F Financial Sector Induced Systemic Instability of Economy

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Financial Sector Induced Systemic Instability of Economy

While I believe in usefulness of capital markets, it is clear that they are double edge sword and that banks "in a long run" tend to behave like sociopathic individuals. Mr. Capone may have something to say about danger of banks :-).That means that  growth of financial sector represents a direct threat to the stability of the society. Positive feedback loops creates one financial crisis after another with the increasing magnitude leading up to a collapse of financial system like happened in 1927 and 2008.

News Casino Capitalism Recommended Links  Stability is destabilizing: The idea of Minsky moment Corruption of Regulators Quiet coup
Neoliberalism as a New Form of Corporatism Principal-agent problem Numbers racket Criminal negligence in financial regulation Corruption of FED Invisible Hand Hypothesis
The “Too Big To Fail” Problem In Goldman Sachs we trust Citi - The bank that couldn’t shoot straight JPMorgan AIG collapse Lehman
Free Markets Newspeak as Opium for regulators Derivatives Lobby Corrupts Congress Lobbying and the Financial Crisis Control Fraud
(crisis of corporate governance)
Stock Market with buybacks as a Ponzi scheme Derivatives
Small government smoke screen Financial Bonuses as Money Laundering Corporatist Corruption: Systemic Fraud under Clinton-Bush-Obama Regime Corporatism   Financial obesity
Webliography of heterodox economists HFT Aleynikov vs. Goldman Sachs Casino Capitalism Dictionary Financial Humor Etc
  "Minsky's financial instability hypothesis depends critically on what amounts to a sociological insight. People change their minds about taking risks. They don't make a one-time rational judgment about debt use and stock market exposure and stick to it. Instead, they change their minds over time. And history is quite clear about how they change their minds. The longer the good times endure, the more people begin to see wisdom in risky strategies."

The Cost of Capitalism: Understanding Market Mayhem and Stabilizing our Economic Future, by Robert Barbera

The flaw with Capitalism is that it creates its own positive feedback loop, snowballing to the point where the accumulation of wealth and power hurts people — eventually even those at the top of the food chain. ”

Uncle Billy Cunctator
In comment to Economic Donkeys

 
  Banks are a clear case of market failure and their employees at the senior level have basically become the biggest bank robbers of all time. As for basing pay on current revenues and not profits over extended periods of time, then that is a clear case of market failure --  
  The banksters have been able to sell the “talent” myth to justify their outsized pay because they are the only ones able to deliver the type of GDP growth the U.S. economy needs in the short term, even if that kills the U.S. economy in the long term. You’ll be gone, I’ll be gone.  
  Unfortunately, many countries go broke pursuing war, if not financially, then morally (are the two different? – this post suggests otherwise).

I occurs to me that the U.S. is also in that flock; interventions justified by grand cause built on fallacy, the alpha and omega of failure. Is the financial apparatchik (or Nomenklatura, a term I like which, as many from the Soviet era, succinctly describes aspects of our situation today) fated also to the trash heap, despite the best efforts of the Man of the hour, Ben Bernanke?

 

Introduction

Financialization is a Damocles sword hanging over the neoliberal society

While I believe in usefulness of capital markets, it is clear that they are double edge sword and that banks "in a long run" tend to behave like sociopathic individuals. Mr. Capone may have something to say about danger of banks :-).That means that growth of financial sector represents a direct threat to the stability of the society (Keynesianism and the Great Recession )

Without adult supervision, as it were, a financial sector that was already inherently unstable went wild. When the subprime assets were found to be toxic since they were based on mortgages on which borrowers had defaulted, highly indebted or leveraged banks that had bought these now valueless securities had little equity to repay their creditors or depositors who now came after them. This quickly led to their bankruptcy, as in the case of Lehman Brothers, or to their being bailed out by government, as was the case with most of the biggest banks. The finance sector froze up, resulting in a recession—a big one—in the real economy.

Neoliberal revolution, or, as Simon Johnson called it after "quite coup" (Atlantic), brought political power to the financial oligarchy deposed after the New Deal. Deregulation naturally followed, with especially big role played by corrupt Clinton administration.  Positive feedback loops creates one financial crisis after another with the increasing magnitude. "Saving and loans" crisis followed by dot-com crisis of  2000, which in turn followed by the collapse of financial system in 2008, which looks somewhat similar to what happened in 1927.  No prominent financial honcho, who was instrumental in creating "subprime crisis" was jailed.  Most remained filthy rich.

Unless the society puts severe limits on their actions like was done during New Deal,  financial firms successfully subvert the regulation mechanisms and take the society hostage.  But periodic purges with relocation of the most active promoters of "freedom for banks" (aka free market fundamentalism) under the smoke screen of "free market" promotion does not solve the problem of positive feedback loops that banks create by mere existence. That's difficult to do while neoliberal ideology and related neoclassical economy dominates the society thinking (via brainwashing), with universities playing especially negative role -- most of economics departments are captured by neoliberals who censor any heretics. So year after year brainwashing students enter the society without understanding real dangers that neoliberalism brought for them.  Including lack of meaningful employment opportunities.

Of course, most of high level officers of leading finance institutions which caused the crisis of 2008-2009 as a psychological type are as close to  gangsters as one can get. But there is something in their actions that does not depend on individual traits (although many of them definitely can be classified as psychopaths), and is more related to their social position.  This situation is somewhat similar to Bolsheviks coup d'état of 1917 which resulted in capturing Russia by this ideological sect.  And in this sense quite coupe of 1980 is also irreversible in the same sense as Bolsheviks revolution was irreversible:  the "occupation" of the country by a fanatical sect lasts until the population rejects the ideology with its (now apparent) utopian claims.

Bolshevism which lasted 75 years, spend in such zombie state the last two decades (if we assume 1991 as the year of death of Bolshevism, its ideology was dead much earlier -- the grave flaws in it were visible from late 60th, if not after the WWII).  But only  when their ideology was destroyed both by inability to raise the standard of living of the population and by the growing neoliberal ideology as an alternative (and a new, more powerful then Marxism high-demand cult) Bolsheviks started to lose the grip on their power in the country. As a result Bolsheviks lost the power only in 1991, or more correctly switched camps and privatized the country. If not inaptness of their last General Secretary, they probably could last more. In any case after the ideology collapsed, the USSR disintegrated (or more correctly turn by national elites, each of which wanted their peace of the pie).

The sad truth is that the mere growth of financial sector creates additional positive feedback loops and increases structural instability within both the financial sector itself and the society at large. Dynamic systems with strong positive feedback loops not compensated by negative feedback loops are unstable. As a result banks and other financial institution periodically generate a deep, devastating crisis. This is the meaning of famous Hyman Minsky phrase "stability is destabilizing".

In other words, financial apparatchiks (or Financial Nomenklatura, a term from the Soviet era, which succinctly describes aspects of our situation today) drive the country off the cliff because they do not have any countervailing forces, by the strength of their political influence and unsaturable greed. Although the following analogy in weaker then analogy with dynamic systems with positive feedback loops, outsized financial sector can be viewed in  biological terms as cancer.

Cancer, known medically as a malignant neoplasm, is a broad group of diseases involving unregulated cell growth. In cancer, cells divide and grow uncontrollably, forming malignant tumors, and invading nearby parts of the body. The cancer may also spread to more distant parts of the body through the lymphatic system or bloodstream. Not all tumors are cancerous; benign tumors do not invade neighboring tissues and do not spread throughout the body. There are over 200 different known cancers that affect humans.[1]

Like certain types of cancer they depend of weakening "tumor suppressor genes"  (via "Quiet coup" mechanism of acquiring dominant political power) which allow then to engage in uncontrolled growth, destroying healthy cells (and first of all local manufacturing).   

The other suspicion is the unchecked financialization always goes too far and the last N percent of financial activity absorbs much more resources (especially intellectual resources) and creates more potential instability than its additional efficiency-benefits (often zero or negative) can justify. It is hard to imagine that a Hedge Fund Operator of the Year does anything that is even remotely socially useful to justify his enormous (and lightly taxed) compensation. It is pure wealth redistribution up based on political domination of financial oligarchy.  Significant vulnerabilities  within the shadow banking system and derivatives are plain vanilla socially destructive. Yet they persist due to inevitable political power grab by financial oligarchy  (Quiet coup).

Again, I would like to stress that this problem of the oversized financial sector which produces one devastating crisis after another   is closely related to the problem of a positive feedback loops. And the society in which banks are given free hand inevitably degrades into "socialism for banks"  or "casino capitalism" -- a type of neoliberalism with huge inequality and huge criminality of top banking officers.  

Whether we can do without private banks is unclear, but there is sound evidence that unlike growth of manufacturing, private financial sector growth is dangerous for the society health and perverts society goals.  Like cult groups the financial world does a terrific job of "shunning" the principled individuals and suppressing dissent (by capturing and cultivating neoliberal stooges in all major university departments and press),  so self-destructing tendencies after they arise can't be stopped within the framework of neoliberalism. In a way financial firm is like sociopath inevitable produces its  trail of victims (and sociopaths might be useful in battles exactly due to the qualities such as ability to remain cool in dangerous situation, that make them dangerous in the normal course of events).

This tendency of society with unregulated or lightly regulated financial sector toward self-destruction was first formulated as "Minsky instability hypothesis" -- and outstanding intellectual achievement of American economic Hyman Minsky (September 23, 1919 – October 24, 1996). Who BTW was pretty much underappreciated (if not suppressed) during his lifetime because his views were different from  orthodox (and false) neoclassic economic theory which dominates US universities, Like flat Earth theory was enforce by Catholic church before, it is fiercely enforced by an army of well paid neoliberal economics, those Jesuits of modern era. Who prosecute heretics who question flat Earth theory even more efficiently then their medieval counterparts; the only difference is that they do not burn the literally, only figuratively ;-)

Minsky financial instability hypothesis

Former Washington University in St. Louis economics professor Hyman P. Minsky had predicted the Great Recession decades before it happened.  Hyman Minsky was a real student of the Great Depression, while Bernanke who widely is viewed as a scholar who studied the Great Depression, in reality was a charlatan, who just tried to explain the Great Depression from the positions of neo-classical economy. That's a big difference.

Minsky instability hypothesis ("stability is destabilizing" under capitalism) that emerged from his analysis of the Great Depression was based on intellectual heritage of three great thinkers in economics (my presentation is partially based on an outstanding lecture by Steve Keen Lecture 6 on Minsky, Financial Instability, the Great Depression & the Global Financial Crisis). We can talk about three source of influence, there authors writing of which touched the same subject from similar positions and were the base of Hyman Minsky great advance in understanding of mechanics of development of financial crisis under capitalism and the critical role of financial system in it (neoclassical economics ignores the existence of financial system in its analysis): 

  1. Karl Marx influence
  2. Irving Fisher influence
  3. Joseph Schumpeter influence

Karl Marx influence

Minsky didn't follow the conventional version of Marxism  . And it was dangerous for him to do so due to McCarthysm. Even mentioning of Marx might lead to strakism fromthe academy those years.  McCarthy and his followers in academy did not understand the difference between Marx great analysis of capitalism and his utopian vision of the future. Impliedly this witch hunt helped to establish hegemony of neoclassical economy in economic departments in the USA.

While Minsky did not cited Marx in his writings and did use Marx's Labor Theory of Value his thinking was definitely influenced by Marx’s critique of  finance. We now know that he read and admired the Capital. And that not accidental due to the fact that his parents were Mensheviks -- a suppressed after Bolshevik revolution more moderate wing of Russian Social Democratic Party that rejected the idea of launching the socialist revolution in Russia --  in their opinion Russia needed first to became a capitalist country and get rid of remnants of feudalism. They escaped from Soviet Russia when Mensheviks started to be prosecuted by Bolsheviks.

And probably the main influence on Minsky was not Marx's discussion  of finance in Volume I of Capital with a "commodity" model of money, but critical remarks scattered in   Volumes II & III (which were not edited by Marx by compiled posthumously by Engels), where he was really critical of big banks as well as Marx's earlier works (Grundrisse, Theories of Surplus Value) where Marx was scathing about finance:

"A high rate of interest can also indicate, as it did in 1857, that the country is undermined by the roving cavaliers of credit who can afford to pay a high interest because they pay it out of other people's pocket* (whereby, however, they help to determine the rate of interest  for all) and meanwhile they live in grand style on anticipated profits. 

Irving Fisher influence

The second source on which Minsky based his insights was Irving Fisher. Irving Fisher’s reputation destroyed by wrong predictions on stock market prices. In aftermath, developed theory to explain the crash and published it in his book  "The Debt Deflation Theory of Great Depressions". His main points are:

According to Fisher two key disequilibrium forces that push economic into the next economic crisis are debt and subsequent deflation

Joseph Schumpeter influence

Joseph Schumpeter was Joseph Schumpeter has more positive view of capitalism than the other two. He authored the theory of creative destruction as a path by which capitalism achieves higher and higher productivity. He capitalism as necessarily unstable, but for him this was a positive feature -- instability of capitalism the source of its creativity. His view of capitalism was highly dynamic and somewhat resembles the view of Marx (who also thought that capitalism destroys all previous order and create a new one):

Unlike Marx, who thought that the periodic crisis of overproduction  is the source of instability (as well as  gradual absolute impoverishment of workers), Minsky assumed that the key source of that instability of capitalist system is connected with the cycles of business borrowing and fractional bank lending, when "good times" lead to excessive borrowing leading to high leverage and overproduction and thus to eventual debt crisis (The Alternative To Neoliberalism ):

Minsky on capitalism:

The idea of Minsky moment is related to the fact that the fractional reserve banking periodically causes credit collapse when the leveraged credit expansion goes into reverse. And mainstream economists do not want to talk about the fact that increasing confidence breeds increased leverage. So financial stability breeds instability and subsequent financial crisis. All actions to guarantee a market rise, ultimately guarantee it's destruction because greed will always take advantage of a "sure thing" and push it beyond reasonable boundaries.  In other words, marker players are no rational and assume that it would be foolish not to maximize leverage in a market which is going up. So the fractional reserve banking mechanisms ultimately and ironically lead to over lending and guarantee the subsequent crisis and the market's destruction. Stability breed instability.

That means that fractional reserve banking based economic system with private players (aka capitalism) is inherently unstable. And first of all because  fractional reserve banking is debt based. In order to have growth it must create debt. Eventually the pyramid of debt crushes and crisis hit. When the credit expansion fuels asset price bubbles, the dangers for the financial sector and the real economy are substantial because this way the credit boom bubble is inflated which eventually burst. The damage done to the economy by the bursting of credit boom bubbles is significant and long lasting.

Blissex said...

«When credit growth fuels asset price bubbles, the dangers for the financial sector and the real economy are much more substantial.»

So M Minsky 50 years ago and M Pettis 15 years ago (in his "The volatility machine") had it right? Who could have imagined! :-)

«In the past decades, central banks typically have taken a hands-off approach to asset price bubbles and credit booms.»

If only! They have been feeding credit-based asset price bubbles by at the same time weakening regulations to push up allowed capital-leverage ratios, and boosting the quantity of credit as high as possible, but specifically most for leveraged speculation on assets, by allowing vast-overvaluations on those assets.

Central banks have worked hard in most Anglo-American countries to redistribute income and wealth from "inflationary" worker incomes to "non-inflationary" rentier incomes via hyper-subsidizing with endless cheap credit the excesses of financial speculation in driving up asset prices.

Not very hands-off at all.

Steve Keen is probably the most well know researcher who tried to creates model of capitalist economy based on Minsky work (  http://www.debtdeflation.com/blogs/manifesto/ )

John Kay in his January 5 2010 FT column very aptly explained the systemic instability of financial sector hypothesis: 

The credit crunch of 2007-08 was the third phase of a larger and longer financial crisis. The first phase was the emerging market defaults of the 1990s. The second was the new economy boom and bust at the turn of the century. The third was the collapse of markets for structured debt products, which had grown so rapidly in the five years up to 2007.

The manifestation of the problem in each phase was different – first emerging markets, then stock markets, then debt. But the mechanics were essentially the same. Financial institutions identified a genuine economic change – the assimilation of some poor countries into the global economy, the opportunities offered to business by new information technology, and the development of opportunities to manage risk and maturity mismatch more effectively through markets. Competition to sell products led to wild exaggeration of the pace and scope of these trends. The resulting herd enthusiasm led to mispricing – particularly in asset markets, which yielded large, and largely illusory, profits, of which a substantial fraction was paid to employees.

Eventually, at the end of each phase, reality impinged. The activities that once seemed so profitable – funding the financial systems of emerging economies, promoting start-up internet businesses, trading in structured debt products – turned out, in fact, to have been a source of losses. Lenders had to make write-offs, most of the new economy stocks proved valueless and many structured products became unmarketable. Governments, and particularly the US government, reacted on each occasion by pumping money into the financial system in the hope of staving off wider collapse, with some degree of success. At the end of each phase, regulators and financial institutions declared that lessons had been learnt. While measures were implemented which, if they had been introduced five years earlier, might have prevented the most recent crisis from taking the particular form it did, these responses addressed the particular problem that had just occurred, rather than the underlying generic problems of skewed incentives and dysfunctional institutional structures.

The public support of markets provided on each occasion the fuel needed to stoke the next crisis. Each boom and bust is larger than the last. Since the alleviating action is also larger, the pattern is one of cycles of increasing amplitude.

I do not know what the epicenter of the next crisis will be, except that it is unlikely to involve structured debt products. I do know that unless human nature changes or there is fundamental change in the structure of the financial services industry – equally improbable – there will be another manifestation once again based on naive extrapolation and collective magical thinking. The recent crisis taxed to the full – the word tax is used deliberately – the resources of world governments and their citizens. Even if there is will to respond to the next crisis, the capacity to do so may not be there.

The citizens of that most placid of countries, Iceland, now backed by their president, have found a characteristically polite and restrained way of disputing an obligation to stump up large sums of cash to pay for the arrogance and greed of other people. They are right. We should listen to them before the same message is conveyed in much more violent form, in another place and at another time. But it seems unlikely that we will.

We made a mistake in the closing decades of the 20th century. We removed restrictions that had imposed functional separation on financial institutions. This led to businesses riddled with conflicts of interest and culture, controlled by warring groups of their own senior employees. The scale of resources such businesses commanded enabled them to wield influence to create a – for them – virtuous circle of growing economic and political power. That mistake will not be easily remedied, and that is why I view the new decade with great apprehension. In the name of free markets, we created a monster that threatens to destroy the very free markets we extol.

While Hyman Minsky was the first clearly formulate the financial instability hypothesis, Keynes also understood this dynamic pretty well. He postulated that a world with a large financial sector and an excessive emphasis on the production of investment products creates instability both in terms of output and prices. In other words it automatically tends to generate credit and asset bubbles.  The key driver is the fact that financial professionals generally risk other people’s money and due to this fact have asymmetrical incentives:

This asymmetry is not a new observation of this systemic problem. Andrew Jackson noted it in much more polemic way long ago:

“Gentlemen, I have had men watching you for a long time and I 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 intend to rout you out, and by the grace of the Eternal God, will rout you out.”

This asymmetrical incentives ensure that the financial system is structurally biased toward taking on more risk than what should be taken. In other words it naturally tend to slide to the casino model, the with omnipresent reckless gambling as the primary and the most profitable mode of operation while an opportunities last.  The only way to counter this is to throw sand into the wheels of financial mechanism:  enforce strict regulations, limit money supplies and periodically jail too enthusiastic bankers. The latter is as important or even more important as the other two because bankers tend to abuse "limited liability" status like no other sector.

Asset inflation over the past 10 years and the subsequent catastrophe incurred is a way classic behavior of dynamic system with strong positive feedback loop.  Such behavior does not depends of personalities of bankers or policymakers, but is an immanent property of this class of dynamic systems. And the main driving force here was deregulation. So its important that new regulation has safety feature which make removal of it more complicated and requiring bigger majority like is the case with constitutional issues.

Another fact was the fact that due to perverted incentives, accounting in the banks was fraudulent from the very beginning and it was fraudulent on purpose.  Essentially accounting in banks automatically become as bad as law enforcement permits. This is a classic case of control fraud and from prevention standpoint is make sense to establish huge penalties for auditors, which might hurt healthy institutions but help to ensure that the most fraudulent institution lose these bank charter before affecting the whole system.  With the anti-regulatory zeal of Bush II administration the level of auditing became too superficial, almost non-existent. I remember perverted dances with Sarbanes–Oxley when it was clear from the very beginning that the real goal is not to strengthen accounting but to earn fees and to create as much profitable red tape as possible, in perfect Soviet bureaucracy style.

Deregulation also increases systemic risk by influencing the real goals of financial organizations. At some point of deregulation process the goal of higher remuneration for the top brass becomes self-sustainable trend  and replaces all other goals of the financial organization. This is the essence of  Martin Taylor’s, the former chief executive of Barclays,  article FT.com - Innumerate bankers were ripe for a reckoning in the Financial Times (Dec 15, 2009), which is worth reading in its entirety:

City people have always been paid well relative to others, but megabonuses are quite new. From my own experience, in the mid-1990s no more than four or five employees of Barclays’ then investment bank were paid more than £1m, and no one got near £2m. Around the turn of the millennium across the market things began to take off, and accelerated rapidly – after a pause in 2001-03 – so that exceptionally high remuneration, not just individually, but in total, was paid out between 2004 and 2007.

Observers of financial services saw unbelievable prosperity and apparently immense value added. Yet two years later the whole industry was bankrupt. A simple reason underlies this: any industry that pays out in cash colossal accounting profits that are largely imaginary will go bust quickly. Not only has the industry – and by extension societies that depend on it – been spending money that is no longer there, it has been giving away money that it only imagined it had in the first place. Worse, it seems to want to do it all again.

What were the sources of this imaginary wealth?

In the last two of these the bank was not receiving any income, merely “booking revenues”. How could they pay this non-existent wealth out in cash to their employees? Because they had no measure of cash flow to tell them they were idiots, and because everyone else was doing it. Paying out 50 per cent of revenues to staff had become the rule, even when the “revenues” did not actually consist of money.

In the next phase instability is amplified by the way governments and central banks respond to crises caused by credit bubble: the state has powerful means to end a recession, but the policies it uses give rise to the next phase of instability, the next bubble…. When money is virtually free – or, at least, at 0.5 per cent – traders feel stupid if they don’t leverage up to the hilt. Thus previous bubble and crash become a dress rehearsal for the next.

Resulting self-sustaining "boom-bust" cycle is very close how electronic systems with positive feedback loop behave and   cannot be explained by neo-classical macroeconomic models. Like with electronic devices the financial institution in this mode are unable to provide the services that are needed.

As Minsky noted long ago (sited from Stephen Mihm  Why capitalism fails Boston Globe):

Modern finance, he argued, was far from the stabilizing force that mainstream economics portrayed: rather, it was a system that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.

...our whole financial system contains the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.”

Minsky’s vision might have been dark, but he was not a fatalist; he believed it was possible to craft policies that could blunt the collateral damage caused by financial crises. But with a growing number of economists eager to declare the recession over, and the crisis itself apparently behind us, these policies may prove as discomforting as the theories that prompted them in the first place. Indeed, as economists re-embrace Minsky’s prophetic insights, it is far from clear that they’re ready to reckon with the full implications of what he saw.

And he understood the roots of the current credit bubble much better that neoclassical economists like Bernanke: 
As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled by the rise of far riskier borrowers - what [Minsky] called speculative borrowers, those whose income would cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose income could cover neither, and could only pay their bills by borrowing still further.

As these latter categories grew, the overall economy would shift from a conservative but profitable environment to a much more freewheeling system dominated by players whose survival depended not on sound business plans, but on borrowed money and freely available credit.

Minsky’s financial instability hypothesis suggests that when optimism is high and ample funds are available for investment, investors tend to migrate from the safe hedge end of the Minsky spectrum to the risky speculative and Ponzi end. Indeed, in the current crisis, investors tried to raise returns by increasing leverage and switching to financing via short-term—sometimes overnight— borrowing (Too late to learn?):

In the church of Friedman, inflation was the ol' devil tempting the good folk; the 1980s seemed to prove that, let loose, it would cause untold havoc on the populace. But, as Barbera notes:

The last five major global cyclical events were the early 1990s recession - largely occasioned by the US Savings & Loan crisis, the collapse of Japan Inc after the stock market crash of 1990, the Asian crisis of the mid-1990s, the fabulous technology boom/bust cycle at the turn of the millennium, and the unprecedented rise and then collapse for US residential real estate in 2007-2008. All five episodes delivered recessions, either global or regional. In no case was there a significant prior acceleration of wages and general prices. In each case, an investment boom and an associated asset market ran to improbable heights and then collapsed. From 1945 to 1985, there was no recession caused by the instability of investment prompted by financial speculation - and since 1985 there has been no recession that has not been caused by these factors.
Thus, meet the devil in Minsky's paradise - "an investment boom and an associated asset market [that] ran to improbable heights and then collapsed".

According the Barbera, "Minsky's financial instability hypothesis depends critically on what amounts to a sociological insight. People change their minds about taking risks. They don't make a one-time rational judgment about debt use and stock market exposure and stick to it. Instead, they change their minds over time. And history is quite clear about how they change their minds. The longer the good times endure, the more people begin to see wisdom in risky strategies."

Current economy state can be called following Paul McCulley a "stable disequilibrium" very similar to a state  a sand pile.  All this pile of  stocks, debt instruments, derivatives, credit default swaps and God know corresponds to a  pile of sand that is on the verse of losing stability. Each financial player works hard to maximize their own personal outcome but the "invisible hand" effect in adding sand to the pile that is increasing systemic instability. According to Minsky, the longer such situation continues the more likely and violent an "avalanche".

The late Hunt Taylor wrote, in 2006:

"Let us start with what we know. First, these markets look nothing like anything I've ever encountered before. Their stunning complexity, the staggering number of tradable instruments and their interconnectedness, the light-speed at which information moves, the degree to which the movement of one instrument triggers nonlinear reactions along chains of related derivatives, and the requisite level of mathematics necessary to price them speak to the reality that we are now sailing in uncharted waters.

"... I've had 30-plus years of learning experiences in markets, all of which tell me that technology and telecommunications will not do away with human greed and ignorance. I think we will drive the car faster and faster until something bad happens. And I think it will come, like a comet, from that part of the night sky where we least expect it."

This is a gold age for bankers as Simon Johnson wrote in New Republic (The Next Financial Crisis ):

Banking was once a dangerous profession. In Britain, for instance, bankers faced “unlimited liability”--that is, if you ran a bank, and the bank couldn’t repay depositors or other creditors, those people had the right to confiscate all your personal assets and income until you repaid. It wasn’t until the second half of the nineteenth century that Britain established limited liability for bank owners. From that point on, British bankers no longer assumed much financial risk themselves.

In the United States, there was great experimentation with banking during the 1800s, but those involved in the enterprise typically made a substantial commitment of their own capital. For example, there was a well-established tradition of “double liability,” in which stockholders were responsible for twice the original value of their shares in a bank. This encouraged stockholders to carefully monitor bank executives and employees. And, in turn, it placed a lot of pressure on those who managed banks. If they fared poorly, they typically faced personal and professional ruin. The idea that a bank executive would retain wealth and social status in the event of a self-induced calamity would have struck everyone--including bank executives themselves--as ludicrous.

Enter, in the early part of the twentieth century, the Federal Reserve. The Fed was founded in 1913, but discussion about whether to create a central bank had swirled for years. “No one can carefully study the experience of the other great commercial nations,” argued Republican Senator Nelson Aldrich in an influential 1909 speech, “without being convinced that disastrous results of recurring financial crises have been successfully prevented by a proper organization of capital and by the adoption of wise methods of banking and of currency”--in other words, a central bank. In November 1910, Aldrich and a small group of top financiers met on an isolated island off the coast of Georgia. There, they hammered out a draft plan to create a strong central bank that would be owned by banks themselves.

What these bankers essentially wanted was a bailout mechanism for the aftermath of speculative crashes -- something more durable than J.P. Morgan, who saved the day in the Panic of 1907 but couldn’t be counted on to live forever. While they sought informal government backing and substantial government financial support for their new venture, the bankers also wanted it to remain free of government interference, oversight, or control.

Another destabilizing fact is so called myth of invisible hand which is closely related to the myth about market self-regulation. The misunderstood argument of Adam Smith [1776], the founder of modern economics, that free markets led to efficient outcomes, “as if by an invisible hand” has played a central role in these debates: it suggested that we could, by and large, rely on markets without government intervention. About "invisible hand" deification, see The Invisible Hand, Trumped by Darwin - NYTimes.com.

The concept of Minsky moment

The moment in the financial system when the quantity of debt turns into quality and produces yet another financial crisis is called Minsky moment. In other words the “Minsky moment” is the time when an unsustainable financial boom turns into uncontrollable collapse of financial markets (aka financial crash). The existence of Minsky moments is one of the most important counterargument against financial market self-regulation.  It also expose free market fundamentalists such as "former Maestro" Greenspan as charlatans. Greenspan actually implicitly admitted that he is and that it was he, who was the "machinist"  who helped to bring the USA economic train off the rails in 2008 via deregulation  and dismantling the New Deal installed safeguards. 

Here how it is explained by Stephen Mihm in Boston Globe in 2009 in the after math of 2008 financial crisis:

“Minsky” was shorthand for Hyman Minsky, an American macroeconomist who died over a decade ago.  He predicted almost exactly the kind of meltdown that recently hammered the global economy. He believed in capitalism, but also believed it had almost a genetic weakness. Modern finance, he argued, was far from the stabilizing force that mainstream economics portrayed: rather, it was a system that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.

In other words, the one person who foresaw the crisis also believed that our whole financial system contains the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.”

Minsky believed it was possible to craft policies that could blunt the collateral damage caused by financial crises. As economists re-embrace Minsky’s prophetic insights, it is far from clear that they’re ready to reckon with the full implications of what he saw.

Minsky theory was not well received due to powerful orthodoxy, born in the years after World War II, known as the neoclassical synthesis. The older belief in a self-regulating, self-stabilizing free market had selectively absorbed a few insights from John Maynard Keynes, the great economist of the 1930s who wrote extensively of the ways that capitalism might fail to maintain full employment. Most economists still believed that free-market capitalism was a fundamentally stable basis for an economy, though thanks to Keynes, some now acknowledged that government might under certain circumstances play a role in keeping the economy - and employment - on an even keel.

Economists like Paul Samuelson became the public face of the new establishment; he and others at a handful of top universities became deeply influential in Washington. In theory, Minsky could have been an academic star in this new establishment: Like Samuelson, he earned his doctorate in economics at Harvard University, where he studied with legendary Austrian economist Joseph Schumpeter, as well as future Nobel laureate Wassily Leontief.

But Minsky was cut from different cloth than many of the other big names. The descendent of immigrants from Minsk, in modern-day Belarus, Minsky was a red-diaper baby, the son of Menshevik socialists. While most economists spent the 1950s and 1960s toiling over mathematical models, Minsky pursued research on poverty, hardly the hottest subfield of economics. With long, wild, white hair, Minsky was closer to the counterculture than to mainstream economics. He was, recalls the economist L. Randall Wray, a former student, a “character.”

So while his colleagues from graduate school went on to win Nobel prizes and rise to the top of academia, Minsky languished. He drifted from Brown to Berkeley and eventually to Washington University. Indeed, many economists weren’t even aware of his work. One assessment of Minsky published in 1997 simply noted that his “work has not had a major influence in the macroeconomic discussions of the last thirty years.”

Yet he was busy. In addition to poverty, Minsky began to delve into the field of finance, which despite its seeming importance had no place in the theories formulated by Samuelson and others. He also began to ask a simple, if disturbing question: “Can ‘it’ happen again?” - where “it” was, like Harry Potter’s nemesis Voldemort, the thing that could not be named: the Great Depression.

In his writings, Minsky looked to his intellectual hero, Keynes, arguably the greatest economist of the 20th century. But where most economists drew a single, simplistic lesson from Keynes - that government could step in and micromanage the economy, smooth out the business cycle, and keep things on an even keel - Minsky had no interest in what he and a handful of other dissident economists came to call “bastard Keynesianism.”

Instead, Minsky drew his own, far darker, lessons from Keynes’s landmark writings, which dealt not only with the problem of unemployment, but with money and banking. Although Keynes had never stated this explicitly, Minsky argued that Keynes’s collective work amounted to a powerful argument that capitalism was by its very nature unstable and prone to collapse. Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff.

This insight bore the stamp of his advisor Joseph Schumpeter, the noted Austrian economist now famous for documenting capitalism’s ceaseless process of “creative destruction.” But Minsky spent more time thinking about destruction than creation. In doing so, he formulated an intriguing theory: not only was capitalism prone to collapse, he argued, it was precisely its periods of economic stability that would set the stage for monumental crises.

Minsky called his idea the “Financial Instability Hypothesis.” In the wake of a depression, he noted, financial institutions are extraordinarily conservative, as are businesses. With the borrowers and the lenders who fuel the economy all steering clear of high-risk deals, things go smoothly: loans are almost always paid on time, businesses generally succeed, and everyone does well. That success, however, inevitably encourages borrowers and lenders to take on more risk in the reasonable hope of making more money. As Minsky observed, “Success breeds a disregard of the possibility of failure.”

As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled by the rise of far riskier borrowers - what he called speculative borrowers, those whose income would cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose income could cover neither, and could only pay their bills by borrowing still further. As these latter categories grew, the overall economy would shift from a conservative but profitable environment to a much more freewheeling system dominated by players whose survival depended not on sound business plans, but on borrowed money and freely available credit.

Once that kind of economy had developed, any panic could wreck the market. The failure of a single firm, for example, or the revelation of a staggering fraud could trigger fear and a sudden, economy-wide attempt to shed debt. This watershed moment - what was later dubbed the “Minsky moment” - would create an environment deeply inhospitable to all borrowers. The speculators and Ponzi borrowers would collapse first, as they lost access to the credit they needed to survive. Even the more stable players might find themselves unable to pay their debt without selling off assets; their forced sales would send asset prices spiraling downward, and inevitably, the entire rickety financial edifice would start to collapse. Businesses would falter, and the crisis would spill over to the “real” economy that depended on the now-collapsing financial system.

From the 1960s onward, Minsky elaborated on this hypothesis. At the time he believed that this shift was already underway: postwar stability, financial innovation, and the receding memory of the Great Depression were gradually setting the stage for a crisis of epic proportions. Most of what he had to say fell on deaf ears. The 1960s were an era of solid growth, and although the economic stagnation of the 1970s was a blow to mainstream neo-Keynesian economics, it did not send policymakers scurrying to Minsky. Instead, a new free market fundamentalism took root: government was the problem, not the solution.

Moreover, the new dogma coincided with a remarkable era of stability. The period from the late 1980s onward has been dubbed the “Great Moderation,” a time of shallow recessions and great resilience among most major industrial economies. Things had never been more stable. The likelihood that “it” could happen again now seemed laughable.

Yet throughout this period, the financial system - not the economy, but finance as an industry - was growing by leaps and bounds. Minsky spent the last years of his life, in the early 1990s, warning of the dangers of securitization and other forms of financial innovation, but few economists listened. Nor did they pay attention to consumers’ and companies’ growing dependence on debt, and the growing use of leverage within the financial system.

By the end of the 20th century, the financial system that Minsky had warned about had materialized, complete with speculative borrowers, Ponzi borrowers, and precious few of the conservative borrowers who were the bedrock of a truly stable economy. Over decades, we really had forgotten the meaning of risk. When storied financial firms started to fall, sending shockwaves through the “real” economy, his predictions started to look a lot like a road map.

“This wasn’t a Minsky moment,” explains Randall Wray. “It was a Minsky half-century.”

Minsky is now all the rage. A year ago, an influential Financial Times columnist confided to readers that rereading Minsky’s 1986 “masterpiece” - “Stabilizing an Unstable Economy” - “helped clear my mind on this crisis.” Others joined the chorus. Earlier this year, two economic heavyweights - Paul Krugman and Brad DeLong - both tipped their hats to him in public forums. Indeed, the Nobel Prize-winning Krugman titled one of the Robbins lectures at the London School of Economics “The Night They Re-read Minsky.”

Today most economists, it’s safe to say, are probably reading Minsky for the first time, trying to fit his unconventional insights into the theoretical scaffolding of their profession. If Minsky were alive today, he would no doubt applaud this belated acknowledgment, even if it has come at a terrible cost. As he once wryly observed, “There is nothing wrong with macroeconomics that another depression [won’t] cure.”

But does Minsky’s work offer us any practical help? If capitalism is inherently self-destructive and unstable - never mind that it produces inequality and unemployment, as Keynes had observed - now what?

After spending his life warning of the perils of the complacency that comes with stability - and having it fall on deaf ears - Minsky was understandably pessimistic about the ability to short-circuit the tragic cycle of boom and bust. But he did believe that much could be done to ameliorate the damage.

To prevent the Minsky moment from becoming a national calamity, part of his solution (which was shared with other economists) was to have the Federal Reserve - what he liked to call the “Big Bank” - step into the breach and act as a lender of last resort to firms under siege. By throwing lines of liquidity to foundering firms, the Federal Reserve could break the cycle and stabilize the financial system. It failed to do so during the Great Depression, when it stood by and let a banking crisis spiral out of control. This time, under the leadership of Ben Bernanke - like Minsky, a scholar of the Depression - it took a very different approach, becoming a lender of last resort to everything from hedge funds to investment banks to money market funds.

Minsky’s other solution, however, was considerably more radical and less palatable politically. The preferred mainstream tactic for pulling the economy out of a crisis was - and is - based on the Keynesian notion of “priming the pump” by sending money that will employ lots of high-skilled, unionized labor - by building a new high-speed train line, for example.

Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government - or what he liked to call “Big Government” - should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

While economists may be acknowledging some of Minsky’s points on financial instability, it’s safe to say that even liberal policymakers are still a long way from thinking about such an expanded role for the American government. If nothing else, an expensive full-employment program would veer far too close to socialism for the comfort of politicians. For his part, Wray thinks that the critics are apt to misunderstand Minsky. “He saw these ideas as perfectly consistent with capitalism,” says Wray. “They would make capitalism better.”

But not perfect. Indeed, if there’s anything to be drawn from Minsky’s collected work, it’s that perfection, like stability and equilibrium, are mirages. Minsky did not share his profession’s quaint belief that everything could be reduced to a tidy model, or a pat theory. His was a kind of existential economics: capitalism, like life itself, is difficult, even tragic. “There is no simple answer to the problems of our capitalism,” wrote Minsky. “There is no solution that can be transformed into a catchy phrase and carried on banners.”

It’s a sentiment that may limit the extent to which Minsky becomes part of any new orthodoxy. But that’s probably how he would have preferred it, believes liberal economist James Galbraith. “I think he would resist being domesticated,” says Galbraith. “He spent his career in professional isolation.”

Stephen Mihm is a history professor at the University of Georgia and author of “A Nation of Counterfeiters” (Harvard, 2007). © Copyright 2009 Globe Newspaper Company.

 

Some important albeit random (and overlapping) points about instability of financial system

The first thing to understand is that attempt to weaken positive feedback looks via regulation, approach that can be called  “regulation as a Swiss knife” does not work without law enforcement and criminal liability for bankers, as there is an obvious problem of corruption of regulators. In this sense the mechanism of purges might be the only one that realistically can work.

In other words it’s unclear who and how can prevents the capture of regulators as financial sector by definition has means to undermine any such efforts. One way this influence work is via lobbing for appointment of pro-financial sector people in key positions. If such "finance-sector-selected" Fed chairman does not like part of Fed mandate related to regulation it can simply ignore it as long as he is sure that he will be reappointed. That happened with Greenspan.  After such process started it became irreversible and only after a significant, dramatic shock to the system any meaningful changes can be instituted and as soon as the lessons are forgotten work on undermining them resumes.

In essence, the Fed is a political organization and Fed Chairman is as close to a real vice-president of the USA as one can get.  As such Fed Chairman serves the elite which rules that country, whether you call them financial oligarchy or some other name. Actually Fed Chairman is the most powerful unelected official in the USA. If you compare this position to the role of the Chairman of the Politburo  in the USSR you’ll might find some interesting similarities.

In other words it is impossible to prevent appointment of another Greenspan by another Reagan without changes in political power balance.  And the transition to banana republic that follows such appointment is irreversible even if the next administration water boards former Fed Chairman to help him to write his memoirs.  That means that you need to far-reaching reform of political system to be able to regulate financial industry and you need to understand that the measures adopted need vigilant protection as soon as the current crisis is a distant history.

Additional reading

Several other source of financial instability were pointed out by others:

There are some outstanding lectures and presentation on YouTube on this topic. Among them:

See an expended list at Webliography of heterodox economists

Dr. Nikolai Bezroukov


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[In casino capitalism] financial institutions make a living screwing over their customers so their biggest concern is how to avoid losing lawsuits when they get sued

Why Wall Street Ignores Real Risk
And Why History Will Repeat Itself

[Jul 24, 2021] Woke Nasdaq's Boardroom Diversity Push

Neoliberal oligarchy fight against income redistribution by pushing perverted social justice smoke screen and in effect can turn the USA in South Africa. Money quote from comments: "If I read NASDAQ's proposal for Board representation in the Onion, I would have thought that even these jokesters have exceeded the creativity threshold of ridiculousness I thought was possible." and "What about the Mentally Ill? Do they get a seat? How about the Homeless?"
Three words about famele CEO and board room members: Elizabeth Holmes, Theranos. BTW what is unclear in NASDAQ bold critical race theory support is: Can we exchange one black member for two female members? Or not.
Also why stop at the boardrooms. Why not require the same in professional sport teams?
Jul 24, 2021 | www.wsj.com
Nasdaq has, in its own words, embraced "the social justice movement." The actual job of a stock exchange, however, is to ensure that trading is orderly and its listed companies follow standard governance rules. But doing that doesn't earn the applause of the political left. Progressive approval apparently means a lot to Nasdaq, which has officially proposed to its regulator -- the Securities and Exchange Commission, newly chaired by Gary Gensler -- to increase boardroom diversity through a "regulatory approach."

This proposal would require that Nasdaq-listed companies not only disclose the diversity characteristics of their existing boards, but also retain "at least one director who self-identifies as female," and "at least one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, two or more races or ethnicities, or as LGBTQ+."

Noncompliant firms must publicly "explain" -- in writing -- why they don't meet Nasdaq's quotas. Nasdaq has, in its own words, embraced "the social justice movement."

The actual job of a stock exchange, however, is to ensure that trading is orderly and its listed companies follow standard governance rules. But doing that doesn't earn the applause of the political left. Progressive approval apparently means a lot to Nasdaq, which has officially proposed to its regulator -- the Securities and Exchange Commission, newly chaired by Gary Gensler -- to increase boardroom diversity through a "regulatory approach."

[Jul 24, 2021] New variation of the old saying

Apr 07, 2021 | www.zerohedge.com

OldNewB

Give a man a gun and he can rob a bank.

Give a man a bank and he can rob the world.

[Jul 24, 2021] The Fed, BLS and al Capone: the Fed, in sync with the fiction writers at the Bureau of Labor Statistics (BLS), reports consumer inflation as honestly as Al Capone reported taxable income

Jul 24, 2021 | www.zerohedge.com

The Fed, in sync with the fiction writers at the Bureau of Labor Statistics (BLS), reports consumer inflation as honestly as Al Capone reported taxable income.

Vardaman 3 hours ago

"A basket of things no one actually buys, with prices we just pull out of our asses..."

Glock 1 hour ago

Yep, the BLS uses the CPI-W to literally avoid raising SS payments. The real rate of inflation for seniors is close to 10% as the things they spend most of their money on like medical care, medicine, food and utilities have gone through the roof

While the government claims they are entitled to 1.5% or less COLA's out of which comes a bigger deduction every year for Medicare. Scam artists.

[Jul 19, 2021] What was not mentioned

Jul 19, 2021 | www.zerohedge.com

Filosofur 7 hours ago

I find it very odd that ZH not even mentioning the 1000 point drop in dow today...wtf??

sbin 7 hours ago

1000 points is a good start.

Pareto 7 hours ago

its only 2%

[Jul 09, 2021] Could Pfizer and Moderna Be in Trouble After the Latest COVID Vaccine Findings

So Motley Fool analysts advocate profiteering... Nice. there is some dark neoliberal humor in stating that the elimation of booster shots is bad..
Jul 09, 2021 | www.msn.com

Keith Speights: Some findings were recently published in Nature magazine that indicate that the Pfizer-BioNTech and the Moderna vaccines may provide protection for years.

Many investors are and were hoping for annual recurring revenue from these companies' vaccines. Brian, how troublesome is this latest data for the prospects for Pfizer, BioNTech, and Moderna?

Brian Orelli: There's a bit of an extrapolation going on here. The researchers looked at memory B cells, which tend to provide more long-term protection than, let's say, antibodies. They looked at those in the lymph nodes and found the cells were there as long as 15 weeks.

Typically, they'd mostly be gone by four to six weeks. So that's the basis of this claim that it could offer protection for years. If true, that will be a big blow obviously to vaccine makers, at least for Moderna and BioNTech.

Pfizer would be fine because it's so diversified. It's really hard to make an argument for the valuations of Moderna and BioNTech right now if these vaccines are one and done over a couple of years. They really need to have ongoing sales until they can get growth from other drugs in their pipelines.

Speights: Brian, when I first saw the story, I went to check out to see how the stocks were performing, and Moderna is up, BioNTech was barely changed, Pfizer barely changed. It seems to me that investors really aren't making much of this news. Do you think that's the right take at this point?

Orelli: I think it's still too early to be able to conclude that it's definitely going to work for years. The other issue is that we're looking at, will those B cells actually protect against the variants?

If they don't protect against the variants, then it doesn't really matter if you have B cells in your lymph nodes. If they're not going to protect against the variants then we're going to have to get a booster shot anyway.

Speights: Right. Obviously, if these vaccines provide immunity for multiple years, these companies aren't going to make nearly as much money as they expect and a lot of investors expect. So this is a big story to watch, but like you said, really, really early right now and too soon to maybe go drawing any conclusions at this point.

[Jul 08, 2021] Who Goldman think it actually is?

Jul 08, 2021 | www.zerohedge.com


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duck_fur 9 hours ago

Note to Goldman: you're a bank. Stick to banky-stuff. Leave the fear **** and lies to the professionals in the .gov and MSM.

p3scobar 7 hours ago

Goldman is the government... sooo.....

espirit 9 hours ago

If Goldman can give medical advice, so can I.

A Lunatic 9 hours ago remove link

Turning off the TV will neutralize the Delta Variant.

rag_house 9 hours ago

Just like 'Climate Change' you know it's contrived when the bankers start doing 'science.'

liberty2day 9 hours ago

when did they not?

rag_house 8 hours ago

Bankers aren't scientists. They simply dream up fake things they want to convince people of and bribe people to try to make it seem real.

Enraged 9 hours ago remove link

Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay Over $2.9 Billion

The Goldman Sachs Group Inc. and Goldman Sachs (Malaysia) have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees.

https://www.justice.gov/opa/pr/goldman-sachs-charged-foreign-bribery-case-and-agrees-pay-over-29-billion

[Jul 08, 2021] Nothing to do...

Jul 08, 2021 | www.zerohedge.com


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HillaryOdor 5 hours ago remove link

bond prices have nothing to do with recovery [sic]

stock prices have nothing to do with growth, except growth of the money supply

Kreditanstalt 3 hours ago

"...the price of a beer or a McDonalds in 10-years time will be exactly the same as it is today. (Which it won't.)"

But the type who buy US government bonds don't care about the price of burgers. They only plan to flip the thing back to the next Greater Fool...or THE FED

[Jul 03, 2021] Opinion: The looming stagflationary debt crisis will deliver a one-two punch to markets and economies by Nouriel Roubini

Highly recommended!
Notable quotes:
"... For now, loose monetary and fiscal policies will continue to fuel asset and credit bubbles, propelling a slow-motion train wreck. The warning signs are already apparent in today's high price-to-earnings ratios SPX , low equity risk premiums, inflated housing and tech assets COMP , and the irrational exuberance surrounding special purpose acquisition companies (SPACs), the crypto sector BTCUSD, , high-yield corporate debt , collateralized loan obligations, private equity, meme stocks AMC, and runaway retail day trading. ..."
"... But meanwhile, the same loose policies that are feeding asset bubbles will continue to drive consumer price inflation, creating the conditions for stagflation whenever the next negative supply shocks arrive. Such shocks could follow from renewed protectionism; demographic aging in advanced and emerging economies; immigration restrictions in advanced economies; the reshoring of manufacturing to high-cost regions; or the balkanization of global supply chains. ..."
"... More broadly, the Sino-American decoupling threatens to fragment the global economy at a time when climate change and the COVID-19 pandemic are pushing national governments toward deeper self-reliance. ..."
"... Making matters worse, central banks have effectively lost their independence, because they have been given little choice but to monetize massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. Central banks will be damned if they do and damned if they don't, and many governments will be semi-insolvent and thus unable to bail out banks, corporations, and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated world-wide ..."
"... When former Fed Chair Paul Volcker hiked rates to tackle inflation in 1980-82, the result was a severe double-dip recession in the United States and a debt crisis and lost decade for Latin America. But now that global debt ratios are almost three times higher than in the early 1970s, any anti-inflationary policy would lead to a depression, rather than a severe recession. The question is not if but when. ..."
Jun 30, 2021 | www.marketwatch.com

Roubini warns: After 'the Minsky Moment' crashes overheated speculative markets, 'the Volcker Moment' will will arrive to crash the debt-burdened global economy

( Project Syndicate ) -- In April, I warned that today's extremely loose monetary and fiscal policies, when combined with a number of negative supply shocks, could result in 1970s-style stagflation (high inflation alongside a recession). In fact, the risk today is even bigger than it was then.

After all, debt ratios in advanced economies and most emerging markets were much lower in the 1970s, which is why stagflation has not been associated with debt crises historically. If anything, unexpected inflation in the 1970s wiped out the real value of nominal debts at fixed rates, thus reducing many advanced economies' public-debt burdens.

The warning signs are already apparent in today's high price-to-earnings ratios, low equity risk premiums, inflated housing and tech assets, and the irrational exuberance surrounding special purpose acquisition companies (SPACs), the crypto sector, high-yield corporate debt, collateralized loan obligations, private equity, meme stocks, and runaway retail day trading.

Conversely, during the 2007-08 financial crisis, high debt ratios (private and public) caused a severe debt crisis -- as housing bubbles burst -- but the ensuing recession led to low inflation, if not outright deflation. Owing to the credit crunch, there was a macro shock to aggregate demand, whereas the risks today are on the supply side.

Worst of both worlds

We are thus left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years.

For now, loose monetary and fiscal policies will continue to fuel asset and credit bubbles, propelling a slow-motion train wreck. The warning signs are already apparent in today's high price-to-earnings ratios SPX , low equity risk premiums, inflated housing and tech assets COMP , and the irrational exuberance surrounding special purpose acquisition companies (SPACs), the crypto sector BTCUSD, , high-yield corporate debt , collateralized loan obligations, private equity, meme stocks AMC, and runaway retail day trading.

But meanwhile, the same loose policies that are feeding asset bubbles will continue to drive consumer price inflation, creating the conditions for stagflation whenever the next negative supply shocks arrive. Such shocks could follow from renewed protectionism; demographic aging in advanced and emerging economies; immigration restrictions in advanced economies; the reshoring of manufacturing to high-cost regions; or the balkanization of global supply chains.

Recipe for macroeconomic disruption

More broadly, the Sino-American decoupling threatens to fragment the global economy at a time when climate change and the COVID-19 pandemic are pushing national governments toward deeper self-reliance. Add to this the impact on production of increasingly frequent cyberattacks on critical infrastructure and the social and political backlash against inequality, and the recipe for macroeconomic disruption is complete.

Making matters worse, central banks have effectively lost their independence, because they have been given little choice but to monetize massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. Central banks will be damned if they do and damned if they don't, and many governments will be semi-insolvent and thus unable to bail out banks, corporations, and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated world-wide

As inflation rises over the next few years, central banks will face a dilemma. If they start phasing out unconventional policies and raising policy rates to fight inflation, they will risk triggering a massive debt crisis and severe recession; but if they maintain a loose monetary policy, they will risk double-digit inflation -- and deep stagflation when the next negative supply shocks emerge.

But even in the second scenario, policy makers would not be able to prevent a debt crisis. While nominal government fixed-rate debt in advanced economies can be partly wiped out by unexpected inflation (as happened in the 1970s), emerging-market debts denominated in foreign currency would not be. Many of these governments would need to default and restructure their debts.

At the same time, private debts in advanced economies would become unsustainable (as they did after the global financial crisis), and their spreads relative to safer government bonds would spike, triggering a chain reaction of defaults. Highly leveraged corporations and their reckless shadow-bank creditors would be the first to fall, soon followed by indebted households and the banks that financed them.

The Volcker Moment

To be sure, real long-term borrowing costs may initially fall if inflation rises unexpectedly and central banks are still behind the curve. But, over time, these costs will be pushed up by three factors. First, higher public and private debts will widen sovereign and private interest-rate spreads. Second, rising inflation and deepening uncertainty will drive up inflation risk premiums. And, third, a rising misery index -- the sum of the inflation and unemployment rate -- eventually will demand a "Volcker Moment."

When former Fed Chair Paul Volcker hiked rates to tackle inflation in 1980-82, the result was a severe double-dip recession in the United States and a debt crisis and lost decade for Latin America. But now that global debt ratios are almost three times higher than in the early 1970s, any anti-inflationary policy would lead to a depression, rather than a severe recession. The question is not if but when.

Under these conditions, central banks will be damned if they do and damned if they don't, and many governments will be semi-insolvent and thus unable to bail out banks, corporations, and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated world-wide, sucking in households, corporations, and shadow banks as well.

As matters stand, this slow-motion train wreck looks unavoidable. The Fed's recent pivot from an ultra-dovish to a mostly dovish stance changes nothing. The Fed has been in a debt trap at least since December 2018, when a stock- and credit-market crash forced it to reverse its policy tightening a full year before COVID-19 struck. With inflation rising and stagflationary shocks looming, it is now even more ensnared.

So, too, are the European Central Bank, the Bank of Japan, and the Bank of England. The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when.

Nouriel Roubini is CEO of Roubini Macro Associates and chief economist at Atlas Capital Team.

This commentary was published with permission of Project Syndicate -- The Looming Stagflationary Debt Crisis.

See also:

[Jul 02, 2021] Number Of US Truck Drivers Sidelined Due To Substance Abuse Violations Has Surpassed 60,000

Jul 02, 2021 | www.zerohedge.com

Lone_Star 7 hours ago

I don't see what's wrong with truck drivers being all hopped up on amphetamines, they were doing it to bomber pilots during WWII and beyond.

rockstone 7 hours ago

The whole idea is to keep a shipping network from resembling a bombing run.

fxrxexexdxoxmx3 PREMIUM 7 hours ago

Comment of the day

ParkAveSlasher 7 hours ago (Edited)

I would think a bombing run would be the most efficient thing a delivery and offload could resemble

[Jun 21, 2021] Do you remember when a trillion was a big number? Well, it still is especially if we are talking about possible stock market losses even with "accommodative" FED

Jun 21, 2021 | www.zerohedge.com

Traders are addicted to trading, much like murderers fixate on murdering. The traders noticed a slight change in the Fed's tone and sold anything tied to inflation. They whacked gold good. Then they went after the other commodities. When they were done there, they went after value stocks, before finishing the week by blasting a bunch of cyclical names.


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ted41776 5 hours ago

the only kind of ism that has exist is sociopathism

they always end up at the top of any power pyramid and make the rules that apply to all others but not them

same as it always was and same as it always will be

NoDebt 4 hours ago

Traders are addicted to trading, much like murderers fixate on murdering

A line I wish I had come up with.

lambda PREMIUM 4 hours ago

This was already modeled and formalized: The Gambler Fallacy.

[Jun 14, 2021] World War II Was Transitory- - Putting Inflation In Context

Jun 14, 2021 | www.zerohedge.com

Via Global Macro Monitor,

Let us preface our inflation note with one of our favorite quotes:

"World War II was transitory"

– GMM

Inflation has eroded my purchasing power in my transitory life. Bring back the $.35 Big Mac, which was only about 20% of the minimum wage. Now? About 40-50%... Enough to spark a revolution?

[Jun 13, 2021] Dennis Gartman is still considered a commodities expert. He infamously said in 2016 that WTI would never be above $44 again in his lifetime. He is still alive last I knew

There are also Bagdad Bobs from IEA " "World oil supply is expected to grow at a faster rate in 2022, with the US driving gains of 1.6 million bpd from producers outside the OPEC alliance. "
Jun 13, 2021 | peakoilbarrel.com
SHALLOW SAND IGNORED 06/11/2021 at 3:58 pm

Dennis Gartman is still considered a commodities expert.

He infamously said in 2016 that WTI would never be above $44 again in his lifetime. He is still alive last I knew.

[Jun 12, 2021] There s a new LGBTQ-focused ETF

Notable quotes:
"... Just in time for Pride Month, a new exchange traded fund aims to connect with LGBTQ investors. ..."
"... LGBTQ Loyalty Holdings partners with Harris Poll to annually survey 150,000 self-identifying LGBTQ constituents across the U.S. for their views about a company's brand awareness, brand image, brand loyalty and how the firm supports the community. As noted in its prospectus , 25% of the index's weighting is derived from that survey data. ..."
Jun 06, 2021 | www.marketwatch.com

Just in time for Pride Month, a new exchange traded fund aims to connect with LGBTQ investors. Two previous efforts failed to attract enough assets.

The fund, LGBTQ + ESG100 ETF LGBT, , launched in late May, is a passively managed, large-cap index fund that holds the top 100 U.S. companies that most align with the LGBTQ community.

In 2019, two LGBTQ-focused ETFs were delisted: ALPS Workplace Equality Portfolio ETF and InsightShares LGBT Employment Equality ETFs. Like this new fund, both were mostly U.S. large-cap, passive index ETFs comprising companies that received high or perfect marks for workplace equality in the Human Rights Campaign Corporate Equality Index , a benchmark for corporate LGBTQ policies.

The first ETF stuck around for five years, but the second barely made it two years, even though it was launched with much fanfare by UBS. Neither gained many assets.

Bobby Blair, CEO and founder of LGBTQ Loyalty Holdings, which launched the fund with issuer ProcureAM, says community input on holdings makes this fund different.

LGBTQ Loyalty Holdings partners with Harris Poll to annually survey 150,000 self-identifying LGBTQ constituents across the U.S. for their views about a company's brand awareness, brand image, brand loyalty and how the firm supports the community. As noted in its prospectus , 25% of the index's weighting is derived from that survey data.

... the LGBTQ + ESG100 has an annual expense ratio of 0.75%.

[Jun 07, 2021] There s a new LGBTQ-focused ETF

Jun 06, 2021 | www.marketwatch.com

Just in time for Pride Month, a new exchange traded fund aims to connect with LGBTQ investors. Two previous efforts failed to attract enough assets.

The fund, LGBTQ + ESG100 ETF LGBT, +0.91% , launched in late May, is a passively managed, large-cap index fund that holds the top 100 U.S. companies that most align with the LGBTQ community.

In 2019, two LGBTQ-focused ETFs were delisted: ALPS Workplace Equality Portfolio ETF and InsightShares LGBT Employment Equality ETFs. Like this new fund, both were mostly U.S. large-cap, passive index ETFs comprising companies that received high or perfect marks for workplace equality in the Human Rights Campaign Corporate Equality Index , a benchmark for corporate LGBTQ policies.

The first ETF stuck around for five years, but the second barely made it two years, even though it was launched with much fanfare by UBS. Neither gained many assets.

Bobby Blair, CEO and founder of LGBTQ Loyalty Holdings, which launched the fund with issuer ProcureAM, says community input on holdings makes this fund different.

LGBTQ Loyalty Holdings partners with Harris Poll to annually survey 150,000 self-identifying LGBTQ constituents across the U.S. for their views about a company's brand awareness, brand image, brand loyalty and how the firm supports the community. As noted in its prospectus , 25% of the index's weighting is derived from that survey data.

... the LGBTQ + ESG100 has an annual expense ratio of 0.75%.

[Jun 01, 2021] ARK Invest Stocks To Buy And Watch- 6 Stocks That Cathie Wood's ARK ETFs Own; Zoom Slides Before Earnings

Reminds me of Trading Places.
Jun 01, 2021 | finance.yahoo.com

Theo the Cat 19 April, 2021 Ark is gonna turn into Titanic.

[May 31, 2021] Yes inflation is transitionary. Thos only question is transitionary to what level?

Highly recommended!
As for whether this is "transitory," we may paraphrase J.M. Keynes: In the long run, everything is transitory.
May 31, 2021 | www.wsj.com
D

David Weisz

I accept the reality except that FED said this inflation is "transitory."

The Fed description is accurate... it's just whether the transition is to lower inflation or to runaway inflation.

Jim McCreary
The biggest single factor that will drive long-term inflation is the absence of downward price pressure from new Chinese market entrants. Cutthroat pricing from China is the ONLY reason the West has been able to get away with Money-Printing Gone Wild for the past 20 years without triggering runaway inflation.

There are no new Chinese entrants because the Chinese are now all in in the world economy. The existing Chinese competitors are seeing their costs go UP, not down, because they have fully employed the Chinese population, and have to pay up in order to get and keep workers.

So, without any more downward price pressure from China, this latest round of Money-Printing Gone Wild is showing up as price inflation, and will continue to do so.

Batten down the hatches! Stagflation and then runaway inflation are coming!

[May 30, 2021] Everything Bubble: issuance of new CLOs is on pace to easily exceed 2018's record.

May 30, 2021 | www.zerohedge.com
Lordflin 2 hours ago (Edited) remove link

This has worked out so well in the past I cannot see what could possibly go wrong...

At least the people involved in these transactions are honest, trustworthy folks...

We have built a world upon such a foundation folks... I guess we should all be grateful for the coming war...

And I must be off my meds again...

ebworthen 2 hours ago

Oh yeah, those little beasties.

Mortgage Backed Securities, Credit Default Swaps, Collateralized Loan Obligations.

4X levered ETF's, mortgage/rent +50% of monthly income, HELOC's, 10% inflation.

What could go wrong?

[May 26, 2021] U.S. stocks are demonstrating most of the characteristics of a bubble, but don't sell yet, says strategist

Of course, you need to wait until all banks and hedge managers sell ;-)
May 26, 2021 | finance.yahoo.com
Steve Goldstein

U.S. stocks are looking bubbly but it isn't time to sell, argues this fund manager's strategist.

[May 24, 2021] Taibbi- Con Of The Week - Greensill Capital

May 24, 2021 | www.zerohedge.com

pndr4495 2 days ago (Edited)

Doyle Lonnegan to Johnny "Hooker" Kelly in the movie The Sting: "Your boss is quite the card player Mr. Kelly. How does he do it?"

Kelly to Lonnegan: "He cheats."

philipat 2 days ago

It's appropriate that the entirely useless ex-PM Cameron got taken by this guy and tried to use his influence to access free money for him from The Treasury as an "advisor"..He didn't get any.

Cameron couldn't even do corruption properly!!

[May 24, 2021] -The Fed Has Lost Control- - John Williams Warns Of Hyperinflation In 2022

May 24, 2021 | www.zerohedge.com

messystateofaffairs 48 minutes ago

The Fed never had control, just s bunch of shysters running a long term hybrid ponzi scheme.

Lordflin 54 minutes ago (Edited)

The Fed is losing control...

I suppose that is true... as the function has been to drain the people's wealth into the coffers of the few...

The Real Satoshi 29 minutes ago remove link

Sad that Greg Hunter got kicked off youtube.

gregga777 12 minutes ago (Edited)

He is in great company, though. Anyone who offends the Marxist narratives (Politically Correct, Multicultural, Affirmative Action, Diversity, Feminist, LGBTQQ, etc.) gets kicked off YouTube.

pmc 36 minutes ago (Edited) remove link

...As Kissinger said "The illegal we do immediately; the unconstitutional takes a little longer."

https://thenewamerican.com/kissinger-the-illegal-we-do-immediately-the-unconstitutional-takes-a-little-longer/

[May 11, 2021] 11 Plunging Stocks Are Badly Burning Cathie Wood's ARK Invest

May 11, 2021 | finance.yahoo.com

Cathie Wood's ARK Invest is still red-hot, but now in the opposite way: It's getting burned by many collapsing stocks including some in the S&P 500.

[May 10, 2021] How many times can a declared "expert" be wrong before they are not an expert anymore!

Notable quotes:
"... Ask an economist. Wrong more than 50% of the time and still fully employed. When was the last time an economist got fired for being wrong? ..."
Apr 15, 2021 | www.zerohedge.com
lwilland1012 1 hour ago

How many times can a declared "expert" be wrong before they are not an expert anymore!

INTJ Economist 1 hour ago

Ask an economist. Wrong more than 50% of the time and still fully employed. When was the last time an economist got fired for being wrong?

[May 09, 2021] CPI Is A Lie! We can't trust CPI to tell us the truth about inflation by Peter Schiff

Highly recommended!
Notable quotes:
"... The CPI is calculated by analyzing the price of a "basket of goods." The makeup of that basket has a big impact on the final CPI number. According to WolfStreet , 10.9% of the CPI is based on durable goods (computers, automobiles, appliances, etc.). Nondurable goods (primarily food and energy) make up 26.6% of CPI. Services account for the remaining 62.5% of the basket. This includes rent, healthcare, cellphone service etc.) ..."
"... The things the government includes and excludes from the basket can make a profound difference in that final CPI number. Back in 1998, the government significantly revised the CPI metrics. Even the Bureau of Labor Statistics (BLS) admitted the changes were "sweeping." ..."
"... In 1998, the BLS followed the recommendations of the Boskin Commission. It was appointed by the Senate in 1995. Initially called the "Advisory Commission to Study the Consumer Price Index," its job was to study possible bias in the computation of the CPI. Unsurprisingly, it determined that the index overstated inflation " by about 1.1% per year in 1996 and about 1.3% prior to 1996. The 1998 changes to CPI were meant to address this "issue." ..."
"... As Peter pointed out, there is a lot of geometric weighting, substitution and hedonics built into the calculation. The government can basically create an index that outputs whatever it wants. ..."
"... Peter said there is a bit of irony in government officials and central bankers constantly complaining about "not enough inflation." ..."
"... They're the ones that are cooking the books to pretend that inflation is lower than it really is. Because what they're really trying to do is get the go-ahead to produce more inflation, which is printing money." ..."
"... And there are other things that hide inflation. For instance, shrinking packaging so there is less product sold at the same price, or substituting lower quality ingredients, or requiring consumers to assemble items themselves. ..."
"... They find different ways to lower the quality and not increase the price, and I'm sure that the government is not picking up on any of that. If the quality improves, yeah, yeah, they calculate that. But they probably ignore all the circumstances where the quality is diminished." ..."
"... The bottom line is we can't trust CPI to tell us the truth about inflation. ..."
May 04, 2021 | www.zerohedge.com

Via SchiffGold.com,

We've been talking a lot about the specter of inflation. Despite the Fed's assurances not to worry because any price increases we're seeing are transitory, some people are indeed worried. A former JP Morgan managing director warned about inflation and echoed Peter Schiff's view that the central bank is powerless to fight it.

And we're seeing rising prices all over the place, from the grocery store to the gas station. Even the government numbers flash warning signs . But as Peter Schiff explains in this clip from an interview with Jay Martin, it's probably even worse than we realize because the government cooks the numbers when it calculates CPI.

The monthly rises in CPI through the first quarter show an upward trend. The CPI in January was up 0.3%. It was up 0.4% in February. And now it's up 0.6% in March. That totals a 1.013% increase in Q1 alone. The question is does this really reflect the truth about inflation? Peter doesn't think it does.

The government always makes changes to their methods of measuring things, whether it's GDP, or inflation, or unemployment. And they always tweak the numbers to produce a better result as a report card. "

https://www.youtube.com/embed/lnPrsBzIZsw

Imagine if students in a school had the ability to change the metrics by which they were graded or the methodology the teacher used to calculate their grades.

Would it surprise anybody that all of a sudden they started getting more As and Bs and fewer Cs and Ds? The government always wants to make the good stuff better, like economic growth, and the bad stuff better, like unemployment or inflation. So, they want to find ways to make those numbers little and the good numbers big."

The CPI is calculated by analyzing the price of a "basket of goods." The makeup of that basket has a big impact on the final CPI number. According to WolfStreet , 10.9% of the CPI is based on durable goods (computers, automobiles, appliances, etc.). Nondurable goods (primarily food and energy) make up 26.6% of CPI. Services account for the remaining 62.5% of the basket. This includes rent, healthcare, cellphone service etc.)

The things the government includes and excludes from the basket can make a profound difference in that final CPI number. Back in 1998, the government significantly revised the CPI metrics. Even the Bureau of Labor Statistics (BLS) admitted the changes were "sweeping."

According to the BLS, periodic changes to the CPI calculation are necessary because "consumers change their preferences or new products and services emerge. During these occasions, the Bureau reexamines the CPI item structure, which is the classification scheme of the CPI market basket. The item structure is a central feature of the CPI program and many CPI processes depend on it."

In 1998, the BLS followed the recommendations of the Boskin Commission. It was appointed by the Senate in 1995. Initially called the "Advisory Commission to Study the Consumer Price Index," its job was to study possible bias in the computation of the CPI. Unsurprisingly, it determined that the index overstated inflation " by about 1.1% per year in 1996 and about 1.3% prior to 1996. The 1998 changes to CPI were meant to address this "issue."

As Peter pointed out, there is a lot of geometric weighting, substitution and hedonics built into the calculation. The government can basically create an index that outputs whatever it wants.

I think this period of "˜Oh wow! We have low inflation!' It's not a coincidence that it followed this major revision into how we calculate it."

Peter said there is a bit of irony in government officials and central bankers constantly complaining about "not enough inflation."

They're the ones that are cooking the books to pretend that inflation is lower than it really is. Because what they're really trying to do is get the go-ahead to produce more inflation, which is printing money."

Peter said the CPI will never reveal the true extent of rising prices.

And there are other things that hide inflation. For instance, shrinking packaging so there is less product sold at the same price, or substituting lower quality ingredients, or requiring consumers to assemble items themselves.

They find different ways to lower the quality and not increase the price, and I'm sure that the government is not picking up on any of that. If the quality improves, yeah, yeah, they calculate that. But they probably ignore all the circumstances where the quality is diminished."

The bottom line is we can't trust CPI to tell us the truth about inflation.

[May 08, 2021] In 1999, the Wall Street Journal had 286 articles on bubbles. Here are a few of the titles

May 08, 2021 | www.wsj.com

J John Smith

Not only is this not true, the evidence shows that bubbles are called in advance. In 1999, the Wall Street Journal had 286 articles on bubbles. Here are a few of the titles,

And on, and on, etc., etc.

[May 08, 2021] Dogecoin is now valued at more than Ford

May 08, 2021 | www.wsj.com

R Robert A

Dogecoin is now valued at more than Ford.
Economics?
Lunacy is more like it.
This is just more proof that the dollars are becoming more worthless.
Whistling past the graveyard.

[May 07, 2021] Crooks are selling to fools

finance.yahoo.com

...retail investors have been net buyers of stocks for 10 straight weeks, hedge funds have been sellers, client data from BofA Global Research showed, with the four-week average of net sales of equities by hedge funds hitting their highest levels since the firm began tracking the data in 2008.

[May 05, 2021] FED Powell on tough question: Not sure what the exact nature of that question is

May 05, 2021 | www.zerohedge.com

ReadyForHillary 1 hour ago

When will the economy be able to stand on its own feet?

He immediately followed with:

I'm not sure what the exact nature of that question is.

HA HA HA HA! HA HA HA HA HA HA HA HA!

[May 03, 2021] New kind of leadership

Apr 26, 2021 | finance.yahoo.com

Archegos is a Greek word denoting leadership. The place where the eponymous family office led UBS, and a growing roll call of investment banks, was into a morass.

[May 03, 2021] This Bull Market Has a Troubling Reliance on Speculation by James Mackintosh

Highly recommended!
See also Investors Big and Small Are Driving Stock Gains With Borrowed Money - WSJ The stock market definitely has gambling problem. Just look at Yahoo Finance coverage. It is insane. They cheerleading reckless behaviour and ignore each and every warning sign.
Notable quotes:
"... In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. ..."
"... The parallel in the stock market is the hunt for the greater fool . Sure, GameStop shares bear no relation to the reality of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they 'like the stock.' ..."
"... The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. ..."
Mar 26, 2021 | www.wsj.com

In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less.

The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out.

A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded.

In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example.

The parallel in the stock market is the hunt for the greater fool . Sure, GameStop shares bear no relation to the reality of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they 'like the stock.'

Wild bets became obvious this year, as newcomers armed with stimulus, or 'stimmy,' checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards.

The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back.

... ... ...

Write to James Mackintosh at James.Mackintosh@wsj.com

[May 02, 2021] If I'm going to lose the house gambling, it's more respectable to do so in the stock market.

May 02, 2021 | www.wsj.com
SUBSCRIBER 2 hours ago Borrowing money to gamble on the stock market is not a very smart thing to do in my opinion. Like thumb_up 7 Reply Share link Report R

If I'm going to lose the house gambling, it's more respectable to do so in the stock market. SUBSCRIBER 2 hours ago

Borrowing money to gamble on the stock market is not a very smart thing to do in my opinion.

[Apr 24, 2021] When The Market Unravels There Will Be -No Place To Hide- - David Stockman - YouTube

Apr 24, 2021 | www.youtube.com

peter plouf , 4 hours ago

The current financial world has been reduced to a one-legged bar-stool in a bar where drinks are on the house. There is no scenario where this does not end well no matter how euphoric we are in the moment.

[Apr 24, 2021] -Our Bullish Conviction Is Now Lower-- JPM Joins Major Banks In Turning Bearish On -Easy- Market Gains - ZeroHedge

Apr 24, 2021 | www.zerohedge.com

Yen Cross 21 hours ago

FOAD- JPM. What you really mean to say is the stimmy money is running down so you're running outta sheep to fleece.

Rainman 21 hours ago

There's been so much stimmy the shoeshine boy who are doing dollar averaging...

Soloamber 20 hours ago

Criminal investment bank speaks and no one listerns .

venturen 21 hours ago (Edited)

We are on a Permanent High Plataue of Zero Interest Easy Money... We don't need jobs, businesses or revenue!

https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm

Soloamber 20 hours ago

Translation JP Morgan has it's shorts in place .

Time to kick the legs out of the casino .

Hezekiah PREMIUM 17 hours ago (Edited)

Even those with half a brain can twig that JP Morgan are a bunch of crooks. Simply Google "JP Morgan fines".

Those who are market savvy should Google "JP Morgan fines".

Surely in literally everly market segment the CEO, Jamie Dimond, would be banged up in prison?!!!!!!!!!!!!!!!!!!

nsurf9 21 hours ago (Edited)

You think this guy understands that, even with more than 50% of the, country in plandemic lock-down, shutter/closed and/or bankrupt for a solid year, the "markets" have literally doubled.

Wake me up when the Treasury Securities Operational Details daily theft goes to zero.

Gentleman Bastard 21 hours ago remove link

This just means that JPM like the other whores have taken their short positions and will now do everything in their power to ensure that they cash out.

[Apr 22, 2021] Pastors as black Bolsheviks: some black churches try to hold Home Depot hostage

"History Does Not Repeat Itself, But It Rhymes" -- Mark Twain (attributed). This is a naked fight for political power using very questionable means.
Apr 22, 2021 | www.zerohedge.com

Corporations, especially those headquartered in Georgia, have come out against the legislation signed by Governor Kemp. Republicans describe the bill as one that addresses election integrity while Democrats call it a voter suppression law – "Jim Crow 2.0". Coca-Cola and Delta were among the first to make a point to virtue-signal after the governor signed the bill, only to be exposed as taking part in the process and giving input into the legislation. Both were fine with the law until the governor signed it and grievance activists did their thing. Coke soon discovered that not all of its consumers think that companies should be making policy – that 's the job of lawmakers- and now it is trying to clean up the mess it made for itself.

Churches have increasingly played a part in American politics and this is an escalation of that trend. Evangelical churches have shown support for conservative and Republican candidates while black churches get out the vote for Democrats. This threat of bringing a large-scale boycott over state legislation is a hostile action against the corporation. It's political theatre. Groups like Black Voters Matter, the New Georgia Project Action Fund (Stacey Abrams), and the Georgia NAACP are pressuring companies to publicly voice their opposition and the religious leaders are doing the bidding of these politically active groups.

When SB 241 and HB 531 were working through the legislative process, the groups put pressure on Republican lawmakers and the governor to abandon the voting reform legislation. They also demanded that donations to any lawmakers supporting the legislation be stopped. The Georgia Chamber of Commerce tried to remain bipartisan while still voicing support for voting rights but then caved and expressed "concern and opposition" to some provisions . At the time, several large Georgia companies were targeted by activists, including Aflac, Coca-Cola, Delta Airlines, Home Depot, Southern Company and UPS.

The Georgia Chamber of Commerce previously reiterated the importance of voting rights without voicing opposition against any specific legislation. In a new statement to CNBC, the Georgia Chamber said it has "expressed concern and opposition to provisions found in both HB 531 and SB 241 that restrict or diminish voter access" and "continues to engage in a bipartisan manner with leaders of the General Assembly on bills that would impact voting rights in our state."

Office Depot came out at the time and supported the Chamber's statement. The Election Integrity Act of 2021, originally known as Georgia Senate Bill 202, is a Georgia law overhauling elections in the state that was signed into effect by the governor and we know what happened. Office Depot has not delivered for the activists as they demand so now the company faces boycott drama. The religious leaders are taking up where the activist groups left off.

African Methodist Episcopal Bishop Reginald Jackson said the company has remained "silent and indifferent" to his efforts to rally opposition to the new state law pushed by Republicans, as well as to similar efforts elsewhere.

" We just don't think we ought to let their indifference stand ," Jackson said.

The leader of all his denomination's churches in Georgia, Jackson had a meeting last week with other Georgia-based executives to urge them to oppose the voting law, but said he's had no contact with Home Depot, despite repeated efforts to reach the company.

Faith leaders at first were hesitant to jump into the boycott game. Now the political atmosphere has changed and they are being vocal. Jackson focused on pressuring Coca-Cola first. After that company went along to get along, before it realized its error, Jackson moved his focus onto other companies.

"We believe that corporations have a corporate responsibility to their customers, who are Black, white and brown, on the issue of voting ," Jackson said. "It doesn't make any sense at all to keep giving dollars and buying products from people that do not support you."

He said faith leaders may call for boycotts of other companies in the future.

So, here we are with Home Depot in the spotlight. There are four specific demands leveled at Home Depot in order to avoid further action from the activists.

Rev. Lee May, the lead pastor of Transforming Faith Church, said the coalition is "fluid in this boycott" but has four specifics requests of Home Depot: To speak out publicly and specifically against SB 202; to speak out against any other restrictive voting provisions under consideration in other states; to support federal legislation that expands voter access and "also restricts the ability to suppress the vote;" and to support any efforts, including investing in litigation, to stop SB 202 and other bills like it.

" Home Depot, we're calling on you. I'm speaking to you right now. We're ready to have a conversation with you. You haven't been ready up to now, but our arms are wide open. We are people of faith. People of grace, and we're ready to have this conversation, but we're very clear those four things that we want to see accomplished ," May said.

The Rev. Timothy McDonald III, senior pastor of the First Iconium Baptist Church, warned this was just the beginning.

"It's up to you whether or not, Home Depot, this boycott escalates to phase two, phase three, phase four," McDonald said. "We're not on your property -- today. We're not blocking your driveways -- today. We're not inside your store protesting -- today. This is just phase one."

That sounds a lot like incitement, doesn't it? Governor Kemp is speaking out, he has had enough. He held a press conference to deliver his comments.

"First, the left came for baseball, and now they are coming for Georgia jobs," Kemp said, referring to MLB's decision to move this year's All-Star Game from Atlanta over the new laws. "This boycott of Home Depot – one of Georgia's largest employers – puts partisan politics ahead of people's paychecks."

"The Georgians hardest hit by this destructive decision are the hourly workers just trying to make ends meet during a global pandemic. I stand with Home Depot, and I stand with nearly 30,000 Georgians who work at the 90 Home Depot stores and 15 distribution centers across the Peach State. I will not apologize for supporting both Georgia jobs and election integrity," he added.

"This insanity needs to stop. The people that are pushing this, that are profiting off of it, like Stacey Abrams and others, are now trying to have it both ways," Kemp said. "There is a political agenda here, and it all leads back to Washington, D.C."

The governor is right. The activists are in it to federalize elections, not to look out for Georgians, who will lose jobs over these partisan actions. The law signed by Kemp increases voting rights, it doesn't limit them .

[Apr 22, 2021] Market Cap Of Money-Losing Companies Surpasses Dot Com Bubble Record

Apr 22, 2021 | www.zerohedge.com

DHS Fusion Center 6 hours ago

Is Paul Krugman available to talk about how great everything is now or is he still being investigated for distribution of child ****?

archipusz 5 hours ago

I needed a cross dressing analyst to explain this mkt to me. Thanks.

YesWeKahn 6 hours ago

This is Powell speaking:

There is no bubble, this is just a optimism of "not happening" reopening and "not working" vaccine.

[Apr 15, 2021] The Financial Instability Hypothesis by Hyman P. Minsky -- SSRN

Apr 15, 2021 | papers.ssrn.com

The Financial Instability Hypothesis (FIH) has both empirical and theoretical aspects that challenge the classic precepts of Smith and Walras, who implied that the economy can be best understood by assuming that it is constantly an equilibrium-seeking and sustaining system. The theoretical argument of the FIH emerges from the characterization of the economy as a capitalist economy with extensive capital assets and a sophisticated financial system.

In spite of the complexity of financial relations, the key determinant of system behavior remains the level of profits: the FIH incorporates a view in which aggregate demand determines profits. Hence, aggregate profits equal aggregate investment plus the government deficit. The FIH, therefore, considers the impact of debt on system behavior and also includes the manner in which debt is validated.

Minsky identifies hedge, speculative, and Ponzi finance as distinct income-debt relations for economic units. He asserts that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system: conversely, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a "deviation-amplifying" system. Thus, the FIH suggests that over periods of prolonged prosperity, capitalist economies tend to move from a financial structure dominated by hedge finance (stable) to a structure that increasingly emphasizes speculative and Ponzi finance (unstable). The FIH is a model of a capitalist economy that does not rely on exogenous shocks to generate business cycles of varying severity: business cycles of history are compounded out of (i) the internal dynamics of capitalist economies, and (ii) the system of interventions and regulations that are designed to keep the economy operating within reasonable bounds.

[Apr 15, 2021] Anatomy of a Stock Market Bubble by FRANK VENEROSO

Highly recommended!
Notable quotes:
"... much like the dot-com period, there is a broad subset of stocks (mostly in technology) that have become completely untethered, particularly since the summer of 2020, from business fundamentals like earnings and even sales -- driven higher only by euphoric market participants extrapolating from a past extraordinary trajectory of prices. ..."
"... A lot of today's US stock market has become what I call a "pure price-chasing bubble." Examination of the history of comparable pure price-chasing bubbles shows there has been a set of key causal factors that contributed to these rare (I have found nine in total) market events; the presence of most of these factors has usually been necessary for markets to reach the requisite escape velocity. ..."
"... To fuel the bubble further, there was a rapid expansion of bank money beginning three years before the market peak -- but the expansion of credit was even greater, owing to an explosion of margin credit (with implied annuaized interest rates sometimes reaching 100 percent) through an informal system utilizing postdated checks ..."
"... The US market certainly exhibits an exceptional record of price appreciation, with the S&P 500 having risen by almost 500 percent over more than a decade. In contrast to most other bubbles, however, it is notable that US economic growth over this period has been relatively anemic. ..."
"... Due to a sustained high rate of corporate equity purchases financed with debt, this overarching expansion of credit has also made its way into the last decade's bull market and steepened its price trajectory. ..."
"... The role of message boards and chat rooms -- with their millions of participants, all in instant real-time contact -- has created crowd dynamics in speculative stock market favorites at a pace without parallel in other pure price-chasing bubbles. ..."
"... a peak will be reached, a decline will follow, and the psychological dynamics in play on the way up will go into reverse and will accelerate the fall. ..."
"... Moreover, in the context of a grossly underestimated mass of corporate debt, history tells us the consequences of the bursting of the US stock market bubble should be another financial crisis and another recession ..."
Apr 01, 2021 | www.levyinstitute.org

According to Frank Veneroso, a broad subset of today's US stock market has become what he calls a "pure price-chasing bubble." Examination of the history of comparable pure price-chasing bubbles shows there has been a set of key causal factors that contributed to these rare market events.

The most extreme such case was an over-the-counter market in Kuwait called the "Souk al-Manakh." This exemplar of a pure price-chasing phenomenon may shed light -- albeit unflattering -- on the current US equity market, Veneroso contends.

[Apr 09, 2021] A modest suggestion for semi-vacant malls

Apr 09, 2021 | www.zerohedge.com

Cock Strong 38 minutes ago

Bezos notches another $100 billion.

Mando Ramos 7 minutes ago (Edited)

My simple solution is to turn the vacant malls into giant marijuana growing operations,and huge meth labs,and use the revenue from the meth and weed sales to balance the Federal budget..As an additional plus,you put the Mexican drug cartels out of business,which can't be a bad thing,either

FurnitureFireSale 26 minutes ago

The smile on the side of the Prime trucks looks like a big wang (Bezos's?) saying "F-U, take THIS!" to all the small businesses. Once you see it, you cannot unsee it.

Puppyteethofdeath 14 minutes ago

Turn them into homeless shelters.

744,000 Americans filed for 1st time unemployment last week.

Every week the numbers are the same.

no cents at all 5 minutes ago

Yet mall property owners and their ilk have equity prices in the stratosphere. Same with cruise lines. A mystery. (Although doesn't take scooby doo to understand why)

is scooby canceled yet?

aarockstar 7 minutes ago

A 60 year retail experiment goes bust...

[Apr 08, 2021] There is no inflation, it is just that everything costs more.

Apr 08, 2021 | www.wsj.com


B
BA Byron SUBSCRIBER 1 day ago @ Anthony

Economists: " There is no inflation, it is just that everything costs more. "

[Apr 07, 2021] Jamie Dimon in the eyes of ZH crowd

Such comments were definitely impossible before 2007. The level of vitriol is simply incredible. That spells trouble...
Apr 07, 2021 | www.zerohedge.com

10 hours ago

Jamie has Jerome's phone number.

That makes Jamie brilliant. play_arrow 5 play_arrow 1


zorrosgato 10 hours ago

"flush with savings"

HA!

Yen Cross 10 hours ago

Jack, ****, Dimon? Which one was it Z/H Google moderator?

I donate at Christmas.

Basil 20 minutes ago

whats gone wrong is the cancer of progressiveism. wokeism, social justice nonsense.

Gadbous 29 minutes ago

Don't you want to just slap these people?

MuleRider 18 minutes ago

You misspelled decapitate.

GrandTheftOtto 2 hours ago

"It was a year in which each of usfaced difficult personal challenges"

boundless hypocrisy...

Mr. Rude Dog 2 hours ago remove link

" Americans know that something has gone terribly wrong, and they blame this country's leadership: the elite, the powerful, the decision makers - in government, in business and in civic society," he wrote.

"This is completely appropriate, for who else should take the blame?"

Lets see if he projects the problem back on the citizens...Let's see what happens.

"But populism is not policy, and we cannot let it drive another round of poor planning and bad leadership that will simply make our country's situation worse."

I knew the so called elites could not take the blame... You know populism always makes bad decisions with the economy, our monetary system, our infrastructure and just managing our tax money in general...Yes I knew Jamie could not take the blame..LOL.!!!!

QE4MeASAP 2 hours ago

So Dimon is giving the state of the union instead of Biden?

Budnacho 2 hours ago

Jamie Dimon....Friend of the Little Guy....

Tomsawyer2112 PREMIUM 11 hours ago

He doesn't believe a word of what he just said. But he knows that if he wants his bank to continue to be an extension of the government and curry favor then he needs to tow the line. I am sure he also has his eye on a future role as Fed Lead or US Treasurer but might be tough since he's not a diversity candidate.

oknow 2 hours ago

Someone turn off his mike, dont need your sorry *** confession

Just confiscate his wealth and make him do 9 to 5 jobs for the rest of his life.

ChromeRobot 9 hours ago remove link

This guy is a rarity in the banking industry. He's a billionaire. Running a bank I was often told in my early years in finance was foolproof. Everybody needs money and they have it. Hard to fk up. Somehow this "titan" has gamed it to do really well doing something incredibly easy. Positioning yourself to be a SIFI helps too! Too big to fail has it's perks.

a drink before the war 10 hours ago

What Jamie is really saying without saying it is " I get paid in stock options however since the pandemic JPM and other banks haven't been allowed to do stock buy back but come June we get back to the NORMAL and with the FED printing money and giving it to us we going to talk this stock WAY up no matter what because I got almost two years of stock options I gotta get paid for!"

lay_arrow 2
archipusz 10 hours ago

If you want to get to the top, you must speak the party line narrative.

The truth is something different altogether.

Eddie Haskell 10 hours ago

If you want to be a state-approved oligarch you've gotta suck the right dickie. Good job.

Detective Miller 38 minutes ago

"Jaimie Tells Bagholders To 'Buy Buy Buy!!!'"

Onthebeach6 38 minutes ago

The US is addicted to helicoptor money.

The world looks fine to an addict until the supply is cut off.

sbin 41 minutes ago

Jimmy going to lock himself in jail and forfeit his assets?

34k of jerkoff.

Nuk Soo Kow 2 hours ago

How magnanimous of Jamie to blame elitists and civic "leaders" for the structural problems in America. It was the banksters that pushed NAFTA and helped China engineer it's currency against the dollar, which led to massive outflows of productive capital. It was the banksters via the use of financial legerdemain who engineered the collapse in 2008 (not to mention every other banking panic and collapse prior to). It's high time to throw out this den of vipers once and for all.

Nature_Boy_Wooooo 2 hours ago

He lost me at.....

We need more cheap immigrant labor...... housing is unaffordable for many.

No **** moron!......you suppressed our wages and increased demand for housing.

PT 10 hours ago remove link

I always consult the fox when I want to know about the state of the hen house.

QuiteShocking 10 hours ago

Economic boom?? Is really just trying to get back to where we were previously before the pandemic hit with things opening back up etc... More people have been working from home so different spending patterns are developing.. but could change... Supply chain chaos makes it seem like shortages and inflation etc... It may only last through 2023?? but with Dems in charge this is not a given with their anti business slant??

same2u 11 hours ago

UBI for the rich= stock market...

Hope Copy 3 hours ago (Edited)

Jamie knows that the core of Crypto is at the CIA and that the pseudo Republic has far to much Fascist politics at the core .. There has been a competitive failure at most all levels of the government in recent times with a 'winner take all' at the cost of keeping competitive practices alive (not to mention kickbacks).. Of course China is laughing even though they have a history of cutting corners (and outright fraud) in every economic sector.

Mario Landavoz 20 minutes ago

Banker. That's all ya need to know.

Just a Little Froth in the Market 40 minutes ago

But the CEO was very candid about China...

"China's leaders believe America is in decline... The Chinese see an America that is losing ground in technology, infrastructure and education – a nation torn and crippled . . . and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals

This is correct.

Joe A 55 minutes ago

He is just mocking and taking a piss at everybody. That America is such a mess is because of people like him with his scorched earth robber baron rogue capitalism. But there is a way to redeem yourselves. Just make all your assets available to the American people. And oh, blow your own brain out.

Abi Normal 3 hours ago remove link

What else is he supposed to say? As long as things don't go bad for Jamie it's cool.

OrazioGentile 3 hours ago

The Banksters, after years of mismanagement, borderline fraud, and endless bailouts now see that investments in unicorn startups, selling mindless BS to each other, and the quick buck lead to a burned out husk called America?!? Now?!? Let all of them live in the great paradise called the Cayman Islands that they helped build and see how far they get selling "capital instruments" to each other. The last 20 years have taught most Americans that hard work is meaningless to get ahead IMHO.

[Apr 07, 2021] Jamie Dimon: "This boom could easily run into 2023 because all the spending could extend well into 2023."

When did market cheerleading became the key responsibility of all key executives in major banks?
Apr 07, 2021 | www.zerohedge.com

Bay of Pigs 9 hours ago

Legs Dimon has always been a serial liar.

He's incapable of being honest.

One Moment Please 9 hours ago

My neighbors and I are not experiencing any of this 'economic boom' he speaks of.

Maybe we abide in some mysterious economic dead zone?

Mr..Lucky 10 hours ago

"Stock prices have reached what looks like a permanently high plateau," Yale economist Irving Fisher.

[Apr 06, 2021] UBS Predicts 80,000 More Retail Stores Will Close In Five Years

Apr 06, 2021 | www.zerohedge.com

archipusz 1 hour ago

Market surges on 80,000 retail outlet closings optimism.

[Apr 02, 2021] But let's be reasonable - how is it possible to have 700K - 800K initial jobless claims every week and create nearly a million new jobs?

Highly recommended!
If we are to believe authorities the USA. added 916K jobs in March, and the official unemployment rate is at 6% (note the word official; the current official U6 unemployment rate as of March 2021 is 10.70%; so the real number is probably much higher than 10%)
Fudging data became as prominent as it was in the USSR. The neoliberal empire can't afford objective stats.
Notable quotes:
"... monthly data is collected over a brief timeframe - just a few days - and that the calculations are seasonally adjusted. ..."
"... Yes, at least half the sheep population think they are real. It's insane how dumb people are today. ..."
Apr 02, 2021 | www.zerohedge.com

variousmarkets

I spent the last 2 weeks digging into the numbers - especially timing of the surveys and data collection. I get the fact that weekly claims don't reflect new hires. I also realize that monthly data is collected over a brief timeframe - just a few days - and that the calculations are seasonally adjusted.

But let's be reasonable - how is it possible to have 700K - 800K initial jobless claims every week and create nearly a million new jobs? Does anyone really believe any of these numbers?

Globalistsaretrash

Yes, at least half the sheep population think they are real. It's insane how dumb people are today.

[Apr 01, 2021] Archegos's Collapse Is a Wakeup Call for Regulators

Apr 01, 2021 | www.wsj.com

...history shows that one messy unwind can easily spread. The U.S. Office of Financial Research finds that the ten largest hedge funds were leveraged far more heavily than the next 40 largest funds, as of June. And many family offices may not be counted in these statistics at all, which mostly rely on disclosure forms they are able to avoid.

There are some obvious responses for regulators, such as mandating disclosure of the total return swaps that allowed Archegos to build big positions out of the public eye. But there are no easy answers to the wider challenge of overseeing leverage within the broadest financial complex when debt is almost free.

The system has held up under the latest strain, but this isn't a victory. Archegos means one who leads the way. Regulators must do what they can to ensure as few as possible follow.

Write to Rochelle Toplensky at rochelle.toplensky@wsj.com and Telis Demos at telis.demos@wsj.com

[Apr 01, 2021] Deutsche Bank Dodged Archegos Hit With Quick $4 Billion Sale - Bloomberg

Apr 01, 2021 | www.bloomberg.com

Swiss rival Credit Suisse expects a hit in the billions of dollars from Archegos, people with knowledge of the matter have said, while Nomura Holdings Inc. has signaled it may lose as much as $2 billion. Analysts at JPMorgan Chase & Co. estimate the Archegos blowup may cause as much as $10 billion of combined losses for banks.

David Herro, chief investment officer of Harris Associates -- one of Credit Suisse's biggest shareholders -- said on Bloomberg Television on Wednesday that the Archegos incident was a "wake-up call" for Credit Suisse and should lead to sweeping changes to its culture and oversight practices.

Shares of Credit Suisse tumbled 21% this week on concern over the size of its potential Archegos hit. Deutsche Bank is down 2.9%.

[Mar 31, 2021] Looks like Goldman and Morgan managed to sell thier shares in Archegos meltdown first as usual pushing other clients under the bus: Billions in Secret Derivatives at Center of Archegos Blowup

Casino capitalism is the fertile ground for the most sleazy types of speculators. The stock market has become a giant slot machine financed by 401K lemmings. The marks here are 401K investors.
Excessive leverage is a immanent feature of the pre-collapse stage of Minsky cycle. So those who argue that we are close to another crash get some additional confirmation due to this event. The Masters of the Universe rediscovered the hidden areas of huge risk, and like in 2008 are afraid but can't and do not want to anything.
TBTF such as Goldman and Morgan aid the most sleazy types as they bring outsized profits for them. So this a catch 22 as Goldman and other TBFT controls SEC not the other way around.
It would be prudent to view banksters as a special type of mafia and treat accordingly and prohibit for them serving in government. But this is impossible under neoliberal as financial oligarchy has all political power.
The question is: Is there another fund that's larger, that's more leveraged with the same characteristics that could prove to be a more systemic event? That's the major concern right now." Wall Street's hottest trades such as pure-tech plays and high-flying tech/media like the ones bet on by Hwang -- could be unwound. The Hwang blowup wakes up investors to the realization that many parts of the market are overvalued and it's time to sell -- and quickly as yields are going up. For the the FAANGS, the Tesla's out there -- the fundamentals don't support the stock. So it would be logical to a large correction.
Notable quotes:
"... The idea that one firm can quietly amass outsized positions through the use of derivatives could set off another wave of criticism directed against loosely regulated firms that have the power to destabilize markets. ..."
Mar 31, 2021 | finance.yahoo.com

Much of the leverage used by Hwang's Archegos Capital Management was provided by banks including Nomura Holdings Inc. and Credit Suisse Group AG through swaps and so-called contracts-for-difference, according to people with direct knowledge of the deals. It means Archegos may never actually have owned most of the underlying securities -- if any at all.

While investors who own a stake of more than 5% in a U.S.-listed company usually have to disclose their holdings and subsequent transactions, that's not the case with positions built through the type of derivatives apparently used by Archegos. The products, which are transacted off exchanges, allow managers like Hwang to amass exposure to publicly-traded companies without having to declare it.

The swift unwinding of Archegos has reverberated across the globe, after banks such as Goldman Sachs Group Inc. and Morgan Stanley forced Hwang's firm to sell billions of dollars in investments accumulated through highly leveraged bets. The selloff roiled stocks from Baidu Inc. to ViacomCBS Inc., and prompted Nomura and Credit Suisse to disclose that they face potentially significant losses on their exposure.

One reason for the widening fallout is the borrowed funds that investors use to magnify their bets: a margin call occurs when the market goes against a large, leveraged position, forcing the hedge fund to deposit more cash or securities with its broker to cover any losses. Archegos was probably required to deposit only a small percentage of the total value of trades.

The chain of events set off by this massive unwinding is yet another reminder of the role that hedge funds play in the global capital markets. A hedge fund short squeeze during a Reddit-fueled frenzy for Gamestop Corp. and other shares earlier this year spurred a $6 billion loss for Gabe Plotkin's Melvin Capital and sparked scrutiny from U.S. regulators and politicians.


The idea that one firm can quietly amass outsized positions through the use of derivatives could set off another wave of criticism directed against loosely regulated firms that have the power to destabilize markets.


Bob 2 days ago This is another major reminder that the stock market is not as rational as we want to believe. A small group of very large, leveraged funds can have far more impact on the market than dozens or hundreds of well thought out and researched programs. Sigh. Take your lumps and move on. Hasso 2 days ago 2008 - Hwang's Tiger Asia suffered losses from the Volkswagen short, 2012 - Hwang's Tiger Asia paid $44M to settle insider trading charges, banned 2014- Hong Kong fined him $5.3M & banned him for four years. 2021 - And here we are again.
Tyrone 2 days ago Gee, Credit Suisse involved in sleezy investments. Again. I'm shocked, just shocked!
Manohar 2 days ago Banks haven't learnt anything yet...you know why? Because its other people's money and the no one gets prosecuted when they are caught with hand in the cookie jar.
killer klown 2 days ago it's a sign that the market and it's regulators have learned nothing.........to even pretend that a penny difference in assumed earnings versus actual earnings using the GAAP accounting (which itself says it's not exact but generally accepted accounting principles)moves a stock is in itself a joke, this situation of a BIG BLACK BOX calls for the complete dismantle of the derivatives market which was created to lay off risk. Bill Hawng should be FLAT Broke his possesions seized, The board of Credit Suisse and Nomura et all should be unemployed as of 8:31 this morning. But they won't and it's only going to happen again and again.
Amvet 2 days ago Market manipulators have a free rein in the USA. Are politicians also involved? Reply 16 3 George 2 days ago Just amazing how some of the world's most sleazy characters have access to cosmic sums of money and remain under the radar and legal(???). Then nothing seems to happen except that loads of other folk get burned while they move on to the next bright idea. Reply 13 1 Rick 2 days ago So clearly limiting those who can purchase these to exclude amateur players has not been successful. Recklessness is not limited to amateurs. Mr. H. 2 days ago In 2008 high finance was playing very high risk games with clients money at the undefined edge between legal and illegal. A bunch of firms went away along with many billions of dollars because a bunch of players were playing CYA. They came up with the term "too big to fail" when they were picking winners and losers. "too big to fail" is is fetid bovine excrement. The SEC, that is the administrative government, was not doing its job! There were many questions about government employee competence to do those jobs. The government should have let the market place pick the winners and losers, then the government should have prosecuted everyone who failed to perform their fiduciary duty and set a major precedent about high risk play with other people's money; keep it legal or go to jail and lose your shirt. That is what should happen this time too! Noone 2 days ago Almost like something that is so dangerous and risky to both the market AND the "investor" that retail traders ARE BANNED from doing it should.. idk.. BE ILLEGAL FOR EVERYONE? Useless SEC. Do your job right.
Philip 2 days ago Ironic that Hedge Funds are the most unhedged game going.... Dan 1 day ago The managers of these HFs lack morality, they steal from other companies because they believe in their twisted little minds if they set up a system whereby they can trade in dark pools with illegal naked shorting, counterfeit shares and stock manipulation under the radar -- it makes the crime okay. All of this criminality is been done with the aid of supplementary leverage ratio (SLR) If they can manage to bankrupt the company they short with Government SLR they end up paying no tax and pocket the money GME/AMC and more for example.. Bingo the most audacious robbery attempt in the history of the state. Oh boys did they fail, wow what a spectacular failure. Now they have to deleverage destabilizing the entire market. Do these HF managers rank their values differently to the moral code we all live by? Obviously they do! There's no doubt they'll get lots of time to think about their behaviour when they're in the slammer. Each case will have to be evaluated on its own merit at some stage of course. On the face of it, all indications points to a tradeoff that benefits themselves at the disadvantaging of other. Sad for them! I rest my case!
Jodes 1 day ago The spikes in shares like ROKU, BIDU, SHOP and many more have huge parabolic spikes at the top accounting for the disfunctional market as we were seeing it at the top. They had huge buy orders to artificially spike the prices keep them up and then experts come in after and raise price targets and put a BUY rating on the stock. Then get retail to buy in and then drop them like a rock. Greedy and dispicibale. All probably done for a huge bonus. While retail suffers for their greed.
Vince 2 days ago More than 100 Trillion (with a T) are moving around the world in Derivatives each and every day., some say closer to 200 Trillion! You figure it our when THAT bubble bursts! Reply 2 1 SniffMopWho 2 days ago Interesting how these guys make millions and billions, just by pressing keys on a keyboard.
... 2 days ago More sleaze trying to bring down the market by making risky bets with swaps and derivatives, yet the regulators are caught asleep again. Just more proof of incompetence by Biden and his hired idiots at the SEC.

[Mar 31, 2021] Us market collapsed in March2020, but nobody has courage to admit that.

Mar 31, 2021 | www.unz.com

anon [406] Disclaimer , says:

[Mar 31, 2021] Citadel and friends have shorted the treasury bond market to oblivion using the repo market.

Mar 31, 2021 | www.zerohedge.com

play_arrow


Crash Overide 2 hours ago (Edited)

Speaking of treasuries... and Citadel, I thought it was an interesting read.

TL;DR- Citadel and friends have shorted the treasury bond market to oblivion using the repo market. Citadel owns a company called Palafox Trading and uses them to EXCLUSIVELY short & trade treasury securities. Palafox manages one fund for Citadel - the Citadel Global Fixed Income Master Fund LTD. Total assets over $123 BILLION and 80% are owned by offshore investors in the Cayman Islands. Their reverse repo agreements are ENTIRELY rehypothecated and they CANNOT pay off their own repo agreements until someone pays them, first. The ENTIRE global financial economy is modeled after a fractional reserve system that is beginning to experience THE MOTHER OF ALL MARGIN CALLS.

THIS is why the DTC and FICC are requiring an increase in SLR deposits. The madness has officially come full circle.

tnorth 4 hours ago

another month of completely rigged 'markets'

mtl4 4 hours ago remove link

Music is still playing, make sure you have a chair when it stops

this_circus_is_no_fun 1 hour ago remove link

Consider these two points:

  1. Treasuries are claimed to be backed by the "full faith and credit of the United States".
  2. In Q1, Treasuries suffer their biggest loss in 40 years.
y_arrow
Kreditanstalt 1 hour ago (Edited)

I've always wondered why seemingly contradictory and uncorrelated assets and asset classes alternately "soar" and "plunge" on different days, usually in random conjunction with others...

It seems so counterintuitively...MECHANICAL...or theory-driven, rather than rational "investing".

Almost like random BETTING

[Mar 29, 2021] Hedge fund blowup sends shockwaves through Wall Street and the City

Mar 29, 2021 | finance.yahoo.com

A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.

Shares in Credit Suisse ( CSGN.SW ) and Nomura ( 8604.T ) sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.

Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge losses.

Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up the cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it also means hedge funds can theoretically lose more money than they hold in client funds.

If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This process is known as a margin call.

Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported on Friday that Goldman Sachs ( GS ) and Morgan Stanley ( MS ) were selling huge chunks of shares in businesses including ViacomCBS ( VIAC ), Discovery ( DISCA ) and Chinese stocks Baidu ( BIDU ) and Tencent Music ( TME ). The block sales are estimated to be worth around $20bn (£14.5bn), according to the Financial Times .

Shares in Credit Suisse sunk after it warned of 'significant losses' linked to the blow up at Archegos Capital. Photo: Fabrice Coffrini/AFP via Getty Images

A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.

Shares in Credit Suisse ( CSGN.SW ) and Nomura ( 8604.T ) sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.

Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge losses.

Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up the cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it also means hedge funds can theoretically lose more money than they hold in client funds.

If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This process is known as a margin call.

Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported on Friday that Goldman Sachs ( GS ) and Morgan Stanley ( MS ) were selling huge chunks of shares in businesses including ViacomCBS ( VIAC ), Discovery ( DISCA ) and Chinese stocks Baidu ( BIDU ) and Tencent Music ( TME ). The block sales are estimated to be worth around $20bn (£14.5bn), according to the Financial Times .

"Things started going wrong for Archegos when shares of companies such as Viacom started to slide mid-last week," said Michael Brown, a senior market analyst at Caxton Business. "It was at that point that margins were called, and couldn't be provided, hence the block sales seen Friday."

A fire sale can have a negative impact on stock prices and shares in both ViacomCBS and Discovery sunk 27% on Friday. Banks therefore risked making less back from the sales than they lent to clients to fund the investments.

Credit Suisse on Monday warned it was facing "highly significant" losses linked to Archegos that could be "material to our first quarter results".

The Swiss lender didn't name Archegos but said: "A significant US-based hedge fund defaulted on margin calls made last week by Credit Suisse and certain other banks."

Credit Suisse said it was "in the process" of selling shares held by Archegos. The bank said it was "premature" to estimate how much it would likely lose from the crisis.

"We intend to provide an update on this matter in due course," Credit Suisse said.

Shares sunk 13.4% in Zurich.

"One would assume that, judging by the size of positions sold, the 'game is up' for Archegos," Brown said.

He said it was "unlikely" that Archegos would pose a systemic risk to the financial system. Neil Wilson, chief market analyst at Markets.com, said the hedge fund "appears to have been too concentrated in a number of risky stocks."

A hedge fund blow up is relatively unusual and Archegos' undoing has raised concerns that other funds could find themselves in similar positions.

"Block equity-trades stemming from margin-calls on Archegos will have sent the market's spidey senses a tingle," said Bill Blain, a senior strategist at Shard Capital. "Who is next?"

Alex Harvey, a portfolio manager at Momentum, said: "We tend to find out after the event that other funds get caught up as sometimes hedge funds may be crowded into similar trades."

"When we look at this and think about the GameStop saga and the decline in Tesla as two examples -- what we're seeing are more and more pockets of very unusual trading activity in some stocks," he said. "You worry that this sort of frothy trading activity in turn creates pockets of distress among investors and banks that leads to larger unwinds and losses for financials."

[Mar 28, 2021] Bubble Deniers Abound to Dismiss Valuation Metrics One by One by Vildana Hajric , Claire Ballentine , Lu Wang

Notable quotes:
"... How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency. Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms. ..."
"... At 35, the CAPE is at its highest since the early 2000s. ..."
"... Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was developed in 1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies. It's showing a reading just shy of a peak reached in 2000. T ..."
"... the signal sent by the "Buffett Indicator," a ratio of the total market capitalization of U.S. stocks divided by gross domestic product. ..."
"... Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an average 3% a quarter since 2015. ..."
"... "This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'" ..."
"... To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a signal, he says. "That's usually an indication we're trying to justify something," he said. ..."
Mar 287, 2021 | www.bloomberg.com

March 27, 2021

Everywhere you look, there's a valuation lens that makes stocks look frothy. Also everywhere you look is someone saying don't worry about it.

The so-called Buffett Indicator . Tobin's Q. The S&P 500's forward P/E. These and others show the market at stretched levels, sometimes extremely so. Yet many market-watchers argue they can be ignored, because this time really is different. The rationale? Everything from Federal Reserve largesse to vaccines promising a quick recovery.

How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency. Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms.

"Every time markets hit new highs, every time markets get frothy, there are always some talking heads that argue: 'It's different,'" said Don Calcagni, chief investment officer of Mercer Advisors . "We just know from centuries of market history that that can't happen in perpetuity. It's just the delusion of crowds, people get excited. We want to believe."

relates to Bubble Deniers Abound to Dismiss Valuation Metrics One by One

Source: Robert Shiller's website

Robert Shiller is no apologist. The Yale University professor is famous in investing circles for unpopular valuation warnings that came true during the dot-com and housing bubbles. One tool on which he based the calls is his cyclically adjusted price-earnings ratio that includes the last 10 years of earnings.

While it's flashing warnings again, not even Shiller is sure he buys it. At 35, the CAPE is at its highest since the early 2000s. If that period of exuberance is excluded, it clocks in at its highest-ever reading. Yet in a recent post , Shiller wrote that "with interest rates low and likely to stay there, equities will continue to look attractive, particularly when compared to bonds."

Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was developed in 1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies. It's showing a reading just shy of a peak reached in 2000. To Ned Davis, it's a valuation chart worth being wary about. Still, while the indicator is roughly 40% above its long-term trend, "there may be an upward bias on the ratio from technological change in the economy," wrote the Wall Street veteran who founded his namesake firm.

Persuasive arguments also exist for discounting the signal sent by the "Buffett Indicator," a ratio of the total market capitalization of U.S. stocks divided by gross domestic product. While it recently reached its highest-ever reading above its long-term trend, the methodology fails to take into consideration that companies are more profitable than they've ever been, according to Jeff Schulze, investment strategist at ClearBridge Investments.

"It's looked extended really for the past decade, yet you've had one of the best bull markets in U.S. history," he said. "That's going to continue to be a metric that does not adequately capture the market's potential."

At Goldman Sachs Group Inc., strategists argue that however high P/Es are, the absence of significant leverage outside the private sector or a late-cycle economic boom points to low risk of an imminent bubble burst. While people are shoveling money into stocks at rates that have signaled exuberance in the past, risk appetite is rebounding after a prolonged period of aversion, according to the strategists, who also cite low interest rates.

"Today is a very different situation -- I don't think we've got a broad bubble," Peter Oppenheimer, chief global equity strategist at the firm, said in a recent interview on Bloomberg Television. "Given the level of real rates, where they are, it's still likely to be broadly supportive for equities versus bonds."

Another rationale employed to dismiss certain valuation metrics is the earnings cycle. Corporate America is just emerging from a recession, with profits forecast to stage a strong comeback. The strong outlook for profits is why many investors are giving similarly stretched valuations the benefit of the doubt. Trading at 32 times reported earnings, the S&P 500 looks quite expensive, but with income forecast to jump 24% to $173 a share this year, the multiple drops to about 23.

The valuation case becomes more favorable should business leaders continue to blow past expectations. For instance, if this year's earnings come in at 16% above analyst estimates, as they did for the previous quarter, that'd imply a price-earnings ratio of less than 20. While that exceeds the five-year average of 18, Ed Yardeni is not troubled by what he calls "the New Abnormal."

"Valuation multiples are likely to remain elevated around current elevated levels because fiscal and monetary policies continue to flood the financial markets with so much free money," said the founder of Yardeni Research Inc. He predicts the S&P 500 will finish the year at 4,300, about an 8% gain from current levels.

Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an average 3% a quarter since 2015.

"This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'"

Returns of 2%

Valuations are never useful market-timing tools because expensive stocks can get more expensive, as was the case during the Internet bubble. Yet viewed through a long-term lens, valuations do matter. That is, the more over-valued the market is, the lower the future returns. According to a study by Bank of America strategists led by Savita Subramanian, things like price-earnings ratios could explain 80% of the S&P 500's returns during the subsequent 10 years. The current valuation framework implies an increase of just 2% a year over the next decade, their model shows.

To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a signal, he says. "That's usually an indication we're trying to justify something," he said.

[Mar 28, 2021] Willful Blindness - Wash and Rinse in Metals and Stocks

Mar 28, 2021 | jessescrossroadscafe.blogspot.com


"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 are nearly always silent. The foolish thus have the field to themselves."

John Kenneth Galbraith, The Great Crash of 1929

"Foolishness is a more dangerous enemy of the good than malice. One may protest against evil; it can be exposed and, if need be, prevented by use of force. Evil always carries within itself the germ of its own subversion in that it leaves behind in human beings at least a sense of unease.

In conversation with them, one virtually feels that one is dealing not at all with a person, but with slogans, catchwords and the like that have taken possession of them. They are under a spell, blinded, misused, and abused in their very being."

Dietrich Bonhoeffer, Prisoner for God: Letters and Papers from Prison

"The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated communist, but people for whom the distinction between fact and fiction, true and false, no longer exists."

Hannah Arendt, The Origins of Totalitarianism

"When we trade the effort of doubt and debate for the ease of blind faith, we become gullible and exposed, passive and irresponsible observers of our own lives. Worse still, we leave ourselves wide open to those who profit by influencing our behavior, our thinking, and our choices. At that moment, our agency in our own lives is in jeopardy."

Margaret Heffernan

Today was a general wash and rinse in the markets.

Wax on, wax off.

If you look at the charts you will see the deep plunges in the early trading hours in stocks and the metals, especially silver.

Simply put, it is called running the stops.

This is not 'the government' doing this.

These are the monstrous financial entities that we have allowed lax regulation and years of propagandizing to create, in the biggest Banks and hedge funds.

Most will run back to the familiar sources of their ideological addiction, the so-called 'news sites' that thrive on the internet and alternative radio funded by the oligarchs.

If you are one of those who cannot wait to run back to your familiar ideological watering hole to relieve the tension of thought, you might just be one of the willfully blind and lost.

Truth is more palatable to the sick at heart when it has been twisted out of shape.

The good news perhaps is that a cleaning out like this often proceeds a resumption of a move higher.

First they kick off the riff raff. Oh, certainly that does not include you, but those others, right?

Or not. It is not easy to think like a criminal when you are not privy to the same jealously guarded information and perverse perspective on life.

On the lighter side I have experienced no side effects from the first dose of the Coronavirus vaccine which I had the other day.

Let's see if the second shot has the same results.

The whole experience reminded me of 'Sabin Oral Sunday' back in 1960. I don't recall any anti-vaxxer or ideologically driven whack-a-doodlism back then, but I was too young to care. And polio shots were no fun. But it beat doing time in an iron lung.

And the band played on.

Have a pleasant evening.

[Mar 28, 2021] Real unemployment is double the 'official' unemployment rate

Notable quotes:
"... The Globe and Mail ..."
"... The Globe and Mail ..."
"... The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China ..."
Mar 28, 2021 | systemicdisorder.wordpress.com

How many people are really out of work? The answer is surprisingly difficult to ascertain. For reasons that are likely ideological at least in part, official unemployment figures greatly under-report the true number of people lacking necessary full-time work.

That the "reserve army of labor" is quite large goes a long way toward explaining the persistence of stagnant wages in an era of increasing productivity.

How large? Across North America, Europe and Australia, the real unemployment rate is approximately double the "official" unemployment rate.

The "official" unemployment rate in the United States, for example, was 5.5 percent for February 2015. That is the figure that is widely reported. But the U.S. Bureau of Labor Statistics keeps track of various other unemployment rates, the most pertinent being its "U-6" figure. The U-6 unemployment rate includes all who are counted as unemployed in the "official" rate, plus discouraged workers, the total of those employed part time but not able to secure full-time work and all persons marginally attached to the labor force (those who wish to work but have given up). The actual U.S. unemployment rate for February 2015, therefore, is 11 percent .

Share of wages, 1950-2014 Canada makes it much more difficult to know its real unemployment rate. The official Canadian unemployment rate for February was 6.8 percent, a slight increase from January that Statistics Canada attributes to "more people search[ing] for work." The official measurement in Canada, as in the U.S., European Union and Australia, mirrors the official standard for measuring employment defined by the International Labour Organization -- those not working at all and who are "actively looking for work." (The ILO is an agency of the United Nations.)

Statistics Canada's closest measure toward counting full unemployment is its R8 statistic, but the R8 counts people in part-time work, including those wanting full-time work, as "full-time equivalents," thus underestimating the number of under-employed by hundreds of thousands, according to an analysis by The Globe and Mail . There are further hundreds of thousands not counted because they do not meet the criteria for "looking for work." Thus The Globe and Mail analysis estimates Canada's real unemployment rate for 2012 was 14.2 percent rather than the official 7.2 percent. Thus Canada's true current unemployment rate today is likely about 14 percent.

Everywhere you look, more are out of work

The gap is nearly as large in Europe as in North America. The official European Union unemployment rate was 9.8 percent in January 2015 . The European Union's Eurostat service requires some digging to find out the actual unemployment rate, requiring adding up different parameters. Under-employed workers and discouraged workers comprise four percent of the E.U. workforce each, and if we add the one percent of those seeking work but not immediately available, that pushes the actual unemployment rate to about 19 percent.

The same pattern holds for Australia. The Australia Bureau of Statistics revealed that its measure of "extended labour force under-utilisation" -- this includes "discouraged" jobseekers, the "underemployed" and those who want to start work within a month, but cannot begin immediately -- was 13.1 percent in August 2012 (the latest for which I can find), in contrast to the "official," and far more widely reported, unemployment rate of five percent at the time.

Concomitant with these sobering statistics is the length of time people are out of work. In the European Union, for example, the long-term unemployment rate -- defined as the number of people out of work for at least 12 months -- doubled from 2008 to 2013 . The number of U.S. workers unemployed for six months or longer more than tripled from 2007 to 2013.

Thanks to the specter of chronic high unemployment, and capitalists' ability to transfer jobs overseas as "free trade" rules become more draconian, it comes as little surprise that the share of gross domestic income going to wages has declined steadily. In the U.S., the share has declined from 51.5 percent in 1970 to about 42 percent. But even that decline likely understates the amount of compensation going to working people because almost all gains in recent decades has gone to the top one percent.

Around the world, worker productivity has risen over the past four decades while wages have been nearly flat. Simply put, we'd all be making much more money if wages had merely kept pace with increased productivity.

Insecure work is the global norm

The increased ability of capital to move at will around the world has done much to exacerbate these trends. The desire of capitalists to depress wages to buoy profitability is a driving force behind their push for governments to adopt "free trade" deals that accelerate the movement of production to low-wage, regulation-free countries. On a global basis, those with steady employment are actually a minority of the world's workers.

Using International Labour Organization figures as a starting point, professors John Bellamy Foster and Robert McChesney calculate that the "global reserve army of labor" -- workers who are underemployed, unemployed or "vulnerably employed" (including informal workers) -- totals 2.4 billion. In contrast, the world's wage workers total 1.4 billion -- far less! Writing in their book The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China , they write:

"It is the existence of a reserve army that in its maximum extent is more than 70 percent larger than the active labor army that serves to restrain wages globally, and particularly in poorer countries. Indeed, most of this reserve army is located in the underdeveloped countries of the world, though its growth can be seen today in the rich countries as well." [page 145]

The earliest countries that adopted capitalism could "export" their "excess" population though mass emigration. From 1820 to 1915, Professors Foster and McChesney write, more than 50 million people left Europe for the "new world." But there are no longer such places for developing countries to send the people for whom capitalism at home can not supply employment. Not even a seven percent growth rate for 50 years across the entire global South could absorb more than a third of the peasantry leaving the countryside for cities, they write. Such a sustained growth rate is extremely unlikely.

As with the growing environmental crisis, these mounting economic problems are functions of the need for ceaseless growth. Once again, infinite growth is not possible on a finite planet, especially one that is approaching its limits. Worse, to keep the system functioning at all, the planned obsolescence of consumer products necessary to continually stimulate household spending accelerates the exploitation of natural resources at unsustainable rates and all this unnecessary consumption produces pollution increasingly stressing the environment.

Humanity is currently consuming the equivalent of one and a half earths , according to the non-profit group Global Footprint Network. A separate report by WWF–World Wide Fund For Nature in collaboration with the Zoological Society of London and Global Footprint Network, calculates that the Middle East/Central Asia, Asia-Pacific, North America and European Union regions are each consuming about double their regional biocapacity.

We have only one Earth. And that one Earth is in the grips of a system that takes at a pace that, unless reversed, will leave it a wrecked hulk while throwing ever more people into poverty and immiseration. That this can go on indefinitely is the biggest fantasy.

[Mar 27, 2021] It is not just Jens Quisling, half (or more) of the European political elite are USA proxies. China stated that it will forego the benefits of trade if sanctions regime persists and doesn't care if the EU's dire economic condition worsens

Mar 27, 2021 | www.moonofalabama.org

karlof1 , Mar 24 2021 22:11 utc | 56

The EUP is cutting its own throat trying to bully China. I see the move was made as soon as Blinken arrived and began spreading lies about both Russia and China. I know China and Russia would like these rogue nations to uphold their honor by obeying the UN Charter, but it seems too many have caught the Outlaw US Empire's disease and now want to return to their Colonial ways. If the EUP ends up trashing the Comprehensive Agreement on Investment (CAI) with China, many individual European nations are going to be very angry. China won't mind if that's what the EUP does as is explained here :

"After China announced sanctions on 10 individuals and four entities from the EU as a countermove to EU's unilateral sanctions against China, some people from the EU reacted strongly, claiming China's countermeasures were "unacceptable." The European Parliament canceled a meeting on Tuesday to discuss the Comprehensive Agreement on Investment (CAI) with China. Some members of the European Parliament warned that the lifting of Chinese sanctions should be a condition to promote talks on CAI. Voices that support to block the agreement in an attempt to punish China have been hyped by some anti-China forces.

"Yet those forces should be told that the CAI between China and the EU is mutually beneficial, rather than a gift from the EU to China. If the European Parliament wants to obstruct the deal, taking it as a bargaining chip in interactions with China, it should first reach a consensus among European countries. If they all agree, let's just take it as negotiations between China and the EU never took place last year. But don't blackmail China with the case. China despises such ugly deeds."

China's saying essentially that it will forego the benefits of trade if it isn't properly respected and doesn't care if the EU's dire economic condition worsens because it can't stand up for itself in the face of the world's #1 Bully, which is exactly the same line Russia has taken.

Lurk , Mar 25 2021 1:33 utc | 74

@Norwegian | Mar 24 2021 21:19 utc | 46

It is not just Jens Quisling, half (or more) of the European political elite are USA proxies.

Take for example the European green parties.

I am pretty sure that the Dutch green party is at its core a NATO/military intelligence operation. It was created as a merger of three parties, all of whom had a distinct pacifist and socialist signature. The new party, GroenLinks ("GreenLeft") has forgotten all of that and has limited itself to churning out Big Climate slogans. The party leader is an obviously hollow puppet in the image of Justin Trudeau. His opinions are handed to him by advisors in the shade.

A few years ago, an MP for GroenLinks, Mariko Peters was enthousiastically promoting more military missions in Afghanistan. She was also a board member of the "Atlantische Commissie", the local Dutch chapter of the Atlantic Treaty Organisation (the USA chapter is the more well-known Atlantic Council). If you study her antics and associations more closely, it is pretty obvious that there is nothing green or left about this lady and that she is an obvious atlanticist diplomat/spy type.

Currently, there are no political parties in the Netherlands that are critical of NATO. This used to be very different not even a very long time ago.

About the German green party I know a bit less, but I trust well-informed members of the CDU when they point out the NATO dirt on Die Grüne:
Green Party is an 'arm of the US elites' & doesn't care about German interests – Merkel's ally to RT

What the article does not mention is the association, reputedly for a six-figure salary) of former Grüne luminary Joschka Fisher to the Nabucco pipeline project (competing with ns2). Fischer is also a member of the council on foreign relations and a founding member even of the European chapter ECFR.

[Mar 26, 2021] Absurd NFT PRices Expose a Global Financial House of Cards - ZeroHedge

Mar 26, 2021 | www.zerohedge.com


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Absurd NFT PRices Expose a Global Financial House of Cards BY SKWEALTHACADEMY FRIDAY, MAR 26, 2021 - 5:59

The insanity of absurd NFT prices reveals the fraud of the global currency system. The pricing for assets worldwide has gone insane at a time when the vast majority of the world's population became poorer, not wealthier, over the past 12 months due to the global economic lockdowns. As an example, there was an article in the Philadelphia Inquirer the other day of a cassette tape of hip hop icon Nas's Illmatic album selling for $13,999 . Not a CD, but a cassette tape. A rectangular piece of cardboard, known as an NBA trading card, for star Luka Doncic's rookie trading card, recently auctioned for $4.6M. Luka Doncic is not a star that played in 1925, and for this reason, his rookie card is worth so much. Luka Doncic entered the NBA in the 2018-19 season, less than three years ago. Nostalgic or collector items are simply selling for insane price because, in my opinion, wealthy people have captured so much of the world's wealth through a global currency system designed and engineered to produce this end result, that they have no better use for their money than to pay $14,000 for a music item that the vast majority of people do not even have the necessary hardware to actually play and to pay more than $4.5M for a piece of cardboard. Anyone that truly understands the difference between a sound and an unsound monetary system realizes that the likelihood, under a sound monetary system, of people paying exorbitant prices for the types of assets and NFTs described above would be a fraction of the probability at which they are occurring today.

Banksy, a UK-based street artist infamous for mocking the very wealthy people that pay millions for his artwork, even titling a piece "Morons" which depicted an art auction with a framed picture of the words "I can't believe you morons actually buy this shit". Instead of being offended by the artist's mockery, someone paid nearly 44,000 pounds for it and it recently sold for nearly 10 times the original purchase price when the piece was destroyed and the act of destruction was turned into an NFT. By the way Banksy also sold a very simple drawing of a girl with a red balloon that was mounted inside a frame in which he had hidden a shredder. After it sold for $1.4M, Banksy remotely activated the hidden shredder and shredded his artwork into thin strips as perhaps "revenge" against the idiocy of narcissistic, wealthy art collectors that can't find any better use of their money than purchasing stencil created art for which no rational person would ever pay $1.4M. To demonstrate the idiocy of the art world, Sotheby's immediately coined the shredding of the art piece as "the first work in history ever created during a live auction", which art collectors worldwide seemed to accept, and thereby increased the value of the destroyed piece of art to perhaps as high as double the original auction price at the current time and avoiding a more rational valuation for the art piece to near zero.

I once read a book called the $12M Stuffed Shark, in which the author revealed that US hedge fund manager Steve Cohen paid $12M to an artist to kill a shark and put it in a vat of plexiglass sealed formaldehyde that he could display in the foyer of his house and basically concluded, after a careful introspection into the art world, that pieces of art like pyramids built from tiny Godiva chocolates and stainless-steel colored balloon animals ($58M or more) would be priced at whatever price dealers could convince the dumbest rich person it was worth. Certainly this conclusion seemed to be supported when someone purchased an "art installation" of a banana taped to the wall with duct tape at a Miami Beach art gallery for $120,000 at the end of 2019 . When people conclude that the best use for $5M or $58M is to buy a piece of cardboard or a steel balloon animal during a period in which Rome is burning (i.e. exploding homelessness numbers in Los Angeles nearing 70,000 as evidenced here and here ), either this is a sign of the fraud of the monetary system, the decline of civilization, or both. If you have ever lived in Los Angeles, as I have, and watch the video referenced in the second link, you will find it astonishing that massive homeless encampments have sprung up throughout Los Angeles in areas that prior to recent years, had no homelessness. (depending on the social media platform you may be watching this on, the soaring prices for which art that I consider to be the lowest form of art that many do not even consider as art is selling for such absurd prices, including NFTs that I will soon discuss, is certainly reflective of the rapid decline of civilization.

This rapid decline of civilization is also reflected in the fact that giant titans of the tech world and social media platforms continue to promote and push the most morally reprehensible content to the top positions of success on their platforms. When popular YouTube Logan Paul visited the "suicide forest" in Japan and found a dead body hanging from the tree, he filmed it and mocked the dead person and YouTube quickly promoted his video as one of their top trending videos on their entire platform for 24 hours, until Logan Paul, not YouTube executives, deleted the video due to the outrage it provoked. Another popular YouTuber, David Dobrik, has had many of his reprehensible videos monetize bullying and belittling of others, often promoted on YouTube among the top trending videos. Recently Dobrik came under fire for allegedly monetizing a video of an actual rape on his channel, and he was roundly mocked when his initial apology consisted of trying to blame the rape victim, who was allegedly underage and too drunk to consent to sex. In his "apology", Dobrik stated he always gains consent for his videos, but sometimes people he victimizes consent at first but then change their minds later, and that is why it appears in many of his videos that he is monetizing morally reprehensible behavior. In any event, YouTube executives allegedly allowed such morally and cowardly behavior to be monetized to massive sums of income for such YouTubers and seem to be more focused on demonetizing anyone that challenges a narrative, true or false, forwarded by the oligarchs.

And as ludicrous as are the prices paid for some of the assets I've mentioned above, the level of insanity paid for NFTs, in my opinion, are at an even exponentially higher level. For those of you that may not know what are NFTs, Non-Fungible Tokens are unique blockchain-based digital assets that represent an increasing number of commodities, from art and real estate to collectibles like sports trading cards. One platform, Original Protocol, recently auctioned off the world's first NFT music album by American DJ 3LAU. Collectively, the artist's fanbase paid out more than $11 million for 33 NFTs contained on 3LAU's album Ultraviolet. In this case, since musicians are routinely ripped off by giant record labels and often have such suffocating, unfair contracts that make it near impossible to earn any significant income from album releases, the digitization of music in the form of NFTs that allow musicians to control their income is a wonderful aspect of the new digital economy of NFTs.

The Non-Fungibility of NFTs and Most Cryptocurrencies Disqualify Them for Use in Financial Derivative Currency Swaps

NFTs sell digital representations of items, including some that used to be represented in the physical world, like trading cards and pieces of art. As is the case in the fine art world, an NFT's price is the highest price you can convince someone to pay for it, a pool of clients that often overlaps with the over indulgent, narcissistic people that comprise the bidders for modern art pieces that sell for millions of dollars. Perhaps the most amazing quality of NFTs is that they actually have a more meaningful value than any cryptocurrency not backed by any type of hard asset. For example, bitcoin is a digital asset, but one would be hard pressed to describe its intrinsic value. One cannot say its fungibility is its price because its price is denominated in fiat currencies with intrinsic values of near zero. Furthermore, for those that constantly and very wrongly argue that non hard-asset backed cryptocurrencies are sound money, if bankers truly believed that bitcoin even remotely qualified as sound money, they would have zero problem offering currency swap derivative contracts between any fiat currency and bitcoin.

Yet, there is not a single corporation in the entire world that has a currency swap that hedges their corporate cash treasury holdings with bitcoin. You can never have any type of financial contract without unlimited risk if it is denominated in bitcoin in which both parties realistically have no idea of the price range of that currency for the maturity of that contract. No rational party will lock themselves into a contract in which a currency presents unlimited risk to them. The simple understanding of why there are no derivative currency swaps or hedging contracts denominated in bitcoin should easily explain to any rational person the very reason why BTC is not considered as sound money by a single banker in the entire world. On the contrary, even as volatile in price as gold and silver may be, gold and silver mining companies routinely hedge their inventory risk and their revenue risk of yet-to-be-mined gold and silver ounces by establishing open positions of gold and silver futures contracts years into the future.

You can't argue that BTC's intrinsic value is the block of the blockchain that records the transaction, because whether that block is used to record an NFT, BTC, or ownership of real estate, a photo or song, the price represented by that block could possibly vary from just a few dollars to several million dollars. So the blockchain has no intrinsic value either. However, with NFTs, its value, is more uniquely determinable than the block upon which a bitcoin transaction is stored that records the price of bitcoin, because that value is simply the highest price willing to be paid by all available bidders at any given time. If there are no available bidders willing to bid on a particular NFT for weeks or perhaps months on end, then one can assume the price of that NFT, even if the last paid price was $100,000, is likely zero. But even if there is one available bidder for that NFT at a price of $1,000,000 then the market price of that NFT is $1M. Though one may state that the bidding mechanism is much more controlled in BTC markets and that BTC could never be priced at zero or $1M per BTC in such a cavalier manner that mimics the pricing of NFTs, the similarities between the pricing mechanisms based upon lack of fungibility should not be ignored when considering the inherent risk imbedded in the price of BTC in its near $60,000 per coin current price. You will either understand this risk and behave accordingly, or ignore this risk and likely expose yourself to strong downside risk in the future at some point that should be expected but will remain unexpected to those that cannot, or will not, accept this existing risk.

The five biggest whales that own BTC in order from top to bottom, are believed to be as follows: (1) The collective of institutions/people called Satoshi Nakamoto; (2) The FBI; (3) The Winklevoss Twins; (4) Micree Zhan; and (5) Jihan Wu. Other notable owners among the top 10 BTC whales are Huobi, Tim Draper and the North Korean State. In 2017, Bloomberg reported that only 1,000 people owned 40% of all BTC in the entire world. Given that in the past two years, it has been reported that the top whales had been cornering the BTC market and increasing their market share, it would not be surprising if they had increased their market share to 50% or perhaps even higher by 2021. In any event, this translates into 0.00012658% of the world's population likely controlling majority ownership of BTC. I don't know of any world in which such a statistic does not translate into enormous risk.

Unanswered Questions

But fungibility is what reveals why cryptocurrencies like BTC and NFTs cannot ever qualify as sound money. For those that don't understand why sound money needs to be a fungible asset, take gold for example. Fungibility essentially means that money should never vary in its qualitative properties but only its quantitative properties. All gold has electroconductivity properties no matter its form. Electroconductivity is an intrinsic quality of gold. Because all purified four nine gold has the same density, the same volume will always be measured by the exact same weight in grams, again another fungible quality of gold. However, depending on how paper gold futures markets are being manipulated and the date, that same gram of gold will vary wildly in fiat currency price. Fiat currency price, thus can never be the quantitative property used to value gold. Weight is the constant that should be used for gold's value when it is to be used as sound money, because this quantitative property is always unwavering, always constant no matter if one is using gold as money in Moscow, Capetown, Montevideo, Santiago, Montreal, Phoenix, Miami, Mogadishu, Kiev, Paris, Heidelberg, Reykjavik, Chiangmai, or Seoul.

What quantitative property of bitcoin that is consistent and always the same across all uses? This is a question without an answer. For this same reason, NFTs could never serve as sound money either. No matter the latest fiat currency price paid for a Banksy "Morons" drawing set on fire, how can one determine the exchange rate for this NFT and an NFT representing a Mark Cuban tweet. Should the Banksy NFT be priced 10 million times higher than a Mark Cuban tweet NFT? Is an NBA TopShot NFT worth 1/1000 the price of a Banksy burning piece of art NFT? And even though NFTs have more uniqueness than say, a satoshi of BTC, because price assigned to that uniqueness is entirely subjective, the uniqueness leaves it no more fit to use as sound money than a cryptocurrency that has no backing of a hard asset. Miami-based art collector Pablo Rodriguez-Fraile proved the absurd pricing mechanism for NFT when he recently sold an NFT that he acquired for $66,666 in October, a 10-second computer-generated video clip of a slogan-covered giant Donald Trump created by digital artist Beeple , for mor than 100 times his original cost at $6.6M.

The last point of irony in the BTC is the solution to the unsound global fiat currency system narrative is that many HODLers of BTC are well aware of the oligarch's use of their power consolidation strategy of (1) Create a crisis; (2) Present the solution to the artificially created crisis; and (3) Implement the solution to consolidate power, yet will never give any type of consideration to the possibility of how perfectly the creation of BTC, in response to the 2008 global financial crisis, fits this exact historical narrative that oligarchs have repeatedly implemented, instead choosing to believe that BTC is the special unique exception to this oft-deployed strategy.

This despite, three US employees of the Central Bank, Galina Hale, Marianna Kudlyak, and Patrick Shultz, and one US university professor, Arvind Krishnamurthy, admitting that the premise I presented to my social media followers in December of 2017, when BTC hit $20,000, that the introduction of the US bitcoin futures market was going to be used to slash the BTC price drastically, essentially writing the premise for the referenced US Central Banker paper five months before it was written. In that paper, titled "How Futures Changed Bitcoin Prices", the four authors basically echoed my premise, and stated,

"We suggest that the rapid rise of the price of bitcoin and its decline following issuance of futures on the CME is consistent with pricing dynamics suggested elsewhere in financial theory and with previously observed trading behavior. Namely, optimists bid up the price before financial instruments are available to short the market (Fostel and Geanakoplos 2012). Once derivatives markets become sufficiently deep, short-selling pressure from pessimists leads to a sharp decline in value. While we understand some of the factors that play a role in determining the long-run price of bitcoin, our understanding of the transactional benefits of bitcoin is too imprecise to quantify this long-run price. But as speculative dynamics disappear from the bitcoin market, the transactional benefits are likely to be the factor that will drive valuation."

While they did not name the players in the BTC futures markets that drove BTC prices downward from $20,000 to $3,000 in 2018, the implication is that Central Bankers were involved in this downward spiral. And if Central Bankers were involved in this downward spiral, the downward price spiral would of course, been far easier to execute, if Central Bankers were also among the members of the collective that constitutes the largest BTC whale, Satoshi Nakamoto. Even though these dots, though purely speculative, are clearly possible, most every BTC HODLer that is confident in the achievement of end-year $300,000 BTC prices or higher, will never consider this possibility, even for a nanosecond, despite heavy suggestions of three US Central Bank employees that Central Bankers were involved in the 2018 BTC price crash. But if one did, as is the rational and logical thing to do, then one would have far greater difficulties distinguishing the mechanisms that set the price for NFTs and BTC. And as the introduction of the first BTC ETFs seem to be on the near horizon now, one would be smart to heed the lessons learned after trading of BTC futures was introduced at the end of 2017. Subscribe to my youtube channel here , to my free newsletter here , to my podcast here , and to learn more about bonus content delivered to skwealthacademy patreons every week, click here , and to download the skwealthacademy fact sheet, click here .

[Mar 26, 2021] This Bull Market Has a Troubling Reliance on Speculation - WSJ by James Mackintosh March 25, 2021 9:42 am ET Listen to this article 6 minutes 00:00 / 06:06 1x Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. U.S. 10-year Treasury yield Source: Tullett Prebon As of March 24 % Pre-pandemic peak of S&P 500 2020 '21 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 S&P 500 forward price/earnings ratio Source: Refinitiv Note: Weekly data S&P 500 peak 2020 '21 12 14 16 18 20 22 24 The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is the The parallel in the stock market is the hunt for the greater fool . Sure, GameStop < shares bear no relation to the reality < of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they "like the stock." Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards. Speculative bets such as the solar and ARK ETFs rallied up until mid-February, long after growth stocks peaked in August Price performance Source: FactSet *Russell 1000 indexes As of March 25, 7:02 p.m. ET % Invesco Solar Value* ARK Innovation Growth* Sept. 2020 '21 -25 0 25 50 75 100 125 The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. me title= A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%.
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Mar 26, 2021 | www.wsj.com

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Since June the story has reversed. Earnings forecasts have soared, and this year's earnings predictions are now back up to match where 2020 earnings were expected to be before the recession. The bond yield has leapt almost a full percentage point, and is higher than it was last February.

Yet, since June, the market's overall valuation is slightly up, and growth stocks are up 23%. Sure, cheap value stocks responded as expected, rising almost a third and beating growth stocks. But if a lower bond yield justified the rise in valuations, a higher bond yield ought to mean lower valuations, and probably outright lower prices for growth stocks.

me title=

This is concerning but, directionally at least, is explained by the oddity of August, when bond yields rose alongside valuation multiples and the biggest technology stocks leapt in price . Measure it from the end of August, instead of the end of June, and valuations have dropped a bit as bond yields have risen.

But the fall isn't enough to provide much comfort, and worse is that the highly speculative stocks popular with many individual traders bucked the trend. Notable themes including electric cars, hydrogen, SPACs and wind and solar power went into ludicrous mode until the middle of February this year, when the rise in bond yields accelerated and the speculative stocks fell back some.

Share prices propelled more by earnings expectations than bond yields is healthy, while speculation is -- by its nature -- fickle, and so a poor basis for holding on to a stock for long. My hope is that the contribution of pure gambling to the overall level of the market is relatively small. But it is hard to explain why stocks should be so much higher than before the pandemic panic when the earnings outlook is worse and bond yields are back to where they were.

Write to James Mackintosh at James.Mackintosh@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the March 26, 2021, print edition as 'This Bull Market Has A Gambling Problem.'

[Mar 24, 2021] On Jerome Powell pronouncements

Mar 24, 2021 | www.wsj.com

P Paul Avila SUBSCRIBER 8 hours ago U.S. stocks edged higher Wednesday as investors awaited more testimony from Federal Reserve Chairman Jerome Powell.

Good grief. Is there any way his subordinates could prevent that? Perhaps lock him in a supply closet until the market closes? Every time he opens his pie hole, I lose money. W Will Bee SUBSCRIBER 8 hours ago Actually I suspect we are waiting for all the FED and Treasury "people" to stop jawboning us so Markets can assimilate their irrelevance

[Mar 24, 2021] BlackRock, others' risks should be studied, 'systemic' tag may not be best- Yellen

Mar.24 -- Senator Elizabeth Warren (D-MA) asks Treasury Secretary Janet Yellen if she would direct the Financial Stability Oversight Council (FSOC) to consider designating BlackRock as a firm whose failure could threaten the financial system.
Mar 24, 2021 | finance.yahoo.com

(Reuters) - Treasury Secretary Janet Yellen said on Wednesday it is important to "look carefully" at systemic risks posed by asset managers, including BlackRock Inc, but said designating them as systematically important financial institutions may not be the right approach.

Yellen's remarks came in response to questions from Senator Elizabeth Warren, a longtime Wall Street critic, who demanded to know why BlackRock and other large asset managers had not been added to the list of designated institutions.

"I believe it is important to look very carefully at the risks posed by the asset management industry, including BlackRock and other firms," Yellen, who as Treasury secretary, chairs the Financial Stability Oversight Council (FSOC), which is charged with making such designations.

"FSOC began to do that, I believe, in 2016 and 2017, but the risks it focused on were ones having to do with open-end mutual funds that can experience massive withdrawals and be forced to sell off assets that could create fire sales. That is actually a risk we saw materialize last spring in March," she said.

In 2014, BlackRock and other asset managers won a battle in their fight against tighter regulation when a panel of top financial regulators agreed to revamp their review of asset-management firms to focus on potentially risky products and activities rather than individual firms.

"I think that with respect to asset management, rather than focus on designation of companies, I think it is important to focus on an activity like that and consider what the appropriate restrictions are," Yellen said.

"The past two administrations in the US, and numerous global regulators, have studied our industry for a decade and concluded that asset managers should be regulated differently from banks, with the primary focus being on the industry's products and services," BlackRock said in a statement.


[Mar 23, 2021] The Collapse Of Greensill- 'Unwise Enablers' A Dearth Of Due Diligence - ZeroHedge

How many additional Greenville exists?
Mar 23, 2021 | www.zerohedge.com

The collapse of Greensill involved a predicable cast of unwise enablers, but it should serve as a warning to the growing number of Alternative Asset buyers on the dangers of complex deals which promise much but deliver less. Due diligence is critical in the highly illiquid alternatives sector.

You really can't make it up when it comes to the collapse of supply chain charlatan Greensill. I suspect it will make a great film It should also send a judder down our spines, reminding us things are seldom what they seem in complex structured finance:

At least former UK premier David Cameron will be happy. A majority comprising Tory MPs on the UK's Treasury Select Committee blocked an inquiry into Greensill yesterday on the basis it may be politically influenced. The fact Call-Me-Dave was texting chancellor Rishi Sunak pleading for GFC to be a special case for Covid Bailout loans says it all about the dangers of lobbying. The SNP will be equally delighted at the lack of scrutiny of dodgy dealings up in the Highlands.

The Greensill collapse is unlikely to be the last time financial chicanery is exposed as sham. And that is why holders of European Alternatives and Asset backed transactions should be nervous. The lessons of the Greensill deals are multiple:

Let's review the unfolding Greensill mess:

There over 1000 holders of the $10 bln plus of defaulted Greensill investment structures packaged and issued by Credit Suisse – which marketed them as ultra-safe secured investments. Under the law, what the holders recover on these deals will rather depend on how much the administrator and the courts can jemmy out of Sanjay Gupta's dead-firm walking ; steel and commodities business GFC Alliance. (I have no hesitation in saying GFC will go to the wall – there can't be a single sane financial firm on the planet willing to finance them as the story of its' Greensill relationship emerges and its connected in-house banking arrangements become clearer – although, apparently, a state rescue is under consideration to save jobs.)

Investors will be lucky to see much more than the 30% recovery already in the pot from non-Gupta related investments in the Greensill funds – but Credit Suisse may decide to make its investors good. The reputational damage of seeing their private and investment banking clients clobbered for their stupidity, which would negate their private banking brand, may mean it's worth taking the hit. No wonder CS staff are very grumpy about their bonuses.

Successful financial scams require willing participants. All the usual fools are there in the mix.

Yet again the German regulator missed what was going on in Greensill's German bank and its exposures to Gupta. The team at Credit Suisse who agreed to warehouse Greensill originated "future receivables" and sell them as pristine secured assets have a limited shelf life. The insurance broker who managed to convince an insurance fund the underlyings were AAA quality looks vulnerable. Or what about the sales teams in Morgan Stanley who actually marketed the deals. Yet again Softbank is in the frame after it invested in excess of $1.5 bln at a $4-7 bln valuation, hailing Greensill as a leading Finech, when the actual truth is that its high-tech driven lending algos were nothing more than basic Excel spread sheets.

Greensill's financial magic was little more than sheer chutzpah – being able to persuade investors that the dull old low margin conservative business of factoring – short-term secured lending against invoices and accounts receivable, was something incredibly clever, undervalued and able to generate huge returns based on unique proprietary tech.

Greensill deals went further. Rather than just factoring Gupta's bills to suppliers and its invoices, the firm conjured up "future receivables" – pledging the company's expected future earnings for lending now. That's not necessarily a bad thing – its basic credit – but it only works if these earnings were completely predictable like obligated mortgage payments. What Greensill was doing was lending on future earnings on very volatile commodities. Remember – oil prices went negative in 2020.

In return for funding challenging names we know Greensill took divots out these clients. It made over £36 mm financing Gupta's deals in Scotland, and an amazing $108mm in fees from the $850mm Bluestone coal deals in the US – for which it is now being taken to court. All these fees gave Lex Greensill the wherewithal for his private Air Greensill fleet – but didn't make the financings any safer.

Any smart investors would probably have asked questions – but what's not to like about a deal that's secured on receivables, offers a high coupon, is wrapped with an insurance package from reputable insurer and involves major investment firms like Credit Suisse banking them, and Morgan Stanley marketing them?

One question is how did Greensill get away with it so long?

It was clear as early as 2017 there were major issues with some of the supply chain financing deals Greensill was putting together. The following year a major Swiss investment group, GAM, blew up when deals a leading fund manager had bet the shop on were questioned internally. A review by external investigators discovered a lack of information and documentation on a whole series of Greensill deals. They questioned how due diligence was done on the deals. The fund manager was suspended and later dismissed – triggering a redemption run on the fund. The whistle-blower was also shown the door on the back of massive client exits.

GAM invested in the funds because it's very hard to turn down the promise of a low risk / high return deal that promised so much more than the tiny yields available in conventional credit markets.

Despite the events at GAM, Credit Suisse went on to package $10 bln plus of Greensill deals. It was all done with an insurance wrap from a single name put them in its safe bucket. I know other insurance firms refused the deals. The trigger for the collapse of the Greensill scam was the withdrawl of that critical insurance – causing Credit Suisse to stop. Greensill has known for a year Tokyo Marine (which sacked the underwriter involved) would not renew and had been unable to find alternative cover.

Perhaps Credit Suisse bought the story and Softbank link that Greensill was a remarkable new Fintech with the Midas touch of changing dull, conservative factoring into a money machine? All that glitters is not gold.

One of the major developing themes in markets has been a shift from financial assets – which are seriously mispriced due to monetary distortion and financial asset inflation – into real assets, the so-called alternatives market. Alternative because they are not stocks or bonds, but cash flows and real assets. The collapse of Greensill will heighten awareness of due diligence risks in these non-standard, off-market, asset backed alternatives. Alternative asset holders will be looking at holdings for what else might be wobbly.

For instance, I might urge them not to be hypnotised by the assumptions underlying a well-known fund investing in music royalties, the basis of which is also being questioned by analysts. (I certainly won't mention the fund by name as the manager is a well-known litigant.) I have no reason to believe or disbelieve what analysts, the FT and a US investment bank have said about it overpaying for assets or questioning the valuation hikes it puts on future revenues when it acquires catalogues. Personally I like music assets, know their value, and, given certain circumstances the fund in question might come good. Equally.. it might not.

To understand how these deals works its critical to understand exactly what's occurring within the structures – how real are the assets, how the cash flows, how its accounted, and where it goes. That's why having top notch accountants and lawyers is such an important requirement for any deal. However, if they are working in the interests of the issuers and bankers – then investors are the likely patsies. There is a real difference between the way US and European Asset Backed deals are structured – basically US deals are transparent. European deals tend to be opaque.

Alternative deals based on real assets and tangible cash flows are often, but not always, decorrelated from distorted financial assets, allowing low risk deals to yield better long- term returns. They tick can the box in terms of risk vs return and provide significant diversification away from conventional markets. The major negative is there is little pretence they will be liquid assets. If you want to sell – even in good markets it will not be easy.

The only way you should participate in Alternative type deals is by knowing exactly what's going on. And – yes, my day job is Head of Alternative Assets. Happy to discuss in depth any time.

[Mar 18, 2021] U.S. Must Fabricate High-End Chips Again

Letter tot he editor
Mar 18, 2021 | www.wsj.com

Your editorial "The Semiconductor Shortage" (March 13) is right that government action is not needed to correct the short-term supply-demand imbalance causing the global chip shortage, but wrong that the U.S. can "prod" its way to stronger domestic semiconductor production and more secure chip supply chains in the long term. Global competitors haven't passed the U.S. as a location for chip manufacturing by prodding. They've done it by funding ambitious government incentives to lure semiconductor production to their shores.

As a result, only 12% of global manufacturing is now done in the U.S., down from 37% in 1990.

... ... ...

John Neuffer

President and CEO

Semiconductor Industry Association

[Mar 14, 2021] Disposable People by Sandwichman

Mar 04, 2021 | angrybearblog.com

Disposable people are indispensable. Who else would fight the wars? Who would preach? Who would short derivatives? Who would go to court and argue both sides? Who would legislate? Who would sell red hots at the old ball game?

For too long disposable people have been misrepresented as destitute, homeless, unemployed, or at best precariously employed. True, the destitute, the homeless, the unemployed and the precarious are indeed treated as disposable but most disposable people pursue respectable professions, wear fashionable clothes, reside in nice houses, and keep up with the Jones.

Disposable people are defined by what they do not produce. They do not grow food. They do not build shelters. They do not make clothes. They also do not make the tractors used to grow food, the tools to build shelters or the equipment to make clothes.

Although disposable people do not produce necessities what they do is not unnecessary. It is simply that the services they provide are not spontaneously demanded as soon as one acquires a bit of additional income. One is unlikely, however, to engage the services or purchase the goods produced by disposable people unless one is in possession of disposable income. Disposable income is the basis of disposable people. Conversely, disposable people are the foundation of disposable income.

[Mar 08, 2021] Change we can believe in

Mar 08, 2021 | www.marketwatch.com

Shoe shop chain Shoe Zone replaces Peter Foot with Terry Boot as finance director. It's not a joke.

[Mar 08, 2021] Tesla down 31%? Not a problem I will use the dividends to offset my losses. Oh wait!

Mar 08, 2021 | www.zerohedge.com


2 play_arrow


bentaxle 54 minutes ago

Tesla down 31%? Not a problem I will use the dividends to offset my losses. Oh wait!

BigJJ 13 minutes ago

I've never understood how Tesla could possibly make money given all the infrastructure they had to install just to sell shoddily thrown together rusty cars that are useless when the grid crashes.

Sound of the Suburbs 41 minutes ago (Edited)

...What was the ponzi scheme of inflated asset prices that collapsed in 2008?

El Hosel 1 hour ago (Edited)

Clearly "It's different this time", now that everybody knows "stocks only go up"...

[Mar 07, 2021] Newton, Physics, The Market Bubble by Lance Roberts

Notable quotes:
"... Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of raising capital and boosting share prices. ..."
"... However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk. ..."
"... Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake at a large profit. ..."
"... However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating, Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak. ..."
"... The story of Newton's losses in the South Sea Bubble has become one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate the motions of the heavenly bodies, but not the madness of people." ..."
"... Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler ..."
Sep 19, 2020 | www.zerohedge.com

Authored by Lance Roberts via RealInvestmentAdvice.com,

I have previously discussed the importance of understanding how "physics" plays a crucial role in the stock market. As Sir Issac Newton once discovered, "what goes up, must come down."

Andy Kessler, via the Wall Street Journa l, recently discussed a similar point with respect to the momentum in stock prices. To wit:

"Does this sound familiar: Smart guy owns stock in March at $200, sells it in June at around $600, but then buys it back in July and August for between $900 and $1,000. By September it's back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month. He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling the force acting on it, didn't know that works for stocks too."

To understand what happened to the South Sea Corporation, you need a bit of history.

The South Sea History

In 1720, in return for a loan of £7 million to finance the war against France, the House of Lords passed the South Sea Bill, which allowed the South Sea Company a monopoly in trade with South America.

England was already a financial disaster and was struggling to finance its war with France. As debts mounted, England needed a solution to stay afloat. The scheme was that in exchange for exclusive trading rights, the South Sea Company would underwrite the English National Debt. At that time, the debt stood at £30 million and carried a 5% interest coupon from the Government. The South Sea company converted the Government debt into its own shares. They would collect the interest from the Government and then pass it on to their shareholders.

Interesting Absurdities

At the time, England was in the midst of rampant market speculation. As soon as the South Sea Company concluded its deal with Parliament, the shares surged to more than 10 times their value. As South Sea Company shares bubbled up to incredible new heights, numerous other joint-stock companies IPO'd to take advantage of the booming investor demand for speculative investments.

Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of raising capital and boosting share prices. Here are some examples of these companies' business proposals (History House, 1997):

A Speculative Mania

However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk.

Though South Sea Company shares were skyrocketing, the company's profitability was mediocre at best, despite abundant promises of future growth by company directors.

The eventual selloff in Company shares was exacerbated by a previous plan of lending investors money to buy its shares. This "margin loan," meant that many shareholders had to sell their shares to cover the plan's first installment of payments.

As South Sea Company and other "bubble " company share prices imploded, speculators who had purchased shares on credit went bankrupt. The popping of the South Sea Bubble then resulted in a contagion that spread across Europe.

Newton's Folly

Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake at a large profit.

However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating, Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak.

It is noteworthy that once Newton decided to go back into South Sea stock, he moved essentially all his financial assets into it. In general, Newton was intimately familiar with commodities and finance. As Master of the Mint, his post required him to make many decisions that depended on market prices and conditions. The story of Newton's losses in the South Sea Bubble has become one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate the motions of the heavenly bodies, but not the madness of people."

For More On The History Of Speculative Bubbles: "Devil Take The Hindmost."

History Never Repeats, But It Rhymes

Throughout financial history, markets have evolved from one speculative "bubble," to bust, to the next with each one being believed "it was different this time." The slides below are from a presentation I made to a large mutual fund company. What we some common denominators between all previous bubbles and now.

The table below shows a listing of assets classes that have experienced bubbles throughout history, with the ones related to the current environment highlighted in yellow. It is not hard to see the similarities between today and the previous market bubbles in history. Investors are currently chasing "new technology" stocks from Zoom to Tesla, piling into speculative call options, and piling into leverage. What could possibly go wrong?

Oh, by the way, the slides above are from a 2008 presentation just one month before the Lehman crisis. The point here is that speculative cycles are always the same.

The Speculative Cycle

Charles Kindleberger suggested that speculative manias typically commence with a "displacement" which excites speculative interest. The displacement may come from either an entirely new object of investment (IPO) or from increased profitability of established investments.

The speculation is then reinforced by a "positive feedback" loop from rising prices. which ultimately induces "inexperienced investors" to enter the market. As the positive feedback loop continues, and the "euphoria" increases, retail investors then begin to "leverage" their risk in the market as "rationality" weakens.

The full cycle is shown below.

During the course of the mania, speculation becomes more diffused and spreads to different asset classes. New companies are floated to take advantage of the euphoria, and investors leverage their gains using derivatives, stock loans, and leveraged instruments.

As the mania leads to complacency, fraud and manipulation enter the market place. Eventually, the market crashes and speculators are wiped out. The Government and Regulators react by passing new laws and legislations to ensure the previous events never happen again.

The Latest Mania

Let's go back to Andy for a moment:

"When bull markets get going, investors come out of the woodwork to pile in. These momentum investors -- I call them momos -- figure if a stock is going up, it will keep going up. But usually, there is some source of hot air inflating stocks: either a structural anomaly that fools investors into thinking ever-rising stock prices are real or a source of capital that buys, buys, buys -- proverbial 'dumb money.' Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen to keep flames growing." – Andy Kessler

We have seen these manias repeated throughout history.

In 2020?

What about today? Look back at the chart of the South Sea Company above. Now, the one below. See any similarities. Yes, that's Tesla. However, you can't solely blame the Federal Reserve as noted by Andy:

"Most simply blame the Federal Reserve -- especially today, with its zero-interest-rate policy -- for pumping the hot air that gets the momos going. Fair enough, but that's only part of the story. Long market runs have always allured investors who figure they're smart to jump in, even if it's late.

Everyone forgets the adage, 'Don't mistake brains for a bull market.'"

As stated, while no two financial manias are ever alike, the end results are always the same. Are there any similarities in today's market? You decide.

"From SPACs, or special purpose acquisition companies, which are modern-day blind pools that often don't end well. Today's momos also chase stock splits, which mean nothing for a company's actual value. Same for a new listing in indexes like the S&P 500. Isaac Newton could explain the math." – Andy Kessler

You get the idea. But one of the tell-tale indications is the speculative chase of "zombie" companies which are only still alive primarily due to the Federal Reserve's interventions.

Fixing The Cause Of The Crash

Historically, all market crashes have been the result of things unrelated to valuation levels. Issues such as liquidity, government actions, monetary policy mistakes, recessions, or inflationary spikes are the culprits that trigger the "reversion in sentiment." Importantly, the "bubbles" and "busts" are never the same. I previously quoted Bob Bronson on this point:

"It can be most reasonably assumed that markets are efficient enough that every bubble is significantly different than the previous one. A new bubble will always be different from the previous one(s). Such is since investors will only bid prices to extreme overvaluation levels if they are sure it is not repeating what led to the previous bubbles. Comparing the current extreme overvaluation to the dotcom is intellectually silly.

I would argue that when comparisons to previous bubbles become most popular, it's a reliable timing marker of the top in a current bubble. As an analogy, no matter how thoroughly a fatal car crash is studied, there will still be other fatal car crashes. Such is true even if we avoid all previous accident-causing mistakes."

Comparing the current market to any previous period in the market is rather pointless. The current market is not like 1995, 1999, or 2007? Valuations, economics, drivers, etc. are all different from cycle to the next.

Most importantly, however, the financial markets always adapt to the cause of the previous "fatal crash." Unfortunately, that adaptation won't prevent the next one.

Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler

[Mar 07, 2021] SEC Issues Devastating Risk Alert on Private Equity Abuses; Effectively Admits Failure of Last 5+ Years of Enforcement by Yves Smith

Notable quotes:
"... In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause. And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing, complex abuses. ..."
"... Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on private equity and hedge funds. ..."
"... The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing on." ..."
"... Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing investors to overpay expenses ..."
"... Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. ..."
"... On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE engage in would happily fall under fraud, if SEC really wanted. ..."
"... Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals do not take their money and leave the gaming tables but pour it back in and the crime metastasizes. AKA, Kleptocracy. ..."
"... You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration. ..."
"... Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan. ..."
"... More banana republic level grift. What happens when investors figure out they can't believe anything they are told? ..."
"... Can we come up with a better descriptor for "private equity"? I suggest "billionaire looters". ..."
"... Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot service the loan and a BK is around the corner. ..."
"... Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and Feudalism for the rest of us. ..."
Jun 26, 2020 | www.nakedcapitalism.com

We've embedded an SEC Risk Alert on private equity abuses at the end of this post. 1 What is remarkable about this document is that it contains a far longer and more detailed list of private abuses than the SEC flagged in its initial round of examinations of private equity firms in 2014 and 2015. Those examinations occurred in parallel with groundbreaking exposes by Gretchen Morgenson at the New York Times and Mark Maremont in the Wall Street Journal.

At least some of the SEC enforcement actions in that era look to have been triggered by the press effectively getting ahead of the SEC. And the SEC even admitted the misconduct was more common at the most prominent firms.

Yet despite front-page articles on private equity abuses, the SEC engaged in wet noodle lashings. Its pattern was to file only one major enforcement action over a particular abuse. Even then, the SEC went to some lengths to spread the filings out among the biggest firms. That meant it was pointedly engaging in selective enforcement, punishing only "poster child" examples and letting other firms who'd engaged in precisely the same abuses get off scot free.

The very fact of this Risk Alert is an admission of failure by the SEC. It indicates that the misconduct it highlighted five years ago continues and if anything is even more pervasive than in the 2014-2015 era. It also confirms that its oft-stated premise then, that the abuses it found then had somehow been made by firms with integrity that would of course clean up their acts, and that now-better-informed investors would also be more vigilant and would crack down on misconduct, was laughably false.

In particular, the second section of the Risk Alert, on Fees and Expenses (starting on page 4) describes how fund managers are charging inflated or unwarranted fees and expenses. In any other line of work, this would be called theft. Yet all the SEC is willing to do is publish a Risk Alert, rather than impose fines as well as require disgorgements?

The SEC's Abject Failure

In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause. And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing, complex abuses.

Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on private equity and hedge funds.

The SEC has long maintained a division between the retail investors and so-called "accredited investors" who by virtue of having higher net worths and investment portfolios, are treated by the agency as able to afford to lose more money. The justification is that richer means more sophisticated. But as anyone who is a manager for a top sports professional or entertainer, that is often not the case. And as we've seen, that goes double for public pension funds.

Starting with the era of Clinton appointee Arthur Levitt, the agency has taken the view that it is in the business of defending presumed-to-be-hapless retail investors and has left "accredited investor" and most of all, institutional investors, on their own. This was a policy decision by the agency when deregulation was venerated; there was no statutory basis for this change in priorities.

Congress tasked the SEC with supervising the fund management activities of private equity funds with over $150 million in assets under management. All of their investors are accredited investors. In other words, Congress mandated the SEC to make sure these firms complied with relevant laws as well as making adequate disclosures of what they were going to do with the money entrusted to them. Saying one thing in the investor contracts and doing another is a vastly worse breach than misrepresentations in marketing materials, yet the SEC acted as if slap-on-the-wrist-level enforcement was adequate.

We made fun when thirteen prominent public pension fund trustees wrote the SEC asking for them to force greater transparency of private equity fees and costs. The agency's position effectively was "You are grownups. No one is holding a gun to your head to make these investments. If you don't like the terms, walk away." They might have done better if they could have positioned their demand as consistent with the new Dodd Frank oversight requirements.

Actively covering up for bad conduct . In 2014, the SEC started working at giving malfeasance a free pass. Specifically, the SEC told private equity firms that they could continue their abuses if they 'fessed up in their annual disclosure filings, the so-called Form ADV. The term of art is "enhanced disclosure". Since when are contracts like confession, that if you admit to a breach, all is forgiven? Only in the topsy-turvy world of SEC enforcement.

And the coddling of crookedness continued. From a January post :

The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing on."

Specifically, as we indicated, the SEC was giving advanced warning of the issues it would focus on in its upcoming exams, in order to give investment managers the time to get their stories together and purge files. And rather than view its periodic exams as being designed to make sure private equity firms comply with the law and their representations, the agency views them as "cooperative" exercises! Misconduct is assumed to be the result of misunderstanding and error, and not design.

It's pretty hard to see conduct like this, from the SEC's Risk Alert, as being an accident:

Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing investors to overpay expenses

The staff observed private fund advisers that did not value client assets in accordance with their valuation processes or in accordance with disclosures to clients (such as that the assets would be valued in accordance with GAAP). In some cases, the staff observed that this failure to value a private fund's holdings in accordance with the disclosed valuation process led to overcharging management fees and carried interest because such fees were based on inappropriately overvalued holdings .

Advisers failed to apply or calculate management fee offsets in accordance with disclosures and therefore caused investors to overpay management fees.

We're highlighting this skimming simply because it is easier for laypeople to understand than some of the other types of cheating the SEC described. Even so, industry insiders and investors complained that the description of the misconduct in this Risk Alert was too general to give them enough of a roadmap to look for it at particular funds.

Ignoring how investors continue to be fleeced . The SEC's list includes every abuse it sanctioned or mentioned in the 2014 to 2015 period, including undisclosed termination of monitoring fees, failure to disclose that investors were paying for "senior advisers/operating partners," fraudulent charges, overcharging for services provided by affiliated companies, plus lots of types of bad-faith conduct on fund restructurings and allocations of fees and expenses on transactions allocated across funds.

The SEC assumed institutional investors would insist on better conduct once they were informed that they'd been had. In reality, not only did private equity investors fail to demand better, they accepted new fund agreements that described the sort of objectionable behavior they'd been engaging in. Remember, the big requirement in SEC land is disclosure. So if a fund manager says he might do Bad Things and then proceeds accordingly, the investor can't complain about not having been warned.

Moreover, the SEC's very long list of bad acts says the industry is continuing to misbehave even after it has defined deviancy down via more permissive limited partnership agreements!

Why This Risk Alert Now?

Keep in mind what a Risk Alert is and isn't. The best way to conceptualize it is as a press release from the SEC's Office of Compliance Inspections and Examinations. It does not have any legal or regulatory force. Risk Alerts are not even considered to be SEC official views. They are strictly the product of OCIE staff.

On the first page of this Risk Alert, the OCIE blandly states that:

This Risk Alert is intended to assist private fund advisers in reviewing and enhancing their compliance programs, and also to provide investors with information concerning private fund adviser deficiencies.

Cutely, footnotes point out that not everyone examined got a deficiency letter (!!!), that the SEC has taken enforcement actions on "many" of the abuses described in the Risk Alert, yet "OCIE continues to observe some of these practices during examinations."

Several of our contacts who met in person with the SEC to discuss private equity grifting back in 2014-2015 pressed the agency to issue a Risk Alert as a way of underscoring the seriousness of the issues it was unearthing. The staffers demurred then.

In fairness, the SEC may have regarded a Risk Alert as having the potential to undermine its not-completed enforcement actions. But why not publish one afterwards, particularly since the intent then had clearly been to single out prominent examples of particular types of misconduct, rather than tackle it systematically? 2

So why is the OCIE stepping out a bit now? The most likely reason is as an effort to compensate for the lack of enforcement actions. Recall that all the OCIE can do is refer a case to the Enforcement Division; it's their call as to whether or not to take it up.

The SEC looks to have institutionalized the practice of borrowing lawyers from prominent firms. Mary Jo White of Debevoise brought Andrew Ceresney with her from Debeviose to be her head of enforcement. Both returned to Debevoise.

Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. Clayton made clear his focus was on "mom and pop" investors, meaning he chose to overlook much more consequential abuses by private equity firms and hedgies. The New York Times determined that the average amount of SEC fines against corporate perps fell markedly in 2018 compared to the final 20 months of the Obama Administration. The SEC since then levied $1 billion fine against the Woodbridge Group of Companies and its one-time owner for running a Ponzi scheme that fleeced over 8,400, so that would bring the average penalty up a bit. But it still confirms that Clayton is concerned about small fry, and not deeper but just as pickable pockets.

David Sirota argues that the OCIE was out to embarrass Clayton and sabotage what Sirota depicted as an SEC initiative to let retail investors invest in private equity. Sirota appears to have missed that that horse has left the barn and is in the next county, and the SEC had squat to do with it.

The overwhelming majority of retail funds is not in discretionary accounts but in retirement accounts, overwhelmingly 401(k)s. And it is the Department of Labor, which regulates ERISA plans, and not the SEC, that decides what those go and no go zones are. The DoL has already green-lighted allowing large swathes of 401(k) funds to include private equity holdings. From a post earlier this month :

Until now, regulations have kept private equity out of the retail market by prohibiting managers from accepting capital from individuals who lack significant net worth.

Private equity firms have succeeded in storming that barricade. The Department of Labor published a June 3 information letter that allows private equity funds, or more accurately funds of funds, to be included in certain 401(k) plan offerings, namely, target date funds and balanced funds. This is significant because despite the SEC regularly calling out bad practices with target date funds, they are the strategy used to manage the majority of 401(k) assets .

Moreover, even though Sirota pointed out that Clayton had spoken out in favor of allowing retail investors more access to private equity investments, the proposed regulation on the definition of accredited investors in fact not only does not lower income or net worth requirements (save for allowing spouses to combine their holdings) it in fact solicited comments on the idea of raising the limits. From a K&L Gates write up :

Previously, the Concept Release requested comment on whether the SEC should revise the current individual income ($200,000) and net worth ($1,000,000) thresholds. In the Proposing Release, the SEC further considered these thresholds, noting that the figures have not been adjusted since 1982. The SEC concluded that it does not believe modifications to the thresholds are necessary at this time, but it has requested comments on whether the final should instead make a one-time increase to the thresholds in the account for inflation, or whether the final rule should reflect a figure that is indexed to inflation on a going-forward basis.

It is not clear how many people would be picked up by the proposed change, which was being fleshed out, that of letting some presumed sophisticated but not rich individuals, like junior hedge fund professionals and holders of securities licenses, be treated as accredited investors. In other words, despite Clayton's talk about wanting ordinary investors to have more access to private equity funds, the agency's proposed rule change falls short of that.

Moreover, if the OCIE staff had wanted to undermine even the limited liberalization of the definition of accredited investor so as to stymie more private equity investment, the time to do so would have been immediately before or while the comments period was open. It ended March 16 .

The New York Times reported that Senate Republicans deemed Clayton's odds of confirmation as US Attorney for the Southern District of New York as remote even before the Trump fired Geoffrey Berman to clear a path for Clayton. So the idea that a technical release by the OCIE would derail Clayton's confirmation is a stretch.

So again, why now? One possibility is that the timing is purely a coincidence. For instance, the SEC staffers might have been waiting until Covid-19 news overload died down a bit so their work might get a hearing (and Covid-19 remote work complications may also have delayed its release).

The second possibility is that OCIE is indeed very frustrated with the enforcement chief Peikin's inaction on private equity. The fact that Peikin's boss and protector Clayton has made himself a lame duck meant a salvo against Peikin was now a much lower risk. If any readers have better insight into the internal workings of the SEC these days, please pipe up.

______

1 Formally, as you can see, this Risk Alert addresses both private equity and hedge fund misconduct, but on reading the details, the citing of both types of funds reflects the degree to which hedge funds have been engaging in the buying and selling of stakes in private companies. For instance, Chatham Asset Management, which has become notorious through its ownership of American Media, which in turn owns the National Enquirer, calls itself a hedge fund. Moreover, when the SEC started examining both private equity and hedge funds under new authority granted by Dodd Frank, it described the sort of misconduct described in this Risk Alert as coming out of exams of private equity firms, and its limited round of enforcement actions then were against brand name private equity firms like KKR, Blackstone, Apollo, and TPG. Thus for convenience as well as historical reasons, we refer only to private equity firms as perps.

2 Media stories at the time, including some of our posts, provided substantial evidence that particular abuses, such as undisclosed termination of monitoring fees and failure to disclose that "senior advisers" presented as general partner "team members" were in fact consultants being separately billed to fund investments, were common practices. Yet the SEC chose to lodge only marquee enforcement actions against one prominent firm for each abuse, as if token enforcement would serve as an adequate deterrent. The message was the reverse, that the overwhelming majority of the abuses were able to keep their ill-gotten gains and not even face public embarrassment.


skippy , June 26, 2020 at 4:27 am

Peter Sellers I'll say now – ????

https://www.youtube.com/watch?v=1TtZgs8k8dU

vlade , June 26, 2020 at 4:35 am

TBH, in the view of Calpers ignoring its advisors, I do have a little understanding of the SEC's point "you're grown ups" (the worse problem is that the advisors who leach themselves to the various accredited investors are often not worth the money.

On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE engage in would happily fall under fraud, if SEC really wanted.

Susan the other , June 26, 2020 at 11:43 am

Yes, the SEC conveniently claims a conflicted authority – 1. to regulate compliance but without an "enforcement authority", and 2. report egregious behavior to their "enforcement authority". So the SEC is less than a permissive nanny. Sort of like "access" to enforcement authority. Sounds like health care to me.

Yves Smith Post author , June 26, 2020 at 4:06 pm

No, this is false. The SEC has an examination division and an enforcement division. The SEC can and does take enforcement actions that result in fines and disgorgements, see the $1 billion fine mentioned in the post. So the exam division can recommend enforcement to the enforcement division. That does not mean it will get done. Some enforcement actions originate from within the enforcement division, like insider trading cases, and the SEC long has had a tendency to prioritize insider trading cases.

The SEC cannot prosecute. It has to refer cases that it thinks are criminal to the DoJ and try to get them to saddle up.

Maritimer , June 26, 2020 at 5:04 am

Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals do not take their money and leave the gaming tables but pour it back in and the crime metastasizes. AKA, Kleptocracy.

Thus in 2008 and thereafter the criminal damage required 2-3 trillion, now 7-10 trillion.

Any economic expert who does not recognize crime as the number one problem in the criminogenic US economy I disregard. Why read all that analysis when, at the end of the run, it all just boils down to bailing out the criminals and trying to reset the criminogenic system?

(Can I get my economics degree now?)

Adam Eran , June 26, 2020 at 1:33 pm

You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration.

The Rev Kev , June 26, 2020 at 5:17 am

The SEC has been captured for years now. It was not that long ago that SEC Examination chief Andrew Bowden made a grovelling speech to these players and even asked them to give his son a job which was so wrong-

https://www.rollingstone.com/politics/politics-news/regulatory-capture-captured-on-video-190033/

But there is no point in reforming the SEC as it was the politicians, at the beck and call of these players, that de-fanged the SEC – and it was a bipartisan effort! So it becomes a chicken-or-the-egg problem in the matter of reform. Who do you reform first?

Can't leave this comment without mentioning something about a private equity company. One of the two major internal airlines in Oz went broke due to the virus and a private equity buyer has been found to buy it. A union rep said that they will be good for jobs and that they are a good company. Their name? Bain Capital!

Yves Smith Post author , June 26, 2020 at 5:44 am

We broke the story about Andrew Bowden! Give credit where credit is due!!!! Even though Taibbi points to us in his first line, linking to Rolling Stone says to those who don't bother clicking through that it was their story.

Plus we transcribed his fawning remarks.

https://www.nakedcapitalism.com/2015/03/secs-andrew-bowden-regulator-sale.html

And he resigned three weeks later.

The Rev Kev , June 26, 2020 at 5:56 am

Of course I remember that story. I was going to mention it but thought to let people see it in virtually the opening line of that story where he gives you credit. More of a jolt of recognition seeing it rather than being told about it first.

Jesper , June 26, 2020 at 6:36 am

Of the three branches of government which ones are not captured by big business? If two out of three were to captured then does it matter what the third does?

In my opinion too much power has been centralised, too much of the productivity gains of the past 40 years have been monetised and therefore made possible to hoard and centralise. SEC should (in my opinion) try to enforce more but without more support then I do not believe (it is my opinion, nothing more and nothing less) that they can accomplish much.

Susan the other , June 26, 2020 at 11:57 am

The SEC is a mysterious agency which (?) must fall under the jurisdiction of the Treasury because it is a monetary regulatory agency in the business of regulating securities and exchanges. But it has no authority to do much of anything. The Treasury itself falls under the executive administration but as we have recently seen, Mnuchin himself managed to get a nice skim for his banking pals from the money Congress legislated.

That's because Congress doesn't know how to effectuate a damn thing – they legislate stuff that morphs before our very eyes and goes to the grifters without a hitch. So why don't we demand that consumer protection be made into hard law with no wiggle room; that since investing is complex in this world of embedded funds and glossy prospectuses, we the consumer should not have to wade through all the nonsense to make decisions – that everything be on the table. And if PE can't manage to do that and still steal its billions then PE should be declared to be flat-out illegal.

Yves Smith Post author , June 26, 2020 at 4:08 pm

Please stop spreading disinformation. This is the second time on this post. The SEC has nada to do with the Treasury. It is an independent regulatory agency. It however is the only financial regulator that does not keep what it kills (its own fees and fines) but is instead subject to Congressional appropriations.

Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan.

Edward , June 26, 2020 at 7:16 am

More banana republic level grift. What happens when investors figure out they can't believe anything they are told?

RJMc, MD , June 26, 2020 at 8:43 am

It should be noted that out here in the countryside of northern Michigan that embezzlement (a winter sport here while the men are out ice fishing), theft and fraud are still considered punishable felonies. Perhaps that is simply a quaint holdover from a bygone time. Dudley set the tone for the C of C with his Green Book on bank deregulation. One of the subsequent heads of C of C was reported as seeing his position as "being the spiritual resource for banks". If bank regulation is treated in a farcical fashion why should be the SEC be any different?

Susan the other , June 26, 2020 at 12:08 pm

I was shocked to just now learn that ERISA/the Dept of Labor is in regulatory control of allowing pension funds to buy PE fund of funds and "balanced PE funds". What VERBIAGE. Are "PE Fund of Balanced Funds" an actual category? And what distinguishes them from good old straightforward Index Funds? And also too – what is happening before our very glazed-over eyes is that PE is high grading not just the stock market but the US Treasury itself. Ordinary investors should be buying US Treasuries directly and retirement funds should too. It will be a big bite but if it knocks PE out of business it would be worth it. PE is in the business of cooking its books, ravaging struggling corporations, and boldly privatizing the goddamned Treasury. WTF?

Kouros , June 26, 2020 at 12:27 pm

I want to bring this to Yves' attention: the recent SCOTUS decision on Thole v. U.S. Bank that opens the doors wide for corporate America to steal with impunity from the pension plans: https://www.unz.com/estriker/corrupt-supreme-court-gives-green-light-to-corporations-to-steal-from-pensioners/

Glen , June 26, 2020 at 12:51 pm

Can we come up with a better descriptor for "private equity"? I suggest "billionaire looters".

Olivier , June 26, 2020 at 2:00 pm

What about the wanton destruction of the purchased companies? If this solely about the harm done to the poor investors? If so, that is seriously wrong.

flora , June 26, 2020 at 3:27 pm

If, you know, the neoliberal "because markets" is the ruling paradigm then of course there is no harm done. The questions then become: is "because markets" a sensible paradigm? What is it a sensible paradigm of? Is "because markets" even sensible for the long term?

flora , June 26, 2020 at 3:19 pm

an aside: farewell, Olympus camera. A sad day. Farewell, OM-1 and OM-2. Film photography is really not replicated by digital photography but the larger market has gone to digital. Speed and cost vs quality. Because markets. Now the vulture swoop.

Stan Sexton , June 26, 2020 at 8:17 pm

Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot service the loan and a BK is around the corner.

Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and Feudalism for the rest of us.

[Mar 07, 2021] Bank Regulation Can not Be Heads Banks Win, Tails Taxpayers Lose

Notable quotes:
"... 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? ..."
Mar 31, 2019 | www.nakedcapitalism.com
... ... ...

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?

The full article of Edward Kane

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WheresOurTeddy , March 29, 2019 at 11:49 am

Enforcement of financial laws is not our thing. Just ask Chuck Schumer of the #Non-Resistance:

https://theintercept.com/2019/03/28/sec-democratic-commissioner-chuck-schumer/

Louis Fyne , March 29, 2019 at 12:17 pm

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.

thesaucymugwump , March 29, 2019 at 12:17 pm

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.

chuck roast , March 29, 2019 at 12:21 pm

Thank you Yves and Tom Ferguson.

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.

Craig H. , March 29, 2019 at 1:04 pm

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.

John Wright , March 30, 2019 at 10:31 am

Greenspan was never willing to counter any problem that might irritate powerful financial constituencies. For example, during the internet stock bubble of the late 1990's, Greenspan decried the "irrational exuberance" of the stock market. The Greenspan Fed could have raised the margin requirement for stocks to buttress this view, but did not. As I remembered reading, Greenspan was in poor financial shape when he got his Fed job.

His subsequent performance at the Fed apparently left him a wealthy man. Real regulation by Greenspan may have adversely affected his wealth. It may explain why Alan Greenspan would much rather let a financial bubble grow until it pops and then "fix it".

Procopius , March 31, 2019 at 12:30 am

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.

rd , March 29, 2019 at 3:06 pm

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.

Inode_buddha , March 29, 2019 at 4:51 pm

I think things will be much better when finance is about ~3% of the S&P 500, but no more than that.

[Mar 07, 2021] Regulatory Capture: The Banks and the System That They Have Corrupted

Notable quotes:
"... 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 . ..."
Mar 14, 2019 | jessescrossroadscafe.blogspot.com

"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.'"

Pam Martens, Wall Street on Parade

[Mar 06, 2021] Value investor John Rogers sees an end to Big Tech's stock market dominance

Mar 06, 2021 | finance.yahoo.com

Michael Mackenzie and James Fontanella-Khan in New York Fri, March 5, 2021, 7:00 PM

The veteran value investor John Rogers predicted the US is headed for a repeat of the "roaring twenties" a century ago that will finally encourage investors to dump tech stocks in favour of companies more sensitive to the economy. The founder of Ariel Investments told the Financial Times in an interview that value investing "dinosaurs" like him stood to win as higher economic growth and rising interest rates took the air out of some of the hottest stocks of recent years. The US central bank is "overly optimistic that they can keep inflation under control", he said, and higher bond market interest rates would reduce the value of future earnings for highly popular growth stocks such as tech companies and for the kinds of speculative companies coming to market in initial public offerings or via deals with Spacs.

[Feb 20, 2021] Why China, with same size of power grid, won't suffer outage like in the US

Feb 20, 2021 | www.moonofalabama.org

vk , Feb 18 2021 18:40 utc | 142

Why China, with same size of power grid, won't suffer outage like in the US

"Why does the US use the winter storm as the excuse every time?" Shu Bin, director of the State Grid Beijing Economics Research Institute, told the Global Times on Thursday, noting that the power grid system is very vulnerable and requires constant maintenance and upgrade.

A report from the US Department of Energy (DOE) in 2015 said that 70 percent of power transformers in the country were 25 years or older, 60 percent of circuit breakers were 30 years or older, and 70 percent of transmission lines are 25 years or older. And the age of these components "degrades their ability to withstand physical stresses and can result in higher failure rates," the report noted.

[...]

"The US has no nationwide power grid network allocation plan like China. When it encounters extreme weather, a state won't help another state like some Chinese provinces and regions do with flexible allocation plans," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Thursday.

[...]

"China uses 50Hz across the country, like the country has the same heartbeat," he said, adding that China has never experienced such a scale of blackouts as the US.

[...]

China has mastered the top technologies such as "UHV transmission" and "flexible DC transmission" and started the strategic "west-east electricity transmission" and "north-south electricity transmission" projects, which in turn offer an opportunity for the development of the country's western region.


[Feb 19, 2021] The infrastructure failed - the people paid to manage this failed - everybody is angry, 10 people died so far last I heard.

Feb 19, 2021 | www.moonofalabama.org

Grieved , Feb 18 2021 0:45 utc | 52

@36 oldhippie

Not as apocalyptic as it may seem. I wrote a comment on the situation in the earlier thread here .

Temps are starting to move up and tomorrow (Thursday) should begin the thaw. Friday is sunny and 47 deg F for a high, then sunny weekend and following. So we're over the worst of it. The lowest it ever got was around 0 deg F.

The infrastructure failed - the people paid to manage this failed - everybody is angry, 10 people died so far last I heard.

Rolling blackouts, some people very much suffering, townships opening warming shelters - probably not millions of pipes bursting. Not totally iced in, just nowhere to go. People stayed home. Businesses stayed closed. Not totally without food, people stocked up staples in 2020.

Not that dire. Absolutely fucking disgusting, and a hardship that touched everyone - some people got really screwed and I don't know why the treatment was uneven like that - not demographics, something with the grid. Dire, yes, and life-threatening to some or perhaps many (numbers not clear to me yet), but not so dire as your picture suggests. Nothing like Katrina, except the same ineptness.

But heads will roll. The governor has mandated an investigation into the regulator, ERCOT. What follows next is of great interest. Facts will appear. I'll post anything useful.

I heard a rumor it was getting better. Could be less blackouts. Will post now in case power goes off ;)


vk , Feb 18 2021 2:24 utc | 63

Texas Could Have Kept the Lights On

This Texas debacle may light a heated debate in the USA for the next weeks, for two reasons:

1) Texas is the big alt-right/Trumpist Festung for the foreseeable future. Their nation-building process involve catapulting Texas as the anti-California , the conservative version of the Shining City on the Hill, around which the USA will be rebuilt;

2) What is happening in Texas right now goes directly to the heart of neoliberalism, which is the political doctrine that vertebrates the alt-right. That's why conservative ideologues such as Tucker Carlson et al are desperately scrambling on TV and social media to blame the outage on the so-called Green New Deal.

What is happening right now in Texas, therefore, may be another episode on the battle for the soul of the American Empire.

vetinLA , Feb 18 2021 2:27 utc | 64

Thom Hartmann podcast on the Texas SNAFU;

http://dl.thomhartmann.com/private/podcasts/2021_0217_thp-021721-hour1.mp3

[Feb 04, 2021] The GameStop Rebels Vs. -Too Big To Fail- - ZeroHedge

Feb 04, 2021 | www.zerohedge.com

The GameStop Rebels Vs. "Too Big To Fail" BY TYLER DURDEN WEDNESDAY, FEB 03, 2021 - 6:10

Authored by Ryan McMaken via The Mises Institute,

Last week, a large number of small-time investors drove up the price of GameStop's (GME) stock a historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's price spiked in part as a result of efforts by "an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals." These professionals were hedge fund managers who had shorted GameStop's stock. In other words, hedge funders were betting billions that GameStop's stock would go down. But the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took "a significant loss," possibly totaling $70 billion.

There surely were plenty of insiders on both sides of this deal. Given the complexity of various schemes employed by seasoned investors, it seems it is very unlikely that this is just a simple matter of little Davids taking on Wall Street Goliaths.

But it also looks like that's not all that was going on. Had this only been just another scheme by some Wall Street insiders against some other Wall Street insiders the story would probably have ended there.

But that's not what happened. Rather, it appears that, for many of the smaller investors who were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey wrench in the plans of Wall Street hedge funds which exist within the rarified world of billionaires and their friends.

Pro–Wall Street Fearmongering

The reactions to the event from media pundits and other commentators were telling in that there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a "fiasco," " insanity ," and something sure to leave a " trail of destruction ." The important thing was to use words designed to make it all look like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim Lebenthal at CNBC, for example, declared the "short-squeeze fiasco is a threat to the proper functioning of financial markets."

The fearmongering went beyond even the usual places we hear about financial news. On The View , for example, Meghan McCain delivered the sort of status quo –defending bromides we've come to expect from her. She insisted the GameStop affair could spiral into an economy-killing disaster because

If the stock ends up plunging because of this, because of GameStop and Wall Street loses billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a lot of average Americans do invest in, and if that happens, average Americans will end up losing even more money.

Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary understanding of what happened. But her comment delivered the important point: namely, that anything that causes volatility in the market could be a disaster for every American household. Translation: and we should all be very, very afraid if something isn't done to keep these Reddit people -- whom she compared to the Capitol "insurrectionists" -- under control.

Of course, in a functioning and relatively unhampered market, unusual, unexpected things happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't counted on. This leads to "instability" and big swings in prices. This is actual capitalism, and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the marketplace is dynamic and responsive to consumers and other market participants.

But that's not something Wall Street insiders or their pals in Washington like in the modern era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the fact is they have very little interest in real, competitive capitalism.

Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing and preserving the portfolios of powerful Wall Street institutions is what really matters.

Decades of "Too Big to Fail"

It's based on the idea that Wall Street is just too important to the whole economy, and Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman explains this philosophy:

[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses form the failure of any big Wall Street institution would be so calamitous that it warranted an exemption from free market discipline.

This goes back at least to the 1994 Mexican bailout -- which was really a bailout of investors, not of Mexico -- which solidified the process of normalizing huge transfers of wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put" was already in place, with the central bank forever poised to embrace more easy money in pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche of easy money -- all of which lopsidedly benefited Wall Street over the rest of the economy.

This "exemption from free market discipline" is what Wall Street is all about these days. The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting financialization which puts ever greater amounts of the US economy into the hands of Wall Street money managers. The sector is now built on corporate welfare, not "free markets." No matter what happens, Wall Street expects the deck to be stacked in its favor.

This is why "volatility" has become a bad word, and "stability" is now the name of the game. It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning of financial markets." If some free market innovation and inventiveness actually takes place in some small corner of the marketplace, well, then we're all expected to get very upset.

That's the way Wall Street likes it. ay_arrow 1


Kayman 8 hours ago

The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more important than the Real Economy. A fatal presumption.

Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves the blood suckers by bleeding the dying core of America.

wmbz 8 hours ago

"The sector is now built on corporate welfare, not "free markets."

This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am amazed how long it has taken otherwise "smart" people to grasp this fact.

The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn proud of it!

junction 7 hours ago (Edited)

Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one at the SEC does anything but collect a salary, issue press releases and go to lunch as the Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The lapdog financial press cheered on the hedge funds as they demolished American businesses. The same gutter journalists who are not yet linking micro-manager Bezos giving up total control of Amazon right after his cloud service illegally de-platformed Parler for violation of bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying B-1 bombers. Anything to distract people from how rotten things are.

Cognitive rationalist 7 hours ago

Banking financial sector: private profits for me, public losses for thee

gladitsover 8 hours ago remove link

"..the table is tilted folks. The game is rigged.."

George Carlin

Lokiban 8 hours ago

I think it was all about showing to those unawares how corrupt and rigged Wall street truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the controllers or is it controllers playing their hideous games again for a reason, like the great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the time..

dustinthewind 9 hours ago

" Curiosity v Manipulation"

https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/curiosity-v-manipulation/

COMMENT: Message: Re Reddit "WallStreetBets"
Hi Marty,
Thanks for this blog post but I think they are not trying to make money out of short squeezing GME really, they are trying to make a point. If you follow some of the posts you see many stories about how badly people and their families were hurt in 2008 when not a single banker went to prison. Stories of Fathers losing jobs and houses and descending into alcoholism in front of their children who now are part of WallStreetBets, others who had to live off of beans and rice or what Mama could grow in the garden and went hungry etc.

So they are not buying GME to see it rise, though that is fine, they are spending money "they can afford to lose" to punish the hedge funds that have along with bankers hurt the little guy repeatedly. These same people IMO have bought off our politicians, removed regulations like Glass Steagal etc all to reap profits to the top while crushing everyone else.

Listen in June 2008 I got laid off from Palm, in July I broke my arm ( badly ), in August some tenants left so I tried to put that property up for sale but in September Lehman fell and the real estate agent told me the market was OFF that I could not sell and needed to rent it with no one renting for 5 more months. At the same time in September I had a 100K home equity line I took out just for emergencies and since I was having one I wanted to use it – but then Wells Fargo pulled the whole thing.

So there I was Marty, sitting on the couch with a cast from fingers to shoulder watching the world meltdown on a tiny TV set while on lots of pain killers
I was forced to use my small 401K, and ended up using the whole thing through 9 months of disability, two surgeries and a job search that did not yield a job until the fall of 2011.
So IMO these arrogant SOB cheating hedge fund guys should pound sand on GME for once because the casino is rigged, heads they win, tails they win, and the taxpayers lose their jobs, homes, and pay for their bailouts.
I say give it to 'em.
Off my soapbox

REPLY: I fully understand that. I have fought against these people my whole life. I was more interested in learning HOW the economy functioned where they were only interested in guaranteed trades. I guess I was the Leonardo da Vinci of finance. Instead of digging up bodies to figure out how the anatomy functioned, I searched history and developed a computer model to try to ascertain what made the world economy tick.

A professor from Princeton where Einstein taught said to me that I reminded him of Einstein. I was surprised, for I did not see myself as comparable to Einstein in any way. He then explained that what he meant was my curiosity which moved me to try to figure out what made it all function. I came to understand what he meant. If you are not CURIOUS and seek out knowledge, then you will NEVER discover anything new! I was not dealing with the physics of the world, but the finance. People are attracted by this blog and Socrates for that same reason. They have that spark of curiosity and seek to also understand what makes it all tick! We need to teach students to be curious. That is the key to all progress we desperately need to survive this never-ending battle of authoritarianism v independence and freedom.

I have stated many times that I had discovered the 8.6-year frequency in my research I conducted at Princeton, University in the Firestone Library. Those were fond memories for it was an amazing resource back then as was the Royal British Newspaper Library, which I gathered my FOREX database by sifting through the largest newspaper collection in the world.

This was the difference between me and the "club" where I tried to understand the movement of the ages that caused the rise and fall of civilization and therein the economy/markets, and the "club" which seeks to manipulate everything by sheer force armed with bribes. They own the Southern District of New York courts, the Second Circuit, and the Department of Justice along with the SEC and CFTC. Goldman Sachs has even stacked the SEC and CFTC with their former people. Nobody was prosecuted despite the fact that they were involved in the looting of capital in Malaysia and Greece. And people have the audacity to claim there was absolutely no election fraud? There is nothing we can trust that goes on in government anymore and it will only get far worse as we head into 2032.

I am well aware of the sentiment behind this Reddit trend. My concern is simple. Don't put it past the "club" to be in there making this seem like a sure bet and then set everyone up for the big crash. Be careful here going into Feb/March 2021.

[Feb 03, 2021] The GameStop Rebels Vs. -Too Big To Fail- - ZeroHedge

Feb 03, 2021 | www.zerohedge.com

The GameStop Rebels Vs. "Too Big To Fail" BY TYLER DURDEN WEDNESDAY, FEB 03, 2021 - 6:10

Authored by Ryan McMaken via The Mises Institute,

Last week, a large number of small-time investors drove up the price of GameStop's (GME) stock a historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's price spiked in part as a result of efforts by "an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals." These professionals were hedge fund managers who had shorted GameStop's stock. In other words, hedge funders were betting billions that GameStop's stock would go down. But the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took "a significant loss," possibly totaling $70 billion.

There surely were plenty of insiders on both sides of this deal. Given the complexity of various schemes employed by seasoned investors, it seems it is very unlikely that this is just a simple matter of little Davids taking on Wall Street Goliaths.

But it also looks like that's not all that was going on. Had this only been just another scheme by some Wall Street insiders against some other Wall Street insiders the story would probably have ended there.

But that's not what happened. Rather, it appears that, for many of the smaller investors who were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey wrench in the plans of Wall Street hedge funds which exist within the rarified world of billionaires and their friends.

Pro–Wall Street Fearmongering

The reactions to the event from media pundits and other commentators were telling in that there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a "fiasco," " insanity ," and something sure to leave a " trail of destruction ." The important thing was to use words designed to make it all look like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim Lebenthal at CNBC, for example, declared the "short-squeeze fiasco is a threat to the proper functioning of financial markets."

The fearmongering went beyond even the usual places we hear about financial news. On The View , for example, Meghan McCain delivered the sort of status quo –defending bromides we've come to expect from her. She insisted the GameStop affair could spiral into an economy-killing disaster because

If the stock ends up plunging because of this, because of GameStop and Wall Street loses billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a lot of average Americans do invest in, and if that happens, average Americans will end up losing even more money.

Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary understanding of what happened. But her comment delivered the important point: namely, that anything that causes volatility in the market could be a disaster for every American household. Translation: and we should all be very, very afraid if something isn't done to keep these Reddit people -- whom she compared to the Capitol "insurrectionists" -- under control.

Of course, in a functioning and relatively unhampered market, unusual, unexpected things happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't counted on. This leads to "instability" and big swings in prices. This is actual capitalism, and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the marketplace is dynamic and responsive to consumers and other market participants.

But that's not something Wall Street insiders or their pals in Washington like in the modern era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the fact is they have very little interest in real, competitive capitalism.

Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing and preserving the portfolios of powerful Wall Street institutions is what really matters.

Decades of "Too Big to Fail"

It's based on the idea that Wall Street is just too important to the whole economy, and Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman explains this philosophy:

[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses form the failure of any big Wall Street institution would be so calamitous that it warranted an exemption from free market discipline.

This goes back at least to the 1994 Mexican bailout -- which was really a bailout of investors, not of Mexico -- which solidified the process of normalizing huge transfers of wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put" was already in place, with the central bank forever poised to embrace more easy money in pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche of easy money -- all of which lopsidedly benefited Wall Street over the rest of the economy.

This "exemption from free market discipline" is what Wall Street is all about these days. The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting financialization which puts ever greater amounts of the US economy into the hands of Wall Street money managers. The sector is now built on corporate welfare, not "free markets." No matter what happens, Wall Street expects the deck to be stacked in its favor.

This is why "volatility" has become a bad word, and "stability" is now the name of the game. It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning of financial markets." If some free market innovation and inventiveness actually takes place in some small corner of the marketplace, well, then we're all expected to get very upset.

That's the way Wall Street likes it. ay_arrow 1


Kayman 8 hours ago

The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more important than the Real Economy. A fatal presumption.

Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves the blood suckers by bleeding the dying core of America.

wmbz 8 hours ago

"The sector is now built on corporate welfare, not "free markets."

This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am amazed how long it has taken otherwise "smart" people to grasp this fact.

The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn proud of it!

junction 7 hours ago (Edited)

Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one at the SEC does anything but collect a salary, issue press releases and go to lunch as the Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The lapdog financial press cheered on the hedge funds as they demolished American businesses. The same gutter journalists who are not yet linking micro-manager Bezos giving up total control of Amazon right after his cloud service illegally de-platformed Parler for violation of bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying B-1 bombers. Anything to distract people from how rotten things are.

Cognitive rationalist 7 hours ago

Banking financial sector: private profits for me, public losses for thee

gladitsover 8 hours ago remove link

"..the table is tilted folks. The game is rigged.."

George Carlin

Lokiban 8 hours ago

I think it was all about showing to those unawares how corrupt and rigged Wall street truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the controllers or is it controllers playing their hideous games again for a reason, like the great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the time..

[Feb 03, 2021] Naked Short Selling- The Truth Is Much Worse Than You Have Been Told

Feb 03, 2021 | oilprice.com

There is a massive threat to our capital markets, the free market in general, and fair dealings overall. And no, it's not China. It's a homegrown threat that everyone has been afraid to talk about.

Until now.

That fear has now turned into rage.

Hordes of new retail investors are banding together to take on Wall Street. They are not willing to sit back and watch naked short sellers, funded by big banks, manipulate stocks, harm companies, and fleece shareholders.

The battle that launched this week over GameStop between retail investors and Wall Street-backed naked short sellers is the beginning of a war that could change everything.

It's a global problem, but it poses the greatest threat to Canadian capital markets, where naked short selling -- the process of selling shares you don't own, thereby creating counterfeit or 'phantom' shares -- survives and remains under the regulatory radar because Broker-Dealers do not have to report failing trades until they exceed 10 days.

This is an egregious act against capital markets, and it's caused billions of dollars in damage.

Make no mistake about the enormity of this threat: Both foreign and domestic schemers have attacked Canada in an effort to bring down the stock prices of its publicly listed companies.

In Canada alone, hundreds of billions of dollars have been vaporized from pension funds and regular, everyday Canadians because of this, according to Texas-based lawyer James W. Christian. Christian and his firm Christian Smith & Jewell LLP are heavy hitters in litigation related to stock manipulation and have prosecuted over 20 cases involving naked short selling and spoofing in the last 20 years.

"Hundreds of billions have been stolen from everyday Canadians and Americans and pension funds alike, and this has jeopardized the integrity of Canada's capital markets and the integral process of capital creation for entrepreneurs and job creation for the economy," Christian told Oilprice.com.

The Dangerous Naked Short-Selling MO

In order to [legally] sell a stock short, traders must first locate and secure a borrow against the shares they intend to sell. A broker who enters such a trade must have assurance that his client will make settlement.

While "long" sales mean the seller owns the stock, short sales can be either "covered" or "naked" . A covered short means that the short seller has already "borrowed" or has located or arranged to borrow the shares when the short sale is made. Whereas, a naked short means the short seller is selling shares it doesn't own and has made no arrangements to buy. The seller cannot cover or "settle" in this instance, which means they are selling "ghost" or "phantom" shares that simply do not exist without their action.

When you have the ability to sell an unlimited number of non-existent phantom shares in a publicly-traded company, you then have the power to destroy and manipulate the share price at your own will.

And big banks and financial institutions are turning a blind eye to some of the accounts that routinely participate in these illegal transactions because of the large fees they collect from them. These institutions are actively facilitating the destruction of shareholder value in return for short term windfalls in the form of trading fees. They are a major part of the problem and are complicit in aiding these accounts to create counterfeit shares.

The funds behind this are hyper sophisticated and know all the rules and tricks needed to exploit the regulators to buy themselves time to cover their short positions. According to multiple accounts from traders, lawyers, and businesses who have become victims of the worst of the worst in this game, short-sellers sometimes manage to stay naked for months on end, in clear violation of even the most relaxed securities laws.

The short-sellers and funds who participate in this manipulation almost always finance undisclosed "short reports" which they research & prepare in advance, before paying well-known short-selling groups to publish and market their reports (often without any form of disclosure) to broad audiences in order to further push the stock down artificially. There's no doubt that these reports are intended to create maximum fear amongst retail investors and to push them to sell their shares as quickly as possible.

That is market manipulation. Plain and simple.

Their MO is to short weak, vulnerable companies by putting out negative reports that drive down their share price as much as possible. This ensures that the shorted company in question no longer has the ability to obtain financing, putting them at the mercy of the same funds that were just shorting them. After cratering the shorted company's share price, the funds then start offering these companies financing usually through convertibles with a warrant attachment as a hedge (or potential future cover) against their short; and the companies take the offers because they have no choice left. Rinse and Repeat.

In addition to the foregoing madness, brokers are often complicit in these sorts of crimes through their booking of client shares as "long" when they are in fact "short". This is where the practice moves from a regulatory gray area to conduct worthy of prison time.

Naked short selling was officially labeled illegal in the U.S. and Europe after the 2008/2009 financial crisis.

Making it illegal didn't stop it from happening, however, because some of the more creative traders have discovered convenient gaps between paper and electronic trading systems, and they have taken advantage of those gaps to short stocks.

Still, it gets even more sinister.

According to Christian, "global working groups" coordinate their attacks on specifically targeted companies in a "Mafia-like" strategy.

Journalists are paid off, along with social media influencers and third-party research houses that are funded by what amounts to a conspiracy. Together, they collaborate to spread lies and negative narratives to destroy a stock.

At its most illegal, there is an insider-trading element that should enrage regulators. The MO is to infiltrate a company through disgruntled insiders or lawyers close to the company. These sources are used to obtain insider information that is then leaked to damage the company.

Often, these illegal transactions involve paying off "informants", journalists, influencers, and "researchers" are difficult to trace because they are made from offshore accounts that are shut down once the deed is done.

Likewise, the "shorts" disguised as longs can be difficult to trace when the perpetrators have direct market access to trading systems. These trades are usually undetected until the trades fail or miss settlement. At that point, the account will move the position to another broker-dealer and start the process all over again.

The collusion widens when brokers and financial institutions become complicit in purposefully mislabeling "shorts" as "longs", sweeping the illegal transactions under the rug and off of regulatory radar.

"Spoofing" and "layering" have also become pervasive techniques to avoid regulator attention. Spoofing, as the name suggests, involves short sellers creating fake selling pressure on their targeted stocks to drive prices lower. They accomplish this by submitting fake offerings in "layers" at different prices to create a mirage.

Finally, these bad actors manage to skirt the settlement system, which is supposed to "clear" on what is called a T+2 basis . That means that any failed trades must be bought or dealt with within 3 days. In other words, if you buy on Monday (your "T" or transaction day), it has to be settled by Wednesday.

Unfortunately, Canadian regulators have a hard time keeping up with this system, and failed trades are often left outstanding for much longer periods than T+2. These failing trades are constantly being traded to reset the settlement clock and move the failing trade to the back of the line. The failures of a centralized system

According to Christian, it can be T+12 days before a failed trade is even brought to the attention of the IIROC (the Investment Industry Regulatory Organization of Canada)

Prime Brokers and Banks are Complicit

This is one of Wall Street's biggest profit center and fines levied against them are merely a minor cost of doing business.

Some banks are getting rich off of these naked short sellers. The profits off this kind of lending are tantalizing, indeed. Brokers are lending stocks they don't own for massive profit and sizable bonuses.

This layer of what many have now called a "criminal organization" is the toughest for regulators to deal with, regardless of the illegal nature of these activities.

Prime brokers lend cash account shares that are absolutely not allowed to be lent. They lend them to short-sellers in order to facilitate them in settling their naked shorts.

It's not that the regulators are in the dark on this. They are, in fact, handing out fines, left and right -- both for illegal lending and for mismarking "shorts" and "longs" to evade regulatory scrutiny. The problem is that these fines pale in comparison to the profits earned through these activities.

And banks in Canada in particular are basically writing the rules themselves, recently making it easier (and legal) to lend out cash account shares.

Nor do law firms have clean hands. They help short sellers bankrupt targeted companies through court proceedings, a process that eventually leads to the disappearance of evidence of naked shorts on the bank books.

"How much has been stolen through this fraudulent system globally is anyone's guess," says Christian, "but the number begins with a 'T' (trillions)."

The list of fines for enabling and engaging in manipulative activity that destroys companies' stock prices may seem to carry big numbers from the retail investor's perspective, but they are not even close to being significant enough to deter such actions:

- The SEC charged Citigroup's principal U.S. broker-deal subsidiary in 2011 with misleading investors about a $1 billion collateralized debt obligation (CDO) tied to the U.S. housing market. Citigroup had bet against investors as the housing market showed signs of distress. The CDO defaulted only months later, causing severe losses for investors and a profit of $160 million (just in fees and trading profits). Citigroup paid $285 million to settle these SEC charges.

- In 2016, Goldman, Sachs & Co. agreed to pay $15 million to settle SEC charges that its securities lending practices violated federal regulations. To wit: The SEC found that Goldman Sachs was mismarking logs and allowed customers to engage in short selling without determining whether the securities could reasonably be borrowed at settlement.

- In 2013, a Charles Schwab subsidiary was found liable by the SEC for a naked short-selling scheme and fined $8.2 million .

- The SEC charged two Merrill Lynch entities in 2015 with using "inaccurate data in the course of executing short sale orders", fining them $11 million.

- And most recently, Canadian Cormark Securities Inc and two others came under the SEC's radar. On December 21, SEC instituted cease-and-desist orders against Cormark. It also settled charges against Cormark and two other Canada-based broker deals for "providing incorrect order-making information that caused an executing broker's repeated violations of Regulation SHO". According to the SEC, Cormark and ITG Canada caused more than 200 sale orders from a single hedge fund, to the tune of more than $660 million between August 2016 and October 2017, to be mismarked as "long" when they were, in fact, "short" -- a clear violation of Regulation SHO. Cormark agreed to pay a penalty of $800,000 , while ITG Canada -- one of the other broker-dealers charged -- agreed to pay a penalty of $200,000. Charging and fining Cormark is only the tip of the iceberg. The real question is on whose behalf was Cormark making the naked short sells?

- In August 2020, Bank of Nova Scotia (Scotiabank) was fined $127 million over civil and criminal allegations in connection with its role in a massive price-manipulation scheme.

According to one Toronto-based Canadian trader who spoke to Oilprice.com on condition of anonymity, "traders are the gatekeeper for the capital markets and they're not doing a very good job because it's lucrative to turn a blind eye." This game is set to end in the near future, and it is only a matter of time.

"These traders are breaking a variety of regulations, and they are taking this risk on because of the size of the account," he said. "They have a responsibility to turn these trades down. Whoever is doing this is breaking regulations [for the short seller] and they know he is not going to be able to make a settlement. As a gatekeeper, it is their regulatory responsibility to turn these trades away. Instead, they are breaking the law willfully and with full knowledge of what they are doing."

"If you control the settlement system, you can do whatever you want," the source said. "The compliance officers have no teeth because the banks are making big money. They over-lend the stocks; they lend from cash account shares to cover some of these fails for instance, if there are 20 million shares they sold 'long', they can cover by borrowing from cash account shares."

The Naked Truth

In what he calls our "ominous financial reality", Tom C.W. Lin, attorney at law, details how "millions of dollars can vanish in seconds, rogue actors can halt trading of billion-dollar companies, and trillion-dollar financial markets can be distorted with a simple click or a few lines of code".

Every investor and every institution is at risk, writes Lin.

The naked truth is this: Investors stand no chance in the face of naked short sellers. It's a game rigged in the favor of a sophisticated short cartel and Wall Street giants.

Now, with online trading making it easier to democratize trading, there are calls for regulators to make moves against these bad actors to ensure that North America's capital markets remain protected, and retail investors are treated fairly.

The recent GameStop saga is retail fighting back against the shorting powers, and it's a wonderful thing to see - but is it a futile punch or the start of something bigger? The positive take away from the events the past week is that the term "short selling" has been introduced to the public and will surely gather more scrutiny.

Washington is gearing up to get involved. That means that we can expect the full power of Washington, not just the regulators, to be thrown behind protecting the retail investors from insidious short sellers and the bankers and prime brokers who are profiting beyond belief from these manipulative schemes.

The pressure is mounting in Canada, too, where laxer rules have been a huge boon for manipulators. The US short cartel has preyed upon the Canadian markets for decades as they know the regulators rarely take action. It is truly the wild west.

Just over a year ago, McMillan published a lengthy report on the issue from the Canadian perspective, concluding that there are significant weaknesses in the regulatory regime.

While covered short-selling itself has undeniable benefits in providing liquidity and facilitating price discovery, and while the Canadian regulators' hands-off approach has attracted many people to its capital markets, there are significant weaknesses that threaten to bring the whole house of cards down.

McMillan also noted that "the number of short campaigns in Canada is utterly disproportionate to the size of our capital markets when compared to the United States, the European Union, and Australia".

Taking Wall Street's side in this battle, Bloomberg notes that Wall Street has survived "numerous other attacks" over the centuries, "but the GameStop uprising could mark the end of an era for the public short", suggesting that these actors are "long-vilified folks who try to root out corporate wrongdoing".

Bloomberg even attempts to victimize Andrew Left's Citron Research, which -- amid all the chaos -- has just announced that it has exited the short-selling game after two decades.

Nothing could be further from the truth. Short sellers, particularly the naked variety, are not helping police the markets and route out bad companies, as Bloomberg suggests. Naked short sellers are not motivated by moral and ethical reasons, but by profit alone. They attack good, but weak and vulnerable companies. They are not the saviors of capital markets, but the destroyers. Andrew Left may be a "casualty", but he is not a victim. Nor likely are the hedge funds with whom he has been working.

In a petition initiated by Change.org, the petitioners urge the SEC and FINRA to investigate Left and Citron Research, noting: "While information Citron Research publishes are carefully selected and distributed in ways that do not break the law at first sight, the SEC and FINRA have overlooked the fact that Left and Citron gains are a result of distributing catalysts in an anticipation of substantial price changes due to public response in either panic, encouragement, or simply a catalyst action wave ride. Their job as a company is to create the most amount of panic shortly after taking a trading position so they and their clients can make the most amount of financial gains at the expense of regular investors."

On January 25 th , the Capital Markets Modernization Taskforce published its final report for Ontario's Minister of Finance, noting that while naked short selling has been illegal in the United States since 2008, it remains a legal loophole in Canada. The task force is recommending that the Ministry ban this practice that allows for the short-selling of tradable assets without first borrowing the security.

The National Coalition Against Naked Short Selling - Failing to Deliver Securities (NCANS), which takes pains to emphasize that is not in any way against short-selling, notes: "Naked short-selling transfers the risk exposure and the hedging expense of the derivatives market makers onto the backs of equity investors, without any corresponding benefit to them. This is fundamentally unfair, and must stop."

Across North America, the issue is about to reach a fever pitch over GameStop. For once, regular retail investors have a voice to use against Wall Street. And for once, Washington appears to be listening. The House and Senate both have hearings scheduled over the GameStop saga.

Paradoxically, the same company that basically started the retail investor coup -- zero-fee trading app Robinhood -- is now under fire for pulling the rug out from under the same democratic movement.

After retail investors joined forces against Wall Street short-sellers to push GameStop stock from $20 to a high of over $480 in less than a week, Robinhood made the very unpopular move of instituting a ban on buying for retail investors. Under the rules, Wall Street could still buy and sell, but retail investors could only sell. This new band of investors -- which includes pretty much all of Robinhood's clientele -- are up in arms, with customers now suing. They won't go away, and they have Washington's ear and Twitter and Reddit's social media power. This is shaping up to be an uprising.

What happens with GameStop next could end up dictating a new form of capital markets democracy that levels the playing field and punishes the Mafia-like elements of Wall Street that have been fleecing investors and destroying companies for years.

Retail investors want to clean up capital markets, and they just might be powerful enough to do it now. That's a serious wake-up call for both naked short sellers and the investing public.

Viva la Revolucion.

James Stafford

Publisher Oilprice.com

More Top Reads From Oilprice.com:

[Feb 02, 2021] Watching stock market moves is like watching Pulp Fiction: halfway through, the violence doesn t even bother you anymore

Notable quotes:
"... "It's like watching 'Pulp Fiction.' Halfway through, the violence doesn't even bother you anymore." ..."
Jan 27, 2019 | www.zerohedge.com

"Investors are becoming desensitized,"

Bryce Doty, SVP at Sit Investment Associates, told Bloomberg, then continued the verbal poetry:

"It's like watching 'Pulp Fiction.' Halfway through, the violence doesn't even bother you anymore."

[Feb 02, 2021] The Importance of Usury Laws

Notable quotes:
"... Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization". ..."
Jan 22, 2021 | www.unz.com

Mefobills , says: January 22, 2021 at 2:34 pm GMT • 9.3 hours ago

The author Jafee is confused on Bentham, because Bentham was confused himself, or was a Jewish agent of mammon.

The highlighted terms accord with Benthamian Utilitarianism -- the greatest human happiness of the greatest human number.[1]
Much (but surely not all) pertinent history suggests that Bentham's thinking influenced the construction of the Preamble

The English philosopher Jeremey Bentham (1748-1832) was a defender of usury, which is the opposite of happiness for the greatest human number.

In 1787 Jeremey Bentham wrote "In Defence of Usury." Bentham was the son of a rich lawyer, and a lawyer himself, not an economist, which is why he was confused. Bentham created the present mis-definition of usury which prevails to today, so he was very damaging. "The taking of grater interest than the law allows, or the taking of greater interest than is usual."

Bentham ignored hundreds of years of the Catholic Scholastics work on usury, and also ignored Aristotle. Actually Bentham attacked Aristotle in order to spread his B.S. Bentham's father was Jewish, and Bentham also ignored the fairly strong Old Testament admonitions against usury.

Bentham spread the same erroneous B.S. that Calvin did, and both men did enormous damage, and whether by design or confusion are NOT for the common good. Their connections to our (((friends))) is suspicious.

A Persian Daric is a gold coin. Bentham said this: Though all money in nature is barren, though a Daric would not beget another Daric yet for a Daric which a man borrowed he might get a ram and couple of ewes and the ewes would probably not be barren (pages 98 to 101 of his screed)

Aristotle and the Catholic Schoolmen clearly showed that it was the Ewes that were fertile, not the coins.

Bentham or Calvin could not read with comprehension and twisted words into new meanings. This twisted language persists in the brains of modern humans as confusion.

As if every Daric is going to buy an Ewe in order to reproduce.

By 1850 John Whipple wrote "The Importance of Usury Laws – An answer to Jeremey Bentham."

"The purpose of money is to facilitate exchange. It was never intended as an article of trade, as an article possessing an inherent value in itself, and further than as representative or test of the value of all other articles."

It undoubtedly admits of private ownership, but of an ownership that is not absolute, like the product of individual industry, but qualified and limited by the special use for which it was designed.

And

The power of money over every other article, arises out of the artificial character given to it by the STATE , AND NOT OUT OF THE QUALITIES OF THE MATERIAL WHICH IT IS COMPOSED.

Bentham also argued that anti-usury laws were due to prejudice against Jews. Whipple was not frightened by the Jew trick of anti-semitism claims. Whipple said this in reply, "The real truth is this feeling which he calls prejudice is the result of the moral instinct of mankind."

Whipple wasn't afraid of calling out the Jew.

In other words, Bentham did not have the moral instinct of mankind, but instead was a usurer, hiding behind his utilitarianism doctrine.

My view is that the preamble general welfare clause is direct lineage that comes through Benjamin Franklin and his experiences in the Philadelphia Colony. Franklin was definitely NOT a usurer, and was not confused on money.

Abdul Alhazred , says: January 22, 2021 at 3:01 pm GMT • 8.9 hours ago

The Preamble of the constitution reflects a Liebnizian metaphysic reflected in the notion of the pursuit of happiness, were are not talking utilitarianism, but a recognition that man is made in the image of the creator, Imago Dei where happiness reflects an acknowledgement that we are actually creative beings where happiness is a reflection of such creativity, above mere acquisition of 'property' as the Confederacy devolved the phrase to "Life, Liberty and Property"

Majority of One , says: January 22, 2021 at 7:45 pm GMT • 4.2 hours ago
@Mefobills eply distorted by Calvinistic Puritanism and its "Chosen People" mythos.

Much of the religious fervor which dominated the American frontier in the latter decades of the 18th Century and early 19th–they called it "The Great Awakening" -- was infused with the patriarchal form of religiosity as ignited by Calvinistic tropes and memes.

Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization".

My preference is to employ the more objectively truthful description: the "JudieChristie MagickMindfuck.

Mefobills , says: January 22, 2021 at 11:20 pm GMT • 35 minutes ago
@Leonard R. Jaffee Anti-semitism card. Bentham even attacked Aristotle for corrupting Christianity.

In Bentham's book, Bentham associates some of the positive attributes of thrift with money lending. Money lending becomes on the same plane as thrift in his worldview. An here is the coup-de-gras: Compound interest was forbidden in Bentham's day, and Bentham urged its legalization.

A compound curve for interest is outside of nature, as the claims on nature grow exponentially. Nature does not grow exponentially. Nature and labor cannot pay the claims, and society polarizes. Jesus started his mission on the Jubilee year, as Jubilees are coded in the Bible to prevent polarization.

If Bentham wasn't a Jew, he certainly had the Jewish spirit. Bentham was not for the common good.

[Jan 29, 2021] The System Is Rigged - Episode 4537- Game Stop Corp

Notable quotes:
"... "I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning." ..."
"... Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip. ..."
"... There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge funds already owned the stocks that they are selling short, they would not be in such trouble now. ..."
Jan 29, 2021 | www.moonofalabama.org

psychohistorian , Jan 28 2021 18:47 utc | 6

Early this week a few amateur stock trading nerds decided to promote a stock that was heavily shortened by certain hedge funds. The idea was to raise the stock price of Game Stop Corp., a vendor for computer games, by having lots of small stock traders to buy into it. The hedge fund that shortened the stock, and thereby bet on a dropping stock price, would then make huge losses while the many small buyers would potentially profit.

These people, who had joined up in the sub-reddit /r/WallStreetBets, were not driven by greed but by rage against the financial machine :

Instead of greed, this latest bout of speculation, and especially the extraordinary excitement at GameStop, has a different emotional driver: anger. The people investing today are driven by righteous anger, about generational injustice, about what they see as the corruption and unfairness of the way banks were bailed out in 2008 without having to pay legal penalties later, and about lacerating poverty and inequality. This makes it unlike any of the speculative rallies and crashes that have preceded it.

The movement was successful. The stock price of Game Stop Corp. rose from some $10 to over $400 within just a few days. The short seller had to take cover under a larger firm:

Hedge fund Melvin Capital closed out its short position in GameStop on Tuesday after taking huge losses as a target of the army of retail investors. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances.

I'm shocked! Absolutely shocked to see that the game of finance is rigged!!!!/snark

There have not been market fundamentals since the beginning of financialization in 1971 when money became fiat instead of gold backed. I find it interesting that it has taken 50 years for the cancer of financialization to fully compromise the host. It will be interesting to see where this goes from here.

I think the speed of decline of empire is speeding up as noted by the increase in international investment in China.

I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning.


Rutherford82 , Jan 28 2021 18:50 utc | 7

@6 psychohistorian

"I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning."

Is Max Keiser going after the silver market again? I bet he was posting on r/Wallstreetbets to stir things up!

karlof1 , Jan 28 2021 18:50 utc | 8

Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip.

We even ran full pages ads in the NY Times and WaPost to add visibility to our justifiable outrage, which was well proven when the bubble burst.

But Obama didn't do his job and enforce the law, and the entire mess is far worse now. This episode epitomizes the amazing amounts of corruption masquerading as well regulated markets and an equitable financial system.

I support Hudson's debt forgiveness for the main reason it will bankrupt the debt holders--the Financial Parasites--who are also the beneficiaries of the corrupt system; and with their destruction, will allow for the rise of the Public Financial Utility that will restore law and order to that realm of the economy. Yes, this must be seen as yet another episode of the longstanding Class War, one of the most brazen ever.

lysias , Jan 28 2021 19:41 utc | 18

There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge funds already owned the stocks that they are selling short, they would not be in such trouble now.

Bemildred , Jan 28 2021 20:20 utc | 24

It's not over yet:

Triden , Jan 28 2021 20:55 utc | 29

Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances.

-b

How Robinhood was rigged:

Robinhood sells its orderflow to Citadel for execution. Citadel then chiselled the retail investor for pennies per trade by frontrunning (think high freq trading) before execution of retail order, inflating the price and cheating the customer. Citadel bailed out Citron, essentially inheriting the short position. Citadel then threatened Robinhood with refusing payment for orderflow

[Dec 10, 2020] The Transnational Financiers as aliens hell-bent of conquering the Earth population

Dec 10, 2020 | zerohedge.com

Dec 4, 2020 10:14 PM Reply to Le Chat Noir

The wonderful world you talk about was not experienced by the peoples of Guatemala, Iran, Chile, Honduras, Nicaragua, Mexico, Argentinia, Haiti, Vietnam, Laos, Cambodia, Iran, Iraq, Libya, Syria and many of the homeless and destitute in the US, UK, Japan etc. The wonderful world you describe is an illusion.

There is a line from the 1960s Science Fiction series called the Invaders from another galaxy who wish take over the world. At the beginning of each episode the narrator says " they wish to take over the world and make it their world".

The Transnational Financiers have been working towards that goal for centuries!!!!

[Nov 02, 2020] WTO was formed in 1995 after the fall of Eastern blocks, to dominate and control the world trade in US fiat currency specially when China with her cheap skilled labor was to become major world manufacturers of goods.

Nov 02, 2020 | www.moonofalabama.org

Kooshy , Nov 1 2020 20:46 utc | 31

Like the petrodollars, WTO better known as globalization, was formed in 1995 after the fall of Eastern blocks ,to dominate and control the world trade in US fiat currency specially when China with her cheap skilled labor was to become major world manufacturers of goods. Basically like oil America agreed not to impose tariff on goods they consumed if you trade and exported on their fiat currency which costed US nothing to produce. Obviously unlike oil trade this globalization of trade in US dollar could not work, since unlike oil trade America couldn't politically dominated and control the good manufacturing countries, like it could, with small oil producing countries. The period of free trade in goods and energy is coming to an end, therefore US needs to lower her standards of living, or to go to major wars with other resources hungry powers to continue colonizing the third world resources and labor. Either way the end result will be the sam as for, not so Great Britain, ottomans, Spanish, Persian empires, the only obvious difference shorter empire.

Kooshy

[Sep 28, 2020] Semitism and Capitalism by Andrew Joyce

Sep 28, 2020 | www.unz.com

"The middleman and the host society come in conflict because elements in each group have incompatible goals. To say this is to deny the viewpoint common in the sociological literature that host hostility is self-generated (from psychological problems or cultural traditions)."
Edna Bonacich, "A Theory of Middleman Minorities," 1973. [1]

An interesting accompaniment to Nathan Cofnas's 2018 attempted debunking of Kevin MacDonald's work on Jews was the subtle resurfacing of Steven Pinker's claim that a more plausible theory of the Jewish historical experience can be found in "Thomas Sowell's convincing analysis of 'middleman minorities' such as the Jews, presented in his magisterial study of migration, race, conquest, and culture." Pinker first involved himself in criticism of MacDonald's work in a letter to Slate , in January 2000, where he made the above comment. A mere teenager in January 2000, it was only in the wake of the Cofnas affair that I first discovered and read Pinker's initial response to MacDonald's theory. It goes without saying that I disagreed with almost everything Pinker had to say, but I was especially vexed by his invocation of the "middleman minority" theory, something I've been familiar with for over a decade and always found strongly lacking. Pinker himself, of course, has relatively little expertise in the area, his only comment on the theme coming from a quasi-memoir on Jewish intelligence written for New Republic . Additionally, his gushing use of persuasive language ("convincing," "magisterial") to describe Thomas Sowell's extremely derivative and now rather dated Migrations and Cultures: A World View (1996) struck me as a wholly contrived inflation of what isn't really a rival theory at all, and certainly not a Sowell innovation. In fact, the history of "middleman minority" theory, and especially its application to the Jews, has a patchy, chequered, and ambiguous history that is worth exploring in its own right. The following essay is intended to provide such a history, as well as to broadly assess the merits and inadequacies of exploring Jewish history through this lens, and also the ways it complements, and falls short of, Kevin MacDonald's theory.

