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Casino Capitalism: Neoliberalism in Western countries

"When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done" ~ John Maynard Keynes

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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.

Thomas Palley, See http://www.levyinstitute.org/pubs/wp_525.pdf

Speculation and gambling were always a part of Wall Street but since the 1930’s they were just a side-show, now they are the show.

Comment to Matt Taibbi article Fannie, Freddie, and the New Red and Blue t


Introduction

“The sense of responsibility in the financial community
for the community as a whole is not small. It is nearly nil.”

-- John Kenneth Galbraith, The Great Crash of 1929

The term Casino Capitalism generally is symonim of neoliberalism (also called economic liberalism), but it also point out to a specific phase of neoliberal transformation of capitalism. Politically it was slow motion corporate coup d'état, which started in 70th and is now accomplished in the USA and other Western countries which buries social-democratic (New Deal style) model of capitalism. 

It hypertrophied police functions of state (in the form of national-security state)  while completely avoiding economic sphere in ways other then enforcement of laws (with a notable exclusion from this top 1% -- "Masters of the Universe"). Like bolshevism it uses the state for the enforcement of the social system.  On top level this is crony capitalism for major corporation. On low level of medium and small business owners it presupposed a deregulated economy (in a sense of the "law of jungle" as a business environment).

Casino capitalism presupposes strong militarized state, suppressing all the attempts to challenge the new "nomenklatura" (much like was the case in the USSR).  It is quite different from traditional liberalism:

“Liberalism” can refer to political, economic, or even religious ideas. In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Right wing. Economic liberalism is different. Conservative politicians who say they hate “liberals” — meaning the political type — have no real problem with economic liberalism, including neoliberalism.

In other words this is neoliberal model of corporatism during the period of "cheap hydrocarbons".  The period that is probably near the end and which by some estimate can last only another 50 years or so (less than 100 years).  The major crisis of casino capitalism in 2008 was connected both with financial excesses (caused by moving to semi-criminal ways of extracting return on capital, typical for casino capitalism),  but also with the rise of the price of oil and decrease of  Energy returned on energy invested (EROEI)In this sense the last low oil price period which started in late 2014 and ended in spring 2018 can be viewed as the "last hurrah" of the casino capitalism.

In understanding neoliberal transformation of the society since early 80th it is important to understanding of the key role of financialization in this process. When major services are privatized (education, healthcare, pension plans) financial institution insert themselves as intermediaries in this arrangement and make it the main source of their profits.  Also contrary to neoliberal propaganda this process is aided and abetted by state. State is used by neoliberalism as a tool of enforcing market relations even where they are not useless or even harmful (education). All this talk about irresolvable controversy between market and state is for gullible fools. In reality, being Trotskyism for rich, neoliberalism uses power of the state to enforce market relations  by force on reluctant population even in areas where this can do no good. That make really it close to Soviet social experiment, which lasted from 1917 to 1991 or almost 75 years. As Marx noted "History repeats itself, first as tragedy, second as farce."

A very good discussion of the role of Financialisation in entrenchment of neoliberalism in modern societies can be found in the book by Costas Lapavitsas. Some highlights are provided in his Guardian article Finance's hold on our everyday life must be broken

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?

The term "casino capitalism" was coined by Susan Strange who used it as a title of her book Casino Capitalism published in 1986. She was one of the first who realized that

  1. "The roots of the world's economic disorder are monetary and financial";
  2. "The disorder has not come about by accident, but has in fact been nurtured and encouraged by a series of government decisions." (p. 60). In other words its was a counter-revolution of the part of ruling elite (financial oligarchy) which lost its influence in 30th (dismantling New Deal from above in the USA (Reaganomics) or Thatcherism in the GB).

According to Susan Strange transformation of industrial capitalism into neoliberal capitalism ("casino capitalism") involved five trends. All of them increased the systemic instability of the system and the level of political corruption:

  1. Innovations in the way in which financial markets work due to introduction of computers;
  2. The sheer size of markets; (with the introduction of 401K the size of stock market multiplied, etc)
  3. Commercial banks turned into investment banks;
  4. The emergence of Asian nations as large players;
  5. The shift to self-regulation by banks (pp.9-10).

Now it is pretty much established fact that the conversion from "industrial capitalism" to neoliberal, completely financialialized "casino capitalism" is the natural logic of development of capitalism. In early and incomplete matter this trend was noticed at early 1990th by many thinkers. This is just the second iteration of the same trend which was interrupted by the Great Depression and subsequent WWII. So, in a way, replacement of industrial capitalism with financial capitalism in a natural tendency within the capitalism itself and corruption was contributing, but not decisive factor.  The same is true about globalization, especially about globalization of financial flows, typical for casino capitalism, which is a form of colonialism (neocolonialism).

Also this conversion did not happen due to lack of oversight or as a folly. It was a couscous choice made by the US and GB elite, both of which faced deterioration of rates of return on capital. Also unlike "industrial capitalism" which was more-or-less stable system, able to outcompete the neo-theocratic system of the USSR, the financial capitalism is unstable in the same sense as radioactive elements are unstable.  And this instability tend to increase with time. So there is probably natural half-life period for neoliberalism as a social system. It might be already reached in 2008.  In we assume that global victory of neoliberalism happened in 1990. It is just 18 years.  If we think that it happened in late 60th, then it is closer to 50 years.

The global crisis of neoliberal capitalism which started from bursting the USA subprime housing bubble in 2008 undermined ideological legitimacy of its central claim that "free markets" lead to faster and more uniform economic development of all countries. While the peak of its "ideological" power might be over (much like the peak of attractiveness of "command socialism" was over after WWII), it will exist in a zombie state for a long time due to economic and military power of the USA and G7.  And as we know from Hollywood films, zombies can be especially bloodthirsty. It probably will remain the dominant force for at least the next two decades pursuing the same policy of "forceful" opening of energy rich  and resource countries for western multinationals intact using color revolutions and local wars.  But as Napoleon quipped "You can do anything with bayonets, you just can't sit on them".

Conversion to neoliberal capitalism was a reaction on stagnation of industrial production and as such it was nurtured and encouraged by a series of government decisions for the last 50 years. Stagnation of industrial production made expansion of financial sector of paramount importance for the ruling elite and by extension for Congress which represents this elite. House vote 377:4 for Commodity Futures Modernization Act of 2000 is pretty telling in this respect.

There were also at least two important parallel developments.

Most respectable authors like Henry Giroux in his article in Counterpunch generally consider the term "casino capitalism" to be an equivalent to the term Neoliberalism. Here is a relevant quote from Henry Giroux's Authoritarian Politics in the Age of Casino Capitalism :

There is more at work here than simply a ramped up version of social Darwinism with its savagely cruel ethic of “reward the rich, penalize the poor, [and] let everyone fend for themselves,” [ii] there is also a full scale attack on the social contract, the welfare state, economic equality, and any viable vestige of moral and social responsibility. The Romney-Ryan appropriation of Ayn Rand’s ode to selfishness and self-interest is of particular importance because it offers a glimpse of a ruthless form of extreme capitalism in which the poor are considered “moochers,” viewed with contempt, and singled out to be punished. But this theocratic economic fundamentalist ideology does more. It destroys any viable notion of the and civic virtue in which the social contract and common good provide the basis for creating meaningful social bonds and instilling in citizens a sense of social and civic responsibility. The idea of public service is viewed with disdain just as the work of individuals, social groups, and institutions that benefit the citizenry at large are held in contempt.

As George Lakoff and Glenn W. Smith point out, casino capitalism creates a culture of cruelty: “its horrific effects on individuals-death, illness, suffering, greater poverty, and loss of opportunity, productive lives, and money.”[iii]

But it does more by crushing any viable notion of the common good and public life by destroying “the bonds that hold us together.”[iv] Under casino capitalism, the spaces, institutions, and values that constitute the public are now surrendered to powerful financial forces and viewed simply as another market to be commodified, privatized and surrendered to the demands of capital. With religious and market-driven zealots in charge, politics becomes an extension of war; greed and self-interest trump any concern for the well-being of others; reason is trumped by emotions rooted in absolutist certainty and militaristic aggression; and skepticism and dissent are viewed as the work of Satan.

If the Republican candidacy race of 2012 is any indication, then political discourse in the United States has not only moved to the right—it has been introducing totalitarian values and ideals into the mainstream of public life. Religious fanaticism, consumer culture, and the warfare state work in tandem with neoliberal economic forces to encourage privatization, corporate tax breaks, growing income and wealth inequality, and the further merging of the financial and military spheres in ways that diminish the authority and power of democratic governance.[v] Neoliberal interests in freeing markets from social constraints, fueling competitiveness, destroying education systems, producing atomized subjects, and loosening individuals from any sense of social responsibility prepare the populace for a slow embrace of social Darwinism, state terrorism, and the mentality of war — not least of all by destroying communal bonds, dehumanizing the other, and pitting individuals against the communities they inhabit.

Totalitarian temptations now saturate the media and larger culture in the language of austerity as political and economic orthodoxy. What we are witnessing in the United States is the normalization of a politics that exterminates not only the welfare state, and the truth, but all those others who bear the sins of the Enlightenment — that is, those who refuse a life free from doubt. Reason and freedom have become enemies not merely to be mocked, but to be destroyed. And this is a war whose totalitarian tendencies are evident in the assault on science, immigrants, women, the elderly, the poor, people of color, and youth.

What too often goes unsaid, particularly with the media’s focus on inflammatory rhetoric, is that those who dominate politics and policymaking, whether Democrats or Republicans, do so largely because of their disproportionate control of the nation’s income and wealth. Increasingly, it appears these political elite choose to act in ways that sustain their dominance through the systemic reproduction of an iniquitous social order. In other words, big money and corporate power rule while electoral politics are rigged. The secrecy of the voting booth becomes the ultimate expression of democracy, reducing politics to an individualized purchase—a crude form of economic action. Any form of politics willing to invest in such ritualistic pageantry only adds to the current dysfunctional nature of our social order, while reinforcing a profound failure of political imagination. The issue should no longer be how to work within the current electoral system, but how to dismantle it and construct a new political landscape that is capable of making a claim on equity, justice, and democracy for all of its inhabitants. Obama’s once inspiring call for hope has degenerated into a flight from responsibility.

The Obama administration has worked to extend the policies of the George W. Bush administration by legitimating a range of foreign and domestic policies that have shredded civil liberties, expanded the permanent warfare state, and increased the domestic reach of the punitive surveillance state. And if Romney and his ideological cohorts, now viewed as the most extremists faction of the Republican Party, come to power, surely the existing totalitarian and anti-democratic tendencies at work in the United States will be dangerously intensified.

History

Alternatively, we could have spent more time studying the work of Hyman Minsky. We could also have considered the possibility that, just as Keynes’s ideas were tested to destruction in the 1950s, 1960s and 1970s, Milton Friedman’s ideas might suffer a similar fate in the 1980s, 1990s and 2000s. All gods fail, if one believes too much. Keynes said, of course, that "practical men … are usually the slaves of some defunct economist". So, of course, are economists, even if the defunct economists are sometimes still alive.

Martin Wolf

 


 

 

Casino capitalism  is a nickname for nailibelism. Probably more properly nickname would be  financial corporatism. While the key idea of corporatism: that political actors are not individual people, but some associations and first of all corporations (which are officially considered to be "persons" and have rights as well as trade unions and some other associations) remains intact, financial corporatism is different from classic corporatism in several major ways:

Historically corporatism in various modifications became dominant social system after WWII and defeated "command socialism" as was implemented in the USSR. Here is an instructive review of corporatism history (The Economic System of Corporatism):

In the last half of the 19th century people of the working class in Europe were beginning to show interest in the ideas of socialism and syndicalism. Some members of the intelligentsia, particularly the Catholic intelligentsia, decided to formulate an alternative to socialism which would emphasize social justice without the radical solution of the abolition of private property. The result was called Corporatism. The name had nothing to do with the notion of a business corporation except that both words are derived from the Latin word for body, corpus.

The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups (sometimes called corporations) and representatives of those interest groups settle any problems through negotiation and joint agreement. In contrast to a market economy which operates through competition a corporate economic works through collective bargaining. The American president Lyndon Johnson had a favorite phrase that reflected the spirit of corporatism. He would gather the parties to some dispute and say, "Let us reason together."

Under corporatism the labor force and management in an industry belong to an industrial organization. The representatives of labor and management settle wage issues through collective negotiation. While this was the theory in practice the corporatist states were largely ruled according to the dictates of the supreme leader.

One early and important theorist of corporatism was Adam Müller, an advisor to Prince Metternich in what is now eastern Germany and Austria. Müller propounded his views as an antidote to the twin dangers of the egalitarianism of the French Revolution and the laissez faire economics of Adam Smith. In Germany and elsewhere there was a distinct aversion among rulers to allow markets to function without direction or control by the state. The general culture heritage of Europe from the medieval era was opposed to individual self-interest and the free operation of markets. Markets and private property were acceptable only as long as social regulation took precedence over such sinful motivations as greed.

Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting social justice. Thus corporatism was formulated as a system that emphasized the positive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population pursuing their own individual self-interests. And above all else, as a political economic philosophy corporatism was flexible. It could tolerate private enterprise within limits and justify major projects of the state. Corporatism has sometimes been labeled as a Third Way or a mixed economy, a synthesis of capitalism and socialism, but it is in fact a separate, distinctive political economic system.

Although rulers have probably operated according to the principles of corporatism from time immemorial it was only in the early twentieth century that regimes began to identify themselves as corporatist. The table below gives some of those explicitly corporatist regimes.

Corporatist Regimes of the Early Twentieth Century
System Name Country Period Leader
National Corporatism Italy 1922-1945 Benito Mussolini
Country, Religion, Monarchy Spain 1923-1930 Miguel Primo de Rivera
National Socialism Germany 1933-1945 Adolph Hitler
National Syndicalism Spain 1936-1973 Francisco Franco
New State Portugal 1932-1968 Antonio Salazar
New State Brazil 1933-1945 Getulio Vargas
New Deal United States 1933-1945 Franklin Roosevelt
Third Hellenic Civilization Greece 1936-1941 Ioannis Metaxas
Justice Party Argentina 1943-1955 Juan Peron

In the above table several of the regimes were brutal, totalitarian dictatorships, usually labeled fascist, but not all the regimes that had a corporatist foundation were fascist. In particular, the Roosevelt New Deal despite its many faults could not be described as fascist. But definitely the New Deal was corporatist. The architect for the initial New Deal program was General Hugh Johnson. Johnson had been the administrator of the military mobilization program for the U.S. under Woodrow Wilson during World War I. It was felt that he did a good job of managing the economy during that period and that is why he was given major responsibility for formulating an economic program to deal with the severe problems of the Depression. But between the end of World War I and 1933 Hugh Johnson had become an admirer of Mussolini's National Corporatist system in Italy and he drew upon the Italian experience in formulating the New Deal.

