." He was sending me to
Dick Cheney's. Dick was home.
He had an assistant or secretary or maybe security who followed me around while I checked
connections and signal levels. I'd already found a system problem outside. I just wanted to
make sure I never had to f!cking set foot in that house again. Dick walked into the office
while I was working. He was reading from a stack of papers and ignored me. I told the
assistant it would probably be a week or so. I'd put the orders in. He had my supervisor's
number.
He said something to the effect of, "You do understand this is the former vice
president." I panicked and said the first thing that came to mind: "Yeah, well, waterboard me if it
makes him feel better. It'll still take a week." And I walked out.
It was my last call that day. I drove the entire way home thinking of a hundred better
things I could've said. Finally, I called my supervisor and told him I might've accidentally
mentioned waterboarding. He laughed and said I'd won. He'd stop sending me to the Cheneys'. I
don't actually know if they ever complained. If they did, he never mentioned it."
If anyone still thinks that Donald Trump has some master plan to kill off his Deep State
adversaries they should check themselves into therapy. I know withdrawal is hard, but admitting
you have a problem is the first step to curing it.
He doesn't have a plan. He may fight them but it won't be with any kind of master plan to
trap them in some beautiful bit of political judo.
Frankly, Vladimir Putin he is not.
No, Trump is winging things at this point. While he still has the office he's trying to do
some of the things he promised. Doing that may keep him in power for a few more months.
But with his walking back the timetable for pulling troops out of Syria after a visit from
Lindsay Graham (R-MIC/AIPAC) should tell you all you need to know about Trump's willingness to
stand up to the pressure he's under.
Add to that the opening salvo from Mitt Romney (R-Wall St.) and it becomes pretty clear that
Trump was told what the score really is. When, not if, the Democrats push for impeachment or a
25th Amendment proceeding against him Graham and Romney will lead a GOP revolt against him,
siding with Senate Democrats to get rid of him.
That's been the point of this from the beginning. Pat Buchanan and I both talked about this
from the moment he was elected. Pat reminding us of what happened to Nixon who was hounded out
of office because he did the unthinkable -- ending the Vietnam War.
I've been simply looking at this from the standard libertarian perspective that "War is the
health of the state" and Trump's opposition to our Middle East follies would net him nothing
but contempt.
The Makinder "Heartland" view of Geopolitics holds complete sway in Washington, Downing St.
and the Pentagon. And as such, the Middle East is the access point to the Heartland and that
means destroying both Russia and Iran to ensure that Germany never joins them.
This is why The Swamp will not let Trump make nice with Putin. It's why the British deep
state and intelligence community was so eager to help Hillary Clinton fabricate the Russiagate
controversy through the creation of the Steele Dossier.
It's why outgoing Chairman of the Joint Chiefs of Staff, General Joseph Dunford, would only
entertain a peace deal with the Taliban in Afghanistan as long as the U.S. maintained all of
its military presence there.
In other words, accept our colonial presence here to ensure you stay in the 19th century and
we no longer have to fight openly.
If for nothing else, Trump's firing Dunford was a brief bit of joy that may outlive his
presidency. Not much else will.
Look, the Deep State is vast and cruel. Nancy Pelosi's first act as Speaker of the House was
to declare open season on Trump. She'll wait until the Mueller report to start the process but
she seems pretty confident she'll get what she needs.
Michael Cohen likely provided the road map to Trump's shady business dealings (far beyond
his pecadillos) which will be used against him. Impeachment isn't a legal proceeding, it's a
purely political one.
There is no standard of proof. If you're hated by enough of the right people, you're done.
That's it. In a time of unlimited corruption counting on people to act honorably is a fool's
game.
And Trump at this point is the head fool.
You don't announce something like the withdrawal from Syria and all that that entails only
to walk it back 10 days later because someone threatened you.
In fact, Trump's best, and frankly, only course of action now is to go on the offensive. And
Elizabeth Warren memes, no matter how entertaining, are not getting this done.
As I lay out in this video, the threat of exposing all of the corruption is his best play.
It may cost him everything but if he's going down the best thing he can do to MAGA is take as
many of them down as possible.
Spot on Tom. Ending a Predator Class war for global hegemony (the Makinder World Island
quest) is a capital offense for any President. That's why JFK was offed... (the Nixon tale is
not credible... Nixon sabotaged LBJ's negotiations with the N. Vietnamese and with Kissinger
dragged on the war until the US was kicked out in '75).
Trump could appeal to the American people over Syria and Afghanistan claiming that as the
Peace President he is being threatened... Maybe DoJ gets cleaned out; Mueller has
nothing.
Order the acting AG to appoint Special Prosecutors for Clinton, Feinstein and Pelosi and
others for their treason and their Chinese Business Dealings
Declassify all of the JFK and other documents that you promised to release, the Mexican
stand off ends the day Trump leaves office and they bankrupt and imprison him and his
family.
Name the CFR, and all other Globalist Organizations and NeoCons, as Foreign Agents and
force register all of their members as Foreign Agents.
Pull the Security clearances from all people not currently employed by the Govt,
especially the CFR members and similar organization.
Name the ADL and SPLC as Hate Groups and appoint a special prosecutor to go after
them.
PS Stop appointing people who want you dead in the key positions in your government
PPS Pardon Assange and give him diplomatic passage to some country that won't extradite
him like Iceland or perhaps Switzerland.
We will stay because our Israeli bought government wants it. They will never allow Trump
to exit Syria.
Here is a list of politicians who carry Israeli Citizenship ... Good to know and explains
a lot
112 CONGRESS
THE US SENATE [13]
Richard Blumenthal (D-CT) Barbara Boxer (D-CA) Benjamin Cardin (D-MD) Dianne Feinstein
(D-CA) Al Franken (D-MN) Herb Kohl (D-WI) Frank Lautenberg (D-NJ) Joseph Lieberman
(Independent-CT) Carl Levin (D-MI) Charles Schumer (D-NY) Ron Wyden (D-OR) Michael Bennet
(D-CO)
HOUSE OF REPRESENTATIVES [27]
Gary Ackerman (D-NY) Shelley Berkley (D-NV) Howard Berman (D-CA) Eric Cantor (R-VA) David
Cicilline (D-RI) Stephen Cohen (D-TN) Susan Davis (D-CA) Ted Deutch (D-FL) Eliot Engel (D-NY)
Bob Filner (D-CA) Barney Frank (D-MA) Gabrielle Giffords (D-AZ) Jane Harman (D-CA) Steve
Israel (D-NY) Sander Levin (D-MI) Nita Lowey (D-NY) Jerrold Nadler (D-NY) Jared Polis (D-CO)
Steve Rothman (D-NJ) Jan Schakowsky (D-IL) Allyson Schwartz (D-PA) Adam Schiff (D-CA) Brad
Sherman (D-CA) Debbie Wasserman Schultz (D-FL) Henry Waxman (D-CA) Anthony Weiner (D-NY) John
Yarmuth (D-KY)
Here is a list of Israel's 'contributions' to US senators
Yesterday I had a conversation about my work, about how and why I started studying
inequality more than 30 years ago, what was my motivation, how it was to work on income
inequality in an officially classless (and non-democratic) society, did the World Bank care
about inequality etc. The interviewer and I thus came to some methodological issues and to
the inescapable influence of Marx on my work. I want to present it more systematically in
this post.
The most important of Marx's influences on people working in social sciences is, I think,
his economic interpretation of history. This has become so much part of the mainstream that
we do no longer associate it with Marx very much. And surely, he was not the only one or even
the first to have defined it. But he applied it most consistently and most creatively.
Even when we believe that such an interpretation of history is common-place today, this
still is not entirely so. Take the current dispute about the reasons that brought Trump to
power. Some (mostly those who believe that everything that went on previously was fine) blame
a sudden outburst of xenophobia, hatred, and misogyny. Others (like myself) see that outburst
as having been caused by long economic stagnation of middle class incomes, and rising
insecurity (of jobs, health care expenses, inability to pay for children's education). So the
latter group tends to place economic factors first and to explain how they led to racism and
the rest. There is a big difference between the two approaches -- not only in their diagnosis
of the causes but more importantly in their view of what needs to be done.
The second Marx's insight which I think is absolutely indispensable in the work on income
and wealth inequality is to see that economic forces that influence historical developments
do so through "large groups of people who differ in their position in the process of
production", namely through social classes. The classes can be defined by the difference in
the access to the means of production as Marx insisted but not only by that. Going back to my
work in socialist economies, there was a very influential left-wing critique of socialist
systems which held that social classes in that system were formed on the basis of
differential access to state power. Bureaucracy can indeed be seen as a social class. And not
only under socialism, but also in pre-capitalist formations where the role of the state as an
"extractor of the surplus value" was important, from the ancient Egypt to the medieval
Russia. Many African countries today can be usefully analyzed using that particular lens. In
my forthcoming "Capitalism, Alone" I use the same approach with respect to the countries of
political capitalism, notably China.
But to underline: class analysis is absolutely crucial for all students of inequality
precisely because inequality before it becomes an individual phenomenon ("my income is low")
is a social phenomenon that affects large swathes of people ("my income is low because women
are discriminated", or because African Americans are discriminated, or poor people cannot
access good education etc.). To give a couple of examples of what I have in mind here:
Piketty's work especially in "Top incomes in France" and Rodriguez Weber's book on Chilean
income distribution over the long-term ("Desarrollo y desigualdad en Chile (1850–2009):
historia de su economía política"). On the other hand, I think that Tony
Atkinson's work on British and various other income and wealth distributions failed to
sufficiently integrate political and class analysis.
This is also where the work on inequality parts ways with one of the scourges of modern
micro- and macro-economics, the representative agent. The role of the representative agent
was to obliterate all meaningful distinctions between large groups of people whose social
positions differ, by focusing on the observation that everybody is an "agent" who tries to
maximize income under a set of constraints. This is indeed trivially true. And by being
trivially true it disregards the multitude of features that make these "agents" truly
different: their wealth, background, power, ability to save, gender, race, ownership of
capital or the need to sell labor, access to the state etc. I would thus say that any serious
work on inequality must reject the use of representative agent as a way to approach reality.
I am very optimistic that this will happen because the representative agent itself was the
product of two developments, both currently on the wane: an ideological desire, especially
strong in the United States because of the McCarthy-like pressures to deny the existence of
social classes, and the lack of heterogeneous data. For example, median income or income by
decile was hard to calculate but GDP per capita was easy to get hold of.
The third extremely important Marx's methodological contribution is the realization that
economic categories are dependent on social formations. What are mere means of production
(tools) in an economy composed of small-commodity producers becomes capital in a capitalist
economy. But it goes further. The equilibrium (normal) price in a feudal economy, or in a
guild system where capital is not allowed to move between the branches will be different from
equilibrium prices in a capitalist economy with the free movement of capital. To many
economists this is still not obvious. They use today's capitalist categories for the Roman
Empire where wage labor was (to quote Moses Finley) "spasmodic, casual and marginal".
But even if they do not realize it fully, they de facto acknowledge the importance of
institutional set up of a society in determining prices not only of goods but also of the
factors of production. Again, we see it daily. Suppose that the world produces exactly the
same set of commodities and the demand for them is exactly the same, but it does so within
national economies that do not permit movement of capital and labor, and then does it in an
entirely globalized economy where borders do not exist. Clearly, the prices of capital and
labor (profit and wage) will be different in the latter, the distribution between capital
owners and workers will be different, prices will change as profits and wages change, incomes
will change too and so will consumption patterns, and ultimately even the structure of
production will be altered. Indeed this is what today's globalization is doing.
The fact that property relations determine prices and structure of production and
consumption is an extremely important insight. The historical character of any institutional
arrangement is thereby highlighted.
The last among Marx's contribution that I would like to single out -- perhaps the most
important and grandiose -- is that the succession of socio-economic formations (or more
restrictively, of the modes of production) is itself "regulated" by economic forces,
including the struggle for the distribution of the economic surplus. The task of economics is
nothing less than global historical: to explain the rise and fall not solely of countries but
of different ways of organizing production: why were nomads superseded by the sedentary
populations, why did Western Roman Empire break into a few large feudal-like demesnes and
serfs, while the Eastern Roman Empire remained populated by small landholders, and the like.
Whoever studies Marx can never forget the grandiosity of the questions that are being asked.
For such a student then using supply and demand curves to determine the cost of pizza in his
town will indeed be acceptable, but surely will never be seen as the prime or the most
important role of economics as a social science.
Rather than investing capital in new manufacturing capacity, new housing, public
utilities, :
'Investment capital' is used to buy an existing business showing a 6% ROI at a price of
twice its book value. New owner, wanting to make at least 6% return on their investment
(ROTI), brings in 'Al' to optimize operations and maximize sales. After 1 year of not getting
to anywhere near 6% ROI, 'Al' is let go and 'Jack' is brought in. Under 'Jack', the business
loses market share and ROI falls to 2... Nation loses ever more manufacturing capacity
Investment banker who thinks any viable business should return at least 12%, buys apple
orchard, can't get the return up, so sells the orchard to a real estate developer. Apple
imports soar.
Really big Investment Bank (RBIB) thinks a Certain Large Utility should pay its
shareholders 12%, buys controlling interest. In order to pay the 12%, management cuts back on
maintenance and safety, and contracts out significant operations. Over the next few years,
the utility; found responsible for multiple accidents leading to injury and death, and
destruction of property; is forced to file for bankruptcy.
RBIB thinks that all utilities should be privatized -- that markets are always best --
buys public water systems in undeveloped nations and charges the poor citizens 'market'
prices.