History of the Theory

The comparing of Jews with other sojourning or diaspora trading peoples is far from new, and has even been a staple of anti-Jewish writing since at least the Enlightenment. Voltaire, for example, wrote in his Oeuvres Complètes (Geneva, 1756) and Dictionnaire Philosophique (Basle, 1764) that "The Guebers [Parsis in the modern terminology], the Banyans [Indian merchants] and the Jews, are the only nations which exist dispersed, having no alliance with any people, are perpetuated among foreign nations, and continue apart from the rest of the world." [2] In the course of his essay, however, Voltaire concluded that, some surface similarities aside, "It is certain that the Jewish nation is the most singular that the world has ever seen." Bruno Bauer (1809 -- 1882), the German Protestant theologian, philosopher and historian, also used the example of the Parsis and Overseas Indians, writing in The Jewish Problem (1843),

The base [of the tenacity of the Jewish national spirit] is lack of ability to develop with history, it is the reason of the quite unhistorical character of that nation, and this again is due to its oriental nature. Such stationary nations exist in the Orient, because there human liberty and the possibility of progress are still limited. In the Orient and in India, we still find Parsees [sic] living in dispersion and worshipping the holy fire of Ormuz. [3]

After Voltaire, commentary on the relationship between the economic activity of the Jews and other aspects of their behavior and history, a key theme in modern middleman minority theory, were common points of discussion and debate. Jakob Friedrich Fries (1773 -- 1843), an avowedly anti-Semitic German philosopher, argued in his essay On the Danger to the Well-Being and Character of the Germans Presented by the Jews (1816), that Jews adopted their historical middleman role willingly, out of a hunger for profit and an innate sense of separateness, rather than being forced into it by broader economic structures and contexts (which again are a major focus of modern middleman minority theory). For Fries,

Both in Germany and abroad the Jews had free states where they enjoyed every right, and even countries where they reigned -- but their sordidness, their mania for deceitful, second-hand dealing always remained the same. They shy away from industrious occupations not because they are hindered from pursuing them but simply because they do not want to.

Following Bauer and Fries -- and before modern scholarship on the subject, the most prominent invocation of ideas similar to modern middleman minority theory can be observed in the work of Karl Marx. In fact, Marx's essay On the Jewish Problem is an explicit reply to Bauer, with Marx accusing Bauer of "a one-sided conception of the Jewish problem." [4] Marx decried Bauer's focus on religious matters, perceiving the roots of the Jewish problem to reside instead in resource competition and raw economics. In many of his arguments and assessments of the economic and sociological position of the Jews, Marx anticipated Edna Bonacich (1940 -- ), the Jewish Marxist anti-Zionist sociologist who essentially invented middleman minority theory in its modern form (and whose work will be discussed below), in arguing for a structural-contextual explanation of the middleman role of the Jews. In this view, the historical development of Capital essentially invites and entices certain sojourning or diaspora groups, including the Jews, to adopt lucrative but exploitative and antagonistic roles within society. In the words of Marx, "we recognize therefore in Judaism a generally present anti-social element which has been raised to its present peak by historical development , in which the Jews eagerly assisted ." [emphasis added] These antagonistic roles then generate host hostility, which reinforces ethnocentrism and negative characteristics in the minority, accelerating and deepening conflict.

Marx's emphasis on economic opportunity and the capitalist superstructure influenced later writers such as the German economist Wilhelm Roscher (1817 -- 1894), Werner Sombart (1863 -- 1941), Max Weber (1864 -- 1920), and Georg Simmel (1858 -- 1918), all of whom attempted in some form to trace the relationship of ethnicity to occupational choice (a major concern of modern middleman minority theory), with particular attention paid to the Jews. In keeping with his flamboyant Marxism, Sombart was closest to Marx's ideas on the Jews, arguing in The Jews and Modern Capitalism (1911) that Capital had drawn Jews into their influential, exploitative, and lucrative roles in such a comprehensive manner that Jews had become a kind of ur-middleman minority, and thus were both the prime movers of modern capitalism and the very embodiment of exploitative capital itself. Later, in Der moderne Kapitalismus (1913), Sombart claimed that the middleman nature of the Jews had become endemic in society, creating generations of mere "traders," a bourgeois "Jewish species" whose entire intellectual and emotional world is "directed to the money value of conditions and dealings, who therefore calculates everything in terms of money." This "spirit of Moloch" compelled the entrepreneur to "make money relentlessly until at last he conceives this as the real goal of all activity and all existence." [5] For Sombart, the origins of the worst of modern capitalism can be found in the early middleman role of the Jews, their medieval semi-nomadic quest for usury-derived profit and Victorian hawking of shoddy goods being a precursor to modern advertising and the mass production of superfluous and quickly obsolete consumer products.

Max Weber's interpretation of the Jewish middleman role was slightly softer, with Weber advancing the notion of "pariah capitalism." Pariah capitalists, who include the Jews as well as the Parsis, the Overseas Indians, and the Overseas Chinese, are groups whose characteristics and situational contexts make them prone to willingly adopt socially negative positions in order to obtain wealth and influence. For Weber, capitalism itself was not intrinsically bad. The Puritans, with their industry and hard work, were held up in Weber's The Protestant Ethic and the Spirit of Capitalism (1904/5) as exemplars of positive, "rational" capitalism. Jews, and other pariah capitalists, however, invariably advanced a negative "irrational" capitalism typified by consumer credit, speculation, and colonialism. According to Weber, middleman minorities or "pariah capitalist groups" perverted the essentially good nature of capitalism because of their practice of "dual ethics," or moral double-standards, which was itself a product of their sojourning nature and situational context. Weber also perceived Judaism itself as reinforcing the Jewish preference for pariah capitalism. [6]

Softer still were the ideas of Wilhelm Roscher, one of the founders of the historical school of political economy. Roscher was part of the historical economist or European Institutionalist movement (which also influenced Weber) that argued for a study of economics based on empirical work that laid special methodological emphasis on context, rather than logical philosophy. Roscher's emphasis on context and the historical development of capitalism are exemplified in his 1875 essay "The Status of the Jews in the Middle Ages Considered from the Standpoint of Commercial Policy."[7] In this essay, Roscher presented capitalism as neither inherently good or bad, and he made the argument that Jews, who like other middleman minorities were economic modernizers, were positive influences and crucial to the development of a burgeoning economic trading system. Gideon Reuveni offers the following summary:

According to Roscher, the modernizing role of the Jews explains the change in attitudes within the social majority: from tolerance and acceptance to exclusion and persecution. In other words, once, in the eyes of the majority the role of the Jews becomes superfluous, resentments towards the Jews become more prevalent. This cycle in relations towards Jews, Roscher observed, was not specific to the relationship between Jews and non-Jews but was rather a general development among many peoples who allow their economies to be administered by a foreign and more highly cultivated people, but later, upon having reached the necessary level of development themselves, often after intense struggles, try to emancipate themselves from this tutelage. According to Roscher, "one may defiantly speak in this connection of a historical law here." [8]

Similar to Roscher's ideas were the theories of the Jewish Marxist anti-Zionist Abram Leon (1918 -- 1944). Leon, a Polish Jew said to have been executed at Auschwitz at the age of 26, published The Jewish Question: A Marxist Interpretation around 1942, in which he proposed that Jews were a "people-class." For Leon, "Judaism mirrors the interests of a pre-capitalist mercantile class." He explains,

Judaism was an indispensable factor in precapitalist society. It was a fundamental organism within it. That is what explains the two-thousand-year existence of Judaism in the Diaspora. The Jew was as characteristic a personage in feudal society as the lord and the serf. It was no accident that a foreign element played the role of "capital" in feudal society. Feudal society as such could not create a capitalist element; as soon as it was able to do so, precisely then it ceased being feudal. Nor was it accidental that the Jew remained a foreigner in the midst of feudal society. The "capital" of precapitalist society existed outside of its economic system. From the moment that capital begins to emerge from the womb of this social system and takes the place of the borrowed organ, the Jew is eliminated and feudal society ceases to be feudal. It is modern capitalism that has posed the Jewish problem. Not because the Jews today number close to twenty million people (the proportion of Jews to non-Jews has declined greatly since the Roman era) but because capitalism destroyed the secular basis for the existence of Judaism. Capitalism destroyed feudal society; and with it the function of the Jewish people-class. History doomed this people-class to disappearance; and thus the Jewish problem arose. The Jewish problem is the problem of adapting Judaism to modern society.

Georg Simmel, an ethnically Jewish sociologist, philosopher, and critic, moved in much the same theoretical direction as Roscher and Leon, as evidenced in his famous and still influential essay "Der Fremde" ("The Stranger") (1908). Simmel argued that certain groups like Jews and other diaspora peoples may be members of host nations in a spatial sense but not in a social sense. They may be in the nation, but not of it. These groups are both near and far, familiar and foreign. This contextual scenario influences the behavior of "stranger" groups by permitting them freedom from convention and allowing them access to an alleged greater objectivity. For Simmel, "the Stranger," the classic example of which in his estimation is the Jew, is "the person who comes today and stays tomorrow. He is, so to speak, the potential wanderer: although he has not moved on, he has not quite overcome the freedom of coming and going." [9] This freedom, argues Simmel, makes "the Stranger" ideally suited to fulfil the role of middleman minority. [10] As with Roscher's theory, which is markedly contradicted in several key areas of the historical record, there are a number of obvious logical and evidential problems with Simmel's theory, and these will be discussed later.

Between Simmel's 1908 essay and the 1970s, middleman minority theories continued to be advanced. With the exception of Philip Curtin and his Cross-cultural Trade in World History (1984), these efforts were developed primarily by Jewish scholars, and overwhelmingly within the context of trying to explicitly or implicitly explore, explain, or offer apologetics for the Jewish experience. For example, Abner Cohen (1921 -- 2001), was an anthropologist at the University of London, who advanced, in his influential work Urban Ethnicity (1974) and numerous other publications, the idea that there are "trading diasporas." [11] Of particular interest are Cohen's ideas about "visibility strategies" pursued by such groups:

The use of symbols to maintain group boundaries can thus be seen as a cultural strategy. In fact, many groups in traditional and modern societies find that their interests are guarded better through invisible organisations such as cousinhoods, membership in a common set of social clubs, religious ties, and informal networks, than through a highly visible, formally recognised institution. At times, ethnic groups may need to heighten their visibility as strangers to maintain their interests while in other instances they may wish to lower their profile and appear to be an integral part of the society. [12]

This bears a striking similarity to the sixth chapter of Kevin MacDonald's Separation and Its Discontents , which is concerned with visibility strategies, especially among crypto-Jews, and concludes with the argument that "this attempt to maintain separatism while nevertheless making the barriers less visible is the crux of the problem of post-Enlightenment Judaism." [13] In fact, beginning in the 1970s, middleman minority theory began to develop several ideas that dovetail very well with the concept of Judaism as a group evolutionary strategy. Nowhere is this more apparent than in the work of Edna Bonacich.

Although the modern refinement of middleman minority theory is often traced to Hubert Blalock's 1967 Toward a Theory of Minority-Group Relations , the greater scholarly interest has been shown in Edna Bonacich's 1973 American Sociological Review article "A Theory of Middleman Minorities." [14] Bonacich sought to refine and systematize Blalock's theory within an anti-capitalist framework, essentially making the argument that all group conflict in such scenarios is the result of a rational competition for resources in which group characteristics and interests play a crucial role. A Jewish Marxist and anti-Zionist, Bonacich's interpretations borrow heavily from Marx, Sombart, Weber, Roscher, and Leon, to the extent that Bonacich essentially concurs that capitalism created opportunities for exploitative middleman communities and the Jews and other middleman minorities, who possess certain predisposing characteristics including dual loyalty and a level of unscrupulousness, willingly and enthusiastically engaged in these roles.

Bonacich is well-known for her work on East Asian middleman minorities in the United States, especially her 1980 monograph The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community , but her earliest work on middleman minorities clearly demonstrates a concern with the Jewish experience. [15] In her discussion of middleman minorities in the 1973 article, Bonacich describes Jews as "perhaps the epitome of the form." Some of the key features of the 1973 article include the arguments that Jews and other middleman minorities are essentially economic "teams," and that these teams rely upon very high levels of ethnocentrism and related social and economic strategies, which in turn enable them to succeed in individualistic societies. Bonacich writes,

The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit his own son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity, where primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy . [emphasis added] [16]

Bonacich makes some very interesting, and controversial, remarks on the nature of conflict between middleman minorities and their hosts, with special reference to Jews. For Bonacich, accusations that Jews have simply been scapegoats for the woes of Europeans are based on nothing more than a "surface impression." [17]
While noting that middleman minorities "are noteworthy for the acute hostility they have faced," it remains that,

host members have reason for feeling hostile toward middleman groups. Even the extremity of the host reaction can be understood as "conflict" behavior. The reason is that the economic and organisational power of middleman groups makes them extremely difficult to dislodge. The difficulty of breaking entrenched middleman monopolies, the difficulty of controlling the growth and extension of their economic power, pushes host countries to ever more extreme reactions. One finds increasingly harsh measures, piled on one another, until, when all else fails, "final solutions" are enacted. [18]
[emphasis added]

Bonacich has also argued that Jews and other middleman minorities do engage in economic and social "dual loyalty," and that middleman minorities do in fact "drain" resources away from host populations and can become very powerful as a result. This then frequently causes host elites and masses to unite against the sojourning element, a conflict that can escalate rapidly if the sojourning element refuses to give up its monopolies. Bonacich explicitly rejects any idea that "host hostility is self-generated (from psychological problems or cultural traditions)," arguing instead that "the middleman and the host society come in conflict because elements in each group have incompatible goals." With her apparent justification of host violence against middleman minorities, including Jews, as well as her objective view of certain Jewish characteristics, Bonacich's theory has been heavily criticized in some quarters, despite its ongoing influence in contemporary sociology. Robert Cherry, for example, has lamented that Bonacich's ideas on middleman minorities "reinforce persistent, negative Jewish stereotypes." [19]

Discussion

Before moving to an assessment of the merits and inadequacies of middleman minority theory in explaining Jewish history, it's worth reflecting on the history of the theory in light of Steven Pinker's claim that it represents a rival, or "more convincing," analysis of the Jewish historical trajectory. The first problem, of course, is that, despite Pinker's lavish praise, Thomas Sowell is not remotely regarded within scholarship as a leading or original thinker in the area of middleman minority theory. Not only does discussion of middleman minorities form a relatively small element of Sowell's Migrations And Cultures , but what does appear is highly derivative of the work of Edna Bonacich, Walter Zenner, and others.

A further problem is Pinker's assumption that there exists a single, unified theory on middleman minorities that will help explain the Jewish historical experience, and that somehow this will also be sufficient to counter the theory of Kevin MacDonald, or at least offer a more convincing framework that would allow MacDonald's ideas to be dispensed with. As should already be clear from this brief, and incomplete, bibliographical overview, within middleman minority theory there is a plethora of often competing interpretations, as well as a general problem of definitions. Walter Zenner, a key proponent of middleman minority theory, concedes that "we tend to make our definitions and models fit the prototypical group. For decades, the Jews were the archetype." [20] In other words, for a considerable time, middleman minority theory was built around trying to explain the experience of Jews, with other groups haphazardly mapped onto the theory in way that tried to give the impression of similarity, even where these similarities were thin to non-existent. Bonacich has made roughly the same argument, asserting that middleman minority theory should be regarded as incomplete because it can only point to an "ideal type," and

In reality there are problems of fit between any actual ethnic group and this picture, problems in establishing which or how many of the traits a population need have before it can be classified as a middleman minority. [21]

Bonacich, very reasonably in my opinion, proposes that middleman minority theory, of which she herself is a pioneer, is something of a misnomer and should be regarded as little more than "a useful sensitiser to a host of interrelated variables." [22]
One is therefore pressed by Pinker's claim to ask not only which of the many strands of middleman minority theories Steven Pinker is praising, but also just how "convincing" and "magisterial" he can find it given the field's leading contemporary thinkers regard their work in such ambiguous terms.

Finally, it is not at all clear how any of the aspects of middleman minority theory obviate the need for a deeper theoretical framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked above, is an incomplete tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion as resource competition, ecological strategies, visibility strategies, psychological attitudes toward the majority, and social identity theory. One of the strong points of Kevin MacDonald's work, which is truly cross-disciplinary and unusually well-equipped in terms of the relevant historical literature, is that is does offer such an analysis, and can be argued to fill a lot of the logical and evidential gaps of middleman minority theory. This is not to say that the two frameworks are in opposition, but that the concept of a group evolutionary strategy can be usefully and seamlessly integrated into middleman minority theory, especially in relation to Jews.

It's been continually remarked by many scholars in the field that Jews should be regarded as either an "ideal type," "the epitome of the form," a singular example, or otherwise unique case -- even within the context of broad comparative approaches with other trading diaspora peoples. The qualities that have made Jews so unique -- cultural, historical, religious, and even biological -- are rarely remarked or elaborated upon in sociological studies of middleman minorities, which are often lacking in depth in terms of their historical analysis. As will be discussed below, Zenner, in particular, has highlighted ways in which Jews do not fit the standard middleman minority pattern, especially in terms of their extravagant and influential involvement in the culture and politics of the host nation (see also MacDonald's Diaspora Peoples on the Overseas Chinese, xlii ff). Unfortunately, middleman minority literature has little to say in terms of further explanatory theory on how or why Jews came to both define and exceed the middleman typology. Here, middleman minority theory not only isn't a rival for MacDonald's work, it positively cries out for it.

"American Jews do not fit the sojourner pattern, since their political involvement goes far beyond the support of Jewish causes. Much Jewish political activity, whether right, center, or left, can be related to a perception of how to make America and the world safe for Jews. American Jewish support for domestic liberalism and internationalism can be interpreted in this way."
Walter Zenner, "American Jewry in the light of Middleman Minority Theories," 1980. [23]

Merits of Middleman Minority Theory

The most obvious merit of middleman minority theory is that, like Kevin MacDonald's theory of a group evolutionary strategy, it places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain minorities. By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique space within academia where the otherwise ubiquitous "pure prejudice" idea that host hostility is self-generated (from psychological problems or cultural traditions) is summarily and comprehensively dismissed. Although this has not come without criticism, as seen in Robert Cherry's denunciation of Edna Bonacich's work as reinforcing bigotry [24] , this emphasis has been able to continue largely untroubled thanks to its advancement under a hardline traditional Marxist interpretive veneer.

Middleman minority theory, especially the variant advanced by Bonacich, also insists that host populations do have interests, and that these interests are genuinely and seriously threatened by middleman minorities who drain away resources. These minorities then use their accumulated resources to build up power and influence, sometimes even to the extent of gaining considerable economic, social, and political monopolies over the hosts. Since these monopolies can be very difficult to dislodge, and since monopolies may satisfy some interests of host populations or segments of host populations, middleman minority theory insists that it is rational and somewhat inevitable that increasingly harsh and even violent measures will be taken against the offending minority. As a result, middleman minority theory offers a far more plausible and objective understanding of group conflict than many of the ideas that dominate the academic discussion of group conflict, especially conflict involving Jews. In addition, the outright rejection of "scapegoat" theories as "superficial," and the lack of appeals to concepts of victimhood in such a framework, can only be described in the context of the current academic climate as utterly refreshing.

A second major merit of middleman minority theory is the emphasis that some strands place on the characteristics of the minorities themselves. Middleman minority theory contains within it three basic theoretical approaches. Context-based theories like that of Roscher, and revived to some degree by Nathan Cofnas (who is particularly concerned with the urban environment-context), argue that middleman minorities are essentially creatures of the societies in which they are found, and are for the most part created by opportunities, status gaps, and vacuums over which they have no control and which have nothing to do with their inherent characteristics (a slight advantage in intelligence being the only characteristic that Cofnas feels comfortable in applying). Situational theories, like that advanced by Simmel are similar, but place more emphasis on the culturally-located role of the trader, the Stranger, and the "sojourner as trader," as the determinant factor in the creation of middleman minorities. Culture-based, or characteristic-based, middleman minority theories, however, tend to be more numerous, and more convincing. These theories, like that advanced by Weber and given tacit assent by Bonacich and Zenner, place strong emphasis on the broad range of traditions, ideologies, behaviors, and aptitudes of middleman minority groups.

The most frequently highlighted of such traits within middleman minority theory is ethnocentrism, which again dovetails with the primary emphasis of Kevin MacDonald's theory. Ethnocentrism is acknowledged as a central factor in the maintenance of self-segregation among middleman minority groups, and is often supported by ideological beliefs such as the caste system, or what Zenner describes as "the Chosen People complex." [25] Ethnocentrism in middleman minorities is presented as crucial to understanding host hostility not only because of the way it facilitates the draining of resources from the host population, but also because of highly antagonistic correlates such as dual loyalty and a willingness to engage in lucrative but morally destructive (for the host) trading. Walter Zenner speaks of a "double standard of morality" that is

Expressed in dealings with outsiders, such as lending to them with interest, unscrupulous selling practices, and providing outsiders with illicit means of gratifying their appetites, while at the same time, denying the same means to in-group members. [26]

An excellent example of this process in action is the fact Israel is the largest producer and host of international online gambling sites , while making it illegal for its own citizens to use such sites. Of course, we are talking here about a nation state rather than a minority population, but this contradiction, and the nature of Israel within the international community, will be discussed in a critique of the narrowness of middleman minority theory later.

A further merit of middleman minority theory is the heavy emphasis the cultural-characteristic interpretation places on group strategies. Middleman minorities, again with Jews being held up by both Zenner and Bonacich as an exemplar or especially acute case, are said to engage in constantly adaptive activity in order to manage their visibility, ensure their safety, advance their interests, accumulate power and wealth, and entrench themselves ever deeper within the host. Bonacich has indicated that Jews are especially keen to remain entrenched in the West, and the United States in particular, because it is financially and politically lucrative, and only a catastrophic weakening of their monopolies would bring an end to existing strategies. [27] Zenner goes as far as to claim that "much of the content of American Jewish life can be seen as visibility strategies. Strategy here includes both unconscious mechanisms of coping with situations and consciously formulated plans." [28] Zenner speaks of a "dynamic process" whereby Jews minimise visibility to avoid hostility, maximise visibility when pursuing certain interests, and generally work unceasingly to make their image more favorable in the minds of the host. Again, all of this corresponds very well with one of the central themes of the Culture of Critique -- the idea that Jewish involvement in certain intellectual movements could be seen in the context of a pursuit of Jewish interests either consciously or in ways that involved unconscious motivations and self-deception. It also maps very closely to MacDonald's framework on Jewish crypsis and other attempts to mitigate anti-Semitism, advanced in the sixth chapter of Separation and Its Discontents .

Problems in Middleman Minority Theory

Given the prevalence of Jews in the development and promotion of the modern incarnation of middleman minority theory, including Georg Simmel, Edna Bonacich, Abner Cohen, Abram Leon, Walter Zenner, Werner Cahnman, [29] Donald Horowitz, [30] Gideon Reuveni, [31] Ivan Light, Steven J. Gold, [32] and Robert Silverman, [33] a reasonable concern might be that middleman minority theory is itself an intellectual "visibility strategy." Just as it has been posited that Jews tend to support mass migration because it will result in Jews becoming "one among many" ethnic minorities, and thus in their logic less conspicuous and therefore safer, middleman minority theory can act to reduce Jewish visibility by offering the idea that Jews are just one among many diaspora trading groups and their history and behavior is therefore not unique or worthy of special attention. It remains the case that even in those interpretations which highlight negative Jewish behavior and portray host responses as rational (e.g. the work of Bonacich and Zenner), the proposed framework still insists on some level of commonality, no matter how tenuous, with the experiences of other minority groups, and it ultimately places the blame for conflict on a much broader context, often the impersonal historical development of capitalism.

In other words, while the framework can deny that Jews are "victims" of host nations, these theories also deny that host nations are truly the victims of Jewish exploitation. Both are simply argued to be the victims of capitalism, and any sense of individual or group agency is rhetorically dissolved. Again, this acts to lower Jewish visibility and culpability and remains attractive for that reason. There are certainly good reasons along this line of thought for proposing that Steven Pinker's promotion of the theory over Kevin MacDonald's ideas has less to do with a serious engagement with the content of the work of Bonacich et al. and significantly more to do with deflecting the entire conversation into an area of discussion in which Pinker feels Jews are less visible.

A major problem with middleman minority theory is that it has a very uncomfortable and unsatisfactory way of handling the obviously unique aspects of the Jewish experience, especially in relation to the unprecedented involvement of Jews in post-Enlightenment Western culture and politics, something for which there is absolutely no parallel among other diaspora trading groups anywhere. As has been discussed, middleman minority theory was essentially first created, consciously or unconsciously, by scholars anxious to find a way to explain the Jewish experience. Attempts to connect this experience, amounting to some two millennia of history, with the much more modern and straightforward experiences of, for example, the Chinese in the Philippines or the Japanese in America, have been doomed to the grossest of generalizations and the clumsiest of associations. This has resulted in a steady stream of admissions within the field that the best way to interpret middleman minority theory is simply that it proposes an "ideal type" (essentially the Jews) with unfortunate "problems of fit between any actual ethnic group and this picture [the Jewish experience]." [34] Zenner has conceded that the concept has been very "difficult to define so as to cover all groups so designated." [35] All of which calls into question whether this concept possesses any real efficacy as an analytical or predictive tool in a comparative sense at all.

An interesting point of difference between the Jewish experience and that of other diaspora trading peoples is that the latter are acknowledged as possessing a genuine sense of sojourn. In other words, their first generations tend to be truly temporary, semi-nomadic groups who aim to make money before eventually returning to a homeland. A subtly different experience is observed in the Jews, as noted by Jack Kugelmass in his 1981 PhD thesis Native Aliens: The Jews of Poland as a Middleman Minority . For Kugelmass, "the so-called "middleman" character of the Jew is seen as an aspect of the Jewish sense of sojourn, which unlike most sojourns is ideological rather than sociological in nature ." [emphasis added] Another way of phrasing this would be to say that the Jewish sense of sojourn is cultural-biological rather than contextual, and since the concept of sojourning has been a major feature of Jewish life since at least the writing of the Exodus, this difference between other groups is really so stark as to require a distinct analysis -- something offered to an unparalleled degree in Kevin MacDonald's A People That Shall Dwell Alone . In this analysis, it would appear that, unlike a relatively small number of other peoples who have merely adopted some tactics in order to pursue a specific diaspora trade role, Jews have, from time immemorial, given themselves over entirely to these strategies as an entire way of life -- the "middleman minority" as a raison d'être .

This absolutely crucial distinction is linked to the remarkable fact of contemporary political life that the state of Israel exists largely according to the same strategies employed by Jews when in a diaspora condition. As stated above, an excellent example of the dual morality process in action is the fact Israel is the largest producer and host of international online gambling sites , while making it illegal for its own citizens to use such sites. The creation of the state of Israel has also exacerbated, rather than ameliorated, issues of dual loyalty in Jewish minority populations, even if these issues are more or less kept out of the public eye through diplomatic soothing around Israeli spying and the maintenance of certain taboos in the mass media. Israel itself would appear to be a kind of middleman minority archetype within the international community, cultivating close and lucrative ties with the elite (the United States), while engaging in more or less unchallenged exploitative and oppressive activities against lower social orders (Palestinians, and other vulnerable or indebted population groups in South America).

Like the "ideal type" of middleman minority, Israel heavily drains the resources even of its allies (U.S. military and diplomatic aid) and pursues its strategies in a ceaseless quest for security, while maintaining moral double standards and being rather shameless in engaging in what Zenner has described as the classic overrepresentation of middleman minorities in "morally shady" activities. [36]
Even in recent years, Israel has become notorious in the international organ trade , moneylending , and allegations of humanitarian atrocities. Israeli newspapers have also described their country as a " monopoly nation " due to the intense tendency towards economic monopoly in the country's business life -- a key feature of middleman minority life that Jews appear to continue to embody to an extent unparalleled in any other ethnic group. Further evidence for the apparently deep-seated, rather than contextual, nature of "middleman" traits in Jews might be found in studies indicative of a biological underpinning to Jewish ethnocentrism, such as that described by Kevin MacDonald in the Preface to the Culture of Critique :

Developmental psychologists have found unusually intense fear reactions among Israeli infants in response to strangers, while the opposite pattern is found for infants from North Germany. The Israeli infants were much more likely to become "inconsolably upset" in reaction to strangers, whereas the North German infants had relatively minor reactions to strangers. The Israeli babies therefore tended to have an unusual degree of stranger anxiety, while the North German babies were the opposite -- findings that fit with the hypothesis that Europeans and Jews are on opposite ends of scales of xenophobia and ethnocentrism.

As well as dealing poorly with obviously unique aspects of the Jewish experience, a significant portion of middleman minority theory is devoted to context-based narratives that are often in stark contrast to, or completely disproven by, the historical record. With the exception of the work of Kevin MacDonald, which demonstrates a very extensive engagement with works of history, a general weakness in all of the late twentieth-century sociological studies discussed above is the fact that, despite their incredibly ambitious claims about the historical trajectory of capitalism or middleman minority populations, there is a quite serious neglect of any of the relevant historiography. This leads, in the case of the modern adherents of Simmel, Roscher, and Leon, to the constant repetition of error-laden tropes such as the idea that Jews turned to commerce because they were prohibited from owning land (rather than arriving as profit-seeking financiers), that Jews were most often invited into nations by elites seeking a financial stimulus, or that Jews were banished from countries once their position as loan merchant was superfluous. In fact, these three tropes, all of which remove Jewish agency and characteristics from consideration, are essentially the pillars of context-based middleman minority theory pertaining to Jews, and are absolutely crucial to Roscher's ideas in particular.

The historical record is now acknowledged as more or less complete in relation to the issue of the Jewish ownership of land. It has been conclusively established, for example, that the general trend across Europe was that Jews were in fact able to possess and own land during the centuries immediately following their initial spread and expansion in Europe (c.1000 -- 1300). Restrictions on land ownership were later enacted as penalties for exploitation or as part of a system of elite land transfer -- e.g., the desire of the English kings to obtain the land of indebted lesser knights, and doing so by financially compensating Jewish moneylenders for forfeited lands they could no longer legally hold.

One of the correlates of the land ownership trope is the astonishingly naive assumption that land ownership would preclude involvement in financial speculation. Again, the historical record contradicts this. Mark Meyerson's Princeton-published A Jewish Renaissance in Fifteenth-Century Spain (2010), for example, offers an expansive analysis of Jewish landowners in Spain who "did not necessarily cultivate the land themselves" and combined wine production operations worked by non-Jewish peasants with "lending operations and tax farming." [37] Pointing to the prevalence of early Jewish land ownership in Poland, France, and Germany, in which Jews enjoyed a "privileged status available to few Christians," Norman Roth has described the trope that Jews were forced out of agriculture by restrictive laws and the violence of the Crusades as "patently absurd." [38]

The theory that Jews, and by tenuous implication other middleman minorities, were most often invited into nations by elites seeking a financial stimulus or to fill a "status gap," is also contradicted by the historical record. The early entry and expansion of Jews in Europe is relatively well-documented, the dominant trend being that Jews either presented themselves before elites in order to solicit business, or that they acted as financiers for conquest and then followed in the wake of the conquerors (e.g., the well-documented role of Jewish financiers in Norman Conquest of England and Strongbow's conquest of Ireland). [39] Ireland's Annals of Innisfallen (1079 A.D.) record: "Five Jews came from over sea with gifts to Tairdelbach [King of Munster], and they were sent back again over sea." Unless Tairdelbach (Turlough O'Brien, 1009 -- 86) had undergone a dramatic change of mind, it's likely that the arrival of the Jews hadn't been preceded by an invitation. In fact, unsolicited approaches for request to settle and establish financial activities are in evidence from the time of O'Brien to the 1655 "Humble Address" of Manasse ben Israel to the English government.

A very common form of government documentation found in the study of Early Modern Jewish communities are the charters outlining their terms of settlement, and these are very revealing. Rather than act as economic catalysts, Jews are more frequently observed following the trail of already economically improving areas, hoping to profit from their advancement. As Felicitas Schmeider has pointed out, in terms of the German context, "permission to settle Jews in a newly privileged town is one thing kings were frequently, if not regularly, asked for, especially in the thirteenth and fourteenth centuries." [40]

The theory that Jews were banished from countries once their position as loan merchant or general role as a middleman minority was superfluous is also forcefully contradicted by the historical record. Just as medieval Jews perceived that they were the innocent victims of evil Gentiles, so Jewish historiography has overwhelmingly portrayed the expulsions as the result of "rumors, prejudices, and insinuating and irrational accusations." [41] Context-based middleman minorities theories absorbed these tropes and reinvented them in narratives that blamed the expulsions on the fact that Capital had simply exhausted the usefulness of the Jews. Such understandings of the expulsions have only very recently come to be revised, most saliently in the work of Harvard historian Rowan W. Dorin, whose 2015 doctoral thesis and subsequent publications have for the first time helped to fully contextualize the mass expulsions of Jews in Europe during the medieval period, 1200 -- 1450. [42]

Dorin points out that Jews were never specifically targeted for expulsion qua Jews, but as usurers, and notes that the vast majority of expulsions in the period targeted "Christians hailing from northern Italy." Jews were expelled, like these Christian usurers, for their actions, choices, and behaviors. What the period witnessed was not a wave of irrational anti-Jewish actions, or for that matter an impersonal reflex of glutted Capital, but rather a widespread ecclesiastical reaction against the spread of moneylending among Christians that eventually absorbed Jews into its considerations for common sense reasons. A number of laws and statutes, for example Usuranum voraginem , were designed in order to provide a schedule of punishments for foreign/travelling Christian moneylenders. These laws contained provisions for excommunication and a prohibition on renting property in certain locales. The latter effectively prohibited such moneylenders from taking up residence in those locations, and compelled their expulsion in cases where they were already domiciled. It was only after these laws were in effect that some theologians and clerics began to question why they weren't also applied to Jews who, in the words of historian Gavin Langmuir, were then "disproportionately engaged in moneylending in northern Europe by the late 12th century." [43] The Church had historically objected to the expulsion of Jews in the belief that their scattered presence fulfilled theological and eschatological functions. It was only via the broader, largely common sense, application of newly developed anti-usury laws that such obstructions to confrontations with Jews became theologically and ecclesiastically permissible, if not entirely desirable. And once this Rubicon had been crossed, it paved the way for a rapid series of expulsions of Jewish usury colonies from European towns and cities, a process that accelerated rapidly between the thirteenth and fifteenth centuries.

The lack of engagement with developments in historiography is worsened to a large extent by the absence of a truly cross-disciplinary approach in most, if not all, existing middleman minority analyses. This is particularly glaring in the works of Bonacich and Zenner which, while making multiple and apparently crucial references to conscious and unconscious group "strategies," fail to engage in any kind of historiographical or psychological scholarly contextualization. How exactly such strategies as "visibility strategies" can operate at group level are left completely unexplained and without any substantial evidence beyond common sense observations of Jewish behavior. The lack of a cross-disciplinary approach in such instances doesn't necessarily mean that these ideas are wrong, or that "visibility strategies" don't exist, but it does mean that explanations and evidence are still required. To date, the only convincing attempt to fill in such gaps, and offer a truly cross-disciplinary approach (incorporating history, sociology, and psychology) to the idea of group strategies, is found in the work of Kevin MacDonald.

Conclusion

As stated at the outset of this essay, it isn't at all clear how any of the aspects of middleman minority theory obviate the need for a deeper theoretical framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked above, is an incomplete tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion as resource competition, ecological strategies, visibility strategies, and social identity theory. Middleman minority theory, or at least some strands of it, is useful and valuable in the study of Jews to the extent that it places an unusual emphasis on group conflict as arising from resource competition, the characteristics of Jews (including Jewish ethnocentrism), and the existence of group strategies. There are, however, multiple, serious inadequacies in middleman minority theory, including the possibility that it is in part itself a "visibility strategy," that is has a general problem of definitions, that it fails to adequately deal with unique qualities of the Jews and their experiences, that it generally fails to engage with the historical record, and that it has no real explanatory or predictive frameworks for many of the ideas it discusses, including group strategies. I am forced to concur with Edna Bonacich that, in regards to the study of Jews, middleman minority theory should be conceived, at best, as "a useful sensitiser to a host of interrelated variables." [44]

Notes

[1] Bonacich, Edna. "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, (589).

[2] Francois-Marie Arouet de Voltaire, Oeuvres Complètes (Geneva, 1756), Vol. 7. Ch.1. See also Dictionnaire Philosophique (Basle, 1764), Vol. 14 .

[3] B. Bauer, The Jewish Problem ( Die Judenfrage , 1843) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish Institute of Religion, 1958).

[4] K. Marx, On the Jewish Problem ( Zur Judenfrage , 1844) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish Institute of Religion, 1958).

[5] W. Sombart, Der moderne Kapitalismus , Munich and Leipzig 1913. This work was published in an English translation by E. Epstein under the title, The Quintessence of Capitalism , London, 1915.

[6] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 5.

[7] W. Roscher, "Die Stellung der Juden im Mittelalter, betrachtet vom Standpunkt der allgemeine Handelspolitik," Zeitschrift für die gesamte Staatswissenschaft Bd. 31 (1875) S. 503 -- 526.

[8] G. Reuveni, "Prolegomena to an "Economic Turn" in Jewish History," in G. Reuveni (ed) The Economy in Jewish History: New Perspectives on the Interrelationship Between Ethnicity and Economic Life (Berghahn, 2011), 3.

[9] As the son of Catholic and Lutheran converts from Judaism, Simmel's relationship to his Jewishness is fascinating in itself. See A. Morris-Reich, The Quest for Jewish Assimilation in Modern Social Science , (New York: Routledge, 2008), chapter 4. For the influence of Simmel's stranger minority theory see Werner Cahnman, "Pariahs, Strangers, and Court Jews -- A Conceptual Classification," Sociological Analysis, 35 (1974); C. R. Hallpike, "Some problems in Cross-Cultural Comparison," in The Translation of Culture , T. Beidelman (ed), (London: Tavistock, 1971); Hilda Kuper, "Strangers in Plural Societies: Asians in South Africa and Uganda," in Pluralism in Africa , Leo Kuper and M. G. Smith (eds) (Berkeley: University of California Press, 1971); Jack H. Porter, "The Urban Middleman: A Comparative Analysis," Comparative Social Research , 4 (1981); R. A. Reminick, "The Evil Eye Belief among the Amhara of Ethiopia," Ethnology, 13 (1974), W. Shack and E. Skinner, Strangers in African Societies (Berkelely: University of California Press, 1979); Paul Siu, "The Sojourner," American Journal of Sociology , 58, (1952).

[10] J. Stone, Racial Conflict in Contemporary Society , (Cambridge: Harvard University Press, 1985), 96.

[11] This coinage is frequently attributed to Philip Curtin, who employs the term in his Cross-cultural Trade in World History (1984), but the term was in use by Cohen, within a strict thematic sense, as early as the latter's 1974 chapter "Cultural Strategies in the Organisation of Trading Diasporas," in C. Meillassoux (ed) The Development of Indigenous Trade and Markets in West Africa (London, 1971).

[12] Quoted in W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 8.

[13] K. MacDonald, Separation and Its Discontents: Toward an Evolutionary Theory of Anti-Semitism , 187.

[14] E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94.

[15] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980).

[16] Ibid, 589.

[17] Ibid.

[18] Ibid, 592.

[19] R. Cherry, "American Jewry and Bonacich's Middleman Minority Theory," Review of Radical Political Economics , 22 (2 -- 3), 158 -- 173, 161.

[20] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 10. See also W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11 -- 30, 18. Zenner argues that "As a synthetic concept, the phrase "middleman minority" is difficult to define so as to cover all groups so designated."

[21] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980), 22. See also E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, 585.

[22] Ibid, 24.

[23] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 18.

[24] R. Cherry, "American Jewry and Bonacich's Middleman Minority Theory," Review of Radical Political Economics , 22 (2-3), 158-173, 161.

[25] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 18.

[26] Ibid.

[27] E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583-94, 592.

[28] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 23.

[29] W. Cahnman, "Pariahs, Strangers and Court Jews," Sociological Analysis 35, 3 (1974): 155-66.

[30] D. Horowitz, Ethnic Groups in Conflict (Berkeley: University of California Press, 1985).

[31] G. Reuveni (ed) The Economy in Jewish History: New Perspectives on the Interrelationship Between Ethnicity and Economic Life (Berghahn, 2011).

[32] I. Light & S. J. Gold, Ethnic Economies (Bingley: Emerald, 2000).

[33] R. Silverman, Doing Business in Minority Markets (New York: Garland, 2000).

[34] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980), 22.

[35] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 13.

[36] Ibid, 15.

[37] M. D. Meyerson, A Jewish Renaissance in Fifteenth-Century Spain (Princeton: Princeton University Press, 2010), 111.

[38] N. Roth, Medieval Jewish Civilization: An Encyclopedia (New York: Routledge, 2003),

[39] J. Hillaby, "Jewish Colonisation in the Twelfth Century," in P. Skinner (ed), The Jews in Medieval Britain: Historical, Literary, and Archaeological Perspectives (Woodbridge: Boydell Press, 2003), 36.

[40] F. Schmeider, "Various Ethnic and Religious Groups in Medieval German Towns? Some Evidence and Reflections," in, Segregation, Integration, Assimilation: Religious and Ethnic Groups in the Medieval Towns of Central and Eastern Europe (Burlington: Ashgate, 2009), 15.

[41] Joseph Pérez, History of a Tragedy: The Expulsion of the Jews from Spain (Chicago: University of Illinois Press, 2007), 60.

[42] R. W. Dorin, Banishing Usury: The Expulsion of Foreign Moneylenders in Medieval Europe, 1200 -- 1450 (Harvard PhD dissertation, 2015); R. W. Dorin, "Once the Jews have been Expelled," Intent and Interpretation in Late Medieval Canon Law," Law and History Review , Vol. 34, No. 2 (2016), 335-362.

[43] G. Langmuir, History, Religion, and Antisemitism (Los Angeles: University of California Press, 1990), 304.

[44] Ibid, 24.


Reg Cæsar , says: September 19, 2020 at 12:36 am GMT

@Vergissmeinnicht

Sowell’s A Conflict of Visions has nothing to say about race, but it and its successors pretty much nail what is wrong with today’s progressives. And it’s the same as what was wrong with yesterday’s progressives.

If we survive 2020, this volume will be what he’s remembered for.

obwandiyag , says: September 19, 2020 at 2:02 am GMT

What about Gujaratis and 7-11s and midwestern motels?

And Greeks and diners?

In San Francisco, they call the local corner store, “the Arab store.” What’s up with that?

J , says: September 19, 2020 at 7:31 am GMT

The Zionist thinkers understood the unnatural and dangerous situation of the Jews in the Diaspora, and seized the first opportunity to re-reform the Jewish people as a normal nation in its homeland. In only one generation, all the Jewish communities in the Eastern lands liquidated their affairs and joined movement. The same with the powerful Russian and Ukrainian communities, they moved (mostly) to Israel. Last year, about 30,000 American Jews gave up their precious citizenship and moved to Israel. I foresee in two generations a more or less Jew-less America. What I am saying is that the Jews do not like their middleman foreigner status. In Marx etc. time there were no alternatives. Now there is Israel. Some 55% of the Jews have already moved there.

brabantian , says: September 19, 2020 at 3:48 pm GMT

Regarding

Israel is the largest producer and host of international online gambling sites, while making it illegal for its own citizens to use such sites

It should be noted that Monaco does the same thing with its gambling casinos. It has long been unlawful for Monaco’s own Monégasque citizens to enter into those casinos to gamble.

Also, the ultra-high level of Jewish involvement in pornography sales is another relevant area here.

One of those Jewish pornography-meisters was Jimmy ‘Jimbo’ Wales, afterwards recruited to head the CIA-Mossad Wikipedia, where paedophilic persons have been able to persistently post fake biographies of themselves and smears against their victims. Jimmy Wales has attended birthday parties of Israeli Presidents, and received a $1 million ‘prize’ from Tel Aviv University.

Chris Moore , says: • Website September 19, 2020 at 3:55 pm GMT

The most obvious merit of middleman minority theory is that, like Kevin MacDonald’s theory of a group evolutionary strategy, it places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain minorities. By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique space within academia where the otherwise ubiquitous “pure prejudice” idea that host hostility is self-generated (from psychological problems or cultural traditions) is summarily and comprehensively dismissed.

The Jews like to cast themselves as “just another struggling minority trying to make it among the oppressive majority.” This ignores the international Zionist (Jewish supremacist) agenda, and the pathological Jewish drive for totalitarian control.

Where does that drive originate? Jesus of Nazareth, apparently Hebrew, preached the opposite, and called organized Jewish hypocrisy, greed, corruption and double standards “the Synagogue of Satan.” Of course, the corrupt Jewish Moneychangers (the Jewish establishment of his era) in bed with the Roman Empire didn’t like that one bit, and so instigated his murder. When the cosmopolitan Hebrew mob, prompted by the corrupt Jewish establishment, chose the criminal Barabbas over Jesus, the Jews made their choice for ideological evil and corruption.

That is a choice they affirm time and again, day after day, year after year, century after century.

Whether one wants to read this decision as a cosmic moral judgement on the Jews, or simply as a rational economic decision by the Jews (choosing systematic corruption and shady insider back room deals over honest work) makes no difference. They chose the path they chose, and they affirm that decision every day through their corrupt, criminal and murderous international Zionist works.

One doesn’t have to be a Christian to wear the Jon Carpenter sunglasses from The Live which allow one to see that the Judeo-Imperial “ruling class are [social] aliens concealing their appearance and manipulating people to spend money, breed, and accept the status quo with subliminal messages in mass media,” but it helps.

One doesn’t have to be a Christian to know that Jewish infiltrated Empires working in concert with a corrupt establishment are bad news, but again, it helps.

Oliver Elkington , says: September 19, 2020 at 11:46 pm GMT

In Britain Jews are clearly influential but the Norman ruling class has had it’s grip on the UK ever since they landed here in 1066, indeed William the Conqueror was mentioned in the article above, he certainly had his uses for Jews, there is little information available though as to just how many Jews arrived and what lead King William 1 to bring them over with his troops. As of present much of inner London is owned by aristocratic families who can trace their descent to King Williams troops

https://whoownsengland.org/2017/10/28/who-owns-central-london/

Also a considerable proportion of high status people in Britain were educated at just a few private schools including a great deal of our present government

https://www.theguardian.com/society/2019/jun/25/britains-top-jobs-still-in-hands-of-private-school-elite-study-finds

In Britain it is often a case of who you know, not what you know that determines whether you will reach the top of society or not, compared to other European countries like Germany and Finland in Britain there is a tendency for the higher classes to promote people on the basis of whether they have a background in common with them rather than merit, just like the Jews.

Supply and Demand , says: September 20, 2020 at 12:41 am GMT
@obwandiyag

When I was going to university there, the corner stores were all Chinese. As were the Laundromats. I suspect the children all became doctors and lawyers and graduated from the need to continue operating them.

Tom Verso , says: September 21, 2020 at 2:39 pm GMT

Jews are a Nation!

As per usual, Andrew Joyce demonstrates that he is an objective social scientific historian by flooding his article with a preponderance of documentable verifiable factual data.

However, to my mind there is one ‘word’ in this 8,000+ word tour de force; one very important word that all lovers of Western history and culture dedicated to the perpetuation of that history and culture should focus on … one word: ‘NATION’!

At the very top of his essay Joyce quotes Voltaire:

“Voltaire concluded that, some surface similarities aside ,
‘It is certain that the Jewish nation is the most singular that the world has ever seen. ’ ”

Similarly he quotes Bruno Bauer:

“The base [of the tenacity of the Jewish national spirit ] … the character of that [Jewish] nation. ..”

Some say Jews are a ‘ race’ , some say they are an ‘ethnicity’, some say they are a ‘religion’. The case can be and is made for all these, in Voltarie’s words, “surface similarities” . However, none capture the essence of what constitutes the basis for Jewish POWER.

Jews are a worldwide profoundly unified ideological NATION. And that ideological unity is the basis of their national power.

This unity was succinctly captured in an interview with a Mossad agent when he said:
“I can knock on the door of any Jew in the world and I will be invited in.”

Ideological unified nations are powerful nations, and are conquers. The Jews are one of the most ideologically unified nations in the world. The power derived from that unity has allowed them to conquer the most economically and militarily powerful country in the world – America.

Further, by conquering America, the wealthiest and most powerful country in Western Civilization, the Jews have de facto conquered the whole of the West.

Ideological unified nations are strong.
Ideological dis-unified nations are weak.
So call ‘Color Revolutions’ are manifestations of dis-unified nations who in turn are weak and conquerable by strong unified nations.

We have seen numerous weak nation color revolutions in Africa, Middle East and Europe. Now we are experiencing an American color revolution.

The American ‘color revolution’ is the Jewish nation delivering the ‘coup de grace’ to America and the West.

Thomasina , says: September 22, 2020 at 8:18 am GMT

Andrew Joyce, your articles are so God-damned good!

Jewish behavior reminds me of narcissism: sense of entitlement, self-centered, feeling of superiority, manipulative and deceitful behavior, desire for power and control, will suck a host dry, and once they’ve gotten what they want, will easily discard the host. Highly competitive, status-oriented.

Don’t dare call them out on anything because that causes them to feel shame, and that’s like driving a stake through them. They work behind the scenes, secretly. They must always be seen in a good light. They will smear and destroy you (your reputation, your job, your life) if you expose them. They will retaliate in ways you would never be able to because they don’t have a conscience, and this is why they win and are so hard to fight. Very vindictive. No qualms about lying or twisting the truth.

They are never content, always working to change things in their favor, to get the upper hand. Most people just want to live their lives, so they acquiesce, but this is a mistake because one day you turn around to realize they now own the farm! If they don’t get their way, they just regroup and come at you from another angle. They keep wearing you down, chipping away at you until you give in. It is really something to behold because you just can’t believe their gall.

Their rabbis keep them in line by using fear (fear of the other), and fear is the greatest motivator/persuader. Keeps them solidly as one. They’re constantly reminded of the Holocaust, the ovens that are lurking around every corner, as well as the injustices they have suffered (through no fault of their own – ha!). Keeps them neurotic and they don’t stray.

Highly destructive destroyers.

Amerimutt Golems , says: September 24, 2020 at 12:27 pm GMT
@Oliver Elkington rville, Fitzroy, Marshall, and Spencer. The Guardian , Independent and Telegraph wrote articles in 2011 and 2013 alleging such persons still ‘run’ Britain. Lefties use this ploy to attack the Conservative Party whose members tend to be wealthy like champagne socialists.

Back to the point raised by neutral , none of the above mentioned newspapers would run similar stories on Jewry. That is the litmus test of who really rules.

Despite being a tiny minority Jews have shaped modern Britain. This has been documented here by Joyce, Langdon and others.

Anon [238] • Disclaimer , says: September 26, 2020 at 12:14 pm GMT

Those christian usurers probably were cripto jews

Spogus Bogus , says: September 28, 2020 at 5:36 am GMT

Sure the middle man theory explains everything, but needs some footnotes:
-These middle men are specifically encouraged to cheat us, it’s written in their holy books
-they regard us as animals in human form, with either no souls or much lesser souls
-they regard us as having been created ONLY to serve them.

NOW the theory makes perfect sense!

Louis Hissink , says: September 28, 2020 at 8:05 am GMT

Biological lifeforms endure parasites. Perhaps understanding parasitism might be a usefal path to travel?

Alfred , says: September 28, 2020 at 10:29 am GMT
@J ain. The Jews did not profit from German hyperinflation to buy up property cheaply. Always the victims.

Due to Brexit, Jews seek passports from countries that oppressed their ancestors
Concerned over losing valuable rights for traveling and staying in the 26-country Schengen Area, more Jewish Brits are turning to Spain, Portugal and Germany for citizenship

Mefobills , says: September 28, 2020 at 1:08 pm GMT

Let’s fix Bonacich’s comment and add to it:

The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit his own son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity, where primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy.

The modern finance capitalist …..

Industrial capitalism after it was invented in the American Colonies, was characterized by injection of state capital (not Jewish finance capital) into industry, to then improve the labor value of the population. American labor was in short supply relative to the large land mass available.

Industrial Capitalist will treat his workers as valuable contributors, because their labor value is constantly being improved upon by improved public health, and improved infrastructure such as roads and phone systems. Industrial Capitalist economic method is to raise up the existing people, and not import low wage “coolie labor.”

The highest form of industrial capitalism was probably Germany, which adopted the American System through Frederick List.

Workers in industrial capitalist Germany had access to best facilities of that era, their work hours were made sensible (no longer exploitative). Autobahns were built, and industry was built up using state capital (not finance capital) to high levels of productivity.

Finance Capitalism is Jewish usury method. Finance Capitalism is middleman theory taken to extremes.

The middleman is a hidden string puller whose god is Moloch. The middleman is the third entity in man’s relations, usurping the role of the King.

It is the King who is to have the role of settling disputes, dispensing with just law, and overseeing high civilization. It is impossible to have high civilization with Jews operating as middlemen.

Finance capitalism’s big bang event is traced to Amsterdam’s Jews invading Britain.

1) Debt Spreading Private Banking .. the Bank of England in 1694. This event stripped the sovereign King of his money power and transferred it to hidden bank stock owners.

2) Stock Market Capital. Absentee ownership of Companies. Hidden String Pullers control corporations, rather than the employees of said companies. The first manifestation was both the Dutch and English India Companies.

3) Allowing Company stock to be on-sold into markets. The logic of prices and money (Moloch) is now tied to private banking ledger credit entry. BOE creates the private bank credit that is used in “free markets.”

4) Corporation charters are now perpetual, and corporations are held up as being more than a god created human. Being perpetual is more than being a human, where said human has a finite life span.

Jews are anti-logos, so everything they touch turns to shit. There is a religious and spiritual element to Jews, who are against the natural order.

Virtually all of the “American System” politicians were assassinated. Countries that attempted to adopt “industrial capitalism” of the American system were invaded and destroyed in world wars. The world wars were engineered in back room deals, using hidden string pulling tactics.

America was turned in 1912, and is now under Jewish finance capitalism control. The founding fathers of America would be appalled if they were alive today.

Moi , says: September 28, 2020 at 1:20 pm GMT
@Sher Singh

Hindus are like Jews–they love money and believe themselves to be a special people (as exemplified by your PM Modi and his RSS buddies). Because of the caste system, Hindus barely tolerate lower caste Hindus.

Mefobills , says: September 28, 2020 at 2:15 pm GMT

This comment is aimed at Andrew Joyce, the writer of the article. Good job Andrew.

In addition to finance big bang event I discuss above, there was also the attack on Christianity. So the big bang event was multi-dimensional, and informs today’s reality.

Here is your quote on Sombart:

For Sombart, the origins of the worst of modern capitalism can be found in the early middleman role of the Jews, their medieval semi-nomadic quest for usury-derived profit and Victorian hawking of shoddy goods being a precursor to modern advertising and the mass production of superfluous and quickly obsolete consumer products.

Here is another quote from Sombart, which I think is critical:

https://www.unz.com/mhudson/finance-capitalism-vs-industrial-capitalism/#comment-3876284

Werner Sombart in his book “The Jews and Modern Capitalism” came to an important conclusion.”That which is called Puritanism is in reality Judaism.”

Our Jewish friends in Amsterdam created puritan Judeo-Christianity, which is a perversion of Jesus’ teachings. Jesus started his mission on the Jubilee year, aiming precisely at the Pharisee class. Jesus also whipped the money changers, his only act of violence.

Weber also has some problems in his non treatment of usury:

Max Weber’s book, “The Protestant Ethic and the Spirit of Capitalism,” created a split definition. Jewish capitalism on one side, and Puritan (Calvanist) on the other. Jewish capitalism was speculative pariah capitalism, while Puritan was bourgeois organization of labor. Weber excluded the problem of usury, thus obscuring what is necessary to see. The Puritan was excluded from blame.

AaronB , says: September 28, 2020 at 2:23 pm GMT
@J m their own country won’t either).

Let that sink for a moment. I think you understimate – as did I – just how radical this site and it’s owner are, as well as the majority of the commenters, and just what they are tiptoeing around, and have been for some time. I also think within another few years, their position will become explicit.

Incidentally, I argely agree that in a few decades most Jews will be flourishing in Israel, but I do think the US will always have a large and prosperous Jewish community as well, forever. It isn’t going anywhere.

Richard B , says: September 28, 2020 at 3:03 pm GMT
@Tom Verso th the surface of JSI’s success that they rarely, if ever, see beheath that surface to what is obviously the real cancer of the human race. That’s why what we’re witnessing today is nothing less than

The Pyrrhic Victory of Jewish Supremacy Inc.

For evidence look at the following:

City – New York
State – California
Country – The USA
Continent – Europe
Civilization – The West

They have conquered the above the way a tumor conquers a human organism.

AaronB , says: September 28, 2020 at 3:46 pm GMT
@Not Only Wrathful

He can’t – yet – express what he is really trying to say clearly and simply, he has to bury it in a thicket of dense verbiage which is tedious to cut through.

In a few years, I think Unz will have developed to the point where writers like Joyce can make their point crystal clear in simple language.

Not Only Wrathful , says: September 28, 2020 at 4:32 pm GMT
@AaronB e that they have developed may eventually topple under its own weight, thereby liberating them from their tragic quest to find and hold external phantoms responsible for their own traumas.

Clarity for Joyce would likely be something like “my father was mean, controlling and made me feel bad, he was always trying to bring me low to make him feel big, I now need to heal to come to terms with it.”

Sorry Joyce that you feel bad. That’s real. Stop doing yourself the disservice of pretending your hurt is actually your concern for the world or whatever. That is stupid.

Anon [381] • Disclaimer , says: September 28, 2020 at 5:08 pm GMT

Judaism is an ethnic/religious supremacist ideology that sees the rest as nothing more than cattle to be exploited, so according to Jewish dogmas if you don’t declare the Jews to be your masters, you are technically anti-Semitic.

BEING FREE IS LITERALLY ANTI-SEMITIC

[Sep 20, 2020] The Criminal Prosecution Of Boeing Executives Should Begin by Mike Shedlock

Sep 20, 2020 | www.zerohedge.com

Authored by Mike Shedlock via MishTalk,

Damning details of purposeful malfeasance by Boeing executives emerged in a Congressional investigation.

FAA, Boeing Blasted Over 737 MAX Failures

On Wednesday, the Transportation Committee Blasted FAA, Boeing Over 737 MAX Failures

The 238-page document, written by the majority staff of the House Transportation Committee, calls into question whether the plane maker or the Federal Aviation Administration has fully incorporated essential safety lessons, despite a global grounding of the MAX fleet since March 2019.

After an 18-month investigation, the report, released Wednesday, concludes that Boeing's travails stemmed partly from a reluctance to admit mistakes and "point to a company culture that is in serious need of a safety reset."

The report provides more specifics, in sometimes-blistering language, backing up preliminary findings the panel's Democrats released six months ago , which laid out a pattern of mistakes and missed opportunities to correct them.

In one section, the Democrats' report faults Boeing for what it calls "inconceivable and inexcusable" actions to withhold crucial information from airlines about one cockpit-warning system, related to but not part of MCAS, that didn't operate as required on 80% of MAX jets.

Other portions highlight instances when Boeing officials, acting in their capacity as designated FAA representatives, part of a widely used system of delegating oversight authority to company employees, failed to alert agency managers about various safety matters .

Boeing Purposely Hid Design Flaws

The Financial Times has an even more damning take in its report Boeing Hid Design Flaws in Max Jets from Pilots and Regulators .

Boeing concealed from regulators internal test data showing that if a pilot took longer than 10 seconds to recognise that the system had kicked in erroneously, the consequences would be "catastrophic" .

The report also detailed how an alert, which would have warned pilots of a potential problem with one of their anti-stall sensors, was not working on the vast majority of the Max fleet . It found that the company deliberately concealed this fact from both pilots and regulators as it continued to roll out the new aircraft around the world.

In Bed With the Regulators

Boeing's defense is the FAA signed off on the reviews. Lovely. Boeing coerced or bribed the FAA to sign off on the reviews now tries to hide behind the FAA.

There is only one way to stop executive criminals like those at Boeing. Charge them with manslaughter, convict them, send them to prison for life, then take all of their stock and options and hand the money out for restitution.

adr , 1 hour ago

Remember, Boeing spent enough on stock buybacks in the past ten years to fund the development of at least seven new airframes.

Instead of developing a new and better plane, they strapped engines that didn't belong on the 737 and called it safe.

SDShack , 21 minutes ago

What is really sad is they already had a perfectly functional and safe 737Max. It was the 757. Look at the specs between the 2 planes. Almost same size, capacity, range, etc. Only difference was the 757 requires longer runways, but I would think they could have adjusted the design to improve that and make it very similar to the 737Max without starting from scratch. Instead Boeing bean counters killed the 757 and gave the world this flying coffin. Now the world bean counters will kill Boeing.

Tristan Ludlow , 1 hour ago

Boeing is a critical defense contractor. They will not be held accountable and they will be rewarded with additional bailouts and contract awards.

MFL5591 , 1 hour ago

Can you imagine a congress of Criminals Like Schiff, Pelosi and Schumer prosecuting someone else for fraud? What a joke. Next up will be Bill Clinton testifying against a person on trial for Pedophilia!

RagaMuffin , 1 hour ago

Mish is half right. The FAA should join Boeing in jail. If they are not held responsible for their role, why have an FAA?

Manthong , 1 hour ago

"There is only one way to stop executive criminals like those at Boeing.

Charge them with manslaughter, convict them, send them to prison for life, then take all of their stock and options and hand the money out for restitution."

Correction:

There is only one way to stop regulator criminals like those in government.

Charge them with manslaughter, convict them, send them to prison for life, then take all of their pensions and ill gotten wealth a nd hand the money out for restitution.

Elliott Eldrich , 43 minutes ago

"There is only one way to stop executive criminals like those at Boeing.

Charge them with manslaughter, convict them, send them to prison for life, then take all of their stock and options and hand the money out for restitution."

Ha ha ha HA HA HA HA HA! Silly rabbit, jail is for poors...

Birdbob , 1 hour ago

Accountability of Elite Perps ended under Oblaba's reign of "Wall Street and Technocracy Architects" .White collar criminals were granted immunity from prosecution. This was put into play by Attorney Genital Eric Holder. This was the beginning of having an orificial Attorney Genital that facilitated the District of Criminals organized crime empire ending the 3 letter agencies' interference. https://www.blogger.com/blog/post/edit/8310187817727287761/1843903631072834621

Dash8 , 1 hour ago

You don't seem to understand the basic principle of aircraft design...it must not require an extraordinary response for a KNOWN problem.

Think of it this way; Ford builds a car that works great most of the time, but occasionally a wheel will fall off at highway speeds...no problem, right? ....you just guide the car to the shoulder on the 3 remaining wheels and all good.

Now, put your wife and kids in that car, after a day at work and the kids screaming in the back.

Still feel good about your opinion?

canaanav , 1 hour ago

I wrote software on the 787. You are right. This was not a known problem and the Trim Runaway procedure was already established. The issue was that the MAX needed a larger horizontal stab and MCAS would have never been needed. The FAA doesnt have the knowledge to regulate things like this. Boeing lost talent too, and gets bailouts and tax breaks to the extent that they dont care.

Dash8 , 1 hour ago

But it was a known problem, Boeing admits this.

Argon1 , 41 minutes ago

LGBT & Ethnicity was a more important hiring criteria than Engineering talant.

gutta percha , 1 hour ago

Why is it so difficult to design and maintain reliable Angle Of Attack sensors? The engineers put in layers and layers of complicated tech to sense and react to AOA sensor failures. Why not make the sensors _themselves_ more reliable? They aren't nearly as complex as all the layers of tech BS on top of them.

Dash8 , 1 hour ago

It's not, but it costs $$....and there you have it.

Argon1 , 37 minutes ago

Its the Shuttle Rocketdyne problem, the upper management phones down to the safety committee and complains about the cost of the delay, take off your engineer hat and put on your management hat. All of a sudden your project launches on schedule and the board claps and cheers at their ability to defy physics and save $ millions by just shouting at someone for about 60 seconds..

canaanav , 1 hour ago

Each AOA sensor is already redundant internally. They have multiple channels. I believe they were hit with a maintenance stand and jammed. That said, AOA has never been a control system component. It just runs the low-speed cue on the EFIS and the stick shaker. It's an advisory-level system. Boeing tied it to Flight Controls thru MCAS. The FAA likely dictated to Boeing how they wanted the System Safety Analysis (SSA) to look, Boeing wrote it that way, the FAA bought off on it.

Winston Churchill , 43 minutes ago

More fundamental is why an aerodynamically stable aircraft wasn't designed in the first place,love of money.

HardlyZero , 13 minutes ago

Yes. In reality the changed CG (Center of Gravity) due to the larger fan engine really did setup as a "new" design, so the MAX should have been treated as "new" and completely evaluated and completely tested as a completly new design. As a new design it would probably double the development and test cost and schedule...so be it.

DisorderlyConduct , 1 hour ago

"Lovely. Boeing coerced or bribed the FAA to sign off on the reviews now tries to hide behind the FAA."

No - what a shoddy analysis.

The FAA conceded many of their oversight responsibilities to Boeing - who was basically given the green light to self-monitor. The FAA is the one that is in the wrong here.

Well, how the **** else was that supposed to end up? This is like the IRS letting people self-audit...

Astroboy , 1 hour ago

Just as the Boeing saga is unfolding, we should expect by the end of the year other similar situations, related to drug companies, pandemia and the rest.

https://thenewroads.com/2019/12/09/forecast-for-2020/

https://thenewroads.com/2020/07/21/great-conjunction-jupiter-and-saturn-next-to-the-solstice-of-december-2020/
play_arrow

highwaytoserfdom , 1 hour ago

It is political economy...

8. The internet was invented by the US government, not Silicon Valley

Many people think that the US is ahead in the frontier technology sectors as a result of private sector entrepreneurship. It's not. The US federal government created all these sectors.

The Pentagon financed the development of the computer in the early days and the Internet came out of a Pentagon research project. The semiconductor - the foundation of the information economy - was initially developed with the funding of the US Navy. The US aircraft industry would not have become what it is today had the US Air Force not massively subsidized it indirectly by paying huge prices for its military aircraft, the profit of which was channeled into developing civilian aircraft.

https://www.zerohedge.com/news/2014-06-20/what-piketty-didnt-say-13-facts-they-dont-tell-you-about-economics

LoneStarHog , 1 hour ago

People believe that corporate executives are immune from prosecution and protected by the fact that they are within the corporation. This is false security. If true purposeful and intended criminal activities are conducted by any corporate executive, the courts can do what is called "Piercing The Corporate Veil" . It is looking beyond the corporation as a virtual person and looking at the actual individuals making and conducting the criminal activities.

Jamie Dimon should be first on this list.

[Aug 31, 2020] Economics Quotes

Aug 31, 2020 | quotes.cat-v.org

Just as a poetic discussion of the weather is not meteorology, so an issuance of moral pronouncements or political creeds about the economy is not economics. Economics is a study of cause-and-effect relationships in an economy.

-- Thomas Sowell


The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

-- Thomas Sowell


Economics is the painful elaboration of the obvious.


The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

-- Friedrich von Hayek


I can't imagine economists admitting how little they actually know. If they admitted to themselves, it would hurt their ego. If they admitted to others, it would hurt their job prospects.

-- Joseph Mattes, Vienna (The Economist, letters December 04, 2010)


The use of mathematics has brought rigor to economics. Unfortunately, it has also brought mortis .

-- Attributed to Robert Heilbroner


A study of economics usually reveals that the best time to buy anything is last year.

-- Marty Allen


Economic statistics are like a bikini, what they reveal is important, what they conceal is vital

-- Attributed to Professor Sir Frank Holmes, Victoria University, Wellington, New Zealand, 1967.


Doing econometrics is like trying to learn the laws of electricity by playing the radio.

-- Guy Orcutt


Economists

-- David Wildasin


"Murphys law of economic policy": Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.

-- Alan S. Blinder


An economist is someone who, when he finds something that works in practice, tries to make it work in theory.


The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.

-- Joan Violet Robinson


An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.

-- Laurence J. Peter


Having a[n in] house economist became for many business people something like havinga resident astrologer for the royal court: I don't quite understand what this fellow is saying but there must be something to it.

-- Linden. (Jan. 11, 1993). Dreary Days in the Dismal Science. Forbes. Pp. 68-70.


Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.


Economists do it with models.

-- Heard at the LSE


Bentley's second Law of Economics: The only thing more dangerous than an economist is an amateur economist!

Berta's Fundamental Law of Economic Rents.. "The only thing more dangerous than an amateur economist is a professional economist."


Definition: Policy Analyst is someone unethical enough to be a lawyer, impractical enough to be a theologian, and pedantic enough to be an economist.




Economists have forecasted 9 out of the last 5 recessions.


An econometrician and an astrologer are arguing about their subjects. The astrologer says, "Astrology is more scientific. My predictions come out right half the time. Yours can't even reach that proportion". The econometrician replies, "That's because of external shocks. Stars don't have those".


When an economist says the evidence is "mixed," he or she means that theory says one thing and data says the opposite.

-- Attributed to Richard Thaler, now at the Univ of Chicago


The last severe depression and banking crisis could not have been achieved by normal civil servants and politicians, it required economists involvement.


Taxes

State run lotteries: think of them as tax breaks for the intelligent.

-- Evan Leibovitch


Inflation

Inflation is the one form of taxation that can be imposed without legislation.

-- Milton Friedman


Having a little inflation is like being a little pregnant–inflation feeds on itself and quickly passes the "little" mark.

-- Dian Cohen


Trade and Trade Barriers

Tariffs, quotas and other import restrictions protect the business of the rich at the expense of high cost of living for the poor. Their intent is to deprive you of the right to choose, and to force you to buy the high-priced inferior products of politically favored companies.

-- Alan Burris, A Liberty Primer


Perhaps the removal of trade restrictions throughout the world would do more for the cause of universal peace than can any political union of peoples separated by trade barriers.

-- Frank Chodorov


When goods don't cross borders, soldiers will.

-- Fredric Bastiat, early French economist


The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.

-- Albert Jay Nock


Regulation

Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him. Protection of the consumer by regulation is thus illusory.

-- Alan Greenspan


You fucking academic eggheads! You don't know shit. You can't deregulate this industry. You're going to wreck it. You don't know a goddamn thing!

-- Robert Crandall, boss of American Airlines, to an unnamed Senate lawyer in 1971


Government

The direct use of physical force is so poor a solution to the problem of limited resources that it is commonly employed only by small children and great nations.

-- David Friedman


Government Spending

See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs.

-- Dave Barry


I don't think you can spend yourself rich.

-- George Humphrey


Capitalism and Free Markets

A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

-- Milton Friedman


The most important single central fact about a free market is that no exchange takes place unless both parties benefit.

-- Milton Friedman


The only thing worse than being exploited by capitalism is not being exploited by capitalism.

-- Joan Violet Robinson


Manufacturing and commercial monopolies owe their origin not to a tendency imminent in a capitalist economy but to governmental interventionist policy directed against free trade and laissez faire.

-- Ludwig Mises, "Socialism"


If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can only gain at the expense of another.

-- Milton Friedman


States with central-planning regimes [ ] do tend to consume much less energy (and much less of everything else) [ ] than do Americans. There is a word for that: poverty.

-- The Politically Incorrect Guide to Socialism


Central Banks

Any system which gives so much power and so much discretion to a few men, [so] that mistakes – excusable or not – can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic – this is the key political argument against an independent central bank To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.

-- Milton Friedman


A central banker walks into a pizzeria to order a pizza.

When the pizza is done, he goes up to the counter get it. There a clerk asks him: "Should I cut it into six pieces or eight pieces?"

The central banker replies: "I'm feeling rather hungry right now. You'd better cut it into eight pieces."


Intellectual Property

For one thing, there are many "inventions" that are not patentable. The "inventor" of the supermarket, for example, conferred great benefits on his fellowmen for which he could not charge them. Insofar as the same kind of ability is required for the one kind of invention as for the other, the existence of patents tends to divert activity to patentable inventions.

-- Milton Friedman


Slavery

From the experience of all ages and nations, I believe, that the work done by freemen comes cheaper in the end than the work performed by slaves.

The work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property can have no other interest but to eat as much and to labour as little as possible.

Whatever work he does, beyond what is sufficient to purchase his own maintenance, can be squeezed out of him by violence only, and not by any interest of his own.

-- Adam Smith


Prohibition

It is because it's prohibited. See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That's literally true.

-- Milton Friedman


In the Long Run
Minimum Wage and Unemployment

The real minimum wage is zero: unemployment.

-- Thomas Sowell


All of the progress that the US has made over the last couple of centuries has come from unemployment. It has come from figuring out how to produce more goods with fewer workers, thereby releasing labor to be more productive in other areas. It has never come about through permanent unemployment, but temporary unemployment, in the process of shifting people from one area to another.

-- Milton Friedman

Misc

Talk is cheap. Supply exceeds Demand.


It is difficult to get a man to understand something when his salary depends on his not understanding it.

-- Upton Sinclair


When you start paying people to be poor, you wind up with an awful lot of poor people.

-- Milton Friedman


of course the country could never listen to this guy .it just makes too much damn sense.

-- ryanx0 about Milton Friedman [http://www.youtube.com/watch?v=Se_TJzB9-z0]


Every individual necessarily labors to render the annual revenue of society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is, in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention.

-- Adam Smith, Wealth of Nations



Back during the Solidarity days, I heard that the following joke was being told in Poland:

A man goes into the Bank of Gdansk to make a deposit. Since he has never kept money in a bank before, he is a little nervous. 
"What happens if the Bank of Gdansk should fail?" he asks. 
"Well, in that case your money would be insured by the Bank of Warsaw." 
"But, what if the Bank of Warsaw fails?" 
"Well, there'd be no problem, because the Bank of Warsaw is insured by the National Bank of Poland." 
"And if the National Bank of Poland fails?" 
"Then your money would be insured by the Bank of Moscow." 
"And what if the Bank of Moscow fails?" 
"Then your money would be insured by the Great Bank of the Soviet Union." 
"And if that bank fails?" 
"Well, in that case, you'd lose all your money. But, wouldn't it be worth it?"

All models are wrong but some are useful.

-- George Box


I'd rather be vaguely right than precisely wrong.

-- J.M.Keynes; Found in Forbes magazine 01/25/1999 issue. In the Numbers Game column by Bernard Cohen


Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise.

-- J. Tukey


There is an entirely leisure class located at both ends of the economic spectrum

[Aug 24, 2020] Tesla market cap $300B v. Exxon at $190B.

Aug 24, 2020 | peakoilbarrel.com

Stephen Hren Ignored says: 08/16/2020 AT 1:03 PM

Tesla market cap – $300B v. Exxon at $190B.

Wall Street is very story driven. They wasted a decade throwing money at tight oil and lost billions. It's hard to see how this tight oil story gets resuscitated. The '10s saw free debt, low regulatory regime, no effective alternatives to oil, skilled work force, entrenched globalized oil markets, no pandemics, etc, and they STILL lost hundreds of billions. Wall Street wants to lose their money in new ways. At least they get some novelty out of it.

[Aug 23, 2020] A Love Letter To The Fed From The Adoring Stock Market -

Aug 23, 2020 | www.zerohedge.com

Authored by Michael Regan via Bloomberg (emphasis ours),

Dear Fed,

Hey there! It's me, the stock market. I know it's weird to write you like this, but I felt like I needed to drop a quick thank-you note for everything you've done for me this year. I mean, your big ol' balance sheet is almost $3 trillion larger since early March! You're backing up the truck and loading it with Treasuries and corporate bonds and bond ETFs, all to keep the competition to stocks from fixed-income yields as limited as Jim Cramer's understanding of me. It's been a dream come true, honestly. I mean, fess up: Have you been reading my diary?!

... ... ...

So please do me a solid and keep this thank-you note in mind when you host your virtual Jackson Hole summit. No cowboy stuff, OK? If I hear anybody mutter something about "irrational exuberance," I swear I'm gonna blow my top and hurt a few of these Robinhood types, you got that? The Lord giveth, and the Lord taketh away. It's what I do -- and I'm good at it! But right now, this is still a lot of fun for me...

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

...  and when I do end up burning folks, do you really want to be the one who gets thrown under the bus?

I mean, you know you're going to catch all the blame, right?

NEVER MISS THE NEWS THAT MATTERS MOST

ZEROHEDGE DIRECTLY TO YOUR INBOX

Receive a daily recap featuring a curated list of must-read stories.

C'mon, Fed. We both know you're smarter than that. What's another few trillion?

With sincere and deepest gratitude,

The Stock Market

[Aug 19, 2020] Some Shocking Facts on the Concentration of Ownership of the US Economy

Highly recommended!
Notable quotes:
"... 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). ..."
May 19, 2019 | russia-insider.com

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

[Jul 25, 2020] The USA is home to the father of protectionism: Alexander Hamilton. He stated that a national industry in its infancy should be protected from its more mature competition. The USA followed his advice and protected its nascent industry from the British threat.

Jul 25, 2020 | www.moonofalabama.org

vk , Jul 24 2020 21:09 utc | 46

The American Revolution was a catastrophe for its economy, which had to endure decades of reconstruction. In order to neutralize the threat of the British Empire, it stroke multiple trade deals with it.

The USA is home to the father of protectionism: Alexander Hamilton. He stated that a national industry in its infancy should be protected from its more mature competition. The USA followed his advice and protected its nascent industry from the British threat.

When the British Empire begun to degenerate, the Americans used the cheap British capital in excess in the financial markets to build up their infrastructure, specially their railways. Australia did the same.

The Founding Fathers did what they had to do in order to protect their country and make it flourish. When the ideology of the time stated they shouldn't, they invented a new ideology that stated they should. And the could: when the British and French tried to destroy the USA through a sea embargo, they responded in kind (Embargo Act of 1807) and prevailed; they did not cave in to the then imperial powers.

So, I don't understand why so many Americans are offended with China. The capitalist world tried to keep China poor and as a raw material exporter, sweatshop conglomeration. China didn't accept this, and decided to fight back. The result is here for all of us to see.

[Jul 16, 2020] If Pompeo has a functioning brain, he should realize that all these blatant efforts to reserve markets for America by sanctioning all its competitors out of the picture is having the opposite effect, and frightening customers away from becoming dependent on American products

Jul 16, 2020 | thenewkremlinstooge.wordpress.com

MOSCOWEXILE July 15, 2020 at 7:58 am

Fat bully boy speaks for Bully Boy state:

"Today the Department of State is updating the public guidance for CAATSA authorities to include Nord Stream 2 and the second line of TurkStream 2. This action puts investments or other activities that are related to these Russian energy export pipelines at risk of US sanctions. It's a clear warning to companies aiding and abetting Russia's malign influence projects and will not be tolerated. Get out now or risk the consequences".

Pompeo speaking at a press conference today.

CAATSA -- Countering America's Adversaries Through Sanctions Act

So Russia and Turkey are "adversaries" of the USA?

In what way?

Do these states wish to wage war against the USA?

Is it adversarial to United States interest to compete economically with the hegemon?

MOSCOWEXILE July 15, 2020 at 7:59 am

Link to above:

https://sputniknews.com/world/202007151079893067-us-plans-to-add-nord-stream-2-turkstream-to-list-of-projects-to-be-sanctioned/

MARK CHAPMAN July 15, 2020 at 3:51 pm

Who cares? Really, is Pompeo still scary? If he has a functioning brain, he should realize that all these blatant efforts to reserve markets for America by sanctioning all its competitors out of the picture is having the opposite effect, and frightening customers away from becoming dependent on American products which might be withheld on a whim when America wants political concessions. 'Will not be tolerated' – what a pompous ass. Sanction away. The consequence is well-known to be seizure of assets held in the United States or an inability to do business in the United States. That will frighten some into submission – like the UK, which was threatened with the cessation of intelligence-sharing with the USA (sure you can spare it?) if it did not drop Huawei from its 5G networks. But others will take prudent steps to limit their exposure to such threats, in the certain knowledge that if they work, they will encourage the USA to use the technique again.

[Jul 14, 2020] The good news is that the unstoppable juggernaut of globalization has fallen to it's knees

Jul 14, 2020 | www.moonofalabama.org

Tod , Jul 13 2020 20:05 utc | 18

The good news is that the unstoppable juggernaut of globalization has fallen to it's knees. Countries and societies around the world will have to look at ways they came become independent and self sufficient,at least to some degree. It's like "War of the Worlds" really, the best effort of humanity to contain the plague fails, but a random natural occurrence saves humanity from the brink of destruction. Hopefully some real scientists will be allowed to mitigate the medical disaster, but one thing is for sure, the grand plan of turning everyone into a nomad competing for pennies on the international market, for the sole benefit of the richest among the rich, is dead. Some really hard times are coming for the international nomads/ parasites, and hopefully humanity will move to some more beneficial culture, and have a real chance to survive as a species, in the long term.

[Jul 03, 2020] The world s economy is in contraction. Although capital, what actual capital exists, will have to try and do something productive, it is confronted by this fact, that everything is facing contraction.

Highly recommended!
Notable quotes:
"... I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back. ..."
"... What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. ..."
"... There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. ..."
"... More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$). ..."
"... the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US. ..."
"... I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading! ..."
"... All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back. ..."
"... Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle ..."
"... We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going. ..."
Jul 03, 2020 | www.moonofalabama.org

Seer , Jul 3 2020 10:34 utc | 125

NemesisCalling @ 28

I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back.

The world's economy is in contraction. Although capital, what actual capital exists, will have to try and do something "productive," it is confronted by this fact, that everything is facing contraction. During times of contraction it's a game of acquisition rather than expanding capacity: the sum total is STILL contraction; and the contraction WILL be a reduction in excess, excess manufacturing and labor.

What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. China is self-sufficient (enough) other than energy (which can be acquired outside of US markets). Most every other country is in a position of declining wealth (per capita income levels peaked and in decline). And manufacturing continues to increase its automation (less workers means less consumers).

There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. One has to look at this in The Big Picture of what it means, and that's that the US population is aging (and in poor health).

More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$).

Lastly, and it's the reason why global trade is being knocked down, is that the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US.

And here too is the fact that other countries' populations are also aging. Years ago I dove into the demographics angle/assessment to find out that ALL countries ramp and age and that you can see countries' energy consumption rise and their their net trade balance swing negative- there's a direct correlation: go to the CIA's Factbook and look at demographics and energy and the graphs tell the story.

I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading!

All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back.

MANY years ago I stated that we will one day face "economies of scale in reverse." We NEVER considered that growth couldn't continue forever. There was never a though about what would happen with the reverse "of economies of scale."

Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle.

We will never be able to replicate the state of things as they are. We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going.

[Jul 01, 2020] The elites have two or three passports, own businesses overseas, own houses.

Jul 01, 2020 | www.unz.com

Jeff Stryker , says: June 30, 2020 at 5:59 pm GMT

@Rev. Spooner bout the Bill of Rights or the Constitution or community. Those are a joke to people whose money is made transnational.

The lumpens who have never traveled out of their state have no concept of geographic dimensions. They have never even left home. They think everyone is as patriotic as them and will fight and die for their country and their community.

I assure none of the elite care a whit. Penthouses look the same from Manhattan to Tokyo.

Ask the Boers in South Africa or Polish in Detroit who did not "sniff the wind" in time.

The guy who has a gun loaded in his pocket as an insurance policy has a plan and it does not end well for the person who hit him.

The elites have two or three passports, own businesses overseas, own houses.

[Jun 16, 2020] Trump Just Fulfilled His Billionaire Pal s Dream by David Sirota

Highly recommended!
Jun 16, 2020 | jacobinmag.com

Trump just changed the rules to let Wall Street's most predatory industry get its hands on hundreds of billions of dollars of ordinary workers' retirement savings. Now his friends in private equity are celebrating.

If politics is the art of the sleight of hand, then Donald Trump is one of the deftest magicians of all time -- a master of creating mesmerizing spectacles, while his minions quietly rob everything in sight. This David Copperfield routine has become so mundane we are practically numb to it, but the trick Trump just pulled off for his billionaire pals was something particularly special -- it could end up being one of the single biggest financial heists in history.

As news cycles were consumed by Trump deliberately inflaming social unrest and threatening a domestic military invasion , the president's political appointees were approving a regulatory change that could transfer hundreds of billions of dollars of Americans' retirement savings to private equity firms. Those are the Gordon Gekko–run outlets that have become famous for fleecing investors , laying off workers , gutting local economies , strip-mining media outlets and creating public health and environmental disasters -- all while minting Wall Street billionaires.

The Trump administration's new directive came just a few months after private equity billionaire Stephen Schwarzman -- who had been pushing for the change -- poured $3 million into a super PAC backing Trump's reelection bid.

"A Windfall of $435 Billion"

To the casual onlooker, the information letter from the Employee Benefits Security Administration reads like every other impenetrable passage of stereo instructions that fills the Federal Register -- but this was no routine piece of paperwork. The guidance to Switzerland-based investment firm Partners Group effectively changed the enforcement of federal law protecting workers' retirement savings.

While long-standing worker-protection regulations have prevented 401(k) plans from investing in high-risk private equity firms, the letter now permits corporations to funnel that money to those firms, which charge notoriously giant fees.

Trump's administration argued that workers should feel fortunate and thankful that the administration will now let employers turn their savings over to private equity barons.

"This information letter will help Americans saving for retirement gain access to alternative investments that often provide strong returns," labor secretary Eugene Scalia said in a statement announcing the new policy. "The letter helps level the playing field for ordinary investors and is another step by the department to ensure that ordinary people investing for retirement have the opportunities they need for a secure retirement."

Scalia previously represented Wall Street banks and investment firms at the law firm Gibson Dunn, including Goldman Sachs, which has been working to raise more money for its private equity funds .

In practice, private equity firms will now be allowed to access -- and skim fees off of -- the $9 trillion in 100 million workers' 401(k) plans and IRAs.

"If just 5 percent of the money in these retirement funds were available to private equity, it would be a windfall of $435 billion -- real money even to private equity millionaires and billionaires," wrote Eileen Appelbaum of the Center for Economic and Policy Research (CEPR).

"A Huge Opportunity for the Firm"

From the beginning, Trump's White House has been operating as a de facto subsidiary of the private equity industry : his reelection campaign is being bankrolled by private equity donors; his commerce secretary is a private equity kingpin ; his SEC chairman was a Wall Street lawyer at a firm that represents private equity clients ; his first National Economic Council was the president of a private equity giant ; and his top outside adviser is Schwarzman, the CEO of the world's largest private equity firm , Blackstone.

The Labor Department letter is the result of all that private equity influence -- and at a particularly opportune time. The industry -- including Partners Group -- has recently been fretting about a decline in fees during the COVID-19 pandemic. The letter offers the potential for a bailout for the industry, paid for by millions of workers' retirement savings.

That said, this is not some temporary relief during a fleeting crisis -- this is the culmination of a long-term campaign by Schwarzman. Six days after Trump was inaugurated, the Blackstone chief said that he had been dreaming of a president who would change the law to let his firm make bank off workers' 401(k) savings.

"In life you have to have a dream," Schwarzman told analysts in January 2017 , days after Trump's inauguration. "One of the dreams is our desire and the market's need to have more access at retail to alternative asset products . . . A lot of people are not allowed to put those into retirement vehicles and other types. And one of the interesting issues when you have a new government is whether they want to continue that type of prohibition or not. Because what it's doing is denying people sort of a better retirement, and if there's a change in that area that becomes a huge opportunity for the firm."

In the ensuing years, Schwarzman and other private equity moguls continued to deliver cash to Trump's national Republican Party while the industry pushed for the changes in law that would allow them to raid 401(k) savings.

"This Wealth Transfer Might Be One of The Largest in the History of Modern Finance"

https://www.youtube.com/embed/ROYuupoGarQ?feature=oembed

Like Shelley Levene's smarmy real-estate sales pitch in Glengarry Glen Ross , Schwarzman's argument is that private equity offers ordinary Americans terrific untapped investment upside. In his telling, workers have been unfairly deprived of these opportunities under the old laws -- and not surprisingly, both the Trump Labor Department and some of the business press have credulously echoed that line.

"Everyday investors may soon be able to get a piece of private equity action," effused the lede of the New York Times ' report on the Labor Department letter, as if this is a sweet get-rich-quick opportunity for the average working man.

But only days after the change, a landmark study was released, telling the real story of private equity.

The report by University of Oxford professor Ludovic Phalippou shows that in the last fifteen years, private equity firms generally have not provided better returns to investors than low-fee stock index funds. In the process, a handful of private equity firms and their executives have raked in roughly $230 billion in fees from investors like public pension funds and university endowments.

"This wealth transfer might be one of the largest in the history of modern finance: from a few hundred million pension scheme members to a few thousand people working in private equity," Phalippou concludes.

Politicians have enabled this redistribution.

In Washington, federal lawmakers have preserved a tax loophole that allows private equity moguls to classify their winnings as capital gains rather than income, thereby paying far lower tax rates than ordinary workers.

Meanwhile, in states and cities, local officials have continued to direct more and more of government workers' pension savings to politically connected private equity firms. Those officials have been hoping that private equity investments would produce outsize returns that might forestall tax hikes necessary to raise revenue and fund the pension benefits promised to public-sector workers. But overall, those returns were not significantly better than the stock market, and they came with giant fees.

In its letter, the Trump administration actually acknowledged some of these pitfalls of private equity investments, noting that they involve "more complex, and typically, higher fees." But that wasn't enough to stop the Labor Department from shoving millions of unwitting workers and retirees into private equity's maw just a few years after Blackstone and other major private equity firms were sanctioned by regulators for fleecing investors.

The Quest for Dumb Money

The private equity industry is hardly short on cash -- the industry was sitting on roughly $1.5 trillion of undeployed capital at the end of 2019. The reason the Labor Department letter is so important to the industry is because 401(k)s and IRAs represent a particular kind of capital that private equity firms love -- so-called "dumb money."

Unlike a share of publicly traded stock whose price is the same for all investors, a private equity investment's fees can vary widely from investor to investor. Private equity firms are therefore always eager to find investors willing to accept the highest possible fees. "Dumb money" refers to such investors -- entities like pension funds, 401(k) plans, and university endowments that are pools of other people's money directed by officials with no personal skin in the investment decisions.

Wall Street sees these funds as "dumb" -- and particularly lucrative -- because the officials negotiating on retirees' or universities' behalf may not drive as hard a bargain on fees and terms as, say, an individual billionaire or an insurance company trying to protect its cash reserves.

This wiggle room with dumb money can be enormously lucrative for private equity firms: a recent study by Stanford and Harvard researchers found that had public pensions all received the same private equity fee rates, they "would have earned nearly $45 billion more on their investments."

In other words: that is $45 billion of earnings that could have gone to retirees, but instead went to private equity firms and other wealthy investors because pension fund managers didn't secure better fees and terms.

That part about "other unobserved investors" is key -- private equity firms explicitly say in their SEC filings that they can and will offer different investors different fees and terms on the exact same investments. It is a situation that has caused some retirees to wonder whether their dumb money is being used to pad the profits of smarter, politically connected investors who negotiate better terms in the same private equity investments.

Now that Trump's Labor Department has opened the floodgates, a lot more money could end up flowing into these opaque deals, enriching private equity executives and their friends -- while leaving workers' meager retirement savings even further depleted.

End Mark

David Sirota is editor-at-large at Jacobin . He edits the Too Much Information newsletter and previously served as a senior adviser and speechwriter on Bernie Sanders's 2020 presidential campaign. You can subscribe to David Sirota's newsletter "Too Much Information" here . Andrew Perez contributed research to this story.

Further Reading

[Jun 12, 2020] PE-Owned Hospitals Paid Owners Millions and Got Low Care Ratings by Lauren Coleman-Lochner and Jeremy Hill

Private equity is essential a mafia style business: they aid to blled thier victim dry.
Notable quotes:
"... By the end of 2018, available cash was so tight that Prospect got a $41 million infusion from Leonard Green and members of its management, according to Moody's. The ratings firm downgraded Prospect deeper into junk last year at B3, citing "shareholder-friendly policies" and the higher leverage resulting from the $457 million dividend. ..."
"... Meanwhile, care quality ratings for seven of the 10 Prospect hospitals evaluated by the Centers for Medicare and Medicaid Services, or CMS, have declined since 2016, according to HMP Metrics, a health-care facility analytics service. CMS ranks facilities from 1 to 5 stars, with 5 being the best. ..."
"... Most Prospect hospitals sit at the bottom rungs of quality assessments, according to the agency's hospital comparison database. Nine have a two-star rating or below, placing them in the lowest 30% of rated hospitals, according to CMS data. Just one Prospect-owned hospital -- Roger Williams Medical Center in Rhode Island -- earned a three-star rating. ..."
"... "Private equity owners, seeking high returns, may be even more willing to cut costs in crucial ways than even other for-profit health care companies," she said in an interview. ..."
Jun 12, 2020 | www.bloomberg.com

[Jun 09, 2020] This is worse the circus: Mitt Romney, a private equty shark the specilaty of whom is to fleece poor marched with BLM

Notable quotes:
"... How much of this is virtue signalling by Mitt Romney and others of the elite? Is he willing to disgorge himself of the the hundreds of millions he took from Americans through his company Bain? ..."
Jun 09, 2020 | www.theamericanconservative.com

>

Victor_the_thinker engineerscotty 21 hours ago

These far right social conservatives lost yesterday and they don't even realize it. Mitt Romney marched with BLM. Mitt is no radical on social issues (he certainly is on. Taxes on the rich) you won't convince a single one of these hard right wing people that systemic racism is real, even when you give examples like the North Carolina Republican Party disenfranchising blacks "with surgical precision" or the direct evidence of the commenter Dukeboy who states he is a retired police officer and is obviously a white supremacists. But you don't need to convince them of anything. This is the same group who would have been against the civil rights protests in the '60's. They aren't needed to create a massive change.

The hubris to think that your feelings of guilt would be meaningful to black people is off the charts.
"My local school has been underfunded for generations due to the property tax funding system and redlining but Karen feels bad about it so all is right with the world!"-Said no black person ever.

joeo 17 hours ago

How much of this is virtue signalling by Mitt Romney and others of the elite? Is he willing to disgorge himself of the the hundreds of millions he took from Americans through his company Bain?

Moonbeam joeo 15 hours ago • edited

How much? 100% of it. Romney is a vicious corporate raider who has destroyed countless jobs and by extension, lives. How many suicides have followed in the wake of Bain's corporate takeovers? When Romney lived in Belmont, MA, he and his wife petitioned the town to not allow ambulances to go down their street with sirens on. Seriously.

[Jun 09, 2020] Galbraith 'Disillusion' Is America's One Big Growth Sector Right Now

Highly recommended!
Notable quotes:
"... Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don't need to eat out. They don't need to travel. Restaurant owners and airlines therefore have two problems: they can't cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America's vast services sector are realizing that their jobs are simply not essential. ..."
"... America's economic plight is structural. It is not simply the consequence of Trump's incompetence or House Speaker Nancy Pelosi's poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down. ..."
Jun 09, 2020 | www.zerohedge.com

In the 1960s, the US had a balanced economy that produced goods for both businesses and households, at all levels of technology, with a fairly small (and tightly regulated) financial sector. It produced largely for itself, importing mainly commodities.

Today, the US produces for the world, mainly advanced investment goods and services, in sectors such as aerospace, information technology, arms, oilfield services, and finance. And it imports far more consumer goods, such as clothing, electronics, cars, and car parts, than it did a half-century ago.

And whereas cars, televisions, and household appliances drove US consumer demand in the 1960s, a much larger share of domestic spending today goes (or went) to restaurants, bars, hotels, resorts, gyms, salons, coffee shops, and tattoo parlors, as well as college tuition and doctor's visits. Tens of millions of Americans work in these sectors.

Finally, American household spending in the 1960s was powered by rising wages and growing home equity. But wages have been largely stagnant since at least 2000, and spending increases since 2010 were powered by rising personal and corporate debts. House values are now stagnant at best, and will likely fall in the months ahead.

Mainstream economics pays little attention to such structural questions. Instead, it assumes that business investment responds mostly to the consumer, whose spending is dictated equally by income and desire. The distinction between "essential" and "superfluous" does not exist. Debt burdens are largely ignored.

But demand for many US-made capital goods now depends on global conditions. Orders for new aircraft will not recover while half of all existing planes are grounded. At current prices, the global oil industry is not drilling new wells. Even at home, though existing construction projects may be completed, plans for new office towers or retail outlets won't be launched soon. And as people commute less, cars will last longer, so demand for them (and gasoline) will suffer.

Faced with radical uncertainty, US consumers will save more and spend less. Even if the government replaces their lost incomes for a time, people know that stimulus is short term. What they do not know is when the next job offer – or layoff – will come along.

Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don't need to eat out. They don't need to travel. Restaurant owners and airlines therefore have two problems: they can't cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America's vast services sector are realizing that their jobs are simply not essential.

Meanwhile, US household debts – rent, mortgage, and utility arrears, as well as interest on education and car loans – have continued to mount. True, stimulus checks have helped: defaults have so far been modest, and many landlords have been accommodating. But as people face long periods with lower incomes, they will continue to hoard funds to ensure that they can repay their fixed debts. As if all this were not enough, falling sales- and income-tax revenues are prompting US state and local governments to cut spending, compounding the loss of jobs and incomes.

America's economic plight is structural. It is not simply the consequence of Trump's incompetence or House Speaker Nancy Pelosi's poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down.

"Reopen America" is therefore an economic and political fantasy. Incumbent politicians crave a cheery growth rebound, and the depth of the collapse makes possible some attractive short-term numbers. But taking them seriously will merely set the stage for a new round of disillusion. As nationwide protests against systemic racism and police brutality show, disillusion is America's one big growth sector right now.

[Jun 04, 2020] When recruiters or job ads say "flexible working hours" all I hear is "you must be flexible to work whatever hours we give you"

Jun 04, 2020 | www.youtube.com

Suadela , 4 months ago

When recruiters or job ads say "flexible working hours" all I hear is "you must be flexible to work whatever hours we give you"

[Jun 03, 2020] RussiaGate for neoliberal Dems and MSM honchos is the way to avoid the necessity to look into the camera and say, I guess people hated us so much they were even willing to vote for Donald Trump

Highly recommended!
Notable quotes:
"... Russiagate became a convenient replacement explanation absolving an incompetent political establishment for its complicity in what happened in 2016, and not just the failure to see it coming. ..."
"... Because of the immediate arrival of the collusion theory, neither Wolf Blitzer nor any politician ever had to look into the camera and say, "I guess people hated us so much they were even willing to vote for Donald Trump ..."
Mar 31, 2019 | www.moonofalabama.org

psychohistorian , Mar 30, 2019 7:51:28 PM | link

Here is an insightful read on Trump's (s)election and Russiagate that I think is not OT

Taibbi: On Russiagate and Our Refusal to Face Why Trump Won

The take away quote

" Russiagate became a convenient replacement explanation absolving an incompetent political establishment for its complicity in what happened in 2016, and not just the failure to see it coming.

Because of the immediate arrival of the collusion theory, neither Wolf Blitzer nor any politician ever had to look into the camera and say, "I guess people hated us so much they were even willing to vote for Donald Trump ."

As a peedupon all I can see is that the elite seem to be fighting amongst themselves or (IMO) providing cover for ongoing elite power/control efforts. It might not be about private/public finance in a bigger picture but I can't see anything else that makes sense

[May 28, 2020] Protestors Criticized For Looting Businesses Without Forming Private Equity Firm First

Highly recommended!
Notable quotes:
"... "I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations..." ..."
May 28, 2020 | www.zerohedge.com

"I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations..."

"Look, we all have the right to protest, but that doesn't mean you can just rush in and destroy any business without gathering a group of clandestine investors to purchase it at a severely reduced price and slowly bleed it to death," said Facebook commenter Amy Mulrain, echoing the sentiments of detractors nationwide who blasted the demonstrators for not hiring a consultant group to take stock of a struggling company's assets before plundering.

" I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations.

It's disgusting to put workers at risk by looting. You do it by chipping away at their health benefits and eventually laying them off. There's a right way and wrong way to do this. "

At press time, critics recommended that protestors hold law enforcement accountable by simply purchasing the Minneapolis police department from taxpayers.

Source: The Onion

[May 24, 2020] Private Equity Is Ruining Health Care, Covid Is Making It Worse: Investors have been buying up doctor s offices, cutting costs, and, critics say, putting pressure on physicians by Heather Perlberg

Highly recommended!
So not only ambulance service was destroyed by private equity, they now added other specialties. I wonder is those criminals who insert unnecessary stents in patients are connected to private equity.
Images removed
Notable quotes:
"... "You can't serve two masters. You can't serve patients and investors" ..."
"... Morganroth's defense of pandemic Botox might seem odd, but it made perfect sense within the logic of the U.S. health-care system, which has seen Wall Street investors invade its every corner, engineering medical practices and hospitals to maximize profits as if they were little different from grocery stores. At the center of this story are private equity firms, which saw the explosive growth of health-care spending and have been buying up physician staffing companies, surgery centers, and everything else in sight. ..."
"... But some doctors say that the private equity playbook, which involves buying companies, drastically cutting costs, and then selling for a profit -- the goal is generally to make an annualized return of 20% to 30% within three to five years -- creates problems that are unique to health care. "I know private equity does this in other industries, but in medicine you're dealing with people's health and their lives," says Michael Rains, a doctor who worked at U.S. Dermatology Partners , a big private equity-backed chain. "You can't serve two masters. You can't serve patients and investors." ..."
"... Yet over the past decade, lawyers devised a structure that allows investors to buy a medical practice without technically owning it: the MSO, or management service organization. Today, when an investment firm buys a doctor's office, what it's actually buying are the office's "nonclinical" assets. In theory, physicians control all medical decisions and agree to pay a management fee to a newly created company, which handles administrative tasks such as billing and marketing. ..."
"... Businessweek ..."
"... When individual doctors sell, they generally receive $2 million to $7 million each, with 30% to 40% of that paid in equity in the group. After the acquisition, doctors get a lower salary and are asked to help recruit other doctors to sell their practices or to join as employees. ..."
"... Patients, for the most part, are in the dark. Unlike when your mortgage changes hands, you usually aren't notified when a big investment firm buys your doctor. Sometimes the sign on the door bearing the physician's name stays put, and subtle changes in operations or unfamiliar fees may be the only clues that anything has happened. ..."
"... At Advanced Dermatology & Cosmetic Surgery , the largest private equity-backed group in the field, with more than 150 locations across the U.S., that sense of discomfort came shortly after Audax Group bought a controlling stake in what was then a much smaller chain in 2011. The new management team introduced a scorecard that rewarded offices with cash if they met daily and monthly financial goals, according to a lawsuit filed in 2013 against the company by one of its dermatologists. The doctor alleged that the bonus program encouraged staff to do as many procedures as possible, rather than strictly addressing patients' medical needs. ..."
"... Most dermatologists use outside labs and pathologists, but private equity-owned groups buy up existing labs and hire their own pathologists. Then doctors are encouraged to refer patients within the group and send biopsy slides to the company-owned labs, keeping the entire chain of revenue in-house. ..."
"... Now comes the cost-cutting. This is supposed to be the hallmark of private equity, and, done right, it can work to the benefit of doctors and patients. But there are pitfalls unique to medicine, where aggressive cuts can lead to problems, some of them merely inconvenient and some potentially dangerous. ..."
"... A doctor at Advanced Dermatology says that waiting for corporate approvals means his office is routinely left without enough gauze, antiseptic solution, and toilet paper. Even before the great toilet paper shortage of 2020, he would travel with a few rolls in the trunk of his car, to spare patients when an office inevitably ran out. The company declined to comment. ..."
"... One paradox of the Covid-19 pandemic has been that even as the virus has focused the entire country on health care, it's been a financial disaster for the industry. And so, while emergency room doctors and nurses care for the sick -- comforting those who would otherwise die alone, and in some cases dying themselves -- private equity-backed staffing companies and hospitals have been cutting pay for ER doctors. These hospitals, like the big medical practices, make a large portion of their money from elective procedures and have been forced into wrenching compromises. ..."
"... For investors with capital, on the other hand, the economic fallout from the virus is a huge opportunity. Stay-at-home orders have left small practices more financially strained than they've ever been. That will likely accelerate sales to private equity firms, according to Marc Cabrera, an investment banker focused on health-care deals at Oppenheimer & Co. Independent doctors or groups that previously rebuffed offers from deep-pocketed backers "will reconsider their options," he says. ..."
"... Many doctors may ultimately come to regret cashing out, but it's hard to get out once you're in. As part of an acquisition, the private equity groups typically require doctors to sign yearslong contracts, with noncompete clauses that prevent them from working in the surrounding area. ..."
May 20, 2020 | www.bloomberg.com

Not long after Gavin Newsom, the governor of California, ordered the state's 40 million residents to stay home to stop the spread of the new coronavirus, Dr. Greg Morganroth called his team of doctors and said their dermatology group was staying open.

Morganroth is chief executive officer of the California Skin Institute , which he founded in 2007 as a single office in Mountain View. He's since expanded to more than 40 locations using a financing strategy that's become exceedingly common in American health care: private equity. In this case, he took out a loan from Goldman Sachs Group Inc. that could eventually convert to an equity stake. CSI is now the largest dermatology chain in California.

But the Covid-19 pandemic put Morganroth in a precarious position. Most medical procedures were characterized as nonessential by government officials and practitioners. Doctors were closing offices, and patients were staying away to limit their potential exposure to the virus.

CSI took a different approach. Morganroth explained his thinking on April 2 in a Zoom call with more than 170 dermatologists from around the country organized by the Cosmetic Surgery Forum, an industry conference. Contrary to what they might have heard, Morganroth told them, they should consider staying open during the pandemic. "Many of us are over-interpreting guidelines," he said.

For a moment there was an awkward silence. Doctors had thought they were signing up for advice on how to apply for government money that would help them meet payroll while they were shut down; they hadn't expected to be told not to shut down at all. Morganroth continued: "We are going to be in a two-year war, and we need to make strategic plans for our businesses that enable us to survive and to rebound."

Back at CSI, the company's front-office staff was working the phones, calling patients in some of the worst-hit areas and reminding them to show up for their appointments, even for cosmetic procedures such as Botox injections to treat wrinkles. During the videoconference, Morganroth argued that offering Botox in a pandemic wasn't so different from a grocery store allowing customers to buy candy alongside staples.

"If I had a food supply company and had to stay open, and I had meat, bread, and milk, would I stop making lime and strawberry licorice?" Morganroth asked. "I would make everything and go forward."

From a public-health point of view, some of the doctors believed, this was questionable. Common reasons for visiting a dermatologist's office -- skin screenings, mole removals, acne consultations -- aren't particularly time sensitive. Serious matters, such as suspected cancers and dangerous rashes, can be handled, at least initially, with telemedicine consultations . Then doctors can weigh the risks for their patients and determine who needs to come in. In a statement, CSI says that it followed local and state laws for staying open, while providing "necessary care" for patients, and that it had not required doctors to come to work.

"You can't serve two masters. You can't serve patients and investors"

Morganroth's defense of pandemic Botox might seem odd, but it made perfect sense within the logic of the U.S. health-care system, which has seen Wall Street investors invade its every corner, engineering medical practices and hospitals to maximize profits as if they were little different from grocery stores. At the center of this story are private equity firms, which saw the explosive growth of health-care spending and have been buying up physician staffing companies, surgery centers, and everything else in sight.

Over the past five years, the firms have invested more than $10 billion in medical practices, with a special focus on dermatology, which is seen as a hot industry because of the aging population. Baby boomers suffer from high rates of two potentially lucrative conditions: skin cancer and vanity. Some estimates suggest that private equity already owns more than 10% of the U.S dermatology market. And firms have started to expand into other specialties, including women's health, urology, and gastroenterology.

There's nothing inherently wrong with any of this. But some doctors say that the private equity playbook, which involves buying companies, drastically cutting costs, and then selling for a profit -- the goal is generally to make an annualized return of 20% to 30% within three to five years -- creates problems that are unique to health care. "I know private equity does this in other industries, but in medicine you're dealing with people's health and their lives," says Michael Rains, a doctor who worked at U.S. Dermatology Partners , a big private equity-backed chain. "You can't serve two masters. You can't serve patients and investors."

Investment firms, and the practices they fund, say these concerns are overblown. They point out that they're giving doctors a financial shelter from the rapidly changing medical environment, a particularly attractive prospect now, and that money from private equity firms has expanded care to more patients. But they've also made it next to impossible to track the industry's impact or reach. Firms rarely announce their investments and routinely subject doctors to nondisclosure agreements that make it difficult for them to speak publicly. Bloomberg Businessweek spoke to dozens of doctors at 10 large private equity-backed dermatology groups. Those interviews, along with information obtained from other employees, investors, lawyers, court filings, and company records, reveal how the firms operate, and why they sometimes fail patients.

The process is never exactly the same, but there are familiar patterns, which tend to play out in five steps.

Step 1: Marriage

The strange thing about private equity money in medicine is that for-profit investors have long been prevented from buying doctor's offices. Corporate ownership goes against a doctrine set by the American Medical Association , the main trade group for doctors in the U.S., and is prohibited by law in many states, including Texas and New Jersey. For most of the past 100 years, if you wanted to make money on a medical practice, you needed to have a medical license.

Yet over the past decade, lawyers devised a structure that allows investors to buy a medical practice without technically owning it: the MSO, or management service organization. Today, when an investment firm buys a doctor's office, what it's actually buying are the office's "nonclinical" assets. In theory, physicians control all medical decisions and agree to pay a management fee to a newly created company, which handles administrative tasks such as billing and marketing.

In practice, though, investors expect some influence over medical decision-making, which, after all, is connected to profits. "When we partner with you, it's a marriage," said Matt Jameson, a managing director at BlueMountain Capital, a $17 billion firm that recently invested in a women's health company, while speaking at a conference in New York in September. "We have to believe it. You have to believe it. It's not going to be something where clinical is completely not touched." (When contacted by Businessweek , Jameson asked to clarify his comments. "Doctors and other qualified healthcare professionals at the providers we've invested in make medical decisions," he said in a statement.)

The typical buyout starts with the acquisition of a big, popular practice, often with multiple doctors and several locations, for as much as $100 million. (Investors typically pay between 9 and 12 times annual profit.) This practice functions as an anchor, like a name-brand department store at a shopping mall, attracting patients and doctors to the new group as it expands. Then comes the roll-up: The private equity firm purchases smaller offices and solo practices, giving the group a regional presence.

As part of the new structure, investors deal with paperwork and save money by buying medical supplies in bulk. Crucially they also negotiate higher insurance reimbursement rates. One dermatologist who sold her practice to the California Skin Institute says she was surprised to find out the bigger group's payouts from insurers were $25 to $125 more per visit.

When individual doctors sell, they generally receive $2 million to $7 million each, with 30% to 40% of that paid in equity in the group. After the acquisition, doctors get a lower salary and are asked to help recruit other doctors to sell their practices or to join as employees.

At first, doctors are generally thrilled by all of this. They have financial security and can focus on treating patients without the stress of running a business. Patients, for the most part, are in the dark. Unlike when your mortgage changes hands, you usually aren't notified when a big investment firm buys your doctor. Sometimes the sign on the door bearing the physician's name stays put, and subtle changes in operations or unfamiliar fees may be the only clues that anything has happened.

Step 2: Growth

The promise of more patients is a big draw for doctors. By sharing marketing costs and adding locations, the new companies can advertise more and attract customers. Private equity-owned practices have been diligent users of social media, announcing newly added doctors and posting coupons on Twitter and Instagram. But these practices can be aggressive in ways that make some doctors uncomfortable.

At Advanced Dermatology & Cosmetic Surgery , the largest private equity-backed group in the field, with more than 150 locations across the U.S., that sense of discomfort came shortly after Audax Group bought a controlling stake in what was then a much smaller chain in 2011. The new management team introduced a scorecard that rewarded offices with cash if they met daily and monthly financial goals, according to a lawsuit filed in 2013 against the company by one of its dermatologists. The doctor alleged that the bonus program encouraged staff to do as many procedures as possible, rather than strictly addressing patients' medical needs.

In some of the company's Florida offices, the doctor alleged, medical assistants responded to the bonus structure by ticking extra boxes on exam reports, stating that doctors checked many more areas of the body than they actually had. That led to higher patient bills, defrauding the government under its Medicare program, according to the lawsuit. The federal government declined to join the case, and it was dismissed about a year after it was filed. Advanced and Audax declined to comment.

One-Stop Skin Care

By buying up labs and adding specialists, private equity-owned dermatology groups get paid at every step of a patient's treatment.

Data: Estimated Medicare reimbursement rates for the Miami area, Sensus Healthcare sales presentation

Private equity-backed practices also try to increase revenue by adding more-lucrative procedures, according to doctors interviewed by Businessweek . In dermatology, this means more cosmetics, laser treatments, radiation, and especially Mohs surgeries -- a specialized skin cancer procedure that removes growths from delicate areas like the face and neck one layer at a time, to limit scarring. The surgery involves expensive equipment and specialized doctors, so some large medical groups keep costs down by assembling traveling Mohs teams, who fly in from other states. Others create mobile labs in vans that set up in clinics' parking lots.

Most dermatologists use outside labs and pathologists, but private equity-owned groups buy up existing labs and hire their own pathologists. Then doctors are encouraged to refer patients within the group and send biopsy slides to the company-owned labs, keeping the entire chain of revenue in-house. This takes advantage of a regulatory quirk that has made dermatology, and a handful of other specialties, attractive to private equity. Under the 1989 Stark Law, doctors aren't allowed to make patient referrals for their own financial gain. An exception was made for some fields because it's more convenient for patients, explains Dr. Sailesh Konda, a Mohs surgeon and professor at the University of Florida. "But that can be abused."

Step 3: Synergy

Now comes the cost-cutting. This is supposed to be the hallmark of private equity, and, done right, it can work to the benefit of doctors and patients. But there are pitfalls unique to medicine, where aggressive cuts can lead to problems, some of them merely inconvenient and some potentially dangerous.

A doctor at Advanced Dermatology says that waiting for corporate approvals means his office is routinely left without enough gauze, antiseptic solution, and toilet paper. Even before the great toilet paper shortage of 2020, he would travel with a few rolls in the trunk of his car, to spare patients when an office inevitably ran out. The company declined to comment.

At the country's second-biggest skin-care group, U.S. Dermatology Partners , a former doctor says a regional manager switched to a cheaper brand of needles and sutures without consulting the medical staff. The quality was so poor, she says, they would often break off in her patients' bodies. Mortified, she'd have to dig them out and start over. She complained to managers but couldn't get better supplies, she says. Paul Singh, U.S. Dermatology's CEO, says the company uses a "reputable, global vendor for medical supplies." "While our group may have standardized purchasing processes, individual providers have the autonomy to procure specific supplies that they need for a particular patient situation or patient population," he says in a statement.

Doctors who join a private equity-backed group generally sign contracts that state they'll never have to compromise their medical judgment, but some say that management began to intervene there, too. Dermatologists at most of the companies say they were pushed to see as many as twice the number of patients a day, which made them feel rushed and unable to provide the same quality of care. Others were forced to discuss their cases with managers or medical directors, who asked the doctors to explain why they weren't sending more patients for surgery. Multiple practices also encouraged doctors to send home Mohs surgery patients with open wounds and have them come back the next day for stitches -- or to have a different doctor do the closure the same day -- because that would allow the practice to collect more from insurers.

That's if doctors are performing the procedures at all. At Advanced Dermatology, several doctors say they were asked to claim that physician assistants, or PAs, were under their supervision when they weren't seeing patients in the same building, or even the same town. Because PAs are paid less than dermatologists, this allowed the company to keep costs low while growing the business. In a statement, Eric Hunt, Advanced's general counsel and chief compliance officer says that having PAs on staff enables the company to "provide access to quality dermatological care to more patients."

Step 4. Rolling Up the Roll-Up

Advanced Dermatology was sold in 2016 by Audax to Harvest Partners LP , following a pattern that's typical in the industry. At some point, after costs have been cut and profits maximized, most private equity-owned medical groups will be sold, often to another private equity firm, which will then try to somehow make the company even more profitable.

Having reduced most of the obvious costs, Advanced Dermatology began skimping on more important supplies, including Hylenex, according to doctors and other employees. The drug is an expensive reversal agent used when cosmetic fillers, which are supposed to make skin look plumper, go wrong. Not having enough is dangerous: Patients who get an injection that inadvertently blocks a blood vessel can be left with dead sections of skin or even go blind if they don't get enough Hylenex in a matter of hours. The company says that it stocks Hylenex in every office that performs cosmetic procedures, and that it "has no records of any provider being denied an order for this medication."

Advanced Dermatology also started giving even more authority to PAs, according to doctors and staff. Without enough oversight some were missing deadly skin cancers, they say. Others were doing too many biopsies and cutting out much larger areas of skin than necessary, leaving patients with big scars. Doctors who complained about the bad behavior say they saw PAs moved to other locations rather than fired or given more supervision. Hunt, the company's lawyer, says that all PAs get six months of training and are supervised by experienced doctors.

The staff coined a new medical diagnosis, "pre- pre- pre-cancer"

Advanced Dermatology also put more pressure on doctors to send biopsies to in-house labs. The move made sense financially, but some of the doctors didn't trust the lab. One of its two pathologists in Delray Beach, Fla., Steven Glanz, had a history of misdiagnosing benign tumors, which led patients to undergo surgeries that were later found to be unnecessary, according to doctors who worked with him. Dermatologists who warned that Glanz was a danger to patients say that their complaints to Dr. Matt Leavitt, the group's founder and CEO, were ignored. More procedures, doctors knew, brought in more money.

Glanz, who had been with the practice since its early days, was known to read slides under a microscope with a pistol on his desk. After he was arrested with a handgun, a folding knife, and a vial of methamphetamine crystals, he was fired and Florida's state medical board fined him $10,000, requiring him to complete a five-hour course on ethics before he could resume practicing. But his former colleagues were unsettled; they knew Glanz's signature was on years of reports that determined treatment for patients. Some slides were reevaluated, and pathologists noticed mistakes. Managers told some doctors and their staff that patients, even those who'd been misdiagnosed and had unnecessary procedures, were not to be told. Glanz pleaded guilty to stalking and a firearms violation and was sentenced to probation. When a reporter called his office and identified herself, the receptionist hung up. Further attempts to reach Glanz were unsuccessful. Advanced's Hunt says that he was "formally released from employment three years ago," but did not comment further.

Of course, some doctors pushed ethical boundaries long before private equity came into the picture. But critics of the industry, including doctors and investors, say management teams put in place by private equity firms tend to look the other way as long as a medical practice is profitable. Of the dermatologists with the highest biopsy rates in the country (between 4 and 11 per patient, per year), almost 25% were affiliated with private equity-backed groups, according to Dr. Joseph Francis, a Mohs surgeon and data researcher at the University of Florida.

Medical providers may have also been blurring ethical lines at U.S. Dermatology Partners, which was until recently on its second private equity owner, Abry Partners LLC . At four of the company's offices in Texas, a doctor and his PAs were doing more biopsies than necessary, according to employees. These employees say the staff routinely called patients with benign lichenoid keratosis, small brownish blotches that usually go away on their own, and told them the growths should be removed. Under instruction from the doctor, the staff coined a new medical diagnosis, "pre- pre- pre-cancer," and then talked patients into coming in for removal, employees say. Singh, the U.S. Dermatology CEO, says that the company trusts doctors to make the right decisions and that it monitors them through routine audits.

Step 5: Sell-Off

In some cases the cost-cutting either becomes impossible or leads to compromises in care too obvious to ignore. In 2016 a DermOne LLC office in Irving, Texas, had been using a faulty autoclave machine to sterilize surgical equipment -- the state and county health departments identified 137 patients that needed to get tested for blood-borne diseases such as HIV and hepatitis. By 2018, DermOne's backer, Westwind Investors, wanted out.

Westwind had been one of the earliest firms to build a big dermatology business -- with practices in five states -- but others had grown larger. After the debacle in Irving, the Nevada-based firm sold DermOne's medical records and patient lists, as well as some of its offices, to other groups. It dissolved the remaining offices, leaving some patients abruptly without care. Westwind did not respond to repeated requests for comment. Two other private equity-backed groups, TruDerm and Select Dermatology LLC, have also gone out of business in the past two years.

The surviving chains have been saddled with large piles of debt they're now struggling to repay. In January, U.S. Dermatology Partners defaulted on a $377 million loan, meaning the private equity backer, Abry Partners, had to hand over the keys to its lenders, Golub Capital , Carlyle Group , and Ares Management , which will now oversee a chain with almost 100 locations, receiving 1 million visits from patients a year. Abry did not respond to requests for comment .

For the medical groups that make it, the game plan is to eventually sell to the largest players, such as KKR , Blackstone Group , and Apollo Global Management . Pioneering investors, including Audax, are now buying practices in other fields -- a concerning development to critics who note that the areas that are currently attracting investment, such as urology, generally involve more invasive procedures. Should doctors performing vasectomies be thinking about the dollar-rate returns for KKR -- or any private investor?

"It's ultimately going to backfire," says Dr. Jane Grant-Kels, a veteran dermatologist and professor at the University of Connecticut School of Medicine. "There's a limit to how much money you can make when you're sticking knives into human skin for profit."

One paradox of the Covid-19 pandemic has been that even as the virus has focused the entire country on health care, it's been a financial disaster for the industry. And so, while emergency room doctors and nurses care for the sick -- comforting those who would otherwise die alone, and in some cases dying themselves -- private equity-backed staffing companies and hospitals have been cutting pay for ER doctors. These hospitals, like the big medical practices, make a large portion of their money from elective procedures and have been forced into wrenching compromises.

For investors with capital, on the other hand, the economic fallout from the virus is a huge opportunity. Stay-at-home orders have left small practices more financially strained than they've ever been. That will likely accelerate sales to private equity firms, according to Marc Cabrera, an investment banker focused on health-care deals at Oppenheimer & Co. Independent doctors or groups that previously rebuffed offers from deep-pocketed backers "will reconsider their options," he says.

Many doctors may ultimately come to regret cashing out, but it's hard to get out once you're in. As part of an acquisition, the private equity groups typically require doctors to sign yearslong contracts, with noncompete clauses that prevent them from working in the surrounding area.

As governors throughout the nation ease restrictions on businesses, Advanced Dermatology is opening its most profitable offices first. The company received an undisclosed sum under the Cares Act, as part of the government relief package intended for health-care workers. Hunt, Advanced's chief compliance officer, told employees in an email earlier this month that the money would be used for protective gear, such as masks, and to replace "millions of dollars" in lost revenue.

The group had closed most of its offices since the stay-at-home orders were issued in March, cutting pay for doctors and furloughing staff. With cities and states beginning to consider reopening, doctors and PAs say they've been told they should be prepared for a full schedule. Hunt says the company is following the appropriate safety measures, but employees fear it will be nearly impossible to keep patients apart in waiting rooms. Opening in a reduced capacity, they understand, is not an option.

Read more: Private Equity Ate Finance, and Now It's Taking Over the World

[May 24, 2020] Trump's 'Uncreative Destruction' of the U.S.-China Relationship - FPIF by John Feffer

May 20, 2020 | fpif.org

Trump's economic war on China comes in the shadow of an even deadlier military escalation. And it may not stop after November, no matter who wins the election.

Economists like to think of the wreckage caused by stock market downturns, widespread bankruptcies, and corporate downsizing as "creative destruction." As it destroys the old and the dysfunctional, the capitalist system continually spurs innovation, much as a forest fire prepares the ground for new growth.

Or so the representatives of the dismal science argue.

Donald Trump, who is neither economist nor scientist, has his own version of creative destruction. He is determined to destroy the Affordable Care Act and replace it with his own health insurance alternative. He has torn up the Iran nuclear deal in favor of negotiating something brand new with Tehran. He has withdrawn from the Paris climate accord and argues that the United States is reducing carbon emissions in its own superior manner.

The problem, of course, is that Trump is very good at destruction but, despite his previous job as a real estate mogul, exceedingly bad at construction. Indeed, there's abundant evidence that he never intended to replace what he is destroying with anything at all. Trump has never offered any viable alternative to Obamacare or any new negotiating framework with Iran. And prior to the recent economic downturn, U.S. carbon emissions were increasing after several years of decline.

Perhaps the most dangerous example of Trump's uncreative destruction is his approach to China.

Previously, Trump said that he simply wanted to level the playing field by placing trade with China on a fairer and more reciprocal basis, strengthening the regime of intellectual property rights, and stopping Beijing from manipulating its currency.

He was willing to go to great lengths to accomplish this goal. The tariffs that Trump imposed on Chinese products precipitated a trade war that jeopardized the livelihoods of millions of American farmers and workers. The initial trade deal that the United States and China signed in January, even though many of the U.S. tariffs remain in place, was supposed to be the grand alternative to the old and dysfunctional trade relationship.

But here again, Trump is not telling the truth. He and his team have a very different set of objectives. As with so many other elements of his domestic and foreign policy, Trump wants to tear apart the current system -- in this case, the network of economic ties between the United States and China -- and replace it with absolutely nothing at all.

Oh sure, Trump believes that U.S. manufacturers can step up to take the place of Chinese suppliers. More recently, as the administration "turbocharges" its efforts to isolate China in response to its purported pandemic mistakes , it has talked of creating an Economic Prosperity Network of trusted allies like South Korea, Australia, India, and Vietnam. But this is all whistling in the dark, because the administration doesn't really understand the consequences -- for the world economy, for the U.S. economy -- of tearing apart the global supply chain in this way.

Just how poorly Trump understands all this is reflected in his statement last week that "we could cut off the whole relationship" with China and "save $500 billion." This from the president who erroneously believes that China is paying the United States "billions and billions of dollars of tariffs a month." What else do you expect from a man who received a BS in economics from Wharton?

Unlike many of the administration's other policies, however, its hardline approach to China has some bipartisan support. Engagement with China has virtually disappeared as a policy option in the Democratic Party. Joe Biden, the Democrats' presumptive presidential candidate, has attempted to present himself as the tougher alternative when it comes to China, a misguided effort to fend off charges of his bedding down with Beijing.

Finger to the wind, Biden is crafting policies in response not just to Trump but to public opinion. In 2017, 44 percent of Americans had a favorable view of China, compared to 47 percent who held an unfavorable opinion of the country, according to Pew. In this year's survey , only 26 percent looked at China positively versus 66 percent who viewed it negatively. The latter category includes 62 percent of Democrats.

Writing for the Atlantic Council, Michael Greenwald sums up the new conventional wisdom of the centrists:

The United States can no longer remain content with the notion of a Chinese economic threat arising in the distant future. The advent of COVID-19 has made it more apparent than any other time including the US-China trade war that now is the moment for the United States, European Union, and other like-minded countries to diversify supply chains away from China.

That's what makes Trump's uncreative destruction vis a vis China so dangerous. It may not stop after November, no matter who wins the election.

The Great Disentanglement

China's economic shutdown at the onset of the coronavirus pandemic disrupted many global supply chains, prompting a number of countries and corporations to accelerate their strategy of reducing their dependency on China for components.

Rising labor costs in China, concerns over human rights abuses there, but especially the trade war between Washington and Beijing had contributed to the U.S. fashion industry and tech firms like Apple rethinking their own supply chains. Japan, heavily dependent on Chinese trade, is using $2 billion in economic stimulus funds to subsidize the move of Japanese firms out of China.

The Trump administration is thus swimming with the current in its effort to isolate China. It has imposed sanctions because of China's violations of Uyghur human rights. It has levied penalties against China for its cooperation with Iranian firms. And it has threatened to add another set of tariffs on top of the existing ones for China's handling of the coronavirus.

Its latest initiative has been to tighten the screws on the Chinese technology firm, Huawei. Last week, the administration announced sanctions against any firms using U.S.-made equipment that supply the Chinese tech giant. The chief victim of these new restrictions will be the Taiwanese firm TSMC, which supplies 90 percent of Huawei's smartphone chips.

In other words, the Trump administration is committed not only to severing U.S. economic connections with China. It wants to put as much pressure on other countries as well to disentangle themselves from Chinese manufacturing. Taiwan, of course, has no particular love for Mainland China. It battles Beijing on a daily basis to get international recognition -- from other countries and from global organizations like the World Health Organization.

But the Taiwanese economy is also heavily dependent on its cross-strait neighbor. As Eleanor Albert points out :

China is Taiwa n's largest trading partner, accounting for nearly 30 percent of the island's total trade, and trade between the two reached $150.5 billion in 2018 (up from $35 billion in 1999). China and Taiwan have also agreed to allow banks, insurers, and other financial service providers to work in both market s.

And it probably won't be Huawei but Taiwan that suffers from the U.S. move. As Michael Reilly notes , "Huawei's size in the global market means its Taiwanese suppliers cannot easily find an alternative customer of comparable standing to replace it." China, meanwhile, will either find another source of chips outside the U.S. sphere, or it will do what the United States has been threatening to do: bring production of critical components back closer to home.

Another key player in the containment of China is India. Trump's friendship with Indian Prime Minister Narendra Modi, a right-wing Hindu nationalist, is more than simply an ideological affection. Trump sealed a $3 billion in military sales deal with India in February, with a trade deal still on the horizon.

Modi, in turn, is hoping to be the biggest beneficiary of the falling out between Washington and Beijing. "The government in April reached out to more than 1,000 companies in the U.S. and through overseas missions to offer incentives for manufacturers seeking to move out of China," reports Bloomberg . "India is prioritizing medical equipment suppliers, food processing units, textiles, leather, and auto part makers among more than 550 products covered in the discussions."

Vietnam is another regional competitor that the United States is supporting in its containment strategy. With only a couple hundred reported coronavirus cases and zero deaths, Vietnam is poised to emerge from the current crisis virtually unscathed. With low labor costs and an authoritarian government that can enforce deals, it is already a favored alternative for corporations looking for alternatives to China. But wildcat strikes have been happening in greater numbers in the country, and the Vietnamese government recently approved the country's first independent trade union.

Yet with a more technologically sophisticated infrastructure, China will continue to look more attractive to investors than India or Vietnam.

Don't Count Out China

If your image of the Chinese economy is stuck in the 1980s -- cheap toys and mass-produced baubles -- then you probably think that severing economic ties with the country is no big deal. America can produce its own plastic junk, right?

But China is no longer hurrying to catch up to the West. In some ways, the West is already in China's rearview mirror.

Huawei is well-known for the part it's playing in the rollout of 5G networks worldwide. China is not only ahead of the curve in upgrading to 5G domestically, it is busy manufacturing all the new tech that will run on these high-speed networks, like virtual reality and augmented reality and AI-driven devices.

Perhaps more to the point, China is not simply part of the global supply chain. It is using these new technologies to revolutionize the global supply chain.

For instance, it's using 3-D modeling to shorten product development. It has long integrated drones into its distribution networks. "Chinese supply chain companies are incorporating groundbreaking technologies like cloud-based systems, data analytics, and artificial intelligence (AI) and using them to redesign supply chain operations," writes Adina-Laura Achim.

And don't discount the role of a well-financed, centralized, authoritarian government. The Trump administration is, frankly, at a huge disadvantage when it tries to pressure companies to relocate their operations. Writes Manisha Mirchandani:

The global technology and consumer electronics sectors are especially reliant on China's infrastructure and specialized labor pool, neither of which will be easy to replicate. The Chinese government is already mobilizing resources to convince producers of China's unique merits as a manufacturing location. Zhengzhou, within Henan Province, has appointed officials to support Apple's partner Foxconn in mitigating the disruptions caused by the coronavirus, while the Ministry of Finance is increasing credit support to the manufacturing sector. Further, the Chinese government is likely to channel stimulus efforts to develop the country's high-tech manufacturing infrastructure, moving away from its low-value manufacturing base and accelerating its vision for a technology-driven services economy.

The Trump administration is playing the short game, trying to use tariffs and anti-Chinese sentiment to hobble a rising power. China, on the other hand, is playing the long game, translating its trade surpluses into structural advantages in a fast-evolving global economy.

Will the Conflict Turn Hot?

Despite the economic ravages of the pandemic, the Pentagon continues to demand the lion's share of the U.S. budget. It wants another $705 billion for 2021, after increasing its budget by 20 percent between 2016 and 2020.

This appalling waste of government resources has already caused long-term damage to the economic competitiveness of the United States. But it's all the money the Pentagon is spending on "deterring China" that might prove more devastating in the short term.

The U.S. Navy announced this month that it was sending its entire forward-deployed sub fleet on "contingency response operations" as a warning to China. Last month, the U.S. Navy Expeditionary Strike Group sailed into the South China Sea to support Malaysia's oil exploration in an area that China claims. Aside from the reality that oil exploration makes no economic sense at a time of record low oil prices, the United States should be helping the countries bordering the South China Sea come to a fair resolution of their disputes, not throwing more armaments at the problem.

There's also heightened risk of confrontation in the Taiwan Strait, the East China Sea, and even in outer space . A huge portion of the Pentagon's budget goes toward preparing for war with China -- and, frankly, provoking war as well.

What does this all have to do with the Great Disentanglement?

The close economic ties between the United States and China have always represented a significant constraint on military confrontation. Surely the two countries would not risk grievous economic harm by coming to blows. Economic cooperation also provides multiple channels for resolving conflicts and communicating discontent. The United States and Soviet Union never had that kind of buffer.

If the Great Disentanglement goes forward, however, then the two countries have less to lose economically in a military confrontation. Trading partners, of course, sometimes go to war with one another. But as the data demonstrates , more trade generally translates into less war.

There are lots and lots of problems in the U.S.-China economic relationship. But they pale in comparison to World War III. Share this:

John Feffer is the director of Foreign Policy In Focus.

Issues: Labor, Trade, & Finance , War & Peace

Regions: Asia & Pacific , China , India , North America , United States , Vietnam

Tags: 5G , Donald Trump , global supply chain , globalization , great disentanglement , huawei , Joe Biden , tariffs , trade war , U.S. military spending

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[May 23, 2020] China is still in great danger: it is still greatly dependent on the West to development and still is a developing country.

May 23, 2020 | www.moonofalabama.org

vk , May 22 2020 21:02 utc | 27

China is still in great danger. Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2 or 3 (see 6:48). It is still greatly dependent on the West to development and still is a developing country.

So, yes, the West still has a realistic chance of destroying China and inaugurating a new cycle of capitalist prosperity.

What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of technological innovation comes (this is obviously based on the USSR's case). This theory states that, if there's innovation in socialism, it is residual and by accident, and that only in capitalism is significant technological advancement possible. From this, they posit that, if China is blocked out of Western IP, it will soon "go back to its place" - which is probably to Brazil or India level.

If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time will tell. Regardless, decoupling is clearly not working, and China is not showing any signs so far of slowing down. Hence Trump is now embracing a more direct approach.

As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the third largest world population 2) huge territory, with excellent proportion of high-quality arable land (35%), that basically guarantees food security indefinitely (for comparison, the USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans (Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea), bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if the situation asks to 4) still the financial superpower 5) still a robust "real" economy - specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking Navy, which gives it thalassocratic power.

I don't see the USA losing its territorial integrity anytime soon. There are separatist movements in places like Texas and, more recently, the Western Coast. Most of them exist only for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still a very strong ideal to the average American, and nobody takes the idea of territory loss for real. If that happens, though, it would change my equation on the survival of the American Empire completely.

As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong does not present an existential threat to China. The greatest existential threat to China are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a distant fourth place.

Those liberal clowns were never close.


Jen , May 22 2020 21:55 utc | 32

VK @ 28:

One problem with your scenario is that the US navy may be over-extended in parts of the world where all the enemy has to do is to cut off supply lines to battleship groups and then those ships would be completely helpless. US warships in the Persian Gulf with the Strait of Hormuz sealed off by Iran come to mind.

Incidents involving US naval ship collisions with slow-moving oil tankers in SE Asian waters and some other parts of of the the world, resulting in the loss of sailors, hardly instill the notion that the US is a mighty thalassocratic force.

It's my understanding also that Russia, China and maybe some other countries have invested hugely in long-range missiles capable of hitting US coastal cities and areas where the bulk of the US population lives.

And if long-range missiles don't put paid to the notion that projecting power through sending naval warships all over the planet works, maybe the fact that many of these ships are sitting ducks for COVID-19 infection clusters might, where the US public is concerned.

vk , May 22 2020 22:16 utc | 33
@ Posted by: Jen | May 22 2020 21:55 utc | 33

I agree the new anti-ship missile technology may have changed the rules of naval warfare.

However, it's important to highlight that, contrary to the US Army, the USN has a stellar record. It fought wonderfully against the Japanese Empire in 1941-1945, and successfully converted both the Pacific and the Atlantic into "American lakes" for the next 75 years. All the Americans have nowadays it owes its Navy.

But you may be right. Maybe the USN is also susceptible to degeneration.

Richard Steven Hack , May 22 2020 23:51 utc | 38
Posted by: vk | May 22 2020 21:02 utc | 28

Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2 or 3 (see 6:48). It is still greatly dependent on the West to development and still is a developing country.

Based on what I've read, China is on a fast track to develop technology on their own. In addition, technology development is world-wide these days. What China can not develop itself - quickly enough, time is the only real problem - it can buy with its economic power.

"if China is blocked out of Western IP, it will soon "go back to its place" - which is probably to Brazil or India level."

Ah, but that's where hackers come in. China can *not* be blocked out of Western IP. First, as I said, China can *buy* it. Unless there is a general prohibition across the entire Western world, and by extension sanctions against any other nation from selling to China - which is an unenforceable policy, as Iran has shown - China can buy what it doesn't have and then reverse-engineer it. Russia will sell it if no one else will.

Second, China can continue to simply acquire technology through industrial espionage. Every country and every industry engages in this sort of thing. Ever watch the movie "Duplicity"? That shit actually happens. I read about industrial espionage years ago and it's only gotten fancier since the old days of paper files. I would be happy to breach any US or EU industrial sector and sell what I find to the Chinese, the Malaysians or anyone else interested. It's called "leveling the playing field" and that is advantageous for everyone. If the US industrial sector employees can't keep up, that's their problem. No one is guaranteed a job for life - and shouldn't be.

"1) the third largest world population"

Which is mostly engaged in unproductive activities like finance, law, etc. I've read that if you visit the main US universities teaching science and technology, who are the students? Chinese. Indians. Not Americans. Americans only want to "make money" in law and finance, not "make things."

"2) huge territory, with excellent proportion of high-quality arable land (35%), that basically guarantees food security indefinitely"

In military terms, given current military technology, territory doesn't matter. China has enough nuclear missiles to destroy the 50 Major Metropolitan Areas in this country. Losing 100-200 millions citizens kinda puts a damper on US productivity. Losing the same number in China merely means more for the rest.

"3) two coasts, to the two main Oceans (Pacific and Atlantic)"

Which submarines can make irrelevant. Good for economic matters - *if* your economy can continue competing. China has one coast - but its Belt and Road Initiative gives it economic clout on the back-end and the front-end. I don't see the US successfully countering that Initiative.

"4) excellent, very defensive territory, protected by both oceans (sea-to-sea)"

Which only means the US can't be "invaded". That's WWI and WWII thinking the US is mired in. Today, you destroy an opponent's military and, if necessary, his civilian population, or at least its ability to "project" force against you. You don't "invade" unless it's some weak Third World country. And if the US can't "project" its power via its navy or air force, having a lot of territory doesn't mean much. This is where Russia is right now. Very defensible but limited in force projection (but getting better fast.) The problem for the US is China and Russia are developing military technology that can prevent US force projection around *their* borders.

"bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if the situation asks"

LOL I can just see the US "absorbing" Mexico. Canada, maybe - they're allies anyway. Mexico, not so much. You want a "quagmire", send the US troops to take on the Mexican drug gangs. They aren't Pancho Villa.

"4) still the financial superpower"

Uhm, what part of "Depression" did you miss? And even if that doesn't happen now, continued financial success is unlikely. Like pandemics, shit happens in economics and monetary policy.

"a big fucking Navy, which gives it thalassocratic power."

That can be sunk in a heartbeat and is virtually a colossal money pit with limited strategic value given current military technology which both China and Russia are as advanced as the US is, if not more so. Plus China is developing its own navy quickly. I read somewhere a description of one Chinese naval shipyard. There were several advanced destroyers being developed. Then the article noted that China has several more large shipyards. That Chinese long coast comes in handy for that sort of thing.

China Now Has More Warships Than the U.S.
But sometimes quantity doesn't trump quality. [My note: But sometimes it does.]
https://tinyurl.com/y7numhef

That's just the first article I found, from a crappy source. There are better analyses, of course.

"I don't see the USA losing its territorial integrity anytime soon. There are separatist movements in places like Texas and, more recently, the Western Coast. Most of them exist only for fiscal reasons and are not taken seriously by anyone else."

I'd agree with that. I hear this "California secession" crap periodically and never believe it. However, for state politicians, the notion of being "President" of your own country versus a "Governor" probably is tempting to these morons. State populations are frequently idiots as well, as the current lockdown response is demonstrating. All in all, though, if there are perceived external military threats, that is likely to make the states prefer to remain under US central control.

[May 23, 2020] HK is protected against US tarrifs imposed on China goods. China exports a good chunk of goods through HK. If Trump were really serious he would remove HK's protected status.

May 23, 2020 | www.moonofalabama.org

Kay Fabe , May 23 2020 0:09 utc | 42

"Britain had to agree to the pact because it had lost the capability to defend the colony.".."

That was the excuse. I believe HK was offered to China in return for Deng to open up and turn China capitalist. Deng was not the one who
demanded HK return. Britain initiated the discussions. Deng gladly accepted although he insisted on maintaining their authoritarian form of undemocratic government and left HK's fate ambiguous so Britain could get support from their people and the HK elite. The party elites were happy to be able to join the Western Elites in accumulating an unequal share of the wealth. The Soviet elites led by the US Globalist puppet Gorbachev chose the same path although they chose Fake Democracy and rule of the oligarchs as in the US rather than party control of China

HK is protected against US tarrifs imposed on China goods. China exports a good chunk of goods through HK. If Trump were really serious he would remove HK's protected status.

vk , May 23 2020 0:30 utc | 47

@ Posted by: Kay Fabe | May 23 2020 0:09 utc | 42

The timing doesn't add up. China opened up in 1972 (the famous Nixon-Mao handshake), while the UK's agreement to give HK back was from 1984 - well into the Thatcher Era.

The most likely reason for the UK to decide to obey the lease deal was of military nature: the valuable land necessary to defend HK was the flatland adjacent to the city proper, where potable water comes from. It already part of the Mainland, thus rendering the defense of HK virtually impossible without an outright invasion of the Mainland itself.

Margaret Thatcher probably didn't want to obey the treaty (99-year lease), as a good neoliberal she was, but her military advisors probably warned her of the practical difficulties, and, since it was a 99-year lease anyway, she must've agreed to simply allow the treaty to be followed.

It is important to highlight that, in 1984, there were a lot of reasons the capitalist world should be optimist about China becoming capitalist. After all, it really got off the Soviet sphere after 1972, and Deng's reforms were - from the point of view of a vulgar (bourgeois) economist - indeed a clear path to a capitalist restoration. It didn't cross Thatcher's mind that China could stand its ground and remain socialist - at least not in 1984. If you read the sources of the time, you will easily see the Western elites treated China's return to capitalism as a given.

[May 23, 2020] China is still in great danger. Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2 or 3

Highly recommended!
May 23, 2020 | www.moonofalabama.org

vk , May 22 2020 21:02 utc | 28

China is still in great danger. Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2 or 3 (see 6:48).

It is still greatly dependent on the West to development and still is a developing country.

So, yes, the West still has a realistic chance of destroying China and inaugurating a new cycle of capitalist prosperity.

What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of technological innovation comes (this is obviously based on the USSR's case). This theory states that, if there's innovation in socialism, it is residual and by accident, and that only in capitalism is significant technological advancement possible. From this, they posit that, if China is blocked out of Western IP, it will soon "go back to its place" - which is probably to Brazil or India level.

If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time will tell. Regardless, decoupling is clearly not working, and China is not showing any signs so far of slowing down. Hence Trump is now embracing a more direct approach.

As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the third largest world population 2) huge territory, with excellent proportion of high-quality arable land (35%), that basically guarantees food security indefinitely (for comparison, the USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans (Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea), bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if the situation asks to 4) still the financial superpower 5) still a robust "real" economy - specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking Navy, which gives it thalassocratic power.

I don't see the USA losing its territorial integrity anytime soon. There are separatist movements in places like Texas and, more recently, the Western Coast. Most of them exist only for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still a very strong ideal to the average American, and nobody takes the idea of territory loss for real. If that happens, though, it would change my equation on the survival of the American Empire completely.

As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong does not present an existential threat to China. The greatest existential threat to China are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a distant fourth place.

Those liberal clowns were never close.

[May 22, 2020] They Saw This Day Coming - Huawei Forges Alliances With Rival Chipmakers As Washington's Crackdown Intensifies

May 22, 2020 | www.zerohedge.com

"They Saw This Day Coming" - Huawei Forges Alliances With Rival Chipmakers As Washington's Crackdown Intensifies by Tyler Durden Fri, 05/22/2020 - 18:05 The US Commerce Department's latest move to block companies from selling products to Huawei that were created with American technology, equipment or software has undoubtedly hurt the Chinese telecoms giant. But it won't be nearly enough to take it down.

Since Washington launched its campaign against Huawei two years ago (when the trade tensions between the US and China started to heat up, as President Trump started slapping more tariffs on foreign goods) the company has been strengthening ties with contract chipmakers in Taiwan and elsewhere, while ramping up its own microchip-technology arm, known as HiSilicon Technologies.

On Friday, Nikkei reported that Huawei had initiated conversations with other mobile chipmakers to try and figure out where it might source certain essential components for its handsets (remember, Huawei is the second-largest cellphone maker by sales volume) and other products.

Of course, the crackdown cuts both ways, as several American companies relied heavily on Huawei's business (they can still apply for licenses to continue selling to Huawei...so long as Commerce approves).

As we reported earlier this week , it's not just American chipmakers that are distancing themselves from Huawei: some Taiwan-based chipmakers are also dropping the telecoms giant for fear of being targeted by Treasury sanctions, including TSMC, the world's largest contract chipmaker.

Now, Huawei is reportedly in talks with MediaTek, the world's second-largest contract chip producer.

Huawei Technologies is seeking help from rival mobile-chip makers to withstand a U.S. clampdown aimed at crippling the Chinese company, sources familiar with the matter told the Nikkei Asian Review.

Huawei is in talks with MediaTek, the world's second-largest mobile chip developer after Qualcomm of the U.S., and UNISOC, China's second-largest mobile chip designer after Huawei's HiSilicon Technologies unit, to buy more chips as alternatives to keep its consumer electronics business afloat, the sources said.

To work with a contract chipmaker, Huawei would still need to design its own chips. Over the past two years, Huawei has expanded its team of engineers working on chip design to more than 10,000, Nikkei said.

To be sure, MediaTek already makes low- and medium-end chips for Huawei, evidence that the company, which was founded by a veteran of China's PLA, and purportedly maintains strong links to the Chinese military, has been bracing for the other shoe to drop. MediaTek, meanwhile, is still trying to figure out if it can meet Huawei's latest bid.

"Huawei has foreseen this day coming. It started to allocate more mid- to low-end mobile chip projects to MediaTek last year amid its de-Americanization efforts," one of the sources said. "Huawei has also become one of the key clients for the Taiwanese mobile chip developer's mid-end 5G mobile chip for this year."

MediaTek is evaluating whether it has sufficient human resources to fully support Huawei's aggressive bid, as the Chinese company is asking for volume 300% above its usual procurement in the past few years, another source familiar with the talks said.

The situation has also created an opportunity for small Chinese chipmakers (working, we imagine, mostly with technology stolen from American and Taiwanese companies) to expand.

Huawei also seeks to deepen its collaboration with UNISOC, a Beijing-backed mobile chip developer that relies mostly on smaller device makers as customers and mainly supports entry-level products and devices for emerging markets. Previously, Huawei used only very few UNISOC chips for its low-end smartphone and tablet offerings, sources said.

"The new procurement deals would be a great boost to help UNISOC further upgrade its chip design capability," said a chip industry executive. "In the past, UNISOC was struggling quite a bit, because it could not really secure big contracts with global leading smartphone makers as these top smartphone makers could find better offerings elsewhere. This time could be an opportunity that it could really seek to match the international standard."

UNISOC last year accelerated its 5G chip development to catch up with Qualcomm and MediaTek, Nikkei has reported. More recently, the company received 4.5 billion yuan ($630 million) from China's national integrated circuit fund, the so-called Big Fund.

UNISOC is preparing to list on the Shanghai STAR tech board, the Chinese version of Nasdaq, later this year. Qualcomm has needed a license from the U.S. Department of Commerce to supply Huawei since mid-May of 2019.

Huawei has already expanded production of in-house mobile processors for its smartphone business to 75%, up from 69% in 2018 and 45% in 2016, according to to data from GF Securities cited by Nikkei. Huawei shipped 240 million smartphones in 2019. And with China now throwing caution to the wind and cracking down on Hong Kong, we wouldn't be surprised to see more Huawei drama in the headlines next week, with serious market repercussions for the US semiconductor industry.

[May 21, 2020] Pompeo Lays Out the Case For Cold War II With China by Matthew Petti

That will be an interesting chess party. The USA moved way to many plants to Chine to get out of this conflict without major losses
Notable quotes:
"... Secretary of State Mike Pompeo slammed China as “hostile to free nations,” portraying Beijing as fundamentally opposed to the United States, on Wednesday. ..."
"... But the Secretary of State pointed to deeper issues in the relationship, claiming that “the nature of the regime is not new.” “For several decades, we thought the regime would become more like us through trade, scientific exchanges, diplomatic outreach, letting them in the [World Trade Organization] as a developing nation,” he said. “That didn’t happen.” ..."
May 20, 2020 | nationalinterest.org

'The regime is ideologically and politically hostile to free nations.'

Secretary of State Mike Pompeo slammed China as “hostile to free nations,” portraying Beijing as fundamentally opposed to the United States, on Wednesday.

Tensions between the United States and China have reached a fever pitch during the coronavirus pandemic. Pompeo’s speech at a Wednesday morning press conference laid out a vision of a global clash between two fundamentally different societies.

“China’s been ruled by a brutal, authoritarian regime, a communist regime since 1949,” he said. “We greatly underestimated the degree to which Beijing is ideologically and politically hostile to free nations. The whole world is waking up to that fact.”

He added that a focus on the coronavirus pandemic “risks missing the bigger picture of the challenge that’s presented by the Chinese Communist Party.”

The pandemic has accelerated U.S.-China tensions.

Last week, a Chinese Communist Party news threatened sanctions against U.S. lawmakers for attempting to sue the Chinese government for the pandemic, and U.S. law enforcement accused Chinese hackers of cyberattacks against U.S. researchers.

But the Secretary of State pointed to deeper issues in the relationship, claiming that “the nature of the regime is not new.” “For several decades, we thought the regime would become more like us through trade, scientific exchanges, diplomatic outreach, letting them in the [World Trade Organization] as a developing nation,” he said. “That didn’t happen.”

Pompeo accused the World Health Organization’s director-general Dr. Tedros Adhanom Ghebreyesus of “unusually close ties to Beijing” that “started long before this current pandemic.”

The Trump administration has accused China of covering up information about the novel coronavirus—even implying that the virus emerged from a lab accident in Wuhan, China—and pointed the finger at the World Health Organization for aiding China’s coverup.

The Secretary of State slammed the public health group for excluding Taiwan in his Wednesday speech, touching on a sensitive topic for Beijing.

Taiwan, an island that was once ruled by China, has ruled itself since the end of the Chinese Civil War in 1950. Beijing considers the island a breakaway Chinese province that must be reunited with the mainland, while Taiwan’s ruling Pan-Green Alliance leans towards independence.

“The democratic process in Taiwan has matured into a model for the world,” Pompeo said, congratulating President Tsai Ing-wen on her re-election. “Despite great pressure from the outside, Taiwan has demonstrated the wisdom of giving people a voice and a choice.”

But he shied away from changing U..S. policy towards Taiwan..

Pompeo said that work that “comports with the history of the agreements between the United States and China is the right solution to maximize the stability there in the straits.”

The United States acknowledged the Chinese position that “there is but one China and Taiwan is part of China” as part of a 1979 joint communique with Beijing, and does not officially recognize Taiwan as a state, but maintains close informal ties with the Taiwanese government and opposes attempts to change the island’s government by force.

“The President talked about how we’re going to respond [to China], how he’s beginning to think about responding to the calamity that has befallen the world as a result of the actions of the Chinese Communist Party,” Pompeo said. “I don’t want to get ahead of him in terms of talking about how the administration will respond to that, but you can already begin to see the outlines of it.”

Matthew Petti is a national security reporter at the National Interest. Follow him on Twitter: @matthew_petti. This article initially stated that the United States “recognized that ‘there is but one China and Taiwan is a part of China’ in a 1979 joint communique.” The communique actually states that the United States “acknowledges” this as the Chinese position. The article has been updated to more correctly reflect the communique. Image: Reuters.

[May 20, 2020] Washington wants to prevent Russia and China supplanting US interests but The China-US relationship is the most important bilateral relationship in the world and involves huge interests of the two countries, as well as the rest of the world. Therefore, it is not something Trump can cut off emotionally

Notable quotes:
"... The Chinese will not start a shooting war and the US has no guts for one. Its industry has been hollowed out not just by outsourcing but by corruption as well. The campaign of demonization against China is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably quite well, in the rest of the World rather less well, I would imagine. Notably, the British economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's, NewZealand's? Could they, would they support a war? ..."
"... Right now, China is leading the vaccine race and has developed an antibody treatment for Covid-19 that should be ready this year. ..."
"... Interesting article by Escobar. If one cares to notice, this anti-China cold war is a neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow the neocon lead. ..."
"... "Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at Fudan University, told the Global Times. ..."
"... Jin Canrong, the associate dean of Renmin University of China's School of International Studies in Beijing, told the Global Times on Thursday that Trump made very irresponsible and emotional remarks in the interview. ..."
"... "For Trump, fantasy is power; bluffing is power, so he might use the future of his country to gamble with China. Although China always believes cooperation is the only right choice for the two countries to solve the problems together, if the US unilaterally and irrationally chooses all-out confrontation, China also needs to be prepared." ..."
May 20, 2020 | www.unz.com

peter mcloughlin , says: Show Comment May 19, 2020 at 6:02 pm GMT

Washington wants to prevent Russia and China supplanting US interests. Moscow and Beijing pursue what they see as their own legitimate interests. What we face is not a "hybrid" war or "New Cold War" but a world war.
https://www.ghostsofhistory.wordpress.com/
foolisholdman , says: Show Comment May 19, 2020 at 8:09 pm GMT
@peter mcloughlin

What we face is not a "hybrid" war or "New Cold War" but a world war.

Honestly, I don't see it. My reasoning is simple, maybe too simple. The Chinese will not start a shooting war and the US has no guts for one. Its industry has been hollowed out not just by outsourcing but by corruption as well. The campaign of demonization against China is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably quite well, in the rest of the World rather less well, I would imagine. Notably, the British economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's, NewZealand's? Could they, would they support a war?

The other reason I think a shooting war is less likely than might appear, is that the the MIC is doing so well with the current cold war; that it would seem stupid to allow the massive disruption and uncertainty that a shooting war would cause to interrupt the torrent of cash being shoveled its way at the moment.

d dan , says: Show Comment May 19, 2020 at 8:34 pm GMT
"Hard landing" vs "Well and alive". Who wins?

source: comment #313 by Godfree Roberts
https://www.unz.com/article/objections-to-an-independent-investigation-of-china/

[Hide MORE]
1990. China's economy has come to a halt. The Economist
1996. China's economy will face a hard landing. The Economist
1998. China's economy's dangerous period of sluggish growth. The Economist
1999. Likelihood of a hard landing for the Chinese economy. Bank of Canada
2000. China currency move nails hard landing risk coffin. Chicago Tribune
2001. A hard landing in China. Wilbanks, Smith & Thomas
2002. China Seeks a Soft Economic Landing. Westchester University
2003. Banking crisis imperils China. New York Times
2004. The great fall of China? The Economist
2005. The Risk of a Hard Landing in China. Nouriel Roubini
2006. Can China Achieve a Soft Landing? International Economy
2007. Can China avoid a hard landing? TIME
2008. Hard Landing In China? Forbes
2009. China's hard landing. China must find a way to recover. Fortune
2010: Hard landing coming in China. Nouriel Roubini
2011: Chinese Hard Landing Closer Than You Think. Business Insider
2012: Economic News from China: Hard Landing. American Interest
2013: A Hard Landing In China. Zero Hedge
2014. A hard landing in China. CNBC
2015. Congratulations, You Got Yourself A Chinese Hard Landing. Forbes
2016. Hard landing looms for China. The Economist
2017. Is China's Economy Going To Crash? National Interest
2018. China's Coming Financial Meltdown. The Daily Reckoning.
2019 China's Economic Slowdown: How worried should we be? BBC
2020. Coronavirus Could End China's Decades-Long Economic Growth Streak. NY Times

=========

source: b
https://www.moonofalabama.org/2020/05/this-illusion-is-alive-and-well.html#more

Godfree Roberts , says: Website Show Comment May 19, 2020 at 11:26 pm GMT
Chinese strategists like Liu He publicly acknowledge that epidemics can catalyze geopolitical changes.

Right now, China is leading the vaccine race and has developed an antibody treatment for Covid-19 that should be ready this year.

If development is successful and if it donates the cure to the world as Xi promised and if WHO's investigation shows China is not the source of the virus, and if China's economy is firing on all cylinders in November, it's game over: 3-0 China.

I put the odds of that conjunction at 2:1.

FB , says: Website Show Comment May 20, 2020 at 4:28 am GMT
@d dan LOLOLOL

You gotta love these headline fails I mean how is it even possible to be so spectacularly WRONG about everything time after time after time ?

Folks if you want to know why the US is screwed, it's because the same kind of geniuses that write these headlines are in charge of EVERYTHING

One day these people will be studied by psychologists dealing with MASSIVE DELUSION

anon [161] Disclaimer , says: Show Comment May 20, 2020 at 4:39 am GMT
@Godfree Roberts Do you have any odds on Trump v. Biden?
vot tak , says: Show Comment May 20, 2020 at 4:54 am GMT
Interesting article by Escobar. If one cares to notice, this anti-China cold war is a neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow the neocon lead. China is one country the zionazi-gays have not been able to dominate. Coupled with China's economic rise and appeal to developing countries, these zionazi oligarchs are going apeshit trying to bring China down. In addition to other articles referenced in the article, see also this Global Time report:

Chinese ridicule Trump's China 'cut-off' threat

https://www.globaltimes.cn/content/1188437.shtml

"Americans will suffer

[MORE]
"Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at Fudan University, told the Global Times.

He noted that Trump is bluffing and acting tough toward China to win more support. Fox News, which has been regarded as Trump's defender and is notorious for a lack of professionalism, is also making eye-catching news to draw attention.

Jin Canrong, the associate dean of Renmin University of China's School of International Studies in Beijing, told the Global Times on Thursday that Trump made very irresponsible and emotional remarks in the interview.

"The China-US relationship is the most important bilateral relationship in the world and involves huge interests of the two countries, as well as the rest of the world. Therefore, it is not something he can cut off emotionally," Jin said.

"If the US unilaterally cuts off ties, the American people will pay a heavier price than us, because China's domestic market is huge and 75-80 percent of Chinese manufacturers are supplying China's market, and the 2 to 5 percent that supply the US can also be absorbed by the domestic market," he noted.

China has nothing to be afraid of as "in the past, we didn't solve the Taiwan question because we wanted to maintain the China-US relationship, and if the US unilaterally cuts it off, we can just reunify Taiwan immediately since the Chinese mainland has an overwhelming advantage to solve this long-standing problem."

"Trump is like a giant baby on the brink of a meltdown as he faces tremendous pressure due to massive failures that caused such a high death toll," Shen Yi, an expert from Fudan University, told the Global Times. "It's like someone who wants to show his guts when he passes by a cemetery in midnight. He needs to shout to give himself the courage," he said.

Shen also noted that the American companies and industries would suffer the most severe consequences, because the supply chain has been integrated with China.

"The Chinese public would only take such bluffing as a joke," Shen said, adding that there has been no US president in the history who has made such a ridiculous statement against China, not even during the Cold War.

Yuan Zheng, a research fellow at the Chinese Academy of Social Sciences (CASS), said he could not even remember any US leader who took a similar action. "His flip-flop rhetoric is unprecedented, but we need to take a look at whether Trump will take real action," he said, noting that there is no need to pay attention to claims that are unrealistic and meaningless.

"For Trump, fantasy is power; bluffing is power, so he might use the future of his country to gamble with China. Although China always believes cooperation is the only right choice for the two countries to solve the problems together, if the US unilaterally and irrationally chooses all-out confrontation, China also needs to be prepared."

Change that Matters , says: Show Comment May 20, 2020 at 5:11 am GMT
@Godfree Roberts China's economy won't be firing on all cylinders by November, but the important parts of it will be. The manufacturers I talk to have weathered the worst of it, and their order books for Q4 are more or less back to what they were in January (or at least healthy enough to prevent soft skill losses). Many are upbeat about the future. (Not all of them will survive, and the ones that die probably should have done so years ago.)

Compare this to the rest of Asia (Bangladesh, Pakistan, India, Cambodia, Myanmar, and others): they are a mess. Bangladesh put all its eggs in the huge volume low quality basket and will now pay a fatal price. Pakistan was dead before corona, and is now in a manufacturing death spiral. India has the capacity to succeed, but is hamstrung by a caste-based barbarism that has jettisoned all pretense of decency by throwing migrant workers in the informal economy to their deaths. This will not be forgotten and I predict years of trouble. The others only have a manufacturing sector because the Chinese moved their factories there. Vietnam has some chance, and should be a big winner as China moves out of low- to middle-end manufacturing.

Countries in South America have lost their opportunity. China passed them by years ago. It's a tragedy, but they really have themselves to blame for it. And Africa, the last frontier, is already dominated by China (15 years ago I'd bump into Chinese businessmen who'd ship a 40-foot container of – 'insert any product you can think of' – to some back of beyond place in Africa and refuse to come home until everything was sold). They've moved up the ladder since then. Ethiopia, the fastest-growing economy on the continent, is essentially an industrial zone for Chinese manufacturing.

Australia has become a mine/farm for China. New Zealand and Canada likewise, and a nice place to send your teenagers to get educated and perhaps for retirement.

The EU, led by Germany, will be back on track soon. The winners here should be the former USSR countries, with low labor costs and strong soft skills. With EU companies wanting to bring the supply chain closer to home, this is their moment. If they screw it up, they will spend another 30 years wondering what went wrong. I hope they won't, but if you spend any time working with these people you know they often fail at the final hurdle (as though on purpose – the psychology of self-destruction is their Achilles heel).

It's China's game to lose. And quite frankly, at this point, I don't see how. This has been in the making since the late 70s. Perhaps earlier. I admire them for their intelligence, their work ethic, their organizational capacity, their can-do spirit, and – yes – their creativity (if you think China is Japan in the 60s, you need to spend some serious time with younger Chinese in China).

The Chinese problem is, of course, its culture of responsibility avoidance. But even with this issue, they are on track for a knockout victory. Most people in the West have no idea what going on, which is exactly how You Know Who likes it.

I have no intention of letting my tribe be overrun by Chinese. But I have enough experience to know they're smarter than my tribe, and it would be a wise thing to start thinking more strategically and tactically about how to carve out a space in a new world most people are unable to imagine (which is less than 10 years away).

Weston Waroda , says: Show Comment May 20, 2020 at 5:19 am GMT
@Godfree Roberts

The center of gravity of global economic power keeps moving, inexorably, toward Asia.

it's game over

While the U.S. spent recent decades policing the world in pointless wars, China was about the business of building an infrastructure in which all roads lead to Beijing, railroad cars and boatloads of wealth. Just keep it coming, folks. Those roads and railroads and shipping are linking nothing less than Eurasia, Sir Halford's World Island. It took this coronavirus to show the imperial subjects that the Empire is naked and that China had already surpassed it economically several years ago. It seems like it really is game over. I'm sad in a way, but I would rather have a normal country than a hegemon; that is, if normalcy is still a possibility.

Bronze Age Persecutor , says: Show Comment May 20, 2020 at 5:35 am GMT
What about the biggest hybrid war going on since centuries ago: jews (including crypto-jews, hybrids and minions) versus everybody else?
The chinese had the full cooperation of diaspora jews (and their sayanim network) and israelis. Specially the Chabad Lubavich.
Miro23 , says: Show Comment May 20, 2020 at 6:09 am GMT
From the referenced Global Times article, the US attack on Huawei (with its 5G leadership + NSA proof encryption ) is at the heart of the story:

Based on Global Times sources, if the US further pinches Chinese telecommunication giant Huawei by blocking companies such as TSMC from providing chips to the company, China will carry out countermeasures, such as including certain US companies into its list of "unreliable entities," imposing restrictions on or investigating US companies such as Qualcomm, Cisco and Apple, and suspending purchases of Boeing aircraft.

The US would lose this fight. Apple for example manufactures in China with only a small percentage of the sales price staying in China. If Apple manufacturing is shut down then Apple is the big loser. They're already trying to move manufacturing to India but that's not going to work.

We must be clear that coping with US suppression will be the key focus of China's national strategy. We should enhance cooperation with most countries. The US is expected to contain China's international frontlines, and we must knock out this US plot and make China-US rivalry a process of US self-isolation.

China has plenty of alternative markets. US corporations mostly only sell to the US using (now very sophisticated) Chinese manufacturing. Take this away, and Apple for example, have no alternative supplier for the volumes, quality, sub-contractor network and export infrastructure required.

General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India and other Asian nations may replace China's cheap workforce: "Think about which of these countries has more skilled workers than China. What quantity of medium and high level human resources was produced in China in these past 30 years? Which country is educating over 100 million students at secondary and university levels? The energy of all these people is still far from being liberated for China's economic development."

True.

This will imply a concerted offensive, trying to enforce embargoes and trying to block regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese assets in the US is not a far-fetched proposition anymore.

If the US steals the $ trillions China has invested in US treasuries, then the US dollar also forfeits its claim to be the world reserve currency (safe place to hold international trade balances).

Still, scores of nations are being asked, bluntly, by the hegemon to position themselves once again in a "you're with us or against us" global war on terror imperative.

9/11 was fakery pumped up by the MSM to target Iraq/Iran and Covid-19 is more of the same – this time targeting China. European states are getting tired of this game. For example they were all dragged into supporting the Venezuela CIA coup that fizzled, and are now trying to disentangle from it.

General Qiao counsels, "Don't think that only territorial sovereignty is linked to the fundamental interests of a nation. Other kinds of sovereignty – economic, financial, defense, food, resources, biological and cultural sovereignty – are all linked to the interests and survival of nations and are components of national sovereignty."

If the US public look carefully at General Qiao's list they will realize that they have already lost more than 50% of these sovereignties.

Anon [392] Disclaimer , says: Show Comment May 20, 2020 at 6:10 am GMT
" General Qiao dismisses the possibility .. India and other Asian nations may replace China's c: "Think about which of these countries has more skilled "

Everyday US. news are amplifying the bipartisan chorus against China . India is begging for favors from USA while serenading USA with reinforcing American position.

India is stealing land from Nepal and Indian media thinks that ultranationalist of Nepal are to blame for questioning Indian stance .

China is under a real threat of concerted attacks by the US 's opportunistic vassals. There will be a seismic change affecting the alliances and the future .
Can China persuade Nepal Bangladesh Pakistan Sri Lanka Afghanistan Iran and Myanmar to work together and persuade them move out of India's hegemony ?.

Natt , says: Show Comment May 20, 2020 at 6:42 am GMT
Nice fluff piece. China is fucked. Demographically, economically and militarily.
Carlos22 , says: Show Comment May 20, 2020 at 7:06 am GMT
They are probably looking past Trump as they think he may not get back in.

Nov is just a few months away.

The question is what will the democrats do?

Not that I particularly want that of course.

carlusjr , says: Show Comment May 20, 2020 at 7:48 am GMT
It's always astounding to read a geopolitical analysis by a journalist who completely ignores the climate pollution crisis with it's impending effects overhanging every strategy any state may envision to dominate the planet. It's as if the writer lives in an imaginary world devoid of nature, along with his supposed expert sources and well placed powerful state movers and shakers. This is delusional. China's cheap forced labor, making more crap for the planet's shrinking population of affluent consumers, competing with other countries with equally desperate workers. Countries competing to build the most dangerous bio-weapons in their unsafe, leaky level 4 labs. All the while the atmosphere is being polluted to the point of melting all the ice on the planet, the air is being degraded to the point of being disgusting to see and carcinogenic to breath, the fresh water supply is being depleted and polluted, the oceans degraded into radioactive chemical cesspools (soon to be a brown sludge inhabited by only bacteria, viruses and fungus), the land ceded with thousands of chemicals that have no purpose other than to kill. The existential threshold is within a few years. The geopolitical strategy of the US and China can be summarized as a strategy to kill all sentient life on the planet in order to have a some sort of imaginary strategic dominance. It is mass psychosis.
Biff , says: Show Comment May 20, 2020 at 7:58 am GMT
@anon

Do you have any odds on Trump v. Biden?

I've got 2 to 1 odds the voting machines will be electing Biden. They got this far didn't they?

paranoid goy , says: Website Show Comment May 20, 2020 at 8:13 am GMT
@foolisholdman Old man, don't be foolish, they all hate us human scum, and will gladly go to war, are at war. Remember how, in Catch 22, the opposing sides eventually saved a crap load of money by geting Milo de Milo to bomb their own airfields using his supply planes? Its already happening, us plebs are just in the way. In the end, the Protocols calls for one government ruling what's left of mankind "with an iron staff." I cannot tell you (yet) what Zion's hold on Beijing is, but be assured, "bring on the war" is the swill of Zion being lapped up by little globalist piggies trying to get to the trough.
People think 'hybrid warfare" is some kind of technological term. Zion chooses its words very carefully, and your first defence is your dictionary. The USAGE of words change with time, the MEANING is constant. Now let's go find them hybrids, before Bill Gates can create enough microcephalics to man his man/machine interfaced battle 'droids armed with depleted uranium bullets and virally-delivered vaccines.
paranoid goy , says: Website Show Comment May 20, 2020 at 8:28 am GMT
@carlusjr Pollution sure is an important issue, one of the most important of our time, yes. The subject matter at hand though, is mostly military, with economics as a condiment to explain the sour taste. China might be the one manufacturing plastic turds, but it is the so-called western media that is teaching your children the dire need to own the latest version of plastic poop. China would not bother with plastic poop, but you voted for people who decided China makes the best poo at the lowest cost and highest profit. Don't blame China for taking advantage of YOUR leadership's desire to disown YOU and hand your habitat over to those who "know how to make a profit" from your suffering, while dangling a piece of plastic poop in front of you, calling it ambition, and deplatforming you if you refuse their offer of improved turdiness.
But yah, now we know you hate pollution. Soon we will close down all the factories, and ban all cars, and only those on "official business" will be alowed on aeroplanes, and then you can breathe freely, as you stand in line, so the Special Agents can see if you have the Bill Gates vaccine licence to visit the plastic poop and soylent green depository that we used to call a supermarket.
Buzz Mohawk , says: Show Comment May 20, 2020 at 9:04 am GMT

A toxic racism-meets-anti-communism matrix is responsible for the predominant anti-Chinese sentiment across the US, encompassing at least 66% of the whole population.

No it isn't.

A hint of what is responsible is this from the same article:

"They have state of the art technology, but not the methods and production capacity. So they have to rely on Chinese production."

Our jobs, our industry, our hard-earned intellectual property, and our money have all gone to China. Our own leaders of industry and government are to blame for our predicament, but our anger at China is the result.

Funny this from the Chinese General Qiao:

"as a producing country, we still cannot satisfy our manufacturing industry with our own resources and rely on our own markets to consume our products."

No kidding, General. Your country built itself up by selling to us! We made you into our own rival. Thanks are in order, but instead you plot to weaken us.

Tor597 , says: Show Comment May 20, 2020 at 9:10 am GMT
Just wanted to point out the excellent concept of cultural sovereignty as something that is akin to territorial sovereignty.

Both are needed, but cultural sovereignty is ever more important to inoculate your citizens against globe homo.

Half-Jap , says: Show Comment May 20, 2020 at 9:14 am GMT
@Godfree Roberts Sounds like a man who has no understanding of the science regarding the matter, but so doesn't most of the world. Vaccine? Anti-body treatment? Does anybody know what they are and how they work (or doesn't) or mean? From those tests to those invasive ventilators, it shows me how people can easily be herded towards slaughter, for their safety, ofc, because "science." And just over a mild cold no less.
So much for China's brilliance; they are as dumb or brainwashed by 'accepted science' as the next moronic authority figure.
But exploiting the situation, that's something else that should be appreciated.
anon [232] Disclaimer , says: Show Comment May 20, 2020 at 9:17 am GMT
@Godfree Roberts

China is leading

Godfree, we will bury you and your beloved CCP.

Wood Stove , says: Show Comment May 20, 2020 at 9:42 am GMT
@carlusjr Ok Karen
Adûnâi , says: Show Comment May 20, 2020 at 9:45 am GMT

This will be China's contribution to ensuring vaccine accessibility and affordability in developing countries." The Global South is paying attention.

Do the underdeveloped (hate the PC term "developing") countries even want a vaccine? They have too many people anyway, any moderate dying will be an advantage to their societies. And another point is that the anti-vaxxer movement there might be on the rise, just as it is in America – remember how the Philippines government was watching a conspiracy video about evil Bill Gates? I have talked to anti-vaxxer people in my Ukrainian university!

"Containment" will go into overdrive. A neat example is Admiral Philip Davidson – head of the Indo-Pacific Command – asking for $20 billion for a "robust military cordon" from California to Japan and down the Pacific Rim, complete with "highly survivable, precision-strike networks" along the Pacific Rim and "forward-based, rotational joint forces" to counteract the "renewed threat we face from great power competition."

My prediction is the US goes into a civil war > the liberals start losing > the liberals invite the Chinese into California > the Chinese exterminate all Americans and get a large Lebensraum in the East.

Anon [397] Disclaimer , says: Show Comment May 20, 2020 at 9:50 am GMT
a Korea War pictorial. Nice.
It's long long ago since China made the last movie about Korea War. Too long ago that they are in black and white.
Recently someone is preparing for a new movie: The Chosin Lake.
I really hope it will be well made. I love war movies, especially the ones on historical big wars.
Just Passing Through , says: Show Comment May 20, 2020 at 10:13 am GMT
@Natt I think you are mistaken and are describing America.
Just Passing Through , says: Show Comment May 20, 2020 at 10:28 am GMT
@Buzz Mohawk I think the Western globalists though that China would be subservient to them and not get any funny ideas, this virus is just a cover for antipathy that was building up for years, similar to how the poor Jews being persecuted in Germany was used by propagandists to whip up Germany sentiment, because of German economic prowess.

Western thinking is dominated by this balance of power mentality, the same mentality such caused it to enter into two fratricidal wars not too long ago.

One can only hope this is good news for us, but I fear the globalists will just use this time to move manufacturing to other Third World countries instead of bringing it back home.

I agree that it was a huge mistake transferring our IP to China, they would simply have not got to this point if we hadn't. This is also why the Chinese are not taking any chances in their BRI, and are using Chinese labour instead of doing the more sustainable thing and training up local workers, that would mean a destruction of their market! Sadly this will continue, on top of the terrible policy of mass Third World immigration, we let Chinese into out top companies and research facilities, some of whom no doubt pass this information back home.

https://time.com/5596066/emory-fires-chinese-researchers/

In terms of realpolitik, I think it is very smart that China is using its diaspora as a fifth column.

padre , says: Show Comment May 20, 2020 at 10:36 am GMT
@Natt Do you know, how many times in their short history of about roughly 5000 years were Chinese doomed ?
Really No Shit , says: Show Comment May 20, 2020 at 10:50 am GMT
So the Global South is going to be "grateful" to China for coming up with vaccination after innudating it with the Chinese virus in the first place Pepe, lay of the Mezcal because is clouding your opaque thinking!
John Hagan , says: Show Comment May 20, 2020 at 11:07 am GMT
Let me make this clear. America is self-destructing. A malignant narcissist in charge and a man who cannot construct a sentence is an alternative. A stock market devoid of reality and a 1 percent devoid of conscience. Any remote consideration of the other 99 percent is soley based on profit. Any civilization that cannot reverse itself is doomed. China maybe a shortterm factor yet not a factor in the longer considerations.
Avery , says: Show Comment May 20, 2020 at 11:10 am GMT
@foolisholdman {Honestly, I don't see it.}

Agree.

{ .. and the US has no guts for one. Its industry has been hollowed out not just by outsourcing but by corruption as well.}

Even in the 50s when US industry was not hollowed out ( ran supreme) and China had no nukes, US was unable to defeat China in a ground war in Korea. Of course there was talk in US of using nukes against China (Gen. MacArthur), but cooler heads prevailed, arguing that, that would trigger USSR to use nukes too, resulting in world wide nuclear conflagration.

Now China has nukes, and delivery systems, and US cannot possible defeat China conventionally, so US will huff-and-puff, try to damage China financially, or steal its holdings in US*, but nothing will come out of it.

Sad that US screwed itself over the years so badly that it is in this predicament now.

_____________________________
* There has been semi-serious talk in US of just taking $ hundreds of billions of Chinese holdings in US as payment for ' damages' China has supposedly caused US by Covid-19.

Big Daddy , says: Show Comment May 20, 2020 at 11:28 am GMT
All this big nation state fluff stinks today as it did when the first two Western ones, England and France had a 100 Years War and it has stunk throughout history.

We humans are born naked, helpless, and totally ignorant. We also have an evil streak in us; vide Adam and Eve. And as Shakespeare stated we must consign ourselves to a willing death each eve or we die. We are so haughty yet the first thing we must do upon wakening from our nightly death is evacuate waste.

We have never respected Nature. Now we spray aluminum and plastic microns in the upper atmosphere which we all breathe as they fall and have virtually destroyed the ozone layer and the biosphere. We live in 1984 right now!

True libertarianism which is no aggression against person or property and backed up by cheap, Natural Law arbitration courts works. It is that or sayonara humans.

Realist , says: Show Comment May 20, 2020 at 11:42 am GMT
@Natt

Nice fluff piece. China is fucked. Demographically, economically and militarily.

Is that you Trump?

You're new around these here parts aren't you boy?

Parfois1 , says: Show Comment May 20, 2020 at 11:45 am GMT
@foolisholdman

My reasoning is simple, maybe too simple. The Chinese will not start a shooting war and the US has no guts for one.

You may be right about the Chinese (their government looks after 1,3 billion people) and that the US has no guts. But what is the "US"? If you mean the (mostly Jewish) ruling cabal and their goyim political clowns and puppets, you have no reason to be so sanguine about the "no guts". It's not their guts that will be on the line, for they will be quite happy so sacrifice millions of the plebes for the greater good of Israel and rebooting the "economy". War devastations (and pandemics) are the greatest source for immiserating and culling the masses and channeling wealth to the banksters.

Facing the demise of the Jewish-led hegemony through its PNAC's "full-spectrum dominance" – and what that could do to the SHITIS (shit-state of Israel) – it is reasonable (in their twisted minds) to step to the brink and beyond. Besides, the most recent great wars (the greatest carnages in the world's history) were not intended to end the way the warhawks wanted (neither Hitler not Chamberlain wished the destruction of country or empire) but the power dynamics unleashed by geopolitical gamesmanship suppresses reason.

JohnPlywood , says: Show Comment May 20, 2020 at 11:49 am GMT
@paranoid goy Non-CO2 pollution is a non-issue. It was far worse in the USA and China 50 years ago (air and water), and in Europe/East coast USA over 200 years ago. Wildlife populations are also rebounding. Every time I hear some retard complaining about pollution on the internet, I want to reach through the monitor and pepper spray them.
bigduke6 , says: Show Comment May 20, 2020 at 11:52 am GMT

A toxic racism

You're a "toxic racist" cries the yellow supremacist as he shills for Beijing

GeeBee , says: Show Comment May 20, 2020 at 12:05 pm GMT
@Natt In other news, the USA's Ministry of Plenty has announced that the weekly chocolate ration is to be increased from 70 gms to 40 gms
ld , says: Show Comment May 20, 2020 at 12:19 pm GMT
@d dan The American Dream is Live and well.

If they keep saying it like a mantra maybe it will come true.

Trust the media.

ld , says: Show Comment May 20, 2020 at 12:25 pm GMT
@anon They say that Biden is Israel's pick so it will likey be Biden.
His senility will make him easier to control than Trump.
Desert Fox , says: Show Comment May 20, 2020 at 12:37 pm GMT
The zionists are in control of China and the ZUS and Russia and Europe and India and everywhere in central and South America, and the fact is the zionist control was proven by every country that forced their people into the forced lockdown, using this scam of a coronavirus as an excuse.

These wars are a deversion, as the zionist install their global prison.

AWM , says: Show Comment May 20, 2020 at 1:16 pm GMT
"When will the Communist "clenched fist" attack America?"

Stanislav Lunev: "As soon as they can't steal from you anymore."

Guess what folks, the "Combloc Flu" was the first strike.

450.org , says: Show Comment May 20, 2020 at 1:31 pm GMT

General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India and other Asian nations may replace China's cheap workforce: "Think about which of these countries has more skilled workers than China. What quantity of medium and high level human resources was produced in China in these past 30 years? Which country is educating over 100 million students at secondary and university levels? The energy of all these people is still far from being liberated for China's economic development."

Once again, I must caveat this with the proclamation I was not and I am not an advocate for Obama's TPP. The reason I'm not an advocate is for environmental purposes. I believe growth is killing the living planet and soon enough will extinct humans as well as many, most even, other species on the planet. The TPP did nothing to address growth and instead enabled it further by enhancing global trade versus diminishing it.

That being said, the TPP was a strategy to contain China's growing influence. It was intended to put global trade eggs in many baskets and not just in the basket labeled China. What does Trump do? He puts all the trade eggs in China's basket under the aegis/rubric of repatriating manufacturing to America. He put a knife in TPP and killed it but he never brought manufacturing back to America. Now America is truly good and fucked. Over a barrel. No options. Can you believe this moron and the cabal that's using him as a foil? Like I said before, if Trump didn't exist, the CCP would have to invent him because more than any other power player, be it Russia or Saudi Arabia or Israel, Trump has been extremely beneficial to China. Under Trump's watch, China is now the most powerful country in the world. Because of Trump, China is now the leader of the world. America, finally, has been knocked from its perch just as England was over 100 years prior. Once knocked from the perch, there is no regaining the status you once enjoyed. I suspect that within five years the dollar will no longer be the world's currency. When that happens, it's lights out for America FOR REAL. All this banter is whistling past the graveyard. What's done is done.

https://www.japantimes.co.jp/opinion/2015/06/21/commentary/japan-commentary/chinas-the-reason-why-u-s-needs-the-tpp/#.XsUuMS-z17M

House Democrats who've been interfering with President Barack Obama's ability to negotiate the Trans-Pacific Partnership are missing something very important: The trade deal isn't primarily significant because of the economy. It matters because it's part of the broader American geostrategic goal of containing China -- which pointedly hasn't been invited to join the TPP.

In the new cool war, China's rising economic influence is giving it greater geopolitical power in Asia. The TPP is, above all, an effort to push back on China's powerful trade relationships to reduce its political clout. By weakening Obama's ability to pursue it, congressional Democrats had been unintentionally weakening the U.S. side in the cool war.

In all this, China is using its close economic relationship with its neighbors as leverage to build its geopolitical position. Its ultimate goal is to displace the U.S. as the regional hegemon. President Xi Jinping's slogan of the "Chinese dream" requires nothing less.

The TPP aims to reduce some of China's geopolitical resurgence by damping down the extent of China's regional trade dominance. China itself has a proposed regional trade alliance, the Regional Comprehensive Economic Partnership, that would include 16 members and exclude the U.S. Australia, Japan and South Korea are all involved in negotiations to become members. The TPP is a direct, competitive counterpart to the RCEP.

Fyi, the following cartoon is per China Daily , a publication owned and run by the CCP. It's favorable to Trump. It's clear by virtue of Trump's cozy relationship with Putin and Xi that Trump is a communist in capitalist clothing. He is a communist trojan horse in the oval office. But he's even more than that. He has many hats. He's a tool, a self-promoting front man, for any tyrant or tyranny that expands his brand masquerading as a man of the people. As if. He's a man, albeit an insane moron, of the extractive elite and the extractive elite are transnational and transcultural. The extractive elite are a nation and culture unto themselves and the rest of us are their slaves on this global plantation.

Astuteobservor II , says: Show Comment May 20, 2020 at 1:34 pm GMT
@Weston Waroda Once reserved currency status of dollar is over n done with, there would be zero need for the huge military budget. That is the silver lining of this whole thing. The wars might finally stop. But living standards will take a hit from the devaluation of the dollar. But but, Jobs would return through that weakened dollar as off shoring jobs would no longer make sense. And just maybe, our political class might finally focus on domestic issues and improve the country after 4 decades of stagnation.
Astuteobservor II , says: Show Comment May 20, 2020 at 1:38 pm GMT
@Miro23 Apple follows every single law in China. Apple makes a lot of money in China, but also pays alot of taxes. I highly doubt it would be a target of retaliation. But other companies are fair game. Just something I noticed.
450.org , says: Show Comment May 20, 2020 at 1:47 pm GMT
@carlusjr Spot on. Humans are drowning in their own filth. There's an adage, "don't shit where you eat." Humans invented the saying but apparently don't abide by it and in fact zealously defy it. Here we are. It will be one pandemic after another from now until human is no more. Rapid pace, like automatic weapon fire. The center cannot hold and is not holding. Civilization is going down. Will the Samson Option be utilized? Man's last act? Destroy the planet entirely if he can't have it entirely? My bet is this is how it will go down. All you have to do is extrapolate the curve.
Sick of Orcs , says: Show Comment May 20, 2020 at 1:51 pm GMT
As long as America's Most Important Ally™ is safe
Cowboy , says: Show Comment May 20, 2020 at 1:54 pm GMT
Another bubblegum pop song from Lil Peepee and the chinks
Just Passing Through , says: Show Comment May 20, 2020 at 1:59 pm GMT
@bigduke6 It is quite obvious why they are doing, they are using Europeans' own liberal ideology against them. In today's Western world, nothing is worse than being a "racist" (except maybe, just maybe a paedophile necrophiliac, but even that is a close one) as such they will use these terms to beat down Europeans. Erdogan recently likened Greece to "Nazis", due to their brave defiance to Third World invaders.

https://www.theguardian.com/world/2020/mar/11/erdogan-compares-greek-border-crackdown-to-nazi-atrocities

As if they genuinely give a shit about Nazis, a particularly European obsession due to decades of brainwashing by the Jewish media elite. Even if one believes the textbooks in relation to Nazi atrocities, the fact is that such things are normal for history. No other people's beat themselves down over bad stuff they've done, hell, the Mongolians have erected a big statue of Genghis Khan, one of the greatest mass murderers in history!

Hegar , says: Show Comment May 20, 2020 at 2:07 pm GMT
Extremely misleading headline. Since the Asia Times story is actually about economic and political sovereignity – always a big issue for China ever since the Eight Powers carved up the nation in the past: Germany, Japan, Russia, Britain, France, Italy, Austria-Hungary, and the U.S.

It doesn't speak about warfare against the U.S. It speaks about meeting a threat from the U.S. It does speak of taking Taiwan, though by avoiding outright warfare. This is not something we should desire, but it is not war against the U.S., as the misleading headline is intended to make people believe.

As usual most of the rubes will only read the headline and look at the pictures, maybe skim through the text a bit, before typing out an angry post based on whether they like or dislike whatever nation is mentioned. Much like cruzbots and Bush lovers use Breitbart comments to screech against Iran and praise Israel. No facts needed.

[May 20, 2020] China Updates its 'Art of (Hybrid) War'

Notable quotes:
"... An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over 1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final assembly. That's the US problem today. They have state of the art technology, but not the methods and production capacity. So they have to rely on Chinese production." ..."
"... The gold standard expression has come in a no-holds barred Global Times editorial : "We must be clear that coping with US suppression will be the key focus of China's national strategy. We should enhance cooperation with most countries. The US is expected to contain China's international front lines, and we must knock out this US plot and make China-US rivalry a process of US self-isolation." ..."
"... An inevitable corollary is that the all-out offensive to cripple Huawei will be counterpunched in kind, targeting Apple, Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do business in China." ..."
"... So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions. ..."
"... The politicians controlling US foreign policy are leading us straight into the 19th century, with their updated gunboat diplomacy ..."
May 20, 2020 | consortiumnews.com

Dancing with Wolves

The bulk of his argument concentrates on the shortcomings of U.S. manufacturing: "How can the US today want to wage war against the biggest manufacturing power in the world while its own industry is hollowed out?"

An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over 1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final assembly. That's the US problem today. They have state of the art technology, but not the methods and production capacity. So they have to rely on Chinese production."

... ... ...

Gloves Are Off

Now compare General Qiao's analysis with the by-now-obvious geopolitical and geo-economic fact that Beijing will respond tit for tat to any hybrid war tactics deployed by the United States government. The gloves are definitely off.

The gold standard expression has come in a no-holds barred Global Times editorial : "We must be clear that coping with US suppression will be the key focus of China's national strategy. We should enhance cooperation with most countries. The US is expected to contain China's international front lines, and we must knock out this US plot and make China-US rivalry a process of US self-isolation."

An inevitable corollary is that the all-out offensive to cripple Huawei will be counterpunched in kind, targeting Apple, Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do business in China."

So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions.

A toxic racism-meets-anti-communism matrix is responsible for the predominant anti-Chinese sentiment across the U.S., encompassing at least 66 percent of the whole population. Trump instinctively seized it – and repackaged it as his re-election campaign theme, fully approved by Steve Bannon.

The strategic objective is to go after China across the full spectrum. The tactical objective is to forge an anti-China front across the West: another instance of encirclement, hybrid war-style, focused on economic war.

This will imply a concerted offensive, trying to enforce embargoes and trying to block regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese assets in the U.S. is not a far-fetched proposition anymore.

Every possible Silk Road branch-out – on the energy front, ports, the Health Silk Road, digital interconnection – will be strategically targeted. Those who were dreaming that Covid-19 could be the ideal pretext for a new Yalta – uniting Trump, Xi and Putin – may rest in peace.

"Containment" will go into overdrive. A neat example is Admiral Philip Davidson – head of the Indo-Pacific Command – asking for $20 billion for a "robust military cordon" from California to Japan and down the Pacific Rim, complete with "highly survivable, precision-strike networks" along the Pacific Rim and "forward-based, rotational joint forces" to counteract the "renewed threat we face from great power competition."

Davidson argues that, "without a valid and convincing conventional deterrent, China and Russia will be emboldened to take action in the region to supplant U.S. interests."

... ... ...

From the point of view of large swathes of the Global South, the current, extremely dangerous incandescence, or New Cold War, is mostly interpreted as the progressive ending of the Western coalition's hegemony over the whole planet.

Still, scores of nations are being asked, bluntly, by the hegemon to position themselves once again in a "you're with us or against us" global war on terror imperative.

... ... ...

For the first time in 35 years, Beijing will be forced to relinquish its economic growth targets. This also means that the objective of doubling GDP and per capita income by 2020 compared with 2010 will also be postponed.

What we should expect is absolute emphasis on domestic spending – and social stability – over a struggle to become a global leader, even if that's not totally overlooked.

... ... ...

Internally, Beijing will boost support for state-owned enterprises that are strong in innovation and risk-taking. China always defies predictions by Western "experts." For instance, exports rose 3.5 percent in April, when the experts were forecasting a decline of 15.7 percent. The trade surplus was $45.3 billion, when experts were forecasting only $6.3 billion.

Beijing seems to identify clearly the extending gap between a West, especially the U.S., that's plunging into de facto New Great Depression territory with a China that's about to rekindle economic growth


Zhu , May 20, 2020 at 00:34

"A toxic mixture of racism and anti-communism" sounds about right. The Chinese government is not submissive and the "Chinks" are getting too prosperous. That's bound to infuriate both elite and grass-roots Americans.

Drew Hunkins , May 20, 2020 at 00:34

"For the first time in 35 years, Beijing will be forced to relinquish its economic growth targets. This also means that the objective of doubling GDP and per capita income by 2020 compared with 2010 will also be postponed. "

Good, good, just wonderful. This will really endear the United States to the Chinese people.

All that the Chinese govt did for its people over the last 30 years is totally eliminate poverty, that's all. Gotta love how our Western mass media won't shut their mouths about this small achievement.

Drew Hunkins , May 20, 2020 at 00:15

"Those who were dreaming that Covid-19 could be the ideal pretext for a new Yalta – uniting Trump, Xi and Putin – may rest in peace."

Rest in peace, no doubt. Washington is all about unilateralism, period. This is the crux of the issue, the rapacious capitalist-imperialists who infest Wall St, the military contractors and corporate mass media want nothing to do with a multi-polar world. This could lead to putting the far east on a dangerous path with U.S. warships provocatively traversing the area.

gcw , May 19, 2020 at 21:08

The politicians controlling US foreign policy are leading us straight into the 19th century, with their updated gunboat diplomacy . Never a thought to the impending disaster of climate change and unparalleled social and environmental chaos, they dream instead of yet another Cold War (Yellow-Peril 2.0), all the time sustaining a gargantuan military establishment which is draining the life-blood from American society. The Covid-19 virus is just a warning to us: we have about 5% of the world's population, yet lead the pack in deaths from the virus. If this monumental display of incompetence doesn't wake us up, what will?

[May 20, 2020] The best argument I have read from the anti China camp has been that if China succeeds, US dollar will be kaput, living standard in the USA will tanked

May 20, 2020 | www.unz.com

,

Ann Nonny Mouse , says: Show Comment May 6, 2020 at 9:33 pm GMT
@utu ... He produces evidence, evidence in response to highly-coordinated anti-China propaganda, the mountains of belligerent lies that are all that remain today of the failed state the USA. Those lies plus its military killing millions all over the world, incessantly destroying or attempting to destroy states simply for being independent.

Enormous thanks to Godfree Roberts.

Realist , says: Show Comment May 6, 2020 at 10:49 pm GMT
@Astuteobservor II

The best argument I have read from the anti China camp has been that if China succeeds, US dollar will be kaput, living standard in the USA will tanked to shit levels compare to right now.

Why would China succeeding reduce our living standard?

Realist , says: Show Comment May 6, 2020 at 11:07 pm GMT
@Ron Unz

Well, American propaganda is certainly vastly superior to the Chinese variety

American propaganda is certainly more effective but that is because of the stupidity of most Americans.

Yes the video is accurate and that means the Chinese know us well much better than we know them.

Astuteobservor II , says: Show Comment May 6, 2020 at 11:13 pm GMT
@Realist If China succeeds, that means dollar as reserve currency is kaput. Without the reserved currency status, dollar will devalue by 50% or more. Living standard auto lowers by 50% or more.

[May 17, 2020] TSMC a Taiwan chip's foundry not permitted to sell any chips to Huawei

May 17, 2020 | www.moonofalabama.org

JC , May 17 2020 18:03 utc | 16

Almost every freaking day Trump and Pompeo bashing China including Huawei.. Not a day of peace without china bashing.

Days earlier ZeroHedge, SCMP and other media reported freaking Trump and Pompeo... no companies inside or outside USA can sell American software or technology items or chips made with USA properties or machines to Huawei.

Meaning TSMC a Taiwan chip's foundry not permitted to sell any chips to Huawei, TSMC has been the world's dedicated semiconductor foundry. "curtailing its chip supply, an escalation of its campaign against the Chinese company that may also hurt Taiwan Semiconductor Manufacturing Co."

"China has the most fab projects in the world.... 30 facilities planned, including 10/7nm processes, but trade war and economic factors could slow progress...... SMIC 's move would put it on par with some of its foreign rivals. In addition, SMIC has obtained $10 billion in funding to develop 10nm and 7nm. Semiconductor Manufacturing International Corporation (SMIC) is a publicly held semiconductor foundry company, and the largest in China.

"Wuhan Hongxin Semiconductor Manufacturing (HSMC), a logic IC foundry founded in late 2017, is gearing up for 14nm and 7nm process manufacturing eyeing to be China's most advanced contract chipmaker.....Shang-yi Chiang, the former executive VP and co-chief operating officer overseeing R&D for Taiwan Semiconductor Manufacturing Company (TSMC), will join a Wuhan-headquartered foundry in China. "<

[May 17, 2020] India can serve as the USA ally in US-china trade war

May 17, 2020 | astutenews.com

BRICS Is Broken

Gone are the "good 'ole days" of BRICS bonhomie when the Alt-Media Community used to sing the praises of this nascent trade bloc and portray it as a game-changing development in International Relations. Although promising on paper, BRICS was always destined to be disappointing due to the irreparable differences between India and China that were either downplayed or outright ignored by this organization's loudest advocates. The author has been consistently warning for over the past four years that " India Is Now An American Ally " after it clinched the Logistics Exchange Memorandum Of Agreement (LEMOA) with the US to allow the latter to use its military infrastructure on a case-by-case "logistical" bases. Since then, India has fully submitted to the Pentagon's "Indo-Pacific" strategy of empowering the South Asian state as a "counterweight" China, with even Russian Foreign Minister Lavrov loudly warning his country's strategic partner of the pitfalls of this scenario as recently as early January of this year while speaking at a conference in their country.

Modi's Military Madness

Alas, whether due to long-lasting ignorance of the situation, unchecked professional incompetence, and/or shadowy motives that can only be speculated upon, the majority of the Alt-Media Community still refuses to recognize these facts, though the latest developments pertaining to Indian-Chinese relations might finally cause them to reconsider their inexplicable stance of always "covering up" for New Delhi. India has recently clashed with China along the Line of Actual Control (LAC) in Indian-Occupied Kashmir 's Ladakh region and close to the Donglang Plateau (described as "Doklam" by India and thus widely reported upon with this name in the Western Mainstream Media and among the members of the Alt-Media Community sympathetic to New Delhi) near Sikkim where they had their infamous three-month-long standoff in summer 2017 (which threatened to repeat itself in 2018). So tense has the situation become in Ladakh that China reportedly flew several helicopters near the scene while India flew a few fighter jets, significantly upping the ante.

India's Attempt To "Poach" Chinese-Based Companies

The backdrop against which these clashes are transpiring is India's aggressive attempt to "poach" foreign companies from the People's Republic, which the author analyzed last month in his piece about how " India's Selective Embrace Of Economic Nationalism Has Anti-Chinese Motivations ". Of relevance, India has also set aside land twice the size of Luxembourg for such companies to exploit in the event that they decide to re-offshore from the East Asian state to the South Asian one.

This perfectly dovetails with Trump's " trade war " plans to encourage foreign companies to leave his country's rival and either return home or set up shop in a friendly pro-American country instead. Of note, India is also vehemently opposed to China's Belt & Road Initiative ( BRI ) behind the US on the basis that its flagship project of the China-Pakistan Economic Corridor ( CPEC ) traverses through territory that New Delhi claims as its own per its maximalist approach to the Kashmir Conflict . Obviously, the US couldn't have found a better ally than India to thwart China's economic plans.

The US Might Rule The WHO Via Its Indian Proxy

On the soft power front, India is slated to assume leadership of the World Health Assembly (WHA, the governing body of the World Health Organization, WHO) from Japan later this month, and it's already being widely speculated in Indian media that the country might be seriously considering taking the US' side in respect to investigating the WHO for its alleged pro-Chinese bias . Not only that, but India might even be receptive towards Taiwan's request to participate in the organization's meetings, the scenario of which has already concerned China so much that its embassy in New Delhi felt compelled to remind the Indian leadership that doing so would violate the One China principle. From the American perspective, this is an unprecedented opportunity for Washington to exercise proxy leadership of the WHO through its "junior partner" of India, which could add a speciously convincing degree of credibility to its anti-Chinese claims in an attempt to win back the many hearts and minds that it's lost to its rival throughout the course of World War C .

The Indo-American Hybrid War On China

Taken together, India is indisputably intensifying its American-backed Hybrid War against China as a sign of fealty to its new ally, especially considering that it's only officially been the US' " comprehensive global strategic partner " since Trump's landmark visit to the country a few months back in February and thus feels like it has something to prove. Both countries share the grand strategic goal of "containing" China, to which end they're working hand-in-glove with one another to carry out this concerted campaign against the People's Republic.

Building off of the idiom, the American hand is unquestionably controlling the Indian glove after Trump cracked the whip on Modi by forcing him to export hydroxychloroquine to the US last month, which asserted his country's dominance as India's neo-imperial master. Whether across the military, economic, or soft power domains, the US-Indian alliance is doing its utmost to create serious difficulties for China. With India now suspecting China of building an island off of its coast, ties will likely continue to worsen to the US' benefit.


By Andrew Korybko

Source: One World

[May 15, 2020] China Ready To Target Apple, Qualcomm, Cisco and Boeing in Retaliation Against US' Huawei Ban - Slashdot

May 15, 2020 | apple.slashdot.org

An anonymous reader shares a report: China is ready to take a series of countermeasures against a US plan to block shipments of semiconductors to Chinese telecom firm Huawei , including putting US companies on an "unreliable entity list," launching investigations and imposing restrictions on US companies such as Apple and suspending the purchase of Boeing airplanes, a source close to the Chinese government told the Global Times. The Trump administration on Friday moved to block shipments of semiconductors to Huawei from global chipmakers. The US Commerce Department said it was amending an export rule and the Entity List to "strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology," according to a statement on its website. "China will take forceful countermeasures to protect its own legitimate rights," if the US moves forward with the plan to bar essential suppliers of chips, including Taiwan-based TSMC, from selling chips to the Chinese tech giant, the source told the Global Times in an exclusive interview.


Brain-Fu ( 1274756 ) , Friday May 15, 2020 @02:58PM ( #60064610 ) Homepage Journal

All chips have backdoors. ( Score: 5 , Insightful)

Every hardware vendor has clear and strong incentives to bake backdoors into their hardware. The only difference is to whom they are loyal.

sehlat ( 180760 ) , Friday May 15, 2020 @02:20PM ( #60064454 )
Universal Rule of Economic Warfare ( Score: 1 )

Both sides lose ... BIG.

bodog ( 231448 ) writes:
Re: ( Score: 1 )

BIGLY. tftfy.

UnknowingFool ( 672806 ) , Friday May 15, 2020 @02:45PM ( #60064558 )
Re:Universal Rule of Economic Warfare ( Score: 3 )

Well people on both sides lose. The leaders on both sides do not lose as much. Concisely Put.

Alain Williams ( 2972 ) writes: < addw@phcomp.co.uk > on Friday May 15, 2020 @02:31PM ( #60064502 ) Homepage
Is anyone surprised ? ( Score: 5 , Interesting)

China will also put a lot of money into making things that it has, up to now, obtained from the USA. It might take a few years, but China's government set up (ie one party always in power) means that it does not have to do things to an electoral cycle.

[May 14, 2020] The USA fake democracy vs inverted totalitarism with Chinese characteristics

Notable quotes:
"... Sad but true. We are all given our illusions. In US its the illusion of democracy which is a fake democracy cloaking our totalitarian reality. In China they give the people the illusion of moving towards socialism, a fake socialism to be sure, never mind all the billionaire party members (and they don't have universal health care either, its insurance based) .The people have long accepted the reality of totalitarianism so they are one step ahead. ..."
May 14, 2020 | www.unz.com

Pft , says: Show Comment May 14, 2020 at 6:41 am GMT

Sad but true. We are all given our illusions. In US its the illusion of democracy which is a fake democracy cloaking our totalitarian reality. In China they give the people the illusion of moving towards socialism, a fake socialism to be sure, never mind all the billionaire party members (and they don't have universal health care either, its insurance based) .The people have long accepted the reality of totalitarianism so they are one step ahead.

Since China doesn't have another party to blame they must blame external enemies like the US and we happily play along with tarrifs paid for by us dumb sheep who cry out in satisfaction "take that". Lol

A fake Cold War works for us too. Trump says we are in a race for 5G and AI/Robotics with China. We must win or all is lost to China. Social credit scores, digital ID and digital currency along with Total Information Awareness and Full Spectrum Dominance over the herd.

Health effects of 5G will be blamed on CoVID. Fake Science is a great tool. Scientists never lie, they can be trusted, just like Priests . They are the Priests of the New Technocratic World Order. Global Warming and COVID- We must believe. They say Vaccines and 5G are good for you, just like DDT and Tobacco were said to be Good by Scientists of another time. We must believe. Have Faith and you will earn social credit bonus points.

Reality is Fake Wrestling. Kayfabe all the way baby. Who is the face and who is the heel? We are free to choose. So who says we don't have freedom?

[May 14, 2020] If we discard xenophobia, China is not natural ally of the USA

But it was natural target of offshoring manufacturing during neoliberal globalization frenzy. Now the USA needs to pay the price for the betryal of its elite.
Notable quotes:
"... China is not a natural ally of the US. It was helped for decades as a counterweight to the USSR and that policy continued after the Cold War ended because the Western elite reaped vast profits from the entry of a billion Chinese into the world labour markets. We have created a monster of arrogance and economic dynamism that refuses to take measures against novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine habits. ..."
May 14, 2020 | www.unz.com

Sean , says: Show Comment May 14, 2020 at 6:22 am GMT

The USA is under no obligation whatsoever to be friendly to Russia, and especially not to China which rather owes America for everything and has repaid it in death. Capital and technology has flowed to China from America for decades. In return they sent profit to Wall St, Wuhan made Fentanyl the death of choice for whites desperate as a result of the policies that made China did so well out of, and now they send us a deadly epidemic.

RussiaGateRussiaGateRussiaGateChinaDidItChinaDidItChinaDidItIranIsEvilIranIsEvil

China is not a natural ally of the US. It was helped for decades as a counterweight to the USSR and that policy continued after the Cold War ended because the Western elite reaped vast profits from the entry of a billion Chinese into the world labour markets. We have created a monster of arrogance and economic dynamism that refuses to take measures against novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine habits.

It was coffee made from beans taken from civet faeces that led to the SARS-CoV bat/ civet recombination virus and the 2002 Sars outbreak, during which China lied about what was happening as they subsequently admitted. The SARS-CoV 2 receptor-binding domain from pangolins ( world's most trafficked animal, is in demand by Chinese as a male enhancer) and it recombined with a bat virus was hundreds of times more effective a pathogen in humans than the one from bat–civet recombination of eighteen years ago.

But that is not what the Chinese said. Researchers in Wuhan on December 31st told the world about the Wuhan disease having been identifies as a coronavirus but said, 'It's not highly transmissible'. As late as the the 24th of January, Doctor Fauci w gave a briefing for senators in which he said there was very little danger to the US from the Wuhan disease. Later that day he repeated that opinion at a press conference.

So China said it was not infectious between people and there was nothing much to worry about. When Trump began to restrict travel into the US from China on the 31st January there was uproar about this supposed further evidence of his xenophobia,.

[May 14, 2020] How Beijing will respond to the anti-China fervor sweeping the US by Sam Bresnick & Lucas Tcheyan

May 13, 2020 | responsiblestatecraft.org

President Trump has used his executive power to take a hatchet to 40 years of America's China policy. His administration has called for a "whole-of-government" approach to counter Beijing's unfair economic practices, initiated a damaging trade war, banned Chinese telecommunication equipment from domestic networks, and implemented stringent regulations to vet Chinese investments in sensitive industries.

In a novel development, the administration has begun coaxing individual states to aid the federal government in its anti-China fervor. Speaking to the National Governors Association in early February, Secretary of State Mike Pompeo warned that "competition with China is not just a federal issue It's happening in your states with consequences for our foreign policy, for the citizens that reside in your states, and indeed, for each of you."

The administration's enlisting of states in the broader U.S.-China competition has significant economic implications for subnational actors. Increasingly hawkish incumbents, as well as congressional candidates, could provoke economic pushback from Beijing. Many of these officials have bought into the Republican Party's strategy of carrying out an " anti-China assault " on the campaign trail, scapegoating Beijing for the coronavirus outbreak in the United States instead of acknowledging the Trump administration's central role in the country's failure to prepare itself properly.

While Washington is correct to scrutinize Chinese investments in sensitive technologies and pursue reciprocal trade and economic relations, politically motivated, opportunistic anti-China rhetoric could threaten individual states' cooperation with China, one of the few remaining productive aspects of the bilateral relationship. Indeed, as Hu Xijin, editor of Chinese tabloid Global Times, tweeted , "Beijing is already preparing to take necessary punishment measures against some members of the US Congress, the state of Missouri, and relevant individuals and entities."

China-skeptic sentiment in the U.S. government and on the campaign trail is not a new phenomenon , but the coronavirus pandemic and resultant economic crisis have afforded many politicians the cover to push hawkish policies. Some of their proposals would benefit the United States, including reducing U.S. reliance on Chinese-made pharmaceutical products , a motion broadly backed by both Republicans and Democrats. But many of their arguments are politically motivated and risk further inflaming U.S.-China tensions and painting Beijing as an enemy, à la the Soviet Union during the Cold War, rather than a competitor.

Senator Tom Cotton made waves last month by arguing that U.S. universities should not accept Chinese STEM students given the chance they might return home and use their training to drive China's scientific advances. Senators Josh Hawley and Marco Rubio have also joined the fray, advocating that the United States reduce its reliance on China and punish the country for failing to contain the COVID-19 outbreak. The attorneys general of Missouri and Mississippi have filed lawsuits seeking damages from Beijing for the coronavirus.

Incumbents, however, are not the only ones wagering their political futures on China. Senate candidates in Tennessee , Arizona , and Alabama , among other states, have adopted overtly hawkish stances toward Beijing, blaming China for the pandemic, painting their opponents as soft on the country, and using the China threat to push anti-immigration policies .

Amid Washington's anti-China turn, preserving cooperation at the state level will be critical to maintaining any semblance of productive bilateral ties going forward. As Los Angeles Deputy Mayor of International Affairs Nina Hachigian said at a Brookings panel last year, "cities and states can take advantage of the trade, investment, students, climate change cooperation, culture, and tourism China offers without really having to balance the broader national security, geopolitical, and human rights questions."

It is no coincidence that three of the past four U.S. Ambassadors to Beijing previously served as governors of states with deep links to China: Terry Branstad (Iowa), Gary Locke (Washington), and John Huntsman (Utah).

The aforementioned politicians may be fighting to relocate supply chains outside of mainland China and decouple vast sections of the two countries' economies, but their rhetoric may also lead Beijing to move Chinese-owned businesses out of the United States or cut imports from the country. Despite bilateral tensions, there is clear evidence that Chinese investments in the United States can be beneficial. In the midst of the trade war, a Chinese takeover of a failing paper mill in Maine helped revitalize a local community. In Tennessee, Chinese investments in automotive parts , mattresses , and porcelain manufacturing have benefited the state's economy. There is a real risk that Chinese companies, seeing both politicians' and the American public's growing distaste for China, could simply up and leave.

A more likely outcome of the growing antagonism, however, is for Beijing to engage in economic coercion , which it uses to try to force nations, companies, and officials into doing its bidding and punish those who do not. The Chinese Communist Party (CCP) has developed a wide-ranging and flexible toolkit of coercive measures that it has used strategically throughout the world.

When South Korea agreed to host the United States' Terminal High Altitude Area Defense (THAAD) missile defense system, Beijing did not impose tariffs on Seoul despite its displeasure. China instead restricted flights to South Korea, drummed up nationalist sentiment among the Chinese public to boycott South Korean goods, and even shut down China-based outlets of Lotte Group, the Korean company on whose land THAAD was installed.

China took a similar approach with the Philippines following a 2012 dispute over claims in the South China Sea. In order to cause significant economic pain, Beijing tightened quality controls on agriculture exports from Manila while stemming the flow of Chinese tourists to the Philippines. And most recently, Beijing threatened and then followed through on a boycott of Australian beef after Canberra called for an independent investigation into the origins of the coronavirus.

Beijing coerces not only countries but also private companies for perceived transgressions. Marriott, Delta Airlines, and Zara all faced the prospect of losing business in China after listing Taiwan, Hong Kong, or Tibet as sovereign nations. Last fall, Beijing suspended broadcasts of NBA games after Houston Rockets general manager Daryl Morey tweeted his support for pro-democracy protestors in Hong Kong.

If public sentiment across the United States continues to turn against China, Beijing may begin adapting its methods of economic coercion to retaliate against states and politicians it perceives as hostile to its interests.

Indeed, China is clearly paying attention to U.S. domestic politics and state officials' views of China. A think tank in Beijing recently ranked all 50 governors on their attitudes toward China, information the CCP values as it attempts to mold the views of officials outside of Washington. As Dan Blumenthal has noted , Beijing "split[s] Americans into 'friends of China' who might lobby on their behalf and others who refuse to do so [and] will not be granted access to China's massive market."

In recent years, Beijing has provided glimpses of what economic coercion in the United States might look like. During the initial stages of the trade war, China's retaliatory tariffs disproportionally targeted Red states critical to Trump's 2016 election victory. Furthermore, China identified key officials able to influence U.S. policy, such as then-Wisconsin Representative Paul Ryan and Senate Majority Leader Mitch McConnell, and levied tariffs that threatened jobs in and exports from their states in a bid to pressure the politicians to split with Trump.

These actions are possible harbingers of economic pressures to come. Beijing may be tempted to pressure local officials to influence policy from the bottom up. As the aforementioned think tank report explicitly notes , Beijing believes that "State-level officials 'enjoy a certain degree of diplomatic independence,'" and that "Governors can ignore orders from the White House."

Recent downturns in public opinion in both countries, the result of several years of increasing competition, and an emerging view that the other views the pandemic as a strategic opportunity, could even see Beijing move beyond tariffs and drum up anti-U.S. sentiment. It could even encourage citizens to boycott American products, the political and economic effects of which could be devastating.

While the United States imports more from China than it exports, China-bound exports supported around one million U.S. jobs in 2018. According to the U.S.-China Business Council, 42 states counted China among their top five export destinations in 2019. Chinese FDI, which peaked at $46.5 billion in 2016, dropped to just over $3 billion in 2019 -- a decline of over 90 percent. Industries ranging from energy, agriculture, and manufacturing could be negatively affected by an exodus of Chinese investment, a freeze on new Chinese FDI into the United States, or increased tariffs on or bans of imports.

Given the astronomically high unemployment rate and ballooning federal and state debt levels, U.S. states are in no position to lose more investments or export-supporting jobs. Senator McConnell's recent call for states to file bankruptcy highlights their increasingly gloomy economic prospects, and already over 25 percent of state revenues have disappeared due to the coronavirus.

The United States certainly needs to diversify its supply chains so as not to depend so much on China. Washington has already rolled out several measures to better screen Chinese investments in the country and limit sensitive technology exports. The increasingly prevalent and politically expedient one-size-fits-all anti-China position espoused by many state-level politicians, however, could endanger China-state ties, the locus of the two countries' economic relationship, and threaten China-owned U.S.-based companies that pose no national security threats and provide hundreds of thousands of jobs.

Written by
Sam Bresnick
Lucas Tcheyan

[May 13, 2020] The Chinese Mindset in a Hybrid War With the US by Xiaoran Tong

While some observationare valid, the main drawback is that the guy does not understand the term "neoliberalism"
May 13, 2020 | original.antiwar.com
I recently came across a Facebook comment from a Hongkonger, arguing that the Chinese Communist Party (CCP) is nothing communist given China's prosperous private sector after 1979's reform . He then linked a video to mock the western electoral democracy that put Trump and Hitler into the office, leading to the conclusion that the West has no credential to criticize the one-party system of China for the lack of democracy. His comment represents the contemporary Chinese sentiment and is quite understandable given the ongoing color revolution in Hong Kong 2019 , which is still lukewarm to this day, and the unrelenting blame of COVID19 on China . Although the hybrid war waged on China is unjust, the current Chinese mindset does not help to diffuse but only fuels the conflict even further.

The Facebook comment was right about CPP not being Communist that seeks total control of the economy by the state. Yet, China is state capitalism, an oligarchy, or crony capitalism. China is a plutocracy by the marriage between the party leadership (the state), and the monopolizing mega-corporations (the money) like Huawei, Ali, the four state-owned commercial banks , and Sinopec Group .

It is far from a free-market where the only way to win a competition is to provide excellent products, where the state has no role in deciding the winner and no ability to finance itself by forcing the circulation of central-banknotes. China does have a private sector – the semi-free-market, the good part of our bad plutocracy. Still, even that part is weathering after supreme leader Xi took power, and most Chinese do no realize that we are marching back into a more planned, more communism, more Mao Zedong like system, slowly but surely. In China, life is artificially expensive under the tightening state control that imposes layers upon layers of covert taxation, to the point of causing hesitation to have more children .

However, the west, in general, is fundamentally the same, albeit having a façade electoral democracy where no crucial issues (i.e., war and peace, monetary policy, and downsizing the government) are allowed into a debate.

The real private sector (not the likes of Google and Lockheed Martin) is also dying. The states interfere with the market relentlessly, in the name of safety, welfare, and stimulating the economy, which achieved the opposite (i.e., the 1929 great depression, 2000 dot com bubble, and 2008 housing bubble). The Federal Reserve finances the government spending via debt, encourages malinvestment by atrocious QE packages , which all translate into taxing away people's purchasing power by creating tons of money out of thin air.

We see the same unholy marriage between the state and the money like big techs, big pharma, and, most disgustingly, the Military-Industrial Complex. People are either covertly forced, or duped into funding the nonsense by paying tax, no matter which party they elect.

Therefore, the Chinese are right about the West not in the position of a critic, but for the wrong reason. We either fail to realize or willfully deny that we are living under a harsh plutocracy. Instead, we are distracted by the never losing fake debate about which system elects the better government, since the "one-party system" is most attacked by western pro-democracy voices.

Strangely though, both systems have seemingly good intentions, either emphasizing a person's moral conduct and experience in low-tier office (the Chinese internal nomination), or the people's direct control of the government (the West electoral democracy). Strangely, both unanimously favor the use of "government power" the "right way."

Yet, power always corrupts its user by attracting the money, no matter how well-disciplined, how experienced he/she was. A system that operates on coercive power always finds its way to circumvent any laws and regulations meant to promote meritocracy. Both have tried to fight cronyism rigorously with new agencies and new legislation, but in the end, cronyism always prevails, for both. For the most part of history, the essence of the Chinese system is not much different from the West, since they are all plutocracies that conned the people into helplessly relying on more power to solve problems caused by power until it collapses.

In a 1979 Chinese opera broadcasted nationwide, the protagonist, a low tier official, finds himself risking his political career to enforce the law on the aristocrats who made the law; intoxicated, he yelled in desperation "谁做管官的官," which literally is " Quis custodiet ipsos custodes " in Chinese; in the end, he left his career behind – adding no more to the bloated, self-conflicting bureaucracy, to preserve his integrity. Maybe this was a coincidence, 1979 was the year the Chinese leadership decided to let the government govern less – kudos to them.

The year 1979, and the economic boom that followed, is one of the most common counter-arguments from a Chinese when you criticize the draconian practices of CCP. Admittedly, there are times the state power is not insane. In 1979 Deng Xiaoping at least gave up some government mandate to allow the private sector to grow , resulting in the exploitative system we see today, nonetheless a society much more productive than Mao Zedong's total state dominance. Some state heads refrained from moving the government "muscle" too much, such as Jimmy Carter's resistance to wars and money supply that reduced overspending and inflation since the Vietnam War. In these "less bad, more sensible" eras, it is easier for people's entrepreneurial spirit and creativity to overcome the innate irresponsibility of centralized capital management. As a result, we saw significant progress like the Chinese miracle, and the upswing during the Reagan presidency (even if he turned up wars, debt, and the Fed's money machine again). Sadly, the leaderships are eager to claim credits, creating the impression that it is the right administration resulting in progress and recovery when it is the lack of governing that allows the people to make sensible decisions on their own, achieving faster growth.

If we Chinese and the American attack each other's electoral system, it is like the two worst kids in the class picking on each other over their looks rather than their poor study and bullying of other kids, which only makes them both worse. In the real world, we leave the unhinged growth of government power – the real enemy of all people, Chinese and American alike, unattended.

Like that Hongkonger, most Chinese learned to mock Trump's personal, and naively conclude that the democracy that put him (and Hilter) in the office is a joke. Some more informed Chinese mock the media's clownish, unfair treatment of Trump, and naively conclude that the freedom of the press is a joke. However, a bombastic president, the democracy, and the media are not the problems; neither are the aggressive sino-phobic policies of which Trump pretends to be in charge. The actual problem is the monstrous government, married with big money, capable of waging costly war, funding wasteful programs that drain the middle class to enrich a selected few, no matter who is in the office. It can either be the well-spoken Obama loved by the media, who started seven wars and won the Nobel peace prize, or the bombastic, scandalous New Yorker hated by the press, who nonetheless continued these wars. People coerced into funding this abusive machine themselves are part of, with their hard-earned tax dollars, is the problem. Yet, you do not see the Chinese majority mocking this miserable setup and come to realize that we are under the same situation!

For us, the Chinese, the real issue is not the superficial corruption that the supreme leader XI fiercely fought, nor the insanity, the incompetence, and the betrayal of the oath of some party members. It is our innate reliance on authorities and the love of collective glory, a part of our culture passing down through generations over more than 2400 years, being the problem. We can never break the dynastic cycle if we do not see the path to the self-destruction of unhinged state power, such as Mao's era . If we are still yearning for a "just leader" to solve issues like retirement, education, and medication, still admiring exhaustive achievements such as the Belt and Road, the South China Sea, and Taiwan, we then have learned nothing from the downfall of thirteen dynasties and countless hegemonies throughout the history of China. The collective conscious of the Chinese have so far failed to realize the force driving the rise and fall of a dynasty is not the moral and intellect of the leaders, but the people's economic freedom relatively untouched or infringed at times, by a mixture of chance, sanity, and imperialism vainglory. The blind reliance on leaders and the love of collective grandiosity is only compounded when the Americans fail to take back their power from the government, who is warring with China and covertly overtaxing them. The collective enlightenment of the Chinese population is nearly impossible, since the tyrants in Beijing have no shortage of strawman to throw at the people and say "that is the problem, blame the belligerent Trump and the jealous Americans", and the Communist Dynasty will always enjoy the " mandate of heaven ".

Even with a sheep's mindset, the Chinese economy will overtake the US, despite the slow death of its most productive private sector. The sheer momentum of the slight right turn to liberty 40 years ago is good enough for China, since the Americans do not restore their free-market and liberty that had made them an exceptionally productive civilization for a long time. But then what? We Chinese are just molecules burnt to fuel the blinding flash of a new empire not far from its fourteenth dynastic downfall, just like the Achaemenids, the Romans, the Umayyads, the Ottomans, Napoleon's France, the British, and the Americans before us.

Xiaoran Tong has a Ph.D. in Epidemiology from the Michigan State University (MSU). He is originally from Kunming, Yunan, China and arrived in the US in 2014 to pursue his Ph.D. at MSU. He is Interested in the history of America and its similarities with ancient and contemporary China.

[May 12, 2020] A Tsunami Of Anger Chinese Officials Call For Renegotiation Of Phase One Trade Deal

May 11, 2020 | www.zerohedge.com
Amid the ongoing diplomatic spat between Washington DC and Beijing, which now also includes the deployment of B-1B bombers and warships in the South China Sea , late on Monday (local time) China's Global Times reported , citing sources close to the Chinese government, that some "hawkish" officials in China are calling for a renegotiation the the "phase one" trade deal with Washington as well as a "tit-for-tat approach on spiraling trade issues after US' malicious attacks on China ignited a tsunami of anger among Chinese trade insiders."

The calls to renegotiate the current version of the deal - which has yet to be actively implemented - emerge amid dissatisfaction because "China has made compromise for the deal to press ahead."

While in the past, these same trade negotiators "believed that it would be worthwhile to make certain compromise to reach a partial truce in the 22-month trade war and ease escalating tensions", given what the Global Times called "President Donald Trump's hyping an anti-China conspiracy that aims to cover up his mishandling of the COVID-19 pandemic", advisors close to the trade talks have suggested Chinese officials rekindling the possibility of invalidating the trade pact and negotiating a new one to tilt the scales more to the Chinese side, sources close the matter told the Global Times.

A former Chinese trade official told the Global Times on condition of anonymity on Monday that China could complete such procedures based on force majeure provisions in the pact.

"It's in fact in China's interests to terminate the current phase one deal. It is beneficial to us. The US now cannot afford to restart the trade war with China if everything goes back to the starting point," another trade advisor to the Chinese government told the Global Times, pointing to the staggering US economy and the coming of the US presidential election this year.

"After signing the phase one deal, the US intensifies crackdown in other areas such as technology, politics and the military against China. So if we don't retreat on trade issues, the US could be trapped," the former official noted.

Some could disagree, and counter that Trump can certainly restart the trade war especially since it suits his pre-election agenda - after all, now that the fate of the market is entirely in the hands of the Fed which has gone full MMT, Trump is no longer afraid by the market's response to a renewed trade war. In fact, with over 60% of the US population seeking to distance US from China, it would appear that Trump's best bet to winning independent votes is precisely to keep hammering China.

Confirming this, Trump said on Friday that he was "very torn" about whether to end the China-US phase one deal, Fox News reported, with some observers interpreting his words as equating to a threat from the US to re-launch a trade war against China.

Then again, over the weekend, the SCMP reported that US source familiar with recent discussions stated US officials acknowledged China was largely delivering its pledges on structural issues such as opening market access and improving IP protection but they have yet to agree in some details including IP action plan and easing equity caps for foreign investors. Furthermore, the source stated fallout from the virus meant agreement on purchasing US goods has become much more important and that many believe China needs to increase pace on purchases.

Meanwhile, Gao Lingyun, an expert at the Chinese Academy of Social Sciences who advises the government on trade issues, told the Global Times on Monday that China has "well documented" Washington's usual threats after previous rounds of confrontation. That means if the trade war restarts, "China knows how to respond, and it is able to retaliate quickly and inflict serious harm on the US economy," Gao said.

Still, as the Global Times concludes, analysts noted that terminating the phase one trade deal would be China's "last option" and one that China would only resort to under extremely hostile conditions.

[May 11, 2020] Note on US-China decoupling: it will be tough because the train had left the station and Chinese acted first

Notable quotes:
"... What does a developing country like China, still mired in socio-economic inequality, technological dependence, political corruption and environmental degradation do? Concentrate on its own hinterland while bidding its time? Confront the hegemon head-on which would lead to military conflict? Or control its responses while cultivating partnerships with ALL peace-loving countries, whether rich or poor, First World or Third World, Western or non-Western? ..."
May 08, 2020 | www.unz.com
antibeast , says: Show Comment May 9, 2020 at 5:46 pm GMT
Unlike Escobar, Roberts, et al, I am much more sanguine about the prospects of China's rise which has threatened the indispensable nation of Yankistan because China was not supposed to rise above its assigned role as the cheap cog of the globalist economy serving the Capitalist Oligarchy of the NWO. By dint of hard work, sly cunning and shrew tactics, China outgrew its role by becoming the hub of the international economy via its New Silk Road and the BRI.

What does a developing country like China, still mired in socio-economic inequality, technological dependence, political corruption and environmental degradation do? Concentrate on its own hinterland while bidding its time? Confront the hegemon head-on which would lead to military conflict? Or control its responses while cultivating partnerships with ALL peace-loving countries, whether rich or poor, First World or Third World, Western or non-Western?