It should be noted that many elements of the early New Deal were later declared unconstitutional and abandoned, but some elements such as the National Labor Relations Act which promoted unionization of the American labor force are still in effect. One part of the New Deal was the development of the Tennessee River Valley under the public corporation called the Tennessee Valley Authority (TVA). Some of the New Dealer saw TVA as more than a public power enterprise. They hoped to make TVA a model for the creation of regional political units which would replace state governments. Their goal was not realized. The model for TVA was the river development schemes carried out in Spain in the 1920's under the government of Miguel Primo de Rivera. Jose Antonio Primo de Rivera, the son of Miguel Primo de Rivera, was the founder of Franco's National Syndicalism.

Corporatist regime typically promote large governmental projects such as TVA on the basis that they are too large to be funded by private enterprise. In Brazil the Vargas regime created many public enterprises such as in iron and steel production which it felt were needed but private enterprise declined to create. It also created an organized labor movement that came to control those public enterprises and turned them into overstaffed, inefficient drains on the public budget.

Although the above locates the origin of corporatism in 19th century France it roots can be traced much further back in time. Sylvia Ann Hewlett in her book, The Cruel Dilemmas of Development: Twentieth Century Brazil, says,

Corporatism is based on a body of ideas that can be traced through Aristotle, Roman law, medieval social and legal structures, and into contemporary Catholic social philosophy. These ideas are based on the premise that man's nature can only be fulfilled within a political community.
..........
The central core of the corporatist vision is thus not the individual but the political community whose perfection allows the individual members to fulfill themselves and find happiness.
...............
The state in the corporatist tradition is thus clearly interventionist and powerful.

Corporatism is collectivist; it is a different version of collectivism than socialism but it is definitely collectivist. It places some importance on the fact that private property is not nationalized, but the control through regulation is just as real. It is de facto nationalization without being de jure nationalization.

Although Corporatism is not a familiar concept to the general public, most of the economies of the world are corporatist in nature. The categories of socialist and pure market economy are virtually empty. There are only corporatist economies of various flavors.

These flavors of corporatism include the social democratic regimes of Europe and the Americas, but also the East Asian and Islamic fundamentalist regimes such as Taiwan, Singapore and Iran. The Islamic socialist states such as Syria, Libya and Algeria are more corporatist than socialist, as was Iraq under Saddam Hussain. The formerly communist regimes such as Russia and China are now clearly corporatist in economic philosophy although not in name.

The concept of Quite Coup

Sine ira et studio

Tacitus, see Wikipedia

The term "Quiet coup" which means the hijacking of the political power in the USA by financial oligarchy was introduced by Simon H. Johnson, a British-American economist, who currently is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. From March 2007 through the end of August 2008, he was Chief Economist of the International Monetary Fund. The term was introduced in his article in Atlantic magazine, published in May 2009(The Quiet Coup - Simon Johnson - The Atlantic). Which opens with a revealing paragraph:

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government

The wealth of financial sector gave it unprecedented opportunities of simply buying the political power iether directly or indirectly (via revolving door mechanism):

Becoming a Banana Republic

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies — lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits — such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight — a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

He further researched this theme in his book 2010 book 13 Bankers The Wall Street Takeover and the Next Financial Meltdown  (ISBN 978-0307379054), coauthored with James Kwak. They also founded and regularly contributes to the economics blog The Baseline Scenario. See also History of Casino Capitalism

The net effect of the ideological counter-revolution based on market fundamentalism ideology was that it restored the power of financial oligarchy typical for Gilded Age. As Simon Johnson argues that was partially done by subverting regulators and that oversize institutions always disproportionately influence public policy:

The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

Oversize institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.

Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.

This may seem like a crude and arbitrary step, but it is the best way to limit the power of individual institutions in a sector that is essential to the economy as a whole. Of course, some people will complain about the "efficiency costs" of a more fragmented banking system, and these costs are real. But so are the costs when a bank that is too big to fail—a financial weapon of mass self-destruction—explodes. Anything that is too big to fail is too big to exist.

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation. Laws put in place more than 100years ago to combat industrial monopolies were not designed to address the problem we now face. The problem in the financial sector today is not that a given firm might have enough market share to influence prices; it is that one firm or a small set of interconnected firms, by failing, can bring down the economy. The Obama administration’s fiscal stimulus evokes FDR, but what we need to imitate here is Teddy Roosevelt’s trust-busting.

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. Wall Street’s main attraction—to the people who work there and to the government officials who were only too happy to bask in its reflected glory—has been the astounding amount of money that could be made. Limiting that money would reduce the allure of the financial sector and make it more like any other industry.

Still, outright pay caps are clumsy, especially in the long run. And most money is now made in largely unregulated private hedge funds and private-equity firms, so lowering pay would be complicated. Regulation and taxation should be part of the solution. Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine.

Two Paths

To paraphrase Joseph Schumpeter, the early-20th-century economist, everyone has elites; the important thing is to change them from time to time. If the U.S. were just another country, coming to the IMF with hat in hand, I might be fairly optimistic about its future. Most of the emerging-market crises that I’ve mentioned ended relatively quickly, and gave way, for the most part, to relatively strong recoveries. But this, alas, brings us to the limit of the analogy between the U.S. and emerging markets.

Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy "stress scenario" that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump "cannot be as bad as the Great Depression." This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

It is pretty interesting to see how financial oligarchy filters information provided to the population to fit their biases. For example, the key facts about repeal of Glass-Steagall law  (BTW Joe Biden voted for it) mostly hidden from the public: 

Commodity Futures Trading Commission — under the leadership of Mr. Gramm’s wife, Wendy — had approved rules in 1989 and 1993 exempting some swaps and derivatives from regulation. In December 2000, the Commodity Futures Modernization Act was passed as part of a larger bill by unanimous consent after Senator Gramm dominated the Senate debate...

"He was the architect, advocate and the most knowledgeable person in Congress on these topics," Mr. Donovan said. "To me, Phil Gramm is the single most important reason for the current financial crisis."

"The virtually unregulated over-the-counter market in credit-default swaps has played a significant role in the credit crisis, including the now $167 billion taxpayer rescue of A.I.G.," Christopher Cox, the chairman of the S.E.C. and a former congressman, said Friday.

But you will never find discussion of flaws and adverse consequences Phil Gram (or Greenspan for a change) initiatives in Heritage Foundation and other right-wing think tanks publications.

Stages of transformation

So what we are experiencing is a the completion of the transformation of one phase of capitalism to another. It happened in stages:

  1. Manufacturing stagnated and can't provide the "decent" rate of growth. Competition from re-built Europe and Asian markets severely stressed the US manufacturing. due to competition return of capital dropped and in several industries became negative.

  2. Computers brought innovations into financial markets. They make possible real time trading of induces like S&P500, complex financial instruments like derivatives, etc. Later they enables superfast trading (HFT). All those instruments dramatically increased the possibilities of extracting the rent by financial institutions from the society.

  3. Globalization kicked in due to new opportunities offered by high speed global communications (Internet). And that is not limited to outsourcing. Due to globalization the sheer size of the financial markets increased to the extent that they started to represent a different, new transnational phenomena allowing new types of redistribution of wealth to be practiced. Integration of Russian elite (oligarchs) is just one example of this process. In case of pro-western oligarchs (fifth column) West went to significant length to protect them and their racket (Mikhail Khodorkovsky - Wikipedia,)

  4. Commercial banks turned into investment banks to exploit this opportunity.

  5. Financial sector completely corrupted academic science converting most economists to pay prostitutes which serve their interests.

  6. Collapse of the USSR provided the financial sector major shoot in the arm and a golden, once in century opportunity to finance new half-billion consumers and stole for a penny on a dollar huge industrial assets and natural resources as well as put most of those countries in the debt (Latin-Americanization of xUSSR space). Harvard Mafia (with some support from London) did the bidding of western banks in xUSSR space. As more becomes known about the laundering of Russian money in Western banks, many in the United States will likely try to hide behind stories of faraway organized crime. But U.S. policy toward Russia has contributed to that country's sorry conditions--with the Harvard Institute for International Development's Russia project (HIID) playing a major role (Harvard's 'Best and Brightest' Aided Russia's Economic Ruin ). Professor Jeffery Sacks provided a bogus idea of "shock therapy" to achieve spectacular for Western banks result. As a result all xUSSR space became new Latin America with typical for Latin America problems like huge level of inequality, prostitution, child poverty, and prominent role of organized crime.

  7. Banks became dominant political force on western societies with no real counterbalance from other parts of the elite. The first president completely subservient to banking elite was elected in the USA in 1992. Bill Clinton regime lasted eight years and along with economic rape of xUSSR space in best colonial powers tradition, it removed what was left of financial regulations after the flurry of deregulation of the early 1980s. And they behaved as an occupying force not only in xUSSR space but in the USA as well. They deprived workers out of their jobs, they abolished the US pension system as it impede playing with population money and replaced in with widely inadequate 401K plans. They deprived municipalities out of their revenues and assets, while municipalities became just a den of bond traders looking for then next mark which give them the ability to put municipalities deeper in debt.

  8. Newly acquired political power of financial elite speeded the shift to bank "self-regulation" created huge shadow banking system which dwarf "official" under the smoke screen of "free-market" propaganda and PR from a coterie of corrupts academics (Chicago Scholl, Harvard Mafia, etc) . It engaged in pursuit of short term profits and self-enrichment of top brass which became new elite by-and-large displacing not only the old one, but also the newly minted IT elite of dot-com boom. Using newly acquired power financial elite remove all regulations that hamper their interests. Glass-Steagall was repealed at the last days of Clinton presidency, financial derivatives became unregulated.

  9. Deindustrialization kicked in. As financial speculation proved to be much more profitable to other activities deindustrialization kicked in the USA as the financial center of the world. Outsourcing which first was limited to manufacturing jobs now extent its reach on IT and decimate previously profitable sector and its export potential.

  10. Externalities can no longer be suppressed and economics became unstable. Growth of inequality, job insecurity, as well as frequency of financial crises were natural consequences of financialization of the economy. They create huge imbalances, like bubble in residential real estate which was blown with the help and full support of the USA government as a way to overcome dot-com crisis consequences.

  11. Debt crisis strikes. Growth of debt became unsustainable and produces the financial crisis of enormous proportions. By their reckless policies and greed financial sector caused huge financial crisis of 2008 and now they are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in fire sales at prices rigged by twenty-something largest banks, the most corrupt institutions the world has ever known.

  12. Devastating "local" wars became "new normal". Due to financial crisis, the overconsumption in western economies came under threat. Debt expansion which led to overconsumption within the western economies affected (or infected) by financialization. To sustain the current standard of living financial expansion became the necessity. It took the form of a competition for spheres of influence in the area of energy supplies, which we see in post USSR space, Iraq, Libya and elsewhere. And central banks play critical role in financing wars. After all Banks of England was created with this exact purpose.

I think by 2008 when the second major financial crisis hit the USA, the transformation on the USA economy into casino capitalism, which is essentially implementation of neoliberal doctrine (or more correctly the US brand of corporatism) was by-and-large complete.

In short we are living in a new politico-economic system in which financial capital won victory over both labor and industrial capital. We might not like what we got, but financial elite is now a new ruling class and this fact is difficult to dispute. As a result. instead of the robber barons of the early 20th century (some of whom actually created/consolidated new industries), we have the top executives from investment banks, insurers and mortgage industry who represent a new Rentier class, much like old aristocracy.

They are living off parasitic monopolization of access to any (physical, financial, intellectual, etc.) kind of property and gaining significant amount of profit without contribution to society (see Rentier capitalism which is a very fuzzy term for neoliberal model of capitalism).

Casino Capitalism as a result of stagnation of industrial manufacturing

Stagnation of industrial manufacturing droved up financial speculation as the method to compensate for falling rate on return on capital. This stagnation became prominent during Reagan administration (which started the major shift toward neoliberalism), although signs of it were present from early 60th.

For example Chicago which was a manufacturing center since 1969 lost approximately 400K manufacturing jobs which were replaced mainly by FIRE-related jobs, In 1995 over 22% of those employed by FIRE industries (66K people) were working in executive and managerial positions. Another 17% are in marketing, sales and processional specialty occupations (computer system analysts, PR specialists, writer and editors).

Those changes in the structure of employment had several consequences:

  1. The stagnation of the underlying economy meant that capitalists were increasingly dependent on the growth of finance to preserve and enlarge their money capital.
  2. The financial superstructure of the capitalist economy could not expand independently of its base -- underlying productive economy — hence the bursting of speculative bubbles became a recurrent and growing problem.
  3. Financialization could never overcome stagnation of industrial production. It is just an opium for rich, not a structural adjustment of the stagnation-prone economy. But like addition to narcotics does to human body it does tremendous damage to real economy.
  4. Rapid increase in inequality is necessary to sustain the appetites of the elite in the system with fixed size of the pie. Politico-economic conditions might became even more unfavorable for labor. Stagnation of industrial production mean shrinking pie, which necessitates redistribution of wealth in favor of a new, all-powerful financial Rentier class. This redistribution resulted in partial wipe-out of large swats of middle class. For the past three decades, America has steadily converted itself into a nation of haves (as Bush II quipped "This is an impressive crowd -- the haves and the have mores! Some people call you the elite -- I call you my base". ) and have-nots. The cost of a college education rises rapidly at a time when wages for skilled labor stagnate, so access to college became against discriminated in favor of upper class of the society. Repressive apparatus and ideological brainwashing are too strong to mount effective resistance.

The key to understanding of Casino Capitalism is that it was a series of government decisions (or rather non-decisions) that converted the state into neoliberal model. In other words casino capitalism has distinct "Government property" mark. It was the USA elite, which refused to act responsibly in the face of changing economic conditions resulting from its own actions, and instead chose to try to perpetuate, by whatever means it had at its disposal, the institutional advantages of dollar as a reserve currency which it had vis-à-vis its main economic rivals and grab as large part of the world economic pie as it can. And this power grab was supported first of all by the role of dollar as currency in which oil is traded.