RBIBs and Wall Street, deciding that student loans are a good market opportunity, because
they can, buy themselves a few easily bent congresscritters (senators from ignorant, backward
states have inordinate power and can often be bought on the cheap), write the lender
favorable legislation for these bought and paid for; then get said passed.
Any debt is an investment opportunity, consumer debt is boundless, and if you own congress
credit card debt can be made tougher to escape than mortgages, bonds,
For the sophisticated wealthy investor there are hedge funds. Hedge funds can invest in
anything.
Venture capitalists invest in the high risk, potential high return start-ups and
emergents.
Rentiers, already having their capital invested, seek to increase their return. At times
rent increases are limited by competition. Not now in places like San Francisco, New York
City, Seattle, ... While prattling that the market always know best, greedy landlords in
California keep raising rents to 'market level' creating an ever raising rents positive
feedback loop (a rent bubble) that leads to ever more homelessness. The higher the rents, the
higher the property value, the higher the rents, ...
Can rent control be made to work efficiently indefinitely, and if so how? I have no proper
idea. Hong Kong used a seemingly efficient form of rent control for decades, though Milton
Friedman who advised the governor of the then British colony preferred not to notice. China
is working on rent control currently.
In SF it is impossible for rent control to work. There simply are not enough units to satisfy
demand. You cannot create millions of jobs while restricting the building of any new housing.
There is enough of a boom that the cost of materials is become a problem now that just a few
new units are in the pipeline. I don't see how you can have price controls on one side and a
artificial constraint on supply and not have all of the not rent controlled properties get
insanely expensive.
"In SF it is impossible for rent control to work. There simply are not enough units to
satisfy demand. You cannot create millions of jobs while restricting the building of any new
housing. There is enough of a boom that the cost of materials is become a problem now that
just a few new units are in the pipeline. I don't see how you can have price controls on one
side and a artificial constraint on supply and not have all of the not rent controlled
properties get insanely expensive."
Cant build affordable housing when Prop 13 prevents tax funded roads, water, sewer,
transit, schools to enanle building on the abundant vacant land.
I know you have likely bought the right-wing claim that rezoning single family to high
rise housing will increase the supply of modest cost single family houses, because the more
you restrict supply, the more supply you get.
California has had plenty of waves of rapid housing development which was quickly followed
by crisis requiring tax hikes and massive construction of infrastructure to provide roads,
water, schools, etc.
It was these tax hikes that led to popular support for Prop 13.
Around the same time, NH got stronger zoning plus the Union Leader "the pledge" campaign,
the pledge to starve NH of tax revenue to fund public investment. For the same reason: rapid
population growth from uncontrolled development causing crisis in public services like
schools, transportation, and pollution.
Tanstaafl
Only tax and spend allows affordable population growth.
I have written here a number of times about the perverse incentives of prop 13. SF needs to
build more mid and high rise. They need to replace the vacant warehouses with
midrise/highrise. This is the only way housing becomes affordable (that and inclusionary
housing that is reasonable and can get built). I certainly am no fan of single family zoning
nor am I for restricting supply.
"I certainly am no fan of single family zoning nor am I for restricting supply."
So, you hate most people living in SF because they make housing too expensive?
The past few decades have eliminated most single family homes in the city.
Now you want to eliminate all businesses that employ working class people?
Nature seems to be your enemy. You need a vocano, which can't exist in the bay area, to
add land so supply can increase, like in Hawaii.
For the Bay area, there is plenty of land, but no taxes to pay for building speedy
transportation, no taxes to pay for schools, water, sewer, etc. But its the speedy
transportation part that is the biggest barrier. For decades, new housing means slower
transportation, thanks to Prop 13, and its free lunch economics behind it.
"The true conservative seeks to protect the system of private property and free enterprise by
correcting such injustices and inequalities as arise from it. The most serious threat to our
institutions comes from those who refuse to face the need for change. Liberalism becomes the
protection for the far-sighted conservative. In the words of the great essayist [Lord
Macaulay, not named by FDR], "Reform if you would preserve." I am that kind of conservative
because I am that kind of liberal." FDR
Elizabeth Warren Announces She Is Running for
President in 2020 https://nyti.ms/2RoXMNo
NYT - Astead W. Herndon and Alexander Burns - Dec. 31, 2018
Senator Elizabeth Warren, the Massachusetts Democrat and a sharp critic of big banks and
unregulated capitalism, entered the 2020 race for president on Monday, becoming the first
major candidate in what is likely to be a long and crowded primary marked by ideological and
generational divisions in a Democratic Party desperate to beat President Trump.
In an 8:30 a.m. email to supporters on New Year's Eve -- 13 months before the first votes
will be cast in the Iowa caucuses -- Ms. Warren said she was forming an exploratory
committee, which allows her to raise money and fill key staff positions before a formal
kickoff of her presidential bid. Ms. Warren also released a video that leaned on the
populist, anti-Wall Street themes that are sure to be central to her campaign message.
"I've spent my career getting to the bottom of why America's promise works for some
families, but others, who work just as hard, slip through the cracks into disaster," she said
in the video. "And what I've found is terrifying: these aren't cracks families are falling
into, they're traps. America's middle class is under attack."
"But this dark path doesn't have to be our future," she continued. "We can make our
democracy work for all of us. We can make our economy work for all of us."
The race for the 2020 Democratic nomination is poised to be the most wide open since
perhaps 1992, with the party leaderless and lacking obvious front-runners. After a midterm
election that saw many women, liberals, minorities and young Democrats win, the primaries and
caucuses next year are likely to be fought over not only who is the most progressive
candidate but also which mix of identities should be reflected in the next nominee.
Ms. Warren, 69, is among the best-known Democrats seeking to take on Mr. Trump, who has
already announced his re-election campaign, but she also faces challenges: recent controversy
over her claims to Native American heritage, skepticism from the party establishment and a
lack of experience in a presidential race
She is running. I am glad EMichael likes her. About one of the only good things about him. I
suspect it's just that he likes her more than Bernie. He's anybody but Bernie.
Warren's 2020 agenda: break up monopolies, give workers control over corporations, fight
drug companies
A policy guide to the Massachusetts senator running for the White House
By Jeff Stein
December 31 at 3:17 PM
Sen. Elizabeth Warren (D-Mass.) is running for president on proposals to transfer
corporate power to workers, have the government produce prescription drugs and create
millions of new homes through federal intervention.
Warren has touted her policies as a way to use government to shift the benefits of
economic growth from big businesses and the rich to America's middle and working classes.
"America's middle class is under attack," Warren said in a video to supporters as she
announced her presidential exploratory committee on Monday. "How did we get here?
Billionaires and big corporations decided they wanted more of the pie. And they enlisted
politicians to cut them a bigger slice."
Warren does not see herself as a socialist, and has in interviews rejected the label by
saying she is a "capitalist to my bones." The senator does support some plans to have the
federal government take over certain industries, as she has signed on as a co-sponsor to a
bill from Sen. Bernie Sanders' (I-Vt.) to federalize national health insurance.
But of the key policies Warren is championing, most aim to use the federal government's
power to restructure markets -- rather than have the federal government take them over
directly. These policies reflect her perspective that a handful of concentrated economic
interests have come to unfairly dominate certain sectors, and that federal intervention can
reform markets to make them fairer by opening them up to greater competition.
Her housing bill, for instance, includes trying to repeal restrictive local zoning codes
rather than building new federally-owned housing, as some on the left have proposed.
Warren has focused on breaking up what she sees as monopolies in the technology sector and
other industries through new antitrust enforcement, and she has criticized anti-competitive
behavior by large tech companies.
And one of her most recently passed pieces of legislation in fact decreases the
government's footprint, deregulating the hearing aid industry by allowing Americans to
purchase them over the counter.
"If I could characterize Warren's ideology, it's that we should select the tool
appropriate to each economic problem we face, and not decide ahead of time that the same
solution is appropriate," said Marshall Steinbaum, fellow at the Roosevelt Institute, a
left-leaning think-tank.
Whether that approach can power Warren to the top of the primary pack or the White House
is another matter. To critics on her right, Warren's suite of policy proposals -- many of
which require tens of billions in new federal spending -- still look a lot like big
government socialism.
"Her impulse to mend but not end capitalism is the right one," said Jim Kessler, executive
vice president at Third Way, a center-left think-tank. "But I think some of her ideas, like
single-payer, may work for a base Democratic audience but not anybody else."
Here's a look at some of key pieces of legislation Warren has authored or supported.
Worker power over corporations. Warren's Accountable Capitalism Act, introduced this
summer, is perhaps her most distinctive contribution to the field of progressive U.S.
policy-making.
Most significantly, the plan would require large U.S. corporations to have 40 percent of
their board of directors selected by company employees. This proposal aims to redirect
trillions of dollars to American workers, as labor's share of the national income has
continued to fall despite rising corporate profits over the last several decades.
"It used to be that as firm profits grew, they grew for both workers and shareholders --
everybody gained when the economy as a whole gained," said Robert C. Hockett, a law professor
at Cornell University who helped Warren write the proposal. "The point is to give
wage-earners a much stronger voice in the determination of their own compensation."
This "codetermination" proposal would only apply to firms bigger than $1 billion, and is
modeled primarily after Germany, where workers have been given a seat on corporate boards
since the 1970's.
The bill would also require corporate expenditures on political candidates to be approved
by shareholders, and would eliminate incentives Warren says encourages corporate executives
to pay out dividends rather than plow profits back into their businesses.
Allen Sinai, chief economist at Decision Economics, said in theory he did not oppose
having more worker input on corporate boards, but said Warren's plan goes too far and would
be difficult to carry out.
"It would be a revolution in corporate America and extremely disruptive, and
counter-productive because it's so extreme," Sinai said. "It's far-fetched and totally
impractical."
Going after the monopoly power. In 2016, Warren delivered a speech calling for the federal
government to crackdown on tech giants and other corporate monopolies, arguing the country
needs a more robust antitrust policy.
A year later, the Democratic Party leadership incorporated antitrust reform in its "Better
Deal" blueprint, which allies of Warren credit in part to the senator's advocacy.
"People don't remember, but monopoly wasn't really an issue on people's radars at the
time," said Matt Stoller, policy director at the Open Markets Institute, where Warren
delivered the 2016 speech. "It was the first time a politician had criticized big tech for
being monopolistic in a big way."
Warren's demand that Apple, Google, and Amazon face antitrust scrutiny fits her broader
push on the dangers of monopoly power to the American economy. Earlier this month, Warren
unveiled a bill that would create a public option for pharmaceutical drugs, giving the
government the power to produce an affordable generic version of certain drugs that see big
price increases.
"Promoting competition used to be a central goal of economic policymaking," Warren wrote
in The Washington Post. "Today, in market after market, competition is dying as a handful of
giant companies gain more and more market share."
Similarly, earlier this year, Warren also unveiled a housing bill that would aim to reward
local governments for relaxing strict zoning laws that have prevented developers from
expanding the supply of housing. The plan also calls for investing billions more in
government spending in affordable housing projects, as well as helping black families
historically hurt by federal housing practices.
"Warren believes markets can be the mechanism for overthrowing the aristocrats who have
all the money," Stoller said.
Nationalize health insurance, $15 an hour minimum wage. But while many of her policies
stop short of having the government federalize parts of the private sector, Warren has also
embraced many of the ideas that align with the left.
The best example of this is Warren's support of Sanders' "Medicare for All" plan to
nationalize the health insurance industry. That plan rejects the Affordable Care Act's
market-based approach to reforming health insurance by allowing consumers to buy plans on
open exchanges, instead requiring the government to provide insurance to every American.
Similarly, Warren's plan to confront the opioid epidemic would require the federal
government to help treat millions of additional Americans who face addiction. Modeled after
the national response to the AIDS epidemic, that plan would pour $100 billion in federal
funding over 10 years to fighting the opioid epidemic.
Warren has also cosponsored a bill requiring a national $15 an hour minimum wage, as well
as a plan that would make it easier for workers to form and join unions.
Liz is starting a 2nd 6-year term,
with the next presidential election
just two years away. Now is as good
t5me for anyone with such job security
to go for the brass ring, as they say.
Not going to be a lot of useful work
done by Dems in the Senate anytime soon.
... With his political self-branding as "Middle-Class Joe," he is seen by Democratic
strategists as well equipped to make inroads into President Trump's base of blue-collar white
voters. ...
Outsider independent....LMAO - only according to the very narrowly limited range of
allowed speech that Chomsky references in his famous quote. Trump may not be a D.C. insider
in the recent traditional sense, but he's no outsider and he's no independent. His
three-letter agency actions and judicial nominations clearly point to longstanding
Republican/corporate/Wall Street/Israeli wish lists.
I'm happy about the Syria decision, but I have a suspicion that it's not as positive a
development as many of his supporters are touting.
Just remembered something about Arkin. This book: Code Names: Deciphering U.S. Military
Plans, Programs and Operations in the 9/11 World January 25, 2005 by William M. Arkin
https://books.google.com/books/about/Code_Names.html?id=KXLfAAAAMAAJ
In particular there was this one exercise called Vigilant Guardian, run by NORAD, simulating
terrorist attacks by hijackers which, curiously enough, happened to be in operation on the
very day the Saudi hijackers were actually conducting such attacks:
NORAD's next Vigilant Guardian exercise, in 2001, will actually be several days underway on
9/11 (see (6:30 a.m.) September 11, 2001). It will include a number of scenarios based
around plane hijackings, with the fictitious hijackers targeting New York in at least one
of those scenarios (see September 6, 2001, September 9, 2001, September 10, 2001, and (9:40
a.m.) September 11, 2001). [9/11 COMMISSION, 2004; VANITY FAIR, 8/1/2006]
It's just one of many stories that makes one wonder exactly how much pre-warning the Bush
Administration had about the 9/11 attacks, and whether there was a deliberate decision to
allow the hijackers to seize control of the planes without any interference. It did save the
Bush presidency, it did open the door to the Iraq invasion, and the Saudi intelligence
services were involved with helping the hijackers. All very suspicious, really. Point being,
Arkin's book is one of the few sources that lay out all those covert/overt program names, and
is a real treasure for anyone interested in the history of that era.