The rapid decoupling of China's economy away from the USA started with the GFC 2008 but has since accelerated with Obama's "Pivot to Asia" and Trump's trade war with China. Exports to the USA account for less than 3% of China's GDP today with 60% of those exports being either US or foreign goods manufactured in China. So the real figure is 1% of China's GDP consists of Chinese goods exported to the US market, consisting mostly of industrial commodities or consumer products.

As China has already charted its own independent path of building trading/investment partnerships with Europe, Asia, Africa and Latin America, the USA has become threatened by China's successful decoupling from its export dependence on the US market as proven by its hostile reaction to Xi's BRI and China's New Silk Road. In addition, the US was caught off-guard by the sudden rise of Chinese tech firms such as Huawei which is the world's number one vendor of telecommunications equipment with undisputed world leadership in 5G technology.

Shocked to find its manhood as no longer exceptional, Uncle Sam feels the need to show off to the world: "Me Gringo! Big Dick!"

[May 10, 2020] Watch Is China Merely a Competitor of the U.S., or an Adversary or Even an Enemy

May 10, 2020 | theintercept.com

China has become, over the past two decades, the planet’s second-most powerful nation after the United States. Booming economic growth has lifted millions of its citizens out of poverty and catapulted it to the world’s second-largest economy, while increased military spending has made it the second-largest military power (though its military spending, and nuclear stockpile, are still a small fraction of the U.S.’s).

That growth — in both economic and military power — has led U.S. officials to conclude that they must do more to counteract what they regard as China’s growing influence. President Obama, early in his administration, memorably vowed an “Asia pivot,” whereby the U.S. would devote fewer resources and less attention to the Middle East and more toward China’s growing power in its own region.

That led to some moderate escalation in adversarial relations between the two countries — including the Trans Pacific Partnership trade agreement (TPP) and other regional skirmishes — but nothing approaching direct military confrontation. President Trump, since taking office, has largely heaped praise on the Chinese government and its leader President Xi Jinping, siding with Xi over democracy protests in Hong Kong and even Beijing’s handling of the coronavirus outbreak.

But this pandemic has seriously escalated tensions between the two countries given the increasingly hostile rhetoric emanating from various sectors of the west, making it more urgent than ever to grapple with the complex relations between the two countries and how China ought to be perceived.

The question is far more complex than the usual efforts to create a new U.S. Enemy because numerous power centres in the U.S. and the west generally — particularly its oligarchs, Wall Street, and international capital — are not remotely hostile to Beijing but, quite the contrary, are both fond of it and dependent upon it. That’s why — unlike with other U.S. enemies such as Saddam Hussein, Fidel Castro, the Iranian government or Nicolas Maduro — one finds very powerful actors, from Bill Gates to Michael Bloomberg to the consulting giant McKinsey to Trump himself, defending Chinese officials and urging better relations with them.

That, in turn, reflects a critical reality about U.S./China relations that defies standard foreign policy frameworks: while hawkish, pro-war political elements in both parties speak of China as an adversary that must be confronted or even punished, the interests of powerful western financial actors — the Davos crowd — are inextricably linked with China, using Chinese markets and abusive Chinese labor practices to maximize their profit margins and, in the process, stripping away labor protections, liveable wages and jobs from industrial towns in the U.S. and throughout the west.

That is why standard left-wing anti-imperialism or right-wing isolationism is an insufficient and overly simplified response to thinking about China: policy choices regarding Beijing have immense impact on workers and the economic well-being of citizens throughout the west.

Today’s new episode of SYSTEM UPDATE is devoted to sorting through the complexities of this relationship and how to think about China. I’m joined by two guests with radically different views on these questions: the long-time Singeporean diplomat who served as President of the U.N. Security Council, Kishore Mahbubani, whose just-released compelling book “Has China Won?” argues that the U.S. should view China as a friendly competitor and not as a threat to its interests; and Matt Stoller, who has worked on issues of economic authoritarianism and the U.S. working class in multiple positions in Congress and in various think tanks, culminating in his 2019 book “Goliath,” and who argues that China is a threat to the economic well-being of the U.S. working class and to civil liberties in the west.

The show, which I believe provides excellent insight into how to think about these questions, debuts this afternoon at 2:oo pm ET on the Intercept’s YouTube channel or can be viewed on the player below at 2:30 p.m. As always, a transcript of the program will be added shortly thereafter.

Update: May 7, 1:54 p.m. EDT

The debut time for this episode has been moved by 30 minutes; it will not debut on the Intercept’s YouTube channel at 2:30 pm ET.

[May 10, 2020] Trump and decoupling from China

Highly recommended!
May 10, 2020 | www.moonofalabama.org
I have been watching China's gradual rise in the world's GDP– as well as GDP-per-capita– charts and a concomitant fall in the United States' position in these charts, for nearly 20 years now. The United States' decline is still relative rather than absolute. In absolute terms, its GDP is still "Number 1!" But the decline was accelerated from 2003 on, when successive US presidents decided to pour massive amounts of government revenues into large-scale and always disastrous military adventures all around the world. As of last November, Brown University's "Costs of War" project tallied the U.S. budgetary costs of these wars, FY2001-2020, to be $6.4 trillion. These were funds that could have been invested, instead, in repair and upgrading of vital infrastructure here at home– including vital health infrastructure. But no. Instead, the money was shoveled into the pockets of the large military contractors who then used a portion of it on expensive lobbying operations designed to ensure that the sow of military spending continued feeding her offspring (them.)

When Donald Trump became president, in 2017, one of his early instincts was to pull back from the foreign wars. (This was about his only sound instinct.) The military-industrial complex then proved able to slow-walk a lot of the military-retraction moves he wanted to make One of the other abiding themes of Trump's presidency has been his desire to "decouple" the U.S. economy from the tight integration it had developed at many levels with the economy of China, as part of broader push to halt or slow the rise of China's power in the global system. At the economic level, we have seen the "tariff wars" and the campaign against Huawei. At the military level, we have seen a slight escalation in the kinds of "demonstration operations" the U.S. Navy has been mounting in the South China Sea. Mobilizing against "Chinese influence" also seems to come naturally to a president who shows no hesitation in denigrating anyone– even US citizens and politicians– who happens not to be of pale-complected European-style hue.

With the eruption of Covid-19 in U.S. communities nationwide, Pres. Trump's pre-existing proclivity to demonize and denigrate anything Chinese has escalated considerably– spurred on, it seems, by his evident desire to find an external scapegoat to blame for the terrible situation Covid-19 has inflicted on Americans and to detract voters' attention from the grave responsibility he and his administration bear for their plight.

He and his economic advisors clearly realize that, with the supply chains of major US industries still inextricably tied up with companies located in China and with China still holding $1.1 trillion-worth of U.S. government debt, he can't just cut the cord and decouple from China overnight. Yesterday, his Treasury Secretary and the US Trade Representative held a phone call with China's Vice Premier Liu He, the intent of which was to reassure both sides that a trade deal concluded four months ago would still be adhered to.

But today, less than 12 hours after the reassuring joint statement released after the phone call, Trump told Fox News that he was "very torn" about the trade deal, and had "not decided" whether to maintain it. This, as he launches frequent verbal tirades against China for having "caused" the coronavirus crisis. US GDP is highly inflated by counting financial moves on Wall Street (extracting money from suckers and moving money from one hand to another) as productive activity. China's purchasing power parity already exceeds the US and I suspect its actual GDP does as well. Only US financialization is able to mask the lack of actual productivity in the US economy.

likbez , May 9 2020 17:12 utc | 10

I am somewhat skeptical about China chances in this race. That will be much tougher environment for China from now on. And other major technological powers such as Germany, Korea and Japan are still allied with the USA.

The major problem for China is two social systems in one box: state capitalism part controlled by completely corrupt Communist Party (which completely abandoned the communist doctrine and became essentially a religious cult ) + no less corrupt neoliberalism part created with the help of the West.

The level of corruption inherent in the current setup (first adopted in Soviet NEP -- New Economic Policy) is tremendous, as the party has absolute political power and controls the major economic and financial areas while the entrepreneurs try to bribe state officials to get the leverage and/or enrich themselves at the state expense or bypass the bureaucratic limitations/inefficiencies imposed by the state, or offload some costs. So mafia style relationship between party officials and entrepreneurs is not an aberration, it is a norm. And periodic "purges" of corrupt Party officials do not solve the problem. Ecological problems in China are just one side effect of this.

The fact that a Chinese scientist from a biolab got 12 years jail sentence is pretty telling. https://www.nature.com/articles/d41586-020-00051-2

Add to this the certain pre-existing tendencies within Chinese society to put greed above everything else, the tendency clearly visible in some emigrants and to which Yen devoted one post recently. Riots in some Asians countries against Chinese diaspora are often at least partially caused by this diaspora behavior, not only by xenophobia. Note that several African countries with Chinese investments now intent to sue China for damages from COVID-19. This is not accidental.

Technologically the USA and its G7 satellites are still in the lead although outsourcing manufacturing to China helped Chinese tremendously to narrow the gap. For example, Intel CPUs still dominate both desktops and servers. All major operating systems (with the exception of some flavors of Linux) are all USA developed.

I do not see the possibility for China to quickly narrow this gap as the technology transfer might now be controlled in the same way it the USA controlled the trade with the USSR via COCOM ( https://en.wikipedia.org/wiki/Coordinating_Committee_for_Multilateral_Export_Controls )

Looks how easily the USA managed to kick Huawei in the butt and essentially deprive it of the major market.

vk , May 9 2020 17:48 utc | 12
@ Posted by: likbez | May 9 2020 17:12 utc | 10

You rise important points, but I respectfully disagree with all of them.

1) I don't think China is a "State capitalism" country. The term "State capitalism" was first coined by Lenin for a very specific situation the USSR was in. Yes, the similarities are striking - and Deng Xiaoping's reforms were clearly inspired by Lenin's NEP - but it is important to state that the CCP actively avoided the term and built upon the concept both theoretically and in practice. Besides, we don't need to read Lenin's works critically, an not take him as the second coming of Jesus: when he used the term "State capitalism", he used it in a clearly desperate moment of the USSR, almost by improvisation. Lenin's last years were definitely desperate times.

Besides, the NEP didn't culminate with the capitalist restoration of the USSR. On the contrary: it collapsed in 1926 (after another bad harvest) and gave way to the rise of Stalin and the radical faction of the CPSU. The Five-year plans were born (1928), and agriculture would be fully collectivized by the end of the 1930s (a process which catapulted Molotov to the second most powerful man in the USSR during the period). By the end of WWII, the USSR had a fully collectivized economy.

2) The corruption hypothesis is an attractive one - specially for the liberal middle classes of the post-war and for the Trotskyists - but it doesn't stand the empirical test. The USA was an extremely corrupt nation from its foundation to pre-war, and it never stopped it from growing and reaching prosperity. The Roman Empire and Republic were so corrupt that it was considered normal. There's no evidence the PRC is historically exceptionally corrupt. However, I can see why the CCP is worried about corruption, as it is a flank through which the West can sabotage it from within.

3) The COCOM tactic will be much harder to apply against China than against the USSR. For starters, the USSR lost circa 35% of its GDP in WWII. This gave it a delay from which it never recovered. Second, the USSR fought against capitalism when capitalism was at its apex. Third, the USSR collectivized and closed its economy too early, not taking into account that it still lived in a capitalist world.

China doesn't have that now. It is fighting against capitalism in a phase where it is weakened. It is open and intimately integrated economically with its capitalist enemies. It closed or is about to close the technological gap in many strategic sectors during a stage where the capitalists have low retaliation capacity. It found time to close at least the GDP gap. It found time to recover fully from its civil war and the Japanese Invasion of the Northeast.

Germany, South Korea and Japan are not technologically more advanced than the USA. This is a myth. Plus, they are too small. They may serve as very useful - even essential - pawns for the USA-side, but I don't see any of the three ever achieving Pax .

[May 09, 2020] Huawei's HiSilicon becomes first mainland Chinese chip company to enter top 10 in global sales, says IC Insights South China

Notable quotes:
"... Over 90 per cent of Huawei phones in China now use HiSilicon processors, according to CINNO ..."
May 09, 2020 | www.scmp.com

HiSilicon , Huawei Technologies ' in-house semiconductor and integrated circuit design company, has surpassed US chip giant Qualcomm in terms of smartphone processor shipments in China for the first time amid coronavirus-linked disruptions that have hit most major players, according to a report.

In the first quarter of 2020, HiSilicon shipped 22.21 million smartphone processors, according to Chinese research firm CINNO's latest monthly report on China's semiconductor industry. Although HiSilicon's shipments only increased slightly from the 22.17 million units it shipped in the first quarter of last year, it was the only major company that did not see a year-on-year decline in the quarter, CINNO said in a summary of the report posted on its official WeChat account.

As a result, the Huawei subsidiary's market share surged to 43.9 per cent, from 36.5 per cent during the same period last year, and beat Qualcomm for the first time to become China's top smartphone processor supplier. HiSilicon's steady performance comes at a time when the Chinese smartphone industry is being battered by delayed product launches and dampened consumer sentiment linked to the coronavirus pandemic. Smartphone shipments in the country slumped by 34.7 per cent – more than a third – to 47.7 million units in the first quarter of 2020, according to a report released earlier this month by the China Academy of Information and Communications Technology.

CINNO's report showed that there was a similar plunge in processor shipments, with overall smartphone processor shipments in the country dropping by 44.5 per cent in the first three months of 2020, compared to the same period last year. Huawei makes end-run around US trade ban by turning to its own chips 2 Mar 2020

US-based Qualcomm, the long-time market leader, fell to second place in the latest quarter with a year-on-year decline in its market share from 37.8 per cent to 32.8 per cent. Taiwan's Mediatek maintained its third-place position, but also saw its market share slide year-on-year from 14 per cent to 13.1 percent

. Table showing the market share of smartphone processor supplies according to CINNO Research. Source: CINNO Research / WeChat

Table showing the market share of smartphone processor supplies according to CINNO Research. Source: CINNO Research / WeChat

Huawei, HiSilicon's parent company, is at the centre of a high-profile US-China tech war. The Trump administration added the company to its Entity List last year, citing the risk that Huawei could give Beijing access to sensitive data from telecommunications networks. The trade blacklist effectively bars Huawei from buying US products and services. In response, the Chinese company, which has denied the allegations, is ramping up its own capabilities to produce more American component-free network gear, including through HiSilicon.

Huawei is also reportedly shifting production of HiSilicon-designed chips away from Taiwan Semiconductor Manufacturing Co (TSMC) and towards Shanghai-based Semiconductor Manufacturing International Corp (SMIC) as Washington readies new rules which would require foreign companies using US chipmaking equipment to obtain a license before supplying chips to Huawei – a move that would directly affect TSMC.

Over 90 per cent of Huawei phones in China now use HiSilicon processors, according to CINNO. However, Huawei founder Ren Zhengfei said in an interview with Yahoo Finance last year that the company would continue using chips from US vendors such as Intel and Qualcomm as long as it is still allowed by US regulators.

[May 08, 2020] Post-pandemic animosity by US - Global Times

May 08, 2020 | www.globaltimes.cn

In the face of the upcoming presidential elections, Republicans launched a new China Task Force committee in US Congress on Thursday to attract attention despite its futile efforts to pass the buck amid the pandemic. But this not-so-surprising move only shows how hysterical and desperate Republicans have become as criticism of the government's mishandling of the domestic coronavirus outbreak increases, experts said.

Following a series of anti-China moves the Trump administration has made when its epidemic prevention spiraled out of control with more than 1.2 million infections - the world's largest number - to date, House Minority Leader Kevin McCarthy announced on Thursday a proposal to set up a new "China Task Force" which will develop legislative policies to curtail Chinese influence. The committee currently consists of 15 Republicans with no Democrats joining.

McCarthy said the pandemic made it apparent "for a national strategy to deal with China." The task force will hold meetings and briefings on China-related issues, which include China's influence inside the US, presence on American campuses and control over important supply chains, the Washington Post reported.

A search for the members in the China Task Force revealed their antagonism toward China. One of them is Rep. Elise Stefanik, who in late April asked Secretary of State Mike Pompeo and the attorney general to bring China to the International Court of Justice for the handling of COVID-19, according to a report by The Adirondack Daily Enterprise.

Analysts said setting up the new China committee is the Republicans' new tactic to fuel anti-China sentiment, but this won't help stop power from shifting from the West to East, which was happening before the pandemic. The pandemic is very likely to speed up this process.

Democrats not joining the committee does not mean they are more China-friendly, but they don't want Republicans to shift the focus of President Donald Trump's failure to handle the pandemic. Since last year, both parties passed several bills regarding China's Xinjiang and Hong Kong, interfering in China's internal affairs, Diao Daming, an associate professor at the Renmin University of China in Beijing, told the Global Times on Friday.

Diao noted the Democrats in the Congress won't endorse the legislation but will support other anti-China measures that the new committee aims to push forward.

"The pandemic will very likely further weaken the US and strengthen China," he said.

A man covering his face walks in Manhattan, New York on April 6 amid the serious outbreak of COVID-19 in the US. Photo: AFP

Treating China as equals

In the past months, certain American politicians, including Pompeo, kept passing the buck, making groundless accusations that China was responsible for the outbreak, and hyped conspiracy theories by calling it the "China virus" to claim the virus originated from a Wuhan lab. At Friday's media briefing, Chinese Foreign Ministry spokesperson Hua Chunying joked that the press conference was almost all about refuting Pompeo's lies.

The extreme atmosphere has made many people in the US worry for a return of the McCarthy era, where free speech in the country was curtailed. A former US Ambassador to China pointed out in a CNN interview the US is now similar to Germany in the 1930s.

Li Haidong, a professor at the Institute of International Relations of the China Foreign Affairs University, told the Global Times on Friday the task force will fuel the existing unfriendly atmosphere toward China at the local level in the country.

Trump administration's China policy focuses on conflicts, and the task force could further aggravate tensions, he said.

Former US Ambassador to China Max Baucus said in an interview with CNN that "The [Trump] administration's rhetoric is so strong against China. It's over the top. We're entering a kind of an era which is similar to Joe McCarthy back when he was red-baiting the State Department, attacking communism."

"A little bit like Hitler in the 30s. A lot of people knew what was going on was wrong. They knew it was wrong, but they didn't stand up and say anything about it. They felt intimidated," he said.

Analysts warned that China needs to stay alert as the US is trying to create a new McCarthy era of international repression on China.

But, on the other hand, we should be aware that most countries won't follow the US, Li said.

"It's difficult for the US to mobilize the world against China. People know how selfish and self-centered the US is. So only a few of its allies will join," he told the Global Times.

The US interception of other countries' anti-virus medical supplies and pointing a finger at the WHO when international cooperation is urgently needed occupied world headlines.

Meanwhile, the Chinese government had provided over 150 countries and international organizations with supplies, hosted over 120 video conferences with health experts from more than 160 members of the international community, and dispatched 19 medical groups to 17 countries, according to the Zhang Ming, Chinese Ambassador to the European Union, at a Coronavirus Global Response pledging event on Monday.

Li told the Global Times that most countries, including its traditional allies, such as Germany and France, have different demands from the US. So they won't join this wave.

As early as February 1, the European Union had dispatched tons of medical supplies to assist China. And in March when the continent was hit hard, China immediately provided more than 2 million protective masks and sent medical groups. Positive reactions were constantly heard in Europe on China.

Meanwhile, it has been reported that China faces a rising wave of hostility led by the US amid the pandemic. The discrimination against Chinese people is growing in some parts of the world.

Li said "The rising hostility shows some Western countries are not accustomed to a rising China. It's a challenge for them to learn to see China on an equal footing, which adds to their anxiety."

He added that they need to learn to respect differences and deal with other countries equally.

Analysts noted that China should step up efforts to enhance its own capabilities in high-tech, military and other fields. It should also conduct far-reaching international cooperation and uphold multilateralism to share its benefits with other countries, rather than being distracted by the anti-China wave.

Cooperation amid competition

The task force on China is not the first one in the West. On April 24, several UK Conservative MPs launched a "China Research Group" to promote "factual debate" in dealing with the "rapidly changing nature of the relationship" between China and the UK. The group would attempt to look "beyond" the coronavirus pandemic to "examine China's long-term economic and diplomatic aims," BBC reported.

Kevin Hollinrake, an MP and a member of the group, told the Global Times that the group will make some inquiries on specific policy areas. The group will look at, for example, how the Chinese political system and business work.

It will look at certain work streams and develop fact-based reports based on those work streams. "They may be reported back to parliament or published in the public domain," Hollinrake said.

Although the group was set up at a time when the virus was rampant in the UK, "the pandemic itself is not the underlying issue," Hollinrake noted.

The China Research Group is likely to "lobby for a less cooperative approach to China, and for the UK to align more with the US on China policy," Tim Summers, senior consulting fellow on the Asia-Pacific program at Chatham House, told the Global Times.

However, Chris Wood, the British Consul General in Shanghai, told the Global Times that "We will see continued discussions and collaboration. There is no global challenge that can be solved without China's participation. We recognize that we very much want to work with China on these big global issues, and that will continue."

In the post-coronavirus era, China and Europe might continue to seek cooperation amid competition, analysts said, pointing out that Europe's anxieties are, to a large extent, provoked by the US.

In the early stages of the pandemic, despite old disputes, cooperation was the mainstream in China-Europe interactions. But things have changed since the US became the new epicenter, Sun Keqin, a research fellow at the China Institutes of Contemporary International Relations, told the Global Times.

Sun told the Global Times that to reduce the negative influence from the US on European countries, China needs to make efforts to let its voice heard in international public opinion and seek cooperation opportunities. What the US is advocating is nothing but rumors and conspiracy, and China must smash these lies with sound and reasonable evidence and awaken European countries, Sun said.

[May 07, 2020] So, is it correct that the DNC had some kind of Obama-era "chi-merica" project to further their globalist, neolib project -- as it became obvious that the US was never going to be able to pull off the unipolar Empire -- into the new century with a sort of US/China alliance, with a substantial US aligned fifth-column (if that's the right phrase) working in China to further the project?

May 07, 2020 | smoothiex12.blogspot.com

Casey19 hours ago So, is it correct that the DNC had some kind of Obama-era "chi-merica" project to further their globalist, neolib project -- as it became obvious that the US was never going to be able to pull off the unipolar Empire -- into the new century with a sort of US/China alliance, with a substantial US aligned fifth-column (if that's the right phrase) working in China to further the project? Then Trump came in a screwed that all up, trying to pretend to be friendly to Russia, which the DNC promptly scuttled. And now the net result is Russia and China growing relations, which is a very real nightmare for the US, the absolute worst possible outcome for the globalists? Probably I have this all ass-backwards. Also, really, how long would it take to relocate important industries to the US? Wouldn't that need to be a multi-generational project because you can;t turn baristas into machinists over night? Also, what prevents the US from taking over Venezuela right now, militarily, instead of those apparently poorly organized attempts to infiltrate with mercenaries, as was recently revealed?

[May 06, 2020] Whom Bitcoin brings together

May 06, 2020 | www.moonofalabama.org

Deltaeus , May 6 2020 9:29 utc | 63

@karlof1 | May 5 2020 21:05 utc | 18

There was an amusing quote from somewhere, something like:

Bitcoin brings together
everything people don't understand about money with
everything people don't understand about technology.

[May 05, 2020] I don't think the bankster parasites will sit on their hands and let the Trump idiots blow up their entire system. I think there would be a palace coup d'etat first.

May 05, 2020 | www.moonofalabama.org

Trailer Trash , May 4 2020 20:55 utc | 33

If Uncle Sam defaults on his debts, that would be the biggest own goal ever. The whole financial system is based on US Treasury bonds, and a default would send their value to zero. The US Social Security Trust Fund is still worth almost three trillion dollars, most of it in US Treasury bonds. Default means Goodbye Social Security Pensions, or at least a huge "haircut".

I think Pompous Ass is bluffing. One reason is that Wall Street parasites have been salivating over the Social Security trust fund for decades, and GW Bush was working on a plan to give it to them. I don't think the bankster parasites will sit on their hands and let the Trump idiots blow up their entire system. I think there would be a palace coup d'etat first.

[May 04, 2020] The essence of a financial parasite is not only to drain the host's nourishment, but to dull the host's brain so that it does not recognize that the parasite is there by Michael Hudson

The problem here is that there is no countervailing force. Marxist idea that proletariat is such a force proved to be yet another utopia.
Notable quotes:
"... istory's main engine of economic exploitation – the banking, creditor and financial systems' ever-increasing extraction of value through interest payments. The rentier class and FIRE sector – Finance, Insurance and Real Estate – have long succeeded in depicting themselves as part of a productive economy. Yet for centuries, these sectors were recognized as being parasitic. ..."
"... The essence of a parasite is not only to drain the host's nourishment, but to dull the host's brain so that it does not recognize that the parasite is there. ..."
May 04, 2020 | www.unz.com

Jim Vrettos : Welcome once again to the Radical Imagination. I'm your host, Jim Vrettos. I'm a sociologist whose taught at John Jay College of Criminal Justice and Yeshiva University here in New York.

Our guest today on the Radical Imagination is Michael Hudson. He was on our March 8th show. We had such an overwhelmingly positive response to that show that we've asked him to return today, and he's been gracious enough to accept.

Unlike most economists, he's been a fierce champion and advocate for the economic rights of the poor, workers, disenfranchised and the vulnerable around the world through his scholarship and lifelong activism. His unique economic analysis has explored h istory's main engine of economic exploitation – the banking, creditor and financial systems' ever-increasing extraction of value through interest payments. The rentier class and FIRE sector – Finance, Insurance and Real Estate – have long succeeded in depicting themselves as part of a productive economy. Yet for centuries, these sectors were recognized as being parasitic.

Now with the United States losing some 10 million jobs in just the past two weeks and the world awash in debt, the total world gross domestic product is $90 trillion. The public and private debt is a mind-boggling $260 trillion. The pandemic has given this parasitic sector yet another, even more vicious opportunity to exploit and devour humanity.

As our guest puts it, the recently passed Trump "Bank and Landlord Relief" bill, mistakenly named the Coronavirus bill, starts by providing banks with an even larger giveaway of wealth than they received from Obama in 2008. Helping the banks, financial and real estate sectors in a so-called free market system is conflated with helping the industrial economy and general living standards for most Americans. The essence of a parasite is not only to drain the host's nourishment, but to dull the host's brain so that it does not recognize that the parasite is there.

[May 04, 2020] 'Turbocharging' exodus: US beats trade war drums to remove supply chains out of China

May 04, 2020 | www.rt.com

The US wants to сut industrial and supply dependence on China amid rising tensions between the two powers. However, not everyone is eager to pack their bags and leave the lucrative Chinese market in the midst of the previous row. The Trump administration has long been pushing American firms to get back to US soil, especially when trade tensions were flaring between the two biggest global economies. Now the US has revived the trade war rhetoric again. Read more Asian markets plunge amid escalating US-China tensions

"We've been working on [reducing the reliance of our supply chains in China] over the last few years but we are now turbo-charging that initiative," Under Secretary for Economic Growth, Energy and the Environment at the US State Department Keith Krach told Reuters.

Krach as well as other officials told the agency that some critical and essential manufacturing should be moved from the country, and the government may take steps on it soon. Apart from the US' seemingly favorite options of tariffs and sanctions, the plans may include tax incentives and potential reshoring subsidies as well as closer relations with Taiwan – a move which has always angered Beijing.

Washington is also mulling the creation of what one of the officials called 'Economic Prosperity Network' which would include companies and groups from some "trusted partners." The network is set to share the same standards "on everything from digital business, energy and infrastructure to research, trade, education and commerce."

China's vital role in global supply chains was felt sharply amid the coronavirus pandemic as many international giants – from tech to car industries – are reliant on the country. The pandemic has forced some US companies to seriously consider at least partial relocation and changing supply chain strategy, according to one of the latest polls conducted by the American Chamber of Commerce in China and its sister organization in Shanghai. However, the majority of firms said that the outbreak does push them to turn their backs on China.

Nevertheless, one of the "China hawks" told Reuters that the virus created "a perfect storm" as it "crystallised all the worries that people have had about doing business with China" and the damages from Covid-19 have eclipsed possible profits.

Also on rt.com 'No mass exodus': Most US firms don't want to wind down operations in China over pandemic

When the trade war showed no signs of abating last year and the US and China were still hitting each other with tariffs, another AmCham poll showed that the punitive measures were hurting US businesses operating in China. While over forty percent of the 250 respondents were "considering or have relocated" production facilities outside China, some 35 percent of companies said they would rather source within China and target the domestic market. Fewer than six percent wanted to move or already shifted their factory operations to the US.

Set aside the enormous relocation costs – which the White House has recently pledged to cover should an American company decide to ditch China – there is still another massive hurdle in this plan. China is still the world's top producer of rare earth metals – the group of elements vital for production of multiple devices, from cell phones to some advanced military gear. Should all the production be moved from China, it could ban exports of these materials. Last year Chinese media said the option was already being mulled by Beijing, and it could consider the drastic measure again if trade war tensions further escalate.

For more stories on economy & finance visit RT's business section

[May 02, 2020] The USA makes an expected move in trade war with china: complites access of china companies to US produced chips

May 02, 2020 | thenewkremlinstooge.wordpress.com

et Al April 28, 2020 at 2:17 am

Euractiv mit Neuters: US imposes new rules on exports to China to keep them from its military
https://www.euractiv.com/section/defence-and-security/news/us-imposes-new-rules-on-exports-to-china-to-keep-them-from-its-military/

The new rules will require licenses for US companies to sell certain items to companies in China that support the military, even if the products are for civilian use. They also do away with a civilian exception that allows certain US technology to be exported without a license.

They come as relations between the United States and China have deteriorated amid the new coronavirus outbreak
####

It's far too late and will be significantly damaging to US companies. No doubt Washington still expects Beijing to buy Boeing airliners. If Beijing were to pull that plug, then it would take out Arbus, P&W, GE, CFM all the suppliers, MRO ventures and collapse the whole western airline supply chain. It would obviously kill any Chinese or Russian airline program that has any western content . I doubt Beijing will go that far so they'll be looking at actions, not words.

t-Rump and co need to show something sym-bollox to the American electorate that yet again they are being 'tough on China' during this erection year but it requires China to play along. It simply might not. It is reported that China is currently purchasing large quantities of American LNG to fulfill 'Phase one' of t-Rump's Deal of the Century with China.

Maybe that is the obvious counter, threatening to pull the whole DoC, starting with dumping LNG purchases as a direct warning. t-Rump's Administration has pushed itself into a smaller and smaller box, all of its own making. As I've always said and I still believe to be true, the biggest threat to t-Rump's re-erection is t-Rump himself.

Like Like

Mark Chapman April 28, 2020 at 9:22 am
Paradoxically, the more Trump's belligerence and 'gut-based' trade policies damage international trade, the more convinced his supporters become that only Trump can handle increasingly-complicated trade relationships. This probably stems from his going into a meeting under difficult conditions, emerging to fire off a miracle tweet, "China will now buy massive quantities of our agricultural products", and ducking out the back without elaboration. This leads to a misplaced belief that Trump can perform miracles, as much of a jerk as he can be, because his loyalists rarely pay attention long enough for the rebuttal which always comes, laying out his serial exaggerations. Remember when U.S. Steel was building three new steel plants, on the strength of Trump's hard-ass negotiations in the Canada-Mexico-USA Free Trade deal? Lighthizer's hard-ass negotiations, actually. Anyway, yeah; totally made it up. He doesn't see anything wrong with making optimistic projections which have no basis in fact.

Mind you, it would be a bit of a downer to have to explain again to Biden what 'oil' is, every single time the subject comes up. But I wouldn't be too worried about that.

LNG is pretty cheap right now, like all energy products. I see China behaving much like Russia; once it strikes an international bargain, it will stick to it until the terms play out. But Trump might find a different China when he tries to strike the next agreement.

Like Like

et Al April 29, 2020 at 3:43 am
China can also take similar measures, sic (I read that) Alibaba and other gigantic Chinese companies that rely on server farms are switching over to Chinese made chippery and not buying foreign. Simply in lost sales for the foreseeable future is gigantic.

Like Like

Mark Chapman April 29, 2020 at 9:54 am
I imagine you are too young to remember Victor Kiam (he died in 2001) former president of the Remington Razor Company. He had a popular line of commercials in the late 80's in which he would say "I liked it so much, I bought the company".

https://www.youtube.com/embed/3NlMTkfI8Sc?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent

The Chinese must have heard him, because they took his method to heart; Alibaba doesn't just buy Chinese-made chips, they bought the company. Right after the United States started up its we-have-to-keep-priceless-American-technological-secrets-out-of-the-hands-of-the-thieving-Chinks policies. Suit yourself, Sam.

https://www.reuters.com/article/us-csky-m-a-alibaba-idUSKBN1HR0VY

Shanghai-based Semiconductor Manufacturing International, a $5.4 Billion company and one of the largest such companies in China, pulled its listing from the NYSE.

https://www.cnbc.com/2019/05/24/major-chinese-chipmaker-delisting-from-the-nyse-but-says-it-has-nothing-to-do-with-trade-war.html

In 2018, Skyworks Solutions had 83% of its business in China. Apple had 20%, but 20% of Apple's revenue is a shitload of money. I had to laugh at the line, "Investors are increasingly concerned over the prospect of rising global protectionism." 'Global protectionism' pretty much covers The Donald's act.

https://www.cnbc.com/2018/04/04/chipmakers-may-have-the-most-to-lose-in-a-trade-war-with-china.html

[May 01, 2020] Assuming that the US did indeed seed the virus in Wuhan, then we might speculate that the seeding was timed to coincide with the flu season in China and with mass preparations for Chinese New Year.

May 01, 2020 | www.moonofalabama.org

Jen , Apr 29 2020 23:21 utc | 69

Jackrabbit @ 21, 53:

Justin GLyn @ 65 is correct: New Zealand Prime Minister Jacinda Ardern instituted a Stage 4 lockdown in her country in mid-to-late March with the aim of eliminating the virus from Kiwi shores. That goal is no longer feasible but the country has begun relaxing its lockdown to Stage 3 in an effort to revive its economy.

The US failure to anticipate blowback can be understood in one way: assuming that the US did indeed seed the virus in Wuhan, then we might speculate that the seeding was timed to coincide with the flu season in China and with mass preparations for Chinese New Year. The thinking was that the virus would spread through public transportation networks throughout the country and Beijing would have a full-time job on its hands just dealing with massive viral outbreaks all over the country, and fail to deal with them even adequately, leading to mass riots and eventually widespread resistance to Beijing, and maybe even the eventual disintegration of the CCP and its overthrow. US and other expatriates would be trapped in the country, and foreign embassies and consulates might even be torched, prompting a US-led coalition to invade parts of the country (like the south and the southeast) and take over in a start to the balkanisation of the country cunningly disguised as foreign help to keep order.

The US certainly did not anticipate that Chinese people trusted enough in Beijing to be willing to carry out whatever orders Beijing issued; the US assumption seems to be that everywhere around the planet, people yearn to be just as individualistic and suspicious of Big Government as Americans are, and that what they think of their local councils and regional governments is the same as what they think of their national governments.

The reality is that in many countries, whatever people think of their local councils and regional (state, provincial) governments may not be true of what they think of their national governments, because the functions of the three tiers of government in their countries may not overlap to the extent that they might do in the Anglocentric world.

Neither did the US anticipate that Chinese society could be advanced in its own way technologically with various functions such as public health, public transport and others integrated enough that the Chinese could respond to a rapidly spreading crisis in the way they did. That is in part because US society and values are based on competition, mutual suspicion and top-down orders among other things, rather than co-operation, collective behaviour and willingness to consider solutions based on ideas from divergent yet integrated sources.


Vasco da Gama , Apr 29 2020 23:47 utc | 75

Very good comment! Jen@69

That is a very plausible working hypothesis, and I mean it working, the main assumption is still to be proven but it explains many other observations of fact. But I will append a variable in the main assumption: we could even replace the initiative's agent with some non-state actor, ie Big Pharma. I am unable to "decide" between these possibilities. Are the Imperial forces conflicting to the extent implied? Are we yet at the point that a non-state actor is bold enough for such an action? I really don't want to stretch a perfectly good hypothesis but am I?

David KNZ , Apr 30 2020 1:39 utc | 90
===> Jen @ 69 Good Post; astute observations

I was in China at the time when this unfolded and note the following: 1: The Chinese cultural mindset is totally different from the Western one, and the gap much greater than most Westerners realise. Look at the videos of the 75th Anniversary of Modern China for a few clues 2: As the worlds largest atheist nation, death is considered final, rituals notwithstanding So they are motivated to survive..( and focus on delicious food to this end) 3: They talk. Incessantly. It is no accident that WeChat has grown exponentially.. What happens in one part of China is pretty quickly spread to other parts And on the Flipside, there are surveillance cameras everywhere

So when this unfolded, Mid Spring festival when the cities were emptied, the memory of the SARS epidemic sprang to forefront of the official mind. Xi JingPing appeared on most TV Channels, making it clear that he was taking responsibility for the government response. And implicitly, that if he failed, he would be gone, in keeping with the long tradition of Chinese leadership.

At this point we decided to bail, being prime targets to host the virus. Avoided getting quarantined in HongKong by 4 hours, and quarantine in Manus Island, Aus by one phone call.

There were 6 temperature checks and 4 police checks on route to HongKong Airport; arriving in New Zealand expecting some major medical checks. None. Just 2 nurses at a deck asking if we felt OK - handed a pamphlet and sent on our way. I did try to follow up but given official discouragement. So NZ was asleep at the wheel for weeks, and just plain lucky. However, once NZ woke up, the response was excellent; PM Jacinda Adern's speech was masterful and the response excellent. We had only two CoVid cases yesterday, as we move into level 3.

There are big problems in economic recovery here, but the alternative scenarios would have been far worse. And theres got to be a reason why various luxury private jets are turning up unannounced and often unmarked at the airports here :-)

Jackrabbit , Apr 30 2020 6:11 utc | 113
Jen @Apr29 23:21
karlof1 @Apr30 0:34

Each of your explanations are compelling in their own way.

A few things that your explanations left out (this is not meant to be a comprehensive list):


IMO any theory of deliberate release should consider these points.

Bolton's was asked to leave the administration because he was involved in pushing development of a virus which accidentally escaped the lab -OR- willingly left to give Trump/Deep State a scapegoat in case it became known that the use of the virus was deliberate? In either case, the virus was already "in the wild" ...

... which would explain why no medical professional resigned in Feb/March. It was never going to be possible to contain the virus in the West.

This would also explain why virus discussion were classified.

Trump did a trade deal with China that he knew they would have trouble to satisfy the terms of. The ARAMACO IPO - which had been delayed several times - came just about 6 weeks before the new virus was identified. And it was done despite the Houthi attack on ARAMACO facilities two months before (investors should've been very wary of the continuing war at the super high valuation).

<> <> <> <> <>

PS I do know that New Zealand had a lock-down but they did that as soon as they found 'community spread' and their vigilance has allowed them to start lifting the lock-down after only a short period.

!!

[Apr 30, 2020] No Weapon Left Behind The American Hybrid War on China by Pepe Escobar

Feb 21, 2020 | www.strategic-culture.org

Branding BRI as a "pandemic"

As the usual suspects fret over the "stability" of the Chinese Communist Party (CCP) and the Xi Jinping administration, the fact is the Beijing leadership has had to deal with an accumulation of extremely severe issues: a swine-flu epidemic killing half the stock; the Trump-concocted trade war; Huawei accused of racketeering and about to be prevented from buying U.S. made chips; bird flu; coronavirus virtually shutting down half of China.

Add to it the incessant United States government Hybrid War propaganda barrage, trespassed by acute Sinophobia; everyone from sociopathic "officials" to self-titled councilors are either advising corporate businesses to divert global supply chains out of China or concocting outright calls for regime change – with every possible demonization in between.

There are no holds barred in the all-out offensive to kick the Chinese government while it's down.

A Pentagon cipher at the Munich Security Conference once again declares China as the greatest threat , economically and militarily, to the U.S. – and by extension the West, forcing a wobbly EU already subordinated to NATO to be subservient to Washington on this remixed Cold War 2.0.

The whole U.S. corporate media complex repeats to exhaustion that Beijing is "lying" and losing control. Descending to sub-gutter, racist levels, hacks even accuse BRI itself of being a pandemic , with China "impossible to quarantine".

All that is quite rich, to say the least, oozing from lavishly rewarded slaves of an unscrupulous, monopolistic, extractive, destructive, depraved, lawless oligarchy which uses debt offensively to boost their unlimited wealth and power while the lowly U.S. and global masses use debt defensively to barely survive. As Thomas Piketty has conclusively shown, inequality always relies on ideology.

We're deep into a vicious intel war. From the point of view of Chinese intelligence, the current toxic cocktail simply cannot be attributed to just a random series of coincidences. Beijing has serial motives to piece this extraordinary chain of events as part of a coordinated Hybrid War, Full Spectrum Dominance attack on China.

Enter the Dragon Killer working hypothesis: a bio-weapon attack capable of causing immense economic damage but protected by plausible deniability. The only possible move by the "indispensable nation" on the New Great Game chessboard, considering that the U.S. cannot win a conventional war on China, and cannot win a nuclear war on China.

A biological warfare weapon?

On the surface, coronavirus is a dream bio-weapon for those fixated on wreaking havoc across China and praying for regime change.

Yet it's complicated. This report is a decent effort trying to track the origins of coronavirus. Now compare it with the insights by Dr. Francis Boyle, international law professor at the University of Illinois and author, among others, of Biowarfare and Terrorism . He's the man who drafted the U.S. Biological Weapons Anti-Terrorism Act of 1989 signed into law by George H. W. Bush.

Dr. Boyle is convinced coronavirus is an

"offensive biological warfare weapon" that leaped out of the Wuhan BSL-4 laboratory, although he's "not saying it was done deliberately."

Dr. Boyle adds, "all these BSL-4 labs by United States, Europe, Russia, China, Israel are all there to research, develop, test biological warfare agents. There's really no legitimate scientific reason to have BSL-4 labs." His own research led to a whopping $100 billion, by 2015, spent by the United States government on bio-warfare research: "We have well over 13,000 alleged life science scientists testing biological weapons here in the United States. Actually this goes back and it even precedes 9/11."

Dr. Boyle directly accuses "the Chinese government under Xi and his comrades" of a cover up "from the get-go. The first reported case was December 1, so they'd been sitting on this until they couldn't anymore. And everything they're telling you is a lie. It's propaganda."

The World Health Organization (WHO), for Dr. Boyle, is also on it: "They've approved many of these BSL-4 labs ( ) Can't trust anything the WHO says because they're all bought and paid for by Big Pharma and they work in cahoots with the CDC, which is the United States government, they work in cahoots with Fort Detrick ." Fort Detrick, now a cutting-edge bio-warfare lab, previously was a notorious CIA den of mind control "experiments".

Relying on decades of research in bio-warfare, the U.S. Deep State is totally familiar with all bio-weapon overtones. From Dresden, Hiroshima and Nagasaki to Korea, Vietnam and Fallujah, the historical record shows the United States government does not blink when it comes to unleashing weapons of mass destruction on innocent civilians.

For its part, the Pentagon's Defense Advanced Research Project Agency (DARPA) has spent a fortune researching bats, coronaviruses and gene-editing bio-weapons. Now, conveniently – as if this was a form of divine intervention – DARPA's "strategic allies" have been chosen to develop a genetic vaccine.

The 1996 neocon Bible, the Project for a New American Century (PNAC), unambiguously stated, "advanced forms of biological warfare that can "target" specific genotypes may transform biological warfare from the realm of terror to a politically useful tool."

There's no question coronavirus, so far, has been a Heaven-sent politically useful tool, reaching, with minimum investment, the desired targets of maximized U.S. global power – even if fleetingly, enhanced by a non-stop propaganda offensive – and China relatively isolated with its economy semi paralyzed.

Yet perspective is in order. The CDC estimated that up to 42.9 million people got sick during the 2018-2019 flu season in the U.S. No less than 647,000 people were hospitalized. And 61,200 died.

This report details the Chinese "people's war" against coronavirus.

It's up to Chinese virologists to decode its arguably synthetic origin. How China reacts, depending on the findings, will have earth-shattering consequences – literally.

Setting the stage for the Raging Twenties

After managing to reroute trade supply chains across Eurasia to its own advantage and hollow out the Heartland, American – and subordinated Western – elites are now staring into a void. And the void is staring back. A "West" ruled by the U.S. is now faced with irrelevance. BRI is in the process of reversing at least two centuries of Western dominance.

There's no way the West and especially the "system leader" U.S. will allow it. It all started with dirty ops stirring trouble across the periphery of Eurasia – from Ukraine to Syria to Myanmar.

Now it's when the going really gets tough. The targeted assassination of Maj. Gen. Soleimani plus coronavirus – the Wuhan flu – have really set up the stage for the Raging Twenties. The designation of choice should actually be WARS – Wuhan Acute Respiratory Syndrome. That would instantly give the game away as a War against Humanity – irrespective of where it came from.

[Apr 30, 2020] "Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organised, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it." -- Woodrow Wilson, 28th President of the United States (1856-1924)

Apr 29, 2020 | www.unz.com

Anonymous Disclaimer , says: Show Comment April 19, 2012 at 6:49 pm GMT

Thank you for an excellent article on what is happening. My only criticism is that it appears that these things "just happen". With your insight and erudition, could you please address "why" the situation has arisen. What could be the motivation behind actions and policies which so clearly will destroy not only the 99% but also the basic wealth of the1%?

This is not something new, but a recurrent theme in world affairs.

" Behind all the governments and the armies there was a big subterranean movement going on, engineered by very dangerous people." "Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organised, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it."
-- Woodrow Wilson, 28th President of the United States (1856-1924) "So you see, my dear Coningsby, that the world is governed by very different personages from what is imagined by those who are not behind the scenes." -- Benjamin Disraeli, British Prime Minister (1804-1881) President Franklin Delano Roosevelt wrote in November 1933 to Col. Edward House: "The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the government since the days of Andrew Jackson."

Many thanks

[Apr 29, 2020] China has become GREAT because the USA turned to neoliberalism and financialization of the economy and turned the USA into byzantinne, militaristic, mercenary rogue nation at service of the Globalists elites

Apr 29, 2020 | www.unz.com

which do not care about that cosmological romantic lyrical notion of America.

Anonymous [589] Disclaimer , says: Show Comment April 29, 2020 at 8:38 pm GMT

It is undeniable that China has made impressive achievements since the Maosits revolution to date. BUT lets be realistic pre1973 China still a Nation with markedly 3th world living standards, even today with a soft racist inuendos , people speak about the Chinese must adopt better hygiene standards personally and privately.

Before 1973 China had mainly 3th world status, eversince Nixon (or Kissinger?) opened China US Corporate Capitalists inundated Chinas economic landscape, in other words the real, KEY bases for Chinas economic success remain USA Corporations majority perhaps more than 70% of their industrial output, although China has wisely constraint, restrain the USA/World FINANCIAL cartels..(Soros speclation against te yuan, ans Soros Opensociety inflkuence in HongKong)

Can China remain stable internally with a growing well travel educated savvy middle class, and a POOR lower working class with meager salaries, slave like labor conditions, and oppressive political controls, that's a recipe for a social cauldron..

Will the Chinese proletariat demand more "democracy" western/eastern oriented reforms??..

... ... ...

China has become GREAT because the USA decided to become poor a Spartan, byzantinne, militaristic, mercenary rogue nation at service of the Globaloists ELITES which do not care about that cosmological romantic lyrical notion of America.

[Apr 28, 2020] Hudson gives him the primary credit for providing the foundation for Modern Monetary Theory

Apr 28, 2020 | www.moonofalabama.org

karlof1 , Apr 27 2020 0:25 utc | 53

Some will know who Hyman Minsky was, some won't. Hudson gives him the primary credit for providing the foundation for Modern Monetary Theory, and he gets praise from Keen, Wolfe and many others too. On the occasion of his 100th birthday, here's a long essay that seeks the following:

"But the question still stands: Was Minsky in fact a communist? Of course not. But, a century after his birth, it is useful to clarify often neglected aspects of his intellectual biography."

Since Minsky's referenced so often by Hudson particularly, I think this piece will be helpful for those of us following the serious economic issues now in play. I'd reserve an hour for a critical read.

[Apr 24, 2020] The USA is entering its Byzantine Empire phase

Apr 24, 2020 | www.unz.com

anonymous [589] Disclaimer , says: Show Comment April 23, 2020 at 8:52 pm GMT

YOU are completely MISreading the events so yo miss the target by 90% NO it wasnt the Russians . neither the Chinese..

IT was the FREEtraders NEOcons from Wallstreet and CFR, that transfer all american manufacturing overseas (china) deabsing the dollar into fiat money, banktupted the USA traesury The USA is entering its Byzanntyne Empire pahse a Spartan roque millitary nation while inploding intrenally the Angloamerican zionists already ecided toi amke China de first world power

[Apr 24, 2020] Sometime before the 20th century closed, there was a term coined: the "Princelings". These were the extravagantly wealthy offspring of many of the leadership of the CCP, and grandchildren of the men who endured the "Long March".

Apr 24, 2020 | www.unz.com

anachronism , says: Show Comment April 23, 2020 at 8:20 pm GMT

@Anonymous How should I describe it? The Chinese Communist Party has formed a plutarchy and an oligopoly "with Chinese characteristics".

Sometime before the 20th century closed, there was a term coined: the "Princelings". These were the extravagantly wealthy offspring of many of the leadership of the CCP, and grandchildren of the men who endured the "Long March".

"Genocide" is a term that is broadly applied to what is more accurately described as "ethnic cleansing". The Hans have taken over Tibet and Xin Jiang, and have oppressed the locals in a ruthless manner, that is comparable to what the Jews have done to Palestinians.

Systematically, the Chinese are converting the indigenous populations of poorer countries into indentured servants. These countries are so indebted to their Chinese "benefactors" that they have no hope for redemption, unless the Chinese are prepared to forgive the loans. So far, the Chinese have not been disposed to do so.

The effect and the consequence of these developments are close enough to warrant the comparison.

[Apr 24, 2020] Atlantacist Method: Raw materials come into China by Ship, and finished Goods leave by ship. Globo Homo ownership class takes the increment of production and wage arbitrage as gains. Wall Street/London is a hero, main street is a zero.

Apr 24, 2020 | www.unz.com

Mefobills , says: Show Comment April 23, 2020 at 5:05 pm GMT

@anon Lets add to the bigger picture. With regards to Israel: Exceptions don't make the rule.
_______

The forces that off-shored the jobs, to then make wage arbitrage and become masters of the universe, are the very same ones that are now demonizing China.

They are "international" in outlook, and the only national country that matters to them is Israel.

In general, it is a "class" of people -sometimes called "Davos Man" who goes by other names, such as globo-homo, ZOG (zionist world government), Ne0-Con, Neo-Liberal.

Globo-Homo couldn't resist the wage arbitrage that China represented after the Berlin Wall fell in 1990. Clinton gave China effective MFN status in 1993. Wall Street begins Green Mail Coercion Techniques against American industry to then off-shore jobs.

China also runs a simultaneous gambit against the U.S. by buying up TBills instead of goods from U.S. main-street. This then insures that U.S. dollar is propped up against the Yuan e.g. currency manipulation. The China/Wall Street Gambit is in full swing, and globo-homo is happy.

Globo-Homo doesn't care about the destruction of American Mainstreet, because only prices matter, and they are getting rich. China becomes the workshop for the world.

There are still elements within Globo-Homo that like their easy money derived from ownership of transplanted industry.

If you look at today's propaganda emission center for China psy-ops you will see that it is another mouthpiece and organ of the "international." They are festooned with neo-liberals and ne0-cons.

Why the sudden shift, where China is the golden goose, to becoming the enemy?

Summary: There are two main enemies against American Mainstreet Labor. There is the internal and international enemy of globo homo centered in Wall Street and London, and there are elements within China that used Mercantile techniques to continue imbalanced trade and theft of American patrimony and industry.

Globo homo has new marching orders, as they have belatedly realized that they got played. The jig is up, you cannot operate the usury mechanism, do speculation, and RIG THE WORLD, forever.

The U.S. military security state has communicated clearly, they don't like their "international" supply chains and loss of U.S. domestic manufacturing. Globo Homo has long used the US. military as a Golem which protected movement of ships from China's east coast.

Atlantacist Method: Raw materials come into China by Ship, and finished Goods leave by ship. Globo Homo ownership class takes the increment of production and wage arbitrage as gains. Wall Street/London is a hero, main street is a zero.

[Apr 21, 2020] Jim Chanos Says He's 'Outraged' Private Equity Giants Want Taxpayer Aid by Katherine Burton

"And if a bunch of hedge funds get wiped out - what's the big deal? Let them fail. So they don't get the summer in the Hamptons - who cares."
See also https://finance.yahoo.com/video/why-chanos-bemused-pe-push-213642036.html
Apr 10, 2020 | finance.yahoo.com

(Bloomberg) -- Legendary short-seller Jim Chanos said he's troubled that private equity is seeking financial aid from the federal government due to the economic impact of the coronavirus epidemic.

"'I'm a little bemused, puzzled and somewhat outraged, I guess, that private equity would be pushing to the front of the line to try to get taxpayer assistance," he said in an interview Thursday on Bloomberg Television.

The Federal Reserve's move Thursday to throw a lifeline to small and mid-sized businesses and fund the purchases of some types of high-yield bonds has has been seen by some market participants as helping the private equity firms who owns some of these companies. Those firms earlier this week were dealt a setback in their attempt to gain access to billions of dollars of loans that the U.S. government is doling out to help businesses hit hard by the pandemic, Bloomberg reported.

Chanos said a look at the year-end letters for the four biggest publicly-traded private equity firms showed they had more than $300 billion in dry powder to put to use.

"I think private equity is possibly at a crossroads similar to where hedge funds were post the global financial crisis," said Chanos, who runs hedge fund Kynikos Associates. "People are going to start to judge the high fees and the illiquidity and think: 'Am I really getting the return commensurate for the risk?"

For more articles like this, please visit us at bloomberg.com

[Apr 20, 2020] John Kenneth Galbraith

Apr 20, 2020 | en.wikipedia.org

1955 book about 1929 crash. https://en.wikipedia.org/wiki/The_Great_Crash,_1929

The tectonic shifts and the trajectory of both countries (China and the USA) after this epidemics end is unpredictable. "Chimerica" type of globalization was in decline before the epidemic (Huawai, etc) and Trump badly wants decoupling from China. Somebody needs to pay for those changes. It might well be us. So it is quite probable that those techno Nouveau riche like us might be soon royally fleeced one way or another.

It might be prudent to have at least 300K in three bank accounts (in the USA only the first 100K are ensured) at 1% or less. Buying TIPs directly from Treasury is another option. I hope your house is already fully paid.

BTW Marina can get half of your Social Security pension if her own is too small.

[Apr 13, 2020] COVID-19 Shutdown The End Of Globalization And Planned Obsolescence Enter Multipolarity by Joaquin Flores

Notable quotes:
"... Authored by Joaquin Flores via The Strategic Culture Foundation, ..."
"... the declining rate of profit necessitated by automation, with the increasingly irrational policies, in all spheres, being pursued to salvage the ultimately unsalvageable. ..."
"... Because the present system is premised on a production-consumption and financial model, the solutions to crises are presented as population reduction and what even appears, at least in the case of Europe, as population replacement. As cliché as this may seem, this also appeared to be the policy of the Third Reich when capitalism faced its last major crises culminating in WWII. ..."
Apr 12, 2020 | www.zerohedge.com
Authored by Joaquin Flores via The Strategic Culture Foundation,

The coronavirus pandemic has shown that the twin processes of globalization and planned obsolescence are deficient and moribund. Globalization was predicated on a number of assumptions including the perpetuity of consumerism, and the withering away of national boundaries as transnational corporations so required.

What we see instead is not a globalization process, but instead a process of rising multipolarity and a rethinking of consumerism itself.

Normally a total market crash and unemployment crisis would usher in a period of militant labor activity, strikes, walk-outs and community-labor campaigns. We've seen some of this already . But the 'medical state of emergency' we are in, has effectively worked like a 'lock-out' . The elites have effectively flipped-the-script. Instead of workers now demanding a restoration of wages, hours, and work-place rights, they are clamoring for any chance to work at all, under any conditions handed down. Elites can 'afford' to do this because they've been given trillions of dollars to do so. See how that works?

All our lives we've been misinformed over what a growing economy means, what it looks like, how we identify it. All our lives we've been lied to about what technical improvement literally means.

A growing economy in fact means that all goods and services become less expensive. That cuts against inflation. Rather all prices should be deflating – less money ought to buy the same (or the same money ought to buy more). Technical innovation means that goods should last longer, not be planned for obsolescence with shorter lifespans.

Unemployment is good if it parallels price deflation. If both reached a zero-point, the problems we believe we have would be solved.

In a revealing April 2nd article that featured on the BBC's website, Will coronavirus reverse globalisation? it is proposed that the pandemic exposes the weaknesses and vulnerabilities of a global supply-chain and manufacturing system, and that this in combination with the over-arching US-China trade war would see a general tendency towards 're-shoring' of activities. These are fair points.

But the article misses the point of the underlying problem facing economics in general: the declining rate of profit necessitated by automation, with the increasingly irrational policies, in all spheres, being pursued to salvage the ultimately unsalvageable.

The Karmic Wheel of Production-Consumption

The shut-downs – which seem unnecessary in the numerous widely esteemed experts in virology and epidemiology – appear to be aimed at stopping the production-consumption cycle. When we look at the wanton creation of new 'money', to bailout the banks, we are told that this will not cause inflation/debasement so long as the velocity of money is kept to a minimum. In other words – so long as there is not a chain reaction of transactions, and the money 'stays still' – this won't cause inflation. It's a specious claim, but one which justifies the quarantine/lock-down policy which today destroys thousands of small businesses every day. In the U.S. alone, unemployment claims will pass 30 million by mid April .

Likewise, this money appears real, it sits digitally as new liquidity on the computer screens of tran-Atlantic banks – but it cannot be spent, or it tanks the system with hyper-inflation. More to the point, the BBC piece erroneously continues to assume the necessity of the production-consumption cycle, spinning wheat into gold forever.

The elites were not wrong to shut-down the cycle per se. The problem is that they cannot offer the correct hardware in its place – for it puts an end to the very way that they make money. It is this, which in turn is a major source for the maintenance of their dopamine equilibrium and narcissist supply.

This is not an economic problem faced by 'the 1%' (the 0.03%) . It is an existential crisis facing the meaning of their lives, where satisfaction can only be found in ever greater levels of wealth and control, real or imagined – chasing that dragon, in search of that ever-elusive high.

So naturally, their solutions are population reduction and other such quasi-genocidal neo-Malthusian plans. Destruction of humanity – the number one productive-potential force – resets the hands of time, back to a period where profit levels were higher. The algorithmically favored coronavirus Instagram campaign of seeing city centers without people and declaring these 'beautiful' and 'peaceful' is an example of this misanthropic principle at play.

That the elites have chosen to shut-down the western economy is telling of an historic point we have reached. And while we are told that production and consumption will return somewhat 'after quarantine', we also hear from the newly-emerged unelected tsars – Bill Gates et al – that things will never return to normal .

What we need to end is the entire theory and practice of globalization itself, including UN Agenda 21 and the dangerous role of 'book-talking' philanthropists like Gates and his grossly unbalanced degree of power over policy formation in the Western sphere.

In place of waning globalization, we are seeing the reality of rising multipolarity and inter-nationalism. With this, the end of the production-consumption cycle, based upon off-shore production and international assembly, and at the root of it all: planned obsolescence towards long-term profitability.

The Problem of Globalization Theory

Without a doubt, globalization theory satisfied aspects of descriptive power. But as time marched forward, its predictive power weakened. Alternate theories began to emerge – chief among these, multipolarity theory.

The promotion of globalization theory also raises ethical problems. Like a criminologist 'describing' a crime-wave while being invested in new prison construction, globalization theory was as much theory as it was a policy forced upon the world by the same institutions behind its popularization in academia and in policy formation. Therefore we should not be surprised with the rise of solutions like those of Gates. These involve patentable 'vaccines' by for-profit firms at the expense of buttressing natural human immunities, or using drugs which other countries are using with effectiveness.

The truth? Globalization is really just a rebrand of the Washington Consensus – neo-liberal think-tanks and the presumed eternal dominance of institutions like the World Bank and the International Monetary Fund, which in turn are thinly disguised conglomerates of the largest trans-Atlantic banking institutions.

So while globalization was often given a humanist veneer that promised global development, modernization, the end of 'nation-states' which presumably are the source of war; in reality globalization was premised on continuing and increasing concentration of capital towards the 19th century zones – New York, London, Berlin, and Paris.

'Internationalism' was once rooted in the existence of nations which in turn are only possible with the existence of culture and peoples, but was hi-jacked by the trans-Atlanticist project. Before long, the new-left 'internationalists' became champions of the very same process of imperialism that their forbearers had vehemently opposed. Call it 'globalization' and show how it's destroying 'toxic nationalism' and creating 'microfinance solutions for women and girls' – trot out Malala – and it was bought; hook, line and sinker.

This was not the new era of 'globalization', but rather the usual suspects going back to the 19th century; a 'feel-good' rebranding of the very same 19th century imperialism as described in J.A Hobson's seminal work from 1902, Imperialism. Its touted 'inevitability' rested not on the impossibility of alternate models, but on the authority that flows forth from gunboat diplomacy. But sea power has given way to land power.

In many ways it aligned with the era of de-colonialization and post-colonialism. New nations could wave their own flags and make their own laws, so long as the traditionally imperialist western banking institutions controlled the money supply.

But what is emerging is not Washington Consensus 'globalization', but a multipolar model based in civilizational sovereignty and difference, building products to last – for their usefulness and not their repeatable retail potential. This cuts against the claims that global homogenization in all spheres (moral, cultural, economic, political, etc.) was inevitable, as a consequence of mercantile specialization.

Therefore, inter-nationalism hyphenated as such, reminds us that nations – civilizations, sovereignty, and their differences – make us stronger as a human species. Like against viruses, some have stronger natural immunity than others. If people were identical, one virus could wipe-out all of humanity.

Likewise, an overly-integrated global economy leads to global melt-down and depression when one node collapses. Rather than independent pillars that could aid each other, the interdependence is its greatest weakness.

Multipolarity is Reality

This new reality – multipolarity – involves processes which aspects of globalization theory also suggest and predict for, so there are some honest reasons why experts could misdiagnose multipolarity as globalization. Overlooked was that the concentration of capital nodes in various and globally diverse regions by continent, were not exclusively trans-Atlantic regions as in the standard globalization model of Alpha ++ or Alpha+ cities. This capital concentration along continental lines was occurring alongside regional economic development and rising living standards which tended to promote the efficiency of local transportation as opposed to ocean-travel in the production process. As regional nodes by continent had increasingly diversified their own domestic production, a general tendency for transportation costs to increase as individual per capita usage increased, worked against the viability of an over-reliance on global transit lines.

But among many problems in globalization theory was that the US would always be the primary consumer of the world's goods, and with it, the trans-Atlantic financial sector. It was also contingent on the idea that mercantilist conceptions of specialization (by nation or by region) would always trump autarkic models and ISI (income substitution industrialization). Again, if middle-class consumer bases are rising in all the world's inhabited continents as multipolarity explains and predicts, then a global production regimen rationalized towards a trans-Atlantic consumer base as globalization theory predicts isn't quite as apt.

Because the present system is premised on a production-consumption and financial model, the solutions to crises are presented as population reduction and what even appears, at least in the case of Europe, as population replacement. As cliché as this may seem, this also appeared to be the policy of the Third Reich when capitalism faced its last major crises culminating in WWII.

Breaking the Wheel

The shutdown reveals the karmic wheel of production-consumption is in truth already broken. We have already passed the zenith point of what the old paradigm had to offer, and it has long since entered into a period of decay, economic and moral destruction.

Like the Christ who brings forth a new covenant or the Buddha who emerges to break the wheel of karma, the new world to be built on the ruins of modernity is a world that liberates the productive forces, realizing their full potential, and with it the liberation of man from the machine of the production-consumption cycle.

Planned obsolescence and consumerism (marketing) are the twin evils that have worked towards the simultaneous time-wasting enslavement of 'living to work' , and have built globalization based on global assembly and global mono-culture.

What is important for people and their quality of life is the time to live life, not be stuck in the grind. We hear politicians and economists talking about 'everyone having a job', as if what people want is to be away from their families, friends, passions, or hobbies. What's more – people cannot invent, innovate, or address the greater questions of life and death – if their nose is to the grindstone.

Now that we are living under an overt system of control, a 'medical state of emergency' with a frozen economy, we can see that another world is possible. The truth is that most things which are produced are intentionally made to break at a specific time, so that a re-purchase is predictable and profits are guaranteed. This compels global supply chains and justifies artificially induced crashes aimed at upward redistribution and mass expropriations.

Instead of allowing Bill Gates to tour the world to tout a police-state cum population reduction scheme right after a global virus pandemic struck, one which many believe he owns the patent for , we can instead address the issues of multipolarity, civilizational sovereignty, and ending planned obsolescence and the global supply chain, as well as the off-shoring it necessitates – which the BBC rightly notes, is in question anyhow.

[Apr 10, 2020] Global Times blasts Outlaw US Empire COVID response:

Apr 10, 2020 | www.globaltimes.cn
Global Times blasts Outlaw US Empire COVID response :

"The vicious virus, the polarization of US politics and deepening international divergences have plunged humanity into unprecedented uncertainties. A jumbled, irresponsible and impulsive US greatly enhanced the risks the world is facing.

"What's worse, the US did not engage in any reflection, and the inability of its government was only attributed to partisanship. The anti-China element in its public opinion has been brewing with the instigation of the administration and some politicians. This has greatly crumbled the US' self-correction ability.

"The harm on humanity caused by a virus, no matter how frightening it is, only remains at the physical level. But the US destruction at the political level is amplifying this crisis that endangers global governance. Even if the pandemic is put under control, humanity has to face the turbulence post-pandemic. Such dual uncertainties have gone beyond the imagination of people even with their decades of living experience."

IMO and contrary to the editorial's conclusion, "populist politics" had nothing to do with Trump's beyond mediocre response; rather, it's all been ideological beginning with the utter lack of preparation.

Posted by: karlof1 | Apr 9 2020 17:22 utc | 108

[Apr 10, 2020] 'Piracy' Or America First US Customs To Seize All Exports Of Masks Gloves

Apr 09, 2020 | www.zerohedge.com

A policy that US allies in Europe have recently slammed as 'piracy' is set to continue, as Washington unabashedly and unapologetically continues blocking shipments from US soil of personal protective equipment (PPE) -- such as gowns, gloves, and N95 face masks -- which hospitals and health workers desperately need in the fight against COVID-19.

The Hill reports that "The federal government will begin seizing exports of personal protective equipment, or PPE, until it decides if the tools should be kept in the country to fight the coronavirus."

The announcement was made Wednesday by US Customs and Border Protection (CBP), formalizing an existing controversial practice under Defense Production Act (DPA) which has recently blocked millions of masks from being exported from Minnesota-based 3M to Canada. US customs will block all respirators, surgical masks and surgical gloves from going abroad.

Image source: Reuters

Canadian leaders blasted the move as putting lives in danger, while Germany and France described the US policy, which has seen recent interventions against shipments from China bound for Europe, as 'piracy'.

"FEMA and CBP are working together to prevent domestic brokers, distributors, and other intermediaries from diverting these critical medical resources overseas," a joint statement indicated.

"Today's order is another step in our ongoing fight to prevent hoarding, price gouging, and profiteering by preventing the harmful export of critically needed PPE," the White House also said in a statement. "It will help ensure that needed PPE is kept in our country and gets to where it is needed to defeat the virus."

It appears Trump's 'America First' policy in action at a crucial time of crisis , as the US is the global epicenter for COVID-19, now with over 430,000 confirmed cases - most in New York state - which has witnessed hospitals running desperately low on supplies, including ventilators.

However, foreign governments have of late essentially warned 'what goes around comes around' . Berlin Interior Minister Andreas Geisel at the start of the week stated bluntly of Washington's brazen policy that it constitutes a Wild West tactic - essentially warning Europe can play dirty too.

[Apr 10, 2020] Japan To Spend Billions Relocating Production Out Of China

Apr 09, 2020 | www.zerohedge.com
Japan has allocated $2.2 billion (US) of its $993 billion emergency stimulus package to help manufacturers relocate production out of China amid the COVID-19 pandemic which began in the communist nation. According to SCMP , $2 billion (US) will be set aside for companies shifting production back to Japan , while roughly $223.5 million will be spent on helping companies move production to other countries, according to SCMP .

Under normal circumstances, China is Japan's largest trading partner - however imports from China plummeted nearly 50% in February as the coronavirus pandemic resulted in closed factories and unfilled orders. Meanwhile, a planned visit by Chinese President Xi Jinping to Japan early this month - the first such trip in a decade - was postponed with no date rescheduled.

It remains to be seen how the policy will affect Prime Minister Shinzo Abe's years-long effort to restore relations with China.

" We are doing our best to resume economic development ," Foreign Ministry spokesman Zhao Lijian told a briefing Wednesday in Beijing, when asked about the move. " In this process, we hope other countries will act like China and take proper measures to ensure the world economy will be impacted as little as possible and to ensure that supply chains are impacted as little as possible ." - SCMP

China's production trainwreck has revived discussion among Japanese firms over reducing their reliance on China as a manufacturing base - while the government's panel on future investment recommended last month that manufacturing of high-value products should shift back to Japan - while other goods should be diversified across Southeast Asia.

"There will be something of a shift," according to Japan Research Institute economist Shinichi Seki, who noted that Japanese companies were already considering moving out of China. "Having this in the budget will definitely provide an impetus." That said, certain industries such as automotive will likely stay put.

Japan exports a far larger share of parts and partially finished goods to China than other major industrial nations, according to data compiled for the panel. A February survey by Tokyo Shoko Research found 37 per cent of the more than 2,600 companies that responded were diversifying procurement to places other than China amid the coronavirus crisis. - SCMP

[Apr 06, 2020] A sound banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him. ~Keynes

Highly recommended!
Apr 06, 2020 | www.nakedcapitalism.com

notabanktoadie , April 6, 2020 at 8:04 am

A sound banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him. Keynes via Yves

The problem is that the payment system, besides grubby coins and paper Central Bank notes (e.g. Federal Reserve Notes), must work through private depository institutions or not at all.

How then can we have a sound economy when it is held hostage by "sound" bankers?

And are not the banks a form of rentier – who rent the Nation its money supply?

Then where are the proposals of the MMT School to euthanize those rentiers?

[Apr 05, 2020] Capitalism is the legitimate racket of the ruling class. Al Capone

Apr 05, 2020 | www.moonofalabama.org

Mao , Apr 6 2020 2:25 utc | 134

Al Capone Money Quote saying that being a capitalist is the legitimate racket of those in power – with laws to back it up. Al Capone said:

"Capitalism is the legitimate racket of the ruling class."

https://itsamoneything.com/money/wp-content/uploads/Al-Capone-Capitalism-Ruling-Class-Racket.jpg

[Apr 05, 2020] If there's one industry where private equity has done the most to directly harm American public, it's health care

Apr 05, 2020 | www.zerohedge.com

This KKR-Backed Healthcare Firm Just Slashed Doctors' Pay In The Middle Of An Unprecedented Pandemic

Even if they aren't exactly certain how the business model works, Twitter blue checks and the rest of the mainstream media - having been whipped into an anti-banker fervor by Bernie Sanders and the last glowing embers of Occupy - never pass up an opportunity to kick private equity in the nuts.

And if there's one industry where private equity has done the most to directly harm American public, it's health care.

Envision's Colorado headquarters

During the latter part of the Democratic primary campaign, Bernie Sanders and Elizabeth Warren primed the pump by extolling the evils of private equity to the public every chance they got, helping impress the term into the memory banks of legions of twentysomethings how the industry had contributed to America's health-care crisis, along with a multitude of other societal ills. Now, with the world in the grip of an unprecedented crisis, the industry is about to get pilloried once again - but this, much, much bigger than before, we suspect - as private equity-backed health-care companies, loaded down from their LBO debt binges, are forced to make cutbacks including slashing pay for doctors and nurses in the middle of a pandemic that has already killed nearly 9,500 Americans.

And now the KKR-backed Envision Healthcare Corp., one of the biggest medical providers backed by private equity, is poised to become the poster-child for Wall Street greed as it informs hundreds of doctors in its employ will not be receiving the bonus checks they had been expecting in April. Though we suspect this isn't a complete surprise, the cuts will deprive hundreds of doctors of roughly one-third of their total comp during an already extremely difficult time for them and their families. The company has promised to repay them at a later date once their financial situation has improved.

The move risks igniting a blowback that could make KKR one of "the most hated companies in the world. Just ask Martin Shkreli.

But the reason the company's financial position is so poor in the first place is because Envision carries more than $7 billion of debt. This debt was amassed during what was, according to data compiled by Bloomberg , the third-largest health-care LBO ever.

In a statement, Envision said it's "100% focused" on saving lives during this crisis, even though its business (ambulatory surgical centers and medical staffing) shrank more than 75% in two weeks, Bloomberg said. With so many Americans hiding at home and fearful of entering hospitals and doctor's offices, people are delaying elective and non-emergency care at unprecedented rates.

"We are on the front lines caring for patients during this unprecedented public health and economic crisis," the Nashville, Tennessee-based company said. "Envision Healthcare is 100 percent focused on saving lives and sustaining the nation's fragile health-care system. The safety net we provide for millions of patients must remain fully intact for when we get to the other side of this national crisis."

Like many companies, Envision completely drew down its two credit lines to provide financial flexibility in recent weeks (apparently it didn't listen to Larry Kudlow and Mnuchin). The company spends about $1.5 billion on compensation for physicians quarterly, an insider reportedly told BBG. The company has about $140 million to $150 million in debt payments due in the next two weeks, according to Mike Holland of Bloomberg Intelligence, and has $650 million of cash on its balance sheet. It has warned investors that it might need to raise more financing if circumstances continue to deteriorate.

The biggest problem for KKR, is that some of the physician groups are planning to sue the company; litigation could draw unwanted attention to KKR at a time when public anger is dangerously high.

But as the 'cockroach' theory suggests, Envision isn't alone: The boom in LBOs (part of the binge on corporate debt that also fueled the surge in buybacks) left many companies, especially in the health-care space, where many companies were built via a series of costly mergers and acquisitions.

[Mar 28, 2020] Just imagine the French hoity toity now not having to put up with the yellow vests in the streets. Must be such a comforting relief.

Mar 28, 2020 | www.unz.com

Old and Grumpy , says: Show Comment

[Mar 28, 2020] One common flavour of modern idiotism: I've heard doctors and pharmacists complain that patients will get offended when prescribed a cheaper, older drug. They want the best and newest, they need and deserve it!

Highly recommended!
Mar 28, 2020 | www.unz.com

Redneck farmer , says: Show Comment March 27, 2020 at 10:09 am GMT

There is also a tendency to think newer=better. I've heard doctors and pharmacists complain that patients will get offended when prescribed a cheaper, older drug. They want the best and newest, they need and deserve it!
Jake , says: Show Comment March 27, 2020 at 11:42 am GMT
@Redneck farmer That is because advertising works. Drug companies being allowed to advertise guaranteed that predators, such as the Sacklers, would want to own drug companies.
Oracle , says: Show Comment March 27, 2020 at 2:43 pm GMT
More activity on the dark, unethical side of capitalism. There's an entire history of it, opium wars, Atlantic slave trade, pornography, control of political agents through pedophilia. The list does go on and strangely enough it's usually the same actors.

[Mar 27, 2020] We have to beg for hand sanitizer? It's almost like we are one of the nations under strct USA sanction

Mar 27, 2020 | www.moonofalabama.org

karlof1 , Mar 26 2020 23:56 utc | 90

Just one of many important anecdotal observations :

"We have to beg for hand sanitizer? It's almost like we are one of the nations we sanction."

[Mar 27, 2020] Exactly when did behaviour of neoliberals become a bunch of out-takes from Catch-22?"

Mar 27, 2020 | www.moonofalabama.org

bevin , Mar 27 2020 1:17 utc | 98

johnbrewster@77
Here's a story from today's Toronto Star. It's a neoliberalism story and goes well with Pepe Escobar's piece in Asia Times (see above for link)
Basically the Province of Ontario stockpiled everything need for the pandemic that SARs warned them was bound to come.

Then, a couple of years ago, they destroyed the stockpiles including 55 million facemasks.

Now there are no face masks to be found and medical staff, inter alia, are having to take totally unnecessary risks.

Why did this happen? Because neo-liberalism is all about profits and fiscal austerity: as soon as the masks got beyond their 'best before' date they were destroyed - so the manufacturers could have another bite at the cherry and sell another 55 million masks. But then, austerity, the need to finance tax cuts for the wealthy, stepped in so the orders were not renewed. And people will die, horrible deaths, as a result.


https://www.thestar.com/opinion/star-columnists/2020/03/25/province-stockpiled-55-million-face-masks-then-destroyed-them.html

[Mar 27, 2020] Looks like the USA and the Soviet Union traded jerseys after the wall fell.

Mar 27, 2020 | www.moonofalabama.org

steve , Mar 26 2020 22:46 utc | 75

For me the USA and the Soviet Union traded jerseys after the wall fell. The USA took victory way to seriously.

[Mar 27, 2020] Larry Summers should have a drink named after him

Mar 27, 2020 | www.moonofalabama.org

uncle tungsten , Mar 26 2020 19:46 utc | 22

karlof1 #10

Larry Summers should have a drink named after him.
Ofshore double hoarder
Safebreaker with tonic
Gin and plunder scammer


Thanks b,I bought last roll of narrow elastic yesterday and will cut up some old silk shirts today.

[Mar 27, 2020] Trump's about as innocent in the coronavirus fiasco as jack the ripper

Mar 27, 2020 | www.moonofalabama.org

Miss Lacy , Mar 26 2020 20:32 utc | 35

PS to vk # 1. Please think again. Trump has been in a trade war with China for what? a couple of years? AND, he specifically banned imports of medical supplies from China. Other posters wave supplied links for this idiocy.

Trump's about as innocent as jack the ripper. You may just be seeing things relatively, as ghouls like Elliot Abrahms and disgusting Pomposity make Trump seen like an amateur.

[Mar 27, 2020] Senior officials in the Trump administration agreed to new measures to restrict the global supply of chips to China's Huawei Technologies, sources familiar with the matter said, as the White House ramps up criticism of China over coronavirus.

Mar 27, 2020 | www.moonofalabama.org

Likklemore , Mar 26 2020 21:56 utc | 66

Is the troop deployment along the Canadian border is to stop anyone interfering in the coming chaos?

Posted by: Ian2 | Mar 26 2020 20:34 utc | 36

You have a point there --the coming chaos after the COVID-19 Health crisis.

Wondering if Trudeau knows about the fences that were erected this morning?

Maybe I missed Trump's tweet on his declaration of War.

- He has imposed more sanctions on Iranians.
- Indicted Maduro of Venezuela on narco trafficking, sponsor of terrorism; placed a $15 million bounty on his head --straight from the Panama playbook.

and this beauty - continues his trade war on China because -----

Exclusive: U.S. prepares crackdown on Huawei's global chip supply - sources

(Reuters) - Senior officials in the Trump administration agreed to new measures to restrict the global supply of chips to China's Huawei Technologies, sources familiar with the matter said, as the White House ramps up criticism of China over coronavirus.

The move comes as ties between Washington and Beijing grow more strained, with both sides trading barbs over who is to blame for the spread of the disease and an escalating tit-for-tat over the expulsion of journalists from both countries.

Under the proposed rule change, foreign companies that use U.S. chipmaking equipment would be required to obtain a U.S. license before supplying certain chips to Huawei. The Chinese telecoms company was blacklisted last year, limiting the company's suppliers.[.]
"This is going to have a far more negative impact on U.S. companies than it will on Huawei, because Huawei will develop their own supply chain," trade lawyer Doug Jacobson said. "Ultimately, Huawei will find alternatives."[.]

Huawei has been doing just that - finding alternatives. Trade wars have been proven to end badly. They end up going hot.

[Mar 25, 2020] Goldman Gives CEO 20% Raise - While Forecasting Major Coronavirus-caused Financial Crash for Americans

Mar 25, 2020 | www.unz.com

Boiling frogss , says: Show Comment March 25, 2020 at 1:46 pm GMT

Goldman Gives CEO 20% Raise-

While Forecasting Major CoronaVirus-Caused Financial Crash for Americans

https://www.youtube.com/embed/MFinbvX0Jg0?feature=oembed

https://www.youtube.com/embed/IXatS9PeuCU?feature=oembed

[Mar 24, 2020] With the neocon foreign policy of "full Spectrum Dominance" the USA seems well trapped in its rail tracks

Mar 24, 2020 | www.unz.com

Daniel Chieh , says: Show Comment March 24, 2020 at 1:21 pm GMT

@Divine Right American conflicts with Russia are based partly on self-serving fictions of the military industrial complex that need an enemy for their continued existence, as well as some more realistic conflicts involving Eastern Europe and rival interests over oil prices. The US need for hegemony, which is highly tied to the value of the dollar as a reserve currency, further thrusts this forward and center(and indeed, into conflict with China as well). This all is intermingled with a [fake and hypocritical] generalized rejection of "authoritarian" governments.

China, on the other hand, has no real current conflicts with Russia – most conflicts involve sales of weaponry and political influence over central Asian states, nothing of vast importance at least compared to being their the target of an enormous world-spanning sanctions order or a dedicated trade war.

Your argument has the weird self-contradiction that the CCP both is supposedly the mind-controlling alien brain of all Asians, while at the same time, not actually benefiting from any specific conflict with Russia. This also ignores the fact that Asians tend to assimilate the highest by any population(at nearly 40% intermarriage in some segments, that Chinese students in particularly no longer tend to stay in the US( only 20% by 2017 ), and that a overwhelming part of the demographic increase by immigration is Indian with long historical and cultural rivalries with China. And far more than Chinese Americans, who often engage in racial masochism(witness Gordan Chang ), Indian Americans are vastly more active and influential in American politics both due to cultural reasons as well as higher verbal IQ. This isn't even hypothetical: Indian American political writers dominate National Interest articles stressing for more hawkish Chinese attitudes and were directly contributory to renaming the South China Seas conflict to the "Indo-Pacific region."

I do agree that the US has long since crippled its resource base. But there's no evidence that Trump, or anyone else, is demonstrating the barest inkling of trying to resolve it(or that it is even possible, given the bueaucratic overload and red tape of regulations). Gould once described evolution as a "drunkard's walk" between complexity, where organisms sometimes fall trapped inside rail tracks, unable to stumble out.

The US seems well trapped in its rail tracks.

Blinky Bill , says: Show Comment March 24, 2020 at 2:35 pm GMT
@Daniel Chieh

Indian American political writers dominate National Interest articles stressing for more hawkish Chinese attitudes and were directly contributory to renaming the South China Seas conflict to the "Indo-Pacific region."

Prime example Saagar Enjeti.

https://www.youtube.com/embed/vkqq74knVXM?feature=oembed

neutral , says: Show Comment March 24, 2020 at 3:25 pm GMT
@Blinky Bill This is just further proof that there is a growing Indian problem in America.

[Mar 24, 2020] Many Italians in Northern Italy sold their leather goods and textiles companies to China. Italy then allowed 100,000 Chinese from Wuhan/Wenzhou to move to Italy to work in these factories, with direct Wuhan flights. Result: Northern Italy is Europe's hotspot for Wuhan Coronavirus

Mar 24, 2020 | www.unz.com

Felix Keverich , says: Show Comment March 22, 2020 at 4:37 pm GMT

@Anatoly Karlin There is apparently a large colony (100.000) of Chinese workers in Lombardy, with direct flights between Lombardy and Wuhan, so this Italian outbreak is not a coincidence.

Many Italians in Northern Italy sold their leather goods and textiles companies to China. Italy then allowed 100,000 Chinese from Wuhan/Wenzhou to move to Italy to work in these factories, with direct Wuhan flights. Result: Northern Italy is Europe's hotspot for Wuhan Coronavirus

-- George Papadopoulos (@GeorgePapa19) March 18, 2020

UK had a "herd immunity" strategy from the beginning. They made no real effort at containment. British government allowed their people to become infected, and only began to change course after public outrage.

Europe Europa , says: Show Comment March 22, 2020 at 4:48 pm GMT
@Felix Keverich The large Chinese population in Italy has been completely ignored by the media, in fact China itself seems to have been let completely off the hook. The focus is now on how terrible Britain and the native British people are.

Someone even posted a Tweet above by a Vietnamese person trying to claim that BRITAIN of all countries is responsible for the outbreak in Vietnam, I mean what kind of ridiculous logic is that? Vietnam bloody BORDERS China, the origin and epicentre of the Coronavirus outbreak, and the Vietnamese are trying to say Britain is the cause? It beggars belief.

[Mar 24, 2020] Manufacturing in cheap Third World countries and rewarding the local compradors with a permission to migrate to the West as contributing factor to the coronavirus epidemic

Mar 24, 2020 | www.unz.com

Beckow , says: Show Comment March 22, 2020 at 6:56 pm GMT

@AP

less globalization outside North America/Europe/Japan/Australia

You are missing the point of globalization: manufacturing in cheap Third World countries and rewarding the local compradors with a permission to migrate to the West. That's the deal, that's what globalization is.

With NA-Europe-Japan all you get is tourism and travel. I would be surprised if we can at this point convince Chinese and the other cheap labor countries to do the work and forgo the hope of migration. It was a Faustian deal and those as we know end in hell.

utu , says: Show Comment March 22, 2020 at 7:01 pm GMT
@AP Calm down, man and stop the stupid blaming game. It seems that your Banderite spin also includes bashing Chinese which, on the second thought, should not be surprising as there is only one paymaster. Perhaps you should specialize in Ukraine only and leave China to more competent haters.

Compare Canada and Italy on Chinese residents: Canada has 5 times more Chinese than Italy but 62 times less infection cases and 539 times less fatalities than Italy (as of March 16). Furthermore France and UK have more Chinese than Italy.

What about tourists: In Canada 0.75 mil Chinese tourist but in Italy 3.5 mil Chinese tourists. So it must be the tourists, right?

So compare Japan with Italy on Chinese tourists: 8.4 mil Chinese tourist in Japan vs. 3.5 mil Chinese tourists in Italy. How many cases in Japan?

So what I am trying to convey is that the expression of the epidemic in different countries is not congruent with the number of Chinese residents or Chinese tourist.

We will never know where the patients zero (yes plural, there are many patients zero) really came from. For various political reasons we will not be told and what we will be told we must be skeptical about. I found interesting data about the first infected in British Columbia that has huge rather affluent Chinese population. There were as many Iranians as non-Iranians on the list.

In British Columbia cases 1 to 5 were from China though it does not appear they infected others while cases 6, 7, , 12 and 14, 15, 19 were traced to Iran. Then the case 22 was from Iran and also case 31. Case 32 was from Italy, case 35 was from Egypt and case 37 was from Germany. So out of first 37 cases over 50% were people came form Iran, Egypt, Germany and Italy. My point is that while Canada has huge Chinese population (1.7 mil) and gets 700,000 Chinese visitors per year it does not look like China was the main vector. In BC it is Iran and Europe.

https://nationalpost.com/news/canada/covid-19-coronavirus-canadian-cases

One should consider a possibility whether virus introduction to Iran and the Middle East did precede its introduction in China.

Now let's return to Italy. Most Chinese tourists go to Rome, Florence and Venice. These cities were not affected as much as Lombardy where there is not that many tourists. So we are told that Chinese workers could carry the virus. So look at Prato (in Tuscany near Florence) which has the highest density of Chinese population in Italy. Wiki lists 11,882 (6.32%) for Prato while the highest absolute number is Milan 18,918 (1.43%). The numbers are probably outdated as most likely they do not include illegal residents.

On March 11 Italy had 12,246 cases.
https://www.worldometers.info/coronavirus/country/italy/

So I checked what Prato had on March 11:

https://iltirreno.gelocal.it/prato/cronaca/2020/03/11/news/coronavirus-casi-triplicati-a-prato-e-il-giorno-piu-nero-1.38580402
Coronavirus, casi triplicati a Prato: è il giorno più nero

"In a single day the positive cases of coronavirus in the province of Prato have tripled: from 7 to 21 . It is the darkest day since the outbreak began. According to what was announced in the afternoon of today, March 11, by the bulletin of the regional council "

"Therefore, 314 patients are currently positive in Tuscany. This is the subdivision by signaling areas: 71 Florence, 32 Pistoia, 21 Prato (total Asl center: 124), 43 Lucca, 40 Massa Carrara, 34 Pisa, 16 Livorno (total North West Asl: 133), 12 Grosseto, 37 Siena , 14 Arezzo (total Asl southeast: 63)."

So clearly the 2nd largest Chinese community in Italy (and first in density) with 21 cases (out of 12,246 cases in Italy) did not contribute a lot to the corona virus outbreak in Italy.

utu , says: Show Comment March 22, 2020 at 7:01 pm GMT
@AP Calm down, man and stop the stupid blaming game. It seems that your Banderite spin also includes bashing Chinese which, on the second thought, should not be surprising as there is only one paymaster. Perhaps you should specialize in Ukraine only and leave China to more competent haters.

Compare Canada and Italy on Chinese residents: Canada has 5 times more Chinese than Italy but 62 times less infection cases and 539 times less fatalities than Italy (as of March 16). Furthermore France and UK have more Chinese than Italy.

What about tourists: In Canada 0.75 mil Chinese tourist but in Italy 3.5 mil Chinese tourists. So it must be the tourists, right?

So compare Japan with Italy on Chinese tourists: 8.4 mil Chinese tourist in Japan vs. 3.5 mil Chinese tourists in Italy. How many cases in Japan?

So what I am trying to convey is that the expression of the epidemic in different countries is not congruent with the number of Chinese residents or Chinese tourist.

We will never know where the patients zero (yes plural, there are many patients zero) really came from. For various political reasons we will not be told and what we will be told we must be skeptical about. I found interesting data about the first infected in British Columbia that has huge rather affluent Chinese population. There were as many Iranians as non-Iranians on the list.

In British Columbia cases 1 to 5 were from China though it does not appear they infected others while cases 6, 7, , 12 and 14, 15, 19 were traced to Iran. Then the case 22 was from Iran and also case 31. Case 32 was from Italy, case 35 was from Egypt and case 37 was from Germany. So out of first 37 cases over 50% were people came form Iran, Egypt, Germany and Italy. My point is that while Canada has huge Chinese population (1.7 mil) and gets 700,000 Chinese visitors per year it does not look like China was the main vector. In BC it is Iran and Europe.

https://nationalpost.com/news/canada/covid-19-coronavirus-canadian-cases

One should consider a possibility whether virus introduction to Iran and the Middle East did precede its introduction in China.

Now let's return to Italy. Most Chinese tourists go to Rome, Florence and Venice. These cities were not affected as much as Lombardy where there is not that many tourists. So we are told that Chinese workers could carry the virus. So look at Prato (in Tuscany near Florence) which has the highest density of Chinese population in Italy. Wiki lists 11,882 (6.32%) for Prato while the highest absolute number is Milan 18,918 (1.43%). The numbers are probably outdated as most likely they do not include illegal residents.

On March 11 Italy had 12,246 cases.
https://www.worldometers.info/coronavirus/country/italy/

So I checked what Prato had on March 11:

https://iltirreno.gelocal.it/prato/cronaca/2020/03/11/news/coronavirus-casi-triplicati-a-prato-e-il-giorno-piu-nero-1.38580402
Coronavirus, casi triplicati a Prato: è il giorno più nero

"In a single day the positive cases of coronavirus in the province of Prato have tripled: from 7 to 21 . It is the darkest day since the outbreak began. According to what was announced in the afternoon of today, March 11, by the bulletin of the regional council "

"Therefore, 314 patients are currently positive in Tuscany. This is the subdivision by signaling areas: 71 Florence, 32 Pistoia, 21 Prato (total Asl center: 124), 43 Lucca, 40 Massa Carrara, 34 Pisa, 16 Livorno (total North West Asl: 133), 12 Grosseto, 37 Siena , 14 Arezzo (total Asl southeast: 63)."

So clearly the 2nd largest Chinese community in Italy (and first in density) with 21 cases (out of 12,246 cases in Italy) did not contribute a lot to the corona virus outbreak in Italy.

Daniel Chieh , says: Show Comment March 22, 2020 at 7:10 pm GMT
@AP

If this started in the USA and spread elsewhere the world would have good cause to condemn the USA and to judge any subsequent efforts by Americans to help others as "the least they could do."

Chinese shipments of medical goods are actually to the risk of the own population, where hospitals are still recovering. While in some ways it is a blatant PR play, its quite a significant cost amd self-risk that goes beyond "the least they could do."

[Mar 24, 2020] Chinese settlers in northern Italy.

Mar 24, 2020 | www.unz.com

AP , says: Show Comment March 22, 2020 at 3:09 pm GMT

@TheTotallyAnonymous

The Chinese are showing an unprecedented amount of humanity, morality and basic decency by giving medical aid to more than half the world in genuinely useful forms despite almost everyone shitting on them by calling this a "Chinese virus" and other garbage.

... ... ...

Here is an article about them in the New York Times. Written soon before the onset of the plague. It would not be written now – there's too obvious a connection between open borders, multiculturalism, and death:

https://www.nytimes.com/2019/12/05/business/italy-china-far-right.html

As Prato's factories went dark, people began arriving from China to exploit an opportunity.

Most were from Wenzhou, a coastal city famed for its entrepreneurial spirit. They took over failed workshops and built new factories. They imported fabric from China, sewing it into clothing. They cannily imitated the styles of Italian fashion brands, while affixing a valuable label to their creations -- "Made in Italy."

Chinese groceries and restaurants have emerged to serve the local population. On the outskirts of the city, Chinese-owned warehouses overflow with racks of clothing destined for street markets in Florence and Paris.

Among Italian textile workers who have veered to the right, the arrival of the Chinese tends to get lumped together with African migration as an indignity that has turned Prato into a city they no longer recognize.

"I don't think it's fair that they come to take jobs away from Italians," says Ms. Travaglini, the laid-off textile worker. She claims that Chinese companies don't pay taxes and violate wage laws, reducing pay for everyone.

Since losing her job at a textile factory nearly three years ago, Ms. Travaglini has survived by fixing clothes for people in her neighborhood. "There are no jobs, not even for young people," she says.

Chinese-owned factories have jobs, she acknowledges, but she will not apply. "That's all Chinese people," she says, with evident distaste. "I don't feel at ease."

:::::::::::

Lots of Ukrainians there also. They don't bring such a virus to Italy, but they bring the virus back to Ukraine.

::::::::::

So nice PR move after killing lots of European old people. One of the sacrificed in Milan to this virus, Vittorio Gregotti, was an architect who helped build the city. Killed by the Chinese virus. A symbol of native Italy replaced by migration.

[Mar 24, 2020] The Chinese have internal natural resources and have been vigorously working world wide to obtain rights to, develop, and extract mineral and energy resources in order to keep production going

Mar 24, 2020 | www.unz.com

Alfa158 , says: Show Comment March 22, 2020 at 3:25 pm GMT

@Kim The Chinese have internal natural resources and have been vigorously working world wide to obtain rights to, develop, and extract mineral and energy resources in order to keep production going. See the documentary Empire of Dust about Chinese getting the rights to African resources and developing the infrastructure to extract them. Also following the supposed "war for oil" in Iraq the oil contracts went almost entirely to China. China has a lot of the mines for the rare earths needed in modern technological products. The largest single mine used to be in California. A Chinese company bought and re-opened it.

In effect they already own or have contracts for what they need and are much less leveraged than we are.

As to whether their customers can continue to pay for it, that is a different kettle of fish. The rest of us have been running up our credit card with them. We have been paying it off by selling off our countries piece by piece through Chinese purchases of real estate, businesses, port facilities etc. As China has grown economically they have been developing their internal market to reduce dependence on Wal-Mart so that might reduce the impact of poorer foreign markets.

In any event they own a huge infrastructure in plants tooling and human expertise for making things. Our leaders have deliberately hollowed ours out for profits and cheaper consumer goods.

[Mar 19, 2020] Much of the US elite is sinecured in the media, foreign policy, and national security state establishments

Mar 19, 2020 | www.unz.com

Anonymous [252] Disclaimer , says: Show Comment March 18, 2020 at 6:53 pm GMT

@Sean

Here was me thinking the Western elites wanted to continue making money on Chinese growth.

Much of the US elite is sinecured in the media, foreign policy, and national security state establishments, whose status depends on the relative power and prestige of the US state. The relative power and prestige of the US state is jeopardized by the continued growth of China.

If you follow US coverage of China in the US, you'll find that this US elite is generally critical of China, although style and presentation vary. The liberal "China watchers" among the US elite in the media and foreign policy establishment tend to focus on human rights, democracy promotion, and liberalism as vectors to attack the Chinese state. They tend to be polished and more subtle rather than explicitly hostile.

The US elite in the national security establishment tend to be more overt about military containment and or confrontation with China, and on developing an anti-China coalition in the Pacific.

[Mar 15, 2020] Our Neo-Feudal System Is on the Verge of Collapse by Michael Hudson

Mar 15, 2020 | www.unz.com

Michael Hudson: [00:00:00] There's recognition that commercial banking has become dysfunctional and that most loans by commercial banks are either against assets – in which case the lending inflates the prices of real estate, stocks and bonds – or for corporate takeover loans.

The economy's low-income brackets have not been helped by today's financial system. Here in New York City, red lining and a visceral class hatred by high finance toward the poor characterized the major banks. From the very top to the bottom, they were very clear they were not going to lend to places with racial minorities like the Lower East Side. The Chase Manhattan Bank told me that the reason was explicitly ethnic, and they didn't want to deal with poor people.

A lot of people in these neighborhoods used to have savings banks. There were 135 mutual savings banks in New York City with names like the Bowery Savings Banks, the Dime Savings Bank, the Immigrant Savings Bank. As their names show, they were specifically to serve the low-income neighborhoods. But in the 1980s the commercial banks convinced the mutual savings banks to let themselves be raided. Their capital reserves of the savings banks, was just looted by Wall Street. The depositors' equity was stripped away (leaving their deposits, to be sure). Sheila Bair, former head of the FDIC, told me that the commercial banks' cover story was that they were large enough to provide more capital reserves to lend for low-income neighborhoods. The reality was that instead, they simply extracted revenue from these neighborhoods. Large parts of the largest cities in America, from Chicago and New York to others, are underbanked because of the transformation of commercial banks from providers of mortgages to emptiers-out, just revenue collectors. That leaves the main recourse in these neighborhoods to pay-day lenders at usurious interest rates. These lenders have become major new customers for Wall Street bankers, not the poor who have no comparable access to credit.

Apart from the savings banks, of course, you had the post office banks. When I went to work on Wall Street in the 1960s, 3 percent of U.S. savings were in the form of post office savings. The advantage, of course, is that post offices were in every neighborhood. So you actually had either a local community banking like savings banks – not like today's community banks, which are commercial banks, lending largely to real estate speculators to capitalize rental apartments into heavily mortgaged co-ops with much higher financial carrying charges – or you had post offices. You now have a deprivation of basic bank services in much of the economy, combined with an increasingly dysfunctional and predatory commercial banking system.

The question is, what's going to happen next time there's a bank crash? Sheila Bair wrote about after the 2008 crash that the most corrupt bank was Citibank – not only corrupt, but incompetent. She had wanted to take it over. But Obama and his Secretary of the Treasury, Tim Geithner, acted as lobbyists for Citibank from the beginning, protecting it from being taken over. But imagine what would have happened if Citibank would have been become a public bank – or other banks that are about to have negative equity if there is a downturn in the stock and bond and real estate market. Imagine what will happen if they were turned into public banks. They would be able to provide the kind of credit that the commercial banking system has refused to provide – credit to blacks, Hispanics and poor people that have just been red-lined in what is becoming a financially polarized dual economy, one for the wealthy and one for everyone else.

Walt McRee: [00:04:10] Well, power in that realm, of course, lies with the banking cartel. They look at public banks as a threat. They hate competition of any sort, it seems.

Michael Hudson: [00:04:18] Of course it is a threat.

Walt McRee: [00:04:22] And even when we say, Michael, that we're not going after the business you're already doing because you aren't lending to small, medium enterprises and so forth – we want to take on the infrastructure that you don't want to fund, but they still are pushing back. How will we be able to get past that?

Michael Hudson: [00:04:40] I think you should say that of course you're not going to take business away from them, because the public community bank or government-owned bank would not make corporate takeover loans or speculative derivative bets. It would not create the dysfunctional credit and debt overhead that has been expanding ever since 1999 when the Clinton administration changed the banking rules.

The problem is that the big commercial banks don't want the productive kind of loans that public banking would make. For instance, the reason they didn't want to extend credit to the Lower East Side or the Hudson Yards west side of New York was they wanted to sort of drive out their residents and gentrify it, by providing the money to the big developers who socially bulldoze these neighborhoods. Their policy is to kick out as many low-income renters or owners as they can, and replace them by raising rents from like $50 a month to $5,000 a month. That's what's happened on the Lower East Side from the time I first lived there to what rents are today.

There is a fight of the economy's unproductive sector against people who want to use credit in a productive way that actually helps the economy. I think it's a fight between good and evil, at least between the productive and unproductive economy, between economics for the people and economics for the One Percent.

ORDER IT NOW

Ellen Brown: [00:06:14] I wonder, though, if the Fed is going to even allow the banks to collapse again, with what they just did with the repo market. They can step in at any time to save anybody. I don't know that Congress, even has a say in it. What do you think?

Michael Hudson: [00:06:30] I think that's right. I've talked to Paul Craig Roberts and we discuss whether they can just keep on keeping these zombie banks alive. Can they keep the over-indebted zombie economy alive by the Federal Reserve manipulating the forward stock and bond markets to support prices? It doesn't actually have to buy stocks and bonds beyond the $4 trillion it's already put into Quantitative Easing. It can simply make manipulate the forward market. That doesn't really cost any money until the big crash comes. So I think one should have a discussion over what President Trump says is a boom that that he's created, with the stock market going up. Does that mean that the economy is getting richer? Are we fine with commercial banking the way it is, so that we don't need public banking?

I think you have to expose the fact that what's happened is artificial state intervention. What we have in the name of free market support of the banks is not a free market at all. It's a highly centralized market to support the predatory financial sector's wealth against the rest of the economy. The financial sector's wealth takes the form of credit to the rest of the economy, extracting interest and amortization, while making loans simply to increase asset prices for real estate and financial securities, not put new means of production in place to employ labor. So you have to go beyond the public banking issue as such, and look at the political context. Ultimately, the way that you defend public banking is to show how the economy works and how public banking could play a positive role in the economy as it should work.

Ellen Brown: [00:08:14] Can you explain what you meant by forward lending? I mean, they don't have to

Michael Hudson: [00:08:19] It's not forward lending, it's buying long. For the stock market's Dow Jones average, they'll contract to buy all its stocks or those in the S&P 500 in one month, or one week or whatever the timeframe is, for X amount – say, 2% over what they're selling today. Well, once the plunge protection team issues a guarantee to buy, the market is going to raise the bid prices for these stocks up to what the Fed and the Treasury have promised to pay for them. By the time the prices go up, the Fed doesn't actually have to buy these stocks, because everybody's anticipated that the Fed would buy them at this 2 percent gain. So it's a self-fulfilling prophecy. We're dealing with a government run by the banks and the creditor powers to artificially raise asset prices, on credit. This has kept alive a system that represents itself as creating prosperity. But it's not creating prosperity for the 99 Percent. Public banking would aim at prosperity for the 99 Percent, not just for the One Percent.

Ellen Brown: [00:09:46] I'm writing about Mexico's AMLO, who is now who has just announced in January that he will be building 2,700 branches of a public bank in the next two years. He's expecting 13,000 branches ultimately, so it will be the largest bank in the country. His reasoning is just what you're saying, that the banks have failed and have not serviced the poor. His mandate is to help the poor, and he can't do that if they don't have banking services.

Michael Hudson: [00:10:17] Is that national?

Ellen Brown: [00:10:18] Yes, all across the country.

Walt McRee: [00:10:22] "Loprabrador", AMLO. So we know that a public monetary source is a public utility. Our vision is to create a network of local and state public banks. That leads us to the view that what we really need to be targeting is the Federal Reserve, to ultimately turn it into a publicly-owned entity. Is that folly or

Michael Hudson: [00:10:55] I think the way to get people to support this is if they understand how the Federal Reserve was created. A few years ago I published an article in an Indian economic journal (I think it's on my website), about how the Federal Reserve was created. [1] "How the U.S. Treasury avoided Chronic Deflation by Relinquishing Monetary Control to Wall Street," Economic & Political Weekly (India), May 7, 2016. Available on Naked Capitalism an michael-hudson.com. There was a fight by Wall Street led by J.P. Morgan. America had a central bank until 1913 – the Treasury. Until 1913 the Treasury was doing everything that the Federal Reserve began to do. The idea of creating the Federal Reserve was to take power away from the Treasury. The Treasury wasn't even allowed to be on the board as an owner of Federal Reserve stock. The idea was to take decision-making away from Washington, away from democratic politics, and insulate the financial system from the democratic political system by turning control over to the corporate financial centers -- Wall Street, Chicago, and the other Federal Reserve districts. They were the same districts as those that the Treasury already had divided the country into. Remember, these were the decades leading up to World War I when there was a social democratic revolution from Europe to the United States. A guiding idea was to democratize banking.

Wall Street very quickly developed a counter strategy to this. And the counter strategy was the Federal Reserve. You're welcome to republish my article on your site. You and I both aim to reverse the counterrevolution mounted against classical economics and social democracy. The entity you're talking about would probably be under the aegis of the Treasury. You'd be putting the economy back in the direction that the world was moving before World War I derailed these efforts.

ORDER IT NOW

You talk of nationalizing the Fed. I know people don't like the word nationalizing. How about thing de-privatizing or de-Thatcherizing the Fed? You have to represent the Fed as having stolen economic and financial policy away from the public domain. It became part of the neoliberal project taking form in Austria in the 1930s. You're trying to restore the classical economic vision of productive versus unproductive credit, productive versus unproductive labor, and public money as opposed to private money. These distinctions were erased by the censorial neoliberal counter-revolution.

It's not that you're radical, that these people had a radical revolution to carve away the financial system from democracy. And you're restoring the classical vision of democratizing, re-democratizing finance and banking.

Walt McRee: [00:14:12] I want to thank you for saying that, Michael, because de-privatizing the Federal Reserve is so much more accurate and powerful. You'll recall that we kind of exchanged a phrase when I said "institutionalized deception.". I think that's really important. But let's say that prior to that, Stephanie Kelton gets in there, or somebody from the MMT crowd gets into a new administration prior to de-privatizing the Fed. Does MMT have a place to play or to emerge in that environment?

Michael Hudson: [00:14:55] Of course, and here's the role: You can leave the commercial banks to do what they're doing, but you're not going to provide Federal Reserve credit for them to load down the economy with unproductive debt. The question is, if you're going to create real community banking via a public banking sector, where will it get the money to lend out? How do we provide money to the red-lined areas of the economy to actually finance tangible capital investment and people's living needs, not just predatory lending? The way that MMT comes in is much like the Chicago plan for one hundred percent reserves. These community banks will need Treasury-created depository credit beyond the deposits they raise in their local areas.

They need more money. MMT will provide credit to these banks in exchange for their loan originations of a productive character, on terms that borrowers can afford, with realistic mortgages also to build public housing. The new Fed that we're talking about will be a major depositor and will provider of the capital deposits and reserves to the banks. Right now, it has provided $4 trillion of Quantitative Easing credit to the banks, not to put into the economy but only to inflate the stock and bond market and make housing more expensive. Wouldn't it be much better to provide credit to community banks that actually would make credit available for productive economic purposes – and not for takeover loans, stock buybacks and asset speculation?

Productive credit was what everybody expected banking to develop in the late 19th century. Germany and Central Europe were leading the way. It was called Middle Europa banking, as opposed to Anglo-American banking. (I discuss this contrast in Killing the Host .) That was essentially following the classical model, as everybody expected banking to evolve prior to World War I.

Ellen Brown: [00:17:29] Cool. That's totally what I also wrote about in my latest book. The Federal Reserve is where you should be getting credit, so you don't have to borrow it from somewhere else. Everybody thinks this whole repo thing is so contrived. It's re-hypothecated. One party owns the collateral at night, the other party owns it during the day. It's all just bluff to make it look like they borrowed something that wasn't really there. So let's just acknowledge that all money is just credit. And like you say, if you have a good loan, a good project to be monetized, that's the whole point of a bank. It will turn your future productivity into something you can spend in the marketplace. And the central bank is there to provide the credit.

Michael Hudson: [00:18:21] That's right.

Ellen Brown: [00:18:22] Turn it into dollars.

Michael Hudson: [00:18:24] That's right. My way of describing it is to look at history, to show that this is not a utopian idea. It is what made German and Central European banking so much more productive in the decades leading up to World War I. So we actually have historical examples of good banking versus bad banking. But the predators won in the end.

Ellen Brown: [00:18:53] Well, regarding this whole repo thing, one big problem we have with our public banks is the 110 percent collateralization requirement in California. How is a bank supposed to make loans if it has to use its deposits to buy securities – something safe and yielding low interest to back the deposits? It seems to me that what the big banks do – and I think we could do it, too – is to take those deposits and buy federal securities at 1.5 percent, and then they turn around and use the securities as collateral in the repo market, where they pay 1.5 percent. In other words, they earn 1.5 percent and they pay 1.5 percent. So it's a wash. They get their money for free. I think we could do that, too. Or are only certain players allowed to play that game, and we can't jump in?

Michael Hudson: [00:19:50] Well, you're the lawyer. Of course they could do it. I think one of the things that you and other progressives have recommended is that the Fed should stop paying money to the banks for their reserve deposits. Stop giving them the free giveaway. If you want to say, "We're against the largest welfare recipients in the country. They're not the people you think. They're the Wall Street banks. These hypocrites want to cut back Social Security to balance the budget. They want to cut back medical care and social services, and make themselves the only welfare recipients."

Ellen Brown: [00:20:30] Right, agreed. But if we just stand on our high horse and say this has to change, nothing will happen. We could do it ourselves and just show what you're doing in contrast to what they're doing

ORDER IT NOW

Michael Hudson: [00:20:44] You're asking for symmetry. They're making us carry a big load on our back, that they don't have to carry. They're loading the dice in their own favor. You want to unload the dice and stop the insider favoritism. You correctly represent the banks as being insiders. You have to say, "Look, these insiders are trying to keep a monopoly." You could use the anti-monopoly legislation that's been on the books since Teddy Roosevelt's time. You have a lot of legal power to break up the big banks. You could treat them like I think they could treat the pharmaceutical companies if Bernie gets in.

Walt McRee: [00:21:44] Monopolies are being challenged by the shadow banking industry. New forms of payment exchange technologies seem to be eating away at that singular source of credit. What's your prognosis for how that's going to evolve? Will the big banks find a way to clamp down on that ultimately?

Michael Hudson: [00:22:05] Are we talking about cryptocurrency?

Walt McRee: [00:22:07] That would be one example, yes.

Michael Hudson: [00:22:10] Well,. you can't stop people from gambling. People think that buying a cryptocurrency is like buying an Andy Warhol etching. Maybe it'll go up in price if a large number of people want it. But basically, it's junk. It's very speculative. It's certainly not stable. It goes up and down. One day there may be a solar flare that's going to wipe out all the bank records for these things. But there is no way to stop people from doing something that seems to be silly or gambling. You certainly will not insure them. So you will not give them any protection against loss. You also will want to insulate the economy from having any transactions in crypto, in these alternative money things that pose a big threat of loss. They are not real money, because the government will not accept payment of cryptocurrencies as taxes or for public goods and services. The government will only accept specified forms of money. You can create any kind of swap or bet. If you want to create the equivalent of a racetrack on horses. You can do it, but that's a financial racetrack. I think there may be taxes on racetracks. They were unregulated for a long time. But Hollywood movies showed that there's a lot of criminalization going on there.

Walt McRee: [00:23:59] We were all amused, well, maybe a little wondering about Max Kaiser. Ellen and I and Tyson Slokum had some time with him over there just before you were at his Brooklyn studio, but Max is into Bitcoin in a big way, and he sees it as the new gold.

Michael Hudson: [00:24:20] He told me that a lot of people watch his show because they're gold bugs or they are interested in Bitcoin. I think he's tried to take a neutral view of it, certainly in our personal conversations. He's not a gold bug and he's not a Bitcoin or other bug. But he said that a lot of people want to find out about it, so he has guests on his show telling people, "Here it is, take your choice." It's part of the new speculative financial landscape, just like swamps are part of landscape for Florida real estate. So he's going to cover the whole spectrum. Reuters produces his shows, and the audience wants to hear about this. So he talks about what they want to hear.

Ellen Brown: [00:25:20] I think he actually does promote Bitcoin. He's heavily invested in it and he was one of the originals, so he's obviously made a lot of money on it.

Michael Hudson: [00:25:29] Okay.

Ellen Brown: [00:25:29] I think he agrees that it can't be a national currency. It's too slow, too expensive, and too environmentally unfriendly. But like you say, it has been a good investment, just like fine art or something that, if people want it, the value goes up. Plus, there's a big black market for it, for trading and things that you don't want the government to know about.

Michael Hudson: [00:25:57] It's a real phenomenon. I know people who benefited from Andy Warhol. So he saw the phenomenon and he seems to have made money, but when Steve Keen and I and others got together with him for a couple of days two months ago, the topic never came up in discussion.

But gold did. I wonder where the gold of Libya went, for instance. Apparently it was all taken and I understand the US gave it to ISIS. Hillary said it had to go to ISIS to act as our Foreign Legion. We gave them Libya's weapons. Some of the gold must have just been taken by the CIA and State Department for dirty tricks for its black operations. Certainly, America wants to prevent any other country or large gold possessor from having enough gold to try to reinstate it as a means of settling balance-of-payments deficits. America runs a large military deficit, so at a certain point, the more money it spends abroad for its 800 military bases, the more gold it would lose. Just like in General de Gaulle's time during the Vietnam War, although actually Germany was taking more gold than France. So America wants to keep the dollar at the center of the world financial system. That really was why it went to war with Libya, because Libya was one of the first countries to de-dollarize and move its currency toward gold. So you're having a group of countries – Russia, China, Iran and others – add gold to their reserves instead of dollars. You're having a de-dollarization move throughout the world to break free from the US ability to do what it did do Iran.

When Iran borrowed in dollars under the Shah, it used Chase Manhattan Bank as its paying agent. It put enough money into the account to pay its foreign debts service. But then the State Department told Chase to screw Iran and refuse to turn over the payment. Now that the Shah wasn't running Iran, once Chase refused to turn over the payment and froze Iran's account, that meant that Iran went into default on the entire dollarized foreign debt. It was liable for a huge amount of capital.

ORDER IT NOW

That was a warning for the rest of the world that no government could safely put its money in an American bank or an American bank branch, or in a British branch that would act as a subsidiary of the Pentagon. Because if you do, the bank can simply force you into default at any time, just like the US CIA can come in and use electronic weaponry to destroy your bank payment-clearing system. That's why the threat of cutting Russia and China and other countries off from the Swift Interbank Clearing System led Russia to develop its own clearing system. With a flick of a switch it can begin to work anytime United States tries to cut Russia off from the SWIFT payments system. So you're having the whole world de-dollarize very quickly. And right now the question is what Europe will choose. Are Germany and other countries going to become part of the de-dollarized system, or remain part of the dollar area?

This is part of the fight against using the IT chips and the communications chips from Huawei. Huawei did not put US spyware into the system. The United States says that if it can't have a phone system and communications system that it can control by spyware and use to blow up your economy, your public utilities, your electrical systems, then you're our enemy, because we feel insecure without this control. When President Trump said that Huawei was a threat to US national security, he meant that we don't feel secure unless we have the power to destroy any economy that acts in any way that is independent of the United States – because you might do something we don't like. This is the most aggressive concept of security that one could imagine. So of course the rest of the world is seeing its own national security as having a financial dimension. The financial dimension is to create a monetary and financial system that minimizes connections to the dollar except to the extent of having to buy and sell dollars to stabilize foreign exchange rate.

Ellen Brown: [00:31:31] There's a lot of talk, even among central bankers, that we need to get off the dollar as a global reserve currency. But it seems to me that gold is also manipulatable. I mean, it's not the ideal I had envisioned a system where instead of reserves being a thing, like dollars or gold that you can actually trade, it would just be a measure, like a yardstick. You would be able to compare one currency to another according to what you could buy with it. Like you'd have a whole basket of things that everybody uses in every country. And now that they report that kind of stuff, it wouldn't be all that hard to get the figures and, you know, just compare and say, well, your dollar will be worth so many pesos in Mexico or whatever. That was my idea, but what do you think?

Michael Hudson: [00:32:27] That would meet one of the criteria of money, which is as a measure of value, but it would not do at all for international money. You have to have some means of constraint. In other words, suppose the United States continued to run another military budget deficit like it did in the Vietnam War. There is no way that you could use the balance of payments as a constraint on the policy of deficit countries, which are usually the military aggressors. The whole idea of going off gold was that under the gold standard no country can afford to make war, because if you go to war your currency collapses. In 1976, Herman Kahn and I went to the Treasury and – this is to answer your question. He put up a map of the world and said, "These are the countries – Scandinavia, Western Europe, the United States – that don't believe in gold. They're all politically stable social democratic countries. They have faith in government. No look at these others here's the rest of the world – India, South America, Africa and most of Asia. these are people that believe in gold. Why do they believe in gold, but not the Protestant cultural area? Well, they don't have faith in government. They don't trust governments. They want some option that is independent of government. Gold is not only to bribe the border guards if they're escaping from somewhere. They want to be free of governments that have been captured by anti-democratic, predatory forces."

He said if you tried to think of what you would make that is an alternative to the dollar that people could understand, well, for thousands of years, people have decided that gold and silver. (I'm sure that you could add platinum and palladium.) So they have been the ultimate means of settlement, and hence of international monetary constraint.

Gold isn't to be used as money. It's not to be used as a normal means of payment. What it is to be used for is as a balance-of-payments constraint on the ability of countries to run up chronic deficits that are mainly military in character. So I called our presentation "Gold: the Peaceful Metal." Well, needless to say, the Treasury didn't go for that, because they said that we had just explained how super-imperialism works via the dollar. So they didn't go back to gold. We lost that argument.

Ellen Brown: [00:35:34] Isn't the reason we went off gold standard, though, that there simply isn't enough gold and that we wound up leveraging it, and

Michael Hudson: [00:35:42] No, there's plenty of gold. There wasn't enough gold to pay for the military deficit. Every month the dollars we spent in Vietnam would be turned over to the banks in Indo-China. They were French. They'd turn the dollars over to Paris and General de Gaulle would turn in these dollars for gold. We had to pay in gold for the military deficit, which was the entire source of the US balance-of-payments deficits in the 50s, 60s and into the 70s. America went off gold so that it could afford to wage war without the constraint of losing its control over the international monetary system.

Ellen Brown: [00:36:29] We went after gold domestically because it didn't work. I mean, you had to use fractional reserve lending

Michael Hudson: [00:36:35] Yes, of course gold doesn't work domestically. It's certainly not an appropriate domestic money supply. I'm only talking about it for settlements among central banks internationally.

Ellen Brown: [00:36:49] But you said it's not to be traded. But if you don't, how do you settle your balance of payments?

ORDER IT NOW

Michael Hudson: [00:36:53] It can be traded. There is a market. And you began by saying, quite correctly, that gold prices are manipulated. Well, right now the US and the central banks are manipulating its price to keep it low, in the same way that they're manipulating the stock and bond market by buying forward. Except in the case of gold, they're selling forward. If they keep agreeing to sell gold at a very low price, people will see that if they can buy gold at this low price, why should they buy it at a higher price today, as the price will fall and be driven down. So, yes, gold is manipulated downwards today by the U.S. – essentially the plunge protection team acting internationally to keep the price of gold down to discourage other countries and populations from buying it is protection against collapse of the financial system.

So we're back to the fact that the financial system is dysfunctional. In a functional financial system, you wouldn't need domestic reference to gold. You'd have a domestic financial system that works fine without gold. Gold is what you have when the financial system becomes dysfunctional and there's a breakdown.

Ellen Brown: [00:38:21] Well, it almost seems like you need some sort of global regulator. But that's like a one-world government, which we all freak out about.

Michael Hudson: [00:38:28] You certainly don't want a one world government. Right now all the plans for world government are neoliberal. They aim essentially to limit, to break up democratic government regulation of corporate business, mining and monopolies. The idea of a one-world government is to destroy any democratic government's ability to make its own laws in the interests of labor or society. You would have a parallel government of wealth, government of property. It's what the University of Chicago calls the Law and Economics regime. And this is, this is fascism on an international scale. And there is a wonderful book by Quinn Slobodian in 2008, Globalists: The End of Empire and the Birth of Nationalism , showing how these plans were developed by fascists in the 1930s and by the fascist promoters at the University of Chicago. The fascist promoters were people like Hayek and von Mises and the Geneva economists around the League of Nations. So when they say they're anti-government, they're really anti-democracy. They're for an iron-fisted government by big business, big mining and big oil – and most of all, by big banks. That is the reason why people don't trust an international government. It would be an international iron fist of fascism, the way the current maneuvering of the financial classes and the rentier classes and the neocons have arranged things.

Ellen Brown: [00:39:56] Well, I totally agree. It's quite frightening. We want sovereignty for all our little nations, and even our little cities, states and so forth. But it seems to me, how do you get everybody to work together? For example, Venezuela has the debt problem that any country has that's heavily in debt to foreigners, or to vulture funds or whatever. There's not a universally recognized court that you can go to. And, you know, everybody agrees. It does seem like on some level we need some sort of collaborative effort where we all agree on the rules.

Michael Hudson: [00:40:33] Absolutely right. Now, of course, the United States would not recognize any international court. So, again, you'd have all the rest of the world belonging to the court, and the United States as the outlier. It's like you're the healthy body and we want to parasitize you. And it will not recognize the court. My Super-Imperialism reviews the history of this policy.

But you're right: There should be a court that would recognize such things as odious debt for governments. Venezuela's problem is that under the dictators that the Americans had installed by assassination and force, Venezuela had pledged its oil reserves as collateral for its international bonds. That gives a vested interest in the creditors to make it default and grab its oil reserves and its investments in the United States, the oil distributors it bought. So, yes, you do need a set of international rules for writing down bad debts. That means an alternative to the IMF. You need an anti-IMF. Instead of acting on behalf of the creditors imposing austerity on countries, you should create an organization representing society. And s the interest of society is to grow. Instead of promoting austerity like the IMF does, it would promote prosperity. Instead of financing the US government dollarization and giving US control, it would be part of the de-dollarization group.

So you'd have a pro-growth group of nations – of the world economy – using finance for growth and development with productive credit. You'd also have the United States providing predatory credit, austerity, cutting back Social Security, cutting back Medicare and having a polarizing economy that is shrinking and will end up looking like Greece or Argentina. The rest of the world would follow more productive and less oligarchic financial policies. That should ultimately be our global dream. But there's been little preparation for that. The financial sector's neoliberals have o put together an almost conspiratorial Law and Economics lobbying group to promote the Trans-Pacific Partnership and World Trade Organization rules blocking governments from imposing anti-pollution fines or regulating monopolies or closing tax havens. If you fine an oil company for polluting, the government is obliged under this international law to pay the oil companies what they would have earned if they would have continued to poison the environment. This is

Ellen Brown: [00:43:41] Shocking.

Michael Hudson: [00:43:41] Definitely. This is an international deathwish.

Ellen Brown: [00:43:45] Agreed. Totally agreed.

Walt McRee: [00:43:47] We've been speaking with economist Michael Hudson. Our thanks to him for being on this program again. And you'll be hearing more from Michael on future editions of It's Our Money.

Walt McRee: [00:43:59] Well, that's it for this edition of It's Our Money with Ellen Brown. Thanks to our guests or sponsors, Public Banking Associates, and to you for listening. Be sure to check out Ellen's latest writings on the economy and the changing world of money by visiting ellenbrown.com. And for more information on public banking, visit PublicBankingInstitute.org. For information on how local and state governments can obtain professional insight and council about public banks from key national experts, visit PublicBankingAssociates.com. I'm Walt McRee. See you next time on It's our Money with Ellen Brown.

Notes

[1] "How the U.S. Treasury avoided Chronic Deflation by Relinquishing Monetary Control to Wall Street," Economic & Political Weekly (India), May 7, 2016. Available on Naked Capitalism an michael-hudson.com.

animalogic , says: Show Comment March 13, 2020 at 8:51 am GMT

@dc.sunsets "This is why those who promise to "Plan" economic prosperity are liars and fools, for they have the PRETENSE of knowledge, nothing more. "
Of course, this point is true -- but its posed as an absolute. No government can "plan" an entire economy -- we know this from the failings of the USSR etc. But nor can economies be totally unplanned. The US is not an unplanned economy: its an economy planned by the 1% for the 1%.
Modern economies are "mixed". There is coordinated planning between the public & private sector.
Sadly the US Gov' has renounced its responsibilities to "plan". Had the US Gov "planned" it would never have allowed key industries, knowledge & talent to be off shored to China. Such off shoring was a private plan by the 1% for the 1%. Worked well -- for them.
Robert White , says: Show Comment March 13, 2020 at 4:54 pm GMT
Adding complexity to an already far too complex system merely hastens blow out of distributions that are skewed fat tails and stressed to a breaking point of systemic failure. Greenspan purposely built a complex financial empire of asset inflation to replace Volcker's fiscal prudence & macroprudential professionalism system wide.

Once Greenspan has locked in the asset inflation regime & deregulated Glass-Steagall Act it was off to the races on a credit card for the largest parasite in the financial empire governing by force.

On September 10th 2001 Donald Rumsfeld announced to the world that the ever incompetent Pentagon had misplaced $1.3 trillion USD of taxpayer money. On September 11th 2001 Donald Rumsfeld took part in a clandestine covert US Military operation to assassinate all of the principle investigators & forensic Chartered Accountants that were about to uncover the crimes taking place under Donald Rumsfeld's directorship as Pentagon executive.

The USA has always been a system of fraud by stealth of US Military force thugsterism & all out fascist behaviour.

Great synthesis by Hudson IMHO.

[Mar 10, 2020] Welcome to America, haven for the Gangs of New York and Grifters about town.

Mar 10, 2020 | www.moonofalabama.org

Bubbles , Mar 9 2020 22:12 utc | 62

New York Federal Reserve Bank announced Monday it will increase its daily injections of cash into financial markets by $50 billion to $150 billion as a protective step amid #coronavirus epidemic.

https://twitter.com/PDChina/status/1237020467652935680

I see your tangible assets bet and raise another $50 billion per day of presto digitizer created out of thin air fiat.

Because I CAN!

Now what are you going to do about it huh?

If you crash our ponzi scheme, who are you going to sell your oil and gas to?


That said, in periods of past extreme economic turmoil folks like Steve Mnuchin, with the trophy British wife, aka The King of Foreclosure, made out like bandits. He's now duce Trump's Secretary of the Treasury. The prior Republican standard bearer, the Mitt, was also a Vulture who participated in the hollowing out of the American Industrial Heartland, for profit.

A life long con man and grifter coupled up with a Jewish vulture capitalist leading a phony charge to Make America Great Again...?

A script that writes itself.

Sadly..the supposed opposition are also beholding to AIPAC, and it's dictates.

Chuck Schumer says he was appointed by God to be the Guardian of Israel. It's true, and confirmation is available on the web.

Is he an American or an Israeli? No one should be allowed to be both, should they? Am I right or wrong?


Why just look at the good ole boys Netanyahu's very good friend , Tabloid Star and huckster about town the donald to see who is really the Bossman of Murika's gun toting Patriots.

Pretty sad really when you think about it. A Country that ravaged it's indigenous people to break the land open for settlers of European descent, only to have it fall into the clutches of a tiny tribe of foreigners who never put skin the game and came in with their gangsterism and were always about accumulation of wealth and power for themselves.

Welcome to America, haven for the Gangs of New York and Grifters about town.

[Mar 09, 2020] COVID-19 burst the asset price bubble. In a new low, Pompeo passes buck to Beijing

Mar 09, 2020 | www.moonofalabama.org

CitizenX , Mar 9 2020 2:58 utc | 57

"Perhaps this will finally burst the out-of-control asset price bubble and drop-kick the Outlaw US Empire's economy into the sewer as the much lower price will rapidly slow the recycling of what remains of the petrodollar. Looks like Trump's reelection push just fell into a massive sinkhole as the economy will tank."

Posted by: karlof1 | Mar 9 2020 1:29 utc | 49
....

Call me crazy- but this Virus provides great cover as to why the economy plummets, the Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the economy tanking as its result.

Don't worry...just continue to go shopping and take those selfies.


vk , Mar 9 2020 3:37 utc | 60

Pompeo accuses China of giving "imperfect data" on COVID-19, blame it for US failure in containing the virus:

In new low, Pompeo passes buck to Beijing

It will be hard for the American people to swallow that one. From day 1 I've read a lot of "articles" and "papers" from know-it-all Western doctors and researchers from commenters here in this blog, all of them claiming to have very precise and definitive data on what was happening. A lot of bombastic conclusions I've read here (including one that claimed R0 was through the roof - it's funny how the R0 is being played down after it begun to infect the West; suddenly, it's all just a stronger cold...).

And that's just here, in MoA's comment section. Imagine what was being published in the Western MSM. I wouldn't be surprised there was a lot of rednecks popping their beers celebrating the fall of China already.

--//--

China to back global virus fight with production boost

Since China allegedly had a lot of idle industrial capacity - that is, if we take the Western MSM theories seriously (including the fabled "ghost towns" stories) - then boosting production wouldn't be a problem to China.

Disclaimer: it's normal for any kind of economy - socialist or capitalist - to have a certain percentage of idle capacity. That's necessary in order to insure the economy against unexpected oscillations in demand and to give space of maneuvre for future technological progress. Indeed, that was one of the USSR's mistakes with its economy: they instinctly thought unemployment should be zero, and waste should also be zero, so they planned in a way all the factories always sought to operate at 100% capacity. That became a problem when better machines and better methods were invented, since the factory manager wouldn't want to stop production so that his factory would fall behind the other factories in the five-year plan's goals. So, yes, China indeed has idle capacity - but it is mainly proposital, not a failure of its socialist planning.

--//--

... ... ...

vk , Mar 9 2020 3:56 utc | 61
This is important. The only reason I didn't comment about it is I hadn't the data:

Follow the money: Understanding China's battle against COVID-19

By the latest count, in addition to yuan loans worth 113 billion U.S. dollars granted by financial institutions and more than 70 billion U.S. dollars paid out by insurance companies, the Chinese government has allocated about 13 billion U.S. dollars to counter fallout from the outbreak.

The numbers could look abstract. However, breaking the data down reveals how the money is being carefully targeted. The government is allocating the money based on a thorough evaluation of the system's strengths.

...

Local governments are equipped with more local knowledge that allows them to surgically support key manufacturers or producers that are struggling.

Together, they have borne the bulk of the financial responsibility with an allocation of equivalently more than nine billion U.S. dollars. It is carefully targeted, divided into hundreds of thousands of individual grants that are tailor-made by and for each county, town, city and business.

This is the mark of a socialist system.

The affected capitalist countries will simply use monetary devices (so the private sector can offset the losses) and burn their own reserves with non-profitable palliatives such as masks, tests, other quarantine infrastructure etc.

Pft , Mar 9 2020 4:44 utc | 64
Sounds like US socialism. Basically corporate socialism. Loans are just dollars created out of thin air, same as in US. Insurance payouts come from premiums, nothing socialist about that, pure capitalism. Government hand outs to provinces, cities, state owned corporations,well all of these are run by the party elite, its called pork. US handed out a lot of pork during the last financial crisis. None of it trickled down to the little people. I doubt it does in China either.

All crisis are opportunities for the elite to get richer. Those Biolake firms in Wuhan will make out like bandits. Chinese firms will double the price of API's sold to India and US. China will knock out the small farmer in the wake of concurrent chicken and swine flu so the big enterprises take over, a mimicry of the US practice over the last century. China tech firms will double up on surveillance apps, censoring tools, surveillance and toughen up social credit restrictions. 5G will allow China to experiment with nanobots to monitor citizens health from afar (thanks to Harvards Dr Leiber).

Oh yes, socialism with Chinese characteristics is a technocratic capitalists dream. Thats why the West has never imposed sanctions on China since welcoming them to the global elites club. Sanctions are reserved for those with true socialism, especially those who preach equality and god forbid, democracy.

uncle tungsten , Mar 9 2020 8:35 utc | 83

CitizenX #57

Call me crazy- but this Virus provides great cover as to why the economy plummets, the Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the economy tanking as its result.


Don't forget the Russians.. They have to be to blame. See they just kept the price of oil low so now the rest of the world gets gas cheaper than the USA. The USA motorist now has to bail out the dopey frackers and shale oil ponzis.

Global envy will eat murica. Maybe they will just pull out all their troops and go home. ;)

[Mar 06, 2020] Over eighty percent of the medicines used in the United States are manufactured in China

Mar 06, 2020 | www.unz.com

Anon 2 , says: Show Comment February 25, 2020 at 5:39 am GMT

As far as I know, no one here has mentioned that because of the globalization drive by Clinton, Bush, and Obama, 85% of the medicines used in the United States are manufactured in China. Even U.S. troops depend on medicines from China! China could bring the entire health system in the U.S. to a stop in a matter of months. This is what our inept elites have done to America – they gave away the shop. People are beginning to realize that manufacturing our own medicines is a matter of national security but it'll take years to bring the factories back to the U.S. So much for globalization.

Rod Dreher's blog IMHO is the best source for quick info on the coronavirus because he is in touch with American M.D.'s who are married to women from China who in turn are in contact with relatives at home and the Chinese media. Of course, Rod himself can be hysterical at times but, apparently, that's what it takes to have a successful blog. The M.D.'s are reporting that the U.S. is already beginning to run out of certain medications, and recommend stocking up on the basic necessities, i.e., recommend assuming the mental framework of the survivalists – have plenty of canned goods, etc and refill your prescriptions ASAP. This is what many people here seem to forget – the coronavirus's indirect effects due to having no access to medications may be much worse than the direct pathogenic effects.

[Mar 05, 2020] What is Globalism? Globalism is Neoliberalism which is Corporatism

Mar 05, 2020 | www.reddit.com

The term Globalism has been around from at least the 1960's but its origins come from Cecil Rhodes Round Tables which were set up around 1900 as a mechanism for Rhodes and his allies from the British and South African Oligarchs to take over the world. Globalism is another term for Neoliberalism, which is another term for Corporatism. It is principally pushed by Fake Liberals who pretend to be lefties, but are actually Corporatists or Corporate Fascists.

Globalism

The aim of Globalism is to transfer all power and wealth from ordinary people to a handful of Banking Elites, Oligarchs and major Corporate CEO's. The ultimate aim is to set up an anti democratic, authoritarian one world government where ordinary people are effectively serfs and have no say, in a system of Neo-Feudalism. We are very nearly already there.

This is being constantly carried out by transferring ever increasing powers from elected local governments to massive governmental Super States, such as the EU or the Federal government in Washington DC.

A great example of a Globalist policy was Obama's Corporate Power Grab TPP and TTIP, Corporate protectionist deals, which transferred power from elected legislatures to transnational tribunals staffed by Corporate lawyers acting as Judge and Jury.

TPP, TISA and TTIP agreements are massive Corporate power grabs dressed up as trade deals http://ian56.blogspot.com/2015/11/tpp-tisa-and-ttip-agreements-are.html

"Neo-libs" are NOT Centrists. They are extremist supporters of Perpetual War, Corruption, Corporatism, Authoritarianism & the Transfer of all wealth & power from ordinary ppl to the Oligarchs & CEOs in the top 0.01%.

What is Globalism? Clue: Its NOT what the Corporate Establishment tells you it is http://ian56.blogspot.com/2017/11/what-is-globalism.html

Neoliberalism. The ideology that dare not speak its name is actually a New, More Dangerous, Form of Corporatism http://www.softpanorama.org/Skeptics/Political_skeptic/Neoliberalism/index.shtml

[Mar 04, 2020] Why Are We Being Charged? Surprise Bills From Coronavirus Testing Spark Calls for Government to Cover All Costs by Jake Johnson

Highly recommended!
Notes of disaster capitalism in action...
Notable quotes:
"... The Centers for Disease Control and Prevention (CDC) is not billing patients for coronavirus testing, according to Business Insider . "But there are other charges you might have to pay, depending on your insurance plan, or lack thereof," Business Insider noted. "A hospital stay in itself could be costly and you would likely have to pay for tests for other viruses or conditions." ..."
"... Congress needs to immediately pass a bill appropriating funding to cover 100% of the cost of all coronavirus testing & care within the United States. We will not have a chance at containing it otherwise. @tedlieu - as my rep, can you please ensure this is brought up? ..."
"... In the case of the Wucinskis, Kliff reported that "the ambulance company that transported [them] charged the family $2,598 for taking them to the hospital." ..."
"... Last week, the Miami Herald reported that Osmel Martinez Azcue "received a notice from his insurance company about a claim for $3,270" after he visited a local hospital fearing that he contracted coronavirus during a work trip to China. ..."
"... Did anyone expect the unconscionable greed of capitalism to cease when a public health crisis emerges? This is just testing for the virus, wait until a vaccine has been developed so expensive that the majority of the US populace can not afford it at all and people are dropping like flies. Wall Street, never-the-less, will continue to have its heydays ..."
"... The very idea that the defense and "Homeland" security budgets are bloated and additional funding approved year after year but the citizens of this country are not afforded 100% health coverage In a time of global health crisis that could become a pandemic. ..."
Mar 03, 2020 | www.commondreams.org

"Huge surprise medical bills [are] going to make sure people with symptoms don't get tested. That is bad for everyone." by Jake Johnson, staff writer Public health advocates, experts, and others are demanding that the federal government cover coronavirus testing and all related costs after several reports detailed how Americans in recent weeks have been saddled with exorbitant bills following medical evaluations.

Sarah Kliff of the New York Times reported Saturday that Pennsylvania native Frank Wucinski "found a pile of medical bills" totaling $3,918 waiting for him and his three-year-old daughter after they were released from government-mandated quarantine at Marine Corps Air Station in Miramar, California.

"My question is why are we being charged for these stays, if they were mandatory and we had no choice in the matter?" asked Wucinski, who was evacuated by the U.S. government last month from Wuhan, China, the epicenter of the coronavirus outbreak.

"I assumed it was all being paid for," Wucinski told the Times . "We didn't have a choice. When the bills showed up, it was just a pit in my stomach, like, 'How do I pay for this?'"

The Centers for Disease Control and Prevention (CDC) is not billing patients for coronavirus testing, according to Business Insider . "But there are other charges you might have to pay, depending on your insurance plan, or lack thereof," Business Insider noted. "A hospital stay in itself could be costly and you would likely have to pay for tests for other viruses or conditions."

Lawrence Gostin, a professor of global health law at Georgetown University, told the Times that

"the most important rule of public health is to gain the cooperation of the population."

"There are legal, moral, and public health reasons not to charge the patients,"

Gostin said.

Congress needs to immediately pass a bill appropriating funding to cover 100% of the cost of all coronavirus testing & care within the United States. We will not have a chance at containing it otherwise. @tedlieu - as my rep, can you please ensure this is brought up?

-- William LeGate (@williamlegate) March 2, 2020

In the case of the Wucinskis, Kliff reported that "the ambulance company that transported [them] charged the family $2,598 for taking them to the hospital."

"An additional $90 in charges came from radiologists who read the patients' X-ray scans and do not work for the hospital," Kliff noted.

The CDC declined to respond when Kliff asked whether the federal government would cover the costs for patients like the Wucinskis.

The Intercept 's Robert Mackey wrote last Friday that the Wucinskis' situation spotlights "how the American government's response to a public health emergency, like trying to contain a potential coronavirus epidemic, could be handicapped by relying on a system built around private hospitals and for-profit health insurance providers."

We should be doing everything we can to encourage people with #COVIDー19 symptoms to come forward. Huge surprise medical bills is going to make sure people with symptoms don't get tested. That is bad for everyone, regardless of if you are insured. https://t.co/KOUKTSFVzD

-- Saikat Chakrabarti (@saikatc) March 1, 2020

Play this tape to the end and you find people not going to the hospital even if they're really sick. The federal government needs to announce that they'll pay for all of these bills https://t.co/HfyBFBXhja

Last week, the Miami Herald reported that Osmel Martinez Azcue "received a notice from his insurance company about a claim for $3,270" after he visited a local hospital fearing that he contracted coronavirus during a work trip to China.

"He went to Jackson Memorial Hospital, where he said he was placed in a closed-off room," according to the Herald . "Nurses in protective white suits sprayed some kind of disinfectant smoke under the door before entering, Azcue said. Then hospital staff members told him he'd need a CT scan to screen for coronavirus, but Azcue said he asked for a flu test first."

Azcue tested positive for the flu and was discharged. "Azcue's experience shows the potential cost of testing for a disease that epidemiologists fear may develop into a public health crisis in the U.S.," the Herald noted.

Sen. Bernie Sanders (I-Vt.), a 2020 Democratic presidential candidate, highlighted Azcue's case in a tweet last Friday.

"The coronavirus reminds us that we are all in this together," Sanders wrote. "We cannot allow Americans to skip doctor's visits over outrageous bills. Everyone should get the medical care they need without opening their wallet -- as a matter of justice and public health."

Last week, as Common Dreams reported , Sanders argued that the coronavirus outbreak demonstrates the urgent need for Medicare for All.

The coronavirus reminds us that we are all in this together. We cannot allow Americans to skip doctor's visits over outrageous bills.

Everyone should get the medical care they need without opening their wallet -- as a matter of justice and public health. https://t.co/c4WQMDESHU

-- Bernie Sanders (@SenSanders) February 28, 2020

The number of confirmed coronavirus cases in the U.S. surged by more than two dozen over the weekend, bringing the total to 89 as the Trump administration continues to publicly downplay the severity of the outbreak.

Dr. Matt McCarthy, a staff physician at NewYork–Presbyterian Hospital, said in an appearance on CNBC 's "Squawk Box" Monday morning that testing for the coronavirus is still not widely available.

"Before I came here this morning, I was in the emergency room seeing patients," McCarthy said. "I still do not have a rapid diagnostic test available to me."

"I'm here to tell you, right now, at one of the busiest hospitals in the country, I don't have it at my finger tips," added McCarthy. "I still have to make my case, plead to test people. This is not good. We know that there are 88 cases in the United States. There are going to be hundreds by middle of week. There's going to be thousands by next week. And this is a testing issue."

Our work is licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feel free to republish and share widely.


Harry_Pjotr 13h

Did anyone expect the unconscionable greed of capitalism to cease when a public health crisis emerges? This is just testing for the virus, wait until a vaccine has been developed so expensive that the majority of the US populace can not afford it at all and people are dropping like flies. Wall Street, never-the-less, will continue to have its heydays

Smerl fern 12h

A wall street bank or private predator may own your emergency room. A surprise bill may await your emergency treatment above insurance payments or in some instances all of the bill.

An effort was made recently in congress to stop surprise billings but enough dems joined repubs to kill it. More important to keep campaign dollars flowing than keep people alive. fern Smerl 12h I know emergency rooms are being purchased by organizations like Tenet (because they are some of the most expensive levels of care) and M.D.s provided by large agencies. I'm not as up on this as I should be but a friend of mine tells me that some of this is illegal. I have received bills that were later discharged by challenge. This is worth investigating further. Atlas oldie 11h Hmmmm A virus that overwhelmingly kills the elderly and/or those with pre-exisitng conditions.

Sounds like a medical insurance companies wet dream. As well as .gov social security/medicare wet dream.

Just sayin'

Ticki 11h

The very idea that the defense and "Homeland" security budgets are bloated and additional funding approved year after year but the citizens of this country are not afforded 100% health coverage In a time of global health crisis that could become a pandemic. And as has been stated, the unconscionable idea suggested that a possible vaccine (a long way away or perhaps not developed at all) might not be affordable to the workers who pay the taxes that fund the government? That's insane.

leftonadoorstep 11h

Another example of "American Exceptionalism." China doesn't charge its coronavirus patients, neither does South Korea. I guess they are simply backward countries.

Barton 11h

I own my own home after years of hard work paying it off. It's the only thing of value, besides my old truck, that I have. If I get the virus, I will stay home and try to treat it the best I can. I can't afford to go to the hospital and pay thousands in medical bills, with the chance that they'll come after my possessions. America, the land of the _______. Fill in the blank. (Hint: it's no longer free).

fern 1 Barton 11h

There are other ways to protect your home. Homesteading or living trust. I'm not good at this but I know there are ways to do it. Hopefully, it would never come to that but outcomes are not certain even with treatment in this case.

Giovanna-Lepore oldie 11h

As someone who lost a mother at 5 years old I can sympathize with your grief in losing a daughter-in-law and especially seeing her four children orphaned. However, I think you miss the point here: This is about we becoming a society invested in each others welfare and not a company town that commodifies everything including the health and well being of us all.

fern 1 Giovanna-Lepore 11h

I'm going by: https://www.congress.gov/bill/116th-congress/senate-bill/1129/text

As a revision it is better but flawed. It is a cost containment bill based on the same research as the republican plan with global budgets and block grants.

Edited: I encourage you to read this:
-ttps://www.rand.org/blog/2018/10/misconceptions-about-medicare-for-all.html Giovanna-Lepore 10h oldie:

Part D

Higher education is not free but they do need to become free for the students and payed by us as a society.

Part D is a scam, a Republican scam also supported by corporate democrats because of its profit motive and its privatization

Medicare only covers 80% and does not cover eye and dental care and older folks especially need these services. Medicaid helps but there are limits and one cannot necessarily use it where one needs to go. Expanded, Improved Medicare For All is a vast improvement. because it covers everyone in one big pool and, therefore, much more dignified than the rob Paul to pay peter system we have.

Social Security too can be improved. Why should it simply be based on the income of the person which means that a person working in a low paying job in a capitalist system gone wild with greed will often work until they die.

Pell grants can be eliminated when we have what the French have: publicly supported education for everyone.

The demise of unions certainly did not help but it was part of the long strategy of the Right to privatize everything to the enrichment of the few.

Yunzer SuspiraDeProfundis 10h

Thank goodness for the "/s". Poe's Law you know

The overall competence that Canada is handling this outbreak, compared to the USA, is stark. First world (Canada) versus third-world (USA). Testing is practically available for free, to any suspect person, sick or not, as Toronto alone can run 1000 tests a day and have results in 4 hours. That is far more than all the US's capacity for 330 million people.

I wonder how long before Canada closes its borders to USAns? Me and my wife (both in a vulnerable age/medical group) should seriously consider fleeing to my brother's place in Toronto as the first announced cases in Pittsburgh are probably only days away. What about our poor cat though? We could try to smuggle her across the border, but she is a loud and talkative kitty

Greenwich 10h

Don't want to discourage anyone from any protective measures – but the "low down" from my veggie store today was that a lot of health professionals shop there and they think it's being hyped by media. Did get this from my NJ Sen. Menendez –

Center for Disease and Control and Prevention (CDC)

There is currently no vaccine to prevent coronavirus disease 2019 (COVID-19). The best way to prevent illness is to avoid being exposed to this virus. However, everyday preventive actions can help prevent the spread of respiratory diseases:

  • Wash your hands often
  • Avoid close contact with people who are sick.
  • Avoid touching your eyes, nose, and mouth.
  • Stay home when you are sick.
  • Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
  • For more information : htps://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html
  • How it spreads : The virus is thought to spread mainly from person-to-person. It may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the main way the virus spreads. [Read more.]
    https://www.cdc.gov/coronavirus/2019-ncov/about/transmission.html )
  • Symptoms : For confirmed coronavirus disease 2019 (COVID-19) cases, reported illnesses have ranged from mild symptoms to severe illness and death. Symptoms can include fever, cough, and shortness of breath.
Seeker 9h Greenwich:

Don't want to discourage anyone from any protective measures – but the "low down" from my veggie store today was that a lot of health professionals shop there and they think it's being hyped by media.

I agree it is being hyped by the media to the point of being fear mongering. At the same time it is being ignored by the administration to such an extent that really little almost nothing is being done. At some point the two together will create an even bigger problem.

It is like the old adage: "Just because you are paranoid doesn't mean they aren't out to get you." Each over/under reach in considering the reality of the situation has its own problem, which multiply when combined. Every morning when I wake up I say a little atheistic prayer to myself before I get out of bed: "Another day and for better or worse...".

Seeker 8h

Well, two reported here in Florida tonight. One in my county, one in the county next door. And more of the "we already knew, but told you late". One person checked into the hospital on Wednesday. We hear it Monday night. Both were ignored far a long time it seems, and 84 in particular are being watched (roommates, friends, hospital workers not alerted for several days, the usual). But no one knows every place they had been since becoming infected.

Oh, and they have tested a handful of people. No worry?

I can't see anyway that this level of incompetency is an accident. Spring break is just starting usually a 100's of thousand tourist bonanza.

So the question is do they want to kill us, or just keep us in fear?

I think the later. But the end result is a crap shoot. So once again, it is a gamble with our lives.

Archie1954 7h

The business of America is business. Sometimes that can go too far and this is one of those times. Making money from the loss, distress, harm and suffering of others is perverse beyond belief.

[Mar 02, 2020] Why the Coming Economic Collapse Will NOT be Caused by Corona Virus by Matthew Ehret

Highly recommended!
Notable quotes:
"... With Glass-Steagall now removed, legitimate capital such as pension funds could be used to start a hedge to end all hedges. Billions were now poured into mortgage-backed securities (MBS), a market which had been artificially plunged to record-breaking interest rate lows of 1-2% for over a year by the US Federal Reserve making borrowing easy, and the returns on the investments into the MBSs obscene. ..."
"... This is the system which died in 2008. Contrary to popular belief, nothing was actually resolved. For all the talk of an "FDR revival" under Obama, speculation wasn't actually regulated under the Dodd-Frank Act or the Volker Rule of 2010. No productive credit was created to grow the real economy under a national mission as was the case in 1933-1938. ..."
"... Banks were not broken up while derivatives GREW by 40% with the new bubble concentrated in the corporate/household debt sector now collapsing. During this time, nation states continued to be stripped, as austerity was rammed down the throats of nations. ..."
"... It should be no surprise that in the midst of this despair, a creative alliance was consolidated in defense of the interests of sovereign nation states and humanity at large led by the leadership of Russia and China. ..."
"... The Eurasian nations are already firmly committed to this new system, and if the west is to qualify morally to take part in this new epoch, then the first step will be a return to a Glass-Steagall. ..."
"... Joe Kennedy was tasked by FDR with creating the regulations to reform Wall Street, thus earning him their undying enmity. ..."
"... Joe Kennedy has therefore had a hard press and been accused of the Corbyn disease of anti-semitisms, and I imagine the same old experts will be lining up to give him another kicking ..."
"... I would venture that the coronavirus rollocks is all a cover for the inevitable economic collapse. ..."
"... At last. Sanity. A brilliantly truthful article. Almost totally agree with this history of how the fuck the fucking bankers got their hands on almost fucking everything. ..."
"... Interesting article, but the conclusions are off. That solution (i.e. return to Glass-Steagall) would have worked 20 , maybe 10 years ago. We are way to passed that point. The looters are now part of the system– no one will embrace Glass-Steal. The system is on life support. ..."
Mar 02, 2020 | off-guardian.org

(Photo by Philip FONG / AFP) (Photo by PHILIP FONG/AFP via Getty Images)

With last Monday's 1000 point stock market plunge the internet has been set ablaze with discussion of a new crash looming on the horizon. The fact that such a chain reaction collapse was only kept at bay due to massive liquidity injections by the Federal Reserve's overnight repo loans should not be ignored.

These injections which began in September 2019, have grown to over $100 billion per night all that to support the largest financial bubble in human history with global derivatives estimated at $1.2 quadrillion (20 times the global GDP!).

Sadly economic illiteracy is so pervasive among today's modern economists that the real reasons for this crisis have been entirely misdiagnosed with financial experts from CNN, to Forbes blaming the volatility on the spread of the Corona virus!

Not the Corona Virus: The real cause of the oncoming Financial collapse.

As refreshing as it is to hear candid criticisms of the system's failure and even support for the restoration of Glass-Steagall bank separation from presidential candidates like Bernie Sanders, Tulsi Gabbard or even the lame Elisabeth Warren we find that in each case, those candidates are on record supporting policies cooked up by the very same oligarchs they appear to despise in the form of the Green New Deal.

In spite of what many of its progressive proponents would wish, such a global green reform would not only impose Malthusian depopulation upon nation states globally were it accepted, but would establish a the supranational authority of a technocratic managerial elite as enforcers of a "de-carbonization agenda".

Due to the rampant lack of comprehension of how this crisis was created such that such idiotic proposals as "green new deals" are now seriously being suggested as remedies to our current ills, a bit of history is in order.

Some necessary background

"The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit."
Franklin Delano Roosevelt, first Inaugural Address 1933

Knowing that the "money changers" had only been able to create the great bubbles of the 1920s via their access to the deposits of the commercial banks, Franklin Roosevelt made the core of his battle against the abuses of Wall Street centre around a 1933 legislation entitled "Glass-Steagall", named after the two federally elected officials who led the reform with FDR.

This was a bill which forced the absolute separation of productive from speculative banking, guaranteeing via the Federal Deposit Insurance Corporation (FDIC) only those commercial banking assets associated with the productive economy, but forcing any speculative losses arising from investment banking to be suffered by the gambler. The striking success of this law inspired other countries around the world to establish similar bank separation.

Alongside principles of capital budgeting, public credit, parity pricing and a commitment to scientific and technological development, a dynamic had been created that would express the greatest hope for the world, and the greatest fear for the financial empire occupying the City of London and Wall Street.

The death of John F. Kennedy ushered in a new age of pessimism and cultural irrationalism from which our society has never recovered. The destruction of a long term vision as exemplified by the space program, the St. Lawrence Seaway and the New Deal projects had resulted in a tendency within the population to increasingly look upon present pleasures as the only reality, and future goods as the mystical expression of the sum of present pleasures.

In this new philosophical setting, so alien in previous epochs, money was permitted to act as a power unto itself for short term gains instead of serving the investments into the real productive wealth of society. With this new paradigm shift into the "now", a new economic model was adopted to replace the industrial economic model which had proven itself in the years preceding and following World War II.

The name for this system was "post-industrial monetarism". This would be a system ushered in by Richard Nixon's announcement of the destruction of the fixed-exchange rate Bretton Woods system and its replacement by the "floating rate" system of post 1971 fame.

During that same fateful year of 1971, another ominous event took place: the formation of the Rothschild Inter-Alpha Group of banks under the umbrella of the Royal Bank of Scotland, which today controls upwards of 70% of the global financial system.

The stated intention of this Group would be found in the 1983 speech by Lord Jacob Rothschild:

"two broad types of giant institutions, the worldwide financial service company and the international commercial bank with a global trading competence, may converge to form the ultimate, all-powerful, many-headed financial conglomerate."

This policy demanded the destruction of the sovereign nation-state system and the imposition of a new feudal structure of world governance through the age-old scheme of controlling the money system on the one side, and playing on the vices of credulous fools who, by allowing their nations to be ruled by the belief that hedonistic market forces govern the world, would seal their own children's doom.

All the while, geopolitical structures foreign to the United States constitutional traditions were imposed by nests of Oxford-trained Rhodes Scholars and Fabians who converted America into a global "dumb giant" enforcing a neo colonial program under a "Anglo-US Special Relationship". The Dulles brothers, McGeorge Bundy, Kissinger, and Bush all represent names that advanced this British directed plan throughout the 20th century.

London's 'Big Bang'

The great "liberalization" of world commerce began with a series of waves through the 1970s, and moved into high gear with the interest rate hikes of Federal Reserve Chairman Paul Volcker in 1980-82, the effects of which both annihilated much of the small and medium sized entrepreneurs, opened the speculative gates into the "Savings and Loan" debacle and also helped cartelize mineral, food, and financial institutions into ever greater behemoths.

Volcker himself described this process as the "controlled disintegration of the US economy" upon becoming Fed Chairman in 1978. The raising of interest rates to 20-21% not only shut down the life blood of much of the US economic base, but also threw the third world into greater debt slavery, as nations now had to pay usurious interest on US loans.

In 1986, the City of London announced the beginning of a new era of economic irrationalism with Margaret Thatcher's "Big Bang" deregulation. This wave of liberalization took the world by storm as it swept aside the separation of commercial, deposit and investment banking which had been the post-world war cornerstone in ensuring that the will of private finance would never again hold more sway than the power of sovereign nation-states.

After decades of chipping away at the structure of regulation that FDR's bold intervention into history had built, the "Big Bang" set a precedent for similar financial de-regulation into the "Universal Banking" model in other parts of the western world.

The Derivative Time Bomb is Set

In September 1987, the 20-year foray into speculation resulted in a 23% collapse of the Dow Jones on October 19, 1987. Within hours of this crash, international emergency meetings had been convened with former JP Morgan tool Alan Greenspan introducing a "solution" which would have the future echoes of hyperinflation and fascism written all over it.

"Creative financial instruments" was the Orwellian name given to the new financial asset popularized by Greenspan, but otherwise known as "derivatives".

New supercomputing technologies were increasingly used in this new venture, not as the support for higher nation building practices, and space exploration programs as their NASA origins intended, but would rather become perverted to accommodate the creation of new complex formulas which could associate values to price differentials on securities and insured debts that could then be "hedged" on those very spot and futures markets made possible via the destruction of the Bretton Woods system in 1971.

So while an exponentially self-generating monster was created that could end nowhere but in a meltdown, "market confidence" rallied back in force with the new flux of easy money. The physical potential to sustain human life continued to plummet.

NAFTA, the Euro and the End of History

It is no coincidence that within this period, another deadly treaty was passed called the North American Free Trade Agreement (NAFTA). With this Agreement made law, protective programs that had kept North American factories in the U.S and Canada were struck down, allowing for the export of the lifeblood of highly skilled industrial workforce to Mexico where skills were low, technologies lower, and salaries lower still.

With a stripping of its productive assets, North America became increasingly reliant on exporting cheap resources and services for its means of existence.

Again, the physically productive powers of society would collapse, yet monetary profits in the ephemeral "now" would skyrocket. This was replicated in Europe with the creation of the Maastricht Treaty in 1992 establishing the Euro by 1994 while the "liberalization" process of Perestroika replicated this agenda in the former Soviet Union. While some personalities gave this agenda the name "End of History" and others "the New World Order", the effect was the same.

Universal Banking, NAFTA, Euro integration and the creation of the derivative economy in a space of just several years would induce a cartelization of finance through newly legalized mergers and acquisitions at a rate never before seen. The multitude of financial institutions that had existed in the early 1980s were absorbed into each other at great speed through the 1990s in true "survival of the fittest" fashion. No matter what level of regulation were attempted under this new structure, the degree of conflict of interest, and private political power was uncontrollable, as evidenced in the United States, by the shutdown of any attempt by Securities and Exchange Commission head Brooksley Born to fight the derivative cancer at its early stages.

By 1999 a politically castrated Bill Clinton found himself signing into law a treaty authored by then Treasury Secretary Larry Summers known as the Gramm-Leach-Bliley Act, which would be the final nail in the coffin for the Glass-Steagall separation of commercial and investment banking in the United States.

The new age of unregulated trading and creation of over-the-counter derivatives caused these strange financial instruments to grow from $60 trillion in 2000 to $600 trillion by 2008.

The 2000-2008 Frenzy

With Glass-Steagall now removed, legitimate capital such as pension funds could be used to start a hedge to end all hedges. Billions were now poured into mortgage-backed securities (MBS), a market which had been artificially plunged to record-breaking interest rate lows of 1-2% for over a year by the US Federal Reserve making borrowing easy, and the returns on the investments into the MBSs obscene.

The obscenity swelled as the values of the houses skyrocketed far beyond the real values to the tune of one hundred thousand dollar homes selling for 5-6 times that price within the span of several years.

As long as no one assumed this growth was ab-normal, and the unpayable nature of the capital underlying the leveraged assets locked up in the now infamous "sub-primes" and other illegitimate debt obligations was ignored, then profits were supposed to just continue infinitely. Anyone who questioned this logic was considered a heretic by the latter-day priesthood.

The stunning "success" of securitizing housing debts immediately induced a wave of sovereign wealth funds to come into prominence applying the same model that had been used in the case of mortgage-backed securities (MBS) and collateralized debt obligations (CDO) to the debts of entire nations.

The securitizing of bundled packages of sovereign debts that could then be infinitely leveraged on the de-regulated world markets would no longer be considered an act of national treason, but the key to easy money.

Conclusion

This is the system which died in 2008. Contrary to popular belief, nothing was actually resolved. For all the talk of an "FDR revival" under Obama, speculation wasn't actually regulated under the Dodd-Frank Act or the Volker Rule of 2010. No productive credit was created to grow the real economy under a national mission as was the case in 1933-1938.

Banks were not broken up while derivatives GREW by 40% with the new bubble concentrated in the corporate/household debt sector now collapsing. During this time, nation states continued to be stripped, as austerity was rammed down the throats of nations.

It should be no surprise that in the midst of this despair, a creative alliance was consolidated in defense of the interests of sovereign nation states and humanity at large led by the leadership of Russia and China.

This leadership took the form of the China-led Belt and Road Initiative which has grown to embrace over 130 countries today and looking more and more like an Asian-led version of the New Deal of the 1930s.

Indeed, China's capacity to unleash long term credit for thousands of international long term infrastructure projects was made possible by the fact that it was the only country on the globe which had not given up the principles of bank separation which were destroyed in every other nation.

Very few western figures stood up to this self-induced destruction over the decades, but one notable exception here worth mentioning is the figure of the late American economist Lyndon LaRouche (1922-2019) who not only resisted this process for over four decades , but fought alongside the Schiller Institute to promote New Silk Road as early as 1996 .

With the 2016 Brexit and election of President Trump, a new wave of nationalist spirit has become a fire which the technocrats have lost their capacity to snuff out.

Increasingly, the idea that nation-states have a power over the private banking system has become revived and discussion for reforming the now dead Trans-Atlantic system is increasingly shaped not by the calls for a "New World Order" as Sir Kissinger would have liked, but rather for a New Silk Road and a true New Deal.

The Eurasian nations are already firmly committed to this new system, and if the west is to qualify morally to take part in this new epoch, then the first step will be a return to a Glass-Steagall.

Matthew Ehret is the Editor-in-Chief of the Canadian Patriot Review , a BRI Expert on Tactical talk , and has authored 3 volumes of 'Untold History of Canada' book series. In 2019 he co-founded the Montreal-based Rising Tide Foundation and can be reached at matt.ehret@tutamail.com

Hugh O'Neill ,

Excellent article which I could almost understand (my eyes glaze over at any mention of filthy lucre). The author makes clear that the world took a different trajectory after the convenient death of JFK. As I recall from a biography of his father, Ambassador Joe, was that Joe Kennedy was tasked by FDR with creating the regulations to reform Wall Street, thus earning him their undying enmity.

Joe Kennedy has therefore had a hard press and been accused of the Corbyn disease of anti-semitisms, and I imagine the same old experts will be lining up to give him another kicking

Spinky ,

A New Deal? A Green New Deal or a true New Deal? After revealing all of this incredible amount of manipulation of banking without going the final step to the ultimate controllers of the deep state, and you suggest another New Deal? What the world needs now is for the control systems to fail, not to be re supported again with handouts from the corporatocracy to the workers. We need to reclaim our communities with local food security via non corporate food systems based on living soils. We need to reclaim any kind of semblance of currency sanity with local currencies and supports. We need health care based on food as medicine, food that is not GMO and chemical based, but based on healthy local ecosystems, not transportation systems spanning the globe, controlled by central planners of any ideological stripe. Only if we focus on our own local regions can we ever hope to have any semblance of sanity again. We need to realize that the corporatocracy, the deep state, doesn't concern itself with ideologies other than as tools to control us with. All they care about is control, like all neurotics. After going through that entire article outlining the insanity of regulation and control and deregulation and infinity of financial flows and the obvious insanity of all of it, you surely must see that the ones with the money making the systems work are totally gonzo and the best the rest of us can do is focus on what we can do locally, like they have done in Greece. We can't control trillionaires with logical arguments. It ain't gonna happen. Bernie Sanders can become president and he still isn't going to stop the trillionaires and their insane efforts to control the planet. He will just be a different type of puppet with different types of handouts and control mechanisms. Voting is pointless and so are efforts at regulation. At this point, the best we can do is abandon the system, focus on our communities and self sufficiency locally, and try to avoid the system collapse when it falls around us.

RobG ,

It looks like they're rolling out the police state in the UK https://www.bbc.com/news/uk-51708550 but we'll have to wait until tomorrow (Tuesday) to get a better idea of what the psychopaths are trying to foist on us.

I would venture that the coronavirus rollocks is all a cover for the inevitable economic collapse.

Dungroanin ,

At last. Sanity. A brilliantly truthful article. Almost totally agree with this history of how the fuck the fucking bankers got their hands on almost fucking everything.

The first quibble is that starting history at FDR ignores the period of the creation of the Fed all the way back to it's prototype the BoE.

The second is about the creation of the Euro which ignores the political economic security desire of the evolving EU – the EMU and it's years of alignment of the EC preceding Maastricht and the bastardisation of the original vision by the rapid enrollment of countries and economies for Geopolitical (and even anti-EU) reasons. The EU being more likely to implement a 'Glass-Steagle' type of alignment through the level-playing-field ever-closet-union. That chalice being liberally poisoned by the global Banker interests.

Torontonian,

Interesting article, but the conclusions are off. That solution (i.e. return to Glass-Steagall) would have worked 20 , maybe 10 years ago. We are way to passed that point. The looters are now part of the system– no one will embrace Glass-Steal. The system is on life support.

[Feb 29, 2020] A very interesting and though provoking presentation by Ambassador Chas Freeman "America in Distress: The Challenges of Disadvantageous Change"

Highly recommended!
Notable quotes:
"... the American-led takedown of the post-World War II international system has shattered long-standing rules and norms of behavior. ..."
"... The combination of disorder at home and abroad is spawning changes that are increasingly disadvantageous to the United States. With Congress having essentially walked off the job, there is a need for America's universities to provide the information and analysis of international best practices that the political system does not. ..."
Feb 29, 2020 | angrybearblog.com

likbez , February 29, 2020 7:38 pm

A very interesting and though provoking presentation by Ambassador Chas Freeman "America in Distress: The Challenges of Disadvantageous Change"

https://www.youtube.com/watch?v=mvILLCbOFo4

I think this would be very informative for anybody seriously interested in the USA foreign policy. Listening to him is so sad to realize that instead of person of his caliber we have Pompous Pompeo, who forever is frozen on the level of a tank repair mechanical engineer, as the Secretary of State.

Published on Feb 24, 2020

In the United States and other democracies, political and economic systems still work in theory, but not in practice. Meanwhile, the American-led takedown of the post-World War II international system has shattered long-standing rules and norms of behavior.

The combination of disorder at home and abroad is spawning changes that are increasingly disadvantageous to the United States. With Congress having essentially walked off the job, there is a need for America's universities to provide the information and analysis of international best practices that the political system does not.

Ambassador Chas W. Freeman, Jr. is a senior fellow at Brown University's Watson Institute for International and Public Affairs, a former U.S. Assistant Secretary of Defense, ambassador to Saudi Arabia (during operations Desert Shield and Desert Storm), acting Assistant Secretary of State for African Affairs, and Chargé d'affaires at both Bangkok and Beijing. He began his diplomatic career in India but specialized in Chinese affairs. (He was the principal American interpreter during President Nixon's visit to Beijing in 1972.)

Ambassador Freeman is a much sought-after public speaker (see http://chasfreeman.net ) and the author of several well-received books on statecraft and diplomacy. His most recent book, America's Continuing Misadventures in the Middle East was published in May 2016. Interesting Times: China, America, and the Shifting Balance of Prestige, appeared in March 2013. America's Misadventures in the Middle East came out in 2010, as did the most recent revision of The Diplomat's Dictionary, the companion volume to Arts of Power: Statecraft and Diplomacy. He was the editor of the Encyclopedia Britannica entry on "diplomacy."

Chas Freeman studied at the Universidad Nacional Autónoma de México and in Taiwan, and earned an AB magna cum laude from Yale University as well as a JD from the Harvard Law School.

He chairs Projects International, Inc., a Washington-based firm that for more than three decades has helped its American and foreign clients create ventures across borders, facilitating their establishment of new businesses through the design, negotiation, capitalization, and implementation of greenfield investments, mergers and acquisitions, joint ventures, franchises, one-off transactions, sales and agencies in other countries.

He is the author of several books including the most recent

Interesting times: China, America, and the shifting balance of prestige (2013)

[Feb 24, 2020] The fatal flaw of neoliberalism: it's bad economics by Dani Rodrik

Notable quotes:
"... Neoliberalism and its usual prescriptions – always more markets, always less government – are in fact a perversion of mainstream economics. ..."
"... The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash. ..."
"... The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle . The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world. ..."
"... That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that centre-left politicians – Democrats in the US, socialists and social democrats in Europe – enthusiastically adopted some of the central creeds of Thatcherism and Reaganism, such as deregulation, privatisation, financial liberalisation and individual enterprise? Much of our contemporary policy discussion remains infused with principles supposedly grounded in the concept of homo economicus , the perfectly rational human being, found in many economic theories, who always pursues his own self-interest. ..."
Nov 14, 2017 | www.theguardian.com

Neoliberalism and its usual prescriptions – always more markets, always less government – are in fact a perversion of mainstream economics.

As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over cultural norms, and private entrepreneurship over collective action. It has been used to describe a wide range of phenomena – from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and the UK's New Labour to the economic opening in China and the reform of the welfare state in Sweden.

The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash.

We live in the age of neoliberalism, apparently. But who are neoliberalism's adherents and disseminators – the neoliberals themselves? Oddly, you have to go back a long time to find anyone explicitly embracing neoliberalism. In 1982, Charles Peters, the longtime editor of the political magazine Washington Monthly, published an essay titled A Neo-Liberal's Manifesto . It makes for interesting reading 35 years later, since the neoliberalism it describes bears little resemblance to today's target of derision. The politicians Peters names as exemplifying the movement are not the likes of Thatcher and Reagan, but rather liberals – in the US sense of the word – who have become disillusioned with unions and big government and dropped their prejudices against markets and the military.

The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle . The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world.

That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that centre-left politicians – Democrats in the US, socialists and social democrats in Europe – enthusiastically adopted some of the central creeds of Thatcherism and Reaganism, such as deregulation, privatisation, financial liberalisation and individual enterprise? Much of our contemporary policy discussion remains infused with principles supposedly grounded in the concept of homo economicus , the perfectly rational human being, found in many economic theories, who always pursues his own self-interest.

But the looseness of the term neoliberalism also means that criticism of it often misses the mark. There is nothing wrong with markets, private entrepreneurship or incentives – when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas.

The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions. A proper understanding of the economics that lie behind neoliberalism would allow us to identify – and to reject – ideology when it masquerades as economic science. Most importantly, it would help us to develop the institutional imagination we badly need to redesign capitalism for the 21st century.


N eoliberalism is typically understood as being based on key tenets of mainstream economic science. To see those tenets without the ideology, consider this thought experiment. A well-known and highly regarded economist lands in a country he has never visited and knows nothing about. He is brought to a meeting with the country's leading policymakers. "Our country is in trouble," they tell him. "The economy is stagnant, investment is low, and there is no growth in sight." They turn to him expectantly: "Please tell us what we should do to make our economy grow."

The economist pleads ignorance and explains that he knows too little about the country to make any recommendations. He would need to study the history of the economy, to analyse the statistics, and to travel around the country before he could say anything.

Facebook Twitter Pinterest Tony Blair and Bill Clinton: centre-left politicians who enthusiastically adopted some of the central creeds of Thatcherism and Reaganism. Photograph: Reuters

But his hosts are insistent. "We understand your reticence, and we wish you had the time for all that," they tell him. "But isn't economics a science, and aren't you one of its most distinguished practitioners? Even though you do not know much about our economy, surely there are some general theories and prescriptions you can share with us to guide our economic policies and reforms."

The economist is now in a bind. He does not want to emulate those economic gurus he has long criticised for peddling their favourite policy advice. But he feels challenged by the question. Are there universal truths in economics? Can he say anything valid or useful?

So he begins. The efficiency with which an economy's resources are allocated is a critical determinant of the economy's performance, he says. Efficiency, in turn, requires aligning the incentives of households and businesses with social costs and benefits. The incentives faced by entrepreneurs, investors and producers are particularly important when it comes to economic growth. Growth needs a system of property rights and contract enforcement that will ensure those who invest can retain the returns on their investments. And the economy must be open to ideas and innovations from the rest of the world.

But economies can be derailed by macroeconomic instability, he goes on. Governments must therefore pursue a sound monetary policy , which means restricting the growth of liquidity to the increase in nominal money demand at reasonable inflation. They must ensure fiscal sustainability, so that the increase in public debt does not outpace national income. And they must carry out prudential regulation of banks and other financial institutions to prevent the financial system from taking excessive risk.

Now he is warming to his task. Economics is not just about efficiency and growth, he adds. Economic principles also carry over to equity and social policy. Economics has little to say about how much redistribution a society should seek. But it does tell us that the tax base should be as broad as possible, and that social programmes should be designed in a way that does not encourage workers to drop out of the labour market.

By the time the economist stops, it appears as if he has laid out a fully fledged neoliberal agenda. A critic in the audience will have heard all the code words: efficiency, incentives, property rights, sound money, fiscal prudence. And yet the universal principles that the economist describes are in fact quite open-ended. They presume a capitalist economy – one in which investment decisions are made by private individuals and firms – but not much beyond that. They allow for – indeed, they require – a surprising variety of institutional arrangements.

So has the economist just delivered a neoliberal screed? We would be mistaken to think so, and our mistake would consist of associating each abstract term – incentives, property rights, sound money – with a particular institutional counterpart. And therein lies the central conceit, and the fatal flaw, of neoliberalism: the belief that first-order economic principles map on to a unique set of policies, approximated by a Thatcher/Reagan-style agenda.

Consider property rights. They matter insofar as they allocate returns on investments. An optimal system would distribute property rights to those who would make the best use of an asset, and afford protection against those most likely to expropriate the returns. Property rights are good when they protect innovators from free riders, but they are bad when they protect them from competition. Depending on the context, a legal regime that provides the appropriate incentives can look quite different from the standard US-style regime of private property rights.

This may seem like a semantic point with little practical import; but China's phenomenal economic success is largely due to its orthodoxy-defying institutional tinkering. China turned to markets, but did not copy western practices in property rights. Its reforms produced market-based incentives through a series of unusual institutional arrangements that were better adapted to the local context. Rather than move directly from state to private ownership, for example, which would have been stymied by the weakness of the prevailing legal structures, the country relied on mixed forms of ownership that provided more effective property rights for entrepreneurs in practice. Township and Village Enterprises (TVEs), which spearheaded Chinese economic growth during the 1980s, were collectives owned and controlled by local governments. Even though TVEs were publicly owned, entrepreneurs received the protection they needed against expropriation. Local governments had a direct stake in the profits of the firms, and hence did not want to kill the goose that lays the golden eggs.

China relied on a range of such innovations, each delivering the economist's higher-order economic principles in unfamiliar institutional arrangements. For instance, it shielded its large state sector from global competition, establishing special economic zones where foreign firms could operate with different rules than in the rest of the economy. In view of such departures from orthodox blueprints, describing China's economic reforms as neoliberal – as critics are inclined to do – distorts more than it reveals. If we are to call this neoliberalism, we must surely look more kindly on the ideas behind the most dramatic poverty reduction in history.

One might protest that China's institutional innovations were purely transitional. Perhaps it will have to converge on western-style institutions to sustain its economic progress. But this common line of thinking overlooks the diversity of capitalist arrangements that still prevails among advanced economies, despite the considerable homogenisation of our policy discourse.

What, after all, are western institutions? The size of the public sector in OECD countries varies, from a third of the economy in Korea to nearly 60% in Finland. In Iceland, 86% of workers are members of a trade union; the comparable number in Switzerland is just 16%. In the US, firms can fire workers almost at will; French labour laws have historically required employers to jump through many hoops first. Stock markets have grown to a total value of nearly one-and-a-half times GDP in the US; in Germany, they are only a third as large, equivalent to just 50% of GDP.

Facebook Twitter Pinterest 'China turned to markets, but did not copy western practices ... ' Photograph: AFP/Getty

The idea that any one of these models of taxation, labour relations or financial organisation is inherently superior to the others is belied by the varying economic fortunes that each of these economies have experienced over recent decades. The US has gone through successive periods of angst in which its economic institutions were judged inferior to those in Germany, Japan, China, and now possibly Germany again. Certainly, comparable levels of wealth and productivity can be produced under very different models of capitalism. We might even go a step further: today's prevailing models probably come nowhere near exhausting the range of what might be possible, and desirable, in the future.

The visiting economist in our thought experiment knows all this, and recognises that the principles he has enunciated need to be filled in with institutional detail before they become operational. Property rights? Yes, but how? Sound money? Of course, but how? It would perhaps be easier to criticise his list of principles for being vacuous than to denounce it as a neoliberal screed.

Still, these principles are not entirely content-free. China, and indeed all countries that managed to develop rapidly, demonstrate the utility of those principles once they are properly adapted to local context. Conversely, too many economies have been driven to ruin courtesy of political leaders who chose to violate them. We need look no further than Latin American populists or eastern European communist regimes to appreciate the practical significance of sound money, fiscal sustainability and private incentives.


O f course, economics goes beyond a list of abstract, largely common-sense principles. Much of the work of economists consists of developing stylised models of how economies work and then confronting those models with evidence. Economists tend to think of what they do as progressively refining their understanding of the world: their models are supposed to get better and better as they are tested and revised over time. But progress in economics happens differently.

Economists study a social reality that is unlike the physical universe. It is completely manmade, highly malleable and operates according to different rules across time and space. Economics advances not by settling on the right model or theory to answer such questions, but by improving our understanding of the diversity of causal relationships. Neoliberalism and its customary remedies – always more markets, always less government – are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.

Does an increase in the minimum wage depress employment? Yes, if the labour market is really competitive and employers have no control over the wage they must pay to attract workers; but not necessarily otherwise. Does trade liberalisation increase economic growth? Yes, if it increases the profitability of industries where the bulk of investment and innovation takes place; but not otherwise. Does more government spending increase employment? Yes, if there is slack in the economy and wages do not rise; but not otherwise. Does monopoly harm innovation? Yes and no, depending on a whole host of market circumstances.

Facebook Twitter Pinterest 'Today [neoliberalism] is routinely reviled as a shorthand for the ideas that have produced growing economic inequality and precipitated our current populist backlash' Trump signing an order to take the US out of the TPP trade pact. Photograph: AFP/Getty

In economics, new models rarely supplant older models. The basic competitive-markets model dating back to Adam Smith has been modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric information, irrational behaviour and many other real-world features. But the older models remain as useful as ever. Understanding how real markets operate necessitates using different lenses at different times.

Perhaps maps offer the best analogy. Just like economic models, maps are highly stylised representations of reality . They are useful precisely because they abstract from many real-world details that would get in the way. But abstraction also implies that we need a different map depending on the nature of our journey. If we are travelling by bike, we need a map of bike trails. If we are to go on foot, we need a map of footpaths. If a new subway is constructed, we will need a subway map – but we wouldn't throw out the older maps.

Economists tend to be very good at making maps, but not good enough at choosing the one most suited to the task at hand. When confronted with policy questions of the type our visiting economist faces, too many of them resort to "benchmark" models that favour the laissez-faire approach. Kneejerk solutions and hubris replace the richness and humility of the discussion in the seminar room. John Maynard Keynes once defined economics as the "science of thinking in terms of models, joined to the art of choosing models which are relevant". Economists typically have trouble with the "art" part.

This, too, can be illustrated with a parable. A journalist calls an economics professor for his view on whether free trade is a good idea. The professor responds enthusiastically in the affirmative. The journalist then goes undercover as a student in the professor's advanced graduate seminar on international trade. He poses the same question: is free trade good? This time the professor is stymied. "What do you mean by 'good'?" he responds. "And good for whom?" The professor then launches into an extensive exegesis that will ultimately culminate in a heavily hedged statement: "So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's wellbeing." If he is in an expansive mood, the professor might add that the effect of free trade on an economy's longterm growth rate is not clear either, and would depend on an altogether different set of requirements.

This professor is rather different from the one the journalist encountered previously. On the record, he exudes self-confidence, not reticence, about the appropriate policy. There is one and only one model, at least as far as the public conversation is concerned, and there is a single correct answer, regardless of context. Strangely, the professor deems the knowledge that he imparts to his advanced students to be inappropriate (or dangerous) for the general public. Why?

The roots of such behaviour lie deep in the culture of the economics profession. But one important motive is the zeal to display the profession's crown jewels – market efficiency, the invisible hand, comparative advantage – in untarnished form, and to shield them from attack by self-interested barbarians, namely the protectionists . Unfortunately, these economists typically ignore the barbarians on the other side of the issue – financiers and multinational corporations whose motives are no purer and who are all too ready to hijack these ideas for their own benefit.

As a result, economists' contributions to public debate are often biased in one direction, in favour of more trade, more finance and less government. That is why economists have developed a reputation as cheerleaders for neoliberalism, even if mainstream economics is very far from a paean to laissez-faire. The economists who let their enthusiasm for free markets run wild are in fact not being true to their own discipline.


H ow then should we think about globalisation in order to liberate it from the grip of neoliberal practices? We must begin by understanding the positive potential of global markets. Access to world markets in goods, technologies and capital has played an important role in virtually all of the economic miracles of our time. China is the most recent and powerful reminder of this historical truth, but it is not the only case. Before China, similar miracles were performed by South Korea, Taiwan, Japan and a few non-Asian countries such as Mauritius . All of these countries embraced globalisation rather than turn their backs on it, and they benefited handsomely.

Defenders of the existing economic order will quickly point to these examples when globalisation comes into question. What they will fail to say is that almost all of these countries joined the world economy by violating neoliberal strictures. South Korea and Taiwan, for instance, heavily subsidised their exporters, the former through the financial system and the latter through tax incentives. All of them eventually removed most of their import restrictions, long after economic growth had taken off.

But none, with the sole exception of Chile in the 1980s under Pinochet, followed the neoliberal recommendation of a rapid opening-up to imports. Chile's neoliberal experiment eventually produced the worst economic crisis in all of Latin America. While the details differ across countries, in all cases governments played an active role in restructuring the economy and buffering it against a volatile external environment. Industrial policies, restrictions on capital flows and currency controls – all prohibited in the neoliberal playbook – were rampant.

Facebook Twitter Pinterest Protest against Nafta in Mexico City in 2008: since the reforms of the mid-90s, the country's economy has underperformed. Photograph: EPA

By contrast, countries that stuck closest to the neoliberal model of globalisation were sorely disappointed. Mexico provides a particularly sad example. Following a series of macroeconomic crises in the mid-1990s, Mexico embraced macroeconomic orthodoxy, extensively liberalised its economy, freed up the financial system, sharply reduced import restrictions and signed the North American Free Trade Agreement (Nafta). These policies did produce macroeconomic stability and a significant rise in foreign trade and internal investment. But where it counts – in overall productivity and economic growth – the experiment failed . Since undertaking the reforms, overall productivity in Mexico has stagnated, and the economy has underperformed even by the undemanding standards of Latin America.

These outcomes are not a surprise from the perspective of sound economics. They are yet another manifestation of the need for economic policies to be attuned to the failures to which markets are prone, and to be tailored to the specific circumstances of each country. No single blueprint fits all.


A s Peters's 1982 manifesto attests, the meaning of neoliberalism has changed considerably over time as the label has acquired harder-line connotations with respect to deregulation, financialisation and globalisation. But there is one thread that connects all versions of neoliberalism, and that is the emphasis on economic growth . Peters wrote in 1982 that the emphasis was warranted because growth is essential to all our social and political ends – community, democracy, prosperity. Entrepreneurship, private investment and removing obstacles that stand in the way (such as excessive regulation) were all instruments for achieving economic growth. If a similar neoliberal manifesto were penned today, it would no doubt make the same point.

Critics often point out that this emphasis on economics debases and sacrifices other important values such as equality, social inclusion, democratic deliberation and justice. Those political and social objectives obviously matter enormously, and in some contexts they matter the most. They cannot always, or even often, be achieved by means of technocratic economic policies; politics must play a central role.

Still, neoliberals are not wrong when they argue that our most cherished ideals are more likely to be attained when our economy is vibrant, strong and growing. Where they are wrong is in believing that there is a unique and universal recipe for improving economic performance, to which they have access. The fatal flaw of neoliberalism is that it does not even get the economics right. It must be rejected on its own terms for the simple reason that it is bad economics.

A version of this article first appeared in Boston Review

[Feb 20, 2020] China denounces US lies at the Munich Security Conference by Peter Symonds

Feb 19, 2020 | www.wsws.org

In unusually blunt statements, top Chinese officials hit back during last weekend's Munich Security Conference at Washington's confrontational stance toward Beijing on a range of issues, including the Chinese tech giant Huawei and China's response to the coronavirus.

Trump administration officials, supported to the hilt by top Democrats, took a particularly aggressive attitude at the conference, warning European powers that intelligence sharing could end if Huawei equipment were used in building 5G telecommunications networks.

US Secretary of State Mike Pompeo branded "Huawei and other Chinese state-backed tech companies" as "Trojan horses for Chinese intelligence." In his speech, US Defence Secretary Mark Esper accused Beijing of carrying out a "nefarious strategy" through Huawei.

In a bid to intensify its pressure on its European allies, the US last week announced new charges of racketeering and theft of trade secrets against Huawei. These follow the arrest of the company's chief financial officer, Meng Wanzhou, in Canada last year after the US filed charges of fraud and sanctions evasion, and sought her extradition.

Esper made clear that the US attack on China was across the board. He declared that under President Xi Jinping's rule, "the Chinese Communist Party is heading even faster and further in the wrong direction -- more internal repression, more predatory economic practices, more heavy-handedness, and most concerning for me, a more aggressive military posture."

Asked about the speeches by Pompeo and Esper, Chinese Foreign Minister Wang Yi did not mince words, branding the US allegations as "lies." He said their remarks were part of "a common scenario" everywhere they went. "I don't want to waste our time responding to each and every thing they've said. The thing I want to say is that all these accusations against China are lies and not based on facts."

Wang pointed to the driving force behind the confrontation -- the US drive to ensure its continued global domination by every available means. "The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation of China, still less would they want to accept the success of a socialist country, but that is not fair, China has the right to develop."

China, with its burgeoning markets, stock exchanges, billionaires and deep social divide, is not a socialist country. In fact, Huawei, as Wang said in countering US criticism, is a privately-owned company: the world's largest telecommunications equipment provider with nearly 200,000 employees.

Wang described the US attack on Huawei as "immoral" and asked: "Why can't America accept that other countries' companies can also display their talent in the economy, in technology? Perhaps deep down, it doesn't hope to see other countries develop." He accused the US of resorting to rumours to defame Huawei and declared there was no credible evidence that the company has a so-called back door that harms US security.

The US accusations against China and Huawei are utterly hypocritical. The revelations by the whistleblower Edward Snowden demonstrated that the US routinely spies electronically on the world's population, including governments and government leaders, allies and rivals alike, as well as its own citizens.

The US intelligence establishment has long relied on electronic "back doors" provided by American tech corporations to gather intelligence. The use of Huawei equipment not only threatens the economic position of US companies, but could undermine US spying operations.

China's forthright push back against heavy US criticism in Munich stems firstly from the relentless campaign by Washington, not only in propaganda, but through trade war measures and a huge military build-up in Asia against Beijing. Secondly, the Chinese regime is seeking support from the European powers. Wang's comments gained traction in Munich amid deepening conflicts between the US and its erstwhile European allies.

Britain has given the go-ahead for the inclusion of Huawei components in non-core aspects of its 5G rollout, while Germany and France have signaled they will do the same. The European decisions are largely driven by technical and economic factors, as Huawei is a leader in 5G technology and produces at a lower cost.

Washington's threats to end intelligence-sharing arrangements with the European powers could end up affecting US spying operations as much as those of its European rivals. The New York Times

The US has sought to exploit the coronavirus outbreak in China to add to the barrage of criticism against Beijing. Trump's economic adviser Larry Kudlow last week complained about the lack of Chinese transparency over the disease. He declared that Washington was disappointed that American health experts had not been allowed into China, and questioned Chinese statistics.

A considerable portion of Wang's speech to the Munich Security Conference was devoted to defending China's handling of the outbreak. He said the coronavirus largely had been confined to the city of Wuhan and Hubei Province, and the number of cases outside China was a small percentage of the total. Wang said this was the outcome of the rapid development of a test for the virus, the dispatch of 20,000 health workers to the area and the building of new health facilities.

Wang said: "In the spirit of openness and transparency, we promptly notified the world about the outbreak and shared the genetic sequence of the virus. We have been working closely with WHO [World Health Organisation], invited international experts to join our ranks, and provided assistance and facilitation to foreign nationals in China."

In comments to Reuters, the Chinese foreign minister effectively criticised the harsh travel restrictions imposed by the US on any foreign nationals coming from China. "Some countries have stepped up measures, including quarantine measures, which are reasonable and understandable, but for some countries they have overreacted which has triggered unnecessary panic," he said.

If Washington expected European support on the issue, its hopes were dashed. Conference chairman Wolfgang Ischinger praised China's response to the epidemic and declared it was "not getting a very fair deal I think China deserves a little bit of compassion and cooperation, and encouragement rather than only criticism."

China's reaction to the US criticisms in Munich underscores again the sharpening geo-political rivalries and break-up of longstanding alliances being fueled by worsening global economic conditions. Far from responding to the lack of support from Europe against China by moderating its confrontation, the US will intensify its provocative campaign, not just against Beijing, but any threat to its global position, including from its European allies.

[Feb 16, 2020] Psychologist Explains Why Economists -- and Liberals -- Get Human Nature Wrong by Lynn Parramore

Feb 12, 2020 | www.nakedcapitalism.com

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

For a fictional character, homo economicus has had a pretty good run . Since the 1950s, this mono-motivated, self-seeking figure has stalked the pages of economics textbooks, busy deciding each action according to a rational calculus of personal loss and gain. But more recently his territory has shrunk as experts on human nature have demonstrated what any decent novelist could have told them: our real selves are nothing like this.

Unfortunately, many economists still plug this flawed view of people into computer models that determine all kinds of things that impact our lives, from how much workers get paid to how we value life or common goods, such as a clean environment. The results can be disastrous.

Typically, economists aren't that keen on admitting that their work is deeply connected to morality -- never mind that Adam Smith himself was a moral philosopher. But if you ask a question as simple as how to price a used car, you quickly find that moral concerns and economic activity happen together all the time.

In his 2012 book, The Righteous Mind , New York University social psychologist Jonathan Haidt explored why so many perfectly intelligent people have misread human nature– and not just economists, but plenty of psychologists and even (shocker!) people who identify as politically liberal. For him, the key to getting to know ourselves properly lies with moral psychology, a newish strain that pulls together evolutionary, neurological, and social-psychological research on moral emotions and intuitions.

As Haidt sees it, we are creatures driven by moral intuition and attuned to both our personal interests as well as what's good for the groups with which we identify. He points out that in order to thrive, we have to appreciate our complex, interactive natures and see each other more clearly and empathetically – an observation that may be especially useful at a time when threats like climate change and the concentration of money and power threatens all of us, no matter who we are or what groups we belong to. At the moment, we aren't doing such a good job of this.

The Rider and the Elephant

Morality, Haidt argues, doesn't arise from reason, and besides, humans aren't winning any prizes for rationality. Heaps of studies show how factors beyond conscious awareness influence how we think and act, from judges giving out more lenient sentences after lunch to bottles of hand sanitizer making people more feel more conservative .

In Haidt's view, the conscious mind is like a press secretary spewing after-the-fact justifications for decisions already made. Thinkers like David Hume and Sigmund Freud were certainly hip to this idea, but somehow a lot of economists missed the memo, as did psychologists following dominant rationalist models in the 1980s and '90s.

Haidt invites us to consider ourselves as a rider (our analytical, rational part) and an elephant (our emotional, intuitive part). The rider holds the reins, but the beast below is in charge, urged on by the complex interaction of genetic influence, neural wiring, and social conditioning. The rider can advise the elephant, but the elephant calls most of the shots.

Fortunately, the elephant is quite intelligent and equipped with all sorts of intuitions that are good for conscious reasoning. But elephants get very stubborn when threatened and like to stick to what's familiar. The rider, for her part, is not exactly a reliable character. She's not really searching for truth, but mostly for ways to justify what the elephant wants.

That's why a rebel economist challenging conventional thinking about subjects like human nature faces a heavy lift. Experts have to see a lot of evidence accumulating across many studies before they reach a point where they are finally forced to think differently. Scientific studies are even less helpful in persuading the general public.

When I asked Haidt how the mavericks could help their cause, he noted that humans are social creatures more influenced by people than by ideas. So, it matters who says something as much as what they say. It also makes a difference how they say it: elephants don't like to be insulted, and they lean towards arguments made by people they like and admire. Not very rational, perhaps, but likely true.

Homo Duplex

The notion that human beings are social creatures is another strike against homo economicus. We are selfish much of the time, but we are also "groupish," as Haidt puts it, and perhaps better described as "homo duplex" operating on two levels. Here he offers another animal analogy, suggesting that we're 90% chimp and 10% bee, meaning that from an evolutionary perspective, we are selfish primates with a more recently developed a "hivish" overlay that lets us occasionally devote ourselves to helping others, or our groups.

This helps explain why you can't predict how someone is going to vote based on their narrow self-interest. Political opinions are like badges of social membership. We don't just ask what's in it for us, but also what it means to our groups. Having a kid in public school doesn't tell you that a person will support aid to public schools, probably because there are group interests in play. What unifies us in groups, Haidt argues, are certain moral foundations that allow us to share emotionally compelling worldviews that we can easily justify and defend against any attack by outsiders who don't share them. And we can get pretty nasty about those outsiders.

This begins to sound like ugly tribalism, the kind of stuff that leads to war. But Haidt reminds us that this propensity also prepares us to get along within our groups and even to cooperate on a large scale -- our human superpower. We differ from other primates because we exhibit shared intentionality: we're able to plan things together and work together towards a common goal. You never see two chimps carrying a log – they just don't act in concert that way. We do, and in our groups we've developed mechanisms to suppress cheaters and free riders and reap the benefit of division of labor. Groups of early humans may well have triumphed over other hominids not because they smashed them with clubs , but because they out-cooperated them.

To better understand how we operate in political groups, which have lately become more antagonistic, Haidt created a map of our moral landscape called Moral Foundations Theory which delineates multiple "foundations" we presumably use when making moral decisions, including care/harm, fairness/cheating, loyalty/betrayal, authority/subversion, sanctity/degradation, and liberty/oppression. (Some scholars have challenged his system, offering alternative maps). His research indicates that liberals and conservatives differ in the emphasis they place on each of these foundations, with conservatives tending to value all six domains equally and liberals valuing the first two much more than the other three.

Haidt argues that liberals tend to home in on care and fairness when they talk about policy issues, which can put them at a disadvantage vis-à-vis conservatives, who tend to activate the whole range of foundations. Republicans are thus better able to talk to elephants than Democrats because they possess more ways to go for the gut, as it were. If Democrats want to win, Haidt warns, they need to think of morality as more than just care and fairness and to try to better understand that foundations more important to conservatives, like deference to authority or a reverence for sacredness, are not pathological, but aspects human social evolution that have helped us survive in many situations.

When he wrote The Righteous Mind , Haidt noted that Democrats had espoused a moral vision that did not resonate with many working class and rural voters. In the current presidential race, he sees some progress on economic populism from the Bernie Sanders wing, in part because Occupy Wall Street got people attuned to issues of fairness and the oppression of the 1%. When politicians talk about the abuse of political and economic power, they can activate not only care and fairness concerns, but also the liberty/oppression foundation which people respond to across the political spectrum.

But this line is also tricky because, as Haidt pointed out to me, "Americans don't really hate their rich." (One recent study suggested only 25% of Americans have a negative view of the rich, though a majority said they should be taxed more).

Haidt also worries that many Democrats, particularly elites, are currently engaging with cultural issues by embracing a what he called a "common enemy" form of identity politics which "demonizes people at the intersectional point of evil (white men)" rather than focusing on a "common humanity" story which "draws a larger circle around everyone. (Haidt plunged into controversial territory with his 2018 book, The Coddling of the American Mind , which argues that college campuses are shutting down useful debate through "safetyism" that protects students from ideas considered harmful or offensive).

He observed to me that while the polarizing Donald Trump may have turned off the younger generation "for the next few decades," Democrats may be failing "to look seriously at the ways that their social policies -- and their messengers -- alienate many moderates." Newly "woke" white elites, for example, who see racism as the driver of nearly every phenomenon, may be having an unintended negative effect in his view. When they ascribe Trump's victory to racial resentment and ignore the concerns of those who fear sliding down the economic ladder, for example, they may turn off potential allies. Call a person or a group racist and you won't be able to convince them to support your view on anything. Their elephants aren't listening.

Haidt acknowledges that our moral matrices are not written in stone; they can and do evolve, sometimes quite rapidly within a couple of generations. Economic forces surely act to shift attunement to moral foundations, making people more susceptible, for example, to anti-immigration arguments. If you fail to consider the economic influence on this kind of moral activation, you'll be less equipped to address problems like ethnic conflict. Being able to step outside our own moral matrix is essential to persuasion. We not only have to talk to the elephant, but see the beehive.

We also have to remember the truth is not likely to be something held by any one individual, but rather something that emerges as a large number of flawed and limited minds exchange views on a given subject. Our smarts and flexibility are increased by our ability to cooperate and share information. Economists, for example, improve their understanding of human nature by opening up to other social sciences and the humanities for insight.

There is evidence that economists are paying attention to moral psychology. In their book Identity Economics , Nobel laurate George Akerlof and Rachel Kranton argue that people identify with "social categories," and that each category, whether it be Christian, mother, or neighbor, has associated norms or ideals to which people want to aspire. Sam Bowles' The Moral Economy shows that monetary incentives don't work in many situations and that policies targeting our selfish instincts can actually weaken the institutions which depend on our more selfless impulses– including financial markets. At the Institute of New Economic Thinking (INET), the connection between economics and morality has been explored by INET president Rob Johnson and political philosopher Michael Sandel as well as thinkers like economic historian Robert Skidelsky and economist Darrick Hamilton .

All of this rather bad news for homo economicus. But pretty good news for humanity.


Carolinian , February 12, 2020 at 1:37 am

we're 90% chimp and 10% bee, meaning that from an evolutionary perspective, we are selfish primates with a more recently developed a "hivish" overlay that lets us occasionally devote ourselves to helping others, or our groups.

Well if one wants to take an "evolutionary perspective" (works for me) then obviously our instincts are shaped to promote survival of the species and not just the individual. And if that's true then the Randian/economics version of rational isn't rational at all. Perhaps it would be clearer to talk about this problem in terms of rational versus irrational rather than appealing to some "altruism gene" that will supposedly save us. IMO only that rational, intelligent, creative aspect of humans will save us from that irrational side that is indeed totally instinctive. Somehow we've gotten this far–despite everything–"by the skin of our teeth." Here's hoping those minds will find a path.

eg , February 12, 2020 at 2:30 pm

I believe that a huge controversy continues to rage in Biology around "group selection"

erik , February 13, 2020 at 12:53 am

Over what? Carol's point about the sociology of Ayn Rand?

In point of fact, Carol, altruism is always secondary (where it appears) in nature. Selfishness ensures the fittest genes survive to carry on the species. Only in the face of catastrophe does altruism at
the individual level become more valuable than selfishness. So, indeed it is because of our selfishness, because we've struggled by the skin of our teeth, that we as a species have survived and prospered.

Susan the other , February 13, 2020 at 2:41 pm

but, but erik, that leaves out all the energy saving advantage we get from a cohesive group which is also determined to survive and carry on centuries of knowledge on just how to do so .

H. Alexander Ivey , February 12, 2020 at 2:01 am

Just a quick jab: why does Haidt, and others, assume that feelings are inferior to logic and intellect? Seems to me they are inter-twined, separate-able, but equal in value, if not dimension.

It could be a three way set-up instead of a two way (like markets, which are commonly spoken of as two: buyer and seller, but are three: buyer, seller, and banker /money man). Man's consciousness could be 1) feelings, 2) logic /intellect, and 3) the decider (call out to ex-prez W, so got political jab in too!).

But all that rather kicks Haidt's argument

eg , February 12, 2020 at 2:34 pm

In fairness to Haidt, I think he's more nuanced than "rationality good; feelings bad"

I have encountered more of that rather rigid approach among those who have read "Thinking Fast and Slow" perhaps because that book doesn't do as good a job of outlining as crucial the capacity to recognize which situations favor System 1 thinking and those which favor System 2 -- a problem compounded by the emphasis in the book on the rather narrow range of circumstances in which System 2 is clearly superior.

vlade , February 12, 2020 at 3:00 am

Social scientists can't add:
"value all six domains equally [ ] valuing the first two much more than the other three."

More seriously, yes. Years ago, Heinlein wrote "Man is not a rational animal, he is a rationalizing animal".

somecallmetim , February 12, 2020 at 8:56 pm

Jeez – I spent years getting an Econ degree in the homo economus/monetarist era (dark times), when I should've been making my way through my D&D Dungeon Master's sci fi collection!

Dell , February 13, 2020 at 2:53 pm

I always thought that the Professors who thought up homo economus never went with their wives (as it was back then) to the grocery store.

The rational choice, always, was the store brand. DelMonte and all other such brands owed their very existence to non-rational, emotional choices–by tons of people.

But the implications of that never sunk in.

erik , February 13, 2020 at 1:04 am

'Rational' just means 'consistently following an internally sound logic.' A machine does that – following the logic of its mechanics. A computer does that – following the logic of code. An animal does that – following the logic dictated by emotion. And an animal certainly does that better than we humans whose behaviors become muddled by ideas. Truly, by this measure animals are better machines than humans – more mechanical, more emotional, more logical, more rational.

Hayek's Heelbiter , February 12, 2020 at 5:28 am

That's why a rebel economist challenging conventional thinking about subjects like human nature faces a heavy lift. Experts have to see a lot of evidence accumulating across many studies before they reach a point where they are finally forced to think differently.

As an ex-organic chemist, I was astonished to find that more than a few scientists cling to outdated paradigms with a tenacity that would shame the most rigid religious fundamentalist. Cf. heliobacter, continental drift, even the heliocentric solar system.

divadab , February 12, 2020 at 11:02 am

Huh? Heliocentric solar system is an outdated paradigm? Are you talking about this planet or are you coming from another solar system?

vlade , February 12, 2020 at 11:50 am

same for continental drift – pretty much no one in geology challenges plate tectonics, as it explains way more than any other theory on offer.

Anon , February 12, 2020 at 12:06 pm

While "continental" drift was first proposed in about 1600 AD it was not completely wrong. Like many initial geologic theories it was partially correct. It is now known that it is not the "continents" that move across the earth, but tectonic plates, on which the continents are located, that is creating movement. The convection of the earths interior magma is thought to be the movement vector for the plates.

Henry Moon Pie , February 12, 2020 at 6:04 am

"this propensity also prepares us to get along within our groups and even to cooperate on a large scale -- our human superpower"

Yuval Harari's central point revolves around this. Humans, like other primates, engage in "grooming" activities to maintain group cohesion. With the development of language, this "grooming" went from picking lice out of each other's hair (fun!) to gossiping about each other. But this behavior seems to be unable to maintain a group size larger than 150 individuals, not surprising considering the person-to-person contact necessary.

To gather a larger group around common goals requires myth, Harari says. Early myths involved gods, often imagined as living in a separate world with structures parallel to our own. In a polytheistic society, the head god related to the lesser gods as a king related to his human subjects. In the henotheistic Ancient Near East, nations like Babylon, Assyria and even the southern Israelite kingdom of Judah envisioned a parallel war occurring in "heaven" between the national gods when two countries went to war. These days, there are new, completely secular myths like what Harari calls "Money" that orient our world around materialism, competition and power.

eg , February 12, 2020 at 2:46 pm

William H. McNeill also noted the almost universal human behaviours of mass marching/dancing (which requires and reinforces cooperation) as indicative of a social behaviour rooted in a biological need

We also have "mirror neurons" for a reason -- one that baffles the proponents of "homo economicus"

Eric , February 12, 2020 at 7:20 am

I was more interested in this article from the political perspective; i.e. what liberals get wrong.

Like many who read this site, I'm interested in the primary elections and want Bernie to win.

But Bernie's message could be better by being more attuned to some of the "Moral Foundation" issues Haidt raises.

Take Medicare for All which, by most accounts, is the leading issue to most voters:

Talking more about Medicare being a simple and successful 50+ year program appeals to authority. Medicare Advantage plans can be framed as subversion. Or loyalty / betrayal. Also consider sanctity / degradation.

Talking more about the 80/20 aspect of coverage addresses fairness / cheating and "free stuff"

Not talking about eliminating private insurance shows concern for liberty / oppression. I would actually make a joke about people who would still want private insurance after M4A becomes available

Just food for thought in terms of how the ideas contained in the article could be applied.

And the next time some nefarious reporter asks how we will pay for this or that; I wish someone will just say "Mexico will pay for it".

deplorado , February 13, 2020 at 1:20 am

This!
Share it with the campaign on twitter – please!

LowellHighlander , February 12, 2020 at 7:24 am

As an economist (M.A. in Econ), I am elated to see Jonathan Haidt's work receive this kind of attention from serious thinkers. In addition to the reasons cited by Lynn Parramore, I believe Professor Haidt's work validates, by building on, the work of Humanistic Economics by Professor Mark Lutz (Ph.D. UC-Berkeley) and Dr. Kenneth Lux. Moreover, Professor Haidt's work appears, to me, to further validate the astute criticisms of Dean Baker and Mark Weisbrot for neoclassical Marxists' use of "Rational Economic Man" in their paradigm's modls (no "e"). Having obtained my degree about 25 years ago, basically in humanistic economics, I am sure that adoption of such thinking by grad students in economics can help rescue humanity from its current barbaric state. I just hope there's still time left.

Jeremy Grimm , February 12, 2020 at 1:03 pm

But economics without homo economicus? Does that not mess-up a lot of beautiful economic proofs and their beautiful mathematics?

eg , February 12, 2020 at 3:00 pm

Let them have their toys -- just don't let them near anything like policy

Ignacio , February 12, 2020 at 7:30 am

On hate and having negative view on the rich : this article mentions that "only" 25% of Americans have a negative or very negative view of the rich". Only is the proper word? I would say that is a lot of bad feelings. Hate is not a sane feeling and we are inclined to hate in stressful situations. So, if 25% of Americans, have these negative feelings (8% very negative) about the rich this spells quite a lot of despair/stress. It would be interesting a comparison with other countries to evaluate if this is normal by international standards.

Ignacio , February 12, 2020 at 7:52 am

I mention this because stress & despair might explain, at least partially, the relative low turnout in general elections in the US compared with other OECD countries. Does anybody here know the evolution of electoral turnout in the US since 1950? Has turnout declined with time?

Dirk77 , February 12, 2020 at 5:13 pm

There is a Wikipedia article under the title Voter Turnout in the US Presidential Elections fwiw.

John Wright , February 12, 2020 at 9:46 am

I remembered an old David Brooks column mentioning that Americans vote their aspirations.

I'm not a fan of Brooks, but this 20 year old column may explain some USA citizens' current attitudes..

Here is a sample quote (about a proposed Al Gore estate tax):

"The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them."

https://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html

While it has been 20 years since this was published, one might suspect American "I'll be rich" aspirations have taken a beating during this interval.

The economics profession has ridden the hydrocarbon energy spend of the last 100+ years as hydrocarbon energy has been pulled from the ground and converted into "economic growth".

It will be interesting to see how the profession responds to future events with climate change, peak human population and peak energy inexorably (in my view) arriving.

Susan the other , February 12, 2020 at 10:38 am

Yes, after all corvid-19 only has a mortality rate of 2.5% . are viruses comparable to hate?

Donald , February 12, 2020 at 7:49 am

One thing that has happened is that over the past several decades so- called liberals have agreed with conservatives that the market represents freedom and efficiency and the government represents the opposite. Some younger people are rebelling, but older voters have been hearing this their whole lives without challenge until Sanders came along.

I just read a description of a Trump rally at the NYT and I think it was accurate. The reporters just repeated what ordinary people said there. One guy claimed the Democrats have just swung so far left he can't support them anymore, yet on economics this simply isn't the case. Sanders just represents what Democrats used to be on economic issues.

gsinbe , February 12, 2020 at 7:57 am

I enjoyed the article, and agree with the main ideas, but he was a little rough on our primate cousins. Chimps may not cooperate by "carrying logs", but, like a lot of social animals, they work together when, say, hunting other primates. And most social animals have a pretty well-developed sense of fairness (watch what happens if you give one of your dogs a treat and ignore the other one).

a different chris , February 12, 2020 at 8:59 am

Yes I am trying to think about what chimps would actually need to transport a log for. That famous jocular saying by one of the researchers "we were beginning to think the difference between us was merely cultural".

Carolinian , February 12, 2020 at 9:26 am

Is that a sense of fairness or a sense of competition or perhaps a sense of both? Each dog would prefer being the favorite but will accept being the equal.

Dogs are an interesting analogy because in my observation they are, as social animals, so much like us. Perhaps the main takeaway from the above article is the belief that there is such a thing as "human nature" and that we have a kinship with the other species. Needless to say such a view was once anathema in an intellectual climate dominated by religion and a human centric world view. Even now people like Pence are "dominionists" and believe that humans have been given dominion over the planet and all its other species because of what it says in the Bible. Power always needs to justify itself–perhaps because of that innate sense of fairness/competition that you mention.

Susan the other , February 12, 2020 at 10:54 am

Haidt got me thinking about language too. His thesis could be talking about the evolution of language itself. The evolution of rationalization. Since he seems to premise his insights on human intuition and a certain bedrock of morality that all animals seem to have. Pre language. Can we attribute the morality of animals to a lack of rationalization? They do seem to lack immorality. If we were mute, but very intuitive as we are, what effect would our intuition have on our communication skills and our actions? Raising the question here, Is language the emotional middleman that is always (duplex) less than rational and causing all this confusion? Sort of thinking here about someone giving an over-the-top sermon, like an economics professor claiming that we are all homo-economicus.

Carolinian , February 12, 2020 at 12:00 pm

Morality traditionally implies conscious choice so I'm not sure that's relevant to the animal world. Guess what I'm saying is that we are similar to certain animals in our instincts, not our intelligence.

However the language of economic profs is deceptive since they should be saying "irrational self interest" rather than "rational self interest." Pure selfishness usually ends up being bad even for the selfish.

Susan the other , February 13, 2020 at 2:56 pm

Also on this very subject, last night on Nova, the one about dogs, their domestication (or ours?) and their amazing ability to relate – communicate. They attribute a dog's ability to communicate to oxytocin – because they thrive on love and friendship. I do believe that because I've only had one aloof dog and he was very wolf-like. A throwback. Indicating that evolution tends toward love – not to be too corny. Maybe Oxytocin will save us ;-)

Susan the other , February 12, 2020 at 12:04 pm

Maybe we could develop a more finely-tuned consciousness.

eg , February 12, 2020 at 3:07 pm

Um, pack animals have hierarchies -- period

And we are biologically pack animals, mercifully moderated by culture

Carolinian , February 12, 2020 at 4:25 pm

If by "pack animals" you mean species that live in societies I never said they didn't. But obviously there is also cooperation on some level and social bonding. I do think this is a very complicated subject and not easily reduced to simplifications by yours truly–not a biologist–or the above article. But arguably the above is correct in asserting that economists themselves are ignoring the complications.

Ignacio , February 12, 2020 at 8:16 am

And for those interested, here is a paper published in 2008 that empirically demonstrates that the "Homo economicus" approach in this case disguised in the form of "median-voter model" is bullshit regarding inequality, redistribution and public opinion, though they regard it as intelectually compelling. Economists!

John Wright , February 12, 2020 at 10:19 am

Your link did not work for me.

But this did work (after google searching for "mwm006.pdf") that was buried in your link

https://academic.oup.com/ser/article-pdf/6/1/35/4761357/mwm006.pdf

Ignacio , February 12, 2020 at 11:10 am

Thank you. That was the paper.

a different chris , February 12, 2020 at 8:56 am

>Experts have to see a lot of evidence accumulating across many studies before they reach a point where they are finally forced to think differently.

Ummm, the whole, underlying maybe, point of the rest of the article is that the dominant economic thought of our age has nothing to do with evidence. Yet they overthrew Keynes. "Trust us, We're Experts" or something like that right?

DJG , February 12, 2020 at 8:58 am

I just finished slogging through The Master and His Emissary by Iain McGilchrist, which harmonizes with this article. Instead of the rider on an elephant, McGilchrist writes of the functions of the left and right hemispheres of the brain, which are significantly different. The left brain is verbal, analytical, and task oriented. It likes straight lines. (This strikes me as a description of the pseudo-accuracy and busyness of economics.) The right brain sees a larger picture, is less talky, and is generally better at perceiving the world around us. It is the hemisphere that can attain greater knowledge even if it is not as adept at expressing such knowledge in words. (The "bee" part of the brain–and more than 10 percent.)

McGilchrist's book is good, but way too long, which is an irony given that he asserts that the left brain, the emissary, is trying to subvert the master, the part of the brain less likely to go on and on and on in words.

But this era of too many easy paradigms (economics, "free markets"), too much flimsy analysis (critical studies, queer studies, economics, New York Times op-ed columnists), and too much talk (social media) is very much left-brained. I think that what is wearing all of us out is the endless tsunami of word salad. Economics, with its insistance on rationality rather than reasonableness (left brain rather than right brain), fell into the salad bowl a long time ago.

Mel , February 12, 2020 at 10:12 am

Yes. I, too, think this is a very important book. Being retired, I don't think it's too long. I revel in how much stuff I got for only thirty bucks (or whatever it was -- something like that.)
The neurological case is complete after 94 very dense pages. (535 citations. Pleasantly readable prose, though, and that bizarre experiment that "proves" that porcupines are monkeys.) After that he traces the effects and footprints of the two independent modes of thought through philosophy, art, music, and, generally, the working of our societies from ancient to post-modern.
There's a strong parallel to Daniel Kahneman's Fast and Slow thinking, the right hemisphere being the fast one. The one wrinkle is that language is the province of the left hemisphere, but Kahnemann finds that fast thinking is perfectly adept at small-talk, as long as it doesn't get too abstract.
Worst for me is that now that I've read it, I've got to go back into Heidegger, all the other modern Germans, John Dryden, classical and modern painting, religion

The Rev Kev , February 12, 2020 at 9:27 am

So how would homo economicus work out in anything other than a modern industrial system? In earlier times, I would say that at the least they would be shunned as a danger to the community or maybe even thrown out altogether as being incapable of working in a close-knit community. Want a modern example instead? How about the fact that you cannot have a military based on the idea of homo economicus unless you are talking about a band of mercenaries. This whole stupid idea is why every relationship these days whether for work, employment, government, etc is defined by contracts. In short, it is a cookie-cutter idea that come in only one shape.

Sound of the Suburbs , February 12, 2020 at 9:31 am

"Since the 1950s, this mono-motivated, self-seeking figure has stalked the pages of economics textbooks, busy deciding each action according to a rational calculus of personal loss and gain."

Advertising gave up with that sort of approach years ago.
Advertisers appeal to deep seated wants and desires and this works really well, so they haven't looked back.
Are the wealthy much more rational?
Let's have a look at adverts targeted at wealthy people.
Are they a long list of specifications and comparisons saying why these products are better?
No.
An advert for a Sunseeker luxury yacht conveys luxury, elegance, being able to get away from it all and there is usually a young woman in the back in a bikini; the less said about that the better.

What about PR and propoganda?
How do they work?
The same as advertising really, and it's got nothing to do with appealing to rational human beings.
It works; they are not going to be doing it differently anytime soon.

Economics seems to be the odd man out.

Mel , February 12, 2020 at 11:32 am

A propos of nothing, long, long ago there was an ad during the Superbowl placed by Cadillac. It was all about authority, power, celebrity, and it hardly mentioned cars at all, if it even did. Blog commenters had to work very hard to explain how this was selling Cadillacs. IMHO, it didn't sell Cadillacs. It told the top Cadillac executives all the things about themselves that they most longed to hear. It didn't sell cars to wealthy people, it sold the ad itself to the Cadillac C-suite. It worked like a charm.

Sound of the Suburbs , February 12, 2020 at 9:56 am

Inequality exists on two axes:

Y-axis – top to bottom
X-axis – Across genders, races, etc ..

As long as the Democrats wealthy donors keep them focussed on identity politics and the X-axis, the donors should be able to keep making progress in the reverse direction on the Y-axis.

Rob Chametzky , February 12, 2020 at 11:33 am

Samuel Bowles has examined these issues recently in "The moral
economy":

https://yalebooks.yale.edu/book/9780300163803/moral-economy

and he's MUCH better than Haidt. I recommend this book and lots
of his earlier work, much of it done with Herbert Gintis.

Their 1976 "Schooling in capitalist America" is no less necessary
reading now than it was then, and their 1986 "Democracy & capitalism"
is maybe even more relevant now (Milanovic credits it as a forerunner
to his current "Capitalism, alone", which it is–and much more than that).
More recent stuff is referenced in "The moral economy" and pretty
much always worthwhile.

–Rob Chametzky

Tim , February 12, 2020 at 2:41 pm

Morality is a big part of decision making, but I'll argue that is secondary to our cognitive biases that exist at an even lower level of consciousness to enable us to retain function and decision making in the face of an overwhelming number of variables.

The opposite of cognitive bias or perhaps the antidote is critical thinking, which must be taught/learned, so yeah it is preposterous to assume people use solid reasoning that could only come about with the use of critical thinking, which vasts swaths of society almost never exercise.

flora , February 12, 2020 at 2:53 pm

Thanks for this post. Homo economicus was/is always and only about the 'one'.

Whereas the basis of moral philosophy is about 'the one and the many' in equal importance, imo.

Thanks for this post and to the commentors recommending more writings in this field.

Dirk77 , February 12, 2020 at 6:10 pm

The article to me is all over the place, which builds on Haidt's views that seem all over the place too. Interesting though. Comments too. The experimental data about Haidt's classifications of moral decision making elements, and where self-described liberals and conservatives rank them in importance was interesting. I suppose the liberals regarding only two of the six as important could be due to their college educations. As a math professor I had once observed about a smart student in his class: "he learned his subject too well". Or to paraphrase Othello: "One that learned not wisely but too well".

greensachs , February 12, 2020 at 6:26 pm

Nuff sd

"It's Armageddon Time for the Democratic Party"
https://theintercept.com/2020/02/12/its-armageddon-time-for-the-democratic-party/

TG , February 12, 2020 at 6:43 pm

Hmm yes but

Humans are rational economic agents! Therefore we must ship our industrial base to China so that the rich can make more money.

Humans are rational economic agents! Therefore we must allow big companies to merge and quash competition and raise prices.

Humans are rational economic agents! Therefore we must allow "surprise medical billing" when insured people go to the emergency room.

Humans are rational economic agents! Therefore we must do nothing to stop the use of slave labor in peeling shrimp for export in Southeast Asia.

Humans are rational economic agents! Therefore we must bail out and subsidize Wall Street and big finance with tens of trillions of taxpayer dollars.

Perhaps the "humans are rational economic agents!" argument is not really an argument, as such

deplorado , February 13, 2020 at 2:29 am

The most important takeaway from this is that we should not let economists guide the economy. Not the economists believing in homo economicus anyway (and, while we are at it, believing in equilibrium as well). The reason for existence of such a concept is clearly to replace ethics and morality as a guiding principle of human economic activity with a pseudo- "natural law" (humans by nature are "economicus" – i.e. self-interested and materialistic – phew!), which once entrenched, relieves those in power from moral obligations because it safely explains away almost any economic outcome as result of "natural" forces – i.e. no one to blame (globalization=natural force). It's a great tool for them. Down with it.

Dick Swenson , February 14, 2020 at 4:25 pm

The asumption of rationality has been defeated by many economists, as well as psychologists, sociologists, etc.. Carrying on about this is unncessary. Assuming that humans worry about "care and fairness' is true. The "12" prophets of the Tanakh (Old Testament") raised this concern numerous times, and one can find it as a major issue in the Synoptic Gospels. Smith also worried about this in his first book on economocs, "The Theory of Moral Sentiments." The only reason for any further consideration of "rationality" in economics is due to the attemprt by economists to treat economics as a "science" like physics. There are also numerous misguided attempts to mathemaize economics.

But one insidious reason to pretend that economics is a "science" is to justify the idea of a "Nobel Prize" in economics, or to give a "halo" to economists that win the "Swedish Central Bank Prize in Economic Scholarship in Memory of Alfred Nobel."

Avner Offer and Gabriel Söderberg have written a good book about the creation of this prize, "The Nobel Factor." Please note, the words "Nobel Prize" do not seem to appear on either the certificates or medal awarded.

Daniel Kahneman who won the prize (justifiably, (and John Nash a famous mathematicin who won many real prizes) notd that giving labels often transfers a false aura to those being labeled. Offer and Söderberg noted that this is true of the label "winner of the Nobel Prize." Given that there is no decent encompasssing theory of economics similar to Newton's Laws and how often the prizes are awarded to economists who don't produce anything like such a theory, we should once and for all abandone the pretense that economis is a science. It is an attempt to describe social behaviour in a very restricted context. Leaving it to psychologists, sociologists and others has produce better undertandings of human behaviour.

[Feb 15, 2020] Global supply chains are cost-efficient but not resilient

Feb 15, 2020 | www.zerohedge.com

So here we are, with a global economy that's very cost-efficient but not resilient. It's wonderful that Walmart has worked out how to order a new tube of toothpaste from China the second one is pulled off a shelf in Topeka, KS. But that means there is no deep storage to draw upon in times of disruption to the status quo. No warehouses stocked with 12 months of future goods. Just a brilliantly-complicated supply chain thousands of miles long that has to work perfectly for things to keep running.

As an example that drives home this point: we learned during the 2011 earthquake in Japan that there was just one single factory making a necessary polymer gel for the odd-shaped lithium batteries used in smartphones and iPods. There was no backup factory.

We watched closely during that enormous crisis (which also spawned the Fukushima nuclear disaster) as electronics companies scrambled to triage their remaining supplies and attempt to find new sources. It was very touch and go. Vast portions of the battery-fueled electronic industry came within a whisker of simply shutting down production -- all for want of an esoteric polymer gel.

Yes, the most cost-effective way to make that gel was to house it all in a single plant. But it made no sense from a redundancy and resilience standpoint.

And did 'we' learn from that experience? Nope.

Supply Chain Armageddon

The global economy is more interdependent than ever. Its supply chains are built on a huge network of dependencies with many 'single points of failure' strung along its many branches.

Can anybody predict what will happen next? No.

But we're already seeing early failures as Chinese plants, factories and ports sit idle from the country's massive quarantine efforts:

China set to lose out on production of 1M vehicles as coronavirus closes car plants

China exports about $70 billion worth of car parts and accessories globally, with roughly 20 percent going to the U.S.

Feb. 5, 2020, 4:32 PM EST

By Paul A. Eisenstein

China could suffer the loss of a million vehicles worth of production as factories in its crucial automotive industry remain shuttered until at least next week -- and likely longer in Wuhan, the "motor city" at the center of the coronavirus outbreak.

With more than 24,000 people infected, the impact of the highly contagious disease is also beginning to be felt by automakers in other parts of the world. Hyundai is suspending production in its South Korean plants because of a shortage of Chinese-made parts, and even European car manufacturers could be hit: Volkswagen and BMW could see a dip of 5 percent in their earnings for the first half of 2020, according to research firm Bernstein.

( Source – NBC )

We're predicting that these auto shutdowns are just beginning. All it takes is a single component to be unavailable and the entire line has to be shut down.

Is China the sole source for many critical components in the auto industry? Absolutely.

Here's an inside view:

On Monday, Steve Banker and I had the opportunity to speak with Razat Gaurav, CEO of Llamasoft. Razat had some interesting takes on the outbreak, especially as it relates to the automotive and pharmaceutical supply chains. On average it takes 30,000 parts to make a finished automobile.

Due to the virus, production facilities have already indicated that they will have lower than normal parts volumes. This has left companies scrambling to make contingency plans. During my conversation with Razat, he mentioned that inventories for most of these automotive parts are managed on a lean just-in-time basis.

This means that, on average, companies have anywhere between two and twelve weeks of buffer inventory on-hand for automotive parts. As production volumes are decreasing, this has the potential to cause quite the global shortage of parts. The buffer inventory will only last so long, and once the pre-holiday supply runs dry, the industry is going to be in serious trouble. According to Gaurav: " Most OEMs single source components for new vehicles and China is a large supplier of those."

( Source – Logistics Viewpoints )

"Single sourcing" is exactly what it implies. There's a single factory somewhere churning out a single component that is absolutely vital to make a motorized vehicle. If that factory goes away for any length of time, a new source has to be identified or – worse, from a time and cost standpoint – built from scratch.

But this vulnerability to China-dependent supply chains is by no means unique to the auto industry:

Last month, the U.S.-China Economic and Security Review Commission held a hearing on the United States' growing reliance on China's pharmaceutical products. The topic reminded me of a spirited discussion described in Bob Woodward's book, Fear: Trump in the White House.

In the discussion, Gary Cohn, then chief economic advisor to President Trump, argued against a trade war with China by invoking a Department of Commerce study that found that 97 percent of all antibiotics in the United States came from China.

( Source – CFR )

That's as close to a 'sole source' as you can get.

And to put the cherry on top: guess the name of the region in China responsible for producing all if these antibiotics? Yep, Hubei province. With Wuhan its most important production hub.

Can we find another source for our generic drugs and antibiotics? India, possibly. But here again we run into the same global interdependency issue:

Another industry that is feeling the impact of the coronavirus is the pharmaceutical industry. The average buffer inventory for the pharmaceutical industry is between three and six months. However, this does not tell the full story. Gaurav mentioned that China is responsible for producing 40 percent of the active pharmaceutical ingredients (APIs) for the pharmaceutical world.

Additionally, China supplies 80 percent of key starting materials (KSM's), which are the chemicals in APIs, to India . Put together, this represents 70 percent of all APIs across the world.

( Source – Logistics Viewpoints )

India's production is directly tied to uninterrupted supply from China:

Indian generic drugmakers may face supply shortages from China if coronavirus drags on

Feb 13 (Reuters) – Shortages and potential price increases of generic drugs from India loom if the coronavirus outbreak disrupts suppliers of pharmaceutical ingredients in China past April , according to industry experts.

An important supplier of generic drugs to the world, Indian companies procure almost 70% of the active pharmaceutical ingredients (APIs) for their medicines from China.

India's generic drugmakers say they currently have enough API supplies from China to cover their operations for up to about three months.

"We are comfortably placed with eight to 10 weeks of key inventory in place," said Debabrata Chakravorty, head of global sourcing and supply chain for Lupin Ltd, adding that the company does have some local suppliers for ingredients.