There might be some geo-strategically motives as well as the US elite in late 80th perceived that competitiveness is slipping out of the USA and the danger of deindustrialization is real. Many accuse Reagan with the desire to ride dollar status as a world reserve currency (exorbitant privilege) until the horse is dead. That's what real cowboys do in Hollywood movies... But the collapse of the main rival, the USSR vindicated this strategy and give a strong short in the arm to financialization of the economy. Actually for the next ten years can be called a triumphal ascend of financialization in the USA.

Dominance of FIRE industries clustered up and in recent years reached in the USA quite dramatic proportions. The old Bolsheviks saying "When we say Lenin we mean the Party and when we say the Party we mean Lenin" now can be reworded: "Now it we say US banks, we mean the US government and vise versa if we say US government we mean US banks".

According to the Center for Responsive Politics, the FIRE sector was and is the biggest contributor to federal candidates in Washington. Companies cannot give directly, so they leave it to bundlers to solicit maximum contributions from employees and families. They might have been brought down to earth this year, but they’ve given like Gods: Goldman Sachs, $4.8 million; Citigroup, $3.7 million; J.P. Morgan Chase & Co., $3.6 million; Merrill Lynch, $2.3 million; Lehman Brothers, $2.1 million; Bank of America, $2.1 million. Some think the long-term effect of such contributions to individual candidates was clear in the roll-call votes for the bailout.

Take the controversial first House vote on bailout of major banks on Sept. 29, 2008. According to CRP, the "ayes" had received 53 percent more contributions from FIRE since 1989 than those who voted against the bill, which ultimately failed 228 to 205. The 140 House Democrats who voted for the bill got an average of $188,572 in this election cycle, while the 65 Republicans backing it got an average of $185,461 from FIRE—about 23 percent more than the bill’s opponents received. A tinkered bill was passed four days later, 263 to 171.

According to the article Fire Sale (The American Conservative) half of Obama’s top ten contributors, together giving him nearly $2.2 million, are FIREmen. The $13 million contributed by FIRE executives to Obama campaign is probably an undercount. Democratic committee leaders are also dependent of FIRE contributions. The list includes Sen. Dodd ( please look at Senator Dodd's top donors for 2007-8 on openSecrets.org ) and Sen. Chuck Schumer ($12 million from FIRE since 1989), Rep. Barney Frank ($2.5 million), and Rep. Charlie Rangel ($4 million, the top recipient in the House). All of them have been accused of taking truckloads of contributions while failing to act on the looming mortgage crisis. Dodd finally pushed mortgage reform last year but by then as his hometown paper, The Hartford Courant stated, "the damage was done."

Casino Capitalism and Financial Instability

At the same time rise of financial capital dramatically increased instability. An oversized financial sector produces instability due to multiple positive feedback loops. In this sense we can talk about Financial Sector Induced Systemic Instability of Economy. The whole society became "House of cards", "Giant Enron" and "extension of Las Vegas". Reckless management, greed and out-right stupidity in playing derivatives games was natural consequence of the oversized financial sector, not just a human folly. In a way it was dramatic manifestation of the oversized financial sector negative influence of the economy. And in 2008 it did brought out economy to the brink of destruction. Peak oil added to suffocating effect on the economy of reckless gambling (and related debts) of financial sector producing the economic calamity that rivals Great Depression. Also, like Socialism, Casino Capitalism demands too much of its elite. And in reality, the financial elite much like Bolsheviks elite, is having its own interests above the interests of the society.

As Kevin Phillips noted "In the United States, political correctness, religious fundamentalism, and other inhibitions sometimes dumb down national debate". And the same statement is true for financial elite that became the center of power under the Casino Capitalism. Due to avalanche of greed the society became one giant Enron as money that are made from value addition in the form of manufacturing fade in significance to the volume of the money that is made from shuffling money around. In other was the Wall Street's locked USA in the situation from which there is no easy exit.

Self-reinforcing ‘positive’ feedback loops prevalent in Casino Capitalism trigger an accelerating creation of various debt instruments, interest of which at some point overwhelm the system carrying capacity. Ability to lend against good collateral is quickly exhausted. At some point apparently there is no good collateral against which lending freely was possible, even at high rates. This means that each new stage of financial innovation involves scam and fraud, on increasing scale. In other words Ponzi economy of "saving and loans" is replaced with Madoff economy.

Whether you shift the resulting huge private debt to public to increase confidence or not, the net result is of this development of events is a crisis and a huge debt that society needs to take. Actually the debt bubble in 2008 can only be compared to the debt bubble of 1933. The liquidation of Bear Sterns and Lehman was only a start of consolidation of finances and we need to find something that replace financial sector dominance in the national economy. It would be nice is some technological breakthrough happened which would lift the country out of this deep hole.

See Financial Sector Induced Systemic Instability of Economy for more details.

Neoliberalism as the Ideology of Casino Capitalism

Like Bolshevism was marked by deification of teaching of Marx and Lenin, converting them into pseudo-religious doctrine, the Casino Capitalism has its own deified ideological doctrine. It is the ideology of Neoliberalism. The latter as an ideology and an agenda seeks to topple democratic capitalism and replace it with a de facto unaccountable autocratic government which serves as channel of a wealth transfer from the public to a rentier elite. In a way it is a spectacular example of a successful (in a very negative sense) pseudo-religious doctrine.

Addiction of the societies to disastrous politico-economical doctrines are similar to addictions to alcohol and drugs in individuals. It is not easy to recover and it takes a long, long time and a lot of misery. As dissolution of the USSR aptly demonstrated not all societies can make it. In this case the USSR elite (nomenklatura) simply shed the old ideology as it understood that it will be better off adopting ideology of neoliberal capitalism; so it was revolution from above.  this abrupt switch created chaos in economics (which was applauded by Washington which under Clinton administration adopted the stance the Carnage needs to be destroyed and facilitated the process), criminal privatization of major industries, and pushed into object poverty the 99% of population of those countries. For some period under "drunk Yeltsyn" Russia sees to exist as an independent country and became a vassal of Washington.

This also means that "society at large" did not had effective brakes to the assent of financial plutocracy (aka financial oligarchy).  I would add to this the computer revolution and internet that made many financial transaction qualitatively different and often dramatically cheaper that in previous history. Computers also enabled creation of new financial players like mutual funds (which created a shadow banking system with their bond funds) , hedge funds, exchange-traded funds (ETFs), as well as high-frequency trading and derivatives.

From the historical view Reaganomics also can be considered to be the US flavor of Lysenkoism with economics instead of genetics as a target. Here is how Reaganomics is defined in Wikipedia

Reaganomics (a portmanteau of "Reagan" and "economics") refers to the economic policies promoted by United States President Ronald Reagan. The four pillars of Reagan's economic policy were to:[1]
  1. reduce the growth of government spending,
  2. reduce marginal tax rates on income from labor and capital,
  3. reduce government regulation of the economy,
  4. control the money supply to reduce inflation.

In attempting to cut back on domestic spending while lowering taxes, Reagan's approach was a departure from his immediate predecessors.

Reagan became president during a period of high inflation and unemployment (commonly referred to as stagflation), which had largely abated by the time he left office.

Please not that the Number 1 idea ("reduce government spending") was essentially a scam, a smoke screen designed to attract Rednecks as a powerful voting block. In a way this was a trick similar to one played by Bolsheviks in Russia with its "worker and peasants rule" smokescreen which covered brutal dictatorship. In reality all administrations which preached Reagonomics (including Clinton's) expanded the role of state and government spending. The number two was applied by-and-large to top 1%. The number three means deregulation in the interests of financial oligarchy and dismantling all social program that hamper profit of the latter (including privatizing of Social Security). The number fours is a scam, in the same sense as number one. As soon as financial institutions get in trouble, money are printed as if there is no tomorrow.

While the essence of Reagonomics was financial deregulation, the other important element was restoring the Gilded Age level of power of financial oligarchy which influence was diminished by FDR reforms. In this sense we can say that Reagan revolution was essentially a counter-revolution: an attempt to reverse the New Deal restrictions on financial sector and restore its dominance in the society.

Like it was the case in Bolshevism the ideology was developed and forced upon the society by a very small group of players. The key ideas of Casino Capitalism were formulated and implemented by Reagan administration with some contribution by Nixon (the role of rednecks aka "moral majority", "silent majority" as an important part of republican political base, which can be attracted to detrimental to its economic position policies by the smoke screen of false "moral" promises).

It was supported by each president after Reagan (paradoxically with Clinton having the most accomplished record -- he was the best Republican President in a very perverted way). Like in case of Lysenkoism opponents were purged and economic departments of the country were captured by principless careerists ready to tow the party line for personal enrichment. Like in case of Bolshevism, many of those special breed of careerists rotated from Republican Party into Fed and other government structures. A classic example of compulsive careerists that were used by finance sector to promote its interests was Alan Greenspan.

One of the key ideas of Reaganomics was the rejection of the sound approach that there should be a balance between too much government regulation and too little and that government role is important for smooth functioning of the market. In this area Reagan and its followers can be called Anarchists and their idea of 'free market" is a misnomer that masks the idea of "anarchic market" (corporate welfare to be exact -- as it was implemented). Emergence of corporate welfare Queens such as GS, Citi, AIG, are quite natural consequence of Reaganomics.

Reaganomics was a the US flavor of Lysenkoism with economics instead of generics as a target... It can and should be called Economic Lysenkoism.

The most interesting part of Reaganomics was that the power of this ideology made it possible to conditioned "working class" and middle class to act against their own economic interests. It helped to ensure the stagnation of wages during the whole 25 years period, which is close to what Soviets managed to achieve with working class of the USSR, but with much more resentment. This makes it in many ways very similar to Bolshevism as a whole, not just Lysenkoism (extremes meet or in less flattering way: "history repeats, first as a tragedy, then as farce).

Along with the term Reaganimics which implicitly stresses the deregulation, the other close term "market fundamentalism" is often used. Here is how market fundamentalism is defined (Longview Institute):

Market Fundamentalism is the exaggerated faith that when markets are left to operate on their own, they can solve all economic and social problems. Market Fundamentalism has dominated public policy debates in the United States since the 1980's, serving to justify huge Federal tax cuts, dramatic reductions in government regulatory activity, and continued efforts to downsize the government’s civilian programs.

Some level of government coercion (explicit or implicit ) is necessary for proper labeling of any pseudo-scientific theory with the term Lysenkoism. This holds true for both Market Fundamentalism (after all Reagan revolution was "revolution from above" by financial oligarchy and for financial oligarchy and hired guns from academia just do what powers that be expected) and, especially, Supply side economic. The political genius of those ideas is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?

In this sense the Republican Party played the role very similar to the Communist Party of the USSR.

For example supply side economics was too bizarre and would never survive without explicit government support. This notion is supported by many influential observers. For example, in the following comment for Krugman article (Was the Great Depression a monetary phenomenon):

Market fundamentalism (neoclassical counter-revolution — to be more academic) was more of a political construct than based on sound economic theory. However, it would take a while before its toxic legacy is purged from the economics departments. Indeed, in some universities this might never happen.

Extreme deregulation and extreme regulation (Brezhnev socialism) logically meets and both represent a variant of extremely corrupt society that cannot be sustained for long (using bayonets as in the case of USSR or using reserve currency and increasing leverage as is the case of the USA). In both cases the societies were economically and ideologically bankrupt at the end.

Actually, elements of market fundamentalism looks more like religious doctrine than political philosophy — and that bonds its even closer to Lysenkoism. In both cases critics were silenced with the help of the state. It is interesting to note that Reaganomics was wiped into frenzy after the dissolution of the USSR, the country which gave birth to the term of Lysenkoism. In a way the last act of the USSR was to stick a knife in the back of the USA. As a side note I would like to stress that contrary to critics the USSR was more of a neo-feudal society with elements of slavery under Stalin. Gulag population were essentially state slaves; paradoxically a somewhat similar status is typical for illegal immigrants in industrialized countries. From this point of view this category of "state slaves" is generally more numerous that gulag inmates. Prison population also can be counted along those lines.

It look like either implicitly or explicitly Reagan's bet was on restoration of gilded Age with its dominance of financial oligarchy, an attempt to convert the USA into new Switzerland on the "exorbitant privilege" of dollar status as the global fiat currency.

Casino Capitalism is characterized by political dominance of FIRE industries (finance, insurance, and real estate) and diminished role of other and first of all manufacturing industries. It was also accompanied by the drastic growth of inequality (New Gilded Age). Its defining feature is "the triumph of the trader in assets over the long-term producer" in Martin Wolf's words.

Voodoo economic theories

Attempts of theoretical justification of Economic Lysenkoism fall into several major categories:

Those can be called pillars, cornerstones of Economic Lysenkoism. Each of the deserves as separate article (see links above).

Historically especially important was Chicago school of market fundamentalism promoted pseudo-scientific theories of Milton Freedman (Chicago School) as well as supply side economics.

Collapse of the USSR as ideological justification of Casino Capitalism superiority

The huge boost of Casino Capitalism was given by the collapse of the USSR in 1991. That gave a second life to Reagan era. Collapse of the USSR was used as a vindication of market fundamentalism. After it New Deal regulations were systematically destroyed. Dumped down variants of Nietzsche philosophy like bastardatized variant promoted by Russian emigrant became fashionable with an individual "creative" entrepreneur as a new Übermensch, which stands above morality.

"The word Übermensch [designates] a type of supreme achievement, as opposed to 'modern' men, 'good' men, Christians, and other nihilists ... When I whispered into the ears of some people that they were better off looking for a Cesare Borgia than a Parsifal, they did not believe their ears."[9] Safranski argues that the combination of ruthless warrior pride and artistic brilliance that defined the Italian Renaissance embodied the sense of the Übermensch for Nietzsche. According to Safranski, Nietzsche intended the ultra-aristocratic figure of the Übermensch to serve as a Machiavellian bogeyman of the modern Western middle class and its pseudo-Christian egalitarian value system.[10]

Brainwashing

The instability and volatility of active markets can devalue the economic base of real lives, or in more macro-scenarios can lead to the collapse of national and regional economies. In a very interesting and grotesque way it also incorporates the key element of Brezhnev Socialism in everyday life: huge manipulation of reality by mass media to the extend that Pravda and the USSR First TV Channel look pretty objective in comparison with Fox news and Fox controlled newspapers. Complete poisoning of public discourse and relying on the most ignorant part of the population as the political base (pretty much reminiscent of how Bolsheviks played "Working Class Dictatorship" anti-intellectualism card; it can be called "Rednecks Dictatorship").