The Case for a Mixed Economy
Maybe not everything should be privatized
By Paul Krugman
A mind is a terrible thing to lose, especially if the mind in question is president of the
United States. But I feel like taking a break from that subject. So let's talk about
something completely different, and probably irrelevant.
I've had several interviews lately in which I was asked whether capitalism had reached a
dead end, and needed to be replaced with something else. I'm never sure what the interviewers
have in mind; neither, I suspect, do they. I don't think they're talking about central
planning, which everyone considers discredited. And I haven't seen even an implausible
proposal for a decentralized system that doesn't rely on price incentives and self-interest
– i.e., a market economy with private property, which most people would consider
capitalism.
So maybe I'm being dense or lacking in imagination, but it seems to be that the choice is
still between markets and some kind of public ownership, maybe with some decentralization of
control, but still more or less what we used to mean by socialism. And everyone either thinks
of socialism as discredited, or pins the label on stuff – like social insurance
programs – that isn't what we used to mean by the word.
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
In other words, while Communism failed, there's still a pretty good case for a mixed
economy – and public ownership/control could be a significant, although not majority,
component of that mix. My back of the envelope says that given what we know about economic
performance, you could imagine running a fairly efficient economy that is only 2/3
capitalist, 1/3 publicly owned – i.e., sort-of-kind-of socialist.
I arrive at that number by looking at employment data. What we see right away is that even
now, with all the privatization etc. that has taken place, government at various levels
employs about 15 percent of the work force – roughly half in education, another big
chunk in health care, and then a combination of public services and administration.
Looking at private sector employment, we find that another 15 percent of the work force is
employed in education, health, and social assistance. Now, a large part of that employment is
paid for by public money – think Medicare dollars spent at private hospitals. Much of
the rest is paid for by private insurers, which exist in their current role only thanks to
large tax subsidies and regulation.
And there's no reason to think the private sector does these things better than the
public. Private insurers don't obviously provide a service that couldn't be provided,
probably more cheaply, by national health insurance. Private hospitals aren't obviously
either better or more efficient than public. For-profit education is actually a disaster
area.
So you could imagine an economy in which the bulk of education, health, and social
assistance currently in the private sector became public, with most people at least as well
off as they are now.
Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already. Private health insurance
directly employs hundreds of thousands of people, with doubtful social purpose. And I'm sure
I'm missing a few others.
By and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership – but even there you could see some cases. Elizabeth Warren is
suggesting public manufacture of generic drugs, which isn't at all a stupid idea.
Put all of this together, and as I said, you could see an economy working well with
something like 1/3 public ownership.
Now, this wouldn't satisfy people who hate capitalism. In fact, it wouldn't even live up
to the old slogan about government controlling the economy's "commanding heights." This would
be more like government running the boiler in the basement. Also, I see zero chance of any of
this happening in my working lifetime.
But I do think it's worth trying to think a bit beyond our current paradigm, which says
that anything you could call socialist has been an utter failure. Maybe not so much?
"Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already."
I look at public utilities and see extremely weak regulation.
The free lunch economic criticism of public utility regulation until Jimmy Carter was it
increased consumer costs too much by paying too much to workers to provide too much service
and build too much capital.
And Germany and UK owned utilities more than the US, which meant that populists or
progressives, the Bernies and AOCs, demanded more mining of fossil fuels even when cheaper,
cleaner alternatives, were available.
How will Bernie and AOC create jobs when all their policies kill jobs, but prevent
creating new jobs in the US? Why won't they end up protecting coal mining jobs ten times more
than Trump? Or will they become Clinton: "your jobs that that made you middle class are never
coming back, and creating new jobs cost too much in higher taxes, so no new jobs".
Was and is the older liberal paradigm
Reinvigorated
Recall this De facto abandonment
Of organized labor
allowed full collaboration
Between progressive professional class
Elements
and major corporate bottom lines
ane and I want to take this opportunity to wish you and yours a very healthy and happy new
year.
It goes without saying that 2019 will be a pivotal and momentous time for our country and
the entire planet. As you know, there is a monumental clash now taking place between two very
different political visions. Not to get you too nervous, but the future of our country and
the world is dependent upon which side wins that struggle.
The bad news is that in the United States and other parts of the world, the foundations of
democracy are under severe attack as demagogues, supported by billionaire oligarchs, work to
establish authoritarian type regimes. That is true in Russia. That is true in Saudi Arabia.
That is true in the United States. While the very rich get much richer these demagogues seek
to move us toward tribalism and set one group against another, deflecting attention from the
real crises we face.
The good news is that, all across this country, people are getting politically involved
and are fighting back. They are standing up for economic, political, social and racial
justice.
In the last year we saw courageous teachers, in some of the most conservative states in
the country, win strikes as they fought for adequate funding for education.
We saw low paid workers at Amazon, Disney and elsewhere undertake successful struggles to
raise their wages to a living wage – at least $15 an hour.
We saw incredibly courageous young people, who experienced a mass shooting in their
school, lead successful efforts for commonsense gun safety legislation.
We saw diverse communities stand together in the fight against mass incarceration and for
real criminal justice reform.
We saw tens of thousands of Americans, from every walk of life, take to the streets and
demand that politicians respond to the global crisis of climate change.
As we enter 2019, it seems to me that we must mount a two-pronged offensive. First, we
must vigorously take on the lies, bigotry and kleptocratic behavior of the most irresponsible
president in the modern history of our country. In every way possible, we must stand up to
the racism, sexism, homophobia, xenophobia and religious intolerance of the Trump
administration.
But fighting Trump is not enough.
The truth is that despite relatively low unemployment, tens of millions of Americans
struggle daily to keep their heads above water economically as the middle class continues to
shrink.
While the rich get richer, 40 million live in poverty, millions of workers are forced to
work two or three jobs to pay the bills, 30 million have no health insurance, one in five
cannot afford their prescription drugs, almost half of older workers have nothing saved for
retirement, young people cannot afford college or leave school deeply in debt, affordable
housing is increasingly scarce, and many seniors cut back on basic needs as they live on
inadequate Social Security checks.
Our job, therefore, is not only to oppose Trump but to bring forth a progressive and
popular agenda that speaks to the real needs of working people. We must tell Wall Street, the
insurance companies, the drug companies, the fossil fuel industry, the military-industrial
complex, the National Rifle Association and the other powerful special interests that we will
not continue to allow their greed to destroy this country and our planet.
Politics in a democracy should not be complicated. Government must work for all of the
people, not just the wealthy and the powerful. As a new House and Senate convene next week,
it is imperative that the American people stand up and demand real solutions to the major
economic, social, racial and environmental crises that we face. In the richest country in the
history of the world, here are some (far from all) of the issues that I will be focusing on
this year. What do you think? How can we best work together?
Protect American democracy: Repeal Citizens United, move to public funding of elections
and end voter suppression and gerrymandering. Our goal must be to establish a political
system that has the highest voter turnout in the world and is governed by the democratic
principle of one person - one vote.
Take on the billionaire class: End oligarchy and the growth of massive income and wealth
inequality by demanding that the wealthy start paying their fair share of taxes. We must
rescind Trump's tax breaks for billionaires and close corporate tax loopholes.
Increase Wages: Raise the minimum wage to $15 an hour, establish pay equity for women and
revitalize the trade union movement. In the United States, if you work 40 hours a week, you
should not live in poverty.
Make health care a right: Guarantee health care for everyone through a Medicare-for-all
program. We cannot continue a dysfunctional healthcare system which costs us about twice as
much per capita as any other major country and leaves 30 million uninsured.
Transform our energy system: Combat the global crisis of climate change which is already
causing massive damage to our planet. In the process, we can create millions of good paying
jobs as we transform our energy system away from fossil fuel and into energy efficiency and
sustainable energy.
Rebuild America: Pass a $1 trillion infrastructure plan. In the United States we must not
continue to have roads, bridges, water systems, rail transport, and airports in
disrepair.
Jobs for All: There is an enormous amount of work to be done throughout our country
– from building affordable housing and schools to caring for our children and the
elderly. 75 years ago, FDR talked about the need to guarantee every able-bodied person in
this country a good job as a fundamental right. That was true in 1944. It is true today.
Quality Education: Make public colleges and universities tuition free, lower student debt,
adequately fund public education and move to universal childcare. Not so many years ago, the
United States had the best education system in the world. We much regain that status
again.
Retirement Security: Expand Social Security so that every American can retire with dignity
and everyone with a disability can live with security. Too many of our elderly, disabled and
veterans are living on inadequate incomes. We must do better for those who built this
country.
Women's rights: It is a woman, not the government, who should control her own body. We
must oppose all efforts to overturn Roe v. Wade, protect Planned Parenthood and oppose
restrictive state laws on abortion.
Justice for All: End mass incarceration and pass serious criminal justice reform. We must
no longer spend $80 billion a year locking up more people than any other country. We must
invest in education and jobs, not jails and incarceration.
Comprehensive immigration reform: It is absurd and inhumane that millions of hardworking
people, many of whom have lived in this country for decades, are fearful of deportation. We
must provide legal status to those who are in the DACA program, and a path to citizenship for
the undocumented.
Social Justice: End discrimination based on race, gender, religion, place of birth or
sexual orientation. Trump cannot be allowed to succeed by dividing us up. We must stand
together as one people.
A new foreign policy: Let us create a foreign policy based on peace, democracy and human
rights. At a time when we spend more on the military than the next ten countries combined, we
need to take a serious look at reforming the bloated and wasteful $716 billion annual
Pentagon budget.
In the New Year, let us resolve to fight like we have never fought before for a
government, a society and an economy that works for all of us, not just those on top.
The Ghost of Trump Chaos Future
Sorry, investors, but there is no sanity clause.
By Paul Krugman
Two years ago, after the shock of Donald Trump's election, financial markets briefly
freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly
unqualified for the job, temperamentally and intellectually, it wouldn't matter. He might
talk the populist talk, but he'd walk the plutocratic walk. He might be erratic and
uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things.
To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies,
are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned
sharply against the tweeter in chief.
But market behavior has, until recently, been a different story.
The reality that presidential unfitness matters for investors seems to have started
setting in only about three weeks (and around 4,000 points on the Dow) ago. First came the
realization that Trump's much-hyped deal with China existed only in his imagination. Then
came his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer, his abrupt
pullout from Syria, his firing of Jim Mattis and his shutdown of the government because
Congress won't cater to his edifice complex and build a pointless wall. And now there's buzz
that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of
justice, pressuring his acting attorney general (who is himself a piece of work) over the
Mueller investigation as the tally of convictions, confessions and forced resignations
mounts.
But let's play devil's advocate here: Does all this Trump chaos matter for the economy, or
for the stock market (which isn't at all the same thing)? At first sight, it's not all that
obvious.
After all, aside from the prospect of trade war, none of Individual-1's tantrums,
unpresidential as they are, have much direct economic impact. Even the government shutdown
will impose only a modest drag on overall spending.
And even trade war might not do that much harm, as long as it's focused mainly on China,
which is only one piece of U.S. trade. The really big economic risk was that Trump might
break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply
integrated with production in Canada and Mexico that this would have been highly disruptive.
But he settled for changing the agreement's name while leaving its structure basically
intact, and the remaining risks don't seem that large.
So why do investors seem to be losing their what-me-worry attitude? It's not so much what
Trump is doing, as what he might do in the future -- or, perhaps even more important, what he
might not do.
The truth is that most of the time, presidential actions don't matter much for the
economy; short-term economic management is mainly up to the Fed. But when bad things happen,
we do need the White House to step up. In 2008 and 2009, it mattered a lot that officials of
both the outgoing Bush administration and the incoming Obama administration responded
competently and intelligently to the financial crisis.
Unfortunately, there's no reason to expect a comparable degree of competence if something
goes wrong again.
Consider how the Trumpistas have responded to falling stocks. So far these are just a
minor economic bobble. Yet Trump himself, having claimed credit when stocks were rising, has
flown into a rage and lashed out; hence the attacks on Powell. Meanwhile, top officials are
still claiming that last year's tax cut was a triumph in the teeth of the evidence, and
issuing bizarre statements -- via Twitter -- about the health of the banks, which nobody was
questioning.
Now imagine how this administration team might cope with a real economic setback, whatever
its source. Would Trump look for solutions or refuse to accept responsibility and focus
mainly on blaming other people? Would his Treasury secretary and chief economic advisers
coolly analyze the problem and formulate a course of action, or would they respond with a
combination of sycophancy to the boss and denials that anything was wrong? What do you
think?
Let's be clear: There isn't an obvious crisis-level threat looming at the moment. But
growth is slowing, and as the bumper stickers don't quite say, stuff happens. And if and when
it does, the people who would be supposed to deal with it are the gang that can't think
straight. Merry Christmas.
"He might talk the populist talk, but he'd walk the plutocratic walk."
What does PK mean here by populist? Good or bad?
"In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things."
Is this true. Are wealthy investor worried about Trump in particular? He just cut their
taxes.
"To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms."
Not clear at all. Yes it had a large part to do with it. What was the Dems message? Did
they all talk about Trump?
Unfortunately PK is pulling this out of his behind to fill column space.
"Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A
CNBC survey finds that millionaires, even Republican millionaires, have turned sharply
against the tweeter in chief.""
Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them.
"Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them."
So the rich guys behind Sears are really really happy?
Why hasn't Trump created millions of Sears customers flush with cash shopping at Sears? My
guess is the prime Sears customer before 1990 voted for and supports Trump. Sears was the
store for rural America, especially when you add in Kmart.
On the other hand, my guess is neither Bezos nor Warren Buffett nor Elon Musk is paying
significantly less in taxes as a result of the Trump tax cuts.
The corporations Bezos owns have no profits so paid no taxes on profits before. Ditto with
Elon Musk.
Buffett structured his coorporation based on the 50% plus tax on profits of the 60s, 70s,
80s which promoted owning assets for the very long term, and the tax law vhanges promoting
asset churn, pump and dump, did not change his theory of "wealth", so hes done nothing to
benefit from the tax cuts, but he sees harm to his businesses flowing from the Trump taxes
and cost cutting taking money out of consumer pockets, hurting his extensive consumer
business holdings long run.
(Insurers as holding companies pay taxes on profits differently than a shareholder
business does, so by owning the entire corporattion with profits flowing to the holding
company and then used to pay claims, no taxes are due. But increasing assets is capital gains
that are not taxed until sold, but Buffett almost never sells assets, except at a loss, which
means no taxes owed.)
Buffett companies pay lots of taxes, but on labor costs and on property, but has never
paid taxes on wealth, and seldom on profits, which was by Keynesian tax policy design.
Profits paid to workers to build more assets is the Keynesian ideal. More capital assets
destroys wealth abd increases labor costs to exceed capital asset prices.
The problem today is too little capitalism, too much rent seeking, too much restriction by
rent seekers on capitalists.
Trump and his administration are rent seekers who want to make capital much scarcer. They
hate China and Germany which built too much capital. And Bezos who pays too much to workers
to build ever more capital, increases the number of workers paid too much.
Wonder what McConnell thinks of Bezos. Is building a big distribution center in Kentucky a
good thing? Or is driving up wages in Kentucky a bad thing? Is higher worker incomes a good
thing, or is the higher living costs that result from higher wages a bad thing? Is stealing
jobs from liberal coastal elite cities a good thing, or does driving up living costs in
Kentucky to catch up with coastal elite suburban living costs a bad thing?
"So the rich guys behind Sears are really really happy?"
The rich get most of the capital income, from rent, dividends, interest, etc. they win no
matter what. They're invested in EVERYTHING and pay minions to try to earn them more than
average.
Heads they win, tails we lose.
The main thing is worker power. Krugman's take is - forgive me - a little naive. Or maybe
it is just meant for the naive bien pensant plebes like you and me.
It's hard to tell with Krugman. At least he and DeLong admit what Piketty has reported
even if they don't dwell on it.
We are ruled by an oligarchy. Most of the income goes to this oligarchy no matter the rent
seeking and living costs and profits and asset values etc. They win no matter what and they
pay people to obfuscate and spread propaganda about how we're a meritocracy where people earn
what they deserve.
"The truth is that most of the time, presidential actions don't matter much for the economy;
short-term economic management is mainly up to the Fed."
Free lunch economics!
The Fed has zero authority to manage the economy.
The economy is workers paying workers, through intermediaries.
The Fed can buy labor IOUs so past and future labor prices do not fluctuate wildly and
thus cause too little or too much paying for labor based market speculation on labor
prices.
Ie, if market speculation is that future labor prices will be significantly lower, workers
will not be paid the higher current price in expectation profit will be made paying the lower
price in the future. The Fed can buy labor futures to keep future prices as high as they are
today. However, labor can only be traded as assets. The Fed can never set labor prices by
paying workers.
Again. The Fed can never set labor prices by paying workers.
So, if businesses and government decides to kill jobs, the Fed is totally powerless.
While Bush and Obama were president, the policy priority was cutting paying workers,
driven by conservatives in control of the GOP.
And since Trump, the conservatives have been even more vigously trying to kill payments to
workers,, but wanting much more consumption spending.
However, no one has found a way to consume without paying workers to at least deliver the
goods made by not paying US workers. And the boomers are cashing in labor IOUs earned before
1990 and 2000 when they paid higher taxes and higher consumer prices.
I accumulated all my labor IOUs before 2000, and I count on the Fed to keep them from
becoming worth less or, worse, worthless.
But all the Fed is doing is creating labor IOUs that Millennials will need to buy with
labor without consumption.
If they don't, the economy will crash like it has in Greece, Venezuela, Germany before the
rise of Hitler, ...
Being about the same age as Trump, I expect to not be around when that happens. Which
means Trump knows he's eagerly pillaging and plundering the future.
Tanstaafl.
Remember, Venezuela was the richest nation in Latin America, and then wealth was taxed for
redistribution, and the wealth has vanished into nothingness, nowhere. Ie, if the rich simply
took the wealth and left, where are the Venezuela multibillionaires living today with all the
stolen trillions in Venezuela wealth?
It's Cold, Dark and Lacks Parking. But Is This Finnish Town the World's Happiest?
By Patrick Kingsley
Dec. 24, 2018
141
Leer en español
KAUNIAINEN, Finland -- Jan Mattlin was having what counts as a bad day in Kauniainen.
He had driven to the town's train station and found nowhere to park. Mildly piqued, he
called the local newspaper to suggest a small article about the lack of parking spots.
To Mr. Mattlin's surprise, the editor put the story on the front page.
"We have very few problems here," recalled Mr. Mattlin, a partner at a private equity
firm. "Maybe they didn't have any other news available."
Such is the charmed life in Kauniainen (pronounced: COW-nee-AY-nen), a small and wealthy
Finnish town that can lay claim to being the happiest place on the planet.
Public Ownership Is Suitable for All Sectors
Matt Bruenig December 24, 2018
Paul Krugman has a piece in the New York Times where he argues in favor of a mixed
economy. The piece is meant to be a limited defense of public ownership and production
against those who categorically argue against government enterprises. But Krugman's argument
ends up being far too limited in my view. Due to the wonders of our financial system, public
ownership could be extended to the vast majority of the economy without presenting any
problems.
Here's Krugman:
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
He goes on to argue that the education, health care, and social assistance sectors, which
employ around one-third of US workers, are often better run by the government. He also
briefly dabbles in the idea that certain natural monopolies like utilities are also better
run publicly. But that's the limit of Krugman's imagination on these things. He concludes
that "by and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership."
Why Not Own It All?
When Krugman says the retail and manufacturing sectors are not suitable for public
ownership, I think he is suffering from a lack of imagination about how such public ownership
could be structured.
Public ownership generally comes in three forms:
1. General government (GG) services like education, health care, and social
assistance.
2. State-owned enterprises (SOEs) like utilities, transit systems, and the post
office.
3. Social wealth funds (SWFs) like the Alaska Permanent Fund that are able to own
basically anything.
Krugman only considers GG and SOEs in his piece. Thus, since he thinks retail and
manufacturing are not suitable as GG or SOEs, he concludes that they should not be done
publicly. But retail, manufacturing, and basically anything else not suitable for GG and SOEs
are suitable for SWFs.
The state can very competently own retail and manufacturing companies by simply buying up
their stock and acting like an institutional investor. For instance, a social wealth fund
created by the federal government could gradually buy up stock in Amazon and Walmart to get
into retail and buy up stock in US Steel and General Motors to get into manufacturing. The
latter is not even a hypothetical because the government did recently buy up almost all of
the GM stock during the financial crisis, though it subsequently sold off its stake.
The genius of modern finance has been to create corporate ownership arrangements that
allow basically anyone, including the government, to own shares of any company in any sector
while being as involved (or uninvolved) as they want to be in steering the company. A federal
social wealth fund, like the one we advocate, should be able to take advantage of modern
shareholding institutions to expand public ownership into every aspect of the US economy.
Why can't Krugman, an economist, clearly explain the destruction of the nation by neoliberals
destruction of economic theory, turning benefits into liabilities, and liabilities into
benefit, but only asymetricaly???
Hard core neoliberals cleverly attacked Adam Smith and Keynes so stealthily that even
Krugman rejects Adamm Smith and Keynes, and embraces free lunch economics.
No progressive today would support FDR or his advisors, including Eccles, who was much
smarter than anyone running the Fed since about 1970.
Hard core neoliberals want no money paid to workers, but they demand government ensure
consumers have lots of money to spend, far mote money than they earn. But, Hard core
neoliberals do not want government giving consumers money to spend to generate high profits
for Hard core neoliberals, but want the government to enable cHard core neoliberals get the
free money to rent to consumers, and then government punish consumers for not being able to
pay debt because they are not paid to work, because paying workers costs Hard core
neoliberals too much.
Just read a editorial from the anti government control of economy Heritage demanding a
branch of government, the Fed, control the economy, ie print more money, so businesses don't
have to pay consumers to buy stuff, ie, pay higher wages.
Free lunch economics is a total failure, yet hard core neoliberals argue its working
great, except [real] liberals keep pointing out its clear and obvious failures.
But hard core neoliberals should be thankful Krugman is not a liberal, but a free lunch
progressive in near total agreement with free lunch Hard core neoliberals.
In 1906 the great statistician Francis Galton observed a competition to guess the weight of
an ox at a country fair. Eight hundred people entered. Galton, being the kind of man he was,
ran statistical tests on the numbers. He discovered that the average guess was extremely close
to the weight of the ox. This story was told by James Surowiecki, in his entertaining book The
Wisdom of Crowds. 2
Not many people know the events that followed. A few years later, the scales seemed to
become less and less reliable. Repairs would be expensive, but the fair organiser had a
brilliant idea. Since attendees were so good at guessing the weight of an ox, it was
unnecessary' to repair the scales. The organiser would simply ask everyone to guess the weight,
and take the average of their estimates.
A new problem emerged, however. Once weight-guessing competitions became the rage, some
participants tried to cheat. They even tried to get privileged information from the farmer who
had bred the ox. But there was fear that, if some people had an edge, others would be reluctant
to enter the weight-guessing competition. With few entrants, you could not rely on the wisdom
of crowds. The process of weight discovery would be damaged.
So strict regulatory rules were introduced. The farmer was asked to prepare three monthly
bulletins on the development of his ox. These bulletins were posted on the door of the market
for everyone to read. If the farmer gave his friends any other information about the beast,
that information was also to be posted on the market door. And anyone who entered the
competition who had knowledge about the ox that was not available to the world at large would
be expelled from the market. In this way the integrity of the weight-guessing process would be
maintained.
Professional analysts scrutinised the contents of these regulatory' announcements and
advised their clients on their implications. They' wined and dined farmers; but once the
farmers were required to be careful about the information they' disclosed, these lunches became
less useful. Some smarter analysts realised that understanding the nutrition and health of the
ox wasn't that useful anyway. Since the ox was no longer being weighed -- what mattered was the
guesses of the bystanders -- the key' to success lav not in correctly assessing the weight of
the ox but in correctly' assessing what others would guess. Or what other people would guess
others would guess. And so on.
Some people -- such as old Farmer Buffett -- claimed that the results of this process were
more and more divorced from the realities of ox rearing. But he was ignored. True, Farmer
Buffett's beasts did appear healthy and well fed, and his finances ever more prosperous; but he
was a countryman who didn't really understand how markets work.
International bodies were established to define the rules for assessing the weight of the
ox. There were two competing standards -- generally accepted ox-weighing principles, and
international ox-weighing standards. But both agreed on one fundamental principle, which
followed from the need to eliminate the role of subjective assessment by any individual. The
weight of the ox was officially defined as the average of everyone's guesses.
One difficulty was that sometimes there were few, or even no, guesses of the weight of the
ox. But that problem was soon overcome. Mathematicians from the University of Chicago developed
models from which it was possible to estimate what, if there had actually been many guesses as
to the weight of the ox, the average of these guesses would have been. No knowledge of animal
husbandry was required, only a powerful computer.
By' this time, there was a large industry of professional weight-guessers, organisers of
weight-guessing competitions and advisers helping people to refine their guesses. Some people
suggested that it might be cheaper to repair the scales, but they' were derided: why go back to
relying on the judgement of a single auctioneer when you could benefit from the aggregated
wisdom of so many clever people?
And then the ox died. Amid all this activity', no one had remembered to feed it.
"... The 30-year U.S. yield fell to 2.91 percent on Thursday, the lowest since January 2018 ..."
"... The other interpretation is that the company chose to refinance with long-term fixed-rate debt because it sees the big drop in 30-year yields as unsustainable ..."
Berkshire, with the third-highest credit rating from both Moody's Investors Service and
S&P Global Ratings, is expected to price the debt on Thursday with a spread of 150 to 155
basis points above benchmark Treasuries. The 30-year U.S. yield fell to 2.91 percent on
Thursday, the lowest since January 2018.
The other interpretation is that the company chose to refinance with long-term fixed-rate
debt because it sees the big drop in 30-year yields as unsustainable. After all, if a borrower
expects interest rates to rise in the future, it would prefer to lock in a fixed rate now
rather than face higher payments down the road.
OPEC oil supply fell by 460,000 barrels per day (bpd) between November and December, to
32.68 million bpd, a Reuters survey found on Thursday, as top exporter Saudi Arabia made an
early start to a supply-limiting accord, while Iran and Libya posted involuntary declines.
OPEC, Russia and other non-members - an alliance known as OPEC+ - agreed last December to
reduce supply by 1.2 million bpd in 2019 versus October 2018 levels. OPEC's share of that cut
is 800,000 bpd.
"If OPEC is faithful to its agreed output cut together with non-OPEC partners, it would take
3-4 months to mop up the excess inventories," energy consultancy FGE said.
Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and
Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined
to diversify Europe's natural gas sources and find a long-term reliable market outlet for all
the recent Mediterranean gas discoveries. The three sides have reached an agreement in late
November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of
which hovers around $7 billion (roughly the same as rival TurkStream's construction cost). Yet
behind the brave facade, it is still very early to talk about EastMed as a viable and
profitable project as it faces an uphill battle with traditionally difficult Levantine
geopolitics, as well as field geology.
The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of
Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek
mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5
kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably
the longest, too, with an estimated length of 1900km. The countries involved proceed from the
premise that the pipeline's throughput capacity would be 20 BCM per year (706 BCf), although
previous estimates were within the 12-16 BCm per year interval. According to Yuval Steinitz,
the Israeli Energy Minister, the stakeholders would need a year to iron out all the remaining
administrative issues and 4-5 years to build the pipeline, meaning it could come onstream not
before 2025.
The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast
of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the
Greek mainland.
Cyprus,Crete,Greece, Italy....
Yes, very stable EU supply line going through the most stable countries in the EU.
Yeah, I'm having trouble with the sub sea depth numbers too, despite the route cuts the
conflicts to a half a dozen from an infinite number.
Intuitively, shipping LNG offers comparable delivery price albeit at lower volumes,and can
be done off shore.
Even here in bucolic Pensyltucky, delivery of natty to market is limited by a lack of
piping infrastructure, limiting the gas boom. It gives the tree huggers time to throttle the
business. Figuring that the political climate and costs are going to get better with time
passing is foolish.
Also considered is price, still cheap, cheap, cheap.
Our local natty supplier just applied for, and received a price reduction, effective next
fall.
Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer,
in case it is built it would become the deepest subsea gas pipeline, most probably the
longest, too...
oh yeah bitchez. nothing could possibly go wrong with that plan. /s
none has even discovered the goods yet ... and we are told we have to go to war about
building some (((PIPELINES))) on something to be discovered in the future ... if ever
....
as Abba Waterloo song said the history books on the shelf just keeps repeating itself ...
that is why is not that difficult to see through the BS ...
World War I we are told was over some archiduke being killed by some extremist ...as a
result 1/3 of the Serb nation was killed ...
No sooner did you pass the fake fireplace than you heard an ungodly roar, like the roar of a
mob ... It was the sound of well-educated young white men baying for money on the bond
market.
TOM WOLFE, The Bonfire of the Vanities. 1987
We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or
some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it
were profitable. ...
We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we
have a position. We don't take an hour or more for a lunch break. We don't demand a union. We
don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is
on your dinner plates, we'll eat that....
We aren't dinosaurs. We are smarter and more vicious than that, and we are going to
survive.
Reported by STACY-MARIE ISHMAEL, FT Alphaville, 30 April 2010
If [neoliberal] left is understood as Clinton DemoRats, then it's just a second war party. Just look at Hillary. Such an
anti-war hero.
Notable quotes:
"... For decades, a common myth pervading the American political arena has been that the left is anti-war. ..."
"... But they are as much opposed to war as Sen. Lindsey Graham (R-SC) – at least he is honest about his appetite for blood and desire for perpetual regime change, no matter who occupies the Oval Office. So, from where did this mendacity come? ..."
"... In 2008, the United States was entrenched in an election battle and two major wars – Afghanistan and Iraq. The Democrats portrayed themselves as the anti-war party, promising to correct the foreign disasters of the incumbent administration. Since then, it's as if former President George W. Bush never departed. The Democrats have championed military interventions, twiddled their thumbs under President Barack Obama, and nominated a hawk to lead the party in 2016. ..."
"... Today, the [neoliberla] left has united with the neoconservatives in opposition to President Donald Trump's decision to bring 2,000 troops home from Syria and potential plans to withdraw from Afghanistan. Because they loathe Trump so much and don't want him to be portrayed as a more peaceful president than his predecessor, leftists demand that U.S. forces permanently stay in the region, facing death or serious injury. ..."
"... Attempting to locate a handful of consistent anti-war Democrats is like trying to spot Vice President Mike Pence with a woman other than his wife at a restaurant: It's never going to happen. ..."
"... For the last century, virtually every war, invasion, and occupation have been given the stamp of approval by Democrats. President Woodrow Wilson dragged the U.S. into one of those wars-to-end-all- wars fiascos. President Harry Truman sent thousands of young men to their deaths in Korea, setting the stage for perpetual global interventionism. President Lyndon Baines Johnson escalated American involvement in Vietnam. The Democratic leadership approved of the Iraq War, and Obama destabilized an entire region, killed American citizens, and intensified the drone bombing campaign. ..."
"... Outside of Capitol Hill, the predominantly left-leaning mainstream media have never seen a war it didn't like. In the last two years alone, the vacuous TV commentators have employed the same two strategies: Demand action against Russia (eh, Paul Begala ?) and oppose President Trump for using diplomacy and other tactics to institute peace ..."
Otto von Bismarck once said, "People never lie so much as after a hunt, during a war or
before an election." For decades, a common myth pervading the American political arena has been that the left
is anti-war.
But they are as much opposed to war as Sen. Lindsey Graham (R-SC) – at least he is
honest about his appetite for blood and desire for perpetual regime change, no matter who
occupies the Oval Office. So, from where did this mendacity come?
In 2008, the United States was entrenched in an election battle and two major wars –
Afghanistan and Iraq. The Democrats portrayed themselves as the anti-war party, promising to
correct the foreign disasters of the incumbent administration. Since then, it's as if former
President George W. Bush never departed. The Democrats have championed military interventions,
twiddled their thumbs under President Barack Obama, and nominated a hawk to lead the party in
2016.
Progressives, the same ones who, under Republican administrations, routinely held massive
anti-war rallies on days that ended in "y," have been eerily silent for the last ten years.
Today, the [neoliberla] left has united with the
neoconservatives in opposition to President Donald Trump's decision to
bring 2,000 troops home from Syria and potential plans to
withdraw from Afghanistan. Because they loathe Trump so much and don't want him to be
portrayed as a more peaceful president than his predecessor, leftists demand that U.S. forces
permanently stay in the region, facing death or serious injury.
Is this a case of Freaky Friday politics, or has the left always been
pro-war?
Anti-War Democrats, Please Stand Up
Attempting to locate a handful of consistent anti-war Democrats is like trying to spot Vice
President Mike Pence with a woman other than his wife at a restaurant: It's never going to
happen.
Even Sen. Bernie Sanders (I-VT), the man who switches from Independent to Democrat when it
suits the occasion, has come out of the closet on occasion as a hawk. In addition to
supporting the so-called Little War in Kosovo in the 1990s, Sanders
revealed to ABC News in September 2015 that the U.S. could use its military forces when not
attacked and apply sanctions on adversaries.
For the last century, virtually every war, invasion, and occupation have been given the
stamp of approval by Democrats. President Woodrow Wilson dragged the U.S. into one of those
wars-to-end-all- wars fiascos. President Harry Truman sent thousands of young men to their
deaths in Korea, setting the stage for perpetual global interventionism. President Lyndon
Baines Johnson escalated American involvement in Vietnam. The Democratic leadership approved of
the Iraq War, and Obama destabilized an entire region, killed American citizens, and
intensified the drone bombing campaign.
Outside of Capitol Hill, the predominantly left-leaning mainstream media have never seen a
war it didn't like. In the last two years alone, the vacuous TV commentators have employed the
same two strategies: Demand action against Russia (eh, Paul
Begala ?) and oppose President Trump for using diplomacy and other tactics to institute
peace.
So, how exactly is the left anti-war?
The Born-Again Right
When it comes to foreign policy, there are now three wings of the GOP: hawks, doves, and
those who realize the doctrine of the last 20 years has failed.
One of the biggest surprises since Trump's election is that the right has become
increasingly more cautious about seeking dragons to slay and erecting Old Glory on every plot
of land in the world. House Republicans have
slashed foreign aid in the billions, Senate Republicans have voted to end America's
role in Yemen's humanitarian crisis, and prominent figures in the White House have asked one
simple question: Why should the United States be the policeman of the world?
Stephen Miller, a senior adviser to the president, recently
dismantled the hawkish Counterfeit News Network when he told Wolf Blitzer:
"What I'm talking about, Wolf, is the big picture of a country that through several
administrations had an absolutely catastrophic foreign policy that cost trillions and
trillions of dollars and thousands and thousands of lives and made the Middle East more
unstable and more dangerous. And let's talk about Syria. Let's talk about the fact -- ISIS is
the enemy of Russia. ISIS is the enemy of Assad. ISIS is the enemy of Turkey. Are we supposed
to stay in Syria generation after generation, spilling American blood to fight the enemies of
all those countries?"
Comments that should draw praise from the left have been met with mockery and
scorn.
US Foreign Policy
H.L. Mencken was right when he said that "every decent man is ashamed of the government he
lives under." There is no other area in government that should instill more shame in the
population than foreign policy.
The political theater of sending young men and women overseas to fight in wars is a
tragicomedy: a comedy for those who don't have to wield a weapon and a tragedy for those who
do. It is easy and comfortable for politicians and pundits, a paltry few of whom have ever done
any of the fighting, to shout platitudes as if they were reincarnated John Waynes.
It's clear that politicians of all stripes have blood on their hands. The only difference is
that some policymakers showcase this human flesh with pride, while others pretend to be
benevolent. Trump's foreign policy has not been perfect, but it has been far superior to what
has transpired over the years. To rebuke the president's withdrawal of soldiers in an NPC-like
manner makes you complicit to atrocity.
"... only 1 in 3 US citizen STEM graduates can actually find jobs these days. ..."
"... US citizen are left submitting their resumes into black holes because the tech firms have placed their HR function into bunkers with near zero accessibility to the professional community who wants to offer their services. ..."
"... many bright minds, in the prime of their lives, instead of contributing, are sitting around trying to figure out where they're going to get their next meal. ..."
You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter don't you call me 'cause I can't go,
I owe my soul to the company store.
Travis Merle wrote the song Sixteen Tons about working your life away in the coal mines and spending your whole paycheck–and then
some–at the company store. You had no other options in the corporate mining villages of the early twentieth century.
The most famous version of the song came from Tennessee Ernie Ford. Sixteen Tons was covered by many others, including Johnny
Cash, and even Elvis at some concerts though he never recorded it.
And South Park recently featured their own version in an episode called "Unfulfilled," about working for Amazon. Of course, South Park is a comedy cartoon series that parodies real-life events. They depicted Amazon fulfilment centers as the only available jobs in the small Colorado town. People worked in dangerous collaboration
with machines, and went home to spend their entire paycheck on Amazon.
Jeff Bezos was depicted as a telepathic villain . He would tune in to various
Alexa streams to gauge the mood of the town. And anyone who didn't do his bidding would have their Prime status revoked. Comparing Amazon to coal mines is funny because it exaggerates a fear in society. Everyone buys from Amazon, so the small businesses
go under. And everyone working for the small businesses goes to work for Amazon.
South Park did the same thing with a Walmart episode about a decade back. Walmart possessed some unknown power which compelled
people to shop there, they were powerless to resist. Even better if they could work there and get an employee discount despite the
low pay.
Just when American workers were getting comfortable and were delivering productivity improvements, "corporate America" dropped
the ball and started doing massive outsourcing and importation of H-1B workers. To such a severe extent that only 1 in 3 US citizen
STEM graduates can actually find jobs these days.
Even top grads from top schools are ignored while the red carpet is rolled out
to foreign national OPT and H-1B visa recipients. US citizen are left submitting their resumes into black holes because the tech
firms have placed their HR function into bunkers with near zero accessibility to the professional community who wants to offer their
services.
The loss to the economy due to such is enormous. So many bright minds, in the prime of their lives, instead of contributing, are
sitting around trying to figure out where they're going to get their next meal.
XXX
10 hours ago remove link
Being your own boss sounds great, but in fact most people are not 'wired' for that. Which is a good thing, because any hierarchal
organization requires that a few be leaders, with the majority being led. That's why tribes have one chief, nations have one King
or President. It's why there is one judge who presides over a trial, why there is one teacher to a classroom, and why we have many
times more soldiers than generals.
That is simply the reality. The folks who go on about how we should all become entrepreneurs and work for ourselves as a solution
to the noxious employment situation we find ourselves in are ignoring that reality. A world of 'all chiefs and no Indians' just doesn't
work, because most people are unable to function that way. That doesn't make them inferior, it doesn't make them suckers for working
for 'the man'...that this is not currently working out too well is a function of the incompetent way we've been handling the whole
employment-thing, not because too many are employed by others.
The ratio of leaders vs. followers is the way it is because that's what is needed for these systems to WORK. Furthermore, you
find this in ALL of nature as well...the pack has ONE leader, the hive has ONE Queen, even among single-celled organisms, the mitochondria
have assumed the leadership role and now control and direct all other cellular functions. We see this in the evolution of out own
bodies, which consist of many different systems all operating under the leadership of organized neural cells in the brain. You will
of course notice that these biological systems have something in common...they all work for the good of the WHOLE organism, not just
a few parts. This is a missing piece in most human-run systems, and is likely a reason most people tend to mistrust them and want
out.
There is nothing wrong with being a 'worker bee'! Not everyone in the church choir can sell a million albums...does that mean
everyone else should just say the hell with it and disband their choirs? When company A makes one guy the CEO, should all the other
employees quit in protest and go form their own companies? Then what is the CEO going to run? And who will work for all those new
companies?
Anyone who thinks Americans have some kind of problem with 'work' needs to examine the MESSAGING our society is sending about
work. I think the problem really lies there. Because competition without cooperation is just warfare. And boy, is THIS a society
at war with itself or what?