Sun Pharmaceuticals Industries Ltd said it has sufficient inventory of API and raw materials for the short term and has not seen any major disruption in supplies at the moment.

The Indian drugmaker, however, said supply has been impacted for a few API products and the company is closely monitoring the situation. It did not identify the products.

India supplies nearly a third of medicines sold in the United States , the world's largest and most lucrative healthcare market.

( Source )

Is this a huge concern? Of course it is.

If you're dependent in any way on prescription drugs, it would be entirely rational to chase down whether those come from China or India and, if they are, begin talks with your doctor about alternatives or what to do if supplies get pinched.

A Fast-Moving Situation

Look, we entirely get why the authorities and media are downplaying the covid-19 pandemic. We really do. They feel the need to manage the crisis, which means managing the public narrative.

But c'mon. Does it make any sense for Apple's stock price to be up while its main Foxconn manufacturing facility is all but completely shuttered?

Fewer iPhones and Airpods being made should equate with lower future earnings and thus a lower stock price. But no, AAPL is up handily over the past month:

And this is even crazier. Does it make ANY sense for Boeing's stock to be up $12 over the past month? As it reported its first year (2019) of NEGATIVE orders and a completely order-free January (2020)? No, of course not.

But those are the sorts of 'signals' that the officials believe have to be sent in order to keep the masses from catching on that something really concerning is happening.

Unfortunately, such signals work on the masses. Higher stock prices send a powerful comforting message that "all is well".

But prudent critical thinkers, which defines those in the Peak Prosperity tribe, can readily see through the ruse and get busy preparing themselves for what's coming.

It's Time For Action

The situation with covid-19 is fluid, and fast-moving. Staying on top of the breaking developments and making sense of them for you is our primary job.

But information without informed action is useless.

After all, knowing something concerning but then doing nothing about it is merely cause for anxiety if not alarm.

The only ways to remain calm and protect your loved ones from the threat of this pandemic are rooted in taking smart action.

Yes, we can all hope this blows over. We sincerely wish the macro-planners all the best in shaping the narrative and keeping the macro economy somehow functioning and glued together.

But we're going to prepare as best we can, here at our micro level because that's our duty to ourselves, to our families, and to our communities.

Creating A Resilient Defense Against The Coronavirus

This is a huge moment in history. The first global pandemic at a time when the world economy is sole-sourced and completely interdependent.

Nobody can predict what will happen next. Autos, drugs who knows what the next industry to stumble will be?

Given the ridiculously high rate of infectivity of covid-19 there's really no chance of stopping its spread. The rate is now just a equation of time, luck, and official actions to aggressively isolate and quarantine infected individuals and communities.

Our position affords us many experienced contacts with experts throughout the world, and those we know with deep medical training are preparing the most aggressively right now. This outbreak has their full attention; and that informs us that it should have ours, too.

Which is why our advice is to get busy preparing yourself now.

Last week we issued the guide How We're Personally Preparing For The Coronavirus to our premium subscribers. It's a great resource providing specific recommendations for prevention and treatment.

Today, we're releasing an expanded companion guide A Resilient Defense Against The Coronavirus , again for our premium members.

Particularly useful for those who have recently found their way to PeakProsperity.com, it offers both a valuable framework to use in preparing for any disaster (including pandemics) and then details out specific action steps to take today across all aspects of your life (i.e., not just health & hygiene) against a coronavirus outbreak in your local area.

Click here to read this report (free executive summary, enrollment required for full access).

[Feb 14, 2020] US Warms Up Its Own Old Spy Stories To Bash Putative Chinese Espionage

Feb 14, 2020 | www.moonofalabama.org

That such cynicism was wholly justified became evident when Edward Snowden revealed the NSA machinations. Soon thereafter Juniper Networks, a provider of large backbone equipment, was found to have at least two NSA backdoors in its operation system. Other 'western' telecommunication equipment companies were similarly manipulated :

Even neutral countries firms are not off-limits to NSA manipulations. A former Crypto AG employee confirmed that high-level US officials approached neutral European countries and argued that their cooperation was essential to the Cold War struggle against the Soviets. The NSA allegedly received support from cryptographic companies Crypto AG and Gretag AG in Switzerland, Transvertex in Sweden, Nokia in Finland, and even newly-privatized firms in post-Communist Hungary. In 1970, according to a secret German BND intelligence paper, supplied to the author, the Germans planned to "fuse" the operations of three cryptographic firms-Crypto AG, Grattner AG (another Swiss cipher firm), and Ericsson of Sweden.

So why was the allegedly secret CIA history of an already known story leaked right now? And why was it also leaked to a German TV station?

Sanho Tree points to the likely reason:

If you want to understand why the US intelligence community is so freaked out about Huawei, it's because they've been playing the same game for decades.

The WaPo story itself also makes that connection :

There are also echoes of Crypto in the suspicions swirling around modern companies with alleged links to foreign governments, including the Russian anti-virus firm Kaspersky , a texting app tied to the United Arab Emirates and the Chinese telecommunications giant Huawei .

The warmed up Crypto AG story is a subtle smear piece against Huawei and Kapersky.

The U.S. wants to convince European countries to not buy Huawei products for their 5G networks. It wants to remind them that telecommunication products can be manipulated. It wants to instill fear that China would use Huawei to spy on foreign countries just like the U.S. used Crypto AG.

This is also the reason for this recent misleading Reuters headline which the story itself debunked:

Germany has proof that Huawei worked with Chinese intelligence: Handelsblatt

"At the end of 2019, intelligence was passed to us by the U.S., according to which Huawei is proven to have been cooperating with China's security authorities," the newspaper quoted a confidential foreign ministry document as saying.

'U.S. intelligence' that is handed over to manipulate someone is of course not 'proof' for anything.

The U.S. is pressing its allies on a very high level:

Secretary of State Mike Pompeo declared the Chinese Communist Party "the central threat of our times" on Thursday, even as he sought to talk up the prospects of a United States trade deal with Britain, which rebuffed American pressure to ban a Chinese company from future telecommunications infrastructure.

The scathing criticism of the Chinese government was the strongest language Mr. Pompeo has used as the Trump administration seeks to convince American allies of the risks posed by using equipment from Huawei, a Chinese technology giant.

A week after Pompeo's panic message Trump took to the phone to convince Boris Johnson who was not impressed :

Donald Trump's previously close relationship with UK Prime Minister Boris Johnson looks close to collapse, following new revelations that the president slammed down the phone on him.

Trump's behaviour during last week's call was described by officials as „apoplectic," and Johnson has now reportedly shelved plans for an imminent visit to Washington.
...
The call, which one source described to the Financial Times as „very difficult," came after Johnson defied Trump and allowed Chinese telecoms company Huawei the rights to develop the UK's 5G network.

Trump's fury was triggered by Johnson backing Huawei despite multiple threats by Trump and his allies that the United States would withdraw security co-operation with the UK if the deal went ahead.

Trump's threats reportedly „irritated" the UK government, with Johnson frustrated at the president's failure to suggest any alternatives to the deal.

Huawei products are pretty good, relatively cheap and readily available. They are just as buggy as the products of other equipment providers. The real reason why the U.S. does not want anyone to buy Huawei products is that it is the one large network company the U.S. can not convince to provide it with backdoors.

European countries do not fear China or even Chinese spying. They know that the U.S. is doing similar on a much larger scale. Europeans do not see China as a threat and they do not want to get involved in the escalating U.S.-China spat:

"Whose side should your country take in a conflict between the US and China?"

Source - bigger

The U.S. just indicted four Chinese military officers for the 2017 hacking of Equifax during which millions of addresses and financial data were stolen. The former CIA Director General Michael Hayden had defended such pilfering as "honorable espionage" and Equifax had made it laughably easy to get into its systems :

[J]ust five days after Equifax went public with its breach -- KrebsOnSecurity broke the news that the administrative account for a separate Equifax dispute resolution portal catering to consumers in Argentina was wide open, protected by perhaps the most easy-to-guess password combination ever: "admin/admin."

To indict foreign military officers for spying when they simply pilfered barely protected servers is seen as offensive. What will the U.S. do when China does likewise?

Every nation spies. It is one of the oldest trades in this world. That the U.S. is making such a fuss about putative Chinese spying when it itself is the biggest sinner is unbecoming.

Posted by b on February 11, 2020 at 18:52 UTC | Permalink

[Feb 14, 2020] Why the USA is fighting Huawei without offering any super alternative

Feb 14, 2020 | www.moonofalabama.org

james , Feb 11 2020 20:13 utc | 13

thanks b...no shortage of hypocrisy in all this...

regarding @ 4 mike r which @8 ian2 linked properly to, i enjoyed the last paragraph which i think sums it up well.. here it is..

"I continue to believe that the United States cannot effectively restrict the spread of a technology under Chinese leadership without offering a superior product of its own. The fact that the United States has attempted to suppress Huawei's market leadership in the absence of any American competitor in this field is one of the oddest occurrences in the history of US foreign policy. If the US were to announce something like a Manhattan Project for 5G broadband and solicit the cooperation of its European and Asian allies, it probably would get an enthusiastic response. As matters stand, America's efforts to stop Huawei have become an embarrassment."


Petri Krohn , Feb 11 2020 20:38 utc | 16

The reason European customers trust Huawei is because Huawei uses open-source software or at least makes their code available for inspection by customers.

Closed-source software cannot provide secrecy or security. This was vividly demonstrated last month when NSA revealed a critical vulnerability in Windows 10 that rendered any cryptographic security worthless.

Critical Windows 10 vulnerability used to Rickroll the NSA and Github

Rashid's simulated attack exploits CVE-2020-0601, the critical vulnerability that Microsoft patched on Tuesday after receiving a private tipoff from the NSA. As Ars reported, the flaw can completely break certificate validation for websites, software updates, VPNs, and other security-critical computer uses. It affects Windows 10 systems, including server versions Windows Server 2016 and Windows Server 2019. Other versions of Windows are unaffected.

The flaw involves the way the new versions of Windows check the validity of certificates that use elliptic-curve cryptography. While the vulnerable Windows versions check three ECC parameters, they fail to verify a fourth, crucial one, which is known as a base point generator and is often represented in algorithms as 'G.' This failure is a result of Microsoft's implementation of ECC rather than any flaw or weakness in the ECC algorithms themselves.

The attacker examines the specific ECC algorithm used to generate the root-certificate public key and proceeds to craft a private key that copies all of the certificate parameters for that algorithm except for the point generator. Because vulnerable Windows versions fail to check that parameter, they accept the private key as valid. With that, the attacker has spoofed a Windows-trusted root certificate that can be used to mint any individual certificate used for authentication of websites, software, and other sensitive properties.

I do not believe this vulnerability was a bug. It is more likely a backdoor intentionally left in the code for NSA to utilize. Whatever the case, NSA must have known about it for years. Why did they reveal it now? Most likely someone else had discovered the back door and may have been about to publish it.

(I commented on these same issues on Sputnik a few weeks ago.)

Piotr Berman , Feb 11 2020 23:04 utc | 25
The other possible US objection is that Huawei will only let their customers spy, not third countries.

Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 24

It reminds me a joke about Emperor Napoleon arriving in a town. The population, the notables and the mayor are greeting him, and the Emperor says "No gun salute, hm?". Mayor replies "Sire, we have twenty reasons. Fist, we have canons", "Enough", replied Napoleon.

Isn't the "other possible US objection" exactly "Enough"? Of course, USA is not a mere "third country", USA is the rule maker of rule based international order.

[Feb 14, 2020] Last year I was so mad at USA bulling Huawei and ZTE, decided to buy a Huawei Honor View V20 PCT-L29 Smartphone.

Feb 14, 2020 | www.moonofalabama.org

JC , Feb 13 2020 0:11 utc | 90

Last year I was so mad at USA bulling Huawei and ZTE, decided to buy a Huawei Honor View V20 PCT-L29 Smartphone. Global version on T-Mobile network . Still fumbling at the setting. This smartphone installed GPS and BeiDou (BDS). I never used Google searches but instead DuckDuckGo long ago

[Feb 14, 2020] I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.

Feb 14, 2020 | www.moonofalabama.org

Ash Naz , Feb 12 2020 0:20 utc | 32

I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.

What is going on?

I could understand if this was DNC/CIA-MI6 passing orders down the line (a la Skripal) to upset Trump but the US Intel Community has no interest in such a snub from the UK Govt.

Obviously this isn't the UK Govt asserting their independence from US instruction because such a thing has never happened in my lifetime.

Wierd.

Anyway, too bad I won't be able to read the thread on my phone tomorrow as Bruce has just broken the thread with his million-character link. :-(


Piotr Berman , Feb 12 2020 3:11 utc | 33

I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.

What is going on?

Posted by: Ash Naz | Feb 12 2020 0:20 utc | 39

However I cringe and the obedient vassals, and Boris who may well be the Chief Poodle, given that exceedingly cute Justin is from another breed, Newtrumplander. But even poodles have privacy concerns, you know? What you web surf, what you buy, whom do you send gifts and WHAT gifts (dominatrix set?). However you trust NSA to use all that info solely for good causes, well, you know, not everyone is an exhibitionist...

Laguerre , Feb 12 2020 9:23 utc | 49
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.

Posted by: Ash Naz | Feb 12 2020 0:20 utc | 32

The reason is said to be that they've already bought and installed a lot of the Huawei equipment, and the new decision is just a fake, to justify the position.

https://www.theguardian.com/commentisfree/2020/jan/28/huawei-security-boris-johnson

Ash Naz , Feb 12 2020 13:17 utc | 52

@Laguerre:

The reason is said to be that they've already bought and installed a lot of the Huawei equipment, and the new decision is just a fake, to justify the position.

The financial angle makes sense, but what is the price of disobedience?

@Piotr Berman:

But even poodles have privacy concerns

The preventing blackmail angle makes sense too

And how useful to be able to use blackmail to get allies to jump when ordered? It's often said that Washington has no real friends, just obedient vassals.

Jon_in_AU , Feb 12 2020 14:50 utc | 54

Ash Naz|Feb 12 2020 0:20 utc|32 & Posted by: Laguerre|Feb 12 2020 9:23 utc|47

It would appear to me that the UK, by allowing Huawei (limited) access to their market, are achieving several advantageous outcomes.

1) They are preventing potential for a duopoly of Eriksson & Nokia on the hardware by allowing a third player into the market.
2) By only allowing a maximum of 35% of the market share, they prevent Huawei from quickly out-competing the others on price and capturing a monopoly.
3) They are only allowing access to the network comm's market, and not the core of the system, which may or may not protect against unwanted data capture and intrusion (by exactly whom remains the question - as per the article above).
4) It allows the four main network providers (especially EE, owned by BT) and the accompanying state surveillance apparatus the ability to familiarise themselves with Huawei tech/code/vulnerabilities which may be invaluable going forward. On this point alone, the USA (and Australia, among others) are doing themselves a great disservice by missing out on a learning experience from arguably the world leader in this technology.

As md|Feb 12 2020 8:29 utc|44 alluded to, they are claiming to allow clintele access to all code (and the freedom to modify it as desired). So denying them access to a particular market only hinders the technical understanding of the technology and its implementation, leaving such states behind.

The USA (and its' vassal client states) once again shoot themselves in the foot in a vain attempt to create and re-create the archetypal "boogeyman" for the populace to wring their hands over and keep them up at night. Fools.

Ps. Thank you B for another illuminating read.

[Feb 14, 2020] Trump and US has a horrible hand to play regarding Huawei. It's desperation time!

Feb 14, 2020 | www.moonofalabama.org

daffyDuct , Feb 12 2020 3:51 utc | 35


Trump and US has a horrible hand to play regarding Huawei. It's desperation time!

Mike Pence tries to link UK/US trade deal with Trump Huawei ban.

https://www.politicshome.com/news/world/united-states/donald-trump/news/109751/mike-pence-hints-us-uk-trade-deal-risk-because


Among Huawei, Ericsson, Nokia, looks like Nokia's way behind.

https://www.itnews.com.au/news/fearing-huawei-curbs-deutsche-telekom-tells-nokia-to-shape-up-537710

U.S. to review new curbs on Huawei, China in Feb. meeting: sources (The Commerce Dept is keeping their potential "rules" vague to buy time)

https://uk.reuters.com/article/us-usa-huawei-tech-meeting/u-s-to-review-new-curbs-on-huawei-china-in-feb-meeting-sources-idUKKBN1ZZ01H?rpc=401&

Pentagon Cites Supply Chain Sustainability For Opposing Huawei Sanctions

https://wccftech.com/pentagon-huawe-sanctions-supply-chain/


Barr scoffs at White House's anti-Huawei 5G approach
https://www.axios.com/barr-scoffs-at-white-houses-anti-huawei-5g-proposal-e3afb2c2-7f21-4609-a02e-ae3753f514f5.html

To counter Huawei, U.S. could take 'controlling stake' in Ericsson, Nokia: attorney general

https://www.reuters.com/article/us-usa-china-espionage/to-counter-huawei-u-s-could-take-controlling-stake-in-ericsson-nokia-attorney-general-idUSKBN2001DL

(Jan 2018) Scoop: Trump team considers nationalizing 5G network
https://www.axios.com/trump-team-debates-nationalizing-5g-network-f1e92a49-60f2-4e3e-acd4-f3eb03d910ff.html

I enjoy David Goldman (Spengler) article at Asia Times. He accurately notes the vast lead Huawei/China has and then provides "but we can do something" bromides. What do mean "we", kimosabe?


daffyDuct , Feb 12 2020 3:55 utc | 36

Per a quote from Newt Gingrich's book ""Trump vs. China: Facing America's Greatest Threat", quoted recently by David Goldman. Gingrich didn't say who was the greatest threat, Trump or China.

"It is not China's fault that in 2017, 89% of Baltimore eighth graders couldn't pass their math exam

"It is not China's fault that too few Americans in K-12 and in college study math and science to fill the graduate schools with future American scientists

"It is not China's fault that, faced with a dramatic increase in Chinese graduate students in science, the government has not been able to revive programs like the 1958 National Defense Education Act

"It is not China's fault the way our defense bureaucracy functions serves to create exactly the 'military-industrial complex' that President Dwight Eisenhower warned about

"It is not China's fault that NASA has been so bureaucratic and its funding so erratic that there is every reason to believe that China is catching up rapidly and may outpace us. This is because of us not because of them

"It is not China's fault that the old, bureaucratic, entrenched American telecommunications companies failed to develop a global strategy for 5G over the 11 years that the Chinese company Huawei has been working to become a world leader "

farm ecologist , Feb 12 2020 3:59 utc | 37
I feel less uncomfortable about the possibility of being spied on by the Chinese than I do about the probability of being spied on by the US.
ak74 , Feb 12 2020 6:09 utc | 42
Here is another Orwellian irony that has been forgotten down the MemoryHole.

Way back in 2014, Edward Snowden revealed that the Americans (and the NSA in particular) were spying on Huawei dating back to at least 2007.

This American spying occurred before the current national security hysterics about Huawei, indeed, before most people in the USA had even heard of the company itself.

As this article states,

"In the final analysis, the NSA spying campaign against Huawei has two fundamental purposes. First, Huawei (unlike the American telecommunications companies) does not allow the NSA free access to its infrastructure to conduct spying on its products' users. Accordingly, as part of its mission of spying on the entire world's population, the NSA hacked into Huawei's systems in order to gather information traveling through its infrastructure.

Second, the spying campaign against Huawei is part of broader efforts to protect the profits and interests of American telecommunications companies at the expense of Huawei. This is the purpose of the NSA's particular interest in Huawei's executives and their 'leadership plans and intentions.'"

Edward Snowden exposes NSA spying against Chinese telecom firm Huawei
https://www.wsws.org/en/articles/2014/03/24/huaw-m24.html?view=print

md , Feb 12 2020 8:29 utc | 46
The other possible US objection is that Huawei will only let their customers spy, not third countries.
Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 20

So it seems. In the words of Ren Zhengfei 'When we transfer the tech, they can modify code on top of my tech, once that's through, it's not only shielded from me, it's shielded from everyone else in the world US 5G will be their own thing, there's no security concern, the only concern will be the U.S. keeping American companies (which bought it) in check.'

https://www.youtube.com/watch?v=LUUwK3DxGlA&feature=youtu.be

[Feb 07, 2020] The Consequence Of Globalism Is World Instability by Paul Craig Roberts

Highly recommended!
Yes, more complex systems are less stable.
Notable quotes:
"... The thoughtless people who constructed " globalism " overlooked that interdependence is dangerous and can have massive unintended consequences . With or without an epidemic, supplies can be cut off for a number of reasons. For example, strikes, political instability, natural catastrophes, sanctions and other hostilities such as wars, and so forth. Clearly, these dangers to the system are not justified by the lower labor cost and consequent capital gains to shareholders and bonuses to corporate executives. Only the one percent benefits from globalism. ..."
"... Globalism was constructed by people motivated by short-term greed. None of the promises of globalism have been delivered. Globalism is a massive mistake. Yet, almost everywhere political leaders and economists are protective of globalism. So much for human intelligence. ..."
Feb 07, 2020 | www.zerohedge.com

If the coronavirus proves to be serious, as it does not appear to be at the present time, many economies could be adversely affected. China is the source of many parts supplied to producers in other countries, and China is the source of the finished products of many US firms such as Apple. If shipments cannot be made, sales and production outside of China are affected. Without revenues, employees cannot be paid. Unlike the financial crisis of 2008, this would be an unemployment crisis and bankruptcy of large manufacturing and marketing corporations.

This is the danger to which globalism makes us vulnerable. If US corporations produced in the US the products that they market in the US and the world, an epidemic in China would affect only their Chinese sales, not threaten the companies' revenues.

The thoughtless people who constructed " globalism " overlooked that interdependence is dangerous and can have massive unintended consequences . With or without an epidemic, supplies can be cut off for a number of reasons. For example, strikes, political instability, natural catastrophes, sanctions and other hostilities such as wars, and so forth. Clearly, these dangers to the system are not justified by the lower labor cost and consequent capital gains to shareholders and bonuses to corporate executives. Only the one percent benefits from globalism.

Globalism was constructed by people motivated by short-term greed. None of the promises of globalism have been delivered. Globalism is a massive mistake. Yet, almost everywhere political leaders and economists are protective of globalism. So much for human intelligence.

At this point of time, it is difficult to understand the hysteria over coronavirus and predictions of global pandemic. In China there are about 24,000 infections and 500 deaths in a population of 1.3 billion people. This is an inconsequential illness. Compared to the ordinary seasonal flu that infects millions of people worldwide and kills 600,000, the coronavirus so far amounts to nothing. Infections outside of China are miniscule and appear to be limited to Chinese people. It is difficult to know for certain, because of the reluctance to identify people by race.

Yet China has huge areas in quarantine, and travel to and from the country is restricted. Nothing like these precautions are taken against seasonal flu. So far this flu season in the US alone 19 million people have been sickened, 180,000 hospitalized, and 10,000 have died. The latest report is that 16 people in the US (possibly all Chinese) have come down with coronavirus, and none have died.

Perhaps the coronavirus is just warming up and much worse is to come. If so, world Gross Domestic Product (GDP) will take a hit. Quarantines prevent work. Finished products and parts cannot be made and shipped. Sales cannot take place without products to sell. Without revenues companies cannot pay employees and other expenses. Incomes decline across the world. Companies go bankrupt.

You can take it from here.

If a deadly coronavirus pandemic or some other one does erupt and there is a world depression, we should be very clear in our mind that globalism was the cause. Countries whose governments are so thoughtless or corrupt as to make their populations vulnerable to disruptive events abroad are medically, economically, socially, and politically unstable.

The consequence of globalism is world instability.


yerfej , 47 minutes ago link

It makes sense for rich countries elites to leverage poor backwards shithole countries to manufacture the things they need because the elites then don't have to worry about anyone but themselves. Globalism is wonder as it bypasses all that crazy western nonsense like jobs and wages and society and hope and such.

Coram Justice , 1 hour ago link

"Bolshevism is globalism according to Lenin."
Prof. V. G. Liulevicius, Utopia & Terror in the 20th Century

Street Chief Martin , 2 hours ago link

Globalism is nothing more than the major central banks finding ways to dump off their inflation which is the deflation of an ever increasing number countries which the major cb's used to deflate their currencies. The older the cb you are the worse off yo are. From a since A.D. perspective only the Sterling is what you have to worry. From my last fiat currency perspective its the Venisthaler that is un doing everything.

To get more zero's you have to add more nine's. They can not be added as nausem like people think zero's are. The compensation pool has been shrinking for centuries on end now. Globalism is an attempt to keep the pool growing at all cost which results relentless asset appreciation. We are out of nine's. The end result of that is hyper deflation for the man and hyper reflation for the people. Easily provable at a store named Vons owned by the treasury retired.

That ladies and gents is your simplified street fed explanation. I am not trying to even remotely write out the longer technical version.

Having said that meet me at what is known as the small walmart around here, which is the home of what does MU do, what does MU do at walmart it never gets old fame for a real life walk thru of what globalism is and looks like. We will then progress to the "Big Walmart" not even a mile away and I will show you what an out of control system looks like.

So we are clear of what I just said. I live in the only place in the world where when a tourist ask you where Wal Mart is, you get your choice of size. Whats the difference you ask??? The small Wal Mart has one main entrance, the big one has three. The lady almost smacked the **** out of the guy I got that from when she asked what the difference was. The hand came up. You really had to be there.

rtb61 , 2 hours ago link

Regional trade blocks with relatively balanced resource and production capabilities make more sense. Globalisation just lead to one country seeking to 'DOMINATE' in every sphere of global activity, raising the threats of economic and military conflict, as clearly demonstrated and this with the aim of global enslavement to multinational corporations, the aim of Globalism, really sick psychopathic stuff.

Regional trade blocks relatively balanced for resource and production, provide stability within each block and lesson competition for outside resource and commercial competitiveness, and represents a far more long term stable structure.

Within each trade block, as it is economic rather than socio-political the original identities of each distinct region can be preserved for the long term, so that future generations can enjoy and share in the different cultures. Race ******** is race ********, there is only one race and all of it's people are free to share in which ever culture they choose or combinations there of. Whether you get to move to those regions and enjoy those cultures will be done to your personal worth, character and ability to contribute to those societies, just the way it will be.

Some economic blocks will be far more preferable to others and will attract higher worth individuals (character and ability to contribute to society), the least and most desirable will become more so as higher worth individuals move to the most preferable away from the least preferable and make the most preferable more preferable by their active presence.

I would tip the Japan Australia one to be the most preferable for this century, the next hard to tell (there are real deep problems in the Americas caused by the USA, the EU had an bad immigrant problem as in they let in too many bad unvetted immigrants, Africa will be what Africa will be corrupt and Russia China it depends upon how quickly the modernise and socially advance, the middle of the middles south east to mid east it depends how long it takes them to come together and religion is a real problem for them).

free corn , 2 hours ago link

Competing MAD capable nations need communication/cooperation to keep the world somewat stable, that's one reason for Globalism. Author sucks.

headless blogger , 4 hours ago link

I've been wondering if this might be some kind of Globalist Drill. It doesn't make sense, although there is always the potential it could become worse than it is.

uhland62 , 3 hours ago link

I thought so, too. Strangely enough, Wuhan Chinese are now repatriated from Bali back to Wuhan?!

Instability is a necessary condition to get more conflicts and then wars going. Weapons production must be kept up; peace and stability would make make weapons production an expensive hobby.

Shifter_X , 4 hours ago link

Globalism is the shredding of nations, peoples, traditions, culture and religion.

It is failing and will continue to fail for two reasons:

1. Good fences make good neighbors

2. When in Rome, do as the Romans do.

People are not going to stand for these destructive invasions any more. Bottom-of-the-barrel wages, crap jobs, high crime -- it's coming to a head.

I hope every nation in the EU exits.

Every idiot in Congress who supports this ridiculous bill that would make illegal immigration legal, require that the US NOT deport criminals and that we taxpayers pay to bring CRIMINALS we've deported, back to the USA, should be stripped of citizenship and kicked off the planet.
https://www.congress.gov/bill/116th-congress/house-bill/5383/text?q=%7B%22search%22%3A%5B%22chamberActionDateCode%3A%5C%222019-12-10%7C116%7C1000%5C%22+AND+billIsReserved%3A%5C%22N%5C%22%22%5D%7D&r=10&s=4

Have you SEEN this **** pending in Congress???

surf@jm , 5 hours ago link

Globalism was outlawed forever at the Tower of Babel.....

That law has never been revoked....

[Feb 03, 2020] Numerical illiteracy of the modern world

The Western MSM is relentlessly trying to sell this coronavirus epidemic as a China failure
Feb 03, 2020 | www.moonofalabama.org
Jeff Harrison , Feb 2 2020 17:24 utc | 9
This corona virus panic is interesting. RT has an interesting piece that points out that corona virus has been officially recognized in some 8,000 odd people and 200 odd people have died from it, we need a sense of perspective. World wide seasonal flu, kills between 350,000 and 600,000 people each year. Tuberculosis kills over 1,000,000 people each year. Malaria kills a similar number. AIDS killed over 500,000 last year. And we're panicking about 200 or so?

TJ , Feb 2 2020 19:11 utc | 23

Just had an email from a company I deal with in China, the relevant passages-

2. The company has been following instructions from the Chinese government to postpone the Spring Festival holiday to Feb. 9th, 2020 if not any further postpone. But, we believe most of our services should be provided as usual since then.

5. We also would like your attention that there's yet no evidence or cases to support the transmission of the novel coronavirus through packages or imported goods. According to the Centers for Disease Control and Prevention (CDC) of the US, because of poor survivability of these coronaviruses on surfaces, there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures. The National Health Commission of the People's Republic of China advises that coronavirus is spread most often by respiratory droplets from one person to another, regular packages from Wuhan can be received as usual. Reference links are attached as the footnote below for your references.[1]
6. The Company will take proactive measures like ultraviolet light to ensure a safe and healthy environment of its warehouse. Disinfection work will be conducted before each delivery.

[Feb 01, 2020] Stragulation of nations with petty laws in EU: the "regulatory ecosystem" that the EU has evolved is unsound

Feb 01, 2020 | www.moonofalabama.org

Jerry , Jan 31 2020 19:51 utc | 24

I like Moon aka Bernard or whatever but he says the EU needs slightly less regulation. This stupid giant politically correct police state has like 66,000 laws and they pass 5,000 new ones a year. Nanny police state fascism and all they do is steal money from the taxpayers of Europe. It is a Central Bank ponzi scheme that is going to implode.

Most recent joke today is the EU Army which has pretty much no working tanks, planes or ships. Who are they going to fight anyway? The Russians? God help Europe - maybe Russians and Putin might reinstate Christianity in Europe and throw off the yoke of the CIA/MIC/Operation Gladio-Mockingbird from USA.


SteveK9 , Feb 1 2020 12:49 utc | 94

vk , Feb 1 2020 13:35 utc | 95
The impression I'm getting from comments here is that there are still many Europeans (in the broad sense, both EU and British) in complete denial.

Europe is in decline, not in ascension. The numbers just came out yesterday: 0.1% for the EU (with France and Italy in recession); UK's number for Q4 are still one month away, but Q3 was also pathetic.

World trade (globalization) has grown to a halt. It's all maxed out already, there are no more free trade deals to be made.

Germany is in de facto recession. Most worryingly, its industrial output is plummeting - with only its services sector keeping the whole thing afloat. And we know that's not how the German economy should work.

The UK is still a capitalist economy - free from the EU or not. It will not invest in those fabled renewable energy sources from tide, wind etc. etc. if the profit rates are not high enough. And they are not high enough. The only way, then, for those investments to happen is if energy prices spike up - very bad news for the British people (which, fair to say, could happen in or out of the EU, so this is not a Brexit question).

Many countries in Europe tried to invest in those renewable, but apart from insignificant micro-nations such as Denmark, most failed to supplant the old sources. It was reduced to a complementary source.

The only reason to think the European Peninsula can rise from the ashes is that it rose from the ashes before (post-war miracle). But the post-war miracle was a very exceptional historical period, where a lot of improbable variables aligned. It will certainly not happen again.

The European peoples should stop with their dellusions of grandeur and accept a treaty of Eurasian integration, with a subordinate status to Russia and China. You did it before with the USA in 1945, you can do it again now with Russia/China. That is unexceptional in European History, and can certainly happen again.

Likklemore , Feb 1 2020 14:06 utc | 96
Posted by: Patroklos | Feb 1 2020 7:35 utc | 83

The Commonwealth long since ceased to have any meaning for the UK other than as a vestige of an expropriative empire, which has been a caricature since 1942[.]
If you think that the land mass of the Commonwealth represents a kind of control comparable to the EU then you need to study the last century[.]

In that comment you have attracted Her Majesty's displeasure. Suggest a read up of the 53 Commonwealth countries' property ownership in common law - in fee simple>radical title > The Crown's underlying title in common law. Oh, add the thirteen colonies prior to the American revolution found unpalatable.

Bubbles , Feb 1 2020 14:09 utc | 97
Fun read from George Galloway @RT. Lot's of things independent minded folk can agree with but pay particular attention to the conclusion / ending and give it a 1 to 10 reality rating.

https://www.rt.com/op-ed/479595-brexit-eu-uk-future/

Eloquent words of inspiration and Hopium are so nice to read in the morning.

Nemesiscalling , Feb 1 2020 14:30 utc | 98
@89 LuBa

No, I don't think so.

Think of the absolutely absurd straight line that separates Canada from the U.S. West of the great lakes.

Now think of that artificially imposed boundary and ask yourself, "What a stupid line, surely that line wouldn't be able to instill any cultural differences between two artificial constructs (nations)?"

(Anecdotally, I live in the Pac NW and every time I have ever crossed the border into Canada it literally feels like you are entering a retiring, European state.)

And then ask yourself how it is possible one country has a national healthcare system while the other abhors the idea. Or why the U.S. has the worst gun violence in the First World while Canada has a 1/10th of that number.

Face it, regardless of lines on a map, a national identity still gives a people the choice to galvanize and develop independently.

Bubbles , Feb 1 2020 14:35 utc | 99
Posted by: SteveK9 | Feb 1 2020 12:49 utc | 94

Apologies to Steve as I didn't see you had already posted the link to Galloway's story and should have referenced your post.

Russianasset , Feb 1 2020 15:08 utc | 100
I think the EU is in for more trouble in the future than the UK. By the end of this decade, several central and eastern European countries economies will have grown sufficiently that their EU yearly subsidies will now become EU payments. In other words, the EU cash cow will suddenly become a cash drain for some countries. In the meantime, France and Germany will have the pick up the financial slack caused by Brexit. Put it all together and it seems to me some trouble ahead for the EU.
English Outsider , Feb 1 2020 15:17 utc | 101
A User @ 58

I believe you have stated the underlying facts here -

"b is correct tho that the tendency of politicians pretending to be technocrats to centralise in order to build a trade-able power base must be halted. otherwise the national devolution movements become superseded by a Brussels top down pyramid management structure where citizens are too removed from decision makers and the decision makers are too removed from the results of their decisions."

That's the reason we have to leave the EU.

The next question is how.

The central fact here is that on a key point Brussels is absolutely in the right. Frictionless access to the Single Market - what we have now - can only go with Dynamic Alignment - continuing adherence to EU regulations. This fact was obscured during the vacillations of the May Premiership and may still be being obscured.

Me, I think the "regulatory ecosystem" that the EU has evolved is unsound. It also goes well beyond the technical setting of standards (most of which are set outside the EU in any case) and affects matters far removed from the purely technical. But it's what they have and it's not for us to attempt to change it.

Much of the hostility from the EU derives from the belief that as we leave we are trying to change their system, and for our own benefit. All the fears of "Cherry picking" and the rest. But it's not that they won't change. They can't, not without an entire recasting of that regulatory ecosystem. That would cause chaos if they attempted to do it. Engrenage is their watchword, the gradual accumulation of regulation and prescription, not demolition or radical rebuilding.

In short, for the reasons you have given above, we have to leave. When we consider the "how", we see that there is no magic solution that allows us to leave while continuing trading as if we have not left. Out really does mean out.

So where's the problem?

We've built up a good many trade links with the 27, the EU countries. They are vulnerable links, particularly the JIT links. It's going to take time to run down these links and replace them with new. We have other links as well - through the agencies - that will also take time to replace.

Such changes could take several years. If Brussels insists on that process happening overnight the result is serious disruption. On the principle that the EU is so much larger the calculation is that that disruption would hurt the UK much more than the EU. That is Brussels' bargaining counter.

Whether Brussels is using that counter for punitive reasons or whether it is using it in order to retain at least some control over the UK is irrelevant. The threat is there, however you look at it.

Some think we should face the threat down. I do - I think it is bluff. Others think we should not face it down - they fear it is not bluff. We wait to see which course the Johnson administration will adopt, not forgetting that the previous UK administration, and certainly the previous Parliament, didn't much like Brexit anyway - they wanted to stay in or close - and we're not yet sure what Johnson's position is.

.


(Note - engrenage as it works in practice explained here)

http://www.eureferendum.com/blogview.aspx?blogno=76804

[Feb 01, 2020] Quotes of former and current neoliberals suggest that globalization is an essential part of neoliberal doctrine

Notable quotes:
"... In this sense the current backlash is a sign of collapse of this ideology ..."
Feb 01, 2020 | www.zerohedge.com

In this sense the current backlash is a sign of collapse of this ideology

General Titus , 22 minutes ago link

"The affirmative task we have now is to actually create a new world order."

-- Vice President Joe Biden, April 5, 2013

"Out of these troubled times, our fifth objective -- a new world order -- can emerge."

-- President George H. W. Bush, September 11, 1990

"We saw deterioration where there should have been positive movement toward a new world order."

-- Mikhail Gorbachev, October 19, 2011

"I think that his [Obama's] task will be to develop an overall strategy for America in this period, when really a 'new world order' can be created. It's a great opportunity."

-- Henry Kissinger, January 5, 2009

https://www.thenewamerican.com/usnews/politics/item/15036-joe-biden-on-creating-a-new-world-order

RoboFascist 1st , 1 hour ago link

Remember it was the British that basically established political Zionism as a state back in Palestine.

It was Trump that declared Jerusalem as the 'eternal capital' of anti-Christ Judaism.

Boris Johnson is a 'passionate Zionist' by his own proclamation.

This is about a realignment of Zionist interest in the English speaking world.

The EU wasn't going to play ball on the terms of American (and British) Zionism.

The English (KJV) world of eschatology demands a pseudo-Christianity to bow down to the interests of anti-Christ Jewish nationalism. (It is why the U.S. Senate has passed legislation making it illegal to criticize 'Israel' as 'anti-Semitic')

American evangelicals are being misrepresented by heretics like John Hagee and a pseudo-Christianity that cares not for Jesus Christ at all but rather maintains a focus only on 'Israel'. A dual covenant theology mixed with heresies galore served up in a controlled media that doesn't allow for the recognition of Christianity as the real Israel against a history of the destruction of ancient Israel because of their rejection of Jesus Christ as the Son of God.

The New Testament Parable of the Wicked Husbandmen is Jesus foretelling and giving clear reason for the destruction of anti-Christ Judaism in 70 AD.

The heresies of John Darby and Cyrus Scofield (again nearly exclusively in English) have created everything from British Israelism to fear and anxiety hustling crapola such as Hal Lindsey and The Late Great Planet Earth end of the world heresies.

On the basis of Christian heresy has emerged anti-Christ political Zionism and its vast adherents in the English speaking world now realigning.

[Jan 26, 2020] The Collapse of Neoliberalism by Ganesh Sitaraman

Highly recommended!
From the book The Great Democracy by Ganesh Sitaraman.
This is a very valuable article, probably the best written in 2019 on the topic, that discusses several important aspects of neoliberalism better then its predecessors...
Notable quotes:
"... For some, and especially for those in the millennial generation, the Great Recession and the wars in Iraq and Afghanistan started a process of reflection on what the neoliberal era had delivered. ..."
"... neoliberal policies had already wreaked havoc around the world ..."
"... "excessively rapid financial and capital market liberalization was probably the single most important cause of the crisis"; he also notes that after the crisis, the International Monetary Fund's policies "exacerbated the downturns." ..."
"... In study after study, political scientists have shown that the U.S. government is highly responsive to the policy preferences of the wealthiest people, corporations, and trade associations -- and that it is largely unresponsive to the views of ordinary people. The wealthiest people, corporations, and their interest groups participate more in politics, spend more on politics, and lobby governments more. Leading political scientists have declared that the U.S. is no longer best characterized as a democracy or a republic but as an oligarchy -- a government of the rich, by the rich, and for the rich. ..."
"... Neoliberalism's war on "society," by pushing toward the privatization and marketization of everything, indirectly facilitates a retreat into tribalism. ..."
"... neoliberalism's radical individualism has increasingly raised two interlocking problems. First, when taken to an extreme, social fracturing into identity groups can be used to divide people and prevent the creation of a shared civic identity. ..."
"... Demagogues rely on this fracturing to inflame racial, nationalist, and religious antagonism, which only further fuels the divisions within society. Neoliberalism's war on "society," by pushing toward the privatization and marketization of everything, thus indirectly facilitates a retreat into tribalism that further undermines the preconditions for a free and democratic society. ..."
"... The second problem is that neoliberals on right and left sometimes use identity as a shield to protect neoliberal policies. As one commentator has argued, "Without the bedrock of class politics, identity politics has become an agenda of inclusionary neoliberalism in which individuals can be accommodated but addressing structural inequalities cannot." What this means is that some neoliberals hold high the banner of inclusiveness on gender and race and thus claim to be progressive reformers, but they then turn a blind eye to systemic changes in politics and the economy. ..."
"... They thought globalization was inevitable and that ever-expanding trade liberalization was desirable even if the political system never corrected for trade's winners and losers. They were wrong. These aren't minor mistakes. ..."
"... In spite of these failures, most policymakers did not have a new ideology or different worldview through which to comprehend the problems of this time. So, by and large, the collective response was not to abandon neoliberalism. After the Great Crash of 2008, neoliberals chafed at attempts to push forward aggressive Keynesian spending programs to spark demand. President Barack Obama's advisers shrank the size of the post-crash stimulus package for fear it would seem too large to the neoliberal consensus of the era -- and on top of that, they compromised on its content. ..."
"... When it came to affirmative, forward-looking policy, the neoliberal framework also remained dominant. ..."
"... It is worth emphasizing that Obamacare's central feature is a private marketplace in which people can buy their own health care, with subsidies for individuals who are near the poverty line ..."
"... Fearful of losing their seats, centrists extracted these concessions from progressives. Little good it did them. The president's party almost always loses seats in midterm elections, and this time was no different. For their caution, centrists both lost their seats and gave Americans fewer and worse health care choices. ..."
"... The Republican Party platform in 2012, for example, called for weaker Wall Street, environmental, and worker safety regulations; lower taxes for corporations and wealthy individuals; and further liberalization of trade. It called for abolishing federal student loans, in addition to privatizing rail, western lands, airport security, and the post office. Republicans also continued their support for cutting health care and retirement security. After 40 years moving in this direction -- and with it failing at every turn -- you might think they would change their views. But Republicans didn't, and many still haven't. ..."
"... Although neoliberalism had little to offer, in the absence of a new ideological framework, it hung over the Obama presidency -- but now in a new form. Many on the center-left adopted what we might call the "technocratic ideology," a rebranded version of the policy minimalism of the 1990s that replaced minimalism's tactical and pragmatic foundations with scientific ones. The term itself is somewhat oxymoronic, as technocrats seem like the opposite of ideologues. ..."
"... The technocratic ideology preserves the status quo with a variety of tactics. We might call the first the "complexity canard." ..."
"... The most frequent uses of this tactic are in sectors that economists have come to dominate -- international trade, antitrust, and financial regulation, for example. The result of this mind-set is that bold, structural reforms are pushed aside and highly technical changes adopted instead. Financial regulation provides a particularly good case, given the 2008 crash and the Great Recession. When it came time to establish a new regulatory regime for the financial sector, there wasn't a massive restructuring, despite the biggest crash in 70 years. ..."
"... Instead, for the most part, the Dodd-Frank Act was classically technocratic. It kept the sector basically the same, with a few tweaks here and there. There was no attempt to restructure the financial sector completely. ..."
"... The Volcker Rule, for example, sought to ban banks from proprietary trading. But instead of doing that through a simple, clean breakup rule (like the one enacted under the old Glass-Steagall regime), the Volcker Rule was subject to a multitude of exceptions and carve-outs -- measures that federal regulators were then required to explain and implement with hundreds of pages of technical regulations ..."
"... Dodd-Frank also illustrates a second tenet of the technocratic ideology: The failures of technocracy can be solved by more technocracy. ..."
"... Dodd-Frank created the Financial Stability Oversight Council, a government body tasked with what is called macroprudential regulation. What this means is that government regulators are supposed to monitor the entire economy and turn the dials of regulation up and down a little bit to keep the economy from another crash. But ask yourself this: Why would we ever believe they could do such a thing? We know those very same regulators failed to identify, warn about, or act on the 2008 crisis. ..."
"... In the first stage, neoliberalism gained traction in response to the crises of the 1970s. It is easy to think of Thatcherism and Reaganism as emerging fully formed, springing from Zeus's head like the goddess Athena. ..."
"... Early leaders were not as ideologically bold as later mythmakers think. In the second stage, neoliberalism became normalized. It persisted beyond the founding personalities -- and, partly because of its longevity in power, grew so dominant that the other side adopted it. ..."
"... Eventually, however, the neoliberal ideology extended its tentacles into every area of policy and even social life, and in its third stage, overextended. The result in economic policy was the Great Crash of 2008, economic stagnation, and inequality at century-high levels. In foreign policy, it was the disastrous Iraq War and ongoing chaos and uncertainty in the Middle East. ..."
"... The fourth and final stage is collapse, irrelevance, and a wandering search for the future. With the world in crisis, neoliberalism no longer has even plausible solutions to today's problems. ..."
"... The solutions of the neoliberal era offer no serious ideas for how to restitch the fraying social fabric, in which people are increasingly tribal, divided, and disconnected from civic community ..."
Dec 23, 2019 | newrepublic.com
Welcome to the Decade From Hell , our look back at an arbitrary 10-year period that began with a great outpouring of hope and ended in a cavalcade of despair. The long-dominant ideology brought us forever wars, the Great Recession, and extreme inequality. Good riddance.

With the 2008 financial crash and the Great Recession, the ideology of neoliberalism lost its force. The approach to politics, global trade, and social philosophy that defined an era led not to never-ending prosperity but utter disaster. "Laissez-faire is finished," declared French President Nicolas Sarkozy. Federal Reserve Chairman Alan Greenspan admitted in testimony before Congress that his ideology was flawed. In an extraordinary statement, Australian Prime Minister Kevin Rudd declared that the crash "called into question the prevailing neoliberal economic orthodoxy of the past 30 years -- the orthodoxy that has underpinned the national and global regulatory frameworks that have so spectacularly failed to prevent the economic mayhem which has been visited upon us."

... ... ...

[Jan 26, 2020] How (Not) to Criticize Karl Polanyi by Steven Klein

Notable quotes:
"... Steven Klein is a political theorist who is an Assistant Professor of Political Science at the University of Florida. He writes and teaches about democracy, the welfare state, and European political thought. ..."
Jun 05, 2017 | democracyjournal.org

A recent critique of Karl Polanyi reveals more about the limits of our current political debates than anything about the man himself.

Globalization has not been doing so well lately. Since the 2008 financial crisis, the idea that unfettered free markets bring unadulterated benefits to society has lost its sheen. Trump's election demolished Republican Party catechisms around free trade. The irony of our current moment is that the center-left politicians, traditionally wary of markets, have become the great defenders of global openness, while the opponents of globalization are gravitating to the nationalist right.

Once a relatively obscure Hungarian academic, Karl Polanyi has posthumously become one of the central figures in debates about globalization. This recent interest in his thought has occasioned an unsympathetic treatment by Jeremy Adelman in the Boston Review . Adelman, a Princeton professor, has scores to settle with Polanyi. But his article ends up revealing more about the limits of our current political debates than anything about the man himself.

Polanyi's classic book, The Great Transformation: The Political and Economic Origins of Our Time , published in 1944, argued that the utopian obsession with self-adjusting markets had wreaked havoc in nineteenth-century European society, eventually laying the groundwork for the rise of fascism. His once unfashionable views have witnessed a remarkable revival of late. His name is frequently invoked when describing the dangers that global market integration poses to democracy. Polanyi has now moved one step closer to intellectual canonization with the publication of Gareth Dale's excellent biography, Karl Polanyi: A Life on the Left (2016), the impetus of Adelman's article.

First, there are aspects of Polanyi's thought worth criticizing. His historical account of the origins of the market society is murky. He neglects gender, race, and colonialism, although he was a supporter of anti-colonial struggles. Yet, instead, Adelman returns to a well-worn and wrong-headed criticism of Polanyi: that his thought represents a romantic revolt against markets in favor of a warm communalism, a stance that inevitably leads to violent nationalism and tyrannical "collectivism."

More troubling still is Adelman's explanation for why Polanyi was supposedly attracted to romantic attacks on liberalism. In Adelman's telling, Polanyi, who was born into an assimilated Jewish family but converted to Christianity, suffered from a sort of intellectual Stockholm Syndrome: Excluded from European society, he romanticized his murderous oppressors. He longed for the communal belonging that was denied to him as a Jew. And so Polanyi, Adelman declares, wanted to "merge into the national Volk ." This desire explains his "blind spot for reactionary nationalism," which "would only grow with time" as he looked to the passions of nationalist belonging "as a way to restore a sense of fraternal community." Polanyi's rejection of liberalism was thus a rejection of his own Judaism. He attacked market liberalism and excused reactionary nationalism because of his unfulfillable desire to belong in a Europe defined by ethnic unity and anti-Semitism.

Now, there is much to be said about Polanyi's social circumstances and life story, beautifully recounted in Dale's biography. The complex identity of assimilated Jewish elites in the Austro-Hungarian Empire and Polanyi's lifelong attraction to Christianity certainly informed his thinking. There is also a larger story here about the attraction of interwar Jewish intellectuals to various strains of Christianity. Perhaps this fascination reflected a degree of self-loathing for highly educated Jews, caught in the double binds of Jewish identity: either too assimilated and therefore incapable of authenticity, or else clinging to their primitive roots. Or perhaps a radical interpretation of aspects of Christianity provided such Jews with a standpoint to criticize Europe without having their criticisms dismissed on account of their Judaism. These are all interesting and worthy questions.

For Adelman, though, Polanyi's conversion to Christianity is a bludgeon with which to attack him, a crude device to explain Polanyi's (again supposed) hatred for European liberalism. But the idea that Polanyi, who was forced to flee Europe, is some sort of apologist for nationalism is just plain wrong. Indeed, he viewed European liberalism's attachment to market fundamentalism as the barrier to an alliance between democratically inclined liberals and the working masses. The worst that could be said of him on this account is that he underestimates nationalism as a source of opposition to markets, although he certainly was aware of the fascist threat. But his central point was always that, if we want to avoid an authoritarian reaction to the ravages of the market, we need to develop a democratic alternative to pro-market liberalism.

To tar Polanyi with the brush of reactionary nationalism, Adelman makes some strange claims. For instance, he argues that Polanyi affiliates Judaism with liberalism, both of which he then views as stepping stones to Christianity and socialism, respectively. The only problem is that Polanyi explicitly associated Christianity , and not Judaism, with liberalism -- Christianity revealed the principle of individual freedom that is the core of liberalism -- and, for him, both Christianity and liberalism stood in need of a revision that would push them toward democratic socialism. Of course, deeply internalized anti-Semitism could be more important than Polanyi's actual statements. The problem with such psychological arguments, though, is their pointillist quality: They cohere better from afar than up close.

Reading Polanyi is admittedly a frustrating experience. He mixes high theory, historical narrative, and overheated journalistic polemic into a distinct mélange. Yet at the center of his thinking is a brilliant idea: that the three core "inputs" of the economy -- labor, land, and money -- are what he calls "fictitious" commodities. By this, Polanyi means that, try as we might, workers are never going to move at a moment's notice to wherever markets dictate, markets aren't going to replenish rivers and fields, and governments will bail out banks to keep money flowing. To take one not-exactly-random example: Since land, to Polanyi, is more than just a resource for market exchange, so too will housing only ever be a partial commodity. Access to housing is a vital interest, and so democracies will face pressure to introduce a variety of regulations that "distort" housing markets. So, it is hardly surprising that the financial crisis was centered on mortgages -- try as we might, we will never get housing markets to be the smooth, frictionless edifices imagined by economists. A house cannot be moved like a bushel of wheat. Adelman misses the significance of these arguments because he reduces Polanyi's thinking to the binary of morality or markets. But the central opposition, for Polanyi, is democracy or markets. Democratic demands for social protection conflict with the dictates of the market, a fact that is ever more apparent in our era of financial capitalism.

Adelman boils this down to a simplistic rejection of the market as such, an inability to see how markets can function as engines of wealth-creation and need-satisfaction. But here Polanyi fully agrees with Adelman about the remarkable potential of markets. Polanyi's attack on market liberalism is not that it impoverishes the masses in favor of the rich. The problem with markets, for him, is that they are so good at producing efficiencies that they tend to override all other considerations. To unlock their full potential, markets require the subordination of all individual, social, and political institutions to their dictates.

Polanyi expresses this as the tension between habitation and improvement: We cannot live off the land while we improve the land. This is a lesson that the Greeks and other Europeans are currently learning first-hand, as the search for long-term competitiveness through "structural reforms" leads to massive unemployment. Polanyi thinks this hunt is politically unrealistic and potentially explosive. Societies create moral expectations around fairness, rewards for effort, and stability that markets, by their nature, cannot meet. What is efficient from a market perspective can be profoundly harmful from a human perspective -- Polanyi learned this as a teenager, when his father went through a traumatic bankruptcy.

If Polanyi's argument was just that markets were immiserating and destroyed communal integration, we should certainly consign him to the dustbin of failed moral economists. Fortunately, that was not his view. But Adelman's line of attack reveals more about our contemporary moment than it does about Polanyi. It speaks to a growing rift between liberalism and the left. Liberals want globalization with a human face, while leftists echo Polanyi in fundamentally questioning the undemocratic political infrastructure of our current market era. The unexpected strength of Sanders in the United States, Mélenchon in France, and now Corbyn in the UK shows that old political dogmas are dying.

Adelman's read of Polanyi reinforces the liberal view that globalization is a done deal and left anti-globalization rests on a romantic fantasy, one that cannot but appease the racism and nationalism of the "losers" of the market. Just as, if you squint hard enough, you can persuade yourself that Polanyi is a sort of self-hating, pseudo-nationalist reactionary, despite his professed socialism, so too, if you work at it, can you merge Sanders and Trump, Mélenchon and Le Pen into one anti-globalization, anti-liberal morass.

Yet Polanyi provides a vital avenue out of this paralyzing deadlock between pro-globalization liberalism and nationalist populism. Our contemporary market order is in crisis not because of fuzzy-headed leftists, adorned in too many buttons, who refuse to get with the program. Nor is the crisis one last revolt from the losers of globalization, animated by the fever dreams of white Americans and "native" Europeans. Our order is in crisis because it has failed to deliver on its own promise of widely distributed, real growth. For Polanyi, the central problem was how to channel the reaction to such inevitable failures in a democratic rather than authoritarian direction. Polanyi saw many different avenues toward this goal, including Roosevelt's New Deal. Today, of course, we face different political conditions, but many similar problems: a massively exploitative consumer credit "marketplace," the degraded power of workers, and flows of speculative capital that undermine democracy. Tackling these issues, though, will require a more foundational rethink of a global institutional order that facilitates market exchange above all else.

One last thought: Adelman takes capitalism's revival after World War II as an embarrassment for Polanyi. To be sure, Polanyi failed to foresee the remarkable resiliency of capitalism, produced in part by the ability of elites to absorb the undercurrents of his own teaching and construct a form of embedded, organized capitalism. The flipside of post-war capitalism, though, was the creation of an environmental crisis the full scope of which has only now become apparent. If Polanyi failed to predict the persistence of our market society, he was certainly prescient about the destructive environmental implications of unconstrained growth. In this respect, as in many others, we should heed his warnings and learn from his thought, as today the stakes could hardly be higher.

Read more about Globalization Karl Polanyi Liberalism nationalism socialism

Steven Klein is a political theorist who is an Assistant Professor of Political Science at the University of Florida. He writes and teaches about democracy, the welfare state, and European political thought.

[Jan 21, 2020] How a Hidden Parliamentary Session Revealed Trump's True Motives in Iraq by Whitney Webb

Notable quotes:
"... The Americans are the ones who destroyed the country and wreaked havoc on it. They have refused to finish building the electrical system and infrastructure projects. They have bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports. So, I refused and decided to go to China and concluded an important and strategic agreement with it. Today, Trump is trying to cancel this important agreement. ..."
"... After my return from China, Trump called me and asked me to cancel the agreement, so I also refused, and he threatened [that there would be] massive demonstrations to topple me. Indeed, the demonstrations started and then Trump called, threatening to escalate in the event of non-cooperation and responding to his wishes, whereby a third party [presumed to be mercenaries or U.S. soldiers] would target both the demonstrators and security forces and kill them from atop the highest buildings and the US embassy in an attempt to pressure me and submit to his wishes and cancel the China agreement." ..."
"... It could also explain why President Trump is so concerned about China's growing foothold in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but could also lead to major trouble for the petrodollar system and the U.S.' position as a global financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having the opposite effect, showing that this administration's "gangster diplomacy" only serves to make the alternatives offered by countries like China and Russia all the more attractive. ..."
Jan 21, 2020 | www.unz.com

... ... ...

After the feed was cut, MPs who were present wrote down Abdul-Mahdi's remarks, which were then given to the Arabic news outlet Ida'at . Per that transcript , Abdul-Mahdi stated that:

The Americans are the ones who destroyed the country and wreaked havoc on it. They have refused to finish building the electrical system and infrastructure projects. They have bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports. So, I refused and decided to go to China and concluded an important and strategic agreement with it. Today, Trump is trying to cancel this important agreement. "

Abdul-Mahdi continued his remarks, noting that pressure from the Trump administration over his negotiations and subsequent dealings with China grew substantially over time, even resulting in death threats to himself and his defense minister:

After my return from China, Trump called me and asked me to cancel the agreement, so I also refused, and he threatened [that there would be] massive demonstrations to topple me. Indeed, the demonstrations started and then Trump called, threatening to escalate in the event of non-cooperation and responding to his wishes, whereby a third party [presumed to be mercenaries or U.S. soldiers] would target both the demonstrators and security forces and kill them from atop the highest buildings and the US embassy in an attempt to pressure me and submit to his wishes and cancel the China agreement."

"I did not respond and submitted my resignation and the Americans still insist to this day on canceling the China agreement. When the defense minister said that those killing the demonstrators was a third party, Trump called me immediately and physically threatened myself and the defense minister in the event that there was more talk about this third party."

Very few English language outlets reported on Abdul-Mahdi's comments. Tom Luongo, a Florida-based Independent Analyst and publisher of The Gold Goats 'n Guns Newsletter, told MintPress that the likely reasons for the "surprising" media silence over Abdul-Mahdi's claims were because "It never really made it out into official channels " due to the cutting of the video feed during Iraq's Parliamentary session and due to the fact that "it's very inconvenient and the media -- since Trump is doing what they want him to do, be belligerent with Iran, protected Israel's interests there."

"They aren't going to contradict him on that if he's playing ball," Luongo added, before continuing that the media would nonetheless "hold onto it for future reference .If this comes out for real, they'll use it against him later if he tries to leave Iraq." "Everything in Washington is used as leverage," he added.

Given the lack of media coverage and the cutting of the video feed of Abdul-Mahdi's full remarks, it is worth pointing out that the narrative he laid out in his censored speech not only fits with the timeline of recent events he discusses but also the tactics known to have been employed behind closed doors by the Trump administration, particularly after Mike Pompeo left the CIA to become Secretary of State.

For instance, Abdul-Mahdi's delegation to China ended on September 24, with the protests against his government that Trump reportedly threatened to start on October 1. Reports of a "third side" firing on Iraqi protesters were picked up by major media outlets at the time, such as in this BBC report which stated:

Reports say the security forces opened fire, but another account says unknown gunmen were responsible .a source in Karbala told the BBC that one of the dead was a guard at a nearby Shia shrine who happened to be passing by. The source also said the origin of the gunfire was unknown and it had targeted both the protesters and security forces . (emphasis added)"

U.S.-backed protests in other countries, such as in Ukraine in 2014, also saw evidence of a " third side " shooting both protesters and security forces alike.

After six weeks of intense protests , Abdul-Mahdi submitted his resignation on November 29, just a few days after Iraq's Foreign Minister praised the new deals, including the "oil for reconstruction" deal, that had been signed with China. Abdul-Mahdi has since stayed on as Prime Minister in a caretaker role until Parliament decides on his replacement.

Abdul-Mahdi's claims of the covert pressure by the Trump administration are buttressed by the use of similar tactics against Ecuador, where, in July 2018, a U.S. delegation at the United Nations threatened the nation with punitive trade measures and the withdrawal of military aid if Ecuador moved forward with the introduction of a UN resolution to "protect, promote and support breastfeeding."

The New York Times reported at the time that the U.S. delegation was seeking to promote the interests of infant formula manufacturers. If the U.S. delegation is willing to use such pressure on nations for promoting breastfeeding over infant formula, it goes without saying that such behind-closed-doors pressure would be significantly more intense if a much more lucrative resource, e.g. oil, were involved.

Regarding Abdul-Mahdi's claims, Luongo told MintPress that it is also worth considering that it could have been anyone in the Trump administration making threats to Abdul-Mahdi, not necessarily Trump himself. "What I won't say directly is that I don't know it was Trump at the other end of the phone calls. Mahdi, it is to his best advantage politically to blame everything on Trump. It could have been Mike Pompeo or Gina Haspel talking to Abdul-Mahdi It could have been anyone, it most likely would be someone with plausible deniability .This [Mahdi's claims] sounds credible I firmly believe Trump is capable of making these threats but I don't think Trump would make those threats directly like that, but it would absolutely be consistent with U.S. policy."

Luongo also argued that the current tensions between U.S. and Iraqi leadership preceded the oil deal between Iraq and China by several weeks, "All of this starts with Prime Minister Mahdi starting the process of opening up the Iraq-Syria border crossing and that was announced in August. Then, the Israeli air attacks happened in September to try and stop that from happening, attacks on PMU forces on the border crossing along with the ammo dump attacks near Baghdad This drew the Iraqis' ire Mahdi then tried to close the air space over Iraq, but how much of that he can enforce is a big question."

As to why it would be to Mahdi's advantage to blame Trump, Luongo stated that Mahdi "can make edicts all day long, but, in reality, how much can he actually restrain the U.S. or the Israelis from doing anything? Except for shame, diplomatic shame To me, it [Mahdi's claims] seems perfectly credible because, during all of this, Trump is probably or someone else is shaking him [Mahdi] down for the reconstruction of the oil fields [in Iraq] Trump has explicitly stated "we want the oil."'

As Luongo noted, Trump's interest in the U.S. obtaining a significant share of Iraqi oil revenue is hardly a secret. Just last March, Trump asked Abdul-Mahdi "How about the oil?" at the end of a meeting at the White House, prompting Abdul-Mahdi to ask "What do you mean?" To which Trump responded "Well, we did a lot, we did a lot over there, we spent trillions over there, and a lot of people have been talking about the oil," which was widely interpreted as Trump asking for part of Iraq's oil revenue in exchange for the steep costs of the U.S.' continuing its now unwelcome military presence in Iraq.

With Abdul-Mahdi having rejected Trump's "oil for reconstruction" proposal in favor of China's, it seems likely that the Trump administration would default to so-called "gangster diplomacy" tactics to pressure Iraq's government into accepting Trump's deal, especially given the fact that China's deal was a much better offer. While Trump demanded half of Iraq's oil revenue in exchange for completing reconstruction projects (according to Abdul-Mahdi), the deal that was signed between Iraq and China would see around 20 percen t of Iraq's oil revenue go to China in exchange for reconstruction. Aside from the potential loss in Iraq's oil revenue, there are many reasons for the Trump administration to feel threatened by China's recent dealings in Iraq.

The Iraq-China oil deal – a prelude to something more?

When Abdul-Mahdi's delegation traveled to Beijing last September, the "oil for reconstruction" deal was only one of eight total agreements that were established. These agreements cover a range of areas, including financial, commercial, security, reconstruction, communication, culture, education and foreign affairs in addition to oil. Yet, the oil deal is by far the most significant.

Per the agreement, Chinese firms will work on various reconstruction projects in exchange for roughly 20 percent of Iraq's oil exports, approximately 100,00 barrels per day, for a period of 20 years. According to Al-Monitor , Abdul-Mahdi had the following to say about the deal: "We agreed [with Beijing] to set up a joint investment fund, which the oil money will finance," adding that the agreement prohibits China from monopolizing projects inside Iraq, forcing Bejing to work in cooperation with international firms.

The agreement is similar to one negotiated between Iraq and China in 2015 when Abdul-Mahdi was serving as Iraq's oil minister. That year, Iraq joined China's Belt and Road Initiative in a deal that also involved exchanging oil for investment, development and construction projects and saw China awarded several projects as a result. In a notable similarity to recent events, that deal was put on hold due to "political and security tensions" caused by unrest and the surge of ISIS in Iraq, that is until Abdul-Mahdi saw Iraq rejoin the initiative again late last year through the agreements his government signed with China last September.

Chinese President Xi Jinping, center left, meet with Iraqi Prime Minister Adil Abdul-Mahdi, center right, in Beijing, Sept. 23, 2019. Lintao Zhang | AP

Notably, after recent tensions between the U.S. and Iraq over the assassination of Soleimani and the U.S.' subsequent refusal to remove its troops from Iraq despite parliament's demands, Iraq quietly announced that it would dramatically increase its oil exports to China to triple the amount established in the deal signed in September. Given Abdul-Mahdi's recent claims about the true forces behind Iraq's recent protests and Trump's threats against him being directly related to his dealings with China, the move appears to be a not-so-veiled signal from Abdul-Mahdi to Washington that he plans to deepen Iraq's partnership with China, at least for as long as he remains in his caretaker role.

Iraq's decision to dramatically increase its oil exports to China came just one day after the U.S. government threatened to cut off Iraq's access to its central bank account, currently held at the Federal Reserve Bank of New York, an account that currently holds $35 billion in Iraqi oil revenue. The account was set up after the U.S. invaded and began occupying Iraq in 2003 and Iraq currently removes between $1-2 billion per month to cover essential government expenses. Losing access to its oil revenue stored in that account would lead to the " collapse " of Iraq's government, according to Iraqi government officials who spoke to AFP .

Though Trump publicly promised to rebuke Iraq for the expulsion of U.S. troops via sanctions, the threat to cut off Iraq's access to its account at the NY Federal Reserve Bank was delivered privately and directly to the Prime Minister, adding further credibility to Abdul-Mahdi's claims that Trump's most aggressive attempts at pressuring Iraq's government are made in private and directed towards the country's Prime Minister.

Though Trump's push this time was about preventing the expulsion of U.S. troops from Iraq, his reasons for doing so may also be related to concerns about China's growing foothold in the region. Indeed, while Trump has now lost his desired share of Iraqi oil revenue (50 percent) to China's counteroffer of 20 percent, the removal of U.S. troops from Iraq may see American troops replaced with their Chinese counterparts as well, according to Tom Luongo.

"All of this is about the U.S. maintaining the fiction that it needs to stay in Iraq So, China moving in there is the moment where they get their toe hold for the Belt and Road [Initiative]," Luongo argued. "That helps to strengthen the economic relationship between Iraq, Iran and China and obviating the need for the Americans to stay there. At some point, China will have assets on the ground that they are going to want to defend militarily in the event of any major crisis. This brings us to the next thing we know, that Mahdi and the Chinese ambassador discussed that very thing in the wake of the Soleimani killing."

Indeed, according to news reports, Zhang Yao -- China's ambassador to Iraq -- " conveyed Beijing's readiness to provide military assistance" should Iraq's government request it soon after Soleimani's assassination. Yao made the offer a day after Iraq's parliament voted to expel American troops from the country. Though it is currently unknown how Abdul-Mahdi responded to the offer, the timing likely caused no shortage of concern among the Trump administration about its rapidly waning influence in Iraq. "You can see what's coming here," Luongo told MintPress of the recent Chinese offer to Iraq, "China, Russia and Iran are trying to cleave Iraq away from the United States and the U.S. is feeling very threatened by this."

Russia is also playing a role in the current scenario as Iraq initiated talks with Moscow regarding the possible purchase of one of its air defense systems last September, the same month that Iraq signed eight deals, including the oil deal with China. Then, in the wake of Soleimani's death, Russia again offered the air defense systems to Iraq to allow them to better defend their air space. In the past, the U.S. has threatened allied countries with sanctions and other measures if they purchase Russian air defense systems as opposed to those manufactured by U.S. companies.

The U.S.' efforts to curb China's growing influence and presence in Iraq amid these new strategic partnerships and agreements are limited, however, as the U.S. is increasingly relying on China as part of its Iran policy, specifically in its goal of reducing Iranian oil export to zero. China remains Iran's main crude oil and condensate importer, even after it reduced its imports of Iranian oil significantly following U.S. pressure last year. Yet, the U.S. is now attempting to pressure China to stop buying Iranian oil completely or face sanctions while also attempting to privately sabotage the China-Iraq oil deal. It is highly unlikely China will concede to the U.S. on both, if any, of those fronts, meaning the U.S. may be forced to choose which policy front (Iran "containment" vs. Iraq's oil dealings with China) it values more in the coming weeks and months.

Furthermore, the recent signing of the "phase one" trade deal with China revealed another potential facet of the U.S.' increasingly complicated relationship with Iraq's oil sector given that the trade deal involves selling U.S. oil and gas to China at very low cost , suggesting that the Trump administration may also see the Iraq-China oil deal result in Iraq emerging as a potential competitor for the U.S. in selling cheap oil to China, the world's top oil importer.

The Petrodollar and the Phantom of the Petroyuan

In his televised statements last week following Iran's military response to the U.S. assassination of General Soleimani, Trump insisted that the U.S.' Middle East policy is no longer being directed by America's vast oil requirements. He stated specifically that:

Over the last three years, under my leadership, our economy is stronger than ever before and America has achieved energy independence. These historic accomplishments changed our strategic priorities. These are accomplishments that nobody thought were possible. And options in the Middle East became available. We are now the number-one producer of oil and natural gas anywhere in the world. We are independent, and we do not need Middle East oil . (emphasis added)"

Yet, given the centrality of the recent Iraq-China oil deal in guiding some of the Trump administration's recent Middle East policy moves, this appears not to be the case. The distinction may lie in the fact that, while the U.S. may now be less dependent on oil imports from the Middle East, it still very much needs to continue to dominate how oil is traded and sold on international markets in order to maintain its status as both a global military and financial superpower.

Indeed, even if the U.S. is importing less Middle Eastern oil, the petrodollar system -- first forged in the 1970s -- requires that the U.S. maintains enough control over the global oil trade so that the world's largest oil exporters, Iraq among them, continue to sell their oil in dollars. Were Iraq to sell oil in another currency, or trade oil for services, as it plans to do with China per the recently inked deal, a significant portion of Iraqi oil would cease to generate a demand for dollars, violating the key tenet of the petrodollar system.

Chinese representatives speak to defense personnel during a weapons expo organized by the Iraqi defense ministry in Baghdad, March, 2017. Karim Kadim | AP

As Kei Pritsker and Cale Holmes noted in an article last year for MintPress :

The takeaway from the petrodollar phenomenon is that as long as countries need oil, they will need the dollar. As long as countries demand dollars, the U.S. can continue to go into massive amounts of debt to fund its network of global military bases, Wall Street bailouts, nuclear missiles, and tax cuts for the rich."

Thus, the use of the petrodollar has created a system whereby U.S. control of oil sales of the largest oil exporters is necessary, not just to buttress the dollar, but also to support its global military presence. Therefore, it is unsurprising that the issue of the U.S. troop presence in Iraq and the issue of Iraq's push for oil independence against U.S. wishes have become intertwined. Notably, one of the architects of the petrodollar system and the man who infamously described U.S. soldiers as "dumb, stupid animals to be used as pawns in foreign policy", former Secretary of State Henry Kissinger, has been advising Trump and informing his China policy since 2016.

This take was also expressed by economist Michael Hudson, who recently noted that U.S. access to oil, dollarization and U.S. military strategy are intricately interwoven and that Trump's recent Iraq policy is intended "to escalate America's presence in Iraq to keep control of the region's oil reserves," and, as Hudson says, "to back Saudi Arabia's Wahabi troops (ISIS, Al Qaeda in Iraq, Al Nusra and other divisions of what are actually America's foreign legion) to support U.S. control of Near Eastern oil as a buttress of the U.S. dollar."

Hudson further asserts that it was Qassem Soleimani's efforts to promote Iraq's oil independence at the expense of U.S. imperial ambitions that served one of the key motives behind his assassination.

America opposed General Suleimani above all because he was fighting against ISIS and other U.S.-backed terrorists in their attempt to break up Syria and replace Assad's regime with a set of U.S.-compliant local leaders – the old British "divide and conquer" ploy. On occasion, Suleimani had cooperated with U.S. troops in fighting ISIS groups that got "out of line" meaning the U.S. party line. But every indication is that he was in Iraq to work with that government seeking to regain control of the oil fields that President Trump has bragged so loudly about grabbing. (emphasis added)"

Hudson adds that " U.S. neocons feared Suleimani's plan to help Iraq assert control of its oil and withstand the terrorist attacks supported by U.S. and Saudi's on Iraq. That is what made his assassination an immediate drive."

While other factors -- such as pressure from U.S. allies such as Israel -- also played a factor in the decision to kill Soleimani, the decision to assassinate him on Iraqi soil just hours before he was set to meet with Abdul-Mahdi in a diplomatic role suggests that the underlying tensions caused by Iraq's push for oil independence and its oil deal with China did play a factor in the timing of his assassination. It also served as a threat to Abdul-Mahdi, who has claimed that the U.S. threatened to kill both him and his defense minister just weeks prior over tensions directly related to the push for independence of Iraq's oil sector from the U.S.

It appears that the ever-present role of the petrodollar in guiding U.S. policy in the Middle East remains unchanged. The petrodollar has long been a driving factor behind the U.S.' policy towards Iraq specifically, as one of the key triggers for the 2003 invasion of Iraq was Saddam Hussein's decision to sell Iraqi oil in Euros opposed to dollars beginning in the year 2000. Just weeks before the invasion began, Hussein boasted that Iraq's Euro-based oil revenue account was earning a higher interest rate than it would have been if it had continued to sell its oil in dollars, an apparent signal to other oil exporters that the petrodollar system was only really benefiting the United States at their own expense.

Beyond current efforts to stave off Iraq's oil independence and keep its oil trade aligned with the U.S., the fact that the U.S. is now seeking to limit China's ever-growing role in Iraq's oil sector is also directly related to China's publicly known efforts to create its own direct competitor to the petrodollar, the petroyuan.

Since 2017, China has made its plans for the petroyuan -- a direct competitor to the petrodollar -- no secret, particularly after China eclipsed the U.S. as the world's largest importer of oil.

As CNBC noted at the time:

The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months -- but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency .The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous."

If the U.S. continues on its current path and pushes Iraq further into the arms of China and other U.S. rival states, it goes without saying that Iraq -- now a part of China's Belt and Road Initiative -- may soon favor a petroyuan system over a petrodollar system, particularly as the current U.S. administration threatens to hold Iraq's central bank account hostage for pursuing policies Washington finds unfavorable.

It could also explain why President Trump is so concerned about China's growing foothold in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but could also lead to major trouble for the petrodollar system and the U.S.' position as a global financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having the opposite effect, showing that this administration's "gangster diplomacy" only serves to make the alternatives offered by countries like China and Russia all the more attractive.

anonymous [331] Disclaimer , says: Show Comment January 18, 2020 at 5:54 am GMT

One can see how all these recent wars and military actions have a financial motive at their core. Yet the mass of gullible Americans actually believe the reasons given, to "spread democracy" and other wonderful things. Only a small number can see things for what they really are. It's very frustrating to deal with the stupidity of the average person on a daily basis.

This is not Trump's policy, it is American policy and the variation is in how he implements it. Any other person would have fallen in line with it as well. US policy has it's own inner momentum that can't change course. The US depends upon continuation of the dollar as the world's reserve currency. Were that to be lost the US likely would descend into chaos without end. When the USSR came apart it was eventually able to downsize into the Russian state. We don't have that here; there is no core ethnicity with it's own territory left anymore, it's just a jumble. For the US it's a matter of survival.

John Chuckman , says: Website Show Comment January 18, 2020 at 3:04 pm GMT
Yes, but we also have this

It is reported this morning (CNN) that Trump bragged about the killing to a crowd at a big fundraising dinner.

Just sick, official state murder for campaign donations.

That's what America is reduced to.

[Jan 21, 2020] Trump Is Pulling the Wool Over Voters' Eyes About What Is in the China Deal

Return to quote-based trade means total bankruptcy of neoliberalism ideology and practice. Another nail in the coffin so to speak.
Jan 21, 2020 | www.anti-empire.com

The Chinese, for now, are not contradicting the Trump administration on the promise of Chinese mega-purchases, because when Trump is more amicable their interests align. If an empty promise that wasn't even made means the trade war de-escalation goes on, that is fine with them. They would like to calm the markets as much as Trump would, and in this way they have added leverage on Trump. Should they change their minds they can always explode the fiction later on and injure Trump, perhaps strategically right around October.


Now that the dust has settled on the US-China trade deal and analysts have had some time to pore over its 90+ pages, various chapters and (non-binding) terms that comprise the body of the agreement, one high-level observation noted by Rabobank, is that the agreement foresees the total amount of goods exports from the US to China to reach above $ 290BN by end-2021.

The implication of this is that the chart for US exports to China should basically look like this for the next two years:

As Rabobank's senior economist Bjorn Giesbergen writes, t here are probably very few economists that would deem such a trajectory feasible (except for the perpetually cheerful economics team at Goldman , of course), seeing that it took the US more than 15 years to raise exports from around USD16bn in 2000 to USD 130bn in 2017.

Moreover, the Chinese purchases of goods are beneficial to US companies, but at the cost of other countries, and the agreement is only for two years. If China will buy more aircraft from the US, that could be to the detriment of the EU.

According to the document "the parties project that the trajectory of increases will continue in calendar years 2020 through 2025." But "to project" does not sound as firm as "shall ensure." So, as the Rabo economist asks, "are we going to see a repetition of the 2019 turmoil caused by the phase 1 trade negotiations after those two years? Or is this supposed to be solved in the phase 2 deal that is very unlikely to be made? What's more, while the remaining tariffs provide leverage for US trade negotiators, they are still a tax on US importers and US consumers of Chinese goods."

But before we even get there, going back to the chart shown above, Bloomberg today points out something we have pointed out in the past, namely that China's $200 billion, two-year spending spree negotiated with the Trump administration appears increasingly difficult to deliver, and now a $50 billion "hole" appears to have opened up : that is the amount of U.S. exports annually left out and many American businesses still uncertain about just what the expectations are.

Some background: while Trump officials stressed the reforms aimed at curbing intellectual-property theft and currency manipulation that China has agreed to in the "phase one" trade deal signed Wednesday, the Chinese pledge to buy more American exports has become an emblem of the deal to critics and supporters alike.

The administration has said those new exports in manufactured goods, energy, farm shipments and services will come over two years on top of the $130 billion in goods and $57.6 billion in services that the U.S. sent to China in 2017 -- the year before the trade war started and exports were hit by Beijing's retaliatory measures to President Donald Trump's tariffs.

And while Goldman said it is certainly feasible that China can ramp up its purchases of US goods , going so far as providing a matrix "scenario" of what such purchases could look like

that now appears virtually impossible, because as Bloomberg notes, the list of goods categories in the agreement covers a narrower group of exports to China that added up to $78.8 billion in 2017, or $51.6 billion less than the overall goods exports to the Asian nation that year. The goods trade commitment makes up $162.1 billion of the $200 billion total, with $37.9 billion to come from a boost in services trade such as travel and insurance.

Here, the math gets even more ridiculous:

The target for the first year that the deal takes effect is to add $63.9 billion in manufactured goods, agriculture and energy exports. According to Bloomberg economist Maeva Cousin's analysis, that would be an increase of 81% over the 2017 baseline. In year two, the agreement calls for $98.2 billion surge in Chinese imports, which would require a 125% increase over 2017.

Importantly for China, the deal requires those purchases to be "made at market prices based on commercial considerations," a caveat which spooked commodities traders, and led to a sharp drop in ags in the day following the deal's announcement.

Can China pull this off? Yes, if Beijing tears up existing trade deals and supply chains and imposes explicit procurement targets and demands on China's local business. As Bloomberg notes, "critics argue that such pre-ordained demand amounts to a slide into the sort of government-managed trade that U.S. presidents abandoned decades ago" and the very sort of act of central planning that U.S. officials have , paradoxically, spent years trying to convince China to walk away from.

This may also explain why a key part of the trade deal will remain secret: the purchase plan is based on what the administration insists is a specific – if classified – annex of Chinese commitments. "The 20-page public version of that annex lists hundreds of products and services from nuclear reactors to aircraft, printed circuits, pig iron, soybeans, crude oil and computer services but no figures for purchases."

Going back to the critics, it is this convoluted mechanism that has them arguing that China's stated targets will likely never be met: "This is ambitious and it will create some stresses within the supply system," said Craig Allen, the president of the U.S.-China Business Council.

That's not all: as Allen said, among the outstanding questions was whether China would lift its retaliatory duties on American products as the US keeps its tariffs on some $360 billion in imports from China as Trump seeks to maintain leverage for the second phase of negotiations.

Allen also made clear the overall purchase schedule left many U.S. companies uncomfortable even as they saw benefits in other parts of the deal. "The vast majority of our members are looking for no more than a level playing field in China," Allen said. "We are not looking for quotas or special treatment."

As a result, for many manufacturers what is actually changing -- and what China has committed to instead of given a "best efforts" promise to achieve -- remains unclear.

Major exporters such as Boeing Co., whose CEO Dave Calhoun attended Wednesday's signing ceremony, have stayed mum about what exactly the deal will mean for their business with China. In an attempt to "clarify", Trump tweeted that the deal includes a Chinese commitment to buy $16 billion to $20 billion in Boeing planes. It was unclear if he meant 737 MAX planes which nobody in the world will ever voluntarily fly inside again.

Finally, prompting the latest round of cronyism allegations, Trump's new China pact also includes plans for exports of American iron and steel , "a potential gain for an industry close to the president that has benefited from his tariffs and complained about Chinese production and overcapacity for years." As Bloomberg adds, the text of the agreement lists iron and steel products ranging from pig iron to stainless steel wire and railway tracks, but steel industry sources said they had been caught by surprise and not been given any additional details on China's purchase commitments.

It is unclear why Beijing would need US product s: after all, in its scramble to erect ghost cities and hit a goalseeked GDP print, China produces more than 50% of the world's steel, drawning criticism from around the world – if not Greta Thunberg – for the massive coal-derived pollution that comes from flooding global markets with cheap steel.

[Jan 19, 2020] Has US overplayed its tech advantage

Jan 19, 2020 | www.asiatimes.com

This partly explains why the US is taking its battle on 5G technology with the Chinese so seriously. As a faltering global leader, the Americans do not take it kindly when China tries to snatch a lunch right from under their nose. As such, the US-China trade war goes beyond economics and ideology. It is about global domination across every conceivable technology that consumers and governments worldwide are addicted to these days.

Metaphorically, technology is the new opium that rakes in money, power and control. Take a look at the way consumers across the world are utilizing technologies. From smartphones to mobile apps, from cloud-computing to cybersecurity, trillions of dollars are being spent by consumers and their governments. The Americans were laughing their way to the bank until the Chinese came along and upset their game.

As greed has no boundary or limit, every challenger or opposition to the consumption of this "new opium" means a loss in revenue, power and control for the US and its preferred allies. Sharing the spoils with others is looking like an inconceivable option for them at this stage.

To call the tension between the US and China a trade war undermines this greater reality. From unilateral sanctions to outright destruction of economies, it is starting to look as if the US is using technology to regain global domination at all costs.

[Jan 19, 2020] The US-China "Trade Deal" by Paul Craig Roberts

Notable quotes:
"... Trump is covering his retraction by calling it a trade deal. China's part of the deal is to agree to purchase the US goods that it already intended to purchase. ..."
Jan 18, 2020 | www.informationclearinghouse.info

The first thing to understand is that it is not a trade deal. It is Trump backing off his tariffs when he discovered that the tarrifs fall on US goods and American consumers, not on China. Trump is covering his retraction by calling it a trade deal. China's part of the deal is to agree to purchase the US goods that it already intended to purchase.

The purpose of tariffs is to protect domestic producers from foreign competition by raising the price of imported goods. What Trump, his administration, and the financial press did not understand is that at least half of the US trade deficit with China is the offshored goods produced in China by such corporations as Apple, Nike, and Levi. The offshored production of US global corporations counts as imports when they are brought into the US to be sold to Americans. Thus, the cost of the tariffs were falling on US corporations and US consumers.

Tariffs are not an effective way to bring offshored US manufacturing home. If Trump or any US government wants to bring US manufacturing back to the US from its offshored locations, the way to achieve this result is to change the way the US taxes corporations. The rule would be: If a US corporation produces in the US with US labor for US markets, the firm's profits are taxed at a low rate. If the corporation produces products for the US market abroad with foreign labor, the tax rate will be high enough to more than wipe out the labor cost savings.

As I have emphasized for years, the offshoring of US manufacturing has inflicted massive external costs on the United States. Middle class jobs have been lost, careers ended, living standards of former US manufacturing workers and families have dropped. The tax base of cities and states has shrunk, causing cutbacks in public services and undermining municipal and state pension funds. You can add to this list. These costs are the true cost of the increased profits from the lower foreign labor and compliance costs. A relatively few executives and shareholders benefitted at the expense of a vast number of Americans.

This is the problem that needs to be addressed and corrected.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts' latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West , How America Was Lost , and The Neoconservative Threat to World Order . Donate and support Dr, Roberts Work.

[Jan 18, 2020] The US China Phase 1 Deal Interpeted: Break Thing, Claim to Fix Thing, Repeat

Highly recommended!
Jan 18, 2020 | econbrowser.com

...if nothing had happened in the US-China trade war. Well, me might have gotten to where we are supposed to be with the deal

..a honest question. In terms of the environment and global climate, is it a good thing that farmers will be producing more monoculture grains, dairy, beef and pork for export?

[Jan 18, 2020] The US-China Nothing Burger Trade Deal by Barkley Rosser

Jan 18, 2020 | angrybearblog.com

There has been much hype about the signing of Phase One (and probably only) US-China trade deal. However based on a front page story in today's Washington Post, there is not much there. The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors that had them, although some were halved. But numerous US sectors see no change at all and are now viewing the situation as not likely to improve, with them suffering losses of business likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and other sectors there is not much reduction of uncertainty regarding US-China trade, so not likely much increase in investment.

The main items in it besides no worsening of tariffs, China has made promises not to pressure US firms to turn over technology and also to increase imports from the US by $200 billion over the next two years, especially in energy and agriculture. So maybe US soybean farmers will no longer need the bailouts of billions of $ Trump has been providing to them. However, such promises have been made in the past.

As it is, I am watching commentators on Bloomberg, and about the most any of them are willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations. That is far from some dramatic breakthrough, and most of the tariffs put on as part of the US-China trade war remain in place.

Barkley Rosser


spencer , January 16, 2020 3:49 pm

This looks like it may be a way to make it a status quo or back burner issue until after the election.

Of course Trump will always be able to blow it up if he decides that would be to his advantage.

Bert Schlitz , January 16, 2020 4:53 pm

I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and that is why purchases were flattening by 2014.

Its noise and circuses.

pgl , January 16, 2020 5:48 pm

Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise and circus. Check it out!

[Jan 18, 2020] Numerous US sectors see no change at all and are now viewing the situation as not likely to improve, with them suffering losses of business likely to return. Among those are chemicals, apparel retailers, and auto parts by Barkley Rosser

Jan 18, 2020 | angrybearblog.com

There has been much hype about the signing of Phase One (and probably only) US-China trade deal. However based on a front page story in today's Washington Post, there is not much there. The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors that had them, although some were halved. But numerous US sectors see no change at all and are now viewing the situation as not likely to improve, with them suffering losses of business likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and other sectors there is not much reduction of uncertainty regarding US-China trade, so not likely much increase in investment.

The main items in it besides no worsening of tariffs, China has made promises not to pressure US firms to turn over technology and also to increase imports from the US by $200 billion over the next two years, especially in energy and agriculture. So maybe US soybean farmers will no longer need the bailouts of billions of $ Trump has been providing to them. However, such promises have been made in the past.

As it is, I am watching commentators on Bloomberg, and about the most any of them are willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations. That is far from some dramatic breakthrough, and most of the tariffs put on as part of the US-China trade war remain in place.


spencer , January 16, 2020 3:49 pm

This looks like it may be a way to make it a status quo or back burner issue until after the election.

Of course Trump will always be able to blow it up if he decides that would be to his advantage.

Bert Schlitz , January 16, 2020 4:53 pm

I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and that is why purchases were flattening by 2014.

Its noise and circuses.

pgl , January 16, 2020 5:48 pm

Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise and circus. Check it out!

[Jan 16, 2020] Battle of the Ages to stop Eurasian integration by Pepe Escobar

Jan 16, 2020 | www.asiatimes.com

Battle of the Ages to stop Eurasian integration

Coming decade could see the US take on Russia, China and Iran over the New Silk Road connection

The Raging Twenties started with a bang with the targeted assassination of Iran's General Qasem Soleimani.

Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great Game in Eurasia, which pits the US against Russia, China and Iran, the three major nodes of Eurasia integration.

Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be analyzed in connection to this epic clash.

The Deep State and crucial sectors of the US ruling class are absolutely terrified that China is already outpacing the "indispensable nation" economically and that Russia has outpaced it militarily . The Pentagon officially designates the three Eurasian nodes as "threats."

Hybrid War techniques – carrying inbuilt 24/7 demonization – will proliferate with the aim of containing China's "threat," Russian "aggression" and Iran's "sponsorship of terrorism." The myth of the "free market" will continue to drown under the imposition of a barrage of illegal sanctions, euphemistically defined as new trade "rules."

Yet that will be hardly enough to derail the Russia-China strategic partnership. To unlock the deeper meaning of this partnership, we need to understand that Beijing defines it as rolling towards a "new era." That implies strategic long-term planning – with the key date being 2049, the centennial of New China.

The horizon for the multiple projects of the Belt and Road Initiative – as in the China-driven New Silk Roads – is indeed the 2040s, when Beijing expects to have fully woven a new, multipolar paradigm of sovereign nations/partners across Eurasia and beyond, all connected by an interlocking maze of belts and roads.

The Russian project – Greater Eurasia – somewhat mirrors Belt & Road and will be integrated with it. Belt & Road, the Eurasia Economic Union, the Shanghai Cooperation Organization and the Asia Infrastructure Investment Bank are all converging towards the same vision.

Realpolitik

So this "new era", as defined by the Chinese, relies heavily on close Russia-China coordination, in every sector. Made in China 2025 is encompassing a series of techno/scientific breakthroughs. At the same time, Russia has established itself as an unparalleled technological resource for weapons and systems that the Chinese still cannot match.

At the latest BRICS summit in Brasilia, President Xi Jinping told Vladimir Putin that "the current international situation with rising instability and uncertainty urge China and Russia to establish closer strategic coordination." Putin's response: "Under the current situation, the two sides should continue to maintain close strategic communication."

Russia is showing China how the West respects realpolitik power in any form, and Beijing is finally starting to use theirs. The result is that after five centuries of Western domination – which, incidentally, led to the decline of the Ancient Silk Roads – the Heartland is back, with a bang, asserting its preeminence.

On a personal note, my travels these past two years, from West Asia to Central Asia, and my conversations these past two months with analysts in Nur-Sultan, Moscow and Italy, have allowed me to get deeper into the intricacies of what sharp minds define as the Double Helix. We are all aware of the immense challenges ahead – while barely managing to track the stunning re-emergence of the Heartland in real-time.

In soft power terms, the sterling role of Russian diplomacy will become even more paramount – backed up by a Ministry of Defense led by Sergei Shoigu, a Tuvan from Siberia, and an intel arm that is capable of constructive dialogue with everybody: India/Pakistan, North/South Korea, Iran/Saudi Arabia, Afghanistan.

This apparatus does smooth (complex) geopolitical issues over in a manner that still eludes Beijing.

In parallel, virtually the whole Asia-Pacific – from the Eastern Mediterranean to the Indian Ocean – now takes into full consideration Russia-China as a counter-force to US naval and financial overreach.

Stakes in Southwest Asia

The targeted assassination of Soleimani, for all its long-term fallout, is just one move in the Southwest Asia chessboard. What's ultimately at stake is a macro geoeconomic prize: a land bridge from the Persian Gulf to the Eastern Mediterranean.

Last summer, an Iran-Iraq-Syria trilateral established that "the goal of negotiations is to activate the Iranian-Iraqi-Syria load and transport corridor as part of a wider plan for reviving the Silk Road."

There could not be a more strategic connectivity corridor, capable of simultaneously interlinking with the International North-South Transportation Corridor; the Iran-Central Asia-China connection all the way to the Pacific; and projecting Latakia towards the Mediterranean and the Atlantic.

What's on the horizon is, in fact, a sub-sect of Belt & Road in Southwest Asia. Iran is a key node of Belt & Road; China will be heavily involved in the rebuilding of Syria; and Beijing-Baghdad signed multiple deals and set up an Iraqi-Chinese Reconstruction Fund (income from 300,000 barrels of oil a day in exchange for Chinese credit for Chinese companies rebuilding Iraqi infrastructure).

A quick look at the map reveals the "secret" of the US refusing to pack up and leave Iraq, as demanded by the Iraqi Parliament and Prime Minister: to prevent the emergence of this corridor by any means necessary. Especially when we see that all the roads that China is building across Central Asia – I navigated many of them in November and December – ultimately link China with Iran.

The final objective: to unite Shanghai to the Eastern Mediterranean – overland, across the Heartland.

As much as Gwadar port in the Arabian Sea is an essential node of the China-Pakistan Economic Corridor, and part of China's multi-pronged "escape from Malacca" strategy, India also courted Iran to match Gwadar via the port of Chabahar in the Gulf of Oman.

So as much as Beijing wants to connect the Arabian Sea with Xinjiang, via the economic corridor, India wants to connect with Afghanistan and Central Asia via Iran.

Yet India's investments in Chabahar may come to nothing, with New Delhi still mulling whether to become an active part of the US "Indo-Pacific" strategy, which would imply dropping Tehran.

The Russia-China-Iran joint naval exercise in late December, starting exactly from Chabahar, was a timely wake-up for New Delhi. India simply cannot afford to ignore Iran and end up losing its key connectivity node, Chabahar.

The immutable fact: everyone needs and wants Iran connectivity. For obvious reasons, since the Persian empire, this is the privileged hub for all Central Asian trade routes.

On top of it, Iran for China is a matter of national security. China is heavily invested in Iran's energy industry. All bilateral trade will be settled in yuan or in a basket of currencies bypassing the US dollar.

US neocons, meanwhile, still dream of what the Cheney regime was aiming at in the past decade: regime change in Iran leading to the US dominating the Caspian Sea as a springboard to Central Asia, only one step away from Xinjiang and weaponization of anti-China sentiment. It could be seen as a New Silk Road in reverse to disrupt the Chinese vision.

Battle of the Ages

A new book, The Impact of China's Belt and Road Initiativ e , by Jeremy Garlick of the University of Economics in Prague, carries the merit of admitting that, "making sense" of Belt & Road "is extremely difficult."

This is an extremely serious attempt to theorize Belt & Road's immense complexity – especially considering China's flexible, syncretic approach to policymaking, quite bewildering for Westerners. To reach his goal, Garlick gets into Tang Shiping's social evolution paradigm, delves into neo-Gramscian hegemony, and dissects the concept of "offensive mercantilism" – all that as part of an effort in "complex eclecticism."

The contrast with the pedestrian Belt & Road demonization narrative emanating from US "analysts" is glaring. The book tackles in detail the multifaceted nature of Belt & Road's trans-regionalism as an evolving, organic process.

Imperial policymakers won't bother to understand how and why Belt & Road is setting a new global paradigm. The NATO summit in London last month offered a few pointers. NATO uncritically adopted three US priorities: even more aggressive policy towards Russia; containment of China (including military surveillance); and militarization of space – a spin-off from the 2002 Full Spectrum Dominance doctrine.

So NATO will be drawn into the "Indo-Pacific" strategy – which means containment of China. And as NATO is the EU's weaponized arm, that implies the US interfering on how Europe does business with China – at every level.

Retired US Army Colonel Lawrence Wilkerson, Colin Powell's chief of staff from 2001 to 2005, cuts to the chase: "America exists today to make war. How else do we interpret 19 straight years of war and no end in sight? It's part of who we are. It's part of what the American Empire is. We are going to lie, cheat and steal, as Pompeo is doing right now, as Trump is doing right now, as Esper is doing right now and a host of other members of my political party, the Republicans, are doing right now. We are going to lie, cheat and steal to do whatever it is we have to do to continue this war complex. That's the truth of it. And that's the agony of it."

Moscow, Beijing and Tehran are fully aware of the stakes. Diplomats and analysts are working on the trend, for the trio, to evolve a concerted effort to protect one another from all forms of hybrid war – sanctions included – launched against each of them.

For the US, this is indeed an existential battle – against the whole Eurasia integration process, the New Silk Roads, the Russia-China strategic partnership, those Russian hypersonic weapons mixed with supple diplomacy, the profound disgust and revolt against US policies all across the Global South, the nearly inevitable collapse of the US dollar. What's certain is that the Empire won't go quietly into the night. We should all be ready for the battle of the ages.

[Jan 16, 2020] A Trade Deal Meant to Heal Rifts Could Actually Make Them Worse

Jan 16, 2020 | www.moonofalabama.org

vk , Jan 16 2020 18:16 utc | 9

An extremely rare candid and somewhat precise piece of journalism by the NYT (albeit telling the story from the point of view of the Americans/capitalists):

A Trade Deal Meant to Heal Rifts Could Actually Make Them Worse

Here's an interesting paragraph:

What it does not do is tackle the root causes of the trade war. The deal leaves untouched Beijing's subsidies for homegrown industries and its firm control over crucial levers of its hard-charging economy . The deal also keeps in place most of Mr. Trump's tariffs on $360 billion worth of Chinese goods, a much heavier tax than Americans pay for products from practically anywhere else.

Solving those issues could take years.

Interesting to see what the Americans consider to be China's "root causes of the trade war". And we still have people who believe the war against China is not a war between capitalism and socialism, but between "freedom and tyranny". Pure middle class liberal dellusion of grandeur.

--//--

In the last open thread, in my first comment, I highlighted how fast the Western MSM gave up the idea the Labour Party should have its first female leader in order to prop up their guy, Keir Starmer (literally the only male still in the dispute right now). The reason, of course, is that his main rival - Rebecca Long-Bailey - is Corbyn's successor and, as such, has Momentum's (and, probably, of the unions) support.

Well, this didn't stop the typical Western hypocrisy from working. Yesterday, a wave of accusations of Bernie Sanders happened (again).

I have been stating here for some time now that the function of the middle class is to serve as the battering ram of the capitalists. They are the class tasked with fabricating the narratives and "theories" which all the society should believe and never question. They are what that 007 villain (Spectre) called "visionaires", or what the far-rightists in America call "the experts".

If that's true, then postmodernism is their ideological weapon of choice nowadays.

karlof1 , Jan 16 2020 18:37 utc | 10

doesn't matter in which order they're read, but Escobar's latest intersects with Alastair Crooke's to provide Big Picture perspective.

Towards his conclusion, Escobar cites retired US Army Colonel Lawrence Wilkerson, Colin Powell's chief of staff from 2001 to 2005:

"We are going to lie, cheat and steal to do whatever it is we have to do to continue this war complex. That's the truth of it. And that's the agony of it."

But nowhere in the citation does Wilkerson say that any of this effort's being done to defend the USA, whereas its beyond clear that Iran, China and Russia are all working to protect their nations and people. Rather, it appears as if "the profound disgust and revolt against US policies all across the Global South" is finally being adopted by a majority of the USA's polity as it becomes clear that all the lying, cheating and stealing is being done at the expense of the 99% for the 1%'s benefit.

As Crooke alludes, wagging the dog a la Clinton might save Trump from being convicted and removed by the Senate, but such a move will likely cost him the election, although much depends on how those controlling the D-Party behave in the face of Sanders winning the nomination via the primaries prior to the Convention.

[Jan 16, 2020] US-China Phase One Deal Signed What Is Inside and What to Expect Next

Trust was destroyed, but it looks like China folded...
Jan 16, 2020 | sputniknews.com

Under the text of the Phase One deal - which was released later in the day by the Office of the US Trade Representative - both sides agree that they can formally complain to each other if either feels the other side is not holding up its end of the bargain.

China Accepts Deal to Buy $200Bln in US Goods

First and foremost, the document obliges Beijing to purchase at least $200 billion worth of US goods over the next two years.

"During the two-year period from January 1, 2020, through December 31, 2021, China shall ensure that purchases and imports into China from the United States of the manufactured goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the corresponding 2017 baseline amount by no less than $200 billion", the text of the agreement reads.

The agreement said China will ensure that it buys $32.9 billion worth of US manufactured goods this year and $44.8 billion in 2021; $12.5 billion in US agricultural goods this year and $19.5 billion in 2021; $18.5 billion in US energy products this year and $33.9 billion in 2021; and $12.8 billion in US services this year and $25.1 billion in 2021.

US, China Agree to Protect Patents, Fight Abuse of Trade Secrets

The United States and China agreed to protect patents, particularly in pharmaceuticals, and ban counterfeit products and the misappropriation of trade secrets.

"China shall permit pharmaceutical patent applicants to rely on supplemental data to satisfy relevant requirements for patentability, including sufficiency of disclosure and inventive step, during patent examination proceedings, patent review proceedings, and judicial proceedings", the text of the deal said. "The United States affirms that existing US measures afford treatment equivalent to that provided for in this Article".

Beijing and Washington also resolved to strengthen cooperation and coordination in combating piracy, including counterfeiting on e-commerce platforms, in the agreement.

On the protection of trade secrets, the United States said China will treat as "urgent" the use, or attempted use, of claimed trade secret information and provide its judicial authorities the authority to order a preliminary injunction based on case facts and circumstances. Washington pledged to do the same for China.

China to Boost US Energy Imports by $52 Bln

China also agreed to increase purchases of US energy products by $52 billion in the next two years.

The US energy products will be part of the total $200 billion worth of US goods that China will import through 2021, according to the agreement.

"For the category of energy products no less than $18.5 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2020, and no less than $33.9 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2021", the text of the deal said.

The agreement listed the US energy products that China will be buying as: crude oil, liquefied natural gas, refined petroleum and coal.

China is the world's largest buyer of oil and the United States is the largest producer of the commodity.

Oil prices, which hit five-week lows earlier on Wednesday, pared their losses after the energy deal was announced by the US and Chinese governments.

Avoiding Currency Manipulations

Under the Phase One deal China agrees to not engage in currency manipulation for the purpose of achieving trade advantages over the United States.

"The Parties shall refrain from competitive devaluations and not target exchange rates for competitive purposes, including through large-scale, persistent, one-sided intervention in exchange markets," the agreement states.

The United States and China will communicate regularly and consult on foreign exchange markets, activities and policies as well as consult with each other regarding the International Monetary Fund's assessment of the exchange rate of each country, the agreement states.

The agreement states that the United States and China should achieve and maintain a market-determined exchange rate regime.

The agreement comes after two years of wrangling and numerous halts in discussions, during which both sides piled hundreds of billions of dollars of tit-for-tat tariffs on each other.

Despite the signing of the accord, the Trump administration will maintain tariffs on $360 billion of Chinese goods in an attempt to hold Beijing accountable to the deal, US officials said. The Chinese government has also said it will decide later on the tariffs it has imposed on US imports, which last stood at $185 billion in value.

The US-China trade war sparked in January 2019, when the Trump administration announced duties on Chinese-made solar panels and washing machines. The Trump administration has since placed tariffs on $550 billion worth of Chinese products.

'Phase Two' Will End US-China Trade War?

US Treasury Secretary Steve Mnuchin commented earlier on Wednesday on the agreement and said that certain technology and cybersecurity issues would be resolved in the next chapter of the deal to end the trade dispute.

"I think a very significant amount of the technology issues are in Phase One. There are other certain areas of services away from financial services that will be in Phase Two. There are certain additional cybersecurity issues that will be in Phase Two [...] There still more issues to deal with and we'll address those", Mnuchin said, cited by CNBC.

Although the timing and details of Phase Two remain vague, Mnuchin ruled out Huawei being included, claiming that the Chinese tech giant is part of "the national security dialogue".

Trump claimed during a news conference on Wednesday that he does not foresee a Phase Three trade agreement with China, expecting to conclude the trade negotiations with Phase Two.

Buick Verano is assembled at General Motors' Orion Assembly plant in Orion Township © AP Photo / Carlos Osorio Fed Study Finds Trump's Trade Wars Backfired, Leading to Lost Jobs and Price Hikes Trump pointed out that his administration will begin Phase Two trade negotiations with China "shortly", without elaborating a timeline. US Vice President Mike Pence told Fox Business later in the day that the talks on the second phase were already underway.

"We've already begun discussions on a Phase 2 deal", Pence said, cited by Fox Business.

Trump said earlier that inking of the second phase of the deal may have to wait until after the 2020 presidential election to allow time to negotiate a better agreement.

Phase One and Phase Two could reportedly ease trade tensions between the two major economic powers but it would unlikely settle the dispute, The Washington Post reported.

According to the media outlet, the Trump administration is developing new export control regulations aimed at limiting flows of sophisticated technology to China, while US officials embarked on closely scrutinizing potential Chinese investments in the United States. Media reports of alleged new economic and technology levies against Beijing sparked speculation among analysts that Phase Three should not be excluded.

[Jan 11, 2020] Good Riddance to the WTO by Walden Bello

Dec 18, 2019 | www.wsws.org

Rich countries embraced trade multilateralism when it suited them, and now they're abandoning it. That may not be such a bad thing.

The World Trade Organization (WTO) is on its last legs now that the Trump administration has blocked the appointment or reappointment of judges to the appeals court of its Dispute Settlement Mechanism -- which is the central pillar of the 24-year-old multilateral body.

Do I regret the demise of the World Trade Organization now that Trump is on a unilateral trade rampage? No. I always saw the WTO and unilateralism as two faces of U.S. power deployed against those countries seeking to remake the world trading order in a more equitable and just direction.

Multilateralism and unilateralism have, since the end of the Second World War, been alternative strategies for global hegemony preferred by competing factions of the U.S. ruling elite.

The Democrats preferred multilateralism because they felt it would both institutionalize the U.S.'s hegemonic status in the world trading order at the same time that it would make it more legitimate by obtaining the consent of its allies. Republicans, however, felt that the exercise of U.S. power should be as little constrained by global rules and institutions as possible.

These two views clashed head-on in 1948 during the debate over the ratification of the Havana Charter, which would have established the International Trade Organization (ITO). After having participated in the negotiations, the Democratic administration of President Truman did not submit it to the Senate for ratification, worried that the Republicans would successfully block it. The Republicans argued that ratifying the Havana Charter would be unconstitutional since no legal code could stand above the U.S. Constitution, and that a treaty governing trade would do precisely that.

Republicans and Democrats agreed to a compromise: the much weaker General Agreement on Tariffs and Trade (GATT), which had little checks on U.S. trade practices and did not bring under its ambit the global agricultural trade that U.S. corporations dominated. With trade making up only a small part of U.S. gross domestic product (GDP) then, the U.S. was not worried about the absence of strong rules on global trade, and felt these would only harm the bottom line of its emerging transnational corporations.

Paradoxically, GATT allowed the rise of a number of formerly minor trading countries into major actors in global trade, which would not have been possible within an iron-clad free trade regime. These were mainly economies from East Asia like South Korea, Taiwan, and Malaysia that engaged in aggressive export policies while building up manufacturing industries protected by high tariffs and import quotas. At the same time, by the 1970s and 1980s, trade accounted for a greater part of U.S. GDP than in the late 1940s, and U.S. corporations wanted fewer restrictions on their penetration of foreign markets.

So Washington changed its mind in the 1980s, and both Republicans and Democrats agreed to push for a strengthened global trade regime.

The U.S. was confident that it would benefit mainly its corporations which it saw as the most competitive in the world. The European Union decided to join the bandwagon for a strengthened international trade regime mainly because, like Washington, it wanted to dump its massive agricultural surpluses on developing countries.

Leading industries in Europe, the U.S., and Japan -- like the automobile, information, and pharmaceutical industries -- also had a joint interest in preventing the emergence of new competitors from East and Southeast Asia by making the latter's liberal acquisition of complex technologies (dubbed "intellectual piracy") a violation of trade rules, or by preventing them from using trade restrictions to build up their industries.

The result was the World Trade Organization, which came into being in 1995. The WTO, from the perspective of U.S. interests, was a set of rules and institutions that would promote, consolidate, and legitimize structures of global trade ensuring the hegemony of US interests.

While free trade was the rhetoric of the WTO, the achievement of monopoly was actually the aim of the WTO's three most important agreements.

The Agreement on Agriculture (AOA) institutionalized the dumping of U.S. and European surpluses on developing countries by forcing the latter to end their import quotas and lower their tariffs. The Trade Related Intellectual Property Rights Agreement (TRIPs) sought to institutionalize U.S. corporations' monopoly of high technology by outlawing reverse engineering and other methods used by developing countries to get universal access to knowledge. The Trade Related Investment Measures Agreement (TRIMs) sought to prevent countries from imitating Japan, South Korea, and Malaysia and using trade policy, like reducing imported inputs into finished goods in favor of local inputs, to build up industries that became significant competitors both in local and global markets.

Then, in 2003, with the heft provided by India, Brazil, and China (a WTO member since 2001), the developing countries in the WTO were able to prevent the U.S. and EU's attempt to dismantle government protection of small farmers. They foiled attempts to tighten the already very restrictive TRIPs Agreement, and prevented the joint U.S.-EU attempt to bring investment, government procurement, and competition policy under the ambit of the WTO.

Following this, the U.S. abandoned the multilateral route. After the Fifth Ministerial of the WTO collapsed in Cancun in 2003, the Republican Bush administration's Special Trade Representative Robert Zoellick warned: "As the WTO members ponder the future, the U.S. will not wait: we will move towards free trade with can-do countries."

Over the next few years, the U.S. and the EU preferred to put their efforts into forging bilateral trade agreements or limited multilateral agreements, like the Trans-Pacific Partnership (TPP) that was the fallback position favored by the Obama administration. So Trump did not initiate the move back to unilateralism -- he merely brought to its climax, with his trade war with China, a swing back to unilateralism that had begun with the George W. Bush administration in 2003.

Indeed, Trump's blocking of judges to the WTO's appellate court is simply an extension of the policy of blocking the appointment or reappointment of judges practiced earlier by the supposedly multilateralist Obama administration. The most notorious trade act of the U.S. under Obama was its ouster in 2016 of Appellate Body Member Seung Wha Chang of South Korea on the grounds that it did not agree with the distinguished South Korean jurist's judgments in four trade disputes involving the U.S.

The result, the current global trading system, is a hodge-podge featuring a weakened WTO, failed trade agreements like the TPP, stalemated or slow-moving negotiations like the Regional Comprehensive Economic Partnership (RCEP), developing country trade arrangements like Mercosur, bilateral treaties like the South Korea-U.S. free trade agreement, and non-institutionalized bilateral and unilateral initiatives.

This may, in fact, be the least undesirable of outcomes. For many developing countries, the era of the weak GATT regime from 1948 to 1995 was a dynamic era that left them a lot of development space owing to the lack of pressure for them to open up their agricultural and manufacturing sectors, weak trade dispute mechanisms, and the absence of anti-development pro-developed country regimes like TRIPs.

Instead of the chaos that neoliberal ideologues warn us against, current conditions might, in fact, be moving in the direction of a hybrid GATT-like system that would hold out a larger space for efforts at genuine sustainable development by the global South. Share this:

One of the principal actors in the Anti-Globalization Movement, FPIF commentator Walden Bello is the author of Deglobalization: Ideas for a New World Economy (Zed, 2000) and Revisiting and Reclaiming Deglobalization (Focus on the Global South, 2019). He can be contacted at waldenbello@yahoo.com . This article originally appeared in German in the German periodical Welt-Sichten, Nov 7, 2019

[Jan 11, 2020] Blackstone Group , CEO Stephen A. Schwarzman Buys Houses in Bulk to Profit from Mortgage Crisis

Notable quotes:
"... These anecdotal stories about Invitation Homes being quick to evict tenants may prove to be the trend rather than the exception, given Blackstone's underlying business model. Securitizing rental payments creates an intense pressure on the company to ensure that the monthly checks keep flowing. For renters, that may mean you either pay on the first of the month every month, or you're out. ..."
Dec 19, 2019 | www.unz.com

renfro December 19, 2019 at 6:23 am GMT 2,600 Words

Tucker could have done a number on Trump friend Schwarzman too.Mark my words you're gonna have another melt down now that all the people who lost their home and ended up in rentals stop paying their rent that is now 2 1/2 times what their mortgage was.
This is another fake bubble being securitized and sold off. Just like putting people into houses with ARMs who couldnt afford them when the rates went up, Scharzman will fill up his rentals to 99% occupancy with special deals to sell them to investors, when the special deal period runs out and the rent goes up people will move out looking for cheaper housing and the securities wont be worth shit.

Blackstone Group , CEO Stephen A. Schwarzman Buys Houses in Bulk to Profit from Mortgage Crisis

https://corpwatch.org/article/blackstone-group-buys-houses-bulk-profit-mortgage-crisis

You can hardly turn on the television or open a newspaper without hearing about the nation's impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.
Wall Street's foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It's going to rent these foreclosed houses back to us. In the process, it's devised a new form of securitization that could cause this whole plan to blow up -- again.

Since the buying frenzy began, no company has picked up more houses than the Blackstone Group, a major private equity firm. Using a subsidiary company, Invitation Homes, Blackstone has grabbed houses at foreclosure auctions, through local brokers, and in bulk purchases directly from banks the same way a regular person might stock up on toilet paper from Costco.

In one move, it bought 1,400 houses in Atlanta in a single day. As of November, Blackstone had spent $7.5 billion to buy 40,000 mostly foreclosed houses across the country. That's a spending rate of $100 million a week since October 2012. It recently announced plans to take the business international, beginning in foreclosure-ravaged Spain.

Few outside the finance industry have heard of Blackstone. Yet today, it's the largest owner of single-family rental homes in the nation -- and of a whole lot of other things, too. It owns part or all of the Hilton Hotel chain, Southern Cross Healthcare, Houghton Mifflin publishing house, the Weather Channel, Sea World, the arts and crafts chain Michael's, Orangina, and dozens of other companies.

Blackstone manages more than $210 billion in assets, according to its 2012 Securities and Exchange Commission annual filing. It's also a public company with a list of institutional owners that reads like a who's who of companies recently implicated in lawsuits over the mortgage crisis, including Morgan Stanley, Citigroup, Deutsche Bank, UBS, Bank of America, Goldman Sachs, and of course JP Morgan Chase, which just settled a lawsuit with the Department of Justice over its risky and often illegal mortgage practices, agreeing to pay an unprecedented $13 billion fine.

In other words, if Blackstone makes money by capitalizing on the housing crisis, all these other Wall Street banks -- generally regarded as the main culprits in creating the conditions that led to the foreclosure crisis in the first place -- make money too.

An All-Cash Goliath

In neighborhoods across the country, many residents didn't have to know what Blackstone was to realize that things were going seriously wrong.

Last year, Mark Alston, a real estate broker in Los Angeles, began noticing something strange happening. Home prices were rising. And they were rising fast -- up 20 percent between October 2012 and the same month this year. In a normal market, rising home prices would mean increased demand from homebuyers. But here was the unnerving thing: the homeownership rate was dropping, the first sign for Alston that the market was somehow out of whack.

The second sign was the buyers themselves.

"I went two years without selling to a black family, and that wasn't for lack of trying," says Alston, whose business is concentrated in inner-city neighborhoods where the majority of residents are African American and Hispanic. Instead, all his buyers -- every last one of them -- were besuited businessmen. And weirder yet, they were all paying in cash.

Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53 percent of African American wealth and 66 percent of Hispanic wealth, figures that stagger the imagination. As a result, it's safe to say that few blacks or Hispanics today are buying homes outright, in cash. Blackstone, on the other hand, doesn't have a problem fronting the money, given its $3.6 billion credit line arranged by Deutsche Bank. This money has allowed it to outbid families who have to secure traditional financing. It's also paved the way for the company to purchase a lot of homes very quickly, shocking local markets and driving prices up in a way that pushes even more families out of the game.

"You can't compete with a company that's betting on speculative future value when they're playing with cash," says Alston. "It's almost like they planned this."

In hindsight, it's clear that the Great Recession fueled a terrific wealth and asset transfer away from ordinary Americans and to financial institutions. During that crisis, Americans lost trillions of dollars of household wealth when housing prices crashed, while banks seized about five million homes. But what's just beginning to emerge is how, as in the recession years, the recovery itself continues to drive the process of transferring wealth and power from the bottom to the top.

From 2009-2012, the top 1 percent of Americans captured 95 percent of income gains. Now, as the housing market rebounds, billions of dollars in recovered housing wealth are flowing straight to Wall Street instead of to families and communities. Since spring 2012, just at the time when Blackstone began buying foreclosed homes in bulk, an estimated $88 billion of housing wealth accumulation has gone straight to banks or institutional investors as a result of their residential property holdings, according to an analysis by TomDispatch. And it's a number that's likely to just keep growing.

"Institutional investors are siphoning the wealth and the ability for wealth accumulation out of underserved communities," says Henry Wade, founder of the Arizona Association of Real Estate Brokers.

But buying homes cheap and then waiting for them to appreciate in value isn't the only way Blackstone is making money on this deal. It wants your rental payment, too.

Securitizing Rentals

Wall Street's rental empire is entirely new. The single-family rental industry used to be the bailiwick of small-time mom-and-pop operations. But what makes this moment unprecedented is the financial alchemy that Blackstone added. In November, after many months of hype, Blackstone released history's first rated bond backed by securitized rental payments. And once investors tripped over themselves in a rush to get it, Blackstone's competitors announced that they, too, would develop similar securities as soon as possible.

Depending on whom you ask, the idea of bundling rental payments and selling them off to investors is either a natural evolution of the finance industry or a fire-breathing chimera.

"This is a new frontier," comments Ted Weinstein, a consultant in the real-estate-owned homes industry for 30 years. "It's something I never really would have dreamt of."

However, to anyone who went through the 2008 mortgage-backed-security crisis, this new territory will sound strangely familiar.

"It's just like a residential mortgage-backed security," said one hedge-fund investor whose company does business with Blackstone. When asked why the public should expect these securities to be safe, given the fact that risky mortgage-backed securities caused the 2008 collapse, he responded, "Trust me."

For Blackstone, at least, the logic is simple. The company wants money upfront to purchase more cheap, foreclosed homes before prices rise. So it's joined forces with JP Morgan, Credit Suisse, and Deutsche Bank to bundle the rental payments of 3,207 single-family houses and sell this bond to investors with mortgages on the underlying houses offered as collateral. This is, of course, just a test case for what could become a whole new industry of rental-backed securities.

Many major Wall Street banks are involved in the deal, according to a copy of the private pitch documents Blackstone sent to potential investors on October 31st, which was reviewed by TomDispatch. Deutsche Bank, JP Morgan, and Credit Suisse are helping market the bond. Wells Fargo is the certificate administrator. Midland Loan Services, a subsidiary of PNC Bank, is the loan servicer. (By the way, Deutsche Bank, JP Morgan Chase, Wells Fargo, and PNC Bank are all members of another clique: the list of banks foreclosing on the most families in 2013.)

According to interviews with economists, industry insiders, and housing activists, people are more or less holding their collective breath, hoping that what looks like a duck, swims like a duck, and quacks like a duck won't crash the economy the same way the last flock of ducks did.

"You kind of just hope they know what they're doing," says Dean Baker, an economist with the Center for Economic and Policy Research. "That they have provisions for turnover and vacancies. But have they done that? Have they taken the appropriate care? I certainly wouldn't count on it." The cash flow analysis in the documents sent to investors assumes that 95 percent of these homes will be rented at all times, at an average monthly rent of $1,312. It's an occupancy rate that real estate professionals describe as ambitious.

There's one significant way, however, in which this kind of security differs from its mortgage-backed counterpart. When banks repossess mortgaged homes as collateral, there is at least the assumption (often incorrect due to botched or falsified paperwork from the banks) that the homeowner has, indeed, defaulted on her mortgage. In this case, however, if a single home-rental bond blows up, thousands of families could be evicted, whether or not they ever missed a single rental payment.

"We could well end up in that situation where you get a lot of people getting evicted not because the tenants have fallen behind but because the landlords have fallen behind," says Baker.

Bugs in Blackstone's Housing Dreams

Whether these new securities are safe may boil down to the simple question of whether Blackstone proves to be a good property manager. Decent management practices will ensure high occupancy rates, predictable turnover, and increased investor confidence. Bad management will create complaints, investigations, and vacancies, all of which will increase the likelihood that Blackstone won't have the cash flow to pay investors back.

If you ask CaDonna Porter, a tenant in one of Blackstone's Invitation Homes properties in a suburb outside Atlanta, property management is exactly the skill that Blackstone lacks. "If I could shorten my lease -- I signed a two-year lease -- I definitely would," says Porter.

The cockroaches and fat water bugs were the first problem in the Invitation Homes rental that she and her children moved into in September. Porter repeatedly filed online maintenance requests that were canceled without anyone coming to investigate the infestation. She called the company's repairs hotline. No one answered.

The second problem arrived in an email with the subject line marked "URGENT." Invitation Homes had failed to withdraw part of Porter's November payment from her bank account, prompting the company to demand that she deliver the remaining payment in person, via certified funds, by five p.m. the following day or incur "the additional legal fee of $200 and dispossessory," according to email correspondences reviewed by TomDispatch.

Porter took off from work to deliver the money order in person, only to receive an email saying that the payment had been rejected because it didn't include the $200 late fee and an additional $75 insufficient funds fee. What followed were a maddening string of emails that recall the fraught and often fraudulent interactions between homeowners and mortgage-servicing companies. Invitation Homes repeatedly threatened to file for eviction unless Porter paid various penalty fees. She repeatedly asked the company to simply accept her month's payment and leave her alone.

"I felt really harassed. I felt it was very unjust," says Porter. She ultimately wrote that she would seek legal counsel, which caused Invitation Homes to immediately agree to accept the payment as "a one-time courtesy."

Porter is still frustrated by the experience -- and by the continued presence of the cockroaches. ("I put in another request today about the bugs, which will probably be canceled again.")

A recent Huffington Post investigation and dozens of online reviews written by Invitation Homes tenants echo Porter's frustrations. Many said maintenance requests went unanswered, while others complained that their spiffed-up houses actually had underlying structural issues.

There's also at least one documented case of Blackstone moving into murkier legal territory. This fall, the Orlando, Florida, branch of Invitation Homes appeared to mail forged eviction notices to a homeowner named Francisco Molina, according to the Orlando Sentinel. Delivered in letter-sized manila envelopes, the fake notices claimed that an eviction had been filed against Molina in court, although the city confirmed otherwise. The kicker is that Invitation Homes didn't even have the right to evict Molina, legally or otherwise. Blackstone's purchase of the house had been reversed months earlier, but the company had lost track of that information.

The Great Recession of 2016?

These anecdotal stories about Invitation Homes being quick to evict tenants may prove to be the trend rather than the exception, given Blackstone's underlying business model. Securitizing rental payments creates an intense pressure on the company to ensure that the monthly checks keep flowing. For renters, that may mean you either pay on the first of the month every month, or you're out.

Although Blackstone has issued only one rental-payment security so far, it already seems to be putting this strict protocol into place. In Charlotte, North Carolina, for example, the company has filed eviction proceedings against a full 10 percent of its renters, according to a report by the Charlotte Observer.

About 9 percent of Blackstone's properties, approximately 3,600 houses, are located in the Phoenix metro area. Most are in low- to middle-income neighborhoods.

Forty thousand homes add up to only a small percentage of the total national housing stock. Yet in the cities Blackstone has targeted most aggressively, the concentration of its properties is staggering. In Phoenix, Arizona, some neighborhoods have at least one, if not two or three, Blackstone-owned homes on just about every block.

This inundation has some concerned that the private equity giant, perhaps in conjunction with other institutional investors, will exercise undue influence over regional markets, pushing up rental prices because of a lack of competition. The biggest concern among many ordinary Americans, however, should be that, not too many years from now, this whole rental empire and its hot new class of securities might fail, sending the economy into an all-too-familiar tailspin.

"You're allowing Wall Street to control a significant sector of single-family housing," said Michael Donley, a resident of Chicago who has been investigating Blackstone's rapidly expanding presence in his neighborhood. "But is it sustainable?" he wondered. "It could all collapse in 2016, and you'll be worse off than in 2008."


Rebel0007 , says: December 19, 2019 at 6:39 am GMT

This is not surprising that this has happened. All of the de-regulation on Wall Street, lobbied for by Wall Street has allowed this to transpire.

Congress does not even read the bills that they sign into law, let alone write them! Many are written by ALEC American Legislative Exchange Council, the Chamber of Commerce, the Realtor's assosiation, the Medical Industrial Complex, public employee unions, and various other special interest groups!

Why is it a pressing issue to actively promote homosexuality? What is the point? That is really strange! There is a difference between not actively discriminating and actively promoting!

Are they trying to worsen the AIDS epidemic or lower the birth rate? It does not make sense to be actively promoting and encouraging homosexuality.

sally , says: December 19, 2019 at 7:18 am GMT
@Colin Wright There are many venture capitalist that are not Jewish.. Venture Capitalist don't always advertise their wealth. Not everybody in Wall Street or the City of London is Jewish.

I think it is important to separate the Jews from the Zionist , many in that small group (Zionist) are Jewish and Christian but most Jews and most Christians are neither Venture Capitalist nor Zionist. 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 hosts many races among its members; in the states, Christian Zionism is big, maybe bigger even than Jewish Zionism.. see Christian Zionism : The Tragedy and the Turning: the cause of our Conflicts (on DVD) by http://www.Whit.org. .

Zionism is an economic system. Zionism is a winner take all system of Economics . Zionism is like an adult version of the game called King of the Mountain. In such a game, no one is allowed to play unless they first have sufficient resources to be counted, and are then willing to and believe they are personally capable of defeating the then residing well armed king (Oligarch). IMO, all Jews everywhere, would be well advised to avoid being labelled a Zionist<=hence the reason ?

Zionism is not the same as Judaism, its not a race, its not a religion, its not even a culture, it is an economic system with virus like attributes.

mark green , says: December 19, 2019 at 7:23 am GMT
@Lot You are quibbling. You are prevaricating. You are obfuscating.

Joyce has assembled a powerful case against a known cast of financial parasites. This phenomena is hardly new. It brings to mind another financial scandal of a generation ago that was chronicled in James B. Stewart's book 'Den of Thieves'.

The mega-wealthy swindlers of that era were also all Jews: Boesky, Siegel, Levine, Milken, among others. Some twenty years later, another Wall Street Jew, Bernie Madoff, succeeds in pulling off the biggest fraud in US history. There's a pattern here.

Yet all you can do, Lot, is deflect, denigrate, and deny.

Joyce is giving us more actual names. These are the actual perps as well as institutions they hide behind. These ruthless predators collude with one another as they exploit the labor of millions of gentiles worldwide, then shower Jewish causes and philanthropies with their loot. Their tribal avarice is revolting. And insatiable.

Do you deny this phenomena?

Is it all just another 'anti-Semitic canard'?

You even claim [Joyce] is

"retarded and highly uninformed".

Retarded?

He's brilliant and persuasive.

Uninformed?

He's erudite and scholarly.

You, Lot, are demonstrating again devious tribal dishonesty. It's glaring, it's shameful, and it's obvious. This is a trait I've observed in virtually all of your writings. You invariably deflect and deny. But Jewish criminality is real.

Joyce aptly concludes:

[T]he prosperity and influence of Zionist globalism rests to an overwhelming degree on the predations of the most successful and ruthless Jewish financial parasites.

So true. So tragically true.

Rebel0007 , says: December 19, 2019 at 7:28 am GMT
This is a Jewish conspiracy to make Jews look terrible. Congress should slam the breaks here. The de-regulation of the powerful combined with the over-regulation of the powerless is criminally wreckless. Kind of like the friends don't let friends drive drunk approach.

Congress slam the breaks, yeah right, that'll happen! Lol!

This won't end well.

HammerJack , says: December 19, 2019 at 7:30 am GMT
@Colin Wright 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".

In fact, he gave away 90% of his massive fortune–about $75 Billion in current dollars. Funding, in the process, many charities, hospitals, museums, foundations and institutions of learning. He was a major benefactor of negro education.

He was a staunch anti-imperialist who believed America should concentrate its energies on peaceful endeavors rather than conquering and subduing far-off lands.

Although they are even more keen to put their names on things, today's robber barons leave behind mainly wreckage.

PetrOldSack , says: December 19, 2019 at 8:16 am GMT
@anon "Crowing on a pile of dung", global in scope, local and exclusive to thier own.
Ghali , says: December 19, 2019 at 8:46 am GMT
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.
Just passing through , says: December 19, 2019 at 8:56 am GMT
@anon A combination of both I would say, although some would like to make it out that Anglo-Saxons were the epitome of honour, they too resorted to morallly abject tricks and swindles to acquire their wealth.

WASPs allowed Jews into their lands and both of them struck a sort of implicit contract to work together to loot the world, when the word had been sucked dry, the conflict between Jews and WASPs began and Hitler and the National Socialists were a last gasp attempt to save the WASP side from being beaten, in the end higher Jewish verbal IQ gave them the upper edge in the ability to trick people.

It is hard to feel sorry for WASPs, they struck a deal with the Jews centuries ago to work together and were backstabbed, what is happening to these Third World countries will now happen to WASP countries, it is poetic justice. Luckily the torch of civilisation will continue by way of East Asia and Eastern Europe, who were true conservatives in that all they wished was prosperity for their people in their own lands without any aggressive foreign policy moves.

Basically, WASPs thought that they could win in the end, but they were out Jew'd and now they are crying.

The one difference you will notice is that certain subsections of WASPs, notable the British, actually did build infrastructure in the countries they looted, this to me was borne out of a sense of guilt, so to be fair, WASPs were not as parasitic and ruthless as Jews.

But in the end, the more ruthless wins. To quote the Joker

You get what you fucking deserve

Sean , says: December 19, 2019 at 9:44 am GMT
@Lot Kyle Bass's fund is called 'Hayman', maybe because the MSM loathe the Bass family that fellow Texican Bass is not related to. They are not the only ones aware of the drawbacks of a name. Elliot is Singer's middle one.

The article bounces back and forth between two completely different fields: private equity and distressed debt funds

If someone owes you money and you cannot collect, you factor the account, (sell it on) and then people who are going to be a lot less pleasant about it will pay them a visit and have a 'talk' with them. While it is good to have a domestic bankruptcy regime in which innovation and entrepreneurship is encouraged– to the extent that people are not routinely gaming the system–I don't see why Argentina should benefit. Singer became notorious for what he did to Argentina after he bought their debt, and he is pretty upfront about not caring who objects. Puerto Rico is neither foreign or protected by Chapter 9 of the U.S. Bankruptcy Code so it is a borderline case, which is probably why the people collecting that debt tried to hide who they were.

The way he took down Jonathan Bush and others led to Bloomberg dubbing Singer 'The World's Most Feared Investor'. Singer buys into companies where he sees the management as as failing to deliver maximum value to the shareholders, then applies pressure to raise the share price (in Bush's case extremely personal pressure) that often leads to the departure of the CEO and sale of the company. That immediate extra value for the shareholder Singer creates puts lots of working people out a job. Because of Singer and his imitators, CEO's are outsourcing and importing replacements for indigenous workers in those services that cannot be outsourced. All the while loath to foster innovation that could bring about long term growth, because that would interfere with squeezing out more and more shareholder value.

Singer is less like a vulture than a rogue elephant that is killing the breeding pair white rhinos on a game reserve, and they are going extinct. Well it's a good thing! Thanks to Singer et al (including Warren Buffett) Trump got elected. According to someone in jail with Epstein, he had an anecdote about Trump being asked by a French girl what 'white trash' was, and Trump replied 'It's me without the money'.

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.

All to the good. Iran won't leave Saudi Arabia (serious money) alone so Iran is going to have to be crushed as a threat to the Saud family like Saddam before it anyway. If the Jews think they are causing it, let 'em think so.

https://www.unz.com/pgiraldi/trump-creates-a-new-nation/
When the Israelis occupy nearly all of the West Bank with Donald Trump's approval and start "relocating" the existing population, who will be around to speak up? No one, as by that time saying nay to Israel will be a full-fledged hate crime and you can go to jail for doing so

Loudspeaker goes off " All Anti–Zionist Jews to Times Square ".

silviosilver , says: December 19, 2019 at 9:48 am GMT
@Colin Wright No judeophile, but it's 90% demagogic horsehit.

God forbid anybody should ever have to pay back money they borrow! Why, that's utterly Jewish!

These so-called "vulture" funds didn't originate the debt. They simply purchased already existing debt at deeply discounted prices either because the debt was already in default or was at imminent risk of defaulting, which is why the debt sells at a heavy discount, since existing debt holders are often happy to sell cheap and get something rather than hold on and risk getting nothing.

What Joyce zeroes in on is these vulture funds' willingness to use all legal avenues to force debtors to make good on their debts, including seizing the collateral the debtors pledged when they borrowed the money. Joyce chooses to characterize this practice as "Jewish," implying that gentile creditors would instead be overcome with compassion and let the debtors off the hook and wear the loss themselves.

What Joyce regards as a defect of "vulture" funds, others might regard as an benefit. The size of these funds, their legal expertise, and their political connections mean that borrowers can more successfully be held to account. If I owned, say, Puerto Rican debt in my retirement account, the chances that I could make Puerto Rico honor its obligations are much slimmer.

None of this is to suggest that finance, as we today know it, is perfect and that it couldn't be reformed in any way to make its operation more conducive to nationalistic social values, only that anti-cap ideologues like Joyce weave lurid tales of malfeasance out of completely humdrum market economics (which is precisely the same market economics that Tucker Carlson learned about too, btw).

J Adelman , says: December 19, 2019 at 9:53 am GMT
Mr. Joyce
Your obsession with us will prove to be your downfall.
Jewish people have always stood against tyranny against the working class, the poor and other people of color.
The phrases and catch words that you used to vilify Jews are in many cases pulled from the age old tropes used to demonize Jews for centuries and are anti-Semitic through and through. They can't be overlooked nor hidden by claims of legitimate political disagreements.
We know that it is not only the Jewish community that is at risk from unchecked antisemitism, but also other communities that white nationalists target.
I find it very offensive that people like you continue to demonize us for no reason.

I dare you to hold a debate with me on this so called "Jewish Influence".
I am not even hiding my name here.

[Jan 03, 2020] For corporate Democrats and their profuse media allies, the approach of disparaging and minimizing Bernie Sanders in 2019 didn't work. In 2020, the next step will be to trash him with a vast array of full-bore attacks

Dec 29, 2019 | www.truthdig.com

A central premise of conventional media wisdom has collapsed. On Thursday, both the New York Times and Politico published major articles reporting that Bernie Sanders really could win the Democratic presidential nomination. Such acknowledgments will add to the momentum of the Bernie 2020 campaign as the new year begins -- but they foreshadow a massive escalation of anti-Sanders misinformation and invective.

Throughout 2019, corporate media routinely asserted that the Sanders campaign had little chance of winning the nomination. As is so often the case, journalists were echoing each other more than paying attention to grassroots realities. But now, polling numbers and other indicators on the ground are finally sparking very different headlines from the media establishment.

From the Times : " Why Bernie Sanders Is Tough to Beat ." From Politico : " Democratic Insiders: Bernie Could Win the Nomination ."

Those stories, and others likely to follow in copycat news outlets, will heighten the energies of Sanders supporters and draw in many wavering voters. But the shift in media narratives about the Bernie campaign's chances will surely boost the decibels of alarm bells in elite circles where dousing the fires of progressive populism is a top priority.

For corporate Democrats and their profuse media allies, the approach of disparaging and minimizing Bernie Sanders in 2019 didn't work. In 2020, the next step will be to trash him with a vast array of full-bore attacks.

Along the way, the corporate media will occasionally give voice to some Sanders defenders and supporters. A few establishment Democrats will decide to make nice with him early in the year. But the overwhelming bulk of Sanders media coverage -- synced up with the likes of such prominent corporate flunkies as Rahm Emanuel and Neera Tanden as well as Wall Street Democrats accustomed to ruling the roost in the party -- will range from condescending to savage.

When the Bernie campaign wasn't being ignored by corporate media during 2019, innuendos and mud often flew in his direction. But we ain't seen nothing yet.

With so much at stake -- including the presidency and the top leadership of the Democratic Party -- no holds will be barred. For the forces of corporate greed and the military-industrial complex, it'll be all-out propaganda war on the Bernie campaign.

While reasons for pessimism are abundant, so are ample reasons to understand that a Sanders presidency is a real possibility . The last places we should look for political realism are corporate media outlets that distort options and encourage passivity.

Bernie is fond of quoting a statement from Nelson Mandela: "It always seems impossible until it is done."

From the grassroots, as 2020 gets underway, the solution should be clear: All left hands on deck.


Jan Goslinga 38 minutes ago ,

Elections aren't real. Democrats will nominate Joe Biden to lose the election. Trump will remain as fascist strongman and the dems will continue to blame his neoconservative policies on his white trash constituency.

Bernie serves a few important functions.
1. he keeps the radicals from leaving the plantation and going 3rd party.
2. his promotion of progressive policies will make Biden less popular and help him lose to Trump
3. Bernie and his "socialism" can then be blamed for losing the election to Trump

Maxwell Jan Goslinga 15 minutes ago ,

Unfortunately this comment will be buried in this monstrosity of a thread- now at over 300 comments with only about a third of them having a much relevance.

You might consider re-posting in reply to one of the foremost comments. Your simple realism will certainly not be well received during the campaign hallucinations.

I've often wondered how it is people could believe the elections could have any positive and lasting impact on their lives if they have been through a couple of cycles. Do they not also wonder how it is that these election (marketing) campaigns now stretch out for well over a year nowadays demanding everyone's political attention, energy and resources. To say it is a colossal waste does not quite capture the enormity of the mind job being to people.

Mensch59 Maxwell 8 minutes ago • edited ,

Your simple realism will certainly not be well received during the campaign hallucinations.

Yeah, yeah, sure, sure. You "realists" who are true believers that you have the Truth and have a calling to preach the Truth absolutely must stand against the unwashed masses who claim that your "reality" isn't even intersubjectively verifiable, much less dialectical & material [eta & historical ].

I quite enjoyed what SteelPirate/LaborSolidarity had to say about you attempting to gain a vanguard following by trolling lib-prog sites.

Mensch59 Jan Goslinga 21 minutes ago ,

Elections aren't real.

Never pay attention to anyone who claims what's "real" and what isn't. Politics certainly doesn't exist in the realm of an objective, concrete, physical, naturalistic, materialistic reality which is shared by a consensus of rational observers. At best, politics deals with intersubjectively verifiable social phenomena. Thus, politics is mostly idealistic in the belief that each mind generates its own reality.

This realization is the topic of intersubjective verifiability, as recounted, for example, by Max Born (1949, 1965) Natural Philosophy of Cause and Chance , who points out that all knowledge, including natural or social science, is also subjective. p. 162: "Thus it dawned upon me that fundamentally everything is subjective, everything without exception. That was a shock."
newestbeginning 2 hours ago ,

Meanwhile the wealth of the world's top 500 grew 25% in 2019...

https://www.livemint.com/ne...

V4V 2 hours ago • edited ,

Noam Chomsky on Bernie Sanders's Chances of Success- "...the chances he can be elected are pretty small." (Waiting with bated breath for copious downvotes by those who hate the truth and hate reality).

https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.youtube.com%2Fembed%2FEpXJvWSa4FQ%3Ffeature%3Doembed&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DEpXJvWSa4FQ&image=https%3A%2F%2Fi.ytimg.com%2Fvi%2FEpXJvWSa4FQ%2Fhqdefault.jpg&key=21d07d84db7f4d66a55297735025d6d1&type=text%2Fhtml&schema=youtube

PGGreen V4V 2 hours ago • edited ,

Most of who support Sanders know that his presidency will involve an uphill battle. Chomsky is being realistic.

But there really is no better option for meaningful change working within the political system than supporting Sanders. it is also important to note that "Our Revolution" has energized many young activists, encouraging them to continue the fight. This goes beyond politics to social and economic issues. If Sanders leaves us with a movement, this may turn out to be more important than the presidency in the long run.

Keep working for effective moral and economic justice and democracy!

V4V PGGreen an hour ago ,

Well, I have said this several times, it's not the microscopic left that you need to convince, it's the majority of self-identifying Democrats not supporting Sanders that you need to convince. I am repelled by the Democratic Party, but there are millions who identify as Democrats and many are proud of it. You need to convince them, not us.

PGGreen V4V 21 minutes ago • edited ,

Yes, although I don't think that those who support a Leftist agenda--whether you actually call them Leftists or not--are quite so microscopic a group as you imply. But you don't need to convince me or most others here (probably) that Sanders isn't perfect, or that it will be difficult for him to be elected president. We already know; we simply consider him the best option within this context of voting.

Have you ever thought of turning your approach to systemic commentary (which is valid and interesting, BTW, I'm not discounting it) around and saying what candidates you support-- in this context being discussed of voting-- instead of which ones you don't? And then explaining why such support would be effective?

I would say that what is wrong with the world is more a fault of the economic and political system than of Sanders alone--who not only plays small part in causing what is wrong, but a significant part in trying to correct it. Yes, he works within the system. That is a given. It may be, as Chris Hedges thinks, that there is no hope working within the system. But Noam Chomsky's approach also bears serious consideration that even Hedges doesn't discount. Voting will only be a small part of what brings about change, but it may make some slight difference--if you can stomach it. And it only takes a small amount of time.

"In a system of immense power, small differences can translate into large outcomes."

I don't see much of an argument that Sanders will be no better as president than Trump (and if you think so, I'd like to hear you argue it). I suspect you find the compromise unpalatable. I can understand that. I, too, draw the line at a certain point. I couldn't vote for HRC.

Yes, Sanders isn't perfect. Chomsky also said another important thing: "We're all compromised." Everyone who is a citizen of the US is compromised, and bears some measure of responsibility for the military interventions undertaken by our government. Perhaps we should renounce our citizenship, refuse to pay taxes, etc. But most of us don't -- not even those of us committed to activist work in other ways -- significant ways -- to make things better.

So what are those ways, for you?

V4V PGGreen 6 minutes ago ,

But you don't need to convince me or most others here (probably) that Sanders isn't perfect

-for me it isn' that he's not perfect, it's that I think he sucks

"In a system of immense power, small differences can translate into large outcomes."

-funny, that's a favorite line of Democrats

I get that, but it doesn't negate that Sanders's chances are next to nil.

Your suggestion of me signaling whom I support would fall on deaf ears around here. I have said this many times- I will probably for the Green Party candidate or the Socialist Equality Party candidate. If only a Democrat and Republican appear on the ballot then I would refuse to vote even if I had to pay a fine. I am not in the habit of telling anyone whom to vote for unless asked.

Before a 3rd can succeed, the fantasy that the fix can come through the Democrats needs to be destroyed. Not to worry, in due time it will be obvious.

Mensch59 PGGreen 16 minutes ago ,

My guess/bet is that V4V believes that the truth "We're all compromised" doesn't apply to him.
He sees himself as a truth-knower and a truth-teller.
He won't commit to logical argumentation.
He'll preach the truth to you.

Patrick_Walker V4V 2 hours ago • edited ,

I saw this video long ago--and agreed with it. But though Sanders' chances are small, they're still vastly larger than the NONEXISTENT chances of success of the purist, "Born to Lose" left. Why not just admit that you've totally given up and simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

V4V Patrick_Walker an hour ago • edited ,

simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

-straw man

That isn't what I do because I couldn't care less whom Democrats support and vote for. Typically, I post some unpleasant truth about Sanders, like his lackluster polling numbers or his support for neoliberal warmongers and sit back and watch the ad hominems and downvotes roll in. I am not normally on the attack, I am usually on the receiving end.

I admit that I see this forum as a form of entertainment. I admit I have zero expectation that someone to my liking will be elected president and that the system is going to change anytime soon. Do I believe it possible? Yes, I believe it is possible, I just don't believe it possible using the corrupt, Democratic Party as a vehicle and that's where we differ.

And that the crux of our issue- you believe the Democratic Party can be used a vehicle to convert the CIA/Wall Street/War Inc. Democrats into the peoples' party, and I do not. If the needed changes are ever to arrive, it will be in spite of the Democrats not because of them. I hope you stick around because in due time I'll be telling you, "Told ya so."

acme V4V an hour ago ,

The problem with your position is that, unlike Sanders, you don't seem to understand that a third candidate party candidate hasn't a snowball's chance in hell of being president unless if s/he somehow gets more electoral votes that both the major parties combined. If not, it goes to the house, and in the current partisan atmosphere, would be decided for the candidate of the House majority.
The major parties have a death-grip on the presidency while the electoral college exists.

V4V acme an hour ago • edited ,

You don't seem to understand that Sanders has a snowball's chance in hell of being the Democratic Party candidate for many reasons including the DNC arguing in court it is a private corporation and can legally rig primary and the trusty superdelegates for Biden.

What I propose is a movement outside the Democratic Party in inside it. I believe any attempt to reform the Democratic Party is doomed to fail. All this whistling in the dark over Sanders is a distraction and a kicking the can down the road to the time you Democrats finally realize it isn't going to work. You obviously didn't learn it in 2016, and I would be surprised if you learn it once Sanders tanks and begins campaigning for Biden just like he did Clinton. I will promise this, I'll say, "I told ya so" in a matter of months. That's okay, play it again, Sam.

Zsuzsi Kruska 4 hours ago • edited ,

People believe they need others to tell them what to do and give them the illusion somebody cares about them and has their best interests at heart. That's an archetype in the brain that goes back to our baby/childhood when we were dependent on our caregivers for sustenance, comfort and life itself.That's where the original concept of needing "leaders" comes from. But, what happens is psyco/sociopaths see this weakness in humanity and force their way to the top, to herd and exploit the gullible sheeple for their own agendas and selfish interests. No matter who rises to the top, she/he got their through the same system that's been going on since tribes had their chief; chief's lieutenant and witch doctor/shaman. Those three keep the tribe in line with their own desires. Chief through brute force, his lieutenant through information and witch doctor through religion and "spiritual" services; and all three require tribute and fees from the rest of the tribe. So, you will see, regardless of who the next POTUS will be, that same structure, although more complex today, will repeat itself. New boss/old boss, same ol' same ol'. All power has to be returned to the people at the local level before Wash. starts WWIII. But, if that happens, at least we won't have to worry about global warming with a nuclear winter after the bombs drop.

[Jan 01, 2020] Financial oligarchy is a cancer and Jewish financial oligarchy is just the most abhorrent flavor of it

Notable quotes:
"... 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. ..."
"... 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 ..."
"... 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. ..."
Jan 01, 2020 | www.unz.com

Mulegino1 says: December 19, 2019 at 5:08 pm GMT 300 Words @J Adleman

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.

Ilya G Poimandres , says: December 19, 2019 at 5:09 pm GMT

@Anon 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.

Rebel0007 , says: December 19, 2019 at 5:11 pm GMT

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!

9/11 Inside job , says: December 19, 2019 at 5:25 pm GMT
@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 " ?

Agent76 , says: December 19, 2019 at 5:33 pm GMT

Jan 28, 2010 The Creature From Jekyll Island (by G. Edward Griffin)

A Second Look at the Federal Reserve

https://www.youtube.com/embed/lu_VqX6J93k?feature=oembed

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).

https://www.youtube.com/embed/Fj4HyL8pOy0?feature=oembed

Robjil , says: December 19, 2019 at 5:39 pm GMT
@Onebornfree 001. It just as murderous as the first Zion century.

If we had a free press that calls out the Jewish Zion Mafia that in itself would solve the problem.

This Zion Mafia is destroying our planet faster than any Climate Change or any pollution.

Yet, we can not speak about it. It is anti-S to speak about what the Big Js do.

Onebornfree, the J mafia roams the world without being bound to any nation. A nation-less world would not stop their menace.

The best way to stop this world wide menace is free speech to talk about it. Usury control is the next step to end this menace to our planet.

More R1b, Less H1B , says: December 19, 2019 at 5:45 pm GMT
@Lot 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.

Mefobills , says: December 19, 2019 at 5:51 pm GMT

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.

Digital Samizdat , says: December 19, 2019 at 6:01 pm GMT
@Colin Wright

Echoing words once supposedly used by Hermann Goering: whenever I here the word 'philanthropist' these days, I instinctively reach for my revolver!

Agent76 , says: December 19, 2019 at 6:03 pm GMT

Jan 23, 2012 Why the Constitution Had to Be Destroyed | Thomas J. DiLorenzo

Archived from the live Mises tv broadcast, this lecture was presented by Tom DiLorenzo at the Mises Circle in Houston on 14 January 2012.

https://www.youtube.com/embed/wDyDxgJuaDY?feature=oembed

Mefobills , says: December 19, 2019 at 6:07 pm GMT
@Ilya G Poimandres edina. 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.

Robjil , says: December 19, 2019 at 6:18 pm GMT
@9/11 Inside job

Jewish bigwigs think that the world will be their oyster if there are less White Euros in the world.

Yet, Jewish Advisors have been at the top of white Euro nations for centuries as their oyster to pillage the planet.

Non-White Euro people may not be so welcoming to Jewish Advisors at the top telling to them to go to war or pillage their fellow non-White Euros.

I don't think that the big Jews at the top thought this out too much.

Mefobills , says: December 19, 2019 at 6:20 pm GMT
@Onebornfree You are missing something because you are unwilling to adapt and learn with new information. This makes you an ideologue.

Libertarianism 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.

Rebel0007 , says: December 19, 2019 at 6:30 pm GMT

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.

Secrecy has expanded under Clayton.

https://wallstreetonparade.com/2018/01/wall-streets-top-cop-cant-shake-money-ties-to-mysterious-firm/

alex in San Jose AKA digital Detroit , says: December 19, 2019 at 6:34 pm GMT

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.

Digital Samizdat , says: December 19, 2019 at 6:36 pm GMT
@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!

Digital Samizdat , says: December 19, 2019 at 7:01 pm GMT

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."

Nuff said?

renfro , says: December 19, 2019 at 7:16 pm GMT
@anon 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.

WALL STREET'S LAST GENTLEMAN, Richard Jenrette

https://www.nytimes.com/1984/11/18/business/wall-street-s-last-gentleman-richard-jenrette-forging-the-equitable-connection.html

[MORE]
the grand wazoo , says: December 19, 2019 at 7:19 pm GMT

"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 issuing 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.

Ilya G Poimandres , says: December 19, 2019 at 7:28 pm GMT
@Mefobills he 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.

Colin Wright , says: Website December 19, 2019 at 7:31 pm GMT

So I scanned through the posts quickly -- probably too quickly.

How many specific, gentile vulture capitalists currently prominent in the field have been named so far?

When you list them, please respond to my post so that I will be notified.

anarchyst , says: December 19, 2019 at 7:34 pm GMT
@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.

Mark Hunter , says: Website December 19, 2019 at 7:41 pm GMT

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.

Digital Samizdat , says: December 19, 2019 at 7:55 pm GMT
@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'.

All clear now?

.

Art , says: December 19, 2019 at 8:03 pm GMT
@Colin Wright 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.

Do No Harm

Art , says: December 19, 2019 at 8:08 pm GMT

Major Kudos to these three heroes – Ron Unz, Tucker Carlson, and Andrew Joyce – for this article and discussion.

tomo , says: December 19, 2019 at 8:16 pm GMT
@anon ith 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 )

Old and grumpy , says: December 19, 2019 at 8:22 pm GMT
@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.

the grand wazoo , says: December 19, 2019 at 8:27 pm GMT
@Realist

No, not stupid whites, they're not to blame. It's the greedy corrupt politician: white, black, or white jew, who are to blame.

Mefobills , says: December 19, 2019 at 8:31 pm GMT
@Ilya G Poimandres o – 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.

annamaria , says: December 19, 2019 at 8:43 pm GMT
@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.

Anon [271] Disclaimer , says: December 19, 2019 at 8:59 pm GMT
@J Adelman s 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?

DaveE , says: December 19, 2019 at 9:00 pm GMT
@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 !

Mefobills , says: December 19, 2019 at 9:05 pm GMT
@alex in San Jose AKA digital Detroit as 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.

Father O'Hara , says: December 19, 2019 at 9:06 pm GMT
@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! )

Antares , says: December 19, 2019 at 9:06 pm GMT
@Anon

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.

Happy Tapir , says: December 19, 2019 at 9:12 pm GMT
@Rebel0007

I looked at his book on amazon. Do you believe all that stuff? Are these people with psychoses or delusional disorders?

Anon [271] Disclaimer , says: December 19, 2019 at 9:12 pm GMT

https://www.trunews.com/stream/jew-coup-seditious-jews-orchestrating-trump-impeachment-lynching

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.

Adrian , says: December 19, 2019 at 9:20 pm GMT
@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 favor of Iran

Informed Reader , says: December 19, 2019 at 9:21 pm GMT
@Colin Wright

Colin Wright: Tel Aviv University's Medical School is called the "Sackler Faculty of Medicine." Does that help answer your question?

annamaria , says: December 19, 2019 at 9:24 pm GMT
@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.

utu , says: December 19, 2019 at 9:25 pm GMT
@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.

Anon [271] Disclaimer , says: December 19, 2019 at 9:33 pm GMT

Browder's case is really interesting. http://www.ihr.org /jhr/v17/v17n6p13_Michaels.html

"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:

https://www.zerohedge.com/news/2018-07-21/guardians-magnitsky-myth-will-real-bill-browder-please-step-forward

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.

Apparently that's collusion.

But this isn't collusion.

https://www.nationalreview.com/2017/08/left-red-scare-democrats-suddenly-hate-russia/

Remember when Obama literally said he would sell out US defence interests to the Russians on a hot mic?

https://www.americanthinker.com/articles/2019/10/corrupt_senators_took_ukraine_cash.html

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.

renfro , says: December 19, 2019 at 9:50 pm GMT
@Anonymous

t 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

steinbergfeldwitzcohen , says: December 19, 2019 at 9:54 pm GMT

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.

JUSA , says: December 19, 2019 at 9:59 pm GMT
@Lot

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.

bike-anarkist , says: December 19, 2019 at 10:16 pm GMT
@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.

Anon [112] Disclaimer , says: December 19, 2019 at 10:27 pm GMT
@Lot e, 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."

steinbergfeldwitzcohen , says: December 19, 2019 at 10:27 pm GMT
@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.

You should pack.
Real Soon.
Good Riddance.

Anon [112] Disclaimer , says: December 19, 2019 at 10:31 pm GMT
@Just passing through

I accept the guilt for what whites have done in the past.

But whites have become incredibly generous and gentle with the Other. We have turned in the opposite direction, we are not the same.

Great Britain gave up many of its colonies with no fight. Kenya was given up before there was even an anti-colonial movement in Kenya!

We whites are fair-players, and we respect the right of other peoples to self-determination. We haven't in the past, but we have learned.

thotmonger , says: December 19, 2019 at 11:02 pm GMT

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

Mefobills , says: December 19, 2019 at 11:08 pm GMT
@steinbergfeldwitzcohen o 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.

Anonymous [147] Disclaimer , says: December 19, 2019 at 11:08 pm GMT
@Digital Samizdat 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.

Johan , says: December 19, 2019 at 11:15 pm GMT
@Anon 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.

secondElijah , says: December 19, 2019 at 11:18 pm GMT
@J Adleman 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.

tomo , says: December 19, 2019 at 11:28 pm GMT
@Father O'Hara

he can't be bargained with,he can't reasoned with,he doesn't feel pity,remorse,or fear " In other words – a 'culture' as a PSYCHOPATH it's a well-oiled psychopath support group

Clutch these pearls, sqrt, sqrt, sqrt , says: December 19, 2019 at 11:36 pm GMT

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.

https://www.tabletmag.com/jewish-news-and-politics/295595/pride-and-prejudice-at-fieldston

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.

Fuck Israel. Fuck the Jewish State.

tomo , says: December 19, 2019 at 11:41 pm GMT
@J.W. en 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

Skeptikal , says: December 19, 2019 at 11:56 pm GMT

@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.

tomo , says: December 20, 2019 at 12:04 am GMT
@Anon ou 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
lavoisier , says: Website December 20, 2019 at 12:22 am GMT
@anon

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!

PCA , says: December 20, 2019 at 12:24 am GMT
@mark green

The singular is PHENOMENON for God's sake. Phenomena is plural.

Have Americans always been this illiterate?

BannedHipster , says: Website December 20, 2019 at 12:26 am GMT
@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.

Daniel Rich , says: December 20, 2019 at 12:31 am GMT
@Digital Samizdat

But I see all kinds of people even on this thread blaming the victim instead -- 'Damn goyishe deadbeats!' Whatever

The number of families who're unable to pay an $500 emergency bill is staggering as is the number of families being 1 paycheck away from bankruptcy.

Yes, some people are totally irresponsible and burn through their money faster than it can be printed, but not all 55,000,000 of 'em.

Rafael Martorell , says: December 20, 2019 at 12:47 am GMT

The other side of the explanation is the lacking 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.

Milesglorious , says: December 20, 2019 at 12:50 am GMT
@anarchyst

And when it comes, vae victis.

Frank Frivilous , says: December 20, 2019 at 12:51 am GMT

Well, DynCorp has a particularly insidious reputation beyond your run of the mill Usury.

https://www.outsidethebeltway.com/wikileaks-reveals-american-contractors-involvement-in-afghan-pedophile-ring/

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.

Rafael Martorell , says: December 20, 2019 at 12:59 am GMT

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.

Thomasina , says: December 20, 2019 at 1:14 am GMT
@Just passing through h 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.

Isthatright , says: December 20, 2019 at 1:23 am GMT
@Colin Wright

Tucker is smart. He never uses the J word. Great article.

Fayez chergui , says: December 20, 2019 at 1:31 am GMT

The only path to understand the spirit of jews to money is to read the Old Testament : clear and sharp.

lavoisier , says: Website December 20, 2019 at 1:42 am GMT
@utu

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.

Rebel0007 , says: December 20, 2019 at 1:42 am GMT

[Too much totally off-topic crackpottery. Stop this or most of your future comments may get trashed.]

Mefobills , says: December 20, 2019 at 2:02 am GMT
@utu

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.

9/11 Inside job , says: December 20, 2019 at 2:10 am GMT
@Anon 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
Realist , says: December 20, 2019 at 2:17 am GMT
@the grand wazoo

No, not stupid whites, they're not to blame. It's the greedy corrupt politician: white, black, or white jew, who are to blame.

Who votes these greedy corrupt politicians into office? Hint: It is Whites who are the majority.

Citizen of a Silly Country , says: December 20, 2019 at 2:20 am GMT
@anon

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.

Thomasina , says: December 20, 2019 at 2:22 am GMT
@lavoisier

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.

Robert Dolan , says: December 20, 2019 at 2:37 am GMT

...Trump sucks. All decent people should stand up and fight against these scumbags.

They can't play whack a mole with all of us.

Colin Wright , says: Website December 20, 2019 at 2:49 am GMT
@Informed Reader

'Colin Wright: Tel Aviv University's Medical School is called the "Sackler Faculty of Medicine." Does that help answer your question?'

That sort of thing is what led me to ask the question.

tomo , says: December 20, 2019 at 2:50 am GMT
@Father O'Hara

I now use therm 'Weinsteined' to mean 'raped' (by jewish banksters, investors etc)

Also Jewish , says: December 20, 2019 at 2:52 am GMT
@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.

tomo , says: December 20, 2019 at 3:00 am GMT
@bike-anarkist

I posted the same comment on the Facebook a few hours ago and it's still there

Colin Wright , says: Website December 20, 2019 at 3:04 am GMT
@Art

'Hmm -- The day after Trump in inaugurated for his second term -- will Iran be in his crosshairs? We need to think very seriously about that!

My guess is Iran is in the crosshairs. Trump probably promised he'd start the war as soon as he was elected the first time -- but he putzed around, and now it's almost 2020. Adelson et al are pissed -- but Trump's got a point. If he starts the war now the unknown Democrat will win -- and do you trust their word instead? They just gotta trust Trump. Let him get reelected -- then he'll come through.

This is one of those cases where I'll be happy to be proved wrong -- but such is my suspicion.

mark green , says: December 20, 2019 at 3:23 am GMT
@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.

redmudhooch , says: December 20, 2019 at 4:13 am GMT

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.

Thomasina , says: December 20, 2019 at 5:31 am GMT
@Anon

You've read "Red Notice", but that is only Browder's side. To get the other side, read these articles from Consortium News:

https://consortiumnews.com/tag/william-browder/

Thomasina , says: December 20, 2019 at 6:18 am GMT
@Colin Wright , 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.

ivan , says: December 20, 2019 at 9:38 am GMT

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.

PaddyWhack , says: December 20, 2019 at 9:58 am GMT
@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

Calvin Simms , says: December 20, 2019 at 10:12 am GMT

Amazing article from the ever insightful Andrew Joyce. The usual apologists are sputtering to try to mitigate the damage, but the game is almost up.

anno nimus , says: December 20, 2019 at 10:38 am GMT

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

Wizard of Oz , says: December 20, 2019 at 10:38 am GMT
@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.

9/11 Inside job , says: December 20, 2019 at 11:30 am GMT
@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 .

Realist , says: December 20, 2019 at 12:07 pm GMT
@eah

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.

Digital Samizdat , says: December 20, 2019 at 12:09 pm GMT
@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

Digital Samizdat , says: December 20, 2019 at 12:18 pm GMT
@Mefobills

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.

Yup. And don't forget that ongoing Zionist psy-op known as the AMIA bombing: https://thesaker.is/hezbollah-didnt-do-argentine-bombing-updated/

Thomasina , says: December 20, 2019 at 4:14 pm GMT
@geokat62

"'I'm HARDCORE Zionist and so is president Trump!' – Roger Stone"

If Trump was hardcore Zionist, they wouldn't have been going after him since the day he announced he would run for President.

No, they see him as an absolute threat to their existence.

As they twist to fight him, they are all exposing themselves.

Ilya G Poimandres , says: December 20, 2019 at 4:14 pm GMT
@Mefobills mo.. 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.

Desert Fox , says: December 20, 2019 at 4:48 pm GMT
@Thomasina

Trump is a hardcore zionist and the impeachment is another zionist scam to divide the American people, read The Protocols of Zion.

Mefobills , says: December 20, 2019 at 4:51 pm GMT
@sally n 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.

Trinity , says: December 20, 2019 at 5:05 pm GMT

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.

Mefobills , says: December 20, 2019 at 5:09 pm GMT
@Ilya G Poimandres zies, 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.

Digital Samizdat , says: December 20, 2019 at 5:31 pm GMT
@utu Great clip! I always loved Fry & Laurie.

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.

likbez , says: December 20, 2019 at 5:50 pm GMT
@Anon k 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:

http://www.softpanorama.org/Skeptics/Political_skeptic/Fighting_russophobia/Propaganda_as_creation_of_artificial_reality/Browder/index.shtml

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.

Anonymouse , says: December 20, 2019 at 5:59 pm GMT
@Colin Wright

There is no defending these jewish malefactors. It has been pointed out that immorality is a disposition to be found in every ethnicity. The problem is that the jews with that disposition are more clever than folks from other ethnicities with the same dispostion. Being more clever, they are outstandinly better at depradation. I don't see how and why the recognition of the existence of evil jews justifies the author's hatred of jews as a whole.

Brundlefly , says: December 20, 2019 at 6:04 pm GMT
@Colin Wright

Colin, I'm going to assume this is a rhetorical question, as there is not one example that would cause you to suspect there is really any doubt about the types of organizations that the Sacklers are donating their ill-gotten wealth to.

annamaria , says: December 20, 2019 at 6:27 pm GMT
@Digital Samizdat ocities, including the murder of civilians, predominantly Jews and Poles under the Nazi German administration. The term Banderites was also used by the Bandera followers themselves, and by others during the Holocaust, and the massacres of Poles and Jews in Volhynia and Eastern Galicia by OUN-UPA in 1943–1944.

The zionists have been asking hard for a backlash: https://katehon.com/article/riding-tiger-zionism-israel-and-far-right

[MORE]

Mefobills , says: December 20, 2019 at 7:00 pm GMT

@Digital Samizdat and infest England, is not well understood by the average Goy.

Our modern world is a direct line back to this big-bang event. Christian Zionism goes back much further in time than to just Cyrus Scofield and Darby. Our Jewish friends in Amsterdam were even publishing bibles at great expense, to then push the narrative that the "people of god and old testament" deserve to return to England.

(The usurers had been previously kicked out of England by King Edward in 1290. The usurers had been plying their game, and "putting house to house" to where English citizens were being dispossessed from their own lands.)

Sound familiar?

Mefobills , says: December 20, 2019 at 7:12 pm GMT
@Anonymouse y Jewish as were the Bolsheviks of a hundred years ago, and they have greatly benefited from the political immunity provided by this totally bizarre inversion of historical reality. Partly as a consequence of their media-fabricated victimhood status, they have managed to seize control over much of our political system, especially our foreign policy, and have spent the last few years doing their utmost to foment an absolutely insane war with nuclear-armed Russia. If they do manage to achieve that unfortunate goal, they will surely outdo the very impressive human body-count racked up by their ethnic ancestors, perhaps even by an order-of-magnitude or more.
ANZ , says: December 20, 2019 at 9:34 pm GMT
@Mefobills ted into being seen as the greatest victims, a transformation so seemingly implausible that future generations will surely be left gasping in awe.

Aided by no small part by chutzpah. The uncanny ability to ability to call black white and to call good evil. With no cultural love of truth to anchor them in reality. Thus detached, they are free to invent an alternate reality. I wonder if they do not suffer from cognitive dissonance. They seem genetically protected from it.

They are actually self-deluded and want to infect the rest of us with their visions of victimhood.

Long live the internet

alex in San Jose AKA digital Detroit , says: December 20, 2019 at 10:04 pm GMT

@Mefobills

Not saying fellow Whites haven't helped me out, but Jews have, out of proportion to their numbers in the population by far.

I'm not sure how tons of Nobel prizes, advances in medicine, etc are "destroying everything they touch".

There was nothing done to my family to make them cold, short-sighted, selfish bastards. That's just White culture for ya.

eah , says: December 20, 2019 at 10:21 pm GMT
@Realist ; votes these greedy corrupt politicians into office? Hint: It is Whites who are the majority.

My first comment to you was #256 -- again "for the record": I did not give enough of a damn about you or your idiotic statement ("Stupid Whites are responsible for allowing this to happen") to comment/reply to you before you mentioned voting .

"LOL"

And I don't appreciate it when people attribute specific words, views, or thoughts to me that I did not express -- make a note of it, asshole.

You fucking prick.

Mefobills , says: December 20, 2019 at 10:24 pm GMT
@Thomasina ich changed the meaning of the Statue.

Descendants of this immigration wave are the liberal jews pushing the jew coup against Trump. This is why they are from Ukraine (former pale of settlement area) or Russian haters.

To my mind, Trump is a Christian Zionist and has naturally allied with Bibi and the Zionist religious factions, such as Chabbad/Likkud.

Since U.S. has been fully infiltrated, then having Mossad and its agents on your side, is a strategy to keep from being suicided by the deep state, like JFK.

I'm willing to give Trump some lee-way, given the circumstances of our current reality.

Mefobills , says: December 20, 2019 at 10:40 pm GMT
@alex in San Jose AKA digital Detroit n pale of the settlement, or in Polish Shtetls, they created nothing of import.

Only when operating within the confines of Western Christian culture, or forced into western education by the Tsars, did Jews break free to be productive. And even then that production came at high cost to the host societies.

In other words, a good argument can be made, that if Jews had never infiltrated into Western Civilization, then said Westerners would have been much better off.

Sorry if real history is butt-hurting.

Today's Iran is another model on how to deal with the Jew problem. Jews are limited there in the same way as was done in Byzantium.

Druid , says: December 20, 2019 at 10:52 pm GMT
@sally

Your Jewish friends are, as they're wont to be, Zionist talmudists liars!!

Digital Samizdat , says: December 20, 2019 at 11:03 pm GMT
@Colin Wright ow" href="https://www.counterpunch.org/2019/12/18/impeachment-what-lies-beneath/">over at CounterPunch

So here's my entirely speculative tea-leaf reading: If there's a hidden agenda behind the urgency to remove Trump, one that might actually garner the votes of Republican Senators, it is to replace him with a president who will be a more reliable and effective leader for a military attack on Iran that Israel wants to initiate before next November. Spring is the cruelest season for launching wars.

His story is that the Israelis consider Pence to be more reliable. Who knows

Art , says: December 20, 2019 at 11:03 pm GMT
@Digital Samizdat Pelosi is a figurehead controlled by AIPAC.

The most important committee chairmanships to Israeli interests, are all held by Jews.

Nita Lowey – Appropriations Committee
Adam Schiff – Intelligence Committee
Jerrold Nadler – Judiciary Committee
Eliot Engel – Foreign Affairs Committee

This ploy of holding back the impeachment documents sounds like something crazy Schiff would do.

I think that there is something mentally and culturally wrong with that guy – he has zero regard for truthfulness.

Pelosi has trashed her legacy. That's what happens when you get close to the Jews.

annamaria , says: December 21, 2019 at 1:28 am GMT
@ANZ 11/13/the-psychopathology-of-being-jewish-and-getting-away-with-it/"> https://vidrebel.wordpress.com/2012/11/13/the-psychopathology-of-being-jewish-and-getting-away-with-it/

No wonder that the majority of Jews do not want to live in the Jewish State. too many Jews there.
They are quetching about antisemitism while attacking the western civilization -- from the assault on the First Amendment to the cheerleading for more wars for Israel in the Middle East.

No one keeps the Jews from joining their brethren in Israel. There is no need to sing "Next year in Jerusalem." Enough already. Just go there -- and stay there.

annamaria , says: December 21, 2019 at 1:49 am GMT
@alex in San Jose AKA digital Detroit o humanity, the Jewish style.
Buddy , says: December 21, 2019 at 2:34 am GMT
@Mefobills ons that distract us from seeing the top of the pyramid. However, it would appear that Marx finally gets to finance in Volume Three of Capital. I could read the whole thing myself, but I would rather simply ask you what you think. How do you reconcile Marx the Illuminati Jewish agent with Marx the perspicacious critic of capitalism? Where were his real loyalties? Did he stick the dynamite at the end of his magnum opus instead of at the beginning in order to hide it from his finance masters, whom he knew would never actually read that far? Was he attempting to assuage a guilty conscience by sneaking the truth into a footnote?
ANZ , says: December 21, 2019 at 3:31 am GMT
@annamaria are quetching about antisemitism while attacking the western civilization -- from the assault on the First Amendment to the cheerleading for more wars for Israel in the Middle East.

The complete lack of shame it takes to act like this is amazing to me. Also the hubris it would take. Though if you see yourself as a chosenite, those behaviors fit.

Apparently if you hang around then long enough, the behavior is contagious. Biden's shady Ukrainian dealings, which are 100% real are being denied and instead projected onto Trump. It's infecting our politics. The shabbos goy are emulating their masters.

Colin Wright , says: Website December 21, 2019 at 3:49 am GMT

@sally

'before I do, you must define venture capital.'

Vulture capital, actually. How many gentiles you can name in that category?

Achilles Wannabe , says: December 21, 2019 at 4:48 am GMT
@redmudhooch ts since the cave but that is not capitalism. Capitalism is Usury – profit for the sake of profit independent of usefulness, welfare, community, lifestyle.
.
And as was argued by the great German economist/sociologist Werner Sombart, Capitalism was really invented by Jews However as E Michael Jones has argued, Protestantism – particularly Anglo Calvinism- was a backsliding of Christianity into Jewish materialism – the spiritual basis for capitalism. So everything seemingly goes around and around. Capitalism cannot be blamed solely on the Jews but Jews can never be abstracted from the evils of capitalism. We have to keep both balls in the air
Daniel Rich , says: December 21, 2019 at 4:51 am GMT
@Buddy

Grab a small piece of paper. Add some fancy, symbolic stuff to it, like a fire-breathing dragon, with big, burning eyes, named ' Nimajneb , the faerie overlord, that hovers over an upside-down pyramid. Oh, and you'll need a number, let's say, '100.' Done. Print it out. Walk to the nearest person, say, "I've got here a $100 bill," and see what happens

Yet, the FED can take the same little piece of paper, sprinkle some magic dust on it, et voilà, you've got your $100 greenback [aka IOU $100 banknote].

Money makes the world go round?

Spin out of control into a state of utter madness, I'd say.

Achilles Wannabe , says: December 21, 2019 at 4:53 am GMT
@redmudhooch

Interesting argument. Please see my comment -# 313

Mefobills , says: December 21, 2019 at 5:26 am GMT
@Buddy can read through economic history or texts and spot the lies and fakery. So where does that leave the average layman to turn and not be hoaxed?

Sorry it is so hard out there to navigate. I commend you for trying. I'm feeling pressure to write a book, because even Hudson does not initiate people from level zero up to someone advanced enough to resist the hoaxers.

Richard Werner is pretty good, but you have to navigate around his favoritism of private banking. Money is law.. and he doesn't want to acknowledge that. This is what you run into, and the only way is for you to navigate as best you can and see if things ring true.

Miggle , says: December 21, 2019 at 11:16 am GMT
@Art

This ploy of holding back the impeachment documents sounds like something crazy Schiff would do.

I think that there is something mentally and culturally wrong with that guy – he has zero regard for truthfulness.

Wrong? Zero regard for truthfulness is mentally and culturally right for Schiffty. Very Jewish. The right way, if one is Jewish.

Nonny Mouse , says: December 21, 2019 at 11:27 am GMT
@anno nimus

I think Talmud means Pentateuch, not O.T.

Nonny Mouse , says: December 21, 2019 at 11:35 am GMT
@Nonny Mouse

Sorry, I meat Torah, not Talmud. You called the Torah the O.T. It's only the first few books of the O.T., I think.

Anon [388] Disclaimer , says: December 21, 2019 at 11:46 am GMT
@Achilles Wannabe moral framework informing their behaviour.

Real science has been suppressed and removed from the public sphere. Or it's been perverted for mass surveillance and social command and control and dual systems.

I fully believe that execrable demons like Soros never die because they're getting baby blood from orphans passed through some heinous engine into their vile bodies.

Meanwhile, we're forced to deal with nonsense like anthropogenic climate change, string theory, dark matter and other Jewry the sole purpose of which is to centralise power over mind and body in the hand of Jews and Masons.

The Capitalist Jew is the Science Jew.

The answer to both is the same.

Robjil , says: December 21, 2019 at 12:02 pm GMT

Poland created Askenazis by inviting them in 1025. They grew from 25,000 to the millions we have today all over the world.

Yet, now the Ashkenazi tribe wants to stick it to Poland for creating them.

https://russia-insider.com/en/polands-ruling-elite-want-hand-over-30-residential-property-holocaust-survivors/ri27962

The Zionist racial bigotry behind S447 was foreshadowed by Israel Singer of the World Jewish Congress in 1996:

"More than 3 million Jews died in Poland and Poles will not be the heirs of Polish Jews. We will never allow it. We will harass them until Poland is ice covered again. If Poland fails to satisfy Jewish demands, it will be publicly humiliated and attacked internationally . – secretary general of the World Jewish Congress"

Notice the guy's last name – Singer. This is another form of Jewish mafia vulture capitalism, using any means to hurt the masses.

What is S447?

Section 3 of Act 447, the provision for heirless property, is the part that reveals the law's intent. Under existing laws, heirless property becomes the property of the state. After WW2 there was a lot of property without owners (whether owned by Poles or Jews), and it has been sold ever since. This law has the potential to cause national havoc, as the vast majority of Poles own their own homes. Even in the relatively cosmopolitan capital of Warsaw, 79% of city-dwellers own their homes and apartments.

Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish diaspora. If this law is put into practice, approximately 30% of Warsaw homeowners will be forced to pay "rent" to random Jews claiming to be Holocaust survivors or their descendants in New York City and Tel Aviv.

How would this "law" work in Poland?

Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish diaspora. If this law is put into practice, approximately 30% of Warsaw homeowners will be forced to pay "rent" to random Jews claiming to be Holocaust survivors or their descendants in New York City and Tel Aviv.

Trump was "impeached" for not giving arms freely to ZUS controlled Ukraine. The arms have been used to shell and kill civilians in East Ukraine. Yet, Trump should be impeached for pushing this Jewish Mafia vulture like capitalism on Poland.

Pressure from the US government is only reason this law is even being considered. While Donald Trump appeals to the West and Polish patriotism in his speeches, his government's actions say something radically different. Last February, US Secretary of State Mike Pompeo demanded the Polish state pass this law. Last August, the American congress urged more pressure on the Polish state to get S447 through.

George , says: December 21, 2019 at 12:39 pm GMT

"Tucker Carlson's recent attack on the activities of Paul Singer's vulture fund"

Yup, the bricks and mortar outdoor gear shops, Cabela's + Bass Pro need 2 HQs. Nebraska could have stopped it but instead chose farm subsidies, forever war, and pensions for government workers. To have that much spending excess in the government spending you need high efficiency from the civilian sector.

The reaction in Nebraska seems to be a big yawn. My guess is Cabela was constantly trying to reduce their state and local taxes, at some point keeping the low wage retail jobs while dumping the high wage HQ jobs made sense, short term, so they sold Sidney NB down the river.

Candidate targets Sasse on Sidney response, other issues

"Nobody tried anything," was the compaint(sic) Innis heard on his visits to the struggling community.

https://www.mccookgazette.com/story/2656650.html

REI is probably safe as it is a Consumers' co-operative.

mcohen , says: December 21, 2019 at 12:40 pm GMT

Mefo says

"Forces jews into honorable laboring professions"

That is funny.I feel a laugh coming on.

Well mefo let me tell you a funny story.This guy i know made some nasty comments about jews and not long after he got cancer.His doctor,a jewish cancer specialist put him back on his feet.
Know what the funny part is.He still makes the same comments.

From an article in the jew york times

https://www.nytimes.com/2012/05/15/health/exhibition-traces-the-emergence-of-jews-as-medical-innovators.html

Few escaped the pervasive prejudice, however. In the early 1900s, Dr. Paul Ehrlich, a German Jew who discovered a treatment for syphilis and is considered the father of chemotherapy, popularized the term "magic bullet" to describe a medical compound that would "aim exclusively at the dangerous intruding parasites" yet not "touch the organism itself."

But though Dr. Ehrlich was awarded the Nobel Prize in 1908, he was not made a full professor at a university until 1914, a year before he died. (That posting was at the University of Frankfurt, in the year of its founding.) In the 1930s, as the Nazis came to power, his name was removed from textbooks and taken off Frankfurt's street signs. Paul-Ehrlich-Strasse regained its name only after World War II.

annamaria , says: December 21, 2019 at 1:31 pm GMT
@ANZ of bankers and religious fanatics or a land-based theocratic toy-state of Israel.

It is the spirit of parasitism that is "infectious" and works against patriotism. Hense the local profiteers, from Rumsfeld to McCain, Biden, Brennan, Pelosi, Rubio and the likes who have been hastening the demise of the US for the immediate monetary compensation tied to the allegiance to the Jewish cause. The zionized NYT and the presstituting stink tanks the Atlantic Council (affiliated with the openly subversive Integrity Initiative), American Enterprise Institute and such have been working openly against the US interests and for ziocon interests.

annamaria , says: December 21, 2019 at 1:43 pm GMT
@Mefobills

"Herzyl admired the Germans of the day, and wanted Jews to be like the German's he so admired. Herzyl thought that if Jews had their own country of Zion, they would settle down and become normal people."

-- The dream was an illusion. When the meme "is it good for the Jew?" beats all and any moral principles, then the world gets a nation of thieves and murderers quetching non-stop about their eternal victimhood. Pathetic.

http://www.thehypertexts.com/Israeli%20Prime%20Ministers%20Terrorists%20Nakba.htm

annamaria , says: December 21, 2019 at 1:49 pm GMT

http://www.thehypertexts.com/Israeli%20Prime%20Ministers%20Terrorists%20Nakba.htm

[MORE]
annamaria , says: December 21, 2019 at 5:25 pm GMT
@mcohen spot.com/2012/10/czech-activists-accused-madeleine.html#more

From the position of the USA Secretary of State, Madeleine Albright pushed for the bombing of the Federal Republic of Yugoslavia in 1999, when NATO planes bombed without a UN mandate. She also supported the jihad in Bosnia during 1992-1995, and the manipulation of the facts about Srebrenica, but also personally earned from the privatization of Kosovo Telecommunications. She should, therefore, bear the consequences of her political decisions and acknowledge responsibility for the bloodshed, in which thousands of civilians were killed.

FvS , says: December 21, 2019 at 6:44 pm GMT
@lavoisier

But in fairness, the Koch brothers are no damn good for the nation either.

No, they are (were) not. However, they also got a lot of negative media attention while these Jewish vulture capitalists have mostly been given a pass. Also, whites are about 55% of the population while Jews are about 2%.

Mr. Anon , says: December 21, 2019 at 7:32 pm GMT
@silviosilver er because the debt was already in default or was at imminent risk of defaulting, which is why the debt sells at a heavy discount, since existing debt holders are often happy to sell cheap and get something rather than hold on and risk getting nothing.

If A enters into a contract with B to borrow money, and then fails to be pay it back to B, why should C be able to come in and buy the debt from B and expect to be paid back? A entered into a contract with B, not C. And why should C expect to be able to employ the machinery of state coercion to force A to honor a contract that A didn't even make with C in the first place? Mr. Anon , says: December 21, 2019 at 7:37 pm GMT

@Colin Wright

It's important not to get carried away with this.

I agree. Mitt Romney was also a financial hustler. The over-representation is real, but not exclusive.

Mefobills , says: December 21, 2019 at 7:52 pm GMT
@Thales the Milesian ters sent representatives to a small central government. This form of government was usurped in 1913, by the "money powers," and these money powers use elections as a veneer to sanction their behind the scenes rule.

Here is another quote from the Ivan the Terrible article, which sums things up:

n 1601, just a few years after Ivan's death, Russia was starving, leaderless and under attack. Again, under elite rule, with no ruling monarch, Russia was plunged into years of war and violence. Fighting oligarchy has been the traditional job of any monarch and is the ultimate purpose of government.

Mefobills , says: December 21, 2019 at 8:10 pm GMT
@Robjil olves to the "were so smart" and look at the medical advances, nobel prizes, etc. we've contributed.

Conveniently left out of account, is that these advances would have been done anyway in their absence. The goyim do possess the intelligence and fortitude to solider on without jews in our midst, and in-fact, when jews are absent from our civilizations, advancement accelerates.

The best thing for a jew to do is turn his back on the tribe, and re-join humanity.

To any Jew reading this . walk away from the tribe. Man-up and get some intestinal fortitude, leave the parasite method behind you, and join humanity.

niceland , says: December 21, 2019 at 8:11 pm GMT
@Mefobills

I'm feeling pressure to write a book, because even Hudson does not initiate people from level zero up to someone advanced enough to resist the hoaxers.

Have you considered writing articles? Series of articles could later on become raw material for a book. Perhaps easier path to take and could perhaps provide useful feedback along the way.

It sure looks like you could write far more informative and interesting articles than many writers here on Unz because of your broad perspective. The big picture is always more interesting and I agree with you about the importance of the subject.

Mefobills , says: December 21, 2019 at 8:27 pm GMT
@Mr. Anon d by these degenerate types of people in order to take illicit gains.

In the U.S., (I'm an American), these usury flows funnel into the press – to where the press becomes owned, so that these Oligarchic interests can continue to take rents and unearned income through their various schemes.

I might add, our intelligent UNZ readers, have noticed that the U.S. mainstream press is predominantly Jewish owned. Intelligent people notice patterns are some of us are unwilling to look away. No amount of deception through the mainstream press can reduce the revulsion moral people instinctively feel when watching vultures operate.

ThreeCranes , says: December 21, 2019 at 9:37 pm GMT
@Bookish1 ing whiteness has never been more urgent.' By Mark Levine"

When challenged for apparently encouraging genocide, Levine and his cronies answer that "whiteness", as they are employing the term, is merely an accidental property as opposed to an essential quality. So stripping an organism of its whiteness will not diminish it to any significant degree, does not threaten its very existence, merely prunes it into a more acceptable shape.

And yet when some poor misguided soul has the temerity to put up a sign saying "It's Okay To Be White", the Mark Levines of the world have a cow. Suddenly, "white" is not a mere accidental quality at all.

mark green , says: December 21, 2019 at 9:53 pm GMT
@FvS

The Koch Brothers (what's left of them; one died recently) are industrialists. They build things people want. They are innovators. Yes, the Koch Brothers are filthy rich but they employ tens of thousands of people in the US alone.

Most importantly, the Koch Bros. are not parasitic, money-skimming extractors or wealth like the vulture capitalists described by Joyce.

Buddy , says: December 21, 2019 at 11:50 pm GMT
@Mefobills s and schemes. The advantage of their technique is that it does not leave a positive trace but a negative trace. It is much more difficult to notice absence than presence. You can't see all the money that is constantly being vacuumed out of the economy. It doesn't leave a visible hole. And since none of us has ever witnessed firsthand what a rent-free economy might actually look like (since they are not allowed to exist), we internalize the belief that such an economy goes against natural law, when in fact the contrary is true.

Is there any way for you to link to more of your writing without giving away your identity?

mcohen , says: December 21, 2019 at 11:52 pm GMT
@mcohen class="comment-text">

Mefo

Lol

Ah so you're a team.interesting.protecting the ween.

How about this paul ehrlich.next generation

https://en.m.wikipedia.org/wiki/Paul_R._Ehrlich

Paul Ralph Ehrlich (born May 29, 1932) is an American biologist, best known for his warnings about the consequences of population growth and limited resources.[2][3] He is the Bing Professor of Population Studies of the Department of Biology of Stanford University and president of Stanford's Center for Conservation Biology.

Mefobills , says: December 21, 2019 at 11:52 pm GMT
@Thales the Milesian

Straw man argument. I am not for democracy or human rights. Apparently you don't want to let go of your false worldview.

mcohen , says: December 22, 2019 at 12:01 am GMT
@mark green dding.Stop posting on unz,its for adults only.

http://www.newyorker.com
A Whistle-Blower Accuses the Kochs of "Poisoning" an Arkansas Town

http://www.rollingstone.com
Web results
David Koch Built a Toxic Empire -- with Human Consequences

https://m.huffpost.com › entry
Koch Brothers' Toxic Legacy Detailed In New Report | HuffPost

Reid right on claiming Kochs produce more pollution than oil giants

Wally , says: December 22, 2019 at 12:11 am GMT
@Achilles Wannabe

Don't like a product or service that a "capitalist" makes or offers?

Fine & dandy, don't buy it, don't pay for it.

It's called choice .

There is no choice under your preferred Communism, as we have seen repeatedly.

Daniel Rich , says: December 22, 2019 at 12:19 am GMT
@Robjil

Under S447, any Polish-Jew or descendent of said Polish Jew can lay claim to property to property deemed heirless and sold after the war, thus all land that can be claimed to have been owned by Jews before 1939 will be transferred to the global Jewish diaspora.

Let's make a variant of the Polish S447 applicable to Palestinians and find out how much the illegal occupiers of Palestine like to see 'justice.'

Dingo jay b , says: Website December 22, 2019 at 12:20 am GMT

To be brief :Wasn't. Singer originally behind the dossier on Trump?

Mefobills , says: December 22, 2019 at 12:42 am GMT
@mcohen eir factories full of low IQ but compliant workers. 3) The finance banking class who want new debts to pay off old debts. New Debtors help fund a new debt cycle. 4) New people through population replacement, destroy the history and cohesion of the host country. By de-racinating and destroying the host people, then Plutocrats can continue with their thefts unchallenged.

The debt money cycle is something like a pyramid, where it sucks upward toward plutocracy. Plutocrats and Oligarchs then emit hypnosis and propaganda through the owned press to maintain their status. The funnel, or bottom of the pyramid wants new debts and new debtors.

anon [415] Disclaimer , says: December 22, 2019 at 12:46 am GMT
@Father O'Hara

how do entities like Puerto Rico get so far in debt in the first place? so many problems because of what appeared to be incompetent and comatose government.

Yes, ultimately the blame must lie with the voters: they picked douche, when they should have picked turd.

Robjil , says: December 22, 2019 at 12:55 am GMT
@Daniel Rich l, Germany and Russia were both strangled. The US's turn is now. The US wants to strangle Poland too with this s447 law. Trump should have been impeached for pushing this law on Poland.

Pressure from the US government is only reason this law is even being considered. While Donald Trump appeals to the West and Polish patriotism in his speeches, his government's actions say something radically different. Last February, US Secretary of State Mike Pompeo demanded the Polish state pass this law. Last August, the American congress urged more pressure on the Polish state to get S447 through.

anon [415] Disclaimer , says: December 22, 2019 at 12:58 am GMT
@Svevlad uple of centuries, nearly took Europe too, and were a serious thorn in everyone's side for a thousand years

In other words, they did much better than the Jews over the same period

Ball-breaking is a viable strategy, apparently

I think that all afroasiatic-speaking populations are like this, if they were to gain in intelligence the world would get weird real fast

Nah, no danger: it's just first-mover advantage, which, by definition, can belong only to one entity

Things went a little differently two thousand years ago, people like Joyce could just as easily have been writing about Kurds or Alawites or whatever

Mefobills , says: December 22, 2019 at 1:03 am GMT

Buddy,

The real eureka moment for me came when I finally understood that money and debt were created at the same time on opposite sides of the ledger. Only the two columns are not equal. One column grows through magic while the other does not. Once the sorcery has been wrought, the creditors can simply sit back and wait as the mechanism eventually transfers all the wealth in the world to them.

That is pretty good. Economics and most equations do not codify time. The equal sign cannot comprehend time, so most of the math used in economics textbooks is telling lies.

Also, as I mentioned earlier, the bad guys put their thumb on the scale and call things equal. They do this with swaps of unlike kinds. For example, you can build up housing prices with bubble economics, then collapse the economy by preventing new loans, or doing call-in loans. That then forces prices downward. The bankster/vulture class then forces a swap of the asset to collapse (cancel) the debt instrument. In this case, the house is transferred to creditor to erase debts. The house transfers to collapse a money contract, which is a swap of unlike kinds. Vultures do the same thing, they don't necessarily want money in exchange for the debt instrument they have bought.

With regards to double entry hypothecation – at the first instance of time, when debt instrument is signed ONLY THEN IS IT A MIRROR. The credit created and the debt claims are 1:1 only at the instant (minus fees). Later in time, the debt claims grow while the credit created does not. This is why debt claims destroy the natural world, as people rape the world converting forests to board feet of lumber, to then make a price, to then fetch money.

In the first cycles of a loan it is ALL USURY. Worse it is seignorage. Seignorage is greater purchasing power now, whereas the money is worth less later.

In the first cycles of the loan, the bank credit that you pay back, virtually none of it goes to paying off principle. The credit decrements the asset side of your ledger (your savings go down) and then point at the banker, to increase the asset side of his ledger. In the first cycles of the loan, your liability column (principle on the loan) goes down only slightly or not at all.

This is pure usury, plain and simple. There is little to risk the loan emitter either, as a house is fungible and can be grabbed by law. If a real asset is attached to the double entry ledger, it is to lower risk to the creditor (banker), not the debtor. A double entry ledger can lie, or tell the truth. It would tell the truth if we used fees in this case and didn't hypothecate new credit. But, then again, as you mention most people are locked into a hypnotic trance.

The proper way to do things is with sovereign money, not private corporate bank money at usury.

http://www.sovereignmoney.eu

Whenever a nations people demand their sovereignty, they are attacked by the usual suspects. A lot of people don't want to admit that both world wars were started by the finance class, with Jews as leading agents, to then demonize Germany.

Germany had the temerity under the Kaiser to run an Industrial Capitalist Mixed Economy using its own sovereign credit, and then Hitler resurrected this system in 1933.

Mefobills , says: December 22, 2019 at 1:36 am GMT
@mcohen

How about this paul ehrlich.next generation

Oh, sorry a different Paul Ehrlich.

You are only making my point. If a jew is in an honorable profession, he can be of benefit to the host society.

Maybe Jews should also be limited from the press too, so they may not have a malign influence on easily duped goyim minds.

But then, I don't want to lose the brave and honorable Jews like Ron Unz who are for the truth of things, even if it is damaging to their co-ethnics.

9/11 Inside job , says: December 22, 2019 at 1:40 am GMT

renegadetribune.com ; "US Court sentences Israeli CEO to 22 years for scamming Americans , media ignore it ":

"The company specifically targeted the elderly and the vulnerable , one of over 100 companies perpetrating a scam called binary options Israel permitted the scam to go on for a decade "

Will Trump pardon him before he leaves office ? The Jerusalem Post : " Trump pardons Israeli drug smuggler" after serving just 4 years of a 20 year sentence .

Bookish1 , says: December 22, 2019 at 1:41 am GMT
@Thomasina

To get it straight: Trump is playing their game but not totally. He isn't invading Iran so the globalists aren't getting everything that they want.

Bookish1 , says: December 22, 2019 at 1:51 am GMT
@Digital Samizdat

Maybe the dems want Trump in because they see a world war coming and the Republicans in for that.

Hibernian , says: December 22, 2019 at 2:31 am GMT
@Mr. Anon

Contracts often have provisions for successors and assignees. The real question is whether the weaker party was sufficiently strong to know what they were signing and have a good chance of being able to carry out their side of the bargain. Many sovereign buyers are about as good risk as an unemployed man who wants to buy a car on credit.

Lot , says: December 22, 2019 at 3:11 am GMT
@silviosilver

I agree this is a real problem, but no need to exaggerate. It isn't 99%. Outside of the USA, it is probably well under half.

Desert Fox , says: December 22, 2019 at 3:28 am GMT
@9/11 Inside job

Trump will do anything his zionist masters tell him to do, I am sure they have enough videos of Trump to last a lifetime.

KA , says: December 22, 2019 at 4:32 am GMT
@Just passing through 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."

It's called comeuppance.

But IQ doesn't explain fully but the readiness to believe the west . Congo is particularly a sad case. It has been fighting a war for last 60 years .

As far as Belgium is concerned, that nations should be swamped to the brim with Congolese making it burst at the seams .

Who cares if some moronic Trump supporters get all shook up in Battle Creek . Who gives a toss ?

Trump is a fraud , a huckster a corrupt filthy white thrash

mcohen , says: December 22, 2019 at 4:39 am GMT
@geokat62 iven the environmental damage said industries have caused. The vulture capitalists recover debt from failed states. A worthy cause indeed, especially for investors.

mark green says:
December 21, 2019 at 9:53 pm GMT • 100 Words

@FvS
The Koch Brothers (what's left of them; one died recently) are industrialists. They build things people want. They are innovators. Yes, the Koch Brothers are filthy rich but they employ tens of thousands of people in the US alone.

Most importantly, the Koch Bros. are not parasitic, money-skimming extractors or wealth like the vulture capitalists described by Joyce.

hotrod31 , says: December 22, 2019 at 8:03 am GMT
@Colin Wright

Should one suspect that your last question is, rhetorical? Quite, i'm sure.

geokat62 , says: December 22, 2019 at 2:20 pm GMT
@mcohen ly able to secure large amounts of debt at very favourable interest rates. But this very soon changed. The vultures at GS, after peering into the Greece's true financial records, knew how vulnerable Greek finances were and were betting heavily against Greek sovereign debt by shorting it. This soon drove borrowing rates sky high which made it nearly impossible for the Greek govt to roll over their short term debt obligations.

So, thanks to the vulture capitalists at GS, a large percentage of the Greek population has been suffering and will continue to suffer under the austerity policies that were introduced in the wake of the financial crises.

ANZ , says: December 22, 2019 at 3:08 pm GMT
@annamaria d us out from the classic American tradition into the modern Zionist vision. These turncoats are a uniquely despicable lot since they come with smiles and handshakes to kill the soul of our nation.

If history serves as a guide, it will take a government led by s strongman to right this ship. Democracy has proven too easily corruptible by a private banking cartel that can print its way to dominance. This cartel will select, groom, install and maintain their double agents into our political, economic and cultural spheres.

Here is the most plain lesson I can take from this: don't allow privatized money as the national currency.

Thales the Milesian , says: December 22, 2019 at 6:20 pm GMT
@Mefobills

I know you are not. Go and tell that to the World. Stop preaching democracy, and other crap.

Mr. Singer will prosper as this is the will of the American people and you can do nothing to change that.

Thales the Milesian , says: December 22, 2019 at 6:35 pm GMT
@Thales the Milesian

By the way Mefobills people like you are the problem. Sitting on your butt, doing nothing and whining.

mcohen , says: December 22, 2019 at 8:10 pm GMT
@geokat62

Geo you cannot bullshit me.i am teflonika. Retitrement age was 55 but now it is 67.

Great people.Failed state."They"stole his money.lol http://www.ekathimerini.com/218552/article/ekathimerini/community/they-stole-my-money-greek-dreams-of-retirement-turn-sour

Robjil , says: December 22, 2019 at 8:57 pm GMT
@mcohen oycott abroad. It did this by using a barter system: equipment and commodities were exchanged directly with other countries, circumventing the international banks. This system of direct exchange occurred without debt and without trade deficits. Germany's economic experiment, like Lincoln's, was short-lived; but it left some lasting monuments to its success, including the famous Autobahn, the world's first extensive superhighway.1

Greece or any nation need not be in "debt". It is a game, a game of money printed out of thin air. All Greece has to do, is give up the debt game. Barter game is a better game.

MrFoSquare , says: December 22, 2019 at 10:42 pm GMT

@Buddy three.

Roger Elletson, in his excellent book "Money: A Medium of Power"(Amazon), defines the purpose of usury: "Under the current monetary regime, the effect, and indeed the purpose, of usury is to create compounding (think 'little by little') monetary claims from usurers against the productive output and underlying assets of nations."

In his unpublished manuscript, "The Triumph of Western Civilization," Elletson says: "What Parapometrics© now reveals, however, is that usury is the ultimate expression of parasitic (or mammonic) monetary law; it is the life principle of satanic power and human parasitism."

Mefobills , says: December 23, 2019 at 1:13 am GMT
@Robjil n proportion to the economies needs, as is what happened in Germany. Hitler laughed at the gold-men, and considered gold money as a tool used by the Jews in their "international capital game."

Purchasing power was put into the German economy using Oeffa and Mefo bills. When the bills were discounted (redeemed) at a bank, said bank turned around and presented the bills to the Central Bank (Reichsbank). Reichsbank then created new Reichsmarks to pay off the Bills. In this way millions of marks of new credit flooded into the German economy. By 1938 the tax roles in Germany had almost tripled, and it was not due to Gold or "international credit."

NoseytheDuke , says: December 23, 2019 at 1:16 am GMT
@Thales the Milesian

All that you and I really know about Mefobills is that information about the nature of money and economics is being freely given and appears to be much appreciated according to other commenters. We don't know anything about what other activities Mefobills is engaged in so your comment is nonsense thinly disguised as petty insults.

Robjil , says: December 23, 2019 at 2:00 am GMT
@Mefobills ding began.5

In Billions for the Bankers, Debts for the People (1984), Sheldon Emry commented:

Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today.

Caruthers , says: December 23, 2019 at 2:47 am GMT
@Colin Wright

The underdog in Israel are Palestinians. The Chosen, in Israel and elsewhere, treat them like vermin. The Israeli chosen are the most color-conscious and racist people in the Western world.

Caruthers , says: December 23, 2019 at 2:54 am GMT
@mcohen

What benefit did the vulture capitalists give to the Greek people that they must now pay for with austerity?

Achilles Wannabe , says: December 23, 2019 at 3:21 am GMT
@Just passing through

I would say WASP's and Jews savaged Germany in WW2. Perhaps then the Jews turned on the WASPS. But WASP's are a curious bunch. They seem to have absolutely no loyalty to their own people. Look at what they have done to the English white working class. WASP's also are very enamored of Jews. If anything their loyalty sees to be to the Jews and not their own

Achilles Wannabe , says: December 23, 2019 at 3:46 am GMT

"we should ditch the word capitalism for usuryism."

Best idea I've heard in awhile. Likewise change Economics Departments to Usury Departments – at least in the Anglo=Judeo Sphere

ivan , says: December 23, 2019 at 3:48 am GMT
@Nonny Mouse

That may be the case in the Exodus dramas but the idea of 'who is thy brother' was already made clear earlier in Genesis – the story of Abel and Cain. The later Jews and the Christians merely rediscovered what was the original plan : that is, that all mankind share one brotherhood under one God.

mcohen , says: December 23, 2019 at 4:43 am GMT
@MrFoSquare

Mr 4

Aah so more bullshit. https://en.m.wikipedia.org/wiki/Loans_and_interest_in_Judaism

Caruthers , says: December 23, 2019 at 7:44 am GMT
@mcohen

So the Greek debt was caused by the purchase of too many weapons to defend against other countries like Turkey in NATO, an American-led organization that promises to provide security to all its member states? So the populace of a treaty-bound ally should suffer US-enforced austerity to have weapons so that vulture capitalists can enjoy large profits which they largely funnel to Jewish causes while the Jewish state never is expected to suffer austerity for weapons?

Buddy , says: December 23, 2019 at 11:53 am GMT
@MrFoSquare . The texts are diabolically equivocal and ingeniously interlocking. The exoteric interpretation is innocent (Torah) and full of plausible deniability, the esoteric interpretation is malevolent (Talmud), and the ultra-esoteric interpretation (Kabbalah) is Satanic. At the very bottom you have the ultimate esoteric language of gematria. The good news is that it is easy to see through the necromancy once you understand how money magic functions. But this is only possible if we refuse the temptation of greed. We have not done a very good job of resisting greed, and those of us who succumb to this temptation deserve to be swindled.
Just passing through , says: December 23, 2019 at 1:28 pm GMT
@Achilles Wannabe re to be Jewish, people like Joyce would be on the case saying it was all da jooz, but he isn't very keen to blame WASPs for the black-on-white violence in American public schools, makes ya wonder.

WASP's also are very enamored of Jews. If anything their loyalty sees to be to the Jews and not their own

Jews have always been present in the elite, WASPs identify with Jews because they identfy with the elite. I am quite sure even to this day, WASPs and Jews are working together, it is just that the lower rungs of White society are being overwhelmed first and it seems unlikely that these North-Eastern WASPs will feel the pain any time soon.

Hibernian , says: December 23, 2019 at 1:50 pm GMT
@Achilles Wannabe

New England Neo-Calvinists never saw Southern and Border Anglo-Celts as brothers. Not at all. Thus the Civil War. As for their closer kin, poorer Mayflower, etc., descendants, they mixed in with Germans, Scandinavians, and, horror of horrors, the Irish, as they moved West. Bing Crosby was a Mayflower descendant.

George F. Held , says: Website December 23, 2019 at 2:00 pm GMT
@Truth3

Trump is a bad president for the reasons you cite, but neither Pence nor any demorat would be better. So let him be

silviosilver , says: December 23, 2019 at 8:31 pm GMT
@eah conclusions?

Joyce's conclusions -- that any of this behavior is uniquely "Jewish" -- are absurd. The facts he cites refer to no more than simply the standard operations of the market economy.

Some people just loath the very concept of credit and finance, so they reflexively praise any "analysis" which they believe justifies their anger.

Others are casting about for somebody or something to blame for their own incompetence -- the poor, downtrodden debtor "victims" -- and they too are happy to have their failings explained away.

On the substantive issues, this essay is just hot air.

silviosilver , says: December 23, 2019 at 8:39 pm GMT

@jack daniels e financial system by allowing widespread bank failures. But the banking executives whose criminal incompetence and, in some cases, corruption led to the crisis should definitely have been jailed, or at least permanently barred from ever working in the industry again. (Liberal egalitarianism shouldn't so lightly get off the hook either. After all, it is lunatic egalitarians who insisted that blacks and hispanics are just as good credit risks as whites, and who demanded that banks extend loans even to obvious deadbeats.)

This is an infinitely more important issue than bellyaching about "vulture" funds and trying to portray them as uniquely Jewish.

silviosilver , says: December 23, 2019 at 8:46 pm GMT
@Wyatt what they owe – in other words, to just give their money away?

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.

Okay, but so what? Given that there's nothing immoral – and much that is beneficial – about lending and borrowing, why should this be any more of an issue than that west Africans genes help them excel at sportsball or east Asians genes at math and engineering?

Caruthers , says: December 23, 2019 at 9:38 pm GMT
@Just passing through

Jewish elites are infinitely more tribal and ethnocentric than WASP elites, which is demonstrated by their charitable giving, which is far more narrowly focused on specifically Jewish causes than that of WASP elites is focused on specifically WASP causes.

Given their small numbers, Jewish elites usually must make tactical alliances with Gentile elites; but when their ethnic interests conflict with general elite interests (e.g., Marxist class conflicts), the former will almost always prevail. Hence, any WASP "loyalty" to Jews as a group is foolish.

Farrakhan.DDuke.AliceWalker.AllAgree , says: December 23, 2019 at 10:35 pm GMT
@Mefobills this month's Executive Order Jews extracted from Trump declaring Jews to be a distinct race/nationality.

Usury is a power relation, where you steal from others because you can. Laws are changed to enable the thefts.

The people of Euro lineage, i.e., the descendants of Christendom, usually don't steal even when they easily could because they are naturally indifferent as to materialism, their complimentary instinctive drives being 1) for adventure in overcoming challenges while staying within the bounds of ethical self-restraint; and 2) intellectual curiosity to learn what's out there and how to harmoniously survive and coexist with realities discovered.

renfro , says: December 24, 2019 at 1:52 am GMT
@silviosilver ws: An Overview – Jstor
https://www.jstor.org/stable/42909635
by M Amir – ‎1971 – ‎Cited by 3 – ‎Related articles

"The Jewish crime rate tends to be higher than that of non-Jews and other religious groups for white-collar offenses, that is, commercial or commercial finance.

*Also where special laws have been enacted for religious groups the crime rate among Jews tended to be even higher.
*Jews are found to be significantly over-represented in both fraudulent and genuine bankruptcies (almost ten times the rate of non-Jews)."

silviosilver , says: December 24, 2019 at 2:33 am GMT
@annamaria t's not news to me that hyperethnocentric Jewish financiers help fund hyperethnocentric Jewish organizations.

Ultimately, though, that funding is a consequence of Jewish participation in the economy. So if that in itself is wrong, then this essay is not so much a criticism of Jewish behavior, but crosses over into a criticism of Jewish existence – how are you supposed to live if you're barred from economic participation? – which to me is a different kettle of fish altogether. As much as I hate the term, that's something even I would call anti-semitic (note the absence of sneer quotes, which for me are practically mandatory).

silviosilver , says: December 24, 2019 at 2:45 am GMT
@Mr. Anon er appetite for risk. See, sometimes I don't know that I'm not going to be repaid; it's just that I now assess the prospects of being repaid as failing to meet some risk criterion I have. Other people's risk assessments differ from mine, which creates a market for existing debt.

Sometimes the market highly irrationally prices financial assets – most evident (in hindsight) at market peaks and troughs – so there are certainly some good opportunities in distressed debt. I just don't see that "vulture" funds which scan the market looking for distressed debt are doing anything fundamentally different to any other buyers of debt.

Achilles Wannabe , says: December 24, 2019 at 4:59 am GMT
@Hibernian ch and Germans from NY and the middle colonies like the Rockefellers Roosevelt's. Basically they are individualized deracinated people who are not even brothers to each other. They worship mammon – money and power. Jews are of course anything but deracinated. They are however the world's leading usurers so the WASP with his Protestant Ethic – usury sanctified – is bawled over by them – not just financially but psychologically. They have handed the Jews their universities, their cultural institutions. They are a people who gave themselves up to a people for whom there is no one but themselves. The rest of us are just along for the ride – treacherous as it is
Hibernian , says: December 24, 2019 at 5:13 am GMT
@silviosilver

I'd be very surprised if the last sentence of the above excerpt was true. Also it's a no brainer that US courts are more favorable to foreigners than third world courts are.

Mr. Anon , says: December 24, 2019 at 5:44 am GMT
@silviosilver

A bond is a financial asset, and like other financial assets it can be bought and sold virtually at will.

Yes, but a bond is also an agreement between two parties to lend money and to pay it back.

Mr. Anon , says: December 24, 2019 at 5:56 am GMT
@silviosilver ought legal recourse to exact repayment?

No, but they shouldn't necessarily expect to get it. They took the risk in lending to a bad credit-risk. At least they provided something of value – the money. Singer's fund provides nothing of value. They're just parasites.

Should they simply be forced to "lend" to people who are completely unwilling to pay what they owe – in other words, to just give their money away?

Nobody forced them to lend anything. They did it of their own accord. They didn't have to make the loans. They could have done something else with the money.

Elsztain and Mindlin, both Top Jews, now control Argentina.

Elsztain and Mindlin's close connections to a merging network of some of the most powerful globalists in the world today suggest their role to be one of sniffing out the opportunities and laying the groundwork for hostile take-over of resources and infrastructure by these elite scavengers who prey upon target nations, protected from view by the likes of Elsztain and Mindlin, who are little more than mafia outreach agents."

Robjil , says: December 24, 2019 at 12:12 pm GMT
@silviosilver nterest in relations with Israel comes as a number of Central and South American countries, notably Brazil, have adopted increasingly pro-Israel positions in line with policies of US President Donald Trump.

Guatemala opened a new embassy in Jerusalem al-Quds in occupied Palestine shortly after the US formally transferred its embassy from Tel Aviv to the city in May 2018, which prompted worldwide condemnation and anger among Palestinians.

In August, Honduras also recognized Jerusalem al-Quds as the the so-called capital of Israel and announced that it sought to open a diplomatic office there.

Caruthers , says: December 24, 2019 at 9:06 pm GMT
@mcohen callously don't care about the suffering they cause, or sadistically delight in it. The more distressed mortgages they can find at a discount, the more homes they can seize, the more non-co-ethnics they can render homeless, the happier they are. Like Gordon Gekko, and unlike bankers who lend money for production of goods, they don't produce anything -- -they simply parasitize the lending and borrowing of the productive economy.
If they are an asset to society, if their activities are a boon to society, let them practice those activities exclusively in Israel and among their own coethnics elsewhere, and contravene Talmudic injunctions.
mcohen , says: December 24, 2019 at 9:45 pm GMT
@Caruthers

"Co ethnics" lol

https://www.reuters.com/article/us-china-bonds-vultures-insight/chinas-fledgling-junk-bond-market-spawns-new-breed-of-vulture-funds-idUSKCN1QH32O

Just a matter of time before the arrive in your neighborhood.They love pork in a barrel

Talmudic indeed.Take your vanilla flavoured anti semitism and piss off.

Robjil , says: December 24, 2019 at 11:29 pm GMT
@mcohen

That is companies in China fighting with each other. It is vulture funds on a small scale.

It not hurting or attacking struggling nations on a grand scale such as Paul Singer and his ilk does.

renfro , says: December 25, 2019 at 4:19 am GMT
@silviosilver

Okay, but so what? Given that there's nothing immoral – and much that is beneficial – about lending and borrowing, why should this be any more of an issue than that west Africans genes

You don't get the difference between the Jewish white collar crime and Africans being good at sports ball?
That comparison doesnt make sense.

annamaria , says: December 25, 2019 at 2:36 pm GMT
@silviosilver history of Jews in Russia during the Bolshevik revolution? The kettle and fish fit right: Mr. Snger has been financing the Holo-museums while destroying the lives of the millions in South America. Pushing the ball-point (!) written story of Anne Frank upon American kids while immiserating hundreds of thousands of Argentian kids is morally ugly. Ugly.

As for antisemitism, the involvement of US leading zionists, and the Jewish State itself, in supporting Ukrainian banderites (self-proclaimed neo-nazi) has buried the canard of antisemitism forever. There is no hope for the moral recovery of your Holobiz Museums and "eternal victimhood" memes.

Achilles Wannabe , says: December 26, 2019 at 2:15 am GMT
@annamaria

Actually we get the Jewish version of the history of Jews in Germany as we get the Jewish version of our own history – founding to Trump. It is breathtaking how Jews, Semophiles and people who are intimidated by Jews and Semophiles have created how we understand ourselves. This has been going on since Dec 7, 1941. There is almost no one left who remembers when stand up Euro Gentiles wrote history

eah , says: December 26, 2019 at 12:55 pm GMT
@annamaria in a speech he gave at Brown in 1966, George Lincoln Rockwell addressed the role of Jews in the Russian Revolution -- you can listen to the speech here –> Brown link -- he covers similar material in a 1967 speech at UCLA –> UCLA link .
Malla , says: December 26, 2019 at 5:22 pm GMT

One must take lessons from the great ruler Frederick the Great of Prussia about how to deal with Jewish scams. You see, Jewish scams have a long history. And most of these Jewish scamsters donate a lot of money to Jewish organisations.

Well Frederick the Great came up with a novel and effective solution to all this. He just charged the official Jewish organisations the amount in money in loss to Prussian society due to such scams. Guess What? The Jewish scams stopped. Totally stopped.

"Oy Vey" screamed the Jews, "All the money ended up in the hands of the cursed goyim and all our efforts and hard work in scamming went to waste. "

Makes me wonder if Democracy is really a better form of government than Monarchy.

Caruthers , says: December 27, 2019 at 1:40 am GMT
@mcohen

Joyce's article contends that the victims of these Jewish vulture capitalists are overwhelmingly goyim, while the ultimate benefactors (through their charitable donations) are Jews. You never dispute, let alone refute, this contention. However, you do contend that these vulture capitalists somehow benefit society as a whole (through some sort of economic "discipline" or whatever), but resent the suggestion that they confine this beneficial discipline (like they confine their charitable donations) to Jews, a suggestion you call "antisemitic".

Achilles Wannabe , says: December 28, 2019 at 5:43 am GMT
@Skeptikal

Yeah, that is it. In college I knew a Brahmin intimately. I was struck by the contrast between her quiet classic WASP disdain towards ordinary white conventionality and her near awe of what I thought of as Jewish vulgarity -chutzpah.

There was something ersatz Semitic in the original New England Puritanism = a sort of Jewish 1.0. Now the WASP's think the Jews are better at their game than they are. They are right of course. The question is should anyone be playing that game.

Platypus jr , says: December 28, 2019 at 1:24 pm GMT
@sally

Zionism is a political ideology, not an economic system.

silviosilver , says: December 29, 2019 at 3:08 pm GMT
@annamaria

There is no hope for the moral recovery of your Holobiz Museums and "eternal victimhood" memes.

Well, I'm not one of (((them))), so I actually hope you're proven right about this.

silviosilver , says: December 29, 2019 at 3:16 pm GMT
@Mr. Anon

Singer's fund provides nothing of value. They're just parasites.

We were talking about the nature of bonds. The fact bond/debt can be bought and sold does provide value – it makes it more likely that the credit which business need to expand and to hire workers will be provided, and provided at a lower interest rate. So the existence of the Singers of the world, troubling as it might be to you or me (in my case, given what he does with his money), is best regarded as providing indirect value – in the sense that they make our credit system possible.

eah , says: December 30, 2019 at 12:53 am GMT
@silviosilver thin air, then loaned out at interest and/or against real assets as collateral, and/or perhaps traded by 'vultures' -- or the part of the "credit system" that burdens millions of young adults with debt in the form of student loans, which ultimately is also money created out of nothing and loaned to them.

Within a few years, interest on the national debt will be the second largest federal expenditure, i.e. even greater than defense spending -- always left unexplained is why the US, a sovereign entity with the authority to issue currency, has to borrow money to run a deficit.

Yes, what a great "credit system".

Hibernian , says: December 30, 2019 at 3:28 am GMT
@eah

Fractional reserve banking (unstable and exploitative) and assignment of debt to assignees/purchasers (provided the borrower has agreed to a covenant allowing this) are two separate issues. It is possible to have either one without the other. The idea that you're released from your debt if your lender dies or moves to a far off city or gets worn out trying to collect or whatever is a notion worthy of a junior high school juvenile delinquent. Also if national sovereignty means the right to welsh on debts, then no one in his right mind will lend to a sovereign nation and then they cannot get credit.

eah , says: December 30, 2019 at 9:53 am GMT
@Hibernian

(of course this will have consequences too; living beyond one's means indefinitely always does eventually).

Student loan debt is massively detrimental to affordable family formation -- I also see it as immoral to burden young people in this way.

Multi-generational national indebtedness is profoundly immoral -- it's a disgrace that there is little to no recognition of this, or outrage about what is going on.

silviosilver , says: December 30, 2019 at 12:41 pm GMT
@eah edit system" that burdens millions of young adults with debt in the form of student loans, which ultimately is also money created out of nothing and loaned to them.

That's much more a consequence of the prevailing American attitude towards higher education – that individuals should pay for it rather than the state – than it is the monetary system.

If fractional reserve banking is nothing more than "creating money out of nothing," then don't you ever ask yourself how it is that a bank could find itself in financial trouble? Why doesn't it just create some more money out of thin air and put itself back in the black?

Hibernian , says: December 30, 2019 at 12:58 pm GMT

@eah ts, although for individuals some are protected, or a repayment plan (for individuals) or a reorganization plan (for corporations.) It requires the payment of often large legal fees. It's not equivalent to walking away (although sometimes it looks like close to the same thing) or having the debt forgiven based on political pressure, and it doesn't have anything to do with whether any of the creditors are assignees who bought the paper, or not.

Printing press finance just means that government, instead of private interests, defrauds the people. Edison was a great inventor but hardly a sophisticated economic and /or political thinker.

Hibernian , says: December 30, 2019 at 1:09 pm GMT
@eah out better than others. If paying $0.10 on the dollar automatically made you rich, the world would have a lot more billionaires than it does now. The rate would quickly be bid up to $0.95 on the dollar in no time flat. Also, legal fees and other collection costs (towing away or storing ships, etc.) need to be taken into account.

I suspect that Mr. Singer may use his political influence to get the US, and likely some other governments, to aid in the collections. That is an issue in itself. That is where the ethical issue lies. As another poster mentioned, the way he uses his money (his idea of the good of society) is also an issue.

Hibernian , says: December 30, 2019 at 1:21 pm GMT
@silviosilver

The answer to your last sentence is that the government places limits through reserve requirements. If this were not so a run on the bank could end the charade. Sometimes these runs still happen and the FDIC steps in. Unlike the government, the bank has to redeem its paper (checks and passbooks) on demand. The government has not done this for private parties since 1933, or for foreign governments since 1971. It can and does tell you to just continue circulating the paper, which creditors are required to accept, no matter how watered down it is.

eah , says: December 30, 2019 at 2:08 pm GMT
@Hibernian it has full authority to do, instead of selling debt , taxpayers, including future generations of taxpayers, are nor burdened with interest payments, nor with repayment of principal .

Edison was a great inventor but hardly a sophisticated economic and /or political thinker.

Sure bud, whatever you say -- the essential question here is, was he correct in his statement re debt issuance and who benefits from it, also its disadvantages, vs dollar issuance? -- the answer is yes, he clearly was: it makes no sense for a government to sell debt when it can just spend money .

eah , says: December 30, 2019 at 2:21 pm GMT
@silviosilver uch more a consequence of the prevailing American attitude towards higher education – that individuals should pay for it rather than the state – than it is the monetary system.

Sure, right -- BOOM!, suddenly the "the prevailing American attitude towards higher education", also young people, just changed, and within a generation or so, it was decided to exploit the hell out of them and burden them with huge amounts of debt .

"LOL" -- you are naive.

Regardless of the etiology, student debt is immoral and something must be done about it.

Hibernian , says: December 30, 2019 at 5:39 pm GMT

Bankruptcy law, like other laws, limits the discretion of judges. Sure, in practice, this is aspirational. As is the notion that some judges deviations from the law are motivated by fairness.

"LOL" -- yeah, "what's the difference?" -- at least in the case of a government spending money into existence, which it has full authority to do, instead of selling debt, taxpayers, including future generations of taxpayers, are nor burdened with interest payments, nor with repayment of principal.

A super iconoclast vis a vis businessmen, especially if they're Jewish, but a true believer that Government is the same thing as The People, or at least represents them perfectly or almost perfectly.

it makes no sense for a government to sell debt when it can just spend money.

And it makes no sense to work, save, be frugal, borrow only as necessary, and pay back what you borrow, when you can write bad checks oh wait Government is Divinely Anointed! It is of the People, by the People, and for the People!

Which one of us is being obtuse? I'll leave it as an exercise for the student.

Ginger Bread Man , says: December 30, 2019 at 7:56 pm GMT

So, can anyone tell my why Jewish people would want to fund homosexual causes? What benefit does it give them? I'm just beginning to understand the mass migration thing, but still neither of these seem explicitly Jewish. Doesn't the Torah ban homosexuality? Just wondering

Barb Weir , says: December 31, 2019 at 1:52 am GMT

@HammerJack flak," said Standiford.

Carnegie was born in 1836 in Dunfermline, Fife. His father was a handloom weaver and an active Chartist who marched for the rights of the working man. So when Andrew went to sleep every night knowing he had starved, beaten and killed his factory workers, he spent his $$$$ trying to assuage his conscience.
Andrew is not a hero, hero's don't kill their employees by starvation and shooting!

Despicable man, trying to pave his way to Heaven.

Similar to Mr. Bloomberg who states that his path to heaven is assured by his good works.

Gag me with a Gomulka please.

Barb Weir , says: December 31, 2019 at 1:58 am GMT
@Anon " said Standiford.

Carnegie was born in 1836 in Dunfermline, Fife. His father was a handloom weaver and an active Chartist who marched for the rights of the working man. So when Andrew went to sleep every night knowing he had starved, beaten and killed his factory workers, he spent his $$$$ trying to assuage his conscience.
Andrew is not a hero, hero's don't kill their employees by starvation and shooting!

Despicable man, trying to pave his way to Heaven.

Similar to Mr. Bloomberg who states that his path to heaven is assured by his good works.

Gag me with a Gomulka please.

Ginger bread man , says: December 31, 2019 at 2:57 am GMT
@geokat62

Interesting, where does it mention homosexuality?

geokat62 , says: December 31, 2019 at 4:44 am GMT
@Ginger bread man

This was the Frankfurt School's great insight. The best way to undermine a sense of nationalism is to divide the people through the promotion of identity politics, including LGBTQ.

https://www.zerohedge.com/news/2016-08-12/birth-cultural-marxism-how-frankfurt-school-changed-america

eah , says: December 31, 2019 at 6:43 pm GMT

Some of what Paul Singer does with his money: create front organizations to recruit Christians in the effort to make the Middle East safe for Israel, and the world safe for Jews:

tweet

This guy is competing for world's top butt goy. Unfortunately there is a lot of competition. The author, Robert Nicholson, is President of Philos Project, a pro-Zionist "Christian" organization that is funded by Paul Singer.

The above tweet refers to this piece in the NY Post by Robert Nicholson, director of the 'Philos Project':

American Christians should lead the fight against anti-Semitism

An interesting blog post from a few years ago (2015) re the sudden appearance of the 'Philos Project' -- even today it is difficult to find info (eg financial) on this organization:

The Jewish Billionaire Behind A New Christian Anti-Iran Group

[Jan 01, 2020] FDA Failed to Police Opioids Makers, Thus Fueling Opioids Crisis

Jan 01, 2020 | www.nakedcapitalism.com

FDA Failed to Police Opioids Makers, Thus Fueling Opioids Crisis Posted on January 1, 2020 by Jerri-Lynn Scofield By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

I had hoped to welcome 2020 with a optimistic post.

Alas, the current news cycle has thrown up little cause for optimism.

Instead, what has caught my eye today: 2019 closes with release of a new study showing the FDA's failure to police opioids manufacturers fueled the opioids crisis.

This is yet another example of a familiar theme: inadequate regulation kills people: e.g. think Boeing. Or, on a longer term, less immediate scale, consider the failure of the Environmental Protection Agency, in so many realms, including the failure to curb emissions so as to slow the pace of climate change.

In the opioids case, we're talking about thousands and thousands of people.

On Monday, Jama Internal Medicine published research concerning the US Food and Drug Administration's (FDA) program to reduce opioids abuse. The FDA launched its risk evaluation and mitigation strategy – REMS – in 2012. Researchers examined nearly 10,000 documents, released in response to a Freedom of Information ACT (FOA) request, to generate the conclusions published by JAMA.

As the Gray Lady tells the story in As Tens of Thousands Died, F.D.A. Failed to Police Opioids :

In 2011, the F.D.A. began asking the makers of OxyContin and other addictive long-acting opioids to pay for safety training for more than half the physicians prescribing the drugs, and to track the effectiveness of the training and other measures in reducing addiction, overdoses and deaths.

But the F.D.A. was never able to determine whether the program worked, researchers at the Johns Hopkins Bloomberg School of Public Health found in a new review, because the manufacturers did not gather the right kind of data. Although the agency's approval of OxyContin in 1995 has long come under fire, its efforts to ensure the safe use of opioids since then have not been scrutinized nearly as much.

The documents show that even when deficiencies in these efforts became obvious through the F.D.A.'s own review process, the agency never insisted on improvements to the program, [called a REMS]. . .

The FDA's regulatory failure had serious public health consequences, according to critics of US opioids policy, as reported by the NYT:

Dr. Andrew Kolodny, the co-director of opioid policy research at the Heller School for Social Policy and Management at Brandeis, said the safety program was a missed opportunity. He is a leader of a group of physicians who had encouraged the F.D.A. to adopt stronger controls, and a frequent critic of the government's response to the epidemic.

Dr. Kolodny, who was not involved in the study, called the program "a really good example of the way F.D.A. has failed to regulate opioid manufacturers. If F.D.A. had really been doing its job properly, I don't believe we'd have an opioid crisis today."

Now, as readers frequently emphasize in comments: pain management is a considerable problem – one I am all too well aware of, as I watched my father succumb to cancer. He ultimately passed away at my parents' home.

That being said, as CNN tells the story in The FDA can't prove its opioid strategy actually worked, study says :

Although these drugs "can be clinically useful among appropriately selected patients, they have also been widely oversupplied, are commonly used nonmedically, and account for a disproportionate number of fatal overdoses," the authors write.

The FDA was unable, more than 5 years after it had instituted its study of the opioids program's effectiveness, to determine whether it had met its objectives, and this may have been because prior assessments were not objective, according to CNN:

Prior analyses had largely been funded by drug companies, and a 2016 FDA advisory committee "noted methodological concerns regarding these studies," according to the authors. An inspector general report also concluded in 2013 that the agency "lacks comprehensive data to determine whether risk evaluation and mitigation strategies improve drug safety."