The "heroes" or transformation of US economy to casino capitalism model

While transformation to casino capitalism was an objective development, there were specific individuals who were instrumental in killing New Deal regulations. We would single out the following twelve figures:

  1. Ronald Reagan (although first steps toward casino capitalism were made under Carter).
  2. Milton Friedman
  3. Alan Greenspan
  4. Phil Gramm
  5. Robert Rubin
  6. Larry Summers
  7. Helicopter Ben
  8. Bush II
  9. Bill Clinton
  10. Sandy Weill
  11. Jeffrey Sachs with his "shock therapy" racket
  12. Martin Feldstein

There is no question that Reagan and most of his followers (Greenspan, Rubin, Phil Gramm, etc) were rabid radicals blinded by ideology. But they were radicals of quite different color then FDR with disastrous consequences for society. Here again the analogy with Bolsheviks looms strong. In a way, they can be called financial terrorists inflicting huge damage on the nation and I wonder if RICO can be use to prosecute at least some of them.

In Bailout Nation (Chapter 19) Barry Ritholtz tried to rank major players that led country into the current abyss:

1. Federal Reserve Chairman Alan Greenspan
2. The Federal Reserve (in its role of setting monetary policy)
3. Senator Phil Gramm
4-6. Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings (rating agencies)
7. The Securities and Exchange Commission (SEC)
8-9. Mortgage originators and lending banks
10. Congress
11. The Federal Reserve again (in its role as bank regulator)
12. Borrowers and home buyers
13-17. The five biggest Wall Street firms (Bear Stearns, Lehman Brothers, Merrill Lynch,Morgan Stanley, and Goldman Sachs) and their CEOs
18. President George W. Bush
19. President Bill Clinton
20. President Ronald Reagan
21-22. Treasury Secretary Henry Paulson
23-24. Treasury Secretaries Robert Rubin and Lawrence Summers
25. FOMC Chief Ben Bernanke
26. Mortgage brokers
27. Appraisers (the dishonest ones)
28. Collateralized debt obligation (CDO) managers (who produced the junk)
29. Institutional investors (pensions, insurance firms, banks, etc.) for
buying the junk
30-31. Office of the Comptroller of the Currency (OCC); Office of Thrift
Supervision (OTS)
32. State regulatory agencies
33. Structured investment vehicles (SIVs)/hedge funds for buying the junk

Early Researchers of Casino Capitalism

Hyman Minsky

Hyman Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt and the fact the financial system represents a positive feedback loop that tend to destabilize the system, creating ossilations in the form of boom and bust cycles. . He identified 3 types of borrowers that contribute to the accumulation of insolvent debt: Hedge Borrowers; Speculative Borrowers; and Ponzi Borrowers. That corresponds to three stages of Casino Capitalism of increasing fragility:

Growth of debt and increased levarate at some point create predocition of the crash. The stage of business cycle at which those preconditions are met is called "Minsky moment":

A Minsky moment is the point in a credit cycle or business cycle when investors are starting to have cash flow problems due to spiraling debt they have incurred in order to finance speculative or Ponzy investments.

At this point, a major selloff begins due to the fact that no counterparty can be found to bid at the high asking prices previously quoted, leading to a sudden and precipitous collapse in market clearing asset prices and a sharp drop in market liquidity.[1]

After the collapse of the USSR there were a lot of chest thumping of the status of America as a hyper power (American exceptionalism) and the "end of history" where neoliberalism that displaced Brazhvev socialism (and wiped out the socialist camp) was supposed to reign supreme forever.

But this triumphal march of neoliberalism was short lived. The system proved to be self-destructive due to strong positive feedback look from the unregulated financial sector.

But in 2000 the first moment to pay the piper arrives. It was postponed by Iraq war and housing bubble, but reappeared in much more menacing form in 2008. In 2009 the USA experienced a classic Minsky moment with high unemployment rate and economy suppressed by (and taken hostage) by Ponzi finance institutions which threaten the very survival of the capitalist system and way of life. Huge injection freom the state halped to save the economy from disintration, but the price was very high. And  after 2009 the US economy entered the period prologed stagnation, called  the perios of "secular stagnation".

In events preceding 2008 the shift from speculative toward Ponzi finance was speed up by increased corruption of major players.  The drive to redistribute wealth up destroyed any remnants of the rule of the law in the USA. It became a neo-feudal two casts society with "Masters of the Universe" as the upper cast (top 1% ) and "despicables" (lower 80%) as the lower cast. With some comprador strata of professional in between (top 20% or so), who generally support the upper cast.

Loweer cast experienced deterioration of the standard of living, loss of well paying jobs to outsourcing and offshoring and in 2016 revolted electing Trump, who defeated Hillary Clinton, who became a real symbol of the corruption of neoliberal system. 

"As Minsky observed, capitalism is inherently unstable. As each crisis is successfully contained, it encourages greater speculation and risk taking in borrowing and lending. Financial innovation makes it easier to finance various schemes. To a large extent, borrowers and lenders operate on the basis of trial and error. If a behavior is rewarded, it will be repeated. Thus stable periods naturally lead to optimism, to booms, and to increasing fragility.

A financial crisis can lead to asset price deflation and repudiation of debt. A debt deflation, once started, is very difficult to stop. It may not end until balance sheets are largely purged of bad debts, at great loss in financial wealth to the creditors as well as the economy at large."

For more information see

Susan Strange

For Strange the speed at which computerized financial markets work combined with their much larger size and  near-universal pervasiveness is an important qualitative change, that changes the social system into what he called "casino capitalism".  She actually popularized the term "Casino Capitalism" with her important book Casino Capitalism  published in 1997.

One of the side effects of this change is that volatility extends globally. Approximately $1.5 trillion dollars are invested daily as foreign transactions. It is estimated that 98% of these transactions are speculative. In comparison with this casino Las Vegas looks like a aborigine village in comparison with Manhattan.

Notes:

Susan Strange (June 9, 1923 - October 25, 1998) was a British academic who was influential in the field of international political economy. Her most important publications include

For a quarter of a century, Susan Strange was the most influential figure in British international studies. She held a number of key academic posts in Britain, Italy and Japan. From 1978 to 1988, she was Montague Burton Professor of International Relations at the London School of Economics and Political Science (LSE), the first woman to hold this chair and a professorial position in international relations at the LSE. She was a major figure in the professional associations of both Britain and the US: she was an instrumental founding member and first Treasurer of the British International Studies Association (BISA) [1] and the first female President of the International Studies Association (ISA) in 1995.

It was predominantly as a creative scholar and a forceful personality that she exercised her influence. She was almost single-handedly responsible for creating ‘international political economy’ and turning it into one of the two or three central fields within international studies in Britain, and she defended her creation with such robustness, and made such strong claims on its behalf, that her influence was felt—albeit not always welcomed—in most other areas of the discipline. She was one of the earliest and most influential campaigners for the closer integration of the study of international politics and international economics in the English language scholarship.

In the later period of her career, alongside the financial analyses offered in Casino Capitalism (the analysis in which she felt was vindicated by the South-East Asian financial crisis) and Mad Money, Strange's contributions to the field include her characterisation of the four different areas (production, security, finance and knowledge) through which power might be exercised in International Relations. This understanding of what she termed "structural power", formed the basis of her argument against the theory of American Hegemonic Decline in the early eighties.

Her analysis particularly in States and Markets focused on what she called the ‘market-authority nexus’, the see-saw of power between the market and political authority. The overall argument of her work suggested that the global market had gained significant power relative to states since the 1970s.

This led her to dub the Westphalia system Westfailure. She argued that a ‘dangerous gap’ was emerging between territorially-bound nation states and weak or partial intergovernmental cooperation in which markets had a free hand which could be constructive or destructive.

John K. Galbraith

Among important early critiques of casino capitalism was John K. Galbraith. He promoted a pretty novel idea that the major economic function of Governments is to strengthen countervailing powers to achieve some kind of balance between capital and labor.

While unions are far from being perfect and tend to slide into corruption due to "iron law of oligarchy" when thier management stop representing interests of thwe worksers and start to reprreesnt interest of thier own narry strate of fat cats,  there were the only sizable countewailing power that made the New Seal possible.

His prediction proved to be wrong as government actually represent the capitalist class and is not that interested in creating this balance, which was convincingly demonstrated by Thatcher and Reagan.  Both Britain and the USA start sliding into a new form of corporations, called neoliberalism which actually does not allocate any space for uniot at the negotiation table and strive for their complete elimination and "atomization" of work force, when each invididual is up to himself to find employment and group solidarity is suppressed by instilling neoliberal ideology in schools and universitites as well as via MSM (which in the USA surprisingly never were allowed to use the work neoliberlaism, as if it represents some secret Masonic cult)

And it does not look like there is any renewed support of unions right  (including important right to organize) at the  post subprime/derivatives/shadow_banking crisis stage of neoliberalism, when neoliberal ideology became sufficiently discredited to allow rise of populist politicians such as Trump. 

Still John K. Galbraith critique of primitive market fundamentalism of Milton Freedman and the whole pseudoscience of neoclassical economics which like Marxist political economy is one of there pillars of neoliberalism (along with Randism as philosophy and Neoconservatism or "Trotskyism for the rich" in politics), still has its value today. As Joseph Stiglitz noted (CSMonitor, Dec 28, 2006):

...In many ways, Galbraith was a more critical observer of economic reality.

Driven to understand market realities

Galbraith's vivid depictions of the good, bad, and ugly of American capitalism remain a sorely needed reminder that all is not quite as perfect as the perfect market models – with their perfect competition, perfect information, and perfectly rational consumers – upon which so much of Friedman's analysis depended.

Galbraith, who cut his teeth studying agricultural economics, strove to understand the world as it was, with all the problems of unemployment and market power that simplistic models of competitive markets ignore. In those models, unemployment didn't exist. Galbraith knew that made them fatally flawed

... ... ...

In his early research, Galbraith attempted to explain what had brought on the Great Crash of 1929 – including the role of the stock market's speculative greed fed by (what would today be called) irrational exuberance. Friedman ignored speculation and the failure of the labor market as he focused on the failures of the Federal Reserve. To Friedman, government was the problem, not the solution.

What Galbraith understood, and what later researchers (including this author) have proved, is that Adam Smith's "invisible hand" – the notion that the individual pursuit of maximum profit guides capitalist markets to efficiency – is so invisible because, quite often, it's just not there. Unfettered markets often produce too much of some things, such as pollution, and too little of other things, such as basic research. As Bruce Greenwald and I have shown, whenever information is imperfect – that is, always – markets are inefficient; hence the need for government action.

Galbraith reminded us that what made the economy work so well was not an invisible hand but countervailing powers. He had the misfortune of articulating these ideas before the mathematical models of game theory were sufficiently developed to give them expression. The good news is that today, more attention is being devoted to developing models of these bargaining relationships, and to complex, dynamic models of economic fluctuations in which speculation may play a central role.

Government's role

While Friedman never really appreciated the limitations of the market, he was a forceful critic of government. Yet history shows that in every successful country, the government had played an important role. Yes, governments sometimes fail, but unfettered markets are a certain prescription for failure. Galbraith made this case better than most.

Galbraith knew, too, that people aren't just rational economic actors, but consumers, contending with advertising, political persuasion, and social pressures. It was because of his close touch with reality that he had such influence on economic policymaking, especially during the Kennedy-Johnson years.

Galbraith's penetrating insights into the nature of capitalism – as it is lived, not as it is theorized in simplistic models – has enhanced our understanding of the market economy. He has left an intellectual legacy for generations to come. And he has left a gap in our intellectual life: Who will stand up against the economics establishment to articulate an economic vision that is both in touch with reality and comprehensible to ordinary citizens?

Galbraith was vindicated in his belief that the only economics possible is political economics and that government is always an agent of dominant class. As such it always pursue poklitics favorable to this class, just making marginal efforts to prevent the open revolt of lower classes.

In 2008 neoliberal economist such as Krugman and (to a lesse extent) Stiglitz both have eaten humble pie, because according to neoclassical economics the crises should not have happened. Both should now reread Galbraith's The Great Crash: 1929 (see also extracts).  Krugman also need to shred his previous writings with this mathiness execises of using differential equations to justify the dominance of financial oligarchy,  and eat them with borsch ;-)

BTW it is interesting that in 1996 neoliberal stooge Paul Krugman criticized limitations of Galbright vision in the following way:

To be both a liberal and a good economist you must have a certain sense of the tragic--that is, you must understand that not all goals can be attained, that life is a matter of painful tradeoffs. You must want to help the poor, but understand that welfare can encourage dependency. You must want to protect those who lose their jobs, but admit that generous unemployment benefits can raise the long-term rate of unemployment. You must be willing to tax the affluent to help those in need, but accept that too high a rate of taxation can discourage investment and innovation.

To the free-market conservative, these are all arguments for government to do nothing, to accept whatever level of poverty and insecurity the market happens to produce. A serious liberal does not reply to such conservatives by denying that there are any trade-offs at all; he insists, rather, that some trade-offs are worth making, that helping the poor and protecting the unlucky may have costs but will ultimately make for a better society.

The revelation one gets from reading John Kenneth Galbraith's The Good Society is that Galbraith--who is one of the world's most celebrated intellectuals, and whom one would expect to have a deeper appreciation of the complexity of the human condition than a mere technical economist would -- lacks this tragic sense. Galbraith's vision of the economy is one without shadows, in which what is good for social justice always turns out to have no unfavorable side effects. If this vision is typical of liberal intellectuals, the ineffectuality of the tribe is not an accident: It stems from a deep-seated unwillingness to face up to uncomfortable reality.

Similar limited understanding of Galbright is demonstrated in London Times (cited from comment to Economist's View blog) :

Some motifs of Galbraith’s work have entered popular consciousness. Galbraith wrote of private opulence amid public squalor, illustrating it with a memorable metaphor of a family that travels by extravagant private car to picnic by a polluted river.

Yet while arguing for increased public expenditure on welfare, Galbraith gave scant attention to the limits of that approach. His writings perpetuate a debilitating weakness of modern liberalism: a reluctance to acknowledge that resources are scarce.

In Galbraith’s scheme, said Herbert Stein, the former chairman of the Council of Economic Advisers: “The American people were only asked whether they wanted cleaner air and water . . . The answers to such questions seemed obvious — but they were not the right questions.”