XXX 12 hours ago
All large systems are hierarchical. Feudalism was hierarchical. So in that sense they are similar, although in corporations there
are usually a lot more levels and a lot more people are 'not serfs', but something slightly higher up.
Hierarchies (as far as we know) are the only way to 'scale'. Look at any large system and you will see a hierarchy (roads, Internet,
vascular system, government, military, and yes, corporations).
Hierarchical systems may have undesirable elements for some e.g. inequality, but until someone comes up with a different way to
organize and run a large system, it is the only way. And, it was not 'designed', it is simply the natural outcome. As natural as
the blood flowing in your veins. To 'blame' natural systems for perceived drawbacks is like blaming 'math'.
XXX
14 hours ago (Edited) remove link
This article indicates that we live within a system built and controlled by others and that our only choice is how we respond
to that environment. Someone else writes the rules that favor them and the rest of us just have to live with it.
It's a political economy. Changing the rules changes the economy.
Metalredneck , 14 hours ago
I'm sure the resemblance to feudalism is a coincidence. /s
CHICAGO -- Saying it was ultimately a small price to pay in exchange for the splendid spectacle that has followed, millions of
Americans admitted Thursday that they didn't really mind having their Facebook data stolen if it meant getting to watch that
little fucker squirm.
SEATTLE -- Deciding at the last minute to hold off due to ethical concerns, Amazon founder
and CEO Jeff Bezos reportedly set aside his latest cost-cutting initiative Wednesday after
realizing it was actually human slavery. "On the surface, it seemed plausible -- owning our
employees' bodies, implementing a mandatory 18-hour workday, restricting their movements, and
not compensating them with anything besides minimal food and shelter -- but then it started to
sound really familiar in a bad way," said Bezos, who acknowledged his fears were confirmed when
Amazon's general counsel kept reporting back that such labor arrangements had been illegal
throughout the United States since 1865. "It's too bad; the increased efficiency and cost
savings would have been tremendous. And now I have to go explain to our shareholders why I
spent $1.8 million outfitting all of our managers with bullwhips, shackles, and branding
irons." Bezos went on to describe the setback as temporary, saying it wouldn't matter in five
to 10 years when his entire workforce was robots.
"... But systemic risk is an inherent feature of finance, and a disturbance in one area can quickly spread to others through global networks. ..."
"... John Kay has written about the inability to recognize and minimize systemic risk in financial systems in Other People's Money: The Real Business of Finance ..."
"... The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It. ..."
"... "The global financial network remains most susceptible to shocks coming from large central countries and countries with large financial systems (namely, the USA and the UK) " ..."
The ten-year anniversary of the global financial crisis has brought a range of analyses of
the current stability of the financial system (see, for example,
here ). Most agree that the banking sector is more robust now due to increased capital,
less leverage, more prudent balance sheets and better regulation. But systemic risk is an
inherent feature of finance, and a disturbance in one area can quickly spread to others through
global networks.
The growth of financial markets and institutions during the 1990s and 2000s benefitted many,
including those in emerging market economies that became integrated with world markets during
this period. But the large-scale extension of credit to the housing sector led to property
bubbles in the U.S., as well as in Ireland and Spain. The development of financial instruments
such as mortgage backed securities (MBS), collateralized debt obligations (CDOs), and credit
default swaps (CDS) were supposed to spread the risk of lenders in order to mitigate the impact
of a negative price shock. However, these instruments and the extension of credit to subprime
borrowers increased the vulnerability of financial institutions to reversals in the housing
markets. Risk increased in a non-linear fashion as balance sheets became highly leveraged, and
national regulators simply did not understand the nature and scale of these risks.
The holdings of assets across borders amplified the impact of the disruption of the U.S.
financial markets once housing prices fell. European banks that had borrowed dollars in order
to participate in the U.S. MBS markets found themselves exposed when dollar funding was no
longer available. The gross flows of money between the U.S. and Europe increased the ties
between their institutions and increased the fragility of their financial markets. It took the
the establishment of swap networks between the Federal Reserve and European central banks to
provide the necessary dollar funding.
John Kay has written about the
inability to recognize and minimize systemic risk in financial systems in Other
People's Money: The Real Business of Finance . He draws from engineers the lesson that
" stability and resilience requires conscious and systematic simplification, modularity, which
enables failures to be contained, and redundancy, which allows failed elements to be by-passed.
None of these features -- simplification, modularity, redundancy -- characterized the financial
system as is had developed in 2008."
Similarly, Ian Goldin of Oxford University
and Chris Kutarna examined the impact of rising financial complexity on the stability of
financial systems in the period leading up to the crisis: "Cumulative connective and
developmental forces produced a global financial system that was suddenly far bigger and more
complex than just a decade before. This made the new hazards harder to see and simultaneously
spread the dangers more widely -- to workers, pensioners, and companies worldwide."
Goldin and Mike Marithasan of KU Leuven also looked at the impact of increasing complexity
on financial systems in The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About
It. They use Iceland as an example of how complex financial relationships were
constructed with virtually no understanding of the consequences if they unraveled. They draw
several lessons for dealing with a more complex financial networks. These include global
oversight by regulators using systemic analysis, and the use of simple rules such as leverage
ratios rather than complex regulations.
The Basel III regulatory
regime follows this advice in a number of areas. But the basic vulnerability of financial
networks remains. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon and Mason A.
Porter have analyzed the interconnectedness of the global financial system in an IMF working
paper, "
Evolution of the Global Financial Network and Contagion: A New Approach ." They use a
multilayer network framework with data on foreign direct investment, portfolio equity and debt
and bank loans over the period 2008-15 to analyze the global financial network.
The authors compare the networks for the years 2009 and 2015, and report which countries are
systematically important in the networks. They find that the U.S. and the U.K. appear at the
top of these rankings in both of the selected years, although the cross-border holdings of U.S.
financial institutions has increased over time while those of the U.K.'s institutions fell.
China has moved up in the rankings, as have other Asian countries such as Singapore and South
Korea. The authors conclude that "The global financial network remains most susceptible to
shocks coming from large central countries and countries with large financial systems (namely,
the USA and the UK) "
A decade after the global crisis, the possibility of the rapid propagation of a financial
shock remains. There is more resiliency in those parts of the financial system that failed in
2008, but the current most vulnerable areas may not be identified until there is a new crisis.
Policymakers who ignore this reality will be tripped up when the next shock occurs, and they
will learn that "
The past is not dead. It's not even past ."
Bert Schlitz , January 2, 2019 3:12 pm
That is the paradox of low interest rates. They lower leverage and raise it at the same
time.
This cycles low interest rates have given business the ability to not spend "real" money
and instead borrow while keeping their actually savings, growing. This has created
artificially high real earnings reports, when the business simply hasn't been growing that
fast. At least corporate earnings of the mid-00's were "real" insofar as accounting. This
cycle is all debt based fantasies. As interest rises, Corporations won't be able to keep
their books cooked anymore and borrowing will decline. Exposing that will crush real earnings
and profits will vanish. The "exposure" will cause a run on high yield corporate bonds after
the owners figure out the tide has pulled out, destroying market liquidity. Causing a
panic.
This is why, if you want to get rid of financial problems in the modern financialized
systems, you need higher interest rates 1-2% above the rate of inflation ex-energy to keep
"good" leverage high and "bad" leverage low.
Poland and Ukraine cannot stop provoking laughter from international observers. After the
lunatic idea circulating in Ukraine of resurrecting the country's nuclear arsenal, it is
now Poland's turn to send shockwaves around Europe. Polish foreign minister Czaputowicz
proposed that France share its nuclear arsenal and hand over its seat on the United Nations
Security Council (UNSC) to the European Union. It is is worth noting that this suggestion did
not even receive an official comment from Paris, showing that there was little prospect of the
Polish idea being taken seriously . Warsaw continues its opposition to the EU's domestic
policies on migration and austerity, while in foreign policy, agrees with countries like
Ukraine and the United States, particularly the neocon faction opposed to Russia. If there is a
distinctive feature in the political proposals that come from Poland, it is an acute
Russophobia. The idea of hosting a US base on Polish territory, and assuming its
costs, is another Polish proposal. The Americans are serious considering taking them up on
the offer .
The Poles and the Ukrainians would be willing to sacrifice themselves on behalf of their
allies for the privilege of being able to poke the Bear. Fortunately for them, Paris, London
and Berlin have neither the military capabilities nor the suicidal intention to challenge
Moscow with permanent military bases on its border. Neither do they wish to share their nuclear
weapons with other EU countries, nor engage in any such hare-brained ideas that threaten
humanity as the American Aegis Ashore system or the planned US withdrawal from the INF
Treaty.
So read the headline in The Washington Post , Aug. 18, 2011.
The story quoted President Barack Obama directly:
"The future of Syria must be determined by its people, but President Bashar al-Assad is
standing in their way... the time has come for President Assad to step aside."
France's Nicolas Sarkozy and Britain's David Cameron signed on to the Obama ultimatum: Assad
must go!
Seven years and 500,000 dead Syrians later, it is Obama, Sarkozy, and Cameron who are gone.
Assad still rules in Damascus, and the 2,000 Americans in Syria are coming home. Soon, says
President Donald Trump.
But we cannot "leave now," insists Sen. Lindsey Graham, or "the Kurds are going to get
slaughtered."
Question: Who plunged us into a Syrian civil war, and so managed the intervention that were
we to go home after seven years our enemies will be victorious and our allies will "get
slaughtered"?
Seventeen years ago, the U.S. invaded Afghanistan to oust the Taliban for granting sanctuary
to al-Qaida and Osama bin Laden.
U.S. diplomat Zalmay Khalilzad is today negotiating for peace talks with that same Taliban.
Yet, according to former CIA director Mike Morell, writing in The Washington Post today, the
"remnants of al-Qaeda work closely" with today's Taliban.
It would appear that 17 years of fighting in Afghanistan has left us with these alternatives
:
Stay there, and fight a forever war to keep the Taliban out of Kabul,
or withdraw and let the Taliban overrun the place.
Who got us into this debacle?
After Trump flew into Iraq over Christmas but failed to meet with its president, the Iraqi
Parliament, calling this a "U.S. disregard for other nations' sovereignty" and a national
insult, began debating whether to expel the 5,000 U.S. troops still in their country.
George W. Bush launched Operation Iraq Freedom to strip Saddam Hussein of WMD he did not
have and to convert Iraq into a democracy and Western bastion in the Arab and Islamic
world.
Fifteen years later, Iraqis are debating our expulsion.
Muqtada al-Sadr, the cleric with American blood on his hands from the fighting of a decade
ago, is leading the charge to have us booted out. He heads the party with the largest number of
members in the parliament.
Consider Yemen. For three years, the U.S. has supported with planes, precision-guided
munitions, air-to-air refueling and targeting information, a Saudi war on Houthi rebels that
degenerated into one of the worst humanitarian disasters of the 21st century.
Belatedly, Congress is moving to cut off U.S. support for this war. Crown Prince Mohammed
bin Salman, its architect, has been condemned by Congress for complicity in the murder of
journalist Jamal Khashoggi in the consulate in Istanbul. And the U.S. is seeking a truce in the
fighting.
Who got us into this war? And what have years of killing Yemenis, in which we have been
collaborators, done to make Americans safer?
Consider Libya. In 2011, the U.S. attacked the forces of dictator Moammar Gadhafi and helped
to effect his ouster, which led to his murder.
Told of news reports of Gadhafi's death, Secretary of State Hillary Clinton joked, "We came,
we saw, he died."
The Libyan conflict has since produced tens of thousands of dead. The output of Libya's
crucial oil industry has collapsed to a fraction of what it was. In 2016, Obama said that not
preparing for a post-Gadhafi Libya was probably the "worst mistake" of his presidency.
The price of all these interventions for the United States?
Some 7,000 dead, 40,000 wounded and trillions of dollars.
For the Arab and Muslim world, the cost has been far greater. Hundreds of thousands of dead
in Afghanistan, Iraq, Syria, Yemen, and Libya, civilian and soldier alike, pogroms against
Christians, massacres, and millions uprooted and driven from their homes.
How has all this invading, bombing and killing made the Middle East a better place or
Americans more secure? One May 2018 poll of young people in the Middle East and North Africa
found that more of them felt that Russia was a closer partner than was the United States of
America.
The fruits of American intervention?
We are told ISIS is not dead but alive in the hearts of tens of thousands of Muslims, that
if we leave Syria and Afghanistan, our enemies will take over and our friends will be
massacred, and that if we stop helping Saudis and Emiratis kill Houthis in Yemen, Iran will
notch a victory.
In his decision to leave Syria and withdraw half of the 14,000 troops in Afghanistan, Trump
enraged our foreign policy elites , though millions of Americans cannot get out of there soon
enough.
In Monday's editorial celebrating major figures of foreign policy in the past half-century,
The New York Times wrote,
"As these leaders pass from the scene, it will be left to a new generation to find a way
forward from the wreckage Mr. Trump has already created."
"The Only Meddling "Russian Bots" Were Actually Demorats Experts
masquerading as progressive Republicans and Democrats"............FIFY
It's all they have left after being rendered politically irrelevant and statistically
insignificant in November 2016 by the deplorables. ROFLMAO.........this civil war needs to
die in federal government so we do not waste money in mass deportations to an established
island nation surrounded by 1000 nautical miles of water.
"Election tampering via false identity" sounds like the right kind of language for
a federal law -- but I'm betting there is something already out there (at state/fed level),
and am not wild about yet more laws (which [[[they]]] get to ignore anyway).
a text book case of "projection" by demorats -their own crimes of sedition and treason
projected onto trump via the russians.
one can only hope that Mueller has found the proof that DemoRats were responsible for
attempts to rig the presidential elections - aided and abetted by criminal journalists also
guilty of sedition and treason.