In addition to failing to evaluate the effective of the limited steps it had taken, the FDA neglected to take more aggressive steps that were within the ambit of its regulatory authority. According to CNN:

"FDA has tools that could mitigate opioid risks more effectively if the agency would be more assertive in using its power to control opioid prescribing, manufacturing, and distribution," said retired FDA senior executive William K. Hubbard in an editorial that accompanied the study. "Instead of bold, effective action, the FDA has implemented the Risk Evaluation and Mitigation Strategy programs that do not even meet the limited criteria set out by the FDA."

One measure the FDA could have taken, according to Hubbard: putting restrictions on opioid distribution.

"Restricting opioid distribution would be a major decision for the FDA, but it is also likely to be the most effective policy for reducing the harm of opioids," said Hubbard, who spent more than three decades at the agency and oversaw initiatives in areas such as regulation, policy and economic evaluation.

The Trump administration has made cleaning up the opioids crisis – which it inherited – a policy priority. To little seeming effect so far. although to be fair, this is not a simple problem to solve. And litigation to apportion various costs of the damages various prescription drugmakers, distributors, and doctors caused it far from over – despite some settlements, and judgements (see Federal Prosecutors Initiate Criminal Probe of Six Opioid Manufacturers and Distributors ; Four Companies Settle Just Before Bellwether Opioids Trial Was to Begin Today in Ohio ; Purdue Files for Bankruptcy, Agrees to Settle Some Pending Opioids Litigation: Sacklers on Hook for Billions? and Judge Issues $572 Million Verdict Against J & J in Oklahoma Opioids Trial: Settlements to Follow? )

Perhaps the Johns Hopkins study will spark moves to reform the broken FDA, so that it can once again serve as an effective regulator. This could perhaps be something we can look forward to achieving in 2020 (although I won't hold my breath).

Or, perhaps if enacting comprehensive reform is too overwhelming, especially with a divided government, as a starting point: can we agree to stop allowing self-interested industries to finance studies meant to assess the effectiveness of programs to regulate that very same industry? Please?

This is a concern in so many areas, with such self-interested considerations shaping not only regulation, but distorting academic research (see Virginia Supreme Court Upholds Ruling that George Mason University Foundation Is Not Subject to State FOIA Statute, Leaving Koch Funding Details Undisclosed ).

What madness!

[Jan 01, 2020] Bernie Could Win the Nomination

Notable quotes:
"... For corporate Democrats and their profuse media allies, the approach of disparaging and minimizing Bernie Sanders in 2019 didn't work. In 2020, the next step will be to trash him with a vast array of full-bore attacks. ..."
"... When the Bernie campaign wasn't being ignored by corporate media during 2019, innuendos and mud often flew in his direction. But we ain't seen nothing yet. ..."
Dec 29, 2019 | www.truthdig.com

A central premise of conventional media wisdom has collapsed. On Thursday, both the New York Times and Politico published major articles reporting that Bernie Sanders really could win the Democratic presidential nomination. Such acknowledgments will add to the momentum of the Bernie 2020 campaign as the new year begins -- but they foreshadow a massive escalation of anti-Sanders misinformation and invective.

Throughout 2019, corporate media routinely asserted that the Sanders campaign had little chance of winning the nomination. As is so often the case, journalists were echoing each other more than paying attention to grassroots realities. But now, polling numbers and other indicators on the ground are finally sparking very different headlines from the media establishment.

From the Times : " Why Bernie Sanders Is Tough to Beat ." From Politico : " Democratic Insiders: Bernie Could Win the Nomination ."

Those stories, and others likely to follow in copycat news outlets, will heighten the energies of Sanders supporters and draw in many wavering voters. But the shift in media narratives about the Bernie campaign's chances will surely boost the decibels of alarm bells in elite circles where dousing the fires of progressive populism is a top priority.

For corporate Democrats and their profuse media allies, the approach of disparaging and minimizing Bernie Sanders in 2019 didn't work. In 2020, the next step will be to trash him with a vast array of full-bore attacks.

Along the way, the corporate media will occasionally give voice to some Sanders defenders and supporters. A few establishment Democrats will decide to make nice with him early in the year. But the overwhelming bulk of Sanders media coverage -- synced up with the likes of such prominent corporate flunkies as Rahm Emanuel and Neera Tanden as well as Wall Street Democrats accustomed to ruling the roost in the party -- will range from condescending to savage.

When the Bernie campaign wasn't being ignored by corporate media during 2019, innuendos and mud often flew in his direction. But we ain't seen nothing yet.

With so much at stake -- including the presidency and the top leadership of the Democratic Party -- no holds will be barred. For the forces of corporate greed and the military-industrial complex, it'll be all-out propaganda war on the Bernie campaign.

While reasons for pessimism are abundant, so are ample reasons to understand that a Sanders presidency is a real possibility . The last places we should look for political realism are corporate media outlets that distort options and encourage passivity.

Bernie is fond of quoting a statement from Nelson Mandela: "It always seems impossible until it is done."

From the grassroots, as 2020 gets underway, the solution should be clear: All left hands on deck.


Jan Goslinga 38 minutes ago ,

Elections aren't real. Democrats will nominate Joe Biden to lose the election. Trump will remain as fascist strongman and the dems will continue to blame his neoconservative policies on his white trash constituency.

Bernie serves a few important functions.
1. he keeps the radicals from leaving the plantation and going 3rd party.
2. his promotion of progressive policies will make Biden less popular and help him lose to Trump
3. Bernie and his "socialism" can then be blamed for losing the election to Trump

Maxwell Jan Goslinga 15 minutes ago ,

Unfortunately this comment will be buried in this monstrosity of a thread- now at over 300 comments with only about a third of them having a much relevance.

You might consider re-posting in reply to one of the foremost comments. Your simple realism will certainly not be well received during the campaign hallucinations.

I've often wondered how it is people could believe the elections could have any positive and lasting impact on their lives if they have been through a couple of cycles. Do they not also wonder how it is that these election (marketing) campaigns now stretch out for well over a year nowadays demanding everyone's political attention, energy and resources. To say it is a colossal waste does not quite capture the enormity of the mind job being to people.

Mensch59 Maxwell 8 minutes ago • edited ,

Your simple realism will certainly not be well received during the campaign hallucinations.

Yeah, yeah, sure, sure. You "realists" who are true believers that you have the Truth and have a calling to preach the Truth absolutely must stand against the unwashed masses who claim that your "reality" isn't even intersubjectively verifiable, much less dialectical & material [eta & historical ].

I quite enjoyed what SteelPirate/LaborSolidarity had to say about you attempting to gain a vanguard following by trolling lib-prog sites.

Mensch59 Jan Goslinga 21 minutes ago ,

Elections aren't real.

Never pay attention to anyone who claims what's "real" and what isn't. Politics certainly doesn't exist in the realm of an objective, concrete, physical, naturalistic, materialistic reality which is shared by a consensus of rational observers. At best, politics deals with intersubjectively verifiable social phenomena. Thus, politics is mostly idealistic in the belief that each mind generates its own reality.

This realization is the topic of intersubjective verifiability, as recounted, for example, by Max Born (1949, 1965) Natural Philosophy of Cause and Chance , who points out that all knowledge, including natural or social science, is also subjective. p. 162: "Thus it dawned upon me that fundamentally everything is subjective, everything without exception. That was a shock."
newestbeginning 2 hours ago ,

Meanwhile the wealth of the world's top 500 grew 25% in 2019...

https://www.livemint.com/ne...

V4V 2 hours ago • edited ,

Noam Chomsky on Bernie Sanders's Chances of Success- "...the chances he can be elected are pretty small." (Waiting with bated breath for copious downvotes by those who hate the truth and hate reality).

https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.youtube.com%2Fembed%2FEpXJvWSa4FQ%3Ffeature%3Doembed&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DEpXJvWSa4FQ&image=https%3A%2F%2Fi.ytimg.com%2Fvi%2FEpXJvWSa4FQ%2Fhqdefault.jpg&key=21d07d84db7f4d66a55297735025d6d1&type=text%2Fhtml&schema=youtube

PGGreen V4V 2 hours ago • edited ,

Most of who support Sanders know that his presidency will involve an uphill battle. Chomsky is being realistic.

But there really is no better option for meaningful change working within the political system than supporting Sanders. it is also important to note that "Our Revolution" has energized many young activists, encouraging them to continue the fight. This goes beyond politics to social and economic issues. If Sanders leaves us with a movement, this may turn out to be more important than the presidency in the long run.

Keep working for effective moral and economic justice and democracy!

V4V PGGreen an hour ago ,

Well, I have said this several times, it's not the microscopic left that you need to convince, it's the majority of self-identifying Democrats not supporting Sanders that you need to convince. I am repelled by the Democratic Party, but there are millions who identify as Democrats and many are proud of it. You need to convince them, not us.

PGGreen V4V 21 minutes ago • edited ,

Yes, although I don't think that those who support a Leftist agenda--whether you actually call them Leftists or not--are quite so microscopic a group as you imply. But you don't need to convince me or most others here (probably) that Sanders isn't perfect, or that it will be difficult for him to be elected president. We already know; we simply consider him the best option within this context of voting.

Have you ever thought of turning your approach to systemic commentary (which is valid and interesting, BTW, I'm not discounting it) around and saying what candidates you support-- in this context being discussed of voting-- instead of which ones you don't? And then explaining why such support would be effective?

I would say that what is wrong with the world is more a fault of the economic and political system than of Sanders alone--who not only plays small part in causing what is wrong, but a significant part in trying to correct it. Yes, he works within the system. That is a given. It may be, as Chris Hedges thinks, that there is no hope working within the system. But Noam Chomsky's approach also bears serious consideration that even Hedges doesn't discount. Voting will only be a small part of what brings about change, but it may make some slight difference--if you can stomach it. And it only takes a small amount of time.

"In a system of immense power, small differences can translate into large outcomes."

I don't see much of an argument that Sanders will be no better as president than Trump (and if you think so, I'd like to hear you argue it). I suspect you find the compromise unpalatable. I can understand that. I, too, draw the line at a certain point. I couldn't vote for HRC.

Yes, Sanders isn't perfect. Chomsky also said another important thing: "We're all compromised." Everyone who is a citizen of the US is compromised, and bears some measure of responsibility for the military interventions undertaken by our government. Perhaps we should renounce our citizenship, refuse to pay taxes, etc. But most of us don't -- not even those of us committed to activist work in other ways -- significant ways -- to make things better.

So what are those ways, for you?

V4V PGGreen 6 minutes ago ,

But you don't need to convince me or most others here (probably) that Sanders isn't perfect

-for me it isn' that he's not perfect, it's that I think he sucks

"In a system of immense power, small differences can translate into large outcomes."

-funny, that's a favorite line of Democrats

I get that, but it doesn't negate that Sanders's chances are next to nil.

Your suggestion of me signaling whom I support would fall on deaf ears around here. I have said this many times- I will probably for the Green Party candidate or the Socialist Equality Party candidate. If only a Democrat and Republican appear on the ballot then I would refuse to vote even if I had to pay a fine. I am not in the habit of telling anyone whom to vote for unless asked.

Before a 3rd can succeed, the fantasy that the fix can come through the Democrats needs to be destroyed. Not to worry, in due time it will be obvious.

Mensch59 PGGreen 16 minutes ago ,

My guess/bet is that V4V believes that the truth "We're all compromised" doesn't apply to him.
He sees himself as a truth-knower and a truth-teller.
He won't commit to logical argumentation.
He'll preach the truth to you.

Patrick_Walker V4V 2 hours ago • edited ,

I saw this video long ago--and agreed with it. But though Sanders' chances are small, they're still vastly larger than the NONEXISTENT chances of success of the purist, "Born to Lose" left. Why not just admit that you've totally given up and simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

V4V Patrick_Walker an hour ago • edited ,

simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

-straw man

That isn't what I do because I couldn't care less whom Democrats support and vote for. Typically, I post some unpleasant truth about Sanders, like his lackluster polling numbers or his support for neoliberal warmongers and sit back and watch the ad hominems and downvotes roll in. I am not normally on the attack, I am usually on the receiving end.

I admit that I see this forum as a form of entertainment. I admit I have zero expectation that someone to my liking will be elected president and that the system is going to change anytime soon. Do I believe it possible? Yes, I believe it is possible, I just don't believe it possible using the corrupt, Democratic Party as a vehicle and that's where we differ.

And that the crux of our issue- you believe the Democratic Party can be used a vehicle to convert the CIA/Wall Street/War Inc. Democrats into the peoples' party, and I do not. If the needed changes are ever to arrive, it will be in spite of the Democrats not because of them. I hope you stick around because in due time I'll be telling you, "Told ya so."

acme V4V an hour ago ,

The problem with your position is that, unlike Sanders, you don't seem to understand that a third candidate party candidate hasn't a snowball's chance in hell of being president unless if s/he somehow gets more electoral votes that both the major parties combined. If not, it goes to the house, and in the current partisan atmosphere, would be decided for the candidate of the House majority.
The major parties have a death-grip on the presidency while the electoral college exists.

V4V acme an hour ago • edited ,

You don't seem to understand that Sanders has a snowball's chance in hell of being the Democratic Party candidate for many reasons including the DNC arguing in court it is a private corporation and can legally rig primary and the trusty superdelegates for Biden.

What I propose is a movement outside the Democratic Party in inside it. I believe any attempt to reform the Democratic Party is doomed to fail. All this whistling in the dark over Sanders is a distraction and a kicking the can down the road to the time you Democrats finally realize it isn't going to work. You obviously didn't learn it in 2016, and I would be surprised if you learn it once Sanders tanks and begins campaigning for Biden just like he did Clinton. I will promise this, I'll say, "I told ya so" in a matter of months. That's okay, play it again, Sam.

Zsuzsi Kruska 4 hours ago • edited ,

People believe they need others to tell them what to do and give them the illusion somebody cares about them and has their best interests at heart. That's an archetype in the brain that goes back to our baby/childhood when we were dependent on our caregivers for sustenance, comfort and life itself.That's where the original concept of needing "leaders" comes from. But, what happens is psyco/sociopaths see this weakness in humanity and force their way to the top, to herd and exploit the gullible sheeple for their own agendas and selfish interests. No matter who rises to the top, she/he got their through the same system that's been going on since tribes had their chief; chief's lieutenant and witch doctor/shaman. Those three keep the tribe in line with their own desires. Chief through brute force, his lieutenant through information and witch doctor through religion and "spiritual" services; and all three require tribute and fees from the rest of the tribe. So, you will see, regardless of who the next POTUS will be, that same structure, although more complex today, will repeat itself. New boss/old boss, same ol' same ol'. All power has to be returned to the people at the local level before Wash. starts WWIII. But, if that happens, at least we won't have to worry about global warming with a nuclear winter after the bombs drop.


trilobytegames 3 days ago ,

As usual, I find your analysis and commentary honest and accurate. However, I do take exception to your pulling out these canards:
"Trump's contempt of Congress and attempt to get Volodymyr Zelensky, the Ukrainian president, to open an investigation of Joe Biden and his son, Hunter, in exchange for almost $400 million in U.S. military aid and allowing Zelensky to visit the White House are impeachable offenses"

Trump has certain executive privileges and him being guilty of contempt of Congress should be up to the Supreme Court to decide. Jonathan Turley in his testimony made that quite clear. Military aid was never mentioned in the phone call. Zelensky was unaware aid would be withheld. So if Trump were using the money as a means to induce Zelensky to do those favors, it was a totally botched one. To quote Dr. Strangelove, "The whole point of the doomsday machine is lost...if you keep it a secret!"

Nir Haramati 3 days ago • edited ,

New avenues for accountability and oversight became possible in Washington, D.C., in 2019, following the election of a new Democratic Party majority in the House (and the most diverse Congress ever) in the 2018 midterms. As a result, Democrats took hold of the subpoena power that rests in the House of Representatives, along with the power to set the agenda across congressional committees. As a result, 2019 has been full of important moments for congressional oversight of both the Trump administration and private business. Here are five of the most important moments in congressional oversight in 2019.

1. Betsy DeVos, Are You "Too Corrupt" or "Too Incompetent"? ...
2. Big Bank CEOs Are Stumped by Simple Budgets ...
3. Wells Fargo Announces Plan to Divest From Private Prisons in Congressional Testimony ...
4. Rep. Ilhan Omar vs. Elliott Abrams ...
5. Voting to Impeach the President ...

Congressional Oversight Claimed Important Victories in 2019. Here Are the Top 5

The only people who lie and obfuscate facts as much as Trump and his GOP cult are neo progressive demagogues and propaganda buffs like Chris 'regime-change-in-America' Hedges.

Kaptain Amerika 3 days ago • edited ,

Absolutely bush should have been impeached, convicted, removed and executed for war crimes and mass murder.

But because he wasn't doesn't mean that our orange Fuhrer shouldn't be.
He is the most dangerous authoritarian propagandist and threat to this country since Hitler.

Dr Hacksaw Kaptain Amerika 3 days ago • edited ,

"[Trump] is the most dangerous authoritarian propagandist and threat to this country since Hitler."

Correction, Kaptain: Since Obama.

rosemariejackowski Dr Hacksaw 3 days ago ,

THE MOST DANGEROUS IN HISTORY....
https://countercurrents.org...

Kaptain Amerika Dr Hacksaw 3 days ago ,

NObama was a horrible POTUS for the 99% and is THE reason why we have trump, but he didn't poison every aspect of the government and everything else like your orange Fuhrer is doing, which is the exact same tactic that Hitler used to create Nazi Germany.

Ron Ruggieri Dr Hacksaw 3 days ago ,

The generic Left is ignoring this aspect of the Trump impeachment circus . The whole farce IS political. Now Senator Lisa Murkowski wants her Republican Party to rise above politics ( and do the wrong thing ? ). In the past three years when did the Democrat Party ever rise above politics ? Politics USA is always CLASS politics, always IMPERIALIST , MILITARIST politics . All the " liberal " Democrats have been slobbering over the UN-ELECTED shadow government of the United States , the National Security Police State , slobbering over FBI, CIA bureaucrats , uniformed officials of the Pentagon War Crimes Machine . Join them ?

This Senator Lisa Murkowski -no surprise - is in good standing with the Israel Lobby collectively determined to nullify the 2016 presidential election . NEWS clip :

[ "There are about 6 million Jewish people living in America, so as a percentage it's quite small, but in terms of influence its quite big," Farage said. Farage seemed to question why Israel was not facing election-meddling accusations, saying Israeli groups "have a voice within American politics" but "I don't think anybody is suggesting that the Israeli government tried to affect the result of the American elections."]

Did not the Kafkaesque Trump impeachment hearings look and sound like Old Yiddish Theater soap opera ? How many working class Christian Americans have heartfelt moral and cultural ties to the Ukraine of all places, now celebrating its first Jewish friend of Zionist Apartheid Israel president ? Who in the USA authorized this character to wage a proxy war against post-communist Russia ? WE THE PEOPLE ?
Guess WHO is promoting the HATE RUSSIA, New McCarthyism ?

VallejoD 3 days ago ,

$748 billion in 2020 for the military death machine equals $23 MILLION A SECOND.

How many schools or hospitals could have been built, how many roads or bridges repaired, how many students educated with the money the MIC has squandered in the few seconds it has taken me to write this?

We are destroying our people from the inside out. This is treason.

[Jan 01, 2020] A central premise of conventional media wisdom has collapsed. On Thursday, both the New York Times and Politico published major articles reporting that Bernie Sanders really could win the Democratic presidential nomination

Notable quotes:
"... New York Times ..."
Dec 29, 2019 | www.truthdig.com

A central premise of conventional media wisdom has collapsed. On Thursday, both the New York Times and Politico published major articles reporting that Bernie Sanders really could win the Democratic presidential nomination. Such acknowledgments will add to the momentum of the Bernie 2020 campaign as the new year begins -- but they foreshadow a massive escalation of anti-Sanders misinformation and invective.

Throughout 2019, corporate media routinely asserted that the Sanders campaign had little chance of winning the nomination. As is so often the case, journalists were echoing each other more than paying attention to grassroots realities. But now, polling numbers and other indicators on the ground are finally sparking very different headlines from the media establishment.

From the Times : " Why Bernie Sanders Is Tough to Beat ." From Politico : " Democratic Insiders: Bernie Could Win the Nomination ."

Those stories, and others likely to follow in copycat news outlets, will heighten the energies of Sanders supporters and draw in many wavering voters. But the shift in media narratives about the Bernie campaign's chances will surely boost the decibels of alarm bells in elite circles where dousing the fires of progressive populism is a top priority.

For corporate Democrats and their profuse media allies, the approach of disparaging and minimizing Bernie Sanders in 2019 didn't work. In 2020, the next step will be to trash him with a vast array of full-bore attacks.

Along the way, the corporate media will occasionally give voice to some Sanders defenders and supporters. A few establishment Democrats will decide to make nice with him early in the year. But the overwhelming bulk of Sanders media coverage -- synced up with the likes of such prominent corporate flunkies as Rahm Emanuel and Neera Tanden as well as Wall Street Democrats accustomed to ruling the roost in the party -- will range from condescending to savage.

When the Bernie campaign wasn't being ignored by corporate media during 2019, innuendos and mud often flew in his direction. But we ain't seen nothing yet.

With so much at stake -- including the presidency and the top leadership of the Democratic Party -- no holds will be barred. For the forces of corporate greed and the military-industrial complex, it'll be all-out propaganda war on the Bernie campaign.

While reasons for pessimism are abundant, so are ample reasons to understand that a Sanders presidency is a real possibility . The last places we should look for political realism are corporate media outlets that distort options and encourage passivity.

Bernie is fond of quoting a statement from Nelson Mandela: "It always seems impossible until it is done."

From the grassroots, as 2020 gets underway, the solution should be clear: All left hands on deck.


Jan Goslinga 38 minutes ago ,

Elections aren't real. Democrats will nominate Joe Biden to lose the election. Trump will remain as fascist strongman and the dems will continue to blame his neoconservative policies on his white trash constituency.

Bernie serves a few important functions.
1. he keeps the radicals from leaving the plantation and going 3rd party.
2. his promotion of progressive policies will make Biden less popular and help him lose to Trump
3. Bernie and his "socialism" can then be blamed for losing the election to Trump

Maxwell Jan Goslinga 15 minutes ago ,

Unfortunately this comment will be buried in this monstrosity of a thread- now at over 300 comments with only about a third of them having a much relevance.

You might consider re-posting in reply to one of the foremost comments. Your simple realism will certainly not be well received during the campaign hallucinations.

I've often wondered how it is people could believe the elections could have any positive and lasting impact on their lives if they have been through a couple of cycles. Do they not also wonder how it is that these election (marketing) campaigns now stretch out for well over a year nowadays demanding everyone's political attention, energy and resources. To say it is a colossal waste does not quite capture the enormity of the mind job being to people.

Mensch59 Maxwell 8 minutes ago • edited ,

Your simple realism will certainly not be well received during the campaign hallucinations.

Yeah, yeah, sure, sure. You "realists" who are true believers that you have the Truth and have a calling to preach the Truth absolutely must stand against the unwashed masses who claim that your "reality" isn't even intersubjectively verifiable, much less dialectical & material [eta & historical ].

I quite enjoyed what SteelPirate/LaborSolidarity had to say about you attempting to gain a vanguard following by trolling lib-prog sites.

Mensch59 Jan Goslinga 21 minutes ago ,

Elections aren't real.

Never pay attention to anyone who claims what's "real" and what isn't. Politics certainly doesn't exist in the realm of an objective, concrete, physical, naturalistic, materialistic reality which is shared by a consensus of rational observers. At best, politics deals with intersubjectively verifiable social phenomena. Thus, politics is mostly idealistic in the belief that each mind generates its own reality.

This realization is the topic of intersubjective verifiability, as recounted, for example, by Max Born (1949, 1965) Natural Philosophy of Cause and Chance , who points out that all knowledge, including natural or social science, is also subjective. p. 162: "Thus it dawned upon me that fundamentally everything is subjective, everything without exception. That was a shock."
newestbeginning 2 hours ago ,

Meanwhile the wealth of the world's top 500 grew 25% in 2019...

https://www.livemint.com/ne...

V4V 2 hours ago • edited ,

Noam Chomsky on Bernie Sanders's Chances of Success- "...the chances he can be elected are pretty small." (Waiting with bated breath for copious downvotes by those who hate the truth and hate reality).

https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.youtube.com%2Fembed%2FEpXJvWSa4FQ%3Ffeature%3Doembed&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DEpXJvWSa4FQ&image=https%3A%2F%2Fi.ytimg.com%2Fvi%2FEpXJvWSa4FQ%2Fhqdefault.jpg&key=21d07d84db7f4d66a55297735025d6d1&type=text%2Fhtml&schema=youtube

PGGreen V4V 2 hours ago • edited ,

Most of who support Sanders know that his presidency will involve an uphill battle. Chomsky is being realistic.

But there really is no better option for meaningful change working within the political system than supporting Sanders. it is also important to note that "Our Revolution" has energized many young activists, encouraging them to continue the fight. This goes beyond politics to social and economic issues. If Sanders leaves us with a movement, this may turn out to be more important than the presidency in the long run.

Keep working for effective moral and economic justice and democracy!

V4V PGGreen an hour ago ,

Well, I have said this several times, it's not the microscopic left that you need to convince, it's the majority of self-identifying Democrats not supporting Sanders that you need to convince. I am repelled by the Democratic Party, but there are millions who identify as Democrats and many are proud of it. You need to convince them, not us.

PGGreen V4V 21 minutes ago • edited ,

Yes, although I don't think that those who support a Leftist agenda--whether you actually call them Leftists or not--are quite so microscopic a group as you imply. But you don't need to convince me or most others here (probably) that Sanders isn't perfect, or that it will be difficult for him to be elected president. We already know; we simply consider him the best option within this context of voting.

Have you ever thought of turning your approach to systemic commentary (which is valid and interesting, BTW, I'm not discounting it) around and saying what candidates you support-- in this context being discussed of voting-- instead of which ones you don't? And then explaining why such support would be effective?

I would say that what is wrong with the world is more a fault of the economic and political system than of Sanders alone--who not only plays small part in causing what is wrong, but a significant part in trying to correct it. Yes, he works within the system. That is a given. It may be, as Chris Hedges thinks, that there is no hope working within the system. But Noam Chomsky's approach also bears serious consideration that even Hedges doesn't discount. Voting will only be a small part of what brings about change, but it may make some slight difference--if you can stomach it. And it only takes a small amount of time.

"In a system of immense power, small differences can translate into large outcomes."

I don't see much of an argument that Sanders will be no better as president than Trump (and if you think so, I'd like to hear you argue it). I suspect you find the compromise unpalatable. I can understand that. I, too, draw the line at a certain point. I couldn't vote for HRC.

Yes, Sanders isn't perfect. Chomsky also said another important thing: "We're all compromised." Everyone who is a citizen of the US is compromised, and bears some measure of responsibility for the military interventions undertaken by our government. Perhaps we should renounce our citizenship, refuse to pay taxes, etc. But most of us don't -- not even those of us committed to activist work in other ways -- significant ways -- to make things better.

So what are those ways, for you?

V4V PGGreen 6 minutes ago ,

But you don't need to convince me or most others here (probably) that Sanders isn't perfect

-for me it isn' that he's not perfect, it's that I think he sucks

"In a system of immense power, small differences can translate into large outcomes."

-funny, that's a favorite line of Democrats

I get that, but it doesn't negate that Sanders's chances are next to nil.

Your suggestion of me signaling whom I support would fall on deaf ears around here. I have said this many times- I will probably for the Green Party candidate or the Socialist Equality Party candidate. If only a Democrat and Republican appear on the ballot then I would refuse to vote even if I had to pay a fine. I am not in the habit of telling anyone whom to vote for unless asked.

Before a 3rd can succeed, the fantasy that the fix can come through the Democrats needs to be destroyed. Not to worry, in due time it will be obvious.

Mensch59 PGGreen 16 minutes ago ,

My guess/bet is that V4V believes that the truth "We're all compromised" doesn't apply to him.
He sees himself as a truth-knower and a truth-teller.
He won't commit to logical argumentation.
He'll preach the truth to you.

Patrick_Walker V4V 2 hours ago • edited ,

I saw this video long ago--and agreed with it. But though Sanders' chances are small, they're still vastly larger than the NONEXISTENT chances of success of the purist, "Born to Lose" left. Why not just admit that you've totally given up and simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

V4V Patrick_Walker an hour ago • edited ,

simply like to spent your time bitching and criticizing those of us with some (albeit small) hope?

-straw man

That isn't what I do because I couldn't care less whom Democrats support and vote for. Typically, I post some unpleasant truth about Sanders, like his lackluster polling numbers or his support for neoliberal warmongers and sit back and watch the ad hominems and downvotes roll in. I am not normally on the attack, I am usually on the receiving end.

I admit that I see this forum as a form of entertainment. I admit I have zero expectation that someone to my liking will be elected president and that the system is going to change anytime soon. Do I believe it possible? Yes, I believe it is possible, I just don't believe it possible using the corrupt, Democratic Party as a vehicle and that's where we differ.

And that the crux of our issue- you believe the Democratic Party can be used a vehicle to convert the CIA/Wall Street/War Inc. Democrats into the peoples' party, and I do not. If the needed changes are ever to arrive, it will be in spite of the Democrats not because of them. I hope you stick around because in due time I'll be telling you, "Told ya so."

acme V4V an hour ago ,

The problem with your position is that, unlike Sanders, you don't seem to understand that a third candidate party candidate hasn't a snowball's chance in hell of being president unless if s/he somehow gets more electoral votes that both the major parties combined. If not, it goes to the house, and in the current partisan atmosphere, would be decided for the candidate of the House majority.
The major parties have a death-grip on the presidency while the electoral college exists.

V4V acme an hour ago • edited ,

You don't seem to understand that Sanders has a snowball's chance in hell of being the Democratic Party candidate for many reasons including the DNC arguing in court it is a private corporation and can legally rig primary and the trusty superdelegates for Biden.

What I propose is a movement outside the Democratic Party in inside it. I believe any attempt to reform the Democratic Party is doomed to fail. All this whistling in the dark over Sanders is a distraction and a kicking the can down the road to the time you Democrats finally realize it isn't going to work. You obviously didn't learn it in 2016, and I would be surprised if you learn it once Sanders tanks and begins campaigning for Biden just like he did Clinton. I will promise this, I'll say, "I told ya so" in a matter of months. That's okay, play it again, Sam.

Zsuzsi Kruska 4 hours ago • edited ,

People believe they need others to tell them what to do and give them the illusion somebody cares about them and has their best interests at heart. That's an archetype in the brain that goes back to our baby/childhood when we were dependent on our caregivers for sustenance, comfort and life itself.That's where the original concept of needing "leaders" comes from. But, what happens is psyco/sociopaths see this weakness in humanity and force their way to the top, to herd and exploit the gullible sheeple for their own agendas and selfish interests. No matter who rises to the top, she/he got their through the same system that's been going on since tribes had their chief; chief's lieutenant and witch doctor/shaman. Those three keep the tribe in line with their own desires. Chief through brute force, his lieutenant through information and witch doctor through religion and "spiritual" services; and all three require tribute and fees from the rest of the tribe. So, you will see, regardless of who the next POTUS will be, that same structure, although more complex today, will repeat itself. New boss/old boss, same ol' same ol'. All power has to be returned to the people at the local level before Wash. starts WWIII. But, if that happens, at least we won't have to worry about global warming with a nuclear winter after the bombs drop.


trilobytegames 3 days ago ,

As usual, I find your analysis and commentary honest and accurate. However, I do take exception to your pulling out these canards:
"Trump's contempt of Congress and attempt to get Volodymyr Zelensky, the Ukrainian president, to open an investigation of Joe Biden and his son, Hunter, in exchange for almost $400 million in U.S. military aid and allowing Zelensky to visit the White House are impeachable offenses"

Trump has certain executive privileges and him being guilty of contempt of Congress should be up to the Supreme Court to decide. Jonathan Turley in his testimony made that quite clear. Military aid was never mentioned in the phone call. Zelensky was unaware aid would be withheld. So if Trump were using the money as a means to induce Zelensky to do those favors, it was a totally botched one. To quote Dr. Strangelove, "The whole point of the doomsday machine is lost...if you keep it a secret!"

Nir Haramati 3 days ago • edited ,

New avenues for accountability and oversight became possible in Washington, D.C., in 2019, following the election of a new Democratic Party majority in the House (and the most diverse Congress ever) in the 2018 midterms. As a result, Democrats took hold of the subpoena power that rests in the House of Representatives, along with the power to set the agenda across congressional committees. As a result, 2019 has been full of important moments for congressional oversight of both the Trump administration and private business. Here are five of the most important moments in congressional oversight in 2019.

1. Betsy DeVos, Are You "Too Corrupt" or "Too Incompetent"? ...
2. Big Bank CEOs Are Stumped by Simple Budgets ...
3. Wells Fargo Announces Plan to Divest From Private Prisons in Congressional Testimony ...
4. Rep. Ilhan Omar vs. Elliott Abrams ...
5. Voting to Impeach the President ...

Congressional Oversight Claimed Important Victories in 2019. Here Are the Top 5

The only people who lie and obfuscate facts as much as Trump and his GOP cult are neo progressive demagogues and propaganda buffs like Chris 'regime-change-in-America' Hedges.

Kaptain Amerika 3 days ago • edited ,

Absolutely bush should have been impeached, convicted, removed and executed for war crimes and mass murder.

But because he wasn't doesn't mean that our orange Fuhrer shouldn't be.
He is the most dangerous authoritarian propagandist and threat to this country since Hitler.

Dr Hacksaw Kaptain Amerika 3 days ago • edited ,

"[Trump] is the most dangerous authoritarian propagandist and threat to this country since Hitler."

Correction, Kaptain: Since Obama.

rosemariejackowski Dr Hacksaw 3 days ago ,

THE MOST DANGEROUS IN HISTORY....
https://countercurrents.org...

Kaptain Amerika Dr Hacksaw 3 days ago ,

NObama was a horrible POTUS for the 99% and is THE reason why we have trump, but he didn't poison every aspect of the government and everything else like your orange Fuhrer is doing, which is the exact same tactic that Hitler used to create Nazi Germany.

Ron Ruggieri Dr Hacksaw 3 days ago ,

The generic Left is ignoring this aspect of the Trump impeachment circus . The whole farce IS political. Now Senator Lisa Murkowski wants her Republican Party to rise above politics ( and do the wrong thing ? ). In the past three years when did the Democrat Party ever rise above politics ? Politics USA is always CLASS politics, always IMPERIALIST , MILITARIST politics . All the " liberal " Democrats have been slobbering over the UN-ELECTED shadow government of the United States , the National Security Police State , slobbering over FBI, CIA bureaucrats , uniformed officials of the Pentagon War Crimes Machine . Join them ?

This Senator Lisa Murkowski -no surprise - is in good standing with the Israel Lobby collectively determined to nullify the 2016 presidential election . NEWS clip :

[ "There are about 6 million Jewish people living in America, so as a percentage it's quite small, but in terms of influence its quite big," Farage said. Farage seemed to question why Israel was not facing election-meddling accusations, saying Israeli groups "have a voice within American politics" but "I don't think anybody is suggesting that the Israeli government tried to affect the result of the American elections."]

Did not the Kafkaesque Trump impeachment hearings look and sound like Old Yiddish Theater soap opera ? How many working class Christian Americans have heartfelt moral and cultural ties to the Ukraine of all places, now celebrating its first Jewish friend of Zionist Apartheid Israel president ? Who in the USA authorized this character to wage a proxy war against post-communist Russia ? WE THE PEOPLE ?
Guess WHO is promoting the HATE RUSSIA, New McCarthyism ?

VallejoD 3 days ago ,

$748 billion in 2020 for the military death machine equals $23 MILLION A SECOND.

How many schools or hospitals could have been built, how many roads or bridges repaired, how many students educated with the money the MIC has squandered in the few seconds it has taken me to write this?

We are destroying our people from the inside out. This is treason.

[Jan 01, 2020] 'Predatory capitalism' is disproportionately Jewish.

Jan 01, 2020 | www.unz.com

Amerimutt Golems says: December 19, 2019 at 1:04 pm GMT 200 Words @Lot

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.

Sears accuses Eddie Lampert of looting the company
https://nypost.com/2019/04/18/sears-accuses-eddie-lampert-of-looting-the-company/

[Jan 01, 2020] 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.

Jan 01, 2020 | www.unz.com

Robjil , says: December 19, 2019 at 6:56 pm GMT

@Robjil ssociates, 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.

[Jan 01, 2020] Karl Marx analysis of vulture behaviour of Jewish financiers remains pretty sound

Jan 01, 2020 | www.unz.com

secondElijah , says: Website December 19, 2019 at 1:10 pm GMT

@J Adelman 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.

J.W. , says: December 19, 2019 at 1:39 pm GMT
@J Adelman nder. Jewish business behavior has a retarding effect on societies. It's prominent, large, rapacious and extremely selfish.

As long as Jews made their money then fuck everybody else.

Yes, it's unfair when innocent Jews suffer. When the actions of other members of it's DNA choose schemes and dishonorable ways to make money it's going to happen.

Stop acting like innocent victims all the time. This narcissistic stance might explain why Jews are hated seemingly everywhere. Relationships with narcissists are no fun and the means necessary to break free are often hurtful and unfortunate for everyone involved.

Hapalong Cassidy , says: December 19, 2019 at 1:44 pm GMT

No mention of Mitt Romney's vulture fund Bain Capital? The one that destroyed Toys R Us, among others?

BannedHipster , says: Website December 19, 2019 at 2:21 pm GMT

It's a simple ingroup/outgroup distinction.

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.

Realist , says: December 19, 2019 at 2:22 pm GMT
@Ghali

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.

Greed from all races is the problem.

BannedHipster , says: Website December 19, 2019 at 2:31 pm GMT
@Just passing through obs 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.

Really No Shit , says: December 19, 2019 at 2:35 pm GMT

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!

Arnieus , says: December 19, 2019 at 2:37 pm GMT

Don't think the US will fair better than Puerto Rico when the fake money dries up and there is no way to keep paying the trillions in debt.

Just passing through , says: December 19, 2019 at 2:48 pm GMT
@Father O'Hara ians 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.

Satan Became President , says: December 19, 2019 at 3:03 pm GMT

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.

Mulegino1 , says: December 19, 2019 at 3:14 pm GMT

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.

Happy Tapir , says: December 19, 2019 at 3:18 pm GMT

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.

Bookish1 , says: December 19, 2019 at 3:19 pm GMT
@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

Jimmy1969 , says: December 19, 2019 at 3:23 pm GMT
@Arnieus

China will then try to take us and Israel will make a deal with the winner.

jack daniels , says: December 19, 2019 at 3:25 pm GMT
@silviosilver ors 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.

Desert Fox , says: December 19, 2019 at 3:39 pm GMT

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.

[Jan 01, 2020] Vulture corporatism = U.S. corporations consuming consumers.

Jan 01, 2020 | www.unz.com

Rebel0007 , says: December 19, 2019 at 4:19 pm GMT

Vulture corporatism = U.S. corporations consuming consumers.

Anon [491] Disclaimer , says: December 19, 2019 at 11:43 am GMT
@Colin Wright 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?
Richard B , says: December 19, 2019 at 4:34 pm GMT
@Anon

Bravo!

Hands down one of the best comments on Jewish Supremacy Inc.'s psychopathy, lack of accountablity and corresponding projection.

Of course, you thought you were doing something else.

Just passing through , says: December 19, 2019 at 4:38 pm GMT
@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.

Realist , says: December 19, 2019 at 4:41 pm GMT
@Adrian

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.

That wasn't his intent.

Just passing through , says: December 19, 2019 at 4:44 pm GMT
@Wally '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.

aandrews , says: December 19, 2019 at 5:07 pm GMT

" 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.

DaveE , says: December 19, 2019 at 5:08 pm GMT
@Mulegino1 l 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.

[Jan 01, 2020] Andrew Carnegie at least 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".

Jan 01, 2020 | www.unz.com

HammerJack , says: December 19, 2019 at 7:30 am GMT

@Colin Wright sity, 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".

In fact, he gave away 90% of his massive fortune–about $75 Billion in current dollars. Funding, in the process, many charities, hospitals, museums, foundations and institutions of learning. He was a major benefactor of negro education.

He was a staunch anti-imperialist who believed America should concentrate its energies on peaceful endeavors rather than conquering and subduing far-off lands.

Although they are even more keen to put their names on things, today's robber barons leave behind mainly wreckage.

Just passing through , says: December 19, 2019 at 8:56 am GMT
@anon who were true conservatives in that all they wished was prosperity for their people in their own lands without any aggressive foreign policy moves.

Basically, WASPs thought that they could win in the end, but they were out Jew'd and now they are crying.

The one difference you will notice is that certain subsections of WASPs, notable the British, actually did build infrastructure in the countries they looted, this to me was borne out of a sense of guilt, so to be fair, WASPs were not as parasitic and ruthless as Jews.

But in the end, the more ruthless wins. To quote the Joker

You get what you fucking deserve

Adrian , says: December 19, 2019 at 11:35 am GMT
@HammerJack

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.

https://www.youtube.com/embed/gqF-NcRXdEs?feature=oembed

[Sep 13, 2019] Clowns, AI and layoffs

Sep 13, 2019 | www.nakedcapitalism.com

Bugs Bunny , September 13, 2019 at 4:25 pm

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.

[Sep 10, 2019] What s wrong with you people ?

Mar 11, 2014 | independentaustralia.net

[Sep 10, 2019] Neoliberal Capitalism at a Dead End by Utsa Patnaik and Prabhat Patnaik

Highly recommended!
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. ..."
Aug 25, 2019 | portside.org
Originally from: Monthly Review printer friendly
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.

Notes
  1. Harry Magdoff, The Age of Imperialism (New York: Monthly Review Press, 1969).
  2. Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914 (Liverpool: Liverpool University Press, 1960).
  3. Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966).
  4. 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).
  5. Joseph E. Stiglitz, " Inequality is Holding Back the Recovery ," New York Times , January 19, 2013.
  6. For a discussion of how even the recent euphoria about U.S. growth is vanishing, see C. P. Chandrasekhar and Jayati Ghosh, " Vanishing Green Shoots and the Possibility of Another Crisis ," The Hindu Business Line , April 8, 2019.
  7. 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.
  8. Federal Reserve Board of Saint Louis Economic Research, FRED, "Capacity Utilization: Manufacturing," February 2019 (updated March 27, 2019), http://fred.stlouisfed.org .
  9. This issue is discussed by Charles P. Kindleberger in The World in Depression, 1929–1939 , 40th anniversary ed. (Oakland: University of California Press, 2013).
  10. Michał Kalecki, " Political Aspects of Full Employment ," Political Quarterly (1943), available at mronline.org.
  11. 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).

[Sep 09, 2019] What's the True Unemployment Rate in the US? by Jack Rasmus

Highly recommended!
Notable quotes:
"... 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%. ..."
Sep 09, 2019 | www.counterpunch.org

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 .

[Sep 04, 2019] Economists 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

Sep 04, 2019 | www.economist.com

"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!

[Aug 25, 2019] Trump and the value of the 90 days probation period for any newly elected President

Aug 25, 2019 | www.zerohedge.com

youshallnotkill , 2 hours ago link

The markets love nothing more than uncertainty. Anybody who says otherwise is spreading fake news. /s

Serious question: Is he shorting the market? Nobody can be this dumb or demented.

free corn , 2 hours ago link

Never underestimate a comedian!

steverino999 , 2 hours ago link

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.........

[Aug 23, 2019] I believe being oblivious is the main qualification for being a successful mainstream economist.

Notable quotes:
"... I believe being oblivious is the main qualification for being a successful mainstream economist. ..."
Aug 23, 2019 | www.nakedcapitalism.com

Skip Intro , , August 23, 2019 at 2:29 pm

I believe being oblivious is the main qualification for being a successful mainstream economist.

[Aug 23, 2019] Poorly targeted is in reality "richly targeted" under neoliberalism

Aug 23, 2019 | www.nakedcapitalism.com

Samuel Conner , August 23, 2019 at 7:30 am

"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".

fixed it.

Elspeth , August 23, 2019 at 11:16 am

"poorly targeted", no no my friend it's benefiting the ususally suspects.

Synoia , August 23, 2019 at 11:23 am

"richly targeted" would be most accurate.

[Aug 23, 2019] Is nonsense economic throes promoted by NYT a deliberate policy or are they really ignorant ?

Aug 23, 2019 | www.nakedcapitalism.com

templar555510 , August 23, 2019 at 8:41 am

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.

MichaelSF , August 23, 2019 at 12:17 pm

There's no reason it can't be both.

[Aug 23, 2019] Austerity is Prosperity

Aug 23, 2019 | www.nakedcapitalism.com

Ian Perkins , August 23, 2019 at 10:57 am

"War Is Peace, Freedom Is Slavery, Ignorance Is Strength." And if Orwell were still around, perhaps he would add: Austerity is Prosperity.

Synoia , August 23, 2019 at 11:24 am

Warriors are Peacekeepers

[Aug 23, 2019] Checkmate, liberals

Aug 23, 2019 | www.nakedcapitalism.com

Dr. James Rustler , August 23, 2019 at 2:03 pm

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.

Checkmate, liberals

[Aug 23, 2019] 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.

Aug 23, 2019 | www.nakedcapitalism.com

The Rev Kev , August 23, 2019 at 7:06 pm

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.

[Aug 23, 2019] Investment advice from Wall Street for workers and their 401k just before the Great Recession: "Don't worry about the price. Invest now as much as you can. You can't predict the market "

Aug 23, 2019 | www.nakedcapitalism.com

Summer , August 23, 2019 at 7:32 pm

"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).

[Aug 23, 2019] One can hope that Larry Summers will eventually convert to MMT, especially if he get a stipend for that

Aug 23, 2019 | www.nakedcapitalism.com

Samuel Conner , August 23, 2019 at 2:21 pm

One can hope that Larry S will eventually convert to MMT, but I intuit that if that does happen, it will only be on his deathbed.

Synoia , August 23, 2019 at 2:38 pm

Or when receiving a huge stipend from a MMT adherent.

a different chris , August 23, 2019 at 3:05 pm

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.

[Aug 03, 2019] 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

Aug 03, 2019 | turcopolier.typepad.com

ted richard , 03 August 2019 at 01:22 PM

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

[Aug 03, 2019] Hell's Top Banker Explains How To Destroy The Global Economy

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
Aug 03, 2019 | www.zerohedge.com

(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!

Thank you for your kind attention.

TJ Wormwood,

Demonic Chief Office – Finance

[Jul 29, 2019] Michael Hudson Trump s Brilliant Strategy to Dismember US Dollar Hegemony by Michael Hudson

Highly recommended!
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. ..."
Feb 01, 2019 | www.nakedcapitalism.com

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 naïve? 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.

Footnotes

[1] "It Can't be Fixed: Senior ICC Judge Quits in Protest of US, Turkish Meddling," January 31, 2019.

[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.

[3] ibid

[4] Corina Pons, Mayela Armas, "Exclusive: Venezuela plans to fly central bank gold reserves to UAE – source," Reuters, January 31, 2019.

[5] Constanze Stelzenmüller, "America's policy on Europe takes a nationalist turn," Financial Times, January 31, 2019.

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is "and forgive them their debts": Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year< Jointly posted with Hudson's website


doug , February 1, 2019 at 8:03 am

We see the Democratic Party showing the same colors. Yes we do. no escape? that I see

drumlin woodchuckles , February 1, 2019 at 9:43 am

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.

drumlin woodchuckles , February 1, 2019 at 2:27 pm

I read somewhere that the Czarist Imperial Army had a saying . . . "Quantity has a Quality all its own".

... ... ...

Cal2 , February 1, 2019 at 2:54 pm

Drumlin,

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.

drumlin woodchuckles , February 1, 2019 at 8:56 pm

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.

Quanka , February 1, 2019 at 8:29 am

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?

The Rev Kev , February 1, 2019 at 8:43 am

Here is a bit more info on it but Trump is already threatening Europe if they use it. That should cause them to respect him more:

https://www.dw.com/en/instex-europe-sets-up-transactions-channel-with-iran/a-47303580

LP , February 1, 2019 at 9:14 am

The NYT and other have coverage.

https://www.google.com/amp/s/www.nytimes.com/2019/01/31/world/europe/europe-trade-iran-nuclear-deal.amp.html

Louis Fyne , February 1, 2019 at 8:37 am

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.

Mel , February 1, 2019 at 9:18 am

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.

integer , February 1, 2019 at 8:43 am

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.

James , February 1, 2019 at 10:34 am

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.

drumlin woodchuckles , February 1, 2019 at 2:39 pm

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.

integer , February 1, 2019 at 8:09 pm

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.

Stephen Gardner , February 1, 2019 at 9:02 am

Excellent article but I believe the expression is "cui bono": who benefits.

hemeantwell , February 1, 2019 at 9:09 am

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?

Oregoncharles , February 1, 2019 at 3:23 pm

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.

whine country , February 1, 2019 at 9:15 am

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.

a different chris , February 1, 2019 at 9:30 am

Unfortunately this

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.

orange cats , February 1, 2019 at 11:22 am

"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.

OpenThePodBayDoorsHAL , February 1, 2019 at 1:41 pm

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.

orange cats , February 1, 2019 at 3:47 pm

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.

skippy , February 1, 2019 at 8:09 pm

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.

timbers , February 1, 2019 at 12:26 pm

I don't agree, and do agree. The distinction is this:

If you fix a few of Hudson's errors, and take him as making the point that USD is losing it's hegemony, IMO he is basically correct.

Brian (another one they call) , February 1, 2019 at 9:56 am

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?

Steven , February 1, 2019 at 10:23 am

Great stuff!

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.

Oh , February 1, 2019 at 3:52 pm

The use of the stick will only go so far. What's the USG going to do if they refuse?

Summer , February 1, 2019 at 10:46 am

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.

Yikes , February 1, 2019 at 12:07 pm

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?

Ian Perkins , February 1, 2019 at 12:21 pm

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.

Michael A Gualario , February 1, 2019 at 12:49 pm

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.

Oregoncharles , February 1, 2019 at 2:12 pm

" 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.

Oregoncharles , February 1, 2019 at 3:41 pm

Wukchumni beat me to the suspicion that the gold isn't there.

The Rev Kev , February 1, 2019 at 7:40 pm

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-

https://www.whas11.com/article/news/local/after-40-years-fort-knox-opens-vault-to-civilians/466441331

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

Summer , February 1, 2019 at 5:44 pm

A non-accountable standard. It's more obvious BS than what is going on now.

jochen , February 2, 2019 at 6:46 am

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.

Susan the Other , February 1, 2019 at 2:19 pm

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.

skippy , February 2, 2019 at 2:44 am

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.

ChrisAtRU , February 1, 2019 at 6:02 pm

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.

mikef , February 1, 2019 at 6:07 pm

" 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."

http://www.tomdispatch.com/blog/176373/tomgram%3A_alfred_mccoy%2C_tweeting_while_rome_burns

Rajesh K , February 1, 2019 at 7:23 pm

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?

Keith Newman , February 2, 2019 at 1:12 am

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.

RBHoughton , February 1, 2019 at 9:16 pm

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.

skippy , February 2, 2019 at 1:11 am

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.

/lasse , February 2, 2019 at 7:50 am

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.

Sound of the Suburbs , February 2, 2019 at 10:26 am

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

Sound of the Suburbs , February 2, 2019 at 10:29 am

When the delusion takes hold, it is the beginning of the end.

The British Empire will last forever
The thousand year Reich
American exceptionalism

As soon as the bankers thought they thought they were "Master of the Universe" you knew 2008 was coming. The delusion had taken hold.

Sound of the Suburbs , February 2, 2019 at 10:45 am

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.

This is the US (46.30 mins.) https://www.youtube.com/watch?v=ba8XdDqZ-Jg

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.).

https://www.youtube.com/watch?v=8YTyJzmiHGk

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.

skippy , February 2, 2019 at 5:28 pm

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.

[Jul 24, 2019] Elizabeth Warren Seeks to Cut Private Equity Down to Size

Highly recommended!
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. ..."
Jul 23, 2019 | www.nakedcapitalism.com

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.

... ... ...

[Jul 22, 2019] When the music stops, in terms of liquidity, things will be complicated

Jul 22, 2019 | jessescrossroadscafe.blogspot.com

"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,"

Chuck Prince, CEO Citigroup, July 9, 2007

[Jul 22, 2019] A baited banker

Jul 22, 2019 | jessescrossroadscafe.blogspot.com

"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!'

Jonathan Swift, A Run Upon the Bankers

[Jul 12, 2019] Nine Consequences of the Upcoming US-China Trade War by Renaud Anjoran

Highly recommended!
This author really knows what he is talking about
Notable quotes:
"... 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. ..."
May 09, 2019 | qualityinspection.org

https://qualityinspection.org/9-consequences-us-china-trade-war/

Based on all the 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

As I wrote before, since China announced their 5-year plan to increase wages, other Asian countries adopted similar plans . That's how we got to this upward trend across the board:

Minimum wage comparison

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.

[Jul 05, 2019] Globalisation- the rise and fall of an idea that swept the world - World news by Nikil Saval

Highly recommended!
Globalization was simply the politically correct term for neocolonialism.
Jul 14, 2017 | www.theguardian.com

... ... ...

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."

[Jun 10, 2019] Are Bonds Peaking-Interest Rates Bottoming

Jun 10, 2019 | www.zerohedge.com

Bam_Man , 3 hours ago link

One year ago, EVERYBODY was a bond "bear", predicting a long string of rate hikes that would bring Fed Funds up to 4.50%.

They were ALL wrong. VERY wrong.

They are probably just as wrong now that they are bond "bulls".

Greenspazm , 1 hour ago link

No, if you use kimble charting technical analysis you will get very rich.

Bam_Man , 1 hour ago link

Undoubtedly.

[Jun 10, 2019] If ever there were a candidate who might be inclined to rethink our relationship with the Saudis, it's Buttigieg.

Notable quotes:
"... 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." ..."
Jun 10, 2019 | turcopolier.typepad.com

Timothy Hagios , 09 June 2019 at 01:49 PM

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."

[Jun 09, 2019] The looming 100-year US-China conflict by Martin Wolf

Highly recommended!
Notable quotes:
"... 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. ..."
Jun 04, 2019 | archive.fo
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.

Martin Wolf chart on US/China

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 .

The US negotiating position vis-à-vis China is that "might makes right". This is particularly true of insisting that the Chinese accept the US role as judge, jury and executioner of the agreement .

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".

Martin Wolf chart on US/China

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.

Martin Wolf chart on US/China

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.

Martin Wolf chart on US/China

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.

Martin Wolf chart on US/China

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.

martin.wolf@ft.com

[May 14, 2019] Trump desperately needs a trade deal with China as he gears up for his re-election bid in 2020.

Highly recommended!
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.
May 14, 2019 | www.asiatimes.com
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.

[May 11, 2019] Has Privatization Benefitted the Public? by Jomo Kwame Sundaram

Highly recommended!
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. ..."
Apr 07, 2019 | www.nakedcapitalism.com

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.


diptherio , April 7, 2019 at 9:11 am

SOE must stand for "state owned enterprise."

caloba , April 7, 2019 at 10:45 am

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

DJG , April 7, 2019 at 11:15 am

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.

California is no better , April 7, 2019 at 5:16 pm

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.

stan6565 , April 7, 2019 at 6:36 pm

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?

Tyronius Maximus , April 8, 2019 at 4:13 pm

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.

rps , April 8, 2019 at 12:08 pm

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.

eg , April 7, 2019 at 12:04 pm

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.

Grizziz , April 7, 2019 at 12:39 pm

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.

Thuto , April 7, 2019 at 1:00 pm

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.

PhilB , April 7, 2019 at 2:53 pm

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.

RepubAnon , April 7, 2019 at 7:54 pm

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 ,

Iapetus , April 7, 2019 at 3:39 pm

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.

Not sure if these are still being considered.

Tom Stone , April 7, 2019 at 3:54 pm

There's no way I could ask that question with a straight face.

Jack Parsons , April 7, 2019 at 6:35 pm

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.

https://youtu.be/-U_Tccwyh70?t=139

The Rev Kev , April 7, 2019 at 7:50 pm

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-

https://www.abc.net.au/news/2017-07-18/australian-gold-plated-power-grid/8721566

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.

Procopius , April 7, 2019 at 8:54 pm

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.

John Rose , April 8, 2019 at 10:05 am

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

Stratos , April 8, 2019 at 12:36 pm

" 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.

Meanwhile, less affluent countries like Korea and Romania have lightning fast fiber optic broadband universally available at affordable prices.
https://motherboard.vice.com/en_us/article/jp5aa3/why-romanias-internet-is-so-much-faster-than-americas

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.

[Apr 03, 2019] The software's reengagement is what doomed everybody aboard Boeing Ethiopian Airlines Flight 302

Apr 03, 2019 | www.zerohedge.com

Flankspeed60 , 2 hours ago link

Never thought Boeing would make Tesla look like a bunch of geniuses...

[Mar 29, 2019] Trumps billionaire coup détat: Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history

Highly recommended!
Notable quotes:
"... 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. ..."
Mar 22, 2017 | failedevolution.blogspot.gr

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.

https://www.youtube.com/embed/z-q5R4k_3rE

Take a taste of Paul Singer from Wikipedia :

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.

[Mar 19, 2019] "Monopoly" is such an ugly term.

Mar 19, 2019 | crookedtimber.org

Glen Tomkins 03.09.19 at 5:25 pm ( 2 )

"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".

[Mar 06, 2019] The only real growth in the US -

Mar 06, 2019 | www.zerohedge.com

1. Opiates/Big Pharma

2. Redundancies

3. John Bolton's harelip cover

[Feb 26, 2019] THE CRISIS OF NEOLIBERALISM by Julie A. Wilson

Highly recommended!
Notable quotes:
"... 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."' ..."
Oct 08, 2017 | www.amazon.com

Quote from the book is courtesy of Amazon preview of the book Neoliberalism (Key Ideas in Media & Cultural Studies)

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?

HOW WE GET THERE

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.

Against Disposability: Radical Equality

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.

[Feb 11, 2019] 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.

Feb 11, 2019 | www.nakedcapitalism.com

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.

[Feb 05, 2019] Fed's Dudley Explains How I Learned To Stop Worrying Love The Fed's Balance Sheet

Feb 05, 2019 | www.zerohedge.com

"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.

fersur , 19 minutes ago link

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 !

costa ludus , 42 minutes ago link

Is this from The Onion?

[Feb 05, 2019] Dad Heartbreakingly Thinks His Connections Can Help Son Find Job

Feb 05, 2019 | local.theonion.com

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.

[Feb 05, 2019] 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 a nasty neoliberal propaganda trick. You need to analise the whole time serioes to get an objective picture

Highly recommended!
Notable quotes:
"... And as for the median wage and income -- it is still too weak to sustain an economic recovery. ..."
Feb 05, 2019 | jessescrossroadscafe.blogspot.com

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.

[Feb 03, 2019] Neoliberalism and Christianity

Highly recommended!
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. ..."
May 02, 2018 | www.moonofalabama.org

karlof1 , May 1, 2018 2:27:06 PM | 13

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.

psychohistorian , May 1, 2018 3:31:50 PM | 26
@ 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

james , May 1, 2018 10:30:01 PM | 96
@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...

WJ | May 1, 2018 10:48:58 PM | 100

James @96,

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.

WJ , May 1, 2018 8:23:40 PM | 88
Juliana @84,

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.

[Jan 29, 2019] The Religious Fanaticism of Silicon Valley Elites by Paul Ingrassia

Highly recommended!
Notable quotes:
"... 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 ..."
Jan 10, 2019 | www.theamericanconservative.com

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.

Big Government Isn't the Way to Fix Big Tech The Tech Giants Must Be Stopped

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 .


Fran Macadam , January 10, 2019 at 2:58 am

"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.

George Crosley , , January 10, 2019 at 7:47 am
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!

madge , , January 10, 2019 at 9:03 am
"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.

TheSnark , , January 10, 2019 at 10:23 am
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.

CLW , , January 10, 2019 at 3:07 pm
This is an interesting topic meriting serous thought and analysis; instead, we get corny, hyperbolic alarmism. You can do better than this, TAC.
Sisera , , January 10, 2019 at 8:05 pm

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.

Great article.

peterc , , January 11, 2019 at 12:33 pm
@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
R Henry , , January 11, 2019 at 2:14 pm
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.

grumpy realist , , January 11, 2019 at 4:12 pm
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 .

Frederick , , January 12, 2019 at 12:03 am
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.

Pete from Baltimore , , January 12, 2019 at 8:57 am
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

Connecticut Farmer , , January 12, 2019 at 10:09 am
" one of the gravest dangers the founders feared was democracy?"

Wrong! They didn't fear democracy per se', only democracy run amok, hence the checks and balances

[Jan 24, 2019] No One Said Rich People Were Very Sharp Davos Tries to Combat Populism by Dean Baker

Highly recommended!
Notable quotes:
"... 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! ..."
Jan 22, 2019 | cepr.net
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.


pieceofcake pieceofcake a day ago ,

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!

Robert Lindsay pieceofcake 12 hours ago ,

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.

Woodshedding a day ago ,

"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?

Robert Lindsay pieceofcake 12 hours ago ,

Trump is a rightwing populist in fact. Nasty critters, aren't they?

pieceofcake Robert Lindsay 7 hours ago ,

''Nasty critters, aren't they''?

Yes!

Dwight Cramer 2 days ago ,

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 Crew Dwight Cramer 19 hours ago ,

in my view half of ted talks are extremely stupid; the other half are basic 101 (eg j Hari).

Dwight Cramer Ishi Crew 17 hours ago ,

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.

jake • 2 days ago ,

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.

pieceofcake jake 2 days ago ,

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!

skeptonomist pieceofcake 2 days ago ,

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.

Robert Lindsay skeptonomist 12 hours ago ,

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.

Woodshedding skeptonomist a day ago ,

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]

Robert Lindsay Woodshedding 12 hours ago ,

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.

pieceofcake Woodshedding a day ago ,

''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?.

Robert Lindsay pieceofcake 12 hours ago ,

Rightwing populism is indeed often nationalism + racism. That's how it works.

pieceofcake skeptonomist 2 days ago ,

- ''it tends to be applied indiscriminately to the likes of Trump and to leftist reformers''.

Only some very Confused (Americans?) confuse Idiotic (''Rightwing) ''Populists'' with Social (Leftwing) ''Socialists''.

Robert Lindsay pieceofcake 12 hours ago ,

Rightwing populists are indeed a thing. Wikipedia is your friend. Just because they suck ass doesn't mean they don't exist, comrade.

It's very common to get mixed up about the types of populism and jumble them all together though.

Robert Lindsay pieceofcake 3 hours ago ,

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.

pieceofcake 2 days ago ,

- 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?

Robert Lindsay pieceofcake 12 hours ago ,

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.

Lord Koos pieceofcake 2 days ago ,

Trump is not a populist, even if he appeals to them. He's a very wealthy man who looks out for his rich friends.

DAS Lord Koos 8 hours ago ,

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.

Robert Lindsay Lord Koos 12 hours ago ,

He actually has a lot of traits of a rightwing populist, US style, but then that's always been a suckhole anyway.

pieceofcake Lord Koos 2 days ago ,

''Trump is not a populist, even if he appeals to them. He's a very wealthy man who looks out for his rich friends''.

How true - but as most of the current so called ''Populists'' are just as ''non-populist'' as Trump - it might be time to find a new ''expression''.

Robert Lindsay pieceofcake 3 hours ago ,

Typical rightwing populism, which isn't really pro-people anyway, just another rightwing fraud.

pieceofcake pieceofcake 2 days ago ,

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)

pieceofcake 2 days ago ,

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?

Robert Lindsay pieceofcake 12 hours ago ,

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!

[Jan 21, 2019] Sound financial advice

Jan 21, 2019 | www.zerohedge.com

BandGap , 2 hours ago link

Retirement? Hahahahahahahahahaha! Whatever.

in 2008 I switched everything into bonds, didn't lose anything in the market. In 2011 I got divorced and lost 55%. My advice, stay married.

[Jan 13, 2019] There is no free market! It's all crooked by financial oligarchy!

Highly recommended!
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!" ..."
Jan 13, 2019 | www.unz.com

obwandiyag , says: January 13, 2019 at 6:37 am GMT

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.
obwandiyag , says: January 13, 2019 at 6:42 am GMT
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!"

[Jan 12, 2019] Tucker Carlson Mitt Romney supports the status quo. But for everyone else, it's infuriating Fox News

Highly recommended!
Notable quotes:
"... Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2, 2019. ..."
Jan 02, 2019 | www.foxnews.com
Tucker: America's goal is happiness, but leaders show no obligation to voters

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.

Video

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.

[Jan 12, 2019] Tucker Carlson has sparked the most interesting debate in conservative politics by Jane Coaston

Highly recommended!
Tucker Carlson sounds much more convincing then Trump: See Tucker Leaders show no obligation to American voters and Tucker The American dream is dying
Notable quotes:
"... 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." ..."
Jan 10, 2019 | www.vox.com

"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 book The 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.

-- Ann Coulter (@AnnCoulter) January 4, 2019

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.

-- Jeremy McLallan (@JeremyMcLellan) January 8, 2019

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!!

-- Judah Maccabeets (@AdamSerwer) January 9, 2019

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.

[Jan 11, 2019] How Shocking Was Shock Therapy

Highly recommended!
Notable quotes:
"... 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. ..."
Jan 11, 2019 | www.nakedcapitalism.com

likbez , January 11, 2019 at 1:33 am

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.

Jura , January 11, 2019 at 4:54 am

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..

John Mc , January 11, 2019 at 11:28 am

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).

Susan the Other , January 11, 2019 at 1:21 pm

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.

bruce wilder , January 11, 2019 at 2:17 pm

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.

[Jan 08, 2019] 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

Highly recommended!
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.
Jan 08, 2019 | neweconomicperspectives.org
Ben | March 18, 2014 at 5:32 pm

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!

Doc | March 19, 2014 at 5:26 am

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.

Paul | March 28, 2014 at 4:18 pm

Ben,

>>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/ )

golfer1john | March 30, 2014 at 11:23 pm

Semantics.

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.

Briana | March 31, 2014 at 10:22 am

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.

golfer1john | April 1, 2014 at 12:05 am

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.

Jim Shannon | April 1, 2014 at 9:20 am

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!

Briana | April 1, 2014 at 7:23 pm

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!

golfer1john | April 2, 2014 at 1:50 pm

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 | April 11, 2014 at 11:48 am

"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.

[Jan 08, 2019] Rewriting Economic Thought - Michael Hudson

Highly recommended!
Notable quotes:
"... 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 ..."
Oct 05, 2015 | michael-hudson.com

The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson.

Eric Draitser: Today I have the privilege of introducing Michael Hudson to the program. Doctor Hudson is the author of the new book Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy , available in print on Amazon and an e-version on CounterPunch. Michael Hudson, welcome to CounterPunch Radio.

Michael Hudson: It's good to be here.

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.

ED: Thank you

[Jan 08, 2019] The Financial Sector Is the Greatest Parasite in Human History by Ben Strubel

Highly recommended!
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. ..."
March 13, 2014

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

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.

strbl2

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.

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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.

strbl5

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 my articles 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.

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(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.


Brian | March 13, 2014 at 9:44 am

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?

Jim Shannon | March 13, 2014 at 9:57 am

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!

Jonathan | March 13, 2014 at 11:00 am

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??

Zane Zodrow | March 13, 2014 at 2:07 pm

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' ?

Dale Pierce | March 13, 2014 at 2:11 pm

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?

Thanks again, Ben – great post.

golfer1john | March 13, 2014 at 4:44 pm

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.

golfer1john | March 18, 2014 at 10:04 am

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.

zak | March 17, 2014 at 8:25 pm

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.

FSK | March 17, 2014 at 10:05 pm

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.

http://www.realfreemarket.org/blog/2012/07/10/banksters-rob-cities-via-interest-rate-swaps-and-libor-rate-manipulation/

Ben | March 18, 2014 at 5:32 pm

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!

Doc | March 19, 2014 at 5:26 am

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.

Paul | March 28, 2014 at 4:18 pm

Ben,

>>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/ )

Briana | March 30, 2014 at 8:32 pm

Hi Paul,

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.

golfer1john | March 30, 2014 at 11:23 pm

Semantics.

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.

Briana | March 31, 2014 at 10:22 am

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.

golfer1john | April 1, 2014 at 12:05 am

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.

Jim Shannon | April 1, 2014 at 9:20 am

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!

Briana | April 1, 2014 at 7:23 pm

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!

Paul | April 1, 2014 at 9:41 am

Briana,

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.

golfer1john | April 2, 2014 at 1:50 pm

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.

Briana | April 1, 2014 at 6:21 pm

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.

Paul | April 3, 2014 at 11:44 am

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.

Briana | April 4, 2014 at 7:02 pm

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.

Paul | April 9, 2014 at 10:51 am

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.)

Briana | April 9, 2014 at 10:43 pm

Hi Paul,

"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."

There is when it's considered "money creation" http://www.usdebtclock.org/

"This discussion in the comments has actually been more fruitful than the article itself."

Agreed. And I could write a paper elaborating on this!

Paul | April 11, 2014 at 11:48 am

"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.

Briana | April 11, 2014 at 7:50 pm

Paul –

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!

[Jan 08, 2019] No, wealth isn t created at the top. It is merely devoured there by Rutger Bregman

Highly recommended!
Financialization is a new type of racket...
Notable quotes:
"... 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. ..."
Mar 30, 2017 | www.theguardian.com

Rutger Bregman

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

Comments 890

'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.

Don't get me wrong. Banks can help to gauge risks and get money where it is needed, both of which are vital to a well-functioning economy. But consider this: economists tell us that the optimum level of total private-sector debt is 100% of GDP. Based on this equation, if the financial sector only grows, it won't equal more wealth, but less. So here's the bad news. In the United Kingdom, private-sector debt is now at 157.5% . In the United States, the figure is 188.8% .

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.

• Pre-order Utopia for Realists and How Can We Get There by Rutger Bregman

• Translated from the original Dutch by Elizabeth Manton

See also:

[Jan 07, 2019] 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. Now we have exactly the same trends

Highly recommended!
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. ..."
Oct 31, 2008 | jessescrossroadscafe.blogspot.com

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.

[Jan 03, 2019] The parable of casino capitalism, or neoliberal finance innovative method of weighting the ox via wisdom of the crowd

Jan 03, 2019 | www.amazon.com

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.

[Jan 02, 2019] Jeff Bezos Tables Latest Breakthrough Cost-Cutting Idea After Realizing It's Just Slaves

Jan 02, 2019 | www.theonion.com

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.

[Jan 02, 2019] American People Admit Having Facebook Data Stolen Kind Of Worth It To Watch That Little Fucker Squirm

Jan 02, 2019 | www.theonion.com

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.

[Dec 27, 2018] 'Trickle down effect' and pub test

Dec 27, 2018 | discussion.theguardian.com

Phoroneus57 , 3 Jun 2018 23:03

'Trickle down effect' - the favourite buzzword of neoliberal supporters. I'd like to see trickle down effect tried at the local pub on the taps by the local mp. Imagine what would happen. Definitely doesn't pass the pub test.

[Dec 26, 2018] You might say that neoliberalism borrows from economics only in the sense that astrology borrows from astronomy.

Dec 26, 2018 | mainlymacro.blogspot.com

phayes , 23 January 2014 at 03:51

That'd be like astronomers saying that although Hellenic astrology is pseudoscientific nonsense they can probably do business with Ptolemaic or Hindu astrology. Other scientists would laugh and call astronomy the dismal physics. Isn't it about time economists like yourself just told the knuckle dragging ideologues - of whatever colour and salinity - to fuck off?

Anonymous , 23 January 2014 at 04:12

Who is an economist who is not an ideologue?

[Dec 14, 2018] Neoliberalism has spawned a financial elite who hold governments to ransom by Deborah Orr

Highly recommended!
Notable quotes:
"... The crash was a write-off, not a repair job. The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe ..."
"... The IMF also admits that it "underestimated" the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute "kick up the arse to all the lazy scroungers" whenever they encounter the word "austerity", have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask. ..."
"... Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem. ..."
"... Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments. ..."
"... The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory , did not agree that economic activity alone was enough to keep humans decent and civilised. ..."
"... Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. ..."
Jun 08, 2013 | www.theguardian.com

The crash was a write-off, not a repair job. The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe

Sat 8 Jun 2013 02.59 EDT First published on Sat 8 Jun 2013 02.59 EDT

The IMF's limited admission of guilt over the Greek bailout is a start, but they still can't see the global financial system's fundamental flaws, writes Deborah Orr. Photograph: Boris Roessler/DPA FILE T he International Monetary Fund has admitted that some of the decisions it made in the wake of the 2007-2008 financial crisis were wrong, and that the €130bn first bailout of Greece was "bungled". Well, yes. If it hadn't been a mistake, then it would have been the only bailout and everyone in Greece would have lived happily ever after.

Actually, the IMF hasn't quite admitted that it messed things up. It has said instead that it went along with its partners in "the Troika" – the European Commission and the European Central Bank – when it shouldn't have. The EC and the ECB, says the IMF, put the interests of the eurozone before the interests of Greece. The EC and the ECB, in turn, clutch their pearls and splutter with horror that they could be accused of something so petty as self-preservation.

The IMF also admits that it "underestimated" the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute "kick up the arse to all the lazy scroungers" whenever they encounter the word "austerity", have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask.

Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem. They know the crash was a debt-bubble that burst. What they don't seem to acknowledge is that the merry days of reckless lending are never going to return; even if they do, the same thing will happen again, but more quickly and more savagely. The thing is this: the crash was a write-off, not a repair job. The response from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.

The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt. And, of course, its loans famously come with strings attached: adopt a free-market economy, or strengthen the one you have, kissing goodbye to the Big State. Yet, the irony is painful. Neoliberal ideology insists that states are too big and cumbersome, too centralised and faceless, to be efficient and responsive. I agree. The problem is that the ruthless sentimentalists of neoliberalism like to tell themselves – and anyone else who will listen – that removing the dead hand of state control frees the individual citizen to be entrepreneurial and productive. Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That's what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further – some setting about the task with greater relish than others. Now the task, supposedly, is to get the free market up and running again.

But the basic problem is this: it costs a lot of money to cultivate a market – a group of consumers – and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people – people who expect to be well paid themselves, having been brought up believing in material aspiration, as consumers need to be.

So why, exactly, given the huge amount of investment needed to create such a market, should access to it then be "free"? The neoliberal idea is that the cultivation itself should be conducted privately as well. They see "austerity" as a way of forcing that agenda. But how can the privatisation of societal welfare possibly happen when unemployment is already high, working people are turning to food banks to survive and the debt industry, far from being sorry that it brought the global economy to its knees, is snapping up bargains in the form of busted high-street businesses to establish shops with nothing to sell but high-interest debt? Why, you have to ask yourself, is this vast implausibility, this sheer unsustainability, not blindingly obvious to all?

Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments.

And further, those who invest in these companies, and insist that taxes should be low to encourage private profit and shareholder value, then lend governments the money they need to create these populations of sophisticated producers and consumers, berating them for their profligacy as they do so. It's all utterly, completely, crazy.

The other day a health minister, Anna Soubry , suggested that female GPs who worked part-time so that they could bring up families were putting the NHS under strain. The compartmentalised thinking is quite breathtaking. What on earth does she imagine? That it would be better for the economy if they all left school at 16? On the contrary, the more people who are earning good money while working part-time – thus having the leisure to consume – the better. No doubt these female GPs are sustaining both the pharmaceutical industry and the arts and media, both sectors that Britain does well in.

As for their prioritising of family life over career – that's just another of the myriad ways in which Conservative neoliberalism is entirely without logic. Its prophets and its disciples will happily – ecstatically – tell you that there's nothing more important than family, unless you're a family doctor spending some of your time caring for your own. You couldn't make these characters up. It is certainly true that women with children find it more easy to find part-time employment in the public sector. But that's a prima facie example of how unresponsive the private sector is to human and societal need, not – as it is so often presented – evidence that the public sector is congenitally disabled.

Much of the healthy economic growth – as opposed to the smoke and mirrors of many aspects of financial services – that Britain enjoyed during the second half of the 20th century was due to women swelling the educated workforce. Soubry and her ilk, above all else, forget that people have multiple roles, as consumers, as producers, as citizens and as family members. All of those things have to be nurtured and invested in to make a market.

The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory , did not agree that economic activity alone was enough to keep humans decent and civilised.

Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. And even as the results of their folly become ever more plain to see, they are grudging in their admittance of the slightest blame, bickering with their allies instead of waking up, smelling the coffee and realizing that far too much of it is sold through Starbucks.

[Dec 08, 2018] Neocons Sabotage Trump s Trade Talks - Huawei CFO Taken Hostage To Blackmail China

Highly recommended!
Notable quotes:
"... It was Bolton who a week ago intentionally damaged U.S. relations with China. ..."
"... Meng Wanzhou is a daughter of the founder and main owner of Huawei, Ren Zhengfei, and was groomed to be his successor. The company is extremely well regarded in China. It is one its jewel pieces and, with 170,000 employees and $100 billion in revenues, an important political actor. ..."
"... The arrest on December 1 happened while president Trump was negotiating with president Xi of China about trade relations. Trump did not know about the upcoming arrest but Bolton was informed of it ..."
"... It was a trap. The arrest is a public slap in the face of China and to Xi personally. It will not be left unanswered. Whatever Trump may have agreed upon with Xi is now worthless. John Bolton intentionally sabotaged the talks and the U.S. relations with China. ..."
"... Having read this in context with the comments (especially those by Denk and others) previous on this topic, I would ask if anyone can provide a time line of US clandestine negative (and sometimes fatal) actions against high level Chinese engineers and telecoms. Again, the above summary is outstanding. ..."
"... The terrifying aspect is Bolton, Pompeo - puppets both for shadow power players - have no constraints whatsoever, and obviously operate without any constraint or regard for our severely (cognitively and emotionally) challenged president ..."
"... The timing of this arrest - while Trump and Xi are dining and Sabrina Meng is on her way to the G-20 conference gives a loud message that Trump is serves at the pleasure of his neocon staff - and son in law, the latter being instrumental in the firing of Rex Tillerson, the hiring of Bolton, Pompeo and the impending firing of Gen. Kelly. ..."
"... Trump is a global front for a different approach to maintaining global hegemony but make no mistake, Trump is not fronting for you ..."
"... Arresting US business execs by China is a mistake that would be cheered by Bolton and Navarro. The provocation of arresting Meng is designed by the Trump team to provoke China to arrest US business leaders and thus destroy their direct investment into China. ..."
"... The enemy of China is not US businesses but rather the neocon dominated US govt. To impact this group, China needs to cut off their drug supply(their financing) thru no longer buying their USTs to finance and enable their massive military spending and financial aggression. ..."
"... Canada's role in this is shocking. It is all of a piece with the surrender to the USA in the Trade negotiations whereby, inter alia, Canada is not allowed to enter into Trade agreements with 'non-market' economies. The non-market formulation being code for unapproved by Uncle Sam. No doubt the Nazi Freeland is running this show. In this she is ably seconded by the 'opposition' Tories and the social fascist NDP which is as enthusiastic for war against China as it is for an attack on the Donbas. ..."
"... Those who talk about Trump, Pompeo, Bolton, Kelly, etc. direct our attention to a shell game. They are all in on the scam. How better to say it? There is one party: the war party. Trump is a member of TEAM USA. US political maestros dance to the tune of the Deep State/neolibcon. ..."
"... With respect to Foreign Policy, how much real difference is there between Clinton, Bush, Obama, and Trump? They have all supported MIC, Israel, and expanding the Empire - aka Job #1 ..."
"... Bolton works for Adelson probably Pompeo does too. So Trump can't fire their crazy asses any time he chooses. ..."
"... Adelson has made millions with his gambling dens. In some ways it's a bit like what the East India Company did with opium. ..."
"... I think we can assume that the arrest was not an unwelcome surprise for Trump, or he would have reversed it. He knew, and accepts it. It's total asymmetric war on China. The arrest was on December 1. Trump twitter, Dec 7 China talks are going very well! here ..."
"... Does the fact that Huawei recently passed Apple for the number 2 phone sales have anything to do with this ..."
"... CNN: A judge in the US District Court for the Eastern District of New York issued a warrant for Meng's arrest on August 22, it was revealed at the hearing Friday here . She was arrested on December 1. Meng didn't know about this "issued warrant?" How does this 'system of laws' work, anyhow? Perhaps the warrant issue was classified secret, for US national security? ..."
"... The problem with Iran is (as was with Iraq, Libya, Venezuela, and even Syria) that a country with an independent/non-aligned foreign policy has control of a large quantity of valuable natural resources for which there is a constant and relatively insatiable demand. If they cannot be controlled they they should be destroyed so they cannot pursue their own agenda and ignore the dictates of the west. China and Russia are this problem writ large, and they have nukes and a means of delivery to all corners of the globe... ..."
Dec 08, 2018 | www.moonofalabama.org

Neocons Sabotage Trump's Trade Talks - Huawei CFO Taken Hostage To Blackmail China Willy2 , Dec 7, 2018 2:30:00 PM | link

CNN reports that White House chief of staff John Kelly is expected to resign soon . There have been similar rumors before, but this time the news may actually be true. That is bad for Trump and U.S. policies. Kerry is one a the few counterweights to national security advisor John Bolton. His replacement will likely be whoever Bolton chooses. That will move control over Trump policies further into the hands of the neo-conservatives.

It was Bolton who a week ago intentionally damaged U.S. relations with China.

The U.S. Justice Department arranged for Canada to arrest the chief financial officer of Huawei, Meng Wanzhou, over alleged U.S. sanctions violations with regards to Iran. The case is not over the sanction Trump recently imposed, but over an alleged collision with the sanction regime before the nuclear deal with Iran. The details are still unknown.

Meng Wanzhou is a daughter of the founder and main owner of Huawei, Ren Zhengfei, and was groomed to be his successor. The company is extremely well regarded in China. It is one its jewel pieces and, with 170,000 employees and $100 billion in revenues, an important political actor.

The arrest on December 1 happened while president Trump was negotiating with president Xi of China about trade relations. Trump did not know about the upcoming arrest but Bolton was informed of it :

While the Justice Department did brief the White House about the impending arrest, Mr. Trump was not told about it. And the subject did not come up at the dinner with Mr. Xi. Mr. Trump's national security adviser, John R. Bolton, said on NPR that he knew about the arrest in advance, ..

Bolton surely should have informed Trump before his dinner with Xi, in which Bolton took part, but he didn't.

It was a trap. The arrest is a public slap in the face of China and to Xi personally. It will not be left unanswered. Whatever Trump may have agreed upon with Xi is now worthless. John Bolton intentionally sabotaged the talks and the U.S. relations with China.

Cont. reading: Neocons Sabotage Trump's Trade Talks - Huawei CFO Taken Hostage To Blackmail China

Posted by b at 02:00 PM | Comments (76) - I almost starting to feel sorry for D.A.A.D. Trump.
- We have seen in the last years that the US has been (deliberately) ratcheting up tensions in the Far East. And the summit between Trump & Kim Jung Un was a severe threat for that (deliberate) increase of tensions. But the US & european media have told their readers/listener/watchers that China was to blame for the increase of tensions.


Jen , Dec 7, 2018 2:34:44 PM | link

The death of Shoucheng Zhang, by falling from a building, supposedly due to depression, reminded me of an incident I had read about years ago, of another scientist's death in 1953 in vaguely similar circumstances. I had forgotten the fellow's name but I remembered the incident had something to do with the CIA and the administration of LSD so I used those two terms along with "fall" and "window" and was able to dig up the details.

In 1953, CIA researcher Frank Olson was administered LSD without his consent by researchers working in the Project MK Ultra program. Olson became severely depressed and resigned from the CIA. He was later found dead, apparently after falling out of a motel building through a window, and his death was ruled a suicide. In the 1970s, his family ordered an autopsy and the autopsy showed that Olson had died from head injury trauma before falling through the window. A CIA agent was found to have been staying at the same motel in a separate room at the time Olson died. The family sued the US government and received $750,000 in compensation and an apology from the CIA.
https://thoughtcatalog.com/jeremy-london/2018/08/mkultra-conspiracy/

One wonders if Zhang's death had been, ahem, "arranged" according to that template. The description of Zhang from the Stanford University News website's obituary that B linked to in his post does not sound like a profile of someone who suffered depression on and off.

PavewayIV , Dec 7, 2018 2:35:17 PM | link
This has to be embarrassing as hell to Trump - he should be absolutely furious with Bolton and Pompeo. And all this for violating sanctions on Iran? I feel like on crazy pills. We live in interesting times.
Richard , Dec 7, 2018 2:38:20 PM | link
So, if Bolton sabotaged Trump's efforts to do some sort of deal with China, in whose interest is Bolton working. You'd think that a trade deal with China would be good for the US. Is Bolton working against US interest.

If we accept the Globalist/Nationalist framework, then does this not mean that Bolton is helping the nationalists against US interests. And what are the implications of that.

jayc , Dec 7, 2018 2:38:29 PM | link
Trump's rapid departure from Argentina may well have been motivated by receiving the information about the arrest after the well hyped dinner. If that is the case, Bolton should have been fired on the spot. The lack of any statement about this affair from Trump is curious. There may be an element of blackmail at play here too, related to Mueller's machinations ahead of the G20. A malignancy is loose, no doubt.
abierno , Dec 7, 2018 2:52:06 PM | link
Thank you for this excellent column. Having read this in context with the comments (especially those by Denk and others) previous on this topic, I would ask if anyone can provide a time line of US clandestine negative (and sometimes fatal) actions against high level Chinese engineers and telecoms. Again, the above summary is outstanding.

The terrifying aspect is Bolton, Pompeo - puppets both for shadow power players - have no constraints whatsoever, and obviously operate without any constraint or regard for our severely (cognitively and emotionally) challenged president, as this report makes clear.

The timing of this arrest - while Trump and Xi are dining and Sabrina Meng is on her way to the G-20 conference gives a loud message that Trump is serves at the pleasure of his neocon staff - and son in law, the latter being instrumental in the firing of Rex Tillerson, the hiring of Bolton, Pompeo and the impending firing of Gen. Kelly.

psychohistorian , Dec 7, 2018 2:56:18 PM | link
I can't believe that Trump did not know about the detention of Meng Wanzhou before hand. Trump is a TV actor and he is apprenticing for a higher spot for himself and family is the elite pecking order.

While we might want to give Trump credit for being who he is, the elite that fronted him know exactly what his style and penchants are. Trump is a global front for a different approach to maintaining global hegemony but make no mistake, Trump is not fronting for you nor I

freetrade , Dec 7, 2018 3:11:30 PM | link
From the perspective of China, their most appropriate response in this complicated situation IMO, should be to accelerate their gradual reduction of USTs.

All those articles about how China will hurt itself if it gradually sells down USTs are nonsense articles placed into the media to throw off attention to what is already happening. Russia and Turkey have alrdy done it on a smaller scale, it's a no-brainer that China can do it also. Why should China finance the US govt to wage war on itself?

If China and other countries gradually stop buying USTs, actual demand will collapse and many other holders will sell or reduce likewise. Mnuchin is fantasizing when he says there will still be strong demand. Any demand will be from the US Treasury buying its own USTs, like a dog licking its own rear quarters.

Arresting US business execs by China is a mistake that would be cheered by Bolton and Navarro. The provocation of arresting Meng is designed by the Trump team to provoke China to arrest US business leaders and thus destroy their direct investment into China.

The enemy of China is not US businesses but rather the neocon dominated US govt. To impact this group, China needs to cut off their drug supply(their financing) thru no longer buying their USTs to finance and enable their massive military spending and financial aggression.

How to do that without crashing the markets n decreasing China's own assets? Sell and reduce USTs gradually. And pretend u r not doing it. Eventually the lack of buying will force the Fed to raise rates or force the US Treasury to buy its own USTs, further debasing the US dollar.

In history, all empires fall this way, they keep on printing or taking out the silver content until their currency gets debased into nothing, and nobody wants it.

dh , Dec 7, 2018 3:14:42 PM | link
Looks like Bolton wants war with China. I recall he was hired during the North Korea talks to add a bit of muscle and now Trump is stuck with him whether he likes it or not.

Re. Meng....apparently she faces fraud charges related to the Skycom affair. Of course that is just what we're told. Who knows what kind of pressure she will come under once they get her in the US.

"Meng Wanzhou -- the chief financial officer for the Chinese tech giant Huawei -- is wanted in the U.S. on allegations of fraud, a bail hearing has been told." https://www.cbc.ca/news/canada/british-columbia/bail-hearing-huawei-cfo-1.4936150

chu teh , Dec 7, 2018 3:24:15 PM | link
1959, CIA disobeyed Pres Eisenhower's ban on further overflights of USSR until after his summit meeting with Khrushchev. Then the U-2 was brought down over USSR and the live pilot captured. The US officially denied it happened.

The USSR cancelled the summit meeting.

At first, Eisenhower claimed to have no knowledge of the operation and was outraged when the truth revealed. UN Ambassador Stevenson made a vehement speech at the UN denying it happened, followed immediately with USSR producing both the plane's wreckage and its pilot.

Then USSR showed the pilot and wreckage was publicly displayed. Pilot F G Powers had safely bailed-out and was put on-trial in Moscow, convicted and then allowed to return to the US.

Mission Accomplished! by the unelected leaders of the US [who were certain their man Nixon would be the next President, followed by quick re-capture of Cuba and then war in Vietnam. Both those operations already directly involved Nixon, who was fully "in" on The Bay of Pigs and, earlier, plans for US "support" of Saigon leaders in "South" Vietnam with whom he established communications during his 1953 visit as Ike's new Vice-President.]

james , Dec 7, 2018 3:30:06 PM | link

...that data on this is more shocking then i realized.. the death of prof zhang - apparent suicide, is bizarre here..

i agree that the usa has been taken over by small minded neo cons that would try to use meng wanzhou as leverage.. the fact Bolton knew and Trump didn't.. i am not buying that, or Bolton is more manipulative then i realized.. they are all that stupid though.. i hope Canada doesn't allow this, but under the wuss Justin Trudeau, i am not holding my breath..

@ 12 dh... wanted for ignoring us sanctions on iran from 2009 to 2014... what the fuck has that to do with canada?? is canada now doing book keeping, and everything else for the usa? the usa can go fuck themselves.. if Canada wasn't a 2 bit vassal state, that is what we would tell the usa..

Uncle $cam , Dec 7, 2018 3:31:59 PM | link
Flashback Friday

Oh, and what happened to the head of interpol, Meng Hongwei recently???

A. Person , Dec 7, 2018 3:46:11 PM | link
OT, but just to a degree.

Today is Dec.7, a day in 1941 that Pres. Roosevelt aptly called "A Day of Infamy," as the Japanese military attacked Pearl Harbor.

We now know that the very top echelons of US government first correctly anticipated and then knew precisely when and how the attack would occur. The 3,000 (+/-) GI's who were sacrificed were considered "acceptable losses." (The 3,000 civilians who were sacrificed on 9/11 were also considered "acceptable losses.") "Infamy" is an accurate word for US .gov conduct.

(Pls, do not comment to this OT. Wait for the next open thread, if you must.)

John Gilberts , Dec 7, 2018 4:28:57 PM | link
Trudeau says he knew about the arrest in advance.

https://www.theglobeandmail.com/politics/article-canada-prepared-for-possible-chinese-cyber-retaliation-over-arrest-of/

Looks like Trump was out of the loop. Trudeau is mainly photo-op material only. This would have been Chrystia Freeland, the Nazi grand-daughter's file.

ashley albanese , Dec 7, 2018 5:29:38 PM | link
In Australia - endless media trumpeting the closed door to Chinese telcos from Australia and New Zealand but one has to go out of one's way to discover our neighbor Papua New GUINEA has continued using HuaHwei products albeit under U S pressure not to do so
bevin , Dec 7, 2018 5:32:00 PM | link
1/ "... the rise first of Communism and then of Islam as world forces opposing imperialism."

Has Islam, in fact, been in opposition to imperialism? For the most part, as in India/Pakistan, it has been a very useful imperialist foil against nationalism and socialism. There have been sincere and effective muslim campaigns against imperialism but equally there have been imperialist financed 'islamic' campaigns against enemies of the Empire.

2/ Canada's role in this is shocking. It is all of a piece with the surrender to the USA in the Trade negotiations whereby, inter alia, Canada is not allowed to enter into Trade agreements with 'non-market' economies. The non-market formulation being code for unapproved by Uncle Sam. No doubt the Nazi Freeland is running this show. In this she is ably seconded by the 'opposition' Tories and the social fascist NDP which is as enthusiastic for war against China as it is for an attack on the Donbas.

I used to be a member of this, once mildly socialist party. I am proud to say that I was expelled.

Rolf , Dec 7, 2018 5:38:42 PM | link
Five Eyes Against Huawei

7 DECEMBER 2018, http://www.voltairenet.org/article204264.html

Washington has asked Ottawa to arrest Meng Wanzhou and to extradite her. The motive for the war undertaken by Washington against Huawei is deep-rooted and spurious are the justifications.

The heart of the problem is that the Chinese firm uses a system of encryption that prevents the NSA from intercepting its communications. A number of governments and secret services in the non-Western world have begun to equip themselves exclusively with Huawei materials, and are doing so to protect the confidentiality of their communications.

The covers/excuses for this war are theft of intellectual property or in the alternative, trade with Iran and North Korea, and violating rules of competition by benefitting from national subsidies.

The Five Eyes is a system of electronic espionage by Australia, Canada, the United States, New Zealand and the United Kingdom. They have begun to exclude Huawei from their auctions.

Jackrabbit , Dec 7, 2018 5:46:11 PM | link

Those who talk about Trump, Pompeo, Bolton, Kelly, etc. direct our attention to a shell game. They are all in on the scam. How better to say it? There is one party: the war party. Trump is a member of TEAM USA. US political maestros dance to the tune of the Deep State/neolibcon.

Fine distinctions between senior US govt officials make me want to tear my hair out. In US govt only whistle-blowers are white knights. Everyone else is engaging in good guy/bad guy bullshit and controlled opposition.

With respect to Foreign Policy, how much real difference is there between Clinton, Bush, Obama, and Trump? They have all supported MIC, Israel, and expanding the Empire - aka Job #1.

Willy2 , Dec 7, 2018 5:46:51 PM | link
- Bolton was appointed under pressure from one Sheldon Adelson, who was a (large) donor to the Trump campaign. In that regard, it was (nearly) impossible for Trump to fire Bolton.
Castellio , Dec 7, 2018 5:50:25 PM | link
Jen @2

In terms of Frank Olsen, there is a very good six part documentary series on Netflix called "Wormwood". Most important are the interviews with Olsen's son. His search for the truth took many years (too many years) and he finally uncovered the final levels of deceit. Worth the time.

dh , Dec 7, 2018 5:53:10 PM | link
@14 ".. wanted for ignoring us sanctions on iran from 2009 to 2014... what the fuck has that to do with canada?? "

Absolutely nothing james. I suspect they are using that charge, rather than getting into 5G backdoor whatever, to make the extradition process go faster. They don't want it to drag on for years.

dh , Dec 7, 2018 5:56:39 PM | link
@32 Right. Bolton works for Adelson probably Pompeo does too. So Trump can't fire their crazy asses any time he chooses.
CDWaller , Dec 7, 2018 6:18:32 PM | link
Surely it's Bolton who must go. That was an enormous betrayal. The one thing that Trump had going for him was the performance of the stock market. His neocon enemies in the form of Bolton, managed to strike two blows simultaneously; increase conflict with China and tank the market.
Daniel , Dec 7, 2018 6:32:55 PM | link
Too many posters letting Trump off the hook here. He's a brilliant 4D chess master but at the same time he's also a vulnerable naif who lets neocons, ziofascists and other hostile entities keep hijacking his administration for their own ends? Bit of a problem there. You can't have it both ways.

Occam's Razor says the Trump administration's foreign policy, possibly with Russia as an exception, is run with the full approval of Donald John Trump. He's no friend of China, remember, and Steve Bannon's plan to befriend Russia was designed to keep it from partnering with China against the United States.

It's almost 2019 and like the Obots of 2010 it's time to accept that your man is a busted flush, a fraud, an American exceptionalist through and through.

jayc , Dec 7, 2018 6:37:39 PM | link
The "fraud" charge goes back to 2009/10, and concerns an alleged misrepresentation over the relationship between a company called SkyComm and Huawei. The alleged sanction violation by SkyComm had nothing to do with Iran's nuclear or military programs, and may not have even proceeded beyond a negotiation phase. The alleged "fraud", or misrepresentation, rests on a technical interpretation of complicated interlocking corporate structures. The prosecutors and the defence will likely both be correct in their presentations, as it is a muddle, but the well has already been poisoned by the now well-publicized accusations that Huawei is a Communist trojan horse. It's very thin gruel to proceed with such a high profile arrest.
Sasha , Dec 7, 2018 8:22:10 PM | link
@Posted by: Rolf | Dec 7, 2018 5:38:42 PM | 30
The heart of the problem is that the Chinese firm uses a system of encryption that prevents the NSA from intercepting its communications. A number of governments and secret services in the non-Western world have begun to equip themselves exclusively with Huawei materials, and are doing so to protect the confidentiality of their communications.

And not only the governments and secret services, Huawei is widely popular all along EU amongst the common working class user ( which means millions and millions of users....) especially because of its advantageous price and great capabilities.... I myself own a Huawei device, my friends own Huaweis....Glad to hear that "Five Eyes" can not spy on us....I am very fidel to marks/services who do not deceive me, but after knowing this new "capability", I am thinking in keeping Huawei as my header mark....Just waiting for them to launch the laptop "Five Eyes" waterproof and I will be throwing this old one to the trash bin....

dh , Dec 7, 2018 8:58:58 PM | link
Well it seems we have to wait until Monday to see if Meng gets bail or not. That's a long time for Trump to keep his mouth shut on anything.
Glenn Brown , Dec 7, 2018 9:03:38 PM | link
@32,36
I wonder how Adelson would react to a Chinese boycott of his casinos in Macau and Singapore? A lot of his wealth has come from Chinese gamblers. Given Adelson's connections to Bolton and Trump, it would seem like an obvious pressure point.
james , Dec 7, 2018 9:29:36 PM | link
@38 lili... denk was discussing this on the open thread yesterday.. see his links @68 / 76 and etc on this page.. no one is discussing this..

@48 peter au.. it certainly appears that way.. funny thing how trump sold himself on a number of topics, but not that one.. meanwhile, i guess the loot from adelson is quite good... stick with me and you don't need any stickin russian oligarch.. what is quite amazing is how blind the average amerikkkan is to all this.. they are still stuck on the mueller investigation which has been running on empty for some time... they would never do an investigation on isreal, or zionists influence on us elections, as it is too friggin' obvious for anyone looking... better to skip that and continue to serve israel.. thus the constant fixation with iran..

james , Dec 7, 2018 9:30:59 PM | link
or russia and china, as the case may be... the top 3 evil countries, according to obama, or was that north korea.. i guess trump will have to revise it.. the usa is pathetic.. canada is not far behind..
Don Bacon , Dec 7, 2018 9:38:22 PM | link
Trump didn't know b/c the NYTimes said so?
I've got this bridge....
China's response may not be immediate, but it will come.
I'm reminded of the sudden death of Vice Adm. Scott Stearney, commander of the Navy's 5th Fleet, Persian Gulf, discovered inside his home in Bahrain last weekend, a "suspected suicide."
Iran always gets even.
psychohistorian , Dec 7, 2018 9:41:09 PM | link
To those of us that understand that all/most of the politicians are working for the same team, it should be easy to see the good cop/bad cop dynamic being used here.

If b thinks Trump is a good cop, as he presents him here (yes, b has written that he disagrees with all/most of what Trump does) as do other commenters that post here, I would posit that "they" are being successful in working that meme at this time.

China will not back down and now will play hardball back, but in a globalist sense I expect them to continue to take the high road as the West mires itself further in the muck of its religion of private finance.

Another commenter mentioned the strategy of China dumping its massive amount of US Treasuries. I think we are getting to that moment and the response of the US is to default on whomever is holding its debt...............

and then the war we have been in for some time turns serious.

The problem the elite have is making the public have the fervor to slaughter themselves for the purpose of continuing a society run by and only servicing the elite. I don't understand how they have managed all these centuries but here we are, a bit still in the dark ages of a thousand years ago.

dh , Dec 7, 2018 9:57:33 PM | link
@55. Very interesting idea. Adelson has made millions with his gambling dens. In some ways it's a bit like what the East India Company did with opium.
Don Bacon , Dec 7, 2018 10:14:47 PM | link
I think we can assume that the arrest was not an unwelcome surprise for Trump, or he would have reversed it. He knew, and accepts it. It's total asymmetric war on China. The arrest was on December 1. Trump twitter, Dec 7 China talks are going very well! here
Anunnaki , Dec 7, 2018 10:21:01 PM | link
Does the fact that Huawei recently passed Apple for the number 2 phone sales have anything to do with this
Hoarsewhisperer , Dec 7, 2018 10:21:55 PM | link
This is a 100% neocon clusterfuck. It is vital to the success of Trump's Drain The Swamp strategy that The Swampers be given every opportunity to put their anti-US influence on public display. At least now we know which weirdos are responsible for the US policy of "Let's do SOMETHING, even it it's stupid."

I've been scouring the 'News' and the www for evidence that China agreed to uphold US sanctions on Iran to an extent that would invite the US to punish China for disregarding US whims. No luck, so far.

What makes this story entertaining is that the US has not only surrendered its lead in Military Tech, from the Good Old Days, but Computer and Communications Tech too. You have to be pretty desperate to admit a blunder of that magnitude, albeit obliquely, as in this case.

slit , Dec 7, 2018 10:24:07 PM | link
Unlikely that few in Trump's cabinet or Senate Foreign Relations committee could even pass the physics section of a college entrance exam, and have little idea what quantum encryption even is (Chinese published on it first a couple of years ago).

That presumption alone suggests Pompeo Bolton etc are just finger puppets ... which oligarch has all those cia contracts again?

They are in well over their heads. They can't even keep up with the Russians. They will likely get stung by Chinese scorpions without even knowing what hit them!

dh , Dec 7, 2018 10:28:27 PM | link
@63 Indirectly yes. According to Jim Cramer....whose objectivity I am increasingly coming to respect....Apple will lose out because of the arrest.

"Top tech players like Apple, Micron, Intel and Qualcomm are all "worth less today than yesterday," says the "Mad Money" host."

https://www.cnbc.com/2018/12/06/cramer-huawei-cfo-arrest-just-made-companies-like-apple-less-valuable.html

Hoarsewhisperer , Dec 7, 2018 10:52:40 PM | link
Another 'unintended consequence' of the neocon gambit to embarrass Trump by by-passing him, will be renewed interest in something Vlad said in one of Oliver Stone's Putin's Interviews.

In the context of Vlad's feelings about POTUS Trump, Vlad said words to the effect that it's too soon to say. Everyone knows that AmeriKKKa has been run by the Permanent Bureaucracy (not the POTUS). A lot of people would have been 'too busy' to watch the Putin Interviews but World Leaders, everywhere, would not have been among them. So as of December 1, 2018, that cat is well and truly out of the bag and all eyes, as usual, are on Trump. Again.

Don Bacon , Dec 7, 2018 10:54:09 PM | link
CNN: A judge in the US District Court for the Eastern District of New York issued a warrant for Meng's arrest on August 22, it was revealed at the hearing Friday here . She was arrested on December 1. Meng didn't know about this "issued warrant?" How does this 'system of laws' work, anyhow? Perhaps the warrant issue was classified secret, for US national security?

Actually, I fear, it's a conspiracy of intel agencies, security advisors and courts to conduct domestic and foreign policy. It's a non-elected "government" which elected politicians can't touch. For those that doubt it, check out this important interview with intel whistleblowers Shipp, Binney and Kiriakou which describes Washington corruption is here . (h/t Carlton Meyer)
Politicians can't touch this secret government lest their security clearances be removed.

Don Bacon , Dec 7, 2018 11:03:36 PM | link
@70
In the two-hour interview John Kiriakou points out that the intel agencies have their favorite courts. His delayed case, resurrected by Obama, was heard by a court in eastern Virginia, which had a 98% conviction rate. They got him for a couple years in prison. General Petraeus, however, who did much worse, had his case heard in a court in western Virginia, and he got probation. It appears that the US District Court for the Eastern District of New York is good for anti-China warrants.
the pessimist , Dec 7, 2018 11:48:53 PM | link
D B@70 I read that she was aware of the warrant and avoided traveling to the USA because of it as she had been doing to ?" visit her son who was in school here"? but likely thought Canada safe. Wrong.

So China seems fearful to me - detaining the head of INTERPOL for instance and re-educating the Uyghurs en mass, plus the heavy internet censorship. But they cannot disengage from the west economically without risking social upheaval. Nor can the US afford to disengage from China for roughly the same reason (unlike Russia from whom the US gets rocket engines but little else they cannot obtain from other sources).

In a few years time (2, or perhaps 3) both Russia and China will have deployed weapons that can deter anything but a full on nuclear attack, and their military capability will continue to advance. US strategy seems to be to disrupt, slow, and sabotage both to the extent it is able using economic and political weapons and military posturing. I don't believe it can catch up and this creates extra danger - the longer it waits the greater the gap will be - economic and military. Many of the responses seem borderline hysterical to me - not a good thing.

The problem with Iran is (as was with Iraq, Libya, Venezuela, and even Syria) that a country with an independent/non-aligned foreign policy has control of a large quantity of valuable natural resources for which there is a constant and relatively insatiable demand. If they cannot be controlled they they should be destroyed so they cannot pursue their own agenda and ignore the dictates of the west. China and Russia are this problem writ large, and they have nukes and a means of delivery to all corners of the globe...

[Dec 03, 2018] Neoliberalism is a modern curse. Everything about it is bad and until we're free of it, it will only ever keep trying to turn us into indentured labourers. It's acolytes are required to blind themselves to logic and reason to such a degree they resemble Scientologists or Jehovah's Witnesses more than people with any sort of coherent political ideology, because that's what neoliberalism actually is... a cult of the rich, for the rich, by the rich... and it's followers in the general population are nothing but moron familiars hoping one day to be made a fully fledged bastard.

Highly recommended!
Notable quotes:
"... What sticks in the neoliberalism craw is that the state provides these services instead of private businesses, and as such "rob" them of juicy profits! The state, the last easy cash cow! ..."
"... Who could look at the way markets function and conclude there's any freedom? Only a neoliberal cult member. They cannot be reasoned with. They cannot be dissuaded. They cannot be persuaded. Only the market knows best, and the fact that the market is a corrupt, self serving whore is completely ignored by the ideology of their Church. ..."
"... when Thatcher and Reagan deregulated the financial markets in the 80s, that's when the trouble began which in turn led to the immense crash in 2008. ..."
"... Neo-liberalism is just another symptom of liberal democracy which is government by oligarchs with a veneer of democracy ..."
"... The state has merged with the corporations so that what is good for the corporations is good for the state and visa versa. The larger and richer the state/corporations are, the more shyster lawyers they hire to disguise misdeeds and unethical behavior. ..."
"... If you support a big government, you are supporting big corporations as well. The government uses the taxpayer as an eternal fount of fresh money and calls it their own to spend as they please. Small businesses suffer unfairly because they cannot afford the shyster lawyers and accountants that protect the government and the corporations, but nobody cares about them. ..."
"... Deborah's point about the illogical demands of neoliberalism are indeed correct, which is somewhat ironic as neoliberalism puts objective rationality at the heart of its philosophy, but I digress... ..."
"... There would not be NHS, free education etc. without socialism; in fact they are socialism. It took the Soviet-style socialism ("statism") 70 years to collapse. The neoliberalistic capitalism has already started to collapse after 30 years. ..."
"... I'm always amused that neoliberal - indeed, capitalist - apologists cannot see the hypocrisy of their demands for market access. Communities create and sustain markets, fund and maintain infrastructure, produce and maintain new consumers. Yet the neolibs decry and destroy. Hypocrites or destructive numpties - never quite decided between Pickles and Gove ..."
"... 97% of all OUR money has been handed over to these scheming crooks. Stop bailing out the banks with QE. Take back what is ours -- state control over the creation of money. Then let the banks revert to their modest market-based function of financial intermediaries. ..."
"... The State can't be trusted to create our money? Well they could hardly do a worse job than the banks! Best solution would be to distribute state-created money as a Citizen's Income. ..."
"... To promote the indecent obsession for global growth Australia, burdened with debt of around 250 billion dollars, is to borrow and pay interest on a further 7 billion dollars to lend to the International Monetary Fund so as it can lend it to poorer nations to burden them with debt. ..."
Dec 03, 2018 | www.theguardian.com
szwalby , 8 Jun 2013 06:03
This private good, public bad is a stupid idea, and a totally artificial divide. After all, what are "public spends"? It is the money from private individuals, and companies, clubbing together to get services they can't individually afford.

What sticks in the neoliberalism craw is that the state provides these services instead of private businesses, and as such "rob" them of juicy profits! The state, the last easy cash cow!

TedSmithAndSon , 8 Jun 2013 06:01
Neoliberalism is a modern curse. Everything about it is bad and until we're free of it, it will only ever keep trying to turn us into indentured labourers. It's acolytes are required to blind themselves to logic and reason to such a degree they resemble Scientologists or Jehovah's Witnesses more than people with any sort of coherent political ideology, because that's what neoliberalism actually is... a cult of the rich, for the rich, by the rich... and it's followers in the general population are nothing but moron familiars hoping one day to be made a fully fledged bastard.

Who could look at the way markets function and conclude there's any freedom? Only a neoliberal cult member. They cannot be reasoned with. They cannot be dissuaded. They cannot be persuaded. Only the market knows best, and the fact that the market is a corrupt, self serving whore is completely ignored by the ideology of their Church.

It's subsumed the entire planet, and waiting for them to see sense is a hopeless cause. In the end it'll probably take violence to rid us of the Neoliberal parasite... the turn of the century plague.

fr0mn0where -> CaptainGrey , 8 Jun 2013 05:51
@CaptainGrey -

"Capitalism, especially the beneficial capitalism of the NHS, free education etc. has won and countless people have gained as a result."

I agree with you and it was this beneficial version of capitalism that brought down the Iron Curtain. Working people in the former Communist countries were comparing themselves with working people in the west and wanted a piece of that action. Cuba has hung on because people there compare themselves with their nearest capitalist neighbor Haiti and they don't want a piece of that action. North Korea well North Korea is North Korea.

Isn't it this beneficial capitalism that is being threatened now though? When the wall came down it was assumed that Eastern European countries would become more like us. Some have but who would have thought that British working people would now be told, by the likes of Kwasi Kwarteng and his Britannia Unchained chums, that we have to learn to accept working conditions that are more like those in the Eastern European countries that got left behind and that we are now told that our version of Capitalism is inferior to the version adopted by the Communist Party of China?

jazzdrum -> bullwinkle , 8 Jun 2013 05:51
@bullwinkle - No , when Thatcher and Reagan deregulated the financial markets in the 80s, that's when the trouble began which in turn led to the immense crash in 2008.
Eddiel899 , 8 Jun 2013 05:51
Neo-liberalism is just another symptom of liberal democracy which is government by oligarchs with a veneer of democracy.

This type of government began in America about 150 years ago with the Rockefellers, Carnegie, J.P. Morgan, Ford etc who took advantage of new inventions, cheap immigrant labour and financial deregulation in finance and social mores to amass wealth for themselves and chaos and austerity for workers.

All this looks familiar again today with new and old oligarchs hiding behind large corporations taking advantage of the invention of the €uro, mass immigration into western Europe and deregulation of the financial "markets" and social mores to amass wealth for a super-wealthy elite and chaos and austerity for workers.

So if we want to see where things went wrong we need only go back 150 years to what happened to America. There we can also see our future?

WilliamAshbless -> CaptainGrey , 8 Jun 2013 05:49
@CaptainGrey

The beneficial capitalism of the NHS, free education etc. has won

Free education and the NHS are state institutions. As Debbie said, Amazon never taught anyone to read. Beneficial capitalism is an oxymoron resulting from your lack of understanding.

cpp4ever -> CaptainGrey , 8 Jun 2013 05:41
@CaptainGrey -

especially the beneficial capitalism of the NHS, free education etc. has won and countless people have gained as a result.

At one and the same time being privatized and having their funding squeezed, a direct result of the neoliberal dogma capitalism of austerity. Free access is being eroded by the likes of ever larger student loans and prescription costs for a start.

ATrueFinn -> SpinningHugo , 8 Jun 2013 05:41
@ SpinningHugo 08 June 2013 10:02am .

Nah. They achieved this by copying the west.

I would not go that far. The Western Capitalist Party is only now getting to be as powerful as CCP and China started the "reforms" in the late 1970s.

succulentpork , 8 Jun 2013 05:36

they avoid their taxes, because they can, because they are more powerful than governments

Let's not get carried away here. Let's consider some of the things governments can do, subject only to a 5 yearly check and challenge:

  1. force people upon pain of imprisonment to pay taxes to them
  2. pay out that tax money to whomever they like
  3. spend money they don't have by borrowing against obligations imposed on future taxpayers without their agreement
  4. kill people in wars, often from the comfort of a computer screen thousands of miles away
  5. print money and give it to whomever they like,
  6. get rid of nation state currencies and replace them with a single, centrally controlled currency
  7. make laws and punish people who break them, including the ability to track them down in most places in the world if they try and run away.
  8. use laws to create monopolies and favour special interests

Let's now consider what power apple have...

- they can make iPhones and try to sell them for a profit by responding to the demands of the mass consumer market. That's it. In fact, they are forced to do this by their owners who only want them to do this, and nothing else. If they don't do this they will cease to exist.

generalelection , 8 Jun 2013 05:26
The state has merged with the corporations so that what is good for the corporations is good for the state and visa versa. The larger and richer the state/corporations are, the more shyster lawyers they hire to disguise misdeeds and unethical behavior.

If you support a big government, you are supporting big corporations as well. The government uses the taxpayer as an eternal fount of fresh money and calls it their own to spend as they please. Small businesses suffer unfairly because they cannot afford the shyster lawyers and accountants that protect the government and the corporations, but nobody cares about them. Remember, that Green Energy is big business, just like Big Pharma and Big Oil. Most government shills have personally invested in Green Energy not because they care about the environment, only because they know that it is a safe investment protected by government for government. The same goes for large corporations who befriend government and visa versa.

... ... ...

finnkn -> NeilThompson , 8 Jun 2013 05:20
@NeilThompson - It's all very well for Deborah to recommend that the well paid share work. Journalists, consultants and other assorted professionals can afford to do so. As a self-employed tradesman, I'd be homeless within a month.
finnkn -> SpinningHugo , 8 Jun 2013 05:17
@SpinningHugo - Interesting that those who are apparently concerned with prosperity for all and international solidarity are happy to ignore the rest of the world when it's going well, preferring to prophesy apocalypse when faced with government spending being slightly reduced at home.
sedan2 -> Fachan , 8 Jun 2013 05:11
@Fachan -

Dont see a lot of solutions in this article - as long as our sentiments revolve around envy of the rich, we wont get very far

Yeah, there actually wasn't anything in this article which even smelled of "envy of the rich". Read it again.

KingOfNothing -> 1nn1t , 8 Jun 2013 05:03
@1nn1t - That is a point which just isn't made enough. This is the first group of politicians for whom a global conflict seems like a distant event.

As a result we have people like Blair who see nothing wrong with invading countries at a whim, or conservatives and UKIP who fail to understand the whole point of the European Court of Human Rights.

They seem to act without thought of our true place in the world, without regard for the truly terrible capacity humanity has for self destruction.

REDLAN1 , 8 Jun 2013 05:03
Deborah's point about the illogical demands of neoliberalism are indeed correct, which is somewhat ironic as neoliberalism puts objective rationality at the heart of its philosophy, but I digress...

The main problem with replacing neoliberalism with a more rational, and fairer system, entails that people like Deborah accept that they will be less wealthy. And that my friends is the main problem. People like Deborah, while they are more than happy to point the fingers at others, are less than happy to accept that they are also part of the problem.

(Generalisation Caveat: I don't know in actuality if Deborah would be unhappy to be less wealthy in exchange for a fairer system, she doesn't say)

Herbolzheim , 8 Jun 2013 04:49
Good critique of conservative-neoliberalism, unless you subscribe to it and subordinate any morals or other values to it. She mentions an internal tension and I think that's because conservatism and neoliberal market ideology are different beasts.
NotAgainAgain -> CaptainGrey , 8 Jun 2013 04:47
@CaptainGrey -

There are different models of capitalism quite clearly the social democratic version in Scandinavia or the "Bismarkian" German version have worked a lot better than the UKs.

DavidPavett , 8 Jun 2013 04:45

Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem.

How is it a sign of that? We are offered no clues.

What they don't seem to acknowledge is that the merry days of reckless lending are never going to return;

Try reading a history of financial crashes to dislodge this idea.

... even if they do, the same thing will happen again, but more quickly and more savagely.

This may or may not be true but here it is mere assertion.

The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt.

At this point I start to have real doubts as to whether Deborah Orr has actually read even the Executive Summary of the Report this article is ostensibly a response to.

All the comments that follow about the need for public infrastructure, education, regulated markets and so on are made as if they were a criticism of the IMF and yet the IMF says many of those same things itself. The IMF position may, of course, be contradictory - but then that is something that would need to be demonstrated. It seems that Deborah has not got beyond reading a couple of Guardian articles on the issues she discusses and therefore is in no position to do this.

Thus, for example in its review of world problems of Feb 2013 the IMF comments favorably that in Bangladesh in order to boost competitiveness

Efforts are being made to narrow the skills gap with other countries in the region, as the authorities look to take full advantage of Bangladesh's favorable demographics and help create conditions for more labor-intensive led growth. The government is also scaling up spending on education, science and technology, and information and communication technology.

Which seems to be the sort of thing Deborah Orr is calling for. She should spend a little time on the IMF website before criticising the institution. It is certainly one that merits much criticism - but it needs to be informed.

And the solution to the problems? For Deborah Orr the response

... from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.

Does anyone have any idea what this is supposed to mean? There are certainly no leads on this in the link given to "the philosopher" John Gray. And what a strange reference that is. John Gray, in his usual cynical mode, dismisses the idea of progress being achieved by the EU. But then I suppose that is consistent from a man who dismisses the idea of progress itself.

... Conservative neoliberalism is entirely without logic.

The first step in serious political analysis is to understand that the people one opposes are not crazy and are not devoid of logic. If that is not clearly understood then all that is left is the confrontation of assertion and contrary assertion. Of course Conservative neoliberalism has a logic. It is one I do not agree with but it is a logic all the same.

The neoliberalism that the IMF still preaches pays no account to any of this [the need for public investment and a recognition of the multiple roles that individuals have].

Wrong again.

It insists that the provision of work alone is enough of an invisible hand to sustain a market.

And again.

This stuff can't be made up as you go along on the basis of reading a couple of newspaper articles. You actually have to do some hard reading to get to grip with the issues. I can see no signs of that in this piece.

EllisWyatt -> NotAgainAgain , 8 Jun 2013 04:43
@NotAgainAgain - We are going off topic and that is in no small part down to my own fault, so apologies. Just to pick up the point, I guess my unease with the likes of Buffet, Cooper-Hohn or even the wealthy Guardian columnists is that they are criticizing the system from a position of power and wealth.

So its easy to advocate change if you feel that you are in the vanguard of defining that change i.e. the reforms you advocate may leave you worse off, but at a level you feel comfortable with (the prime example always being Polly's deeply relaxed attitude to swingeing income tax increases when her own lifestyle will be protected through wealth).

I guess I am a little skeptical because I either see it as managed decline, a smokescreen or at worst mean spiritedness of people prepared to accept a reasonable degree of personal pain if it means other people whom dislike suffer much greater pain.

Again off topic so sorry about that

NotAgainAgain -> mountman , 8 Jun 2013 04:43
@mountman -

The critical bit is this

"There is a clear legal basis in Germany for the workplace representation of employees in all but the very smallest companies. Under the Works Constitution Act, first passed in 1952 and subsequently amended, most recently in 2001, a works council can be set up in all private sector workplaces with at least five employees."

http://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation

The UK needs to wake up to the fact that managers are sometimes inept or corrupt and will destroy the companies they work for, unless their are adequate mechanisms to hold poor management to account.

ATrueFinn -> SpinningHugo , 8 Jun 2013 04:42
@ SpinningHugo 08 June 2013 9:26am

More people lifted out of poverty in China over the last 25 years than the entire population of South America.

Maybe we need the Chinese Communist Party to take over the world?

ATrueFinn -> CaptainGrey , 8 Jun 2013 04:40
@ CaptainGrey 08 June 2013 8:43am

Capitalism, especially the beneficial capitalism of the NHS, free education etc. has won

There would not be NHS, free education etc. without socialism; in fact they are socialism. It took the Soviet-style socialism ("statism") 70 years to collapse. The neoliberalistic capitalism has already started to collapse after 30 years.

irishaxeman , 8 Jun 2013 04:40
I'm always amused that neoliberal - indeed, capitalist - apologists cannot see the hypocrisy of their demands for market access. Communities create and sustain markets, fund and maintain infrastructure, produce and maintain new consumers. Yet the neolibs decry and destroy. Hypocrites or destructive numpties - never quite decided between Pickles and Gove, y'see.
EllisWyatt -> JamesValencia , 8 Jun 2013 04:38
@JamesValencia - Actually on reflection you are correct and I was wrong in my attack on the author above. Having re-read the article its a critique of institutions rather than people so my points were wide of the mark.

I still think that well heeled Guardian writers aren't really in a position to attack the wealthy and politically connected, but I'll save that for a thread when they explicitly do so, rather than the catch all genie of neoliberalism.

bullwinkle -> bluebirds , 8 Jun 2013 04:38
@bluebirds -

@CaptainGrey - deregulated capitalism has failed. That is the product of the last 20 years. The pure market is a fantasy just as communism is or any other ideology. In a pure capitalist economy all the banks of the western world would have bust and indeed the false value "earned" in the preceding 20 years would have been destroyed.

If the pure market is a fantasy, how can deregulated capitalism have failed? Does one not require the other? Surely it is regulated capitalism that has failed?

snodgrass , 8 Jun 2013 04:36
97% of all OUR money has been handed over to these scheming crooks. Stop bailing out the banks with QE. Take back what is ours -- state control over the creation of money. Then let the banks revert to their modest market-based function of financial intermediaries.

The State can't be trusted to create our money? Well they could hardly do a worse job than the banks! Best solution would be to distribute state-created money as a Citizen's Income.

EllisWyatt -> 1nn1t , 8 Jun 2013 04:35
@1nn1t - Some good points, there is a whole swathe of low earners that should not be in the tax system at all, simply letting them keep the money in their pocket would be a start.

Second the minimum wage (especially in the SE) is too low and should be increased. Obviously the devil is in the detail as to the precise rate, the other issue is non compliance as there will be any number of businesses that try and get around this, through employing people too ignorant or scared to know any better or for family businesses - do we have the stomach to enforce this?

Thirdly there is a widespread reluctance to separate people from the largesse of the state, even at absurd levels of income such as higher rate payers (witness child tax credits). On the right they see themselves as having paid in and so are "entitled" to have something back and on the left it ensures that everyone has a vested interest in a big state dipping it hands into your pockets one day and giving you something back the next.

Broken system

1nn1t -> Uncertainty , 8 Jun 2013 04:34

@Uncertainty - Which is why the people of the planet need to join hands.

The only group of people in he UK to see that need were the generation that faced WW2 together. It's no accident that, joining up at 18 in 1939, they had almost all retired by 1984.
BruceMullinger , 8 Jun 2013 04:31
To promote the indecent obsession for global growth Australia, burdened with debt of around 250 billion dollars, is to borrow and pay interest on a further 7 billion dollars to lend to the International Monetary Fund so as it can lend it to poorer nations to burden them with debt.

It is entrapment which impoverishes nations into the surrender of sovereignty, democracy and national pride. In no way should we contribute to such economic immorality and the entire economic system based on perpetual growth fuelled by consumerism and debt needs top be denounced and dismantled. The adverse social and environmental consequence of perpetual growth defies all sensible logic and in time, in a more responsible and enlightened era, growth will be condemned.

[Nov 27, 2018] The political fraud of Alexandria Ocasio-Cortez's "Green New Deal"

Highly recommended!
After Democratic party was co-opted by neoliberals there is no way back. And since Obama the trend of Democratic Party is toward strengthening the wing of CIA-democratic notthe wing of the party friendly to workers. Bought by Wall Street leadership is uncable of intruting any change that undermine thier current neoliberal platform. that's why they criminally derailed Sanders.
Notable quotes:
"... When you think about the issue of how exactly a clean-energy jobs program would address the elephant in the room of private accumulation and how such a program, under capitalism, would be able to pay living wages to the people put to work under it, it exposes how non threatening these Green New Deals actually are to capitalism. ..."
"... To quote Trotsky, "These people are capable of and ready for anything!" ..."
"... "Any serious measures to stop global warming, let alone assure a job and livable wage to everyone, would require a massive redistribution of wealth and the reallocation of trillions currently spent on US imperialism's neo-colonial wars abroad." ..."
"... "It includes various left-sounding rhetoric, but is entirely directed to and dependent upon the Democratic Party." ..."
"... "And again and again, in the name of "practicality," the most unrealistic and impractical policy is promoted -- supporting a party that represents the class that is oppressing and exploiting you! The result is precisely the disastrous situation working people and youth face today -- falling wages, no job security, growing repression and the mounting threat of world war." - New York Times tries to shame "disillusioned young voters" into supporting the Democrats ..."
"... It is an illusion that technical innovation within the capitalist system will magically fundamentally resolve the material problems produced by capitalism. But the inconvenient facts are entirely ignored by the corporate shills in the DSA and the whole lot of establishment politicians, who prefer to indulge their addiction to wealth and power with delusions of grandeur, technological utopianism, and other figments that serve the needs of their class. ..."
"... First it was Obama with his phoney "hope and change" that lured young voters to the Dumbicrats and now it's Ocacia Cortez promising a "green deal" in order to herd them back into the Democratic party--a total fraud of course--totally obvious! ..."
"... from Greenwald: The Democratic Party's deceitful game https://www.salon.com/2010/... ..."
Nov 27, 2018 | www.wsws.org

Raymond Colison4 days ago

they literally ripped this out of the 2016 Green Party platform. Jill Stein spoke repeatedly about the same exact kind of Green New Deal, a full-employment, transition-to-100%-renewables program that would supposedly solve all the world's problems.

When you think about the issue of how exactly a clean-energy jobs program would address the elephant in the room of private accumulation and how such a program, under capitalism, would be able to pay living wages to the people put to work under it, it exposes how non threatening these Green New Deals actually are to capitalism.

In 2016, when the Greens made this their central economic policy proposal, the Democrats responded by calling that platform irresponsible and dangerous ("even if it's a good idea, you can't actually vote for a non-two-party candidate!"). Why would they suddenly find a green new deal appealing now except for its true purpose: left cover for the very system destroying the planet.

To quote Trotsky, "These people are capable of and ready for anything!"

Greg4 days ago
"Any serious measures to stop global warming, let alone assure a job and livable wage to everyone, would require a massive redistribution of wealth and the reallocation of trillions currently spent on US imperialism's neo-colonial wars abroad."

Their political position not only lacks seriousness, unserious is their political position.

"It includes various left-sounding rhetoric, but is entirely directed to and dependent upon the Democratic Party."

For subjective-idealists, what you want to believe, think and feel is just so much more convincing than objective reality. Especially when it covers over single-minded class interests at play.

"And again and again, in the name of "practicality," the most unrealistic and impractical policy is promoted -- supporting a party that represents the class that is oppressing and exploiting you! The result is precisely the disastrous situation working people and youth face today -- falling wages, no job security, growing repression and the mounting threat of world war." - New York Times tries to shame "disillusioned young voters" into supporting the Democrats

Penny Smith4 days ago
It is an illusion that technical innovation within the capitalist system will magically fundamentally resolve the material problems produced by capitalism. But the inconvenient facts are entirely ignored by the corporate shills in the DSA and the whole lot of establishment politicians, who prefer to indulge their addiction to wealth and power with delusions of grandeur, technological utopianism, and other figments that serve the needs of their class.
Jim Bergren4 days ago
First it was Obama with his phoney "hope and change" that lured young voters to the Dumbicrats and now it's Ocacia Cortez promising a "green deal" in order to herd them back into the Democratic party--a total fraud of course--totally obvious!

Only an International Socialist program led by Workers can truly lead a "green revolution" by expropriating the billionaire oil barons of their capital and redirecting that wealth into the socialist reconstruction of the entire economy.

Master Oroko4 days ago
Alexandria Ocasio-Cortez's "Green New Deal" is a nice laugh. Really, it sure is funny hearing these lies given any credence at all. This showmanship belongs in a fantasy book, not in real life. The Democratic Party as a force for good social change Now that's a laugh!
Vivek Jain4 days ago
from Greenwald: The Democratic Party's deceitful game https://www.salon.com/2010/...
лидия5 days ago
"Greenwashing" of capitalism (and also of Zionist apartheid colony in Palestine) is but one of dirty tricks by Dems and their "left" backers.
Kalen5 days ago
Lies, empty promises, meaningless tautologies and morality plays, qualified and conditional declarations to be backpedalled pending appropriate political expediencies, devoid any practical content that is what AOC, card carrying member of DSA, and in fact young energetic political apparatchik of calcified political body of Dems establishment, duty engulfs. And working for socialist revolution is no one of them.

What kind of socialist would reject socialist revolution, class struggle and class emancipation and choose, as a suppose socialist path, accommodation with oligarchic ruling elite via political, not revolutionary process that would have necessarily overthrown ruling elite.

What socialist would acquiesce to legalized exploitation of people for profit, legalized greed and inequality and would negotiate away fundamental principle of egalitarianism and working people self rule?

Only National Socialist would; and that is exactly what AOC campaign turned out to be all about.

National Socialism with imperial flavor is her affiliation and what her praises for Pelosi, wife of a billionaire and dead warmonger McCain proved.

Now she is peddling magical thinking about global change and plunge herself into falacy of entrepreneurship, Market solution to the very problem that the market solutions were designed to create and aggravate namely horrific inequality that is robbing people from their own opportunities to mitigate devastating effects of global change.

The insidiousness of phony socialists expresses itself in the fact that they lie that any social problem can be fixed by current of future technical means, namely via so called technological revolution instead by socialist revolution they deem unnecessary or detrimental.

Me at home Kalen4 days ago
The technical means for achieving socialism has existed since the late 19th century, with the telegraph, the coal-powered factory, and modern fertilizer. The improvements since then have only made socialism even more streamlined and efficient, if such technologies could only be liberated from capital! The idea that "we need a new technological revolution just to achieve socialism" reflects the indoctrination in capitalism by many "socialist" theorists because it is only in capitalism where "technological growth" is essential simply to maintain the system. It is only in capitalism (especially America, the most advanced capitalist nation, and thus, the one where capitalism is actually closest towards total crisis) where the dogma of a technological savior is most entrenched because America cannot offer any other kind of palliative to the more literate and productive sections of its population. Religion will not convince most and any attempt at a sociological or economic understanding would inevitably prove the truth of socialism.

[Nov 27, 2018] American capitalism could afford to make concessions assiciated with The New Deal because of its economic dominance. The past forty years have been characterized by the continued decline of American capitalism on a world stage relative to its major rivals. The ruling class has responded to this crisis with a neoliberal counterrevolution to claw back all gains won by workers. This policy has been carried out under both Democratic and Republican administrations and with the assistance of the trade unions.

Highly recommended!
Notable quotes:
"... The original "New Deal," which included massive public works infrastructure projects, was introduced by Democratic President Franklin Roosevelt in the 1930s amid the Great Depression. Its purpose was to stave off a socialist revolution in America. It was a response to a militant upsurge of strikes and violent class battles, led by socialists who were inspired by the 1917 Russian Revolution ..."
"... Since the 2008 crash, first under Bush and Obama, and now Trump, the ruling elites have pursued a single-minded policy of enriching the wealthy, through free credit, corporate bailouts and tax cuts, while slashing spending on social services. ..."
"... To claim as does Ocasio-Cortez that American capitalism can provide a new "New Deal," of a green or any other variety, is to pfile:///F:/Private_html/Skeptics/Political_skeptic/Neoliberalism/Historyromote an obvious political fiction." ..."
Nov 27, 2018 | thenewkremlinstooge.wordpress.com

Northern Star November 26, 2018 at 4:23 pm

As the New deal unravels:

"The original "New Deal," which included massive public works infrastructure projects, was introduced by Democratic President Franklin Roosevelt in the 1930s amid the Great Depression. Its purpose was to stave off a socialist revolution in America. It was a response to a militant upsurge of strikes and violent class battles, led by socialists who were inspired by the 1917 Russian Revolution that had occurred less than two decades before.

American capitalism could afford to make such concessions because of its economic dominance. The past forty years have been characterized by the continued decline of American capitalism on a world stage relative to its major rivals. The ruling class has responded to this crisis with a social counterrevolution to claw back all gains won by workers. This has been carried out under both Democratic and Republican administrations and with the assistance of the trade unions.

Since the 2008 crash, first under Bush and Obama, and now Trump, the ruling elites have pursued a single-minded policy of enriching the wealthy, through free credit, corporate bailouts and tax cuts, while slashing spending on social services.

To claim as does Ocasio-Cortez that American capitalism can provide a new "New Deal," of a green or any other variety, is to pfile:///F:/Private_html/Skeptics/Political_skeptic/Neoliberalism/Historyromote an obvious political fiction."

https://www.wsws.org/en/articles/2018/11/23/cort-n23.html

[Nov 22, 2018] Here's one for all those who say, indignantly, "US debt is not 100% of GDP". No, that's right; it's not.

Nov 22, 2018 | thenewkremlinstooge.wordpress.com

Mark Chapman November 14, 2018 at 8:46 pm

Here's one for all those who say, indignantly, "US debt is not 100% of GDP". No, that's right; it's not.

https://seekingalpha.com/article/4221893-liquidity-bubble-pops-face-biggest-crisis-yet

[Nov 17, 2018] Goldman Sachs CEO is "personally outraged" at criminal behavior in his bank

I guess he thinks Lloyd Blankfein god is a real greedy thief that would screw people for a dollar.
Nov 17, 2018 | caucus99percent.com
disreputable behavior in his bank.

... ... ...

Ah, yes. Goldman Sachs is famous for their "good work and integrity".

The US Department of Justice (DOJ) has said about $4.5 billion was misappropriated from 1MDB, including some money that Goldman Sachs helped raise, by high-level officials of the fund and their associates from 2009 through 2014.

US prosecutors filed criminal charges against 2 former Goldman Sachs bankers earlier this month. One of them, Tim Leissner, pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act.

I'm sure it was just a "few bad apples", like Goldman Sachs's Ex-CEO Lloyd Blankfein , who was personally involved in the transaction.
You might remember Lloyd from his doing "God's Work" .

[Nov 03, 2018] Kunstler The Midterm Endgame Democrats' Perpetual Hysteria

Highly recommended!
Notable quotes:
"... The Democratic Party split into a four-headed monster comprised of Wall Street patrons seeking favors, war hawks and their corporate allies looking for new global rumbles, the permanent bureaucracy looking to always expand itself, and the various ethnic and sexual minorities whose needs and grievances are serviced by that bureaucracy. It's the last group that has become the party's most public face while the party's other activities – many of them sinister -- remain at least partially concealed. ..."
"... the Republicans are being forced to engage on some real issues, such as the need for a coherent and effective immigration policy and the need to redefine formal trade relations. (Other issues like the insane system of medical racketeering and the deadly racket of the college loan industry just skate along on thin ice. And then, of course, there's the national debt and all its grotesque outgrowths.) ..."
"... Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting with the position that "diversity and inclusion" means shutting down free speech, an unforgivable transgression against common sense and common decency. It's a party that lies even more systematically than Mr. Trump, and does so knowingly (as when Google execs say they "Do no Evil"). Its dirty secret is that it relishes coercion, it likes pushing people around, telling them what to think and how to act. Its idea of "social justice" is a campus kangaroo court, where due process of law is suspended. And it is deeply corrupt, with good old-fashioned grift, new-fashioned gross political misconduct in federal law enforcement, and utter intellectual depravity in higher education. ..."
"... I hope that the party is shoved into an existential crisis and is forced to confront its astounding dishonesty. I hope that the process prompts them to purge their leadership across the board. ..."
Nov 03, 2018 | www.zerohedge.com

Kunstler: The Midterm Endgame & Democrats' "Perpetual Hysteria"

by Tyler Durden Fri, 11/02/2018 - 17:05 44 SHARES Authored by James Howard Kunstler via Kunstler.com,

Back in the last century, when this was a different country, the Democrats were the "smart" party and the Republicans were the "stupid" party.

How did that work?

Well, back then the Democrats represented a broad middle class, with a base of factory workers, many of them unionized, and the party had to be smart, especially in the courts, to overcome the natural advantages of the owner class.

In contrast, the Republicans looked like a claque of country club drunks who staggered home at night to sleep on their moneybags. Bad optics, as we say nowadays.

The Democrats also occupied the moral high ground as the champion of the little guy. If not for the Dems, factory workers would be laboring twelve hours a day and children would still be maimed in the machinery. Once the relationship between business and labor was settled in the 1950s, the party moved on to a new crusade on even loftier moral high ground: civil rights, aiming to correct arrant and long-lived injustices against downtrodden black Americans. That was a natural move, considering America's self-proclaimed post-war status as the world's Beacon of Liberty. It had to be done and a political consensus that included Republicans got it done. Consensus was still possible.

The Dems built their fortress on that high ground and fifty years later they find themselves prisoners in it. The factory jobs all vamoosed overseas. The middle class has been pounded into penury and addiction.

The Democratic Party split into a four-headed monster comprised of Wall Street patrons seeking favors, war hawks and their corporate allies looking for new global rumbles, the permanent bureaucracy looking to always expand itself, and the various ethnic and sexual minorities whose needs and grievances are serviced by that bureaucracy. It's the last group that has become the party's most public face while the party's other activities – many of them sinister -- remain at least partially concealed.

The Republican Party has, at least, sobered up some after getting blindsided by Trump and Trumpism. Like a drunk out of rehab, it's attempting to get a life. Two years in, the party marvels at Mr. Trump's audacity, despite his obvious lack of savoir faire. And despite a longstanding lack of political will to face the country's problems, the Republicans are being forced to engage on some real issues, such as the need for a coherent and effective immigration policy and the need to redefine formal trade relations. (Other issues like the insane system of medical racketeering and the deadly racket of the college loan industry just skate along on thin ice. And then, of course, there's the national debt and all its grotesque outgrowths.)

Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting with the position that "diversity and inclusion" means shutting down free speech, an unforgivable transgression against common sense and common decency. It's a party that lies even more systematically than Mr. Trump, and does so knowingly (as when Google execs say they "Do no Evil"). Its dirty secret is that it relishes coercion, it likes pushing people around, telling them what to think and how to act. Its idea of "social justice" is a campus kangaroo court, where due process of law is suspended. And it is deeply corrupt, with good old-fashioned grift, new-fashioned gross political misconduct in federal law enforcement, and utter intellectual depravity in higher education.

I hope that Democrats lose as many congressional and senate seats as possible. I hope that the party is shoved into an existential crisis and is forced to confront its astounding dishonesty. I hope that the process prompts them to purge their leadership across the board. If there is anything to salvage in this organization, I hope it discovers aims and principles that are unrecognizable from its current agenda of perpetual hysteria. But if the party actually blows up and disappears, as the Whigs did a hundred and fifty years ago, I will be content. Out of the terrible turbulence, maybe something better will be born.

Or, there's the possibility that the dregs of a defeated Democratic Party will just go batshit crazy and use the last of its mojo to incite actual sedition. Of course, there's also a distinct possibility that the Dems will take over congress, in which case they'll ramp up an even more horrific three-ring-circus of political hysteria and persecution that will make the Spanish Inquisition look like a backyard barbeque. That will happen as the US enters the most punishing financial train wreck in our history, an interesting recipe for epic political upheaval.

[Oct 12, 2018] The Fundamentals are Strong!

Oct 10, 2018 | angrybearblog.com

"The fundamentals and future of the U.S. economy remain incredibly strong."

[Sep 27, 2018] The power elites goal is to change its appearance to look like something new and innovative to stay ahead of an electorate who are increasingly skeptical of the neoliberalism and globalism that enrich the elite at their expense.

Highly recommended!
Sep 27, 2018 | www.moonofalabama.org
james , Sep 26, 2018 10:19:13 PM | link

Pft , Sep 26, 2018 9:58:02 PM | link

In my own words then. According to Cook the power elites goal is to change its appearance to look like something new and innovative to stay ahead of an electorate who are increasingly skeptical of the neoliberalism and globalism that enrich the elite at their expense.

Since they do not actually want change they find actors who pretend to represent change , which is in essence fake change. These then are their insurgent candidates

Trump serves the power elite , because while he appears as an insurgent against the power elite he does little to change anything

Trump promotes his fake insurgency on Twitter stage knowing the power elite will counter any of his promises that might threaten them

As an insurgent candidate Trump was indifferent to Israel and wanted the US out of Syria. He wanted good relations with Russia. He wanted to fix the health care system, rebuild infrastructure, scrap NAFTA and TTIPS, bring back good paying jobs, fight the establishment and Wall Street executives and drain the swamp. America First he said.

Trump the insurgent president , has become Israel's biggest cheerleader and has launched US missiles at Syria, relations with Russia are at Cold War lows, infrastructure is still failing, the percentage of people working is now at an all time low in the post housewife era, he has passed tax cuts for the rich that will endanger medicare, medicaid and social security and prohibit infrastructure spending, relaxed regulations on Wall Street, enhanced NAFTA to include TTIPS provisions and make US automobiles more expensive, and the swamp has been refilled with the rich, neocons , Koch associates, and Goldman Sachs that make up the power elites and Deep State Americas rich and Israel First

@34 pft... regarding the 2 cook articles.. i found they overly wordy myself... however, for anyone paying attention - corbyn seems like the person to vote for given how relentless he is being attacked in the media... i am not so sure about trump, but felt cook summed it up well with these 2 lines.. "Trump the candidate was indifferent to Israel and wanted the US out of Syria. Trump the president has become Israel's biggest cheerleader and has launched US missiles at Syria." i get the impression corbyn is legit which is why the anti-semitism keeps on being mentioned... craig murrary is a good source for staying on top of uk dynamics..

Piotr Berman , Sep 26, 2018 10:23:41 PM | link

For Trump to be "insurgent" he should

(a) talk coherently
(b) have some kind of movement consisting of people that agree with what is says -- that necessitates (a)

Then he could staff his Administration with his supporters rather than a gamut of conventional plutocrats, neocons, and hacks from the Deep State (intelligence, FBI and crazies culled from Pentagon). As it is easy to see, I am describing an alternate reality. Who is a Trumpian member of the Administration? His son-in-law?

karlof1 , Sep 26, 2018 11:42:43 PM | link
Pft @34--

Yes. just like Obama before him--another snake in the swamp!

Pft , Sep 27, 2018 12:53:59 AM | link
Karlof1@39

The swamps been filled with all kinds of vile creatures since the Carter administration. This is when the US/UK went full steam ahead with neoliberal globalism with Israel directing the war on terror for the Trilateral Empire (following Bibis Jerusalem conference so as to fulfill the Yinon plan). 40 years of terror and financial mayhem following the coup that took place from 1963-1974. After Nixons ouster they were ready to go once TLC Carter/Zbig kicked off the Trilateral era. Reagan then ran promising to oust the TLC swamp but broke his promise, as every President has done since .

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[Sep 25, 2018] The entire documentary "The Spider's Web: Britain's Second Empire" by Michael Oswald is worth watching as an introduction to the corruption in the global finance industry.

Highly recommended!
Sep 25, 2018 | www.moonofalabama.org

karlof1 , Sep 24, 2018 7:41:49 PM | link

OT--FYI--

There's a new film out regarding (il)legal finance: Scenes From the Spider's Web . Some will find the information provided by Hudson in his interview segment astounding and shocking, but somehow not altogether surprising.

Jen , Sep 24, 2018 9:02:35 PM | link

Karlof1 @ 105:

The entire documentary "The Spider's Web: Britain's Second Empire" by Michael Oswald is worth watching as an introduction to the corruption in the global finance industry.
https://www.youtube.com/watch?v=np_ylvc8Zj8

And when you finish watching that - twice, three times, however many times you need for all the information to sink in - you can read Nicholas Shaxson's excellent book "Treasure Islands:Tax Havens and the Men who Stole the World", on which the documentary leans heavily for information and structure.

[Aug 22, 2018] The US financial sector has manifestly failed at allocating capital properly and is filled with rent seeking by Anatoly Karlin

Highly recommended!
Notable quotes:
"... Since the 80s, the stock market capitalization to GDP ratio has been much higher than the historical norm, higher than when the US had higher rates of growth. ..."
"... In financialized economies with inflated asset prices, people have low savings and can't even afford to buy real estate or can only afford it by taking on lots of debt and having to depend on further price inflation so that they don't go underwater. In countries with financial repression, public debt tends to be low and interest rates tend to be low and capital gets directed towards industry ..."
"... Well like I said earlier, this is a matter of one's values and views on political economy. If one prefers asset price inflation and a capital structure of heavily indebted households and young adults, then there's nothing wrong and everything is rosy. ..."
"... Household income overall, not just wages, has stagnated. ..."
Aug 22, 2018 | www.unz.com
Thorfinnsson , says: May 31, 2018 at 8:44 pm GMT
@Anonymous

... ... ...

"Paper pusher" is an irrational criticism of the finance sector. Allocating capital is a very important job.

Anonymous , [400] Disclaimer says: May 31, 2018 at 9:35 pm GMT
@Thorfinnsson

No doubt there are fanboys among asset managers.

Whether it's an irrational criticism or not depends on one's values and views on political economy. To some, the financial sector has manifestly failed at allocating capital properly and is filled with rent seeking. Others will point to its size and the capitalization of financial markets as evidence of its value and importance.

Thorfinnsson , says: May 31, 2018 at 10:12 pm GMT
@Anonymous

What's the evidence that it has failed at allocating capital successfully? No shortage of rent-seeking of course. But if there's one thing I've learned it's that bagholders are gonna bag. This isn't some hypothetical either, look at countries without sophisticated financial markets. People are forced to save by speculating in real estate, and credit is often not available to business unless the state makes it available (perfectly reasonable in such economies to be fair).

Anonymous , [400] Disclaimer says: June 1, 2018 at 3:02 am GMT
@Thorfinnsson

Since the 80s, the stock market capitalization to GDP ratio has been much higher than the historical norm, higher than when the US had higher rates of growth.

There have been several bubbles, and consumer debt has risen significantly while income has stagnated and startup formation is at a 40 year low. Capital allocation has been very unproductive. It's caused lots of asset price inflation and increased debt without producing new assets and income streams. Capital allocation is highly centralized and it has the same problems communist economies have with central planning where capital is centralized in the state. A lot of unproductive activity and rent seeking.

In financialized economies with inflated asset prices, people have low savings and can't even afford to buy real estate or can only afford it by taking on lots of debt and having to depend on further price inflation so that they don't go underwater. In countries with financial repression, public debt tends to be low and interest rates tend to be low and capital gets directed towards industry.

Thorfinnsson , says: June 1, 2018 at 4:04 am GMT
@Anonymous

Real Soon Now.

Since the 80s, the stock market capitalization to GDP ratio has been much higher than the historical norm, higher than when the US had higher rates of growth.

Stock prices were unusually low in the 1970s, as epitomized by BusinessWeek's famous 1979 The Death of Equities cover. In addition to reversion to the mean, several other factors made stocks more valuable since that time.

The collapse of inflation and interest rates increased the net present value of stocks, the rise of emerging markets with poor domestic capital markets increased foreign demand for stocks, America's persistent trade deficit further increased foreign demand for American assets, and the low-cost trading and 401k revolutions.

... ... ...

Anonymous , [400] Disclaimer says: June 1, 2018 at 5:26 am GMT
@Thorfinnsson

Well like I said earlier, this is a matter of one's values and views on political economy. If one prefers asset price inflation and a capital structure of heavily indebted households and young adults, then there's nothing wrong and everything is rosy.

Household income overall, not just wages, has stagnated.

Startup formation is still at a 40 year low, despite all the noise about venture capital and Silicon Valley.

ROC and ROE are based on corporate income, which are at historical highs.

The rest of your comment is just econ 101 and biz school corp finance and accounting 101 hand waving to justify the status quo.

Your whole argument in the original post is that Tesla and SpaceX could not get the capital that they have without Musk committing fraud and violating a bunch of laws. In other words, two new industrial firms with tremendous brand value and advancing decades ahead of the competition ( https://www.nextbigfuture.com/2018/05/every-3-5-years-spacex-is-adding-a-decade-lead-on-competitors.html ) could not have been capitalized otherwise.

[Aug 19, 2018] End of "classic neoliberalism": to an extent hardly imaginable in 2008, all the world's leading economies are locked in a perpetually escalating cycle of economic warfare.

Highly recommended!
Notable quotes:
"... But to an extent hardly imaginable in 2008, all the world's leading economies are locked in a perpetually escalating cycle of economic warfare. This global trade war is spearheaded by the Trump White House, which sees trade sanctions and tariffs, such as the onslaught it launched against Turkey, as an integral component of its drive to secure the United States' geopolitical and economic interests at the expense of friend and foe alike. ..."
"... But while they are deeply divided as to their economic and geo-political objectives, the capitalist ruling classes are united on one essential question. However the next stage of the ongoing breakdown of world capitalism proceeds, they will all strive by whatever means considered necessary to make the working class the world over pay for it. ..."
"... In 2008, capitalist governments around the world, above all in the US, derived enormous benefit from the decades-long suppression of the class struggle by the trade unions and the parties of the political establishment. The rescue operation they carried out on behalf of parasitic and criminal finance capital would not have been possible without it ..."
Aug 19, 2018 | thenewkremlinstooge.wordpress.com

Northern Star August 16, 2018 at 3:07 pm

http://www.wsws.org/en/articles/2018/08/16/pers-a16.html

"But to an extent hardly imaginable in 2008, all the world's leading economies are locked in a perpetually escalating cycle of economic warfare. This global trade war is spearheaded by the Trump White House, which sees trade sanctions and tariffs, such as the onslaught it launched against Turkey, as an integral component of its drive to secure the United States' geopolitical and economic interests at the expense of friend and foe alike.

The character of world economy has undergone a major transformation in the past decade in which economic growth, to the extent it that it occurs, is not driven by the development of production and new investments but by the flow of money from one source of speculative and parasitic activity to the next."

"But while they are deeply divided as to their economic and geo-political objectives, the capitalist ruling classes are united on one essential question. However the next stage of the ongoing breakdown of world capitalism proceeds, they will all strive by whatever means considered necessary to make the working class the world over pay for it.

This is the lesson from the past decade which, in every country, has seen a deepening attack on wages, social conditions and living standards as wealth is redistributed up the income scale, raising social inequality to unprecedented heights.

In 2008, capitalist governments around the world, above all in the US, derived enormous benefit from the decades-long suppression of the class struggle by the trade unions and the parties of the political establishment. The rescue operation they carried out on behalf of parasitic and criminal finance capital would not have been possible without it."

[Aug 10, 2018] On Contact: Casino Capitalism with Natasha Dow Schull

Highly recommended!
This is kind of symbolic and amazing figures: 34 billions are spend in casinos each year. and that's just official figure...
Notable quotes:
"... Casinos and Gambling are a tax on the ignorant and the indigent. ..."
"... Economist, Michael Hudson recently said in an interview that economics trumps politics every time. I am an observer of casinos and gambling in it's many forms. I am someone who has been fleeced by vulture capitalists and unscrupulous financial types as well as government officials in charge of business financial assistance schemes that don't deliver. ..."
"... Another version of how ''Brave New World'' has come to pass. The documentaries: ''The Century of the Self'' and ''HyperNormalisation 2016'' by Adam Curtis explain how we have been subdued. This lady professor is very knowledgable. Excellent episode. ..."
"... Completing the circle of predatory capitalism. Government controlled by oligarchy/plutoracry that see us, the citizens, as enemies of the state. ..."
Mar 25, 2017 | www.youtube.com

On this week's episode of On Contact, Chris Hedges discusses the ramifications of casino culture in America with Professor Natasha Dow Schüll, author of " Addiction by Design: Machine Gambling in Las Vegas". RT Correspondent Anya Parampil examines how gambling has become our premier form of entertainment and escape.


gre999999man , 1 year ago

Casinos and Gambling are a tax on the ignorant and the indigent.

Gerald Comeau , 1 year ago (edited)

Economist, Michael Hudson recently said in an interview that economics trumps politics every time. I am an observer of casinos and gambling in it's many forms. I am someone who has been fleeced by vulture capitalists and unscrupulous financial types as well as government officials in charge of business financial assistance schemes that don't deliver.

Often the two ie the vultures and the government officials work in tandem.

I have extreme distaste for these zombies and an always on the alert. I am bowled over with how an overwhelming number of people in society are scammed day in and day out and having their lives ruined. I fear it will shatter life as we know it not for individuals only but for whole nations. People must pay more attention to attention to what this video says and what Michael Hudson explains in his books .....Killing the Host and Junk Economics are his most recent ones.

PleaseStayTuned , 1 year ago

I liked what she had to say, but I wonder why she didn't go a bit deeper into the operant conditioning aspect considering that's what Skinner's work was based on. Why intermittent rewards work so well, and why the dopamine spike curve is so important in conditioning a behavior in anything with a limbic system. Important because understanding how dopamine and dopamine spikes work came largely from gambling research for slot machines. Technology that was built on Skinner's work by the gov and then business marketing along with gov propaganda, then gambling. If people understood how it worked and where the technology came from they would be much less likely to let gambling addiction happen in the first place.

Darren Swift , 1 year ago

I come from a family of gamblers, at least on my father's side. My dad towed us around to the racetracks and billiards parlors until we were old enough to drive, and card games for money were a frequent family activity for us. I never felt attracted to gambling, and often feel bored by the prospect. Needless to say, with advanced age I now find myself estranged from my remaining siblings. What had occurred to me some time ago is how living life is such a gamble. Outcomes can always vary, from planning and preparing for a career to going to the market for groceries. Games of chance seem to furnish a microcosm of the life experience, where participants are allowed an illusion of greater control and the outcomes tend to be uniformly immediate. It also allows you to ignore your greater life experience. Maybe that's the "zone" so many enjoy. I didn't remember what "March Madness" is. Until all those slots were shown I thought they were talking about something similar to Black Friday. Now that I remember, it hits me that my brother and sister undoubtedly have their bets down in multiple pools.

John E , 1 year ago

Another version of how ''Brave New World'' has come to pass. The documentaries: ''The Century of the Self'' and ''HyperNormalisation 2016'' by Adam Curtis explain how we have been subdued. This lady professor is very knowledgable. Excellent episode.

writernthesky , 1 year ago

And casinos have no windows so that it's difficult to track the time.

Richard Burt , 6 months ago

Skinner on slot machine as metaphor for the Skinner box! incredible.

Joe M , 1 year ago

Completing the circle of predatory capitalism. Government controlled by oligarchy/plutoracry that see us, the citizens, as enemies of the state.

Patricia MacLeod , 1 month ago

23:50 right on. We selfie generation are too busy trolling the media and playing games to think, meditate, analyze, understand and act for our fellow man or a healthier future for our country. It's all about me and my short-term gratifications.

starmanskye , 1 year ago

Casino-Disasterism Capitalism is well named -- All of the engineered mechano-psychological traits used to make longshot escapist-gambling popular, lucrative and addicting, based on the faux-goals of numb indulgence, cultivating of cheap-thrill delights, pandering to the conceits of synthetic wastrel satisfactions and dead-end fatalism -- is evident in the terminal phase of the global corporate deepstate technoracy of Empire Inc. that is pillaging and plundering its way across the planet, securitizing the earth right out from under our feet! ~ ; )

Mechyuda , 1 year ago

Professor Natasha Dow Schüll said Trump won the presidential election, because Trump used his casino expertise to manipulate voters. Based on the news I've seen, Trump was a failed casino owner. Trump is a con-artist who uses his massive inheritance, multiple bankruptcies, privatized large gains, socialized larger losses, and sales hype in order "to win". Trump, Obama, and Bush Jr. are good examples of how the average person lacks the talent, training, and experience to manage his/her own nation. Democracy, majority tyranny, mob rule, or dumb-mock-crazy elections are modern myths.

inessa armand , 1 year ago

The Clinton era, signified so much. Basically, in regard to this aspect, the very ending of any culture whatsoever; gambling casinos took over our down-towns, and our oldest landmarks. I went in once and saw those carpets and nearly puked. Now she tells why they are so ugly. Why any human being would find that appealing reminds me of Kissinger's infamous quote: "We've successfully made the public so dumb, I cannot die. For there is no one to replace me.."

[Jul 28, 2018] American Society Would Collapse If It Were not For These 8 Myths by Lee Camp

Highly recommended!
Notable quotes:
"... Well, it comes down to the myths we've been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned. ..."
"... Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can't get anything resembling hard news because it's funded by dicks.) The corporate media's jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It's their mission to actually fortify belief in the myths I'm telling you about right now. Anybody who steps outside that paradigm is treated like they're standing on a playground wearing nothing but a trench coat. ..."
"... The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted , "The most basic constitutional rights have been erased for many. Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security." ..."
"... This myth (Buying will make you happy) is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious). ..."
"... According to Deloitte's Shift Index survey : "80% of people are dissatisfied with their jobs" and "[t]he average person spends 90,000 hours at work over their lifetime." That's about one-seventh of your life -- and most of it is during your most productive years. ..."
"... Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms. ..."
Jul 27, 2018 | www.zerohedge.com

Authored by Lee Camp via TruthDig.com,

Our society should've collapsed by now. You know that, right?

No society should function with this level of inequality (with the possible exception of one of those prison planets in a "Star Wars" movie). Sixty-three percent of Americans can't afford a $500 emergency . Yet Amazon head Jeff Bezos is now worth a record $141 billion . He could literally end world hunger for multiple years and still have more money left over than he could ever spend on himself.

Worldwide, one in 10 people only make $2 a day. Do you know how long it would take one of those people to make the same amount as Jeff Bezos has? 193 million years . (If they only buy single-ply toilet paper.) Put simply, you cannot comprehend the level of inequality in our current world or even just our nation.

So shouldn't there be riots in the streets every day? Shouldn't it all be collapsing? Look outside. The streets aren't on fire. No one is running naked and screaming (usually). Does it look like everyone's going to work at gunpoint? No. We're all choosing to continue on like this.

Why?

Well, it comes down to the myths we've been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned.

I'm going to cover eight of them. There are more than eight. There are probably hundreds. But I'm going to cover eight because (A) no one reads a column titled "Hundreds of Myths of American Society," (B) these are the most important ones and (C) we all have other shit to do.

Myth No. 8 -- We have a democracy.

If you think we still have a democracy or a democratic republic, ask yourself this: When was the last time Congress did something that the people of America supported that did not align with corporate interests? You probably can't do it. It's like trying to think of something that rhymes with "orange." You feel like an answer exists but then slowly realize it doesn't. Even the Carter Center and former President Jimmy Carter believe that America has been transformed into an oligarchy : A small, corrupt elite control the country with almost no input from the people. The rulers need the myth that we're a democracy to give us the illusion of control.

Myth No. 7 -- We have an accountable and legitimate voting system.

Gerrymandering, voter purging, data mining, broken exit polling, push polling, superdelegates, electoral votes, black-box machines, voter ID suppression, provisional ballots, super PACs, dark money, third parties banished from the debates and two corporate parties that stand for the same goddamn pile of fetid crap!

What part of this sounds like a legitimate election system?

No, we have what a large Harvard study called the worst election system in the Western world . Have you ever seen where a parent has a toddler in a car seat, and the toddler has a tiny, brightly colored toy steering wheel so he can feel like he's driving the car? That's what our election system is -- a toy steering wheel. Not connected to anything. We all sit here like infants, excitedly shouting, "I'm steeeeering !"

And I know it's counterintuitive, but that's why you have to vote. We have to vote in such numbers that we beat out what's stolen through our ridiculous rigged system.

Myth No. 6 -- We have an independent media that keeps the rulers accountable.

Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can't get anything resembling hard news because it's funded by dicks.) The corporate media's jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It's their mission to actually fortify belief in the myths I'm telling you about right now. Anybody who steps outside that paradigm is treated like they're standing on a playground wearing nothing but a trench coat.

Myth No. 5 -- We have an independent judiciary.

The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted , "The most basic constitutional rights have been erased for many. Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security."

If you're not part of the monied class, you're pressured into releasing what few rights you have left. According to The New York Times , "97 percent of federal cases and 94 percent of state cases end in plea bargains, with defendants pleading guilty in exchange for a lesser sentence."

That's the name of the game. Pressure people of color and poor people to just take the plea deal because they don't have a million dollars to spend on a lawyer. (At least not one who doesn't advertise on beer coasters.)

Myth No. 4 -- The police are here to protect you. They're your friends .

That's funny. I don't recall my friend pressuring me into sex to get out of a speeding ticket. (Which is essentially still legal in 32 states .)

The police in our country are primarily designed to do two things: protect the property of the rich and perpetrate the completely immoral war on drugs -- which by definition is a war on our own people .

We lock up more people than any other country on earth . Meaning the land of the free is the largest prison state in the world. So all these droopy-faced politicians and rabid-talking heads telling you how awful China is on human rights or Iran or North Korea -- none of them match the numbers of people locked up right here under Lady Liberty's skirt.

Myth No. 3 -- Buying will make you happy.

This myth (Buying will make you happy) is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious).

If we're lucky, we'll make enough money during the week to afford enough beer on the weekend to help it all make sense. (I find it takes at least four beers for everything to add up.) But that doesn't truly bring us fulfillment. So what now? Well, the ads say buying will do it. Try to smother the depression and desperation under a blanket of flat-screen TVs, purses and Jet Skis. Now does your life have meaning? No? Well, maybe you have to drive that Jet Ski a little faster! Crank it up until your bathing suit flies off and you'll feel alive !

The dark truth is that we have to believe the myth that consuming is the answer or else we won't keep running around the wheel. And if we aren't running around the wheel, then we start thinking, start asking questions. Those questions are not good for the ruling elite, who enjoy a society based on the daily exploitation of 99 percent of us.

Myth No. 2 -- If you work hard, things will get better.

According to Deloitte's Shift Index survey : "80% of people are dissatisfied with their jobs" and "[t]he average person spends 90,000 hours at work over their lifetime." That's about one-seventh of your life -- and most of it is during your most productive years.

Ask yourself what we're working for. To make money? For what? Almost none of us are doing jobs for survival anymore. Once upon a time, jobs boiled down to:

I plant the food -- >I eat the food -- >If I don't plant food = I die.

But nowadays, if you work at a café -- will someone die if they don't get their super-caf-mocha-frap-almond-piss-latte? I kinda doubt they'll keel over from a blueberry scone deficiency.

If you work at Macy's, will customers perish if they don't get those boxer briefs with the sweat-absorbent-ass fabric? I doubt it. And if they do die from that, then their problems were far greater than you could've known. So that means we're all working to make other people rich because we have a society in which we have to work. Technological advancements can do most everything that truly must get done.

So if we wanted to, we could get rid of most work and have tens of thousands of more hours to enjoy our lives. But we're not doing that at all. And no one's allowed to ask these questions -- not on your mainstream airwaves at least. Even a half-step like universal basic income is barely discussed because it doesn't compute with our cultural programming.

Scientists say it's quite possible artificial intelligence will take away all human jobs in 120 years . I think they know that will happen because bots will take the jobs and then realize that 80 percent of them don't need to be done! The bots will take over and then say, "Stop it. Stop spending a seventh of your life folding shirts at Banana Republic."

One day, we will build monuments to the bot that told us to enjoy our lives and leave the shirts wrinkly.

And this leads me to the largest myth of our American society.

Myth No. 1 -- You are free.

... ... ...

Try sleeping in your car for more than a few hours without being harassed by police.

Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms.

Try signing up for the military because you need college money and then one day just walking off the base, going, "Yeah, I was bored. Thought I would just not do this anymore."

Try explaining to Kentucky Fried Chicken that while you don't have the green pieces of paper they want in exchange for the mashed potatoes, you do have some pictures you've drawn on a napkin to give them instead.

Try running for president as a third-party candidate. (Jill Stein was shackled and chained to a chair by police during one of the debates.)

Try using the restroom at Starbucks without buying something while black.

We are less free than a dog on a leash. We live in one of the hardest-working, most unequal societies on the planet with more billionaires than ever .

Meanwhile, Americans supply 94 percent of the paid blood used worldwide. And it's almost exclusively coming from very poor people. This abusive vampire system is literally sucking the blood from the poor. Does that sound like a free decision they made? Or does that sound like something people do after immense economic force crushes down around them? (One could argue that sperm donation takes a little less convincing.)

Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults.

It's time to wake up.


bobcatz -> powow Fri, 07/27/2018 - 16:43 Permalink

Myth #9: America is not an Israeli colony

DingleBarryObummer -> bobcatz Fri, 07/27/2018 - 16:49 Permalink

#10: Muh 6 Gorillion

#11: Building 7

bfellow -> DingleBarryObummer Fri, 07/27/2018 - 16:55 Permalink

815M people chronically malnourished according to the UN. Bezos is worth $141B.

$141B / 815M people = $173 per person. That would definitely not feed them for "multiple years". And that's only if Bezos could fully liquidate the stock without it dropping a penny.

Author lost me right there.

Oldguy05 -> Oldguy05 Fri, 07/27/2018 - 22:25 Permalink

" Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults. "

Seems like there's tear gas in the air and guns are going to be used soon. The myths are dying on the tongues of the liars. Molon Labe!....and I'm usually a pacifist.

BennyBoy -> Nunny Fri, 07/27/2018 - 18:51 Permalink

"American Society Would Collapse If It Weren't For Invasions Of Foreign Countries, Murdering Their People, Stealing Their Oil Then Blaming Them For Making The US Do It."

Oldguy05 -> Nunny Fri, 07/27/2018 - 22:43 Permalink

Eisenhower's speeches were awesome and true. But he was right there doing the same shit. Was he feeling guilty in the end?

Proofreder -> vato poco Fri, 07/27/2018 - 18:39 Permalink

Freedom - just another word for nothing left to lose ...

https://www.youtube.com/watch?v=N7hk-hI0JKw&list=RDEMoIkwgyb6gDyuA-bFyR

east of eden -> vato poco Fri, 07/27/2018 - 18:55 Permalink

Well, in a world driven by oil, it is entirely bogus to suggest that citizens have to work their asses off. That was the whole point of the bill of goods that was sold to us in the late 70's and early 80'. More leisure time, more time for your family and personal interests.

Except! It never happened. All they fucking did was reduce real wages and force everyone from the upper middle class down, into a shit hole.

But, they will pay for their folly. Guaran-fucking-teed.

TheEndIsNear -> HopefulCynical Fri, 07/27/2018 - 18:33 Permalink

As one who has hoed many rows of cotton in 115F temperatures as well as picking cotton during my childhood and early adolescence during weekends and school holidays, I concur. It was a very powerful inducement to get a good education back when schools actually taught things and did not tolerate backtalk or guff from students instead of babysitting them. It worked, and I ended up writing computer software for spacecraft, which was much fun than working in the fields.

[Jul 16, 2018] Five Things That Would Make The CIA-CNN Russia Narrative More Believable

Highly recommended!
Notable quotes:
"... How much proof would I need to lend my voice to the escalation of tensions between two nuclear superpowers? Mountains. I personally would settle for nothing less than hard proof which can be independently verified by trusted experts like the Veteran Intelligence Professionals for Sanity. ..."
"... Is that a big ask? Yes. Yes it is. That's what happens when government institutions completely discredit themselves as they did with the false narratives advanced in the manufacturing of support for the Iraq invasion. You don't get to butcher a million Iraqis in a war based on lies, turn around a few years later and say "We need new cold war escalations with a nuclear superpower but we can't prove it because the evidence is secret." That's not a thing. Copious amounts of hard, verifiable proof or GTFO. So far we have no evidence besides the confident-sounding assertions of government insiders and their mass media mouthpieces, which is the same as no evidence. ..."
Jul 15, 2018 | www.zerohedge.com

Authored by Caitlin Johnstone via Medium.com,

As we just discussed , some major news stories have recently dropped about what a horrible horrifying menace the Russian Federation is to the world , and as always I have nothing to offer the breathless pundits on CNN and MSNBC but my completely unsatisfied skepticism. My skepticism of the official Russia narrative remains so completely unsatisfied that if mainstream media were my husband I would already be cheating on it with my yoga instructor.

I do not believe the establishment Russia narrative. I do not believe that Donald Trump colluded with the Russian government to rig the 2016 election. I do not believe the Russian government did any election rigging for Trump to collude with. This is not because I believe Vladimir Putin is some kind of blueberry-picking girl scout, and it certainly isn't because I think the Russian government is unwilling or incapable of meddling in the affairs of other nations to some extent when it suits them. It is simply because I am aware that the US intelligence community lies constantly as a matter of policy, and because I understand how the burden of proof works.

At this time, I see no reason to espouse any belief system which embraces as true the assertion that Russia meddled in the 2016 elections in any meaningful way, or that it presents a unique and urgent threat to the world which must be aggressively dealt with. But all the establishment mouthpieces tell me that I must necessarily embrace these assertions as known, irrefutable fact. Here are five things that would have to change in order for that to happen:

1. Proof of a hacking conspiracy to elect Trump.

The first step to getting a heretic like myself aboard the Russia hysteria train would be the existence of publicly available evidence of the claims made about election meddling in 2016, which rises to the level required in a post-Iraq invasion world. So far, that burden of proof for Russian hacking allegations has not come anywhere remotely close to being met.

How much proof would I need to lend my voice to the escalation of tensions between two nuclear superpowers? Mountains. I personally would settle for nothing less than hard proof which can be independently verified by trusted experts like the Veteran Intelligence Professionals for Sanity.

Is that a big ask? Yes. Yes it is. That's what happens when government institutions completely discredit themselves as they did with the false narratives advanced in the manufacturing of support for the Iraq invasion. You don't get to butcher a million Iraqis in a war based on lies, turn around a few years later and say "We need new cold war escalations with a nuclear superpower but we can't prove it because the evidence is secret." That's not a thing. Copious amounts of hard, verifiable proof or GTFO. So far we have no evidence besides the confident-sounding assertions of government insiders and their mass media mouthpieces, which is the same as no evidence.

2. Proof that election meddling actually influenced the election in a meaningful way.

Even if Russian hackers did exfiltrate Democratic party emails and give them to WikiLeaks, if it didn't affect the election, who cares? That's a single-day, second-page story at best, meriting nothing beyond a "Hmm, interesting, turns out Russia tried and failed to influence the US election," followed by a shrug and moving on to something that actually matters.

After it has been thoroughly proven that Russia meddled in the elections in a meaningful way, it must then be established that that meddling had an actual impact on the election results.

3. Some reason to believe Russian election meddling was unwarranted and unacceptable.

The US government, by a very wide margin , interferes in the elections of other countries far, far more than any other government on earth does. The US government's own data shows that it has deliberately meddled in the elections of 81 foreign governments between 1946 and 2000, including Russia in the nineties. This is public knowledge. A former CIA Director cracked jokes about it on Fox News earlier this year.

If I'm going to abandon my skepticism and accept the Gospel According to Maddow, after meaningful, concrete election interference has been clearly established I'm going to need a very convincing reason to believe that it is somehow wrong or improper for a government to attempt to respond in kind to the undisputed single worst offender of this exact offense. It makes no sense for the United States to actively create an environment in which election interference is something that governments do to one another, and then cry like a spanked child when its election is interfered with by one of the very governments whose elections the US recently meddled in.

This is nonsense. America being far and away the worst election meddler on the planet makes it a fair target for election meddling by not just Russia, but every country in the world. It is very obviously moral and acceptable for any government on earth to interfere in America's elections as long as it remains the world's worst offender in that area. In order for Russia to be in the wrong if it interfered in America's elections, some very convincing argument I've not yet heard will have to be made to support that case.

4. Proof that the election meddling went beyond simply giving Americans access to information about their government.

If all the Russians did was simply show Americans emails of Democratic Party officials talking to one another and circulate some MSM articles as claimed in the ridiculous Russian troll farm allegations , that's nothing to get upset about. If anything, Americans should be upset that they had to hear about Democratic Party corruption through the grapevine instead of having light shed on it by the American officials whose job it is to do so. Complaints about election meddling is only valid if that election meddling isn't comprised of truth and facts.

5. A valid reason to believe escalated tensions between two nuclear superpowers are worthwhile.

After it has been proven beyond a reasonable doubt that Russia did indeed meddle in the US elections in a meaningful way, and after it has then been proven beyond a reasonable doubt that Russia actually influenced election results in a significant way, and after the case has been clearly made that it was bad and wrong for Russia to do this instead of fair and reasonable, and after it has been clearly proven that the election meddling went beyond simply telling Americans the truth about their government, the question then becomes what, if anything, should be done about it?

If you look at the actions that this administration has taken over the last year and a half, the answer to that question appears to be harsh sanctions, NATO expansionism, selling arms to Ukraine, throwing out diplomats, increasing military presence along Russia's border, a Nuclear Posture Review which is much more aggressive toward Russia, repeatedly bombing Syria, and just generally creating more and more opportunities for something to go catastrophically wrong with one of the two nations' aging, outdated nuclear arsenals, setting off a chain of events from which there is no turning back and no surviving.

And the pundits and politicians keep pushing for more and more escalations, at this very moment braying with one voice that Trump must aggressively confront Putin about Mueller's indictments or withdraw from the peace talks. But is it worth it? Is it worth risking the life of every terrestrial organism to, what? What specifically would be gained that makes increasing the risk of nuclear catastrophe worthwhile? Making sure nobody interferes in America's fake elections? I'd need to see a very clear and specific case made, with a 'pros' and 'cons' list and "THE POTENTIAL DEATH OF LITERALLY EVERYTHING" written in big red letters at the top of the 'cons' column.

Rallying the world to cut off Russia from the world stage and cripple its economy has been been a goal of the US power establishment since the collapse of the Soviet Union, so there's no reason to believe that even the people who are making the claims against Russia actually believe them. The goal is crippling Russia to handicap China , and ultimately to shore up global hegemony for the US-centralized empire by preventing the rise of any rival superpowers. The sociopathic alliance of plutocrats and intelligence/defense agencies who control that empire are willing to threaten nuclear confrontation in order to ensure their continued dominance. All of their actions against Russia since 2016 have had everything to do with establishing long-term planetary dominance and nothing whatsoever to do with election meddling.

Those five things would need to happen before I'd be willing to jump aboard the "Russia! Russia! Russia!" train. Until then I'll just keep pointing to the total lack of evidence and how very, very far the CIA/CNN Russia narrative is from credibility.

* * *

Internet censorship is getting pretty bad, so the best way to keep seeing the stuff I publish is to get on the mailing list for my website , which will get you an email notification for everything I publish. My articles are entirely reader and listener-funded, so if you enjoyed this piece please consider sharing it around, liking me on Facebook , following my antics on Twitter , checking out my podcast , throwing some money into my hat on Patreon or Paypal , or buying my book Woke: A Field Guide for Utopia Preppers .

[Jul 16, 2018] Why the Media is Desperate to Reclaim its Gatekeeper Status for News Zero Hedge Zero Hedge

Highly recommended!
Jul 16, 2018 | www.zerohedge.com

Local news differs because it is mixed with first-hand experience, as well as second-hand reports from witnesses–neighbors and friends. Gossip is one way of regulating this local flow of information. It provides details about who can be believed, and who might embellish.

Locally, there is an organic structure of information flow. This alone doesn't make it accurate, but it gets closer by triangulating from where you get your information.

And the further you get from the ability to triangulate from different sources, the faker news gets. I don't mean different sources, as in, different news outlets. I mean first-hand knowledge mixed with historical context, access to first-hand accounts, information about the reliability of witnesses and experts, and so on.

The further away the news gets from you, the harder it is to mix the news with other intelligence. At that point, it is easier to manipulate the truth.

But even if a piece of news about a far-off event is not attempting to misconstrue the truth, it could do so inadvertently. Without the full context of what is happening, events across the world can give the wrong impression.

Were chemical weapons used in Syria? If so, who used them? And who exactly is fighting who ?

The conflict in Syria is the perfect example of fake news. You have a complicated event with many different sides and no clear good guys. There are few first-hand accounts from people we know personally. There are some entities who wish to purposely distort the truth and others which want to hide the full extent of their actions.

All I can do to find out is trust various news sources. And that is what I mean when I say everything is fake news. Just picking which events to report on truthfully can end up presenting a basically fake story.

The Same Old Story

Years ago it was easy to control the spread of information. There were only a handful of television networks and newspapers. All news passed through the channels of official gatekeepers before making its way to the consumer.

But already the government was creating and disseminating fake news through programs like Project Mockingbird. The CIA had thousands of journalists on its payroll to disseminate false news and bury certain real reports.

So the government's problem is not fake news. Governments are concerned that they have lost their monopoly control of fake news. They were the gatekeepers.

Social media "has made things much worse," because it "offers an easy route for non-journalists to bypass journalism's gatekeepers, so that anyone can 'publish' anything, however biased, inaccurate or fabricated," says John Huxford, an Illinois State University journalism professor.

"Journalism's role as the 'gatekeeper' of what is and isn't news has always been controversial, of course. But we're now seeing just how bad things can get when that function breaks down."

Are we seeing how bad things can get? It seems that there was always fake news, but at one time, everyone believed it. Now there is fake news, and no one trusts any news. That is a better situation to be in. It is the rejection of manipulation by the elites, the gatekeepers.

Distrust in unverifiable news is better than blind trust in government propaganda. Better to hold agnostic beliefs about certain national events, versus believing what the government feeds us.

My default position is distrust of the government. So whatever narrative they seem to be pushing, if not outright false, has a purpose behind it. They are trying to shape the behavior of the masses and very rarely is this beneficially to individuals.

Huxford said many internet users are not adept at telling fake news from the real thing, making the role of major news organizations critical.

"This is why Trump falsely labelling the mainstream media as 'fake news' is so toxic," he said.

"It means that, at a time when there is a lot of fabrication and falsehoods swirling through the system, the credibility of the most reliable sources of news is being undermined."

As someone who believes in a grassroots approach to solving problems, starting with individuals, I am naturally averse to the idea of controllers from on high making decisions for me.

And that is why I think it is beneficial to have more distrust in news the further it gets from you, and rather use what you can confirm to live personally as you see fit.

Probably the best example of this is people signing up for the military directly after 9/11 to go kick some al-Qaida ass. They trusted the national news to deliver accurate facts about what happened, and how to stop it from happening again. And they threw themselves into the fight without having an accurate picture of why, or how the war they were signing up for would help.

In the end, they may have ended up supporting a worse regime than the one they were fighting.

Never knowing what you can believe is not ideal. But it beats a false sense of security that the news you get is real. It isn't. And if people are finally waking up to that, perhaps they will stop lining up to fight other people's wars.

You don't have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

[Jul 03, 2018] When you see some really successful financial speculator like Soros or (or much smaller scale) Browder, search for links with intelligence services to explain the success or at least a part of it related to xUSSR space , LA and similar regions

Highly recommended!
Jul 03, 2018 | www.moonofalabama.org

Recently came across the following article written by F. William Engdahl in 1996 which might be of interest to some here:

The secret financial network behind "wizard" George Soros

The last page of the above article can be found here:

Soros's looting of Ibero-America

Posted by: integer | Jul 2, 2018 4:49:45 AM | 35

[Jun 28, 2018] Oil will never be above $44 WTI in my lifetime.

Jun 28, 2018 | peakoilbarrel.com

shallow sand x Ignored says: 06/27/2018 at 2:29 pm

"Oil will never be above $44 WTI in my lifetime."

Dennis Gartman.

[Jun 25, 2018] The review of A Brief History of Neoliberalism by David Harvey by Michael J. Thompson

Highly recommended!
There is still no countervailing force to oppose neoliberalism. Instead we observe internal development of neoliberalism toward national neoliberalism and the rejection of neoliberal globalization.
Notable quotes:
"... Neoliberalism is the intensification of the influence and dominance of capital; it is the elevation of capitalism, as a mode of production, into an ethic, a set of political imperatives, and a cultural logic. It is also a project: a project to strengthen, restore, or, in some cases, constitute anew the power of economic elites. ..."
"... It should be recalled that, in his Grundrisse , Marx explicitly argued that capital is a process that puts into motion all of the other dimensions of modern economic, political, social, and cultural life. It creates the wage system, influences values, goals, and the ethics of individuals, transforms our relation to nature, to ourselves, and to our community, and constantly seeks to mold state imperatives until they are in harmony with its own. ..."
"... Neoliberalism is therefore not a new turn in the history of capitalism. It is more simply, and more perniciously, its intensification, and its resurgence after decades of opposition from the Keynesian welfare state and from experiments with social democratic and welfare state politics. ..."
"... Neoliberalism, as Harvey tells us, quoting Paul Treanor in the process, 'valuesmarket exchange as "an ethic in itself, capable of acting as a guide to all human action, and substituting for all previously held ethical beliefs," it emphasises the significance of contractual relations in the marketplace. It holds that the social goodwill be maximised by maximising the reach and frequency of market transactions, and it seeks to bring all human action into the domain of the market.' (p. 3) ..."
"... Neoliberalism is not simply an ethic in abstract, however. Rather, the locus for its influence has become the 'neoliberal state', which collapses the notion of freedom into freedom for economic elites. ..."
"... 'neoliberalisation was from the very beginning a project to achieve the restoration of class power,' ..."
"... 'a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites ..."
"... another crucial dimension of his argument, namely that neoliberalism is a liberalism for economic elites only; that liberal aspects of the polity are decreased ..."
"... that neoliberal regimes will slowly erode institutions of political democracy since 'the freedom of the masses would be restricted in favour of the freedoms of the few ..."
"... The focus on individual rights, the centrality of property rights, a culture of individualism, consumption, and a market-based populism, all served as means by which the policies of neoliberalism – and the massive inequalities that have emerged over the past two decades – were able to gain widespread support. Political liberalism becomes eroded by the much more powerful forces of economic liberalism. ..."
"... The story of capitalism, for Harvey, always seems to play the same dire tune. But the global expansion of capital is premised on what he terms 'accumulation by dispossession.' ..."
"... accumulation under globalisation continues to expand by dispossessing people of their economic rights and of various forms of ownership and economic power. ..."
"... Neoliberalism's rhetoric of individual freedom, and equality, and its promise of prosperity and growth, are slowly being revealed as falsities. ..."
"... Soon, Harvey believes, it will become evident that all of economic life and institutions are solely for the benefit of a single, small social class. Therefore, theoretical insight – such as Harvey has proffered here – needs to constantly nourish the various opposition movements that currently exist. ..."
"... While we can use Harvey's brilliant and deeply insightful analysis of the structural mechanisms of neoliberalism, it has to be admitted that there are only rumblings of discontent in the United States or China, and no hint of a mass movement against the realities of capitalism. ..."
Jun 25, 2018 | rebels-library.org

...Marx, after all, according to Harvey, had shown that – unlike the liberal paradigm that was, and still is, predominant in the social sciences – the split between fact and value had been overcome. No longerwas it sufficient to talk about social phenomena without invoking political even practical evaluations of them.

Harvey's most recent book, A Brief History of Neoliberalism , dissects the inner workings of what has come to be one of the most salient features of late 20thand early 21st century economic and social life: the gradual shift, throughout the nations of the global economy, toward economic and social policies that have given an increased liberality and centrality to markets, market processes, and to the interests of capital. If Harvey's enduring perspective – and one which admittedly| echoes orthodox Marxism – has been to put the mechanics of the capitalist mode of production at the center of every aspect of modernity (and of postmodernity as well), then his most recent contribution deviates little from that course.

<p>Harvey's contention is that we are witnessing, through this process of neoliberalisation, the deepening penetration of capitalism into political and social institutions as well as cultural consciousness itself. Neoliberalism is the intensification of the influence and dominance of capital; it is the elevation of capitalism, as a mode of production, into an ethic, a set of political imperatives, and a cultural logic. It is also a project: a project to strengthen, restore, or, in some cases, constitute anew the power of economic elites. The essence of neoliberalism, for Harvey, can be characterised as a rightward shift in Marxian class struggle.

This analysis stems from Marx's insight about the nature of capital itself. Capitalis not simply money, property, or one economic variable among others. Rather,capital is the organising principle of modern society. It should be recalled that, in his Grundrisse , Marx explicitly argued that capital is a process that puts into motion all of the other dimensions of modern economic, political, social, and cultural life. It creates the wage system, influences values, goals, and the ethics of individuals, transforms our relation to nature, to ourselves, and to our community, and constantly seeks to mold state imperatives until they are in harmony with its own.

Neoliberalism is therefore not a new turn in the history of capitalism. It is more simply, and more perniciously, its intensification, and its resurgence after decades of opposition from the Keynesian welfare state and from experiments with social democratic and welfare state politics.

Neoliberalism, as Harvey tells us, quoting Paul Treanor in the process, 'valuesmarket exchange as "an ethic in itself, capable of acting as a guide to all human action, and substituting for all previously held ethical beliefs," it emphasises the significance of contractual relations in the marketplace. It holds that the social goodwill be maximised by maximising the reach and frequency of market transactions, and it seeks to bring all human action into the domain of the market.' (p. 3)

Neoliberalism is not simply an ethic in abstract, however. Rather, the locus for its influence has become the 'neoliberal state', which collapses the notion of freedom into freedom for economic elites. 'The freedoms it embodies reflect the interests of private property owners, businesses, multinational corporations and financial capital.' (p. 7) The neoliberal state defends the new reach and depth ofcapital's interests and is defined against the 'embedded liberalism' of the several decades following World War II when 'market processes and entrepreneurial andcorporate activities were surrounded by a web of social and political constraints and a regulatory environment that sometimes restrained but in other instances led the way in economic and industrial strategy.' (p. 11)

Neoliberalism and the neoliberal state have been able to reverse the various political and economic gains made under welfare state policies and institutions. This transformation of the state is an effect of the interests of capital and its reaction to the embedded liberalism of the post war decades. Taking the empirical analysis – and the hypothesis – from the French economists Gérard Duménil and Dominique Lévy, and their important book Capital Resurgent, Harvey argues that 'neoliberalisation was from the very beginning a project to achieve the restoration of class power,' (p. 16) 'a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites .' (p. 19)

This notion of a revolution from above to restore class power is the basso ostinato of Harvey'sa nalysis, the bass line continuously repeated throughout the book that grounds the argument.

He sees the first historical instance of this revolution from above in Pinochet's Chile. The violent coup against Salvador Allende, which installed Pinochet to power, was followed by a massive neoliberalisation of the state. The move toward privatisation and the stripping away of all forms of regulation on capital was one of the key aspects of the Pinochet regime. While the real grounding of a neoliberal theory began much earlier with thinkers such as Friedrich von Hayek and Milton Friedman, among others, its first real empirical manifestation was Pinochet's Chile.

Of course, this also allows Harvey to illustrate another crucial dimension of his argument, namely that neoliberalism is a liberalism for economic elites only; that liberal aspects of the polity are decreased . It is Harvey's fear – along with Karl Polanyi– that neoliberal regimes will slowly erode institutions of political democracy since 'the freedom of the masses would be restricted in favour of the freedoms of the few .'(p. 70)

Insulating economic institutions such as central banks from majority rule is central, especially since neoliberalism – particularly in developed economies –revolves around financial institutions. 'A strong preference,' Harvey argues, 'exists for government by executive order and by judicial decision rather than democraticand parliamentary decision-making.' (p. 66)

America and England constitute Harvey's next two cases for his thesis. Thatcher in Britain and Reagan in the United States were both pivotal figures, not so much because of their economic policies, but, more importantly, because of their success in the 'construction of consent.' The political culture of both countries began to accept neoliberal policies. The focus on individual rights, the centrality of property rights, a culture of individualism, consumption, and a market-based populism, all served as means by which the policies of neoliberalism – and the massive inequalities that have emerged over the past two decades – were able to gain widespread support. Political liberalism becomes eroded by the much more powerful forces of economic liberalism.

Another theme that Harvey explores – understandably, given his background inhuman geography – is the phenomenon of uneven spatial development. In China, Harvey's fourth case, we see the rapid expansion of a neoliberal ethos. Markets were significantly liberalised and an economic elite was reconstituted virtually overnight, in early 1980s, amid Deng Xiaoping's economic reforms. The result has been extreme inequality between regions.

Coastal urban areas, where industry and finance are concentrated, have become massive epicenters of economic power and activity, sucking in surplus labor from agrarian hinterlands which, as a result of the economic growth of these metro regions, have begun sinking into poverty. Harvey sees this reality in China being mirrored throughout the globe, and the results are common: a pattern of rising economic and social inequality which increases the marginalisation of large sectors of national populations and concentrates ever more sectors of capital within certain regions and among certain groups.

Neoliberalisation, therefore, effects a return to some of the most entrenched forms of social inequality and injustice that characterised the industrial expansion during the late 19th century in the West. The story of capitalism, for Harvey, always seems to play the same dire tune. But the global expansion of capital is premised on what he terms 'accumulation by dispossession.'

This concept – developed more fully in Harvey's previous book, The New Imperialism (2003) – argues that accumulation under globalisation continues to expand by dispossessing people of their economic rights and of various forms of ownership and economic power.

Harvey defines it best:

By [accumulation by dispossession] I mean the continuation and proliferation of accumulation practices which Marx had treated of as 'primitive' or 'original' during the rise of capitalism. These include the commodification and privatization of land and the forceful expulsion of peasant populations ; conversion of various forms of property rights (common, collective, state, |etc.) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all the use of the credit system as a radical means of accumulation by dispossession. (p. 159)But it also includes – for working people in developed nations – the 'extraction of rents from patents and intellectual property rights and the diminution or erasure of various forms of common property rights (such as state pensions, paid vacations, and access to education and health care).' (p. 160)

Neoliberalism, therefore, can only continue its process of accumulation by dispossessing people of what they own, or to what they have always had rights. In the end, Harvey tells us, the way out of this situation – not surprisingly – is are connection of theory and practice. But his analysis is, once again, subtle and takes stock of present political realities.

The plethora of social movements need to forma 'broad-based oppositional programme', which sees the activities of the economic elites as fundamentally impinging on traditionally held beliefs about egalitarianism and fairness. Crisis, for Harvey as with any orthodox Marxist, is always looming.

Neoliberalism's rhetoric of individual freedom, and equality, and its promise of prosperity and growth, are slowly being revealed as falsities.

Soon, Harvey believes, it will become evident that all of economic life and institutions are solely for the benefit of a single, small social class. Therefore, theoretical insight – such as Harvey has proffered here – needs to constantly nourish the various opposition movements that currently exist. The dialogue between theory and practice is the only sure wayt o take advantage of the moment when a new crisis – financial or otherwise –bursts forth onto the scene. The deepest hope is that such a moment will foster a basis 'for a resurgence of mass movements voicing egalitarian political demandsand seeking economic justice, fair trade, and greater economic security.' (p. 204)

Harvey's position is explicitly anti-capitalist, and his hope is that the rhetoric of neoliberalism will be unmasked by the various realities – most specifically, massive economic inequalities – that it spawns. Only then will social movements be able to gain political traction, and move society toward some form of social, economic and political transformation.

Harvey's logic is seductive, and his ruminations on 'freedom's prospect' are compelling. But political and cultural realities cannot be simply reduced to the mechanisms of capital and accumulation. While we can use Harvey's brilliant and deeply insightful analysis of the structural mechanisms of neoliberalism, it has to be admitted that there are only rumblings of discontent in the United States or China, and no hint of a mass movement against the realities of capitalism.

There is too little attention paid – and here the deficits of the orthodox Marxist approach can be sensed – to the way that the culture of consent has found a deep affinity with American liberalism. Louis Hartz, in his classic, The Liberal Tradition in America , was perhaps most correct when he predicted that the contours of American liberalism would lead to the acceptance of quasi-authoritarian political and social norms.

China – lacking any democratic tradition – has not seen a mass movement arise to combat the inequality that has swollen over the last two decades, either.

But the question of social movements remains open. There is no guarantee what you get with a mass movement of the disaffected – one can think of Venezuela's Hugo Chavez, in this regard. Harvey does not look into such issues, but they need to be considered since history – even the history of capitalism – cannot be viewed as cyclical and politics does not spring mechanistically from economic conditions.

But despite this, Harvey's book is deeply insightful, rewarding and stimulating. His ability to thematise the imperatives of the most recent manifestation of capitalist accumulation – most specifically the recent trends in economic inequality, the shifts in urban cultural and political life, and the economic logic that currently drives the process of globalization – is nothing short of virtuosic and his ideas should become a central part of the current discourse on globalisation, economic inequality, and the erosion of democratic politics throughout the globe. His history of neoliberalism may indeed be brief, but the richness and profundity of this volume is without question.

Michael J. Thompson is an advisory editor of Democratiya and is also the founder and editor of Logos: A Journal of Modern Society & Culture (www.logosjournal. com). He is Assistant Professor of Political Science at William Paterson University. His next book, Confronting Neoconservatism: The Rise of the New Right in America, is forthcoming from NYU Press. a journal of politics and ideas

[Jun 19, 2018] How The Last Superpower Was Unchained by Tom Engelhardt

Highly recommended!
Notable quotes:
"... However, the truth – at least in retrospect – was that, in the Cold War years, the Soviets were actually doing Washington a strange, if unnoted, favor. Across much of the Eurasian continent, and other places from Cuba to the Middle East, Soviet power and the never-ending contest for influence and dominance that went with it always reminded American leaders that their own power had its limits. ..."
"... This, as the 21st century should have (but hasn't) made clear, was no small thing. It still seemed obvious then that American power could not be total. There were things it could not do, places it could not control, dreams its leaders simply couldn't have. Though no one ever thought of it that way, from 1945 to 1991, the United States, like the Soviet Union, was, after a fashion, "contained." ..."
"... In those years, the Russians were, in essence, saving Washington from itself. Soviet power was a tangible reminder to American political and military leaders that certain areas of the planet remained no-go zones (except in what, in those years, were called "the shadows"). ..."
"... The Soviet Union, in short, rescued Washington from both the fantasy and the hell of going it alone, even if Americans only grasped that reality at the most subliminal of levels. ..."
Jun 19, 2018 | www.zerohedge.com

Authored by Tom Engelhardt via The Asia Times,

Think of it as the all-American version of the human comedy: a great power that eternally knows what the world needs and offers copious advice with a tone deafness that would be humorous, if it weren't so grim.

If you look, you can find examples of this just about anywhere. Here, for instance, is a passage in The New York Times from a piece on the topsy-turvy Trumpian negotiations that preceded the Singapore summit. "The Americans and South Koreans," wrote reporter Motoko Rich, "want to persuade the North that continuing to funnel most of the country's resources into its military and nuclear programs shortchanges its citizens' economic well-being. But the North does not see the two as mutually exclusive."

Think about that for a moment. The US has, of course, embarked on a trillion-dollar-plus upgrade of its already massive nuclear arsenal (and that's before the cost overruns even begin). Its Congress and president have for years proved eager to sink at least a trillion dollars annually into the budget of the national security state (a figure that's still rising and outpaces by far that of any other power on the planet), while its own infrastructure sags and crumbles. And yet it finds the impoverished North Koreans puzzling when they, too, follow such an extreme path.

"Clueless" is not a word Americans ordinarily apply to themselves as a country, a people, or a government. Yet how applicable it is.

And when it comes to cluelessness, there's another, far stranger path the United States has been following since at least the George W Bush moment that couldn't be more consequential and yet somehow remains the least noticed of all. On this subject, Americans don't have a clue. In fact, if you could put the United States on a psychiatrist's couch, this might be the place to start.

America contained

In a way, it's the oldest story on Earth: the rise and fall of empires. And note the plural there. It was never – not until recently at least – "empire," always "empires." Since the 15th century, when the fleets of the first European imperial powers broke into the larger world with subjugation in mind, it was invariably a contest of many. There were at least three or sometimes significantly more imperial powers rising and contesting for dominance or slowly falling from it.

This was, by definition, the history of great powers on this planet: the challenging rise, the challenged decline. Think of it for so many centuries as the essential narrative of history, the story of how it all happened until at least 1945, when just two "superpowers," the United States and the Soviet Union, found themselves facing off on a global scale.

Of the two, the US was always stronger, more powerful, and far wealthier. It theoretically feared the Russian Bear, the Evil Empire , which it worked assiduously to " contain " behind that famed Iron Curtain and whose adherents in the US, always modest in number, were subjected to a mania of fear and suppression.

However, the truth – at least in retrospect – was that, in the Cold War years, the Soviets were actually doing Washington a strange, if unnoted, favor. Across much of the Eurasian continent, and other places from Cuba to the Middle East, Soviet power and the never-ending contest for influence and dominance that went with it always reminded American leaders that their own power had its limits.

This, as the 21st century should have (but hasn't) made clear, was no small thing. It still seemed obvious then that American power could not be total. There were things it could not do, places it could not control, dreams its leaders simply couldn't have. Though no one ever thought of it that way, from 1945 to 1991, the United States, like the Soviet Union, was, after a fashion, "contained."

In those years, the Russians were, in essence, saving Washington from itself. Soviet power was a tangible reminder to American political and military leaders that certain areas of the planet remained no-go zones (except in what, in those years, were called "the shadows").

The Soviet Union, in short, rescued Washington from both the fantasy and the hell of going it alone, even if Americans only grasped that reality at the most subliminal of levels.

That was the situation until December 1991 when, at the end of a centuries-long imperial race for power (and the never-ending arms race that went with it), there was just one gigantic power left standing on Planet Earth. It told you something about the thinking then that, when the Soviet Union imploded, the initial reaction in Washington wasn't triumphalism (though that came soon enough) but utter shock, a disbelieving sense that something no one had expected, predicted, or even imagined had nonetheless happened. To that very moment, Washington had continued to plan for a two-superpower world until the end of time.

America uncontained

Soon enough, though, the Washington elite came to see what happened as, in the phrase of the moment, " the end of history ." Given the wreckage of the Soviet Union, it seemed that an ultimate victory had been won by the very country its politicians would soon come to call "the last superpower," the " indispensable " nation, the " exceptional " state, a land great beyond imagining (until, at least, Donald Trump hit the campaign trail with a slogan that implied greatness wasn't all-American any more).

In reality, there were a variety of paths open to the "last superpower" at that moment. There was even, however briefly, talk of a "peace dividend" – of the possibility that, in a world without contesting superpowers, taxpayer dollars might once again be invested not in the sinews of war-making but of peacemaking (particularly in infrastructure and the well-being of the country's citizens).

Such talk, however, lasted only a year or two and always in a minor key before being relegated to Washington's attic. Instead, with only a few rickety "rogue" states left to deal with – like gulp North Korea, Iraq and Iran – that money never actually headed home, and neither did the thinking that went with it.

Consider it the good fortune of the geopolitical dreamers soon to take the reins in Washington that the first Gulf War of 1990-1991, which ended less than a year before the Soviet Union collapsed, prepared the way for quite a different style of thinking. That instant victory led to a new kind of militarized dreaming in which a highly tech-savvy military, like the one that had driven Iraqi autocrat Saddam Hussein's forces out of Kuwait in such short order, would be capable of doing anything on a planet without serious opposition.

And yet, from the beginning, there were signs suggesting a far grimmer future. To take but one infamous example, Americans still remember the Black Hawk Down moment of 1993 when the world's greatest military fell victim to a Somali warlord and local militias and found itself incapable of imposing its will on one of the least impressive not-quite-states on the planet (a place still frustrating that military a quarter-century later).

In that post-1991 world, however, few in Washington even considered that the 20th century had loosed another phenomenon on the world, that of insurgent national liberation movements, generally leftist rebellions, across what had been the colonial world – the very world of competing empires now being tucked into the history books – and it hadn't gone away. In the 21st century, such insurgent movements, now largely religious, or terror-based, or both, would turn out to offer a grim new version of containment to the last superpower.

Unchaining the indispensable nation

On September 11, 2001, a canny global jihadist by the name of Osama bin Laden sent his air force (four hijacked US passenger jets) and his precision weaponry (19 suicidal, mainly Saudi followers) against three iconic targets in the American pantheon: the Pentagon, the World Trade Center, and undoubtedly the Capitol or the White House (neither of which was hit because one of those jets crashed in a field in Pennsylvania). In doing so, in a sense bin Laden not only loosed a literal hell on Earth, but unchained the last superpower.

William Shakespeare would have had a word for what followed: hubris. But give the top officials of the Bush administration (and the neocons who supported them) a break. There had never been a moment like it: a moment of one. A single great power left alone, triumphant, on planet Earth. Just one superpower – wealthy beyond compare, its increasingly high-tech military unmatched, its only true rival in a state of collapse – had now been challenged by a small jihadist group.

To president Bush, vice-president Dick Cheney, and the rest of their crew, it seemed like nothing short of a heaven-sent opportunity. As they came out of the shock of 9/11, of that " Pearl Harbor of the 21st century ," it was as if they had found a magic formula in the ruins of those iconic buildings for the ultimate control of the planet. As secretary of defense Donald Rumsfeld would instruct an aide at the Pentagon that day, "Go massive. Sweep it up. Things related and not."

Within days, things related and not were indeed being swept up. The country was almost instantly said to be "at war," and soon that conflict even had a name, the Global War on Terror. Nor was that war to be against just al-Qaeda, or even one country, an Afghanistan largely ruled by the Taliban. More than 60 countries said to have "terror networks" of various sorts found themselves almost instantly in the administration's potential gunsights. And that was just to be the beginning of it all.

In October 2001, the invasion of Afghanistan was launched. In the spring of 2003, the invasion of Iraq followed, and those were only the initial steps in what was increasingly envisioned as the imposition of a Pax Americana on the Greater Middle East.

There could be no doubt, for instance, that Iran and Syria, too, would soon go the way of Iraq and Afghanistan. Bush's top officials had been nursing just such dreams since, in 1997, many of them formed a think-tank (the first ever to enter the White House) called the Project for the New American Century and began to write out what were then the fantasies of figures nowhere near power. By 2003, they were power itself and their dreams, if anything, had grown even more grandiose.

In addition to imagining a political Pax Republicana in the United States, they truly dreamed of a future planetary Pax Americana in which, for the first time in history, a single power would, in some fashion, control the whole works, the Earth itself.

And this wasn't to be a passing matter either. The Bush administration's "unilateralism" rested on a conviction that it could actually create a future in which no country or even bloc of countries would ever come close to matching or challenging US military power. The administration's National Security Strategy of 2002 put the matter bluntly: The US was to "build and maintain" a military, in the phrase of the moment, " beyond challenge ."

They had little doubt that, in the face of the most technologically advanced, bulked-up, destructive force on Earth, hostile states would be "shocked and awed" by a simple demonstration of its power, while friendly ones would have little choice but to come to heel as well. After all, as Bush said at a Veterans of Foreign Wars convention in 2007, the US military was "the greatest force for human liberation the world has ever known."

Though there was much talk at the time about the "liberation" of Afghanistan and then Iraq, at least in their imaginations the true country being liberated was the planet's lone superpower. Although the Bush administration was officially considered a "conservative" one, its key officials were geopolitical dreamers of the first order and their vision of the world was the very opposite of conservative. It harkened back to nothing and looked forward to everything.

It was radical in ways that should have, but didn't, take the American public's breath away; radical in ways that had never been seen before.

Shock and awe for the last superpower

Think of what those officials did in the post-9/11 moment as the ultimate act of greed. They tried to swallow a whole planet. They were determined to make it a planet of one in a way that had never before been seriously imagined.

It was, to say the least, a vision of madness. Even in a moment when it truly did seem – to them at least – that all constraints had been taken off, an administration of genuine conservatives might have hesitated. Its top officials might, at least, have approached the post-Soviet situation with a modicum of caution and modesty.

But not George W Bush, Dick Cheney, Donald Rumsfeld and pals. In the face of what seemed like the ultimate in possibilities they proved clueless when it came to the possibility that anything on Earth might have a shot at containing them.

Even among their critics, who could have imagined then that, more than 16 years later, having faced only lightly armed enemies of various sorts, still wealthy beyond compare, still with a military funded in a way the next seven countries couldn't cumulatively match, the United States would have won literally nothing?

Who could have imagined that, unlike so many preceding imperial powers (including the US of the earlier Cold War era), it would have been able to establish control over nothing at all; that, instead, from Afghanistan to Syria, Iraq deep into Africa, it would find itself in a state of " infinite war " and utter frustration on a planet filled with ever more failed states , destroyed cities , displaced people , and right-wing "populist" governments, including the one in Washington?

Who could have imagined that, with a peace dividend no longer faintly conceivable, this country would have found itself not just in decline, but – a new term is needed to catch the essence of this curious moment – in what might be called self-decline?

Yes, a new power, China, is finally rising – and doing so on a planet that seems itself to be going down . Here, then, is a conclusion that might be drawn from the quarter-century-plus in which America was both unchained and largely alone.

The Earth is admittedly a small orb in a vast universe, but the history of this century so far suggests one reality about which America's rulers proved utterly clueless: After so many hundreds of years of imperial struggle, this planet still remains too big, too disparate, too ornery to be controlled by a single power. What the Bush administration did was simply take one gulp too many and the result has been a kind of national (and planetary) indigestion.

Despite what it looked like in Washington once upon a time, the disappearance of the Soviet Union proved to be no gift at all, but a disaster of the first order. It removed all sense of limits from America's political class and led to a tale of greed on a planetary scale. In the process, it also set the US on a path to self-decline.

The history of greed in our time has yet to be written, but what a story it will someday make. In it, the greed of those geopolitical dreamers will intersect with the greed of an ever wealthier, ever more gilded 1%, of the billionaires who were preparing to swallow whole the political system of that last superpower and grab so much of the wealth of the planet, leaving so little for others.

Whether you're talking about the urge to control the planet militarily or financially, what took place in these years could, in the end, result in ruin of a historic kind. To use a favored phrase from the Bush years, one of these days we Americans may be facing little short of "regime change" on a planetary scale. And what a piece of shock and awe that's likely to prove to be.

All of us, of course, now live on the planet Bush's boys tried to swallow whole. They left us in a world of infinite war, infinite harm, and in Donald Trump's America where cluelessness has been raised to a new power.

[Jun 17, 2018] The Necessity of a Trump-Putin Summit by Stephen F. Cohen

Highly recommended!
Decimation of anti-war forces and flourishing of Russophobia are two immanent features of the US neoliberalism. As long as the maintinace fo the US global neoliberal empire depends of weakening and, possibly, dismembering Russia it is naive to expect any change. Russian version of soft "national neoliberalism" is not that different, in principle form Trump version of hard "netional neoliberalism" so those leaders might have something to talk about. In other words as soon as the USA denounce neoliberal globalization that might be some openings.
Notable quotes:
"... The New York Times ..."
Jun 06, 2018 | www.thenation.com

Ten ways the new US-Russian Cold War is increasingly becoming more dangerous than the one we survived.

  1. The political epicenter of the new Cold War is not in far-away Berlin, as it was from the late 1940s on, but directly on Russia's borders, from the Baltic states and Ukraine to the former Soviet republic of Georgia. Each of these new Cold War fronts is, or has recently been, fraught with the possibly of hot war. US-Russian military relations are especially tense today in the Baltic region, where a large-scale NATO buildup is under way, and in Ukraine, where a US-Russian proxy war is intensifying. The "Soviet Bloc" that once served as a buffer between NATO and Russia no longer exists. And many imaginable incidents on the West's new Eastern Front, intentional or unintentional, could easily trigger actual war between the United States and Russia. What brought about this unprecedented situation on Russia's borders -- at least since the Nazi German invasion in 1941 -- was, of course, the exceedingly unwise decision, in the late 1990s, to expand NATO eastward. Done in the name of "security," it has made all the states involved only more insecure.

  2. Proxy wars were a feature of the old Cold War, but usually small ones in what was called the "Third World" -- in Africa, for example -- and they rarely involved many, if any, Soviet or American personnel, mostly only money and weapons. Today's US-Russian proxy wars are different, located in the center of geopolitics and accompanied by too many American and Russian trainers, minders, and possibly fighters. Two have already erupted: in Georgia in 2008, where Russian forces fought a Georgian army financed, trained, and minded by American funds and personnel; and in Syria, where in February scores of Russians were killed by US-backed anti-Assad forces . Moscow did not retaliate, but it has pledged to do so if there is "a next time," as there very well may be. If so, this would in effect be war directly between Russia and America. Meanwhile, the risk of such a direct conflict continues to grow in Ukraine, where the country's US-backed but politically failing President Petro Poroshenko seems increasingly tempted to launch another all-out military assault on rebel-controlled Donbass, backed by Moscow. If he does so, and the assault does not quickly fail as previous ones have, Russia will certainly intervene in eastern Ukraine with a truly tangible "invasion." Washington will then have to make a fateful war-or-peace decision. Having already reneged on its commitments to the Minsk Accords, which are the best hope for ending the four-year Ukrainian crisis peacefully, Kiev seems to have an unrelenting impulse to be a tail wagging the dog of war. Certainly, its capacity for provocations and disinformation are second to none, as evidenced again last week by the faked "assassination and resurrection" of the journalist Arkady Babchenko.

  3. The Western, but especially American, years-long demonization of the Kremlin leader, Putin, is also unprecedented. Too obvious to reiterate here, no Soviet leader, at least since Stalin, was ever subjected to such prolonged, baseless, crudely derogatory personal vilification. Whereas Soviet leaders were generally regarded as acceptable negotiating partners for American presidents, including at major summits, Putin has been made to seem to be an illegitimate national leader -- at best "a KGB thug," at worst a murderous "mafia boss."

  4. Still more, demonizing Putin has generated a widespread Russophobic vilification of Russia itself , or what The New York Times and other mainstream-media outlets have taken to calling " Vladimir Putin's Russia ." Yesterday's enemy was Soviet Communism. Today it is increasingly Russia, thereby also delegitimizing Russia as a great power with legitimate national interests. "The Parity Principle," as Cohen termed it during the preceding Cold War -- the principle that both sides had legitimate interests at home and abroad, which was the basis for diplomacy and negotiations, and symbolized by leadership summits -- no longer exists, at least on the American side. Nor does the acknowledgment that both sides were to blame, at least to some extent, for that Cold War. Among influential American observers who at least recognize the reality of the new Cold War , "Putin's Russia" alone is to blame. When there is no recognized parity and shared responsibility, there is little space for diplomacy -- only for increasingly militarized relations, as we are witnessing today.
  5. Meanwhile, most of the Cold War safeguards -- cooperative mechanisms and mutually observed rules of conduct that evolved over decades in order to prevent superpower hot war -- have been vaporized or badly frayed since the Ukrainian crisis in 2014, as the UN General Secretary António Guterres, almost alone, has recognized : "The Cold War is back -- with a vengeance but with a difference. The mechanisms and the safeguards to manage the risks of escalation that existed in the past no longer seem to be present." Trump's recent missile strike on Syria carefully avoided killing any Russians there, but here too Moscow has vowed to retaliate against US launchers or other forces involved if there is a "next time," as, again, there may be. Even the decades-long process of arms control may, we are told by an expert , be coming to an "end." If so, it will mean an unfettered new nuclear-arms race but also the termination of an ongoing diplomatic process that buffered US-Soviet relations during very bad political times. In short, if there are any new Cold War rules of conduct, they are yet to be formulated and mutually accepted. Nor does this semi-anarchy take into account the new warfare technology of cyber-attacks. What are its implications for the secure functioning of existential Russian and American nuclear command-and-control and early-warning systems that guard against an accidental launching of missiles still on high alert?

  6. Russiagate allegations that the American president has been compromised by -- or is even an agent of -- the Kremlin are also without precedent. These allegations have had profoundly dangerous consequences, among them the nonsensical but mantra-like warfare declaration that "Russia attacked America" during the 2016 presidential election; crippling assaults on President Trump every time he speaks with Putin in person or by phone; and making both Trump and Putin so toxic that even most politicians, journalists, and professors who understand the present-day dangers are reluctant to speak out against US contributions to the new Cold War.

  7. Mainstream-media outlets have, of course, played a woeful role in all of this. Unlike in the past, when pro-détente advocates had roughly equal access to mainstream media, today's new Cold War media enforce their orthodox narrative that Russia is solely to blame. They practice not diversity of opinion and reporting but "confirmation bias." Alternative voices (with, yes, alternative or opposing facts) rarely appear any longer in the most influential mainstream newspapers or on television or radio broadcasts. One alarming result is that "disinformation" generated by or pleasing to Washington and its allies has consequences before it can be corrected. The fake Babchenko assassination (allegedly ordered by Putin, of course) was quickly exposed, but not the alleged Skripal assassination attempt in the UK, which led to the largest US expulsion of Russian diplomats in history before London's official version of the story began to fall apart. This too is unprecedented: Cold War without debate, which in turn precludes the frequent rethinking and revising of US policy that characterized the preceding 40-year Cold War -- in effect, an enforced dogmatization of US policy that is both exceedingly dangerous and undemocratic.

  8. Equally unsurprising, and also very much unlike during the 40-year Cold War, there is virtually no significant opposition in the American mainstream to the US role in the new Cold War -- not in the media, not in Congress, not in the two major political parties, not in the universities, not at grassroots levels. This too is unprecedented, dangerous, and contrary to real democracy. Consider only the thunderous silence of scores of large US corporations that have been doing profitable business in post-Soviet Russia for years, from fast-food chains and automobile manufacturers to pharmaceutical and energy giants. And contrast their behavior to that of CEOs of PepsiCo, Control Data, IBM, and other major American corporations seeking entry to the Soviet market in the 1970s and 1980s, when they publicly supported and even funded pro-détente organizations and politicians. How to explain the silence of their counterparts today, who are usually so profit-motivated? Are they too fearful of being labeled "pro-Putin" or possibly "pro-Trump"? If so, will this Cold War continue to unfold with only very rare profiles of courage in any high places? 9. And then there is the widespread escalatory myth that today's Russia, unlike the Soviet Union, is too weak -- its economy too small and fragile, its leader too "isolated in international affairs" -- to wage a sustained Cold War, and that eventually Putin, who is "punching above his weight," as the cliché has it, will capitulate. This too is a dangerous delusion. As Cohen has shown previously , "Putin's Russia" is hardly isolated in world affairs, and is becoming even less so, even in Europe, where at least five governments are tilting away from Washington and Brussels and perhaps from their economic sanctions on Russia. Indeed, despite the sanctions, Russia's energy industry and agricultural exports are flourishing. Geopolitically, Moscow has many military and related advantages in regions where the new Cold War has unfolded. And no state with Russia's modern nuclear and other weapons is "punching above its weight." Above all, the great majority of Russian people have rallied behind Putin because t hey believe their country is under attack by the US-led West . Anyone with a rudimentary knowledge of Russia's history understands it is highly unlikely to capitulate under any circumstances.

  9. Finally (at least as of now), there is the growing war-like "hysteria" often commented on in both Washington and Moscow. It is driven by various factors, but television talk/"news" broadcasts, which are as common in Russia as in the United States, play a major role. Perhaps only an extensive quantitative study could discern which plays a more lamentable role in promoting this frenzy -- MSNBC and CNN or their Russian counterparts. For Cohen, the Russian dark witticism seems apt: "Both are worst" ( Oba khuzhe ). Again, some of this American broadcast extremism existed during the preceding Cold War, but almost always balanced, even offset, by truly informed, wiser opinions, which are now largely excluded.

Is this analysis of the dangers inherent in the new Cold War itself extremist or alarmist? Even SOME usually reticent specialists would seem to agree with Cohen's general assessment. Experts gathered by a centrist Washington think tank thought that on a scale of 1 to 10, there is a 5 to 7 chance of actual war with Russia. A former head of British M16 is reported as saying that "for the first time in living memory, there's a realistic chance of a superpower conflict." And a respected retired Russian general tells the same think tank that any military confrontation "will end up with the use of nuclear weapons between the United States and Russia."

In today's dire circumstances, one Trump-Putin summit cannot eliminate the new Cold War dangers. But US-Soviet summits traditionally served three corollary purposes. They created a kind of security partnership -- not a conspiracy -- that involved each leader's limited political capital at home, which the other should recognize and not heedlessly jeopardize. They sent a clear message to the two leaders' respective national-security bureaucracies, which often did not favor détente-like cooperation, that the "boss" was determined and that they must end their foot-dragging, even sabotage. And summits, with their exalted rituals and intense coverage, usually improved the media-political environment needed to enhance cooperation amid Cold War conflicts. If a Trump-Putin summit achieves even some of those purposes, it might result in a turning away from the precipice that now looms

[Jun 17, 2018] Neoliberalism as socialism for the banks

Highly recommended!
Notable quotes:
"... I encountered a wonderful concept the other day on the Keiser Report, where they said in passing that the great irony of the Hegemon's position was that it couldn't use its massive financial power because whenever it did, it simply forced alternatives to arise. ..."
"... This is why every financial move by Trump is producing the opposite result. Another ZH article says that the Russian sell-off of US Treasuries was a move to cover Rusal and the sanctions placed on its former CEO, Deripaska. Mr. Trump Attacks Aluminum, Russia Attacks The Debt . ..."
"... Every time the US flaunts its Dollar supremacy, it pushes customers away from the Dollar. ..."
"... The US has power left in the financial sector, but can't use it. The US has no power left in the military area, and cannot show it. Syria, Korea, the theaters are growing where the US has had to step down. ..."
"... Even the fog of propaganda is wearing increasingly thin. The US State Department just issued a warning to its people about traveling to Russia. It's risky, they say. But ticket sales for the World Cup are up by 25% from the US, the largest foreign customer ..."
Jun 17, 2018 | www.moonofalabama.org

psychohistorian | Jun 17, 2018 12:47:46 PM | 2

I was impatient and put this up on last weeks Open Thread about an hour ago....

Nomi Prins: The Central Banking Heist That Put The World At Risk

The take away quote:
"
"What we've witnessed, since 2008, is the unbridled ability of the so-called people at the top to implement socialism for the banks," Prins tells me. "If anyone had said we are going to give $21 trillion to the global banking sector, it would never have happened – so we've had a backdoor process instead, under the pretense it would help ordinary people."

Grieved , Jun 17, 2018 3:26:39 PM | 8
@2 psychohistorian

Excellent article, thanks for the link. Nomi knows all this stuff, and she's right. And Liam Halligan, a financial journalist I greatly respect, wrote the article. Recommended.

~~

I encountered a wonderful concept the other day on the Keiser Report, where they said in passing that the great irony of the Hegemon's position was that it couldn't use its massive financial power because whenever it did, it simply forced alternatives to arise.

This is why every financial move by Trump is producing the opposite result. Another ZH article says that the Russian sell-off of US Treasuries was a move to cover Rusal and the sanctions placed on its former CEO, Deripaska. Mr. Trump Attacks Aluminum, Russia Attacks The Debt .

The tariffs on aluminum compelled the Chinese to create a Yuan-denominated futures contract on industrial metals - convertible to gold at Shanghai, of course. The instability of the overnight tariffs created a more enduring stability than before, resting on gold, which satisfies concerns about transfers between nations.

Every time the US flaunts its Dollar supremacy, it pushes customers away from the Dollar.

~~

But it's not just Trump, nor just the financial markets. It's every theater and every plane of activity. Every use of bullying, drives former allies away. Every posture of aggression runs the supreme risk that the US military will be exposed as ineffective, and if that happens, the Pentagon is finished, and the generals know it.

The US has power left in the financial sector, but can't use it. The US has no power left in the military area, and cannot show it. Syria, Korea, the theaters are growing where the US has had to step down.

Even the fog of propaganda is wearing increasingly thin. The US State Department just issued a warning to its people about traveling to Russia. It's risky, they say. But ticket sales for the World Cup are up by 25% from the US, the largest foreign customer.

I'll have to stop, but fortunately, the examples go on and on.

michael d , Jun 17, 2018 4:02:46 PM | 9
Mate would have got the idea from Stephen Cohen, Russia expert, Nation contributor and husband of the Nation editor. But Cohen has certainly got it from Alt-media - here or similar...

[May 30, 2018] How Media Amnesia Has Trapped Us in a Neoliberal Groundhog Day

Highly recommended!
Notable quotes:
"... By Laura Basu, a Marie Curie Research Fellow at Cardiff School of Journalism, Media and Culture. Originally published at openDemocracy ..."
"... This ideology spread through the media from the 1980s ..."
"... Fast-forward to April 2009, barely 6 months after the announcement of a £500 billion bank bailout. A media hysteria was nowraging around Britain's deficit . While greedy bankers were still taking some of the blame, the systemic problems in finance and the problems with the free-market model had been forgotten. Instead, public profligacy had become the dominant explanation for the deficit. The timeline of the crisis was being erased and rewritten. ..."
"... These measures were a ramped-up version of the kinds of reforms that had produced the crisis in the first place. This fact, however, was forgotten. These 'pro-business' moves were enthusiastically embraced by the media, far more so than austerity. Of the 5 outlets analysed (The BBC, Telegraph, Sun, Guardian and Mirror), only the Guardian rejected them more frequently than endorsing them. ..."
"... "One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back." ..."
"... This post is disheartening in so many ways. Start with "media hysteria" -- adding yet another glib coinage to hide a lack of explanation behind a simple but innapt analogy like the endless "addictions" from which personifications of various abstract entities suffer. ..."
"... This coinage presupposes a media sufficiently free to be possessed by hysteria. Dancing puppets might with some art appear "hysterical". And the strange non-death of Neoliberalsm isn't so strange or poorly understood in 2018 though the detailed explanation hasn't reached as many as one might have hoped, including the authors of this brief post. Consider their unhappy mashup of thoughts in a key sentence of the first paragraph: "This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector." The tail of this sentence obviates the rest of the post. And we ought not ignore the detail that Neoliberalism believes in the Market as a solution to all problems -- NOT the 'free market' of neoclassical economics or libertarian ideology. ..."
"... From "media hysteria" the post postulates "amnesia" of a public convinced of "greedy bankers" who need regulation. In the U.S. the propaganda was more subtle -- at least in my opinion. We were fed the "bad apples" theory mocked in a brief series of media clips presented in the documentary film "Inside Job". Those clips suggest a better explanation for the swift media transitions from banking reform to balanced budgets and austerity with more tax cuts for the wealthy than "amnesia" or "hyper-amnesia". The media Corporations are tightly controlled by the same forces that captured Corporations and -- taking the phrase "the superiority of the private sector over the public sector" in the sense that a superior directs an inferior [rather than the intended(?) sense] -- direct and essentially own our governments. ..."
"... The remarkable thing about public discourse and political and economic news reporting is how superficial it has become, so devoid of a foundation of any kind in history or theory. You can not have an effective critique of society or the economy or anything, if you do not see a system with a history and think it matters. Neoliberalism has become what people say when they think none of it really matters; it is all just noise. ..."
"... "Neoliberalism has become what people say when they think none of it really matters; it is all just noise." ..."
"... I also think that the crisis of neoliberalism echos a problem caused by capitalism, itself. I think David Harvey stated that "capitalism doesn't solve problems, it often just moves them around". ..."
"... Matt Stoller tweet from August 2017, as germane now as ever: "The political crisis we are facing is simple. American commerce, law, finance, and politics is organized around cheating people." ..."
"... George Orwell noted that the middle class Left couldn't handle dealing with real working class people, although there isn't the same huge gulf these days, I believe there is still a vestige of it due to the British class system. The Fabians set up shop in the East End around the turn of the last century & directly rubbed shoulders with the likes of Coster Mongers – a combination that led to a strike that was one of the first success stories in the attempt to get a few more crumbs than what was usually allowed to fall from the top table. ..."
"... If Neoliberalism is now being noticed I imagine that it is because of it's success in working it's way up the food chain. After all these same Middle classes for the most part did not care much for the plight of the poor during those Victorian values. Many could not wait to employ maids of all work who slaved for up to fourteen hours a day with only Sunday afternoon's off. The Suffragettes had a real problem with this as their relatively comfortable lives would soon descend into drudgery without their servants. ..."
"... Coincidentally, the NYT article on Austerity Britain is the closest I have read to an accurate picture that I have seen for a good while. ..."
"... It's also not a new thing. British media worship of neoliberalism has been growing since the 1980s, at the same time as newspapers have been closing and media sources of all kinds laying off their staff. 2008 was a temporary blip, and since the average journalist has the attention span of a hamster, it was back to usual a few months later. Once the crash stopped being "news" old patterns reasserted themselves. I wonder, incidentally, how many economics journalists in the UK actually remember the time before neoliberalism? ..."
"... Consuming corporate media is increasingly a bizarro-world experience. Even something like the Trump scandal/constitutional crisis/investigation seems like the arrogant internecine warfare of corrupt factions of the establishment. Meanwhile, Americans are increasingly living out of their cars. ..."
"... 1. Oligarchs having captured thoroughly the media, the legislatures and the judiciary, (as well as large parts of what might be construed as "liberal" political organisations e.g. the Democratic Party of the USA) ..."
May 30, 2018 | www.nakedcapitalism.com

Posted on May 29, 2018 by Yves Smith Yves here. I'm sure readers could write a US version of this timeline despite the fact that we had a second crisis and bailout, that of way more foreclosures than were warranted, thanks to lousy incentives to mortgage servicers and lack of political will to intervene, and foreclosure fraud to cover up for chain of title failures.

By Laura Basu, a Marie Curie Research Fellow at Cardiff School of Journalism, Media and Culture. Originally published at openDemocracy

It hasn't escaped many people's attention that, a decade after the biggest economic crash of a generation, the economic model producing that meltdown has not exactly been laid to rest. The crisis in the NHS and the Carillion and Capital scandals are testament to that. Sociologist Colin Crouch wrote a book in 2011 about the 'strange non-death of neoliberalism', arguing that the neoliberal model is centred on the needs of corporations and that corporate power actually intensified after the 2008 financial meltdown. This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector. It advocates privatisation, cuts in public spending, deregulation and tax cuts for businesses and high earners.

This ideology spread through the media from the 1980s , and the media have continued to play a key role in its persistence through a decade of political and economic turmoil since the 2008 crash. They have done this largely via an acute amnesia about the causes of the crisis, an amnesia that helped make policies like austerity, privatisation and corporate tax breaks appear as common sense responses to the problems.

This amnesia struck at dizzying speed. My research carried out at Cardiff University shows that in 2008 at the time of the banking collapse, the main explanations given for the problems were financial misconduct ('greedy bankers'), systemic problems with the financial sector, and the faulty free-market model. These explanations were given across the media spectrum, with even the Telegraph and Sun complaining about a lack of regulation . Banking reform was advocated across the board.

Fast-forward to April 2009, barely 6 months after the announcement of a £500 billion bank bailout. A media hysteria was nowraging around Britain's deficit . While greedy bankers were still taking some of the blame, the systemic problems in finance and the problems with the free-market model had been forgotten. Instead, public profligacy had become the dominant explanation for the deficit. The timeline of the crisis was being erased and rewritten.

Correspondingly, financial and corporate regulation were forgotten. Instead, austerity became the star of the show, eclipsing all other possible solutions to the crisis. As a response to the deficit, austerity was mentioned 2.5 as many times as the next most covered policy-response option, which was raising taxes on the wealthy. Austerity was mentioned 18 times more frequently than tackling tax avoidance and evasion. Although coverage of austerity was polarized, no media outlet rejected it outright, and even the left-leaning press implicitly (and sometimes explicitly) backed 'austerity lite'.