Soros contribution to the understanding of growth of financial sector as source of new, global economic instability

This idea of "casino capitalism" as a driver of financial instability was developed further in the book The Crisis of Global Capitalism by prominent financial speculator and staunch neoliberal George Soros (1998), who after Minsky highlights the potential for disequilibrium in the financial system, and the inability of non-market sectors to regulate markets.

the latter is a prominant feature of Casino Capitalism, which can be defined as economic system were financial barons run amok.

Although the insights of the Soros critique of global capitalism are scarcely new, they were articulated with such candor and accuracy that the book made a significant impact. The following is a sampling of Soros' insights.
  1. Unregulated financial markets are inherently unstable. There is nothing new in this statement. It is just a repetition of what Keynes and Minsky said much more eloquently. But Soros made in important observation about the source of constant disequilibrium of markets under neoliberalism, the observation which permitted for him to achieve spectacular success as a financial speculator.  Soros observes that, contrary to conventional economic theory, financial markets are not driven toward a relatively stable and rational price by the objective value assessment of such things as the soundness of a company's management, products, or record of profitability. Rather they are constantly driven away from equilibrium by the momentum of self-fulfilling expectations -- a rising stock price attracts buyers who further raise the price-to the point of collapse. The recent massive inflation and subsequent collapse in the price of the shares of unprofitable dot-com companies illustrates Soros' point.

    Bank lending also contributes to the instability, because the price of real and financial assets is set in part by their collateral value. The higher their market price rises the larger the loans banks are willing to make to their buyers to bid up prices. When the bubble bursts, the value of the assets plummets below the amount of the money borrowed against them. This forces banks to call their loans and cut back on the lending, which depresses asset prices and dries up the money supply. The economy then tanks-until credit worthiness is restored and a new boom phase begins.

  2. Financial markets are amoral by definition. Following Napoleon Bonaparte ("Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. "), Soros stressed that there is no meaningful place for individual moral behavior of financial oligarchy in the context of financial markets, because such behavior has no consequences for them other than to reduce the financial return of  a more  ethical actor.  In other words modern finance is breeding ground for ruthless sociopath, which we really observed during 2008.

    When I bought shares in Lockheed and Northrop after the managements were indicted for bribery, I helped sustain the price of their stocks. When I sold sterling short in 1992, the Bank of England was on the other side of my transactions, and I was in effect taking money out of the pockets of British taxpayers. But if I had tried to take social consequences into account, it would have thrown off my risk-reward calculation, and my profits would have been reduced.

    Soros argues that if he had not bought Lockheed and Northrop, then somebody else would have, and Britain would have devalued sterling no matter what he did. "Bringing my social conscience into the decision-making process would make no difference in the real world; but it may adversely affect my own results." One can challenge the Soros claim that such behavior is amoral rather than immoral, but his basic argument is accurate. His understanding that it is futile to look to individual morality as the solution to the excesses of financial markets is all too accurate.

  3. Corporate employees are duty-bound to serve only corporate financial interests. As such financial institution are closely related to organized crime and top layers of managers are essentially institualized criminals. Soros writes:

    Publicly owned companies are single-purpose organizations-their purpose is to make money. The tougher the competition, the less they can afford to deviate. Those in charge may be well-intentioned and upright citizens, but their room for maneuver is strictly circumscribed by the position they occupy.

     They are duty-bound to uphold the interests of the company. If they think that cigarettes are unhealthy or that fostering civil war to obtain mining concessions is unconscionable, they ought to quit their jobs. Their place will be taken by people who are willing to carry on.

    Though not specifically mentioned by Soros, this is why corporations were in the past (at least partially) excluded from the political processes (although it was never complete and it is well known fact that Crusades and Siege of Constantinople (1204) were financed by Genoese bankers upset by lack of access to the Byzantium markets). But at least formally other parts of the society can define their goals and the rules of the marketplace and suppress excessive appetities of banker, if nessesary by brute force.  Financial oligarchy is incapable of distinguishing between private corporate interests and broader public interests. And that situation became even worse with the the global dominance of corporatism in the form of neoliberalism.

  4. Financial markets are oblivious to externalities and are infected by "short-termism". Specifically the fact that a strategy or policy produces economic returns in the short-term does not mean the long-term results will be beneficial. The focus of financial markets is on short-term individual gain to the exclusion of both social and longer-term consequences. The fact that particular policies and strategies are effective in producing short-term financial returns does not mean they are more generally beneficial or desirable. Soros offers the example that running up a budget or trade deficit "feels good while it lasts, but there can be hell to pay later."

  5. The relationship between the center and the periphery of the capitalist system is profoundly unequal. The powerful countries at the center of the capitalist system are both wealthier and more stable than countries at the periphery because control of the financial system and ownership of productive assets allows them to shape economic and political affairs to their benefit.

    "Foreign ownership of capital deprives peripheral countries of autonomy and often hinders the development of democratic institutions. The international flow of capital is subject to catastrophic interruptions."

    In times of uncertainty financial capital tends to return to its country of origin, thus depriving countries at the periphery of the financial liquidity necessary to the function of monetized economies. "The center's most important feature is that it controls its own economic policies and holds in its hands the economic destinies of periphery countries."

  6. In the capitalist system greed (aka "monetary values") tend to displace social values in sectors where this is destructive to important public interests. Soros writes:

    Monetary values [under neoliberalism] have usurped the role of intrinsic values, and markets have come to dominate spheres of existence where they do not properly belong.

    Law and medicine, politics, education, science, the arts, even personal relations-achievements or qualities that ought to be valued for their own sake are converted into monetary terms; they are judged by the money they fetch rather than their intrinsic value."

    Because financial "capital is free to go where most rewarded, countries vie to attract and retain capital, and if they are to succeed they must give precedence to the requirements of international capital over other social objectives.

Ha-Joon Chang

One notable later researcher of casino capitalism, especially "free market" fundamentalism propaganda Cambridge University researcher Ha-Joon Chang. In 2011 he published a fascinating book 23 Things They Don't Tell You About Capitalism. Here is a Youtube lecture at LSE (23 Things They Don't Tell You About Capitalism  ). We will reproduce  two Amazon reviews that shed some light at the key ideas of the book:

William Podmore

Ha-Joon Chang, Reader in the Political Economy of Development at Cambridge University, has written a fascinating book on capitalism's failings. He also wrote the brilliant Bad Samaritans. Martin Wolf of the Financial Times says he is `probably the world's most effective critic of globalization'.

Chang takes on the free-marketers' dogmas and proposes ideas like

He notes that the USA does not have the world's highest living standard. Norway, Luxemburg, Switzerland, Denmark, Iceland, Ireland, Sweden and the USA, in that order, had the highest incomes per head. On income per hours worked, the USA comes eighth, after Luxemburg, Norway, France, Ireland, Belgium, Austria and the Netherlands. Japan, Switzerland, Singapore, Finland and Sweden have the highest industrial output per person.

Free-market politicians, economists and media have pushed policies of de-regulation and pursuit of short-term profits, causing less growth, more inequality, more job insecurity and more frequent crises. Britain's growth rate in income per person per year was 2.4 per cent in the 1960s-70s and 1.7 per cent 1990-2009. Rich countries grew by 3 per cent in the 1960s-70s and 1.4 per cent 1980-2009. Developing countries grew by 3 per cent in the 1960s-70s and 2.6 per cent 1980-2009. Latin America grew by 3.1 per cent in the 1960s-70s and 1.1 per cent 1980-2009, and Sub-Saharan Africa by 1.6 per cent in the 1960s-70s and 0.2 per cent 1990-2009. The world economy grew by 3.2 per cent in the 1960s-70s and 1.4 per cent 1990-2009.

So, across the world, countries did far better before Thatcher and Reagan's `free-market revolution'. Making the rich richer made the rest of us poorer, cutting economies' growth rates, and investment as a share of national output, in all the G7 countries.

Chang shows how free trade is not the way to grow and points out that the USA was the world's most protectionist country during its phase of ascendancy, from the 1830s to the 1940s, and that Britain was one of world's the most protectionist countries during its rise, from the 1720s to the 1850s.

He shows how immigration controls keep First World wages up; they determine wages more than any other factor. Weakening those controls, as the EU demands, lowers wages.

He challenges the conventional wisdom that we must cut spending to cut the deficit. Instead, we need controls capital, on mergers and acquisitions, and on financial products. We need the welfare state, industrial policy, and huge investment in industry, infrastructure, worker training and R&D.

As Chang points out, "Even though financial investments can drive growth for a while, such growth cannot be sustained, as those investments have to be ultimately backed up by viable long-term investments in real sector activities, as so vividly shown by the 2008 financial crisis."

This book is a commonsense, evidence-based approach to economic life, which we should urge all our friends and colleagues to read.

Loyd E. Eskildson

The 2008 'Great Recession' demands re-examination of prevailing economic thought - the dominant paradigm (post 1970's conservative free-market capitalism) not only failed to predict the crisis, but also said it couldn't occur in today's free markets, thanks to Adam Smith's 'invisible hand.' Ha-Joon Chang provides that re-examination in his "23 Things They Don't Tell You About Capitalism." Turns out that the reason Adam Smith's hand was not visible is that it wasn't there. Chang, economics professor at the University of Cambridge, is no enemy of capitalism, though he contends its current conservative version should be made better. Conventional wisdom tells us that left alone, markets produce the most efficient and just outcomes - 'efficient' because businesses and individuals know best how to utilize their resources, and 'just' because they are rewarded according to their productivity. Following this advice, countries have deregulated businesses, reduced taxes and welfare, and adopted free trade. The results, per Chang, has been the opposite of what was promised - slower growth and rising inequality, often masked by rising credit expansion and increased working hours. Alternatively, developing Asian countries that grew fast did so following a different version of capitalism, though to be fair China's version to-date has also produced much greater inequality. The following summarizes some of Chang's points:

  1. "There is no such thing as a free market" - we already have hygiene standards in restaurants, ban child labor, pollution, narcotics, bribery, and dangerous workplaces, require licenses for professions such as doctors, lawyers, and brokers, and limit immigration. In 2008, the U.S. used at least $700 billion of taxpayers' money to buy up toxic assets, justified by President Bush on the grounds that it was a necessary state intervention consistent with free-market capitalism. Chang's conclusion - free-marketers contending that a certain regulation should not be introduced because it would restrict market freedom are simply expressing political opinions, not economic facts or laws.
  2. "Companies should not be run in the interest of their owners." Shareholders are the most mobile of corporate stakeholders, often holding ownership for but a fraction of a second (high-frequency trading represents 70% of today's trading). Shareholders prefer corporate strategies that maximize short-term profits and dividends, usually at the cost of long-term investments. (This often also includes added leverage and risk, and reliance on socializing risk via 'too big to fail' status, and relying on 'the Greenspan put.') Chang adds that corporate limited liability, while a boon to capital accumulation and technological progress, when combined with professional managers instead of entrepreneurs owning a large chunk (e.g.. Ford, Edison, Carnegie) and public shares with smaller voting rights (typically limited to 10%), allows professional managers to maximize their own prestige via sales growth and prestige projects instead of maximizing profits. Another negative long-term outcome driven by shareholders is increased share buybacks (less than 5% of profits until the early 1980s, 90% in 2007, and 280% in 2008) - one economist estimates that had GM not spent $20.4 billion on buybacks between 1986 and 2002 it could have prevented its 2009 bankruptcy. Short-term stockholder perspectives have also brought large-scale layoffs from off-shoring. Governments of other countries encourage longer-term thinking by holding large shares in key enterprises (China Mobile, Renault, Volkswagen), providing greater worker representation (Germany's supervisory boards), and cross-shareholding among friendly companies (Japan's Toyota and its suppliers).
  3. "Free-market policies rarely make poor countries rich." With a few exceptions, all of today's rich countries, including Britain and the U.S., reached that status through protectionism, subsidies, and other policies that they and their IMF, WTO, and World Bank now advise developing nations not to adopt. Free-market economists usually respond that the U.S. succeeded despite, not because of, protectionism. The problem with that explanation is the number of other nations paralleling the early growth strategy of the U.S. and Britain (Austria, Finland, France, Germany, Japan, Korea, Singapore, Sweden, Taiwan), and the fact that apparent exceptions (Hong Kong, Switzerland, The Netherlands) did so by ignoring foreign patents (a free-market 'no-no'). Chang believes the 'official historians' of capitalism have been very successful re-writing its history, akin to someone trying to 'kick away the ladder' with which they had climbed to the top. He also points out that developing nations that stick to their Ricardian 'comparative advantage,' per the conservatives prescription, condemn themselves to their economic status quo.
  4. "We do not live in a post-industrial age." Most of the fall in manufacturing's share of total output is not due to a fall in the quantity of manufactured goods, but due to the fall in their prices relative to those for services, caused by their faster productivity growth. A small part of deindustrialization is due to outsourcing of some 'manufacturing' activities that used to be provided in-house - e.g.. catering and cleaning. Those advising the newly developing nations to skip manufacturing and go directly to providing services forget that many services mainly serve manufacturing firms (finance, R&D, design), and that since services are harder to export, such an approach will create balance-of-payment problems. (Chang's preceding points directly contradict David Ricardo's law of comparative advantage - a fundamental free market precept. Chang's example of how Korea built Pohang Steel into a strong economic producer, despite lacking experienced managers and natural resources, is another.)
  5. "The U.S. does not have the highest living standard in the world." True, the average U.S. citizen has greater command over goods and services than his counterpart in almost any other country, but this is due to higher immigration, poorer employment conditions, and working longer hours for many vs. their foreign counterparts. The U.S. also has poorer health indicators and worse crime statistics. We do have the world's second highest income per capita - Luxemburg's higher, but measured in terms of purchasing power parity (PPP) the U.S. ranks eighth. (The U.S. doesn't have the fastest growing economy either - China is predicted to pass the U.S. in PPP this coming decade.) Chang's point here is that we should stop assuming the U.S. provides the best economic model. (This is already occurring - the World Bank's chief economist, Justin Lin, comes from China.)
  6. "Governments can pick winners." Chang cites examples of how the Korean government built world-class producers of steel (POSCO), shipbuilding (Hyundai), and electronics (LG), despite lacking raw materials or experience for those sectors. True, major government failures have occurred - Europe's Concorde, Indonesia's aircraft industry, Korea's promotion of aluminum smelting, and Japan's effort to have Nissan take over Honda; industry, however, has also failed - e.g.. the AOL-Time Warner merger, and the Daimler-Chrysler merger. Austria, China, Finland, France, Japan, Norway, Singapore (in numerous other areas), and Taiwan have also done quite well with government-picked winners. Another problem is that business and national interests sometimes clash - e.g.. American firms' massive outsourcing has undermined the national interest of maintaining full employment. (However, greater unbiased U.S. government involvement would be difficult due to the 10,000+ corporate lobbyists and billions in corporate campaign donations - $500 million alone from big oil in 2009-10.) Also interesting to Chang is how conservative free marketing bankers in the U.S. lined up for mammoth low-cost loans from the Federal Reserve at the beginning of the Great Recession. Government planning allows minimizing excess capacity, maximizing learning-curve economies and economies of scale and scope; operational performance is enhanced by also forcing government-owned or supported firms into international competition. Government intervention (loans, tariffs, subsidies, prohibiting exports of needed raw materials, building infrastructure) are necessary for emerging economies to move into more sophisticated sectors.
  7. "Making rich people richer doesn't make the rest of us richer." 'Trickle-down' economics is based on the belief that the poor maximize current consumption, while the rich, left to themselves, mostly invest. However, the years 1950-1973 saw the highest-ever growth rates in the U.S., Canada, Australia, and New Zealand, despite increased taxation of the rich. Before the 'Golden Age,' per capita income grew at 1-1.5%/year; during the Golden Age it grew at 2-3% in the U.S. Since then, tax cuts for the rich and financial deregulation have allowed greater paychecks for top managers and financiers, and between 1979 and 2006 the top 0.1% increased their share of national income from 3.5% to 11.6%. The result - investment as a ratio of national output has fallen in all rich economies and the pace at which the total economic pie grew decreased.
  8. "U.S. managers are over-priced." First, relative to their predecessors (about 10X those in the 1960s; now 300-400X the average worker), despite the latter having run companies more successfully, in relative terms. Second, compared to counterparts in other rich countries - up to 20X. (Third, compared to counterparts in developing nations - e.g.. JPMorgan Chase, world's 4th largest bank, paid its CEO $19.6 million in 2008, vs. the CEO of the Industrial and Commercial Bank of China, the world's largest, being paid $234,700. Read more ›