As if it ******* matters at this point. Get real. We are watching a display of raw power
right now. Well connected individuals are calling the shots right now, well outside of the
legal system. If you haven't realized that over the past 2 years, you haven't been paying
attention. Furthermore, no amount of factual proof is going to result in the actual criminals
being held to account. The thing that is most difficult for Americans to grasp is that they
do not control their own government and have not for many decades. They do not have an equal
system of justice. Instead, the US is ruled by a secret oligarchy which exists above the US
legal code. This is the harsh reality we are watching be revealed right now.
We're watching an attempted display of raw power...that hasn't been going as
planned. If it had, Trump would either be gone or automagically transformed into the next
iteration of BushBama. We are fly in the ointment...buzz buzz
No prosecution... our DOJ does not prosecute anything political... no matter how serious
the felony. Just ask the ***-maggots Hillary, Brennan, Comey, Clapper and Lynch.
Wow! What does Sherlock Holmes Mueller think of this? This story makes Mueller out to be
the biggest fraud of all time and his attorneys tantamount to the Keystone Cops. Where are
they on all this?
Disinfo. Interesting how 911 is getting a lot of attention lately. Uniformly we see
stories that 'expose' the people ... not actually behind it :)
Looks like the high profile (((scum))) are getting nervous. As well they should. Everybody
smells a rat, they doubt the official story, but they can't figure out where the (((stink)))
is coming from - yet.
This is really the ONLY way to get the truth these days; it's from hackers who appropriate
"secret" files that either the corrupt gubmint or private companies will not release.
i wonder if they also have files that show what happened to Malaysia Airlines 370?
Enough with the 9/11 ****. I am so sick and tired of still hearing about this 17.5 years
later as with the way people go on about it, you'd think millions of people died. Even if
evidence ever came out that proved it was an inside job (which I believe it was...sorry,
don't buy that a few groups of 3 or 4 guys with utility knives could successfully hijack 3 or
4 planes at the same time and then have 2 steel towers collapse in their own footprint
because of 2 holes and some fire burning for 30-50 minutes), it isn't going to matter to the
people who don't already believe it was an inside job. They won't care.
Well, along with the obvious reason for 911 to get us into continuous war in the ME for
Israhell, I have read Twin Towers were loaded with asbestos and litigation was about to go
forward on that; Bush Crime Family had long term securities maturing the origin of which
would reveal their Nazi roots; Gold in the vaults beneath TT; Building 7 was old CIA storage
loaded with historical documents of many crimes. Too bad these hackers just want to blackmail
OR that could be a ruse to release information.
The airplanes were neutralized because there was a Training Exercise scheduled, I believe
on the Left Coast. Just like the Kennedy assassination, Cheney, Bush, Rumsfeld had all the
bases covered due to their positions of power.
Architects and Engineers just announced a Grand Jury hearing in Manhattan is upcoming on
911. How do they expect to get a fair hearing in NYC which is more corrupt and complicit in
911 than the criminals running Commiefornika?
Families of the 9/11 victims sought redress immediately after the attacks.
Enter Kenneth Feinberg, highly celebrated and dedicated Zionist extremist, devoted to
Israel. Feinberg was appointed master of a huge $7 billion taxpayer funded Victims
Compensation Fund. Estimates put the total settlement amount at less than $3.5 billion
total for all the victims. Due to the lack of oversight, it's anyone's guess where the rest
of the tax dollars have gone. Ellen Mariani, a brave and fiery widow and 9/11 plaintiff,
included Feinberg in her lawsuit which was eventually forcibly settled.
Feinberg's inclusion in the suit was partially related to his success in bribing
Mariani's attorney to try to coerce his client to accept the fund's payout and attempt to
convince her that she was clinically insane. Feinberg was also appointed as the key clean
up man for the BP oil spill and he aggressively tried to strip plaintiffs of legal
representation by shrewdly leveraging the power of his dollar coffers. In fact, Kenneth
Feinberg has been the money-waving head cover-up artist of many government and corporate
crimes like Agent Orange, the 9/11 Attacks, the Virginia Tech Shooter scandal, the TARP
bailout, and the BP Oil spill.
For the 96 families who initially chose to forgo the fund in favor of a transparent
trial, Sheila Birnbaum was appointed special mediator between Hellerstein and the victims'
families. Birnbaum, another dedicated Zionist lawyer at the Israeli Skadden Arps,
effectively railroaded these brave families and forced them all to settle. Skadden Arps
introduces itself with the following on its website:
Many of our attorneys are thoroughly familiar with the legal structure, business
environment and political system of Israel, and several (including at the partner level)
are Israeli-born, native Hebrew speakers who have been admitted to the bars of both Israel
and New York. A number of our lawyers volunteer a significant amount of their time to
Jewish and Israeli causes, including the America-Israel Friendship League, the
Anti-Defamation League, the College of Management, the Conference of Presidents of Major
American Jewish Organizations, Elem, the Hebrew University of Jerusalem, The Jerusalem
Foundation and Miklat.
Alvin K Hellerstein and Michael Mukasey have been the Israeli connected, Talmudic
tag-team of NY federal judges that have dominated 9/11 related litigation. They've
effectively prevented all cases from the victims' families from being heard in court and
ensuring the maximum payout for the Zionist duo of Silverstein and Lowy from the insurance
companies.
Alvin Hellerstein is tied to 9/11 directly in his role as head gatekeeper on all 9/11
claims, preventing legal discovery, wrongful death and personal injury lawsuits from trial.
Judge Hellerstein is also intimately connected to other key Israeli players of the 9/11
massacre on multiple layers through his son, Joseph. Joseph Hellerstein worked for an
Israeli law firm, Amit, Pollack and Matalon, which represented ICTS, the Israeli firm
implicated in the attacks via passenger screening and airline security at Newark, Boston
Logan, and Dulles, the departure sites of the hijacked aircraft.
ICTS is owned by two Israelis, Ezra Harel and Menachem Atzmon, who was convicted in
Israel of fraud with partner and mayor of Jerusalem, Ehud Olmert. Olmert later became prime
minister of Israel. Olmert incidentally also made a secret trip to meet with then mayor of
NYC, Rudy Guiliani on the eve of 9/11, ostensibly to oversee their plot. He and other
Israeli officials were allowed to leave the US aboard an El Al plane when all other planes
were grounded on 9/11. ICTS was implicated in the 7/7 bombings in London as well.
Hellerstein and Mukasey just so happen to attend the exact same Orthodox, Zionist,
Kehilath Jeshrun synagogue in Manhattan. The synagogue openly states that it is "deeply
committed to the State of Israel and its citizens." How would Americans feel if Pakistani
Jihadists at the behest of Pakistan were implicated in 9/11 and two Pakistani Jihadist
Judges, who attended the same "radical" mosque, were blocking trials for the victims'
families to pursue legal discovery and preventing any presentation of evidence in a
wrongful death suit against an airline security intimately connected to one of the
aforementioned judges?
Hellerstein recently effectively blocked the last victim's family, the Bavises, from
ever having a day of trial against the government and airport security, forcing them to
settle out of court after a decade of his dedicated gatekeeping. His callous quote to the
96 families of victims of 9/11 will live in infamy: "We have to get past 9/11. Let it go.
Life is beautiful. Life is short. Live out your years. Take the award." Both father and son
Hellerstein also worked for Stroock, Stroock, and Lavan, a Rothschild funded law firm
which, incidentally, represented Larry Silverstein in his bid to lease the towers. How many
conflicts of interests can you count?
Families of the 9/11 victims sought redress immediately after the attacks.
Enter Kenneth Feinberg, highly celebrated and dedicated Zionist extremist, devoted to
Israel. Feinberg was appointed master of a huge $7 billion taxpayer funded Victims
Compensation Fund. Estimates put the total settlement amount at less than $3.5 billion
total for all the victims. Due to the lack of oversight, it's anyone's guess where the rest
of the tax dollars have gone. Ellen Mariani, a brave and fiery widow and 9/11 plaintiff,
included Feinberg in her lawsuit which was eventually forcibly settled.
Feinberg's inclusion in the suit was partially related to his success in bribing
Mariani's attorney to try to coerce his client to accept the fund's payout and attempt to
convince her that she was clinically insane. Feinberg was also appointed as the key clean
up man for the BP oil spill and he aggressively tried to strip plaintiffs of legal
representation by shrewdly leveraging the power of his dollar coffers. In fact, Kenneth
Feinberg has been the money-waving head cover-up artist of many government and corporate
crimes like Agent Orange, the 9/11 Attacks, the Virginia Tech Shooter scandal, the TARP
bailout, and the BP Oil spill.
For the 96 families who initially chose to forgo the fund in favor of a transparent
trial, Sheila Birnbaum was appointed special mediator between Hellerstein and the victims'
families. Birnbaum, another dedicated Zionist lawyer at the Israeli Skadden Arps,
effectively railroaded these brave families and forced them all to settle. Skadden Arps
introduces itself with the following on its website:
Many of our attorneys are thoroughly familiar with the legal structure, business
environment and political system of Israel, and several (including at the partner level)
are Israeli-born, native Hebrew speakers who have been admitted to the bars of both Israel
and New York. A number of our lawyers volunteer a significant amount of their time to
Jewish and Israeli causes, including the America-Israel Friendship League, the
Anti-Defamation League, the College of Management, the Conference of Presidents of Major
American Jewish Organizations, Elem, the Hebrew University of Jerusalem, The Jerusalem
Foundation and Miklat.
Alvin K Hellerstein and Michael Mukasey have been the Israeli connected, Talmudic
tag-team of NY federal judges that have dominated 9/11 related litigation. They've
effectively prevented all cases from the victims' families from being heard in court and
ensuring the maximum payout for the Zionist duo of Silverstein and Lowy from the insurance
companies.
Alvin Hellerstein is tied to 9/11 directly in his role as head gatekeeper on all 9/11
claims, preventing legal discovery, wrongful death and personal injury lawsuits from trial.
Judge Hellerstein is also intimately connected to other key Israeli players of the 9/11
massacre on multiple layers through his son, Joseph. Joseph Hellerstein worked for an
Israeli law firm, Amit, Pollack and Matalon, which represented ICTS, the Israeli firm
implicated in the attacks via passenger screening and airline security at Newark, Boston
Logan, and Dulles, the departure sites of the hijacked aircraft.
ICTS is owned by two Israelis, Ezra Harel and Menachem Atzmon, who was convicted in
Israel of fraud with partner and mayor of Jerusalem, Ehud Olmert. Olmert later became prime
minister of Israel. Olmert incidentally also made a secret trip to meet with then mayor of
NYC, Rudy Guiliani on the eve of 9/11, ostensibly to oversee their plot. He and other
Israeli officials were allowed to leave the US aboard an El Al plane when all other planes
were grounded on 9/11. ICTS was implicated in the 7/7 bombings in London as well.
Hellerstein and Mukasey just so happen to attend the exact same Orthodox, Zionist,
Kehilath Jeshrun synagogue in Manhattan. The synagogue openly states that it is "deeply
committed to the State of Israel and its citizens." How would Americans feel if Pakistani
Jihadists at the behest of Pakistan were implicated in 9/11 and two Pakistani Jihadist
Judges, who attended the same "radical" mosque, were blocking trials for the victims'
families to pursue legal discovery and preventing any presentation of evidence in a
wrongful death suit against an airline security intimately connected to one of the
aforementioned judges?
Hellerstein recently effectively blocked the last victim's family, the Bavises, from
ever having a day of trial against the government and airport security, forcing them to
settle out of court after a decade of his dedicated gatekeeping. His callous quote to the
96 families of victims of 9/11 will live in infamy: "We have to get past 9/11. Let it go.
Life is beautiful. Life is short. Live out your years. Take the award." Both father and son
Hellerstein also worked for Stroock, Stroock, and Lavan, a Rothschild funded law firm
which, incidentally, represented Larry Silverstein in his bid to lease the towers. How many
conflicts of interests can you count?
I went to go watch VICE – the story about how Dick Cheney took over the government
with the aid of his wife – Lynne Cheney. Vice is a film that seeks to bring complicated
information about the inner corruption in Washington and transform it into a digestible and
entertaining format. There is no question that Christian Bale delivered a very impressive
performance of how Dick Cheney really is – a secretive and distant man whose eyes were
always filled with naked contempt. Amy Adams gave a fantastic performance as well and captured
the real character of the former Second Lady Lynne Cheney who was very much like her husband
– ambitious, and equally just as ruthless.
While the film captures th e reality of what took place, it completely misses the real story
behind the scenes as to even how Cheney came to be Vice President. The film shows that he was
out of politics and had effectively retired for some time. It pretends that George Bush called
him to be his Vice President and they negotiate that Cheney will have most of the power and
Bush was too stupid to understand what he was agreeing to.
As always, for whatever reason, I seem to be always in the middle of just about every major
event for the past 30+ years. I have stated before that I was asked to fly around the country
and meet with Republicans who wanted to run for President. Prior to 1999, they were told I was
there to advise them on the world economy and how it functioned. I have been to White House
dinners and testified before Congress. I have taken calls from Washington in times of crisis.
So meeting with people who wanted to run for President was nothing unusual for me. The real
issue was not that I was giving them advice, but I was to assess whether they were capable of
comprehending how the world functioned economically as well as politically. I was regarded as
the unbiased adviser around the world. Europeans loved me because I was not one of them. They
knew I would advise according to the cycles and markets. I cannot even bring staff with me to
meetings in Brussels today for the problem because they are European and will have skin in the
game. The same was true when I was asked to fly to Beijing during the 1997 Asian Currency
Crisis .