In 2010, the Conservative-Lib Dem government announced £99 billion in spending cuts and £29 billion in tax increases per year by 2014-15. Having made these 'tough choices', from 2011 the coalition wanted to focus attention away from austerity and towards growth (which was, oops, being stalled by austerity). To do this, they pursued a zealously 'pro-business' agenda, including privatisation, deregulation, cutting taxes for the highest earners, and cutting corporation tax in 2011, 2012, 2013, and in 2015 and 2016 under a Conservative government.

These measures were a ramped-up version of the kinds of reforms that had produced the crisis in the first place. This fact, however, was forgotten. These 'pro-business' moves were enthusiastically embraced by the media, far more so than austerity. Of the 5 outlets analysed (The BBC, Telegraph, Sun, Guardian and Mirror), only the Guardian rejected them more frequently than endorsing them.

The idea behind these policies is that what's good for business is good for everyone. If businesses are handed more resources, freed from regulation and handed tax breaks, they will be encouraged to invest in the economy, creating jobs and growth. The rich are therefore 'job creators' and 'wealth creators'.

This is despite the fact that these policies have an impressive fail rate. Business investment and productivity growth remain low, as corporations spend the savings not on training and innovation but on share buy-backs and shareholder dividends. According to the Financial Times, in 2014, the top 500 US companies returned 95 per cent of their profits to shareholders in dividends and buybacks. Meanwhile, inequality is spiralling and in the UK more than a million people are using food banks .

Poverty and inequality, meanwhile, attracted surprising little media attention. Of my sample of 1,133 media items, only 53 had a primary focus on living standards, poverty or inequality. This confirms other researchshowing a lack of media attention to these issues . Of these 53 items, the large majority were from the Guardian and Mirror. The coverage correctly identified austerity as a primary cause of these problems. However, deeper explanations were rare. Yet again, the link back to the 2008 bank meltdown wasn't made, let alone the long-term causes of that meltdown. Not only that, the coverage failed even to identify the role of most of the policies pursued since the onset of the crisis in producing inequality – such as the bank bailouts, quantitative easing, and those 'pro-business' measures like corporation tax cuts and privatisation.

And so it seems we are living with a hyper-amnesia , in which it is increasingly difficult to reconstruct timelines and distinguish causes from effects. This amnesia has helped trap us in a neoliberal groundhog day. The political consensus around the free market model finally seems to be breaking. If we are to find a way out, we will need to have a lot more conversations about how to organise both our media systems and our economies.


Summer , May 29, 2018 at 10:31 am

Tick-Tock.
It depends. Do you believe the worst can be avoided or do you believe the world is already knee deep in all the things we're told to be afraid will happen? There is a big difference between organizing for reform and organizing to break capture.

makedoanmend , May 29, 2018 at 10:42 am

" Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand "

W.B. Yeats

I suppose we can take some succour from the fact that WWI (and the Spanish flu) seemed to be a harbinger of worse to come but we're still here

Doug , May 29, 2018 at 11:21 am

The hyper-amnesia ground hog problem described in the post happens, in part, because the 'centre continues to hold'. It demonstrates the center can, and does, hold. We don't want the centre to hold. We want it to disappear and get replaced by policies and perspectives keen on an economy (and society) that works for all, not just some

makedoanmend , May 29, 2018 at 11:33 am

I know what you're saying and I tend to agree. But the centre to Yeats (my interpretation, anyway) is that there is a cultural centre both apart from but also part of the social centre, and when that centre goes all hell breaks loose. Meaning of events becomes very confused or impossible to understand on many levels.

Then, it's often the little people (and don't go making jokes about leprechauns) that get crushed in the confusion.

Pam of Nantucket , May 29, 2018 at 10:32 am

We should reflect about the root causes of why our information is not informing us. How can decades go by with the meme "smoking has not been conclusively proven to cause cancer" or now "the science of climate change is inconclusive", not to mention countless similar horror stories in pharma. Bullshit about the effectiveness of supply side economics is no different.

Somehow we collectively need to expect and demand more objectivity from our information sources. We fall for the fox guarding hen houses scam over and over, from TARP bailouts, to FDA approvals to WMD claims. Not sure of the answer, but I know from talking with my boomer parents, skepticism about information sources is not in the DNA of many information consumers.

Isotope_C14 , May 29, 2018 at 11:52 am

"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back."

― Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark

One of Sagan's best, I loaned this out to a not terribly thoughtful acquaintance and I was told it was "too preachy".

I guess Sagan proves himself correct time and time again.

Off The Street , May 29, 2018 at 2:56 pm

Bamboozlers often look to bezzle. That should give anyone pause.

steelhead23 , May 29, 2018 at 12:43 pm

It is also worth noting that a number of newspapers lauded Hitler's rise to power – they overlooked violence against Jews because the trains ran on time. Nor should we ignore disinformation campaigns, led by newspapers (e.g. Hearst and cannabis). In general, each media outlet is a reflection of its owners, most of whom are rich and adverse to any suggestion that we "tax the rich."

sharonsj , May 29, 2018 at 1:59 pm

I've come to the conclusion that we don't have a media anymore. I was watching MSNBC this AM discuss the "missing" 1500 immigrant children. The agency responsible says it calls the people who now have the kids, but most of the people don't call back within the 30-day requirement period.

Now the next logical questions to ask the rep would be: What happens after 30 days? Do you keep calling them? Do send out investigators?" But are these questions asked? No. Instead we get speculation or non-answers. It's the same with every issue.

The internet is not any better. Many articles are just repeating what appears elsewhere with no one checking the facts, even on respected sites. I also got a chain email today regarding petition for a Constitutional Convention. The impetus is a list of grievances ranging from "a congressman can retire after just one term with a full pension" to "children of congressmen don't have to pay back college loans." I already knew most of the claims weren't true but the 131 recipients of the organization I belong to didn't. I did find out that this chain email has been circulating on the internet for five years and it is the work of a conservative groups whose real aim is to stop abortion and make Christianity the law of the land. I was not surprised.

I have said for years that there is no news on the news. And I have repeated this meme for just as long: There is a reason why America is called Planet Stupid.

lewis e , May 29, 2018 at 2:43 pm

On the 1500

https://twitter.com/jduffyrice/status/1000927903759110144

JBird , May 29, 2018 at 3:38 pm

Now the next logical questions to ask the rep would be: What happens after 30 days? Do you keep calling them? Do send out investigators?" But are these questions asked? No. Instead we get speculation or non-answers. It's the same with every issue.

Even competent reporting takes practice, time, and effort, even money sometimes. The same with even half way competent governing. Neither is rewarded, and are often punished, for doing nowadays; asking as a follow-up question "did you call the local police or send over a pair of ICE officers just to politely knock on the door?" Police do people checks all the time. "I haven't see so and so for a week", or "my relative hasn't returned my calls for a month, can you?" It is possible that the paperwork just got lost and asking the guardians/family some questions personally would solve.

But all that is boring bovine excrement, which is just not done.

Jeremy Grimm , May 29, 2018 at 2:41 pm

This post is disheartening in so many ways. Start with "media hysteria" -- adding yet another glib coinage to hide a lack of explanation behind a simple but innapt analogy like the endless "addictions" from which personifications of various abstract entities suffer.

This coinage presupposes a media sufficiently free to be possessed by hysteria. Dancing puppets might with some art appear "hysterical". And the strange non-death of Neoliberalsm isn't so strange or poorly understood in 2018 though the detailed explanation hasn't reached as many as one might have hoped, including the authors of this brief post. Consider their unhappy mashup of thoughts in a key sentence of the first paragraph: "This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector." The tail of this sentence obviates the rest of the post. And we ought not ignore the detail that Neoliberalism believes in the Market as a solution to all problems -- NOT the 'free market' of neoclassical economics or libertarian ideology.

From "media hysteria" the post postulates "amnesia" of a public convinced of "greedy bankers" who need regulation. In the U.S. the propaganda was more subtle -- at least in my opinion. We were fed the "bad apples" theory mocked in a brief series of media clips presented in the documentary film "Inside Job". Those clips suggest a better explanation for the swift media transitions from banking reform to balanced budgets and austerity with more tax cuts for the wealthy than "amnesia" or "hyper-amnesia". The media Corporations are tightly controlled by the same forces that captured Corporations and -- taking the phrase "the superiority of the private sector over the public sector" in the sense that a superior directs an inferior [rather than the intended(?) sense] -- direct and essentially own our governments.

orangecats , May 29, 2018 at 10:09 pm

"skepticism about information sources is not in the DNA of many information consumers"

This.

bruce wilder , May 29, 2018 at 11:37 am

The essayist complains that poverty and the manifest failures of neoliberalism get little critical attention, but she leads off, "It hasn't escaped many people's attention . . ."

The remarkable thing about public discourse and political and economic news reporting is how superficial it has become, so devoid of a foundation of any kind in history or theory. You can not have an effective critique of society or the economy or anything, if you do not see a system with a history and think it matters. Neoliberalism has become what people say when they think none of it really matters; it is all just noise.

Summer , May 29, 2018 at 4:48 pm

"Neoliberalism has become what people say when they think none of it really matters; it is all just noise."

There is a connection there with movies like Deadpool 2.

JohnnyGL , May 29, 2018 at 1:35 pm

Another thing to recall was how quickly talk of nationalizing banks evaporated. Even Paul Krugman, among others were supporting the idea that "real capitalists nationalize".

Once LIBOR came down, and the lending channels began to reopen, the happy talk ensued and the amnesia kicked in strongly.

I also think that the crisis of neoliberalism echos a problem caused by capitalism, itself. I think David Harvey stated that "capitalism doesn't solve problems, it often just moves them around".

The financial crisis and austerity have now manifested themselves into a media crisis of elites and elite legitimacy (BREXIT, Trump's election, etc). The ability to manufacture consent is running into increased difficulty. I don't think the financial crisis narrative shift helped very much at all. A massive crime requires an equally massive cover-up, naturally.

WheresOurTeddy , May 29, 2018 at 1:41 pm

Why, it's almost as if 90% of all media outlets are owned by 5 multibillion dollar conglomerates, controlled by the top 0.1%, for the purposes of protecting their unearned parasitic power, and the employees making six-to-low-seven figures are on the Upton Sinclair "paycheck demands I not understand it" model.

Or it's amnesia.

Matt Stoller tweet from August 2017, as germane now as ever: "The political crisis we are facing is simple. American commerce, law, finance, and politics is organized around cheating people."

maria gostrey , May 29, 2018 at 2:13 pm

this is why frank sobotka got my vote in the 2016 election:

https://m.youtube.com/watch?v=T-j5XWo1fPI#

KLG , May 29, 2018 at 9:56 pm

A big thumbs up for that! Sobotka was a hero in very dark times.

As my brother-in-law puts it: The American Dream used to be "work hard in a useful job, raise a family of citizens, retire with dignity, and hand the controls to the next generation." Now? It's just "Win the lottery."

Problem is, "The Lottery" is right out of Shirley Jackson.

hemeantwell , May 29, 2018 at 3:12 pm

Or it's amnesia.

Agreed. The author is inclined to interpret at the level of cumulative effect -- apparent forgetting -- and to ignore how fear -- of editors, of owners -- plays any role. Her proposed unveiling of a coercive process becomes yet another veiling of it.

precariat , May 29, 2018 at 3:16 pm

There is not a writer or thinker I agree with more than Matt Stoller.

Avalon Sparks , May 29, 2018 at 5:33 pm

He's one I agree with too. His writings on monopoly activity are excellent.

Pamela More , May 29, 2018 at 9:57 pm

This.

It's a feature, not a bug.

Alex morfesis , May 29, 2018 at 1:54 pm

Sadly the narrative of details is lost to history The German landesbanks who had guaranteed payments in loan pools in the USA were allowed to skirt thru crash and burn by the agencies (moody s&p and your little fitch too) fake and shake ratings process But all things German are magical Having lived thru NYC Mac Corp effective bankruptcy of man hat tan..

it was amusing watching the hand wave given when the city of Berlin actually defaulted .

Ah reality I remember it welll

Eustache De Saint Pierre , May 29, 2018 at 2:23 pm

My own view for what it is worth is that the Guardian pays some lip service to the plight of the UK's " Deplorables ", but like most of it's readership does not really give a damn. A state of being exacerbated by Brexit similar to the situation in the US with Trump. It's much easier to imagine hordes of racist morons who inhabit places that you have no direct experience of, than to actually go & take a look. It's also very easy to be in favour of mass immigration if it does not effect your employment, housing & never likely to spoil your early morning dawn chorus with a call to prayer.

Unfortunately it has been left to the Right to complain about such things as the Rotherham abuse scandal, which involved a couple of thousand young girls, who I suspect are worth less to some than perhaps being mistaken as a racist. There are also various groups made up of Muslim women who protest about Sharia councils behaviour to their sex, but nobody in the media is at all interested.

George Orwell noted that the middle class Left couldn't handle dealing with real working class people, although there isn't the same huge gulf these days, I believe there is still a vestige of it due to the British class system. The Fabians set up shop in the East End around the turn of the last century & directly rubbed shoulders with the likes of Coster Mongers – a combination that led to a strike that was one of the first success stories in the attempt to get a few more crumbs than what was usually allowed to fall from the top table.

As for Mirror readers, I suspect that the majority are either the voiceless or are too busy fighting to avoid the fate of those who find themselves availing of food banks, while being labelled as lazy scroungers all having expensive holidays, twenty kids, about thirty grand a year, while being subjected to a now updated more vicious regime of that which was illustrated by " I, Daniel Blake ".

If Neoliberalism is now being noticed I imagine that it is because of it's success in working it's way up the food chain. After all these same Middle classes for the most part did not care much for the plight of the poor during those Victorian values. Many could not wait to employ maids of all work who slaved for up to fourteen hours a day with only Sunday afternoon's off. The Suffragettes had a real problem with this as their relatively comfortable lives would soon descend into drudgery without their servants.

Coincidentally, the NYT article on Austerity Britain is the closest I have read to an accurate picture that I have seen for a good while.

David , May 29, 2018 at 2:39 pm

It's also not a new thing. British media worship of neoliberalism has been growing since the 1980s, at the same time as newspapers have been closing and media sources of all kinds laying off their staff. 2008 was a temporary blip, and since the average journalist has the attention span of a hamster, it was back to usual a few months later. Once the crash stopped being "news" old patterns reasserted themselves. I wonder, incidentally, how many economics journalists in the UK actually remember the time before neoliberalism?

precariat , May 29, 2018 at 2:54 pm

"And so it seems we are living with a hyper-amnesia"

Consuming corporate media is increasingly a bizarro-world experience. Even something like the Trump scandal/constitutional crisis/investigation seems like the arrogant internecine warfare of corrupt factions of the establishment. Meanwhile, Americans are increasingly living out of their cars.

The corporate media forgets the causes of the worst economic crisis since the Depression, and it put Trump in a position to be elected. Trump was the Republican nominee because he was relentlessly promoted by the media -- because ratings, because neoliberal rigged markets.

Break up the media monopolies, roll back Citizens United, enforce the fairness doctrine.

Pamela More , May 29, 2018 at 9:55 pm

Agree.

Slight edit

" Consuming corporate media is increasingly a bizarro-world experience the Trump scandal/constitutional crisis/investigation is nothing other than internecine warfare between corrupt factions of the establishment."

JBird , May 29, 2018 at 3:24 pm

I think there are several issues here for Americans, which can partially be applied to the Europeans.

First, the American nation as whole only has short term memory. It is our curse.

Second, those with the money spend a lot of money, time and effort the late 19th century covering up, massaging, or sometimes just creating lies about the past. American and British businesses, governments, and even private organizations are masters at advertising and propaganda. Perhaps the best on Earth.

Third, the people and the institutions that would counter this somewhat, independent unions, multiple independent media, tenured professors at functioning schools, even non-neoliberalized churches, and social organizations like bowling, crocheting, or heck, the Masons would all maintain a separate continuing body of memory and knowledge.

Lastly, we are all freaking terrified somewhere inside us. Those relative few who are not are fools, and most people, whatever their faults, truly are not fools. Even if they act like one. Whatever your beliefs, position, or knowledge, the knowing of the oncoming storm is in you. Money or poverty may not save you. The current set of lies, while they are lies, gives everyone a comfortable known position of supporting or opposing in the same old, same old while avoiding thinking about whatever catastrophe(s) and radical changes we all know are coming. The lies are more relaxing than the truth.

Even if you are one of society's homeless losers, who would welcome some changes, would you be comfortable thinking about just how likely it is to be very traumatic? Hiding behind begging for change might be more comfortable.

precariat , May 29, 2018 at 4:25 pm

"Even if you are one of society's homeless losers, who would welcome some changes, would you be comfortable thinking about just how likely it is to be very traumatic? Hiding behind begging for change might be more comfortable."

On the contrary, the upheaval the "losers" have been subjected to will be turned around and used as a just cause for rectification. Trumatic consequences can be unpredictable and this is why society should have socio-economic checks and balances to prevent an economic system running amok. Commonsense that necessitates amnesia for neoliberalism to seem viable.

Peter Phillips , May 29, 2018 at 4:54 pm

Facing the current scenario in which we have:

1. Oligarchs having captured thoroughly the media, the legislatures and the judiciary, (as well as large parts of what might be construed as "liberal" political organisations e.g. the Democratic Party of the USA)

2. the seemingly inexorable trend to wealth concentration in the hands of said oligarchs

..one asks oneself.."What is one to do?"

My own response, (and I acknowledge straight off its limited impact), is to do the following:

1. support financially in the limited ways possible media channels such as Naked Capitalism that do their level best to debunk the lies and deceptions perpetrated by the oligarchs

2. support financially social organisations and structures that are genuinely citizen based and focused on a sustainable future for all

3. Do very very limited monitoring of the oligarch's "lies and deceptions" (one needs to understand one's enemies to have a chance to counter them) and try on a personal level, in one's day to day interactions, to present counter arguments

We cannot throw in the towel. We must direct our limited financial resources and personal efforts to constructive change, as, for the 99%..there are no "bunker" to run to when the "proverbial" hits the fan..as it must in the fullness of time.

Spring Texan , May 29, 2018 at 8:21 pm

Yep. One has to go ahead and do what one can. It all makes a difference. Thanks for your strategy, Peter Phillips. Limited impact is not no impact, and we don't have the luxury of despairing because there is only a bit we can do.

sgt_doom , May 29, 2018 at 8:10 pm

Yet this has been going on forever – – this past Sunday, for the first time I recall, I finally heard an accurate Real News story filed on the Bobby Kennedy assassination (50th anniversary coming this June 6, 2018) by the BBC World Service.
They actually noted that there were multiple shooters, that Sen. Kennedy was shot from behind, not the front where Sirhan was located, etc., etc.
I guess we do occasionally witness Real News – – – just that it takes 50 years or so to be reported . . .

[May 29, 2018] Guccifer 2.0's American Fingerprints Reveal An Operation Made In The USA by Elizabeth Lea Vos

Highly recommended!
May 29, 2018 | www.zerohedge.com

Authored by Elizabeth Lea Vos via Disobedient Media,

In his final report in a three-part series, Guccifer 2's West Coast Fingerprint , the Forensicator discovers evidence that at least one operator behind the Guccifer 2.0 persona worked from the West Coast of the United States.

The Forensicator's earlier findings stated that Guccifer 2.0's NGP-VAN files were accessed locally on the East Coast, and in another analysis they suggested that a file published by Guccifer 2.0 was created in the Central time zone of the United States. Most recently, a former DNC official refuted the DNC's initial allegations that Trump opposition files had been ex-filtrated from the DNC by Russian state-sponsored operatives.

So, if Guccifer 2.0's role was negated by the statements of the DNC's own former "official" in a 2017 report by the Associated Press , why do we now return our attention to the Guccifer 2.0 persona, as we reflect on the last section of new findings from the Forensicator?

The answer: Despite almost two years having passed since the appearance of the Guccifer 2.0 persona, legacy media is still trotting out the shambling corpse of Guccifer 2.0 to revive the legitimacy of the Russian hacking narrative. In other words, it is necessary to hammer the final nail into the coffin of the Guccifer 2.0 persona.

As previously noted, In his final report in a three-part series, the Forensicator discusses concrete evidence that at least one operator behind the Guccifer 2.0 persona worked from the West Coast of the United States. He writes:

"Finally, we look at one particular Word document that Guccifer 2 uploaded, which had "track changes" enabled. From the tracking metadata we deduce the timezone offset in effect when Guccifer 2 made that change -- we reach a surprising conclusion: The document was likely saved by Guccifer 2 on the West Coast, US ."

The Forensicator spends the first part of his report evaluating indications that Guccifer 2.0 may have operated out of Russia. Ultimately, the Forensicator discards those tentative results. He emphatically notes:

"The PDT finding draws into question the premise that Guccifer 2 was operating out of Russia, or any other region that would have had GMT+3 timezone offsets in force. Essentially, the Pacific Timezone finding invalidates the GMT+3 timezone findings previously described."

The Forensicator's new West Coast finding is not the first evidence to indicate that operators behind the Guccifer 2.0 persona were based in the US. Nine months ago, Disobedient Media , reported on the Forensicator's analysis , which showed (among other things) that Guccifer 2.0's "ngpvan" archive was created on the East Coast. While that report received the vast majority of attention from the public and legacy media, Disobedient Media later reported on another analysis done by the Forensicator, which found that a file published by Guccifer 2.0 (on a different occasion) was probably created in the Central Timezone of the US.

Adding to all of this, UK based analyst and independent journalist Adam Carter presented his own analysis which also showed that the Guccifer 2.0 Twitter persona interacted on a schedule which was best explained by having been based within the United States.

The chart above shows a box which spans regular working hours. It indicates that unless Guccifer 2.0 worked the night shift, they were likely working out of the US. Though this last data point is circumstantial, it is corroborated by the previously discussed pieces of independently verifiable hard evidence described by the Forensicator.

When taking all of these separate pieces into account, one observes a convergence of evidence that multiple US-based operators were behind the Guccifer 2.0 persona and its publications. This is incredibly significant because it is based on multiple pieces of concrete data; it does not rely on "anonymous sources within the government," nor contractors hired by the DNC. As a result, much of the prior legacy press coverage of Guccifer 2.0 as a Russia-based agent can be readily debunked.

Such tangible evidence stands in contrast to the claims made in a recently published Daily Beast article, which reads more like a gossip column than serious journalism. In the Daily Beast's recital, the outlet cites an anonymous source who claims that a Moscow-based GRU agent was behind the Guccifer 2.0 operation, writing :

"Guccifer 2.0, the "lone hacker" who took credit for providing WikiLeaks with stolen emails from the Democratic National Committee, was in fact an officer of Russia's military intelligence directorate (GRU), The Daily Beast has learned. It's an attribution that resulted from a fleeting but critical slip-up in GRU tradecraft.

But on one occasion, The Daily Beast has learned, Guccifer failed to activate the VPN client before logging on. As a result, he left a real, Moscow-based Internet Protocol address in the server logs of an American social media company, according to a source familiar with the government's Guccifer investigation.

Working off the IP address, U.S. investigators identified Guccifer 2.0 as a particular GRU officer working out of the agency's headquarters on Grizodubovoy Street in Moscow."

[The Daily Beast , March 22, 2018]

Clearly, the claim made in the Daily Beast's report is in direct contradiction with the growing mound of evidence suggesting that Guccifer 2.0 operated out of the United States. A detailed technical breakdown of the evidence confirming a West-Coast "last saved" time and how this counters the claims of the Daily Beast can be found in the Forensicator's work.

The Forensicator explained to Disobedient Media that their discovery process was initiated by the following Tweet by Matt Tait ( @pwnallthings ), a security blogger and journalist. Tait noticed a change revision entry in one of the Word documents published in Guccifer 2.0's second batch of documents, (uploaded 3 days after Guccifer 2.0 first appeared on the scene).

The Forensicator corrects Tait, stating that the timestamp is in "wall time," (local time) not UTC. The Forensicator explains that Tait's mistake is understandable because the "Z" suffix usually implies "Zulu" (GMT) time, but that isn't the case for "track changes" timestamps. The Forensicator writes that the document Tait refers to in his Tweet is named Hillary-for-America-fundraising-guidelines-from-agent-letter.docx ; it has Word's "track changes" feature enabled. Guccifer 2.0 made a trivial change to the document, using the pseudonym, "Ernesto Che," portrayed below:

The Forensicator correlated that timestamp ("12:56:00 AM") with the document's "last saved" timestamp expressed in GMT, as shown below courtesy of the Forensicator's study :

Based on the evidence discussed above, the Forensicator concludes that Guccifer 2.0 saved this file on a system that had a timezone offset of -7 hours (the difference between 0:56 AM and 7:56 AM GMT). Thus, the system where this document was last changed used Pacific Timezone settings.

The logical conclusion drawn from the preceding analysis is that Guccifer 2.0 was operating somewhere on the West Coast of the United States when they made their change to that document . This single finding throws into shambles any other conclusions that might indicate that Guccifer 2.0 was operating out of Russia. This latest finding also adds to the previously cited evidence that the persona was probably operated by multiple individuals located in the United States.

Taken all together, the factual basis of the Russian hacking story totally collapses. We are left instead with multiple traces of a US-based operation that created the appearance of evidence that Kremlin-allied hackers had breached the DNC network. Publicly available data suggests that Guccifer 2.0 is a US-based operation. To this, we add:

In the course of the last nine months this outlet has documented the work of the Forensicator, which has indicated that not only were Guccifer 2.0's "ngp-van" files accessed locally on the East Coast of the US, but also that several files published by the Guccifer 2.0 persona were altered and saved within the United States. The "Russian fingerprints" left on Guccifer 2.0's first document have been debunked, as has the claim that the file itself was extracted from the DNC network in the first place. On top of all this, a former DNC official withdrew the DNC's initial allegations that supported the "Russian hack" claim in the first place.

One hopes that with all of this information in mind, the long-suffering Guccifer 2.0 saga can be laid to rest once and for all, at least for unbiased and critically thinking observers.


Chris2 Tue, 05/29/2018 - 22:15 Permalink

Snowden talked about the NSA or is it CIA, had the ability to leave Russian fingerprints.

All of this was the "insurance" to frame Trump who they knew would win when they saw that Hillary rallies had 20 people only showing up few old lesbians and nobody else.

beemasters -> Chris2 Tue, 05/29/2018 - 22:18 Permalink

The hunt for the messenger has certainly proven to be an effective distraction.

LetThemEatRand Tue, 05/29/2018 - 22:16 Permalink

Meanwhile, Snowden risked his life and liberty to show us evidence that the NSA developed technology to make it appear even with expert analysis that NSA hacking originated from a foreign power.

[Apr 23, 2018] Neoliberals are statists, much like Trotskyites are

Highly recommended!
Apr 23, 2018 | americanaffairsjournal.org

From Neoliberalism The Movement That Dare Not Speak Its Name - American Affairs Journal

While it is undeniable that neoliberals routinely disparage the state, both back then and now, it does not follow that they are politically libertarian or, as David Harvey would have it, that they are implacably opposed to state interventions in the economy and society. Harvey's error is distressing, since even Antonio Gramsci understood this: "Moreover, laissez-faire liberalism, too, must be introduced by law, through the intervention of political power: it is an act of will, not the spontaneous, automatic expression of economic facts." 6 From the 1940s onward, the distinguishing characteristic of neoliberal doctrines and practice is that they embrace this prospect of repurposing the strong state to impose their vision of a society properly open to the dominance of the market as they conceive it. Neoliberals from Friedrich Hayek to James Buchanan to Richard Posner to Alexander Rüstow (who invented the term Vitalpolitik , which became Foucault's "biopolitics") to Jacques Rueff, not to mention a plethora of figures after 1970, all explicitly proposed policies to strengthen the state. 7

Friedman's own trademark proposals, like putting the money supply on autopilot, or replacing public schools with vouchers, required an extremely strong state to enforce them. While neoliberal think tanks rile up the base with debt clocks and boogeyman statistics of ratios of government expenditure to GDP, neoliberal politicians organize a host of new state activities to fortify their markets. They extravagantly increase incarceration and policing of those whom they deem unfit for the marketplace. They expand both state and corporate power to exercise surveillance and manipulation of subject populations while dismantling judicial recourse to resist such encroachments. Neoliberals introduce new property rights (like intellectual property) to cement into place their extensions of market valuations to situations where they were absent. They strengthen international sanctions such as the Trans-Pacific Partnership and investor-state dispute settlement schemes to circumvent and neutralize national social legislation they dislike. They bail out and subsidize private banking systems at the cost of many multiples of existing national income. And they define corporations as legal persons in order to facilitate the buying of elections.

The blue-sky writings of neoliberals with regard to the state are, if anything, even more daunting. In the imaginary constitution proposed in Hayek's Law, Legislation and Liberty , he suggests that politicians be rendered more powerful : in the imagined upper legislative house, Hayek stipulates, only men of substantial property over age forty-five would be eligible to vote or be elected; no political parties would be allowed; and each member would stand for a hefty fifteen-year term. 8 This illustrates the larger neoliberal predisposition to be very leery of democracy, and thus to stymie public participation through the concentration of political power in fewer hands. James Buchanan proposed something very similar. 9 This is just about as far from libertarianism as one could get, short of brute dictatorship.

So here is the answer to my first question: people think the label "neoliberalism" is an awful neologism because the neoliberals have been so good at covering their tracks, obscuring what they stand for, and denying the level of coherence which they have achieved in their long march to legitimacy. Back when some of these proposals were just a gleam in Hayek's eye, they did explicitly use the term "neoliberalism" to describe the project that, back then, did not yet exist -- even Milton Friedman used it in print! 10 But once their program looked like it would start to jell, and subsequently start reshaping both the state and the market more to their liking, they abruptly abjured any reference to that label, and sometime in the later 1950s, following the lead of Hayek, they began to call themselves "classical liberals." This attempt at rebranding was an utter travesty because, as they moved from reconceptualization of one area of human experience to another, the resulting doctrines contradicted classical liberalism point by point, and term by term. It might be worthwhile for us who come after to insist upon the relevance of things that put the neo- in neoliberalism.

What's New about Neoliberalism?

In a nutshell, classical liberalism imagined a night watchman state that would set the boundaries for the natural growth of the market, like a shepherd tending his flock. Markets were born, not made. The principles of good governance and liberty would be dictated by natural rights of individual humans, or perhaps by the prudent accretion of tradition. People needed to be nurtured first to find themselves, in order to act as legitimate citizens in liberal society. Society would be protected from the disruptive character of the market by something like John Stuart Mill's "harm principle": colloquially, the freedom of my fist stops at the freedom of your face. The neoliberals were having none of that, and explicitly said so.

Far from trying to preserve society against the unintended consequences of the operations of markets, as democratic liberalism sought to do, neoliberal doctrine instead set out actively to dismantle those aspects of society which might resist the purportedly inexorable logic of "catallactics," and to reshape it in the market's image. For neoliberals, freedom and the market would be treated as identical. Their rallying cry was to remove the foundation of liberty from natural rights or tradition, and reposition it upon an entirely novel theory concerning what a market was, or should be. They could not acknowledge individual natural rights, because they sought to tutor the masses to become the agent the market would be most likely to deem successful. The market no longer gave you what you wanted; you had to capitulate to what the market wanted. All areas of life could be better configured to behave as if they were more market-like. Gary Becker, for example, a member of the Mont Pèlerin Society, proposed a market-based approach to allow for a socially optimal level of crime, and advocated a revolutionary extension of marginal calculus to include the "shadow costs" and benefits associated with "children, prestige or esteem, health, altruism, envy, and pleasure of the senses." Becker even proposed an economic model of the "dating market," one consequence of which was the proposition that polygamy for successful, wealthy men could be politically rationalized. And voilà! The Sunday New York Times produced an article saying just that, as if it were real news. Classical liberals like Mill or Michael Oakeshott would be spinning in their graves. 11

The intellectual content of neoliberalism is something that warrants sustained discussion, but this can only happen once critical historians can admit they are no longer basing their evaluations on the isolated writings of a single author. There is no convenient crib sheet describing what the modern neoliberal thought collective (for brevity, NTC) actually believes. Nevertheless, neoliberalism does have certain themes that are regularly sounded in emanations from the NTC:

No wonder outsiders are dazed and confused. The neoliberal revolutionaries, contemptuous of tradition, conjured a fake tradition to mask their true intentions. They did this while explicitly abjuring the label of "conservative." But there is one more reason that outsiders tend to think it a mistake to posit an effective intellectual formation called "neoliberalism." Nowadays we doubt that ideas, and particularly political ideas, are the product of the concerted efforts of some thought collective stretching over generations, engaging in critique and reconstruction, fine-tuning and elaborating doctrine, while keeping focused upon problems of implementation and feasibility. Indeed, that doubt is evidence of neoliberal preconceptions having seeped into all of our thought processes. Yet that is an exact description of how neoliberalism developed, in the manner (as I insist on calling it) of a thought collective: sanctioned members are encouraged to innovate and embellish in small ways, but an excess of doctrinal heresy gets one expelled from participation. Central dogmas are not codified or dictated by any single prophet; no one delivers the Tablets down from the "Mont"; and you cannot adequately understand neoliberalism solely by reading Hayek or Milton Friedman, for that matter. While we can locate its origins in 1947, it has undergone much revision since then, and is still a hydra-headed Gorgon to this very day.

[Apr 01, 2018] Does the average user care if s/he is micro-targetted by political advertisements based on what they already believe?

Highly recommended!
Apr 01, 2018 | www.zerohedge.com

BigJim -> MusicIsYou Sat, 03/31/2018 - 10:20 Permalink

The furor is all about the "illegitimate" victories of Brexit and Trump's campaign. Does the average user care if s/he is micro-targetted by political advertisements based on what they already believe?

No, because they already believe they're right, so what's wrong with a little confirmation bias? Most of us spend significant amounts of energy seeking out sources of information confirming what we already believe; micro-targetting just makes our lives that little bit less effortful.

[Mar 31, 2018] RFK and Nixon immediately understood the assassination was a CIA-led wet-works operation since they chaired the assassination committees themselves in the past

Highly recommended!
This hypothesis about JFK preserves currency for along time: "When JFK started dismantling the CIA Deep State and ending the Cold War with the USSR, Dulles dispatched a CIA hit-squad to gun down the President. (RFK and Nixon immediately understood the assassination was a CIA-led wet-works operation since they chaired the assassination committees themselves in the past). "
Notable quotes:
"... The liberal order aka the New British Empire, was born 70 years ago by firebombing and nuking undefended civilian targets. It proceeded to launch serial genocidal rampages in the Koreas, SE Asia, Latin America until finally burning down a large portion of the Middle East. ..."
"... The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators. ..."
"... However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front. ..."
Mar 31, 2018 | www.zerohedge.com

Posa Fri, 03/30/2018 - 23:10 Permalink

The usual self-serving swill from the Best and the Brightest of the Predator Class out of the CFR via Haas.

The liberal order aka the New British Empire, was born 70 years ago by firebombing and nuking undefended civilian targets. It proceeded to launch serial genocidal rampages in the Koreas, SE Asia, Latin America until finally burning down a large portion of the Middle East.

The fact that there has not been a catastrophic nuclear war is pure dumb luck. The Deep State came within seconds of engineering a nuclear cataclysm off the waters of Cuba in 1962. When JFK started dismantling the CIA Deep State and ending the Cold War with the USSR, Dulles dispatched a CIA hit-squad to gun down the President. (RFK and Nixon immediately understood the assassination was a CIA-led wet-works operation since they chaired the assassination committees themselves in the past).

The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators.

However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front.

So the US Imperialists are being eclipsed by the Sino-Russo Alliance and wants us to believe this is a great tragedy. Meanwhile the same crew of Liberal -neoCon Deep Staters presses on with wars and tensions that are slipping out of control.

[Mar 30, 2018] The Death Of The Liberal World Order by Leonid Savin

Highly recommended!
Notable quotes:
"... And, quoting his colleague Archon Fung from the Harvard Kennedy School, " American politics is no longer characterized by the rule of the median voter, if it ever was. Instead, in contemporary America the median capitalist rules as both the Democratic and Republican parties adjust their policies to attract monied interests." And finally Mr. Ringen adds, "American politicians are aware of having sunk into a murky bog of moral corruption but are trapped." ..."
"... Trump merely reflects the dysfunctionality and internal contradictions of American politics. He is the American Gorbachev, who kicked off perestroika at the wrong time. ..."
"... Global financial services exercise monopolistic power over national policies, unchecked by any semblance of global political power. Trust is haemorrhaging. The European Union, the greatest ever experiment in super-national democracy, is imploding ..."
"... Probably this is because the Western model of neoliberalism does not provide any real freedom of commerce, speech, or political activity, but rather imposes a regime of submission within a clearly defined framework. ..."
"... america is going through withdraw from 30 years of trickledown crap. the young are realizing that the shithole they inherit does not have to be a shithole, and the old pathetic white old men who run the show will be dead soon. ..."
"... The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators. ..."
"... However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front. ..."
"... So the US Imperialists are being eclipsed by the Sino-Russo Alliance and wants us to believe this is a great tragedy. Meanwhile the same crew of Liberal -neoCon Deep Staters presses on with wars and tensions that are slipping out of control. ..."
Mar 30, 2018 | www.zerohedge.com

Authored Leonid Savin via Oriental Review,

A few days ago the president of the Council on Foreign Relations, Richard Haass, published an article, titled "Liberal World Order, R.I.P." In it, he states that the current threat to the liberal world order is coming not from rogue states, totalitarian regimes, religious fanatics, or obscurantist governments (special terms used by liberals when referring to other nations and countries that have not pursued the Western capitalist path of development), but from its primary architect -- the United States of America.

Haass writes: " Liberalism is in retreat. Democracies are feeling the effects of growing populism. Parties of the political extremes have gained ground in Europe. The vote in the United Kingdom in favor of leaving the EU attested to the loss of elite influence. Even the US is experiencing unprecedented attacks from its own president on the country's media, courts, and law-enforcement institutions. Authoritarian systems, including China, Russia, and Turkey, have become even more top-heavy. Countries such as Hungary and Poland seem uninterested in the fate of their young democracies

"We are seeing the emergence of regional orders. Attempts to build global frameworks are failing."

Haass has previously made alarmist statements , but this time he is employing his rhetoric to point to the global nature of this phenomenon. Although between the lines one can easily read, first of all, a certain degree of arrogance -- the idea that only we liberals and globalists really know how to administer foreign policy -- and second, the motifs of conspiracy.

"Today's other major powers, including the EU, Russia, China, India, and Japan, could be criticized for what they are doing, not doing, or both."

Probably this list could be expanded by adding a number of Latin American countries, plus Egypt, which signs arms deals with North Korea while denying any violation of UN sanctions, and the burgeoning Shiite axis of Iran-Iraq-Syria-Lebanon.

But Haass is crestfallen over the fact that it is Washington itself that is changing the rules of the game and seems completely uninterested in what its allies, partners, and clients in various corners of the world will do.

" America's decision to abandon the role it has played for more than seven decades thus marks a turning point. The liberal world order cannot survive on its own, because others lack either the interest or the means to sustain it. The result will be a world that is less free, less prosperous, and less peaceful, for Americans and others alike."

Richard Haass's colleague at the CFR, Stewart Patrick, quite agrees with the claim that it is the US itself that is burying the liberal world order . However, it's not doing it on its own, but alongside China. If the US had previously been hoping that the process of globalization would gradually transform China (and possibly destroy it, as happened to the Soviet Union earlier), then the Americans must have been quite surprised by how it has actually played out. That country modernized without being Westernized, an idea that had once been endorsed by the leader of the Islamic revolution in Iran, Ayatollah Khomeini.

Now China is expanding its influence in Eurasia in its own way, and this is for the most part welcomed by its partner countries.

But this has been a painful process for the US, as it is steadily and irrevocably undermining its hegemony.

"Its long-term ambition is to dismantle the U.S. alliance system in Asia, replacing it with a more benign (from Beijing's perspective) regional security order in which it enjoys pride of place, and ideally a sphere of influence commensurate with its power.

China's Belt and Road initiative is part and parcel of this effort, offering not only (much-needed) infrastructure investments in neighboring countries but also the promise of greater political influence in Southeast, South, and Central Asia. More aggressively, China continues to advance outrageous jurisdictional claims over almost the entirety of the South China Sea , where it continues its island-building activities, as well as engaging in provocative actions against Japan in the East China Sea," writes Patrick.

And as for the US:

"The United States, for its part, is a weary titan, no longer willing to bear the burdens of global leadership, either economically or geopolitically.

Trump treats alliances as a protection racket, and the world economy as an arena of zero-sum competition. The result is a fraying liberal international order without a champion willing to invest in the system itself. "

One can agree with both authors' assessments of the changed behavior of one sector of the US establishment, but this is about more than just Donald Trump (who is so unpredictable that he has staffed his own team with a member of the very swamp he was preparing to drain) and North American populism. One needs to look much deeper.

In his book, Nation of Devils: Democratic Leadership and the Problem of Obedience , Stein Ringen, a Norwegian statesman with a history of service in international institutions, notes:

"Today, American democratic exceptionalism is defined by a system that is dysfunctional in all the conditions that are needed for settlement and loyalty...

Capitalism has collapsed into crisis in an orgy of deregulation. Money is transgressing into politics and undermining democracy itself ."

And, quoting his colleague Archon Fung from the Harvard Kennedy School, " American politics is no longer characterized by the rule of the median voter, if it ever was. Instead, in contemporary America the median capitalist rules as both the Democratic and Republican parties adjust their policies to attract monied interests." And finally Mr. Ringen adds, "American politicians are aware of having sunk into a murky bog of moral corruption but are trapped."

Trump merely reflects the dysfunctionality and internal contradictions of American politics. He is the American Gorbachev, who kicked off perestroika at the wrong time. Although it must be conceded that if Hillary Clinton had become president, the US collapse would have been far more painful, particularly for the citizens of that country. We would have seen yet more calamitous reforms, a swelling influx of migrants, a further decline in the nation's manufacturing base, and the incitement of new conflicts. Trump is trying to keep the body of US national policy somewhat alive through hospice care, but what's really needed is a major restructuring, including far-reaching political reforms that would allow the country's citizens to feel that they can actually play a role in its destiny.

These developments have spread to many countries in Europe, a continent that, due to its transatlantic involvement, was already vulnerable and susceptible to the current geopolitical turbulence. The emergence of which, by the way, was largely a consequence of that very policy of neoliberalism.

Stein Ringen continues on that score:

"Global financial services exercise monopolistic power over national policies, unchecked by any semblance of global political power. Trust is haemorrhaging. The European Union, the greatest ever experiment in super-national democracy, is imploding "

It is interesting that panic has seized Western Europe and the US -- the home of transatlanticism, although different versions of this recipe for liberalism have been employed in other regions -- suffice it to recall the experience of Singapore or Brazil. But they don't seem as panicked there as in the West.

Probably this is because the Western model of neoliberalism does not provide any real freedom of commerce, speech, or political activity, but rather imposes a regime of submission within a clearly defined framework. Therefore, the destruction of the current system entails the loss of all those dividends previously enjoyed by the liberal political elites of the West that were obtained by speculating in the stock market, from the mechanisms of international foreign-exchange payments (the dollar system), and through the instruments of supranational organizations (the UN, WTO, and World Bank). And, of course, there are the fundamental differences in the cultural varieties of societies.

In his book The Hidden God, Lucien Goldmann draws some interesting conclusions, suggesting that the foundations of Western culture have rationalistic and tragic origins, and that a society immersed in these concepts that have "abolish[ed] both God and the community [soon sees] the disappearance of any external norm which might guide the individual in his life and actions." And because by its very nature liberalism must carry on, in its mechanical fashion, "liberating" the individual from any form of structure (social classes, the Church, family, society, and gender, ultimately liberating man from his very self), in the absence of any standards of deterrence, it is quite logical that the Western world was destined to eventually find itself in crisis. And the surge of populist movements, protectionist measures, and conservative policies of which Haass and other liberal globalists speak are nothing more than examples of those nations' instinct for self-preservation. One need not concoct conspiracy theories about Russia or Putin interfering in the US election (which Donald Trump has also denied, noting only that support was seen for Hillary Clinton, and it is entirely true that a portion of her financial backing did come from Russia). The baseline political decisions being made in the West are in step with the current crisis that is evident on so many levels. It's just that, like always, the Western elites need their ritual whipping boy(although it would be more accurate to call it a human sacrifice). This geopolitical shake-up began in the West as a result of the implicit nature of the very project of the West itself.

But since alternative development scenarios exist, the current system is eroding away. And other political projects are starting to fill the resultant ideological void -- in both form as well as content.

Thus it's fairly likely that the current crisis of liberalism will definitively bury the unipolar Western system of hegemony.

And the budding movements of populism and regional protectionism can serve as the basis for a new, multipolar world order.

J S Bach Fri, 03/30/2018 - 22:48 Permalink

Oh, Wicked Witch of the West Wing, the cleansing fire awaits thy demise! Those meds can only keep you standing for so long. Keep tripping. Keep stumbling. Satan calls you to him. The day approacheth. Tick tock tick tock. 👹😂

beepbop -> TeamDepends Fri, 03/30/2018 - 23:01 Permalink

The Death Of The Liberal World Order

The Re-Birth Of the Neocon World Disorder

Neocons=Bolsheviks=Zionists. Over 100 years of bloodshed and mayhem.

dogsandhoney2 -> J S Bach Fri, 03/30/2018 - 23:05 Permalink

hillery-cfr neoliberalism is a right-wing politic, actually.

HedgeJunkie -> carbonmutant Fri, 03/30/2018 - 23:04 Permalink

Democracy ultimately melts down into chaos. We have a perfectly good US Constitution, why don't we go back to using it as written? That said, I am for anything that makes the elites become common.

curbjob -> carbonmutant Fri, 03/30/2018 - 23:26 Permalink

Democracy is a form of government. Populism is a movement. Populist movements come about when the current form of government is failing ... historically it seems they seldom choose wisely.

Dilluminati Fri, 03/30/2018 - 22:58 Permalink

Ridiculous cunt Hillary thinks after getting REJECTED by the voters in the USA that somehow being asked to "go the fuck away and shut the fuck up" makes her a women's leader. The cocksucker Soros and some of these other non-elected globalist should keep in mind that while everybody has a right to an opinion: it took the Clinton Crime Family and lots of corruption to create the scandals that sets a Clinton Crime Family member aside, and why Soros was given a free pass on election meddling and not others requires congressional investigation and a special prosecutor. And then there is that special kind of legal and ignorant opinion like David Hogg who I just disagree with, making him in my opinion and many fellow NRA members a cocksucker and a cunt. I'd wish shingles on David Hogg, Hillary Clinton, and Soros.

Theos Fri, 03/30/2018 - 23:02 Permalink

bullshit

america is going through withdraw from 30 years of trickledown crap. the young are realizing that the shithole they inherit does not have to be a shithole, and the old pathetic white old men who run the show will be dead soon.

all i see is a bunch of fleeting old people who found facebook 10 years late are temporarily empowered since they can now connect with other equally impotent old people.

Posa Fri, 03/30/2018 - 23:10 Permalink

The usual self-serving swill from the Best and the Brightest of the Predator Class out of the CFR via Haas.

The liberal order aka the New British Empire, was born 70 years ago by firebombing and nuking undefended civilian targets. It proceeded to launch serial genocidal rampages in the Koreas, SE Asia, Latin America until finally burning down a large portion of the Middle East.

The fact that there has not been a catastrophic nuclear war is pure dumb luck. The Deep State came within seconds of engineering a nuclear cataclysm off the waters of Cuba in 1962. When JFK started dismantling the CIA Deep State and ending the Cold War with the USSR, Dulles dispatched a CIA hit-squad to gun down the President. (RFK and Nixon immediately understood the assassination was a CIA-led wet-works operation since they chaired the assassination committees themselves in the past).

The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators.

However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front.

So the US Imperialists are being eclipsed by the Sino-Russo Alliance and wants us to believe this is a great tragedy. Meanwhile the same crew of Liberal -neoCon Deep Staters presses on with wars and tensions that are slipping out of control.

Yen Cross Fri, 03/30/2018 - 23:17 Permalink

I'll pay extra for a ticket to the George Soros funeral. That's like Game-7 at the Libtard world series!

devnickle Fri, 03/30/2018 - 23:22 Permalink

Death to globalism. It is the Satan World Order.

Grandad Grumps Fri, 03/30/2018 - 23:30 Permalink

Liberalism is anything but liberal... and I suppose that is the problem with it. It aims to do to the western world what Mao did to China and Stalin did to Russia. Many people were murdered or imprisoned and people had no rights, just obligations to dictators and their cronies.

I think this world is past the point where any benefit is gained from having "owners of the people", benevolent or otherwise. And we certainly do not benefit from perverted demonic entities even if they come bearing technology. The price is too high.

Populism goes along with essential freedoms for the human race.-

Yogizuna Fri, 03/30/2018 - 23:30 Permalink

As I told the idiotic retards who argued with me on Prodigy fucking 27 years ago, China will not change because of increased trading and the West making them wealthier. In fact, just the opposite. I wonder if they have caught on yet?

SuzerainGreyMole Fri, 03/30/2018 - 23:40 Permalink

One can understand the demise of the West of many levels. Downfall and then Renewal!

... ... ...

[Mar 12, 2018] There is no democracy without economic democracy by Jason Hirthler

Highly recommended!
Like many high demand cults neoliberalism is a trap, from which it is very difficult to escape...
Notable quotes:
"... A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism. ..."
"... Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged. ..."
"... The enduring lie is that there is no democracy without economic democracy. ..."
turcopolier.typepad.com

Part 3 - A False Promise

This 'Washington Consensus' is the false promise promoted by the West. The reality is quite different. The crux of neoliberalism is to eliminate democratic government by downsizing, privatizing, and deregulating it. Proponents of neoliberalism recognize that the state is the last bulwark of protection for the common people against the predations of capital. Remove the state and they'll be left defenseless .

Think about it. Deregulation eliminates the laws. Downsizing eliminates departments and their funding. Privatizing eliminates the very purpose of the state by having the private sector take over its traditional responsibilities.

Ultimately, nation-states would dissolve except perhaps for armies and tax systems. A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism.

Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged.

The enduring lie is that there is no democracy without economic democracy.

What matters to the one percent and the media conglomerates that disseminate their worldview is that the official definitions are accepted by the masses. The real effects need never be known. The neoliberal ideology (theory) thus conceals the neoliberal reality (practice). And for the masses to accept it, it must be mass produced. Then it becomes more or less invisible by virtue of its universality.

Source, links:

https://www.counterpunch.org/2018/03/02/colonizing-the-western-mind/
[ 1 ] [ 2 ]

[Mar 12, 2018] Colonizing the Western Mind using think tanks

Highly recommended!
Notable quotes:
"... In a short span of time in the 1970s, dozens of think tanks were established across the western world and billions of dollars were spent proselytizing the tenets of the Powell Memo in 1971, which galvanized a counter-revolution to the liberal upswing of the Sixties. The neoliberal economic model of deregulation, downsizing, and privatization was preached by the Reagan-Thatcher junta, liberalized by the Clinton regime, temporarily given a bad name by the unhinged Bush administration, and saved by telegenic restoration of the Obama years. ..."
"... Today think tanks like the Heritage Foundation, the Brookings Institute, Stratfor, Cato Institute, American Enterprise Institute, Council on Foreign Relations, Carnegie Endowment, the Open Society Foundation, and the Atlantic Council, among many others, funnel millions of dollars in donations into cementing neoliberal attitudes in the American mind. ..."
"... The ideological assumptions, which serve to justify what you could call neocolonial tactics, are relatively clear: the rights of the individual to be free of overreach from monolithic institutions like the state. Activist governments are inherently inefficient and lead directly to totalitarianism. Markets must be free and individuals must be free to act in those markets. People must be free to choose, both politically and commercially, in the voting booth and at the cash register. ..."
"... This conception of markets and individuals is most often formulated as "free-market democracy," a misleading conceit that conflates individual freedom with the economic freedom of capital to exploit labor. So when it comes to foreign relations, American and western aid would only be given on the condition that the borrowers accepted the tenets of an (highly manipulable) electoral system and vowed to establish the institutions and legal structures required to fully realize a western market economy. ..."
Mar 12, 2018 | www.counterpunch.org

In Christopher Nolan's captivating and visually dazzling film Inception, a practitioner of psychic corporate espionage must plant and idea inside a CEO's head. The process is called inception, and it represents the frontier of corporate influence, in which mind spies no longer just "extract" ideas from the dreams of others, but seed useful ideas in a target's subconscious.

Inception is a well-crafted piece of futuristic sci-fi drama, but some of the ideas it imparts are already deeply embedded in the American subconscious.

The notion of inception, of hatching an idea in the mind of a man or woman without his or her knowledge, is the kernel of propaganda, a black art practiced in the States since the First World War. Today we live beneath an invisible cultural hegemony, a set of ideas implanted in the mass mind by the U.S. state and its corporate media over decades. Invisibility seems to happen when something is either obscure or ubiquitous. In a propaganda system, an overarching objective is to render the messaging invisible by universalizing it within the culture. Difference is known by contrast. If there are no contrasting views in your field of vision, it's easier to accept the ubiquitous explanation. The good news is that the ideology is well-known to some who have, for one lucky reason or another, found themselves outside the hegemonic field and are thus able to contrast the dominant worldview with alternative opinions. On the left, the ruling ideology might be described as neoliberalism, a particularly vicious form of imperial capitalism that, as would be expected, is camouflaged in the lineaments of humanitarian aid and succor.

Inception 1971

In a short span of time in the 1970s, dozens of think tanks were established across the western world and billions of dollars were spent proselytizing the tenets of the Powell Memo in 1971, which galvanized a counter-revolution to the liberal upswing of the Sixties. The neoliberal economic model of deregulation, downsizing, and privatization was preached by the Reagan-Thatcher junta, liberalized by the Clinton regime, temporarily given a bad name by the unhinged Bush administration, and saved by telegenic restoration of the Obama years.

The ideology that underlay the model saturated academia, notably at the University of Chicago, and the mainstream media, principally at The New York Times. Since then it has trickled down to the general populace, to whom it now feels second nature.

Today think tanks like the Heritage Foundation, the Brookings Institute, Stratfor, Cato Institute, American Enterprise Institute, Council on Foreign Relations, Carnegie Endowment, the Open Society Foundation, and the Atlantic Council, among many others, funnel millions of dollars in donations into cementing neoliberal attitudes in the American mind.

The ideological assumptions, which serve to justify what you could call neocolonial tactics, are relatively clear: the rights of the individual to be free of overreach from monolithic institutions like the state. Activist governments are inherently inefficient and lead directly to totalitarianism. Markets must be free and individuals must be free to act in those markets. People must be free to choose, both politically and commercially, in the voting booth and at the cash register.

This conception of markets and individuals is most often formulated as "free-market democracy," a misleading conceit that conflates individual freedom with the economic freedom of capital to exploit labor. So when it comes to foreign relations, American and western aid would only be given on the condition that the borrowers accepted the tenets of an (highly manipulable) electoral system and vowed to establish the institutions and legal structures required to fully realize a western market economy.

These demands were supplemented with notions of the individual right to be free of oppression, some fine rhetoric about women and minorities, and somewhat more quietly, a judicial understanding that corporations were people, too. Together, an unshackled economy and an unfettered populace, newly equipped with individual rights, would produce the same flourishing and nourishing demos of mid-century America that had been the envy of humanity.

[Mar 11, 2018] Washington s Century-long War on Russia by Mike Whitney

Highly recommended!
The crisis of neoliberalism is at the core of current anti-Russian campaign.
Notable quotes:
"... So, as long as Russia remained open to the West's political maneuvering and wholesale thievery, every thing was hunky-dory. But as soon as Vladimir Putin got his bearings (during his second term as President) and started reassembling the broken state, then western elites became very concerned and denounced Putin as an "autocrat" and a "KGB thug." ..."
"... As the Western countries' elites were implementing a policy of political and economic containment of Russia, old threats were growing and new ones were emerging in the world, and the efforts to do away with them have failed. I think that the main reason for that is that the model of "West-centric" globalization, which developed following the dismantling of the bipolar architecture and was aimed at ensuring the prosperity of one-seventh of the world's population at the expense of the rest, proved ineffective. It is becoming more and more obvious that a narrow group of "chosen ones" is unable to ensure the sustainable growth of the global economy on their own and solve such major challenges as poverty, climate change, shortage of food and other vital resources . ..."
"... The American people need to look beyond the propaganda and try to grasp what's really going on. Russia is not Washington's enemy, it's a friend that's trying to nudge the US in adirection that will increase its opportunities for peace and prosperity in the future. Lavrov is simply pointing out that a multipolar world is inevitable as economic power becomes more widespread. This emerging reality means the US will have to modify its behavior, cooperate with other sovereign nations, comply with international law, and seek a peaceful settlement to disputes. It means greater parity between the states, fairer representation in global decision-making, and a narrower gap between the world's winners and losers. ..."
"... Admit it: The imperial model has failed. It's time to move on. ..."
www.nakedcapitalism.com

The United States has launched a three-pronged offensive on Russia. First, it's attacking Russia's economy via sanctions and oil-price manipulation. Second, it's increasing the threats to Russia's national security by arming and training militant proxies in Syria and Ukraine, and by encircling Russia with NATO forces and missile systems. And, third, it's conducting a massive disinformation campaign aimed at convincing the public that Russia is a 'meddling aggressor' that wants to destroy the foundation of American democracy. (Elections)

In response to Washington's hostility, Moscow has made every effort to extend the olive branch. Russia does not want to fight the world's biggest superpower any more than it wants to get bogged down in a bloody and protracted conflict in Syria. What Russia wants is normal, peaceful relations based on respect for each others interests and for international law. What Russia will not tolerate, however, is another Iraq-type scenario where the sovereign rights of a strategically-located state are shunted off so the US can arbitrarily topple the government, decimate the society and plunge the region deeper into chaos. Russia won't allow that, which is why it has put its Airforce at risk in Syria, to defend the foundational principle of state sovereignty upon which the entire edifice of global security rests.

The majority of Americans believe that Russia is the perpetrator of hostilities against the United States, mainly because the media and the political class have faithfully disseminated the spurious claims that Russia meddled in the 2016 elections. But the allegations are ridiculous and without merit. Russia-gate is merely the propaganda component of Washington's Full Spectrum Dominance theory, that is, disinformation is being used to make it appear as though the US is the victim when, in fact, it is the perpetrator of hostilities against Russia. Simply put, the media has turned reality on its head. Washington wants to inflict as much pain as possible on Russia because Russia has frustrated its plan to control critical resources and pipeline corridors in Central Asia and the Middle East. The Trump administration's new National Defense Strategy is quite clear on this point. Russia's opposition to Washington's destabilizing interventions has earned it the top spot on the Pentagon's "emerging rivals" list. Moscow is now Public Enemy#1.

Washington's war on Russia has a long history dating back at least 100 years to the Bolshevik Revolution of 1917. Despite the fact that the US was engaged in a war with Germany at the time (WW1), Washington and its allies sent 150,000 men from 15 nations to intervene on behalf of the "Whites" hoping to staunch the spread of communism into Europe. In the words of British Prime Minister Winston Churchill, the goal was "to strangle the Bolshevik baby in its crib."

According to Vasilis Vourkoutiotis from the University of Ottawa:

" the Allied intervention in the Russian Civil War.. was a failed attempt to eradicate Bolshevism while it was still weak .As early as February 1918 Britain supported intervention in the civil war on behalf of the Whites, and in March it landed troops in Murmansk. They were soon joined by forces from France, Italy, Japan, the United States, and ten other nations. Eventually, more than 150,000 Allied soldiers served in Russia

The scale of the war between the Russian Reds and Whites, however, was such that the Allies soon realized they would have little, if any, direct impact on the course of the Civil War unless they were prepared to intervene on a far grander scale. By the end of April 1919 the French had withdrawn their soldiers .British and American troops saw some action in November 1918 on the Northern Front but this campaign was of limited significance in the outcome of the Civil War. The last British and American soldiers were withdrawn in 1920. The main Allied contributions to the White cause thereafter were supplies and money, mostly from Britain .

The chief purpose of Allied intervention in Soviet Russia was to help the Whites defeat the Reds and destroy Bolshevism." (Allied Intervention in the Russian Revolution", portalus.ru)

The reason we bring up this relatively unknown bit of history is because it helps to put current events into perspective. First, it helps readers to see that Washington has been sticking its nose in Russia's business more than a century. Second, it shows that– while Washington's war on Russia has ebbed and flowed depending on the political situation in Moscow– it has never completely ended. The US has always treated Russia with suspicion, contempt and brutality. During the Cold War, when Russia's global activities put a damper on Washington's depredations around the world, relations remained stretched to the breaking point. But after the Soviet Union collapsed in December, 1991, relations gradually thawed, mainly because the buffoonish Boris Yeltsin opened the country up to a democratization program that allowed the state's most valuable strategic assets to be transferred to voracious oligarchs for pennies on the dollar. The plundering of Russia pleased Washington which is why it sent a number of prominent US economists to Moscow to assist in the transition from communism to a free-market system. These neoliberal miscreants subjected the Russian economy to "shock therapy" which required the auctioning off of state-owned resources and industries even while hyperinflation continued to rage and the minuscule life savings of ordinary working people were wiped out almost over night. The upshot of this Washington-approved looting-spree was a dramatic uptick in extreme poverty which intensified the immiseration of tens of millions of people. Economist Joseph Stiglitz followed events closely in Russia at the time and summed it up like this:

"In Russia, the people were told that capitalism was going to bring new, unprecedented prosperity. In fact, it brought unprecedented poverty, indicated not only by a fall in living standards, not only by falling GDP, but by decreasing life spans and enormous other social indicators showing a deterioration in the quality of life ..

(Due to) the tight monetary policies that were pursued firms didn't have the money to even pay their employees . they didn't have enough money to pay their pensioners, to pay their workers .Then, with the government not having enough revenue, other aspects of life started to deteriorate. They didn't have enough money for hospitals, schools. Russia used to have one of the good school systems in the world; the technical level of education was very high. (But they no longer had) enough money for that. So it just began to affect people in every dimension of their lives .

The number of people in poverty in Russia, for instance, increased from 2 percent to somewhere between 40 and 50 percent, with more than one out of two children living in families below poverty. The market economy was a worse enemy for most of these people than the Communists had said it would be. It brought Gucci bags, Mercedes, the fruits of capitalism to a few .But you had a shrinking (economy). The GDP in Russia fell by 40 percent. In some (parts) of the former Soviet Union, the GDP, the national income, fell by over 70 percent. And with that smaller pie it was more and more unequally divided, so a few people got bigger and bigger slices, and the majority of people wound up with less and less and less . (PBS interview with Joseph Stiglitz, Commanding Heights)

So, as long as Russia remained open to the West's political maneuvering and wholesale thievery, every thing was hunky-dory. But as soon as Vladimir Putin got his bearings (during his second term as President) and started reassembling the broken state, then western elites became very concerned and denounced Putin as an "autocrat" and a "KGB thug." At the same time, Washington continued its maniacal push eastward using its military catspaw, NATO, to achieve its geopolitical ambitions to control vital resources and industries in the most populous and prosperous region of the coming century, Eurasia. After promising Russian President Gorbachev that NATO would never "expand one inch to the east", the US-led military alliance added 13 new countries to its membership, all of them straddling Russia's western flank, all of them located, like Hitler, on Russia's doorstep, all of them posing an existential threat to Russia's survival. NATO forces now routinely conduct provocative military drills just miles from the Russian border while state-of-the-art missile systems surround Russia on all sides. (Imagine Russia conducting similar drills in the Gulf of Mexico or on the Canadian border. How would Washington respond?)

Russian Foreign Minister Sergey Lavrov gave an excellent summary of post Cold War history at a gathering of the Korber Foundation in Berlin in 2017. Brainwashed Americans who foolishly blame Russia for meddling in the 2016 elections, should pay attention to what he said.

LAVROV– "Ever since the fall of the Berlin Wall we have shown our cards, trying to do our best to assert the values of equal partnership in international affairs .Back in the early 1990s, we withdrew our troops from Eastern and Central Europe and the Baltic states and dramatically downsized our military capacity near our western borders

When the cold war era came to an end, Russia was hoping that this would become our common victory – the victory of both the former Communist bloc countries and the West. The dreams of ushering in shared peace and cooperation seemed near to fruition. However, the United States and its allies decided to declare themselves the sole winners, refusing to work together to create the architecture of equal and indivisible security. They made their choice in favor of shifting the dividing lines to our borders – through expanding NATO and then through the implementation of the EU's Eastern Partnership program

As the Western countries' elites were implementing a policy of political and economic containment of Russia, old threats were growing and new ones were emerging in the world, and the efforts to do away with them have failed. I think that the main reason for that is that the model of "West-centric" globalization, which developed following the dismantling of the bipolar architecture and was aimed at ensuring the prosperity of one-seventh of the world's population at the expense of the rest, proved ineffective. It is becoming more and more obvious that a narrow group of "chosen ones" is unable to ensure the sustainable growth of the global economy on their own and solve such major challenges as poverty, climate change, shortage of food and other vital resources .

The latest events are clear evidence that the persistent attempts to form a unipolar world order have failed .The new centers of economic growth and concomitant political influence are assuming responsibility for the state of affairs in their regions. Let me reiterate that the emergence of multipolar world order is a fact and a reality. Seeking to hold back this process and keep the unfairly gained privileged positions is going to lead nowhere. We see increasing examples of nations raising their voice in defense of their right to decide their own destiny ." (Sergey Lavrov, Russian Foreign Minister)

The American people need to look beyond the propaganda and try to grasp what's really going on. Russia is not Washington's enemy, it's a friend that's trying to nudge the US in adirection that will increase its opportunities for peace and prosperity in the future. Lavrov is simply pointing out that a multipolar world is inevitable as economic power becomes more widespread. This emerging reality means the US will have to modify its behavior, cooperate with other sovereign nations, comply with international law, and seek a peaceful settlement to disputes. It means greater parity between the states, fairer representation in global decision-making, and a narrower gap between the world's winners and losers.

Who doesn't want this? Who doesn't want to see an end of the bloody US-led invasions, the countless drone assassinations, the vast destruction of ancient civilizations, and the senseless slaughter of innocent men, women and children? Who doesn't want to see Washington's wings clipped so the bloodletting stops and the millions of refugees and internally displaced can return to their homes?

Lavrov offers a vision of the future that all peace-loving people should welcome with open arms.

Admit it: The imperial model has failed. It's time to move on.

[Mar 02, 2018] The main reason much of the highest echelons of American power are united against Trump might be that they're terrified that -- unlike Obama -- he's a really bad salesman for the US led neoliberal empire. This threatens the continuance of their well oiled and exceedingly corrupt gravy train

Highly recommended!
Notable quotes:
"... he Dems disgust me with their neo-McCarthyism and the Repubs disgust me because of the way they are playing out their hand right now as well. Games within corrupt games, and yet normal behavior especially in waning empires (or other types of polities, including powerful int'l corporations). ..."
"... Chapter 14 of Guns, Germs and Steel is titled "From Egalitarianism to Kleptocracy" and it used to be available online but my old link is dead and I couldn't find a new one. But a basic definition should suffice: "Kleptocracy, alternatively cleptocracy or kleptarchy, is a form of political and government corruption where the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population, often without pretense of honest service." I have no idea how one turns this around and I doubt it's even possible. ..."
"... The Real Reason Establishment Frauds Hate Trump and Obsess About Russia https://libertyblitzkrieg.com/2018/02/20/the-real-reason-establishment-frauds-hate-trump-and-obsess-about-russia/ ..."
"... Blaming Russia for all the nation's problems serves several key purposes for various defenders of the status quo. For discredited neocons and neoliberals who never met a failed war based on lies they didn't support, it provides an opportunity to rehabilitate their torched reputations by masquerading as fierce patriots against the latest existential enemy. Similarly, for those who lived in denial about who Obama really was for eight years, latching on to the Russia narrative allows them to reassure themselves that everything really was fine before Trump and Russia came along and ruined the party. ..."
"... he doesn't provide the same feel good quality to empire that Obama did. He's simply not the warm and fuzzy salesman for oligarchy and empire Obama was, thus his inability to sugarcoat state-sanctioned murder forces a lot of people to confront the uncomfortable hypocrisies in our society that many would prefer not to admit. ..."
"... I can't stand Kushner's smirky face and got a good chuckle from this prince's fall as I am not a fan of his passion for Israel. But I don't think he's a stupid idiot either. He's probably very smart in business, but he seems to have no feel for politics. Trump is much better at it than Kushner. Of course they are going after Kushner as a way to attack and disadvantage Trump. Politics is a form of warfare after all. ..."
"... My take is that Trump survives but mostly contained by the Borg ..."
Mar 02, 2018 | turcopolier.typepad.com

Originally from discussion at Sic Semper Tyrannis Another SIGINT compromise ...

Valissa -> jsn... 01 March 2018 at 07:44 PM

jsn @16 & 40, in complete agreement with you. Great comments! T he Dems disgust me with their neo-McCarthyism and the Repubs disgust me because of the way they are playing out their hand right now as well. Games within corrupt games, and yet normal behavior especially in waning empires (or other types of polities, including powerful int'l corporations).

Chapter 14 of Guns, Germs and Steel is titled "From Egalitarianism to Kleptocracy" and it used to be available online but my old link is dead and I couldn't find a new one. But a basic definition should suffice: "Kleptocracy, alternatively cleptocracy or kleptarchy, is a form of political and government corruption where the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population, often without pretense of honest service." I have no idea how one turns this around and I doubt it's even possible.

Back when I used to subscribe to STRATFOR, founder George Friedman always made a point of evaluating the elites of whatever country he was analyzing and how they operated amongst themselves and relative to the people and how effective they were or were not in governing a country. But he never did that for the US. I would have paid extra for that report! But of course he could not stay in business if he did such a thing as those people are his clients.

I think Mike Krieger over at Liberty Blitzkrieg nails it from another perspective with this post:

The Real Reason Establishment Frauds Hate Trump and Obsess About Russia https://libertyblitzkrieg.com/2018/02/20/the-real-reason-establishment-frauds-hate-trump-and-obsess-about-russia/

Blaming Russia for all the nation's problems serves several key purposes for various defenders of the status quo. For discredited neocons and neoliberals who never met a failed war based on lies they didn't support, it provides an opportunity to rehabilitate their torched reputations by masquerading as fierce patriots against the latest existential enemy. Similarly, for those who lived in denial about who Obama really was for eight years, latching on to the Russia narrative allows them to reassure themselves that everything really was fine before Trump and Russia came along and ruined the party.

By throwing every problem in Putin's lap, the entrenched bipartisan status quo can tell themselves (and everybody else) that it wasn't really them and their policies that voters rejected in 2016, rather, the American public was tricked by cunning, nefarious Russians. Ridiculous for sure, but never underestimate the instinctive human desire to deny accountability for one's own failures. It's always easier to blame than to accept responsibility.

That said, there's a much bigger game afoot beyond the motivations of individuals looking to save face. The main reason much of the highest echelons of American power are united against Trump has nothing to do with his actual policies. Instead, they're terrified that -- unlike Obama -- he's a really bad salesman for empire. This sort of Presidential instability threatens the continuance of their well oiled and exceedingly corrupt gravy train. Hillary Clinton was a sure thing, Donald Trump remains an unpredictable wildcard.

... Obama said all the right things while methodically doing the bidding of oligarchy. He captured the imagination of millions, if not billions, around the world with his soaring rhetoric, yet rarely skipped a beat when it came to the advancement of imperial policies. He made bailing out Wall Street, droning civilians and cracking down on journalists seem progressive. He said one thing, did another, and people ate it up. This is an extraordinarily valuable quality when it comes to a vicious and unelected deep state that wants to keep a corrupt empire together.

Trump has the exact opposite effect. Sure, he also frequently says one thing and then does another, but he doesn't provide the same feel good quality to empire that Obama did. He's simply not the warm and fuzzy salesman for oligarchy and empire Obama was, thus his inability to sugarcoat state-sanctioned murder forces a lot of people to confront the uncomfortable hypocrisies in our society that many would prefer not to admit.
------------

I can't stand Kushner's smirky face and got a good chuckle from this prince's fall as I am not a fan of his passion for Israel. But I don't think he's a stupid idiot either. He's probably very smart in business, but he seems to have no feel for politics. Trump is much better at it than Kushner. Of course they are going after Kushner as a way to attack and disadvantage Trump. Politics is a form of warfare after all.

My take is that Trump survives but mostly contained by the Borg

[Jan 02, 2018] Who Is the Real Enemy by Philip Giraldi

Highly recommended!
Money quote: "And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation."
Notable quotes:
"... And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation. ..."
"... Cohen-Watnick is thirty years old and has little relevant experience for the position he holds, senior director for intelligence on the National Security Council. But his inexperience counts for little as he is good friend of son-in-law Jared Kushner. He has told the New York Times ..."
"... Both Cohen-Watnick and Harvey share the neoconservative belief that the Iranians and their proxies in Syria and Iraq need to be confronted by force, an opportunity described by Foreign Policy ..."
"... What danger to the U.S. or its actual treaty allies an Iranian influenced land corridor would constitute remains a mystery but there is no shortage of Iran haters in the White House. Former senior CIA analyst Paul Pillar sees "unrelenting hostility from the Trump administration" towards Iran and notes "cherry-picking" of the intelligence to make a case for war, similar to what occurred with Iraq in 2002-3. And even though Secretary of Defense James Mattis and National Security Advisor H.R. McMaster have pushed back against the impulsive Cohen-Watnick and Harvey, their objections are tactical as they do not wish to make U.S. forces in the region vulnerable to attacks coming from a new direction. Otherwise they too consider Iran as America's number one active enemy and believe that war is inevitable. Donald Trump has unfortunately also jumped directly into the argument on the side of Saudi Arabia and Israel, both of which would like to see Washington go to war with Tehran on their behalf. ..."
"... You forgot the third significant potential threat from a friendly nation, i.e. Israel. Israel will sabotage any effort to normallize relations with Russia or even Iran. They will resort to false flag operations to start a war with Iran. ..."
"... The problem with this White House, as well as the previous ones, is that none of the so-called experts really understand the Middle East. The US is not interested in having friendly relations with all nations. All her efforts are towards one goal, the world domination. Even if President Trump wanted to normalize relations with Russia, the MSM, the democrats, as well as, his republican opponents will not let him. ..."
"... That is why the constan drumbeat of Russia's meddling in the 2016 election despite the fact that no proof has been given so far. Similarly, the "Iran has nuclear weapons" narrative is constantly repeated, the reports by IAEA and the 17 Intelligence Agencies to the contrary not withstanding. ..."
"... The elevation of Muhammad bin Salman to the Crown Prince position will only make the Middle East situation worse. Israel will be able to manipulate him much more easily than the old guard. ..."
"... The titanic elephant in the room -- that US foreign policy is not governed by "rationality" but by "special interests" seems .missing ..."
"... Trump has no control of most government functions, particularly foreign affairs. The Deep State takes care of that for him. The Deep State has been calling the shots for decades and all Presidents who weren't assassinated have complied. Democracies never work and ours quit long ago. ..."
"... I fully agree that attacking Iran would be yet another disaster but I don't understand why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles like this. I mean let's be honest with ourselves. KSA is the definition of a vassal state. Has been so since the state established established relations with the USA in the 1940s and the status was confirmed during the 1960s under King Faisal. Oil for security. Why pretend that they have any operational clearance from the US? ..."
"... The BIGGEST threat to the USA is from within, as we are nothing more than an occupied colony of Apartheid Israel, paying that bastard state tributes each year in the form of free money and weapons, political backing at the UN, and never tire of fighting her wars of conquest. ..."
"... The also have a choke-hold on Congress, which is always eager to wag their tail and hope their Yid Overlord gives them a treat and not a dressing-down in the Jew MSM, which is a career killer. ..."
"... Israel's current "agreements" and its "kowtowing" to Saudi Arabia speaks VOLUMES. Once again, Israel is about to get others to do their "dirty work" for them. ..."
"... There's no alternative to Saudi royal family rule of the peninsula. Who's there to replace them? Any other group, assuming there might be one somewhere waiting in the wings, would probably be anti-American and not as compliant as the Saudis. They've spent gigantic sums in the endless billions buying military equipment from the US, weapons they can't even fully use, as a way of making themselves indispensable customers. Many other billions of petrodollars find their way westward into our financial systems. They collaborate with the US in various schemes throughout the Muslim world using their intelligence services and money in furtherance of US goals. ..."
"... Mattis still seems stuck with his Iran obsession. Shame I thought he had the intellectual curiosity to adapt. Trump has good instincts, I hope Tillerson comes to the fore, and Bannon stays influential. ..."
"... Iran is US enemy #1 not only because it is against that country smaller than New Jersey with less people (Israel) but also because Iran has been a model for other countries to follow because of its intransigence to US oppression and attacks, financial political and cyber. As the world becomes multi-polar, Iran's repeated wise reactions to the world hegemon have been an inspiration to China and others to go their own way. The US can't stand that. ..."
"... Contrary to the popular view, Wahabism is necessary to keep the local population under control. Particularly the minority Shia population who live along the eastern coast, an area, which incidentally also has the all the oil reserves. USA fully understands this. Which is why they not only tolerated Wahabism, but strongly promoted it during Afghan jihad. The operation was by and large very successful btw. It was only during the '90s when religion became the new ideology for the resistance against the empire across the Muslim world. Zero surprise there because the preceding ideology, radical left wing politics was completely defeated. Iran became the first country in this pattern. The Iranian left was decimated by the Shah, another vassal. So the religious right became the new resistance. ..."
"... And as far as the KSA is considered, Wahabi preachers aren't allowed to attack the USA anyway. If any individual preacher so much as makes a squeak, he will be bent over a barrel. There won't be any "coming down very hard on Saudi Arabia" because USA already owns that country. ..."
"... The British Empire 'made' the House of Saud. Thinking it wise to use Wahhabism to control Shia Islam is like thinking it wise to use blacks to control the criminal tendencies of Mexicans. ..."
Jul 11, 2017 | www.unz.com

It is one of the great ironies that the United States, a land mass protected by two broad oceans while also benefitting from the world's largest economy and most powerful military, persists in viewing itself as a potential victim, vulnerable and surrounded by enemies. In reality, there are only two significant potential threats to the U.S. The first consists of the only two non-friendly countries – Russia and China – that have nuclear weapons and delivery systems that could hit the North American continent and the second is the somewhat more amorphous danger represented by international terrorism.

And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation.

Also, I would characterize international terrorism as a faux threat at a national level, though one that has been exaggerated through the media and fearmongering to such an extent that it appears much more dangerous than it actually is. It has been observed that more Americans are killed by falling furniture than by terrorists in a year but terrorism has a particularly potency due to its unpredictability and the fear that it creates. Due to that fear, American governments and businesses at all levels have been willing to spend a trillion dollars per annum to defeat what might rationally be regarded as a relatively minor problem.

So if the United States were serious about dealing with or deflecting the actual threats against the American people it could first of all reduce its defense expenditures to make them commensurate with the actual threat before concentrating on three things. First, would be to establish a solid modus vivendi with Russia and China to avoid conflicts of interest that could develop into actual tit-for-tat escalation. That would require an acceptance by Washington of the fact that both Moscow and Beijing have regional spheres of influence that are defined by their interests. You don't have to like the governance of either country, but their national interests have to be appreciated and respected just as the United States has legitimate interests within its own hemisphere that must be respected by Russia and China.

Second, Washington must, unfortunately, continue to spend on the Missile Defense Agency, which supports anti-missile defenses if the search for a modus vivendi for some reason fails. Mutual assured destruction is not a desirable strategic doctrine but being able to intercept incoming missiles while also having some capability to strike back if attacked is a realistic deterrent given the proliferation of nations that have both ballistic missiles and nukes.

Third and finally, there would be a coordinated program aimed at international terrorism based equally on where the terror comes from and on physically preventing the terrorist attacks from taking place. This is the element in national defense that is least clear cut. Dealing with Russia and China involves working with mature regimes that have established diplomatic and military channels. Dealing with terrorist non-state players is completely different as there are generally speaking no such channels.

It should in theory be pretty simple to match threats and interests with actions since there are only a handful that really matter, but apparently it is not so in practice. What is Washington doing? First of all, the White House is deliberately turning its back on restoring a good working relationship with Russia by insisting that Crimea be returned to Kiev, by blaming Moscow for the continued unrest in Donbas, and by attacking Syrian military targets in spite of the fact that Russia is an ally of the legitimate government in Damascus and the United States is an interloper in the conflict. Meanwhile congress and the media are poisoning the waters through their dogged pursuit of Russiagate for political reasons even though nearly a year of investigation has produced no actual evidence of malfeasance on the part of U.S. officials and precious little in terms of Moscow's alleged interference.

Playing tough to the international audience has unfortunately become part of the American Exceptionalism DNA. Upon his arrival in Warsaw last week, Donald Trump doubled down on the Russia-bashing, calling on Moscow to "cease its destabilizing activities in Ukraine and elsewhere and its support for hostile regimes including Syria and Iran." He then recommended that Russia should "join the community of responsible nations in our fight against common enemies and in defense of civilization itself."

The comments in Warsaw were unnecessary, even if the Poles wanted to hear them, and were both highly insulting and ignorant. It was not a good start for Donald's second overseas trip, even though the speech has otherwise been interpreted as a welcome defense of Western civilization and European values. Trump also followed up with a two hour plus discussion with President Vladimir Putin in which the two apparently agreed to differ on the alleged Russian hacking of the American election. The Trump-Putin meeting indicated that restoring some kind of working relationship with Russia is still possible, as it is in everyone's interest to do so.

Fighting terrorism is quite another matter and the United States approach is the reverse of what a rational player would be seeking to accomplish. The U.S. is rightly assisting in the bid to eradicate ISIS in Syria and Iraq but it is simultaneously attacking the most effective fighters against that group, namely the Syrian government armed forces and the Shiite militias being provided by Iran and Hezbollah. Indeed, it is becoming increasingly clear that at least some in the Trump Administration are seeking to use the Syrian engagement as a stepping stone to war with Iran.

As was the case in the months preceding the ill-fated invasion of Iraq in 2003, all buttons are being pushed to vilify Iran. Recent reports suggest that two individuals in the White House in particular have been pressuring the Trump administration's generals to escalate U.S. involvement in Syria to bring about a war with Tehran sooner rather than later. They are Ezra Cohen-Watnick and Derek Harvey, reported to be holdovers from the team brought into the White House by the virulently anti-Iranian former National Security Adviser Michael Flynn.

Cohen-Watnick is thirty years old and has little relevant experience for the position he holds, senior director for intelligence on the National Security Council. But his inexperience counts for little as he is good friend of son-in-law Jared Kushner. He has told the New York Times that "wants to use American spies to help oust the Iranian government," a comment that reflects complete ignorance, both regarding Iran and also concerning spy agency capabilities. His partner in crime Harvey, a former military officer who advised General David Petraeus when he was in Iraq, is the NSC advisor on the Middle East.

Both Cohen-Watnick and Harvey share the neoconservative belief that the Iranians and their proxies in Syria and Iraq need to be confronted by force, an opportunity described by Foreign Policy magazine as having developed into "a pivotal moment that will determine whether Iran or the United States exerts influence over Iraq and Syria." Other neocon promoters of conflict with Iran have described their horror at a possible Shiite "bridge" or "land corridor" through the Arab heartland, running from Iran itself through Iraq and Syria and connecting on the Mediterranean with Hezbollah in Lebanon.

What danger to the U.S. or its actual treaty allies an Iranian influenced land corridor would constitute remains a mystery but there is no shortage of Iran haters in the White House. Former senior CIA analyst Paul Pillar sees "unrelenting hostility from the Trump administration" towards Iran and notes "cherry-picking" of the intelligence to make a case for war, similar to what occurred with Iraq in 2002-3. And even though Secretary of Defense James Mattis and National Security Advisor H.R. McMaster have pushed back against the impulsive Cohen-Watnick and Harvey, their objections are tactical as they do not wish to make U.S. forces in the region vulnerable to attacks coming from a new direction. Otherwise they too consider Iran as America's number one active enemy and believe that war is inevitable. Donald Trump has unfortunately also jumped directly into the argument on the side of Saudi Arabia and Israel, both of which would like to see Washington go to war with Tehran on their behalf.

The problem with the Trump analysis is that he has his friends and enemies confused. He is actually supporting Saudi Arabia, the source of most of the terrorism that has convulsed Western Europe and the United States while also killing hundreds of thousands of fellow Muslims. Random terrorism to kill as many "infidels and heretics" as possible to create fear is a Sunni Muslim phenomenon, supported financially and doctrinally by the Saudis. To be sure, Iran has used terror tactics to eliminate opponents and select targets overseas, to include several multiple-victim bombings, but it has never engaged in anything like the recent series of attacks in France and Britain. So the United States is moving seemingly inexorably towards war with a country that itself constitutes no actual terrorist threat, unless it is attacked, in support of a country that very much is part of the threat and also on behalf of Israel, which for its part would prefer to see Americans die in a war against Iran rather that sacrificing its own sons and daughters.

Realizing who the real enemy actually is and addressing the actual terrorism problem would not only involve coming down very hard on Saudi Arabia rather than Iran, it would also require some serious thinking in the White House about the extent to which America's armed interventions all over Asia and Africa have made many people hate us enough to strap on a suicide vest and have a go. Saudi financing and Washington's propensity to go to war and thereby create a deep well of hatred just might be the principal causative elements in the rise of global terrorism. Do I think that Donald Trump's White House has the courage to take such a step and change direction? Unfortunately, no.

Jake, July 11, 2017 at 4:12 am GMT

The title of the article tells it all.

Saudi Arabia is THE worst nation in the Middle East.

Why does the US follow along blindly? Well, it is a WASP thing. We are the new Brit Empire. By the height of the Victorian era, virtually all English Elites were philoSemitic. Roughly half of the UK WASP Elite philoSemitism was pro-Jewish and half was pro-Arabic/Islamic. And by the time of WW1, the English Elite pro-Arabic/Islamic faction came to adore the house of Saud. So, our foreign policy is merely WASP culture continuing to ruin most of the rest of the world, including all the whites ruled by WASP Elites.

Priss Factor, Website , July 11, 2017 at 4:41 am GMT
US foreign policy is simple. Zionist Emperor goes thumbs up or thumbs down on whatever nation based on his own interests. That's about it.

Priss Factor, July 11, 2017 at 4:49 am GMT

In reality, there are only two significant potential threats to the U.S. The first consists of the only two non-friendly countries – Russia and China – that have nuclear weapons and delivery systems that could hit the North American continent and the second is the somewhat more amorphous danger represented by international terrorism.

No, the only threats are the following three:

Too many Meso-Americans invading from the border. These people have totally changed the SW and may drastically alter parts of US as well. This is an invasion. Meso-Americans are lackluster, but Too Many translates into real power, especially in elections.

The other threat is Hindu-Indian. Indians are just itching to unload 100s of millions of their kind to Anglo nations. Unlike Chinese population that is plummeting, Indian population is still growing.

The other threat, biggest of all, is the Negro. It's not Russian missiles or Chinese troops that turned Detroit into a hellhole. It is Negroes. And look at Baltimore, New Orleans, Selma, Memphis, Oakland, St. Louis, South Side Chicago, etc.

Afromic Bomb is more hellish than atomic bomb. Compare Detroit and Hiroshima.

Also, even though nukes are deadly, they will likely never be used. They are for defensive purposes only. The real missiles that will destroy the West is the Afro penis. US has nukes to destroy the world, but they haven't been used even during peak of cold war. But millions of Negro puds have impregnanted and colonized white wombs to kill white-babies-that-could-have-been and replaced them with mulatto Negro kids who will turn out like Colin Kapernick.

http://stuffblackpeopledontlike.blogspot.com/2017/07/pattern-recognition-great-sin-than.html

The real missile gap is the threat posed by negro dong on white dong. The negro dong is so potent that even Japanese women are going Negroid and having kids with Negro men and raising these kids as 'Japanese' to beat up real Japanese. So, if Japan with few blacks is turning like this, imagine the threat posed by Negroes on whites in the West.

Look at YouTube of street life and club life in Paris and London. Negro missiles are conquering the white race and spreading the savage genes.

Look how Polish women welcomed the Negro missile cuz they are infected with jungle fever. ACOWW will be the real undoing of the West.

Replies: @Z-man

Besides what Priss Factor said above the following is to be reinforced with every real American man, woman and child.

Israel , which for its part would prefer to see Americans die in a war against Iran rather that sacrificing its own sons and daughters.
Israel, the REAL enemy! , @K India is looking to unload hindus to U.S? Quite the opposite. India is 'losing' its best brains to the U.S so its trying to attract them back to their country. For eg: The chief- architect of IBM's Watson is a Hindu Indian and so is the head of IBM's neuro-morphic computing. These people are advancing western technology.... civilian and also defense (IBM is collaborating with the American defense organization DARPA) instead of helping India achieve technological competence. And most of other super intelligent Indians also India is losing them to the west.

(i dont hate the west for doing that. Any country in amercia's place would have done the same. It is india's job to keep its best brains working for it and not for others. And india is trying its best to do that albeit unsuccessfully.)

Wally, July 11, 2017 at 5:02 am GMT

The US govt. does what "that shitty little country" tells them to do.

The True Cost of Parasite Israel. Forced US taxpayers money to Israel goes far beyond the official numbers. http://www.theamericanconservative.com/articles/the-true-cost-of-israel/

How to Bring Down the Elephant in the Room: http://www.unz.com/tsaker/how-to-bring-down-the-elephant-in-the-room/

RobinG, July 11, 2017 at 5:49 am GMT

100 Words #UNRIG adds AMERICA FIRST, NOT ISRAEL to Agenda. ."A.I.P.A.C.. you're outta business!"

Due to slanderous attacks by a Mossad internet psy-op, Steele now prioritizes Israeli malign influence on US. Also, check out Cynthia McKinney's twitter.

#UNRIG – Robert David Steele Weekly Update

@Durruti Nice action approach to cure ills of society.

Enclosing copy of flier we have distributed - with a similar approach at a cure.

*Flier distributed is adjusted & a bit more attractive (1 sheet - both sides).

The key is to Restore the Republic, which was definitively destroyed on November 22, 1963.

Feel free to contact.

Use this, or send me a note by way of a response.

For THE RESTORATION OF THE REPUBLIC

"We hold these truths to be self-evident: that all men are created equal governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it and to institute new government, laying its foundation on such principles "

The above is a portion of the Declaration of Independence, written by Thomas Jefferson.

We submit the following facts to the citizens of the United States.

The government of the United States has been a Totalitarian Oligarchy since the military financial aristocracy destroyed the Democratic Republic on November 22, 1963 , when they assassinated the last democratically elected president, John Fitzgerald Kennedy , and overthrew his government. All following governments have been unconstitutional frauds. Attempts by Robert Kennedy and Martin Luther King to restore the Republic were interrupted by their murder.

A subsequent 12 year colonial war against Vietnam , conducted by the murderers of Kennedy, left 2 million dead in a wake of napalm and burning villages.

In 1965, the U.S. government orchestrated the slaughter of 1 million unarmed Indonesian civilians.

In the decade that followed the CIA murdered 100,000 Native Americans in Guatemala .

In the 1970s, the Oligarchy began the destruction and looting of America's middle class, by encouraging the export of industry and jobs to parts of the world where workers were paid bare subsistence wages. The 2008, Bailout of the Nation's Oligarchs cost American taxpayers $13trillion. The long decline of the local economy has led to the political decline of our hard working citizens, as well as the decay of cities, towns, and infrastructure, such as education.

The impoverishment of America's middle class has undermined the nation's financial stability. Without a productive foundation, the government has accumulated a huge debt in excess of $19trillion. This debt will have to be paid, or suffered by future generations. Concurrently, the top 1% of the nation's population has benefited enormously from the discomfiture of the rest. The interest rate has been reduced to 0, thereby slowly robbing millions of depositors of their savings, as their savings cannot stay even with the inflation rate.

The government spends the declining national wealth on bloody and never ending military adventures, and is or has recently conducted unconstitutional wars against 9 nations. The Oligarchs maintain 700 military bases in 131 countries; they spend as much on military weapons of terror as the rest of the nations of the world combined. Tellingly, more than half the government budget is spent on the military and 16 associated secret agencies.

The nightmare of a powerful centralized government crushing the rights of the people, so feared by the Founders of the United States, has become a reality. The government of Obama/Biden, as with previous administrations such as Bush/Cheney, and whoever is chosen in November 2016, operates a Gulag of dozens of concentration camps, where prisoners are denied trials, and routinely tortured. The Patriot Act and The National Defense Authorizations Act , enacted by both Democratic and Republican factions of the oligarchy, serve to establish a legal cover for their terror.

The nation's media is controlled, and, with the school systems, serve to brainwash the population; the people are intimidated and treated with contempt.

The United States is No longer Sovereign

The United States is no longer a sovereign nation. Its government, The Executive, and Congress, is bought, utterly owned and controlled by foreign and domestic wealthy Oligarchs, such as the Rothschilds, Rockefellers, and Duponts , to name only a few of the best known.

The 2016 Electoral Circus will anoint new actors to occupy the same Unconstitutional Government, with its controlling International Oligarchs. Clinton, Trump, whomever, are willing accomplices for imperialist international murder, and destruction of nations, including ours.

For Love of Country

The Restoration of the Republic will be a Revolutionary Act, that will cancel all previous debts owed to that unconstitutional regime and its business supporters. All debts, including Student Debts, will be canceled. Our citizens will begin, anew, with a clean slate.

As American Founder , Thomas Jefferson wrote, in a letter to James Madison:

"I set out on this ground, which I suppose to be self evident, 'that the earth belongs in usufruct to the living':"

"Then I say the earth belongs to each of these generations, during it's course, fully, and in their own right. The 2d. Generation receives it clear of the debts and incumberances of the 1st. The 3d of the 2d. and so on. For if the 1st. Could charge it with a debt, then the earth would belong to the dead and not the living generation."

Our Citizens must restore the centrality of the constitution, establishing a less powerful government which will ensure President Franklin Roosevelt's Four Freedoms , freedom of speech and expression, freedom to worship God in ones own way, freedom from want "which means economic understandings which will secure to every nation a healthy peace time life for its inhabitants " and freedom from fear "which means a world-wide reduction of armaments "

Once restored: The Constitution will become, once again, the law of the land and of a free people. We will establish a government, hold elections, begin to direct traffic, arrest criminal politicians of the tyrannical oligarchy, and, in short, repair the damage of the previous totalitarian governments.

For the Democratic Republic!
Sons and Daughters of Liberty
florent.defeu@yahoo.com

MEexpert, July 11, 2017 at 5:50 am GMT

In reality, there are only two significant potential threats to the U.S. The first consists of the only two non-friendly countries – Russia and China – that have nuclear weapons and delivery systems that could hit the North American continent and the second is the somewhat more amorphous danger represented by international terrorism.

You forgot the third significant potential threat from a friendly nation, i.e. Israel. Israel will sabotage any effort to normallize relations with Russia or even Iran. They will resort to false flag operations to start a war with Iran.

The problem with this White House, as well as the previous ones, is that none of the so-called experts really understand the Middle East. The US is not interested in having friendly relations with all nations. All her efforts are towards one goal, the world domination. Even if President Trump wanted to normalize relations with Russia, the MSM, the democrats, as well as, his republican opponents will not let him.

That is why the constan drumbeat of Russia's meddling in the 2016 election despite the fact that no proof has been given so far. Similarly, the "Iran has nuclear weapons" narrative is constantly repeated, the reports by IAEA and the 17 Intelligence Agencies to the contrary not withstanding.

The elevation of Muhammad bin Salman to the Crown Prince position will only make the Middle East situation worse. Israel will be able to manipulate him much more easily than the old guard.

jilles dykstra, July 11, 2017 at 6:59 am GMT
The western world is dependent on oil, especially ME oil. Saudi Arabia was made the USA's main oil supplier at the end of 1944. The Saud dynasty depends on the USA. That the Saudis would sponsor terrorism, why would they ? And which terrorism is Muslim terrorism ?

Sept 11 not, Boston not, Madrid and London very questionably. We then are left with minor issues, the Paris shooting the biggest. That Saudi Arabia is waging war in Yemen certainly is with USA support. The Saudi army does what the USA wants them to do.

Ludwig Watzal > Website , July 11, 2017 at 7:01 am GMT
Mr. Giraldi, you forgot to mention Israel as one of America's biggest liabilities besides Saudi Arabia. But with such amateur dramatics in the White House and on the Security Council, the US is destined for war but only against the wrong enemy such as Iran. If the Saudis and the right-wing Netanyahu regime want to get after Iran they should do it alone. They surely will get a bloody nose. Americans have shed enough blood for these rascal regimes. President Trump should continue with his rapprochement towards Russia because both nation states have more in common than expected.
animalogic, July 11, 2017 at 7:32 am GMT
I'm a little disappointed in this article. Not that it's a bad article per se: perfectly rational, reasonable, academic even. But unfortunately, it's simply naive.

"Realizing who the real enemy actually is and addressing the actual terrorism problem would not only involve coming down very hard on Saudi Arabia rather than Iran, it would also require some serious thinking in the White House about the extent to which America's armed interventions all over Asia and Africa have made many people hate us enough to strap on a suicide vest and have a go."

Realize who the real enemy is ? Come down hard on the Saud's ? No -- really ?

The titanic elephant in the room -- that US foreign policy is not governed by "rationality" but by "special interests" seems .missing. Israel, the Saudi's themselves, the MIC & so on & so forth ARE the special interests who literally "realise" US Policy.

Paul, July 11, 2017 at 7:44 am GMT

Well, the real enemy of the people are the real terrorists behind the scenes. Those who planned the 9/11 false flag. Those who sent the Anthrax letters to resisting congress members. Those who pre-planned the wars of aggression in the whole middle east.

So any appeal to the "White House" is almost pointless since the White House is one element of the power structure captured by the war-criminal lunatics.

To change something people in the US should at first stop buying their war criminal lying mass media.

Then they should stop supporting ANY foreign intervention by the US and should stop believing any of the preposterous lies released by the media, the state dept., or any other neocon outlet.

Actually Trump was probably elected because he said he was anti-intervention and anti-media. But did it help?

The US needs mass resistance (demonstrations, strikes, boycotts, non-participation, sit-ins, grass-root information, or whatever) against their neocon/zionist/mafia/cia power groups or nothing will change.

We need demonstrations against NATO, against war, against false flag terrorism, against using terrorists as secret armies, against war propaganda!

B.t.w. Iran has always been one of the main goals. Think of it: Why did the US attack Afghanistan and Iraq? What have those two countries in common? (Hint: a look on the map helps to answer this question.)

Replies:

@Wizard of Oz

I am beginning to get interested in why some people are sure 9/11 was a false flag affair covered up by a lot of lies. So may I try my opening question on you. How much, if any of it, have you read of the official 9/11 commission report? ,

Realist, July 11, 2017 at 8:24 am GMT

"The White House is targeting Iran but should instead focus on Saudi Arabia"

Trump has no control of most government functions, particularly foreign affairs. The Deep State takes care of that for him. The Deep State has been calling the shots for decades and all Presidents who weren't assassinated have complied. Democracies never work and ours quit long ago.

Chad, July 11, 2017 at 8:28 am GMT
I fully agree that attacking Iran would be yet another disaster but I don't understand why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles like this. I mean let's be honest with ourselves. KSA is the definition of a vassal state. Has been so since the state established established relations with the USA in the 1940s and the status was confirmed during the 1960s under King Faisal. Oil for security. Why pretend that they have any operational clearance from the US?

Contrary to the popular view, Wahabism is necessary to keep the local population under control. Particularly the minority Shia population who live along the eastern coast, an area, which incidentally also has the all the oil reserves.

USA fully understands this. Which is why they not only tolerated Wahabism, but strongly promoted it during Afghan jihad. The operation was by and large very successful btw.

It was only during the '90s when religion became the new ideology for the resistance against the empire across the Muslim world. Zero surprise there because the preceding ideology, radical left wing politics was completely defeated. Iran became the first country in this pattern. The Iranian left was decimated by the Shah, another vassal. So the religious right became the new resistance.

And as far as the KSA is considered, Wahabi preachers aren't allowed to attack the USA anyway. If any individual preacher so much as makes a squeak, he will be bent over a barrel. There won't be any "coming down very hard on Saudi Arabia" because USA already owns that country.

So what's the answer? Well, props to Phillip as he understood – "it would also require some serious thinking in the White House about the extent to which America's armed interventions all over Asia and Africa have made many people hate us enough to strap on a suicide vest and have a go."

Bingo.

Replies:

@Jake

Your analysis starts too late. The US supports Wahhabism and the House of Saud because the pro-Arabic/Islamic English Elites of 1910 and 1920 and 1935 supported Wahhabism and the House of Saud.

The British Empire 'made' the House of Saud,

Thinking it wise to use Wahhabism to control Shia Islam is like thinking it wise to use blacks to control the criminal tendencies of Mexicans.

Anonymous, July 11, 2017 at 9:33 am GMT

@Priss Factor

US foreign policy is simple. Zionist Emperor goes thumbs up or thumbs down on whatever nation based on his own interests.

That's about it. That's most of unz.com summed up in a single sentence!

Johnny Smoggins, July 11, 2017 at 10:19 am GMT

The casus belli of America's hostility towards Iran is the 3000 year old grudge that the Jews have been holding against Persia.
Z-man, July 11, 2017 at 11:22 am GMT
@Priss Factor

In reality, there are only two significant potential threats to the U.S. The first consists of the only two non-friendly countries – Russia and China – that have nuclear weapons and delivery systems that could hit the North American continent and the second is the somewhat more amorphous danger represented by international terrorism.

No, the only threats are the following three:

Too many Meso-Americans invading from the border. These people have totally changed the SW and may drastically alter parts of US as well. This is an invasion. Meso-Americans are lackluster, but Too Many translates into real power, especially in elections.

The other threat is Hindu-Indian. Indians are just itching to unload 100s of millions of their kind to Anglo nations. Unlike Chinese population that is plummeting, Indian population is still growing.

The other threat, biggest of all, is the Negro. It's not Russian missiles or Chinese troops that turned Detroit into a hellhole. It is Negroes. And look at Baltimore, New Orleans, Selma, Memphis, Oakland, St. Louis, South Side Chicago, etc.

Afromic Bomb is more hellish than atomic bomb. Compare Detroit and Hiroshima.

Also, even though nukes are deadly, they will likely never be used. They are for defensive purposes only. The real missiles that will destroy the West is the Afro penis. US has nukes to destroy the world, but they haven't been used even during peak of cold war. But millions of Negro puds have impregnanted and colonized white wombs to kill white-babies-that-could-have-been and replaced them with mulatto Negro kids who will turn out like Colin Kapernick.

http://stuffblackpeopledontlike.blogspot.com/2017/07/pattern-recognition-great-sin-than.html

The real missile gap is the threat posed by negro dong on white dong. The negro dong is so potent that even Japanese women are going Negroid and having kids with Negro men and raising these kids as 'Japanese' to beat up real Japanese. So, if Japan with few blacks is turning like this, imagine the threat posed by Negroes on whites in the West.

Look at youtube of street life and club life in Paris and London. Negro missiles are conquering the white race and spreading the savage genes.

Look how Polish women welcomed the Negro missile cuz they are infected with jungle fever. ACOWW will be the real undoing of the West.

https://www.youtube.com/watch?v=8yB69UkJGwk

Besides what Priss Factor said above the following is to be reinforced with every real American man, woman and child.

Israel , which for its part would prefer to see Americans die in a war against Iran rather that sacrificing its own sons and daughters.

Israel, the REAL enemy!

eah, July 11, 2017 at 11:26 am GMT
The WH should focus on the USA.
Replies: @Sowhat And what grudge is that? The only two I can find are connected. The deposing of our puppets, the Assads and the nationalization of their natural resources. I have the impression that it removes around future hegemon and the rich gas reserves off their coast and the decades long desire to run a pipeline west to the Mediterranean.

Greg Bacon > Website , July 11, 2017 at 11:41 am GMT

The BIGGEST threat to the USA is from within, as we are nothing more than an occupied colony of Apartheid Israel, paying that bastard state tributes each year in the form of free money and weapons, political backing at the UN, and never tire of fighting her wars of conquest.

You won't see Israeli troops in the streets, since their confederates control the economy thru their control of the FED and US Treasury and most of those TBTF banks, which we always bail out, no matter the cost.

The also have a choke-hold on Congress, which is always eager to wag their tail and hope their Yid Overlord gives them a treat and not a dressing-down in the Jew MSM, which is a career killer.

The WH is also Israeli territory, especially now with a Jew NYC slumlord now Trump's top adviser and his fashion model faux Jew daughter egging Daddy on to kill more Arab babies, since she can't stand the sight of dead babies

Wizard of Oz, July 11, 2017 at 11:50 am GMT

@Paul Well, the real enemy of the people are the real terrorists behind the scenes. Those who planned the 9/11 false flag. Those who sent the Anthrax letters to resisting congress members. Those who pre-planned the wars of aggression in the whole middle east.

So any appeal to the "White House" is almost pointless since the White House is one element of the power structure captured by the war-criminal lunatics.

To change something people in the US should at first stop buying their war criminal lying mass media.

Then they should stop supporting ANY foreign intervention by the US and should stop believing any of the preposterous lies released by the media, the state dept., or any other neocon outlet.

Actually Trump was probably elected because he said he was anti-intervention and anti-media. But did it help?

The US needs mass resistance (demonstrations, strikes, boycotts, non-participation, sit-ins, grass-root information, or whatever) against their neocon/zionist/mafia/cia power groups or nothing will change.

We need demonstrations against NATO, against war, against false flag terrorism, against using terrorists as secret armies, against war propaganda!

B.t.w. Iran has always been one of the main goals. Think of it: Why did the US attack Afghanistan and Iraq? What have those two countries in common? (Hint: a look on the map helps to answer this question.) I am beginning to get interested in why some people are sure 9/11 was a false flag affair covered up by a lot of lies. So may I try my opening question on you. How much, if any of it, have you read of the official 9/11 commission report?

Replies:

@Sowhat

https://forbiddenknowledgetv.net/former-nist-employee-speaks-out-on-wtc-investigation/

@NoseytheDuke

A better question: Have YOU read The Commission: The Uncensored History of the 9/11 Investigation by Phillip Shenon?

Sowhat, July 11, 2017 at 12:13 pm GMT

@eah The WH should focus on the USA. And what grudge is that? The only two I can find are connected. The deposing of our puppets, the Assads and the nationalization of their natural resources. I have the impression that it removes around future hegemon and the rich gas reserves off their coast and the decades long desire to run a pipeline west to the Mediterranean.
anarchyst, July 11, 2017 at 12:24 pm GMT
Israel's current "agreements" and its "kowtowing" to Saudi Arabia speaks VOLUMES. Once again, Israel is about to get others to do their "dirty work" for them.

The point that everybody seems to miss is the fact that Judaism and Islam are inextricably linked. In fact, one could safely argue that Islam is an arabicized form of Judaism.

1. Both Judaism and Islam promote their own forms of supremacy, relegating non-adherents as "lesser human beings", or in Judaism's take "no better than livestock, albeit with souls, to be used for the advantage of the jew".

2. Both systems proscribe lesser (or no) punishment for those of each respective "tribe" who transgress against "outsiders" -- goyim or infidels. Both systems proscribe much harsher punishments against "outsiders" who transgress against those of each respective "tribe".

3. When it comes to "equality under law", Israel is no better than Saudi Arabia, as a jew who has a disagreement with an "outsider" will always have the advantage of a judicial system which almost always rules for the jew.

4. Both Judaism and Islam have taken it upon themselves to be arbiters of what the rest of the world should follow, demanding that "outsiders" conform to what THEY believe, thinking that they know what is best (for the rest of us). Just look at the demands moslems (who are guests in western Europe) make of local non-moslem populations.

Read the jewish Talmud and islamic Koran you will find virtually identical passages that demonize and marginalize those of us who are "goyim" or "infidels".
A pox on both their houses

Replies:

@ThreeCranes

Now before I say what I'm going to say I want to say that Israel has the right to define and defend her interests just as China, Russia and USA do, as Geraldi says above. No nation or people can be denied this (without force).

Having said that, I am grateful to you, anarchyst, for having pointed out the familial similarities between Islam and Judaism. In addition to what you say there is the fact that the Jewish genome is virtually identical to that of the Palestinians--except for that of Ashkenazi Jews who are more than half European.

As far as I can see, Ashkenazi Jews have an existential choice. They can identify with their European half whereby they acknowledge that the Greeks and not Moses made the greatest contributions to humanity (and more particularly, their humanity) or they can go with their atavistic Semitic side and regress to barbarism. Science, Logic, Math, History, Architecture, Drama and Music or blowing up Buddhas and shrouding your women. Take your pick.

Of course, this is sorta unfair in as much as they were kicked out of Europe and now dwell in the ME where if they try to act like Europeans they will be persecuted by their neighbors as apostates. The Jews do indeed have a tough row to hoe. , @bjondo Jews/Judaism bring death, destruction, misery.

Muslims/Islam (minus Western creation of "Muslim"terrorists) brought golden ages to many areas.

Christianity and Islam elevate the human spirit. Judaism degrades.

bjondo, July 11, 2017 at 12:31 pm GMT

SA is the tail wagged by US. US is the tail wagged by internal Jew. Israel/Jewry the enemy of all.

Terrorism is Israeli weapon to take down Sunnis and Shias.

US is Israel's go-to donkey.

Sauds gone tomorrow if wished. And they may be with Arabia broken into pieces. Yinon still active.

Agent76, July 11, 2017 at 12:54 pm GMT
June 7, 2017 We Have Met the Evil Empire and It Is Us

Life in America was pure injustice, the lash and the iron boot, despite the version of history we have been given by the Ford and Rockefeller Foundations who "re-invented" America and its history through taking control of public education in the late 1940s. You see, the multi-generational ignorance we bask in today is not unplanned. The threat represented by advances in communications and other technology was recognized and dealt with, utterly quashed at birth.

http://www.veteranstoday.com/2017/06/07/we-have-met-the-evil-empire-and-it-is-us/

ThreeCranes, July 11, 2017 at 1:41 pm GMT
@anarchyst Israel's current "agreements" and its "kowtowing" to Saudi Arabia speaks VOLUMES. Once again, Israel is about to get others to do their "dirty work" for them.
The point that everybody seems to miss is the fact that Judaism and Islam are inextricably linked. In fact, one could safely argue that Islam is an arabicized form of Judaism.

1. Both Judaism and Islam promote their own forms of supremacy, relegating non-adherents as "lesser human beings", or in Judaism's take "no better than livestock, albeit with souls, to be used for the advantage of the jew".

2. Both systems proscribe lesser (or no) punishment for those of each respective "tribe" who transgress against "outsiders"--goyim or infidels. Both systems proscribe much harsher punishments against "outsiders" who transgress against those of each respective "tribe".

3. When it comes to "equality under law", Israel is no better than Saudi Arabia, as a jew who has a disagreement with an "outsider" will always have the advantage of a judicial system which almost always rules for the jew.

4. Both Judaism and Islam have taken it upon themselves to be arbiters of what the rest of the world should follow, demanding that "outsiders" conform to what THEY believe, thinking that they know what is best (for the rest of us). Just look at the demands moslems (who are guests in western Europe) make of local non-moslem populations.

Read the jewish Talmud and islamic Koran...you will find virtually identical passages that demonize and marginalize those of us who are "goyim" or "infidels".
A pox on both their houses... Now before I say what I'm going to say I want to say that Israel has the right to define and defend her interests just as China, Russia and USA do, as Geraldi says above. No nation or people can be denied this (without force).

Having said that, I am grateful to you, anarchyst, for having pointed out the familial similarities between Islam and Judaism. In addition to what you say there is the fact that the Jewish genome is virtually identical to that of the Palestinians–except for that of Ashkenazi Jews who are more than half European.

As far as I can see, Ashkenazi Jews have an existential choice. They can identify with their European half whereby they acknowledge that the Greeks and not Moses made the greatest contributions to humanity (and more particularly, their humanity) or they can go with their atavistic Semitic side and regress to barbarism. Science, Logic, Math, History, Architecture, Drama and Music or blowing up Buddhas and shrouding your women. Take your pick.

Of course, this is sorta unfair in as much as they were kicked out of Europe and now dwell in the ME where if they try to act like Europeans they will be persecuted by their neighbors as apostates. The Jews do indeed have a tough row to hoe.

Sowhat, July 11, 2017 at 1:49 pm GMT
@Wizard of Oz I am beginning to get interested in why some people are sure 9/11 was a false flag affair covered up by a lot of lies. So may I try my opening question on you. How much, if any of it, have you read of the official 9/11 commission report? https://forbiddenknowledgetv.net/former-nist-employee-speaks-out-on-wtc-investigation/
virgile, July 11, 2017 at 1:55 pm GMT
Trump is torn between Israel's permanent need to weaken its powerful neighbors (Iraq, Iran) and the necessity to protect the USA from terrorists attacks.

Iran is an hypothetical threat to Israel, Saudi Arabia has proven to be a threat to the world.

SolontoCroesus, July 11, 2017 at 2:07 pm GMT
Saudi Arabian Manal al-Sharif is the latest (((MSM))) media darling; she wrote a book about being imprisoned for driving in Saudi Arabia. She is attempting to expand a movement to strike down the Saudi ban on women driving. https://www.nytimes.com/2017/06/09/opinion/sunday/saudi-arabia-women-driving-ban.html

At the same time, (((MSM))) gleefully focuses on Iranian women who are wearing white hijab in protest of restrictions on women's attire in Iran. http://nytlive.nytimes.com/womenintheworld/2017/05/24/why-women-and-some-men-in-iran-are-wearing-white-headscarves-on-wednesdays/

I think these women ought to get together.

In Iran, women drive.

In Tehran and other Iranian cities including Iran's holiest, that is, most conservative cities like Mashad. there are taxi companies owned and run by women.

http://www.huffingtonpost.com/turnstyle/iranian-women-take-the-wh_b_879041.html

Tehran traffic makes NYC look like Mayberry RFD; many Iranians use small motorcycles to commute and take care of daily chores. It's not at all uncommon to see an Iranian woman in full chador driving a motorcycle with a child and parcels in tow.

Iranian women could offer to teach the women of Saudi Arabia to drive.

What could Saudi women teach Iranian women?

NoseytheDuke, July 11, 2017 at 2:08 pm GMT

@Wizard of Oz I am beginning to get interested in why some people are sure 9/11 was a false flag affair covered up by a lot of lies. So may I try my opening question on you. How much, if any of it, have you read of the official 9/11 commission report? A better question: Have YOU read The Commission: The Uncensored History of the 9/11 Investigation by Phillip Shenon?

siberiancat, July 11, 2017 at 2:08 pm GMT

Why is is so difficult to avoid this ugly term 'regime'? Does it really add anything to the discourse?
anonymous, July 11, 2017 at 2:33 pm GMT
There's no alternative to Saudi royal family rule of the peninsula. Who's there to replace them? Any other group, assuming there might be one somewhere waiting in the wings, would probably be anti-American and not as compliant as the Saudis. They've spent gigantic sums in the endless billions buying military equipment from the US, weapons they can't even fully use, as a way of making themselves indispensable customers. Many other billions of petrodollars find their way westward into our financial systems. They collaborate with the US in various schemes throughout the Muslim world using their intelligence services and money in furtherance of US goals.

They live the royal life thanks to being able to use the money from their nation's resource wealth as their own personal kitty, living in palaces, buying obscene amounts of jewelry and other luxury goods, and so on. They'll never give that up and being a close ally of the US affords them protection which of course they pay for. They may be seen as an enemy by the average person but not at the elite level with whom they all consort and roll around in the money with.

LondonBob, July 11, 2017 at 2:39 pm GMT
http://mihsislander.org/2017/06/full-transcript-james-mattis-interview/

Mattis still seems stuck with his Iran obsession. Shame I thought he had the intellectual curiosity to adapt. Trump has good instincts, I hope Tillerson comes to the fore, and Bannon stays influential.

Don Bacon, July 11, 2017 at 3:02 pm GMT
Iran is US enemy #1 not only because it is against that country smaller than New Jersey with less people (Israel) but also because Iran has been a model for other countries to follow because of its intransigence to US oppression and attacks, financial political and cyber. As the world becomes multi-polar, Iran's repeated wise reactions to the world hegemon have been an inspiration to China and others to go their own way. The US can't stand that.
Corvinus, July 11, 2017 at 3:28 pm GMT
@Paul Well, the real enemy of the people are the real terrorists behind the scenes. Those who planned the 9/11 false flag. Those who sent the Anthrax letters to resisting congress members. Those who pre-planned the wars of aggression in the whole middle east.

So any appeal to the "White House" is almost pointless since the White House is one element of the power structure captured by the war-criminal lunatics.

To change something people in the US should at first stop buying their war criminal lying mass media.

Then they should stop supporting ANY foreign intervention by the US and should stop believing any of the preposterous lies released by the media, the state dept., or any other neocon outlet.

Actually Trump was probably elected because he said he was anti-intervention and anti-media. But did it help?

The US needs mass resistance (demonstrations, strikes, boycotts, non-participation, sit-ins, grass-root information, or whatever) against their neocon/zionist/mafia/cia power groups or nothing will change.

We need demonstrations against NATO, against war, against false flag terrorism, against using terrorists as secret armies, against war propaganda!

B.t.w. Iran has always been one of the main goals. Think of it: Why did the US attack Afghanistan and Iraq? What have those two countries in common? (Hint: a look on the map helps to answer this question.) "Well, the real enemy of the people are the real terrorists behind the scenes. Those who planned the 9/11 false flag."

Adjust tin foil hat accordingly.


Father O'Hara, July 11, 2017 at 3:59 pm GMT
@Jake The title of the article tells it all.

Saudi Arabia is THE worst nation in the Middle East.

Why does the US follow along blindly? Well, it is a WASP thing. We are the new Brit Empire. By the height of the Victorian era, virtually all English Elites were philoSemitic. Roughly half of the UK WASP Elite philoSemitism was pro-Jewish and half was pro-Arabic/Islamic.

And by the time of WW1, the English Elite pro-Arabic/Islamic faction came to adore the house of Saud.

So, our foreign policy is merely WASP culture continuing to ruin most of the rest of the world, including all the whites ruled by WASP Elites. SECOND worst,my friend.

Jake, July 11, 2017 at 4:23 pm GMT
@Chad I fully agree that attacking Iran would be yet another disaster but I don't understand why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles like this.

I mean let's be honest with ourselves. KSA is the definition of a vassal state. Has been so since the state established established relations with the USA in the 1940s and the status was confirmed during the 1960s under King Faisal. Oil for security.

Why pretend that they have any operational clearance from the US?

Contrary to the popular view, Wahabism is necessary to keep the local population under control. Particularly the minority Shia population who live along the eastern coast, an area, which incidentally also has the all the oil reserves. USA fully understands this. Which is why they not only tolerated Wahabism, but strongly promoted it during Afghan jihad. The operation was by and large very successful btw. It was only during the '90s when religion became the new ideology for the resistance against the empire across the Muslim world. Zero surprise there because the preceding ideology, radical left wing politics was completely defeated. Iran became the first country in this pattern. The Iranian left was decimated by the Shah, another vassal. So the religious right became the new resistance.

And as far as the KSA is considered, Wahabi preachers aren't allowed to attack the USA anyway. If any individual preacher so much as makes a squeak, he will be bent over a barrel. There won't be any "coming down very hard on Saudi Arabia" because USA already owns that country.

So what's the answer? Well, props to Phillip as he understood - "it would also require some serious thinking in the White House about the extent to which America's armed interventions all over Asia and Africa have made many people hate us enough to strap on a suicide vest and have a go."

Bingo. Your analysis starts too late. The US supports Wahhabism and the House of Saud because the pro-Arabic/Islamic English Elites of 1910 and 1920 and 1935 supported Wahhabism and the House of Saud.

The British Empire 'made' the House of Saud. Thinking it wise to use Wahhabism to control Shia Islam is like thinking it wise to use blacks to control the criminal tendencies of Mexicans.

Durruti, July 11, 2017 at 4:25 pm GMT

1,000 Words @RobinG #UNRIG adds AMERICA FIRST, NOT ISRAEL to Agenda.
..................."A.I.P.A.C.. you're outta business!"

Due to slanderous attacks by a Mossad internet psy-op, Steele now prioritizes Israeli malign influence on US. Also, check out Cynthia McKinney's twitter.

https://www.youtube.com/watch?v=zxcnaNND4XM

#UNRIG - Robert David Steele Weekly Update Nice action approach to cure ills of society.

Enclosing copy of flier we have distributed – with a similar approach at a cure.

*Flier distributed is adjusted & a bit more attractive (1 sheet – both sides).

The key is to Restore the Republic, which was definitively destroyed on November 22, 1963.

Feel free to contact.

Use this, or send me a note by way of a response.

For THE RESTORATION OF THE REPUBLIC

"We hold these truths to be self-evident: that all men are created equal governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it and to institute new government, laying its foundation on such principles "

The above is a portion of the Declaration of Independence, written by Thomas Jefferson.

We submit the following facts to the citizens of the United States.

The government of the United States has been a Totalitarian Oligarchy since the military financial aristocracy destroyed the Democratic Republic on November 22, 1963 , when they assassinated the last democratically elected president, John Fitzgerald Kennedy , and overthrew his government. All following governments have been unconstitutional frauds. Attempts by Robert Kennedy and Martin Luther King to restore the Republic were interrupted by their murder.

A subsequent 12 year colonial war against Vietnam , conducted by the murderers of Kennedy, left 2 million dead in a wake of napalm and burning villages.

In 1965, the U.S. government orchestrated the slaughter of 1 million unarmed Indonesian civilians.

In the decade that followed the CIA murdered 100,000 Native Americans in Guatemala .

In the 1970s, the Oligarchy began the destruction and looting of America's middle class, by encouraging the export of industry and jobs to parts of the world where workers were paid bare subsistence wages. The 2008, Bailout of the Nation's Oligarchs cost American taxpayers $13trillion. The long decline of the local economy has led to the political decline of our hard working citizens, as well as the decay of cities, towns, and infrastructure, such as education.

The impoverishment of America's middle class has undermined the nation's financial stability. Without a productive foundation, the government has accumulated a huge debt in excess of $19trillion. This debt will have to be paid, or suffered by future generations. Concurrently, the top 1% of the nation's population has benefited enormously from the discomfiture of the rest. The interest rate has been reduced to 0, thereby slowly robbing millions of depositors of their savings, as their savings cannot stay even with the inflation rate.

The government spends the declining national wealth on bloody and never ending military adventures, and is or has recently conducted unconstitutional wars against 9 nations. The Oligarchs maintain 700 military bases in 131 countries; they spend as much on military weapons of terror as the rest of the nations of the world combined. Tellingly, more than half the government budget is spent on the military and 16 associated secret agencies.

The nightmare of a powerful centralized government crushing the rights of the people, so feared by the Founders of the United States, has become a reality. The government of Obama/Biden, as with previous administrations such as Bush/Cheney, and whoever is chosen in November 2016, operates a Gulag of dozens of concentration camps, where prisoners are denied trials, and routinely tortured. The Patriot Act and The National Defense Authorizations Act , enacted by both Democratic and Republican factions of the oligarchy, serve to establish a legal cover for their terror.

The nation's media is controlled, and, with the school systems, serve to brainwash the population; the people are intimidated and treated with contempt.

The United States is No longer Sovereign

The United States is no longer a sovereign nation. Its government, The Executive, and Congress, is bought, utterly owned and controlled by foreign and domestic wealthy Oligarchs, such as the Rothschilds, Rockefellers, and Duponts , to name only a few of the best known.

The 2016 Electoral Circus will anoint new actors to occupy the same Unconstitutional Government, with its controlling International Oligarchs. Clinton, Trump, whomever, are willing accomplices for imperialist international murder, and destruction of nations, including ours.

For Love of Country

The Restoration of the Republic will be a Revolutionary Act, that will cancel all previous debts owed to that unconstitutional regime and its business supporters. All debts, including Student Debts, will be canceled. Our citizens will begin, anew, with a clean slate.

As American Founder , Thomas Jefferson wrote, in a letter to James Madison:

"I set out on this ground, which I suppose to be self evident, 'that the earth belongs in usufruct to the living':"

"Then I say the earth belongs to each of these generations, during it's course, fully, and in their own right. The 2d. Generation receives it clear of the debts and incumberances of the 1st. The 3d of the 2d. and so on. For if the 1st. Could charge it with a debt, then the earth would belong to the dead and not the living generation."

Our Citizens must restore the centrality of the constitution, establishing a less powerful government which will ensure President Franklin Roosevelt's Four Freedoms , freedom of speech and expression, freedom to worship God in ones own way, freedom from want "which means economic understandings which will secure to every nation a healthy peace time life for its inhabitants " and freedom from fear "which means a world-wide reduction of armaments "

Once restored: The Constitution will become, once again, the law of the land and of a free people. We will establish a government, hold elections, begin to direct traffic, arrest criminal politicians of the tyrannical oligarchy, and, in short, repair the damage of the previous totalitarian governments.

For the Democratic Republic!
Sons and Daughters of Liberty
florent.defeu@yahoo.com

SolontoCroesus, July 11, 2017 at 4:28 pm GMT

Scholars at Mercatus Center, George Mason Univ. https://www.mercatus.org/statefiscalrankings

are studying US states and ranking them according to financial stability measures. The states with biggest problems -- Illinois, California, New Jersey, Connecticut -- are in the mess they are in largely because of pension liability issues: some pensions are unfunded or underfunded.

I recall that ten years ago about a dozen Jewish organizations formed the "Iran Task Force," ** whose primary activity was to persuade managers of State pension funds to divest from Iran-connected companies; that is, corporations & banks, etc. that did business with Iran. I recall very clearly that Arnold Schwartznegger was the poster child for California's vanguard role in divesting from such nasty nasty companies, in accord with the wishes of Jewish Israel-firsters.

Perhaps the Mercatus scholars could prepare an exercise in alternative financial history: What shape would the US economy, and the various States's economies, be in if the US were NOT so overwhelmingly influenced by Israel firsters, and were NOT persuaded, Against Our Better Judgment, to entangle themselves in Israel's nefarious activities?

____
** The 2007 Iran Task Force is NOT the same as the group formed in 2015 or so, embedded in US House/Senate, with Joe Lieberman and Michael Hayden playing prominent roles in attempting to influence the Iran Deal.

The 2007 initiative was sponsored by groups such as ZOA, RJC, AIPAC, etc., and / or spun off groups such as Foundation for Defense of Democracy, United Against Nuclear Iran.

[Dec 31, 2017] Is [neo]Liberalism a Dying Faith by Pat Buchanan

Highly recommended!
Nationalism really represent a growing threat to neoliberalism. It is clear the the rise of nationalism was caused by the triumph of neoliberalism all over the globe. As neoliberal ideology collapsed in 2008, thing became really interesting now. Looks like 1920th-1940th will be replayed on a new level with the USA neoliberal empire under stress from new challengers instead of British empire.
Rumor about the death of neoliberalism are slightly exaggerated ;-). This social system still has a lot of staying power. you need some external shock like the need of cheap oil (defined as sustainable price of oil over $100 per barrel) to shake it again. Of some financial crisis similar to the crisis of 2008. Currently there is still no alternative social order that can replace it. Collapse of the USSR discredited both socialism even of different flavors then was practiced in the USSR. National socialism would be a step back from neoliberalism.
Notable quotes:
"... The retreat of [neo]liberalism is very visible in Asia. All Southeast Asian states have turned their backs on liberal democracy, especially Indonesia, the Philippines and Myanmar in the last decade. This NYT article notes that liberalism has essentially died in Japan, and that all political contests are now between what the west would consider conservatives: https://www.nytimes.com/2017/10/15/opinion/liberalism-japan-election.html ..."
"... What is today called "Liberalism" and "Conservatism" both are simply corrupted labels applied to the same top-down corporate-fascistic elite rule that I think Mr. Buchanan once referred to as "two wings of the same bird of prey." ..."
"... Nobody at the top cares about 'diversity.' They care about the easy profits that come from ever cheaper labor. 'Diversity' is not suicide but rather murder: instigated by a small number of very powerful people who have decided that the long-term health of their nations and civilization is less important than short-term profits and power. ..."
"... Hillary and Obama are to the right of the President that Buchanan served in his White House. Richard Nixon was to the Left of both Hillary and Obama. I can't even imagine Hillary accepting and signing into law a 'Clean Water Act' or enacting Price Controls to fight inflation. No way. Heck would freeze over before Hillary would do something so against her Banker Backers. ..."
"... It's sure that financial (neo)liberalism was in a growth phase prior to year 2000 (under Greenspan, the "Maestro") with a general belief that the economy could be "fine tuned" with risk eliminated using sophisticated financial instruments, monetary policy etc. ..."
"... If [neo] Liberalism is a package, then two heavy financial blows that shook the whole foundation were the collapse of the dot.com bubble (2000) and the mortgage bubble (2008). ..."
"... And, other (self-serving) neoliberal stories are now seen as false. For example, that the US is an "advanced post-industrial service economy", that out-sourcing would "free up Americans for higher skilled/higher wage employment" or that "the US would always gain from tariff free trade". ..."
"... The basic divide is surely Nationalism (America First) vs. Globalism (Neo-Liberalism), as shown by the last US Presidential election. ..."
"... Neoliberalism, of which the Clintons are acolytes, supports Free Trade and Open Borders. Although it claims to support World Government, in actual fact it supports corporatism. This is explicit in the TPPA Trump vetoed. Under the corporate state, the state controls the corporations, as Don Benito did in Italy. Under corporatism, the corporations tell the state what to do, as has been the case in America since at least the Clinton Presidency. ..."
"... But I recall that Pat B also said neoconservatism was on its way out a few years after Iraq war II and yet it's stronger than ever and its adherents are firmly ensconced in the joint chiefs of staff, the pentagon, Congress and the White House. It's also spawned a close cousin in liberal interventionism. ..."
Oct 01, 2002 | www.unz.com

Asked to name the defining attributes of the America we wish to become, many liberals would answer that we must realize our manifest destiny since 1776, by becoming more equal, more diverse and more democratic -- and the model for mankind's future.

Equality, diversity, democracy -- this is the holy trinity of the post-Christian secular state at whose altars Liberal Man worships.

But the congregation worshiping these gods is shrinking. And even Europe seems to be rejecting what America has on offer.

In a retreat from diversity, Catalonia just voted to separate from Spain. The Basque and Galician peoples of Spain are following the Catalan secession crisis with great interest.

The right-wing People's Party and far-right Freedom Party just swept 60 percent of Austria's vote, delivering the nation to 31-year-old Sebastian Kurz, whose anti-immigrant platform was plagiarized from the Freedom Party. Summarized it is: Austria for the Austrians!

Lombardy, whose capital is Milan, and Veneto will vote Sunday for greater autonomy from Rome.

South Tyrol (Alto Adige), severed from Austria and ceded to Italy at Versailles, written off by Hitler to appease Mussolini after his Anschluss, is astir anew with secessionism. Even the Sicilians are talking of separation.

By Sunday, the Czech Republic may have a new leader, billionaire Andrej Babis. Writes The Washington Post, Babis "makes a sport of attacking the European Union and says NATO's mission is outdated."

Platform Promise: Keep the Muslim masses out of the motherland.

To ethnonationalists, their countrymen are not equal to all others, but superior in rights. Many may nod at Thomas Jefferson's line that "All men are created equal," but they no more practice that in their own nations than did Jefferson in his

... ... ...

European peoples and parties are today using democratic means to achieve "illiberal" ends. And it is hard to see what halts the drift away from liberal democracy toward the restrictive right. For in virtually every nation, there is a major party in opposition, or a party in power, that holds deeply nationalist views.

European elites may denounce these new parties as "illiberal" or fascist, but it is becoming apparent that it may be liberalism itself that belongs to yesterday. For more and more Europeans see the invasion of the continent along the routes whence the invaders came centuries ago, not as a manageable problem but an existential crisis.

To many Europeans, it portends an irreversible alteration in the character of the countries their grandchildren will inherit, and possibly an end to their civilization. And they are not going to be deterred from voting their fears by being called names that long ago lost their toxicity from overuse.

And as Europeans decline to celebrate the racial, ethnic, creedal and cultural diversity extolled by American elites, they also seem to reject the idea that foreigners should be treated equally in nations created for their own kind.

Europeans seem to admire more, and model their nations more, along the lines of the less diverse America of the Eisenhower era, than on the polyglot America of 2017.

And Europe seems to be moving toward immigration polices more like the McCarran-Walter Act of 1950 than the open borders bill that Sen. Edward Kennedy shepherded through the Senate in 1965.

Kennedy promised that the racial and ethnic composition of the America of the 1960s would not be overturned, and he questioned the morality and motives of any who implied that it would.

Jason Liu , October 20, 2017 at 12:02 pm GMT
Yes. Fuck yes.

Liberalism is the naivete of 18th century elites, no different than today. Modernity as you know it is unsustainable, mostly because equality isn't real, identity has value for most humans, pluralism is by definition fractious, and deep down most people wish to follow a wise strongman leader who represents their interests first and not a vague set of universalist values.

Blind devotion to liberal democracy is another one of those times when white people take an abstract concept to weird extremes. It is short-sighted and autistically narrow minded. Just because you have an oppressive king doesn't mean everyone should be equals. Just because there was slavery/genocide doesn't mean diversity is good.

The retreat of [neo]liberalism is very visible in Asia. All Southeast Asian states have turned their backs on liberal democracy, especially Indonesia, the Philippines and Myanmar in the last decade. This NYT article notes that liberalism has essentially died in Japan, and that all political contests are now between what the west would consider conservatives: https://www.nytimes.com/2017/10/15/opinion/liberalism-japan-election.html

Good riddance. The idea that egalitarianism is more advanced than hierarchy has always been false, and flies against the long arc of history. Time for nationalists around the world to smash liberal democracy and build a new modernity based on actual humanism, with respect to hierarchies and the primacy of majorities instead of guilt and pathological compassion dressed up as political ideology.

TG , October 20, 2017 at 1:10 pm GMT
"Liberalism" is not dying. "Liberalism" is dead, and has been since at least 1970.

What is today called "Liberalism" and "Conservatism" both are simply corrupted labels applied to the same top-down corporate-fascistic elite rule that I think Mr. Buchanan once referred to as "two wings of the same bird of prey."

Nobody at the top cares about 'diversity.' They care about the easy profits that come from ever cheaper labor. 'Diversity' is not suicide but rather murder: instigated by a small number of very powerful people who have decided that the long-term health of their nations and civilization is less important than short-term profits and power.

Paul's Ghost , October 20, 2017 at 6:08 pm GMT
Its been dead for nearly 20 years now. Liberalism has long been the Monty Python parrot nailed to its perch. At this point, the term is mainly kept alive in right-wing attacks by people who lack the imagination to change their habitual targets for so long.

To my eye, the last 'liberal' politician died in a susupicious plane crash in 2000 as the Bush Republicans were taking the White House by their famous 5-4 vote/coup and also needed to claim control of the Senate. So, the last authentic 'liberal' Senator, Paul Wellstone of MN was killed in a suspicious plane crash that was never properly explained.

Hillary and Obama are to the right of the President that Buchanan served in his White House. Richard Nixon was to the Left of both Hillary and Obama. I can't even imagine Hillary accepting and signing into law a 'Clean Water Act' or enacting Price Controls to fight inflation. No way. Heck would freeze over before Hillary would do something so against her Banker Backers.

And, at the root, that is the key. The 'Liberals' that the right now rails against are strongly backed and supported by the Wall Street Banks and other corporate leaders. The 'Liberals' have pushed for a government Of the Bankers, By the Bankers and For the Bankers. The 'Liberals' now are in favor of Endless Unconstitutional War around the world.

Which can only mean that the term 'Liberal' has been so completely morphed away from its original meanings to be completely worthless.

The last true Liberal in American politics was Paul Wellstone. And even by the time he died for his sins, he was calling himself a "progressive" because after the Clintons and the Gores had so distorted the term Liberal it was meaningless. Or it had come to mean a society ruled by bankers, a society at constant war and throwing money constantly at a gigantic war machine, a society of censorship where the government needed to control all music lyrics, the same corrupt government where money could by anything from a night in the Lincoln Bedroom to a Presidential Pardon or any other government favor.

Thus, 'Liberals' were a dead movement even by 2000, when the people who actually believed in the American People over the profits of bankers were calling themselves Progressives in disgust at the misuse of the term Liberal. And now, Obama and Hillary have trashed and distorted even the term Progressive into bombing the world 365 days a year and still constantly throwing money at the military machine and the problems it invents.

So, Liberalism is so long dead that if you exumed the grave you'd only find dust. And Pat must be getting senile and just throwing back out the same lines he once wrote as a speechwriter for the last Great Lefty President Richard Nixon.

Miro23 , October 20, 2017 at 6:17 pm GMT

Is Liberalism a Dying Faith?

Another question is whether this is wishful thinking from Pat or some kind of reality.

I think that he's right, that Liberalism is a dying faith, and it's interesting to check the decline.

It's sure that financial (neo)liberalism was in a growth phase prior to year 2000 (under Greenspan, the "Maestro") with a general belief that the economy could be "fine tuned" with risk eliminated using sophisticated financial instruments, monetary policy etc.

If [neo] Liberalism is a package, then two heavy financial blows that shook the whole foundation were the collapse of the dot.com bubble (2000) and the mortgage bubble (2008).

And, other (self-serving) neoliberal stories are now seen as false. For example, that the US is an "advanced post-industrial service economy", that out-sourcing would "free up Americans for higher skilled/higher wage employment" or that "the US would always gain from tariff free trade".

In fact, the borderless global "world is flat" dogma is now seen as enabling a rootless hyper-rich global elite to draw on a sea of globalized serf labour with little or no identity, while their media and SWJ activists operate a scorched earth defense against any sign of opposition.

The basic divide is surely Nationalism (America First) vs. Globalism (Neo-Liberalism), as shown by the last US Presidential election.

reiner Tor , October 20, 2017 at 6:39 pm GMT
@Randal

A useful analogy might be Viktor Orbán. He started out as a leader of a liberal party, Fidesz, but then over time started moving to the right. It is often speculated that he started it for cynical reasons, like seeing how the right was divided and that there was essentially a vacuum there for a strong conservative party, but there's little doubt he totally internalized it. There's also little doubt (and at the time he and a lot of his fellow party leaders talked about it a lot) that as he (they) started a family and having children, they started to realize how conservatism kinda made more sense than liberalism.

With Kurz, there's the possibility for this path. However, he'd need to start a family soon for that to happen. At that age Orbán was already married with children

Verymuchalive , October 20, 2017 at 10:10 pm GMT
@Paul's Ghost

Liberalism ( large L) is indeed long dead.

Neoliberalism, of which the Clintons are acolytes, supports Free Trade and Open Borders. Although it claims to support World Government, in actual fact it supports corporatism. This is explicit in the TPPA Trump vetoed. Under the corporate state, the state controls the corporations, as Don Benito did in Italy. Under corporatism, the corporations tell the state what to do, as has been the case in America since at least the Clinton Presidency.

Richard Nixon was a capitalist, not a corporatist. He was a supporter of proper competition laws, unlike any President since Clinton. Socially, he was interventionist, though this may have been to lessen criticism of his Vietnam policies. Anyway, his bussing and desegregation policies were a long-term failure.

Price Control was quickly dropped, as it was in other Western countries. Long term Price Control, as in present day Venezuela, is economically disastrous.

KenH , October 21, 2017 at 1:51 pm GMT
Let's hope liberalism is a dying faith and that is passes from the Western world. If not it will destroy the West, so if it doesn't die a natural death then we must euthanize it. For the evidence is in and it has begat feminism, anti-white racism, demographic winter, mass third world immigration and everything else that ails the West and has made it the sick and dying man of the world.

But I recall that Pat B also said neoconservatism was on its way out a few years after Iraq war II and yet it's stronger than ever and its adherents are firmly ensconced in the joint chiefs of staff, the pentagon, Congress and the White House. It's also spawned a close cousin in liberal interventionism.

What Pat refers to as "liberalism" is now left wing totalitarianism and anti-white hatred and it's fanatically trying to remain relevant by lashing out and blacklisting, deplatforming, demonetizing, and physically assaulting all of its enemies on the right who are gaining strength much to their chagrin. They resort to these methods because they can't win an honest debate and in a true free marketplace of ideas they lose.

[Dec 15, 2017] Rise and Decline of the Welfare State, by James Petras

Highly recommended!
Petras did not mention that it was Carter who started neoliberalization of the USA. The subsequent election of Reagan signified the victory of neoliberalism in this country or "quite coup". The death of New Deal from this point was just a matter of time. Labor relations drastically changes and war on union and atomization of workforce are a norm.
Welfare state still exists but only for corporation and MIC. Otherwise the New Deal society is almost completely dismanted.
It is true that "The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives." But the key factor in this compromise was the existence of the USSR as a threat to the power of capitalists in the USA. when the USSR disappeared cannibalistic instincts of the US elite prevailed over caution.
Notable quotes:
"... The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East. ..."
"... In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health. ..."
"... modern welfare state' ..."
"... Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility. ..."
"... Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions. ..."
"... World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war. ..."
"... So-called ' right to work' ..."
"... Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay ..."
"... Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined ..."
"... With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation. ..."
"... Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations. ..."
"... The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income. ..."
"... The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy ..."
"... Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home. ..."
"... President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff. ..."
"... Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities. ..."
"... President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven. ..."
"... Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' . ..."
"... Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe. ..."
"... Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump ..."
"... Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block. ..."
"... The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave. ..."
"... Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump. ..."
"... Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century. ..."
"... The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history ..."
"... "The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class." ..."
"... Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up ..."
"... Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers. ..."
"... The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy. ..."
"... Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it. ..."
Dec 13, 2017 | www.unz.com

Introduction

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. ' Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

What started as incremental reversals during the 1990's under Clinton has snowballed over the last two decades decimating welfare legislation and institutions.

The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East.

In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health.

New Deals and Big Wars

The 1930's witnessed the advent of social legislation and action, which laid the foundations of what is called the ' modern welfare state' .

Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility.

Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions.

World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war.

The post-war period witnessed a contradictory process: wages and salaries increased while legislation curtailed union rights via the Taft Hartley Act and the McCarthyist purge of leftwing trade union activists. So-called ' right to work' laws effectively outlawed unionization mostly in southern states, which drove industries to relocate to the anti-union states.

Welfare reforms, in the form of the GI bill, provided educational opportunities for working class and rural veterans, while federal-subsidized low interest mortgages encourage home-ownership, especially for veterans.

The New Deal created concrete improvements but did not consolidate labor influence at any level. Capitalists and management still retained control over capital, the workplace and plant location of production.

Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay "). Dissident local unions were seized and gutted by the trade union bosses – sometimes through violence.

Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined.

While a new wave of social welfare legislation and programs began in the 1960's and early 1970's it was no longer a result of a mass trade union or workers' "class struggle". Moreover, trade union collaboration with the capitalist regional war policies led to the killing and maiming of hundreds of thousands of workers in two wars – the Korean and Vietnamese wars.

Much of social legislation resulted from the civil and welfare rights movements. While specific programs were helpful, none of them addressed structural racism and poverty.

The Last Wave of Social Welfarism

The 1960'a witnessed the greatest racial war in modern US history: Mass movements in the South and North rocked state and federal governments, while advancing the cause of civil, social and political rights. Millions of black citizens, joined by white activists and, in many cases, led by African American Viet Nam War veterans, confronted the state. At the same time, millions of students and young workers, threatened by military conscription, challenged the military and social order.

Energized by mass movements, a new wave of social welfare legislation was launched by the federal government to pacify mass opposition among blacks, students, community organizers and middle class Americans. Despite this mass popular movement, the union bosses at the AFL-CIO openly supported the war, police repression and the military, or at best, were passive impotent spectators of the drama unfolding in the nation's streets. Dissident union members and activists were the exception, as many had multiple identities to represent: African American, Hispanic, draft resisters, etc.

Under Presidents Lyndon Johnson and Richard Nixon, Medicare, Medicaid, OSHA, the EPA and multiple poverty programs were implemented. A national health program, expanding Medicare for all Americans, was introduced by President Nixon and sabotaged by the Kennedy Democrats and the AFL-CIO. Overall, social and economic inequalities diminished during this period.

The Vietnam War ended in defeat for the American militarist empire. This coincided with the beginning of the end of social welfare as we knew it – as the bill for militarism placed even greater demands on the public treasury.

With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation.

Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations.

The Debacle of Welfarism

Private sector trade union membership declined from a post-world war peak of 30% falling to 12% in the 1990's. Today it has sunk to 7%. Capitalists embarked on a massive program of closing thousands of factories in the unionized North which were then relocated to the non-unionized low wage southern states and then overseas to Mexico and Asia. Millions of stable jobs disappeared.

Following the election of 'Jimmy Carter', neither Democratic nor Republican Presidents felt any need to support labor organizations. On the contrary, they facilitated contracts dictated by management, which reduced wages, job security, benefits and social welfare.

The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income.

The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy.

The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives.

The Second World War secured the economic recovery for capital and subordinated labor through a federally mandated no strike production agreement. There were a few notable exceptions: The coal miners' union organized strikes in strategic sectors and some leftist leaders and organizers encouraged slow-downs, work to rule and other in-plant actions when employers ran roughshod with special brutality over the workers. The recovery of capital was the prelude to a post-war offensive against independent labor-based political organizations. The quality of labor organization declined even as the quantity of trade union membership increased.

Labor union officials consolidated internal control in collaboration with the capitalist elite. Capitalist class-labor official collaboration was extended overseas with strategic consequences.

The post-war corporate alliance between the state and capital led to a global offensive – the replacement of European-Japanese colonial control and exploitation by US business and bankers. Imperialism was later 're-branded' as ' globalization' . It pried open markets, secured cheap docile labor and pillaged resources for US manufacturers and importers.

US labor unions played a major role by sabotaging militant unions abroad in cooperation with the US security apparatus: They worked to coopt and bribe nationalist and leftist labor leaders and supported police-state regime repression and assassination of recalcitrant militants.

' Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home.

Labor union officials had laid the groundwork for the demise of stable jobs and social benefits for American workers. Their collaboration increased the rate of capitalist profit and overall power in the political system. Their complicity in the brutal purges of militants, activists and leftist union members and leaders at home and abroad put an end to labor's capacity to sustain and expand the welfare state.

Trade unions in the US did not use their collaboration with empire in its bloody regional wars to win social benefits for the rank and file workers. The time of social-imperialism, where workers within the empire benefited from imperialism's pillage, was over. Gains in social welfare henceforth could result only from mass struggles led by the urban poor, especially Afro-Americans, community-based working poor and militant youth organizers.

The last significant social welfare reforms were implemented in the early 1970's – coinciding with the end of the Vietnam War (and victory for the Vietnamese people) and ended with the absorption of the urban and anti-war movements into the Democratic Party.

Henceforward the US corporate state advanced through the overseas expansion of the multi-national corporations and via large-scale, non-unionized production at home.

The technological changes of this period did not benefit labor. The belief, common in the 1950's, that science and technology would increase leisure, decrease work and improve living standards for the working class, was shattered. Instead technological changes displaced well-paid industrial labor while increasing the number of mind-numbing, poorly paid, and politically impotent jobs in the so-called 'service sector' – a rapidly growing section of unorganized and vulnerable workers – especially including women and minorities.

Labor union membership declined precipitously. The demise of the USSR and China's turn to capitalism had a dual effect: It eliminated collectivist (socialist) pressure for social welfare and opened their labor markets with cheap, disciplined workers for foreign manufacturers. Labor as a political force disappeared on every count. The US Federal Reserve and President 'Bill' Clinton deregulated financial capital leading to a frenzy of speculation. Congress wrote laws, which permitted overseas tax evasion – especially in Caribbean tax havens. Regional free-trade agreements, like NAFTA, spurred the relocation of jobs abroad. De-industrialization accompanied the decline of wages, living standards and social benefits for millions of American workers.

The New Abolitionists: Trillionaires

The New Deal, the Great Society, trade unions, and the anti-war and urban movements were in retreat and primed for abolition.

Wars without welfare (or guns without butter) replaced earlier 'social imperialism' with a huge growth of poverty and homelessness. Domestic labor was now exploited to finance overseas wars not vice versa. The fruits of imperial plunder were not shared.

As the working and middle classes drifted downward, they were used up, abandoned and deceived on all sides – especially by the Democratic Party. They elected militarists and demagogues as their new presidents.

President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff.

Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities.

Provoked by an act of terrorism (9/11) President G.W. Bush Jr. launched the 'endless' wars in Afghanistan and Iraq and deepened the police state (Patriot Act). Wages for American workers and profits for American capitalist moved in opposite directions.

The Great Financial Crash of 2008-2011 shook the paper economy to its roots and led to the greatest shakedown of any national treasury in history directed by the First Black American President. Trillions of public wealth were funneled into the criminal banks on Wall Street – which were ' just too big to fail .' Millions of American workers and homeowners, however, were ' just too small to matter' .

The Age of Demagogues

President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven.

Obama's electoral 'donor-owners' stashed away two trillion dollars in overseas tax havens and looked forward to global free trade pacts – pushed by the eloquent African American President.

Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' .

Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe.

'Obamacare' , his imitation of an earlier Republican governor's health plan, was formulated by the private corporate health industry (private insurance, Big Pharma and the for-profit hospitals), to mandate enrollment and ensure triple digit profits with double digit increases in premiums. By the 2016 Presidential elections, ' Obama-care' was opposed by a 45%-43% margin of the American people. Obama's propagandists could not show any improvement of life expectancy or decrease in infant and maternal mortality as a result of his 'health care reform'. Indeed the opposite occurred among the marginalized working class in the old 'rust belt' and in the rural areas. This failure to show any significant health improvement for the masses of Americans is in stark contrast to LBJ's Medicare program of the 1960's, which continues to receive massive popular support.

Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump

Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block.

The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave.

Conclusion

Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump.

Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century.

The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history. The first trillionaire and multi-billionaire tax evaders rose on the backs of a miserable standing army of tens of millions of low-wage workers, stripped of rights and representation. State subsidies eliminate virtually all risk to capital. The end of social welfare coerced labor (including young mother with children) to seek insecure low-income employment while slashing education and health – cementing the feet of generations into poverty. Regional wars abroad have depleted the Treasury and robbed the country of productive investment. Economic imperialism exports profits, reversing the historic relation of the past.

Labor is left without compass or direction; it flails in all directions and falls deeper in the web of deception and demagogy. To escape from Reagan and the strike breakers, labor embraced the cheap-labor predator Clinton; black and white workers united to elect Obama who expelled millions of immigrant workers, pursued 7 wars, abandoned black workers and enriched the already filthy rich. Deception and demagogy of the labor-

Issac , December 11, 2017 at 11:01 pm GMT

"The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations."

"The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class."

A mirage so real, it even has you convinced.

whyamihere , December 12, 2017 at 4:24 am GMT
If the welfare state in America was abolished, major American cities would burn to the ground. Anarchy would ensue, it would be magnitudes bigger than anything that happened in Ferguson or Baltimore. It would likely be simultaneous.

I think that's one of the only situations where preppers would actually live out what they've been prepping for (except for a natural disaster).

I've been thinking about this a little over the past few years after seeing the race riots. What exactly is the line between our society being civilized and breaking out into chaos. It's probably a lot thinner than most people think.

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today. I wonder how long it can last.

Disordered , December 13, 2017 at 8:41 am GMT
While I agree with Petras's intent (notwithstanding several exaggerations and unnecessary conflations with, for example, racism), I don't agree so much with the method he proposes. I don't mind welfare and unions to a certain extent, but they are not going to save us unless there is full employment and large corporations that can afford to pay an all-union workforce. That happened during WW2, as only wartime demand and those pesky wage freezes solved the Depression, regardless of all the public works programs; while the postwar era benefited from the US becoming the world's creditor, meaning that capital could expand while labor participation did as well.

From then on, it is quite hard to achieve the same success after outsourcing and mechanization have happened all over the world. Both of these phenomena not only create displaced workers, but also displaced industries, meaning that it makes more sense to develop individual workfare (and even then, do it well, not the shoddy way it is done now) rather than giving away checks that probably will not be cashed for entrepreneurial purposes, and rather than giving away money to corrupt unions who depend on trusts to be able to pay for their benefits, while raising the cost of hiring that only encourages more outsourcing.

The amount of welfare given is not necessarily the main problem, the problem is doing it right for the people who truly need it, and efficiently – that is, with the least amount of waste lost between the chain of distribution, which should reach intended targets and not moochers.

Which inevitably means a sound tax system that targets unearned wealth and (to a lesser degree) foreign competition instead of national production, coupled with strict, yet devolved and simple government processes that benefit both business and individuals tired of bureaucracy, while keeping budgets balanced. Best of both worlds, and no military-industrial complex needed to drive up demand.

Wally , Website December 13, 2017 at 8:57 am GMT
"President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street " That's twice the amount that Bush gave them.
jacques sheete , December 13, 2017 at 10:52 am GMT

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Wrong wrong wrong.

Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up, and welfare for them started before 1935. In fact, it started in America before there was a USA. I do not have time to elaborate, but what were the various companies such as the British East India Company and the Dutch West India Companies but state pampered, welfare based entities? ~200 years ago, Herbert Spencer, if memory serves, pointed out that the British East India Company couldn't make a profit even with all the special, government granted favors showered upon it.

Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers.

Den Lille Abe , December 13, 2017 at 11:09 am GMT
Well, the author kind of nails it. I remember from my childhood in the 50-60 ties in Scandinavia that the US was the ultimate goal in welfare. The country where you could make a good living with your two hands, get you kids to UNI, have a house, a telly ECT. It was not consumerism, it was the American dream, a chicken in every pot; we chewed imported American gum and dreamed.

In the 70-80 ties Scandinavia had a tremendous social and economic growth, EQUALLY distributed, an immense leap forward. In the middle of the 80 ties we were equal to the US in standards of living.

Since we have not looked at the US, unless in pity, as we have seen the decline of the general income, social wealth fall way behind our own.
The average US workers income has not increased since 90 figures adjusted for inflation. The Scandinavian workers income in the same period has almost quadrupled. And so has our societies.

The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy.

wayfarer , December 13, 2017 at 1:01 pm GMT

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. 'Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

source: http://www.unz.com/jpetras/rise-and-decline-of-the-welfare-state/

What does Hollywood "elite" JAP and wannabe hack-stand-up-comic Sarah Silverman think about the class struggle and problems facing destitute Americans? "Qu'ils mangent de la bagels!", source: https://en.wikipedia.org/wiki/Let_them_eat_cake

... ... ...

Anonymous , Disclaimer December 13, 2017 at 1:40 pm GMT
@Greg Fraser

Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it.

Anonymous , Disclaimer December 13, 2017 at 2:43 pm GMT
As other commenters have pointed out, it's Petras curious choice of words that sometimes don't make too much sense. We can probably blame the maleable English language for that, but here it's too obvious. If you don't define a union, people might assume you're only talking about a bunch of meat cutters at Safeway.

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

The war on unions was successful first by co-option but mostly by the media. But what kind of analysis leaves out the role of the media in the American transformation? The success is mind blowing.

America has barely literate (white) middle aged males trained to spout incoherent Calvinistic weirdness: unabased hatred for the poor (or whoever they're told to hate) and a glorification of hedge fund managers as they get laid off, fired and foreclosed on, with a side of opiates.

There is hardly anything more tragic then seeing a web filled with progressives (management consultants) dedicated to disempowering, disabling and deligitimizing victims by claiming they are victims of biology, disease or a lack of an education rather than a system that issues violence while portending (with the best media money can buy) that they claim the higher ground.

animalogic , December 13, 2017 at 2:57 pm GMT
@Wally

""Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today."

Quite right: the 0.01% have worked it out & US democracy is a Theatre for the masses.

Reg Cæsar , December 13, 2017 at 3:08 pm GMT

They elected militarists and demagogues as their new presidents.

Wilson and FDR were much more militarist and demagogic than those that followed.

Reg Cæsar , December 13, 2017 at 3:20 pm GMT
@whyamihere

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury."

Some French aristocrat put it as, once the gates to the treasury have been breached, they can only be closed again with gunpowder. Anyone recognize the author?

phil , December 13, 2017 at 4:48 pm GMT
The author doesn't get it. What we have now IS the welfare state in an intensely diverse society. We have more transfer spending than ever before and Obamacare represents another huge entitlement.

Intellectuals continue to fantasize about the US becoming a Big Sweden, but Sweden has only been successful insofar as it has been a modest nation-state populated by ethnic Swedes. Intense diversity in a huge country with only the remnants of federalism results in massive non-consensual decision-making, fragmentation, increased inequality, and corruption.

HallParvey , December 13, 2017 at 4:57 pm GMT
@Anonymous

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

They are largely defined as Doctors, Lawyers, and University Professors who teach the first two. Of course they are not called unions. Access is via credentialing and licensing. Good Day

Anonymous , Disclaimer December 13, 2017 at 4:57 pm GMT
@Linda Green

Bernie Sanders, speaking on behalf of the MIC's welfare bird: "It is the airplane of the United States Air Force, Navy, and of NATO."

Elizabeth Warren, referring to Mossad's Estes Rockets: "The Israeli military has the right to attack Palestinian hospitals and schools in self defense"

Barack Obama, yukking it up with pop stars: "Two words for you: predator drones. You will never see it coming."

It's not the agitprop that confuses the sheep, it's whose blowhole it's coming out of (labled D or R for convenience) that gets them to bare their teeth and speak of poo.

Anonymous , Disclaimer December 13, 2017 at 5:54 pm GMT
@HallParvey

What came first, the credentialing or the idea that it is a necessary part of education? It certainly isn't an accurate indication of what people know or their general intelligence – although that myth has flourished. Good afternoon.

Logan , December 13, 2017 at 9:10 pm GMT
@Realist

For an interesting projection of what might happen in total civilizational collapse, I recommend the Dies the Fire series of novels by SM Stirling.

It has a science-fictiony setup in that all high-energy system (gunpowder, electricity, explosives, internal combustion, even high-energy steam engines) suddenly stop working. But I think it does a good job of extrapolating what would happen if suddenly the cities did not have food, water, power, etc.

Spoiler alert: It ain't pretty. Those who dream of a world without guns have not really thought it through.

Logan , December 13, 2017 at 9:19 pm GMT
@phil

It has been pointed out repeatedly that Sweden does very well relative to the USA. It has also been noted that people of Swedish ancestry in the USA do pretty well also. In fact considerably better than Swedes in Sweden

[Dec 05, 2017] Controlling speculation in world financial markets Progressive Christians Uniting by Gordon K Douglass

Highly recommended!
Nov 09, 2002 | www.prospect-magazine.co.uk

Financial markets 101
Early history
The Bretton Woods system
The power of financial actors
Consequences of global financial flows
Policy options
Theological and ethical considerations
A new financial architecture
What Christians can do
Want to know more?
Questions For Discussion


"During my whole career at Goldman Sachs - 1967 to 1991 - I never owned a foreign stock or emerging market bonds. Now I have hundreds of millions of dollars in Russia, Brazil, Argentina and Chile, and I worry constantly about the dollar-yen rate. Every night before I go to bed I call in for the dollar-yen quote, and to find out what the Nikkei is doing and what the Hang Seng Index is doing. We have bets in all these markets. Right now Paul [one of my traders] is long [on] the Canadian dollar. We have bets all over the place. I would not have worried about any of these twenty years ago. Now I have to worry about all of them."

Leon Coopermann, hedge fund manager1


Economic globalization is probably the most fundamental transformation of the world's political and economic arrangements since the Industrial Revolution. Decisions made in one part of the world more and more affect people and communities elsewhere in the world. Sometimes the consequences of globalization are positive, liberating inventive and entrepreneurial talents and accelerating the pace of sustainable development. But at other times they are negative, as when many people, especially in less-developed countries, are left behind without a social safety net. Globalization undermines the ability of the nation to tax and to regulate its own economy. This weakens the power of sovereign nations relative to that of large transnational corporations and distorts how social and economic priorities are chosen.

Economic globalization is most often associated with rapid growth in the flow of goods and services across international borders. Indeed, the economic "openness" of a nation is often measured by the value of its exports, imports, or their sum when compared to the size of its economy. Economic globalization also involves large investments from outside each nation, often by transnational corporations. These corporations often combine technology and know-how with their investments that enhance the productive capacity of a nation. Previous position papers of the Mobilization, contained in Speaking of Religion & Politics: The Progressive Church Tackles Hot Topics2, have dealt with globalization primarily in these terms.

But international trade and investment are only part of the openness that has come to be called globalization. Another part, and arguably the most important, is the quickening flow of financial assets internationally. While a small portion of this flow is directly associated with the "real" economy of production and exchange, its vast majority is composed of trades in the "paper" economy of short-term financial markets. This paper economy is enormous: The value of global financial securities greatly exceeds the value of annual world output of goods and services. Moreover, the paper economy often contributes to crises in the real economy. Thus it is important to the well being of humanity and the planet as a whole, yet it is little understood by most people. This essay undertakes to provide a basic understanding of this paper economy, especially as its more speculative features have multiplied during the last two or three decades, so that Christians and others concerned about what is happening in our world can join in an intelligent discussion of how the harmful consequences of financial markets can be controlled.


Financial markets 101

To better understand this paper economy, one first needs to know something about foreign exchange markets, international money markets, and "external" financial markets.

In an open economy, domestic residents often engage in international transactions. American car dealers, for example, buy Japanese Toyotas and Datsuns, while German computer companies sell electronic notebooks to Mexican businessmen. Similarly, Australian mutual funds invest in the shares of companies all over the world, while the treasurer of a Canadian transnational corporation parks idle cash in 90-day Bank of England notes. Most of these transactions require one or more participants to acquire a foreign currency. If an American buys a Toyota and pays the Japanese Toyota dealer in dollars, for example, the latter will have to exchange the dollars for yens in order to have the local currency with which to pay his workers and local suppliers.

The foreign exchange market is the market in which national currencies are traded. As in any market, a price must exist at which trade can occur. An exchange rate is the price of a unit of domestic currency in terms of a foreign currency. Thus, if the exchange rate of the dollar in terms of the Japanese yen increases, we say the dollar has depreciated and the yen has appreciated. Similarly, a decrease in the dollar/yen exchange rate would imply an appreciation of the dollar and a depreciation of the yen.

Foreign exchange markets can be classified as spot markets and forward markets. In spot markets currencies are bought and sold for immediate delivery and payment. In forward markets, currencies are bought or sold for future delivery and payment. A U.S. music company, say, enters into a contract to buy British records for delivery in 30 days. To guard against the possibility of the dollar/pound exchange rate increasing in the meantime, the company buys pounds forward, for delivery in 30 days, at the corresponding forward exchange rate quoted today. This is called hedging.

Of course, there has to be a counterpart to the music company's forward purchase of pounds. Who is the seller of those pounds? The immediate seller would be a commercial bank, as in the spot market. But the bank only acts as an intermediary. The ultimate seller of forward pounds may be another hedger, like the music company, but with a position just its opposite. Suppose, for example, that an American firm or individual has invested in 30-day British securities that it wants to convert back into dollars after the end of 30 days. The investor may decide to sell the pound proceeds forward in order to assure itself of the rate at which the pounds are to be converted back into dollars after 30 days.

Another type of investor may be providing the forward contract bought by the music company. This is the speculator, who attempts to profit from changes in exchange rates. Depending on their expectations, speculators may enter the forward market either as sellers or as buyers of forward exchange. In this particular case, the speculator may have reason to believe that the dollar/pound exchange rate will decrease in the next 30 days, permitting him to obtain the promised pounds at a lower price in the spot market 30 days hence.

The main instruments of foreign exchange transactions include electronic bank deposit transfers and bank drafts, bills of exchange, and a whole array of other short-term instruments expressed in terms of foreign currency. Thus, foreign exchange transactions do not generally involve a physical exchange of currencies across borders. They generally involve only changes in debits and credits at different banks in different countries. Very large banks in the main financial centers such as New York, London, Brussels and Zurich, account for most foreign exchange transactions. Local banks can provide foreign exchange by purchasing it in turn from major banks.

Although the foreign exchange market is dispersed in many cities and countries, it is unified by keen competition among the highly sophisticated market participants. A powerful force keeping exchange rate quotations in different places in line with each other is the search on the part of market participants for foreign exchange arbitrage opportunities. Arbitrage is the simultaneous purchase and sale of a commodity or financial asset in different markets with the purpose of obtaining a profit from the differential between the buying and selling price.

When foreign exchange is acquired in order to engage in international transactions involving the purchase or sale of goods and services, it is said that international trade has taken place in the real economy. When international transactions involve the purchase or sale of financial assets, they are referred to as international financial transactions. They constitute the paper economy.

Financial markets are commonly classified as capital markets or money markets. Capital markets deal in financial claims that reach more than one year into the future. Such claims include shares of stock, bonds, and long-term loans, among others. Money markets, on the other hand, deal in short-term claims, with maturities of less than one year. These include marketable government securities (like Treasury bills), large-denomination certificates of deposit issued by banks, commercial paper (representing short-term corporate debt), money market funds, and many other kinds of short-term, highly liquid (easily transferable) financial instruments. It is these short-term money market securities that account for most of the instability in the global paper economy.

Buying or selling a money market security internationally involves the same kind of foreign exchange risk that plagues buyers or sellers of merchandise internationally. If one wishes to guard against the possibility of an increase or decrease in the foreign exchange rate, one can insure against such fluctuations by "covering" in the forward market. By the same token, the decision about whether to own domestic or foreign money market securities is not simply a comparison of the rates of interest paid on otherwise comparable securities, because one must also take into account the gain (or loss) from purchasing foreign currency spot and selling it forward. Thus, choosing the security with the highest return does not necessarily imply the one with the highest interest rate.

People who trade in international money markets, moreover, need to take into account many other variables, including the costs of gathering and processing information, transaction costs, the possibility of government intervention and regulation, other forms of political risk, and the inability to make direct comparisons of alternative assets. Speculating in international money markets is a risky proposition.

International money markets involve assets denominated in different currencies. External financial markets involve assets denominated in the same currency but issued in different political jurisdictions. Eurodollars, for example, are dollar deposits held outside the United States (offshore), such as dollar deposits in London, Zurich, or even Singapore banks. The deposits may be in banks owned locally or in the offshore banking subsidiaries of U.S. banks. Deutsche mark deposits in London banks or pound sterling deposits in Amsterdam banks also are examples of external deposits. They are referred to as eurocurrency deposits. (The advent of a new common currency in the European Community - the Euro - will require the development of new nomenclature for external financial markets)

External banking activities are a segment of the wholesale international money market. The vast majority of eurocurrency transactions fall in the above $1 million value range, frequently reaching the hundreds of millions (or even billion) dollar value. Accordingly, the customers of eurobanks are almost exclusively large organizations, including multinational corporations, government entities, hedge funds, and international organizations, as well as eurobanks themselves. Like domestic banks, eurobanks that have excess reserves may make loans denominated in eurocurrencies, expanding the supply of eurocurrency deposits. The eurocurrency market funnels funds from lending countries to borrowing countries. Thus, it performs an important function as global financial intermediator.


Early history

The origins of what Karl Polanyi3 called haute finance can be traced to Renaissance Italy, where as early as 1422 there were seventy-two bankers or bill-brokers in or near the Mecato Vecchio of Florence.4 Many combined trade with purely financial business. By the middle of the fifteenth century, the Medici of Florence had opened branches in Bruges, London and Avignon, both as a means of financing international trade and as a way of marketing new kinds of financial assets. Many banking terms and practices still in use today originated in the burgeoning financial centers of Renaissance Europe.

By the early seventeenth century, the Dutch and East India Companies began issuing shares to the public in order to fund imperial enterprises closely linked to Holland and Britain. Their shares were made freely transferable, permitting development of a secondary financial market for claims to future income. Amsterdam opened a stock exchange in 1611, and shortly thereafter, the British government began issuing lottery tickets, an early form of government bonds, to finance colonial expansion, wars and other major areas of state expenditure. A lively secondary market in these financial instruments also emerged.5

Throughout these early years, financial markets were anything but riskless and stable. Consider the famous Dutch tulip mania of 1630, for example. This speculative bubble saw prices of tulip bulbs reach what seemed like absurd levels, yet "the rage among the Dutch to possess them [tulips] was so great that the ordinary industry of the country was neglected." Some investors in Britain and France shared this "irrational exuberance," though it was centered mostly in Holland. Then, not unlike speculative bubbles of more recent vintage, prices crashed6, pushing the economy into a depression and leaving many investors angry and confused.

Paris developed into an early financial center in the eighteenth century, but the Revolution of 1789 dissipated its power. The New York Stock Exchange was formally organized in 1792 and the official London Stock Exchange opened in 1802. The expansion westward of the railroads in the U.S. offered the financial community opportunity to sell railway shares and bonds that quickly became dominant in the financial markets. Indeed, the bond markets of London, Paris, Berlin, and Amsterdam were vehicles for collecting massive amounts of European savings and transferring it at higher returns to the emerging markets of the U.S., Canada, Australia, Latin America and Russia in the century preceding World War I.

Forward markets soon developed, especially in the U.S., in order to counter the impact of long distances and unpredictable weather. As capital and money markets expanded, other new financial instruments came into use. Joint stock companies were formed, enabled by legislation that clarified the distinction between the owners and managers of corporations. This, in turn, helped stimulate the growth of the American stock market in the late nineteenth century. To be sure, financial markets did not grow continuously in the nineteenth century. Lending to the emerging markets was interrupted by defaults in the 1820s, 1850s, 1870s and 1890s, but each wave of default was confined to a relatively small number of countries, permitting growth of financial flows to resume.7

In the four decades leading up to World War I, a truly worldwide economy was forged for the first time, extending from the core of Western Europe and the U.S. to latecomers in Eastern Europe and Latin America and even to the countries supplying raw materials on the periphery. Central to this expansion of trade and investment was an expanding system of finance that girded the globe. The amount was enormous: between 1870 and 1914 something like $30 billion,8 the equivalent in 2002 dollars of $550 billion, was transferred to recipient countries, in a world economy perhaps one-twelfth as large as today's.

During this "Gilded Age" of haute finance, the risks of participating in international trade and investment were generously shared with governments and the banking system. The reason is that foreign exchange rates were kept reasonably stable by the commitment of most governments to the "high" gold standard. In this way, businesses and individuals engaging in international transactions were reasonably certain that the value of their contracts was not going to change before they matured. Their exchange risk was shared with government by its willingness to buy or sell gold in order to keep the exchange rate constant. Because of this assurance, financial flows were reasonably free of regulation.

They were not immune from crises, however. When the sources of financial capital temporarily dried up, capital-importing countries occasionally found they could not expand export earnings sufficiently to avoid suspending interest payments on their debts or abandoning gold parity. On two occasions, the United States faced this possibility. The first was in 1893, when it switched in a sharp economic downturn to bimetallism (which caused William Jennings Bryan to denounce the "cross of gold"), and the second was in 1907, which led to the creation of the Federal Reserve System, handing to the government the function of lender of last resort previously carried out by Wall Street banks under the tutelage of J. Pierpont Morgan.

In his magisterial book The Great Transformation, Karl Polanyi reflected on the pervasive influence of haute finance on the policies of nations even in this "Gilded Age." The globalising financial markets and the gold standard, according to Polanyi, left very little room for states, especially smaller ones, to adopt monetary and fiscal policies independent of the new international order. "Loans, and the renewal of loans, hinged upon credit, and credit upon good behavior. Since, under constitutional government ..., behavior is reflected in the budget and the external value of the currency cannot be detached from the appreciation of the budget, debtor governments were well advised to watch their exchanges carefully and to avoid policies which might reflect upon the soundness of budget positions." Thus, even one hundred years ago the then-dominant world power, Great Britain, speaking as it did so often through the voice of the City of London, "prevailed by the timely pull of a thread in the international monetary network.9

Following World War I, the United States emerged not merely as a creditor country but as the primary source of new international financial flows. At first, the principal borrowers were the national governments of the stronger countries, but as the boom in security underwriting developed in the U.S, numerous obscure provinces, departments and municipalities found it possible to sell their bonds to American investors.10 Just as domestic construction, land, and equity markets went through speculative rises in the 1920s, so too did the U.S. experience a speculative surge in foreign investment. In the aftermath of successive defaults by foreign debtors in 1932, the Senate Committee on Banking and Currency concluded:

The record of the activities of investment bankers in the flotation of foreign securities is one of the most scandalous chapters in the history of American investment banking. The sale of these foreign issues was characterized by practices and abuses that violated the most elementary principles of business ethics.11

Speculation in the stock markets leading up to 1929 offers still another window on the instability of short-term financial flows. A speculative market can be defined as one in which prices move in response to the balance of opinion regarding the future movement of prices rather than responding normally to changes in the demand for and supply of whatever is priced. Helped by the willingness of Wall Street to allow people to buy stocks on margin, people were only too ready to bet prices would rise as long as others thought so too. Day after day and month after month the price of stocks went up in 1927. The gains by later standards were not large, but they had an aspect of great reliability. Then in 1928, the nature of the boom changed. "The mass escape into make-believe, so much a part of the true speculative orgy, started in earnest.12

Following World War I, the gold standard itself took on new form. Nations were allowed to hold their international reserves in either gold or foreign exchange. This worked for a while in the 1920s, but as speculation mounted and balances of payments disequilibria grew, fears of devaluation led central banks to try to replace their foreign-exchange holdings with specie in a "scramble for gold." The worldwide result of these shifts in central bank portfolios was an overall contraction of the supply of money and credit that sapped aggregate demand and forced prices to fall and output levels to shrink. Thus, it can be argued - persuasively in our view - that the Great Depression of the 1930s was as much, if not more, the result of mismanagement of money and credit as it was the result of protectionist policies. Protectionist policies were more likely the result of slowed growth and stalled trade. Countries that broke with the gold-exchange standard early, such as Britain in 1931, and pursued more expansionary monetary policies fared somewhat better.


The Bretton Woods system

During the darkest days of World War II, a radically new economic architecture was designed for the postwar world at a New Hampshire ski resort called Bretton Woods. With the competitive devaluation and protectionist policies of the 1930s still fresh in their minds, the mostly British and American delegates to the conference wanted most of all to design a system with fixed exchange rates that did not rely on national gold hoards to keep exchange rates stable. They decided to depend instead on strict controls of international financial movements. In this way, they hoped to allow countries to pursue full-employment policies through appropriate monetary (money and credit) and fiscal (tax and spending) policies without some of the anxieties associated with open financial markets. The role of monetary and financial stabilizer was given to the International Monetary Fund (IMF), which was provided with modest funds to assist nations to adjust imbalances in their external payments obligations. The International Bank for Reconstruction and Development (IBRD, later the World Bank) assumed the task of helping to finance post-war reconstruction.13

The IMF as it emerged from Bretton Woods had inadequate reserves to advance money for the long periods that many countries require for "soft-landings" from big current-account deficits. It would make only short-term loans. To make sure that borrowing nations were constrained, "conditionality" attached to IMF loans became standard practice, even in the early years of the Fund's operation. Policy limitations and "performance targets" tied to credit lines advanced under "standby agreements" began in the middle 1950s and were universal by the 1960s, long before the notions of "stabilization" and "structural adjustment" came into common parlance.

The Bretton Woods agreement also imposed a foreign exchange standard by which exchange rates between major currencies were fixed in terms of the dollar, and the value of the dollar was tied to gold at a U.S. guaranteed price of thirty-five dollars per ounce. By devising a system that controlled financial movements and assisted with the adjustment of countries' balances of payments, the new system succeeded in keeping exchange rates remarkably stable. They were changed only very occasionally, e.g., as when the value of sterling relative to the dollar was reduced in 1949 and again in 1966. This meant that companies doing business abroad did not need to worry constantly about the risk of exchanging one currency for another.

Among the reasons for this remarkable stability was the willingness of the central banks of other countries to hold an increasing proportion of their official reserves in the form of U.S. dollars. It was an essential part of the system that the dollars held by other countries would be seen as IOUs backed by the U.S. offer to exchange them for gold at a fixed pre-war price. But as the balance-of-payments of the U.S. moved more deeply into deficits in the 1960s, there were more and more U.S. dollars held by other countries, and this so-called "dollar overhang" became disturbingly large.15 General de Gaulle called it "the exorbitant privilege," meaning that the Americans were paying their bills - for defense spending to fight the Vietnam War among other things - with IOUs instead of real resources in the form of exports of goods and services.

Strict control over financial movements began to weaken as early as the 1950s, when the first eurodollar (later eurocurrency) deposits were made in London. At first a trickle, limited originally to Europe, these offshore banking operations soon expanded worldwide. The American "Interest Equalization Tax" (IET) instituted in 1963 raised the costs to banks of lending offshore from their domestic branches.16 The higher external rates led dollar depositors such as foreign corporations to switch their funds from onshore U.S. institutions to eurobanks. Thus, the real effect of the IET was to encourage the dollar to follow the foreigners abroad, rather than the other way around. Eurobanks paid higher interest rates on deposits and loaned eurocurrencies at lower rates than U.S. banks could at home. Still another large inflow of eurodeposits occurred in 1973-74 as the Organization of Petroleum Exporting Countries (OPEC) began "recycling" their surplus dollar earnings through eurobanks. Because of their existence, a country such as Brazil could arrange within a reasonably regulation-free environment to obtain multimillion-dollar loans from a consortium of offshore American, German and Japanese banks and thereby finance its oil imports. Net eurocurrency deposit liabilities that amounted to around $10 billion in the mid-1960s, grew to $500 billion by 1980.

These eurocurrency transactions taught the players in financial markets how to shift their deposits, loans, and investments from one currency to another whenever exchange rates or interest rates were thought to be ready to change. Even the ability of central banks to regulate the supply of money and credit was undermined by the readiness of commercial banks to borrow and lend offshore. Hence, the effectiveness of regulatory mechanisms that had been put in place to implement the Bretton Woods agreement - interest rate ceilings, lending limits, portfolio restrictions, reserve and liquidity requirements - gradually eroded as offshore transactions started to balloon.

The world economy developed at unprecedented rates during the roughly twenty-five years immediately following World War II. Growth and employment rates during these years were at historic highs in most countries. Productivity also advanced rapidly in most developing countries as well as in the technological leaders. These facts suggest that the system devised at Bretton Woods worked reasonably well, despite occasional adjustments. To be sure, it helped to sow the seeds of its own destruction by failing to retain operational control of international financial flows. But the twenty-five years of its survival leading up to August 15, 1971, when President Nixon closed the gold window, have nonetheless come to be called by some economic historians the "Golden Years."

Controlling private risk

Fixed exchange rates did not last long after the U.S. stopped exchanging gold for claims on the dollar held by foreign central banks. The pound sterling was allowed to float against the dollar in July, 1972. Japan set the yen free to float in February, 1973, and most European currencies followed suit shortly thereafter. The Bretton Woods gold-dollar system was doomed.

The fact that exchange rates no longer were fixed meant that companies doing business in different countries had to cope with the day-to-day shifts in the dollar's rate of exchange with other currencies. The risks of unexpected changes in the value of international contracts suddenly had shifted from the public to the private sector. Corporate finance officers now had to hedge against possible exchange losses by buying a currency forward and investing the equivalent in the short-term money market, or by investing in the eurocurrency market. The corporations' banks, in turn, tried to match each foreign currency transaction with another contrary transaction in order not to leave each of the banks exposed to foreign exchange risk overnight. Since no single bank was likely to balance its foreign exchange positions exactly, the need arose to swap deposits in different currencies in order to match corporate hedging transactions and to square the bank's books.

The price of this forward cover on inter-bank transactions - that is to say, the premium or discount on a currency's spot value - has tended to accord with the differences between interest-rates offered for eurocurrency deposits in different currencies. This is the connection between the foreign exchange market and the short-term credit markets, between exchange rates and interest rates. Whenever exchange rates move up or down, therefore, their influence is immediately transmitted through the eurocurrency markets to the credit markets.

It is this scramble to avoid private risk that accounted for the dramatic rise in international financial movements following the demise of the Bretton Woods system. By 1973, daily foreign exchange trading around the world varied between $10 and $20 billion per day. This amount was approximately twice the value of world trade at the time. Bank of International Settlements data suggests that the daily average of foreign exchange trading had climbed by 1980 to about $80 billion, and that the ratio between foreign exchange trading and international trade was more nearly ten to one. The data for 1992 was $880 billion and fifty to one, respectively; for 1995, $l,260 billion and seventy to one; and for 2000, almost $1,800 and ninety to one.

There is very little doubt, therefore, that the lion's share of international financial flows is relatively short-run. Indeed, about eighty percent of foreign exchange transactions are reversed in less than seven business days. Only a very small proportion is used to finance international trade and direct foreign investment. The vast majority must be used with the expectation of gain or to avoid losses that may result from changes in the value of financial assets. In general terms, they are speculative, made in hope of capital gain or to hedge against potential capital loss, or to seek the gains of arbitrage based on slight differences in rates of return in different financial centers.


The power of financial actors17

Foreign exchange markets and markets for money and credit seem remote and abstract to most people. This section introduces the real institutions that operate these markets and assesses the nature of their power.

According to recent work by political scientists, the power of these financial actors is based in part on a complicated "process of multiplication" of loans, assets and transactions. Many investors in financial markets buy financial instruments on very thin margins, based on loans obtained by pledging the assets as collateral. This is called "leverage" in the jargon of financial markets. In turn, the borrowed funds are invested in other financial assets, multiplying the demand for credit and financial assets. As demand rises, more sophisticated financial assets are invented, including many forms of financial derivatives. A major portion of the accumulated debt remains serviceable only as long as the prices of most assets will rise or at least remain relatively stable. If prices turn down, they easily can lead to a chain-reaction. If investors respond instinctively like a herd, they will bring a far-reaching collapse that constitutes a crisis.

As the flow of financial assets climbs, some bankers, brokers, and managers of financial institutions become prominent players in the competition for investor dollars. Some become known for picking profitable places to invest and for promoting their selections successfully. This can influence markets if people have confidence in their advice. A notorious example of the influence of prominent players was the attack on British sterling in 1992 by George Soros' Quantum Fund. Believing that sterling was overvalued, the Fund quietly established credit lines that allowed it to borrow $15 billion worth of sterling and sell it for dollars at the then "overvalued" price. Its purpose, of course, was to pay back the loan with cheaper pounds after they had depreciated. Having gone long on dollars and short on sterling, Soros decided to speak up noisily. He publicized his short-selling and made statements in newspapers that the pound would soon be devalued. It wasn't long before sterling was devalued; he made $1 billion in profit.

The point can be made more generally: financial markets are subject to manipulation because they have become socially structured. Market leaders and financial gurus are admired and followed (at least until very recently). The heavyweights thus dominate the business. An obvious consequence of this is that there is a strong tendency in financial markets for further concentration of resources.

Another source of the power of financial actors is their obvious affinity for the rampant free-market philosophy of neo-liberalism. The freedom with which they move financial capital around depends, of course, on the market-friendly policies of the so-called Washington Consensus.19 As long as they are seen as part of the governing coalition, they derive special powers to regulate themselves rather than be controlled by an independent government agency or civil society. Their power also is reinforced by the activities of several collective associations of financial actors,20 which lobby on their behalf.

One more source of power for the financial actors is their knowledge that if they are big enough and sufficiently interlaced with other financial actors, then the "system" will keep them from failing. Consider the case of Long-term Capital Management, a hedge fund partnership started in 1994. It was able to borrow from various banks the equivalent of forty times its capitalization in order to make bets on changes in the relative prices of bonds in the U.S. and abroad. When the Russian government announced a devaluation and debt moratorium in August, 1998, it produced losses that the fund could not sustain. Nor could some of the banks that had loaned large amounts to the fund. Accordingly, the Federal Reserve Bank of New York, fearful that the risk to the entire system was too high, orchestrated a private rescue operation by fourteen banks and other financial institutions, which re-capitalized the company for $3.5 billion.

Financial actors also have the power indirectly to influence non-financial actors such as firms or states. By providing economic incentives to gamble and speculate on financial instruments, global financial markets divert funds from long-term productive investments. In all probability, they also encourage banks and financial institutions to maintain a regime of higher real interest rates that reduce the ability of productive enterprises to obtain credit. The volatility of global financial markets, moreover, brings uncertainty and volatility in interest rates and exchange rates that are harmful to various sectors of the real economy, particularly international trade.

The above stories about George Soros and Long-term Capital Management are good illustrations of the consequences for non-financial actors of actions by financial actors. Both episodes are examples of games that are basically zero-sum, at least in the short-run. Nothing new was produced; no new values were created. In the 1992 case about speculating against sterling, the Quantum Fund's profits were at the expense of the British government, especially the Bank of England, and British taxpayers. In 1998, the losses suffered by Long-term Capital Management came out of the pockets of the stockholders of the banks that bailed it out, as the stock-market value of their shares depreciated. Hence, the financial system tends to feed itself by drawing more resources from other sectors of the economy, undermining the vitality of the real economy.


Consequences of global financial flows

The dominant economic ideology of the last twenty-five years has been embodied in the so-called Washington Consensus. It is a "market-friendly" ideology that traces its roots to longstanding policies of the IMF that encourage macroeconomic "stabilization;" to adoption by the World Bank of ideas in vogue in Washington early in the Reagan period concerning deregulation and supply-side economics; to the zeal of the Thatcher government in England for privatizing public enterprises; and perhaps most of all to the neo-liberal tendencies of the business community and the economics profession in the U.S. The implementation of these policies of economic "reform," by first "stabilizing" the macro-economy and then "adjusting" the market so that it can perform more efficiently, are supposed to pay off in the form of faster output growth and rising real incomes

Among these policy prescriptions is financial liberalization in both the developed and the developing countries. Domestically it is achieved by weakening or removing controls on interest and credit and by diluting the differences between banks, insurance and finance companies. International financial liberation, on the other hand, demands removal of controls and regulations on both the inflows and outflows of financial instruments that move through foreign exchange markets. It is the implementation of these reforms that is perhaps the single most important cause of the surge in global financial flows. To be sure, the influence of technological advances has broken the natural barriers of space and time for financial markets as twenty-four hour electronic trading has grown. The fact that throughout most of the 1980s and 1990s the developed countries suffered from over-capacity and overproduction in manufacturing may also have led the owners of financial capital to look for alternative profit opportunities.

It now is time to ask whether the implementation of all these reforms, on balance, has produced good or bad results. The focus of this section will be mostly on the consequences of large and expanding international financial flows. After all, they are the main concern of this essay. But first, we should ask whether or not the policies of growth and rising real incomes promoted by the Washington Consensus have borne fruit.

Growth and income

There is little doubt that the introduction of the Washington Consensus' policy mix expanded the volume of international trade. As a result, trade in goods and services has grown at more than twice the rate of global gross domestic product (GDP), and developing countries' share of trade has risen from 23 to 29 percent. Increasing numbers of firms from developing countries, like their industrial-country counterparts, engage in transnational production and adopt a global perspective in structuring their operations. The flow of foreign direct investments and foreign portfolio investments has multiplied even more rapidly than trade, despite the financial instability experienced in Asia, Brazil, Russia, and elsewhere in recent years.

The effects of liberalization have not been uniformly favorable, however. After at least ten full years of experience with the Washington Consensus, several recent studies have begun to assess the consequences for developing countries of this experiment in more open markets.21 Except for the years of crisis in a number of the countries studied, most developing countries achieved moderate growth rates of gross domestic product in the 1990s - considerably higher than in the l980s in Africa and Latin America during the debt crisis, but remarkably unchanged in most other regions. Moreover, average annual growth in the 1990s was slightly lower than in the twenty-five years preceding the debt crisis when a strategy of substituting domestic production for imports was in fullest use. When population growth rates are taken into consideration, the growth rate of per capita income in the developing countries studied during the 1990s also was somewhat lower than in the 1960s and 1970s. Toward the end of the 1990s, growth tapered off in many countries due to emerging domestic financial crises or external events. There is little evidence in these figures, therefore, to suggest the strategy of liberalization boosted growth rates appreciably.

Nor did the distribution of income improve in most developing countries in the 1990s. On the contrary, virtually without exception the wage differentials between skilled and unskilled workers rose with liberalization. The reasons for this varied widely among countries, but one of the most important reasons was the fact that the number of relatively well-paid jobs in sectors of the economy involved with international trade, though growing, was insufficient to absorb available workers, forcing many workers into more precarious and poorly paid employment in the non-traded, informal trade, and service sectors or where traditional agriculture served as a sponge for the labor market. Between the mid-1960s and the late-1990s, the poorest 20 percent of the world population saw its share of income fall from 2.3 to 1.4 percent. Meanwhile, the share of the wealthiest quintile increased from 70 to 85 percent.22

Risk and reward

While all markets are imperfect and subject to failure, financial markets are more prone than others to fail because they are plagued with three particular shortcomings: asymmetric information, herd behavior and self-fulfilling panics. Asymmetric information is a problem whenever one party to an economic transaction has insufficient information to make rational and consistent decisions. In most financial markets where borrowing and lending take place, borrowers usually have better information about the potential returns and risks associated with the investments to be financed by the loans than do the lenders. This becomes especially true as financial transactions disperse across the globe, often between borrowers and lenders of widely different cultures.

Asymmetric information leads to adverse selection and moral hazard. Adverse selection occurs when, say, lenders have too little information to choose from among potential borrowers those who are most likely to use the loans wisely. The lenders' gullibility, therefore, attracts more unworthy borrowers. Moral hazard occurs when borrowers engage in excessively risky activities that were unanticipated by lenders and lead to significant losses for the lender. Yet another form of moral hazard occurs when lenders indulge in lending indiscriminately because they assume that the government or an international institution will bail them out if the loans go awry.

A good illustration of asymmetric information is the story of bank lending following OPEC's large increase in oil prices following 1973. Awash in cash, the oil exporters deposited large amounts in commercial banks that then perfected the Euro-currency loan for developing countries. Eager to put excess reserves to use, the banks spent little time discriminating among potential borrowers, in part because they believed host governments or international agencies would guarantee the loans. At the same time, developing countries found they could readily borrow not only to import oil, but also to increase other kinds of expenditures. This meant they could use borrowed funds to maintain domestic spending rather than be forced to adjust to the new realities of higher prices for necessary imports. There is considerable evidence that moral hazard also was present in the Mexican crises in 1982 and 1994, and in the Southeast Asian crises in 1997-8.

Yet another illustration of asymmetric information is the tendency of financial firms, especially on Wall Street and in the City of London, to invent ever more complex derivatives to shift risk around the financial system. The market for these products is growing rapidly, both on futures and options exchanges (two of the several places where derivatives are traded). A financial engineer, for example, can take the risk in, say, a bond and break it down into a series of smaller risks, such as that inflation will reduce its real value or that the borrower will default. These smaller risks can then be priced and sold, using derivatives, so that the bondholder keeps only those risks he wishes to bear. But this is not a simple task, particularly when it involves assets with risk exposures far into the future and which are traded so rarely that there is no good market benchmark for setting the price. Enron, for instance, sold a lot of these sorts of derivatives, booking profits on them immediately even though there was a serious doubt about their long-term profitability. Stories of huge losses incurred in derivative trading are legion. The real challenge before central banks and regulatory bodies is to curb speculative behavior and bring discipline in derivative markets.

A second source of risk in financial markets is the tendency of borrowers and lenders alike to engage in herd behavior. John Maynard Keynes, writing in the 1930s, suggested that financial markets are like "beauty contests." His analogy was to a game in the British Sunday newspapers that asked readers to rank pictures of women according to their guess about the average choice by other respondents. The winner, therefore, does not express his own preferences, but rather anticipates "what average opinion expects average opinion to be." Accordingly, Keynes thought that anyone who obtained information or signals that pointed to swings in average opinion and to how it would react to changing events had the basis for substantial gain. Objective information about economic data was not enough. Rather, simple slogans "like public expenditure is bad," "lower unemployment leads to inflation," "larger deficits lead to higher interest rates," were then the more likely sources of changes in public opinion. What mattered was that average opinion believed them to be true, and that advance knowledge of, say, more public spending, lower unemployment, or larger deficits, respectively, offered the speculator a special advantage.

A financial market that operates as a beauty contest is likely to be highly unstable and prone to severe changes. One reason for this is that people trading in financial assets, even today, know very little about them. People who hold stock know little about the companies that issued them. Investors in mutual funds know little about the stocks their funds are invested in. Bondholders know little about the companies or governments that issued the bonds. Even knowledgeable professionals are often more concerned with judging how swings in conventional opinion might change market values rather than with the long-term returns on investments. Indeed, since careful analysis of risks and rewards is costly and time consuming, it often makes sense for fund managers and traders to follow the herd. If they decide rationally not to follow the herd, their competence may be seriously questioned. On the other hand, if fund managers follow the herd and the herd suffers losses, few will question their competence because others too suffered losses. When financial markets are operated like a beauty contest, everyone wants to sell at the same time and nobody wants to buy.

The financial markets behaved as predicted shortly after several industrial countries, including the U.S. and Germany, abolished all restrictions on international capital movements in 1973. The new system proved to be highly volatile, with exchange rates, interest rates, and financial asset-prices subject to large short-term fluctuations. The markets also were susceptible to contagion when financial tremors spread from their epicenter to other countries and markets that seemingly had little connection with the initial problem. In less than five years, it already was clear that both the surpluses and the deficits on the major countries' balance of payments were getting larger, not smaller, despite significant changes in the exchange rates.

In some cases, a financial crisis can be self-fulfilling. A rumor can trigger a self-fulfilling speculative attack, e.g. on a currency, that may be baseless and far removed from the economic fundamentals (unlike the Soros story above). This can cause a sudden shift in the herd's intentions and lead to unanticipated market movements that create severe financial crises. Consider, for example, the succession of major financial crises that have pock-marked the recent history of international financial markets, including Latin America's Southern Cone crisis of 1979-81, the developing-country debt crisis of 1982, the Mexican crisis of 1994-95, the Asian crisis of 1997-98, the Russian crisis of 1998, the Brazilian crisis of 1999, and the Argentine crisis of 2001-02.

Perhaps the Asian crisis of 1997-98 is the most interesting in this regard, for there were relatively few signals beforehand of impending crisis. All the main East Asian economies displayed in 1994-96 low inflation, fiscal surpluses or balanced budgets, limited public debt, high savings and investment rates, substantial foreign exchange reserves and no signs of deterioration before the crisis. This background has led many analysts to suppose that the crisis was a mere product of the global financial system. But what could have triggered the herd to stampede out of Asian currencies? No doubt several factors were at work. Before the crisis that started in the summer of 1997, there was a rise in short-term lending to Asians by Western and Japanese banks with little or no premiums, a fact that the Bank for International Settlement raised questions about. Alert investors, especially hedge funds, also noticed that substantial portions of East and Southeast Asian borrowings were going into non-productive assets and real estate that often were linked to political connections. In fact, some of the funds pouring into non-productive assets were coming out of the productive sector, mortgaging the longer-term viability of some real economies. Information about the structure and policies of financial sectors was opaque. Thus, opinions began to change among key lenders about the regulation of financial sectors in several Asian countries and their destabilizing lack of transparency. Suddenly, several important hedge funds reduced their exposure by shorting currency futures, followed quickly by Western mutual funds. The calling of loans led quickly to deep depression in several Asian countries. It has been estimated that the Asian crisis and its global repercussions cut global output by $2 trillion in 1998-2000.

Loss of government autonomy

Both economic theory and the experience of managing the external financial affairs of nations tell us that it is virtually impossible to maintain (1) full financial mobility, (2) a fixed exchange rate, and (3) freedom to seek macro-economic balance (full employment with little inflation) with appropriate monetary and fiscal policies. Only two of these policy objectives can be consistently maintained. If the authorities try to pursue all three, they will sooner or later be punished by destabilizing financial flows, as in the run up to the Great Depression around 1930 and in the months before sterling's collapse 1992. If a government tries to stimulate its economy with lax monetary policy, for example, and players with significant market power like George Soros sense that at a fixed exchange rate, foreigners will be unwilling to lend enough to finance the country's current account deficit, they will begin to flee the home currency in order to avoid the capital losses they will suffer if and when there is a devaluation. If reserve losses accelerate and more players follow suit, crisis ensues. The authorities are forced to devalue, interest rates soar, and the successful attackers sit back to count their profits.

For nations wishing to retain reasonably independent monetary and fiscal authority in order to cater to domestic needs, the solution is to allow the exchange rate to move up or down as conditions in the foreign exchange markets dictate, or to establish some sort of control over the movement of financial instruments in and out of the country, or to devise some combination of these two adjustment mechanisms. The debate over whether fixed or flexible exchange rates is the wiser policy continues to rage in academic quarters and in finance ministries all over the world. For the most part, the international business community prefers reasonably fixed exchange rates in order to minimize their costs of hedging foreign currency positions. Thus instituting some form of control over speculative financial movements may be an appropriate solution to the "trilemma."

The capacity of a nation to levy enough taxes to finance needed public expenditures is another important reason to retain independent authority. A central function of government has been to insulate domestic groups from excessive market risks, particularly those originating in international transactions. This is the way governments have maintained domestic political support for liberalizing trade and finance throughout the postwar period. Yet many governments are less able today to help citizens that are injured by freer markets with unemployment compensation, severance payments, and adjustment assistance because the slightest hint of raising taxes to pay for these vital public services leads to capital flight in a world of heightened financial mobility.

This is a dilemma. Increased integration into the world economy has raised the need of governments to redistribute tax revenues or implement generous social programs in order to protect the vast majority of the population that remains internationally immobile. At the same time, governments find themselves less able to maintain the safety nets needed to preserve social stability. It seems reasonable to suppose, therefore, that doing things that will bolster the ability of governments to levy sufficient taxes - curbing tax avoidance by transnational corporations, controlling offshore tax havens, regulating capital flight - would help make globalization slightly more democratic.

Winners and losers

The people who benefit from speculative financial movements are, for the most part, better educated and wealthier than the vast majority of fellow citizens. They are the elites, whatever the country. As noted above, they have fewer connections to the real economy of production and exchange than most people. And their purpose in trading financial assets, again for the most part, is to make a profit quickly rather than wait for an investment project to mature.

People who do not participate directly in the buying and selling of short-term financial instruments are nonetheless influenced indirectly by the macroeconomic instability and contagion that often accompany interruptions in financial market flows. This is true for people both in developed and developing countries. In developed countries, the voracious appetite of financial markets for more and more resources saps the vitality of the real economy - the economy that most people depend upon for their livelihood. It has been shown that real interest rates rise as a result of the expansion of speculative financial markets. This rise in real interest rates, in turn, dampens real investment and economic growth while serving to concentrate wealth and political power within a growing worldwide rentier class (people who depend for their income on interest, dividends, and rents).23 Rather, the long-term health of the economy depends upon directing investable funds into productive investments rather than into speculation.

In developing countries, attracting global investors' attention is a mixed blessing. Capital market inflows provide important support for building infrastructure and harnessing natural and human resources. At the same time, surges in money market inflows may distort relative prices, exacerbate weakness in a nation's financial sector, and feed bubbles. As the 1997 Asian crisis attests, financial capital may just as easily flow out of as into a country. Unstable financial flows often lead to one of three kinds of crises:

Although these three types of crises sometimes appear singly, they more often arrive in combination because external shocks or changed market expectations are likely to occur simultaneously in the market for government bonds, the foreign exchange market, and the markets for bank assets. Approximately sixty developing countries have experienced extreme financial crises in the past decade.24

The vast majority of people in the developing world suffer from these convulsive changes. They are tired of adjusting to changes over which they exercise absolutely no control. Most people in these countries view Western capitalism as a private club, a discriminatory system that benefits only the West and the elites who live inside "the bell jars" of poor countries. Even as they consume the consumer goods of the West, they are quite aware that they still linger at the periphery of the capitalist game. They have no stake in it, and they believe that they suffer its consequences. As Hernando deSoto puts it, "Globalization should not be just about interconnecting the bell jars of the privileged few."25

Social solidarity

Karl Polanyi in The Great Transformation sought to explain how the "liberal creed" contributed to the catastrophes of war and depression associated with the first half of the twentieth century. Polanyi's central argument, which in fact can be traced back to Adam Smith, is that markets do indeed promote efficiency and change, but that they achieve this through undermining social coherence and solidarity. Markets must therefore be embedded within social institutions that mitigate their negative consequences.

The evidence of more recent times suggests that the global spread of free-market policies has been accompanied by the decline of countervailing institutions of social solidarity. Indeed, a main feature of the introduction of market-friendly policies has been to weaken local institutions of social solidarity. Consider, for example, the top-down policy prescriptions of the IMF and World Bank during the developing world's debt crisis in the 1980s. These policies evolved into an intricate web of expected behaviors by developing countries. In order for developing countries to expect private businesses and financial interests to invest funds within their borders and to boost the growth potential of domestic economies, they needed to drop the "outdated and inefficient" policies that dominated development strategies for most of the postwar period and adopt in their place policies that are designed to encourage foreign trade and freer financial markets. Without significant adjustments in the ways economies were managed, it was suggested, nations soon would be left behind.

The list of Washington Consensus requirements was long and daunting:

In a provocative article, Ute Pieper and Lance Taylor point out that market outcomes often conflict with other valuable social institutions. In addition, they emphasize that markets function effectively only when they are "embedded" in society. The authors then look carefully at the experience of a number of developing countries as they struggled to comply with the policy prescriptions of the IMF and the Fund. In almost every case, they demonstrate conclusively that the impact of these efforts was to make society an "adjunct to the market."26

An appropriate balance is not being struck between the economic and non-economic aspirations of human beings and their communities. Indeed, the evidence is mounting that globalization's trajectory can easily lead to social disintegration - to the splitting apart of nations along lines of economic status, mobility, region, or social norms. Globalization not only highlights and exacerbates tensions among groups; it also reduces the willingness of internationally mobile groups to cooperate with others in resolving disagreements and conflicts.


Policy options

History confirms that free-markets are inherently volatile institutions, prone to speculative booms and busts. Overshooting, especially in financial markets, is their normal condition. To work well, free markets need not only regulation, but active management. During the first half of the post-war era, world markets were kept reasonably stable by national governments and by a regime of international cooperation. Only lately has a much earlier idea been revived and made an orthodoxy - the idea adopted by the Washington Consensus that, provided there are clear and well-enforced rules-of-the-game, free markets can be self-regulating because they embody the rational expectations that participants form about the future.

On the contrary, since markets are themselves shaped by human expectations, their behavior cannot be rationally predicted. The forces that drive markets are not mechanical processes of cause and effect, as assumed in most of economic theory. They are what George Soros has termed "reflexive interactions."27 Because markets are governed by highly combustible interactions among beliefs, they cannot be self-regulating.

The question before us then, is what could be done to better regulate financial markets and to bring active management back into the task of "embedding" markets in society, rather than the other way around? Monetary authorities such as the Federal Reserve System in the U.S. and the central banks of other countries were formed long ago in order to dampen the inherent instabilities of financial market in their home countries. But the evolution of an international regulatory framework has not kept pace with the globalization of financial markets. The International Monetary Fund was not designed to cope with the volume and instability of recent financial trends.

Capital controls

Given the problems outlined above about short-term speculative financial transactions, one might wonder why national policy-makers have not insulated their financial markets by imposing some sort of control over financial capital. The answer, of course, is that some have continued trying to do so despite discouragement from the IMF. For example, some have put limitations on the quantity, conditions, or destinations of financial flows. Others have tried to impose a tax on short-term borrowing by national firms from foreign banks. This is said to be "market-based" because it operates by altering the cost of foreign funds. If such transactions were absolutely prohibited, they would be called "non-market" interventions.

A more extreme form of financial capital controls, one that controls movement of foreign exchange across international borders, also has been tried in a number of countries. This form of control requires that some if not all foreign currency inflows be surrendered to the central bank or a government agency, often at a fixed price that differs from that which would be set in free market. The receiving agency then determines the uses of foreign exchange. The absence of exchange controls means that currencies are "convertible."

The neo-liberal argument opposing financial capital controls asserts that their removal will enhance economic efficiency and reduce corruption. It is based on two basic propositions in economic theory that depend for their proof on perfectly competitive markets in the real economy and perfectly efficient gatherers and transmitters of information in financial markets. Neither assumption is realistic in today's world. Indeed, a number of empirical studies have reported the effectiveness of capital controls in controlling capital flight, curbing volatile capital flows and protecting the domestic economy from negative external developments.

Developing countries have only recently abandoned, or still maintain, a variety of control regimes. Latin American countries traditionally have used market-based controls, putting taxes and surcharges on selected financial capital movements or tying them up in escrow accounts. Non-market based restrictions were more common in Asia until the early 1990s. Many commentators believe that their sudden removal in the early 1990s was a contributing cause to the Asian financial crises in 1997-8. The experience of two countries, Malaysia and Chile, with capital controls is especially instructive.

Malaysia, unlike its Asian neighbors, was reluctant to remove its restrictions on external borrowing by national firms unless they could show how they could earn enough foreign exchange to service their debts. Then when the Asian crises hit, its government imposed exchange controls, in effect making its local currency that was held outside the country inconvertible into foreign exchange. After the ringget was devalued, exporters were required to surrender foreign currency earnings to the central bank in exchange for local currency at the new pegged rate. The government also limited the amount of cash nationals could take abroad, and it prohibited the repatriation of earnings on foreign investments that had been held for less than one year. Thus, Malaysia's capital controls were focused mostly on controlling the outflow of short-term financial transactions. Happily, the authorities were able to stabilize the currency and reduce interest rates, leading to a degree of domestic recovery.28

Chile, on the other hand, tried to limit the inflow of short-term financial transactions. It did so by imposing a costly reserve requirement on foreign-owned capital held in the country for less than one year. Despite attempts to stimulate foreign direct investment of the funds, most of the reserve deposits were absorbed in the form of increased reserves at the central bank. In turn, this created a potential for expanding the money supply, which the government feared would lead to inflation. Rather than allow this to happen, the government "sterilized" the inflows by selling government bonds from its portfolio. But this pushed down the prices of bonds and pushed up the interest rates on them, discouraging business investment. Finally, when prices of copper (Chile's primary export) fell sharply in 1998, the control regime was scrapped.29

The tobin tax

A global tax on international currency movements was first proposed by James Tobin, a Yale University economist, in 1972.30 He suggested that a tax of one-quarter to one percent be levied on the value of all currency transactions that cross national borders. He reasoned that such a tax on all spot transactions would fall most heavily on transactions that involve very short round-trips across borders. In other words, it would be speculators with very short time-horizons that the tax would deter, rather than longer-term investors who can amortize the costs of the tax over many years. For example, the yearly cost of a 0.2 percent round trip tax would amount to 48 percent of the value of the traded amount if the round trip were daily, 10 percent if weekly and 2.4 percent if monthly. Since at least eighty percent of spot transactions in the foreign exchange markets are reversed in seven business days or less, the tax could have a profound effect on the costs of short-term speculators.

Of course, for those who believe in the efficiency of markets and the rationality of expectations, a transactions tax would only hinder market efficiency. They argue that speculative sales and purchases of foreign exchange are mostly the result of "wrong" national monetary and fiscal policies. While we readily admit that national policies sometimes do not accord with desired objectives, they nonetheless have little relevance for speculators focused on the next few seconds, minutes or hours.

Tobin did not intend for his proposal to involve a supranational taxation authority. Rather, governments would levy the tax nationally. In order to make the tax rate uniform across countries, however, an international agreement would have to be entered into by at least the principal financial centers. The revenue obtained from the tax could be designated for each country's foreign exchange reserve for use during periods of instability, or it could be directed into a common global fund for uses like aid to the poorest nations. In the latter case, the feasibility of the tax also would depend on an international political agreement. The revenue potential is sizeable, and could run as high as $500 billion annually.

There are two other advantages often cited by proponents of the Tobin tax. Tobin's original rationale for a foreign exchange transactions tax was to enhance policy autonomy in a world of high financial capital mobility. He argued that currency fluctuations often have very significant economic and political costs, especially for producers and consumers of traded goods. A Tobin tax, by breaking the condition that domestic interest rates may differ from foreign interest rates only to the extent that the exchange rate is expected to change (see p. 10), would allow authorities to pursue different policies than those prevailing abroad without exposing them to large exchange rate movements. More recent research suggests that this is only a very modest advantage.31

An additional advantage of the tax is that it could facilitate the monitoring of international financial flows. The world needs a centralized data-base on all kinds of financial flows. Neither the Bank for International Settlements nor the IMF has succeeded in providing enough information to monitor them all. This information should be regularly shared among countries and international institutions in order to collectively respond to emerging issues.

The feasibility issues raised by the Tobin tax are more political than technical. One of the issues is about the likelihood of evasion. All taxes suffer some evasion, but that has rarely been a reason for avoiding them. Ideally all jurisdictions should be a party to any agreement about a common transactions tax, since the temptation to trade through non-participating jurisdictions would be high. Failing that, one could levy a penalty on transactions with "Tobin tax havens" of, say, double the normal tax rate. Moreover, one could limit the problem of substituting untaxed assets for taxed assets by applying the tax to forwards, swaps and possibly other contracts.

Tobin and many others have assumed that the task of managing the tax should be assigned to the IMF. Others argue that the design of the tax is incompatible with the structure of the IMF and that the tax should be managed by a new supranational body. Which view will prevail depends upon the resolution of other outstanding issues. The Tobin tax is an idea that deserves careful consideration. It should not be dismissed as too idealistic or too impractical. It addresses with precision the problems of excessive instability in the foreign exchange markets, and it yields the additional advantage of providing a means to assist those in greater need.

Reforming the IMF

The IMF was established in 1944 to provide temporary financing for member governments to help them maintain pegged exchange rates during a period of internal adjustment. With the collapse of the pegged exchange rate regime in 1971, that responsibility has been eclipsed by its role as central arbiter of financial crises in developing countries. As noted above (p. 20), these crises may be of three different kinds: fiscal crises, foreign exchange crises, and banking crises.

Under current institutional arrangements, a nation suffering a serious fiscal crisis that could easily lead to default must seek temporary relief from its debts from three different (but interrelated) institutions: the IMF, which is sometimes willing to renegotiate loans in return for promises to adopt more stringent policies (see above); the so-called Paris Club that sometimes grants relief on bilateral (country to country) credits; and the London Club that sometimes gives relief on bank credits. This is an extremely cumbersome process that fails to provide debtor countries with standstill protection from creditors, with adequate working capital while debts are being renegotiated, or with ways to ensure an expeditious overall settlement. The existing process often takes several years to complete.

There is a growing consensus that this problem is best resolved with creation of a new international legal framework that provides for de facto sovereign bankruptcy. This could take the form of an International Bankruptcy Code with an international bankruptcy court, or it could involve a less formal functional equivalent to its mechanisms: automatic standstills, priority lending, and comprehensive reorganization plans supported by rules that do not require unanimous consent. Jeffrey Sachs recommends, for example, that the IMF issue a clear statement of operating principles covering all stages of a debtor's progression through "bankruptcy" to solvency. A new system of emergency priority lending from private capital markets could be developed, he suggests, under IMF supervision. He also feels that the IMF and member governments should develop model covenants for inclusion in future sovereign lending instruments that allow for priority lending and speedy renegotiation of debt claims.32

At the Joint Meeting of the IMF and the World Bank in September, 2002, the policy committee directed the IMF staff to develop by April, 2003, a "concrete proposal" for establishing an internationally recognized legal process for restructuring the debts of governments in default. It also endorsed efforts to include "collective action" clauses in future government bond issues to prevent one or two holdout creditors from blocking a debt-restructuring plan approved by a majority of creditors. The objective of both proposals is to resolve future debt crises quickly and before they threaten to destabilize large regions, as happened in Southeast Asia in 1997-98.

Member countries rarely receive support from the IMF any longer to maintain a particular nominal exchange rate. Because financial capital is so mobile now, pegged exchange rates probably are unsupportable. But there are special times when the IMF still might give such support during a foreign exchange crisis. International lending to support a given exchange rate is legitimate if the government is trying to establish confidence in a new national currency, or if its currency is recovering from a severe bout of hyperinflation. Ordinarily the foreign exchange should be provided from an international stabilization fund supervised by the IMF.

National central banks usually supervise and regulate the domestic banking sector. Thus, banking crises normally are handled by domestic institutions. This may not be possible, however, if the nation's banks hold large short-term liabilities denominated in foreign currencies. If the nation's central bank has insufficient reserves of foreign currencies to fund a large outflow of foreign currencies, there may be circumstances when the IMF or other lenders may wish to act as lenders-of-last-resort to a central bank under siege. Nations like Argentina that have engaged in "dollarization" are learning about the downside risks of holding large liabilities denominated in foreign currencies. The best way to avoid this problem is for governments and central banks to restrict the use of foreign currency deposits or other kinds of short-term foreign liabilities at domestic banks.

Overall, what is most needed is the availability of more capital in developing countries and much quicker responses, amply funded, to emerging financial crises.. George Soros has argued powerfully that the IMF needs to establish a better balance between crisis prevention and intervention.33 The IMF has made some progress in prevention by introducing Contingency Credit Lines (CCLs). The CCL rewards countries that follow sound policies by giving them access to IMF credit lines before rather than after a crisis erupts. But CCL terms were set too high and there have been no takers. Soros also has recommended the issuance of Special Drawing Rights (SDRs) that developed-countries would donate for the purpose of providing international assistance. Its proceeds would be used to finance "the provision of public goods on a global scale as well as to foster economic, social, and political progress in individual countries."34

A growing number of civil society institutions, however, oppose giving more money to the IMF unless it is basically reformed. They point out that it is a committed part of the Washington Consensus, the application of whose policies have made societies adjuncts of the market. They see the IMF as an instrument of the U.S. government and its corporate allies. The conditions it attaches to loans for troubled countries often do more to protect the interests of first world investors than to promote the long-term health of the developing countries. The needed chastening of speculative investors does not occur under these circumstances. There is evidence that in several major crises, IMF requirements for assisting nations have in fact worsened the situation and protracted the crises. The IMF opposed the policies that enabled Malaysia to weather the crisis in Southeast Asia, for example, while it urged the failed policies of other Southeast Asian nations. The vast literature cited by Pieper and Taylor (p. 22) is a convincing chronicle of earlier missteps. For such reasons as these, some civil society institutions argue that, unless IMF policies are changed, giving the institution more money will do more harm than good.

Fortunately, the IMF's policies are beginning to change, partly as a result of criticisms by civil society institutions, but more through recognition of the seriousness of the problems with the present system. In the wake of recent financial crises, leaders in the IMF as well as the World Bank are looking for ways to reform the international financial architecture. Arguably, their emphasis is shifting away from slavish devotion to the prescriptions of the Washington Consensus and toward more state intervention in financial markets. Joseph Stiglitz, the Nobel Laureate who has been particularly critical of the IMF, nonetheless acknowledges that its policy stances are improving.35

The IMF has begun to recognize the importance of at least functional public interventions in markets and the need to provide more supporting revenues. It has realized that controls on external financial movements and prudent regulation can help contain financial crises. It has abandoned the doctrine, long the backbone of structural adjustment policies, that raising the local interest rate will stimulate saving and thereby growth. Both the IMF and the World Bank have rolled over or forgiven the bulk of official debt owed by the poorest economies.

Whether these and other promising changes in IMF thinking and policy formation are sufficient to assure that its future responses to crises will be benign still is not clear. While celebrating what they view as belated improvements, many critics of the IMF among civil society institutions are not convinced that they are sufficiently basic. Even if the IMF avoids repeating some of its more egregious mistakes, some believe that it is likely to continue to function chiefly for the benefit of the international financial community rather than the masses of people. Rather, they believe that, at least in the long term, it would be much better for control over international finance to reside in new institutions under a restructured United Nations. They favor the U.N. because it has a broader mandate, is more open and democratic, and, in its practice, has given much greater weight to human, social, and environmental priorities.

Many civil society institutions want the primary focus of reform to be on taming speculation, restoring the control of their economies to nations, and embedding economies in the wider society. They believe that if these policies are adopted there will be less need for large funding to deal with financial crises. There remains, however, the fact that such crises are occurring and will continue to occur for some time. The IMF is the only institution positioned to respond to these crises. Hence, even for those who sympathize with the goals of the civil society institutions, there is a strong argument for more financing for the IMF.

A world financial authority

A variety of public and private citizens and institutions have recently proposed the establishment of a World Financial Authority (WFA) to perform in the domain of world financial markets what national regulators do in domestic markets. Some believe it should be built upon the foundation of global financial surveillance and regulation that have already been laid by the Bank for International Settlements in Basel, Switzerland. Others regard it as a natural extension of the activities of the IMF. Still others are less interested in the precise institutional form it would take than in the clear delineation of the tasks that need to be done by someone.

Its first task probably should be to provide sufficient and timely financial assistance during crises to avert contagion and defaults. This requires a lender-of-last-resort with sufficient resources and authority to disperse rescue money quickly. Perhaps the best example to date is the bailout loan to Mexico by the U.S. Treasury and the IMF at the end of 1994. It supplied sufficient liquidity for Mexico to make the transition back to stability and to pay back the loans ahead of time. The management of the Asian crises in 1997-8, on the other hand, was badly handled. The bailout packages offered by the IMF were not only significantly smaller than in the Mexico case; they also were constrained with so many conditions that a year later only twenty percent of the funds had been disbursed. This slow response to the crisis probably worsened the contagion. Surprisingly, the error was repeated in the Russian crisis in 1998 and the Brazilian crisis in 1999.

A World Financial Authority also should provide the necessary regulatory framework within which the IMF or a successor institution can develop as a lender-of-last-resort. As long as domestic regulatory procedures function properly, there will be no need for a world authority to be involved, any more than to certify that domestic regulatory procedures are effective. In countries where domestic financial regulation is unsatisfactory, the WFA would assist with regulatory reform. In this way, the WFA could aid financial reconstruction, reduce the likelihood of moral hazard, and give confidence to backers of the operation.

There is little appetite today, especially in Washington, to create a new international bureaucracy. This fact gives support to the idea of building the WFA from the existing infrastructure of the Bank for International Settlements (BIS). The BIS is a meeting place for national central bankers who have constructed an increasingly complicated set of norms, rules and decision-making procedures for handling and preventing future crises. Its committees and cooperative cross-border regulatory framework enjoy the confidence of governments and of the financial community. It may well be the best place to govern an international regulatory authority at the present time.


Theological and ethical considerations

While Christian theology cannot provide us with detailed recommendations on how to correct the adverse consequences of speculative financial movements, it can provide us with an empowering perspective or worldview. Our theological expressions of the faith describe the source of our spiritual energy and hope. They betray our ultimate values and the source of our ethical norms. They shape how we perceive and judge the "signs of the times."

God's world and human responsibilities

Nothing in creation is independent of God. "The earth is the Lord's and all that is in it, the world, and all those who live in it." (Ps. 24:1 NRSV) Thus, no part of the creation - whether human beings, other species, the elements of soil and water, even human-made things - is our property to use as we wish. All is to be treated in accord with the values and ground rules of a loving God, their ultimate owner, who is concerned for the good of the whole creation. All of God's creation therefore deserves to be treated with appropriate care and concern, no matter how remote from one's daily consciousness or existence.

The doctrine of creation reminds us that our ultimate allegiance is not to the nationalistic and human-centered values of our culture, but rather to the values of the loving Maker of heaven and earth. When we seek plenty obsessively, consume goods excessively, compete against others compulsively, or commit ourselves to Economic Fate, we are worshiping false gods. Modern idolatries are often encountered in economic forms, just as in the New Testament's warnings about the spiritual perils of prosperity in the parables of the rich, hoarding fool (Luke 12:15-21) and the rich youth (Matt. 19:16-24 and Luke 18:18-25).

The fact that so much of financial speculation is divorced from the real economy of production and exchange suggests that its paper transactions are more like bets in a casino than an essential component of God's real economy, which seeks the good of all creation. It is wrong to subject people to the effects of wholesale gambling. The fact that the practice of financial speculation is secretive, compulsively competitive, and frequented by lone rangers, moreover, hints at a cult of false idols. Its practitioners, including especially day-traders, seem interested only in exceedingly short-term personal financial advantage, unconcerned about the long-term consequences of their actions or their impact on others. This also indicates a degree of idolatry that contradicts the doctrine of creation.

Image of God

The conviction that human beings have a God-given dignity and worth (Gen. 1:26-28) unites humanity in a universal covenant of rights and responsibilities - the family of God. All humans are entitled to the essential conditions for expressing their human dignity and for participation in defining and shaping the common good. These rights include satisfaction of basic biophysical needs, environmental safety, full participation in political and economic life, and the assurance of fair treatment and equal protection of the laws. These rights define our responsibilities in justice to one another, locally, nationally and - because they are human rights - internationally.

Financial speculation often leads to unmanageable floods of funds into and out of host societies, creating unwanted bubbles and panics. Financial speculators normally ignore the human consequences of their activities on the rights of people in host societies, where economic adjustments are shared widely and painfully. Their primary interest is short-term personal financial gain. The absence of a sense of covenantal unity with their brothers and sisters of the developing world is a sad commentary on the governing ethic of speculators in the capital markets. Their arrogance calls for some form of control over foreign exchange and financial capital markets.

Justice in covenant

The rights and responsibilities associated with the image of God are inextricably tied to the stress on justice in Scripture and tradition. We render to others their due because of our loving respect for their God-given dignity and value. The God portrayed in Scripture is the "lover of justice" (Ps. 99:4, 33:5, 37:28, 11:7; Isa. 30:18, 61:8; Jer. 9:24). Justice is at the ethical core of the biblical message. Faithfulness to covenant relationships, moreover, demands a justice that recognizes special obligations, "a preferential option" to widows, orphans, the poor, and aliens, which is to say the economically vulnerable and politically oppressed. Hence, the idea of the Jubilee Year (Lev. 25) was meant to prevent unjust concentrations of power and poverty. Jesus' ministry embodies concern for the rights and needs of the poor; He befriended and defended the dispossessed and the outcasts.

The fact that the liberalization of trade and finance has failed to improve the distribution of incomes, indeed, that it has widened the gap between rich and poor in virtually every country, is not a sign of distributive justice but of its opposite. The standard of living for the least skilled, least mobile, and poorest citizens of many developing countries has declined absolutely. This, too, is an unjust result of a broken system. The fact that governments that wish to assist the vulnerable and weak of their societies are less able to do so, in part because they no longer can levy sufficient taxes on foreign interests, is a violation of justice in community.

Sin and judgment

Sin is a declaration of autonomy from God, a rebellion against the sovereign source of our being. It makes the self and its values the center of one's existence, in defiance of God's care for all. Sin tempts us to value things over people, measuring our worth by the size of our wealth and the quantity of goods we consume, rather than by the quality of our relationships with God and with others. Sin involves injustice because its self-centeredness defies God's covenant of justice, grasping more than one's due and depriving others of their due.

Sin is manifested not only in individuals, but also in social institutions and cultural patterns. These structural injustices are culturally acceptable ways of giving some individuals and groups of people advantage over others. Because they are pervasive and generally invisible, they compel our participation. They benefit some and harm many others. Whether or not we deserve blame as individuals and churches for these social sins depends in part on whether we defend or resist them, tolerate or reject them.

The fact that the freeing of financial markets has permitted financial speculators to engage in high-risk gambles without regard to the consequences for others is abundant evidence of both individual and institutional sin. The policies of the Washington Consensus frequently lead to adverse consequences for the poor and the environment, even as its proponents gain advantages from the implementation of such policies. They are another serious expression of social sin in our time. These policies inevitably increase the concentration of economic power in fewer hands. The fact that the global spread of free-market policies has led to the decline of countervailing institutions of

social solidarity means that it is easier for the centers of economic power to corrupt governments, control markets, alienate neighbors, manipulate public opinion, and contribute to a sense of political impotency in the public.

The Church's mission and hope

The church is called to be an effective expression of the Reign of God, which Jesus embodied and proclaimed. This ultimate hope is a judgment on our deficiencies

and a challenge to faithful service. God's goal of a just and reconciled world is not simply our final destiny but an agenda for our earthly responsibilities. We are called to be a sign of the Reign of God, on earth as it is in heaven, to reflect the coming consummation of God's new covenant of shalom to the fullest extent possible.


A new financial architecture

In her path-breaking book, Casino Capitalism,36 Susan Strange likens the Western financial system to a vast casino. As in a casino,

"the world of high finance today offers the players a choice of games. Instead of roulette, blackjack, or poker, there is dealing to be done - the foreign-exchange market and all its variations; or in bonds, government securities or shares. In all these markets you may place bets on the future by dealing forward and by buying or selling options and all sorts of other recondite financial inventions. Some of the players - banks especially - play with very large stakes. There are also many quite small operators. There are tipsters, too, selling advice, and peddlers of systems to the gullible. And the croupiers in this global finance casino are the big bankers and brokers. They play, as it were, "for the house.' It is they, in the long run, who make the best living."

She goes on to observe that the big difference between ordinary kinds of gambling and speculation in financial markets is that one can choose not to gamble at roulette or poker, whereas everyone is affected by "casino capitalism." What goes on in the back offices of banks and hedge funds "is apt to have sudden, unpredictable and unavoidable consequences for individual lives."

It is this volatility, this instability in financial markets that has given rise to recurring financial crises. They must be tamed. In the wake of recent financial crises, people are beginning to look for ways to reform the international financial architecture. Although it is difficult to move from general theological convictions to specific proposals, we offer the following suggestions for consideration by Christians and other persons of good will.

Of these recommendations, perhaps the most controversial is that more funds be given to the IMF. We noted above that much of the criticism of the IMF is justified. We also acknowledged that the IMF is improving its policies. We hope that these improvements will continue. Meanwhile, there is no other viable candidate to serve as lender-of-last-resort - an absolutely essential feature of any new financial architecture.

The major reason some civil society institutions resist funding the IMF further is its history of misguided structural adjustment policies, policies that are now widely recognized to have caused widespread suffering. We hope that recent changes will improve this situation as well and enable the IMF to perform the important role we recommend for it.

Along with the World Bank, it is beginning to contextualize its performance criteria and conditionalities, taking much more seriously the unique circumstances of particular economies. It is listening more and nitpicking less. To be sure, the IMF is not likely to abandon its policy of making its loans conditional on the adoption by borrowing countries of mutually agreed economic policies. Even so, there is considerable evidence that when it has had more resources on hand, conditionality has been correspondingly wiser and less draconian.

The IMF now recognizes that it can leave more decisions to developing countries partly because these have better informed and more sophisticated employees than was once the case. Certainly in Latin America and Asia and increasingly in Africa, country economic teams are better qualified technically than the lower rung Ph.D.s from American and European universities to whom the IMF and World Bank entrust their missions. Local economists can do financial programming and standard macroeconomic modeling as well as or better than the people from Washington can; they also know how to do investment project analysis. To be sure, decisions about financial and project plans must include input from many other elements of a society.

We can encourage the IMF (and World Bank) to reverse the typical procedure in setting conditions for multilateral loans. Instead of waiting for it to specify the policies that must be followed to justify additional financing, country economic teams, in consultation with other agencies of their government, should be allowed to propose economic programs to the IMF. Disagreements between Washington staff assessments and the local teams could be resolved directly or by third-party arbitration. The scope of economic conditionality could also be restricted, for example, just to a balance-of-payments target, while the country could pursue its own agenda regarding inflation, income distribution, and growth.


What Christians can do

A primary part of the "principalities and powers" referred to in the Bible is composed of the political-economic institutions and processes that govern how people relate economically to each other and to God's whole creation. The church has a stake in their design. Yet many church members feel powerless to change basic political-economic reality. They think either that the economic conditions of society result "naturally" from the forces of markets that are only marginally within the power of human control, or that economic conditions result from powerful interests that are beyond the reach of ordinary citizens. Thus, there's nothing that can be done about it, or there's nothing we can do about it.