Willem Buiter and the idea of long term stagnation

Willem Buiter in his FT article After the Crisis Macro Imbalance, Credibility and Reserve-Currency suggested that after financial crisis of 2008 there might be very long a painful deleveraging period aka secular stagnation.  He was right.

In short each financial crisis make recovery longer and longer. That's why the US will most likely face a long period of stagnation: the digestion of huge excessive debt of the private sector might well take a decade:

Since the excess of debt is relative to income and GDP, the lower the rate of growth, the longer the required period of digestion. This explains for the paradox of trying to stimulate consumption when the economy faces a monumental crisis provoked exactly by excessive debt and excessive consumption. A cartoon line best captured the spirit of it: "country addicted to speculative bubbles desperately searches a new bubble to invest in. "

... ... ...

The roots of the crisis are major international macroeconomic imbalances. Despite the fact that the excesses of the financial system were instrumental to lead these imbalances further than otherwise possible, insufficient regulation should not be viewed as the main factor behind the crisis. The expenditure of central countries, spinned by all sort of financial innovations created by a globalized financial system, was the engine of world growth. When debt became clearly excessive in central countries and the debt-financed expenditure cycle came to an end, the ensuing crisis paralyzed the world economy. With the lesson of 1929 well assimilated, American monetary policy became aggressively expansionist. The Fed inundated the economy with money and credit, in the attempt to avoid a deep depression. Even if successful, the economies of the US and the other central countries, given the burden of excessive debt, are likely to remain stagnant under the threat of deflation for the coming years. The assumption of troubled assets by the public sector, in order to avoid the collapse of the financial system, might succeed, but at the cost of a major increase in public debt. Fiscal policy is not efficient to restart the economy when the private sector remains paralyzed by excessive debt. Even if a coordinated effort to increase public expenditure is successful, the central economies will remain stagnant for as long as the excessive indebtedness of the private sector persists. The period of digestion of excess debt will be longer than the usual recessive cycle. Since imports represent a drain in the effort to reanimate domestic demand through public expenditure, while exports, on the contrary, contribute to the recovery of internal demand, the temptation to central economies to also adopt a protectionist stance will be strong.

Willem Buiter also defined ‘cognitive regulatory capture’ which existed during the Greenspan years and when the Fed were just an arm of Wall Street.

This regulatory capture has resulted in an excess sensitivity of the Fed to financial market and financial sector concerns and fears and in an overestimation of the strength of the link between financial market turmoil and financial sector deleveraging and capital losses on the one hand, and the stability and prosperity of the wider economy on the other hand. The paper gives five examples of recent behavior by the Fed that are most readily rationalized with the assumption of regulatory capture. The abstract of the paper follows next. The latest version of the entire enchilada can be found here. Future revisions will also be found there.

Joseph Stiglitz on 5 steps to Casino Capitalism

Stiglitz is very unene and early Striglist was actually defender of neoliberalism (aka casino capitalism). Later he became a critic. In his 2008 Vanity Fair article Capitalist Fools Stiglitz identifies five key steps in transformation of American capitalism to Casino Capitalism (moments of failure as he called them):

No. 1: Reagan Fires Fed Chairman Volcker and Replaces Him With Greenspan in 1987:

Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.

snip

If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you’ll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.

Greenspan presided over not one but two financial bubbles.

  1. Congress repealed the Glass-Steagall Act in 1999 under Bill Clinton (Glass-Steagall was a depression-era reform that separated commercial and investment banks)

I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest—toward short-term self-interest, at any rate, rather than Tocqueville’s "self interest rightly understood."

Stiglitz also refers to a 2004 decision by the SEC "to allow big investment banks to increase their debt-to-capital ratio (from 12:1 to 30:1, or higher) so that they could buy more mortgage-backed securities, inflating the housing bubble in the process."

Once more, it was deregulation run amuck, and few even noticed.

  1. The Bush tax cuts, both on income and capital gains

The Bush administration was providing an open invitation to excessive borrowing and lending—not that American consumers needed any more encouragement.

  1. Faking the Numbers

Here he refers to bad accounting, the failure to address problems with stock options, and the incentive structures of ratings agencies like Moodys that led them to give high ratings to toxic assets.

  1. Paulson and the Flawed Bailout

Valuable time was wasted as Paulson pushed his own plan, "cash for trash," buying up the bad assets and putting the risk onto American taxpayers. When he finally abandoned it, providing banks with money they needed, he did it in a way that not only cheated America’s taxpayers but failed to ensure that the banks would use the money to re-start lending. He even allowed the banks to pour out money to their shareholders as taxpayers were pouring money into the banks.

Stiglitz concludes:

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pushed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

The flawed economic philosophy brought by Reagan, and embraced by so many, brought us to this day. Ideas have consequences, especially when we stop empirically testing them. Republican economics have created great pain to America and harmed our national interest.

The flaw that Greenspan found was always there: self-regulation does not work. As Stiglitz said:

As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest — toward short-term self-interest

Yes, for all their claims to science, the premise conflicts with tendencies of people.

This is the real legacy of Ronald Reagan and Alan Greenspan:

The whole scheme was kick-started under Ronald Reagan. Between his tax cuts for the rich and the Greenspan Commission’s orchestrated Social Security heist, working Americans lost out in a generational wealth transfer shift now exceeding $1 trillion annually from 90 million working class households to for-profit corporations and the richest 1% of the population. It created an unprecedented wealth disparity that continues to grow, shames the nation and is destroying the bedrock middle class without which democracy can’t survive.

Greenspan helped orchestrate it with economist Ravi Batra calling his economics "Greenomics" in his 2005 book "Greenspan’s Fraud." It "turns out to be Greedomics" advocating anti-trust laws, regulations and social services be ended so "nothing....interfere(s) with business greed and the pursuit of profits."

 Conclusions: From Animal Farm To Animal House

Instead of conclusion I will reproduce the post from Sudden Debt (March 17, 2008):

In Orwell's Animal Farm all animals are equal - except that some are more equal than others. All in the spirit of law, order and the proper functioning of society, of course. Fittingly, the animals that have chosen this role by themselves and for themselves, are the pigs.

Cut to US financial markets today. After years of swinish behavior more reminiscent of Animal House than anything else, the pigs are threatening to destroy the entire farm. As if it wasn't enough that they devoured all the "free market" food available and inundated the world with their excreta, they now wish to be put on the public trough. Truly, some businessmen believe they are more equal than others.

But do not blame the pigs; they are expected to act as swine nature dictates. The fault lies entirely with the farmers, those authorities entrusted by the people to oversee the farm because they supposedly knew better. While the pigs were rampaging and tearing the place apart, they were assuring us all that farms function best when animals are free to do as they please, guided solely by invisible hooves. No regulation, no oversight, no common sense. Oh yes, and pigs fly..

So what is to be done now? Two things:

In other words, the focus from now on should be on adding value by means of work and savings (capital formation), instead of inflating assets and borrowing.

Furthermore, we should realize that in a world already inhabited by close to 7 billion people and beset by resource depletion and environmental degradation, defending growth for growth's sake is a losing proposition. The wheels are already wobbling on the Permagrowth model; pumping harder on the accelerator is not going to make it go any faster and will likely result in a fatal crash.

Debt, and finance in general, should be left to re-size downwards to a level that better reflects the carrying capacity of our world. The Fed's current actions are shortsighted and "conservative" in the worst interpretation of the words: they are designed to artificially maintain debt at levels that myopically projects growth as far as the eye can see.

What level of resizing may be necessary? I hope not as much as at Bear Stearns, which got itself bought by Morgan at buzz-saw prices: $2 per share represents a 98% discount from its $84 book value. What scares me, though, is the statement by Morgan's CFO, who said the price reflected the risk the firm was taking, even though he was comfortable with the valuation of assets in Bear's books. It "...gives us the flexibility and margin of error that's appropriate given the speed at which the transaction came together", he said.

If it takes a 98% discount and the explicit guarantee of the Fed for a large portion of assets to buy one of the largest investment banks in the world, where should all other financial firms be trading at? ....Hello? Anyone? Is that a great big silence I hear, or the sound of credit imploding into a vacuum?


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[Aug 22, 2019] The Two-Faced Elizabeth Warren by Matt Purple

Yes, is way Warren is a connuation of "Trump tradition" in the USA politics: reling of hate toward the neoliberalism establishment to get the most votes.
Aug 22, 2019 | www.theamericanconservative.com

...in a piece Warren wrote for Medium in which she (rightly) warned of "a precarious economy that is built on debt -- both household debt and corporate debt." Notably missing was the national debt, which amounts to around $182,900 per taxpayer and which Warren's policies would only steepen. How exactly is a government flailing in red ink supposed to make the country solvent? And what of the fact that some of the economy's woes -- student loan debt, for example -- were themselves at least in part caused by federal interventions?

Those objections aside, it would be wrong to dismiss Warren as just another statist liberal. She's deeper than that, first of all, having written extensively about economics, including her book The Two-Income Trap . But more importantly, she's put her finger on something very important in the American electorate. It's the same force that helped propel Donald Trump to victory in 2016: a seething anger against goliath institutions that seem to prize profit and power over the greater welfare. This is firmly in the tradition of most American populisms, which have worried less about the size of government and more about gilded influence rendering it inert.

Warren thus has a real claim to the Bernie Sanders wing of the Democratic Party, which is deeply skeptical of corporate power. She could even try to out-populist Donald Trump. She's already released more detailed policy proposals than any of her Democratic rivals, everything from sledgehammering the rich with new taxes to canceling student debt to wielding antitrust against big tech companies to subsidizing childcare. All this is chum to at least some of the Democratic base (old-school sorts rather than the SJWs obsessed with race and gender), and as a result, she's surged to either second or third place in the primary, depending on what poll you check. She's even elicited praise from some conservative intellectuals, who view her as an economic nationalist friendly to the family against the blackhearted forces of big.

America has been in a populist mood since the crash of 2008, yet in every presidential election since then, there's been at least one distinctly plutocratic candidate in the race. In 2008, it was perennial Washingtonian John McCain. In 2012, it was former Bain Capital magnate Mitt Romney. (The stupidest explanation for why Romney lost was always that tea party activists dragged him down. Romney lost because he sounded like an imposter and looked like the guy who fired your brother from that firm back in 1982.) And in 2016, it was, of course, Hillary Clinton, whose candidacy is what happens when you feed a stock portfolio and a government security clearance into a concentrate machine.

If Elizabeth Warren wins the Democratic nomination next year, it will be the first time since Bear Stearns exploded that both parties' candidates seem to reflect back the national temperament. It will also pose a test for Warren herself. On one hand, her economic policies, bad though they might be, stand a real chance of attracting voters, given their digestibility and focus on relieving high costs of living. On the other hand -- this is where Fauxcahontas comes back in -- a white woman claiming Indian status in order to teach at Harvard Law is pretty much everything Americans hate about politically correct identity politics.

The question, then, is which image of Warren will stick: one is a balm to the country's economic anxiety; the other is unacceptable to its cultural grievances. Right now we can only speculate, though it seems certain that Trump will try to define her as the latter while much of the media will intervene in the other direction.


john a day ago

Her entire political theory seems to have been that giant corporations should not be allowed to utterly screw the common man. That is about it, and for this she is called a commie radical. I like her, little afraid of foreign policy
=marco01= 18 hours ago • edited
Warren was born into a middle class family, Trump wasn't. Trump is playing the populist, he has no idea what average Americans deal with.

Warren was raised on the family lore of having native ancestry and she does. Not much but she does and that's all it takes to start family lore. Her Native American ancestor was from around the time of the American Revolution and it's easy to see how that legend could be passed down. There is no proof she ever benefited from this, she was just proud to have Native American ancestry.

Funny how the RW is so outraged by this one thing. Maybe it would be better for her to con people, lie and make stuff up nonstop like Trump. It seems a never ending blizzard of lies and falsehoods renders one immune.

polistra24 18 hours ago
Let's remember that our only effective populist, in fact our only effective president, was a rich patrician. FDR's roots went back to the Mayflower, yet he was able to break the influence of the banks and give us 50 years of bubble-free prosperity. The only thing that counts is GETTING THE WORK DONE.
Nelson 12 hours ago
Her economics aren't bad. She herself claims to be a capitalist, she just wants our massive economy to also benefit regular folks instead of just the elites. And whatever economic program she proposes is most likely further left than she thinks necessary because that's a better negotiating position to start from. Remember every proposal has to go through both branches of Congress to become law, and they will absolutely try to make everything more pro-corporate because that is their donor base.
cka2nd 11 hours ago
"And what of the fact that some of the economy's woes -- student loan debt, for example -- were themselves at least in part caused by federal
interventions?"