The real story how Cheney got that power is significantly different from how the movie
portrayed that aspect. It did a fantastic job in covering what he did once in power, with the
exception of the meeting when 911 took place. The film portrays everyone in that room and its
sources were correct in saying they were all confused but Cheney was more concerned about
talking to his lawyer in that meeting. What I do know is that the first World Trade Center
bombers were in MCC prison in Manhattan and they were given markers by the recreation officer
Mr. Kumb. They drew on the walls of their cell the twin towers with planes flying into them one
year BEFORE the incident. In creating Home Land Security, Congress merely stated that various
agencies had information but did not share it with one another. Cheney had personal offices in
all the agencies and I believe he knew well what took place on 911.
The movie correctly portrays Donald Rumsfeld as his co-conspirator. Just the day before 911
on September 10th, the Inspector General reported that $2.3 trillion was missing from the
Defense Department accounting. Rumsfeld stated before Congress an investigation was necessary.
The next day, the plane that struck the Pentagon hit the precise room where all those records
were stored.
The World Trade Center 7 collapsed like a pancake when no plane ever touched it. That
building has all the evidence of many things we will never know about. I have 20 years worth of
recordings that would have been enough to put all the major New York trading banks in prison.
Tapes that admitted paying bribes to Russian officials and all sorts of market manipulations.
All of those tapes from my case vanished that same day. I personally believe that Cheney knew
what was in the works. The mere fact that the terrorists drew the WTC on the wall of their cell
1 year before and the MCC took pictures and made a big deal out of it tells me that information
had been passed on.
Now to the issue of Cheney becoming Vice President. I was asked to go to Texas to meet with
George Bush, Jr during the early summer of 1999. I was told that "this is different. He's
really stupid." Up to that point, the entire process I was involved in was to assess the
qualification of those who wanted to run for President. Suddenly I was told this was different.
When I asked why would you make someone stupid President, the response was "he has the
name."
I was then asked if I would accept the position of Chief Economic Adviser in the White
House. I was told BECAUSE Bush was stupid, which they pay well in the movie, that they needed
to surround him with smart people. I declined because to take such a position meant I would
have to shut down my operation. I said thanks, but no thanks.
The kingmakers who I would go visit potential candidates for selected the people to put
around Bush. Cheney had been Chief of Staff so he knew the game. He was inserted into the White
House DELIBERATELY to be the default, President. The movie makes it sound that Bush Junior had
to convince him to be his VP. That is absolutely NOT the way this selection process worked.
They would NEVER have allowed the very person they said was "stupid" to select the people to
run the country. They were selected to be the babysitters. I know this because I was one of the
people asked and declined.
StheNine , 4 minutes ago
"I have 20 years worth of recordings that would have been enough to put all the major New
York trading banks in prison."
so armstrong still has them?-9/11 was for nothing-no wonder cheneys so grumpy/lol
zob2020 , 8 minutes ago
" The mere fact that the terrorists drew the WTC on the wall of their cell 1 year before
and the MCC took pictures and made a big deal out of it tells me that information had been
passed on. "
Worst evidence ever. Only shows why those particular patsies were later chosen as the
alleged perpetrators. All proven via the 2000 degrees Celsius proof passports. As fake
evidence as evidence can be.
blind_understanding , 9 minutes ago
Coincidence/5489228
COINCIDENCE? 9/11 Truth: NORAD Running 9/11 "Drills" ON and DURING 9/11 ... https://www.youtube.com/watch?v=xshSt0Phf_s
NORAD just happened to be running the exact same scenario witnessed on the morning of 9/11 as
a "drill", ON THE MORNING OF SEPTEMBER 11, 2001.
blind_understanding , 11 minutes ago
The movie is part of the 9/11 coverup. Just the old damage control line: Arab Muslim
terrorists did it but the government was incompetent in not catching them beforehand.
---
The only way it was possible for a PASSENGER JET to crash into the pentagon - the most
heavily-defended building on earth, was for someone to STAND DOWN THE FIGHTER-JET
INTERCEPTORS! And Cheney did it!
At least, "passenger jet" was the official story. More likely it was a MISSILE
---
On September 11 2001 **** Cheney stood down North American Aerospace Defense Command (NORAD)
fighter-jet interceptors. - On June 1, 2001 NORAD and Pentagon standing orders to shoot down
errant or hijacked aircraft were revoked and replaced by a new order to stand down until they
were given orders by the President, Vice President or Secretary of Defense. --- copy of the
order: http://www.jonesreport.com/images/260607_docu_1.jpg
----
Don't forget 911 was an inside job.. Cheney did 911 for private central-bank owners and
blamed the Arabs, in order to make their enemies look like our enemies, so we would fight
their wars of colnial financial expansion. And Bush was his side-kick.
Ah, 9/11 the drawing on the cell is new-would like another source but no matter-
1. the ongoing and 9/11 specific drills-door hop galley,amalgam virgo,fema drills-the
number could be up to 50.
2. also,re: drills a norad drill with most of planes on the west coast near canada on
9/11
3. calls to airforce 1-the final call was Angel is next. Angel was code for potus on
af1.
4. ALL the planes crossed a single point on radar in eastern Penn.-swap outs?
5 israeli art students in wtc summer 01. the israeli van guys who stated on israeli tv
they "were there to document the event"
6.the french guys that filmed the first plane strike. did you know they also filmed the
2nd strike from the other side of the buildings and it shows the nose of the plane,with nose
intact exiting the north end going through the whole building!.
7. cleveland airport,nasa building/ oh and reports at lax on 9/11.
hugin-o-munin , 34 minutes ago
Is Armstrong in trouble? Why would he write a piece like this if he wasn't?
Many of us who have joined the architects and engineers for 911 truth know full well of
the impossibility of the official story when it comes to simple physics and some of us even
understand the impossibility of the main hoax narrative about the planes themselves. Whether
this article is meant to shield W or someone else from what's coming is a bit unclear but
when weaved in nonsense like 'the terrorists drew planes on the wall' it starts to smell.
It's not a huge stretch of the imagination to believe W never really personally decided a
thing in his whole life but was a puppet son guided into decisions that he did not fully
comprehend. Cheney, Rumsfeld, Wolfowitz, Bolton and the rest of the initial neocon clan
obviously helped orchestrate this reenactment scene of the Reichtag building fire which we
are living through the aftermath of today. Aside from being completely insane and diabolical
this mindset has robbed the United States of its most valuable asset - its almost obsessively
optimistic people set on overcoming any obstacle on its march through history. It almost
killed the spirit of liberty and individual freedom, I say almost because the patient is not
dead yet and there is still a sliver of hope. Whether or not hanging these traitors is part
of the cure is unclear but uncovering the whole truth certainly is.
Please support the Federal Grand Jury to Hear Evidence of WTC Demolition if you can:
"What I do know is that the first World Trade Center bombers were in MCC prison in
Manhattan and they were given markers by the recreation officer Mr. Kumb. They drew on the
walls of their cell the twin towers with planes flying into them one year BEFORE the
incident."
1- the "first' WTC bombing took lace in 1993
2- the FBI gave the perps explosives which the detonated in the basement of the WTC... no
planes were involved
3- Dept of Homeland Security opened 8 years after the first WTC bombing in 2001... not
sure what Armstrong is driving at... the whole essay is discombobulated... Try again... when
you're not drunk.
4- The idea that 9/11 was executed to prevent a Pentagon audit is petty weak... the
principals had long stated far more global ambitions to use a "New Pearl Harbor" event to
stampede the country into Perpetual War for the Wolfowitz Doctrine of Uni-Polar hegemony and
full spectrum dominance (and creating an Orwellian police state internally)
Normal , 1 hour ago
Dude says all of the recordings vanished that same day without specifically saying that
the collapse of building #7 destroyed all of the recordings. This does two things through
ambivalence. It releases the author of the suspicion that he still holds the recordings and
it suggests that he may still have a copy hidden. The result being a slightly diminished
chance that he still has a copy. The rest of the article was sparse but factually related.
It's rhetoric is somewhat tied to his acknowledgment that Bale made a very impressive
performance and extrapolating his experiences from there. He limits his 911 to what he knows
and what everyone suspects. The stupidity of Bush Jr. is accurate and the fact that the
United States of America is an oligopoly rather than a republic is well shown. I liked the
article very much. Now what?
uhland62 , 54 minutes ago
It is a complex topic with many layers. Weren't there also documents in there re Yamashita
Gold? You wouldn't want that out in the open, would you. Manafort 'happened' to be in the
Philippines 'working' for Marcos when the gold diggers were active there. He'd know but would
probably not say. Manafort returned (from his CIA work?) to every Rep. presidential campaign,
just like a good secret service operative would do.
And then there was Khashoggi. He would have known something about the Saudi 911 guys and
with whom they worked.
hugin-o-munin , 28 minutes ago
Excellent point. The White Dragon gold is secured and out of reach from the Rothschilds.
Once you start really looking into the 911 coup there are so many subplots and crimes that it
almost makes your mind spin. The entire Enron investigation, the fake bond story, the looted
gold vaults, the option trades and on and on.
JethroBodien , 1 hour ago
Spread the word folks. The most important issue of our generation
Let me fill you in. Classified "Matter of National Security"
Jungle Jim , 1 hour ago
What about gold?
Ms No , 1 hour ago
This sums up beautifully why anybody who buys the official story is an idiot.
"...on September 10th, the Inspector General reported that $2.3 trillion was missing from
the Defense Department accounting. Rumsfeld stated before Congress an investigation was
necessary. The next day, the plane that struck the Pentagon hit the precise room where all
those records were stored.
The World Trade Center 7 collapsed like a pancake when no plane ever touched it. That
building has all the evidence of many things we will never know about. I have 20 years worth
of recordings that would have been enough to put all the major New York trading banks in
prison. Tapes that admitted paying bribes to Russian officials and all sorts of market
manipulations. All of those tapes from my case vanished that same day. I personally believe
that Cheney knew what was in the works."
JethroBodien , 59 minutes ago
No passenger liner jumbo yet hit the pentagon on 9/11. Lets get that straight for
starters.
As if a jumbo jet's soft aluminum nose could have crashed through the inner and outer
rings of the penatgaon and punched a perfect round whole out the back. Look at all the photo
and video evidence of the Pentagon site that day and tell me you can find any recognizable
piece of a jumbo jet liner. Not to mention the multi-tone titanium engines.
Have you seen what birds do to the nose of a jet on impact?
hedgeless_horseman , 49 minutes ago
...on September 10th, the Inspector General reported that $2.3 trillion was missing from
the Defense Department accounting...
And it's gone.
It's all gone.
So, what are you going to do about it?
*****.
You. Me. Us.
We are all a bunch of pussies. Vaginas. Wimps.
**** you.
**** me.
**** us.
Happy New Year?
Horse ****.
07564111 , 35 minutes ago
it's gone for sure, more interesting though is what it was used for.
Omega_Man , 1 hour ago
Martin has deluded visions of grandiosity... and has developed a super computer to forsee
events
Rock On Roger , 1 hour ago
A Greg Hunter interview with Dave Janda. Lots of good stuff.
Martin you are full of ****. Anyone who has any kind of a physical engineering background
knows that those boxcutter boys had a lot of help. These are the ONLY steel frame high rises
to collapse because of fire, they collapsed into their basement and jet fuel does not burn
hot enough to cause steel to fail.
Building 7 collapsed because some desks and chairs were burning? If you believe that then
you should NEVER enter another high rise building as long as you live. They are far too
fragile and dangerous.
But of course they are not fragile, nor are they dangerous. 911 was a terrorist event. The
box cutter boys were just pawns however.
LeadPipeDreams , 2 hours ago
+1.
The first WTC bombers were CIA assets, so they weren't serving time in any Manhattan
clink. This article is just more propaganda promoting the "Islamic terrorists did it"
narrative. Sprinkled with half-truths, but ultimately misleading the reader in the wrong
direction.
philipat , 34 minutes ago
If there is a trial anywhere in any US court system, the billions these perps will spend
in bribes, threats and killings will guarantee it to be another complete sham
Not so fast. A Grand Jury has now been empanelled to look at 911. This is a very
encouraging development as the proceeding do not involve a defense but involves only several
highly reputable organizations (including AE911) presenting the facts to the jury. There is
so much accumulated evidence that the official narrative is nonsensical so a jury of ordinary
citizens, even without deep technical understanding, should be able to reach sensible
conclusions using common sense alone. What happens NEXT is the question!!
philipat , 2 hours ago
The next day, the plane that struck the Pentagon
Which plane would that be? Every crash involving a heavy commercial jetliner leaves
wreckage, especially the engines yet there was none. Etc. Same applies to the Shanksville
"crash". Even someone who knows nothing about aviation but watched a couple episodes of "Air
crash investigation" can see there is something wrong here.
But the above statement by Armstrong (Does anyone trust this Guy?) kind of calls into
question what he actually knows or, perhaps being charitable, is prepared to divulge?
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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By Jeffrey D Sachs November 8, 2019
Trump's backing of Saudi war in Yemen is 'business decision'
Surprise medical bills are in the news almost daily. Last Thursday, the White House called for legislation to protect patients from getting surprise doctor bills when they are rushed to the emergency room and receive care from doctors not covered by insurance at an in-network hospital.
"But the impotence one feels today -- an impotence we should never consider permanent -- does not excuse one from remaining true to oneself, nor does it excuse capitulation to the enemy, what ever mask he may wear. Not the one facing us across the frontier or the battle lines, which is not so much our enemy as our brothers' enemy, but the one that calls itself our protector and makes us its slaves. The worst betrayal will always be to subordinate ourselves to this Apparatus, and to trample underfoot, in its service, all human values in ourselves and in others."
"
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