On the contrary, Mobilization for the Human Family believes that the political economy is shaped by deliberate social policy decisions; that conditions at any given time are the result of those decisions; that conditions can be changed by human decisions; and that the will of a nation's and the world's citizens about what the commitments and purposes of the nation and the world should be can be expressed in the political economy through the framework of democratic process provided in our national and transnational polity. Accordingly, we offer below some suggestions for action that may be taken by individual Christians and by our churches and their denominations to correct some correctable flaws of financial globalization.

Actions by individual Christian

Actions by churches and denominations


Want to know more?

Globalization is a vast topic. For a general introduction, see Sarah Anderson and John Cavanagh, Field Guide to the Global Economy (New York: New Press, 2000) and Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York: Farrar Straus Giroux, 1999). A classic introduction to the financial side of globalization is Susan Strange, Casino Capitalism, (New York: Mnchester University Press, 1986). See also Kavaljit Singh, The Globalisation of Finance: A Citizen's Guide (London: Zed Books, 1999) and John Eatwell and Lance Taylor, Global Finance at Risk: The Case for International Regulation (New York: The New Press, 2000). The best introduction to the Tobin Tax is Mahbub ul Haq et al (eds), The Tobin Tax: Coping with Financial Volatility (New York: Oxford University Press, 1996). For how church people might react, see Pamela Brubaker, Globalization at What Price? (Cleveland: Pilgrim Press, 2001).


Questions For Discussion

  1. How have the linkages and interconnections of international finance impacted your life? On balance, do you regard them as advantages or disadvantages for a healthy Christian life?
  2. The frequency and severity of recent financial crises have fueled calls for a radical redesign of the rules of global finance. If you were the advisor to an international commission asked to design "A New International Financial Architecture," what would you recommend?
  3. Do you favor allowing sovereign nations to declare bankruptcy? What Christian traditions might be invoked to support or deny such an action?
  4. A growing number of civil society institutions oppose giving more money to the IMF. They point out that it is part of the Washington Consensus, the application of whose policies have made societies adjuncts of the market. Yet this paper suggests that the IMF needs more money. As a committed Christian, which view do you favor?
  5. Is it too late to expect justice in a globalizing world? Since much of the direction the global economy has taken is irreversible, how can a balance between market and society be negotiated? How might Christians play a role in those negotiations?

[Dec 03, 2017] Another Democratic party betrayal of their former voters. but what you can expect from the party of Bill Clinton?

Highly recommended!
Dec 03, 2017 | www.nakedcapitalism.com

SpringTexan , December 2, 2017 at 12:08 pm

And I feel like the Democrats get so distracted. They have been talking about sexual harassment and stuff instead of the TAX BILL. It is so damn easy to get them to take their eyes off the ball! and get played again and again. . . and TRAGIC given the consequences . . .

Big River Bandido , December 2, 2017 at 3:10 pm

It's the perfect "distraction". Allows them to engage in virtue-signaling and "fighting for average Americans". It's all phony, they always "lose" in the end getting exactly what they wanted in the first place, while not actually having to cast a vote for it.

Kabuki theater in every respect.

jrs , December 2, 2017 at 3:18 pm

It's all related, less safety net and more inequality means more desperation to take a job, *ANY* job, means more women putting up with sexual harassment (and workplace bullying and horrible and illegal workplace conditions etc.) as the price of a paycheck.

Allegorio , December 2, 2017 at 11:07 pm

Horrible Toomey's re-election was a parallel to the Clinton/Trump fiasco. The Democrats put up a corporate shill, Katie McGinty that no-one trusted.

"Former lobbyist Katie McGinty has spent three decades in politics getting rich off the companies she regulated and subsidized. Now this master of the revolving-door wants Pennsylvania voters to give her another perch in government: U.S. Senator." Washington Examiner.

She was a Clintonite through and through, that everyone, much like $Hillary, could see through.

Expat , December 2, 2017 at 8:01 am

To paraphrase the Beatles, you say you want a revolution but you don't really mean it. You want more of the same because it makes you feel good to keep voting for your Senator or your Congressman. The others are corrupt and evil, but your guys are good. If only the others were like your guys. News flash: they are all your guys.

America is doomed. And so much the better. Despite all America has done for the world, it has also been a brutal despot. America created consumerism, super-sizing and the Kardashians. These are all unforgivable sins. America is probably the most persistently violent country in the world both domestically and internationally. No other country has invaded or occupied so much of the world, unless you count the known world in which case Macedonia wins.

This tax plan is what Americans want because they are pretty ignorant and stupid. They are incapable of understanding basic math so they can't work out the details. They believe that any tax cut is inherently good and all government is bad so that is also all that matters. They honestly think they or their kids will one day be rich so they don't want to hurt rich people. They also believe that millionaires got their money honestly and through hard work because that is what they learned from their parents.

Just send a blank check to Goldman Sachs. Keep a bit to buy a gun which you can use to either shoot up a McDonalds or blow your own brains out.

And some people still ask me why I left and don't want to come back. LOL

tony , December 2, 2017 at 9:30 am

Macedonia of today is not the same are that conquered the world. They stole the name from Greeks.

That being said, the US is ripe for a change. Every policy the current rulers enact seems to make things better. However, I suspect a revolution would kill majority of the population since it would disrupt the all important supply chains, so it does not seem viable.

However, a military takeover could be viable. If they are willing to wipe out the most predatory portions of the ruling class, they could fix the healthcare system, install a high-employment policy and take out the banks and even the military contractors. Which could make them very popular.

False Solace , December 2, 2017 at 5:18 pm

> a military takeover could be viable

Yeah, right. Have you seen our generals? They're just more of the same leeches we have everywhere else in the 0.01%. Have you seen any of the other military dictatorships around the world, like actually existing ones? They're all brilliantly corrupt and total failures when it comes to running any sort of economy. Not to mention the total loss of civil rights. Americans have this idiotic love of their military thanks to decades of effective propaganda and think the rule of pampered generals would somehow be better than the right to vote. Bleh.

Allegorio , December 2, 2017 at 11:20 pm

This is a military dictatorship. The fourth and sixth amendments have been de facto repealed. Trump cared about one thing and one thing only, namely to repeal the estate tax. He is the ultimate con man and this was his biggest con. It is truly amazing how he accomplished this. He has saved his family a billion $$$. He will now turn over governing to the generals and Goldman Sachs. He may even retire. Truly amazing. One has to admire the sheer perversity of it all. When will the American electorate get tired of being conned? The fact is they have nothing but admiration for Trump. We live in a criminal culture, winner take all. America loves its winners.

John Wright , December 2, 2017 at 10:45 am

There is an old 2003 David Brooks column in which he mentions that

"The Democrats couldn't even persuade people to oppose the repeal of the estate tax, which is explicitly for the mega-upper class. Al Gore, who ran a populist campaign, couldn't even win the votes of white males who didn't go to college, whose incomes have stagnated over the past decades and who were the explicit targets of his campaign. Why don't more Americans want to distribute more wealth down to people like themselves?"

Then Brooks goes on to explain

"The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them."

http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html

The Republicans have conditioned people to believe government services (except for defense/military) are run poorly and need to be "run like a business" for a profit.

The problem is that not all government services CAN be profitable (homeless care, mental health care for the poor, EPA enforcement, OSHA enforcement). And when attempts are made to privatize some government operations such as incarceration, the result is that the private company tries to maximize profits by pushing for laws to incarcerate ever more people.

The history of the USA as viewed by outsiders, maybe 50 years hence, will be that of a resource consuming nation that spent a vast fortune on military hardware and military adventures when it had little to fear due to geography, a nation that touted an independent press that was anything but, a nation that created a large media/entertainment industry which helped to keep citizens in line, a nation that fostered an overly large (by 2 or 3 times per Paul Whooley) parasitical financial industry that did not perform its prime capital allocation task competently as it veered from bubble to bubble and a nation that managed to spend great sums on medical care without covering all citizens.

But the USA does have a lot of guns and a lot of frustrated people.

Maybe Kevlar vests will be the fashion of the future?

Steve , December 2, 2017 at 2:45 pm

Thanks for the great link on how sadly uninformed average Americans are! I've been looking for it for a while and great comment!

MyLessThanPrimeBeef , December 2, 2017 at 4:08 pm

The provision to do away with the estate tax, if not immediately, in the current versions (House and Senate) is great news for the 1%, and bad for the rest of us.

And if more people are not against that (thanks for quoting the NYTImes article), it's the failure of the rest of the media for not focusing more on it, but wasting time and energy on fashion, sports, entertainment, etc.

Vatch , December 2, 2017 at 7:24 pm

he provision to do away with the estate tax . . . is great news for the 1%

I think it's even a little more extreme than that. The data is a few years old, but it is only the top 0.6% who are affected by estate taxes in the United States. See the data at these web sites:

https://www.irs.gov/statistics/soi-tax-stats-historical-table-17

https://www.irs.gov/statistics/soi-tax-stats-estate-tax-statistics-year-of-death-table-1

Sydney Conner , December 2, 2017 at 5:06 pm

Thanks for the succinct, accurate eloquent description of our nightmare reality.

DHG , December 2, 2017 at 8:13 pm

https://www.rawstory.com/2016/11/the-dark-rigidity-of-fundamentalist-rural-america-a-view-from-the-inside/

JTMcPhee , December 2, 2017 at 10:34 pm

The military adventures were largely in support of what Smedley Butler so accurately called the Great "Racket" of Monroe Doctrine colonialism and rapacious extractive "capitalism" aka "looting."

For those who haven't encountered Maj. Gen. Butler's take on his 33 years of serving the Oligokleptocracy, here's a link: https://www.ratical.org/ratville/CAH/warisaracket.html

A smart and honest fellow, who even declined as a "war hero" to serve as the oligarchs' figurehead in an earlier and clumsier plot to get rid of the trappings and regulation of "democracy:" The Business Plot, https://jtoddring.wordpress.com/2008/01/19/smedley-butler-and-the-business-plot/

It took longer and costed the rich a bit more to buy up all the bits of government, but the way they've done will likely be more compendious and lasting. Barring some "intervening event(s)".

Jonathan Holland Becnel , December 2, 2017 at 11:51 am

Doomed?

Project Much?

While Republicans show their true colors, im out there seeing a resurgence of civil society. And im starting to reach Hard core Tea Party types. Jobs, Manufacturing, Actual Policy.

IOW The Revolution Is Nigh.

2018 will be a Fn watershed.

[Nov 29, 2017] Secular Stagnation: The Time for One-Armed Policy is Over

Highly recommended!
Stagnation that is gripping several of the world's largest economies should be viewed as a secular, long term phenomenon, not something transient. It is connected with the neoliberalism entering a new phase of its development, when New Deal was already devoured, 90% or so of population standard of living slides and thus there are no direct mechanisms to increase consumer demand.
Notable quotes:
"... Stagnation is gripping several of the world's largest economies and many view this as secular, not transient. ..."
"... Above all, ideology must conceal, denigrate, diminish, slander and distract from the ONE effective strategy that workers collectively have. This is the spectre that haunts all economics. ..."
"... For many of those who consume the bottom layers of it, what they are ingesting is a barbarous Pink Slime cultural sludge that makes them stupid, frivolous, dependent, impulsive and emotionally erratic – something like perpetual 15 year olds. ..."
"... In the center, we have the neoliberals, who are convinced that our world will spontaneously and beneficially organize itself if only we turn the macroeconomic tumblers and stumble on the right interest rate, or inflation rate, or some other version of the One Parameter to Rule Them All mindset. They are also too devoted to the religion of demand-goosing: the idea that everything will be all right as long as we generate enough "demand" – as though it makes no difference whether people are demanding high fructose cotton candy or the collected works of Shakespeare. ..."
"... Profits and income share at the top soared; wages and income share at the bottom fell, and employment was maintained by speculative bubbles and increasing debt until the last bubble burst, and the system collapsed. ..."
"... How is an increasing deficit and QE supposed to solve our problems in this situation other than by propping up a failed system that makes the rich richer and the poor poorer by increasing government debt? ..."
"... It seems quite clear to me that it is going to take a very long time for the system to adjust to this situation in the absence of a fall in the value of the dollar and the concentration of income. That kind of adjustment means reallocating resources in a very dramatic way so as to accommodate an economy in which resources are allocated to serve the demands of the wealthy few in the absence of the ability of those at the bottom to expand their debt relative to income. ..."
"... It was the fall in the concentration of income that led to mass markets (large numbers of people with purchasing power out of income) that made investment profitable after WW II in the absence of speculative bubbles, and it was the increase in the concentration of income that led to the bubble economy we have today that has led us into the Great Recession. ..."
"... I think neoliberalism naturally leads to secular stagnation. This is the way any economic system that is based on increasing of inequality should behave: after inequality reached certain critical threshold, the economy faces extended period of low growth reflecting persistently weak private demand. ..."
"... The focus on monetary policy and the failure to enact fiscal policy options is structural defect of neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hit the USA. 2008 crisis, while discrediting neoliberalism, was clearly not enough for the abandonment of this ideology. Like in most cults adherents became more fanatical believers after the prophecy did not materialized. ..."
"... In a way behaviour of the USA elite in this respect is as irrational as behavior of the USSR elite. My impression is that they will stick to neoliberal ideology to the bitter end. But at the same time they are much more reckless. Recent attempt to solve economic problems by unleashing a new wars and relying of war time mobilization so far did not work. Including the last move is this game: Russia did not bite the offer for military confrontation that the USA clearly made by instilling coup d'état in Ukraine. ..."
Jun 05, 2015 | economistsview.typepad.com
Willem Buiter, Ebrahim Rahbari, Joe Seydl at Vox EU:

Secular stagnation: The time for one-armed policy is over: Stagnation is gripping several of the world's largest economies and many view this as secular, not transient.

This column argues that many economies need both demand-side stimulus and supply-side reform to close the output gap and restore potential-output growth. A combined monetary-fiscal stimulus – i.e. helicopter money – is needed to close the output gap, and this should be accompanied with extensive debt restructuring, policies to halt rising inequality, and additional public infrastructure investment.

Selected Skeptical Comments

Sandwichman -> anne:

Workers, collectively, have a single, incontrovertible lever for effecting change -- withholding their labor power. Nothing -- not even imprisonment or death -- can prevent workers from withholding their labor power! Kill me and see how much work you can get out of me.

This is the elementary fact that the elites don't want workers to know. "It is futile!" "It is a fallacy!" "You will only hurt yourselves!"

Once one comprehends the strategic importance of making the withholding of labor power taboo, everything else falls into place. Economics actually makes sense as a persuasive discourse to dissuade from the withholding of labor power.

Above all, ideology must conceal, denigrate, diminish, slander and distract from the ONE effective strategy that workers collectively have. This is the spectre that haunts all economics.

Dan Kervick:

Good stuff by Buiter et al, but here are some suggested additions to the litany of supply side woes:

1. Ineffective economic organization, both inside corporate firms and outside of them.

a. Many corporations are now quite dysfunctional as engines of long-term value creation – but not dysfunctional as vehicles of short-term value extraction for their absurdly over-incentivized key stakeholders.

b. The developed world societies are facing an extreme failure of strategic economic leadership, at both the national and global level, and at both the formal level of government and the informal level of visionary public intellectuals and industrial "captains". There is no coherent consensus on which way lies the direction of progress. Since nobody is setting the agenda for what the future looks like, risk trumps confidence everywhere and nobody knows what to invest in.

2. Dyspeptic dystopianism. The intellectual culture of our times is polluted by obsessive, nail-biting negativity and demoralizing storylines preaching hopelessness: the robots are going to destroy all the jobs; the Big One is going to bury everything, the real "neutral" interest rate is preposterously negative, etc. etc. etc. With so much doom and gloom in the air, there is no reason to invest wealth, rather than consume it. Robert Schiller touched on this at a recent talk at LSE.

3. The popular culture of 2015 America is – as in so many other areas - a tale of two cultural cities. For many of those who consume the bottom layers of it, what they are ingesting is a barbarous Pink Slime cultural sludge that makes them stupid, frivolous, dependent, impulsive and emotionally erratic – something like perpetual 15 year olds. People like this can be duped by the most shallow demagoguery and consumerist manipulation, and can't organize themselves to pursue their enlightened self-interest. Enlightened artists and cultural custodians need to step up, organize and find a way to seize the American mind back from the clutches of consumer capitalist garbage-mongers and philistine society-wreckers.

4. Laissez faire backwardness. We are struggling under left-right-center conspiracy of Pollyanna freedom fools, who despite their constant kvetching at one another all share in common the view that progress is self-organizing.

On the left we have the Chomsky and Graeber-style "libertarian socialists" who are convinced we could have a functioning and prosperous society in which seemingly every action is voluntary and spontaneous, nobody is ever compelled to do anything that their delicate little hearts don't throb to do, and who seemingly have no idea of what it takes even to run a carrot farm.

On the right, we have the clueless paranoid libertarians who think the whole world should revolve around their adolescent desire not to be "tread on", and seem to have no idea of what it takes – and what it took historically - to build a livable civilization.

In the center, we have the neoliberals, who are convinced that our world will spontaneously and beneficially organize itself if only we turn the macroeconomic tumblers and stumble on the right interest rate, or inflation rate, or some other version of the One Parameter to Rule Them All mindset. They are also too devoted to the religion of demand-goosing: the idea that everything will be all right as long as we generate enough "demand" – as though it makes no difference whether people are demanding high fructose cotton candy or the collected works of Shakespeare.

5. I'm an optimist! This is all going to change. We have nearly reached Peak Idiocracy. We're on the verge of a new age of social organization and planning and a return to mixed economy common sense and public-spirited mobilization and adulthood. This will happen because ultimately all of those teenagers will stop denying reality, and stop struggling to escape the realization that a more organized and thoughtfully planned way of life is the only thing that will work in our small, resource strapped, crowded 21st century planet.

George H. Blackford:

Since the 80s, US companies have been buying abroad to sell at home as foreign countries used our trade deficits to depress their exchange rates. Profits and income share at the top soared; wages and income share at the bottom fell, and employment was maintained by speculative bubbles and increasing debt until the last bubble burst, and the system collapsed.

There seem to be no more bubbles in the offing. The dollar is overvalued. Debt relative to income is unprecedented, and the concentration of income has created stagnation for lack of investment opportunities.

How is an increasing deficit and QE supposed to solve our problems in this situation other than by propping up a failed system that makes the rich richer and the poor poorer by increasing government debt? Does anyone really believe this sort of thing can go on forever in the absence of a fall in the value of the dollar and in the concentration of income? Who's going to be left holding the bag when this system collapses again?

It seems quite clear to me that it is going to take a very long time for the system to adjust to this situation in the absence of a fall in the value of the dollar and the concentration of income. That kind of adjustment means reallocating resources in a very dramatic way so as to accommodate an economy in which resources are allocated to serve the demands of the wealthy few in the absence of the ability of those at the bottom to expand their debt relative to income.

We didn't smoothly transition from an agricultural economy to one based on manufacturing. That transition was plagued with a great deal of civil unrest, speculative bubbles, booms and busts that eventually led to a collapse of the system and the Great Depression.

And we didn't smoothly transition out of the Great Depression. That was ended by WW II and dramatic changes in our economic system, the most dramatic changes being the role and size of government and the fall in the concentration of income for thirty-five years after 1940.

It was the fall in the concentration of income that led to mass markets (large numbers of people with purchasing power out of income) that made investment profitable after WW II in the absence of speculative bubbles, and it was the increase in the concentration of income that led to the bubble economy we have today that has led us into the Great Recession.

What this means to me is that we are not going to get out of the mess we are in today in the absence of some kind of catastrophe comparable to WW II if we, and the rest of the world, do not come to grips with the fundamental problem we face in this modern age, namely, the trade deficit and the concentration of income.

See:

likbez:

I think neoliberalism naturally leads to secular stagnation. This is the way any economic system that is based on increasing of inequality should behave: after inequality reached certain critical threshold, the economy faces extended period of low growth reflecting persistently weak private demand.

An economic cycle enters recession when total spending falls below expected by producers and they realize that production level is too high relative to demand. What we have under neoliberalism is kind of Marx constant crisis of overproduction.

The focus on monetary policy and the failure to enact fiscal policy options is structural defect of neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hit the USA. 2008 crisis, while discrediting neoliberalism, was clearly not enough for the abandonment of this ideology. Like in most cults adherents became more fanatical believers after the prophecy did not materialized.

The USA elite tried partially alleviate this problem by resorting to military Keynesianism as a supplementary strategy. But while military budget was raised to unprecedented levels, it can't reverse the tendency. Persistent high output gap is now a feature of the US economy, not a transitory state.

"Top everything" does not help iether (top cheap oil is especially nasty factor). Recent pretty clever chess gambit to artificially drop oil price playing Russian card, and sacrificing US shall industry like a pawn (remember that Saudi Arabia is the USA client state) was a very interesting move, but still expectation are now so low that cheap gas stimulus did not work as expected in the USA. It would be interesting to see how quickly oil will return to early 2014 price level because of that. That will be the sign that gambit is abandoned.

In a way behaviour of the USA elite in this respect is as irrational as behavior of the USSR elite. My impression is that they will stick to neoliberal ideology to the bitter end. But at the same time they are much more reckless. Recent attempt to solve economic problems by unleashing a new wars and relying of war time mobilization so far did not work. Including the last move is this game: Russia did not bite the offer for military confrontation that the USA clearly made by instilling coup d'état in Ukraine.

Now it look like there is a second attempt to play "madman" card after Nixon's administration Vietnam attempt to obtain concession from the USSR by threatening to unleash the nuclear war.

[Nov 29, 2017] Michael Hudson: The Wall Street Economy is Draining the Real Economy

Highly recommended!
Notable quotes:
"... An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website ..."
"... One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary: ..."
"... Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time ..."
"... Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly ..."
"... Secular stagnation is when the predators of finance have eaten too many sheeple. ..."
"... Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently. ..."
"... Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear. ..."
"... . . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business . ..."
www.nakedcapitalism.com
April 29, 2016 by Yves Smith An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website

GORDON LONG: Thank you for joining us. I'm Gordon Long with the Financial Repression Authority. It's my pleasure to have with me today Dr. Michael Hudson Professor Hudson's very well known in terms of the FIRE economy to-I think, to a lot of our listeners, or at least he's recognized by many as fostering that concept. A well known author, he has published many, many books. Welcome, Professor Hudson.

MICHAEL HUDSON: Yes.

LONG: Let's just jump into the subject. I mentioned the FIRE economy cause I know that I have always heard it coming from yourself-or, indirectly, not directly, from yourself. Could you explain to our listeners what's meant by that terminology?

HUDSON: Well it's more than just people getting fired. FIRE is an acronym for Finance, Insurance and Real Estate. Basically that sector is about assets, not production and consumption. And most people think of the economy as being producers making goods and services and paying labor to produce them – and then, labour is going to buy these goods and services. But this production and consumption economy is surrounded by the asset economy: the web of Finance, Insurance, and Real Estate of who owns assets, and who owes the debts, and to whom.

LONG: How would you differentiate it (or would you) with what's often referred to as financialization, or the financialization of our economy? Are they one and the same?

HUDSON: Pretty much. The Finance, Insurance, and Real Estate sector is dominated by finance. 70 to 80% of bank loans in North America and Europe are mortgage loans against real estate. So instead of a landowner class owning property clean and clear, as they did in the 19 th century, now you have a democratization of real estate. 2/3 or more of the population owns their own home. But the only way to buy a home, or commercial real estate, is on credit. So the loan-to-value ratio goes up steadily. Banks lend more and more money to the real estate sector. A home or piece of real estate, or a stock or bond, is worth whatever banks are willing to lend against it

As banks loosen their credit terms, as they lower their interest rates, take lower down payments, and lower amortization rates – by making interest-only loans – they are going to lend more and more against property. So real estate is bid up on credit. All this rise in price is debt leverage. So a financialized economy is a debt-leveraged economy, whether it's real estate or insurance, or buying an education, or just living. And debt leveraging means that a larger proportion of assets are represented by debt. So debt equity ratios rise. But financialization also means that more and more of people's income and corporate and government tax revenue is paid to creditors. There's a flow of revenue from the production-and-consumption economy to the financial sector.

LONG: I don't know if you know Richard Duncan. He was with the IMF, etc, and lives in Thailand. He argues right now that capitalism is no longer functioning, and really what he refers to what we have now is "creditism." Because in capitalism we have savings that are reinvested into productive assets that create productivity, which leads to a higher level of living. We're not doing that. We have no savings and investments. Credit is high in the financial sector, but it's not being applied to productive assets. Is he valid in that thinking?

HUDSON: Not as in your statement. It's confused.

LONG: Okay.

HUDSON: There's an enormous amount of savings. Gross savings. The savings we have that are mounting up are just about as large as they've ever been – about, 18-19% of the US economy. They're counterpart is debt. Most savings are lent out to borrowers se debt. Basically, you have savers at the top of the pyramid, the 1% lending out their savings to the 99%. The overall net savings may be zero, and that's what your stupid person from the IMF meant. But gross savings are much higher. Now, the person, Mr. Duncan, obviously-I don't know what to say when I hear this nonsense. Every economy is a credit economy.

Let's start in Ancient Mesopotamia. The group that I organized out of Harvard has done a 20-study of the origins of economic structuring in the Bronze Age, even the Neolithic, and the Bronze Age economy – 3200 BC going back to about 1200 BC. Suppose you're a Babylonian in the time of Hammurabi, about 1750 BC, and you're a cultivator. How do you buy things during the year? Well, if you go to the bar, to an ale woman, what she'd do is write down the debt that you owe. It was to be paid on the threshing floor. The debts were basically paid basically once a year when the income was there, on the threshing floor when the harvest was in. If the palace or the temples would advance animals or inputs or other public services, this would be as a debt. It was all paid in grain, which was monetized for paying debts to the palace, temples and other creditors.

The IMF has this Austrian theory that pretends that money began as barter and that capitalism basically operates on barter. This always is a disinformation campaign. Nobody believed this in times past, and it is a very modern theory that basically is used to say, "Oh, debt is bad." What they really mean is that public debt is bad. The government shouldn't create money, the government shouldn't run budget deficits but should leave the economy to rely on the banks. So the banks should run and indebt the economy.

You're dealing with a public relations mythology that's used as a means of deception for most people. You can usually ignore just about everything the IMF says. If you understand money you're not going to be hired by the IMF. The precondition for being hired by the IMF is not to understand finance. If you do understand finance, you're fired and blacklisted. That's why they impose austerity programs that they call "stabilization programs" that actually are destabilization programs almost wherever they're imposed.

LONG: Is this a lack of understanding and adherence to the wrong philosophy, or how did we get into this trap?

HUDSON: We have an actively erroneous view, not just a lack of understanding. This is not by accident. When you have an error repeated year after year after year, decade after decade after decade, it's not really insanity doing the same thing thinking it'll be different. It's sanity. It's doing the same thing thinking the result will be the same again and again and again. The result will indeed be austerity programs, making budget deficits even worse, driving governments further into debt, further into reliance on the IMF. So then the IMF turns them to the knuckle breakers of the World Bank and says, "Oh, now you have to pay your debts by privatization". It's the success. The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug.

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99%.

LONG: Well I think most people, without understanding economics, would instinctively tell you they think that's what's happening right now, in some way.

HUDSON: Right. As long as you can avoid studying economics you know what's happened. Once you take an economics course you step into brainwashing. It's an Orwellian world.

LONG: I think you said it perfectly well there. Exactly. It gets you locked into the wrong way of thinking as opposed to just basic common sense. Your book is Killing the Host . What was the essence of its message? Was it describing exactly what we're talking about here?

HUDSON: Finance has taken over the industrial economy, so that instead of finance becoming what it was expected to be in the 19 th century, instead of the banks evolving from usurious organizations that leant to governments, mainly to wage war, finance was going to be industrialized. They were going to mobilize savings and recycle it to finance the means of production, starting with heavy industry. This was actually happening in Germany in the late 19 th century. You had the big banks working with government and industry in a triangular process. But that's not what's happening now. After WW1 and especially after WW2, finance reverted to its pre-industrial form. Instead of allying themselves with industry, as banks were expected to do, banks allied themselves with real estate and monopolies, realizing that they can make more money off real estate.

The bank spokesman David Ricardo argued against the landed interest in 1817, against land rent. Now the banks are all in favor of supporting land rent, knowing that today, when people buy and sell property, they need credit and pay interest for it. The banks are going to get all the rent. So you have the banks merge with real estate against industry, against the economy as a whole. The result is that they're part of the overhead process, not part of the production process.

LONG: There's a sense that there's a crisis lying ahead in the next year, two years, or three years. The mainstream economy's so disconnected from Wall Street economy. What's your view on that?

HUDSON: It's not disconnected at all. The Wall Street economy has taken over the economy and is draining it. Under what economics students are taught as Say's Law, the economy's workers are supposed to use their income to buy what they produce. That's why Henry Ford paid them $5 a day, so that they could afford to buy the automobiles they were producing.

LONG: Exactly.

HUDSON: But Wall Street is interjecting itself into the economy, so that instead of the circular flow between producers and consumers, you have more and more of the flow diverted to pay interest, insurance and rent. In other words, to pay the FIRE sector. It all ends up with the financial sector, most of which is owned by the 1%. So, their way of formulating it is to distract attention from today's debt quandary by saying it's just a cycle, or it's "secular stagnation." That removes the element of agency – active politicking by the financial interests and Wall Street lobbyists to obtain all the growth of income and wealth for themselves. That's what happened in America and Canada since the late 1970s.

LONG: What does an investor do today, or somebody who's looking for retirement, trying to save for the future, and they see some of these things occurring. What should they be thinking about? Or how should they be protecting themselves?

HUDSON: What all the billionaires and the heavy investors do is simply try to preserve their wealth. They're not trying to make money, they're not trying to speculate. If you're an investor, you're not going to outsmart Wall Street billionaires, because the markets are basically fixed. It's the George Soros principle. If you have so much money, billions of dollars, you can break the Bank of England. You don't follow the market, you don't anticipate it, you actually make the market and push it up, like the Plunge Protection Team is doing with the stock market these days. You have to be able to control the prices. Insiders make money, but small investors are not going to make money.

Since you're in Canada, I remember the beginning of the 1960s. I used to look at the Treasury Bulletin and Federal Reserve Bulletin figures on foreign investment in the US stock market. We all used to laugh at Canada especially. The Canadians don't buy stocks until they're up to the very top, and then they lose all the money by holding these stocks on the downturn. Finally, when the market's all the way at the bottom, Canadians decide to begin selling because they finally can see a trend. So they miss the upswing until they decide to buy at the top once again. It's hilarious to look at how Canada has performed in the US bond market, and they did the same in the silver market. I remember when silver was going up to $50. The Canadians said, "Yes, we can see the trend now!" and they began to buy it. They lost their shirts. So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

LONG: Absolutely on that one. What are you currently writing? What is your current focus now?

HUDSON: Well, I just finished a book. You mentioned Killing the Host . My next book will be out in about three months: J is for Junk Economics . It began as a dictionary of terms, so I can provide people with a vocabulary. As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms. If you look at the television reports on the market, they say that any loss in the stock market isn't a loss, it's "profit taking". And when they talk about money. the stock market rises – "Oh that's good news." But it's awful news for the short sellers it wipes out. Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening. For instance, "secular stagnation" means it's all a cycle. Even the idea of "business cycles": Nobody in the 19 th century used the word "business cycle". They spoke about "crashes". They knew that things go up slowly and then they plunge very quickly. It was a crash. It's not the sine curve that you have in Josef Schumpeter's book on Business Cycles . It's a ratchet effect: slow up, quick down. A cycle is something that is automatic, and if it's a cycle and you have leading and lagging indicators as the National Bureau of Economic Research has. Then you'd think "Oh, okay, everything that goes up will come down, and everything that goes down will come up, just wait your turn." And that means governments should be passive.

Well, that is the opposite of everything that's said in classical economics and the Progressive Era, when they realized that economies don't recover by themselves. You need a-the government to step in, you need something "exogenous," as economist say. You need something from outside the system to revive it. The covert idea of this business cycle analysis is to leave out the role of government. If you look at neoliberal and Austrian theory, there's no role for government spending, and no role of public investment. The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19 th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit. It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions. Obviously these financialized charges are factored into the price system and raise the cost of living and doing business.

LONG: Well, Michael, we're-I thank you for the time, and we're up against our hard line. I know we didn't have as much time as we always like, so we have to break. Any overall comments you'd like to leave with our listeners who might be interested this school of economics?

HUDSON: Regarding the downturn we're in, we're going into a debt deflation. The key of understanding the economy is to look at debt. The economy has to spend more and more money on debt service. The reason the economy is not recovering isn't simply because this is a normal cycle. And It's not because labour is paid too much. It's because people are diverting more and more of their income to paying their debts, so they can't afford to buy goods. Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking. Instead of using their earnings to reinvest and hire more labour to increase production, companies are using their earnings for stock buybacks and dividend payouts to raise the share price so that the managers can take their revenue in the form of bonuses and stocks and live in the short run. They're leaving their companies as bankrupt shells, which is pretty much what hedge funds do when they take over companies.

So the financialization of companies is the reverse of everything Adam Smith, John Stuart Mill, and everyone you think of as a classical economist was saying. Banks wrap themselves in a cloak of classical economics by dropping history of economic thought from the curriculum, which is pretty much what's happened. And Canada-I know since you're from Canada, my experience there was that the banks have a huge lobbying power over government. In 1979, I wrote for the IRPP Institute there on Canada In the New Monetary Order . At that time the provinces of Canada were borrowing money from Switzerland and Germany because they could borrow it at much lower interest rates. I said that this was going to be a disaster, and one that was completely unnecessary. If Canadian provinces borrow in Francs or any other foreign currency, this money goes into the central bank, which then creates Canadian dollars to spend. Why not have the central bank simply create these dollars without having Swiss francs, without having German marks? It's unnecessary to have an intermediary. But the more thuggish banks, like the Bank of Nova Scotia, said, "Oh, that way's the road to serfdom." It's not. Following the banks and the Austrian School of the banks' philosophy, that's the road to serfdom. That's the road to debt serfdom. It should not be taken now. It lets universities and the government be run by neoliberals. They're a travesty of what real economics is all about.

LONG: Michael, thank you very much. I learned a lot, appreciate it; certainly appreciate how important it is for us to use the right words on the right subject when we're talking about economics. Absolutely agree with you. Talk to you again?

HUDSON: Going to be here.

LONG: Thank you for the time.

Donald , April 29, 2016 at 7:33 am

Interesting, but after insulting Duncan, Hudson says the banks stopped partnering with industry and went into real estate, which sounded like what Duncan said.

I mention this because for a non- expert like myself it is sometimes difficult to tell when an expert is disagreeing with someone for good reasons or just going off half- cocked. I followed what Hudson said about the evils of the IMF, but didn't see where Duncan had defended any of that, unless it was implicit in saying that capitalism used to function better.

Alejandro , April 29, 2016 at 9:06 am

Michael Hudson from the interview;

"As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms ."Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening."

May consider it's about recognizing and deciphering the "doublespeak", "newspeak", "fedspeak", "greenspeak" etc, whether willing or unwitting using words for understanding and clarifying as opposed to misleading and confusing dialectic as opposed to sophistry.

Michael Hudson , April 29, 2016 at 9:54 am

What I objected to was the characterization of today's situation as "financialization." I explained that financialization is the FIRST stage - when finance WORKS. We are now in the BREAKDOWN of financialization - toward the "barter" stage.
Treating "finance" as an end stage rather than as a beginning stage overlooks the dynamics of breakdown. It is debt deflation. First profits fall, and as that occurs, rents on commercial property decline. This is already widespread here in New York, from Manhattan (8th St. near NYU is half empty) to Queens (Austin St. in Forest Hills.).

Leonard C.Tekaat , April 29, 2016 at 12:19 pm

I wrote an article you might be interested in reading. It outlines a tax policy which would help prevent what you are discussing in your article. The abuse of credit to receive rents and long term capital gains.

The title is "Congress Financialized Our Economy And Created Financial Crisis & More Poverty" Go to http://www.taxpolicyusa.wordpress.com

SomeCallMeTim , April 29, 2016 at 5:23 pm

Thank you for another eye-opening exposition. My political economy education was negative (counting a year of Monetarism and Austrian Economics around 1980), so I appreciate your interviews as correctives.

From your interview answer to the question about what we, the 99+% should do,I gathered only that we should not try to beat the market. Anything more than that?

Skippy , April 29, 2016 at 8:33 pm

From my understanding, post Plaza banking lost most of its traditional market to the shadow sector, as a result, expanded off into C/RE and increasingly to Financialization of everything sundry.

Disheveled Marsupial interesting to note Mr. Hudson's statement about barter, risk factors – ?????

Eduardo Quince , April 29, 2016 at 7:41 am

"secular stagnation" means it's all a cycle

Actually not.

One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary:

Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time

Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly

Excerpted from: http://contrarianinvestorsjournal.com/?p=405#

cnchal , April 29, 2016 at 8:30 am

Secular stagnation from http://lexicon.ft.com/Term?term=secular-stagnation

Secular stagnation is a condition of negligible or no economic growth in a market-based economy . When per capita income stays at relatively high levels, the percentage of savings is likely to start exceeding the percentage of longer-term investments in, for example, infrastructure and education, that are necessary to sustain future economic growth. The absence of such investments (and consequently of the economic growth) leads to declining levels of per capita income (and consequently of per capita savings). With the reduced percentage savings rate converging with the reduced investment rate, economic growth comes to a standstill – ie, it stagnates. In a free economy, consumers anticipating secular stagnation, might transfer their savings to more attractive-looking foreign countries. This would lead to a devaluation of their domestic currency, which would potentially boost their exports, assuming that the country did have goods or services that could be exported.

Persistent low growth, especially in Europe, has been attributed by some to secular stagnation initiated by stronger European economies, such as Germany, in the past few years.

Words. What they mean depends on who's talking.

Secular stagnation is when the predators of finance have eaten too many sheeple.

MikeNY , April 29, 2016 at 9:57 am

Secular stagnation is when the predators of finance have eaten too many sheeple.

This.

digi_owl , April 29, 2016 at 7:44 am

Sad to see Hudson parroting the line about banks lending out savings

Alejandro , April 29, 2016 at 9:18 am

That's not what he said. Re-read or re-listen, please.

Enquiring Mind , April 29, 2016 at 9:02 am

Hudson says

Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking.

Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently.

Perhaps he meant to say that markets are going to shrink as the debt deflation becomes more evident?

tegnost , April 29, 2016 at 9:52 am

I think what it means is it's getting harder to squeeze the blood out of the turnip

Synoia , April 29, 2016 at 10:06 am

What Turnip? Its become a stone, fossilized..

rfdawn , April 29, 2016 at 10:52 am

Yes, I think we are into turnip country now. Figure 1 in this prior article looks clear enough – even if you don't like the analysis that went with it. Wealth inequality still climbs but income inequality has plateaued since Clinton I. Whatever the reasons for that, the 1% should be concerned – where is the ROI?

ke , April 29, 2016 at 10:22 am

Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear.

ke , April 29, 2016 at 12:49 pm

Labor has no problem with multiwhatever presidents, geneticists, psychologists, or economists, trying to hunt down and replace labor, in or out of turn, but none are going to be any more successful than the others. Trump is being employed to bypass the middle class and cut a deal. There is no deal. Labor is always going to pay males to work and their wives to raise children. Obviously, the majority will vote for a competing economy, and it is welcome to do so, but if debt works so well, why is the majority voting to kidnap our kids with public healthcare and education policies.

meeps , April 29, 2016 at 5:36 pm

I'm not sure I heard an answer to the question of what people, who might be trying to save for the future or plan for retirement, can do? Is the point that there isn't anything? Because I'm definitely between rocks and hard places

Robert Coutinho , April 29, 2016 at 9:29 pm

Yeah, he basically said there is no good savings plan. Big-money interests have rigged the rules and are now manipulating the market (this used to be the definition of what was NOT allowed). Thus, they use computer algorithms to squeeze small amounts out of the market millions of times. This means that the "investments" are nothing of the sort. You don't "invest" in something for milliseconds. He said that the 1% are mostly just trying to hold on to what they have. Very few trust the rigged markets.

ke , April 29, 2016 at 7:22 pm

If Big G can print to infinity, print, but then why book it as debt to future generations?

The future is already becoming the present, because the millenials aren't paying.

Russell , April 29, 2016 at 10:00 pm

Low rent & cheap energy are key to the arts & innovations. My model has to work for airports, starts at the fuel farm as the CIA & MI6 Front Page Avjet did. Well before that was Air America. I wonder if now American Airlines itself is a Front.

All of America is a Front far as I can about tell. Hadn't heard that Manhattan rents were coming down. Come in from out of town, how you going to know? Not supposed to I guess.

I got that textbook and I liked that guy John Commons. He says capitalism is great, but it always leads to Socialism because of unbridled greed.

The frenzy to find another stable cash currency showing in Bit Coin and the discussion of Future Tax Credits while the Euro is controlled by the rent takers demands change on both sides of the Atlantic.

We got shot dead protesting the war, and civil rights backlash is the gift that keeps giving to the Southerners looking up every day in every courthouse town, County seat is all about spreading fear and desperation.

How to change it all without violence is going to be really tricky.

cnchal , April 30, 2016 at 4:36 am

Many thanks for the shout out to Canada.

. . . So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

When one reads the financial press in Canada, every dollar extracted by the lords of finance is a glorious taking by brilliant people at the top of the financial food chain from the stupid little people at the bottom, but when it counts, there was silence, in cooperation with Canada's one percent.

The story starts about five years ago, with smart meters. Everyone knows what they are, a method by which electrical power use can be priced depending on the time of day, and day of the week.

To make this tasty, Ontario's local utilities at first kept the price the same for all the time, and then after all the meters were installed, came the changes, phased in over time. Prices were increased substantially, but there was an out. If you changed your living arrangements to live like a nocturnal rodent and washed your clothes in the middle of the night, had supper later in the evening or waited for weekend power rates you could still get low power rates, from the three tier price structure.

The local utilities bought the power from the government of Ontario power generation utility, renamed to Hydro One, and this is where Michael Hudson's talk becomes relevant.

The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug .

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99% .

Eighteen months ago, there was an election in Ontario, and the press was on radio silence during the whole time leading up to the election about the plans to "privatize" Hydro One. I cannot recall one instance of any mention that the new Premier, Kathleen Wynne was planning on selling Hydro One to "investors".

Where did this come from? Did the little people rise up and say to the politicians "you should privatize Hydro One" for whatever reason? No. This push came from the 1% and Hydro One was sold so fast it made my head spin, and is now trading on the Toronto Stock exchange.

At first I though the premier was an economic ignoramus, because Hydro One was generating income for the province and there was no other power supplier, so one couldn't even fire them if they raised their prices too high.

One of the arguments put forward by the 1% to privatize Hydro One was a classic divide and conquer strategy. They argued that too many people at Hydro One were making too much money, and by privatizing, the employees wages would be beat down, and the resultant savings would be passed on to customers.

Back to Michael Hudson

. . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business .

Power prices have increased yet again in Ontario since privatization, and Canada's 1% are "making a killing" on it. There has been another change as well. Instead of a three tier price structure, there are now two, really expensive and super expensive. There is no longer a price break to living like a nocturnal rodent. The 1% took that for themselves.

Procopius , April 30, 2016 at 8:10 am

I am so tired of seeing that old lie about Old Henry and the $5 a day. I realize it was just a tossed off reference to something most people believe for the purpose of describing a discarded policy, but the fact is very, very few of Old Henry's employees ever got that pay. See, there were strings attached.

Old Henry hired a lot of spies, too. He sent them around to the neighborhoods where his workers lived (it was convenient having them all in Detroit). If the neighbors saw your kid bringing a bucket of beer home from the corner tavern for the family, you didn't get the $5.

If your lawn wasn't mowed to their satisfaction, you didn't get the $5. If you were thought not to bathe as often as they liked, you didn't get the $5. If you didn't go to a church on Sundays, you didn't get the $5. If you were an immigrant and not taking English classes at night school, you didn't get the $5. There were quite a lot of strings attached. The whole story was a public relations stunt, and Old Henry never intended to live up to it; he hated his workers.

[Nov 29, 2017] Positive Feedback Loops, Financial Instability, The Blind Spot Of Policymakers

Highly recommended!
Notable quotes:
"... Primates with about exponentially increasing physical technologies continue to deliberately ignore and misunderstand themselves as much as is humanly possible, due to the history of warfare making and maintaining the currently existing political economy, whose maliciousness is manifesting through runaway vicious feedback loops, whereby the excessively successful control of Civilization through applications of the methods of organized crime are resulting in that Civilization manifesting runaway criminal insanities. Indeed, in that context, where there is almost nothing but the central core of triumphant organized crime, namely bankster dominated governments, surrounded by various layers of controlled "opposition" groups, which stay within the same bullshit-based frames of reference regarding those phenomena, the overall situation is that society becoming about exponentially sicker and insane. ..."
"... In general, "Asset Managers" are stuck inside taking for granted that everything they do has become almost totally based on being able to enforce frauds, despite some of them noticing the increasingly blatant ways that there are accumulating apparent anomalies in those systems, as vicious feedback loops drive those systems to become about exponentially more fraudulent, and therefore increasingly unbalanced. To come to better terms with those apparent anomalies requires going through series of intellectual scientific revolutions and profound paradigm shifts, which overall become ways that human beings better understand themselves as manifestations of general energy systems. However, since doing so requires recognizing how and why governments are necessarily the biggest forms of organized crime, dominated by the best organized gangsters, the banksters, it continues to be politically impossible to accomplish that. ..."
"... At each open, algos compute the increase in their AUM from the prior day and their margin reach. They then begin buying. All algos do this. Buying whenever cash/margin exists; selling whenever profit targets exist. On pullbacks, the algos withdraw, volume evaporates, minimizing the drop. The algos collectively increase equity prices without consideration of the value of the money involved. Not valuations. No fundamentals. Just ones and zeroes. Just a program. ..."
Nov 22, 2017 | www.zerohedge.com

Macro-prudential regulations follow financial crises, rarely do they precede one. Even when evidence is abundant of systemic risks building up, as is today, regulators and policymakers have a marked tendency to turn an institutional blind eye, hoping for imbalances to fizzle out on their own – at least beyond the duration of their mandates. It does not work differently in economics than it does for politics, where short-termism drives the agenda, oftentimes at the expenses of either the next government, the broader population or the next generation.

It does not work differently in the business world either, where corporate actions are selected based on the immediate gratification of shareholders, which means pleasing them at the next round of earnings, often at the expenses of long-term planning and at times exposing the company itself to disruption threats from up-and-comers.

Long-term vision does not pay; it barely shows up in the incentive schemes laid out for most professions . Economics is no exception. Orthodoxy and stillness preserve the status quo, and the advantages hard earned by the few who rose from the ranks of the establishment beforehand.

Yet, when it comes to Central Banking, and more in general policymaking, financial stability should top the priority list. It honorably shows up in the utility function, together with price stability and employment, but is not pursued nearly as actively as them. Central planning and interventionism is no anathema when it comes to target the decimals of unemployment or consumer prices, yet is residual when it comes to master systemic risks, relegated to the camp of ex-post macro-prudential regulation. This is all the more surprising as we know all too well how badly a deep unsettlement of financial markets can reverberate across the real economy, possibly leading into recessions, unemployment, un-anchoring of inflation expectations and durable disruption to consumer patterns. There is no shortage of reminders for that in the history books, looking at the fallout of dee dives in markets in 1929, 2000 and 2007, amongst others.

Intriguingly, the other way round is accepted and even theorized. Manipulating bond and stock prices, directly or indirectly, is mainstream policy theory today. From Ben Bernanke's 'portfolio balance channel theory', to the relentless pursuit of the 'wealth effect' via financial repression under Janet Yellen and Haruhiko Kuroda, to Mario Draghi tackling the fragmentation of credit markets across the EU via direct asset purchases, the practice has become commonplace. To some, like us, the 'wealth effect' may be proving to be more of an 'inequality effect' than much, leading to populism and constantly threatening regime change, but that is beyond the scope of this note today.

What we want to focus on instead is the direct impact that monetary interventionism like Quantitative Easing ('QE') and Negative or Zero Interest Rate Policies ('NIRP' or 'ZIRP') have on the structure of the market itself, how they help create a one-sided investment community, oftentimes long-only, fully invested when not levered up, relying on record-highs for bonds and stocks to perpetuate themselves endlessly - despite a striking disconnect from fundamentals, life-dependent on the lowest levels of volatility ever seen in history . The market structure morphed under the eyes of policymakers over the last few years, to become a pressure cooker at risk of blowing-up, with a small but steadily growing probability as times goes by and the bubble inflates. The positive feedback loops between monetary flooding and the private investment community are culpable for transforming an ever present market risk into a systemic risk, and for masking as peaceful what is instead an unstable equilibrium and market fragility.

Positive Feedback Loops create divergence from general equilibrium, and Systemic Risks

Positive feedback loops , in finance like in biology, chemistry, cybernetics, breed system instability, as they orchestrate a further divergence from equilibrium . An unstable equilibrium is defined as one where a small disturbance is sufficient to trigger a large adjustment.

QE and NIRP have two predominant effects on markets: (i) relentless up-trend in stocks and bonds (the 'Trend Factor') , dominated by the buy-the-dip mentality, which encapsulates the 'moral hazard' of investors knowing Central Banks are prompt to come to their rescue (otherwise known as 'Bernanke/Yellen/Kuroda/Draghi put'), and (ii) the relentless down-trend in volatility the 'Volatility Factor').

Two Factors Explain All: Trend and Volatility

The most fashionable investment strategies these days are directly impacted by either one or both of these drivers. Such strategies make the bulk of the overall market, after leverage or turnover is taken into account : we will refer to them in the following as 'passive' or 'quasi-passive' . The trend impacts the long-only community, crowning it as a sure winner, making the case for low- cost passive investing. The low volatility permeates everything else, making the case for full- investment and leverage.

The vast majority of investors these days are not independent from the QE environment they operate within : ETFs and index funds, Risk Parity funds and Target Volatility vehicles, Low Volatility / Short Volatility vehicles, trend-chasing algos, Machine Learning-inspired funds, behavioral Alternative Risk Premia funds. They are the poster children of the QE world. We estimate combined assets under management of in excess of $8trn across the spectrum. They form a broad category of 'passive' or 'quasi-passive' investors, as are being mechanically driven by two main factors: trend and volatility.

Source: Fasanara Presentations | Market Fragility - How to Position for Twin Bubbles Bust, 16 th October 2017. The slide is described in details in this video recording.

Extraordinary monetary policies have feedback loops with the asset management industry as a whole, reinforcing the effects on markets of such policies in a vicious – or virtuous - cycle . QE and NIRP help a large number of investment strategies to flourish, validating their success and supporting their asset gathering in the process, and are in return helped in boosting bond and stock markets by their flows joining the already monumental public flows.

Private flows so reach singularity with public flows, and the whole market economy morphs into a one big common bet on ever-rising prices, in shallow volatility. Here is the story of how $15trn of money printing by major Central Banks in the last ten years, of which $3.7trn in 2017 alone, is joined by total assets of $8trn managed into buying the same safe and risk assets across, with leverage, indiscriminately.

How Market Risk became Systemic Risk

Let's give a cursory look at the main players involved (a recent presentation we did is recorded here) . As markets trend higher, no matter what happens (ever against the shocked disbeliefs of Brexit, Trump, an Italian failed referendum and nuclear threats in North Korea), investors understand the outperformance that comes from pricing risks out of their portfolios entirely and going long-only and fully-invested. Whoever under-weighs positions in an attempt to be prudent ends up underperforming its benchmarks and is then penalized with redemptions. Passive investors who are long-only and fully invested are the winners, as they are designed to be bold and insensitive to risks. As Central Banks policies reduce the level of interest rates to zero or whereabouts, fees become ever more relevant, making the case for passive investing most compelling. The rise of ETF and passive index funds is then inevitable.

According to JP Morgan, in the last 10 years, $2trn left active managers in equities and $2trn entered passive managers (pag.39 here) . We may be excused for thinking they are the same $ 2trn of underlying investors progressively pricing risk provisions out of books, de facto , while chasing outperformance and lower fees.

To be sure, ETFs are a great financial innovation, helping reducing costs in an expensive industry and giving entry to markets previously un-accessible to most investors. Yet, what matters here is their impact on systemic risks, via positive feedback loops. In circular reference, beyond Central Banks flows, markets are helped rise by such classes of valuations-insensitive passive investors, which are then rewarded with further inflows, with which they can then buy more. The more expensive valuations get, the more they disconnect from fundamentals, the more divergence from equilibrium occurs, the larger fat-tail risks become.

In ever-rising markets, 'buy-and-hold' strategies may only possibly be outsmarted by 'buy-the-dip' strategies. Whatever the outcome of risk events, be ready to buy the dip quickly and blindly. As more investors design themselves up to do so, the dips are shallower over time, leading to an S&P500 that never lost 3% in 2017, an historical milestone. Machine learning is another beautiful market innovation, but what is there to learn from the time series of the last several years, if not that buy- the-dip works, irrespective of what caused the dip. Big Data is yet another great concept, shaping the future of us all. Yet, most data ever generated in humankind dates back three years only, in and by itself a striking limitation. The quality of the deduction cannot exceed the quality of the time series upon which the data science was applied. If the time series is untrustworthy, as is heavily influenced by monumental public flows ($300bn per months), what trust can we put on any model output originating from it? What pattern recognition can we really be hopeful of getting, in the first place? May some of it just be a commercial disguise for going long, selling volatility and leveraging up in various shapes or forms? What is hype and what is real? A short and compromised data series makes it hard, if not possible, to really know. Once public flows abate and price discovery is let free again, then and only then will we be in a position to know the difference.

Low volatility does what trending markets alone cannot. A state of low volatility presents the appearance of stuporous, innocuous, narcotized markets, thus enticing new swathes of unfitting investors in, mostly retail-type 'weak hands'. Weak hands are investors who are brought to like investments by certain characteristics which are uncommon to the specific investment itself, such as featuring a low volatility. It is in this form that we see bond-like investors looking at the stock market for yield pick-up purposes, magnetized by levels of realized volatility similar to what fixed income used to provide with during the Great Moderation. It is in this form that Tech companies out of the US have started filling the coffers of not just Growth ETF, where they should rightfully reside, but also Momentum ETF, and even, incredibly, Low-Volatility ETF.

Low volatility is also a dominant input for Risk Parity funds and Target Volatility vehicles . The lower the volatility, the higher the leverage allowed in such players, mechanically. All of which are long-only players, joining public flows, again helping the market rise to record levels in the process, in circular reference. Rewarded by new inflows, the buying spree gathers momentum, in a virtuous circle. Valuations are no real input in the process, volatility is what matters the most. Volatility is not risk, except for them it is.

It goes further than that. It is not only the level of volatility that count, but its direction too . As volatility implodes, relentlessly, into historical lows never seen before in history, a plethora of investment strategies is launched to capitalize on just that, directly: Short Volatility vehicles . They are the best performing strategy of the last decade, by and large. The problem here is that, due to construction, as volatility got to single-digit territory, relatively small spikes are now enough to trigger wipe-out events on several of these instruments. Our analysis shows that if equity volatility doubles up from current levels (while still being half of what it was as recently as in August 2015), certain Short Vol ETFs may stand to lose up to 75% or more. Moreover, short positions on long-vol ETFs can lose up to 250% of capital. For some, 'termination events' are built into contracts for sudden losses of this magnitude, meaning that the notes would be prematurely withdrawn. It is one thing to expect a spike in volatility to cause losses, it is quite another to know that a minor move is all it takes to trigger a default event.

On such spikes in volatility, Morgan Stanley Quant Derivatives Strategy desk warns further that market makers may be forced to rebalance their exposure non-linearly on a spike in volatility. A drop in the S&P 500 of 5% in one day may trigger approximately $ 400mn of Vega notional of rebalancing (pag.48 here) . We estimate that half a trillion dollars of additional selling on S&P stocks may occur following a correction of between 5% and 10%. That is a lot of selling, pre-set in markets, waiting to strike. Unless you expect the market to not have another 5% sell-off, ever again.

For more details, we describe the role of these different players in a recent video presentation and in our June Investment Outlook and May Investment Outlook.

It's All One Big Position

What do ETFs, Risk Parity and Target Vol vehicles, Low Vol / Short Vol vehicles, trend-chasing algos, Machine Learning, behavioral Alternative Risk Premia, factor investing have in common? Except, of course, being the 'winners take all' of QE-driven markets. They all share one or more of the following risk factors: long-only, fully invested when not leveraged-up, short volatility, short correlation, short gamma Thanks to QE and NIRP, the whole market is becoming one single big position.

The 'Trend Factor' and the 'Volatility Factor' are over-whelming, making it inevitable for a high- beta, long-bias, short-vol proxy to disseminate across. Almost inescapably so, given the time series the asset management industry has to deal with, and derive its signals from.

Several classes of investors may move to sell in lock-steps if and when markets turn. The boost to asset prices and the zero-volatility environment created the conditions for systemic risks in the form of an over-compensation to the downside. Record-low volatility breeds market fragility, it precedes system instability.

Flows Matter, Both Ways!

We will know soon if the fragility of markets is that bad. The undoing of loose monetary policies (NIRP, ZIRP) will create a liquidity withdrawal of over $1 trillion in 2018 alone (pag.61-62 here) . The reaction of the passive and quasi-passive communities will determine the speed of the adjustment in the pricing for both safe and risk assets, and how quickly risk provisions will re- enter portfolios. Such liquidity withdrawal will represent the first real crash-test for markets in 10 years.

As public spending on Wall Street abates, the risk is evident of seeing the whole market turning with it. The shocks of Trump and Brexit did not manage to derail markets for long, as public flows were overwhelming. Flows is what mattered, above all elusive, over-fitting economic narratives justifying price action at the margin. Flows may matter again now as they fade

Systemic Risk is Not Just About Banks: Look at Funds

The role of trending markets is known when it comes to systemic risks: a not sufficient but necessary condition. Most trends do not necessarily lead to systemic risks, but hardly systemic risks ever build up without a prolonged period of uptrend beforehand. Prolonged uptrends in any asset class hold the potential to instill the perception that such asset class will grow forever, irrespective of the fundamentals, and may thus lead to excessive risk taking, excess leverage, the formation of a bubble and, ultimately, systemic risks. The mind goes to the asset class of real estate, its undeterred uptrend into 2006/2007, its perception of perpetuity ("we have never had a decline in house prices on a nationwide basis'' Ben Bernanke) , the credit bubble built on banks hazardous activities on subprime mortgages as a result, and the systemic risks which emanated, with damages spanning well beyond the borders of real estate.

The role of volatility is also well-researched, especially low volatility. Hayman Minsky, in his " Financial Instability Hypothesis '' in 1977, analyses the behavioral changes induced by a reduction of volatility, postulating that economic agents observing a low risk are induced to increase risk taking, which may in turn lead to a crisis: "stability is destabilizing". In a recent study, Jon Danielsson, Director of the Systemic Risk Centre at the LSE, finds unambiguous support for the 'low volatility channel', insofar as prolonged periods of low volatility have a strong predictive power over the incidence of a banking crisis, owing to excess lending and excess leverage . The economic impact is the highest if the economy stays in the low volatility environment for five years : a 1% decrease in volatility below its trend translates in a 1.01% increase in the probability of a crisis. He also finds that, counter-intuitively, high volatility has little predictive power : very interesting, when the whole finance world at large is based on retrospective VAR metrics, and equivocates high volatility for high risk.

Both a persistent trend and prolonged low-volatility can lead banks to take excessive risks. But what about their impact on the asset management industry?

Thinking at the hard economic impact of the Great Depression (1929-1932) and the Great Recession (2007-2009), and the eminent role played by banks in both, it comes as little surprise that the banking sector captures all the attention. However, what remains to be looked into, and perhaps more worrying in today's environment, is the role of prolonged periods of uptrend and low-vol on the asset management industry

In 2014, the Financial Stability Board (FSB), an international body that makes recommendations to G20 nations on financial risks, published a consultation paper asking whether fund managers might need to be designated as " global systemically important financial institution " or G-SIFI, a step that would involve greater regulation and oversight. It did not result in much, as the industry lobbied in protest, emphasizing the difference between the levered balance sheet of a bank and the business of funds.

The reason for asking the question is evident: (i) sheer size , as the AM industry ballooned in the last few years, to now represent over [15trnXX] for just the top 5 US players!, (ii) funds have partially substituted banks in certain market-making activities, as banks dialed back their participation in response to tighter regulation and (iii) , funds can indeed do damage: think of LTCM in 1998, the fatal bailout of two Real Estate funds by Bear Stearns in 2007, the money market funds 'breaking the buck' in 2008 amongst others.

But it is not just sheer size that matters for asset managers. What may worry more is the positive feedback loops discussed above and the resulting concentration of bets in one single global pot , life-dependent on infinite momentum/trend and ever-falling volatility. Positive feedback loops are the link for the sheer size of the AM industry to become systemically relevant. Today more than ever, they morph market risks in systemic risks.

Volatility will not forever be low, the trend will not forever go: how bad a damage when it stops? As macro prudential policy is not the art of "whether or not it will happen" but of "what happens if", it is hard not to see this as a blind spot for policymakers nowadays.

ebworthen , Nov 22, 2017 10:55 AM

In other words, it's a Ponzi scheme.

Let it Go , Nov 22, 2017 11:49 AM

I have never seen it this bad, the numbers are all moutof wack!

It seems many of us are drawn to a good illusion and this proves true for most people in their daily life as well. In some ways, it could be said that our culture has become obsessed with avoiding what is real.

We must remember that politicians and those in power tend to throw people under the bus rather than rise up and take responsibility for the problems they create. The article below looks at how we have grown to believe things are fine.

http://The Allure Of Ilusions-Five Favorite Financial Myths.html

Batman11 , Nov 22, 2017 12:47 PM

The real estate boom features all the unknowns in today's thinking, which is why they are global.

This simple equation is unknown.

Disposable income = wages – (taxes + the cost of living)

You can immediately see how high housing costs have to be covered by wages; business pays the high housing costs for expensive housing adding to costs and reducing profits. The real estate boom raises costs to business and makes your nation uncompetitive in a globalised world.

The unproductive lending involved that leads to financial crises.

The UK:

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

The economy gets loaded up with unproductive lending as future spending power has been taken to inflate the value of the nation's housing stock. Housing is more expensive and the future has been impoverished.

US:

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

Unproductive lending is not good for the economy and led directly to 1929 and 2008.

Neoliberalism's underlying economics, neoclassical economics, doesn't look at private debt and so no one really knew what they were doing.

The real estate boom feels good for a reason that is not known to today's thinkers.

Monetary theory has been regressing since 1856, when someone worked out how the system really worked.

Credit creation theory -> fractional reserve theory -> financial intermediation theory

"A lost century in economics: Three theories of banking and the conclusive evidence" Richard A. Werner

http://www.sciencedirect.com/science/article/pii/S1057521915001477

" banks make their profits by taking in deposits and lending the funds out at a higher rate of interest" Paul Krugman, 2015. He wouldn't know, that's financial intermediation theory.

Bank lending creates money, which pours into the economy fuelling the boom; it is this money creation that makes the housing boom feel so good in the general economy. It feels like there is lots of money about because there is.

The housing bust feels so bad because the opposite takes place, and money gets sucked out of the economy as the repayments overtake new lending. It feels like there isn't much money about because there isn't.

They were known unknowns, the people that knew weren't the policymakers to whom these things were unknown.

The global economy told policymakers there was something seriously wrong in 2008, but they ignored it, I didn't.

Batman11 -> Batman11 , Nov 22, 2017 12:51 PM

The most fundamental of all fundamentals was unknown.

The relationship between debt and money.

the money supply = all the debt in the system, public and private

http://www.whichwayhome.com/skin/frontend/default/wwgcomcatalogarticles/images/articles/whichwayhomes/US-money-supply.jpg

M3 is going exponential before 2008, a credit bubble is underway (debt = money)

The FED and everyone else doesn't realise.

Batman11 -> Batman11 , Nov 22, 2017 1:25 PM

This is why austerity doesn't work in a balance sheet recession, e.g. Greece.

The IMF predicted Greek GDP would have recovered by 2015 with austerity.

By 2015 it was down 27% and still falling.

Oh dear.

Richard Koo had to explain the problem to the IMF.

https://www.youtube.com/watch?v=8YTyJzmiHGk

They had pushed Greece into debt deflation by cutting Government spending with austerity.

It wasn't just the IMF, the Troika all went along with this fatally flawed policy, this means the ECB and EU Commission also didn't know what they were doing.

Richard Koo had watched as Western "experts" told Japan to cut Government spending and seen the fall in GDP as the economy went downhill. The only way to get things going again was to increase Government spending and he has had decades to work out what was going on.

The Troika's bad economics has been wreaking havoc across the Club-Med.

Mark Blythe looks at the data.

https://www.youtube.com/watch?v=B6vV8_uQmxs&feature=em-subs_digest-vrecs

It comes out of knowledge that is missing from the mainstream.

Batman11 -> Batman11 , Nov 22, 2017 1:31 PM

Balancing the budget ............ be careful you might head into debt deflation.

If the private sector aren't borrowing the Government needs to borrow to keep the money supply stable.

You don't want to end up like Greece do you?

Radical Marijuana , Nov 22, 2017 3:15 PM

Another superficially correct analysis of "Positive Feedback Loops create divergence from general equilibrium, and Systemic Risks." The vicious feedback loops which have the most leverage are all aspects of the funding of the political processes, which have resulted in runaway systems of legalized lies, backed by legalized violence, the most important of which are the ways that the powers of public governments enforce frauds by private banks, the big corporations that have grown up around those big banks.

About exponentially advancing technologies have enabled enforced frauds to become about exponentially more fraudulent. The underlying drivers were the ways that the combined money/murder systems developed, whose social successfulness became more and more based on maximizing maliciousness. From a superficial point of view, those results may appear to be due to incompetence, however, from a deeper point of view those results make sense as due to the excessively successful applications of the methods of organized crime through the political processes, due to the vicious feedback loops of the funding of those political processes.

The only connections between human laws and natural laws are the abilities to back up lies with violence. Natural selection pressures have driven Globalized Neolithic Civilization to develop the most dishonest artificial selection systems possible, while the continuation of the various vicious feedback loops that made and maintained those developments are driving about exponentially increasing dishonesty. Although the laws of nature are not going to stop working, and the laws of nature underpinned the runaway development of excessively successful vicious feedback loops of organized crime, on larger and larger scales, to result in Globalized Neolithic Civilization, the overall results are that Civilization is becoming about exponentially more psychotic. Since Civilization necessarily operates according to the principles and methods of organized crime, while those who became the biggest and best organized forms of organized crime, namely, banker dominated governments, also necessarily became most dishonest about themselves, and yet, their bullshit social stories continue to dominate the public schools, and mainstream mass media, as well as the publicly significant controlled "opposition" groups.

Political economy is INSIDE human ecology, and therefore, the greatest systematic risks are to be found in the tragic trajectory of human ecologies which are almost totally buried under maximized maliciousness. "Public debates" about the human death control systems are based on previously having being as deceitful and treacherous as possible regarding those topics. The most extreme forms of that manifest as the ways that money is measurement backed by murder. Of course, that the debt controls are backed by the death controls are issues which are generally not publicly admitted nor addressed.

Global Neolithic Civilization has become almost totally based on being able to enforce frauds, in ways which have become about exponentially more fraudulent, as the vicious feedback loops which enable that to happen automatically reinforce themselves to get worse, faster. The almost total triumph of enforced frauds has resulted in social "realities" which are becoming exponentially more insane, since the social successfulness of enforced frauds requires the most people do not understand that, because they have been conditioned to not want to understand that. Rather, almost everyone takes for granted deliberately ignoring and misunderstanding the laws of nature in the most absurdly backward ways possible, because of the long history of successful warfare based on deceits and treacheries becoming the more recent history of successful finance based on enforcing frauds, despite that tragic trajectory of vicious feedback loops resulting in about exponentially increasing overall fraudulence.

Various superficially correct analyses, such as the one in the article above, are typical of the content on Zero Hedge , which does not come remotely close to recognizing the degree to which the dominate natural languages and philosophy of science have undergone series of compromises with the biggest bullies' bullshit-based world views, which became the banksters' bullshit about economics. Although it is theoretically possible for human beings to better understand themselves and Civilization, it continues to become more and more politically impossible to do so, due to the ever increasing vicious feedback loops of enforced frauds achieving symbolic robberies ...

Although the laws of nature are never going to stop working, it is barely possible to exaggerate the degree to which Civilization overall is becoming about exponentially more psychotic, due to the social "realities" based on successfully enforcing frauds becoming more and more out of touch with the surrounding, relatively objective, physical and biological facts. The various superficially correct analyses presented on Zero Hedge regarding that kind of runaway collective psychosis, driven by the vicious feedback loops of the funding of all aspects of the funding of the political processes, tend to always grossly understate the seriousness of that situation, especially including the crucial issues of how to operate the human murder systems after the development of weapons of mass destruction, which is unavoidable due to the rapid development of globalized electronic monkey money frauds, backed by the threat of force from apes with atomic weapons.

Those who believe that possessing precious metals, or cryptocurrencies, etc., are viable solutions to those problems are not remotely close to being in the right order of magnitude. Although there is no doubt that exponentially more "money" is being made out of nothing as debts, in order to "pay" for strip-mining the natural resources of a still relatively fresh planet, and so, there is no doubt that the exponentially decreasing value of that "money" is driving the accumulation of apparent anomalies, such as outlined in the article above, the actually crucial issues continue to be the ways that money is measurement backed by murder, as the most abstract ways that private property are claims backed by coercions. Stop-gap individual responses to the runaway fraudulence, such as faith in possessing precious metals or cryptocurrencies, make some relative sense in terms of the public "money" supplies becoming exponentially more fraudulent, but otherwise dismally fail to be in the ball park of the significant issues driven by prodigious progress in physical sciences, WITHOUT any genuine progress in political sciences, other than to continue to be able to better enforce bigger frauds, through the elaborations of oxymoronic scientific dictatorships, which adamantly refuse to become more genuinely scientific about themselves.

Primates with about exponentially increasing physical technologies continue to deliberately ignore and misunderstand themselves as much as is humanly possible, due to the history of warfare making and maintaining the currently existing political economy, whose maliciousness is manifesting through runaway vicious feedback loops, whereby the excessively successful control of Civilization through applications of the methods of organized crime are resulting in that Civilization manifesting runaway criminal insanities. Indeed, in that context, where there is almost nothing but the central core of triumphant organized crime, namely bankster dominated governments, surrounded by various layers of controlled "opposition" groups, which stay within the same bullshit-based frames of reference regarding those phenomena, the overall situation is that society becoming about exponentially sicker and insane.

That Civilization has been driven by natural selection pressures to manifest runaway psychoses is not going to stop the laws of nature from continuing to work through that Civilization. However, that will nevertheless drive the currently dominate artificial selection systems to become increasingly psychotic, in ways whereby their vicious feedback loops are less and less able to be sanely responded to ... Although some human beings have better and better understood some general energy systems, e.g., electric and atomic energy, etc., since warfare was the oldest and best developed forms of social science and engineering, whose successfulness was based on being able to maximize maliciousness, and since those then enabled successful finance to become based on runaway enforced frauds, human beings living within Globalized Neolithic Civilization are so hidebound by adapting to living inside those vicious feedback loops based on being able to enforce frauds that those human beings are mostly unwilling and unable to better understand themselves as also manifestations of general energy systems.

As the report, embedded in the article, begins by quoting Leonardo da Vinci:

"Learn how to see. Realize that everything connects to everything else."

In general, "Asset Managers" are stuck inside taking for granted that everything they do has become almost totally based on being able to enforce frauds, despite some of them noticing the increasingly blatant ways that there are accumulating apparent anomalies in those systems, as vicious feedback loops drive those systems to become about exponentially more fraudulent, and therefore increasingly unbalanced. To come to better terms with those apparent anomalies requires going through series of intellectual scientific revolutions and profound paradigm shifts, which overall become ways that human beings better understand themselves as manifestations of general energy systems. However, since doing so requires recognizing how and why governments are necessarily the biggest forms of organized crime, dominated by the best organized gangsters, the banksters, it continues to be politically impossible to accomplish that.

Muppet , Nov 22, 2017 7:03 PM

At each open, algos compute the increase in their AUM from the prior day and their margin reach. They then begin buying. All algos do this. Buying whenever cash/margin exists; selling whenever profit targets exist. On pullbacks, the algos withdraw, volume evaporates, minimizing the drop. The algos collectively increase equity prices without consideration of the value of the money involved. Not valuations. No fundamentals. Just ones and zeroes. Just a program.

[Nov 29, 2017] Attack on Sanders Economic Plan By Former Chairs of the Council of Economic Advisors Irresponsible

Highly recommended!
Notable quotes:
"... Well, again, what he was doing was running a program of a certain scale, of a large scale, through a set of standard macroeconomic assumptions. And that, again, is a reasonable exercise. If you ask me what my personal view is, I've written a whole book called The End of Normal in which I lay out reasons for my chronic pessimism about the capacity of the world economy to absorb a great deal more rapid economic growth. ..."
"... But that's not in the standard models, and it would not be appropriate to layer that on to a forecast of this kind. What Friedman was criticized for was not for putting his thumb on the scale, but for failing to put his thumb on the scale. In fact, that was the reasonable thing to do ..."
"... So what we had here was a, what was essentially an academic exercise that produced a result that was highly favorable to the Sanders position, and showed that if you did an ambitious program you would get a strong growth response. It's reasonable, certainly, for the first three or four years that that would transpire in practice. And what happened was that people who didn't like that result politically jumped on it in a way which was, frankly speaking, professionally irresponsible, in my view. It was designed to convey the impression, which it succeeded in doing for a brief while through the broad media, that this was not a reputable exercise, and that there were responsible people on one side of the debate, and irresponsible people on the other. ..."
"... The true nature of Capitalism has obviously been forgotten over time. Today we think it brings prosperity to all, but that was certainly never the intention. Today's raw Capitalism is showing its true nature with ever rising inequality. Capitalism is essentially the same as every other social system since the dawn of civilization. The lower and middle classes do all the work and the upper, leisure Class, live in the lap of luxury. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure. ..."
"... The nature of the Leisure Class, to which the benefits of every system accrue, was studied over 100 years ago. "The Theory of the Leisure Class: An Economic Study of Institutions", by Thorstein Veblen. (The Wikipedia entry gives a good insight. It was written a long time ago but much of it is as true today as it was then. This is the source of the term conspicuous consumption.) We still have our leisure class in the UK, the Aristocracy, and they have been doing very little for centuries. The UK's aristocracy has seen social systems come and go, but they all provide a life of luxury and leisure and with someone else doing all the work. ..."
"... Feudalism – exploit the masses through land ownership. Capitalism – exploit the masses through wealth (Capital) ..."
"... Now the competition has gone, the US middle class is being wiped out. The US is going third world, with just rich and poor and no middle class. Raw Capitalism can only return Capitalism to its true state where there is little demand and those at the bottom live a life of bare subsistence. ..."
"... "The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction" ..."
"... "We came, we saw, he died" rinse and repeat for 5,000 years. ..."
"... By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce. ..."
"... They knew that if wealth concentrated too much there would not be enough demand. ..."
"... Fiscal conservatism, which champions a balanced budget and expenditure restraints, is often hailed as a politico-economic philosophy as well as a policy of financial responsibility. In practice, it has been used as an argument against free spending by governments which can lead to high levels of debt and inflation. It has not been a positive philosophy which advocates the pro-growth and stability benefits coming from balanced budgets. Rather, it is a negative one – reacting against excessive spending and its consequences. This is probably why modern examples of fiscal conservatism in the United States and the United Kingdom have not led to sustainable growth or a significant reduction in public debt. Instead, in the case of the Ronald Reagan era in the US in the 1980s, public debt soared as fiscal conservatism and other policies were abandoned. ..."
"... Galbraith is probably my favorite economist, and eminently reasonable here. It makes me think that Sanders should have used him, or someone like him as an adviser/in house economist, rather than relying on external analyses like Friedman. ..."
"... Is the American public, trained/indoctrinated to think of the USG budget in terms of a household budget analogy, ready for MMT? ..."
"... To me, too many of the supposed (and actual) intellectuals and high level advisers were experts in rationalizing and explaining the chosen party views, but still employed the Cato Institute suggestion to use "Leninist" propaganda techniques as put forth in the 1996 Newt Gingrich/Frank Luntz GoPac memo, "Language: A Key Mechanism of Control." ..."
"... Galbraith said casually about the thesis of his new book: This really is the new normal for capitalism – meaning low growth – because there is not much growth left. ..."
Mar 06, 2016 | naked capitalism

... ... ...

PERIES: James, the Council of Economic Advisors, they put out economic forecasts each year. And there has been some wildly optimistic ones. For example, if you look at the 2010 predictions for 2012 and 2013 they have not quite been attained. And one would say it was done in the interest of trying to make the administration that they were serving more impressive. But what accounts for this particular attack on Friedman's projection and other fellow economists?

GALBRAITH: This was a classic case of professional bad manners and rank-pulling. What we had here were four former chairs of the president's Council of Economic Advisors, and two from President Obama, two from President Clinton, who decided to use their big names and their titles in order to launch an attack on a professor of economics at the University of Massachusetts who had written a paper evaluating the Sanders economic program.

It's likely that the four bigwigs thought that Professor Friedman was a Bernie Sanders supporter. In fact, as of that time he was a Hillary Clinton supporter and a modest donor to her campaign. What he had done was simply to write his evaluation of the economic effects of the ambitious Sanders reform program. The four former council chairs announced that on the basis of their deep commitment to rigor and objectivity, they had discovered that this forecast was unrealistic. And what I pointed out was that that claim was based on no evidence and no analysis whatsoever. And when you pressed down on it you found that it was simply based on the obvious fact that we haven't seen the kinds of growth rates that Professor Friedman's analysis suggested the Sanders program would produce. And for a very simple reason: the Sanders program is bigger. It's more ambitious than anything we've seen in recent years, so it's not surprising that when you put it through a model it generates a higher growth rate.

So that was the basic underlying facts, and these guys, two men and two women, announced that they, that it was a disreputable study, but failed to present any analysis that suggested they'd actually even read the paper before they denounced it. And that's what I pointed out in my counter letter, in a number of articles that have appeared since.

PERIES: James, so in your letter, how do you counter them? What methods did you use to come to your conclusions?

GALBRAITH: Well, I, no need to say anything beyond the fact that I had looked in their letter for the rigor that they were so proud of, for the objectivity and the analysis that they were so proud of, and I'd found that they had not done any. They had not made any such claim, not done any such work.

So that began to provoke a discussion. It's fair to say ultimately, without apologizing for effectively launching an ad hominem attack on an independent academic researcher, one of the former chairs, Christina Romer of President Obama's council, and her husband David Romer, a fellow economist, did produce a paper in which they spelled out their differences with the, with the Friedman paper. But that, again, raised another set of interesting issues which we've continued to discuss at various, various outlets of the press.

PERIES: Now, James Friedman's claim that the growth rate from Sanders' plan to be around 5.3 percent. And some economists, including Dean Baker at the Center for Economic Policy and Research, have claimed that this is unrealistic. What do you make of that?

GALBRAITH: Well, the question is whether it is an effect, let's say, a reasonable projection, of putting the Sanders program into an economic model. And the answer to that question, yes, Professor Friedman did a reasonable job. He spelled out what the underlying assumptions that he was using were. He spelled out the basic rules of thumb that macroeconomists had used for decades to assess the effects of an economic program. In this case, an expansionary economic program. And he ran them through his model and reported the results, a perfectly reasonable thing to do.

Now, one can be skeptical. And I am, and Dean Baker is, lots of people are skeptical that the world would work out quite that way, because lots of things, in fact, happen which are not accounted for in a model. And we've talked, we've basically put together a list of things that you think might be problematic. But the exercise here was not to put everything into paper that might happen in the world. The exercise was to take the kind of bare bones that economists use to assess and to compare the consequences of alternative programs, and to ask what kind of results do you get out? And that's what, again, what Jerry Friedman did. It was a reasonable exercise, he came up with a reasonable answer, and he reported it.

PERIES: Now, Friedman seems to think that the rate of full employment in 1999 is attainable. However, many labor economists seem to think that the larger share of the elderly currently in society compared to 1999 explains some of the lack of labor participation, which creates a lower full employment ceiling that's contradicting Friedman's report. Your thoughts on that?

GALBRAITH: Well, I think it is a fact that the population is getting older. But as, I think, any economist would tell you, that when you offer jobs in the labor market, the first thing that happens is the people who are looking for work take those jobs. The second thing that happens is that people who might look for work when jobs were available start coming back into the labor market. And if that is not enough to fill the vacancies that you have, it's perfectly open to employers to raise their wages so as to bring more people in, or to increase the pace at which they innovate and substitute technology for labor so that they don't need the work.

So there's no real crisis involved in the situation if it turns out five years from now we're at 3.5 percent unemployment, and they were beginning to run short of labor. That's not a reason to, at this stage, say no, we're not going to engage in the exercise and run a more expansionary, vigorous reform program, a vigorous infrastructure project, a major reform of healthcare, a tuition-free public education program. All of those things, which were part of what Friedman put into his paper, should be done anyway. The fact that the labor market forecast might prove to have some different, the labor market might have different characteristics in five years' time is from our present point of view just a, it's an academic or a theoretical proposition, purely.

PERIES: And Friedman's paper, he looks at a ten-year forecast. Did you feel that when you looked at the specifics of that, including college, universal healthcare, infrastructure spending and of course, expanding Social Security and so on, that those categories and his predictions or projections, rather, made sense to you?

GALBRAITH: Well, again, what he was doing was running a program of a certain scale, of a large scale, through a set of standard macroeconomic assumptions. And that, again, is a reasonable exercise. If you ask me what my personal view is, I've written a whole book called The End of Normal in which I lay out reasons for my chronic pessimism about the capacity of the world economy to absorb a great deal more rapid economic growth.

But that's not in the standard models, and it would not be appropriate to layer that on to a forecast of this kind. What Friedman was criticized for was not for putting his thumb on the scale, but for failing to put his thumb on the scale. In fact, that was the reasonable thing to do.

On the contrary, and on the other side, when Christina and David Romer did put out their forecast, their own criticism of the Friedman paper, they concluded by asserting that if this program were tried, inflation would soar. So they there were making an allegation for which, again, they had no evidence and no plausible model, that in the world in which we presently live would produce that result.

So what we had here was a, what was essentially an academic exercise that produced a result that was highly favorable to the Sanders position, and showed that if you did an ambitious program you would get a strong growth response. It's reasonable, certainly, for the first three or four years that that would transpire in practice. And what happened was that people who didn't like that result politically jumped on it in a way which was, frankly speaking, professionally irresponsible, in my view. It was designed to convey the impression, which it succeeded in doing for a brief while through the broad media, that this was not a reputable exercise, and that there were responsible people on one side of the debate, and irresponsible people on the other.

And that was, again, something that–an impression that could be conveyed through the mass media, but would not withstand scrutiny, and didn't withstand scrutiny, once a few of us stood up and started saying, okay, where's your evidence, on what are you basing this argument? And revealed the point, which the Romers implicitly conceded, and I give them credit for that, that in order to criticize a fellow economist you need to do some work.

... ... ...

Keith , March 6, 2016 at 4:45 am

The true nature of Capitalism has obviously been forgotten over time. Today we think it brings prosperity to all, but that was certainly never the intention. Today's raw Capitalism is showing its true nature with ever rising inequality. Capitalism is essentially the same as every other social system since the dawn of civilization. The lower and middle classes do all the work and the upper, leisure Class, live in the lap of luxury. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure.

The nature of the Leisure Class, to which the benefits of every system accrue, was studied over 100 years ago. "The Theory of the Leisure Class: An Economic Study of Institutions", by Thorstein Veblen. (The Wikipedia entry gives a good insight. It was written a long time ago but much of it is as true today as it was then. This is the source of the term conspicuous consumption.) We still have our leisure class in the UK, the Aristocracy, and they have been doing very little for centuries. The UK's aristocracy has seen social systems come and go, but they all provide a life of luxury and leisure and with someone else doing all the work.

Feudalism – exploit the masses through land ownership. Capitalism – exploit the masses through wealth (Capital)

Today this is done through the parasitic, rentier trickle up of Capitalism:

a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.

All this was much easier to see in Capitalism's earlier days.

Malthus and Ricardo never saw those at the bottom rising out of a bare subsistence living. This was the way it had always been and always would be, the benefits of the system only accrue to those at the top.

It was very obvious to Adam Smith:

"The Labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers."

Like most classical economists he differentiated between "earned" and "unearned" wealth and noted how the wealthy maintained themselves in idleness and luxury via "unearned", rentier income from their land and capital.

We can no longer see the difference between the productive side of the economy and the unproductive, parasitic, rentier side. This is probably why inequality is rising so fast, the mechanisms by which the system looks after those at the top are now hidden from us.

In the 19th Century things were still very obvious.

1) Those at the top were very wealthy
2) Those lower down lived in grinding poverty, paid just enough to keep them alive to work with as little time off as possible.
3) Slavery
4) Child Labour

Immense wealth at the top with nothing trickling down, just like today.

This is what Capitalism maximized for profit looks like. Labour costs are reduced to the absolute minimum to maximise profit. The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour. The function of the system is still laid bare. The lower class does the manual work; the middle class does the administrative and managerial work and the upper, leisure, class live a life of luxury and leisure. The majority only got a larger slice of the pie through organised Labour movements.

By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce. They knew that if wealth concentrated too much there would not be enough demand. In the 1950s, when Capitalism had healthy competition, it was essential that the Capitalist system could demonstrate that it was better than the competition. The US was able to demonstrate the superior lifestyle it offered to its average citizens.

Now the competition has gone, the US middle class is being wiped out. The US is going third world, with just rich and poor and no middle class. Raw Capitalism can only return Capitalism to its true state where there is little demand and those at the bottom live a life of bare subsistence.

When you realise the true nature of Capitalism, you know why some kind of redistribution is necessary and strong progressive taxation is the only way a consumer society can ever be kept functioning.

A good quote from John Kenneth Galbraith's book "The Affluent Society", which in turn comes from Marx.

"The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction"

Marx made some mistakes but he got quite a lot right.

Keith , March 6, 2016 at 6:29 am

Thanks to Michael Hudson, whose ideas anyone will recognise who has read his book.

"Killing the Host"

If you haven't read it, do so immediately.

Keith , March 6, 2016 at 1:11 pm

Perhaps, Western civilization had already cultivated and concentrated psychopathic personality traits in its elite before Capitalism ever begun. Early European history is an endless procession of wars at home and abroad as the elite took their wealth by force and the masses were kept in check by force whenever necessary.

No peaceful group could ever survive this relentless onslaught of millennia. This psychopathic elite then took their warlike ways to every corner of the earth. The wealthy elite from this era then became the wealthy elite of the next Capitalist era. Even today their bloodlust cannot be sated as they look to control a global empire.

Keith , March 6, 2016 at 1:17 pm

"We came, we saw, he died" rinse and repeat for 5,000 years.

Vatch , March 6, 2016 at 5:00 pm

Certainly countless hundreds of peaceful, responsible, inclusive, open, empathetic indigenous societies have been co-opted/overthrown by the western model.

Yes, but it's not just the western model that overthrows peaceful societies. The empires of China, the Japanese monarchies, the empires of India (together with a cringeworthy caste system), the human sacrificing Aztecs, Mayas, and Incas, all prove that tyranny is not a western invention.

When a local population becomes too large to be supported by simple egalitarian hunting and gathering, something else is required. That something is agriculture, and almost inevitably, the organization, specialization, and partial urbanization required by large scale agricultural society leads to exploitation and tyranny. This is seen in the earliest societies for which we have a written record, Sumer and Egypt.

Jim Young , March 6, 2016 at 12:27 pm

Thanks for the explanations of Veblen and Galbraith, which I find enduring basics over more than 100 years of speculation, real investment, and the best way to keep consumer society healthy.

My unschooled, simple, way to measure the health of an economy is in the Velocity of Money in the real economy of useful products and services. It appears to be very far below where it was when we did our best, and lower than when we first started measuring it near the beginning of the Great Depression.

Clive , March 6, 2016 at 12:37 pm

Or, pictorially illustrated .

I'm thinking of having my Christmas Cards printed with it on the front this year.

Keith , March 6, 2016 at 1:58 pm

In addition ..

By the 1920s, mass production techniques had improved to such an extent that relatively wealthy consumers were required to purchase all the output the system could produce and extensive advertising was required to manufacture demand for the chronic over-supply the Capitalist system could produce.

They knew that if wealth concentrated too much there would not be enough demand.

Of course the Capitalists could never find it in themselves to raise wages and it took the New Deal and Keynesian thinking to usher in the consumer society.

For The Win , March 6, 2016 at 5:46 am

Colonialism and fiscal conservatism

Fiscal conservatism, which champions a balanced budget and expenditure restraints, is often hailed as a politico-economic philosophy as well as a policy of financial responsibility. In practice, it has been used as an argument against free spending by governments which can lead to high levels of debt and inflation. It has not been a positive philosophy which advocates the pro-growth and stability benefits coming from balanced budgets. Rather, it is a negative one – reacting against excessive spending and its consequences. This is probably why modern examples of fiscal conservatism in the United States and the United Kingdom have not led to sustainable growth or a significant reduction in public debt. Instead, in the case of the Ronald Reagan era in the US in the 1980s, public debt soared as fiscal conservatism and other policies were abandoned.

Rodger Malcolm Mitchell , March 6, 2016 at 2:08 pm

A Monetarily Sovereign government does not need to reduce debt. In the U.S. (which is Monetarily Sovereign) federal so-called "debt" is actually the total of deposits in T-security accounts at the Federal Reserve Bank. In short, "debt" is bank deposits.

Why anyone would want to reduce the size of deposits at the world's safest bank is a mystery to me - other than the misleading use of the word "debt."

While all bank accounts are, in fact, debt of banks, most banks boast about the size of their depositors' accounts.

Contrary to popular myth, federal debt (i.e. deposits at the FRB) does not lead to inflation. America's "debt" has grown more than 9,000% in the past 75 years, and the Fed is struggling to create inflation.

mpr , March 6, 2016 at 9:12 am

Galbraith is probably my favorite economist, and eminently reasonable here. It makes me think that Sanders should have used him, or someone like him as an adviser/in house economist, rather than relying on external analyses like Friedman. It would possibly have given his program more gravitas – first amongst elites, and then more generally. At least it would have had a chance of changing the broader discussion. Whether you agree with it or not, right now the general MSM reporting on the Sanders plan is that it doesn't add up.

diptherio , March 6, 2016 at 9:57 am

I want to know why he hasn't been prominently featuring Prof. Kelton and her economic policy prescriptions. What's up with that?

John Zelnicker , March 6, 2016 at 10:25 am

This is speculative, but since Prof. Kelton is actually the economist for the Minority (the Democrats) of the Senate Banking committee, there may be reasons of protocol that Sanders isn't using her policy ideas at the moment.

Another possibility is that trying to introduce a new economic paradigm while running for the nomination may be a bridge too far. If Sanders tried to explain to people that taxes don't fund federal spending, etc., heads would explode.

I'm also not sure how one would use Prof. Kelton's ideas without bringing in a whole bunch of MMT concepts. Maybe if Sanders wins the nomination he can begin to bring some of these ideas into the conversation.

Rodger Malcolm Mitchell , March 6, 2016 at 2:19 pm

He won't use her ideas simple because the American voter in not yet amenable to the facts of Monetary Sovereignty .

Try explaining even to your best friend that:

1. Unlike state and local taxes, Federal taxes do not fund federal spending.
2. Even if FICA were eliminated, Social Security and Medicare benefits dramatically could (and should) be increased. There are no federal "trust funds."
3. Federal deficits are necessary for economic growth
4. Federal "debt" is nothing more than deposits in T-security accounts at the Federal Reserve Bank.
5. America never has had, and is absolutely in no danger of, hyper-inflation.

Perhaps, if Bernie wins the election, he will be freer to educate the masses, as well as the economics community, but meanwhile he has to claim the popular myth that federal spending has to be "paid for" by taxes.

Kurt Sperry , March 6, 2016 at 11:48 am

Is the American public, trained/indoctrinated to think of the USG budget in terms of a household budget analogy, ready for MMT? I think it's politically OK to use MMT informed policies–"deficits don't matter"–as the Republicans have, but not OK to openly acknowledge doing so. MMT runs head on into bedrock beliefs like the protestant moral virtues of thrift and fiscal responsibility. People cling to this stuff as tightly as they cling to their religion and guns.

MaroonBulldog , March 6, 2016 at 1:00 pm

MMT is a volatile, explosive doctrine. Tell an ordinary off-the-street taxpayer that Federal taxes don't fund Federal expenditures, that Federal taxes destroy the money they collect and so keep inflation at desired levels, and ready yourself to answer this:

"If I'm just paying taxes so the money can be burned, why should I pay taxes? What good does paying taxes for that do me, or people like me?"

And be prepared not to have your answer heard, comprehended, or accepted, after it is given.

It could lead directly and quickly to the end of a system of tax collection based on voluntary compliance. It could ignite a revolution.

MMT is an unpopular doctrine. Whether it is the true theory, or a truer theory than others, of the state of the world–is not the point.

Yves Smith Post author , March 6, 2016 at 3:01 pm

She can't. She's his staffer (on the Senate Budget Committee) so she is now allowed to work on the campaign. It would be a big ethics violation and would produce a scandal. Staffers cannot work on any of their bosses campaigns, including re-elections. Remember, they are government employees, not on Sanders' personal payroll.

Jim Young , March 6, 2016 at 11:56 am

My old party has worked hard to try discredit James Galbraith. I was faced with some ridicule from a Bush era international negotiator for trying to read "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too" in an airport waiting area.

To me, too many of the supposed (and actual) intellectuals and high level advisers were experts in rationalizing and explaining the chosen party views, but still employed the Cato Institute suggestion to use "Leninist" propaganda techniques as put forth in the 1996 Newt Gingrich/Frank Luntz GoPac memo, "Language: A Key Mechanism of Control."

I don't oppose them (at that level) expressing their well thought out views, even using the "persuasive" techniques described in the document at http://www.informationclearinghouse.info/article4443.htm but I do fault them for trying to prevent people from freely exploring far more comprehensive information and views.

We left the party ancestors had founded and stayed loyal to for 5 generations, though, because of the lower level dirty tricksters ("opposition researchers") that wanted us to corrupt the processes as one fund raiser told me, "We have to fight dirtier than Democrats."

Galbraith is a voice that must be listened to, just as there may be many others that we should be able to listen to (as I assume we could have under the old "Fairness Doctrine" before the corporate take over of almost all fully accessible media).

susan the other , March 6, 2016 at 11:49 am

stg Galbraith said casually about the thesis of his new book: This really is the new normal for capitalism – meaning low growth – because there is not much growth left. So maybe we are headed for a no growth world in which stability and sustainability dictate enterprise which is used to maintain a steady state – so that sounds more socialist than capitalist out of necessity. I believe this is our future too. And I think I understand Varoufakis' and Galbraith's "modest proposal" in a clearer light because growth must be used going forward not willy-nilly, but to achieve our ends. And also too – a while back the link that effectively said we had it backwards when we assume that capitalism supports socialism – because capitalism in reality lives off and is only possible under sufficient socialism. And it seems the 4 presidential advisors are more out to lunch than their letter showed.

jack , March 6, 2016 at 1:09 pm

As somebody asked above, I am still left wondering where Justin Wolfer's NYTimes piece fits into all this?

Detroit Dan , March 6, 2016 at 4:49 pm

Can't respond to all the nonsense. I just read Wolfer's piece and it seems to miss the point (as with the Romers), as noted in the following 2 articles. I especially recommend the 2nd one from John Cassidy in the New Yorker.

Friedman-Response-to-the-Romers
Bernie Sanders and the Case for a New Economic-Stimulus Package

Bernard , March 6, 2016 at 1:22 pm

as usual, i hear a lot "they" failed conservatism, never, Conservatism is just the age old avenue to "scam" the other. Bush "failed" at conservatism, i.e., it was Bush's fault not the ideology of Conservatism. on and on, this self repeated/reinforced "idea" that we have just not "found" the correct "application" of the ideal/reality that is Conservatism.

it does get old, too. all the people killed due to Conservatism and its' perpetrators. Greed, in other words, and the age old scam with "new and improved" tactics. These people have no concept of what "society" is, why we are all interrelated. to scam one is to scam us all. and these people are definitely not Christian in the "Jesus Christ" i've always heard about. Whatsoever you do unto the poor, you do unto me!

i just suppose psychopaths use any avenue for their "crimes." as i've heard, too, any great fortune is usually the result of a great crime.

somethings never change.

[Nov 05, 2017] China and the US Rational Planning and Lumpen Capitalism by James Petras

Highly recommended!
Please buy the author books Rulers and Ruled in the US Empire Bankers, Zionists and Militanta and The Politics of Empire The US, Israel and the Middle East both book contain material which the US corporate media will never tell you. A must-read for anyone who wants to understand world economics and current problem with neoliberalism in the USA
Notable quotes:
"... "China is the world leader in payments made by mobile devices", ..."
"... Financial Times ..."
"... Financial Times ..."
"... Financial Times ..."
"... 80% recognize that the Congress is dysfunctional and 86% believe that Washington is dishonest. Never has an empire of such limitless power crumbled and declined with so few accomplishments. ..."
Nov 05, 2017 | www.unz.com

Lumpen Capitalism refers to an economic system in which the financial and military sector exploits the state treasury and productive economy for the 1% of the population.)

Introduction

US journalists and commentators, politicians and Sinologists spend considerable time and space speculating on the personality of China's President Xi Jinping and his appointments to the leading bodies of the Chinese government, as if these were the most important aspects of the entire 19th National Congress of the Communist Party of China (October 18-24, 2017) .

(The 19th National Congress was attended by 2,280 delegates representing 89 million members.)

Mired down in gossip, idle speculation and petty denigration of its leaders, the Western press has once again failed to take account of the world-historical changes which are currently taking place in China and throughout the world.

World historical changes, as articulated by Chinese President Xi Jinping, are present in the vision, strategy and program of the Congress. These are based on a rigorous survey of China's past, present and future accomplishments.

The serious purpose, projections and the presence of China's President stand in stark contrast to the chaos, rabble-rousing demagogy and slanders characterizing the multi-billion dollar US Presidential campaign and its shameful aftermath.

The clarity and coherence of a deep strategic thinker like President Xi Jinping contrasts to the improvised, contradictory and incoherent utterances from the US President and Congress. This is not a matter of mere style but of substantive content.

We will proceed in the essay by contrasting the context, content and direction of the two political systems.

China: Strategic Thinking and Positive Outcomes

China, first and foremost, has established well-defined strategic guidelines that emphasize macro-socio-economic and military priorities over the next five, ten and twenty years.

China is committed to reducing pollution in all of its manifestations via the transformation of the economy from heavy industry to a high-tech service economy, moving from quantitative to qualitative indicators.

Secondly, China will increase the relative importance of the domestic market and reduce its dependence on exports. China will increase investments in health, education, public services, pensions and family allowances.

Thirdly, China plans to invest heavily in ten economic priority sectors. These include computerized machinery, robotics, energy saving vehicles, medical devices, aerospace technology, and maritime and rail transport. It targets three billion (US) dollars to upgrade technology in key industries, including electrical vehicles, energy saving technology, numerical control (digitalization) and several other areas. China plans to increase investment in research and development from .95% to 2% of GDP.

Moreover, China has already taken steps to launch the 'petro-Yuan', and end US global financial dominance.

China has emerged as the world's leader in advancing global infrastructure networks with its One Belt One Road (Silk Road) across Eurasia. Chinese-built ports, airports and railroads already connect twenty Chinese cities to Central Asia, West Asia, South-East Asia, Africa and Europe. China has established a multi-lateral Asian Infrastructure Investment Bank (with over 60 member nations) contributing 100 billion dollars for initial financing.

China has combined its revolution in data collection and analysis with central planning to conquer corruption and improve the efficiency in credit allocation. Beijing's digital economy is now at the center of the global digital economy. According to one expert, "China is the world leader in payments made by mobile devices", (11 times the US). One in three of the world's start-ups, valued at more than $1 billion, take place in China ( FT 10/28/17, p. 7). Digital technology has been harnessed to state-owned banks in order to evaluate credit risks and sharply reduce bad debt. This will ensure that financing is creating a new dynamic flexible model combining rational planning with entrepreneurial vigor (ibid).

As a result, the US/EU-controlled World Bank has lost its centrality in global financing. China is already Germany's largest trading partner and is on its way to becoming Russia's leading trade partner and sanctions-busting ally.

China has widened and expanded its trade missions throughout the globe, replacing the role of the US in Iran, Venezuela and Russia and wherever Washington has imposed belligerent sanctions.

While China has modernized its military defense programs and increased military spending, almost all of the focus is on 'home defense' and protection of maritime trade routes. China has not engaged in a single war in decades.

China's system of central planning allows the government to allocate resources to the productive economy and to its high priority sectors. Under President Xi Jinping, China has created an investigation and judicial system leading to the arrest and prosecution of over a million corrupt officials in the public and private sector. High status is no protection from the government's anti-corruption campaign: Over 150 Central Committee members and billionaire plutocrats have fallen. Equally important, China's central control over capital flows (outward and inward) allows for the allocation of financial resources to high tech productive sectors while limiting the flight of capital or its diversion into the speculative economy.

As a result, China's GNP has been growing between 6.5% – 6.9% a year – four times the rate of the EU and three times the US.

As far as demand is concerned, China is the world's biggest market and growing. Income is growing – especially for wage and salaried workers. President Xi Jinping has identified social inequalities as a major area to rectify over the next five years.

The US: Chaos, Retreat and Reaction

In contrast, the United States President and Congress have not fashioned a strategic vision for the country, least of all one linked to concrete proposals and socio-economic priorities, which might benefit the citizenry.

The US has 240,000 active and reserve armed forces stationed in 172 countries. China has less than 5,000 in one country – Djibouti. The US stations 40,000 troops in Japan, 23,000 in South Korea, 36,000 in Germany, 8,000 in the UK and over 1,000 in Turkey. What China has is an equivalent number of highly skilled civilian personnel engaged in productive activity around the world. China's overseas missions and its experts have worked to benefit both global and Chinese economic growth.

The United States' open-ended, multiple military conflicts in Afghanistan, Iraq, Syria, Libya, Yemen, Niger, Somalia, Jordan and elsewhere have absorbed and diverted hundreds of billions of dollars away from productive investments in the domestic economy. In only a few cases, military spending has built useful roads and infrastructure, which could be counted a 'dual use', but overwhelmingly US military activities abroad have been brutally destructive, as shown by the deliberate dismemberment of Yugoslavia, Iraq and Libya.

The US lacks the coherence of China's policy making and strategic leadership. While chaos has been inherent in the politics of the US 'free market' financial system, it is especially widespread and dangerous during the Trump regime.

Congressional Democrats and Republicans, united and divided, actively confront President Trump on every issue no matter how important or petty. Trump improvises and alters his policies by the hour or, at most, by the day. The US possesses a party system where one party officially rules in the Administration with two militarist big business wings.

US has been spending over 700 billion dollars a year to pursue seven wars and foment 'regime changes' or coups d'état on four continents and eight regions over the past two decades. This has only caused disinvestment in the domestic economy with deterioration of critical infrastructure, loss of markets, widespread socioeconomic decline and a reduction of spending on research and development for goods and services.

The top 500 US corporations invest overseas, mainly to take advantage of low tax region and sources of cheap labor, while shunning American workers and avoiding US taxes. At the same time, these corporations share US technology and markets with the Chinese.

Today, US capitalism is largely directed by and for financial institutions, which absorb and divert capital from productive investments, generating an unbalanced crisis-prone economy. In contrast, China determines the timing and location of investments as well as bank interest rates, targeting priority investments, especially in advanced high-tech sectors.

Washington has spent billions on costly and unproductive military-centered infrastructure (military bases, naval ports, air stations etc.) in order to buttress stagnant and corrupt allied regimes. As a result, the US has nothing comparable to China's hundred-billion-dollar 'One Belt-One Road' (Silk Road) infrastructure project linking continents and major regional markets and generating millions of productive jobs.

The US has broken global linkages with dynamic growth centers. Washington resorts to self-defecating, mindless chauvinistic rhetoric to impose trade policy, while China promotes global networks via joint ventures. China incorporates international supply linkages by securing high tech in the West and low cost labor in the East.

Big US industrial groups' earnings and rising stock in construction and aerospace are products of their strong ties with China. Caterpillar, United Technologies 3M and US car companies reported double-digit growth on sales to China.

In contrast, the Trump regime has allocated (and spent) billions in military procurement to threaten wars against China's peripheral neighbors and interfere with its maritime commerce.

US Decline and Media Frenzy

The retreat and decline of US economic power has driven the mass media into a frenzy of idiotic ad hominem assaults on China's political leader President Xi Jinping. Among the nose pickers in print, the scribes of the Financial Times take the prize for mindless vitriol. Mercenaries and holy men in Tibet are described as paragons of democracy and 'victims' of a flourishing modernizing Chinese state lacking the 'western values' (sic) of floundering Anglo-American warmongers!

To denigrate China's system of national planning and its consequential efforts to link its high tech economy with improving the standard of living for the population, the FT journalists castigate President Xi Jinping for the following faults:

For not being as dedicated a Communist as Mao Zedong or Deng Xiaopeng For being too 'authoritarian' (or too successful) in his campaign to root out corrupt officials. For setting serious long-term goals while confronting and overcoming economic problems by addressing the 'dangerous' level of debt.

While China has broadened its cultural horizon, the Anglo-Saxon global elite increases possibility of nuclear warfare. China's cultural and economic outreach throughout the world is dismissed by the Financial Times as 'subversive soft power'. Police-state minds and media in the West see China's outreach as a plot or conspiracy. Any serious writer, thinker or policymaker who has studied and praised China's success is dismissed as a dupe or agent of the sly President Xi Jinping. Without substance or reflection, the FT (10/27/17) warns its readers and police officials to be vigilant and avoid being seduced by China's success stories!

China's growing leadership in automobile production is evident in its advance towards dominating the market for electric vehicles. Every major US and EU auto company has ignored the warnings of the Western media ideologues and rushed to form joint ventures with China.

China has an industrial policy. The US has a war policy. China plans to surpass the US and Germany in artificial intelligence, robotics, semi-conductors and electric vehicles by 2025. And it will -- because those are its carefully pronounced scientific and economic priorities.

Shamelessly and insanely, the US press pursues the expanding stories of raging Hollywood rapists like the powerful movie mogul, Harvey Weinstein, and the hundreds of victims, while ignoring the world historic news of China's rapid economic advances.

The US business elites are busy pushing their President and the US Congress to lower taxes for the billionaire elite, while 100 million US citizens remain without health care and register decreased life expectancy! Washington seems committed to in State-planned regression.

As US bombs fall on Yemen and the American taxpayers finance the giant Israeli concentration camp once known as 'Palestine', while China builds systems of roads and rail linking the Himalayas and Central Asia with Europe.

While Sherlock Holmes applies the science of observation and deduction, the US media and politicians perfect the art of obfuscation and deception.

In China, scientists and innovators play a central role in producing and increasing goods and services for the burgeoning middle and working class. In the US, the economic elite play the central role in exacerbating inequalities, increasing profits by lowering taxes and transforming the American worker into poorly-paid temp-labor – destined to die prematurely of preventable conditions.

While Chinese President Xi Jinping works in concert with the nation's best technocrats to subordinate the military to civilian goals, President Trump and his Administration subordinate their economic decisions to a military-industrial-financial-Israeli complex. Beijing invests in global networks of scientists, researchers and scholars. The US 'opposition' Democrats and disgruntled Republicans work with the giant corporate media (including the respectable Financial Times ) to fund and fabricate conspiracies and plots under Trump's Presidential bed.

Conclusion

China fires and prosecutes corrupt officials while supporting innovators. Its economy grows through investments, joint ventures and a great capacity to learn from experience and powerful data collection. The US squanders its domestic resources in pursuing multiple wars, financial speculation and rampant Wall Street corruption.

China investigates and punishes its corrupt business and public officials while corruption seems to be the primary criteria for election or appointment to high office in the US. The US media worships its tax-dodging billionaires and thinks it can mesmerize the public with a dazzling display of bluster, incompetence and arrogance.

China directs its planned economy to address domestic priorities. It uses its financial resources to pursue historic global infrastructure programs, which will enhance global partnerships in mutually beneficial projects.

It is no wonder that China is seen as moving toward the future with great advances while the US is seen as a chaotic frightening threat to world peace and its publicists as willing accomplices.

China is not without shortcomings in the spheres of political expression and civil rights. Failure to rectify social inequalities and failure to stop the outflow of billions of dollars of illicit wealth, and the unresolved problems with regime corruption will continue to generate class conflicts.

But the important point to note is the direction China has chosen to take and its capacity and commitment to identify and correct the major problems it faces.

The US has abdicated its responsibilities. It is unwilling or unable to harness its banks to invest in domestic production to expand the domestic market. It is completely unwilling to identify and purge the manifestly incompetent and to incarcerate the grossly corrupt officials and politicians of both parties and the elites.

Today overwhelming majorities of US citizens despise, distrust and reject the political elite. Over 70% think that the inane factional political divisions are at their greatest level in over 50 years and have paralyzed the government.

80% recognize that the Congress is dysfunctional and 86% believe that Washington is dishonest. Never has an empire of such limitless power crumbled and declined with so few accomplishments.

China is a rising economic empire, but it advances through its active engagement in the market of ideas and not through futile wars against successful competitors and adversaries. As the US declines, its publicists degenerate.

The media's ceaseless denigration of China's challenges and its accomplishments is a poor substitute for analysis. The flawed political and policy making structures in the US and its incompetent free-market political leaders lacking any strategic vision crumble in contrast to China's advances.

[Oct 29, 2017] If You Look Behind Neoliberal Economists, You'll Discover the Rich: How Economic Theories Serve Big Business

Highly recommended!
Notable quotes:
"... By Dániel Oláh, a macroeconomic analyst at Hungary's Ministry for National Economy, Forecasting and Modeling Unit. He received his master's degree in economics from Central European University. Originally published at Evonomics . ..."
"... But what if modeling is just an euphemism for modern ideologies? Think of the efforts of neoclassical macroeconomics – for instance, DSGE models – to find the philosophical notion of equilibrium, irrespective of the non-equilibrium nature of the real world, let alone income inequalities. (But also think of Mannheim's paradox that the critique of an ideology – like this article – is also ideological.) ..."
"... Hayek's model was working as an ideology in real life, not at all different from that of the Soviet side. At least we get this impression if we take a look at the cartoon version of Hayek's Road to Serfdom ..."
"... So, Hayek's well-written piece of social philosophy was turned into a black-and-white, stylized world, where keeping the wartime planning roles of the government deterministically leads to the planning of thinking, recreation and disciplining of all individuals. ..."
"... The support for neoliberal policies by one of the largest companies presents how economic theory is embraced – and transformed – by the big business in the 20 th century. ..."
"... The intellectual revolution against the state was building on several new theories, arguing for the ineffectiveness of economic policies. These theories were needed to convince academicians of the intellectual merits of neoclassical economics, allowing them to sympathesize with the neoliberal framework. Milton Friedman argued that active discretionary fiscal and monetary policies are harmful or ineffective because of timing problems among others. As for fiscal policy, the permanent income hypothesis also tried to argue that short-term demand management is ineffective because if they think it to be temporary people save their additional income from the government instead of spending it. New classical macroeconomics was building on the Ricardian equivalence theory to show the same – that a temporary tax cut won't boost consumption, since people know that they have to cover the costs of that policy later. Friedman also explained the new phenomena of stagflation, stating that people adjust their expectations so that an increasing money supply results in only higher inflation, but unemployment remains the same. ..."
"... But this leads to the main paradox of neoliberalism. Its economic system needs a strong state, even at the expense of constraining democracy, to guarantee property rights and the working of the free market, while actively maintaining the rule of neoliberal social philosophy. At the same time some of its proponents tend to dismiss strong states (Mirowski, 2013). In fact, laissez faire was the last thing neoliberals wanted to achieve. This paradoxical stance towards the state led Milton Friedman, the policy entrepreneur to become an advisor of the Chilean dictator, Augusto Pinochet to transform Chile into a policy playground. ..."
"... The Road to Serfdom ..."
"... "I share all your worries and concerns as expressed in The Road to Serfdom and I'm going to go into politics and put it all right." ..."
"... "No you're not! Society's course will be changed only by a change in ideas. First you must reach the intellectuals, the teachers and writers, with reasoned argument. It will be their influence on society which will prevail, and the politicians will follow" (Hayek, 2001: p. 19) . ..."
"... Without Fisher, no IEA; without the IEA and its clones, no Thatcher and quite possibly no Reagan; without Reagan, no Star Wars; without Star Wars, no economic collapse of the Soviet Union. Quite a chain of consequences for a chicken farmer! ..."
"... The neoliberal ideology was successful from the perspective of the big business. The eighties is marked by the start of declining wage shares all over the world, as the distribution of produced added value reflected the strenghtening of global capital. ..."
"... Source: Haldane (2015) ..."
"... The point for neoliberalism is not to make a model that is more adequate to the real world, but to make the real world more adequate to its model ..."
"... Sources in the original ..."
Oct 29, 2017 | www.nakedcapitalism.com

Posted on October 29, 2017 by Lambert Strether Lambert here: I'm hoisting this one paragraph:

But this leads to the main paradox of neoliberalism. Its economic system needs a strong state, even at the expense of constraining democracy, to guarantee property rights and the working of the free market, while actively maintaining the rule of neoliberal social philosophy. At the same time some of its proponents tend to dismiss strong states (Mirowski, 2013). In fact, laissez faire was the last thing neoliberals wanted to achieve. This paradoxical stance towards the state led Milton Friedman, the policy entrepreneur to become an advisor of the Chilean dictator, Augusto Pinochet to transform Chile into a policy playground.

If there should be "markets in everything," it follows there should be markets in selling off bits of the state. That works until it doesn't, as (I would argue) the Tory heirs of Maggie Thatcher are discovering.

By Dániel Oláh, a macroeconomic analyst at Hungary's Ministry for National Economy, Forecasting and Modeling Unit. He received his master's degree in economics from Central European University. Originally published at Evonomics .

Social classes have always embraced ideas and social philosophies. Not only to understand and interpret the real world, but most importantly to change it to their benefit. These theories (primarily in social science) have become beweaponed ideas called ideologies, as they are used to influence rather than to understand the human universe. Of course the two are related: the nature of our understanding, i.e. what we consider important and what we leave out from our theoretical framework, is called modelling.

But what if modeling is just an euphemism for modern ideologies? Think of the efforts of neoclassical macroeconomics – for instance, DSGE models – to find the philosophical notion of equilibrium, irrespective of the non-equilibrium nature of the real world, let alone income inequalities. (But also think of Mannheim's paradox that the critique of an ideology – like this article – is also ideological.)

The great Austrian economist Friedrich Hayek didn't favor mathematical modeling, but he had clear philosophical models in his head. One of his most famous statements is related to the slippery road to dictatorships: if you introduce a little bit of state involvement in the economy, you have already stepped on this messy road to serfdom. The main intention of this model was to call for action and to raise awareness against the increasing governments in an era when the battle between the West and the East hadn't yet been decided.

Hayek's model was working as an ideology in real life, not at all different from that of the Soviet side. At least we get this impression if we take a look at the cartoon version of Hayek's Road to Serfdom . This was his main work on social philosophy and economics, arguing for individualism and liberalism. Hayek's argumentation in defense of a minimal state was so powerful that General Motors decided to sponsor the production of the comic version.

So, Hayek's well-written piece of social philosophy was turned into a black-and-white, stylized world, where keeping the wartime planning roles of the government deterministically leads to the planning of thinking, recreation and disciplining of all individuals.

The support for neoliberal policies by one of the largest companies presents how economic theory is embraced – and transformed – by the big business in the 20 th century.

Theoretical Innovations as Part of an Anti-State Ideology

The Keynesian era lasted for a long time, providing stability and increasing real wages for workers. In the seventies, a seismic paradigm shift happened with the returning of pre-Keynesian neoclassical ideas. Roger E. Backhouse (2005) took the numerous reasons for this change into account. The period of full employment lasted for so long that it was easy to forget that it wasn't a natural order, but the result of conscious policies. In this world, the disadvantages of the market was hidden by active governments, which opened the possibility to turn the critical attention towards the state. Especially in the wake of the new economic crisis that brought stagflation. Keynesian economics wasn't prepared for such new economic environment just like its neoclassical counterpart was shocked by the 1929 crisis.

The intellectual revolution against the state was building on several new theories, arguing for the ineffectiveness of economic policies. These theories were needed to convince academicians of the intellectual merits of neoclassical economics, allowing them to sympathesize with the neoliberal framework. Milton Friedman argued that active discretionary fiscal and monetary policies are harmful or ineffective because of timing problems among others. As for fiscal policy, the permanent income hypothesis also tried to argue that short-term demand management is ineffective because if they think it to be temporary people save their additional income from the government instead of spending it. New classical macroeconomics was building on the Ricardian equivalence theory to show the same – that a temporary tax cut won't boost consumption, since people know that they have to cover the costs of that policy later. Friedman also explained the new phenomena of stagflation, stating that people adjust their expectations so that an increasing money supply results in only higher inflation, but unemployment remains the same.

These theories traced the stagflation phenomena back to policy errors of the government. The rational expectations hypothesis argued that economic policy can't fool people for long since citizens use all new available information rationally when they react to activist government policies. The time inconsistency of governments also meant that discretionary policies may lead to economic harm, so long-term, rule-based policies and commitment to these will be credible and efficient.

Another direction of theories focused directly on the sins of politicians and the government. Public choice theories applied the standard economic theories to politicians and politics, desanctualizing the sphere of politics and transforming it to the area of market forces, emphasizing that decision makers are also just as rational self-interested actors as everyone else. The conclusion was that we can't expect politicians to determine and follow the public interest. It's better to restrict them as much as we can – argues James M. Buchanan, Gordon Tullock and George Stigler, who were committed members of the Hayekian, neoliberal Mont Pelerin Society, the cradle of neoliberalism founded in 1947. Tullock developed another theory as well: the concept of rent-seeking to call the attention to the capture of the state by interest groups.

In parallel, new macroeconomic models, like most versions of the real-business cycle theory, visioned an economy where the government has no role to play any more: economic fluctuations don't mean that there is a problem with the economy. No government, no cry (and always equilibrium) – sings the RBC model of the time.

Neoclassical theorists offered an alternative: the introduction of market forces and property rights in all walks of life. Eugene Fama developed the efficient market hypothesis in Chicago, meaning that prices on the financial market always reflect all relevant, available information. The implication is that the market should be left to itself, allowing company managers to maximize shareholder value for the sake of the whole economy. The impossibility theorem of Kenneth Arrow also proved that the perfect, general economic equilibrium exists, which implies the efficiency of competitive markets.

Arrow developed his theories at RAND Corporation, the Cold War think tank established by the US government, which was a main actor on the theoretical battlefield between the US and the Soviet Union. As Sonja Amadae (2003) argues, several of the theories mentioned above – the rational choice framework – provided the theoretical empowerment of Western liberal democracy with a limited state. She shows that there was considerable governmental efforts in the US after World War II to create new ideas, proving the validity and superiority of liberal democracy in a world where socialist planning was admired also by Western intellectuals and societies.

It's not surprising that Francis Fukuyama, who was also a member of RAND Corporation, made the political statement in 1989 that the liberal democracy with its neoliberal economic system is the best and final one in our history.

Empowered Ideas in Action

The Keynesian era was ended by an economic crisis, but also by political factors. The big business wanted to achieve a policy change because labor gained strong political positions between 1950 and 1970 (Harvey, 2007). Keynesian employment policies provided strong power to labor unions, which were primary allies in determining economic policies. But this led to the decrease of profit rates. A new globalization, based on the neoliberal thought collective was the reaction of business to its relatively marginalized position in governance to increase its bargaining power (Backhouse, 2005 ; Skidelsky, 2010). And business groups strongly supported the intellectual revolution (Mirowski & Plehwe 2009), which created the attracting utopia of the market, where the government is a needless actor. In this world, the entrepreneur is the value-creating hero, a completely perfect economic actor, and needs to be strongly supported – by a passive and small state, and also by the rest of the society.

But this leads to the main paradox of neoliberalism. Its economic system needs a strong state, even at the expense of constraining democracy, to guarantee property rights and the working of the free market, while actively maintaining the rule of neoliberal social philosophy. At the same time some of its proponents tend to dismiss strong states (Mirowski, 2013). In fact, laissez faire was the last thing neoliberals wanted to achieve. This paradoxical stance towards the state led Milton Friedman, the policy entrepreneur to become an advisor of the Chilean dictator, Augusto Pinochet to transform Chile into a policy playground.

The paradox appears when Hayek accepts sponsorship of General Motors. This is so, because he was the main opposition to any kind of planning in the economy. These issues were known by the core intelligentsia of the Mont Pelerin Society – as Mirowski (2013) argues –, but weren't communicated through the media. The communication that the society is a theoretical descendant of the classical school was clearly false.

This paradox didn't prevent the Hayekian thought collective to become an ideology. They declared that the main objective was to change the way people think: the main goal of the society wasn't to develop scientific theories – many different schools of thought were represented in the society – but to save and promote values they believe in. The conscious strategy to become the mainstream was a distinctive feature of the neoliberals.

The appearance of the successful businessmen Antony Fisher symbolized how the big business embraced neoliberal ideas. He was amazed by The Road to Serfdom , so much that he approached Hayek in 1945 at the London School of Economics. Just like David Ricardo more than hundred years before, Fisher wanted to go into politics to influence policy.

Fisher commented to Hayek:

"I share all your worries and concerns as expressed in The Road to Serfdom and I'm going to go into politics and put it all right."

The response of Hayek was:

"No you're not! Society's course will be changed only by a change in ideas. First you must reach the intellectuals, the teachers and writers, with reasoned argument. It will be their influence on society which will prevail, and the politicians will follow" (Hayek, 2001: p. 19) .

Although eight society members won Nobel prize in economics, the society hadn't set high academic standards for its members in order to attract representatives of the big business and other influencers.

To change the ideas of the public, neoliberals created a theoretical building of several floors. The basis is the methodology of positive economics, upon which the economic theories rest. And the final floor is the neoliberal ideology – as Claude Hillinger (2006) argues (this is what Mirowski (2013) calls a Russian doll).

Milton Friedman and George Stigler – with the help of corporate and political support – found the adequate tool to empower their ideas, which was the network of think-tanks, the use of scholarships provide by them, and the intensive use of media. This think-tank network wasn't for creating new ideas, but for being a gatekeeper and disseminating the existing set of ideas, and the „philosophy of freedom". Not only Backhouse (2005) , but also Adam Curtis (2011) , the British documentary film-maker also researched how Fisher created his global think-tank network, spreading the libertarian values of individual and economic – but never social and political – freedom, and also the freedom for capital owners from the state.

According to Curtis (2011) , the „ideologically motivated PR organisations" intended to achieve a technocratic, elitist system, which preserves actual power structures. As he notes, the successful businessmen created The Atlas Economic Research Foundation in 1981, which established 150 think-tanks around the globe. These institutions were set up based on the model of Institute for Economic Affairs (IEA), a think tank founded in 1955 by Fisher, which is a good example how the marginalized group of neoliberal thinkers got into intellectual and political power. Today, "more than 450 free-market organizations in over 90 countries" serve the "cause of liberty" through the network. The network of Fisher was largely directed by the members of Mont Pelerin Society (Djelic, 2014).

So we could add an imaginary upper floor to the neoliberal building, through which the commentators of seemingly independent think tanks represented very similar ideas – without informing the public that in terms of ideologies, it's not free to choose. At the same time, as Mirowski (2013) shows, the network promoted itself towards investors arguing that companies should invest in the production of transformative ideas, becoming policy products for final consumption in the end. (These investors are called edupreneurs by Rob Johnson ( 2017 ), who gives a revealing account of how philantrophists recreated the new parton-client model of the Renaissance in modern science.)

The second-hand dealers of ideas could indeed make a political difference. As Oliver Letwin British MP argued : " Without Fisher, no IEA; without the IEA and its clones, no Thatcher and quite possibly no Reagan; without Reagan, no Star Wars; without Star Wars, no economic collapse of the Soviet Union. Quite a chain of consequences for a chicken farmer! ".

Achieving a Successful Upward Redistribution

The neoliberal ideology was successful from the perspective of the big business. The eighties is marked by the start of declining wage shares all over the world, as the distribution of produced added value reflected the strenghtening of global capital. These years also meant the start of opening of the real wage-productivity gap , resulting in a previously unseen phenomena, the stagnating incomes of the middle class. At the same time, as a result of tax decreases inspired by the neoliberal political program the income of the top 10 percent started to increase dramatically in Great Britain and in the US, which were the homeland of the neoliberal counterrevolution (Alvaredo et al., 2013; Piketty-Saez, 2014).

Source: Haldane (2015)

The policy mistakes, arising from the philosophical and ideological nature of the neoliberal economics to achieve deregulation, were reflected in the increasing number of financial and economic crises. Margaret Thatcher, who once contributed to the development of libertarian think-tanks personally, having seen the soaring unemployment rates despite the implementation of neoliberal set of policies, argued in 1985 that she never believed in monetarist theories. The Washington Consensus, based on static neoclassical economics, turned a blind eye to the dynamic phenomena of institutions, thus contributed to the deep recessions in post-socialist countries in Central Europe. " The point for neoliberalism is not to make a model that is more adequate to the real world, but to make the real world more adequate to its model " – argues Simon Clarke (2005) . Meanwhile, according to David Colander (2004) , neoliberal economics reversed the attitude of classical thinkers, concluding that markets are the best, while their predecessors in the 18-19 th centuries were stating that markets are the least of all evils.

Neoliberalism created the (econo)mist of scientism and economism, decreasing pluralism in economics. These mechanisms to indoctrinate young scholars into the simplistic but often irrelevant models are needed to stabilize the scientific paradigm and the social-economic system built on it ( Earle et. al, 2016 ; Kwak, 2016 ). This distinctive feature of this system – as Dean Baker (2016) shows – is the protectionism of the capital owners and the maintenance of upward redistribution towards them, at the expense of wage growth of the labor force – this is why neoliberalism needs to capture the state.

But what is behind the neoliberal (econo)mist? Let's hope that it's not the road to serfdom.

Sources in the original .

oaf , October 29, 2017 at 7:04 am

neoliberalism is neofeudalism. Savings defeats rent-gathering. Savings bad. Bad consumer. Need more debt.

Also, parton-client? Suspect a typo.

Samuel Conner , October 29, 2017 at 9:10 am

He surely meant "patron-client" relationships, which were very important to science in Europe the 16th-19th centuries when there were no funding agencies of the kind we have today, such as NSF, NIH, etc. It's a bit disheartening to think that we are moving back in that direction.

Eustache De Saint Pierre , October 29, 2017 at 8:08 am

Good to see Adam Curtis getting a mention – a trawl through his history of documentaries catches most of the rotten fish, particularly for the UK.

BillC , October 29, 2017 at 8:28 am

In the seventies, a seismic paradigm shift happened with the returning of pre-Keynesian neoclassical ideas.

The "Backhouse (2005)" link in the first paragraph of the section "Theoretical Innovations as Part of an Anti-State Ideology" is no longer valid. Although its 2009 publication shows it's not the precise article Oláh cites, it appears that this article by the same author nicely summarizes the same material . It's an interesting read and not too long given the history it covers.

nonsense factory , October 29, 2017 at 10:41 am

From that perspective, all one has to do is look at the gross failures of the 'econometric models' that neoliberal economists embraced.

Exhibit A is those economists who ran around in the early 1990s waving the output of econometric models that 'proved' that NAFTA would raise wages and living standards for workers in both Mexico and the United States.

Exhibit B is those economists who promoted deregulation of the California electricity market in the late 1990s, again based on neoliberal ideas such as the one cited in the article:
The impossibility theorem of Kenneth Arrow also proved that the perfect, general economic equilibrium exists, which implies the efficiency of competitive markets.

Exhibit C is deregulation of the financial industry in the late 1990s, elimination of Glass-Steagall rules on separation of investment and commercial banking, which set the stage for the 2008 economic collapse, again based on neoliberal economic ideology.

The conclusion, really, is that today's academic economic discipline is highly flawed – it is barely descriptive, with zero predictive value. The above quote about the 'impossibility theorem' – this is the kind of thing that ecological sciences examined and dispensed with many decades ago. For example, theories about 'ecological equilibrium' gave rise to fire suppression strategies; today ecologists recognize these were flawed, that natural disturbances (fire, landslides, etc.) are a fundamental feature of ecological systems.

Incidentally, isn't this why economists are sequestered away in business departments in academic system, so that they don't have to face real scientific criticism? Econometric modeling is nothing but garbage based on false assumptions – but how many academic economic careers are built on such dissertations?

Synoia , October 29, 2017 at 4:26 pm

Exhibit A is those economists who ran around in the early 1990s waving the output of econometric models that 'proved' that NAFTA would raise wages and living standards for workers

That's the objective of a well paid economist. Produce the correct form of mumbo-jumbo which suits you clients' end, and retire into a well paid environment, such as President of Harvard.

Economics is for "might makes right," not about truth in the "scientific method" sense.

But what is behind the neoliberal (econo)mist? Let's hope that it's not the road to serfdom.

Yes and I also believe in the tooth fairy.

flora , October 29, 2017 at 4:30 pm

About Exhibit B – California energy deregulation: did someone say 'Enron'?

https://www.creators.com/read/molly-ivins/05/06/molly-ivins-may-30-03b7ab17

Collins , October 29, 2017 at 9:37 am

"Benevolent dictatorships" involoving some form of serfdom (actual or virtual) are the norm through human history and can be quite stable and productive (England, various Chinese dynasties, Italian city-states). Time will tell if present day benevolent dictatorships such as Russia, China or Vietnam will also be. Non-benevolent dictatorships (Aztec, Mayan, Mongol, Stalinist) did not. Syria is a toss-up, but illustrates the unpredictability of human behavior; the govt there largely left you alone if you kept quiet (as opposed to the extreme example of say N. Korea ), but look what happened.
Here in America the Neoliberal BeneDicta is Wall St/Global Cap, and the Young Turks of that class (the Fang & other tech billionaires – and it is a class ) lead the charge for the universal basic income, similar to free bread for Roman citizens 2000 years ago. And is the universal hand-held device (free in America if you're poor), used primarily for distraction, gossip and entertainment really all that different than free admission to the Coluseum?

But will it work?

Jeremy Grimm , October 29, 2017 at 4:25 pm

as was written on a Roman drinking cup from the late 3rd Century Rome:
"VITA BONA FRVARVR FELICES".

ape , October 29, 2017 at 9:48 am

"But what if modeling is just an euphemism for modern ideologies?"

If the model is fuzzy, say 70 pages of words with signs of 2nd derivatives and no fixed points, you can guarantee you're curve fitting and thus just mathematizing ideology.

If you give yourself a hard problem, with clear values and only a few words where you can really check whether you're fooling yourself, then it's not. Ask Feynmann about this.

But a lot of economics papers look like the first -- I see pages and pages of words, then a curve that would fit almost anything, then words and word, finally a few tables and an exercise in curve fitting.

That's the issue with soft sciences -- people tend to cheat with math.

nonsense factory , October 29, 2017 at 11:00 am

Ha Joon Chang wrote an exellent book, "Economics: The User's Guide" which has a few choice quotes on that issue:

[Unquestioning acceptance of economic pronouncements] exists mainly because, especially in the last few decades, people have been led to believe that, like physics or chemistry, economics is a 'science', in which there is only one correct answer to everything; thus non-experts should simply accept the 'professional consensus' and stop thinking about it.

Economics can never be a science in the sense that physics or chemistry is. There are many different types of economic theory, each emphasizing different aspects of complex reality, making different moral and political value judgements and drawing different conclusions. Moreover, economic theories constantly fail to predict real-world developments even in areas on which they focus, not least because human beings have their own free will, unlike chemical molecules or physical objects.

If we take ecology, for example, the recolonization of an area destroyed by volcanism, it's very hard to predict the exact species composition that will eventually result. We generally don't think of plants, insects, birds, etc. as having much 'free will', either. So predicting what humans will do is clearly more difficult. A comparable economic problem is what the recovery from war or depression will end up looking like. Anyone claiming to have 'hard mathematical forecasts' for such future outcomes – well, they're just trying to sell you something. "We base everything on hard math" is just a marketing tactic. As Ha Joon Chang further notes:

In the run-up to the 2008 economic crisis, the majority of the economics profession was preaching to the world that markets are rarely wrong and that modern economics has found ways to iron out those few wrinkles that markets may have; Robert Lucas, the 1995 winner of the Nobel Prize in Economics [*the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel] had declared in 2003 that the 'problem of depression prevention has been solved.' So most economists were caught by surprise by the 2008 global financial crisis. Not only that, they have not been able to come up with decent solutions to the ongoing aftermaths of that crisis.

Thuto , October 29, 2017 at 11:18 am

I would suggest they are engaging in a form of intellectual subterfuge. They know that a pretentious sprinkling of math on anything tends to limit mainstream critique, and hardens claims into "indisputable facts" (facts that, by implication, were arrived at with scientific rigor as the guiding principle). Pull out a paper with some curves and formulas in it, present its contents as "laws of economics" and yourself as an expert, then you've gone a long way towards quietening dissent and extracting consent. It's when such unquestioning consent comes from our ruling classes that we run into trouble.

Jeremy Grimm , October 29, 2017 at 4:18 pm

Long ago when I took a course on the calculus of variations [a topic I never really understood and never used -- but which I believe to be extremely important as an area of knowledge and study -- one of many I regret having ignorance of] the professor -- in the mathematics department -- often commented about how frequently he encountered bad mathematics and false reasoning used in the mathematics he reviewed in economics papers -- papers he had sometimes scoured looking for examples to use for the textbook he'd written [a truly excellent textbook now available from Dover Books]. He said the economists seemed intent on mis-using Hamiltonians where a more simple use of the calculus of variations [simple for him -- ugh!] would have more easily provided an answer and also revealed the errors in their models.

RN , October 29, 2017 at 10:09 am

I see at least 3 internal contradictions or logical inconsistencies in the so called neo-liberal policies.

1. State is essential to protect "the interests" , but not to the extent of promoting "the rest". It is a delicate balancing act in framing the laws and regulations. Sometimes, these laws come back to haunt "the interests" themselves. – unintended consequences.

2. interests of Oligopolies are to be protected as the cost of perfect competition – in the name of free markets and market competition !!!

3. These policies result in monotonically increasing level of concentration of wealth and power. The end result will be only a handful of people will ultimately own the entire wealth in the world. The top 10 percenters will end up being losers to the top 1 percenters and the top 1 percenters will also end up being losers to the top 0.1 percenters and so on. It is like killing the goose laying the golden eggs.

Jeremy Grimm , October 29, 2017 at 4:03 pm

Simplify -- the Market knows All. If at first policies fail -- build a better Market -- and if that requires the coercion of the State how is that a problem?

If the top 0.1 percenters own the entire wealth in the world -- how is that a problem? As for geese laying golden eggs -- who cares as long as you have enough golden eggs to make all the ducks stand in line and march to your songs.

Synoia , October 29, 2017 at 4:29 pm

Simplify -- the Market knows All.

Deflects blame, shifts criticism, and avoids responsibility. It's as factual as saying "its god's will," and equally effective at dismissing any attempt for change.

ape , October 29, 2017 at 10:09 am

"The impossibility theorem of Kenneth Arrow also proved that the perfect, general economic equilibrium exists, which implies the efficiency of competitive markets."

Cite? I thought Arrow's impossibility proves that all general voting system can fail to satisfy perfect justice, by his axioms of perfect justice for voting (transitivity, et al). I don't see how that proves general economic equilibrium, given that in general most theoretical systems fail to have a stable equilibrium -- steady state is an exception, not a general condition. Or is there another Arrow's impossibility theorem?

EoH , October 29, 2017 at 10:16 am

Too much passive voice, a little shy on agency. Think tanks, for example, were not "found", but created by the patrons of neoliberal academics, rather like taking their ribs and forming new partners, whose utterances needn't survive the rigors and self-criticism of traditional academic life.

As Mirowski and others contend at length, neoliberalism is a political tool for those desiring the outcomes it espouses. A "self-regulating" market, a contradiction in terms, is a market substantially controlled by its strongest actors. By neoliberal definition, that excludes government. As Klein argues, its policy experiments sometimes had to be implemented at the point of a gun (Friedmanites in Chile, Argentina, Brazil), owing to their consequences being so obviously against the interests of so many.

Now that neoliberalism has become the established church, it will take a reformation to dislodge it. The predictable response will be that we should follow a diet of worms.

Steve Ruis , October 29, 2017 at 10:23 am

The phrase "the road to serfdom" implies we are still on it. I suggest instead, that for most people, we are already "there." We may not be "tied to the land" but we are tied to a pre-existing "job," one that pays just enough to keep us alive and not too disgruntled. (If you don't work, you don't eat. We can own land, but not enough to be self-sufficient.) The option of living off the land no longer exists because all of the land is "owned" now. So, like serfs, there is nowhere to go where the options are different. There is no road out of serfdom. As much as the elites like to beat the drum of entrepreneurism and social mobility, these things do not exist for huge swaths of our society.

Civilization was created so the many could serve the few. Civilizations were created by religious elites and carried on by a coalition of religious coercion and physical coercion: the basic equation was to get the "subjects" to produce a surplus which the elites would confiscate so they could live (usually as lavishly as possible). Slavery and war were upscaled to feed the system.

Has all of this changed because iPhones? I suggest not. Slavery still exists, wage slavery exists, poverty is still prevalent, and the rich keep getting richer. Is this what civilization is for? Any outside observer would have to conclude that any other goal for civilization is not yet observable.

Collins , October 29, 2017 at 11:41 am

But advances in energy, nutrition, public health and other sciences have made life much easier and actually occasionally enjoyable for untold millions whose ancestors were truly dirt poor.
The question is, will the advances be enough to prevent violent revolution? England, Spain, Japan, Argentina, Thailand dodged violent class-based revolution, while France, Russia, China, Bolivia, Haiti, Vietnam, Cambodia and Iran did not. I don't think it's truly predictable for a given society.

Carolinian , October 29, 2017 at 10:39 am

Re the above and yesterday's discussion of neoliberalism–while it's been a long time I recall many of the arguments put forth by the Washington Monthly crowd who became the journalistic spearhead for the revival of neoliberalism–Democratic party version. Charlie Peters and his acolytes saw what they called neoliberalism as a reform movement. Some had also been involved in Ralph Nader's consumer groups and the thrust was that large institutions in both government and business had become ossified and inefficient. The Big Three auto makers were the poster children for this with their exploding Pintos and low quality cars made by supposedly indifferent but union protected laborers. From this perspective the reduction of regulations was a way of encouraging competition that would make entrenched bureaucracies accountable. Kahn's airline deregulation for example was promoted as a boon that would benefit travelers by reducing airline ticket prices (and it did for a time). I'm not sure the movement could simply be put down as a plot by business interests. The Washington Monthly's Peters claimed to be an old style FDR liberal.

But as in Orwell's Animal Farm, the revolutionaries quickly became overlords and as corrupt as the institutions they were criticizing. Many moved to Peretz' New Republic -- not exactly a hotbed of idealism.

Perhaps the takeaway is that theories matter less than the quality of the individuals involved. These days the leadership ranks of both parties and the academics who support them very much need the boot.

Enquiring Mind , October 29, 2017 at 10:48 am

This think-tank network wasn't for creating new ideas, but for being a gatekeeper and disseminating the existing set of ideas, and the "philosophy of freedom".

Awareness of gatekeeper roles and their ramifications is one issue of grave concern to many citizens. There are variations of the role playing in different parts of society whether in the Ivory Tower, Think Tanks (self-designated with initial capitals), media or other areas. Recently, that role in media has come under scrutiny as seen during and after the US campaign and election. Who gets to control what appears as news, and will the NY Times editorial board cede any of that, for example?

The increasing impact of social media in dissemination of information and use of influencers represents a type of Barbarians at the Literal Gate. The boards and think tanks won't easily relinquish their positions, any more than the gatekeepers of prior eras would willingly do so.

This era is unsettling to the average person on the street, and particularly to those living on the street, because they have been told one thing with certainty and gravitas and then found out something else that was materially opposed. In the meantime, truth continues to seek an audience.

Jeremy Grimm , October 29, 2017 at 3:50 pm

The assertion you selected from today's post seems clearly false to me. The think-tank organizations definitely create new ideas and often conflict with each other. Their topics and views also tend to dominate discussions and steal the oxygen from outside ideas.

They are schools of agnotology flooding discussion of every policy with their "answers" and contributing to the Marketplace of ideas.

Sluggeaux , October 29, 2017 at 12:04 pm

As flora points out in yesterday's George Monbiot/Gaius Publius neoliberalism thread, Hayek and Mieses grew up under Habsburg absolutism; Ayn Rand grew up under Romanov absolutism. All that they knew of the actual non-theoretical experience of democracy and free markets came from the insecurity of coming of age under the chaos of the collapse of those two empires during the break to re-arm during 1919-1939 in what should be seen as a single 1914-1945 European war.

The founders of neoliberalism appear in these descriptions to suffer for a nostalgia for pre-war absolutism that self-interested western capitalists have been happy anoint themselves to fill. Their alien neoliberal ideology is nothing but absolutist-nostalgic garbage, shoved down the throats of its victims via simplistic but well-funded propaganda. Neoliberalism's false premise of the benevolence of the absolutism of wealth is quite literally the road to serfdom for the rest of humanity.

Norb , October 29, 2017 at 12:13 pm

The kleptocrats of the world are struggling to find a workable power sharing solution to keep their rule intact. The power of the neoliberal order is that it has beguiled the masses into believing that satisfying short term personal wants constitutes a meaningful social order. The constant churn and turnover of consumer goods is the purpose of life instead of participating in the construction and maintenance of lasting, stable social institutions and customs. This is the culmination of turning citizens into consumers. It is a different form of bondage and slavery. The perfect system of enslaving oneself.

The trouble with the neoliberal order its that the old tools in maintaining its power and relevance are reaching limits. As technology democratizes the use of force, it is more difficult to impose ones will. Also, as the weapons become more devastating, their use would instantly disrupt the entire network supporting the political structure. Imagine the consequence of a nuclear exchange. Neoliberalism needs an existing social structure upon which to deploy its parasitic ideology and methods. As Michael Hudson aptly described in his Killing the Host, once that social structure is weakened or destroyed, neoliberalism will be incapable of functioning. It would have to become naked totalitarianism in order to survive.

The question has always been how do you justify and deal with inequality. With human stupidity, climate change, and planetary resource depletion bearing down on every society, how that question is answered rises to the fore and cannot be papered over with greater reams of propaganda. It seems we are once again on the verge of a truly Revolutionary era- like it or not.

Susan the other , October 29, 2017 at 1:26 pm

Since the 60s all of our Big Boondoggles like Star Wars were embezzlements. The neoliberal mandate quoted above "The point for neoliberalism is not to make a model that is more adequate to the real world, but to make the real world more adequate to its model" is pure hubris. And it has finally run its course by serving us all up a big fat mess. It is very encouraging to see this essay cite so many recent analysts. It's beginning to look like critical mass.

Most of us are thinking about the stock market these days and anticipating a downturn if not a crash. But what if they triggered a crash and nobody came? What if the stock market just stagnates and sits there? The only buyer these days is the Fed but the Fed might refuse to "expand its balance sheet". And in perfect circular logic, this prevents the stock market from crashing because nobody's buying. And where does this leave neoliberal economies and their governments? It will be a tad embarrassing. And also too what if nobody wants to become a worked-to-death entrepreneur with a crappy idea just to make a profit and keep running the squirrel wheel? We don't have to be a capitalist, socialist, or free market society at all. The only thing we are required to be is just. Constitutionally.

Synoia , October 29, 2017 at 4:33 pm

And in perfect circular logic, this prevents the stock market from crashing because nobody's buying.

Or selling. If nobody's buying, and some are selling, that trend is like going over a waterfall. One starts slowly, but does not die until the bottom.

Jeremy Grimm , October 29, 2017 at 3:34 pm

I wish you were right that " the neoliberal order [is] reaching [its] limits" but I am afraid your observation: "It would have to become naked totalitarianism in order to survive" -- may be all too true and all too likely. I've been trying to come to grips with what a " truly Revolutionary era- like it or not" -- could mean.

Frederick1337 , October 29, 2017 at 12:39 pm

The Keynesian truth seems highly classified top secret material. That the first two postulates of the Ricardian theory are flawed, should not be spoken of. Neo-liberal mantra dictates life and evolution itself at some point, wealth dictates the ability to procreate.

Unfortunately for the neo-liberal elite, the end of the "endless" expansionary period of the "new" industrial age ( globalism ) has come, just as it had at the end of the development of the United States. Demand, it seems, once again, can no longer equal supply. The reward ( wage unit ) no longer far outweighs the disutility of labor, no more is it marginal, and gone is the efficiency of capital. The great casinos in the sky have crashed and burned, replaced with a hollow shell of freedom, or perhaps it is only the lie of it. A rich man gambled greatly on those casinos falling down and it is an even more rich man who gambles with him on ever greater portions of real estate, blood, slavery and tax cuts. Perhaps savings indeed should equal investment. Investment in our children and society. Critical thinking, our greatest unit of trade value, even until disposable neo-liberal ideology has been washed away by the ever changing tide of common sense.

flora , October 29, 2017 at 12:53 pm

Economic philosophies come down to questions of morals and ethics: what is 'good' and why; what is 'bad' and why? (These questions often come down to the philosophical questions about "the one and the many"*)

Some (brief) history of moral philosophy in business, or markets:
"Plato is known for his discussions of justice in the Republic, and Aristotle explicitly discusses economic relations, commerce and trade under the heading of the household in his Politics. His discussion of trade, exchange, property, acquisition, money and wealth have an almost modern ring, and he makes moral judgments about greed, or the unnatural use of one's capacities in pursuit of wealth for its own sake, and similarly condemns usury because it involves a profit from currency itself rather than from the process of exchange in which money is simply a means. .

"John Locke developed the classic defense of property as a natural right. For him, one acquires property by mixing his labor with what he finds in nature.7 Adam Smith is often thought of as the father of modern economics with his An Inquiry into the Nature and Causes of the Wealth of Nations. Smith develops Locke's notion of labor into a labor theory of value. In modern times commentators have interpreted him as a defender of laissez-faire economics, and put great emphasis on his notion of the invisible hand. Yet the commentators often forget that Smith was also a moral philosopher and the author of The Theory of Moral Sentiments. For him the two realms were not separate."
-Dr. Richard T. DeGeorge
https://www.scu.edu/ethics/focus-areas/business-ethics/resources/a-history-of-business-ethics/

Now to this article:
"The great Austrian economist Friedrich Hayek didn't favor mathematical modeling, but he had clear philosophical models in his head. One of his most famous statements is related to the slippery road to dictatorships: ."

This is a moral claim or ethical claim: Dictatorships are bad.** Well, I accept that statement. I judge dictatorships bad. I do not want a dictatorship oppressing me or my fellow citizens for any reason.

Hayek feared oppression from an unchecked left, imo.

Again, from De George:
"Marx claimed that capitalism was built on the exploitation of labor. Whether this was for him a factual claim or a moral condemnation is open to debate; but it has been taken as a moral condemnation since 'exploitation' is a morally charged term and for him seems clearly to involve a charge of injustice. Marx's claim is based on his analysis of the labor theory of value, according to which all economic value comes from human labor." (ibid- from link above)

No doubt the old USSR became despotic, supposedly in the name of ending exploitation of labor. (Gulags?)

Back to Olah's paper and definitions. The following line could be rewritten to fit the Marxist USSR moral claims with no loss in accuracy.

"But this leads to the main paradox of neoliberalism communism. Its economic system needs a strong state, even at the expense of constraining democracy, to guarantee property worker rights and the working of the free market communal, while actively maintaining the rule of neoliberal Marxist social philosophy."

It's easy to imagine neoliberalism leading to the same despotic conditions in mirror image of the old communist states. Crushing individuals in the name of Market Rights and neoliberal market philosophy, from an unchecked Marketism.

-- -- -- -- -- -- -- -- -- -- –

* "The question which haunts the dialectical culture is this: how to have unity without totally undifferentiated and meaningless oneness? If all things are basically one, the differences are meaningless, divisions false, and definitions are sophistications, in that the tyranny, or destiny, of oneness is the truth of all being. [my aside: neoliberalism]But, if all things are basically many, and if plurality is ultimate, then the world dissolves into unrelated particulars and becomes, as some thinkers insist, not a universe but a multiverse, and every atom is in a sense its own law and being. [communism] The first leads to the breakdown of differences and the liberty of atomistic individualism and particularity; the second is the breakdown of fundamental law into nihilism and the retreat of men and their arts into isolated and private universes"
― Rousas John Rushdoony, The One And The Many: Studies In The Philosophy Of Order And Ultimacy

flora , October 29, 2017 at 1:18 pm

corrections in footnote *paragraph: [My aside: neoliberalism communism]
and [ communism neoliberalism]

flora , October 29, 2017 at 1:07 pm

Longer comment in moderation.
Shorter comment:

"The great Austrian economist Friedrich Hayek didn't favor mathematical modeling, but he had clear philosophical models in his head. One of his most famous statements is related to the slippery road to dictatorships: "

Dictatorship is a bad and an immoral form of government – whether from the left (communists) or the right (Marketists). Hayek and neoliberals only consider the danger from the left, not from the right. This is moral philosophy, as Adam Smith knew. A technical claim for efficiency is not a moral claim to justice or the good. There is no moral claim in neoliberalism that withstands examination. imo.

JIm , October 29, 2017 at 1:36 pm

It may be time to revisit the socialist calculation debate of the mid-1930 where, over a period of vears, von Mises and von Hayek debated socialist economists like Oskar Lange and A.P. Lerner.

Mises argued that capitalism allowed for a much broader participation in decision-making than that permitted by the cult of nationalization and planning. At that time much of the Left chose to ignore this critique by pointing to the evidence of capitalist failure and apparent Soviet success in rehabilitating the Soviet economy and embarking on a road to industrialization.

Lange responded to Mises's challenge by conceding that planning, even carried out by the most democratic of governments would lack proper economic criteria and that to prevent a relapse into more authoritarian solutions, socialist planning authorities would need to develop a simulated market with a system of shadow prices that could be used to compare different paths to development

Hayek, in the early 1940s, further developed the Austrian critique through his argument that collectivist ownership would erase responsibility for investment decisions making it impossible to accurately assess the responsibility for mistakes.

Hayek also pointed to the fragmented and dispersed character of economic knowledge, and as as Mirowski has argued in his new book "The Knowledge We Have Lost in Information,"– managed to establish the first commandment of neo-liberalism "that markets's don't so much exist to allocate given physical resources so much as to integrate and disseminate something called knowledge." and " that the market ceased to look like a mechanical conveyor belt and instead began to take on the outlines of a computer."

Mirowski adds that It was this new image of markets as superior information processors that has apparently swept everyone along from-neoclassical theorists to market socialists."

Is it true that the Austrian critique can only be met by a case for socialist self-management and .public enterprise that bases itself on the dispersed character of economic knowledge and refuses the tempting delusion of a totally planned economy?

How does the Left today respond to the Hayek/Mises arguments of the 1940s, with their attempted vindication of entrepreneurship, risk-taking, innovation and the need to make economic agents responsible in the use of resources?

Jeremy Grimm , October 29, 2017 at 3:23 pm

"How does the Left today respond ?" Very good question! I would add to that "How does the Left respond to the Market as an epistemology?"

I'll attempt a half-assed answer to the question of " attempted vindication of entrepreneurship, risk-taking, innovation and the need to make economic agents responsible in the use of resources?" [The question I posed is highly problematic for me. Once I accepted Mirowski's assertion that Neoliberals really truly believe this nonsense of the Market as an information processor -- an arbiter of the Truth -- I was flummoxed. I cannot argue with what to me is absurd. However Mirowski convincingly argues that addressing the central absurdity of the Neoliberal Ideology is crucial to any argument with its true believers.]

I'm very old fashioned I admit. I believe humankind has a number of personality types each suited to select and fill various niches in society. There are builders and makers of things. There are those who empathize and care for others. There are those who like to grow things and raise and care for animals. There are those who invent and make new things and think new ways. There are those who teach. There are those who conserve -- and those who break away and cast out in new directions -- pathfinders. There are those who like to decide and direct as well as those quite happy to follow reasonable direction. This is the merest thumbnail sketch but you should see the flesh of a very old concept of human society.

The entrepreneur is but one more type of individual in human society. Entrepreneurs are neither special not specially deserving of acclaim or riches. However what they do is useful. Society benefits by sharing a small portion of resources to entrepreneurs while also absorbing some of their risks of failure so that both gain. If an entrepreneur achieves success that benefits society and there is little cost in sharing a somewhat greater part of that gain with the entrepreneur as an encouragement. I have met and known some I regard as "true" entrepreneurs. They did indeed hope to make a financial gain from their efforts and risk -- but that was NOT what motivated them. That was not their core.

The classic Liberal notion that an entrepreneur deserves and has right to all of the gain from their actions is very difficult for me to argue. Like the Neoliberal notion of the Market as epistemology this Liberal notion strikes me as an absurdity. I am again flummoxed.

Jeremy Grimm , October 29, 2017 at 2:47 pm

I found this post very confusing and it stimulated what to me is a confusing maelstrom of comments. I'll stick with the title of this post rephrasing it as "How Economic Theories Serve the Power Elite". I don't believe the Rich and Big Business are equivalent to the entirety of the Power Elite but I do believe they have achieved a degree of prominence -- perhaps as a result of sponsoring Neoliberalism. I think of Neoliberalism as an ideology rather than a school of economic theories. So I should rephrase the title again as "How Ideologies Serve the Power Elite."

I believe Phillip Mirowski captures the most complete and accurate depiction of Neoliberal Ideology. I also believe the C. Wright Mills and his successor G. William Domhoff have captured the essential structures of Political Power in their characterization of the Power Elite.

So -- How do Ideology and Political Power interact? What is their dynamic? Altandmain pointed to a very troubling paragraph in the Michal Kalecki essay in yesterday's comments. Looking at that essay once more I am troubled also by its conclusion. Kalecki concludes the potential for a rise of Fascism -- as in the political/economic definition of the term -- in 1943 America was slight and would be mitigated by the progressive politics in sway during those times. I would argue that the Ideology of Nazi Fascism achieved dominion over the existing Power Elites in Germany [as well as the business interests in the US who supplied money and expertise to the German Reich]. I also believe the Ideology of Soviet Communism achieved dominion over the Power Elites in Russia. In both cases Ideology drove the State toward horrendous actions I cannot reconcile as providing any service to a Power Elite.

The Power Elites of much of the world embrace and bolster the Ideologies of Neoliberalism using them as tools to consolidate their power and line their pockets. What is the chance Neoliberalism might cast off its leash and what kind of world might we see as a result? Does the ascendance of an Ideology represent a cusp -- a singularity -- not well accounted for in the structural analysis of Political Power?

[Oct 25, 2017] Tomorrow Belongs to the Corporatocracy by C.J. Hopkins

Highly recommended!
Notable quotes:
"... Google is algorithmically burying leftist news and opinion sources such as Alternet, Counterpunch, Global Research, Consortium News, and Truthout, among others. ..."
"... my political essays are often reposted by right-wing and, yes, even pro-Russia blogs. I get mail from former Sanders supporters, Trump supporters, anarchists, socialists, former 1960s radicals, anti-Semites, and other human beings, some of whom I passionately agree with, others of whom I passionately disagree with. As far as I can tell from the emails, none of these readers voted for Clinton, or Macron, or supported the TPP, or the debt-enslavement and looting of Greece, or the ongoing restructuring of the Greater Middle East (and all the lovely knock-on effects that has brought us), or believe that Trump is a Russian operative, or that Obama is Martin Luther Jesus-on-a-stick. ..."
"... What they share, despite their opposing views, is a general awareness that the locus of power in our post-Cold War age is primarily corporate, or global capitalist, and neoliberal in nature. They also recognize that they are being subjected to a massive propaganda campaign designed to lump them all together (again, despite their opposing views) into an intentionally vague and undefinable category comprising anyone and everyone, everywhere, opposing the hegemony of global capitalism, and its non-ideological ideology (the nature of which I'll get into in a moment). ..."
"... Although the term has been around since the Fifth Century BC, the concept of "extremism" as we know it today developed in the late Twentieth Century and has come into vogue in the last three decades. During the Cold War, the preferred exonymics were "subversive," "radical," or just plain old "communist," all of which terms referred to an actual ideological adversary. ..."
"... Which is why, despite the "Russiagate" hysteria the media have been barraging us with, the West is not going to war with Russia. Nor are we going to war with China. Russia and China are developed countries, whose economies are entirely dependent on global capitalism, as are Western economies. The economies of every developed nation on the planet are inextricably linked. This is the nature of the global hegemony I've been referring to throughout this essay. Not American hegemony, but global capitalist hegemony. Systemic, supranational hegemony (which I like to prefer "the Corporatocracy," as it sounds more poetic and less post-structural). ..."
"... Global capitalism, since the end of the Cold War (i.e, immediately after the end of the Cold War), has been conducting a global clean-up operation, eliminating actual and potential insurgencies, mostly in the Middle East, but also in its Western markets. Having won the last ideological war, like any other victorious force, it has been "clear-and-holding" the conquered territory, which in this case happens to be the whole planet. Just for fun, get out a map, and look at the history of invasions, bombings, and other "interventions" conducted by the West and its assorted client states since 1990. Also, once you're done with that, consider how, over the last fifteen years, most Western societies have been militarized, their citizens placed under constant surveillance, and an overall atmosphere of "emergency" fostered, and paranoia about "the threat of extremism" propagated by the corporate media. ..."
"... Short some sort of cataclysm, like an asteroid strike or the zombie apocalypse, or, you know, violent revolution, global capitalism will continue to restructure the planet to conform to its ruthless interests. The world will become increasingly "normal." The scourge of "extremism" and "terrorism" will persist, as will the general atmosphere of "emergency." There will be no more Trumps, Brexit referendums, revolts against the banks, and so on. Identity politics will continue to flourish, providing a forum for leftist activist types (and others with an unhealthy interest in politics), who otherwise might become a nuisance, but any and all forms of actual dissent from global capitalist ideology will be systematically marginalized and pathologized. ..."
"... C. J. Hopkins is an award-winning American playwright, novelist and satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23 , is published by Snoggsworthy, Swaine & Cormorant. He can reached at cjhopkins.com or consentfactory.org . ..."
"... That is certainly what the geopolitical establishment is hoping for, but I remain skeptical of their ability to contain what forces they've used to balance the various camps of dissenting proles. They've painted themselves into a corner with non-white identity politics combined with mass immigration. The logical conclusion of where they're going is pogroms and none of the kleptocracy seem bold enough to try and stop this from happening. ..."
"... Germany is the last EU member state where an anti EU party entered parliament. In the last French elections four out of every ten voters voted on anti EU parties. In Austria the anti EU parties now have a majority. So if I were leading a big corporation, thriving by globalism, what also the EU is, I would be worried. ..."
"... This is a great article. The author's identification of "normality" & "extremism" as Capitalism's go-to concepts for social control is spot on accurate. That these terms can mean anything or nothing & are infinitely flexible is central to their power. ..."
Oct 20, 2017 | www.unz.com

Back in October of 2016, I wrote a somewhat divisive essay in which I suggested that political dissent is being systematically pathologized. In fact, this process has been ongoing for decades, but it has been significantly accelerated since the Brexit referendum and the Rise of Trump (or, rather, the Fall of Hillary Clinton, as it was Americans' lack of enthusiasm for eight more years of corporatocracy with a sugar coating of identity politics, and not their enthusiasm for Trump, that mostly put the clown in office.)

In the twelve months since I wrote that piece, we have been subjected to a concerted campaign of corporate media propaganda for which there is no historical precedent. Virtually every major organ of the Western media apparatus (the most powerful propaganda machine in the annals of powerful propaganda machines) has been relentlessly churning out variations on a new official ideological narrative designed to generate and enforce conformity. The gist of this propaganda campaign is that "Western democracy" is under attack by a confederacy of Russians and white supremacists, as well as "the terrorists" and other "extremists" it's been under attack by for the last sixteen years.

I've been writing about this campaign for a year now, so I'm not going to rehash all the details. Suffice to say we've gone from Russian operatives hacking the American elections to "Russia-linked" persons "apparently" setting up "illegitimate" Facebook accounts, "likely operated out of Russia," and publishing ads that are "indistinguishable from legitimate political speech" on the Internet. This is what the corporate media is presenting as evidence of "an unprecedented foreign invasion of American democracy," a handful of political ads on Facebook. In addition to the Russian hacker propaganda, since August, we have also been treated to relentless white supremacist hysteria and daily reminders from the corporate media that "white nationalism is destroying the West." The negligible American neo-Nazi subculture has been blown up into a biblical Behemoth inexorably slouching its way towards the White House to officially launch the Trumpian Reich.

At the same time, government and corporate entities have been aggressively restricting (and in many cases eliminating) fundamental civil liberties such as freedom of expression, freedom of the press, the right of assembly, the right to privacy, and the right to due process under the law. The justification for this curtailment of rights (which started in earnest in 2001, following the September 11 attacks) is protecting the public from the threat of "terrorism," which apparently shows no signs of abating. As of now, the United States has been in a State of Emergency for over sixteen years. The UK is in a virtual State of Emergency . France is now in the process of enshrining its permanent State of Emergency into law. Draconian counter-terrorism measures have been implemented throughout the EU . Not just the notorious American police but police throughout the West have been militarized . Every other day we learn of some new emergency security measure designed to keep us safe from "the terrorists," the "lone wolf shooters," and other "extremists."

Conveniently, since the Brexit referendum and unexpected election of Trump (which is when the capitalist ruling classes first recognized that they had a widespread nationalist backlash on their hands), the definition of "terrorism" (or, more broadly, "extremism") has been expanded to include not just Al Qaeda, or ISIS, or whoever we're calling "the terrorists" these days, but anyone else the ruling classes decide they need to label "extremists." The FBI has designated Black Lives Matter "Black Identity Extremists." The FBI and the DHS have designated Antifa "domestic terrorists."

Hosting corporations have shut down several white supremacist and neo-Nazi websites , along with their access to online fundraising. Google is algorithmically burying leftist news and opinion sources such as Alternet, Counterpunch, Global Research, Consortium News, and Truthout, among others. Twitter, Facebook, and Google have teamed up to cleanse the Internet of "extremist content," "hate speech," and whatever else they arbitrarily decide is inappropriate. YouTube, with assistance from the ADL (which deems pro-Palestinian activists and other critics of Israel "extremists") is censoring "extremist" and "controversial" videos , in an effort to "fight terrorist content online." Facebook is also collaborating with Israel to thwart "extremism," "incitement of violence," and whatever else Israel decides is "inflammatory."

In the UK, simply reading "terrorist content" is punishable by fifteen years in prison. Over three thousand people were arrested last year for publishing "offensive" and "menacing" material.

Whatever your opinion of these organizations and "extremist" persons is beside the point. I'm not a big fan of neo-Nazis, personally, but neither am I a fan of Antifa. I don't have much use for conspiracy theories, or a lot of the nonsense one finds on the Internet, but I consume a fair amount of alternative media, and I publish in CounterPunch, The Unz Review, ColdType, and other non-corporate journals.

I consider myself a leftist, basically, but my political essays are often reposted by right-wing and, yes, even pro-Russia blogs. I get mail from former Sanders supporters, Trump supporters, anarchists, socialists, former 1960s radicals, anti-Semites, and other human beings, some of whom I passionately agree with, others of whom I passionately disagree with. As far as I can tell from the emails, none of these readers voted for Clinton, or Macron, or supported the TPP, or the debt-enslavement and looting of Greece, or the ongoing restructuring of the Greater Middle East (and all the lovely knock-on effects that has brought us), or believe that Trump is a Russian operative, or that Obama is Martin Luther Jesus-on-a-stick.

What they share, despite their opposing views, is a general awareness that the locus of power in our post-Cold War age is primarily corporate, or global capitalist, and neoliberal in nature. They also recognize that they are being subjected to a massive propaganda campaign designed to lump them all together (again, despite their opposing views) into an intentionally vague and undefinable category comprising anyone and everyone, everywhere, opposing the hegemony of global capitalism, and its non-ideological ideology (the nature of which I'll get into in a moment).

As I wrote in that essay a year ago, "a line is being drawn in the ideological sand." This line cuts across both Left and Right, dividing what the capitalist ruling classes designate "normal" from what they label "extremist." The traditional ideological paradigm, Left versus Right, is disappearing (except as a kind of minstrel show), and is being replaced, or overwritten, by a pathological paradigm based upon the concept of "extremism."

* * *

Although the term has been around since the Fifth Century BC, the concept of "extremism" as we know it today developed in the late Twentieth Century and has come into vogue in the last three decades. During the Cold War, the preferred exonymics were "subversive," "radical," or just plain old "communist," all of which terms referred to an actual ideological adversary.

In the early 1990s, as the U.S.S.R. disintegrated, and globalized Western capitalism became the unrivaled global-hegemonic ideological system that it is today, a new concept was needed to represent the official enemy and its ideology. The concept of "extremism" does that perfectly, as it connotes, not an external enemy with a definable ideological goal, but rather, a deviation from the norm. The nature of the deviation (e.g., right-wing, left-wing, faith-based, and so on) is secondary, almost incidental. The deviation itself is the point. The "terrorist," the "extremist," the "white supremacist," the "religious fanatic," the "violent anarchist" these figures are not rational actors whose ideas we need to intellectually engage with in order to debate or debunk. They are pathological deviations, mutant cells within the body of "normality," which we need to identify and eliminate, not for ideological reasons, but purely in order to maintain "security."

A truly global-hegemonic system like contemporary global capitalism (the first of this kind in human history), technically, has no ideology. "Normality" is its ideology an ideology which erases itself and substitutes the concept of what's "normal," or, in other words, "just the way it is." The specific characteristics of "normality," although not quite arbitrary, are ever-changing. In the West, for example, thirty years ago, smoking was normal. Now, it's abnormal. Being gay was abnormal. Now, it's normal. Being transgender is becoming normal, although we're still in the early stages of the process. Racism has become abnormal. Body hair is currently abnormal. Walking down the street in a semi-fugue state robotically thumbing the screen of a smartphone that you just finished thumbing a minute ago is "normal." Capitalism has no qualms with these constant revisions to what is considered normal, because none of them are threats to capitalism. On the contrary, as far as values are concerned, the more flexible and commodifiable the better.

See, despite what intersectionalists will tell you, capitalism has no interest in racism, misogyny, homophobia, xenophobia, or any other despotic values (though it has no problem working with these values when they serve its broader strategic purposes). Capitalism is an economic system, which we have elevated to a social system. It only has one fundamental value, exchange value, which isn't much of a value, at least not in terms of organizing society or maintaining any sort of human culture or reverence for the natural world it exists in. In capitalist society, everything, everyone, every object and sentient being, every concept and human emotion, is worth exactly what the market will bear no more, no less, than its market price. There is no other measure of value.

Yes, we all want there to be other values, and we pretend there are, but there aren't, not really. Although we're free to enjoy parochial subcultures based on alternative values (i.e., religious bodies, the arts, and so on), these subcultures operate within capitalist society, and ultimately conform to its rules. In the arts, for example, works are either commercial products, like any other commodity, or they are subsidized by what could be called "the simulated aristocracy," the ivy league-educated leisure classes (and lower class artists aspiring thereto) who need to pretend that they still have "culture" in order to feel superior to the masses. In the latter case, this feeling of superiority is the upscale product being sold. In the former, it is entertainment, distraction from the depressing realities of living, not in a society at all, but in a marketplace with no real human values. (In the absence of any real cultural values, there is no qualitative difference between Gerhard Richter and Adam Sandler, for example. They're both successful capitalist artists. They're just selling their products in different markets.)

The fact that it has no human values is the evil genius of global capitalist society. Unlike the despotic societies it replaced, it has no allegiance to any cultural identities, or traditions, or anything other than money. It can accommodate any form of government, as long as it plays ball with global capitalism. Thus, the window dressing of "normality" is markedly different from country to country, but the essence of "normality" remains the same. Even in countries with state religions (like Iran) or state ideologies (like China), the governments play by the rules of global capitalism like everyone else. If they don't, they can expect to receive a visit from global capitalism's Regime Change Department (i.e., the US military and its assorted partners).

Which is why, despite the "Russiagate" hysteria the media have been barraging us with, the West is not going to war with Russia. Nor are we going to war with China. Russia and China are developed countries, whose economies are entirely dependent on global capitalism, as are Western economies. The economies of every developed nation on the planet are inextricably linked. This is the nature of the global hegemony I've been referring to throughout this essay. Not American hegemony, but global capitalist hegemony. Systemic, supranational hegemony (which I like to prefer "the Corporatocracy," as it sounds more poetic and less post-structural).

We haven't really got our minds around it yet, because we're still in the early stages of it, but we have entered an epoch in which historical events are primarily being driven, and societies reshaped, not by sovereign nation states acting in their national interests but by supranational corporations acting in their corporate interests. Paramount among these corporate interests is the maintenance and expansion of global capitalism, and the elimination of any impediments thereto. Forget about the United States (i.e., the actual nation state) for a moment, and look at what's been happening since the early 1990s. The US military's "disastrous misadventures" in Iraq, Libya, Afghanistan, Syria, and the former Yugoslavia, among other exotic places (which have obviously had nothing to do with the welfare or security of any actual Americans), begin to make a lot more sense.

Global capitalism, since the end of the Cold War (i.e, immediately after the end of the Cold War), has been conducting a global clean-up operation, eliminating actual and potential insurgencies, mostly in the Middle East, but also in its Western markets. Having won the last ideological war, like any other victorious force, it has been "clear-and-holding" the conquered territory, which in this case happens to be the whole planet. Just for fun, get out a map, and look at the history of invasions, bombings, and other "interventions" conducted by the West and its assorted client states since 1990. Also, once you're done with that, consider how, over the last fifteen years, most Western societies have been militarized, their citizens placed under constant surveillance, and an overall atmosphere of "emergency" fostered, and paranoia about "the threat of extremism" propagated by the corporate media.

I'm not suggesting there's a bunch of capitalists sitting around in a room somewhere in their shiny black top hats planning all of this. I'm talking about systemic development, which is a little more complex than that, and much more difficult to intelligently discuss because we're used to perceiving historico-political events in the context of competing nation states, rather than competing ideological systems or non-competing ideological systems, for capitalism has no competition . What it has, instead, is a variety of insurgencies, the faith-based Islamic fundamentalist insurgency and the neo-nationalist insurgency chief among them. There will certainly be others throughout the near future as global capitalism consolidates control and restructures societies according to its values. None of these insurgencies will be successful.

Short some sort of cataclysm, like an asteroid strike or the zombie apocalypse, or, you know, violent revolution, global capitalism will continue to restructure the planet to conform to its ruthless interests. The world will become increasingly "normal." The scourge of "extremism" and "terrorism" will persist, as will the general atmosphere of "emergency." There will be no more Trumps, Brexit referendums, revolts against the banks, and so on. Identity politics will continue to flourish, providing a forum for leftist activist types (and others with an unhealthy interest in politics), who otherwise might become a nuisance, but any and all forms of actual dissent from global capitalist ideology will be systematically marginalized and pathologized.

This won't happen right away, of course. Things are liable to get ugly first (as if they weren't ugly enough already), but probably not in the way we're expecting, or being trained to expect by the corporate media. Look, I'll give you a dollar if it turns out I'm wrong, and the Russians, terrorists, white supremacists, and other "extremists" do bring down "democracy" and launch their Islamic, white supremacist, Russo-Nazi Reich, or whatever, but from where I sit it looks pretty clear tomorrow belongs to the Corporatocracy.

C. J. Hopkins is an award-winning American playwright, novelist and satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23 , is published by Snoggsworthy, Swaine & Cormorant. He can reached at cjhopkins.com or consentfactory.org .

Malla , October 20, 2017 at 12:56 pm GMT

Brilliant Article. But this has been going on for nearly a century or more. New York Jewish bankers fund the Bolshevik revolution which gets rid of the Romanov dynasty and many of the revolutionaries are not even Russian. What many people do not know is that many Western companies invested money in Bolshevik Russia as the Bolsheviks were speeding up the modernising of the country. What many do not know is that Feminism, destruction of families and traditional societies, homoerotic art etc . was forced on the new Soviet population in a shock therapy sort of way. The same process has been implemented in the West by the elites using a much slower 'boiling the frog' method using Cultural Marxism. The aim of the Soviet Union was to spread Communism around the World and hence bring about the One World Government as wished by the globalists. Their national anthem was the 'Internationale'. The globalists were funding revolutionary movements throughout Europe and other parts of the world. One such attempt went extremely wrong and that was in Germany where instead of the Communists coming in power, the National Socialists come in power which was the most dangerous challenge faced by the Zio/globalists/elite gang. The Globalists force a war using false flag events like Pearl Harbour etc and crushed the powers which challenged their rule i.e. Germany, Japan and Italy. That is why Capitalist USA funded Communist Soviet Union using the land lease program, which on the surface never makes any sense.

However in Soviet Russia, a power struggle leads to Stalin destroying the old Communist order of Lenin Trotsky. Trotsky and his supporters leave the Soviet Union. Many of the present Neo Cons are ex Trotskyites and hence the crazy hatred for Russia even today in American politics. These Neocons do not have any principles, they will use any ideology such as Communism, Islam, twisted Western Conservatism anything to attain their global goals.

Now with Stalin coming to power, things actually improved and the war with Hitler's Third Reich gave Stalin the chance to purge many old school globalist commies and then the Soviet Union went towards a more nationalist road. Jews slowly started losing their hold on power with Russians and eventually other Soviets gaining more powerful positions. These folks found the ugly modern art culture of the early Soviet period revolting and started a new movement where the messages of Socialism can be delivered with more healthy beautiful art and culture. This process was called 'Social Realism'. So strangely what happened was that the Capitalist Christian West was becoming more and more less traditional with time (Cultural Marxism/Fabien Socialism via media, education, Hollywood) while the Eastern block was slowly moving in an opposite direction. The CIA (which is basically the intelligence agency arm of Wall Street Bankers) was working to stop this 'Social Realism' movement.

These same globalists also funded Mao and pulled the rug under Chiang Kai Shek who they were supporting earlier. Yes, Mao was funded by the Rockerfeller/ Rothschild Cabal. Now, even if the Globalists were not happy with Stalin gaining power in the Soviet Union (they preferred the internationalist Trotskyites), they still found that they could work out with the Soviet Union. That is why during the 2nd World war, the USA supports the USSR with money and material, Stalin gets a facelift as 'friendly Uncle Joe' for the Western audience. Many Cossack families who had escaped the Soviet Union to the West were sent to their deaths after the War to the Soviet Union. Why? Mr. Eden of Britain who could not stand Hitler wanted a New World Order where they could work with the more murderous Soviet Union.

Now we have the cold war. What is not known is that behind the scenes at a higher level, the Americans and the Soviets cooperated with each other exchanging technology, basically the cold war was quite fake. But the Cold war gave the American government (basically the Globalists) to take American Tax payers hard earned money to fund many projects such as Star Wars programme etc All this was not needed, as a gentleman named Keenan had shown in his book that all the Americans needed to do was to make sure Japan, Germany and Britain did not fall to the Soviets, that's it. Thus trillions of American tax payer money would be saved. But obviously the Military Industrial Complex did not like that idea. Both the Soviet and the American governments got the excuse spend their people's hard money on weapons research as well as exchanging some of that technology in the back ground. It is during this period that the precursor to the Internet was already developed. Many of the technology we use today was already invented much earlier by government agencies but released to the people later.

Then we have the Vietnam war. Now you must realise that the Globalist government of America uses wars not only to change enemy societies but also the domestic society in the West. So during the Vietnam War, the US government using the alphabet agencies such as the CIA kick start the fake opposition hippie movements. The CIA not only drugged the Vietnamese population using drugs from the Golden Triangle but later released them on the home population in the USA and the West. This was all part of the Cultural Marxist plan to change or social engineer American/ Western society. Many institutes like the Travestock Institute were part of this process. For example one of the main hochos of the Cultural Marxism, a Mr. Aderno was closely related to the Beatles movement.

Several experiments was done on mind control such as MK Ultra, monarch programming, Edward Bernay's works etc Their aim was to destroy traditional Western society and the long term goal is a New World Order. Blacks for example were used as weapons against Whites at the same time the black social order was destroyed further via the media etc

Now, Nixon going to China was to start a long term (long planned) process to bring about Corporate Communism. Yes that is going to be economic system in the coming New World Order. China is the test tube, where the Worst of Communism and the Worst of Crony Capitalism be brought together as an experiment. As the Soviet Union was going in a direction, the globalist was not happy about (it was becoming more nationalist), they worked to bring the Soviet Union down and thus the Soviet experiment ended only to be continued in China.

NATO today is the core military arm of the globalists, a precursor to a One World Military Force. That explains why after the Warsaw pact was dismantled, NATO was not or why NATO would interfere in the Middle East which is far away from the Atlantic Ocean.

The coming Cashless society will finally lead to a moneyless or distribution society, in other words Communism, that is the long term plan.

My point is, many of the geo political events as well as social movements of the last century (feminism for example) were all planned for a long time and are not accidents. The coming technologies like the internet of things, 5G technology, Cashless society, biometric identification everywhere etc are all designed to help bring about the final aim of the globalists. The final aim is a one world government with Corporate ruled Communism where we, the worker bees will be living in our shitty inner city like ghetto homes eating GM plastic foods and listening to crappy music. That is the future they have planned for us. A inner city ghetto like place under Communism ruled by greedy evil corporates.

Seamus Padraig , October 20, 2017 at 5:13 pm GMT
Once again, C.J. nails it!
Issac , October 21, 2017 at 1:52 am GMT
"Short some sort of cataclysm, like an asteroid strike or the zombie apocalypse, or, you know, violent revolution, global capitalism will continue to restructure the planet to conform to its ruthless interests."

That is certainly what the geopolitical establishment is hoping for, but I remain skeptical of their ability to contain what forces they've used to balance the various camps of dissenting proles. They've painted themselves into a corner with non-white identity politics combined with mass immigration. The logical conclusion of where they're going is pogroms and none of the kleptocracy seem bold enough to try and stop this from happening.

peterAUS , October 21, 2017 at 9:25 pm GMT
@Issac

That is certainly what the geopolitical establishment is hoping for, but I remain skeptical of their ability to contain what forces they've used to balance the various camps of dissenting proles.

Agree.

Wizard of Oz , October 25, 2017 at 4:32 am GMT
@Malla

There must be some evidence for your assertions about the long term plans and aims of globalists and others if there is truth in them. The sort of people you are referring to would often have kept private diaries and certainly written many hundreds or thousands of letters. Can you give any references to such evidence of say 80 to 130 years ago?

edNels , October 25, 2017 at 4:46 am GMT
Finally an article that tells as it is! and the first comment is a great one too. It is right there to see for anybody with eyes screwed in right.
wayfarer , October 25, 2017 at 5:16 am GMT
"Three Things Cannot Be Long Hidden: the Sun, the Moon, and the Truth." – Buddha
ThereisaGod , October 25, 2017 at 5:54 am GMT
Regarding Trump being "a clown" the jury is out:

http://www.voltairenet.org/article198481.html

.. puzzling that the writer feels the need to virtue-signal by saying he "doesn't have much time for conspiracy theories" while condemning an absolutely massive conspiracy to present establishment lies as truth.

That is one of the most depressing demonstrations of the success of the ruling creeps that I have yet come across.

jilles dykstra , October 25, 2017 at 7:35 am GMT
Germany is the last EU member state where an anti EU party entered parliament. In the last French elections four out of every ten voters voted on anti EU parties. In Austria the anti EU parties now have a majority. So if I were leading a big corporation, thriving by globalism, what also the EU is, I would be worried.
animalogic , October 25, 2017 at 7:36 am GMT
"See, despite what intersectionalists will tell you, capitalism has no interest in racism, misogyny, homophobia, xenophobia, or any other despotic values (though it has no problem working with these values when they serve its broader strategic purposes). Capitalism is an economic system, which we have elevated to a social system. It only has one fundamental value, exchange value, which isn't much of a value, at least not in terms of organizing society or maintaining any sort of human culture or reverence for the natural world it exists in. In capitalist society, everything, everyone, every object and sentient being, every concept and human emotion, is worth exactly what the market will bear no more, no less, than its market price. There is no other measure of value."

This is a great article. The author's identification of "normality" & "extremism" as Capitalism's go-to concepts for social control is spot on accurate. That these terms can mean anything or nothing & are infinitely flexible is central to their power.

Mr Hopkins is also correct when he points out that Capitalism has essentially NO values (exchange value is a value, but also a mechanism). Again, Capitalism stands for nothing: any form of government is acceptable as long as it bows to neoliberal markets.

However, the author probably goes to far:

"Nor are we going to war with China. Russia and China are developed countries, whose economies are entirely dependent on global capitalism, as are Western economies. The economies of every developed nation on the planet are inextricably linked. This is the nature of the global hegemony I've been referring to throughout this essay. Not American hegemony, but global capitalist hegemony. Systemic, supranational hegemony".

Capitalism has no values: however the Masters of the capitalist system most certainly do: Capitalism is a means, the most thorough, profound means yet invented, for the attainment of that value which has NO exchange value: POWER.

Capitalism is a supranational hegemony – yet the Elites which control it, who will act as one when presented with any external threats to Capitalism itself, are not unified internally. Indeed, they will engage in cut throat competition, whether considered as individuals or nations or as particular industries.

US Imperialism is not imaginary, it is not a mere appearance or mirage of Capitalism, supranational or not. US Imperialism in essence empowers certain sets of Capitalists over other sets. No, they may not purposely endanger the System as a whole, however, that still leaves plenty of space for aggressive competition, up to & including war.

Imperialism is the political corollary to the ultimate economic goal of the individual Capitalist: Monopoly.

jilles dykstra , October 25, 2017 at 7:36 am GMT
@Malla

Read Howard Zinn, and discover that the USA always was the same since Columbus began.

m___ , October 25, 2017 at 9:00 am GMT
Psychologically daring (being no minstrel to corporatocracy nor irrelevant activism and other "religions" that endorse the current world global system as the overhead), rationally correct, relevant, core definition of the larger geo-world and deeper "ideological" grounding( in the case of capitalism the quite shallow brute forcing of greed as an incentive, as sterile a society as possible), and adhering to longer timelines of reality of planet earth. Perfectly captures the "essence" of the dynamics of our times.

The few come to the authors' through-sites by many venue-ways, that's where some of the corporocratic world, by sheer statistics wind up also. Why do they not get the overhand into molding the shallow into anything better in the long haul. No world leader, no intellectual within power circles, even within confined quarters, speaks to the absurdity of the ongoing slugging and maltering of global human?

The elites of now are too dumb to consider the planet exo-human as a limited resource. Immigration, migration, is the de facto path to "normalization" in the terms of the author. Reducing the world population is not "in" the capitalist ideology. A major weakness, or if one prefers the stake that pinches the concept of capitalism: more instead of quality principles.

The game changers, the possible game changers: eugenics and how they play out as to the elites ( understanding the genome and manipulating it), artificial intelligence ( defining it first, not the "Elon Musk" definition), and as a far outlier exo-planetary arguments.

Confront the above with the "unexpected", the not-human engineered possible events (astroids and the like, secondary effects of human induced toxicity, others), and the chances to get to the author's "dollar" and what it by then might mean is indeed tiny.

As to the content, one of the utmost relevant articles, it is "art" to condense such broad a world view into a few words, it requires a deep understanding foremost, left to wonder what can be grasped by most reading above. Some-one try the numbers?, "big data" anyone, they might turn out in favor of what the author undoubtedly absorbed as the nucleus of twenty-first thinking, strategy and engineering.

This kind of thinking and "Harvard" conventionality, what a distance.

Hans Vogel , October 25, 2017 at 9:24 am GMT
Great article, spot on. Indeed we are all at the mercy now of a relatively small clique of ruthless criminals who are served by armies of desensitized, stupid mercenaries: MBAs, politicians, thugs, college professors, "whorenalists", etc. I am afraid that the best answer to the current and future dystopia is what the Germans call "innere Emigration," to psychologically detach oneself from the contemporary world.

Thus, the only way out of this hellhole is through reading and thinking, which every self-respecting individual should engage in. Shun most contemporary "literature" and instead turn to the classics of European culture: there you will find all you need.

For an earlier and ever so pertinent analysis of the contemporary desert, I can heartily recommend Umberto Galimberti's I vizi capitali e i nuovi vizi (Milan, 2003).

m___ , October 25, 2017 at 9:28 am GMT
@Malla

And yes, another verbally strong expression of the in your face truth, though for so few to grasp. The author again has a deep understanding, if one prefers, it points to the venueway of coming to terms, the empirical pathway as to the understanding.

"Plasticky" society is my preferred term for designating the aberrance that most (within the elites), the rest who cares (as an historical truth), do not seem to identify as proper cluelessness in the light of longer timelines. The current global ideology, religion of capitalism-democracy is the equivalent of opportunistic naval staring of the elites. They are not aware that suffocation will irreversibly affect oneself. Not enough air is the equivalent of no air in the end.

jacques sheete , October 25, 2017 at 11:12 am GMT

The negligible American neo-Nazi subculture has been blown up into a biblical Behemoth inexorably slouching its way towards the White House to officially launch the Trumpian Reich.

While the above is true, I hope most folks understand that the basic concept of controlling people through fear is nothing new. The much vaunted constitution was crammed down our collective throats by the rich scoundrels of the time in the words of more than one anti-federalist through the conjuring of quite a set of threats, all bogus.

I address my most fervent prayer to prevent our adopting a system destructive to liberty We are told there are dangers, but those dangers are ideal; they cannot be demonstrated.

- Patrick Henry, Foreign Wars, Civil Wars, and Indian Wars -- Three Bugbears, June 5, 7, and 9, 1788

https://www.infoplease.com/homework-help/united-states-documents/patrick-henry-foreign-wars-civil-wars-and-indian-wars-three

Bottom line: Concentrated wealth and power suck.The USA was ruled by a plutoligarchy from its inception, and the material benefits we still enjoy have occurred not because of it but despite it.

Jake , October 25, 2017 at 11:28 am GMT
It is the nightmare world of Network come to life.
jacques sheete , October 25, 2017 at 12:29 pm GMT
For today's goofy "right wing" big business "conservatives" who think the US won WW2, I got news for you. Monopoly capitalism, complete with increasing centralization of the economy and political forces were given boosts by both world wars.

It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market tha t business turned, increasingly after the 1900′s, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftish and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations.

-Murray N. Rothbard, Rothbard Left and Right: The Prospects for Liberty, [Originally appeared in Left and Right, Spring 1965, pp. 4-22.]

https://mises.org/library/left-and-right-prospects-liberty

jacques sheete , October 25, 2017 at 12:37 pm GMT

A truly global-hegemonic system like contemporary global capitalism (the first of this kind in human history), technically, has no ideology.

Please change that to" contemporary state-sponsored global capitalism

Malla , October 25, 2017 at 1:58 pm GMT
@Wizard of Oz

It was all about connecting the dots really. Connecting the dots of too many books I have gobe through and videos I have seen. Too many to list here.

You can get a lot of info from the book 'Tragedy and Hope' by Carroll Quigley though he avoids mantioning Jews and calls it the Anglo American establishment, Anthony Sutton however I completely disagree about funding of the Third Reich but he does talk a lot about the secret relationship between the USA and the USSR, Revilo Oliver etc.. etc Well you could read the Protocols. Now if you think that the protocols was a forgery, you gotta see this, especially the last part.

Also check this out

Also check out what this Wall Street guy realised in his career.

Also this 911 firefighter, what he found out after some research

Miro23 , October 25, 2017 at 2:18 pm GMT

Capitalism is an economic system, which we have elevated to a social system. It only has one fundamental value, exchange value, which isn't much of a value, at least not in terms of organizing society or maintaining any sort of human culture or reverence for the natural world it exists in. In capitalist society, everything, everyone, every object and sentient being, every concept and human emotion, is worth exactly what the market will bear no more, no less, than its market price. There is no other measure of value.

This looks like the "financialization" of society with Citizens morphing into Consumers.

And it's worth saying that Citizenship and Consumership are completely different concepts:

Citizenship – Dictionary.com

1. – the state of being vested with the rights, privileges, and duties of a citizen.

2. – the character of an individual viewed as a member of society;behavior in terms of the duties, obligations, and functions of a citizen:

an award for good citizenship.

The Consumer – Dictionary.com

1. a person or thing that consumes.

2. Economics. a person or organization that uses a commodity or service.

A good citizen can then define themselves in a rather non-selfish, non-financial way as for example, someone who respects others, contributes to local decisions (politically active), gains respect through work and ethical standards etc.

A good consumer on the other hand, seems to be more a self-idea, essentially someone who buys and consumes a lot (financial idea), has little political interest – and probably defines themselves (and others) by how they spend money and what they own.

It's clear that US, and global capitalism, prefers active consumers over active citizens, and maybe it explains why the US has such a worthless and dysfunctional political process.

jacques sheete , October 25, 2017 at 2:21 pm GMT

It was all about connecting the dots really.

Some folks are completely unable to connect the dots even when spoon fed the evidence. You'll note that some, in risible displays of quasi-intellectual arrogance, make virtually impossible demands for proof, none of which they'll ever accept. Rather, they flock to self aggrandizing mythology like flies to fresh sewage which the plutoligarchy produces nearly infinitely.

Your observations appear pretty accurate and self justifying I'd say.

daniel le mouche , October 25, 2017 at 2:23 pm GMT
@Wizard of Oz

I can, Wiz.

Look up the film director Aaron Russo (recently deceased), discussing how David Rockefeller tried to bring him over to the dark side. Rockefeller discussed for example the women's movement, its engineering. Also, there's Aldous Huxley's speech The Ultimate Revolution, on how drugs are the final solution to rabble troubles–we will think we're happy even in the most appalling societal conditions.

daniel le mouche , October 25, 2017 at 2:49 pm GMT
@jilles dykstra

I can only say Beware of Zinn, best friend of Chomsky, endlessly tauted by shysters like Amy Goodman and Counterpunch. Like all liberal gatekeepers, he wouldn't touch 911. I saw him speak not long before he died, and when questioned on this he said, 'That was a long time ago, let's talk about now.'

This from a professed historian, and it was only 7 years after 911. He seemed to have the same old Jewish agenda, make Europeans look really bad at all times. He was always on message, like the shyster Chomsky. Sincerely probing for the truth was not part of his agenda; his truths were highly selective, and such a colossal event as 911 concerned him not at all, with the ensuing wars, Patriot Acts, bullshit war on Terror, etc etc

joe webb , October 25, 2017 at 4:17 pm GMT
Say what???

" capitalism has no interest in racism, misogyny, homophobia, xenophobia, or any other despotic values (though it has no problem working with these values when they serve its broader strategic purposes). Capitalism is an economic system, which we have elevated to a social system."

This is a typical Left Lie. Capitalism in its present internationalist phase absolutely requires Anti-Racism to lubricate sales uh, internationally and domestically. We are all Equal.

Then, the ticking-off of the rest of the bad isms, and labeling them 'despotic' is another Leftwing and poetic attack on more or less all of us white folks, who have largely invented Capitalism, from a racialist point of view.

"Poetic" because it is an emotional appeal, not a rational argument. The other 'despotisms' are not despotic, unless you claim, like I do that racial personalities are more, or less despotic, with Whites being the least despotic. The Left totalitarian thinks emotional despotism's source is political or statist. It are not. However, Capitalism has been far less despotic than communism, etc.

Emotional Despotism is part of who Homo Sapiens is, and this emotional despotism is not racially equal. Whites are the least despotic, and have organized law and rules to contain such despotism.

Systems arise naturally from the Human Condition, like it or not. The attempt here is to sully the Capitalist system, and that is all it is. This article itself is despotic propaganda.

Arguably, human nature is despotic, and White civilization has attempted to limit our despotic nature.

This is another story.

As for elevating capitalism into a 'social system' .this is somewhat true. However, that is not totally bad, as capitalism delivers the goods, which is the first thing, after getting out of bed.

The second thing, is having a conformable social environment, and that is where racial accord enters.

People want familiar and trustworthy people around them and that is just the way human nature is genetic similarity, etc.

Beyond that, the various Leftie complaints-without-end, are also just the way it is. And yes they can be addressed and ameliorated to some degree, but human nature is not a System to be manipulated, even thought the current crop of scientistic lefties talk a good storyline about epigenetics and other Hopes, false of course, like communist planning which makes its first priority, Social Change which is always despotic. Society takes care of itself, especially racial society.

As Senator Vail said about the 1924 Immigration Act which held the line against Immigration, "if there is going to be any changing being done, we will do it and nobody else." That 'we' was a White we.

Capitalism must be national. International capital is tyranny.

Joe Webb

Wally , Website October 25, 2017 at 4:24 pm GMT
@jacques sheete

Bingo.

Some agendas require the "state sponsored" part to be hidden.

Wally , Website October 25, 2017 at 4:30 pm GMT
@Malla

"How Big Oil Conquered the World"?

That's called 'taking the bait.'

US oil companies make about five cents off a single gallon of gasoline, on the other hand US Big Government taxes on a single gallon are around seventy-one cents for US states & rising, the tax is now $1.00 per gallon for CA.

IOW, greedy US governments make fourteen to twenty times what oil companies make, and it is the oil companies who make & deliver the vital product to the marketplace.

And that is just in the US. Have a look at Europe's taxes. My, my.

It's Big Government, not Big Oil.

jacques sheete , October 25, 2017 at 5:12 pm GMT
@Wally

Some agendas require the "state sponsored" part to be hidden.

That is part of the reason why the constitutional convention was held in secret as well.

The cunning connivers who ram government down our throats don't like their designs exposed, and it's an old trick which nearly always works.

Here's Aristophanes on the subject. His play is worth a read. Short and great satire on the politicians of the day.

SAUSAGE-SELLER

No, Cleon, little you care for his reigning in Arcadia, it's to pillage and impose on the allies at will that you reckon; y ou wish the war to conceal your rogueries as in a mist, that Demos may see nothing of them, and harassed by cares, may only depend on yourself for his bread. But if ever peace is restored to him, if ever he returns to his lands to comfort himself once more with good cakes, to greet his cherished olives, he will know the blessings you have kept him out of, even though paying him a salary; and, filled with hatred and rage, he will rise, burning with desire to vote against you. You know this only too well; it is for this you rock him to sleep with your lies.

- Aristophanes, The Knights, 424 BC

http://classics.mit.edu/Aristophanes/knights.html

jilles dykstra , October 25, 2017 at 5:18 pm GMT
@daniel le mouche

The first loyalty of jews is supposed to be to jews.

Norman Finkelstein is called a traitor by jews, the Dutch jew Hamburger is called a traitor by Dutch jews, he's the chairman of 'Een ander joodse geluid', best translated by 'another jewish opinion', the organisation criticises Israel.

Jewish involvement in Sept 11 seems probable, the 'dancing Israelis', the assertion that most jews working in the Twin Towers at the time were either sick or took a day off, the fact that the Towers were jewish property, ready for a costly demolition, much abestos in the buildings, thus the 'terrorist' act brought a great profit.

Can one expect a jew to expose things like this ?

On his book, I did not find inconsistencies with literature I already knew.

The merit of the book is listing many events that affected common people in the USA, and destroying the myth that 'in the USA who is poor has only himself to blame'.

This nonsense becomes clear even from the diaries of Harold L Ickes, or from Jonathan Raban Bad Land, 1997.

As for Zinn's criticism of the adored USA constitution, I read that Charles A Beard already in 1919 resigned because he also criticised this constitution.

jilles dykstra , October 25, 2017 at 5:20 pm GMT
@Wally

Indeed, in our countries about half the national income goes to the governments by taxes, this is the reason a country like Denmark is the best country to live in.

[Oct 24, 2017] Goldman Sachs ruling America by Gary Rivlin, Michael Hudson

Highly recommended!
Notable quotes:
"... Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman. ..."
"... Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?" ..."
"... Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council. ..."
"... The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage. ..."
"... Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House. ..."
"... "There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six. ..."
"... There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration. ..."
"... Like any publicly traded company, there would now be pressure on Goldman Sachs to make its quarterly numbers and "maximize shareholder value." Discarding the partner model also meant the loss of a valuable restraint on risk-taking and bad behavior. Under the old system, any losses or fines came out of the partners' pockets ..."
"... Under Cohn, the firm aggressively moved into the subprime mortgage market, using Goldman's own money and that of its customers to help stoke the housing bubble. ..."
"... In just three years, Goldman Sachs had increased its trading volume by a factor of 50, which the Wall Street Journal attributed to "Cohn's successful push to rev up risk-taking and use of Goldman's own capital to make a profit" -- what the industry calls proprietary trading, or prop trading. ..."
"... "He reshaped the culture of the mortgage department into more of a trading environment." ..."
"... With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm's revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn't survive the mortgage meltdown, saw Cohn as "the root of the problem." Explained Marin, "When you become arrogant in a trading sense, you begin to think that everybody's a counterparty, not a customer, not a client. And as a counterparty, you're allowed to rip their face off." ..."
"... Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value. Instead, Cohn and his colleagues decided to take care of Goldman Sachs. ..."
"... At Goldman Sachs, Cohn was known as a hands-on boss who made it his business to walk the floors, talking directly with traders and risk managers scattered throughout the firm. "Blankfein's role has always been the salesperson and big-thinker conceptualizer," said Dick Bove, a veteran Wall Street analyst who has covered Goldman Sachs for decades. "Gary was the guy dealing with the day-to-day operations. Gary was running the company." While making his rounds, Cohn would sometimes hike a leg up on a trader's desk, his crotch practically in the person's face. ..."
"... At 6-foot- 2, bullet-headed and bald with a heavy jaw and a fighter's face, Cohn cut a large figure inside Goldman. Profiles over the years would describe him as aggressive, abrasive, gruff, domineering -- the firm's "attack dog." He was the missile Blankfein launched when he needed to deliver bad news or enforce discipline. Cohn embodied the new Goldman: the man who would run through a brick wall if it meant a big payoff for the bank. ..."
"... The biggest threat to Goldman was the economic health of the American International Group. ..."
"... Goldman and its clients were looking at multibillion-dollar hits to their bottom line -- a potentially fatal blow. ..."
"... But as Goldman learned a century ago, it pays to have friends in high places. The day after Lehman went bankrupt, the Bush administration announced an $85 billion bailout of AIG in return for a majority stake in the company. ..."
"... Once free of government interference, the Goldman board (which included Cohn himself) paid him a $9 million bonus in 2009 and an $18 million bonus in 2010. ..."
"... Yet the once venerated firm was now the subject of jokes on the late-night talk shows. David Letterman broadcast a "Goldman Sachs Top 10 Excuses" list (No. 9: "You're saying 'fraud' like it's a bad thing."). ..."
"... After news leaked that the firm might pay its people a record $16.7 billion in bonuses in 2009, even President Barack Obama, for whom the firm had been a top campaign donor, began to turn against Goldman, telling " 60 Minutes ," "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street." ..."
"... The firm finally acknowledged that it had failed to conduct basic due diligence on the loans its was selling customers and, once it became aware of the hazards, did not disclose them. ..."
"... "Gary was the tip of the spear for Goldman to beat back regulatory reform," said Kelleher, the financial reform lobbyist. "I used to pass him going into different agencies. They brought him in when they wanted the big gun to finish off, to kill the wounded." ..."
"... Yet defanging the Volcker Rule remained the firm's top priority. Promoted by former Fed Chair Paul Volcker, the rule would prohibit banks from committing more than 3 percent of their core assets to in-house private equity and hedge funds in the business of buying up properties and businesses with the goal of selling them at a profit. One harbinger of the financial crisis had been the collapse in the summer of 2007 of a pair of Bear Stearns hedge funds that had invested heavily in subprime loans. That 3 percent cap would have had a big impact on Goldman, which maintained a separate private equity group and operated its own internal hedge funds. But it was the restrictions Volcker placed on proprietary trading that most threatened Goldman. ..."
"... prop trading made up 48 percent of Goldman's. By one estimate , the Volcker Rule could cost Goldman Sachs $3.7 billion in revenue a year. ..."
"... Goldman had five years to prepare for some version of a Volcker Rule. Yet a loophole granted banks sufficient time to dispose of "illiquid assets" without causing undue harm -- a loophole that might even cover the assets Goldman had only recently purchased, despite the impending compliance deadline. The Fed nonetheless granted the firm additional time to sell illiquid investments worth billions of dollars. "Goldman is brilliant at exercising access and influence without fingerprints," Kelleher said. ..."
"... Just two years later, Goldman officials were again summoned by the Senate Permanent Subcommittee on Investigations to address charges that the bank under Cohn and Blankfein had boosted its profits by building a "virtual monopoly" in order to inflate aluminum prices by as much as $3 billion. ..."
"... Trump spoke of the great financial price Cohn paid to join him in the White House during his speech in Cedar Rapids. But something like the opposite was true. A huge amount of Cohn's wealth was tied up in Goldman stock. By entering government, he could sell his stake in the firm to comply with federal ethics laws. That way he could diversify his holdings and avoid roughly $50 million in capital gains taxes -- at least until he sold the replacement assets. ..."
"... As a presidential aide, Cohn did not need Senate approval. He was part of the skeletal crew that arrived at the White House on day one, giving him a critical head start on wielding his clout and cultivating his relationship with the new president. At that point, Trump was summoning Cohn to the Oval Office for impromptu meetings as many as five times a day . ..."
"... How exactly could Cohn recuse himself from matters involving Goldman when almost every aspect of his job has the potential to either grow Goldman's profits and inflate its stock price -- or tank them both? ..."
"... Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest . ..."
"... Beyond deregulation, two other pillars of Trump's economic plan -- cutting taxes and investing in infrastructure -- would have dramatic impacts on Goldman's bottom line. ..."
Sep 17, 2017 | www.defenddemocracy.press

Steve Bannon was in the room the day Donald Trump first fell for Gary Cohn. So were Reince Priebus, Jared Kushner, and Trump's pick for secretary of Treasury, Steve Mnuchin. It was the end of November, three weeks after Trump's improbable victory, and Cohn, then still the president of Goldman Sachs, was at Trump Tower presumably at the invitation of Kushner, with whom he was friendly. Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman.

On the campaign trail, Trump had spoken often about the importance of investing in infrastructure. Yet the president-elect had apparently failed to appreciate that the government would need to come up with hundreds of billions of dollars to fund his plans. Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?"

Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council.

1. GOLDMAN ALWAYS WINS

Goldman Sachs had been a favorite cudgel for candidate Trump -- the symbol of a government that favors Wall Street over its citizenry. Trump proclaimed that Hillary Clinton was in the firm's pockets, as was Ted Cruz. It was Goldman Sachs that Trump singled out when he railed against a system rigged in favor of the global elite -- one that "robbed our working class, stripped our country of wealth, and put money into the pockets of a handful of large corporations and political entities." Cohn, as president and chief operating officer of Goldman Sachs, had been at the heart of it all. Aggressive and relentless, a former aluminum siding salesman and commodities broker with a nose for making money, Cohn had turned Goldman's sleepy home loan unit into what a Senate staffer called "one of the largest mortgage trading desks in the world." There, he aggressively pushed his sales team to sell mortgage-backed securities to unaware investors even as he watched over "the big short," Goldman's decision to bet billions of dollars that the market would collapse.

Now Cohn would be coordinating economic policy for the populist president.

The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage.

Trump raged against "offshoring" by American companies during the 2016 campaign. He even threatened "retribution,"­ a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas. But Cohn laid out Goldman's very different view of offshoring at an investor conference in Naples, Florida, in November. There, Cohn explained unapologetically that Goldman had offshored its back-office staff, including payroll and IT, to Bangalore, India, now home to the firm's largest office outside New York City: "We hire people there because they work for cents on the dollar versus what people work for in the United States."

Candidate Trump promised to create millions of new jobs, vowing to be "the greatest jobs president that God ever created." Cohn, as Goldman Sachs's president and COO, oversaw the firm's mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as "disgusting" Pfizer's decision to buy a smaller Irish competitor in order to execute a "corporate inversion," a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman's help, Johnson Controls had executed its inversion.

With Cohn's appointment, Trump now had three Goldman Sachs alums in top positions inside his administration: Steve Bannon, who was a vice president at Goldman when he left the firm in 1990, as chief strategist, and Steve Mnuchin, who had spent 17 years at Goldman, as Treasury secretary. And there were more to come. A few weeks later, another Goldman partner, Dina Powell, joined the White House as a senior counselor for economic initiatives. Goldman was a longtime client of Jay Clayton, Trump's choice to chair the Securities and Exchange Commission; Clayton had represented Goldman after the 2008 financial crisis, and his wife Gretchen worked there as a wealth management adviser. And there was the brief, colorful tenure of Anthony Scaramucci as White House communications director: Scaramucci had been a vice president at Goldman Sachs before leaving to co-found his own investment company.

Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House.

"There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Earlier this summer, Trump boasted about his team of economic advisers at a rally in Cedar Rapids, Iowa. "This is the president of Goldman Sachs. Smart," Trump said . "Having him represent us! He went from massive paydays to peanuts."

Trump waved off anyone who might question his decision to rely on the very people he had demonized. "Somebody said, 'Why did you appoint a rich person to be in charge of the economy?' I said: 'Because that's the kind of thinking we want.'" He needed "great, brilliant business minds so the world doesn't take advantage of us." How else could he get the job done? "I love all people, rich or poor, but in those particular positions, I just don't want a poor person."

"Does that make sense?" Trump asked. The crowd cheered.

Years of financial disclosure forms confirm that Cohn is indeed very rich. At the end of 2016, he owned some 900,000 shares of Goldman Sachs stock, a stake worth around $220 million on the day Trump announced his appointment. Plus, he'd sold a million more Goldman shares over the previous half-dozen years. In 2007 alone, the year of the big short, Goldman Sachs paid him nearly $73 million -- more than the firm paid CEO Lloyd Blankfein. The disclosure forms Cohn filled out to join the administration indicate he owned assets valued at $252 million to $611 million. That may or may not include the $65 million parting gift Goldman's board of directors gave him for "outstanding leadership" just days before Trump was sworn in.

Like anyone taking a top job in the Trump administration, Cohn was required to sign a pledge vowing not to participate for the next two years in any matter "that is directly and substantially related to my former employer or former clients, including regulations and contracts." But presidents have sometimes issued waivers to these requirements, and it is unclear whether the Trump administration is making such waivers public.

Sens. Warren and Tammy Baldwin, a Democrat from Wisconsin, sent Cohn a letter a few days later. They brought up the $65 million bonus and asked him to publicly recuse himself from any issue that could have a direct or "significant indirect" impact on his old firm. Cohn never responded to the letter, and if he has ever received a waiver, it has not been made available to the public or the Office of Government Ethics.

"Consistent with the Trump administration's stringent ethics rules, Mr. Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs," White House spokesperson Natalie Strom said. "The White House will not comment further."

The White House declined requests to make Cohn available for an interview and declined to answer a detailed set of questions.

Cohn shared the podium with fellow Goldman alum Mnuchin (the two made partner there the same year) when the administration unveiled its new tax plan, one that, if the past is prelude, had the potential to save Goldman more than $1 billion a year in corporate taxes. The president had promised to "do a number" on financial reforms implemented after the 2008 subprime crisis, including one that threatened to cost Goldman several billion dollars a year in revenues. Under Cohn, the administration has introduced new rules easing initial public offerings -- a Goldman Sachs specialty dating back to the start of the last century, when the firm handled the IPOs of Sears, Roebuck; F. W. Woolworth; and Studebaker. As Trump's top economic policy adviser, Cohn can exert influence over regulatory agencies that have shaken billions in penalties and settlements out of Goldman Sachs in recent years. And his former colleagues inside Goldman's Public Sector and Infrastructure group likely appreciate the Trump administration's infrastructure plan, which is more or less exactly as Cohn first pitched it inside Trump Tower in November.

"It's hard to see how Gary Cohn recusing himself would solve a lot of these conflicts because nearly every major decision of his job would have a significant impact, likely billions of dollars, on Goldman Sachs and its executives," said Tyler Gellasch, an attorney and former Senate staffer who helped draft Dodd-Frank, the landmark financial reform law passed in the wake of the financial meltdown. "Goldman touches nearly every aspect of the economy, from selling U.S. treasuries to helping companies go public, and the National Economic Council advises on all of that."

In the wake of last month's white supremacist rally in Charlottesville, Virginia, Cohn confessed to the Financial Times that he has "come under enormous pressure both to resign and to remain." But the man who the Washington Post has dubbed Trump's "moderate voice" declared that neo-Nazis would not force "this Jew" to leave his job. "As a patriotic American, I am reluctant to leave my post as director of the National Economic Council," Cohn told FT. "I feel a duty to fulfill my commitment to work on behalf of the American people."

Or at least a few of them. The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts -- he seeks to slash rates by 57 percent -- that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon's was.

2. ALPHA MALES

Donald Trump, the "blue-collar billionaire," has taken great pains to write grit and toughness into his privileged biography. He talks of military schools and visits to construction sites with his father and wrote in "The Art of the Deal" that in the second grade, "I actually gave a teacher a black eye. I punched my music teacher because I didn't think he knew anything about music and I almost got expelled." Yet when the authors of the book "Trump Revealed: An American Journey of Ambition, Ego, Money, and Power" spoke to several of his childhood friends, none of them recalled the incident. Trump himself crumpled when asked about the incident during the 2016 campaign: "When I say 'punch,' when you're that age, nobody punches very hard."

Gary Cohn, however, is the middle-class kid and self-made millionaire Trump imagines himself to be. It appears that Cohn actually did slug a grade-school teacher in the face. "I was being abused," Cohn told author Malcolm Gladwell, who interviewed him for his book, "David and Goliath: Underdogs, Misfits, and the Art of Battling Giants," back when Cohn was still president of Goldman Sachs. As a child, Cohn struggled with dyslexia, a reading disorder people didn't understand much about when Cohn attended school in the 1970s in a suburb outside Cleveland. "You're a 6- or 7- or 8-year-old-kid, and you're in a public-school setting, and everyone thinks you're an idiot," Cohn confessed to Gladwell. "You'd try to get up every morning and say, today is going to be better, but after you do that a couple of years, you realize that today is going to be no different than yesterday." One time when he was in the fourth grade, a teacher put him under her desk, rolled her chair close, and started kicking him, Cohn said. "I pushed the chair back, hit her in the face, and walked out."

While Trump's father was a wealthy real estate developer, Cohn's father was an electrician. When Trump sought to get into the casino business, his father loaned him $14 million. When Cohn couldn't find a job after graduating from college, all his father could do was find him one selling aluminum siding. While Trump has the instincts of a reality show producer and an eye for spectacle, Cohn prefers to operate in the shadows.

But they likely recognize much of themselves in the other. Both Cohn and Trump are alpha males -- men of action unlikely to be found holed up in an office reading through stacks of policy reports. In fact, neither seems to be much of a reader. Cohn told Gladwell it would take him roughly six hours to read just 22 pages; he ended his time with the author by wishing him luck on "your book I'm not going to read." Both have a transactional view of politics. Trump switched his voter registration between Democratic, Republican, and independent seven times between 1999 and 2012. In the 2000s, his foundation gave $100,000 to the Clinton Foundation, and he contributed $4,700 to Hillary Clinton's senatorial campaigns. He even bought and refurbished a golf course in Westchester County a few miles from the Clinton home, in part, Trump once admitted, to ingratiate himself with the Clintons. Cohn is a registered Democrat who has given at least $275,000 to Democrats over the years, including to the campaigns of Hillary Clinton and Barack Obama, but also around $250,000 to Republicans, including Senate Majority Leader Mitch McConnell and Florida Sen. Marco Rubio.

There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration.

Cohn's path to the White House started with a tale of brass and bluster that would make Trump the salesman proud. Still in his 20s and stuck selling aluminum siding, Cohn made a play that would change his life. In the fall of 1982, while visiting the company's home office on Long Island, he stole a day from work and headed to the U.S. commodities exchange in Manhattan, hoping to talk himself into a job. He overheard an important-looking man say he was heading to LaGuardia Airport; Cohn blurted out that he was headed there, too. He jumped into a cab with the man and, Cohn told Gladwell, who devoted six pages of "David and Goliath" to Cohn's underdog rise, "I lied all the way to the airport." The man confided to Cohn that his firm had just put him in charge of a market, options, that he knew little about. Cohn likely knew even less, but he assured his backseat companion that he could get him up to speed. Cohn then spent the weekend reading and re-reading a book called "Options as a Strategic Investment." Within the week, he'd been hired as the man's assistant.

Cohn soon learned enough to venture off on his own and established himself as an independent silver trader on the floor of the New York Commodities Exchange. In 1990, Goldman Sachs, arguably the most elite firm on Wall Street, offered him a job.

Goldman Sachs was founded in the years just after the American Civil War. Marcus Goldman, a Jewish immigrant from Germany, leased a cellar office next to a coal chute in 1869. There, in an office one block from Wall Street, he bought the bad debt of local businesses that needed quick cash. His son-in-law, Samuel Sachs, joined the firm in 1882. A generation later, in 1906, the firm made its first mark, arranging for the public sale of shares in Sears, Roebuck. Goldman Sachs's influence over politics dates back at least to 1914. That year, Henry Goldman, the founder's son, was invited to advise Woodrow Wilson's administration about the creation of a central bank, mandated by the Federal Reserve Act, which had passed the previous year. Goldman Sachs men have played important roles in U.S. government ever since.

There was the occasional scandal, such as Goldman Sachs's role in the 1970 collapse of Penn Central railroad, then the largest corporate bankruptcy in U.S. history. Still, the firm built a reputation as a sober, elite partnership that served its clients ably. In 1979, when John Whitehead, a senior partner and co-chairman, set to paper what he called Goldman's "Business Principles," he began with the firm's most cherished belief: The client's interests come before all else.

Two years later, Goldman took a step that signaled the beginning of the end of that culture. In the fall of 1981, Goldman purchased J. Aron & Co., a commodities trading firm. Some within the partnership were against the acquisition, worried over how profane, often crude, trading culture would mix with Goldman's restrained, well-mannered way of doing business. "We were street fighters," one former J. Aron partner told Fortune magazine in 2008.

The J. Aron team moved into the Goldman Sachs offices in lower Manhattan, but didn't adopt its culture. Within a few years, it was producing well over $1 billion a year in profits. They were 300 employees inside a firm of 6,000, but were posting one-third of Goldman's total profits. The cultural shift, it turned out, was moving in the other direction. J. Aron, according to a book by Charles D. Ellis, a former Goldman consultant, brought to Goldman "a trading culture that would become dominant in the firm."

Lloyd Blankfein, who ascended to chairman and CEO in in 2006, started his Goldman career at J. Aron, a year after Goldman acquired the firm. "We didn't have the word 'client' or 'customer' at the old J. Aron," Blankfein told Fortune magazine two years after taking over as CEO. "We had counter-parties." Cohn joined J. Aron eight years after Blankfein did, in 1990. Four years later, Blankfein was put in charge of the firm's Fixed Income, Currency, and Commodities division, which included J. Aron. Cohn, loyal and hard-working, with an instinct for connecting with people who can help him, became Blankfein's " corporate problem solver ."

The emergence of "Bad Goldman" -- and Cohn's central role in that drama -- is really the story of the rise of the traders inside the firm. "As trading came to be a bigger part of Wall Street, I noticed that the vision changed," said Robert Kaplan, a former Goldman Sachs vice chairman, who left in 2006 after working at the firm for 23 years. "The leaders were saying the same words, but they started to change incentives away from the value-added vision and tilt more to making money first. If making money is your vision, what lengths will you not go?"

At the height of the dot-com years, a debate raged within the firm. The firm underwrote dozens of technology IPOs, including Microsoft and Yahoo, in the 1980s and 1990s, minting an untold number of multimillionaires and the occasional billionaire. Some of the companies they were bringing public generated no profits at all, while Goldman was generating up to $3 billion in profits a year. It seemed inevitable that some within Goldman Sachs began to dream of jettisoning the Goldman's century-old partnership structure and taking their firm public, too. Jon Corzine was running the firm then -- he would later go into politics in the Goldman tradition, first as a U.S. senator and then as New Jersey governor -- and was four-square in favor of going public. Corzine's second in command, Henry Paulson -- who would go on to serve as Treasury secretary -- was against the idea. But Corzine ordered up a study that supported his view that remaining private stifled Goldman's competitive opportunities and promoted Paulson to co-senior partner. Paulson soon got on board. In May 1999, Goldman sold $3.7 billion worth of shares in the company. At the end of the first day of trading, Corzine's and Paulson's stakes in the firm were each worth $205 million. Cohn's and Mnuchin's shares were each worth $112 million. And Blankfein ended up with $168 million in company stock.

Like any publicly traded company, there would now be pressure on Goldman Sachs to make its quarterly numbers and "maximize shareholder value." Discarding the partner model also meant the loss of a valuable restraint on risk-taking and bad behavior. Under the old system, any losses or fines came out of the partners' pockets. In the early 1990s, for example, the firm was involved in transactions with Robert Maxwell, a London-based media mogul who was accused of stealing hundreds of millions of pounds from his companies' pension funds. The $253 million that Goldman Sachs paid to settle lawsuits brought by pension funds over its involvement was split among the firm's 84 limited partners. Now any losses are paid by a publicly traded entity owned by shareholders, with no direct financial liability for the decision-makers themselves. In theory, Goldman could claw back bonuses in response to executives' bad behavior. But in 2016, when Goldman paid over $5 billion to settle charges brought by the Justice Department that the firm misled customers in the sale of a subprime mortgage product during Cohn's time overseeing that unit, the Goldman board declined to dock Cohn's pay. Instead, the company awarded him a $5.5 million cash bonus and another $12.6 million in company stock.

As Blankfein moved up the corporate hierarchy, Cohn rose along with him. When Blankfein was made vice chairman in charge of the firm's multibillion-dollar global commodities business and its equities division, Cohn took over as co-head of FICC, Blankfein's previous position. That meant Cohn was overseeing not just J. Aron and the firm's commodities business, but also its currency trades and bond sales. By the start of 2004, Blankfein was promoted to president and COO, and Cohn was named co-head of global securities. At that point, Cohn had authority over the mortgage-trading desk. Under Cohn, the firm aggressively moved into the subprime mortgage market, using Goldman's own money and that of its customers to help stoke the housing bubble.

Goldman was already enabling subprime predators, such as Ameriquest and New Century Financial, by providing them with the cash infusions they needed to scale up their lending to individual home buyers. Cohn would steer the firm deeper into the subprime frenzy by setting up Goldman as a patron of some of these same mortgage originators. During his tenure, Goldman snapped up loans from New Century, Countrywide, and other notorious mortgage originators and bundled them into deals with opaque names, such as ABACUS and GSAMP. Under Cohn's watchful eye, Goldman's brokers then funneled slices to customers they sold on the wisdom of holding mortgage-backed securities in their portfolios.

One such creation, GSAA Home Equity Trust 2006-2, illustrates Goldman's disregard for the quality of loans it was buying and packaging into security deals. Created in early 2006, the investment vehicle was made up of more than $1 billion in home loans Goldman had bought from Ameriquest, one of the nation's largest and most aggressive subprime lenders. By that point, the lender already had set aside $325 million to settle a probe by attorneys general and banking regulators in 49 states, who accused Ameriquest of misleading thousands of borrowers about the costs of their loans and falsifying home appraisals and other key documents. Yet GSAA Home Equity Trust 2006-2 was filled with Ameriquest loans made to more than 3,000 homeowners in Arizona, Illinois, Florida, and elsewhere. By the end of 2008, 65 percent of the roughly 1,400 borrowers whose loans remained in the deal were in default, had filed for bankruptcy, or had been targeted for foreclosure.

In just three years, Goldman Sachs had increased its trading volume by a factor of 50, which the Wall Street Journal attributed to "Cohn's successful push to rev up risk-taking and use of Goldman's own capital to make a profit" -- what the industry calls proprietary trading, or prop trading. The 2010 Journal article quoted Justin Gmelich, then the firm's mortgage chief, who said of Cohn, "He reshaped the culture of the mortgage department into more of a trading environment." In 2005, with Cohn overseeing the firm's home loan desk, Goldman underwrote $103 billion in mortgage-backed securities and other more esoteric products, such as collateralized debt obligations, which often were priced based on giant pools of home loans. The following year, the firm underwrote deals worth $131 billion.

In 2006, CEO Henry Paulson left the firm to join George W. Bush's cabinet as Treasury secretary. Blankfein, Cohn's mentor and friend, took Paulson's place. By tradition, Blankfein, a trader, should have elevated someone from the investment banking side to serve as his No. 2, so both sides of the firm would be represented in the top leadership. Instead he named Cohn, his long-time loyalist, and Jon Winkelried, who also had history on the trading side, as co-presidents and co-COOs. Winkelried, who had started at Goldman eight years before Cohn, had probably earned the right to hold those titles by himself. But Cohn had the advantage of his relationship with the CEO. Blankfein and Cohn vacationed together in the Caribbean and Mexico, owned homes near each other in the Hamptons, and their children attended the same school. Winkelreid was out in two years. The bromance between his fellow No. 2 and the top boss may have proved too much.

With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm's revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn't survive the mortgage meltdown, saw Cohn as "the root of the problem." Explained Marin, "When you become arrogant in a trading sense, you begin to think that everybody's a counterparty, not a customer, not a client. And as a counterparty, you're allowed to rip their face off."

3. THE BIG SHORT

People inside Goldman Sachs were growing nervous. It was the fall of 2006 and, as Daniel Sparks, the Goldman partner overseeing the firm's 400-person mortgage trading department, wrote in an email to several colleagues, "Subprime market getting hit hard." The firm had lent millions to New Century, a mortgage lender dealing in the higher-risk subprime market. And now New Century was late on payments. Sparks could see that the wobbly housing market was having an impact on his department. For 10 consecutive trading days, his people had lost money. The dollar amounts were small to a behemoth like Goldman: between $5 million and $30 million a day. But the trend made Sparks jittery enough to share his concerns with the Goldman's top executives: President Gary Cohn; David Viniar, the firm's chief financial officer; and CEO Lloyd Blankfein.

Sparks, a Cohn protégé, was running the mortgage desk that his mentor, only a few years earlier, had built into a major profit center for the bank. In 2006 and 2007, a report by the Senate Permanent Subcommittee on Investigations found, the two "maintained frequent, direct contact" as Goldman worked to jettison the billions in subprime loans it had on its book. "One of my jobs at the time was to make sure Gary and David and Lloyd knew what was going on," Sparks told William Cohan, author of the 2011 book "Money and Power: How Goldman Sachs Came to Rule the World . " "They don't like surprises." Viniar summoned around 20 traders and managers to a 30th floor conference room inside Goldman headquarters in lower Manhattan. It was there, on an unseasonably warm Thursday in December 2006, that the firm decided to initiate what people inside Goldman would eventually dub "the big short."

One name tossed around during the three-hour meeting was that of John Paulson. Paulson (no relation to Goldman's former CEO) would later attain infamy when it was revealed that his firm, Paulson & Co., made roughly $15 billion betting against the mortgage market. (His personal take was nearly $4 billion.) At that point, though, Paulson was a little-known hedge fund manager who crossed Goldman's radar when he asked the firm to create a product that would allow him to take a "short position" on the real estate market -- laying down bets that a large number of mortgage investments were going to plummet in value. Goldman sold Paulson what's called a credit-default swap, essentially an insurance policy that would pay off if homeowners defaulted on their mortgages in large enough numbers. The firm would create several more swaps on his behalf in the intervening months. Eventually, as mortgage defaults began to mount, people inside Goldman Sachs came to see Paulson as more of a prophet than a patsy. Some sitting around the conference table that December day wanted to follow his lead.

"There will be big opportunities the next several months," one Goldman manager at the meeting wrote enthusiastically in an email sent shortly after it ended. Sparks weighed in by email later that night. He wanted to make sure Goldman had enough "dry powder" -- cash on hand -- to be "ready for the good opportunities that are coming." That Sunday, Sparks copied Cohn on an email reporting the firm's progress on laying down short positions against mortgage-backed securities it had put together. The trading desk had already made $1.5 billion in short bets, "but still more work to do."

Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value. Instead, Cohn and his colleagues decided to take care of Goldman Sachs.

Goldman would not have suffered the reputational damage that it did -- or paid multiple billions in federal fines -- if the firm, anticipating the impending crisis, had merely shorted the housing market in the hopes of making billions. That is what investment banks do: spot ways to make money that others don't see. The money managers and traders featured in the film "The Big Short" did the same -- and they were cast as brave contrarians. Yet unlike the investors featured in the film, Goldman had itself helped inflate the housing bubble -- buying tens of billions of dollars in subprime mortgages over the previous several years for bundling into bonds they sold to investors. And unlike these investors, Goldman's people were not warning anyone who would listen about the disaster about to hit. As federal investigations found, the firm, which still claims "our clients' interests always come first" as a core principle, failed to disclose that its top people saw disaster in the very products its salespeople were continuing to hawk.

Goldman still held billions of mortgages on its books in December 2006 -- mortgages that Cohn and other Goldman executives suspected would soon be worth much less than the firm had paid for them. So, while Cohn was overseeing one team inside Goldman Sachs preoccupied with implementing the big short, he was in regular contact with others scrambling to offload its subprime inventory. One Goldman trader described the mortgage-backed securities they were selling as "shitty." Another complained in an email that they were being asked to "distribute junk that nobody was dumb enough to take first time around." A December 28 email from Fabrice "Fabulous Fab" Tourre, a Goldman vice president later convicted of fraud, instructed traders to focus on less astute, "buy and hold" investors rather than "sophisticated hedge funds" that "will be on the same side of the trade as we will."

At Goldman Sachs, Cohn was known as a hands-on boss who made it his business to walk the floors, talking directly with traders and risk managers scattered throughout the firm. "Blankfein's role has always been the salesperson and big-thinker conceptualizer," said Dick Bove, a veteran Wall Street analyst who has covered Goldman Sachs for decades. "Gary was the guy dealing with the day-to-day operations. Gary was running the company." While making his rounds, Cohn would sometimes hike a leg up on a trader's desk, his crotch practically in the person's face.

At 6-foot- 2, bullet-headed and bald with a heavy jaw and a fighter's face, Cohn cut a large figure inside Goldman. Profiles over the years would describe him as aggressive, abrasive, gruff, domineering -- the firm's "attack dog." He was the missile Blankfein launched when he needed to deliver bad news or enforce discipline. Cohn embodied the new Goldman: the man who would run through a brick wall if it meant a big payoff for the bank.

A Bloomberg profile described his typical day as 11 or 12 hours in the office, a bank-related dinner, then phone calls and emails until midnight. "The old adage that hard work will get you what you want is 100 percent true," Cohn said in a 2009 commencement address at American University. "Work hard, ask questions, and take risk."