Mr. Purple might want to remind himself that 75% of federal student financial aid in the 1970's was in the form of grants, not loans, and that it was only after the intervention of conservative Republican congressman Gerald "Jerry" Solomon and the Reagan Administration that the mix of federal student financial aid was changed to be 75% loans and only 25% grants. I believe the Congressman used to rail against free riding college students, which is all well and good until one finds that the "free hand of the market" becomes warped by so many people being in so much debt, and all of them being too small to save.

Democrats might want to ask Joe Biden about this, considering his support for legislation that made it harder to discharge student debt in bankruptcy proceedings. They might also ask Senator Warren about this subject.

Absolute Fictions 11 hours ago
Warren believed her family story. Trump, on the other hand, knew that his family was not Swedish, but knowingly continued the lie for decades, including in "The Art of Deal " - claimin his grandfather came "from Sweden as a child" (rather than dodging the draft in Bavaria who made his fortune in red light districts of the Yukon territory before trying to return to the Reich).

Warren made no money from her heritage claims, but the $413 million (in today's dollars) given to Trump by his daddy was made by lying to Holocaust survivors in Brooklyn and Queens who, understandably, did not want to rent property from a German.

Vanity Fair asked him in 1990 if he were not in fact of German origin. "Actually, it was very difficult," Donald replied. "My father was not German; my father's parents were German Swedish, and really sort of all over Europe and I was even thinking in the second edition of putting more emphasis on other places because I was getting so many letters from Sweden: Would I come over and speak to Parliament? Would I come meet with the president?"

JeffK from PA 10 hours ago
This column was pretty much as I expected. It started out by rehashing all of the Fox News talking points about Warren, without debunking those that were without merit.

After that it touched on Morning Joe's take on her, just to make it 'fair and balanced'.

Then it acknowledged, briefly, that she has been correct in many areas. No comment on how the CFPB recovered hundreds of millions of $$ from corporations that abused their power or broke the law.

Then it mis-characterized the impact of her policies "sledgehammering the rich", "economic policies, bad though they might be".

Dismiss Warren all you want. She could very well be the nominee, or the VP. She would eviscerate Trump in a debate. Her knowledge of issues, facts and policies would show Trump to be what he is. A narcissistic, idiotic, in-over-his-head clueless and dangerous buffoon. I anticipate Trump would fall back on his favorite tropes. Pocahontas, socialist, communist, and MAGA.

My opinion is that the average American is getting really tired of Trump's shtick. The country is looking for somebody with real solutions to real problems. This reality tv star act is getting pretty old....

Kent 10 hours ago
Good article. Especially enjoyed this turn of phrase:

"And in 2016, it was, of course, Hillary Clinton, whose candidacy is what happens when you feed a stock portfolio and a government security clearance into a concentrate machine."

Really enjoyable.

I don't think anyone is going to care about the pocahontas thing. This election will be squarely about Trump. I think Warren is by far the best candidate the dems can bring out if they want to beat him. A Warren/Buttigieg or a Warren/Tulsi ticket would likely be a winner.

Bernie's a little too far to the left for Joe Lunchbucket, Joe Biden is a crooked Hillary wannabe, Kamala Harris is unlikeable, and the rest won't rise out of the dust.

Heaventree 9 hours ago • edited
The whole business about her supposed Native American ancestry and whatever claims she made will make no difference to anybody other than folks like Matt Purple who wouldn't support her under any circumstances anyway.
Consider that the best-known advocate of the "Pocahontas" epithet is of course Donald Trump, whose entire reputation is built on a foundation of bulls--t and flim-flam.
Lynnwig 9 hours ago
"Thus in retrospect was it the "Obama" in "Obamacare" that was the primary driver of opposition from conservatives, only for their concerns over federal intrusion to mostly disappear once Trump was at the controls."

No. What disappeared was the Individual Mandate. THAT was what rankled me...the government can do whatever stupid thing they want as long as they don't try to force me into it.

[Aug 22, 2019] Shale Bleeds Cash Despite Best Quarter In Years

Aug 22, 2019 | www.nakedcapitalism.com

by Nick Cunningham

... ... ...

In a study of 29 fracking-focused oil and gas companies by the Sightline Institute and the Institute for Energy Economics and Financial Analysis (IEEFA), only 11 companies posted positive free cash flow. Even then, the figures were paltry. Collectively, the group only reported $26 million in free cash flow for the second quarter, "far too modest to make a significant dent in the more than $100 billion in long-term debt owed by these companies, let alone reward equity investors who have been waiting for a decade for robust and sustainable results," the report said.

... ... ...


PlutoniumKun , August 21, 2019 at 7:09 am

I think a key point about a future shale bust is that it will leave very little in long term assets. In other busts, someone comes along to cherrypick the assets with potential profitability – its the early investors who get burnt. But if shale operators aren't even breaking even on cashflow excluding early borrowings, then its likely that any attempt to consolidate and shrink the industry to make it profitable would fail in the absence of a significant price rise. Since a typical fracked well for tight oil or gas has about 18 months production, this means that constant capital inputs are essential, an investor can't just get a free ride for a few years on past investments.

What this means in reality is that a year or more after the inevitable bust, there will be a massive drop off in production. Ironically of course this will lead to exactly the sort of price rise the industry is craving – but by then it may be too late. It could of course also be highly disruptive to the world fuel market if the US suddenly finds itself needing a few million barrels a day of SA crude.

Harry , August 21, 2019 at 7:43 am

I tend to think of shale as an out of the money option, that the industry keeps on early exercising to generate the appearance of a going concern, despite it losing money. As absurd as this model of events sounds, it would predict that in a consolidation, these assets would be picked up by oil majors, who would "mothball" till higher prices. Of course the longer these bozos are allowed to pump at capital depleting oil prices, the less there is for the eventual buyer in bankruptcy.

Frank Little , August 21, 2019 at 8:58 am

There's an interesting story in Reuters today about how towns in the Permian are starting to make long-term bets on shale production there, in the form of investing in education and infrastructure. It seems like the entrance of oil majors sent a signal to people there that the bust hasn't come yet and apparently won't come for a little while. After reading the coverage of fracking on NC and Bethany McLean's book Saudi America this seems like a bad idea, as the financial problems of fracking stem from physical limitations of the technology. It doesn't seem like a big oil company would be able to solve this problem, besides maybe having deeper pockets and greater ability to ride out low prices, but that still doesn't make fracking profitable, just less unprofitable. Here's the link:

Texas shale towns grapple with growth as oil-bust fears fade

ewmayer , August 21, 2019 at 4:01 pm

Yes, I fwded that link to Yves & Lambert earlier today – the key thing to me is that the oil majors don't make such long-term investments lightly. From the story:

Some of the smaller producers that pioneered shale drilling in the Permian, such as Concho Resources (CXO.N), Laredo Petroleum (LPI.N) and Whiting Petroleum (WLL.N), are downshifting as West Texas oil prices have lost 16% and natural gas has tumbled 36% over the past year.

But the world's biggest oil majors are increasingly taking control of the Texas shale business, and their drilling plans – sometimes sketched out in decades rather than years – are envisioned to withstand the usual price drops.

The Permian Strategic Partnership, a group of 20 energy companies operating in the area, promises to spend $100 million to promote training, education, health care, housing and roads. The partnership chipped in $16.5 million for the charter school initiative, which will open its first campus in August 2020 and plans to offer public education to 10,000 students over time.

Nat , August 21, 2019 at 4:18 pm

The only thing in all this that is baffling me is that Wall st. just keeps giving loans to and buying bonds for these companies to the tunes of 10s of billions of dollars. Everyone on Wall St can't all be willfully in denial and completely blind to the fact that these were bad investments from the beginning and that continuing to give them money is just throwing good money after bad. Everyone makes a bad investment from time to time, but the solution isn't to just burn money indefinitely to turn it into a zombie corporation when there are no signs it will ever be profitable – indeed from what I have read fracking and shale's best ROI is right after the well is turned on, after that it only gets worse so these bad investments are only gangrening and rotting faster and faster. Yet still, ever more more money from Wall st., the same people who chide any and all public services for being unprofitable and engendering unprofitable subsidized behavior.

So if they can't all be that stupid, the only other explanation is that at least some of them are just plain evil. In this case that would entail them working on "greater fool theory" where they are planing something like the old sub-prime mortgage CDOs. Something like: 1. package all this festering financial garbage they created into illegible little financial products; 2. pay-off the rating's agency to give this repackaged garbage AAA rating; 3. sell to sovereign wealth, retirement, and pension funds; 4. take out credit-default swaps and other bets against the garbage they have sold off because they know it is going to imploade; 5. run like hell; 6. blame poor people for destroying the economy while begging for a government bailout as a result of fallout from destroying the world again.

JPerry , August 21, 2019 at 5:42 pm

The Shale companies believe they can refinance at lower rates and put time on their side. Unfortunately for them there is a divergence between the oil price and oil stocks. Links
https://www.wsj.com/articles/energy-stocks-diverge-from-oil-prices-11561489513
https://www.koyfin.com/research/2019/04/23/thoughts-about-the-divergence-between-oil-prices-and-energy-stocks/
Plus with oil stocks being valued lower by the market, and more natural gas & renewables coming online, and likely a worsening climate sooner rather than later, I believe we've seen top of market and it is clarified by the Saudis weak Aramco IPO interest.
https://www.aljazeera.com/ajimpact/dwindling-enthusiasm-fossil-fuels-hit-saudi-aramco-ipo-190820120106784.html

Pwelder , August 21, 2019 at 6:44 pm

That "study" is a pretty cheesy piece of work.

I'm somewhat familiar with Noble Energy, one of the 29 companies the authors claim to have examined.

They report Noble as having a cash flow deficit of $499 million, a full 20% of their grand total for all 29 companies. The grand total, of course, purports to demonstrate the weakness of the US shale plays.

The thing is, the cash flow from Noble's shale operations in Texas and Colorado is solidly positive. The company has a cash flow deficit because it is finishing up its share of the Leviathan project offshore Israel, which by this time next year will have that country energy independent while enabling a massive shift from coal to natural gas as their primary energy source. Not a bad thing, IMO.

The anti-hydrocarbon jihadists have some valid points, but they also generate a lot of propaganda that has no relation to reality. This "study" is an example of what happens when you know the answer you want before you do your investigation.

The risks and benefits of hydrocarbon energy is an important question. Unfortunately there's a lot of garbage produced on both sides.

drumlin woodchuckles , August 21, 2019 at 7:08 pm

Why should the Shale Business feel bad about bleeding money? It isn't their money. It is "other peoples' money". It is investors' money. As long as the Shale Business operators are retaining for their personal selves some of the "investor peoples' money" which they are bleeding from investors, why should they feel bad about it? Maybe their whole business model was based on bleeding other peoples' money till other people have no more money left to bleed. . . . and keeping a little bit of the money-bleed for themselves.

It's like with mosquitoes . . . . mosquitoes aren't "bleeding" blood. They are sucking blood. It is the animals they are sucking blood FROM . . . which are bleeding blood. If the animals eventually die from blood loss, the mosquitoes at least got some blood in the meantime.

And so it is with the shale frackers. They aren't bleeding money. They are sucking money. The investors they suck money from are the people who are bleeding money. And if the investors finally die from money loss, the shale frackers at least got some money in the meantime.

[Aug 22, 2019] BOLD ENDEAVORS Lessons from Polar and Space Exploration

Notable quotes:
"... A lesson of use at job interviews, schools and even in families. I am thankful for an added knowledge and understanding of the many problems associated with these Endeavors. This book should be a "must" to all young people. ..."
Oct 16, 1999 | Amazon.com
Britta Sahlgren, October 16, 1999
An intriguing story of human relationships in the extreme.

Bold Endeavors by Jack Stuster proved to be a real page-turner! Since childhood reading about adventures and explorers had been my favorite literature. In this book the persons behind these endeavors came to life.

They were of flesh and blood and you as a reader took part of their everyday life, their hardships and personal problems. A thrilling experience. A lesson in the importance of relationships not only among people in isolation

A lesson of use at job interviews, schools and even in families. I am thankful for an added knowledge and understanding of the many problems associated with these Endeavors. This book should be a "must" to all young people.

[Aug 22, 2019] https://getpocket.com/explore/item/the-purpose-of-life-is-not-happiness-it-s-usefulness

Aug 22, 2019 | getpocket.com

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Pocket Worthy

·

Stories to fuel your mind. The Purpose Of Life Is Not Happiness: It's Usefulness Happiness as an achievable goal is an illusion, but that doesn't mean happiness itself is not attainable. Darius Foroux

For the longest time, I believed that there's only one purpose of life: And that is to be happy.

Right? Why else go through all the pain and hardship? It's to achieve happiness in some way.

And I'm not the only person who believed that. In fact, if you look around you, most people are pursuing happiness in their lives.

That's why we collectively buy shit we don't need, go to bed with people we don't love, and try to work hard to get approval of people we don't like.

Why do we do these things? To be honest, I don't care what the exact reason is. I'm not a scientist. All I know is that it has something to do with history, culture, media, economy, psychology, politics, the information era, and you name it. The list is endless.

We are who are.

Let's just accept that. Most people love to analyze why people are not happy or don't live fulfilling lives. I don't necessarily care about the why .

I care more about how we can change.

Just a few short years ago, I did everything to chase happiness.

But at the end of the day, you're lying in your bed (alone or next to your spouse), and you think: "What's next in this endless pursuit of happiness?"

Well, I can tell you what's next: You, chasing something random that you believe makes you happy.

It's all a façade. A hoax. A story that's been made up.

Did Aristotle lie to us when he said:

"Happiness is the meaning and the purpose of life, the whole aim and end of human existence."

I think we have to look at that quote from a different angle. Because when you read it, you think that happiness is the main goal. And that's kind of what the quote says as well.

But here's the thing: How do you achieve happiness?

Happiness can't be a goal in itself. Therefore, it's not something that's achievable.

I believe that happiness is merely a byproduct of usefulness.

When I talk about this concept with friends, family, and colleagues, I always find it difficult to put this into words. But I'll give it a try here.

Most things we do in life are just activities and experiences.

Those things should make you happy, right? But they are not useful. You're not creating anything. You're just consuming or doing something. And that's great.