There's no record of how often Cohn visited his stomping grounds after hours in the early months of 2007, but emails reveal an executive demanding -- and getting -- regular updates. On February 7, one of the largest originators of subprime loans, HSBC, reported a greater than anticipated rise in troubled loans in its portfolio, and another, New Century, restated its earnings for the previous three quarters to "correct errors." Sparks wrote an email to Cohn and others the next morning to reassure them that his team was closely monitoring the pricing of the company's "scratch-and-dent book" and already had a handle on which loans were defaults and which could still be securitized and offloaded onto customers. An impatient Cohn sent a two-word email at 5 o'clock that evening: "Any update?" The next day, an internal memo circulated that listed dozens of mortgage-backed securities with the exhortation, "Let all of the respective desks know how we can be helpful in moving these bonds." A week later, Sparks updated Cohn on the billions in shorts his firm had bought but warned that it was hurting sales of its "pipeline of CDOs," the collateralized debt obligations the firm had created in order to sell the mortgages still on its books.

In early March, Cohn was among those who received an email spelling out the mortgage products the firm still held. The stockpile included $1.7 billion in mortgage-related securities, along with $1.3 billion in subprime home loans and $4.3 billion in "Alt-A" loans that fall between prime and subprime on the risk scale. Goldman was "net short," according to that same email, with $13 billion in short positions, but its exposure to the mortgage market was still considerable. Sparks and others continued to update Cohn on their success offloading securities backed by subprime mortgages through the third quarter of 2007. One product Goldman priced at $94 a share on March 31, 2007 was worth just $15 five months later. Pension funds and insurance companies were among those losing billions of dollars on securities Goldman put together and endorsed as a safe, AAA-rated investments.

The third quarter of 2007 was ugly. A pair of Bear Stearns hedge funds failed. Merrill Lynch reported $2.2 billion in losses -- its largest quarterly loss ever. Merrill's CEO warned that the bank faced another $8 billion in potential losses due to the firm's exposure to subprime mortgages and resigned several weeks later. The roiling credit crisis also took down the CEO of Citigroup, which reported $6.5 billion in losses and then weeks later, warned of $8 billion to $11 billion in additional subprime-related write-downs.

And then there was Goldman Sachs, which reported a $2.9 billion profit that quarter. For the moment, the financial press seemed in awe of Blankfein, Cohn, and the rest of the team running the firm. Fortune headlined an article "How Goldman Sachs Defies Gravity" that said Goldman's "huge, shrewd bet" against the mortgage market "would seem to confirm the view Goldman is the nimblest, and perhaps the smartest, brokerage on Wall Street." A Goldman press release drily noted that "significant losses" in some areas -- the subprime mortgages it hadn't managed to unload -- had been "more than offset by gains on short mortgage products." A Goldman trader who played a central role in the big short was not so demure when making the case for a big bonus that year. John Paulson was "definitely the man in this space," he conceded, but he'd helped make Goldman "#1 on the street by a wide margin."

Disaster struck nine months into 2008 with the collapse of Lehman Brothers, in large part the result of its exposure to subprime losses. Hank Paulson, the Treasury secretary and former Goldman CEO, spent a weekend meeting with would-be suitors willing to take over a storied bank that on paper was now worth virtually nothing. He couldn't find a buyer. Nor could officials from the Federal Reserve, who were also working overtime to save the investment bank, founded in 1850, that was even older than Goldman Sachs. Shortly after midnight on Monday, September 15, 2008, Lehman announced that it would file for bankruptcy protection when the courts in New York opened that morning -- the largest bankruptcy in U.S. history.

Goldman Sachs wasn't immune from the crisis. The week before Lehman's fall, Goldman's stock had topped $161 a share. By Wednesday, it dropped to below $100. It had avoided some big losses by betting against the mortgage market, but the wider financial crisis was wreaking havoc on its other investments. On paper, Cohn had personally lost tens of millions of dollars. He hunkered down in an office with a view of Goldman's trading floor and worked the phone, trying to change the minds of major investors who were pulling their money from Goldman, fearful of anything riskier than stashing their cash in a mattress.

The next week, Goldman converted from a free-standing investment bank to a bank holding company, which made it, in the eyes of regulators, no different from Wells Fargo, JPMorgan Chase, or any other retail bank. That gave the firm access to cheap capital through the Fed but would also bring increased scrutiny from regulators. The bank took a $10 billion bailout from the Troubled Asset Relief Program and another $5 billion from Warren Buffett, in return for an annual dividend of 10 percent and access to discounted company stock. The firm raised additional billions through a public stock offering.

The biggest threat to Goldman was the economic health of the American International Group. Among other products, AIG sold insurance to protect against defaults on mortgage assets, which had been central to Goldman's big short. Of the $80 billion in U.S. mortgage assets that AIG insured during the housing bubble, Goldman bought protection from AIG on roughly $33 billion, according to the Wall Street Journal. When Lehman went into bankruptcy, its creditors received 11 cents on the dollar. Executives at AIG, in a frantic effort to avoid bankruptcy, had floated the idea of pushing its creditors to accept 40 to 60 cents on the dollar; there was speculation creditors like Goldman would receive as little as 25 percent. Goldman and its clients were looking at multibillion-dollar hits to their bottom line -- a potentially fatal blow.

But as Goldman learned a century ago, it pays to have friends in high places. The day after Lehman went bankrupt, the Bush administration announced an $85 billion bailout of AIG in return for a majority stake in the company. The next day, Paulson obtained a waiver regarding interactions with his former firm because, the Treasury secretary said, "It became clear that we had some very significant issues with Goldman Sachs." Paulson's calendar, the New York Times reported, showed that the week of the AIG bailout, he and Blankfein spoke two dozen times. While creditors around the globe were being forced to settle for much less than they were owed, AIG paid its counterparties 100 cents on the dollar. AIG ended up being the single largest private recipient of TARP funding. It received additional billions in rescue funds from the New York Federal Reserve Bank, whose board chair Stephen Friedman was a former Goldman executive who still sat on the firm's board. The U.S. Treasury ended up with greater than a 90 percent share of AIG, and the U.S. government, using taxpayer dollars, paid in full on the insurance policies financial institutions bought to protect themselves from steep declines in real estate prices -- chief among them, Goldman Sachs. All told, Goldman received at least $22.9 billion in public bailouts, including $10 billion in TARP funds and $12.9 billion in taxpayer-funded payments from AIG.

Goldman, once again, had come out on top.

4. THE VAMPIRE SQUID

Goldman Sachs repaid repaid its $10 billion bailout partway through 2009, less than 12 months after the loan was made. Other banks in the U.S. and abroad were still struggling but not Goldman, which reported a record $19.8 billion in pre-tax profits that year, and $12.9 billion the next. Gary Cohn went without a bonus in 2008, left to scrape by on his $600,000 salary. Once free of government interference, the Goldman board (which included Cohn himself) paid him a $9 million bonus in 2009 and an $18 million bonus in 2010.

Yet the once venerated firm was now the subject of jokes on the late-night talk shows. David Letterman broadcast a "Goldman Sachs Top 10 Excuses" list (No. 9: "You're saying 'fraud' like it's a bad thing."). Rolling Stone's Matt Taibbi described the bank as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money," a devastating moniker that followed Goldman into the business pages. After news leaked that the firm might pay its people a record $16.7 billion in bonuses in 2009, even President Barack Obama, for whom the firm had been a top campaign donor, began to turn against Goldman, telling " 60 Minutes ," "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street."

"They're still puzzled why is it that people are mad at the banks," Obama said. "Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it's gone through in decades, and you guys caused the problem."

Goldman was also facing an onslaught of investigations and lawsuits over behavior that had helped precipitate the financial crisis. Class actions and other lawsuits filed by pension funds and other investors accused Goldman of abusing their trust, making "false and misleading statements," and failing to conduct basic due diligence on the loans underlying the products it peddled. At least 25 of these suits named Cohn as a defendant.

State and federal regulators joined the fray. The SEC accused Goldman of deception in its marketing of opaque investments called "synthetic collateralized debt obligations," the values of which were tied to bundles of actual mortgages. These were the deals Goldman had arranged in 2006 on behalf of John Paulson so he could short the U.S. housing market. Goldman, it turned out, had allowed Paulson to cherry-pick poor-quality loans at the greatest risk of defaulting -- a fact Goldman did not share with potential investors. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio," the SEC's enforcement director at the time said, "telling other investors that the securities were selected by an independent, objective third party."

Suddenly, Cohn and other Goldman officials were downplaying the big short. In June 2010, Cohn testified before the Financial Crisis Inquiry Commission, created by Congress to investigate the causes of the nation's worst economic collapse since the Great Depression. Cohn asked the commissioners how anyone could claim the firm had bet against its clients when "during the two years of the financial crisis, Goldman Sachs lost $1.2 billion in its residential mortgage-related business"? His statement was technically true, but Cohn failed to mention the billions of dollars the firm pocketed by betting the mortgage market would collapse. Senate investigators later calculated that, at its peak, Goldman had $13.9 billion in short positions that would only pay off in the event of a steep drop in the mortgage market, positions that produced a record $3.7 billion in profits.

Two weeks after Cohn's testimony, Goldman agreed to pay the SEC $550 million to settle charges of securities fraud -- then the largest penalty assessed against a financial services firm in the agency's history. Goldman admitted no wrongdoing, acknowledging only that its marketing materials "contained incomplete information." Goldman paid $60 million in fines and restitution to settle an investigation by the Massachusetts attorney general into the financial backing the firm had offered to predatory mortgage lenders. The bank set aside another $330 million to assist people who lost their homes thanks to questionable foreclosure practices at a Goldman loan-servicing subsidiary. Goldman agreed to billions of dollars in additional settlements with state and federal agencies relating to its sale of dicey mortgage-backed securities. The firm finally acknowledged that it had failed to conduct basic due diligence on the loans its was selling customers and, once it became aware of the hazards, did not disclose them.

In the final report produced by the Senate's Permanent Subcommittee on Investigations, Goldman Sachs was mentioned an extraordinary 2,495 times, and Gary Cohn 89 times. A Goldman Sachs representative declined to respond to queries on the record.

The investigations and fines were a blow to Goldman's reputation and its bottom line, but the regulatory reforms being debated had the potential to threaten Goldman's entire business model. Even before the 2008 crash, the firm's lobbying spending had grown under Lloyd Blankfein and Cohn. By 2010, the year financial reforms were being drafted, Goldman spent $4.6 million for the services of 49 lobbyists. Their ranks included some of the most well-connected figures in Washington, including Democrat Richard Gephardt, a former House majority leader, and Republican Trent Lott, a former Senate majority leader, who had stepped down from the Senate two years earlier.

Despite all those lobbyists on the payroll, Goldman made its case primarily through proxies during the debate over financial reform. "The name Goldman Sachs was so radioactive it worked to their disadvantage to be tied to an issue," said Marcus Stanley, then a staffer for Democratic Sen. Barbara Boxer and now policy director of Americans for Financial Reform. Instead, Goldman lobbied through industry groups.

Goldman's people likely knew that all of Wall Street's lobbying might could not stop the passage of the sprawling 2010 legislative package dubbed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Obama was putting his muscle behind reform -- "We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers," he said in one speech -- and the Democrats enjoyed majorities in both houses of Congress. "For Goldman Sachs, the battle was over the final language," said Dennis Kelleher of Better Markets, a Washington, D.C., lobby group that pushes for tighter financial reforms. "That way they at least had a fighting chance in the next round, when everyone turned their attention to the regulators."

There was a lot for Goldman Sachs to dislike about Dodd-Frank. There were small annoyances, such as "say on pay," which ordered companies to give shareholders input on executive compensation, a source of potential embarrassment to a company that gave out $73 million in compensation for a single year's work -- as Goldman paid Cohn in 2007. There were large annoyances, such as the requirement that financial institutions deemed too big to fail, like Goldman, create a wind-down plan in case of disaster. There were the measures that would interfere with Goldman's core businesses, such as a provision instructing the Commodity Futures Trading Commission to regulate the trading of derivatives. And yet nothing mattered to Goldman quite like the Volcker Rule, which would protect banks' solvency by limiting their freedom to make speculative trades with their own money. Unless Goldman could initiate what Stanley called the "complexity two-step" -- win a carve-out so a new rule wouldn't interfere with legitimate business and then use that carve-out to render a rule toothless -- Volcker would slam the door shut on the entire direction in which Blankfein and Cohn had taken Goldman.

It was 5:30 a.m. on Friday, June 25, 2010, when a joint House-Senate conference committee approved the final language of Dodd-Frank. By Sunday, an industry attorney named Annette Nazareth -- a former top SEC official whose firm counts Goldman Sachs among its clients -- had already sent off a heavily annotated copy of the 848-page bill to colleagues at her old agency. It was just the first salvo in a lobbying juggernaut.

Within a few months, Cohn himself was in Washington to meet with a governor of the Federal Reserve, one of the key agencies charged with implementing Volcker. The visitors log at the CFTC, the agency Dodd-Frank put in charge of derivatives reform, shows that Cohn traveled to D.C. to personally meet with CFTC staffers at least six times between 2010 and 2016. Cohn also came to the capital for meetings at the SEC, another agency responsible for the Volcker Rule. There, he met with SEC chair Mary Jo White and other commissioners. "I seem to be in Washington every week trying to explain to them the unintended consequences of overregulation," Cohn said in a talk he gave to business students at Sacred Heart University in 2015.

"Gary was the tip of the spear for Goldman to beat back regulatory reform," said Kelleher, the financial reform lobbyist. "I used to pass him going into different agencies. They brought him in when they wanted the big gun to finish off, to kill the wounded."

Democrats lost their majority in the House that November, and Goldman threw its weight behind the spate of Republican bills that followed, aimed at taking apart Dodd-Frank piece by piece. Goldman spent more than $4 million for the services of 45 lobbyists in 2011 and $3.5 million a year in 2012 and 2013. Its lobbying spending was nearly as high in the years after passage of Dodd-Frank as it was the year the bill was introduced.

Goldman lobbyists dug in on a range of issues that would become top priorities for Republicans in the wake of Donald Trump's electoral victory. Records from the Center for Responsive Politics show that Goldman lobbyists worked to promote corporate tax cuts, such as on the Tax Increase Prevention Act of 2014 and Senate legislation aimed at extending some $200 billion in tax cuts for individuals and businesses. Goldman lobbied for a bill to fund economically critical infrastructure projects, presumably on behalf of its Public Sector and Infrastructure group. Goldman had seven lobbyists working on the JOBS Act, which would make it easier for companies to go public, another bottom-line issue to a company that underwrote $27 billion in IPOs last year. In 2016, Goldman had eight lobbyists dedicated to the Financial CHOICE Act, which would have undone most of Dodd-Frank in one fell swoop -- a bill the House revived in April.

Yet defanging the Volcker Rule remained the firm's top priority. Promoted by former Fed Chair Paul Volcker, the rule would prohibit banks from committing more than 3 percent of their core assets to in-house private equity and hedge funds in the business of buying up properties and businesses with the goal of selling them at a profit. One harbinger of the financial crisis had been the collapse in the summer of 2007 of a pair of Bear Stearns hedge funds that had invested heavily in subprime loans. That 3 percent cap would have had a big impact on Goldman, which maintained a separate private equity group and operated its own internal hedge funds. But it was the restrictions Volcker placed on proprietary trading that most threatened Goldman.

Prop trading was a profit center inside many large banks, but nowhere was it as critical as at Goldman. A 2011 report by one Wall Street analyst revealed that prop trading accounted for an 8 percent share of JPMorgan Chase's annual revenues, 9 percent of Bank of America's, and 27 percent of Morgan Stanley's. But prop trading made up 48 percent of Goldman's. By one estimate , the Volcker Rule could cost Goldman Sachs $3.7 billion in revenue a year.

When regulators finalized a new Volcker Rule in 2013, Better Markets declared it a "major defeat for Wall Street." Yet the victory for reformers was precarious. "Just changing a few words could dramatically change the scope of the rule -- to the tune of billions of dollars for some firms," said former Senate staffer Tyler Gellasch, who helped write the rule. Volcker gave banks until July 2015 -- the five-year anniversary of Dodd-Frank -- to bring themselves into compliance. Yet apparently the Volcker Rule had been written for other financial institutions, not elite firms like Goldman Sachs. "Goldman Sachs has been on a shopping spree with its own money," began a New York Times article in January 2015. The bank used its own funds to buy a mall in Utah, apartments in Spain, and a European ink company. Paul Volcker expressed disappointment that banks were still making big proprietary bets, as did the two senators most responsible for writing the rule into law. That June, Cohn appeared to reassure investors that Goldman would find a workaround. Speaking at an investor conference, he said Goldman was "transforming our equity investing activities to continue to meet client needs while complying with Volcker."

Goldman had five years to prepare for some version of a Volcker Rule. Yet a loophole granted banks sufficient time to dispose of "illiquid assets" without causing undue harm -- a loophole that might even cover the assets Goldman had only recently purchased, despite the impending compliance deadline. The Fed nonetheless granted the firm additional time to sell illiquid investments worth billions of dollars. "Goldman is brilliant at exercising access and influence without fingerprints," Kelleher said.

By mid-2016, Goldman, along with Morgan Stanley and JPMorgan Chase, was petitioning the Fed for an additional five years to comply with Volcker -- which would take the banks well into a new administration. All Blankfein and Cohn had to do was wait for a new Congress and a new president who might back their efforts to flush all of Dodd-Frank. Then Goldman could continue the risky and lucrative habits it had adopted since traders like Cohn had taken over the firm -- the financial crisis be damned -- and continue raking in billions in profits each year.

Goldman's political giving changed in the wake of Dodd-Frank. Dating back to at least 1990, according to the Center for Responsive Politics, people associated with the firm and its political action committees contributed more to Democrats than Republicans. Yet in the years since financial reform, Goldman, once Obama's second-largest political donor, shifted its campaign contributions to Republicans. During the 2008 election cycle, for instance, Goldman's people and PACs contributed $4.8 million to Democrats and $1.7 million to Republicans. By the 2012 cycle, the opposite happened, with Goldman giving $5.6 million to Republicans and $1.8 million to Democrats. Cohn's personal giving followed the same path. Cohn gave $26,700 to the Democratic Senatorial Campaign Committee in 2006 and $55,500 during the 2008 election cycle, and none to its GOP equivalent. But Cohn donated $30,800 to the National Republican Senatorial Committee in 2012 and another $33,400 to the National Republican Congressional Committee in 2015, without contributing a dime to the DSCC. Cohn gave $5,000 to Massachusetts Republican Scott Brown weeks after news broke that Elizabeth Warren -- an outspoken critic of Goldman and other Wall Street players -- might try to capture his U.S. Senate seat, which she did in 2012.

Goldman Sachs, under Cohn and Blankfein, was hardly chastened, continuing to play fast and loose with existing rules even as it plunged millions of dollars into fending off new ones. In 2010, the SEC ran a sting operation looking for banks willing to trade favorable assessments by its stock analysts for a piece of a Toys R Us IPO if the company went public. Goldman took the bait, for which they would pay a $5 million fine. An employee working out of Goldman's Boston office drafted speeches, vetted a running mate, and negotiated campaign contracts for the state treasurer during his run for Massachusetts governor in 2010, despite a rule forbidding municipal bond dealers from making significant political contributions to officials who can award them business. According to the SEC, Goldman had underwritten $9 billion in bonds for Massachusetts in the previous two years, generating $7.5 million in fees. Goldman paid $12 million to settle the matter in 2012.

Just two years later, Goldman officials were again summoned by the Senate Permanent Subcommittee on Investigations to address charges that the bank under Cohn and Blankfein had boosted its profits by building a "virtual monopoly" in order to inflate aluminum prices by as much as $3 billion.

The last few years have brought more unwanted attention. In 2015, the U.S. Justice Department launched an investigation into Goldman's role in the alleged theft of billions of dollars from a development fund the firm had helped create for the government of Malaysia. Federal regulators in New York state fined Goldman $50 million because its leaders failed to effectively supervise a banker who leaked stolen confidential government information from the Fed, which hit the firm with another $36.3 million in penalties. In December, the CFTC fined Goldman $120 million for trying to rig interest rates to profit the firm.

Politically, 2016 would prove a strange year for Goldman. Bernie Sanders clobbered Hillary Clinton for pocketing hundreds of thousands of dollars in speaking fees from Goldman, while Trump attacked Ted Cruz for being "in bed with" Goldman Sachs. (Cruz's wife Heidi was a managing director in Goldman's Houston office until she took leave to work on her husband's presidential campaign.) Goldman would have "total control" over Clinton, Trump said at a February 2016 rally, a point his campaign reinforced in a two-minute ad that ran the weekend before Election Day. An image of Blankfein flashed across the screen as Trump warned about the global forces that "robbed our working class."

Goldman's giving in the presidential race appears to reflect polls predicting a Clinton win and the firm's desire for a political restart on deregulation. People who identified themselves as Goldman Sachs employees gave less than $5,000 to the Trump campaign compared to the $341,000 that the firm's people and PACs contributed to Clinton. Goldman Sachs is relatively small compared to retail banking giants.

Yet, according to the Center for Responsive Politics , no bank outspent Goldman Sachs during the 2016 political cycle. Its PACs and people associated with the firm made $5.6 million in political contributions in 2015 and 2016. Even including all donations to Clinton, 62 percent of Goldman's giving ended up in the coffers of Republican candidates, parties, or conservative outside groups.

5. TROJAN HORSE

There's ultimately no great mystery why Donald Trump selected Gary Cohn for a top post in his administration, despite his angry rhetoric about Goldman Sachs. There's the high regard the president holds for anyone who is rich -- and the instant legitimacy Cohn conferred upon the administration within business circles. Cohn's appointment reassured bond markets about the unpredictable new president and lent his administration credibility it lacked among Fortune 100 CEOs, none of whom had donated to his campaign. Ego may also have played a role. Goldman Sachs would never do business with Trump, the developer who resorted to foreign banks and second-tier lenders to bankroll his projects. Now Goldman's president would be among those serving in his royal court.

Who can say precisely why Cohn, a Democrat, said yes when Trump asked him to be his top economic aide? No doubt Cohn has been asking himself that question in recent weeks. But he'd hit a ceiling at Goldman Sachs. In September 2015, Goldman announced that Blankfein had lymphoma, ramping up speculation that Cohn would take over the firm. Yet four months later, after undergoing chemotherapy, Blankfein was back in his office and plainly not going anywhere. Cohn was 56 years old when he was invited to Trump Tower. An influential job inside the White House meant a face-saving exit -- and one offering a huge financial advantage.

Trump spoke of the great financial price Cohn paid to join him in the White House during his speech in Cedar Rapids. But something like the opposite was true. A huge amount of Cohn's wealth was tied up in Goldman stock. By entering government, he could sell his stake in the firm to comply with federal ethics laws. That way he could diversify his holdings and avoid roughly $50 million in capital gains taxes -- at least until he sold the replacement assets.

A job in the White House might also prove an outlet for his frustrations with politicians and regulators intent on reining in the worst impulses of Wall Street. Trump was Trump, but he had also vowed to dismantle financial reform. "Dodd-Frank has made it impossible for bankers to function," Trump said during the campaign. The new president had the potential to serve as a vessel for Goldman's corporate interests.

"Maybe the one thing that holds this administration together is a belief that markets know best, and the least regulation is the best regulation," said Dennis Kelleher of Better Markets. "Goldman's interests fit with that very nicely."

Trump had given Steve Mnuchin, his campaign finance chair, the grander title. But taking over as Treasury secretary meant being confirmed by the Senate. Mnuchin's confirmation vote was delayed after it was revealed that he'd neglected to list $95 million in assets (including homes in New York, Los Angeles, and the Hamptons) on his Senate Finance Committee disclosure forms and failed to disclose his ties to an offshore hedge fund registered in the Cayman Islands. Mnuchin was not confirmed until mid-February. The president's pick for commerce secretary, Wilbur Ross, a financier who had bailed out several of Trump's casinos a few decades earlier, was not confirmed until the end of February.

As a presidential aide, Cohn did not need Senate approval. He was part of the skeletal crew that arrived at the White House on day one, giving him a critical head start on wielding his clout and cultivating his relationship with the new president. At that point, Trump was summoning Cohn to the Oval Office for impromptu meetings as many as five times a day .

In early February, Trump signed an executive order giving his Treasury secretary 120 days to give him a hit list of regulations the administration could eliminate. But with Mnuchin yet to be confirmed, the task appeared to land in Cohn's eager hands. He was standing at the president's shoulder when Trump said, "We expect to be cutting a lot out of Dodd-Frank." Shares in Goldman Sachs, which had jumped by 28 percent after the election, rose another $6 a share that day. Soon Cohn was coordinating Trump's plans not only for rolling back regulations, but also for creating jobs and slashing taxes. He met with a health care specialist, along with House Speaker Paul Ryan and other Republican leaders, to discuss alternatives to the Affordable Care Act.

Proximity is power inside any White House, especially in this one, where policy often seems shaped by Trump's last conversation. Treasury is several blocks away, while Cohn's office was in the West Wing, directly across the hall from Bannon's. Operating within a chaotic administration, Cohn was reportedly energized and focused, working around the clock. Cohn is a tenacious practitioner who, after ascending to the heights of Goldman Sachs, could teach a master class on the art of seizing a leadership vacuum and building alliances. On day 39 of the new administration, the White House sent out a press release introducing the "best-in-class team" Cohn had assembled "to drive President Trump's bold plan for job creation and economic growth." The 13 advisers included familiar figures who had worked for George W. Bush or his father, but they also included at least three former lobbyists so conflicted they would need an ethics waiver to work in the White House. For instance, Michael Catanzaro , the man Cohn chose to oversee energy policy, was until last year a lobbyist for such oil, gas, and coal companies as Devon Energy and Talen Energy. Shahira Knight had been a lobbyist for Fidelity, the mutual fund giant, before joining Cohn's team.

Cohn's strategy in those early months was to make himself indispensable to the new president. Cohn emerged as one of the few people around Trump comfortable interrupting him during a meeting or openly disagreeing on points of policy. The New York Times reported that Trump often turned to Cohn during a meeting and asked him directly, "What do you want to do?" Early on, Trump referred to Cohn as "one of my geniuses" -- a quote Reuters attributed to a "source close to Cohn."

Soon, major media were painting Cohn as a leading centrist inside the Trump White House because he had staked out positions on immigration, international alliances, and global warming at odds with Bannon's hard-right nationalism. Bannon and his allies only bolstered this narrative by characterizing "Carbon Tax Cohn" and his allies, Jared Kushner and Ivanka Trump, as interlopers -- "the Democrats," as some inside the White House called them. "Within Trump's Inner Circle, a Moderate Voice Captures the President's Ear," read the headline of a Cohn profile in the Washington Post.

"Led by Gary Cohn and Dina Powell -- two former Goldman Sachs executives often aligned with Trump's elder daughter and his son-in-law -- the group and its broad network of allies are the targets of suspicion, loathing and jealousy from their more ideological West Wing colleagues," the Washington Post reported. Fueling the rage of the ideologues, Cohn and his allies were largely winning. Trump dropped Bannon from the National Security Council and elevated Powell to deputy national security adviser. When, after Charlottesville, false reports leaked that Cohn was so disgusted with the president he was resigning, blue-chip stocks slid down. Instead, Bannon was out. Cohn, despite reports that he invoked Trump's wrath for critical remarks to the Financial Times, was still in and expected to deliver the president a win on corporate taxes.

On the day it was announced that he was joining the Trump administration, Cohn said on a goodbye podcast for Goldman Sachs, "You look at the size of our capital. You look at the size of our balance sheet. You look at the size of our people -- it's just enormous." More than $40 billion had flowed into the bank in 2016, bringing the bank's assets under management to a record $1.38 trillion. That meant pressure to find ways to put that money to work -- an enormous challenge if regulators finally shut down Goldman's prop trading arm.

How exactly could Cohn recuse himself from matters involving Goldman when almost every aspect of his job has the potential to either grow Goldman's profits and inflate its stock price -- or tank them both?

"To the extent Goldman Sachs is a direct party in a matter, Gary will recuse himself," a source familiar with the situation said. But, the source added, "As NEC director, Gary is going to touch on matters on the day-to-day economy as a whole and Goldman Sachs is a participant in the economy, thus Gary will indirectly touch on things that affect Goldman Sachs along with other banks and institutions."

Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest .

While at Goldman, Cohn had personally met with officials at the Commodity Futures Trading Commission to discuss the derivatives reform plank of Dodd-Frank, an arena in which Goldman is a dominant player. He had taken issue with rules imposed by Dodd-Frank that require banks to keep more capital on hand. Requiring banks to hold more money in reserve made them "unequivocally" safer than before 2008, he said in a 2015 interview while still Goldman's president, but he complained that Goldman was now able to lend less money, hurting profits. And then there's the Volcker Rule. Cohn, while still president of the firm, had traveled to D.C. at least twice to personally lobby regulators about its implementation.

These days, it can be hard to tell whether Cohn is speaking as a high-ranking White House official or a former Goldman Sachs executive.

In the wake of Trump's February call for a rollback in financial regulations, Cohn vowed in an interview with Bloomberg TV, "We're going to attack all aspects of Dodd-Frank." The first example he gave: the Volcker Rule, which he cast as harmful to the country's competitive advantage. In an interview that same day with Fox Business, he homed in on another Goldman obsession: Dodd-Frank's capital requirements. "Banks are forced to hoard money because they are forced to hoard capital, and they can't take any risks," he said. Mortgage, auto, credit card lending, and commercial lending are all up since 2010. Yet Cohn told Fox viewers, "We need to get banks back in the lending business, that's our No. 1 objective."

Roy Smith, a former Goldman partner now teaching at the NYU Stern School of Business, argues that Cohn should avoid the administration's effort to unwind Dodd-Frank altogether, but "at a very minimum he has to excuse himself whenever the discussion turns to Volcker." But Smith said he has trouble imagining Cohn leaving the room when Volcker comes up. "The hard part for someone like Cohn is that he knows where all the pain points are with Volcker and other parts of Dodd-Frank," Smith said. "His every instinct would be to get involved."

Beyond deregulation, two other pillars of Trump's economic plan -- cutting taxes and investing in infrastructure -- would have dramatic impacts on Goldman's bottom line.

Thanks to loopholes, many Fortune 500 corporations pay little or no corporate income tax at all. By contrast, Goldman Sachs typically pays taxes near the official 35 percent federal tax rate. In 2014, for instance, Goldman paid $3.9 billion in taxes on profits of $12.4 billion, or 31 percent. Last year, the firm's tax bill was $2.7 billion on profits of $10.3 billion, or 28 percent. In that same Fox Business interview, Cohn said that "lower corporate taxes" was the White House's "starting point" on tax reform; cuts to personal income taxes were a secondary concern.

Under the plan Cohn and Mnuchin announced last spring, what Cohn called "one of the biggest tax cuts in the American history," corporate taxes would be capped at 15 percent. If Cohn succeeds, Goldman will save massive sums: At that rate, Goldman would have paid $2 billion less in taxes in 2014, $1.4 billion less in 2015, and $1.4 billion less in 2016. The Koch brothers' network of political groups has already spent millions of dollars to promote the proposal. Even Blankfein, who the Trump campaign singled out in the commercial it ran in the final days of the campaign, acknowledged in a voicemail to employees that Trump's commitment to tax cuts, deregulation, and infrastructure "will be good for our clients and our firm."

The details of the president's "$1 trillion" infrastructure plan are similarly favorable to Goldman. As laid out in the administration's 2018 budget, the government would spend only $200 billion on infrastructure over the coming decade. By structuring "that funding to incentivize additional non-Federal funding" -- tax breaks and deals that privatize roads, bridges, and airports -- the government could take credit for "at least $1 trillion in total infrastructure spending," the budget reads.

It was as if Cohn were still channeling his role as a leader of Goldman Sachs when, at the White House in May, he offered this advice to executives: "We say, 'Hey, take a project you have right now, sell it off, privatize it, we know it will get maintained, and we'll reward you for privatizing it.'" "The bigger the thing you privatize, the more money we'll give you," continued Cohn. By "we," he clearly meant the federal government; by "you," he appeared to be speaking, at least in part, about Goldman Sachs, whose Public Sector and Infrastructure group arranges the financing on large-scale public sector deals. "Goldman Sachs is one of the largest infrastructure fund managers globally," according to infrastructure advisory firm InfraPPP Partners , "having raised more than $10 billion of capital since the inception of the business in 2006." Lost in the infamous press conference the president gave in the lobby of Trump Tower a few days after Charlottesville, with Cohn and Mnuchin visibly uncomfortable at his right flank, were Trump's remarks on infrastructure, the ostensible purpose of the event. The thrust was that the president would grease the wheels for project approvals by signing an executive order rolling back environmental impact requirements and other elements of an "overregulated permitting process."

In countless other ways, Cohn is positioned to help the firm that has been so good to him over the years. The country's National Economic Council adviser might caution a president against running too large a deficit, especially amid a healthy economy. But Goldman Sachs is in the business of finding investors to underwrite government debt. An economic adviser might caution a populist president that corporate inversions often cost jobs and tax revenue. Instead, Trump has ordered a review of policies Obama put in place to discourage them -- good news for Cohn's former colleagues. Transparency has been a watchword of initial public offerings dating back at least to the Securities and Exchange Act of 1934, but easing those rules, a step Goldman has sought, could potentially generate hundreds of millions of dollars in fees for investment banks such as Goldman. The SEC announced in June that it would allow any company going public to withhold details of its finances and strategies, an exemption previously available only to firms with under $1 billion in revenue -- more good tidings for Goldman. Just loosening the rules for IPOs, said Tyler Gellasch, the former Senate staffer, "could mean hundreds of millions of dollars more to Goldman."

In June, the Treasury Department released a statement of principles about the administration's approach to financial regulation focused on promoting "liquid and vibrant markets." Not surprisingly, the report included a call to ease capital requirements and substantially amend the Volcker Rule.

It's Cohn's influence over the country's regulators that worries Dennis Kelleher, the financial reform lobbyist. "To him, what's good for Wall Street is good for the economy," Kelleher said of Cohn. "Maybe that makes sense when a guy has spent 26 years at Goldman, a company who has repaid his loyalties and sweat with a net worth in the hundreds of millions." Kelleher recalls those who lost a home or a chunk of their retirement savings during a financial crisis that Cohn helped precipitate. "They're still suffering," he said. "Yet now Cohn's in charge of the economy and talking about eliminating financial reform and basically putting the country back to where it was in 2005, as if 2008 didn't happen. I've started the countdown clock to the next financial crash, which will make the last one look mild."

This article was reported in partnership with The Investigative Fund at The Nation Institute.

[Oct 13, 2017] Sympathy for the Corporatocracy by C. J. Hopkins

Highly recommended!
Biting satire...
Notable quotes:
"... The Tonight Show ..."
"... Now, despite what the Russian propagandists will tell you, this recent outbreak of fascistic behavior has nothing whatsoever to do with these people's frustration with neoliberalism or the supranational Corporatocracy that has been expanding its global empire with total impunity for twenty-five years. And it definitely has nothing at all to do with supranational political unions, or the supersession of national sovereignty by corporate-concocted "free trade" agreements, or the relentless privatization of everything, or the fear that a lot of people have that their cultures are being gradually erased and replaced with a globalized, corporate-friendly, multicultural, market-based culture, which is merely a simulation of culture, and which contains no actual cultural values (because exchange value is its only operative value), but which sells the empty signifiers of their eviscerated cultural values back to them so they can wear their "identities" like designer brands as they hunch together in silence at Starbucks posting pictures of themselves on Facebook. ..."
"... No, this discontent with the political establishment, corporate elites, and the mainstream media has nothing to do with any of that. It's not like global Capitalism, following the collapse of the U.S.S.R. (its last external ideological adversary), has been restructuring the entire planet in accordance with its geopolitical interests, or doing away with national sovereignty, and other nationalistic concepts that no longer serve a useful purpose in a world where a single ideological system (one backed by the most fearsome military in history) reigns completely unopposed. If that were the case, well, it might behoove us to question whether this outbreak of Nazism, racism, and other forms of "hate," was somehow connected to that historical development and maybe even try to articulate some sort of leftist analysis of that. ..."
"... a world where a single ideology rules the planet unopposed from without ..."
"... Brexit is about Britons who want their country back, a movement indeed getting stronger and stronger in EU member states, but ignored by the ruling 'elites'. ..."
"... A lot of these so called "revolutions" are fomented by the elite only to be subverted and perverted by them in the end. They've had a lot of practice co-opting revolutions and independence movements. ..."
"... "Independence" is now so fashionable (as was Communism among the "elite" back in the '30s), that they are even teaching and fostering independence to kids in kindergarten here in the US. That strikes me as most amusing. Imagine "learning" independence in state run brainwashing factories. ..."
Oct 13, 2017 | www.unz.com

Well all right, let's review what happened, or at least the official version of what happened. Not Hillary Clinton's version of what happened, which Jeffrey St. Clair so incisively skewered , but the Corporatocracy's version of what happened, which overlaps with but is even more ridiculous than Clinton's ridiculous version. To do that, we need to harken back to the peaceful Summer of 2016, (a/k/a the "Summer of Fear" ), when the United States of America was still a shiny city upon a hill whose beacon light guided freedom-loving people, the Nazis were still just a bunch of ass clowns meeting in each other's mother's garages, and Russia was, well Russia was Russia.

Back then, as I'm sure you'll recall, Western democracy, was still primarily being menaced by the lone wolf terrorists, for absolutely no conceivable reason, apart from the terrorists' fanatical desire to brutally murder all non-believers. The global Russo-Nazi Axis had not yet reared its ugly head. President Obama, who, during his tenure, had single-handedly restored America to the peaceful, prosperous, progressive paradise it had been before George W. Bush screwed it up, was on The Tonight Show with Jimmy Fallon slow jamming home the TPP . The Wall Street banks had risen from the ashes of the 2008 financial crisis, and were buying back all the foreclosed homes of the people they had fleeced with subprime mortgages. American workers were enjoying the freedom and flexibility of the new gig economy. Electioneering in the United States was underway, but it was early days. It was already clear that Donald Trump was literally the Second Coming of Hitler , but no one was terribly worried about him yet. The Republican Party was in a shambles. Neither Trump nor any of the other contenders had any chance of winning in November. Nor did Sanders, who had been defeated, fair and square, in the Democratic primaries, mostly because of his racist statements and crazy, quasi-Communist ideas. Basically, everything was hunky dory. Yes, it was going to be terribly sad to have to bid farewell to Obama, who had bailed out all those bankrupt Americans the Wall Street banks had taken to the cleaners, ended all of Bush and Cheney's wars, closed down Guantanamo, and just generally served as a multicultural messiah figure to affluent consumers throughout the free world, but Hope-and-Change was going to continue. The talking heads were all in agreement Hillary Clinton was going to be President, and there was nothing anyone could do about it.

Little did we know at the time that an epidemic of Russo-Nazism had been festering just beneath the surface of freedom-loving Western societies like some neo-fascist sebaceous cyst. Apparently, millions of theretofore more or less normal citizens throughout the West had been infected with a virulent strain of Russo-Nazi-engineered virus, because they simultaneously began exhibiting the hallmark symptoms of what we now know as White Supremacist Behavioral Disorder, or Fascist Oppositional Disorder (the folks who update the DSM are still arguing over the official name). It started with the Brexit referendum, spread to America with the election of Trump, and there have been a rash of outbreaks in Europe, like the one we're currently experiencing in Germany . These fascistic symptoms have mostly manifest as people refusing to vote as instructed, and expressing oppressive views on the Internet, but there have also been more serious crimes, including several assaults and murders perpetrated by white supremacists (which, of course, never happened when Obama was President, because the Nazis hadn't been "emboldened" yet).

Now, despite what the Russian propagandists will tell you, this recent outbreak of fascistic behavior has nothing whatsoever to do with these people's frustration with neoliberalism or the supranational Corporatocracy that has been expanding its global empire with total impunity for twenty-five years. And it definitely has nothing at all to do with supranational political unions, or the supersession of national sovereignty by corporate-concocted "free trade" agreements, or the relentless privatization of everything, or the fear that a lot of people have that their cultures are being gradually erased and replaced with a globalized, corporate-friendly, multicultural, market-based culture, which is merely a simulation of culture, and which contains no actual cultural values (because exchange value is its only operative value), but which sells the empty signifiers of their eviscerated cultural values back to them so they can wear their "identities" like designer brands as they hunch together in silence at Starbucks posting pictures of themselves on Facebook.

No, this discontent with the political establishment, corporate elites, and the mainstream media has nothing to do with any of that. It's not like global Capitalism, following the collapse of the U.S.S.R. (its last external ideological adversary), has been restructuring the entire planet in accordance with its geopolitical interests, or doing away with national sovereignty, and other nationalistic concepts that no longer serve a useful purpose in a world where a single ideological system (one backed by the most fearsome military in history) reigns completely unopposed. If that were the case, well, it might behoove us to question whether this outbreak of Nazism, racism, and other forms of "hate," was somehow connected to that historical development and maybe even try to articulate some sort of leftist analysis of that.

This hypothetical leftist analysis might want to focus on how Capitalism is fundamentally opposed to Despotism, and is essentially a value-decoding machine which renders everything and everyone it touches essentially valueless interchangeable commodities whose worth is determined by market forces, rather than by societies and cultures, or religions, or other despotic systems (wherein values are established and enforced arbitrarily, by the despot, the church, or the ruling party, or by a group of people who share an affinity and decide they want to live a certain way). This is where it would get sort of tricky, because it (i.e., this hypothetical analysis) would have to delve into the history of Capitalism, and how it evolved out of medieval Despotism, and how it has been decoding despotic values for something like five hundred years. This historical delving (which would probably be too long for people to read on their phones) would demonstrate how Capitalism has been an essentially progressive force in terms of getting us out of Despotism (which, for most folks, wasn't very much fun) by fomenting bourgeois revolutions and imposing some semblance of democracy on societies. It would follow Capitalism's inexorable advance all the way up to the Twentieth Century, in which its final external ideological adversary, fake Communism, suddenly imploded, delivering us to the world we now live in a world where a single ideology rules the planet unopposed from without , and where any opposition to that global ideology can only be internal, or insurgent, in nature (e.g, terrorism, extremism, and so on). Being a hypothetical leftist analysis, it would, at this point, need to stress that, despite the fact that Capitalism helped deliver us from Despotism, and improved the state of society generally (compared to most societies that preceded it), we nonetheless would like to transcend it, or evolve out of it toward some type of society where people, and everything else, including the biosphere we live in, are not interchangeable, valueless commodities exchanged by members of a global corporatocracy who have no essential values, or beliefs, or principles, other than the worship of money. After having covered all that, we might want to offer more a nuanced view of the current neo-nationalist reaction to the Corporatocracy's ongoing efforts to restructure and privatize the rest of the planet. Not that we would support this reaction, or in any way refrain from calling neo-nationalism what it is (i.e., reactionary, despotic, and doomed), but this nuanced view we'd hypothetically offer, by analyzing the larger sociopolitical and historical forces at play, might help us to see the way forward more clearly, and who knows, maybe eventually propose some kind of credible leftist alternative to the "global neoliberalism vs. neo-nationalism" double bind we appear to be hopelessly stuck in at the moment.

Luckily, we don't have to do that (i.e., articulate such a leftist analysis of any such larger historical forces). Because there is no corporatocracy not really. That's just a fake word the Russians made up and are spreading around on the Internet to distract us while the Nazis take over. No, the logical explanation for Trump, Brexit, and anything else that threatens the expansion of global Capitalism, and the freedom, democracy, and prosperity it offers, is that millions of people across the world, all at once, for no apparent reason, woke up one day full-blown fascists and started looking around for repulsive demagogues to swear fanatical allegiance to. Yes, that makes a lot more sense than all that complicated stuff about history and hegemonic ideological systems, which is probably just Russian propaganda anyway, in which case there is absolutely no reason to read any boring year-old pieces, like this one in The European Financial Review , or this report by Corporate Watch , from way back in the year 2000, about the rise of global corporate power.

So, apologies for wasting your time with all that pseudo-Marxian gobbledygook. Let's just pretend this never happened, and get back to more important matters, like statistically proving that Donald Trump got elected President because of racism, misogyny, transphobia, xenophobia, or some other type of behavioral disorder, and pulling down Confederate statues, or kneeling during the National Anthem, or whatever happens to be trending this week. Oh, yeah, and debating punching Nazis, or people wearing MAGA hats. We definitely need to sort all that out before we can move ahead with helping the Corporatocracy remove Trump from office, or at least ensure he remains surrounded by their loyal generals, CEOs, and Goldman Sachs guys until the next election. Whatever we do, let's not get distracted by that stuff I just distracted you with. I know, it's tempting, but, given what's at stake, we need to maintain our laser focus on issues related to identity politics, or else well, you know, the Nazis win.

C. J. Hopkins is an award-winning American playwright, novelist and satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23 , is published by Snoggsworthy, Swaine & Cormorant. He can reached at cjhopkins.com or consentfactory.org .

jilles dykstra, October 13, 2017 at 3:15 pm GMT

Yesterday evening on RT a USA lady, as usual forgot the name, spoke about the USA. In a matter of fact tone she said things like 'they (Deep State) have got him (Trump) in the box'.

They, Deep State again, are now wondering if they will continue to try to control the world, or if they should stop the attempt, and retreat into the USA.
Also as matter of fact she said 'the CIA has always been the instrument of Deep State, from Kenndy to Nine Eleven'.

Another statement was 'no president ever was in control'.

How USA citizens continue to believe they live in a democracy, I cannot understand.

Yesterday the intentions of the new Dutch government were made public, alas most Dutch also dot not see that the Netherlands since 2005 no longer is a democracy, just a province of Brussels.

You can fool all people .

Che Guava, October 13, 2017 at 4:22 pm GMT

@jilles dykstra

Jilles,

I am thinking you take the article too literally.

jacques sheete, October 13, 2017 at 4:30 pm GMT

Brexit is about Britons who want their country back, a movement indeed getting stronger and stronger in EU member states, but ignored by the ruling 'elites'.

No doubt many do want their country back, but what concerns me is that all of a sudden we have the concept of "independence" plastered all over the place. Such concepts don't get promoted unless the ruling elites see ways to turn those sentiments to their favor.

A lot of these so called "revolutions" are fomented by the elite only to be subverted and perverted by them in the end. They've had a lot of practice co-opting revolutions and independence movements. (And everything else.)

"Independence" is now so fashionable (as was Communism among the "elite" back in the '30s), that they are even teaching and fostering independence to kids in kindergarten here in the US. That strikes me as most amusing. Imagine "learning" independence in state run brainwashing factories.

Does anyone else smell a rat or two?

Anon-og , October 13, 2017 at 5:16 pm GMT

"Now, despite what the Russian propagandists will tell you, this recent outbreak of fascistic behavior has nothing whatsoever to do with these people's frustration with neoliberalism or the supranational Corporatocracy that has been expanding its global empire with total impunity for twenty-five years. And it definitely has nothing at all to do with supranational political unions, or the supersession of national sovereignty by corporate-concocted "free trade" agreements, or the relentless privatization of everything, or the fear that a lot of people have that their cultures are being gradually erased and replaced with a globalized, corporate-friendly, multicultural, market-based culture, which is merely a simulation of culture, and which contains no actual cultural values (because exchange value is its only operative value), but which sells the empty signifiers of their eviscerated cultural values back to them so they can wear their "identities" like designer brands as they hunch together in silence at Starbucks posting pictures of themselves on Facebook."

Very impressed with this article, never really paid attention to CJ's articles but that is now changing!

[Oct 10, 2017] The US Economy: Explaining Stagnation and Why It Will Persist by Thomas I. Palley

Highly recommended!
The paper is two years old. Looks how his prediction fared. Stagnation is still with us althouth low oil prices lifted all the boats. But this period is coming to the end.
Notable quotes:
"... The financial crisis that erupted in 2008 challenged the foundations of orthodox economic theory and policy. At its outset, orthodox economists were stunned into silence as evidenced by their inability to answer the Queen of England's simple question (November 5th, 2008) to the faculty of the London School of Economics as to why no one foresaw the crisis. ..."
"... Six years later, orthodoxy has fought back and largely succeeded in blocking change of thought and policy. The result has been economic stagnation ..."
"... Perspective # 3 is the progressive position which is rooted in Keynesian economics and can be labeled the "destruction of shared prosperity hypothesis" ..."
"... It is identified with the New Deal wing of the Democratic Party and the labor movement, but it has no standing within major economics departments owing to their suppression of alternatives to economic orthodoxy. ..."
"... However, financial excess is just an element of the crisis and the full explanation is far deeper than just financial market regulatory failure According to the Keynesian destruction of shared prosperity hypothesis, the deep cause is generalized economic policy failure rooted in the flawed neoliberal economic paradigm that was adopted in the late 1970s and early 1980s. ..."
"... globalization reconfigured global production by transferring manufacturing from the U.S. and Europe to emerging market economies. This new global division of labor was then supported by having U.S. consumers serve as the global economy's buyer of first and last resort, which explains the U.S. trade deficit and the global imbalances problem. ..."
"... This new global division of labor inevitably created large trade deficits that also contributed to weakening the aggregate demand (AD)generation process by causing a hemorrhage of spending on imports (Palley, 2015) ..."
"... Finance does this through three channels. First, financial markets have captured control of corporations via enforcement of the shareholder value maximization paradigm of corporate governance. Consequently, corporations now serve financial market interests along with the interests of top management. Second, financial markets in combination with corporations lobby politically for the neoliberal policy mix. ..."
"... Third, financial innovation has facilitated and promoted financial market control of corporations via hostile take-overs, leveraged buyouts and reverse capital distributions. Financial innovation has therefore been key for enforcing Wall Street's construction of the shareholder value maximization paradigm. ..."
"... The second vital role of finance is the support of AD. The neoliberal model gradually undermined the income and demand generation process, creating a growing structural demand gap. The role of finance was to fill that gap. Thus, within the U.S., deregulation, financial innovation, speculation, and mortgage lending fraud enabled finance to fill the demand gap by lending to consumers and by spurring asset price inflation ..."
"... this AD generation role of finance was an unintended consequence and not part of a grand plan. Neoliberal economists and policymakers did not realize they were creating a demand gap, but their laissez-faire economic ideology triggered financial market developments that coincidentally filled the demand gap. ..."
"... the financial process they unleashed was inevitably unstable and was always destined to hit the wall. There are limits to borrowing and limits to asset price inflation and all Ponzi schemes eventually fall apart. ..."
"... the long duration of financial excess made the collapse far deeper when it eventually happened. It has also made escaping the after-effects of the financial crisis far more difficult as the economy is now burdened by debts and destroyed credit worthiness. That has deepened the proclivity to economic stagnation. ..."
"... The neoliberal labor market flexibility agenda explicitly attacks unions and works to shift income to wealthier households. ..."
"... That model inevitably produces stagnation because it produces a structural demand shortage via (i) its impact on income distribution, and (ii) via its design of globalization which generates massive trade deficits, wage competition and off-shoring of jobs and investment. In terms of the three-way contest between the government failure hypothesis, the market failure hypothesis and the destruction of shared prosperity hypothesis, the economic policy debate during the Great Recession was cast as exclusively between government failure and market failure. ..."
"... This attitude to fiscal policy reflects the dominance within the Democratic Party of "Rubinomics", the Wall Street view associated with former Treasury Secretary Robert Rubin, that government spending and budget deficits raise real interest rates and thereby lower growth. According to that view, the US needs long-term fiscal austerity to offset Social Security and Medicare Side-by-side with the attempt to reflate the economy, the Obama administration also pushed for major overhaul and tightening of financial sector regulation via the Dodd- Frank Act (2010). ..."
"... The Obama administration's softcore neoliberalism would have likely generated stagnation by itself, but the prospect has been further strengthened by Republicans. ..."
"... The Obama administration was to provide fiscal stimulus to jump start the economy; the Fed would use QE to blow air back into the asset price bubble; the Dodd-Frank Act (2010) would stabilize financial markets; and globalization would be deepened by further NAFTA-styled international agreements. This is a near-identical model to that which failed so disastrously. Consequently, stagnation is the logical prognosis. ..."
"... Consequently, the economy is destined to repeat the patterns of the 1990s and 2000s. However, the US economy has also experienced almost twenty more years of neoliberalism which has left its economic body in worse health than the 1990s. That means the likelihood of delivering another bubble-based boom is low and stagnation tendencies will likely reassert themselves after a shorter and weaker period of expansion ..."
Apr 10, 2015 | www.thomaspalley.com

Abstract

This paper examines the major competing interpretations of the economic crisis in the US and explains the rebound of neoliberal orthodoxy. It shows how US policymakers acted to stabilize and save the economy, but failed to change the underlying neoliberal economic policy model. That failure explains the emergence of stagnation, which is likely to endure

Current economic conditions in the US smack of the mid-1990s. The 1990s expansion proved unsustainable and so will the current modest expansion. However, this time it is unlikely to be followed by financial crisis because of the balance sheet cleaning that took place during the last crisis

Revised 1: This paper has been prepared for inclusion in Gallas, Herr, Hoffer and Scherrer (eds.), Combatting Inequality: The Global North and South , Rouledge, forthcoming in 2015.

The crisis and the resilience of neoliberal economic orthodoxy

The financial crisis that erupted in 2008 challenged the foundations of orthodox economic theory and policy. At its outset, orthodox economists were stunned into silence as evidenced by their inability to answer the Queen of England's simple question (November 5th, 2008) to the faculty of the London School of Economics as to why no one foresaw the crisis.

Six years later, orthodoxy has fought back and largely succeeded in blocking change of thought and policy. The result has been economic stagnation

This paper examines the major competing interpretations of the economic crisis in the US and explains the rebound of neoliberal orthodoxy. It shows how US policymakers acted to stabilize and save the economy, but failed to change the underlying neoliberal economic policy model.

That failure explains the emergence of stagnation in the US economy and stagnation is likely to endure.

Current economic conditions in the US smack of the mid-1990s. The 1990s expansion proved unsustainable and so will the current modest expansion. However, this time it is unlikely to be followed by financial crisis because of the balance sheet cleaning that took place during the last crisis.

Competing explanations of the crisis

The Great Recession, which began in December 2007 and includes the financial crisis of 2008, is the deepest economic downturn in the US since the World War II. The depth of the downturn is captured in Table 1 which shows the decline in GDP and the peak unemployment rate. The recession has the longest duration and the decline in GDP is the largest. The peak unemployment rate was slightly below the peak rate of the recession of 1981-82. However, this ignores the fact that the labor force participation rate fell in the Great Recession (i.e. people left the labor force and were not counted as unemployed) whereas it increased in the recession of 1981-82 (i.e. people entered the labor force and were counted as unemployed).

Table 1. Alternative measures of the depth of US recessions.

... ... ...

Table 2 provides data on the percent change in private sector employment from business cycle peak to trough. The 7.6 percent loss of private sector jobs in the Great Recession dwarfs other recessions, providing another measure of its depth and confirming it extreme nature. 2 Over the course of the 1981-82 labor force participation rose from 63.8 percent to 64.2 percent, thereby likely increasing the unemployment rate. In contrast, over the course of the Great Recession the labor force participation rate fell from 66.0 percent to 65.7 percent, thereby likely decreasing the unemployment. The decrease in the labor force participation rate was even sharper for prime age (25 – 54 years old) workers, indicating that the decrease in the overall participation rate was not due to demographic factors such as an aging population. Instead, it was due to lack of job opportunities, which supports the claim that labor force exit lowered the unemployment rate. Table 2. U.S. private employment cycles, peak to trough. Source: Bureau of labor statistics and author's calculations.

... ... ...

Broadly speaking there exist three competing perspectives on the crisis (Palley, 2012).

For the period 1945 - 1975 the U.S. economy was characterized by a "virtuous circle" Keynesian growth model built on full employment and wage growth tied to productivity growth. This model is illustrated in Figure 1 and its logic was as follows. Productivity growth drove wage growth, which in turn fuelled demand growth and created full employment. That provided an incentive for investment, which drove further productivity growth and supported higher wages. This model held in the U.S. and, subject to local modifications, it also held throughout the global economy - in Western Europe, Canada, Japan, Mexico, Brazil and Argentina.

Figure 1. The 1945 – 75 virtuous circle Keynesian growth model. Wage growth Demand growth Full employment Productivity growth Investment

After 1980 the virtuous circle Keynesian growth model was replaced by a neoliberal growth model. The reasons for the change are a complex mix of economic, political and sociological reasons that are beyond the scope of the current paper. The key changes wrought by the new model were:

  1. Abandonment of the commitment to full employment and the adoption of commitment to very low inflation;
  2. Severing of the link between wages and productivity growth.

Together, these changes created a new economic dynamic. Before 1980, wages were the engine of U.S. demand growth. After 1980, debt and asset price inflation became the engine The new economic model was rooted in neoliberal economic thought. Its principal effects were to weaken the position of workers; strengthen the position of corporations; and unleash financial markets to serve the interests of financial and business elites.

As illustrated in figure 2, the new model can be described as a neoliberal policy box that fences workers in and pressures them from all sides. On the left hand side, the corporate model of globalization put workers in international competition via global production networks that are supported by free trade agreements and capital mobility.

On the right hand side, the "small" government agenda attacked the legitimacy of government and pushed persistently for deregulation regardless of dangers. From below, the labor market flexibility agenda attacked unions and labor market supports such as the minimum wage, unemployment benefits, employment protections, and employee rights. From above, policymakers abandoned the commitment of full employment, a development that was reflected in the rise of inflation targeting and the move toward independent central banks influenced by financial interests.

Figure 2. The neoliberal policy box. Globalization WORKERS Abandonment of full employment Small Government Labor Market Flexibility

Corporate globalization is an especially key feature. Not only did it exert downward inward pressures on economies via import competition and the threat of job off-shoring, it also provided the architecture binding economies together. Thus, globalization reconfigured global production by transferring manufacturing from the U.S. and Europe to emerging market economies. This new global division of labor was then supported by having U.S. consumers serve as the global economy's buyer of first and last resort, which explains the U.S. trade deficit and the global imbalances problem.

This new global division of labor inevitably created large trade deficits that also contributed to weakening the aggregate demand (AD)generation process by causing a hemorrhage of spending on imports (Palley, 2015)

An important feature of the Keynesian hypothesis is that the neoliberal policy box was implemented on a global basis, in both the North and the South. As in the U.S., there was also a structural break in policy regime in both Europe and Latin America. In Latin America , the International Monetary Fund and World Bank played an important role as they used the economic distress created by the 1980s debt crisis to push neoliberal policy

They did so by making financial assistance conditional on adopting such policies. This global diffusion multiplied the impact of the turn to neoliberal economic policy and it explains why the Washington Consensus enforced by the International Monetary Fund and World Bank has been so significant. It also explains why stagnation has taken on a global dimension.

III The role of finance in the neoliberal model

Owing to the extraordinarily deep and damaging nature of the financial crisis of 2008, financial market excess has been a dominant focus of explanations of the Great Recession. Within the neoliberal government failure hypothesis the excess is attributed to ill-advised government intervention and Federal Reserve interest rate policy. Within the neoliberal market failure hypothesis it is attributed to ill-advised deregulation and failure to modernize regulation.

According to the Keynesian destruction of shared prosperity hypothesis neither of those interpretations grasps the true significance of finance. The government failure hypothesis is empirically unsupportable (Palley, 2012a, chapter 6), while the market failure hypothesis has some truth but also misses the true role of finance That role is illustrated in Figure 3 which shows that finance performed two roles in the neoliberal model. The first was to structurally support the neoliberal policy box. The second was to support the AD generation process. These dual roles are central to the process of increasing financial domination of the economy which has been termed financialization (Epstein, 2004, p.3; Krippner, 2004, 2005; Palley, 2013). Figure 3. The role of finance in the neoliberal model. The role of finance: "financialization" Supporting the neoliberal policy box Aggregate demand generation Corporate behavior Economic policy Financial innovation The policy box shown in Figure 2 has four sides.

A true box has six sides and a four sided structure would be prone to structural weakness.

Metaphorically speaking, one role of finance is to provide support on two sides of the neoliberal policy box, as illustrated in Figure 4.

Finance does this through three channels. First, financial markets have captured control of corporations via enforcement of the shareholder value maximization paradigm of corporate governance. Consequently, corporations now serve financial market interests along with the interests of top management. Second, financial markets in combination with corporations lobby politically for the neoliberal policy mix.

The combination of changed corporate behavior and economic policy produces an economic matrix that puts wages under continuous pressure and raises income inequality.

Third, financial innovation has facilitated and promoted financial market control of corporations via hostile take-overs, leveraged buyouts and reverse capital distributions. Financial innovation has therefore been key for enforcing Wall Street's construction of the shareholder value maximization paradigm.

Figure 4. Lifting the lid on the neoliberal policy box. The neoliberal box Corporations Financial markets

The second vital role of finance is the support of AD. The neoliberal model gradually undermined the income and demand generation process, creating a growing structural demand gap. The role of finance was to fill that gap. Thus, within the U.S., deregulation, financial innovation, speculation, and mortgage lending fraud enabled finance to fill the demand gap by lending to consumers and by spurring asset price inflation

Financialization assisted with this process by changing credit market practices and introducing new credit instruments that made credit more easily and widely available to corporations and households. U.S. consumers in turn filled the global demand gap, along with help from U.S. and European corporations who were shifting manufacturing facilities and investment to the emerging market economies.

Three things should be emphasized.

  1. First, this AD generation role of finance was an unintended consequence and not part of a grand plan. Neoliberal economists and policymakers did not realize they were creating a demand gap, but their laissez-faire economic ideology triggered financial market developments that coincidentally filled the demand gap.
  2. Second, the financial process they unleashed was inevitably unstable and was always destined to hit the wall. There are limits to borrowing and limits to asset price inflation and all Ponzi schemes eventually fall apart. The problem is it is impossible to predict when they will fail. All that can be known with confidence is that it will eventually fail.
  3. Third, the process went on far longer than anyone expected, which explains why critics of neoliberalism sounded like Cassandras (Palley, 1998, Chapter 12). However, the long duration of financial excess made the collapse far deeper when it eventually happened. It has also made escaping the after-effects of the financial crisis far more difficult as the economy is now burdened by debts and destroyed credit worthiness. That has deepened the proclivity to economic stagnation.
IV Evidence

Evidence regarding the economic effects of the neoliberal model is plentiful and clear Figure 5 shows productivity and average hourly compensation of non-supervisory workers (that is non-managerial employees who are about 80 percent of the workforce). The link with productivity growth was severed almost 40 years ago and hourly compensation has been essentially stagnant since then.

Figure 5.

... ... ...

Table 3 shows data on the distribution of income growth by business cycle expansion across the wealthiest top 10 percent and bottom 90 percent of households. Over the past sixty years there has been a persistent decline in the share of income gains going to the bottom 90 percent of households ranked by wealth. However, in the period 1948 – 1979 the decline was gradual. After 1980 there is a massive structural break and the share of income gains going to the bottom 90 percent collapses. Before 1980, on average the bottom 90 percent received 66 percent of business cycle expansion income gains. After 1980, on average they receive just 8 percent.

Table 3. Distribution of income growth by business cycle expansion across the wealthiest top 10 percent and bottom 90 percent of households. Source: Tcherneva (2014), published in The New York Times , September 26, 2014. '49- '53 '54- '57 '59- '60 '61- '69 '70- '73 '75- '79 '82- '90 '91- '00 '01- '07 '09- '12 Average Pre-1908 Average Post-1980 Top 10% 20% 28 32 33 43 45 80 73 98 116 34% 92% Bottom 90% 80% 72 68 67 57 55 20 27 2 -16 66% 8%

Figure 6 shows the share of total pre-tax income of the top one percent of households ranked by wealth. From the mid-1930s, with the implementation of the New Deal social contract, that share fell from a high of 23.94 percent in 1928 to a low of 8.95 percent in 1978. Thereafter it has steadily risen, reaching 23.5 percent in 2007 which marked the beginning of the Great Recession. It then fell during the Great Recession owing to a recession-induced fall in profits, but has since recovered most of that decline as income distribution has worsened again during the economic recovery. In effect, during the neoliberal era the US economy has retraced its steps, reversing the improvements achieved by the New Deal and post-World War II prosperity, so that the top one percent's share of pre-tax income has returned to pre-Great Depression levels.

Figure 6. US pre-tax income share of top 1 percent. Source: http://inequality.org/income-inequality/. Original source: Thomas Piketty and Emanuel Saez (2003), updated at http://emlab.edu/users/saez.

As argued in Palley (2012a, p. 150-151) there is close relationship between union membership density (i.e. percent of employed workers that are unionized) and income distribution. This is clearly shown in Figure 7 which shows union density and the share of pre-tax income going to the top ten percent of wealthiest households. The neoliberal labor market flexibility agenda explicitly attacks unions and works to shift income to wealthier households.

Share of income going to the top 10 percent 2013: 47.0% Union membership density 11.2% 0% 10% 20% 30% 40% 50% 60% 1917 1923 1929 1935 1941 1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007 2013 Source: Data on union density follows the composite series found in Historical Statistics of the United States; updated to 2013 from unionstats.com. Income inequality (share of income to top 10%) from Piketty and Saez,

"Income Inequality in the United States, 1913-1998, Quarterly Journal of Economics , 118(1), 2003, 1-39. Updated Figure 7. Union membership and the share of income going to the top ten percent of wealthiest households, 1917 – 2013. Source: Mishel, Gould and Bivens (2015). Table 4 provides data on the evolution of the U.S. goods and services trade balance as a share of GDP by business cycle peak. Comparison across peaks controls for the effect of the business cycle. The data show through to the late 1970s U.S. trade was roughly in balance, but after 1980 it swung to massive deficit and the deficits increased each business cycle. These deficits were the inevitable product of the neoliberal model of globalization (Palley, 2015) and they undermined the AD generation process in accordance with the Keynesian hypothesis.

Table 4. The U.S. goods & services trade deficit/surplus by business cycle peaks, 1960 – 2007. Sources: Economic Report of the President, 2009 and author's calculations. Business cycle peak year Trade balance ($ millions) GDP ($ billions) Trade balance/ GDP (%) 1960 3,508 526.4 0.7 1969 91 984.6 0.0 1973 1,900 1,382.7 0.1 1980 -25,500 2,789.5 -0.9 1981 -28,023 3,128.4 -0.9 1990 -111,037 5,803.1 -1.9 2001 -429,519 10,128.0 -4.2 2007 -819,373 13,807.5 -5.9

Finally, Figure 8 shows total domestic debt relative to GDP and growth. This Figure is highly supportive of the Keynesian interpretation of the role of finance. During the neoliberal era real GDP growth has actually slowed but debt growth has exploded. The reason is the neoliberal model did nothing to increase growth, but it needed faster debt growth to fill the demand gap created by the model's worsening of income distribution and creation of large trade deficits. Debt growth supported debt-financed consumer spending and it supported asset price inflation that enabled borrowing which filled the demand gap caused by the neoliberal model. Figure 8. Total domestic debt and growth (1952-2007). Source: Grantham, 2010.

V The debate about the causes of the crisis: why it matters

The importance of the debate about the causes of the crisis is that each perspective recommends its own different policy response. For hardcore neoliberal government failure proponents the recommended policy response is to double-down on the policies described by the neoliberal policy box and further deregulate markets; to deepen central bank independence and the commitment to low inflation via strict rules based monetary policy; and to further shrink government and impose fiscal austerity to deal with increased government debt produced by the crisis For softcore neoliberal market failure proponents the recommended policy response is to tighten financial regulation but continue with all other aspects of the existing neoliberal policy paradigm. That means continued support for corporate globalization, socalled labor market flexibility, low inflation targeting, and fiscal austerity in the long term. Additionally, there is need for temporary large-scale fiscal and monetary stimulus to combat the deep recession caused by the financial crisis.

However, once the economy has recovered, policy should continue with the neoliberal model For proponents of the destruction of shared prosperity hypothesis the policy response is fundamentally different. The fundamental need is to overthrow the neoliberal paradigm and replace it with a "structural Keynesian" paradigm. That involves repacking the policy box as illustrated in Figure 9.

The critical step is to take workers out of the box and put corporations and financial markets in so that they are made to serve a broader public interest. The key elements are to replace corporate globalization with managed globalization that blocks race to the bottom trade dynamics and stabilizes global financial markets; restore a commitment to full employment; replace the neoliberal anti-government agenda with a social democratic government agenda; and replace the neoliberal labor market flexibility with a solidarity based labor market agenda.

The goals are restoration of full employment and restoration of a solid link between wage and productivity growth.

Figure 9. The structural Keynesian box Corporations & Managed Financial Markets Globalization Full Employment Social Democratic Government Solidarity Labor Markets

Lastly, since the neoliberal model was adopted as part of a new global economic order, there is also need to recalibrate the global economy. This is where the issue of "global rebalancing" enters and emerging market economies need to shift away from export-led growth strategies to domestic demand-led strategies. That poses huge challenges for many emerging market economies because they have configured their growth strategies around export-led growth whereby they sell to U.S. consumers.

VI From crisis to stagnation: the failure to change

Massive policy interventions, unequalled in the post-war era, stopped the Great Recession from spiraling into a second Great Depression. The domestic economic interventions included the 2008 Troubled Asset Relief Program (TARP) that bailed out the financial sector via government purchases of assets and equity from financial institutions; the 2009 American Recovery and Reinvestment Act (ARRA) that provided approximately $800 billion of fiscal stimulus, consisting of approximately $550 billion of government spending and $250 billion of tax cuts; the Federal Reserve lowering its interest target to near-zero (0 - 0.25 percent); and the Federal Reserve engaging in quantitative easing (QE) transactions that involve it purchasing government and private sector securities. At the international level, in 2008 the Federal Reserve established a temporary $620 billion foreign exchange (FX) swap facility with foreign central banks.

That facility provided the global economy with dollar balances, thereby preventing a dollar liquidity shortage from triggering a wave of global default on short-term dollar loans that the financial system was unwilling to roll-over because of panic.3

Additionally, there was unprecedented globally coordinated fiscal stimulus arranged via the G-20 mechanism. 3

The FX swaps with foreign central banks have been criticized as being a bail-out for foreign economies. In fact, they saved the US financial system which would have been pulled down by financial collapse outside

Despite their scale, these interventions did not stop the recession from being the deepest since 1945, and nor did they stop the onset of stagnation. Table 5 shows how GDP growth has failed to recover since the end of the Great Recession, averaging just 2.1 percent for the five year period from 2010 – 2014. Furthermore, that period includes the rebound year of 2010 when the economy rebounded from its massive slump owing to the extraordinary fiscal and monetary stimulus measures that were put in place

Table 5. U.S. GDP growth. Source: Statistical Annex of the European Union, Autumn 2014 and author's calculations.

The growth rate for 2014 is that estimated in October 2014.

1961 - 1970 1971 - 1980 1981 - 1990 1991 - 2000 2001 - 2007 2008 - 2009 2010 - 2014

4.2% 3.2% 3.3% 3.5% 2.5% -1.6% 2.1%

Table 6 shows employment creation in the five years after the end of recessions, which provides another window on stagnation. The job creation numbers show that the neoliberal model was already slowing in the 1990s with the first episode of "jobless the US.

Many foreign banks operating in the US had acquired US assets financed with short-term dollar borrowings. When the US money market froze in 2008 they could not roll-over these loans in accordance with normal practice. That threatened massive default by these banks within the US financial system, which would have pulled down the entire global financial system.

The Federal Reserve could not lend directly to these foreign banks and their governing central banks lacked adequate dollar liquidity to fill the financing gap. The solution was to lend dollars to foreign central banks, which then made dollar loans to foreign banks in need of dollar roll-over short-term financing. recovery".

It actually ground to stagnation in the 2001 – 2007 period, but this was masked by the house price bubble and the false prosperity it created. Stagnation has persisted after the Great Recession, but the economic distress caused by the recession has finally triggered awareness of stagnation among elites economists. In a sense, the Great Recession called out the obvious, just as did the little boy in the Hans Anderson story about the emperor's new suit

Table 6. U.S. private sector employment creation in the five year period after the end of recessions for six business cycles with extended expansions. Source: Bureau of labor statistics and author's calculations. * = January 1980 the beginning of the next recession Recession end date Employment at recession end date (millions) Employment five years later (millions) Percent growth in employment Feb 1961 45.0 52.2 16.0% Mar 1975 61.9 74.6* 20.5% Nov 1982 72.8 86.1 18.3% March 1991 90.1 99.5 10.4% Nov 2001 109.8 115.0 4.7% June 2009 108.4 117.1 8.0% The persistence of stagnation after the Great Recession raises the question "why"? The answer is policy has done nothing to change the structure of the underlying neoliberal economic model.

That model inevitably produces stagnation because it produces a structural demand shortage via (i) its impact on income distribution, and (ii) via its design of globalization which generates massive trade deficits, wage competition and off-shoring of jobs and investment. In terms of the three-way contest between the government failure hypothesis, the market failure hypothesis and the destruction of shared prosperity hypothesis, the economic policy debate during the Great Recession was cast as exclusively between government failure and market failure.

With the Democrats controlling the Congress and Presidency after the 2008 election, the market failure hypothesis won out and has framed policy since then. According to the hypothesis, the financial crisis caused an exceptionally deep recession that required exceptionally large monetary and fiscal stimulus to counter it and restore normalcy. Additionally, the market failure hypothesis recommends restoring and renovating financial regulation, but other than that the neoliberal paradigm is appropriate and should be deepened In accordance with this thinking, the in-coming Obama administration affirmed existing efforts to save the system and prevent a downward spiral by supporting the Bush administration's TARP, the Federal Reserve's first round of QE (November/December 2008) that provided market liquidity, and the Federal Reserve's FX swap agreement with foreign central banks

Thereafter, the Obama administration worked to reflate the economy via passage of the ARRA (2009) which provided significant fiscal stimulus. With the failure to deliver a V-shaped recovery, candidate Obama became even more vocal about fiscal stimulus However, reflecting its softcore neoliberal inclinations, the Obama administration then became much less so when it took office. Thus, the winners of the internal debate about fiscal policy in the first days of the Obama administration were those wanting more modest fiscal stimulus.4 Furthermore, its analytical frame was one of temporary stimulus with the 4 Since 2009 there has been some evolution of policy positions characterized by a shift to stronger support for fiscal stimulus. This has been especially marked in Larry Summers, who was the Obama administration's goal of long-term fiscal consolidation, which is softcore neoliberal speak for fiscal austerity Seen in the above light, after the passage of ARRA (2009), the fiscal policy divide between the Obama administration and hardcore neoliberal Republicans was about the speed and conditions under which fiscal austerity should be restored.

This attitude to fiscal policy reflects the dominance within the Democratic Party of "Rubinomics", the Wall Street view associated with former Treasury Secretary Robert Rubin, that government spending and budget deficits raise real interest rates and thereby lower growth. According to that view, the US needs long-term fiscal austerity to offset Social Security and Medicare Side-by-side with the attempt to reflate the economy, the Obama administration also pushed for major overhaul and tightening of financial sector regulation via the Dodd- Frank Act (2010).

That accorded with the market failure hypothesis's claim about the economic crisis and Great Recession being caused by financial excess permitted by the combination of excessive deregulation, lax regulation and failure to modernize regulation Finally, and again in accordance with the logic of the market failure hypothesis, the Obama administration has pushed ahead with doubling-down and further entrenching the neoliberal policy box. This is most visible in its approach to globalization. In 2010, free trade agreements modelled after NAFTA were signed with South Korea, Colombia and Panama. The Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), two mega-agreements negotiated in secrecy and apparently bearing chief economic adviser when it took office. This shift has become a way of rewriting history by erasing the memory of initial positions. That is also true of the IMF which in 2010-2011 was a robust supporter of fiscal consolidation in Europe. similar hallmarks to prior trade agreements, are also being pushed by the Obama administration

The Obama administration's softcore neoliberalism would have likely generated stagnation by itself, but the prospect has been further strengthened by Republicans.

Thus, in accordance with their point of view, Republicans have persistently pushed the government failure hypothesis by directing the policy conversation to excessive regulation and easy monetary policy as the causes of the crisis. Consequently, they have consistently opposed strengthened financial regulation and demands for fiscal stimulus.

At the same time, they have joined with softcore neoliberal Democrats regarding doubling-down on neoliberal box policies, particularly as regards trade and globalization Paradoxically, the failure to change the overall economic model becomes most visible by analyzing the policies of the Federal Reserve, which have changed the most dramatically via the introduction of QE. The initial round of QE (QE1) was followed by QE2 in November 2010 and QE3 in September 2012, with the Fed shifting from providing short-term emergency liquidity to buying private sector financial assets.

The goal was to bid up prices of longer term bonds and other securities, thereby lowering interest rates on longer-term financing and encouraging investors to buy equities and other riskier financial assets. The Fed's reasoning was lower long-term rates would stimulate the economy, and higher financial asset prices would trigger a positive wealth effect on consumption spending. This makes clear the architecture of policy.

The Obama administration was to provide fiscal stimulus to jump start the economy; the Fed would use QE to blow air back into the asset price bubble; the Dodd-Frank Act (2010) would stabilize financial markets; and globalization would be deepened by further NAFTA-styled international agreements. This is a near-identical model to that which failed so disastrously. Consequently, stagnation is the logical prognosis.

VII Déjà vu all over again: back to the 1990s but with a weaker economy

The exclusion of the destruction of shared prosperity hypothesis, combined with the joint triumph of the market failure and government failure hypotheses, means the underlying economic model that produced the Great Recession remains essentially unchanged. That failure to change explains stagnation. It also explains why current conditions smack of "déjà vu all over again" with the US economy in 2014-15 appearing to have returned to conditions reminiscent of the mid-1990s.

Just as the 1990s failed to deliver durable prosperity, so too current optimistic conditions will prove unsustainable absent deeper change The déjà vu similarities are evident

All of these features mean both policy context and policy design look a lot like the mid-1990s. The Obama administration saved the system but did not change it

Consequently, the economy is destined to repeat the patterns of the 1990s and 2000s. However, the US economy has also experienced almost twenty more years of neoliberalism which has left its economic body in worse health than the 1990s. That means the likelihood of delivering another bubble-based boom is low and stagnation tendencies will likely reassert themselves after a shorter and weaker period of expansion

This structurally weakened state of the US economy is evident in the further worsening of income inequality that has occurred during the Great Recession and subsequent slow recovery.

... ... ...

Thomas I. Palley, Senior Economic Policy Advisor, AFL-CIO Washington, D.C. mail@thomaspalley.com

[Oct 08, 2017] Financialization: theoretical analysis and historical perspectives by Costas Lapavitsas

Highly recommended!
The author introduces an important notion of 'financial expropriation' which is at the core of "casino capitalism". Role of finance as a mediator between people and privatized services led to extraction of new type of rent.
Notable quotes:
"... Financial capital permeates economic activity, and interacts with financial markets in ways capable of generating enormous profits but also precipitating global crises. ..."
"... The economic processes - and the social relations - characteristic of financialization represent a milestone in the development of capitalism. ..."
"... A long boom occurred, lasting until 1973-74, during which production became increasingly dominated by transnational monopolistic enterprises, while finance operated under a system of controls domestically and internationally. For nearly three decades, the US was the dominant economic force in global production and trade. ..."
"... . Since the 1970s, there have been profound changes in production methods deriving from information and telecommunications technologies. Transnational enterprises have become dominant over global production and international trade. The centre of gravity of global productive capacity has partly shifted from mature economies in the West toward rising economies in the East, primarily China. ..."
"... The most striking feature of the period, however, has been the rise of finance, the start of which can be usefully placed in the late 1970s. The financial sector had become progressively larger in the 1950s and 1960s, while still operating within the regulatory framework characteristic of the long post-war boom ..."
"... The three decades that followed have witnessed unprecedented expansion of financial activities, rapid growth of financial profits, permeation of economy and society by financial relations, and domination of economic policy by the concerns of the financial sector. At the same time, the productive sector in mature countries has exhibited mediocre growth performance, profit rates have remained below the levels of the 1950s and 1960s, unemployment has generally risen and become persistent, and real wages have shown no tendency to rise in a sustained manner. ..."
"... Bretton Woods had enforced the convertibility of the US dollar into gold at S35 to the ounce, thus fixing exchange rates during the long boom. Its collapse led to the gradual emergence of alternative international monetary arrangements based on the US dollar functioning as inconvertible quasi-world-money. The new arrangements have generated considerable instability of exchange and interest rates, thereby spurring the growth of international financial markets. ..."
"... Growth of international capital flows during the same period, partly in response to exchange and interest rate instability, has led to financialization in developing countries. ..."
"... The ascendancy of central banks is hardly surprising, since financialization in general would have been impossible without active and continuous intervention by the state. Financialization has depended on the state to deregulate the financial system with regard to prices, quantities, functions and cross-border flows of capital. Equally, financialization has depended on the state to regulate the adequacy of own capital, the management of risk, and the rules of competition among financial institutions. ..."
"... Ultimately, however, the rise of finance has resulted from changes deep within capitalist accumulation. Three characteristic tendencies of accumulation in mature countries have shaped financialization as a structural transformation of contemporary capitalism. First, non-financial enterprises have become increasingly involved in financial processes on an independent basis, often undertaking financial market trans-actions on own account. The financialization of industrial and commercial enterprises has affected their profitability, internal organization, and investment outlook. Non-financial enterprises have become relatively more remote from banks and other financial institutions. Second, banks have focused on transacting in open financial markets with the aim of making profits through financial trading rather than through outright borrowing and lending. At the same time banks have turned toward individual and household income as a source of profit, often combining trading in open markets with lending to households, or collecting household savings. Third, individuals and households have come increasingly to rely on the formal financial system to facilitate access to vital goods and services, including housing, education, health, and transport. The savings of households and individuals have also been increasingly mobilized by the formal financial system. ..."
"... Financialization reflects a growing asymmetry between production and circulation - particularly the financial component of the latter - during the last three decades. The asymmetry has arisen as the financial conduct of non-financial enterprises, banks and households has gradually changed, thus fostering a range of aggregate phenomena of financialization. A telling aspect of the transformation has been the rise of profits accruing through financial transactions, including new forms of profit that could even be unrelated to surplus value. This process is summed up as 'financial expropriation' in subsequent chapters. ..."
"... The most important development in the evolution of derivatives trading in recent years has been the move to cash settlement of the contract, thus freeing the counter- parties from the need to deliver the underlying asset. On this basis, derivatives have become essentially a punt on the future direction of the price of the underlying asset that is subsequently settled in cash. ..."
"... In effect, the derivative has become what could be called a contract-for-differences - an agreement between buyer and seller to exchange the difference between the current value of a share, currency, commodity, or index and its value at maturity of the contract. ..."
"... the core of the enormously expanded derivatives markets lie a few international banks, which have also been one of the driving forces of financialization. Banks are the pillar of contemporary of the 1980s to the end of the 2000s the notional outstanding appears to have doubled every two or three years for most of the period. ..."
"... These dealers werelarge global banks that were also fundamental to financialization. The same banks were among the largest participants in the exchange-traded markets, though data is hard to obtain for the latter. There is no doubt, however, that the large dealer banks were heavily involved in the management of the 'exchanges', including determination of risk management procedures and 'margin' levels. ..."
"... In short, the banks that dominate derivatives trading are also the banks that set the interest rate at which derivatives are traded and valued, although the banks are not obliged to trade at the declared rate. No wonder, then, that one of the most egregious scandals of financialization appears to be the manipulation of the LIBOR by large dealer banks, a matter which has been under police investigation since 2010. ..."
"... The problem is not a few 'rotten apples' amidst the LIBOR committee, criminally colluding with each other and with brokers to influence the LIBOR. Rather, a deeply flawed structure has allowed dealer banks to dominate derivatives markets while effectively manipulating the terms of derivatives trading. ..."
Jan 14, 2014 | www.amazon.com

Extracted from the chapter 1 of this book Profiting Without Producing How Finance Exploits Us All Costs

1. Introduction: the rise and rise of finance

The crisis of the 2000s will prove fertile ground for economic historians for decades to come with regard to both its causes and consequences. However, the crisis has already had one definite outcome: it has finally lifted the curtain on the transformation of mature and developing capitalist economies during the last three decades, confirming the pivotal role of finance, both domestically and internationally. Financial capital permeates economic activity, and interacts with financial markets in ways capable of generating enormous profits but also precipitating global crises. In terms that will be used throughout this book, contemporary capitalism is 'financialized' and the turmoil commencing in 2007 is a crisis of 'financialization'.

The economic processes - and the social relations - characteristic of financialization represent a milestone in the development of capitalism. The catalyst of crisis in 2007 was speculative mortgage lending to the poorest workers in the US during the 2000s, the loans being subsequently traded in 'securitized' form in global financial markets. It is hard to exaggerate what an extraordinary fact this is. Under conditions of classical, nineteenth-century capitalism it would have been unthinkable for a global disruption of accumulation to materialize because of debts incurred by workers, including the poorest. But this is precisely what has happened under conditions of financialized capitalism, an economic and social system that is much more sophisticated than its nineteenth-century predecessor.

Financialization has emerged gradually during recent decades, and its content and implications are the focus of this book. To be sure, capitalist economies are continually restructured due to pressures of competition and to the underlying drive to maintain profitability. However, some transformations have a distinctive historical significance, and financialization is one of those. The change that has taken place in mature capitalist economies and societies since the late 1970s requires appropriate attention to be paid to finance. Consider the following features of financialization to substantiate this claim. Context and structural aspects of financialization

Mature capitalism has been historically marked by deep transformations of economy and society. Toward the end of the nineteenth century, for instance, there emerged new methods of production in heavy industry, accompanied by the rise of monopolistic, joint-stock enterprises. The change coincided with a long depression, 1873-96, and led to a rebalancing of global productive power away from Britain and toward the US and Germany. Similarly, at the end of the Second World War, mass consumption emerged across several developed countries based on methods of mass production. A long boom occurred, lasting until 1973-74, during which production became increasingly dominated by transnational monopolistic enterprises, while finance operated under a system of controls domestically and internationally. For nearly three decades, the US was the dominant economic force in global production and trade.

The transformation represented by financialization is of a similar order of importance. Since the 1970s, there have been profound changes in production methods deriving from information and telecommunications technologies. Transnational enterprises have become dominant over global production and international trade. The centre of gravity of global productive capacity has partly shifted from mature economies in the West toward rising economies in the East, primarily China. Meanwhile, the institutional framework of capitalist activity has been altered as deregulation has prevailed in important markets, above all, for labour and finance. Throughout this period, accumulation has lacked dynamism in mature countries, inequality was exacerbated, and crises have become sharper and more frequent.

The most striking feature of the period, however, has been the rise of finance, the start of which can be usefully placed in the late 1970s. The financial sector had become progressively larger in the 1950s and 1960s, while still operating within the regulatory framework characteristic of the long post-war boom. However, even by the late 1970s, the domestic and international importance of finance remained modest.

The three decades that followed have witnessed unprecedented expansion of financial activities, rapid growth of financial profits, permeation of economy and society by financial relations, and domination of economic policy by the concerns of the financial sector. At the same time, the productive sector in mature countries has exhibited mediocre growth performance, profit rates have remained below the levels of the 1950s and 1960s, unemployment has generally risen and become persistent, and real wages have shown no tendency to rise in a sustained manner.

An asymmetry has emerged between the sphere of production and the ballooning sphere of circulation. The rise of finance has been predicated 011 a radical alteration of the monetary framework of capitalist accumulation, both internationally and domestically. International monetary conditions have been stamped by the collapse of the Bretton Woods Agreement in 1971-73. Bretton Woods had enforced the convertibility of the US dollar into gold at S35 to the ounce, thus fixing exchange rates during the long boom. Its collapse led to the gradual emergence of alternative international monetary arrangements based on the US dollar functioning as inconvertible quasi-world-money. The new arrangements have generated considerable instability of exchange and interest rates, thereby spurring the growth of international financial markets.

Growth of international capital flows during the same period, partly in response to exchange and interest rate instability, has led to financialization in developing countries. Domestic monetary conditions, in contrast, have been marked by the steady accumulation of power by central banks as controllers of credit money backed by the state. Central banks have emerged as the dominant public institution of financialization, the defender of the interests of the financial sector.

The ascendancy of central banks is hardly surprising, since financialization in general would have been impossible without active and continuous intervention by the state. Financialization has depended on the state to deregulate the financial system with regard to prices, quantities, functions and cross-border flows of capital. Equally, financialization has depended on the state to regulate the adequacy of own capital, the management of risk, and the rules of competition among financial institutions. Even more decisively, financialization has depended on the state to intervene periodically to underwrite the solvency of banks, to provide extraordinary liquidity and to guarantee the deposits of the public with banks.

Ultimately, however, the rise of finance has resulted from changes deep within capitalist accumulation. Three characteristic tendencies of accumulation in mature countries have shaped financialization as a structural transformation of contemporary capitalism. First, non-financial enterprises have become increasingly involved in financial processes on an independent basis, often undertaking financial market trans-actions on own account. The financialization of industrial and commercial enterprises has affected their profitability, internal organization, and investment outlook. Non-financial enterprises have become relatively more remote from banks and other financial institutions. Second, banks have focused on transacting in open financial markets with the aim of making profits through financial trading rather than through outright borrowing and lending. At the same time banks have turned toward individual and household income as a source of profit, often combining trading in open markets with lending to households, or collecting household savings. Third, individuals and households have come increasingly to rely on the formal financial system to facilitate access to vital goods and services, including housing, education, health, and transport. The savings of households and individuals have also been increasingly mobilized by the formal financial system.

The transformation of the conduct of non-financial enterprises, banks and households constitutes the basis of financialization. Examining these relations theoretically and empirically, and thus establishing the deeper content of financialized capitalism, is the main task of this book. Hie concepts and methods deployed for the purpose derive from Marxist political economy. To summarize, the capitalist economy is treated as a structured whole that comprises different spheres of activity - namely production, circulation, and distribution - among which production is dominant. Both production and circulation possess their own internal logic, even though the two spheres are inextricably linked. Production creates value; its motive is profit (surplus value) deriving from the exploitation of labour; its aim is the accumulation of capital. Circulation does not create value; it results in profits, but these derive mostly - though not exclusively - from redistributing surplus value. Finance is a part of circulation, but also possesses mechanisms standing aside commodity trading and its corresponding flows of money. The traded object of finance is loanable money capital, the cornerstone of capitalist credit. Production, circulation and distribution give rise to class relations, pivoting on the ownership of the means of production, but also determined by the appropriation of profits.

Financialization reflects a growing asymmetry between production and circulation - particularly the financial component of the latter - during the last three decades. The asymmetry has arisen as the financial conduct of non-financial enterprises, banks and households has gradually changed, thus fostering a range of aggregate phenomena of financialization. A telling aspect of the transformation has been the rise of profits accruing through financial transactions, including new forms of profit that could even be unrelated to surplus value. This process is summed up as 'financial expropriation' in subsequent chapters. New social layers have emerged as financial profit has burgeoned.

Financial markets and banks

It might seem paradoxical at first sight to associate financialization with the conduct of banks, given that the rise of finance has had far more extravagant aspects. Financializa- tion, for instance, appears to relate more to the global spread of financial markets, the proliferation of traded financial instruments, and the emergence of novel, market-re- lated financial transactions, rather than to the behaviour of banks. Compared to the expanding and rapidly changing world of financial markets, banks seem old-fashioned and even staid. And yet, as is shown in the rest of the book, banks have been a decisive factor in the financialization of capitalism. Banks remain the cornerstone of contempo- rary finance and several of the most visible market-related features of financialization emanate from banks. It is not accidental that the crisis of financialization in the late 2000s has revolved around banks rather than other financial institutions.

To establish the importance of banks in the course ot financialization consider some general features of the derivatives markets, arguably the most prominent finan- cial markets of recent years.1 Simply put, a derivative is a contract that establishes a claim on an underlying asset - or on the cash value of that asset - which must be executed at some definite point in the future. The underlying asset could be a com- modity, such as wheat; or another financial asset, such as a bond; or a financial price, for example the value of a currency; or even an entirely non-economic entity like the weather. The units of the underlying asset stated on the contract and multiplied by the spot price define the notional value of the derivative. Historically, derivatives have been associated with agricultural production: a forward or a futures contract would specify the quantity and price of an agricultural commodity that would be delivered at a definite point in the future. A forward contract would be a private agreement between two parties agreeing to trade some specific output at a certain price and time (e.g., the wheat produced by one of the contracting parties); a futures contract would also be a private agreement between two parties but the commodity traded would be generic (e.g., any wheat of a certain type and quality).

Capitalist farmers could use derivatives to hedge against unforeseen fluctuations in the price of output. In addition to hedging, derivatives could also be used to speculate on the future movement of prices, or to arbitrage among different markets exhibiting unwarranted price divergences in the underlying asset. Thus, the standard way of intro- ducing derivatives in textbooks is as instruments that make for hedging, speculation or arbitrage among market traders.* Derivatives markets are typically perceived as spontaneously emerging entities which supplement the services offered by the markets in underlying assets, and hence improve the efficiency of the capitalist economy. Even with this simple definition of derivatives, a key distinction is apparent - one between a contract that meets the specific conditions of two counterparties (a for- ward) and a contract that is more generic and could be traded freely in open mar- kets (a future). The former is similar to an over-the-counter derivative, the latter to an exchange-traded derivative. They represent two different ways of undertaking the trading process - the forward depends on the specific decisions of the trading parties, the future depends on the impersonal and 'third' institution of the 'exchange' which organizes the trading. The exchange' standardizes futures contracts, steps between buyers and sellers to clear purchases and sales by the counterparties and, critically, demands a daily 'margin' in cash as protection from failure to meet contracted obli- gations at maturity.

The most important development in the evolution of derivatives trading in recent years has been the move to cash settlement of the contract, thus freeing the counter- parties from the need to deliver the underlying asset. On this basis, derivatives have become essentially a punt on the future direction of the price of the underlying asset that is subsequently settled in cash. Consequently, the trading of derivatives has come to include underlying assets that could never be delivered, such as a stock market index.

In effect, the derivative has become what could be called a contract-for-differences - an agreement between buyer and seller to exchange the difference between the current value of a share, currency, commodity, or index and its value at maturity of the contract. If the difference is positive, the seller pays the buyer; if it is negative, the buyer is the one who loses money. Profit, in this context, depends on the difference between a fixed financial parameter and its uncertain value in the future.4

Spurred by cash settlement, the growth ol derivatives markets in the years of financialization has been breathtaking: from practical irrelevance in the 1980s, their notion- al sum in 2011 was in the vicinity of 700 trillion US dollars for over-the-counter and probably a similar sum for exchange-traded derivatives.' Yet, at the core of the enormously expanded derivatives markets lie a few international banks, which have also been one of the driving forces of financialization. Banks are the pillar of contemporary of the 1980s to the end of the 2000s the notional outstanding appears to have doubled every two or three years for most of the period.

Consider now the role of banks in these enormous markets. The importance of banks is most apparent in the over-the-counter market, which naturally lacks the organizing role played by the exchange' in the exchange-traded market. Banks func- tion as market-makers, that is, as agents that stand ready to buy and sell in the over- the-counter market; they are the dealers that are integral to market functioning. Banks also provide the necessary market infrastructure through vital market institutions such as the International Swaps and Derivatives Association (ISDA). Table 2 classifies over-the-counter transactions in terms of the counterparties, which are split into dealer banks, other financial institutions, and non-financial customers.8

... ... ...

Approximately US sjotn is not allocated either because it refers to commodity derivatives, or because it represents adjustments in BIS statistics. In practice, over-the-counter derivatives function as banking instruments. Almost a third of the trading in over-the-counter derivatives in 2011 took place in dealer-to-deal- er transactions, while all transactions had at least one dealer bank as a counterparty. There were, perhaps, seventy sizeable dealer banks in about twenty countries transact- ing with many thousands of end users of derivatives; indeed, concentration appears to have been even greater than that, and perhaps fifteen to twenty dealers controlled the overwhelming bulk of over-the-counter trading across the world."

These dealers werelarge global banks that were also fundamental to financialization. The same banks were among the largest participants in the exchange-traded markets, though data is hard to obtain for the latter. There is no doubt, however, that the large dealer banks were heavily involved in the management of the 'exchanges', including determination of risk management procedures and 'margin' levels.

Given the dominant presence of banks in the derivatives markets, it is hardly surprising that banks have encouraged the broadening of derivatives trading to include underlying assets with which they are most familiar - financial securities. Table 2 shows that less that ю percent of over-the-counter transactions actually involved non-financial enterprises: the great bulk comprised transactions that took place among financial institutions, and thus referred mostly to financial derivatives. In fact, growth in the derivatives markets has generally been dominated by inter- est-rate and foreign-exchange derivatives; since the early 2000s the strongest growth has been in credit default swaps (CDS), which are briefly discussed in Part III of this book.10

The price of financial derivatives depends, among other factors, on the rate of interest, and the rate that is typically used to value most financial derivatives is the London Interbank Offered Rate (LIBOR). The LIBOR is determined by a committee comprising several of the banks that dominate the derivatives markets; its determination involves the simple averaging of interest rates (excluding outliers) submitted by LIBOR committee banks daily. These are rates at which the LIBOR banks think that they can borrow from each other, although no LIBOR bank is obliged to undertake borrowing at the submitted rate. The LIBOR acts as a rate of interest that determines the value of derivatives, but it is not a rate of interest in the normal sense since no actual transactions need to take place at the rates declared by the committee banks.

In short, the banks that dominate derivatives trading are also the banks that set the interest rate at which derivatives are traded and valued, although the banks are not obliged to trade at the declared rate. No wonder, then, that one of the most egregious scandals of financialization appears to be the manipulation of the LIBOR by large dealer banks, a matter which has been under police investigation since 2010.

The problem is not a few 'rotten apples' amidst the LIBOR committee, criminally colluding with each other and with brokers to influence the LIBOR. Rather, a deeply flawed structure has allowed dealer banks to dominate derivatives markets while effectively manipulating the terms of derivatives trading.

Banks are at the heart of the derivatives markets which have been such a prominent feature of financialization. Derivatives markets rely on banks, in particular on the price-making skills and general organizational capabilities of banks. Indeed, banks are so dominant in derivatives markets that they are even capable of manipulating the key rate on the basis of which derivatives prices are formed. The vast growth of derivatives markets reflects in part the turn of banks toward trading in open financial markets, which is one of the fundamental tendencies of financialization. In sum, at the root of financialization lie the vast banks of mature and other economies. The theoretical and empirical analysis of financialization in the rest of this book, therefore, focuses on banks as well as non-financial enterprises and households.

[Oct 07, 2017] Finances hold on our everyday life must be broken by Costas Lapavitsas

Highly recommended!
Yves Smith's ebook is available free here. It covers the same set of topics and is useful add on to Costas Lapavitsas book.
Notable quotes:
"... Financialisation represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades. ..."
"... Financialisation has also created new forms of profit associated with financial markets and transactions. Financial profit can be made out of any income, or any sum of money that comes into contact with the financial sphere. Households, for example, generate profits for finance as debtors (mostly by paying interest on mortgages) but also as creditors (mostly by paying fees and charges on pension funds and insurance). Finance is not particular about how and where it makes its profits, and certainly does not limit itself to the sphere of production. It ranges far and wide, transforming every aspect of social life into a profit-making opportunity. ..."
"... Financialised capitalism is, thus, a deeply unequal system, prone to bubbles and crises – none greater than that of 2007-09. What can be done about it? The most important point in this respect is that financialisation does not represent an advance for humanity, and very little of it ought to be preserved. Financial markets are, for instance, able to mobilise advanced technology employing some of the best-trained physicists in the world to rebalance prices across the globe in milliseconds. This "progress" allows financiers to earn vast profits; but where is the commensurate benefit to society from committing such expensive resources to these tasks? ..."
"... The debate should focus on why neoliberalism was seen as the panacea to the relatively socialist post-War consensus. Neoliberalism is an ideology which has not even begun to be deconstructed. Like religion, the myths (concerning deficits and debt, for example) have been exposed here in CiF but not the global public -- and must be eventually. ..."
"... Big Brother=Neoliberalism=The Market=The Party=Enforcement ..."
"... Don't delude yourself. A capitalist "society" must have control over its citizens as intensive as a socialist one - just look at GCHQ/NSA. That it is exercised through markets and advertising instead of propaganda is neither here nor there. ..."
"... Thatcher's and Reagan's vicious, vile strikebreaking and the support they got from the supposedly free press and supposedly impartial judiciary in that is a good example. ..."
"... "The right way to think about it is that the financial industry must be doing something incredibly useful or it would not exist." What a ridiculous thing to say. By the same reasoning both bubonic plague and child abusers are both doing something incredibly useful, otherwise they would not exist. ..."
"... Classical economics generally sees things the way you do, and attempts to match up economics with reality. Neoclassical economics on the other hand, which is the system we're currently using, has little concern with reality. So the specific problem involves our economic system diverging from reality. ..."
"... Compounding factors involve the sociopathic nature of the individuals involved. For example, we think nothing about starting a war (generating profit for our military machine), then rebuilding the ravaged country (generating profit for our construction companies). In neoclassical economics that's just damned good business (the banks and corporations taking profits, the taxpayer footing the bill). ..."
"... There have always been alpha males and alpha females even, people who are very competitive, workaholics, who are leaders, who must be in charge. ..."
"... I think the difference in the last 30 years was Thatcherism and in very short order Reaganism. Adam Curtis says that Thatcher and her campaign manager were ardent anti-communists, they saw Britain in the grip of the unions as a kind of moral decay rotting the nation from the inside out (the enemy within) and they were both obsessed with Churchill, so they embarked on a Methodist 'the devil makes work for idle hands' market philosophy aimed at encouraging people to be self-sufficient, independent, have Victorian values, be as successful as possible and all that stuff. ..."
"... I think another thing is that capitalism then was still in its infancy of the turbo-on-steroids stage. For that cancer to truly metastasize we needed the personal computer network revolution that enabled globalisation, ..."
"... I agree that financialisation is a parasitic activity that will bring the body politic to its knees - and in the not too near future. This is capitalism that really doesn't give f**k about the environment or anyone who is not earning these obscene bucks shuffling electronic wizardry around to nobody's benefit but their own. ..."
"... Whose value system is overly competitive with the desire to win.. How can it be otherwise when we, ourselves, have brainwashed the children since the 1980s. We have given them Gameboys, Xboxes and the WoW where the emphasis is on winning. Play this for hours every day and the message becomes ingrained -- WIN ..."
"... The USSR had to be heavily militarized because its very existence depended on being able to defend itself against the aggressive USA and its little helpers, Nato-countries. It was surrounded by US military bases. That is the same US that went and murdered millions in SE Asia to "fight Communism". ..."
"... The article is about a global issue, not only your backyard. The people of UK can consider themselves lucky compared with billions of others. But what would you care. ..."
"... The financial sector, CEOs, oligarchs etc run on good old fashioned greed - a commodity not about to run out anytime soon. Is it even 'reversible' ? ..."
Jan 01, 2014 | www.theguardian.com

Finance's hold on our everyday life must be broken The rampant capitalism that has brought the market into every corner of society needs to be reined in 'Financial calculation evaluates everything in pennies and pounds, transforming the most basic goods – above all, housing – into "investments".'

The rampant capitalism that has brought the market into every corner of society needs to be reined in

The mature economies of the modern world, particularly the United States and Britain, are often described as "financialised". The term reflects the ascendancy of the financial sector. Even more important, it conveys the penetration of the financial system into every nook and cranny of society, including housing, education, health and other areas of life that were previously relatively immune.

Evidence that financialisation represents a deep transformation of mature economies is offered by the global crisis of 2007-09 . The crisis originated in the elephantine US financial system, and was associated with speculation in housing. For a brief period it led to serious questioning of mainstream economic theory and policy: how to confront the turmoil, and what to do about the diseased financial system; are new economic theories needed? However, after six years it is clear that very little has changed. Financialisation is here to stay.

Consider, for instance, the policies to confront the crisis. First, public funds were injected into banks to boost capital. Second, public liquidity was made available to banks to sustain their operations. Third, public interest rates were driven to zero to enable banks to make secure profits by lending to their own customers at higher rates.

This extraordinary public largesse towards private banks was matched by austerity and wage reductions for workers and households. As for restructuring finance, nothing fundamental has taken place. The behemoths that continue to dominate the global financial system operate in the knowledge that they enjoy an unspoken public guarantee. The unpalatable reality is that financialisation will persist, despite its costs for society.

Financialisation represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades.

The penetration of finance into the everyday life of households has not only created a range of dependencies on financial services, but also changed the outlook, mentality and even morality of daily life. Financial calculation evaluates everything in pennies and pounds, transforming the most basic goods – above all, housing – into "investments". Its logic has affected even the young, who have traditionally been idealistic and scornful of pecuniary calculation. Fertile ground has been created for neoliberal ideology to preach the putative merits of the market.

Financialisation has also created new forms of profit associated with financial markets and transactions. Financial profit can be made out of any income, or any sum of money that comes into contact with the financial sphere. Households, for example, generate profits for finance as debtors (mostly by paying interest on mortgages) but also as creditors (mostly by paying fees and charges on pension funds and insurance). Finance is not particular about how and where it makes its profits, and certainly does not limit itself to the sphere of production. It ranges far and wide, transforming every aspect of social life into a profit-making opportunity.

The traditional image of the person earning financial profits is the "rentier", the individual who invests funds in secure financial assets. In the contemporary financialised universe, however, those who earn vast returns are very different. They are often located within a financial institution, presumably work to provide financial services, and receive vast sums in the form of wages, or more often bonuses. Modern financial elites are prominent at the top of the income distribution, set trends in conspicuous consumption, shape the expensive end of the housing market, and transform the core of urban centres according to their own tastes.

Financialised capitalism is, thus, a deeply unequal system, prone to bubbles and crises – none greater than that of 2007-09. What can be done about it? The most important point in this respect is that financialisation does not represent an advance for humanity, and very little of it ought to be preserved. Financial markets are, for instance, able to mobilise advanced technology employing some of the best-trained physicists in the world to rebalance prices across the globe in milliseconds. This "progress" allows financiers to earn vast profits; but where is the commensurate benefit to society from committing such expensive resources to these tasks?

Financialisation ought to be reversed. Yet such an entrenched system will never be reversed by regulation alone. Its reversal also requires the creation of public banking that would operate with a new spirit of public service. It also needs effective controls to be applied to private banking as well as to international flows of capital. Not least, it requires new methods of meeting the financial requirements of households, as well as of small and medium enterprises. There is an urgent need for communal and associational ways to provide housing, education, health and other basic goods and services for working people, breaking the hold of finance on everyday life.

Ultimately, financialisation will not be reversed without an ambitious programme to re-establish the superiority of the social over the private, and the collective over the individual in contemporary society. Reversing financialisation is about reining in the rampant capitalism of our day.

Costas Lapavitsas's latest book is Profiting Without Producing: How Finance Exploits Us All

ATrueFinn -> Mizzentop , 3 Jan 2014 08:11

The Berlin Wall kept people in - that was its primary purpose.

Few people know what the Berlin Wall was. It was a wall around West Berlin, which was not a part of West Germany but an occupied territory within the GDR. An American president called himself a Berliner, which means a Berliner Pfannkuchen, i.e. a doughnut (technically, not by shape and content.)

But whatever. The good people of the UK nowadays seem to wish there was a Rumanian Wall and a Bulgarian Wall to keep people in. I gather quite a few in the former West Germany would like a wall to keep the Ossies in.

HolyInsurgent -> AhBrightWings , 2 Jan 2014 22:51

Why Reagan and Thatcher were allowed to gut functioning...societies so that a handful could prosper remains the great mystery.

On the contrary. Reagan and Thatcher were convenient advocates of a growing conservative consensus. The convergence of institutions must have begun before their tenure because neoliberalism became the dominant consensus by the time of their leadership.

The debate should focus on why neoliberalism was seen as the panacea to the relatively socialist post-War consensus. Neoliberalism is an ideology which has not even begun to be deconstructed. Like religion, the myths (concerning deficits and debt, for example) have been exposed here in CiF but not the global public -- and must be eventually.

Big Brother=Neoliberalism=The Market=The Party=Enforcement

Gegenbeispiel -> Mizzentop , 2 Jan 2014 17:19

Don't delude yourself. A capitalist "society" must have control over its citizens as intensive as a socialist one - just look at GCHQ/NSA. That it is exercised through markets and advertising instead of propaganda is neither here nor there.

Thatcher's and Reagan's vicious, vile strikebreaking and the support they got from the supposedly free press and supposedly impartial judiciary in that is a good example.

Mowglia -> JohnJohnJohnJohn , 2 Jan 2014 15:49

"The right way to think about it is that the financial industry must be doing something incredibly useful or it would not exist." What a ridiculous thing to say. By the same reasoning both bubonic plague and child abusers are both doing something incredibly useful, otherwise they would not exist.

Perhaps you could explain to me what exactly it is that these socialists are doing that is so useful?

Mowglia -> londongapp , 2 Jan 2014 15:40

It is the essential difference between wealth and money that is constantly missed by Politicians and Economists.

Classical economics generally sees things the way you do, and attempts to match up economics with reality. Neoclassical economics on the other hand, which is the system we're currently using, has little concern with reality. So the specific problem involves our economic system diverging from reality.

Compounding factors involve the sociopathic nature of the individuals involved. For example, we think nothing about starting a war (generating profit for our military machine), then rebuilding the ravaged country (generating profit for our construction companies). In neoclassical economics that's just damned good business (the banks and corporations taking profits, the taxpayer footing the bill).

Mowglia -> Claire Bouskill , 2 Jan 2014 15:25

isnt it amazing that Marx predicted over 150 years ago that the greedy capitalists would be their own gravediggers

I never read Marx, although it sounds like he knew a bit about human nature and simply took the system to its logical conclusion. I'm not anti-capitalism. I believe it was a useful development in human history, similar to religion and feudalism. But now it's time to say goodbye and find a new way of doing things. There's no point in flogging a dead horse, unless you're part of the 1%.
MereMortal -> ScroogeJr , 2 Jan 2014 14:47
I haven't really given that aspect of it much thought. When I was growing up, we played Monopoly or Risk or Cluedo, we went outside, we raced, played cowboys and indians and the rest.

There have always been alpha males and alpha females even, people who are very competitive, workaholics, who are leaders, who must be in charge.

I think the difference in the last 30 years was Thatcherism and in very short order Reaganism. Adam Curtis says that Thatcher and her campaign manager were ardent anti-communists, they saw Britain in the grip of the unions as a kind of moral decay rotting the nation from the inside out (the enemy within) and they were both obsessed with Churchill, so they embarked on a Methodist 'the devil makes work for idle hands' market philosophy aimed at encouraging people to be self-sufficient, independent, have Victorian values, be as successful as possible and all that stuff.

I can well believe that, it's just that they stirred up the whole thing without ever thinking through the terrible potential downsides. That's a major problem with politics, fanatical zealots who claim to have the solution for all the problems a nation faces.

I think another thing is that capitalism then was still in its infancy of the turbo-on-steroids stage. For that cancer to truly metastasize we needed the personal computer network revolution that enabled globalisation, partly because then, it was possible for people to source more and more and more income streams without the commensurate ability to truly monitor the quality of the investments or to manage the human relations that actually motivate people to feel appreciated and to do good work.

That's my sixpence worth anyway.

zavaell , 2 Jan 2014 14:34
Fighting talk. I agree that financialisation is a parasitic activity that will bring the body politic to its knees - and in the not too near future. This is capitalism that really doesn't give f**k about the environment or anyone who is not earning these obscene bucks shuffling electronic wizardry around to nobody's benefit but their own.

Maybe regulation per se is not the main answer, but it sure as hell needs a politician to stand up and say what is said in this article.

ScroogeJr -> MereMortal , 2 Jan 2014 12:46
Whose value system is overly competitive with the desire to win.. How can it be otherwise when we, ourselves, have brainwashed the children since the 1980s. We have given them Gameboys, Xboxes and the WoW where the emphasis is on winning. Play this for hours every day and the message becomes ingrained -- WIN
ATrueFinn -> Mizzentop , 2 Jan 2014 09:37

The failure of the USSR owed much to its militarism but don't you see that a society like that HAS to be heavily militarized because its very existence depends on having total control over its citizens.

The USSR had to be heavily militarized because its very existence depended on being able to defend itself against the aggressive USA and its little helpers, Nato-countries. It was surrounded by US military bases. That is the same US that went and murdered millions in SE Asia to "fight Communism".

TwoWolvesAndALamb , 2 Jan 2014 08:48
You are spot on with this:

Consider, for instance, the policies to confront the crisis. First, public funds were injected into banks to boost capital. Second, public liquidity was made available to banks to sustain their operations. Third, public interest rates were driven to zero to enable banks to make secure profits by lending to their own customers at higher rates.

Yet it seems you still blame the private sector for accepting the favorable situation rather than the state for causing it:

Ultimately, financialization will not be reversed without an ambitious program to re-establish the superiority of the social over the private, and the collective over the individual in contemporary society.

A shift towards the rights of the individual would see the state have less power to bail out the banks. Your solution is to give the source of the problem yet more power. The banks couldn't bail themselves out - they needed the state to take the funds from the citizens. Why do you find the state so blameless as to suggest they need more influence?

theonionmurders -> selfraisingfred , 2 Jan 2014 08:40

Remind me, because maybe I missed something, but which bit of the post-war German economic miracle had them seeking a bailout from the IMF?

I'll tell you. West Germany was allowed to default twice on massive post-war loans in 1946 and 1948 thereby requiring IMF loans to finance it's day-to-day running.

TheGreenLion -> Tenthred , 2 Jan 2014 08:40
My current company needs debt to pay for the machinery and running costs to create products. These are sold for profit and the debt repaid. Without the initial debt the products, the salaries, the taxable income would not exist. Debt is banned in Islamic countries – it is not a coincidence that from being streets behind 1000 years ago, the Western world is now considerably more developed
theonionmurders -> Trilbey , 2 Jan 2014 08:23
Yves Smith's ebook is available free here.
harlequinmod -> JohnJohnJohnJohn , 2 Jan 2014 08:09
I think what sticks in the craw of socialists is that these financial corporations and people working in finance would be out of work if it hadn't been for Government intervention and taxpayer money. There is a real irony in having had to listen how great Thatcher was for breaking the unions, smashing nationalized industries on the basis of free market principles only to have to bail out the biggest advocates of the free market. Especially when the cause of the longest and deepest recession in memory was caused by those financial corporations and people working in finance.

Do I envy these people? Not really, they are on the whole treated like sh1t and they are so attached to their money that they are like mewling, whimpering children when faced with the threat of losing their jobs.

Claire Bouskill -> Mowglia , 2 Jan 2014 07:16
Isn't it amazing that marx predicted over 150 years ago that the greedy capitalists would be their own gravediggers as they continue to pauperize the workers to extract more profit , drive down wages and replace jobs with machinery. Forgetting it is the workers who buy the commodities and if they cannot buy , the system will collapse in on itself
QueenBoadicea -> Tenthred , 2 Jan 2014 07:13
So will the likes of Wonga and other payday lenders should be closed down and the directors face court proceedings for usury?

This is an interesting article: http://unemploymentmovement.com/forum/chat-a-rap/5926-welcome-to-the-usury-kingdom

But seeing as the Anglican church has shares in Wonga, this made me wake up to the hypocrisy of the church http://cesc.net/scholarweb/swabey/swabey.pdf

Mizzentop -> Gegenbeispiel , 2 Jan 2014 06:28
Your problem is that that you may desire a non-aspirational society, but that's just not how people are. The human spirit is aspirational and competitive - whether you think that's desirable or not doesn't matter. Consequently, the type of society you want is only possible if that human spirit can be quashed and contained.

The failure of the USSR owed much to its militarism but don't you see that a society like that HAS to be heavily militarised because its very existence depends on having total control over its citizens. Without guns and walls, people would have just refused to be cowed and would have left.

In simple terms, human beings are imperfect individuals driven by passions, ambitions and desires which result in bad things happening but more often good things. Whether we like the fact that we are imperfect is immaterial - we are what we are and no enforced system which seeks to contain our individuality will ever succeed in the long run.

Yossarian247 -> Hikeybikeychick , 2 Jan 2014 05:47
As bullydoggy says - its land (and I would add debt too).

This Nationwide graph shows price rising 2.7 times adjusted for inflation from q3 1983 – q3 2007. This is 6.5 times in nominal terms.

Residential Land Prices
- Looking at figures for South East England from the same period aug 1983-july 07, it increases further, 13 times nominally - and this was an area with the 3rd lowest increase in nominal terms! (At the bottom of the page - 'download the full residential land value data')

The excellent film RealEstate4Ransom may help explain things, or the transcript may be quicker.

Also a less mentioned part of the increase in 'value' is as Positive Money point out the amount of debt created to purchase one.

succulentpork -> Febo , 2 Jan 2014 05:45
There is no reason that interest can't be paid from the existing stock of money. Play a game of monopoly and you will see that it is possible. Your argument has a false composition within it. The central bank is an arm of the government to all intents and purposes. To consider it as a case of the private sector holding the government over a barrel is silly. The state is the one with a monopoly over money.
Artusov , 2 Jan 2014 05:25
It's fairly simple. Split Banking into ' High Street ' stuff [ as in the good old days ] and the newer riskier stuff . You could even have a State Bank. If an investment company goes bust - let them - no bail outs - no public money. is lost. Have people who know what they are doing in the Treasury and FSA - This hasn't happened so far.

Have a sensible rate of higher tax , get them to spend it here and /or tax luxury goods at higher rates. Rich people like to spend money - encourage it. Encourage philanthropy, endowments to Universities etc.

EllisWyatt -> ATrueFinn , 2 Jan 2014 05:16

Communism has not been tried anywhere, so you don't know whether it works or not. Neoliberalism has now been tried quite enough for us to know that it does not

No what you call neoliberalism might have been tried but not true neoliberalism, that will work brilliantly, all you need to do is give me the reigns of power and let me get on with it, trust me...

Not convinced? about as convincing as your claim that communism has not been properly tried so maybe we should give it a go?

Artusov -> botany , 2 Jan 2014 04:22
' Tobin tax on financial transactions can be of help. '

Unless universally applied [ AND done properly ] this would be an extremely STUPID idea. Do you think for one moment that Wall Street [ or even, say, Moscow ] would ever do this ? The following points should be noted :-

1. Tried in Sweden - didn't work and abandoned

2. 70 % would come from the City - to disappear into the EU coffers never to be seen again apart from extra lunch portions for Van Rumpy Pumpy and his unelected catamites

3. A perfectly respectable international business may need to transfer collateral [ security ] from one subsidiary to another every day [ to cope with different trading zones ]. This sort of transaction happens hundreds of thousands of time a day in the City - twice a day at 0.1 % over 250 trading days for a £ 1 million, say, is a huge amount of money.

So what will happen ? - the tax will either get handed on to the customer [ which may well be a pensioner's or worker's Pension Fund ]

OR gets done in a more expensive way [ again , cost handed on to customer ]

OR Firm decamps elsewhere

IE - NO-ONE BENEFITS

The armchair anarchists and toy-town Trots may jump and down with glee but the City provides a significant chunk of GDP - If you want to be Greece but without the sunshine or being bailed out by the the Germans then so be it.

Febo -> succulentpork , 2 Jan 2014 04:18

If I understand you correctly, I think you are suggesting that to pay interest more money must be created as debt. I've seen this suggested quite often but I think it is a fallacy of composition.

If you were to think about money as a fixed quantity of gold you could pose the same question, how could interest be paid out on the gold in more gold? Quite easily, some of the gold just gets called interest payments as it changes hands, and that's it. No new gold is required.

Under a gold standard interest is paid by the "natural" growth in the money supply resulting from gold mining.
Under a fiat system the only way the intest could be paid would be if non-debt based money were issued which would require monetary reform. Yes, that's right, under our system the govt cannot issue money - it must borrow it from the central bank, which, in the case of the USA, is a group of private banks.

wh1952 -> ATrueFinn , 2 Jan 2014 04:17

The article is about a global issue, not only your backyard. The people of UK can consider themselves lucky compared with billions of others. But what would you care.

Quite. But do you think any one of the "socialists" raging on about nasty neo-liberals and capitalists have twigged that if a fairer system was applied that few in the UK would see any increase in their standard of living?

Freeport -> Mowglia , 2 Jan 2014 04:10

Sure thing mate, it'd be my pleasure! Are you REALLY sure you want to take the risk though?

It would mean you suddenly accumulate a rather large debt...

Nope the debts yours. I just want the cash, and money is bad. Apparently.

Of course we could... financialise the debt. You could roll the debt up and and sell it to people based on whether or not they think you'll pay it. Oh hang on... we've just killed the article because that's bad too.

Freeport -> someoneionceknew , 2 Jan 2014 04:08

It is a transfer.

No. Its an exchange. Each side gets something. Lets take a simple example. I buy a cake at a bakery. I get a cake, in exchange for money. The baker gets money for the cake. The baker (not being a moron) knows how much the ingredients, energy, time and so on the cake has cost. Some of that money goes to pay for these bits of the cake. The remainder is profit. The baker, in turn pays the suppliers. They also know what it cost to get their supplies ready for the baker, and add a little bit more for profit. So... show me the transfer, rather than the exchange.

Profit is income less spending. Somebody else's spending is your income.

Yes. Well done.

ATrueFinn -> Jonesey505 , 2 Jan 2014 03:49

Neither communism or crony capitalism work, so why not a free market system

Communism has not been tried anywhere, so you don't know whether it works or not. Neoliberalism has now been tried quite enough for us to know that it does not. Free market inevitably leads to neoliberalism, otherwise it is not free.

CaptCrash -> bilejones , 2 Jan 2014 03:44
That's right blame the only body which is accountable to you, and can be controlled by you, if only you'd get off your arse
frontalcortexes -> Denny O'Connor , 2 Jan 2014 03:43
It is always amusing to watch the rantings of someone living in the safest, most prosperous, more socially equal, society in the history of man ranting and raving for Communism or a Benevolent Dictator, or something; anything but this.

Were it in my power I would cheerfully transport you to the 12th Century where you could enjoy the benefits of living (shortly) free of Financialism.

Why not make it the 4th century and the collapse of the Western Roman Empire through excessive debt servitude? Or indeed fast forward into the 21st century with the decline of Western capitalist economies for the same reason and the undesirable triumph of Chinese Communist market capitalism through its use of Abba Lerner's Functional Finance?

Tenthred -> grauniadreader101 , 2 Jan 2014 03:40
"I think Christ's attack on the money lenders (which may have been a big part of what cost him his life) and the Islamic prohibition of usury falls into this category. Look what lending money at interest has done to our society."

I agree, and it surely lies at the root of the whole financial mess. if we hadn't allowed interest, the whole confection of finance divorced from enabling trade would not have arisen in the first place.

Diverting from the topic a bit, I'm not so sure about your first paragraph. I'm always struck by a thing the great traveller Freya Stark said:

"I think, with the possible exception of the act of love, water rights have caused more trouble than anything else in human history"

But I am not qualified to discuss the role of Sin - though I'm very grateful for your introduction of it to this threadlet, where it has born much fruit of useful points - so I'll have to leave the ethics there, I think!

ATrueFinn -> greensox , 2 Jan 2014 03:39
The Nordic countries did rather well until quite recently. Then the Neoliberalist religion arrived.
botany , 2 Jan 2014 03:37
Tobin tax on financial transactions can be of help.

We tax the food for children but not speculators play with money. France and Germany can take the lead to let the computers send a small sum on every transaction back to the people. That would be one of the few good things from EU. Otherwise let poor people starve and let the speculators play to death of our countries.

ATrueFinn -> wh1952 , 2 Jan 2014 03:37

So how many people rely on food banks? Is it half of us? One in ten, one in a hundred, one in a thousand?

The article is about a global issue, not only your backyard. The people of UK can consider themselves lucky compared with billions of others. But what would you care.

Daveinireland -> Diogenes44 , 2 Jan 2014 03:16

1. Public banking - it has no ties to corporate/international banking. N. or S. Dakota's "public bank" - begun about 90 years ago by a bunch of conservative farmers who despised the rise of bankster power.

How is this a model? The Bank of North Dakota operates more like the Bank of England than a retail bank, it doesn't offer retail services except for student loans.

2. Community-based markets - see the most famous one in Spain.
There are several one in all places, Ohio.

You may as well offer up the edinburgh bicycle cooperative as a model. Co-op exist all over the work, but they are a rounding error in the global economy. There is a place for them, but they are not going to take over from companies.

ATrueFinn -> KatieL , 2 Jan 2014 02:51

the capitalism which lets people pile up enough money to fund billion-dollar research programmes.

Such programmes are mostly funded by governments using tax money. Even in pharmaceutics the fundamental innovations and inventions are largely done in universities.

Little to do with your capitalism. Well, except that the profits of your benevolent pharmaceutical companies are exceptionally high.

hugaddict , 2 Jan 2014 02:48

Reversing financialisation is about reining in the rampant capitalism of our day.

The financial sector, CEOs, oligarchs etc run on good old fashioned greed - a commodity not about to run out anytime soon. Is it even 'reversible' ?

steverandomno , 1 Jan 2014 21:54
To summarize, you imply that capitalism and 'the market' are exemplified by government bailouts of massively overinflated banks, to allow them to continue benefiting from government created arbitrages of securitized debt and artificial regulatory economies of scale.

You go on to suggest that people's choices of dependence on large financial corporations is bad, but then imply that they would be better off if they were instead dependent on a single monopoly corporation to which they have no choice in belonging.

This is the problem with almost all attacks on capitalism and free markets. They incorrectly ascribe our present system to the same and fail to recognise the similarities between dysfunctional private and public corporate entities.

KSurin -> succulentpork , 1 Jan 2014 20:34

Making up a term - financialisation - and using to describe all use of money and also certain aspects of finance itself actual makes analysing problems harder. You are actually over generalising which makes you prone to creating narrative fallacies.

Porky, the term 'financialisation' has wide currency in economics, and refers to a specific set of transformations in the structure of accumulation. It is not used 'to describe all banking', etc. The Oxford-trained economist Thomas Palley provides this succinct definition of it:

Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes.

Financialization transforms the functioning of economic systems at both the macro and micro levels.

Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage stagnation. Additionally, there are reasons to believe that financialization may put the economy at risk of debt deflation and prolonged recession.

Financialization operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of nonfinancial corporations, and changes in economic policy.

Countering financialization calls for a multifaceted agenda that (1) restores policy control over financial markets, (2) challenges the neoliberal economic policy paradigm encouraged by financialization, (3) makes corporations responsive to interests of stakeholders other than just financial markets, and (4) reforms the political process so as to diminish the influence of corporations and wealthy elites.

See http://www.levyinstitute.org/pubs/wp_525.pdf

paradise33 , 1 Jan 2014 20:30
The financialisation of UK society reached a farcical nadir when the DWP began describing benefit claimants as 'customers'.

Interestingly, in this case the 'customer' is frequently 'wrong' - and is punished accordingly.

Elephantmoth -> wh1952 , 1 Jan 2014 20:28
For some, 'Too much is not enough'. If you want the facts about who is paying for the worship of individual whims, see this:
http://www.poverty.ac.uk/sites/default/files/attachments/The_Impoverishment_of_the_UK_PSE_UK_first_results_summary_report_March_28.pdf
KSurin -> selfraisingfred , 1 Jan 2014 19:54

They used interest rates to control inflation, come what may, which is precisely what Maggie instigated after any ideas of cooperation had been rejected by the unions, during Callaghan's time in office.

Thatcher used interest rates to create unemployment, not control inflation.

Sir Alan Budd (a top Treasury civil servant and Thatcher adviser, a strong supporter of monetarism, who became Provost of The Queen's College, Oxford) let this cat out of the bag:

"The Thatcher government never believed for a moment that [monetarism] was the correct way to bring down inflation. They did however see that this would be a very good way to raise unemployment. And raising unemployment was an extremely desirable way of reducing the strength of the working classes. [...] What was engineered – in Marxist terms – was a crisis of capitalism which re- created the reserve army of labour, and has allowed the capitalists to make high profits ever since."

Quoted in Nick Cohen, "Gambling with our future", New Statesman, 13 January 2003, page 13.

Raytrek -> kimdriver , 1 Jan 2014 19:54
The way I see it is you have the elite class, made of leaders, executives, industrialists, experts, then you have the common hordes.

Common people are like a horse, the elite are like the rider, the horse doesn't mind the rider, the rider is firm with the reigns and keeps the horse controlled, but then if the rider starts to pull too firmly on the reins, the bridle causes discomfort, even pain, to the horse, with the crop whipping and the spurs digging in, you push the horse too far and it will throw you.

The rider will inevitably, albeit gingerly, get back in the saddle, a little wiser. I have no problem with this setup, but I know the rider has a short memory, and it is a case of taking care of all your horses, not just the one you ride, because nags are always trouble and they are worth a lot more when well taken care of.

This is a bad analogy, I know, but it is basically true; a phenomenal amount of problems in communities and the world are due to inadequacies, unfortunately the symptoms of these inadequacies are also big business and the economy would be disturbed by solving them, so we see "austerity" preserving what we should be curing.

mereEngineer , 1 Jan 2014 19:53
Make Bank executives personally responsible for the liabilities of the banks they are directors of. Just like entrepreneurs are often personally responsible for their companies debts.
londongapp , 1 Jan 2014 19:44
I am not sure I would use the description of 'Financialisation'. I would describe it more as the difference between wealth and money. Money is a means of exchange. It is not wealth. In London it is possible to buy a one bedroomed flat for over one million pounds. In some parts of the country a similar flat could be bought for forty thousand pounds or less. The wealth is the property and the money is the means of exchange. Just because my house goes up in value does not mean I have more wealth. My house is unchanged. It is true that if I sold my house and realised the money I might then be able buy a similar house for less money else where. Then with the surplus money I could exchange that for more wealth in the form of goods elsewhere. However as a society no wealth has been generated.
Only if money is used to create wealth in the form of goods and some services does wealth of society increase.
It is the essential difference between wealth and money that is constantly missed by Politicians and Economists.
Herbolzheim -> someoneionceknew , 1 Jan 2014 19:43
of course you are right

left and right, governments - ideally democratically elected - have bossed markets. sometimes rightly so.

Herbolzheim -> MawalTrees , 1 Jan 2014 19:40
good post mate. Thanks for taking the time

Raytrek -> kimdriver , 1 Jan 2014 19:39
Ideally it would be about drawing lines of decency between rights and responsibility; of course everyone wants more rights than responsibility and will fight for that, wether they are just an ordinary person or someone who actually has a high impact sphere of influence, and most people will allow that person that right because they view thing in terms relative to their own context and basically want the same thing.

It isn't about doing anything at gun point, it is about drawing clear lines of decency between rights and responsibility, at which point it becomes a case of people knowing what they and others can and cannot, should and should not, get away with. It isn't about punishment or forcing people to do this or that, it is about natural repercussion that comes from inconsiderate behaviour, it is about logically creating an environment that doesn't want to see you lynched.

[Oct 06, 2017] Prof. Philip Mirowski keynote for Life and Debt conference

Highly recommended!
Among interesting ideas that Mirkowski presented in this lecture are "privatization of science" -- when well paid intellectual prostitutes produce the reuslt which are expected by their handlers. the other is his thought on the difference between neoclassical economics and neoliberalism. Neoliberalism believes in state intervention and this intervention should take the form of enforcing market on all spheres of human society.
Another interesting idea that neoliberalism in many cases doe not need the success of its ideas. The failure can also be exploited for enforcing "more market" on the society.
In other words market fundamentalism has all features of civil religion and like in Middle Ages it is enforced from above. heretics are not burned at the stake but simply ostracized.
Notable quotes:
"... how it is that science came to be subordinate to economics and the very future of nature to be contingent upon the market. ..."
"... As a leading exponent of the Institutional school, he has published formal treatments of financial markets that update Minsky's 'financial instability hypothesis' for the world of computerised derivative trading. ..."
Aug 18, 2013 | www.youtube.com

Life and Debt: Living through the Financialisation of the Biosphere

How can it be that the climate crisis, the biodiversity crisis and the deepest financial crisis since 1930s have done so little to undermine the supremacy of orthodox economics?

The lecture will preview material from Mirowski's new book: Never Lt a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown (Verso, 2013).

In this lecture, Professor Mirowski responds to the question of how it is that science came to be subordinate to economics and the very future of nature to be contingent upon the market. Charting the contradictions of the contemporary political landscape, he notes that science denialism, markets for pollution permits and proposals for geo-engineering can all be understood as political strategies designed to neutralize the impact of environmentalism, as they all originated in the network of corporate-sponsored think-tanks that have made neoliberal accounts of society, politics and the economy so prevalent that even the most profound crises are unable to shake their grip on the political imagination.

For those of us who are still paying attention, the task of constructing an alternative politics of science and markets is a vital one.

Philip Mirowski is Carl E. Koch Professor at the University of Notre Dame, Indiana. His most famous book, More Heat Than Light: Economics as Social Physics (1989) established his reputation as a formidable critic of the scientific status of neoclassical economics. His Machine Dreams: Economics becomes a Cyborg Science (2002) presents a history of the Cold War consolidation of American economic orthodoxy in the same intellectual milieu that produced systems theory, the digital computer, the atomic bomb, the strategy of Mutually Assured Destruction, and the 'think tank'. The Road from Mont Pelerin: the Making of the Neoliberal Thought Collective (with Dieter Plewhe, 2009), drawn from the archives of the Mont Pelerin Society and the Chicago School, presents a scholarly history of neoliberalism: the political movement initiated by Friedrich Hayek and Milton Friedman in the 1940s, which has since become the world's dominant philosophy of government.

As a leading exponent of the Institutional school, he has published formal treatments of financial markets that update Minsky's 'financial instability hypothesis' for the world of computerised derivative trading.

This lecture is presented by the UTS Cosmopolitan Civil Societies Research Centre and the Australian Working Group on Financialisation at the University of Sydney.

[Oct 01, 2017] Neoliberal economic policies in the United States The impact of globalisation on a `Northern country by Kim Scipes

Highly recommended!
Notable quotes:
"... Following Frances Fox Piven, "neoliberal economic policies" refers to the set of policies carried out, in the name of individualism and unfettered markets, for "the deregulation of corporations, and particularly of financial institutions; the rollback of public services and benefit programs; curbing labor unions; 'free trade' policies that would pry open foreign markets; and wherever possible the replacement of public programs with private markets" (Piven, 2007: 13). ..."
"... The case of the United States is particularly useful to examine because its elites have projected themselves as "first among equals" of the globalization project ( Bello , 2006), and it is the place of the Global North where the neoliberal project has been pursued most resolutely and has advanced the farthest. In other words, the experiences of American workers illuminate the affects of the neoliberal project in the Global North to the greatest extent, and suggest what will happen to working people in other northern countries should they accept their respective government's adoption of such policies. ..."
"... However, it is believed that the implementation of these neoliberal economic policies and the cultural wars to divert public attention are part of a larger, conscious political program by the elites within this country that is intended to prevent re-emergence of the collective solidarity among the American people that we saw during the late 1960s-early 1970s (see Piven, 2004, 2007) -- of which the internal breakdown of discipline within the US military, in Vietnam and around the world, was arguably the most crucial (see Moser, 1996; Zeiger, 2006) -- that ultimately challenged, however inchoately, the very structure of the established social order, both internationally and in the United States itself. ..."
Oct 01, 2017 | links.org.au

Most contemporary discussions of globalization, and especially of the impact of neoliberal economic policies, focus on the countries of the Global South (see, for example, Bond, 2005; Ellner and Hellinger, eds., 2003; a number of articles in Harris, ed., 2006; Klein, 2007; Monthly Review, 2007; and, among others, see Scipes, 1999, 2006b). Recent articles arguing that the globalization project has receded and might be taking different approaches (Bello, 2006; Thornton, 2007) have also focused on the Global South. What has been somewhat discussed (see Giroux, 2004; Piven, 2004; Aronowitz, 2005) but not systematically addressed, however, is what has been the impact of globalization and especially related neoliberal economic policies on working people in a northern country? [i]

This paper specifically addresses this question by looking at the impact of neoliberal economic policies on working people in the United States . Following Frances Fox Piven, "neoliberal economic policies" refers to the set of policies carried out, in the name of individualism and unfettered markets, for "the deregulation of corporations, and particularly of financial institutions; the rollback of public services and benefit programs; curbing labor unions; 'free trade' policies that would pry open foreign markets; and wherever possible the replacement of public programs with private markets" (Piven, 2007: 13).

The case of the United States is particularly useful to examine because its elites have projected themselves as "first among equals" of the globalization project ( Bello , 2006), and it is the place of the Global North where the neoliberal project has been pursued most resolutely and has advanced the farthest. In other words, the experiences of American workers illuminate the affects of the neoliberal project in the Global North to the greatest extent, and suggest what will happen to working people in other northern countries should they accept their respective government's adoption of such policies.

However, care must be taken as to how this is understood. While sociologically-focused textbooks (e.g., Aguirre and Baker, eds., 2008; Hurst, 2007) have joined together some of the most recent thinking on social inequality -- and have demonstrated that inequality not only exists but is increasing -- this has been generally presented in a national context; in this case, within the United States. And if they recognize that globalization is part of the reason for increasing inequality, it is generally included as one of a set of reasons.

This paper argues that we simply cannot understand what is happening unless we put developments within a global context: the United States effects, and is affected by, global processes. Thus, while some of the impacts can be understood on a national level, we cannot ask related questions as to causes -- or future consequences -- by confining our examination to a national level: we absolutely must approach this from a global perspective (see Nederveen Pieterse, 2004, 2008).

This also must be put in historical perspective as well, although the focus in this piece will be limited to the post-World War II world. Inequality within what is now the United States today did not -- obviously -- arise overnight. Unquestionably, it began at least 400 years ago in Jamestown -- with the terribly unequal and socially stratified society of England's colonial Virginia before Africans were brought to North America (see Fischer, 1989), much less after their arrival in 1619, before the Pilgrims. Yet, to understand the roots of development of contemporary social inequality in the US , we must understand the rise of " Europe " in relation to the rest of the world (see, among others, Rodney, 1972; Nederveen Pieterse, 1989). In short, again, we have to understand that the development of the United States has been and will always be a global project and, without recognizing that, we simply cannot begin to understand developments within the United States .

We also have to understand the multiple and changing forms of social stratification and resulting inequalities in this country. This paper prioritizes economic stratification, although is not limited to just the resulting inequalities. Nonetheless, it does not focus on racial, gender or any other type of social stratification. However, this paper is not written from the perspective that economic stratification is always the most important form of stratification, nor from the perspective that we can only understand other forms of stratification by understanding economic stratification: all that is being claimed herein is that economic stratification is one type of social stratification, arguably one of the most important types yet only one of several, and investigates the issue of economic stratification in the context of contemporary globalization and the neoliberal economic policies that have developed to address this phenomenon as it affects the United States.

Once this global-historical perspective is understood and after quickly suggesting in the "prologue" why the connection between neoliberal economic policies and the affects on working people in the United States has not been made usually, this paper focuses on several interrelated issues: (1) it reports the current economic situation for workers in the United States; (2) it provides a historical overview of US society since World War II; (3) it analyzes the results of US Government economic policies; and (4) it ties these issues together. From that, it comes to a conclusion about the affects of neoliberal economic policies on working people in the United States .

Prologue: Origins of neoliberal economic policies in the United States

As stated above, most of the attention directed toward understanding the impact of neoliberal economic policies on various countries has been confined to the countries of the Global South. However, these policies have been implemented in the United States as well. This arguably began in 1982, when the Chairman of the US Federal Reserve, Paul Volcker, launched a vicious attack on inflation -- and caused the deepest US recession since the Great Depression of the late 1920s-1930s.

However, these neoliberal policies have been implemented in the US perhaps more subtly than in the Global South. This is said because, when trying to understand changes that continue to take place in the United States, these economic policies are hidden "under" the various and sundry "cultural wars" (around issues such as drugs, premarital sex, gun control, abortion, marriages for gays and lesbians) that have been taking place in this country and, thus, not made obvious: most Americans, and especially working people, are not aware of the changes detailed below. [ii]

However, it is believed that the implementation of these neoliberal economic policies and the cultural wars to divert public attention are part of a larger, conscious political program by the elites within this country that is intended to prevent re-emergence of the collective solidarity among the American people that we saw during the late 1960s-early 1970s (see Piven, 2004, 2007) -- of which the internal breakdown of discipline within the US military, in Vietnam and around the world, was arguably the most crucial (see Moser, 1996; Zeiger, 2006) -- that ultimately challenged, however inchoately, the very structure of the established social order, both internationally and in the United States itself. Thus, we see both Democratic and Republican Parties in agreement to maintain and expand the US Empire (in more neutral political science-ese, a "uni-polar world"), but the differences that emerge within each party and between each party are generally confined to how this can best be accomplished. While this paper focuses on the economic and social changes going on, it should be kept in mind that these changes did not "just happen": conscious political decisions have been made that produced social results (see Piven, 2004) that make the US experience -- at the center of a global social order based on an "advanced" capitalist economy -- qualitatively different from experiences in other more economically-developed countries.

So, what has been the impact of these policies on workers in the US?

1) The current situation for workers and growing economic inequality

Steven Greenhouse of The New York Times published a piece on September 4, 2006, writing about entry-level workers, young people who were just entering the job market. Mr. Greenhouse noted changes in the US economy; in fact, there have been substantial changes since early 2000, when the economy last created many jobs.

Yet, the percentage drop in wages hides the growing gap between college and high school graduates. Today, on average, college grads earn 45 per cent more than high school graduates, where the gap had "only" been 23 per cent in 1979: the gap has doubled in 26 years (Greenhouse, 2006b).

A 2004 story in Business Week found that 24 per cent of all working Americans received wages below the poverty line ( Business Week , 2004). [iii] In January 2004, 23.5 million Americans received free food from food pantries. "The surge for food demand is fueled by several forces -- job losses, expired unemployment benefits, soaring health-care and housing costs, and the inability of many people to find jobs that match the income and benefits of the jobs they had." And 43 million people were living in low-income families with children (Jones, 2004).

A 2006 story in Business Week found that US job growth between 2001-2006 was really based on one industry: health care. Over this five-year period, the health-care sector has added 1.7 million jobs, while the rest of the private sector has been stagnant. Michael Mandel, the economics editor of the magazine, writes:

information technology, the great electronic promise of the 1990s, has turned into one of the greatest job-growth disappointments of all time. Despite the splashy success of companies such as Google and Yahoo!, businesses at the core of the information economy -- software, semi-conductors, telecom, and the whole range of Web companies -- have lost more than 1.1 million jobs in the past five years. These businesses employ fewer Americans today than they did in 1998, when the Internet frenzy kicked into high gear (Mandel, 2006: 56) .

In fact, "take away health-care hiring in the US, and quicker than you can say cardiac bypass, the US unemployment rate would be 1 to 2 percentage points higher" (Mandel, 2006: 57).

There has been extensive job loss in manufacturing. Over 3.4 million manufacturing jobs have been lost since 1998, and 2.9 million of them have been lost since 2001. Additionally, over 40,000 manufacturing firms have closed since 1999, and 90 per cent have been medium and large shops. In labor-import intensive industries, 25 per cent of laid-off workers remain unemployed after six months, two-thirds of them who do find new jobs earn less than on their old job, and one-quarter of those who find new jobs "suffer wage losses of more than 30 percent" (AFL-CIO, 2006a: 2).

The AFL-CIO details the US job loss by manufacturing sector in the 2001-05 period:

As of the end of 2005, only 10.7 per cent of all US employment was in manufacturing -- down from 21.6 per cent at its height in 1979 -- in raw numbers, manufacturing employment totaled 19.426 million in 1979, 17.263 million in 2000, and 14.232 million in 2005. [iv] The number of production workers in this country at the end of 2005 was 9.378 million. [v] This was only slightly above the 9.306 million production workers in 1983, and was considerably below the 11.463 million as recently as 2000 (US Bureau of Labor Statistics, 2006b). As one writer puts it, this is "the biggest long-term trend in the economy: the decline of manufacturing." He notes that employment in the durable goods (e.g., cars and cable TV boxes) category of manufacturing has declined from 19 per cent of all employment in 1965 to 8 per cent in 2005 (Altman, 2006). And at the end of 2006, only 11.7 per cent of all manufacturing workers were in unions (US Bureau of Labor Statistics, 2007).

In addition, in 2004 and 2005, "the real hourly and weekly wages of US manufacturing workers have fallen 3 per cent and 2.2 per cent respectively" (AFL-CIO, 2006a: 2).

The minimum wage level went unchanged for nine years: until recently when there was a small increase -- to $5.85 an hour on July 24, 2007 -- US minimum wage had remained at $5.15 an hour since September 1, 1997 . During that time, the cost of living rose 26 percent. After adjusting for inflation, this was the lowest level of the minimum wage since 1955. At the same time, the minimum wage was only 31 per cent of the average pay of non-supervisory workers in the private sector, which is the lowest share since World War II (Bernstein and Shapiro, 2006).

In addition to the drop in wages at all levels, fewer new workers get health care benefits with their jobs: [vi] in 2005, 64 per cent of all college grads got health coverage in entry-level jobs, where 71 per cent had gotten it in 2000 -- a 7 per cent drop in just five years. Over a longer term, we can see what has happened to high school grads: in 1979, two-thirds of all high school graduates got health care coverage in entry-level jobs, while only one-third do today (Greenhouse, 2006b). It must be kept in mind that only about 28 per cent of the US workforce are college graduates -- most of the work force only has a high school degree, although a growing percentage of them have some college, but not college degrees.

Because things have gotten so bad, many young adults have gotten discouraged and given up. The unemployment rate is 4.4 per cent for ages 25-34, but 8.2 per cent for workers 20-24. (Greenhouse, 2006b).

Yet things are actually worse than that. In the US , unemployment rates are artificially low. If a person gets laid off and gets unemployment benefits -- which fewer and fewer workers even get -- they get a check for six months. If they have not gotten a job by the end of six months -- and it is taking longer and longer to get a job -- and they have given up searching for work, then not only do they loose their unemployment benefits, but they are no longer counted as unemployed: one doesn't even count in the statistics!

A report from April 2004 provides details. According to the then-head of the US Federal Reserve System, Alan Greenspan, "the average duration of unemployment increased from twelve weeks in September 2000 to twenty weeks in March [2004]" (quoted in Shapiro, 2004: 4). In March 2004, 354,000 jobs workers had exhausted their unemployment benefits, and were unable to get any additional federal unemployment assistance: Shapiro (2004: 1) notes, "In no other month on record, with data available back to 1971, have there been so many 'exhaustees'."

Additionally, although it's rarely reported, unemployment rates vary by racial grouping. No matter what the unemployment rate is, it really only reflects the rate of whites who are unemployed because about 78 per cent of the workforce is white. However, since 1954, the unemployment rate of African-Americans has always been more than twice that of whites, and Latinos are about 1 1/2 times that of whites. So, for example, if the overall rate is five percent, then it's at least ten per cent for African-Americans and 7.5 per cent for Latinos.

However, most of the developments presented above -- other than the racial affects of unemployment -- have been relatively recent. What about longer term? Paul Krugman, a Nobel Prize-winning Princeton University economist who writes for The New York Times, pointed out these longer term affects: non-supervisory workers make less in real wages today (2006) than they made in 1973! So, after inflation is taken out, non-supervisory workers are making less today in real terms that their contemporaries made 33 years ago (Krugman, 2006b). Figures provided by Stephen Franklin -- obtained from the US Bureau of Statistics, and presented in 1982 dollars -- show that a production worker in January 1973 earned $9.08 an hour -- and $8.19 an hour in December 2005 (Franklin, 2006). Workers in 2005 also had less long-term job security, fewer benefits, less stable pensions (when they have them), and rising health care costs. [vii]

In short, the economic situation for "average Americans" is getting worse. A front-page story in the Chicago Tribune tells about a worker who six years ago was making $29 an hour, working at a nuclear power plant. He got laid off, and now makes $12.24 an hour, working on the bottom tier of a two-tiered unionized factory owned by Caterpillar, the multinational earth moving equipment producer, which is less than half of his old wages. The article pointed out, "Glued to a bare bones budget, he saved for weeks to buy a five-pack of $7 T-shirts" ( Franklin , 2006).

As Foster and Magdoff point out:

Except for a small rise in the late 1990s, real wages have been sluggish for decades. The typical (median-income) family has sought to compensate for this by increasing the number of jobs and working hours per household. Nevertheless, the real (inflation-adjusted) income of the typical household fell for five years in a row through 2004 (Foster and Magdoff, 2009: 28).

A report by Workers Independent News (WIN) stated that while a majority of metropolitan areas have regained the 2.6 million jobs lost during the first two years of the Bush Administration, "the new jobs on average pay $9,000 less than the jobs replaced," a 21 per cent decline from $43,629 to $34,378. However, WIN says that "99 out of the 361 metro areas will not recover jobs before 2007 and could be waiting until 2015 before they reach full recovery" (Russell, 2006).

At the same time, Americans are going deeper and deeper into debt. At the end of 2000, total US household debt was $7.008 trillion, with home mortgage debt being $4.811 trillion and non-mortgage debt $1.749 trillion; at the end of 2006, comparable numbers were a total of $12.817 trillion; $9.705 trillion (doubling since 2000); and $2.431 trillion (US Federal Reserve, 2007-rounding by author). Foster and Magdoff (2009: 29) show that this debt is not only increasing, but based on figures from the Federal Reserve, that debt as a percentage of disposable income has increased overall from 62% in 1975 to 96.8% in 2000, and to 127.2% in 2005.

Three polls from mid-2006 found "deep pessimism among American workers, with most saying that wages were not keeping pace with inflation, and that workers were worse off in many ways than a generation ago" (Greenhouse, 2006a). And, one might notice, nothing has been said about increasing gas prices, lower home values, etc. The economic situation for most working people is not looking pretty.

In fact, bankruptcy filings totaled 2.043 million in 2005, up 31.6 per cent from 2004 (Associated Press, 2006), before gas prices went through the ceiling and housing prices began falling in mid-2006. Yet in 1998, writers for the Chicago Tribune had written, " the number of personal bankruptcy filings skyrocketed 19.5 per cent last year, to an all-time high of 1,335,053, compared with 1,117,470 in 1996" (Schmeltzer and Gruber, 1998).

And at the same time, there were 37 million Americans in poverty in 2005, one of out every eight. Again, the rates vary by racial grouping: while 12.6 per cent of all Americans were in poverty, the poverty rate for whites was 8.3 percent; for African Americans, 24.9 per cent were in poverty, as were 21.8 per cent of all Latinos. (What is rarely acknowledged, however, is that 65 per cent of all people in poverty in the US are white.) And 17.6 per cent of all children were in poverty (US Census Bureau, 2005).

What about the "other half"? This time, Paul Krugman gives details from a report by two Northwestern University professors, Ian Dew-Becker and Robert Gordon, titled "Where Did the Productivity Growth Go?" Krugman writes:

Between 1973 and 2001, the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 per cent per year. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint. Just to give you a sense of who we're talking about: the nonpartisan Tax Policy Center estimates that this year, the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The Center doesn't give a number for the 99.99th percentile, but it's probably well over $6 million a year (Krugman, 2006a) .

But how can we understand what is going on? We need to put take a historical approach to understand the significance of the changes reported above.

(2) A historical look at the US social order since World War II

When considering the US situation, it makes most sense to look at "recent" US developments, those since World War II. Just after the War, in 1947, the US population was about six per cent of the world's total. Nonetheless, this six per cent produced about 48 per cent of all goods and services in the world! [viii] With Europe and Japan devastated, the US was the only industrialized economy that had not been laid waste. Everybody needed what the US produced -- and this country produced the goods, and sent them around the world.

At the same time, the US economy was not only the most productive, but the rise of the industrial union movement in the 1930s and '40s -- the CIO (Congress of Industrial Organizations) -- meant that workers had some power to demand a share of the wealth produced. In 1946, just after the war, the US had the largest strike wave in its history: 116,000,000 production days were lost in early 1946, as industry-wide strikes in auto, steel, meat packing, and the electrical industry took place across the United States and Canada , along with smaller strikes in individual firms. Not only that, but there were general strikes that year in Oakland , California and Stamford , Connecticut . Workers had been held back during the war, but they demonstrated their power immediately thereafter (Lipsitz, 1994; Murolo and Chitty, 2001). Industry knew that if it wanted the production it could sell, it had to include unionized workers in on the deal.

It was this combination -- devastated economic markets around the world and great demand for goods and services, the world's most developed industrial economy, and a militant union movement -- that combined to create what is now known as the "great American middle class." [ix]

To understand the economic impact of these factors, changes in income distribution in US society must be examined. The best way to illuminate this is to assemble family data on income or wealth [x] -- income data is more available, so that will be used; arrange it from the smallest amount to the largest; and then to divide the population into fifths, or quintiles. In other words, arrange every family's annual income from the lowest to the highest, and divide the total number of family incomes into quintiles or by 20 percents (i.e., fifths). Then compare changes in the top incomes for each quintile. By doing so, one can then observe changes in income distribution over specified time periods.

The years between 1947 and 1973 are considered the "golden years" of the US society. [xi] The values are presented in 2005 dollars, so that means that inflation has been taken out: these are real dollar values, and that means these are valid comparisons.

Figure 1: US family income, in US dollars, growth and istribution, by quintile, 1947-1973 compared to 1973-2001, in 2005 dollars

Lowest 20%

Second 20 %

Third 20%

Fourth 20%

95 th Percentile [xii]

1947

$11,758

$18,973

$25,728

$36,506

$59,916

1973

$23,144

$38,188

$53,282

$73,275

$114,234

Difference (26 years) $11,386

(97%)

$19,145

(100%)

$27,554

(107%)

$36,769

(101%)

$54,318

(91%)

1973

$23,144

$38,188

$53,282

$73,275

$114,234

2001

$26,467

$45,355

$68,925

$103,828

$180,973

Difference (28 years) $3,323

(14%)

$7,167

(19%)

$15,643

(29%)

$30,553

(42%)

$66,739

(58%)

Source: US Commerce Department, Bureau of the Census (hereafter, US Census Bureau) at www.census.gov/hhes/www/income/histinc/f01ar.html . All dollar values converted to 2005 dollars by US Census Bureau, removing inflation and comparing real values. Differences and percentages calculated by author. Percentages shown in both rows labeled "Difference" show the dollar difference as a percentage of the first year of the comparison.

Data for the first period, 1947-1973 -- the data above the grey line -- shows there was considerable real economic growth for each quintile . Over the 26-year period, there was approximately 100 per cent real economic growth for the incomes at the top of each quintile, which meant incomes doubled after inflation was removed; thus, there was significant economic growth in the society.

And importantly, this real economic growth was distributed fairly evenly . The data in the fourth line (in parentheses) is the percentage relationship between the difference between 1947-1973 real income when compared to the 1947 real income, with 100 per cent representing a doubling of real income: i.e., the difference for the bottom quintile between 1947 and 1973 was an increase of $11,386, which is 97 per cent more than $11,758 that the top of the quintile had in 1947. As can be seen, other quintiles also saw increases of roughly comparable amounts: in ascending order, 100 percent, 107 percent, 101 percent, and 91 percent. In other words, the rate of growth by quintile was very similar across all five quintiles of the population.

When looking at the figures for 1973-2001, something vastly different can be observed. This is the section below the grey line. What can be seen? First, economic growth has slowed considerably: the highest rate of growth for any quintile was that of 58 per cent for those who topped the fifth quintile, and this was far below the "lagger" of 91 per cent of the earlier period.

Second, of what growth there was, it was distributed extremely unequally . And the growth rates for those in lower quintiles were generally lower than for those above them: for the bottom quintile, their real income grew only 14 per cent over the 1973-2001 period; for the second quintile, 19 percent; for the third, 29 percent; for the fourth, 42 percent; and for the 80-95 percent, 58 percent: loosely speaking, the rich are getting richer, and the poor poorer.

Why the change? I think two things in particular. First, as industrialized countries recovered from World War II, corporations based in these countries could again compete with those from the US -- first in their own home countries, and then through importing into the US , and then ultimately when they invested in the United States . Think of Toyota : they began importing into the US in the early 1970s, and with their investments here in the early '80s and forward, they now are the largest domestic US auto producer.

Second cause for the change has been the deterioration of the American labor movement: from 35.3 per cent of the non-agricultural workforce in unions in 1954, to only 12.0 per cent of all American workers in unions in 2006 -- and only 7.4 per cent of all private industry workers are unionized, which is less than in 1930!

This decline in unionization has a number of reasons. Part of this deterioration has been the result of government policies -- everything from the crushing of the air traffic controllers when they went on strike by the Reagan Administration in 1981, to reform of labor law, to reactionary appointments to the National Labor Relations Board, which oversees administration of labor law. Certainly a key government policy, signed by Democratic President Bill Clinton, has been the North American Free Trade Act or NAFTA. One analyst came straight to the point:

Since [NAFTA] was signed in 1993, the rise in the US trade deficit with Canada and Mexico through 2002 has caused the displacement of production that supported 879,280 US jobs. Most of these lost jobs were high-wage positions in manufacturing industries. The loss of these jobs is just the most visible tip of NAFTA's impact on the US economy. In fact, NAFTA has also contributed to rising income inequality, suppressed real wages for production workers, weakened workers' collective bargaining powers and ability to organize unions, and reduced fringe benefits (Scott, 2003: 1).

These attacks by elected officials have been joined by the affects due to the restructuring of the economy. There has been a shift from manufacturing to services. However, within manufacturing, which has long been a union stronghold, there has been significant job loss: between July 2000 and January 2004, the US lost three million manufacturing jobs, or 17.5 percent, and 5.2 million since the historical peak in 1979, so that "Employment in manufacturing [in January 2004] was its lowest since July 1950" (CBO, 2004). This is due to both outsourcing labor-intensive production overseas and, more importantly, technological displacement as new technology has enabled greater production at higher quality with fewer workers in capital-intensive production (see Fisher, 2004). Others have blamed burgeoning trade deficits for the rise: " an increasing share of domestic demand for manufacturing output is satisfied by foreign rather than domestic producers" (Bivens, 2005). [xiii] Others have even attributed it to changes in consumer preferences (Schweitzer and Zaman, 2006). Whatever the reason, of the 50 states, only five (Nevada, North Dakota, Oregon, Utah, and Wyoming) did not see any job loss in manufacturing between 1993-2003, yet 37 lost between 5.6 and 35.9 per cent of their manufacturing jobs during this period (Public Policy Institute, 2004).

However, part of the credit for deterioration of the labor movement must be given to the labor movement itself: the leadership has been simply unable to confront these changes and, at the same time, they have consistently worked against any independent action by rank-and-file members. [xiv]

However, it must be asked: are the changes in the economy presented herein merely statistical manipulations, or is this indicating something real?

This point can be illustrated another way: by using CAGR, the Compound Annual Growth Rate. This is a single number that is computed, based on compounded amounts, across a range of years, to come up with an average number to represent the rate of increase or decrease each year across the entire period. This looks pretty complex, but it is based on the same idea as compound interest used in our savings accounts: you put in $10 today and (this is obviously not a real example) because you get ten per cent interest, so you have $11 the next year. Well, the following year, interest is not computed off the original $10, but is computed on the $11. So, by the third year, from your $10, you now have $12.10. Etc. And this is what is meant by the Compound Annual Growth Rate: this is average compound growth by year across a designated period.

Based on the numbers presented above in Figure 1, the author calculated the Compound Annual Growth Rate by quintiles (Figure 2). The annual growth rate has been calculated for the first period, 1947-1973, the years known as the "golden years" of US society. What has happened since then? Compare results from the 1947-73 period to the annual growth rate across the second period, 1973-2001, again calculated by the author.

Figure 2: Annual percentage of family income growth, by quintile, 1947-1973 compared to 1973-2001

Population by quintiles

1947-1973

1973-2001
95th Percentile

2.51%

1.66%

Fourth quintile

2.72%

1.25%

Third quintile

2.84%

.92%

Second quintile

2.73%

.62%

Lowest quintile

2.64%

.48%

Source: Calculated by author from gather provided by the US Census Bureau at www.census.gov/hhes/www/income/histinc/f01ar.html .

What we can see here is that while everyone's income was growing at about the same rate in the first period -- between 2.51 and 2.84 per cent annually -- by the second period, not only had growth slowed down across the board, but it grew by very different rates: what we see here, again, is that the rich are getting richer, and the poor poorer.

If these figures are correct, a change over time in the percentage of income received by each quintile should be observable. Ideally, if the society were egalitarian, each 20 per cent of the population would get 20 per cent of the income in any one year. In reality, it differs. To understand Figure 3, below, one must not only look at the percentage of income held by a quintile across the chart, comparing selected year by selected year, but one needs to look to see whether a quintile's share of income is moving toward or away from the ideal 20 percent.

Figure 3: Percentage of family income distribution by quintile, 1947, 1973, 2001.

Population by quintiles 1947 1973 2001

Top fifth (lower limit of top 5percent, or 95th Percentile)-- $184,500 [xv]

43.0% 41.1% 47.7%
Second fifth--$103,100 23.1% 24.0% 22.9%
Third fifth--$68,304 17.0% 17.5% 15.4%
Fourth fifth--$45,021 11.9% 11.9% 9.7%
Bottom fifth--$25,616 5.0% 5.5% 4.2%

Source: US Census Bureau at www.census.gov/hhes/www/income/histinc/f02ar.html .

Unfortunately, much of the data available publicly ended in 2001. However, in the summer of 2007, after years of not releasing data any later than 2001, the Census Bureau released income data up to 2005. It allows us to examine what has taken place regarding family income inequality during the first four years of the Bush Administration.

Figure 4: US family income, in US dollars, growth and distribution, by quintile, 2001-2005, 2005 US dollars

Lowest 20%

Second 20%

Middle 20%

Fourth 20%

Lowest level of top 5%

2001

$26,467

$45,855

$68,925

$103,828

$180,973

2005

$25,616

$45,021

$68,304

$103,100

$184,500

Difference

(4 years)

-$851

(-3.2%)

-$834

(-1.8%)

-$621

(-.01%)

-$728

(-.007%)

$3,527

(1.94%)

Source: US Census Bureau at www.census.gov/hhes/www/income/histinc/f01ar.html . (Over time, the Census Bureau refigures these amounts, so they have subsequently converted amounts to 2006 dollar values. These values are from their 2005 dollar values, and were calculated by the Census Bureau.) Differences and percentages calculated by author.

Thus, what we've seen under the first four years of the Bush Administration is that for at most Americans, their economic situation has worsened: not only has over all economic growth for any quintile slowed to a minuscule 1.94 per cent at the most, but that the bottom 80 per cent actually lost income; losing money (an absolute loss), rather than growing a little but falling further behind the top quintile (a relative loss). Further, the decrease across the bottom four quintiles has been suffered disproportionately by those in the lowest 40 per cent of the society.

This can perhaps be seen more clearly by examining CAGR rates by period.

We can now add the results of the 2001-2005 period share of income by quintile to our earlier chart:

Figure 5: Percentage of income growth per year by percentile, 1947-2005

Population by quintiles

1947-1973

1973-2001

2001-2005

Top 95 percentile

2.51%

1.66%

.48%

Fourth fifth

2.72%

1.25%

-.18%

Third fifth

2.84%

.92%

-.23%

Second fifth

2.73%

.62%

-.46%

Bottom fifth

2.64%

.48%

-.81%

Source: Calculated by author from data gathered from the US Department of the Census www.census.gov/hhes/www/income/histinc/f01ar.html .

As can be seen, the percentage of family income at each of the four bottom quintiles is less in 2005 than in 1947; the only place there has been improvement over this 58-year period is at the 95th percentile (and above).

Figure 6: Percentage of family income distribution by quintile, 1947, 1973, 2001, 2005.

Population by quintiles 1947 1973 2001 2005

Top fifth (lower limit of top 5percent, or 95th Percentile)-- $184,500

43.0% 41.1% 47.7% 48.1%
Second fifth--$103,100 23.1% 24.0% 22.9% 22.9%
Third fifth--$68,304 17.0% 17.5% 15.4% 15.3%
Fourth fifth--$45,021 11.9% 11.9% 9.7% 9.6%
Bottom fifth--$25,616 5.0% 5.5% 4.2% 4.0%

Source: U.S. Census Bureau at www.census.gov/hhes/www/income/histinc/f02ar.html .

What has been presented so far, regarding changes in income distribution, has been at the group level; in this case, quintile by quintile. It is time now to see how this has affected the society overall.

Sociologists and economists use a number called the Gini index to measure inequality. Family income data has been used so far, and we will continue using it. A Gini index is fairly simple to use. It measures inequality in a society. A Gini index is generally reported in a range between 0.000 and 1.000, and is written in thousandths, just like a winning percentage mark: three digits after the decimal. And the higher the Gini score, the greater the inequality.

Looking at the Gini index, we can see two periods since 1947, when the US Government began computing the Gini index for the country. From 1947-1968, with yearly change greater or smaller, the trend is downward, indicating reduced inequality: from .376 in 1947 to .378 in 1950, but then downward to .348 in 1968. So, again, over the first period, the trend is downward.

What has happened since then? From the low point in 1968 of .348, the trend has been upward. In 1982, the Gini index hit .380, which was higher than any single year between 1947-1968, and the US has never gone below .380 since then. By 1992, it hit .403, and we've never gone back below .400. In 2001, the US hit .435. But the score for 2005 has only recently been published: .440 (source: http://www.census.gov/hhes/www/income/histinc/f04.html ). So, the trend is getting worse, and with the policies established under George W. Bush, I see them only continuing to increase in the forthcoming period. [And by the way, this increasing trend has continued under both the Republicans and the Democrats, but since the Republicans have controlled the presidency for 18 of the last 26 years (since 1981), they get most of the credit -- but let's not forget that the Democrats have controlled Congress across many of those years, so they, too, have been an equal opportunity destroyer!]

However, one more question must be asked: how does this income inequality in the US, compare to other countries around the world? Is the level of income inequality comparable to other "developed" societies, or is it comparable to "developing" countries?

We must turn to the US Central Intelligence Agency (CIA) for our data. The CIA computes Gini scores for family income on most of the countries around the world, and the last time checked in 2007 (August 1), they had data on 122 countries on their web page and these numbers had last been updated on July 19, 2007 (US Central Intelligence Agency, 2007). With each country listed, there is a Gini score provided. Now, the CIA doesn't compute Gini scores yearly, but they give the last year it was computed, so these are not exactly equivalent but they are suggestive enough to use. However, when they do assemble these Gini scores in one place, they list them alphabetically, which is not of much comparative use (US Central Intelligence Agency, 2007).

However, the World Bank categorizes countries, which means they can be compared within category and across categories. The World Bank, which does not provide Gini scores, puts 208 countries into one of four categories based on Gross National Income per capita -- that's total value of goods and services sold in the market in a year, divided by population size. This is a useful statistic, because it allows us to compare societies with economies of vastly different size: per capita income removes the size differences between countries.

The World Bank locates each country into one of four categories: lower income, lower middle income, upper middle income, and high income (World Bank, 2007a). Basically, those in the lower three categories are "developing" or what we used to call "third world" countries, while the high income countries are all of the so-called developed countries.

The countries listed by the CIA with their respective Gini scores were placed into the specific World Bank categories in which the World Bank had previously located them (World Bank, 2007b). Once grouped in their categories, median Gini scores were computed for each group. When trying to get one number to represent a group of numbers, median is considered more accurate than an average, so the median was used, which means half of the scores are higher, half are lower -- in other words, the data is at the 50th percentile for each category.

The Gini score for countries, by Gross National Income per capita, categorized by the World Bank:

Figure 7: Median Gini Scores by World Bank income categories (countries selected by US Central Intelligence Agency were placed in categories developed by the World Bank) and compared to 2004 US Gini score as calculated by US Central Intelligence Agency (CIA)

Income category

Median Gini score

Gini score, US (2004)

Low income countries (less than $875/person/year)

.406

.450

Lower-middle income countries (between $876-3,465/person/year)

.414

.450

Upper-middle income countries (between $3,466-10,725/person/year

.370

.450

Upper-income countries (over $10,726/person/year

.316

.450

As can be seen, with the (CIA-calculated) Gini score of .450, the US family income is more unequal than the medians for each category, and is more unequal than some of the poorest countries on earth, such as Bangladesh (.318 -- calculated in 2000), Cambodia (.400, 2004 est.), Laos (.370-1997), Mozambique (.396, 1996-97), Uganda (.430-1999) and Vietnam (.361, 1998). This same finding also holds true using the more conservative Census Bureau-calculated Gini score of .440.

Thus, the US has not only become more unequal over the 35 years, as has been demonstrated above, but has attained a level of inequality that is much more comparable to those of developing countries in general and, in fact, is more unequal today than some of the poorest countries on Earth. There is nothing suggesting that this increasing inequality will lessen anytime soon. And since this increasing income inequality has taken place under the leadership of both major political parties, there is nothing on the horizon that suggests either will resolutely address this issue in the foreseeable future regardless of campaign promises made.

However, to move beyond discussion of whether President Obama is likely to address these and related issues, some consideration of governmental economic policies is required. Thus, he will be constrained by decisions made by previous administrations, as well as by the ideological blinders worn by those he has chosen to serve at the top levels of his administration.

3) Governmental economic policies

There are two key points that are especially important for our consideration: the US Budget and the US National Debt. They are similar, but different -- and consideration of each of them enhances understanding.

A) US budget. Every year, the US Government passes a budget, whereby governmental officials estimate beforehand how much money needs to be taken in to cover all expenses. If the government actually takes in more money than it spends, the budget is said to have a surplus; if it takes in less than it spends, the budget is said to be in deficit.

Since 1970, when Richard Nixon was President, the US budget has been in deficit every year except for the last four years under Clinton (1998-2001), where there was a surplus. But this surplus began declining under Clinton -- it was $236.2 billion in 2000, and only $128.2 billion in 2001, Clinton 's last budget. Under Bush, the US has gone drastically into deficit: -$157.8 billion in 2002; -$377.6 billion in 2003; -$412.7 billion in 2004; -$318.3 billion in 2005; and "only"-$248.2 billion in 2006 (Economic Report of the President, 2007: Table B-78).

Now, that is just yearly surpluses and deficits. They get combined with all the other surpluses and deficits since the US became a country in 1789 to create to create a cumulative amount, what is called the National Debt.

B) US national debt. Between 1789 and1980 -- from Presidents Washington through Carter -- the accumulated US National Debt was $909 billion or, to put it another way, $.909 trillion. During Ronald Reagan's presidency (1981-89), the National Debt tripled, from $.9 trillion to $2.868 trillion. It has continued to rise. As of the end of 2006, 17 years later and after a four-year period of surpluses where the debt was somewhat reduced, National Debt (or Gross Federal Debt) was $8.451 trillion (Economic Report of the President, 2007: Table B-78).

To put it into context: the US economy, the most productive in the world, had a Gross Domestic Product (GDP) of $13.061 trillion in 2006, but the National Debt was $8.451 trillion -- 64.7 per cent of GDP -- and growing (Economic Report of the President, 2007: Table B-1).

In April 2006, one investor reported that "the US Treasury has a hair under $8.4 trillion in outstanding debt. How much is that? He put it into this context: " if you deposited one million dollars into a bank account every day, starting 2006 years ago, that you would not even have ONE trillion dollars in that account" (Van Eeden, 2006).

Let's return to the budget deficit: like a family budget, when one spends more than one brings in, they can do basically one of three things: (a) they can cut spending; (b) they can increase taxes (or obviously a combination of the two); or (c) they can take what I call the "Wimpy" approach.

For those who might not know this, Wimpy was a cartoon character, a partner of "Popeye the Sailor," a Saturday morning cartoon that was played for over 30 years in the United States . Wimpy had a great love for hamburgers. And his approach to life was summed up in his rap: "I'll gladly give you two hamburgers on Tuesday, for a hamburger today."

What is argued is that the US Government has been taking what I call the Wimpy approach to its budgetary problems: it does not reduce spending, it does not raise taxes to pay for the increased expenditures -- in fact, President Bush has cut taxes for the wealthiest Americans [xvi] -- but instead it sells US Government securities, often known as Treasuries, to rich investors, private corporations or, increasingly, to other countries to cover the budget deficit. In a set number of years, the US Government agrees to pay off each bond -- and the difference between what the purchaser bought them for and the increased amount the US Government pays to redeem them is the cost of financing the Treasuries, a certain percentage of the total value. By buying US Treasuries, other countries have helped keep US interest rates low, helping to keep the US economy in as good of shape as it has been (thus, keeping the US market flourishing for them), while allowing the US Government not to have to confront its annual deficits. At the end of 2006, the total value of outstanding Treasuries -- to all investors, not just other countries -- was $8.507 trillion (Economic Report of the President, 2007: Table B-87).

It turns out that at in December 2004, foreigners owned approximately 61 per cent of all outstanding US Treasuries. Of that, seven per cent was held by China ; these were valued at $223 billion (Gundzik, 2005).

The percentage of foreign and international investors' purchases of the total US public debt since 1996 has never been less than 17.7 percent, and it has reached a high of 25.08 per cent in September 2006. In September 2006, foreigners purchased $2.134 trillion of Treasuries; these were 25.08 per cent of all purchases, and 52.4 per cent of all privately-owned purchases (Economic Report of the President, 2007: Table B-89). [xvii] Altogether, "the world now holds financial claims amounting to $3.5 trillion against the United States , or 26 per cent of our GDP" (Humpage and Shenk, 2007: 4).

Since the US Government continues to run deficits, because the Bush Administration has refused to address this problem, the United States has become dependent on other countries buying Treasuries. Like a junky on heroin, the US must get other investors (increasingly countries) to finance its budgetary deficits.

To keep the money flowing in, the US must keep interest rates high -- basically, interest rates are the price that must be paid to borrow money. Over the past year or so, the Federal Reserve has not raised interest rates, but prior to that, for 15 straight quarterly meetings, they did. And, as known, the higher the interest rate, the mostly costly it is to borrow money domestically, which means increasingly likelihood of recession -- if not worse. In other words, dependence on foreigners to finance the substantial US budget deficits means that the US must be prepared to raise interests rates which, at some point, will choke off domestic borrowing and consumption, throwing the US economy into recession. [xviii]

Yet this threat is not just to the United States -- according to the International Monetary Fund (IMF), it is a threat to the global economy. A story about a then-recently issued report by the IMF begins, "With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy ." The report suggested that net financial obligations of the US to the rest of the world could equal 40 per cent of its total economy if nothing was done about it in a few years, "an unprecedented level of external debt for a larger industrial country" according to the report. What was perhaps even more shocking than what the report said was which institution said it: "The IMF has often been accused of being an adjunct of the United States , its largest shareholder" (Becker and Andrews, 2004).

Other analysts go further. After discussing the increasingly risky nature of global investing, and noting that "The investor managers of private equity funds and major banks have displaced national banks and international bodies such as the IMF," Gabriel Kolko (2007) quotes Stephen Roach, Morgan Stanley's chief economist, on April 24, 2007: "a major financial crisis seemed imminent and that the global institutions that could forestall it, including the IMF, the World Bank and other mechanisms of the international financial architecture, were utterly inadequate." Kolko recognizes that things may not collapse immediately, and that analysts could be wrong, but still concludes, "the transformation of the global financial system will sooner or later lead to dire results" (Kolko, 2007: 5).

What might happen if investors decided to take their money out of US Treasuries and, say, invest in Euro-based bonds? The US would be in big trouble, would be forced to raise its interest rates even higher than it wants -- leading to possibly a severe recession -- and if investors really shifted their money, the US could be observably bankrupt; the curtain hiding the "little man" would be opened, and he would be observable to all.

Why would investors rather shift their investment money into Euro-bonds instead of US Treasuries? Well, obviously, one measure is the perceived strength of the US economy. To get a good idea of how solid a country's economy is, one looks at things such as budget deficits, but perhaps even more importantly balance of trade: how well is this economy doing in comparison with other countries?

The US international balance of trade is in the red and is worsening: -$717 billion in 2005. In 1991, it was -$31 billion. Since 1998, the US trade balance has set a new record for being in the hole every year, except during 2001, and then breaking the all time high the very next year! -$165 B in 1998; -$263 B in 1999; -$378 B in 2000; only -$362 B in 2001; -$421 B in 2002; -$494 B in 2003; -$617 B in 2004; and - $717 B in 2005 (Economic Report of the President, 2007: Table B-103). According to the Census Department, the balance of trade in 2006 was -$759 billion (US Census Bureau, 2007).

And the US current account balance, the broadest measure of a country's international financial situation -- which includes investment inside and outside the US in addition to balance of trade -- is even worse: it was -$805 B in 2005, or 6.4 per cent of national income. "The bottom line is that a current account deficit of this unparalleled magnitude is unsustainable and there is no hope of it being painlessly resolved through higher exports alone," according to one analyst (quoted in Swann, 2006). Scott notes that the current account deficit in 2006 was -$857 billion (Scott, 2007a: 8, fn. 1). "In effect, the United States is living beyond its means and selling off national assets to pay its bills" (Scott, 2007b: 1). [xix]

In addition, during mid-2007, there was a bursting of a domestic "housing bubble," which has threatened domestic economic well-being but that ultimately threatens the well-being of global financial markets. There had been a tremendous run-up in US housing values since 1995 -- with an increase of more than 70 per cent after adjusting for the rate of inflation -- and this had created "more than $8 trillion in housing wealth compared with a scenario in which house prices had continued to rise at the same rate of inflation," which they had done for over 100 years, between 1890 and 1995 (Baker, 2007: 8).

This led to a massive oversupply of housing, accompanied with falling house prices: according to Dean Baker, "the peak inventory of unsold new homes of 573,000 in July 2006 was more than 50 per cent higher than the previous peak of 377,000 in May of 1989" (Baker, 2007: 12-13). This caused massive problems in the sub-prime housing market -- estimates are that almost $2 trillion in sub-prime loans were made during 2005-06, and that about $325 billion of these loans will default, with more than 1 million people losing their homes (Liedtke, 2007) -- but these problems are not confined to the sub-prime loan category: because sub-prime and "Alt-A" mortgages (the category immediately above sub-prime) financed 40 per cent of the housing market in 2006, "it is almost inevitable that the problems will spill over into the rest of the market" (Baker, 2007: 15). And Business Week agrees: "Subprime woes have moved far beyond the mortgage industry." It notes that at least five hedge funds have gone out of business, corporate loans and junk bonds have been hurt, and the leveraged buyout market has been hurt (Goldstein and Henry, 2007).

David Leonhardt (2007) agrees with the continuing threat to the financial industry. Discussing "adjustable rate mortgages" -- where interest rates start out low, but reset to higher rates, resulting in higher mortgage payments to the borrower -- he points out that about $50 billion of mortgages will reset during October 2007, and that this amount of resetting will remain over $30 billion monthly through September 2008. "In all," he writes," the interest rates on about $1 trillion worth of mortgages or 12 per cent of the nation's total, will reset for the first time this year or next."

Why all of this is so important is because bankers have gotten incredibly "creative" in creating new mortgages, which they sell to home buyers. Then they bundle these obligations and sell to other financial institutions and which, in turn, create new securities (called derivatives) based on these questionable new mortgages. Yes, it is basically a legal ponzi scheme, but it requires the continuous selling and buying of these derivatives to keep working: in early August 2007, however, liquidity -- especially "financial instruments backed by home mortgages" -- dried up, as no one wanted to buy these instruments (Krugman, 2007). The US Federal Research and the European Central Bank felt it necessary to pump over $100 billion into the financial markets in mid-August 2007 to keep the international economy solvent (Norris, 2007).

So, economically, this country is in terrible shape -- with no solution in sight.

On top of this -- as if all of this is not bad enough -- the Bush Administration is asking for another $481.4 billion for the Pentagon's base budget, which it notes is "a 62 per cent increase over 2001." Further, the Administration seeks an additional $93.4 billion in supplemental funds for 2007 and another $141.7 billion for 2008 to help fund the "Global War on Terror" and US operations in Iraq and Afghanistan (US Government, 2007). According to Stockholm International Peace Research Institute (SIPRI), in 2006, the US "defense" spending was equivalent to 46 per cent of all military spending in the world, meaning that almost more money is provided for the US military in one year than is spent by the militaries of all the other countries in the world combined (SIPRI, 2007).

And SIPRI's accounting doesn't include the $500 billion spent so far, approximately, on wars in Afghanistan and Iraq .

In short, not only have things gotten worse for American working people since 1973 -- and especially after 1982, with the imposition of neoliberal economic policies by institutions of the US Government -- but on-going Federal budget deficits, the escalating National Debt, the need to attract foreign money into US Treasuries, the financial market "meltdown" as well as the massive amounts of money being channeled to continue the Empire, all suggest that not only will intensifying social problems not be addressed, but will get worse for the foreseeable future.

4) Synopsis

This analysis provides an extensive look at the impact of neoliberal economic policies enacted in the United States on American working people. These neoliberal economic policies have been enacted as a conscious strategy by US corporate leaders and their governmental allies in both major political parties as a way to address intensifying globalization while seeking to maintain US dominance over the global political economy.

While it will be a while before anyone can determine success or failure overall of this elite strategy but, because of is global-historical perspective, sufficient evidence is already available to evaluate the affects of these policies on American working people. For the non-elites of this country, these policies have had a deleterious impact and they are getting worse. Employment data in manufacturing, worsening since 1979 but especially since 2000 (see Aronowitz, 2005), has been horrific -- and since this has been the traditional path for non-college educated workers to be able to support themselves and their families, and provide for their children, this data suggests social catastrophe for many -- see Rubin (1995), Barnes (2005), and Bageant (2007), and accounts in Finnegan (1998) and Lipper (2004) that support this -- because comparable jobs available to these workers are not being created. Thus, the problem is not just that people are losing previously stable, good-paying jobs -- as bad as that is -- but that there is nothing being created to replace these lost jobs, and there is not even a social safety net in many cases that can generally cushion the blow (see Wilson, 1996; Appelbaum, Bernhardt, and Murnane, eds., 2003).

Yet the impact of these social changes has not been limited to only blue-collar workers, although the impact has been arguably greatest upon them. The overall economic growth of the society has been so limited since 1973, and the results increasingly being unequally distributed since then, that the entire society is becoming more and more unequal: each of the four bottom quintiles -- the bottom 80 per cent of families -- has seen a decrease in the amount of family income available to each quintile between 2001-05. This not only increases inequality and resulting resentments -- including criminal behaviors -- but it also produces deleterious affects on individual and social health (Kawachi, Kennedy and Wilkinson, eds., 1999; Eitzen and Eitzen Smith, 2003). And, as shown above, this level of inequality is much more comparable internationally to "developing" countries rather than "developed" ones.

When this material is joined with material on the US budget, and especially the US National Debt, it is clear that these "problems" are not the product of individual failure, but of a social order that is increasingly unsustainable. While we have no idea of what it will take before the US economy will implode, all indications are that US elites are speeding up a run-away train of debt combined with job-destroying technology and off-shoring production, creating a worsening balance of trade with the rest of the world and a worsening current account, with an unstable housing market and intensifying militarism and an increasingly antagonistic foreign policy: it is like they are building a bridge over an abyss, with a train increasingly speeding up as it travels toward the bridge, and crucial indicators suggest that the bridge cannot be completed in time.

Whether the American public will notice and demand a radical change in time is not certain -- it will not be enough to simply slow the train down, but it must turn down an alternative track (see Albert, 2003; Woodin and Lucas, 2004; Starr, 2005) -- but it is almost certain that foreign investors will. Should they not be able to get the interest rates here available elsewhere in the "developed" parts of the world, investors will shift their investments, causing more damage to working people in the United States .

And when this economic-focused analysis is joined with an environmental one -- George Monbiot (2007) reports that the best science available argues that industrialized countries have to reduce their carbon dioxide emissions by 90 per cent by the year 2030 if we are to have a chance to stop global warming -- then it is clear that US society is facing a period of serious social instability.

5) Conclusion

This article has argued that the situation for working people in the United States, propelled by the general governmental adoption of neoliberal economic policies, is getting worse -- and there is no end in sight. The current situation and historical change have been presented and discussed. Further, an examination and analysis of directly relevant US economic policies have been presented, and there has been nothing in this analysis that suggests a radical, but necessary, change by US elected officials is in sight. In other words, working people in this country are in bad shape generally -- and it is worse for workers of color than for white workers -- and there is nothing within the established social order that suggests needed changes will be effected.

The neoliberal economic policies enacted by US corporate and government leaders has been a social disaster for increasing numbers of families in the United States .

Globalization for profit -- or what could be better claimed to be "globalization from above" -- and its resulting neoliberal economic policies have long-been recognized as being a disaster for most countries in the Global South. This study argues that this top-down globalization and the accompanying neoliberal economic policies has been a disaster for working people in northern countries as well, and most particularly in the United States .

The political implications from these findings remains to be seen. Surely, one argument is not only that another world is possible, but that it is essential.

© Kim Scipes, Ph.D.

[Kim Scipes is assistant professor of sociology , Purdue University, North Central, Westville , IN 46391. The author's web site is at http://faculty.pnc.edu/kscipes .This paper was given at the 2009 Annual Conference of the United Association for Labor Education at the National Labor College in Silver Spring , MD. It has been posted at Links International Journal of Socialist Renewal with Kim Scipes' permission.]

* * *

Note to labor educators: This is a very different approach than you usually take. While presenting a "big picture," this does not suggest what you are doing is "wrong" or "bad." What it suggests, however, is that the traditional labor education approach is too limited: this suggests that your work is valuable but that you need to put it into a much larger context than is generally done, and that it is in the interaction between your work and this that we each can think out the ways to go forward. This is presented in the spirit of respect for the important work that each of you do on a daily basis.

[Sep 25, 2017] Free market as a neoliberal myth, the cornerstone of neoliberalism as a secular religion

Highly recommended!
Notable quotes:
"... Two of my criticisms about Krugman/Friedman, etc is that is 'free markets' are supposed to substitute for policy in the government sphere. Except very telling except when we're talking about funding the security state. ..."
"... The other is that the real power of markets is that in a real free market (not a Potemkin one) decisions are made often at the point where needs, information, incentives, and economic power come together. But where the large scale decisions the governments have to make, markets fail. Policy though doesn't. But Neoliberals hate policy. ..."
"... Well, duh. "Policy" and "Capitalism" don't go together and never have. When you enact policy, you destroy the ability to make profit and you get the 1970's. ..."
"... Free market is a neoliberal myth, the cornerstone of neoliberalism as a secular religion. Somewhat similar to "Immaculate Conception" in Catholicism. ..."
"... In reality market almost by definition is controlled by government, who enforces the rules and punish for the transgressions. ..."
"... Also note interesting Orwellian "corruption of the language" trick neoliberals use: neoliberals talk about "free market, not "fair market". ..."
"... After 2008 few are buying this fairy tale about how markets can operate and can solve society problems independently of political power, and state's instruments of violence (the police and the military). This myths is essentially dead. ..."
"... Friedmanism is this sense a flavor of economic Lysenkoism. Note that Lysenko like Friedman was not a complete charlatan. Some of his ideas were pretty sound and withstood the test of time. But that does not make his less evil. ..."
Jan 06, 2017 | economistsview.typepad.com
anne -> Paul Mathis... , December 31, 2016 at 07:09 PM
Krugman's refusal to endorse fiscal stimulus unless the economy is at zero lower bound. That is not only anti-Keynesian, it plays directly into the hands of the debt fear mongers. (Krugman is also worried about the debt.)

[ Only correct to a degree, economic weakness is recognized. ]

Gibbon1 -> anne... , December 31, 2016 at 10:21 PM
Two of my criticisms about Krugman/Friedman, etc is that is 'free markets' are supposed to substitute for policy in the government sphere. Except very telling except when we're talking about funding the security state.

The other is that the real power of markets is that in a real free market (not a Potemkin one) decisions are made often at the point where needs, information, incentives, and economic power come together. But where the large scale decisions the governments have to make, markets fail. Policy though doesn't. But Neoliberals hate policy.

AngloSaxon -> Gibbon1... , January 01, 2017 at 06:08 PM
Well, duh. "Policy" and "Capitalism" don't go together and never have. When you enact policy, you destroy the ability to make profit and you get the 1970's.
likbez -> Gibbon1... , -1
Free market is a neoliberal myth, the cornerstone of neoliberalism as a secular religion. Somewhat similar to "Immaculate Conception" in Catholicism.

In reality market almost by definition is controlled by government, who enforces the rules and punish for the transgressions.

Also note interesting Orwellian "corruption of the language" trick neoliberals use: neoliberals talk about "free market, not "fair market".

After 2008 few are buying this fairy tale about how markets can operate and can solve society problems independently of political power, and state's instruments of violence (the police and the military). This myths is essentially dead.

But like Adventists did not disappear when the Second Coming of Christ did not occurred in predicted timeframe, neoliberals did not did not disappeared after 2008 either. And neither did neoliberalism, it just entered into zombie, more bloodthirsty stage.

The fact that even the term "neoliberalism" is prohibited in the US MSM also helped. It is king of stealth ideology, unlike say, Marxists, neoliberals do not like to identify themselves as such. The behave more like members of some secret society, free market masons.

Friedmanism is this sense a flavor of economic Lysenkoism. Note that Lysenko like Friedman was not a complete charlatan. Some of his ideas were pretty sound and withstood the test of time. But that does not make his less evil.

And for those who try to embellish this person, I would remind his role in 1973 Chilean coup d'état ( https://en.wikipedia.org/wiki/1973_Chilean_coup_d%27%C3%A9tat ) and bringing Pinochet to power. His "Chicago boys" played a vital role in the events. This man did has blood on his hands.

http://www.bidstrup.com/economics.htm

Of course, bringing a reign of terror to Chile was not why the CIA had sponsored him. The reason he was there was to reverse the gains of the Allende social democracy and return control of the country's economic and political assets to the oligarchy. Pinochet was convinced, through supporters among the academics in the elite Chilean universities, to try a new series of economic policies, called "neoliberal" by their founders, the economists of the University of Chicago, led by an economist by the name of Milton Friedman, who three years later would go on to win a Nobel Prize in Economics for what he was about to unleash upon Chile.

Friedman and his colleagues were referred to by the Chileans as "the Chicago Boys." The term originally meant the economists from the University of Chicago, but as time went on, as their policies began to disliquidate the middle class and poor, it took on a perjorative meaning. That was because as the reforms were implemented, and began to take hold, the results were not what Friedman and company had been predicting. But what were the reforms?

The reforms were what has come to be called "neoliberalism." To understand what "neoliberal" economics is, one must first understand what "liberal" economics are, and so we'll digress briefly from our look at Chile for a quick

[Sep 18, 2017] Its always bizarre who easily neoliberals turn into hawkish and warmongering jerks

Highly recommended!
Notable quotes:
"... Why it is bizarre. This is the political regime we are living in: there are now two war parties in the USA now: DemoRats and Repugs, not only one as in good old days. ..."
Apr 09, 2017 | economistsview.typepad.com
Peter K. , April 07, 2017 at 01:41 PM
pgl -> pgl...

Pentagon spokesman Captain Jeff Davis said in an official statement: "Russian forces were notified in advance of the strike using the established deconfliction line. U.S. military planners took precautions to minimize risk to Russian or Syrian personnel located at the airfield."

I guess they could say this was the right thing to do...

Peter K. -> Peter K.... , April 07, 2017 at 01:41 PM
Would you want Russia doing military strikes without notifying U.S. forces first?

It's always bizarre when liberals turn all hawkish and warmongering.

libezkova -> Peter K.... , April 07, 2017 at 05:38 PM
"It's always bizarre when liberals turn all hawkish and warmongering."

Why it is bizarre. This is the political regime we are living in: there are now two war parties in the USA now: DemoRats and Repugs, not only one as in good old days.

How Hillary is different from Senator McShame is unclear to me.

[Sep 11, 2017] Neo-classical economics as a new flat earth cult

Highly recommended!
Notable quotes:
"... Comparative advantage is an absurdity. Protectionism is the only way to wealth, yet economists brainwashed generations of 17 and 18 year olds to believe that up was down and free trade would help the US. ..."
"... This is a new "flat earth" cult. And pretty well paid one: academic economists recently became something like lackeys of financial oligarchy and get some crump from the financial oligarchy table in return to promoting neo-classical economics, as a valuable for neoliberals pseudo-science. ..."
"... People who "do not fit" are filtered at early stages, much like in political parties. Nepotism is another factor. Having relatives in high positions (like is the case with Summers), being member of the dominant ethnic clan, or being a friend of an influential economist (like academic Mafiosi Andrei Shleifer) greatly helps... ..."
"... The most interesting part about this pseudoscience is how well it fits together (reminding me Marxism, to which it was a reaction). ..."
Apr 11, 2017 | economistsview.typepad.com

Will US Economists apologize for destroying the US? Free trade ruined America, April 11, 2017 at 03:28 PM

Will the American Economic Association ever apologize to the American people for helping to destroy the country with their absurd, simple-minded free trade preaching?

Comparative advantage is an absurdity. Protectionism is the only way to wealth, yet economists brainwashed generations of 17 and 18 year olds to believe that up was down and free trade would help the US.

AEA should toast itself in the ruins of Ohio, North Carolina or Iowa - pick any one of the thousands of ruined cities to gloat over.

libezkova -> Will US Economists apologize for destroying the US? Free trade ruined America, April 11, 2017 at 04:48 PM
You are simply naïve.

This is a new "flat earth" cult. And pretty well paid one: academic economists recently became something like lackeys of financial oligarchy and get some crump from the financial oligarchy table in return to promoting neo-classical economics, as a valuable for neoliberals pseudo-science.

Tremendous value of neoclassical economics for neoliberals is that they can use mathiness (trying to imitate physics) to obscure the promotions of neoliberal thinking. In fact, neoclassical economics is the major tool of indoctrination into "free market" nonsense of university students.

People who "do not fit" are filtered at early stages, much like in political parties. Nepotism is another factor. Having relatives in high positions (like is the case with Summers), being member of the dominant ethnic clan, or being a friend of an influential economist (like academic Mafiosi Andrei Shleifer) greatly helps...

People who do not fit but have tremendous talent are often suppressed. Like was the case with Hyman Minsky (and he was lucky that his career was at late stages during the full triumph of neoliberalism -- he managed to get a tenured professor position in 1965 when he was 46)

The most interesting part about this pseudoscience is how well it fits together (reminding me Marxism, to which it was a reaction).

Set of neoclassical myths such as "efficient market hypothesis", "rational expectations", "generalized stochastic equilibrium", "invisible hand", comprise a pretty coherent "secular religion". It may even have some minor value as a mathematical theory of some fictitious economic space (almost like in a computer game like Civilization) that never existed and will never exist.

But it is sold differently and tends to produce predictions and prescriptions (highly politicized in their nature) in line with neoliberal thinking. That's why it is maintained and promoted.

So expecting them to apologize is nonsense.

You can benefit from re-reading recent discussion of Karl Polanyi famous book "The Great Transformation" in this blog

http://economistsview.typepad.com/economistsview/2017/03/a-foreword-to-kari-polanyi-levitt.html#comment-6a00d83451b33869e201b7c8de5388970b

Another interesting question is how neoliberalism and neo-classical economics survived the financial meltdown. Here Professor Phillip Mirowski has some interesting insights:

https://www.youtube.com/watch?v=zsiT9P87J4g

>

[Sep 11, 2017] The only countervailing force, unions, were deliberately destroyed. Neoliberalism needs to atomize work force to function properly and destroys any solidarity among workers. Unions are anathema for neoliberalism, because they prevent isolation and suppression of workers.

Highly recommended!
Apr 15, 2017 | economistsview.typepad.com
Denis Drew , April 15, 2017 at 06:58 AM
What's missing in each and every case above -- at least in the USA! -- is countervailing power. 6% labor union density in private business is equivalent to 20/10 blood pressure in the human body: it starves every other healthy process.

It is not just labor market bargaining power that has gone missing, it is not only the lost political muscle for the average person (equal campaign financing, almost all the votes), it is also the lack of machinery to deal with day-to-day outrages on a day-to-day basis (that's called lobbying).

Late dean of the Washington press corps David Broder told a young reporter that when he came to DC fifty years ago (then), all the lobbyists were union. Big pharma's biggest rip-offs, for profit school scams, all the stuff you hear about for one day on the news but no action is ever taken -- that's because there is no (LABOR UNION) mechanism to stay on top of all (or any) of it (LOBBYISTS).

cm -> Denis Drew ... , April 15, 2017 at 12:16 PM
It is a chicken and egg problem. Before large scale automation and globalization, unions "negotiated" themselves their power, which was based on employers having much fewer other choices. Any union power that was ever legislated was legislated as a *result* of union leverage, not to enable the latter (and most of what was legislated amounts to limiting employer interference with unions).

It is a basic feature of human individual and group relations that when you are needed you will be treated well, and when you are not needed you will be treated badly (or at best you will be ignored if that's less effort overall). And by needed I mean needed as a specific individual or narrowly described group.

What automation and globalization have done is created a glut of labor - specifically an oversupply of most skill sets relative to all the work that has to be done according to socially mediated decision processes (a different set of work than what "everybody" would like to happen as long as they don't have to pay for it, taking away from other necessary or desired expenditure of money, effort, or other resources).

Maybe when the boomers age out and become physically too old to work, the balance will tip again.

Peter K. -> cm... , April 15, 2017 at 12:18 PM
"What automation and globalization have done is created a glut of labor - "

No it's been policy and politics. Automation and globalization are red herrings. They've been used to enrich the rich and stick it to everyone else.

They don't have to be used that way.

There is nothing natural or inherent about it. It's all politics and class war and the wrong side is winning.

cm -> Peter K.... , April 15, 2017 at 01:32 PM
OK - they have *enabled* it. The agency is always on the human side. But at the same time, you cannot wish or postulate away human greed.
cm -> Peter K.... , April 15, 2017 at 01:44 PM
Same thing with the internet - it has been hailed as a democratizing force, but instead it has mostly (though not wholly) amplified the existing power differentials and motivation structures.

Anecdotally, a lot of companies and institutions are either restricting internal internet access or disconnecting parts of their organizations from the internet altogether, and disabling I/O channels like USB sticks, encrypting disks, locking out "untrusted" boot methods, etc. The official narrative is security and preventing leaks of confidential information, but the latter is clearly also aimed in part at whistleblowers disclosing illegal or unethical practices. Of course that a number of employees illegitimately "steal" data for personal and not to uncover injustices doesn't really help.

Denis Drew -> cm... , April 15, 2017 at 03:19 PM
Surely there is a huge difference between the labor market here and the labor market in continental Europe -- though labor there faces the same squeezing forces it faces here. Think of German auto assembly line workers making $60 an hour counting benefits.

Think Teamster Union UPS drivers -- and pity the poor, lately hired (if they are even hired) Amazon drivers -- maybe renting vans.

The Teamsters have the only example here of what is standard in continental Europe: centralized bargaining (aka sector wide labor agreements): the Master National Freight Agreement: wherein everybody doing the same job in the same locale (entire nation for long distance truckers) works under one common contract (in French Canada too).

Imagine centralized bargaining for airlines. A few years ago Northwest squeezed a billion dollars in give backs out of its pilots -- next year gave a billion dollars in bonuses to a thousand execs. Couldn't happen under centralized bargaining -- wouldn't even give the company any competitive advantage.

libezkova -> Denis Drew ... , April 15, 2017 at 04:14 PM
"What's missing in each and every case above -- at least in the USA! -- is countervailing power."

It was deliberately destroyed. Neoliberalism needs to "atomize" work force to function properly and destroys any solidarity among workers. Unions are anathema for neoliberalism, because they prevent isolation and suppression of workers.

Amazon and Uber are good examples. Both should be prosecuted under RICO act. Wall-Mart in nor far from them.

Rising fatalities from heart disease and stroke, diabetes, drug overdoses, accidents and other conditions caused the lower life expectancy revealed in a report by the National Center for Health Statistics .

http://www.cdc.gov/nchs/products/databriefs/db267.htm

http://economistsview.typepad.com/economistsview/2017/03/paul-krugman-the-scammers-the-scammed-and-americas-fate.html#comment-6a00d83451b33869e201b7c8e3c7c6970b

== quote ==
Anne Case and Angus Deaton garnered national headlines in 2015 when they reported that the death rate of midlife non-Hispanic white Americans had risen steadily since 1999 in contrast with the death rates of blacks, Hispanics and Europeans. Their new study extends the data by two years and shows that whatever is driving the mortality spike is not easing up.
... ... ..

Offering what they call a tentative but "plausible" explanation, they write that less-educated white Americans who struggle in the job market in early adulthood are likely to experience a "cumulative disadvantage" over time, with health and personal problems that often lead to drug overdoses, alcohol-related liver disease and suicide.

== end of quote ==

Greed is toxic. As anger tends to accumulate, and then explode, at some point neoliberals might be up to a huge surprise. Trump was the first swan.

Everybody bet on Hillary victory. And then...

[Sep 11, 2017] Around 1970 corporate managers and professionals realized that they shared the same education, background and interests with capital owners and realigned themselves, abandoning working class and a large part of lower middle class (small business owners)

Highly recommended!
Notable quotes:
"... My observation is that the New Class (professionals, lobbyists, financiers, teachers, engineers, etc.) have ruled the country in recent decades. For much of the twentieth century this class was in some tension with corporations, and used their skills at influencing government policy to help develop and protect the welfare state, since they needed the working class as a counterweight to the natural influence of corporate money and power. However, somewhere around 1970 I think this tension collapsed, since corporate managers and professionals realized that they shared the same education, background and interests. ..."
"... This "peace treaty" between former rivals allowed the whole newly enlarged New Class to swing to the right, since they really didn't particularly need the working class politically anymore. And since it is the hallmark of this class to seek prestige, power and money while transferring risk away from themselves, the middle class and blue collar community has been the natural recipient. Free trade (well, for non-professionals, anyway), neoliberalism, ruthless private equity job cutting, etc., etc. all followed very naturally. The re-alignment of the Democratic Party towards the right was a natural part of this evolution. ..."
"... They also sense that organized politics in this country – being chiefly the province of the New Class – has left them with little leverage to change any of this. ..."
"... the New Class has very strong internal solidarity – and since somebody has to pay for these little mistakes, everyone outside that class is "fair game." ..."
"... So in that sense–to the extent that you define liberal as the ideology of the New Class (neoliberal, financial-capitalistic, big corporate-friendly but opposed to non-meritocratic biases like racism, sexism, etc.) is "liberalism", I think it is reasonable to say that it has bred resistance and anger among the "losers." As far as having "failed", well, we'll see: the New Class still controls almost all the levers of power. It has many strategies for channeling lower-class anger and I think under Trump we'll see those rolled out. ..."
"... Perhaps some evolution in "the means of production" or in how governments are influenced will ultimately develop to divide or downgrade the New Class, and break its lock on the corridors of power, but I don't see it on the horizon just yet. If anyone else does, I'd love to hear more about it. ..."
"... A little puzzled by the inclusion of teachers, alongside financiers and the like, in William Meyer's list of the New Class rulers. Enablers of those rulers, no doubt, but not visibly calling the shots. But then I'm probably just another liberal elitist failing to recognize my own hegemony, like Chris. ..."
"... I assume he meant certain professors [of economics]. Actually on @4, there's a good chapter on the topic in a Thomas Franks latest. ..."
Nov 14, 2016 | crookedtimber.org

William Meyer 11.13.16 at 9:40 pm 4

Obviously Mr. Deerin is, on its face, utilizing a very disputable definition of "liberal."

However, I think a stronger case could be made for something like Mr. Deerin's argument, although it doesn't necessarily get to the same conclusion.

My observation is that the New Class (professionals, lobbyists, financiers, teachers, engineers, etc.) have ruled the country in recent decades. For much of the twentieth century this class was in some tension with corporations, and used their skills at influencing government policy to help develop and protect the welfare state, since they needed the working class as a counterweight to the natural influence of corporate money and power. However, somewhere around 1970 I think this tension collapsed, since corporate managers and professionals realized that they shared the same education, background and interests.

Vive la meritocracy. This "peace treaty" between former rivals allowed the whole newly enlarged New Class to swing to the right, since they really didn't particularly need the working class politically anymore. And since it is the hallmark of this class to seek prestige, power and money while transferring risk away from themselves, the middle class and blue collar community has been the natural recipient. Free trade (well, for non-professionals, anyway), neoliberalism, ruthless private equity job cutting, etc., etc. all followed very naturally. The re-alignment of the Democratic Party towards the right was a natural part of this evolution.

I think the 90% or so of the community who are not included in this class are confused and bewildered and of course rather angry about it. They also sense that organized politics in this country – being chiefly the province of the New Class – has left them with little leverage to change any of this. Watching the bailouts and lack of prosecutions during the GFC made them dimly realize that the New Class has very strong internal solidarity – and since somebody has to pay for these little mistakes, everyone outside that class is "fair game."

So in that sense–to the extent that you define liberal as the ideology of the New Class (neoliberal, financial-capitalistic, big corporate-friendly but opposed to non-meritocratic biases like racism, sexism, etc.) is "liberalism", I think it is reasonable to say that it has bred resistance and anger among the "losers." As far as having "failed", well, we'll see: the New Class still controls almost all the levers of power. It has many strategies for channeling lower-class anger and I think under Trump we'll see those rolled out.

Let me be clear, I'm not saying Donald Trump is leading an insurgency against the New Class – but I think he tapped into something like one and is riding it for all he can, while not really having the slightest idea what he's doing.

Perhaps some evolution in "the means of production" or in how governments are influenced will ultimately develop to divide or downgrade the New Class, and break its lock on the corridors of power, but I don't see it on the horizon just yet. If anyone else does, I'd love to hear more about it.

Neville Morley 11.14.16 at 7:11 am ( 31 )

A little puzzled by the inclusion of teachers, alongside financiers and the like, in William Meyer's list of the New Class rulers. Enablers of those rulers, no doubt, but not visibly calling the shots. But then I'm probably just another liberal elitist failing to recognize my own hegemony, like Chris.

http://www.theguardian.com/commentisfree/2016/nov/14/are-you-a-sinister-filthy-elite-take-this-quiz-and-find-out-now?CMP=Share_iOSApp_Other

Chris S 11.14.16 at 7:31 am

@29,

I assume he meant certain professors [of economics]. Actually on @4, there's a good chapter on the topic in a Thomas Franks latest.

[May 08, 2017] Karl Polanyi for President by Patrick Iber and Mike Konczal

Highly recommended!
Recommended !
Notable quotes:
"... Warren, who first made the argument, was speaking out against the idea that calling for higher taxes on the rich constitutes class warfare, saying: There is nobody in this country who got rich on his own-nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory -- and hire someone to protect against this -- because of the work the rest of us did. ..."
"... This is a fundamentally Polanyian point about the embeddedness of markets in society, and the always unnatural nature of income distribution. Polanyian arguments arise pretty naturally as rebuttals to certain libertarian notions of how economies should work, which may be one reason that certain Democrats sometimes sound like Polanyi. ..."
"... But Polanyi also helps explains some of the tensions within the Democratic Party. One of the divides within the Democratic primary between Bernie Sanders and Hillary Clinton has been between a social-democratic and a "progressive" but market-friendly vision of addressing social problems. Take, for example, health care. Sanders proposes a single-payer system in which the government pays and health care directly, and he frames it explicitly in the language of rights: "healthcare is a human right and should be guaranteed to all Americans regardless of wealth or income." ..."
"... Sanders here offers a straightforward defense of decommodification -- the idea that some things do not belong in the marketplace-that is at odds with the kind of politics that the leadership of the Democratic Party has offered more or less since Carter and the narrow policy "wonk" focus that tends to dominate coverage. ..."
"... Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate trait in a free society. From the point of view of the community as a whole, socialism is merely the continuation of that endeavor to make society a distinctively human relationship of persons. ..."
"... Sanders's particular notion of a political revolution-in which people use democracy to change the rules governing our national political economy-is very Polanyian. Polanyi's socialism has a certain modern appeal when the more traditionally Marxist idea of having the state seize the means of production has been abandoned even by most who identify as socialists. Instead, Polanyi's relevance for today lies in his arguments that markets need to be subjected to democratic control, that human beings resist being transformed fully into commodities, and a fully realized market society is both impossible, undesirable, and at odds with genuine liberty and freedom. ..."
May 04, 2017 | www.dissentmagazine.org

Peter K: May 04, 2017 at 01:29 PM

https://www.dissentmagazine.org/online_articles/karl-polanyi-explainer-great-transformation-bernie-sanders

Karl Polanyi for President

Patrick Iber and Mike Konczal ▪ May 23, 2016

...

Is Bernie Sanders the only "Polanyian" Democrat?

Not at all. Democrats have taken up Polanyian arguments in response to many of the market-fundamentalist notions that the Tea Party has helped to circulate in recent years. The most notable example might be President Obama and Elizabeth Warren's "you didn't build that" faux-controversy from 2011 and 2012. Warren, who first made the argument, was speaking out against the idea that calling for higher taxes on the rich constitutes class warfare, saying:

There is nobody in this country who got rich on his own-nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory -- and hire someone to protect against this -- because of the work the rest of us did.

This is a fundamentally Polanyian point about the embeddedness of markets in society, and the always unnatural nature of income distribution. Polanyian arguments arise pretty naturally as rebuttals to certain libertarian notions of how economies should work, which may be one reason that certain Democrats sometimes sound like Polanyi.

But Polanyi also helps explains some of the tensions within the Democratic Party. One of the divides within the Democratic primary between Bernie Sanders and Hillary Clinton has been between a social-democratic and a "progressive" but market-friendly vision of addressing social problems. Take, for example, health care. Sanders proposes a single-payer system in which the government pays and health care directly, and he frames it explicitly in the language of rights: "healthcare is a human right and should be guaranteed to all Americans regardless of wealth or income."

Clinton, meanwhile, describes affordable health care as a right. Clinton also wants higher education to remain a market commodity, because she says that if the government paid, it would needlessly be giving a free ride to the children of the wealthy and the upper-middle class. Clinton's reasoning appeals to ideas of market efficiency, while Sanders, in stating that "Education should be a right, not a privilege," appeals to ideas of community beyond markets.

Sanders here offers a straightforward defense of decommodification -- the idea that some things do not belong in the marketplace-that is at odds with the kind of politics that the leadership of the Democratic Party has offered more or less since Carter and the narrow policy "wonk" focus that tends to dominate coverage.

Whether or not Sanders has read Polanyi-similar language about economic and social rights was also present in FDR's New Deal, which Sanders argues is the basis of his brand of socialism-Polanyi's particular definition of socialism sounds like one Sanders would share:

Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate trait in a free society. From the point of view of the community as a whole, socialism is merely the continuation of that endeavor to make society a distinctively human relationship of persons.

Sanders's particular notion of a political revolution-in which people use democracy to change the rules governing our national political economy-is very Polanyian. Polanyi's socialism has a certain modern appeal when the more traditionally Marxist idea of having the state seize the means of production has been abandoned even by most who identify as socialists. Instead, Polanyi's relevance for today lies in his arguments that markets need to be subjected to democratic control, that human beings resist being transformed fully into commodities, and a fully realized market society is both impossible, undesirable, and at odds with genuine liberty and freedom.

Sanders's campaign has shown that a political platform favoring decommodification and a retreat from the extremes of society's subordination to markets has deep appeal. The future of the party does not belong to Bernie Sanders himself, but the Karl Polanyi Democrats are here to stay.

Peter K. -> Peter K.... Thursday, May 04, 2017 at 01:30 PM

I thought it was odd that DeLong linked to this:

http://crookedtimber.org/2017/05/01/the-thousand-day-reich-the-double-movement/

The Thousand Day Reich: The Double Movement

by HENRY on MAY 1, 2017

This is the second in a series of projected posts that try to look at the Trump administration and right wing populism through the lens of different books (the first – on civil society – is here). The last post was mostly riffing on Ernest Gellner. Today, it's another middle-European exile intellectual – Karl Polanyi.

...

[May 08, 2017] Karl Polanyi for President by Patrick Iber and Mike Konczal

Highly recommended!
Recommended !
Notable quotes:
"... Warren, who first made the argument, was speaking out against the idea that calling for higher taxes on the rich constitutes class warfare, saying: There is nobody in this country who got rich on his own-nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory -- and hire someone to protect against this -- because of the work the rest of us did. ..."
"... This is a fundamentally Polanyian point about the embeddedness of markets in society, and the always unnatural nature of income distribution. Polanyian arguments arise pretty naturally as rebuttals to certain libertarian notions of how economies should work, which may be one reason that certain Democrats sometimes sound like Polanyi. ..."
"... But Polanyi also helps explains some of the tensions within the Democratic Party. One of the divides within the Democratic primary between Bernie Sanders and Hillary Clinton has been between a social-democratic and a "progressive" but market-friendly vision of addressing social problems. Take, for example, health care. Sanders proposes a single-payer system in which the government pays and health care directly, and he frames it explicitly in the language of rights: "healthcare is a human right and should be guaranteed to all Americans regardless of wealth or income." ..."
"... Sanders here offers a straightforward defense of decommodification -- the idea that some things do not belong in the marketplace-that is at odds with the kind of politics that the leadership of the Democratic Party has offered more or less since Carter and the narrow policy "wonk" focus that tends to dominate coverage. ..."
"... Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate trait in a free society. From the point of view of the community as a whole, socialism is merely the continuation of that endeavor to make society a distinctively human relationship of persons. ..."
"... Sanders's particular notion of a political revolution-in which people use democracy to change the rules governing our national political economy-is very Polanyian. Polanyi's socialism has a certain modern appeal when the more traditionally Marxist idea of having the state seize the means of production has been abandoned even by most who identify as socialists. Instead, Polanyi's relevance for today lies in his arguments that markets need to be subjected to democratic control, that human beings resist being transformed fully into commodities, and a fully realized market society is both impossible, undesirable, and at odds with genuine liberty and freedom. ..."
May 04, 2017 | www.dissentmagazine.org

Peter K: May 04, 2017 at 01:29 PM

https://www.dissentmagazine.org/online_articles/karl-polanyi-explainer-great-transformation-bernie-sanders

Karl Polanyi for President

Patrick Iber and Mike Konczal ▪ May 23, 2016

...

Is Bernie Sanders the only "Polanyian" Democrat?

Not at all. Democrats have taken up Polanyian arguments in response to many of the market-fundamentalist notions that the Tea Party has helped to circulate in recent years. The most notable example might be President Obama and Elizabeth Warren's "you didn't build that" faux-controversy from 2011 and 2012. Warren, who first made the argument, was speaking out against the idea that calling for higher taxes on the rich constitutes class warfare, saying:

There is nobody in this country who got rich on his own-nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory -- and hire someone to protect against this -- because of the work the rest of us did.

This is a fundamentally Polanyian point about the embeddedness of markets in society, and the always unnatural nature of income distribution. Polanyian arguments arise pretty naturally as rebuttals to certain libertarian notions of how economies should work, which may be one reason that certain Democrats sometimes sound like Polanyi.

But Polanyi also helps explains some of the tensions within the Democratic Party. One of the divides within the Democratic primary between Bernie Sanders and Hillary Clinton has been between a social-democratic and a "progressive" but market-friendly vision of addressing social problems. Take, for example, health care. Sanders proposes a single-payer system in which the government pays and health care directly, and he frames it explicitly in the language of rights: "healthcare is a human right and should be guaranteed to all Americans regardless of wealth or income."

Clinton, meanwhile, describes affordable health care as a right. Clinton also wants higher education to remain a market commodity, because she says that if the government paid, it would needlessly be giving a free ride to the children of the wealthy and the upper-middle class. Clinton's reasoning appeals to ideas of market efficiency, while Sanders, in stating that "Education should be a right, not a privilege," appeals to ideas of community beyond markets.

Sanders here offers a straightforward defense of decommodification -- the idea that some things do not belong in the marketplace-that is at odds with the kind of politics that the leadership of the Democratic Party has offered more or less since Carter and the narrow policy "wonk" focus that tends to dominate coverage.

Whether or not Sanders has read Polanyi-similar language about economic and social rights was also present in FDR's New Deal, which Sanders argues is the basis of his brand of socialism-Polanyi's particular definition of socialism sounds like one Sanders would share:

Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate trait in a free society. From the point of view of the community as a whole, socialism is merely the continuation of that endeavor to make society a distinctively human relationship of persons.

Sanders's particular notion of a political revolution-in which people use democracy to change the rules governing our national political economy-is very Polanyian. Polanyi's socialism has a certain modern appeal when the more traditionally Marxist idea of having the state seize the means of production has been abandoned even by most who identify as socialists. Instead, Polanyi's relevance for today lies in his arguments that markets need to be subjected to democratic control, that human beings resist being transformed fully into commodities, and a fully realized market society is both impossible, undesirable, and at odds with genuine liberty and freedom.

Sanders's campaign has shown that a political platform favoring decommodification and a retreat from the extremes of society's subordination to markets has deep appeal. The future of the party does not belong to Bernie Sanders himself, but the Karl Polanyi Democrats are here to stay.

Peter K. -> Peter K.... Thursday, May 04, 2017 at 01:30 PM

I thought it was odd that DeLong linked to this:

http://crookedtimber.org/2017/05/01/the-thousand-day-reich-the-double-movement/

The Thousand Day Reich: The Double Movement

by HENRY on MAY 1, 2017

This is the second in a series of projected posts that try to look at the Trump administration and right wing populism through the lens of different books (the first – on civil society – is here). The last post was mostly riffing on Ernest Gellner. Today, it's another middle-European exile intellectual – Karl Polanyi.

...

[May 01, 2017] Trump: A Resisters Guide by Wesley Yang

Highly recommended!
Recommended !
Notable quotes:
"... [Neo]liberalism that needs monsters to destroy can never politically engage with its enemies. It can never understand those enemies as political actors, making calculations, taking advantage of opportunities, and responding to constraints. It can never see in those enemies anything other than a black hole of motivation, a cesspool where reason goes to die. ..."
"... Hence the refusal of empathy for Trump's supporters. Insofar as it marks a demand that we not abandon antiracist principle and practice for the sake of winning over a mythicized white working class, the refusal is unimpeachable. ..."
"... Such a [neo]liberalism becomes dependent on the very thing it opposes, with a tepid mix of neoliberal markets and multicultural morals getting much-needed spice from a terrifying right. Hillary Clinton ran hard on the threat of Trump, as if his presence were enough to authorize her presidency. ..."
"... Clinton waged this campaign on the belief that her neoliberalism of fear could defeat the ethnonationalism of the right. ..."
"... In the novel, what begins as a struggle against inherited privilege results in the consolidation of a new ruling class that derives its legitimacy from superior merit. This class becomes, within a few generations, a hereditary aristocracy in its own right. Sequestered within elite institutions, people of high intelligence marry among themselves, passing along their high social position and superior genes to their progeny. Terminal inequality is the result. The gradual shift from inheritance to merit, Young writes, made "nonsense of all their loose talk of the equality of man": ..."
"... Losing every young person of promise to the meritocracy had deprived the working class of its prospective leaders, rendering it unable to coordinate a movement to manifest its political will. ..."
"... A policy of benign neglect of immigration laws invites into our country a casualized workforce without any leverage, one that competes with the native-born and destroys whatever leverage the latter have to negotiate better terms for themselves. The policy is a subsidy to American agribusiness, meatpacking plants, restaurants, bars, and construction companies, and to American families who would not otherwise be able to afford the outsourcing of childcare and domestic labor that the postfeminist, dual-income family requires. At the same time, a policy of free trade pits native-born workers against foreign ones content to earn pennies on the dollar of their American counterparts. ..."
"... Four decades of neoliberal globalization have cleaved our country into two hostile classes, and the line cuts across the race divide. On one side, college students credential themselves for meritocratic success. On the other, the white working class increasingly comes to resemble the black underclass in indices of social disorganization. On one side of the divide, much energy is expended on the eradication of subtler inequalities; on the other side, an equality of immiseration increasingly obtains. ..."
Jan 21, 2017 | harpers.org
[Neo]liberalism that needs monsters to destroy can never politically engage with its enemies. It can never understand those enemies as political actors, making calculations, taking advantage of opportunities, and responding to constraints. It can never see in those enemies anything other than a black hole of motivation, a cesspool where reason goes to die.

Hence the refusal of empathy for Trump's supporters. Insofar as it marks a demand that we not abandon antiracist principle and practice for the sake of winning over a mythicized white working class, the refusal is unimpeachable. But like the know-nothing disavowal of knowledge after 9/11, when explanations of terrorism were construed as exonerations of terrorism, the refusal of empathy since 11/9 is a will to ignorance. Far simpler to imagine Trump voters as possessed by a kind of demonic intelligence, or anti-intelligence, transcending all the rules of the established order. Rather than treat Trump as the outgrowth of normal politics and traditional institutions - it is the Electoral College, after all, not some beating heart of darkness, that sent Trump to the White House - there is a disabling insistence that he and his forces are like no political formation we've seen. By encouraging us to see only novelty in his monstrosity, analyses of this kind may prove as crippling as the neocons' assessment of Saddam's regime. That, too, was held to be like no tyranny we'd seen, a despotism where the ordinary rules of politics didn't apply and knowledge of the subject was therefore useless.

Such a [neo]liberalism becomes dependent on the very thing it opposes, with a tepid mix of neoliberal markets and multicultural morals getting much-needed spice from a terrifying right. Hillary Clinton ran hard on the threat of Trump, as if his presence were enough to authorize her presidency.

Where Sanders promised to change the conversation, to make the battlefield a contest between a multicultural neoliberalism and a multiracial social democracy, Clinton sought to keep the battlefield as it has been for the past quarter-century. In this single respect, she can claim a substantial victory. It's no accident that one of the most spectacular confrontations since the election pitted the actors of Hamilton against the tweets of Trump. These fixed, frozen positions - high on rhetoric, low on action - offer an almost perfect tableau of our ongoing gridlock of recrimination.

Clinton waged this campaign on the belief that her neoliberalism of fear could defeat the ethnonationalism of the right. Let us not make the same mistake twice. Let us not be addicted to "the drug of danger," as Athena says in the Oresteia, to "the dream of the enemy that has to be crushed, like a herb, before [we] can smell freedom."

The term "meritocracy" became shorthand for a desirable societal ideal soon after it was coined by the British socialist Sir Michael Young. But Young had originally used it to describe a dystopian future. His 1958 satirical novel, The Rise of the Meritocracy, imagines the creation and growth of a national system of intelligence testing, which identifies talented young people from every stratum of society in order to install them in special schools, where they are groomed to make the best use possible of their innate advantages.

In the novel, what begins as a struggle against inherited privilege results in the consolidation of a new ruling class that derives its legitimacy from superior merit. This class becomes, within a few generations, a hereditary aristocracy in its own right. Sequestered within elite institutions, people of high intelligence marry among themselves, passing along their high social position and superior genes to their progeny. Terminal inequality is the result. The gradual shift from inheritance to merit, Young writes, made "nonsense of all their loose talk of the equality of man":

Men, after all, are notable not for the equality, but for the inequality, of their endowment. Once all the geniuses are amongst the elite, and all the morons are amongst the workers, what meaning can equality have? What ideal can be upheld except the principle of equal status for equal intelligence? What is the purpose of abolishing inequalities in nurture except to reveal and make more pronounced the inescapable inequalities of Nature?

I thought about this book often in the years before the crack-up of November 2016. In early 2015, the Harvard sociologist Robert Putnam published a book that seemed to tell as history the same story that Young had written as prophecy. Our Kids: The American Dream in Crisis opens with an evocation of the small town of Port Clinton, Ohio, where Putnam grew up in the 1950s - a "passable embodiment of the American Dream, a place that offered decent opportunity for all the kids in town, whatever their background." Port Clinton was, as Putnam is quick to concede, a nearly all-white town in a pre-feminist and pre-civil-rights America, and it was marked by the unequal distribution of power that spurred those movements into being. Yet it was also a place of high employment, strong unions, widespread homeownership, relative class equality, and generally intact two-parent families. Everyone knew one another by their first names and almost everyone was headed toward a better future; nearly three quarters of all the classmates Putnam surveyed fifty years later had surpassed their parents in both educational attainment and wealth.

When he revisited it in 2013, the town had become a kind of American nightmare. In the 1970s, the industrial base entered a terminal decline, and the town's economy declined with it. Downtown shops closed. Crime, delinquency, and drug use skyrocketed. In 1993, the factory that had offered high-wage blue-collar employment finally shuttered for good. By 2010, the rate of births to unwed mothers had risen to 40 percent. Two years later, the average worker in the county "was paid roughly 16 percent less in inflation-adjusted dollars than his or her grandfather in the early 1970s."

Young's novel ends with an editorial note informing readers that the fictional author of the text had been killed in a riot that was part of a violent populist insurrection against the meritocracy, an insurrection that the author had been insisting would pose no lasting threat to the social order. Losing every young person of promise to the meritocracy had deprived the working class of its prospective leaders, rendering it unable to coordinate a movement to manifest its political will. "Without intelligence in their heads," he wrote, "the lower classes are never more menacing than a rabble."

We are in the midst of a global insurrection against ruling elites. In the wake of the most destructive of the blows recently delivered, a furious debate arose over whether those who supported Donald Trump deserve empathy or scorn. The answer, of course, is that they deserve scorn for resorting to so depraved and false a solution to their predicament - and empathy for the predicament itself. (And not just because advances in technology are likely to make their predicament far more widely shared.) What is owed to them is not the lachrymose pity reserved for victims (though they have suffered greatly) but rather a practical appreciation of how their antagonism to the policies that determined the course of this campaign - mass immigration and free trade - was a fully political antagonism that was disregarded for decades, to our collective detriment.

A policy of benign neglect of immigration laws invites into our country a casualized workforce without any leverage, one that competes with the native-born and destroys whatever leverage the latter have to negotiate better terms for themselves. The policy is a subsidy to American agribusiness, meatpacking plants, restaurants, bars, and construction companies, and to American families who would not otherwise be able to afford the outsourcing of childcare and domestic labor that the postfeminist, dual-income family requires. At the same time, a policy of free trade pits native-born workers against foreign ones content to earn pennies on the dollar of their American counterparts.

In lieu of the social-democratic provision of childcare and other services of domestic support, we have built a privatized, ad hoc system of subsidies based on loose border enforcement - in effect, the nation cutting a deal with itself at the expense of the life chances of its native-born working class. In lieu of an industrial policy that would preserve intact the economic foundation of their lives, we rapidly dismantled our industrial base in pursuit of maximal aggregate economic growth, with no concern for the uneven distribution of the harms and the benefits. Some were enriched hugely by these policies: the college-educated bankers, accountants, consultants, technologists, lawyers, economists, and corporate executives who built a supply chain that reached to the countries where we shipped the jobs. Eventually, of course, many of these workers learned that both political parties regarded them as fungible factors of production, readily discarded in favor of a machine or a migrant willing to bunk eight to a room.

Four decades of neoliberal globalization have cleaved our country into two hostile classes, and the line cuts across the race divide. On one side, college students credential themselves for meritocratic success. On the other, the white working class increasingly comes to resemble the black underclass in indices of social disorganization. On one side of the divide, much energy is expended on the eradication of subtler inequalities; on the other side, an equality of immiseration increasingly obtains.

Even before the ruling elite sent the proletariat off to fight a misbegotten war, even before it wrecked the world economy through heedless lending, even before its politicians rescued those responsible for the crisis while allowing working-class victims of all colors to sink, the working class knew that it had been sacrificed to the interests of those sitting atop the meritocratic ladder. The hostility was never just about differing patterns in taste and consumption. It was also about one class prospering off the suffering of another. We learned this year that political interests that go neglected for decades invariably summon up demagogues who exploit them for their own gain. The demagogues will go on to betray their supporters and do enormous harm to others.

If we are to arrest the global descent into barbarism, we will have to understand the political antagonism at the heart of the meritocratic project and seek a new kind of politics. If we choose to neglect the valid interests of the working class, Trump will prove in retrospect to have been a pale harbinger of even darker nightmares to come.

Continued

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008


Etc

Society

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