Don't get me wrong. I love to go on holiday, or go shopping sometimes. But to be honest, it's not what gives meaning to life.

What really makes me happy is when I'm useful. When I create something that others can use. Or even when I create something I can use.

For the longest time I foud it difficult to explain the concept of usefulness and happiness. But when I recently ran into a quote by Ralph Waldo Emerson, the dots connected.

Emerson says:

"The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well."

And I didn't get that before I became more conscious of what I'm doing with my life. And that always sounds heavy and all. But it's actually really simple.

It comes down to this: What are you DOING that's making a difference?

Did you do useful things in your lifetime? You don't have to change the world or anything. Just make it a little bit better than you were born.

If you don't know how, here are some ideas.

That's just some stuff I like to do. You can make up your own useful activities.

You see? It's not anything big. But when you do little useful things every day, it adds up to a life that is well lived. A life that mattered.

The last thing I want is to be on my deathbed and realize there's zero evidence that I ever existed.

Recently I read Not Fade Away by Laurence Shames and Peter Barton. It's about Peter Barton, the founder of Liberty Media, who shares his thoughts about dying from cancer.

It's a very powerful book and it will definitely bring tears to your eyes. In the book, he writes about how he lived his life and how he found his calling. He also went to business school, and this is what he thought of his fellow MBA candidates:

"Bottom line: they were extremely bright people who would never really anything, would never add much to society, would leave no legacy behind. I found this terribly sad, in the way that wasted potential is always sad."

You can say that about all of us. And after he realized that in his thirties, he founded a company that turned him into a multi-millionaire.

Another person who always makes himself useful is Casey Neistat . I've been following him for a year and a half now, and every time I watch his YouTube show , he's doing something.

He also talks about how he always wants to do and create something. He even has a tattoo on his forearm that says "Do More."

Most people would say, "why would you work more?" And then they turn on Netflix and watch back to back episodes of Daredevil.

A different mindset.

Being useful is a mindset. And like with any mindset, it starts with a decision. One day I woke up and thought to myself: What am I doing for this world? The answer was nothing.

And that same day I started writing. For you it can be painting, creating a product, helping elderly, or anything you feel like doing.

Don't take it too seriously. Don't overthink it. Just DO something that's useful. Anything.

Darius Foroux writes about productivity, habits, decision making, and personal finance. His ideas and work have been featured in TIME, NBC, Fast Company, Inc., Observer, and many more publications. Join his free weekly newsletter.

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This article was originally published on October 3, 2016, by Darius Foroux, and is republished here with permission. Darius Foroux writes about productivity, habits, decision making, and personal finance.

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[Aug 22, 2019] My advice is to relocate someplace with moderate weather

Aug 22, 2019 | peakoilbarrel.com

TechGuy x Ignored says: 08/18/2019 at 11:49 am

"A reason to go long on NG? US consumption rate is mind-boggling. NG is now banned for new construction in some regions."

Should get interesting when NG prices start rising considering that Power companies have been shutting down lots of coal and nuclear plants & replacing then with NG plants. It would not surprise me to see power prices soaring to 35 to 50 cents per kwh in the US. I would imagine lots of people that use NG or Propane for heating also find it difficult to heat their homes in the winter.

My advice is to relocate someplace with moderate weather: Not too cold (heating) or not too hot (air conditioning) as energy prices rise. Either build new or retrofit your home to be extremely energy efficient. My guess is that probably 50% of US home are not going to be livable without affordable heating & cooling. During the bubble years lots of poor quality homes need cheap energy. Not sure if many of them could be retrofitted because of poor layouts & construction.

Also a good idea not to relocate near any major urban regions. I would imagine high unemployment, uncomfortable living conditions is going to make a lot of unhappy & desperate campers: ie lots of violence, riots, general despair.

GuyM x Ignored says: 08/18/2019 at 12:02 pm
Or, move to Texas. Unlimited NG and has its own energy grid.
Longtimber x Ignored says: 08/18/2019 at 1:07 pm
Unless you have 25,000 gal Buried Propane tank to last you a Lifetime, I'd consider lightly populated areas of the Ozarks, IMO Need to be above 1500 feet elevation and have ancient water. I've been buying remote land with and without grid access for decades. If anyone wants to share strategies email me at my handle at gmail. Texas Energy much too Fragile and Centralized. Solar 2.0 will allow abundant battery-optional energy. You can light a mansion with a handful of 18650's, so you really don't need much in that way of eChem Storage. Note that Li Batteries are on the Sept 1st Tariff List. So if you been thinking of a BattleBorn LFP (Lithium Phosphate) Battery for your RV or UPS, now may be the best time for a while.
islandboy x Ignored says: 08/19/2019 at 11:50 am
"It would not surprise me to see power prices soaring to 35 to 50 cents per kwh in the US."

Over what sort of time frame? Maybe for short periods in the short term but, prices like that would result in massive surges of capacity growth for wind and solar. LCOE for solar and wind are now under 2c per kWh in some locations and I suspect at some point in the next decade they will both have an LCOE of under a cent per kWh. 35 to 50 cents? Please!

TechGuy x Ignored says: 08/19/2019 at 12:41 pm
IslandBoy Wrote:
"Maybe for short periods in the short term but, prices like that would result in massive surges of capacity growth for wind and solar."

I doubt it. Electric prices in Germany are about 35 to 40 cents per kwh, and they have a lot of solar & wind which is backed by cheap Polish Coal fired power plants. Issue with both Solar & wind is intermittent generation. Every watt produced by solar & wind in the US is backed by NG fired plants. There is no massive storage system to back Solar & wind production. The only reason why Solar & Wind works is due to the very low cost of NG prices & the fast ramp up/ramp down of NG fired turbines which can change output in just a minute or two.

US power companies are borrowing billions to replace old coal fired & nuclear plants with new NG plants. That debt isn't going disappear even if NG prices go through the roof. The US also has an grid that is showing its age likely needing $300B to $500B in investment for updates and to replace worn out equipment and distribution lines over the next 25 years. We also have to pay a huge cost in decommission shutdown Nuclear power plants (currently shutting down between 2 & 4 Nuke plants per year).

The USA is dead broke with $23T in national debt, and about $70T in unfunded pensions & entitlements. Currently the only way the US economy can function is with ultra low interest rates so it can continue to borrow trillions to keep its doors open. Sooner or later the USA is going to run out road to kick the can, and my guess is that all comes apart in the 2020s.

The US lacks a skilled workforce for the electrical grid as there are few young workers in the industry. Most of the US power companies are in panic mode because their boomer workers are retiring & they cannot find replacements:

https://www.tdworld.com/safety-and-training/trends-report-power-companies-facing-labor-shortage-and-skills-gap

Plus NG is the #1 resource in the US for home heating and Domestic hot water. So even if somehow NG is completely eliminated (very improbable) from power generation it does nothing to solve heating needs.

islandboy x Ignored says: 08/20/2019 at 9:15 am
I can only respond by saying I think Watcher is on to something with regards to money. US Politicians are unlikely to let a lack of money get between their voters and the voters' energy needs. If money is what is needed, it will be borrowed or "quantitatively eased" or whatever (created out of thin air!). That applies to tight oil now and will probably apply to renewables any time they are seen as a viable substitute for FF. I follow developments in the solar PV, EV and battery space very closely. You might be surprised at some of the stuff that is coming down the pike!

[Aug 22, 2019] Banks and investors took away the punch bowl from shale oil, and second quarter losses reflect that.

Aug 22, 2019 | peakoilbarrel.com

TechGuy : 08/19/2019 at 9:40 am

Hugo,

The only production preventing Oil from peaking as far back as 2013-2014 was US Shale, which can only function by borrowing Billions from gullible investors that will never be paid back. If investors were not so gullible, US production would have peaked years ago. Global Peak Oil is controlled by cheap & easy credit. Take away the credit punch bowl and US Shale production collapses, and global production peaks. PO is no longer dependent of geology, but credit.

FWIW: I suspect Shale drillers are going to have a hard time finding more investors willing to part with their capital, especially when Oil prices are very low. That said its possible that the Federal gov't (via Fed) will step in and start buying billions of shale debt (via QE or some other financial bailout mechanism) so Shale drilling can continue on. It appears that the US is running into liquidity problems again as Bond markets are showing signs that they are freezing up again.

GuyM : 08/19/2019 at 10:00 am
Banks and investors took away the punch bowl, and second quarter losses reflect that. Third is going to be the same, and too late for any price increases to reflect anything but losses for this year. No positives going into 2020. Their best option is to find adoption. And being a bunch of spoiled brats, that's going to be somewhat difficult.
Hugo : 08/19/2019 at 12:22 pm
Tech

I agree that shale has been the biggest contributor to increase in global oil supply. However it has also distorted the entire industry.

If the shale companies had to make a profit each year, global supply would have been a less and prices much higher.

This in turn would have supported e&p investment around the world. The fall in investment has been due entirely to shale companies that have been allowed to run at a loss for so many years.

https://www.iea.org/oil2018/

A fall from $800 billion to $400 billion will have a detrimental knock on effect in the mid 2020s

https://www.iea.org/newsroom/news/2018/november/crunching-the-numbers-are-we-heading-for-an-oil-supply-shock.html

TechGuy : 08/19/2019 at 1:04 pm
I don't think we would see a massive rebound in E&P if US shale was eliminated. Shell, Exxon, BP and other started pulling back on Megaprojects back in 2012-2013, since it was doubtful that it would be economical. Basically megaprojects (deepwater & arctic) required $120 to $150 (in 2013 dollars) per bbl to be economically. I don't believe those prices would be sustainable as it would result in demand destruction as consumers would cut back on consumption. The fact that Oil majors were looking at Arctic and deepwater back in 2010-2013 indicates they are reaching the bottom of the barrel for production. There was a long term trend of declining exploration finds even when exploration budgets increased.

At this point any major rebound isn't going to make a difference, if a Oil major started on a new megaproject it would be between 5 and 7 years before new oil reaches the market, and very unlikely to offset declines from existing production (5% to 7% annual declines). We are already behind the curve on gains from any new projects to offset ongoing declines with out shale growth). Perhaps a some of the declines in existing fields could be offset some with higher oil prices. Still reaching to scrap the bottom by trying to extract trapped oil in fields in terminal decline. With all of the supergiants in terminal decline (with the exception of Kazakhstan), its going to be very difficult to expand production further.

Personally I am guessing that global production has already peaked or within the next 18 months if we are lucky). Its difficult to pinpoint an exact period since their are way to many variables to gage effectively. That said I cannot say my record for guessing peak production is any better than winning a lottery, but as the window narrows due to depletion and a shrinking supply of future projects the guessing gets a lot easier.

Hugo : 08/20/2019 at 1:31 am
Tech

Did the majors start cutting back because having knowledge of the geology of the shale plays they realised their potential?

https://www.eia.gov/todayinenergy/detail.php?id=38372

Shale had already taken off by then and predictions of possible productions were being made and importantly have come true.

The majors would have realised there would be too much oil in the short to medium term, so they sensibly postponed more expensive drilling.

How this mess with heavy indebted shale companies and years of under investment plays out I am not sure.
Probably a lower and sooner peak oil than would otherwise have been.

Dennis Coyne : 08/19/2019 at 6:32 pm
Hugo,

Not sure anyone has said US has peaked, the point is that US tight oil growth will slow and it is not apparent that any other nations are increasing output in 2019, so far the drop by OPEC/NOPEC has been greater than any US increase in 2019 and it is looking like 2019 output will be lower than 2018 if current trends continue. When we get to the point that oil prices rise to $80/b, I expect OPEC/NOPEC will increase output, but we do not know when that will be and it is certainly possible that US output might be falling at a faster rate than the rest of the World's rise in output so the net might be a plateau or decline.

Note also that my "medium URR" estimates might be too optimistic, if my "low URR scenarios" prove correct, the peak is likely to be earlier (2022/2023), and if there is a fast transition to EVs, more public transport, etc perhaps the peak in World C+C output could be earlier still. I doubt this will be the case, but in the past I doubted that World C+C output would exceed 80 Mb/d, I was wrong then and I may be wrong now.

Survivalist : 08/20/2019 at 10:00 am
Hugo, something peaked in 2011, so I'd say the peak oil gang is onto something worth listening to. Perhaps you disagree. The graph is a bit dated, but you get the point I'm sure.
I'd say calling peak oil to be in 2018/2019, vs to be within 2022 to 2026 time frame, is pretty much splitting hairs. Perhaps you're just smarter than everyone else here and don't tolerate such loose parameters?
How did you come to your prediction, riding on Dennis' coattails, or do you have any original ideas of your own to contribute?

... ... ...

GuyM : 08/19/2019 at 6:05 am
The assumptions make all the difference. And no one can accurately predict what will happen the rest of the day, much less tomorrow.

The key to the future, so far, is how the majority of independents will fare. Dennis sees prices improving so that many of them heal up, and production is restored to a norm. Ron sees them as totally messed up, which is more my take.

And I am also betting on the majors. They don't lay out hundreds of billions of dollars for downstream without a big plan in mind. And, that plan could not call for those investments to be totally useless in ten years. It wouldn't surprise me to see the skies over the shale areas filled with golden parachutes.

Ten years, or less, based on EOGs quarterly tell sheet. Do you opt for the golden parachute soon, or use your own just before the plane crashes?

[Aug 22, 2019] Attacks of Saudi infrastructure will continue: Houthi drone is mounted with a 30kg warhead and it is flown into the target, usually in a swarm attack.

Aug 22, 2019 | peakoilbarrel.com

Hightrekker

x Ignored says: 08/17/2019 at 11:16 am
Yemen rebel drone attack targets remote Saudi oil field

https://www.miamiherald.com/news/business/article234108062.html

Things are getting even more interesting.

Tom Wilson x Ignored says: 08/17/2019 at 11:49 pm
This attack was 750 miles from Houthi territory.
Round trip would be 1,500 miles.
A Predator has a published range of 1,150 miles.
My guess is they are infiltrating Saudi Arabia, attacking from much closer than 750 miles out and maybe sacrificing the drone. Sort of like the Jimmy Doolittle raid on Tokyo in WWII, for similar purpose. With a similar result. Message sent, message received.
Hightrekker x Ignored says: 08/18/2019 at 9:11 am
You know more than I do.
Sounds reasonable.
Survivalist x Ignored says: 08/18/2019 at 10:55 am
It's a one way trip. The drones used by houthis don't fire a missile and then fly home, they are the missile. The drone is mounted with a 30kg warhead and it is flown into the target, usually in a swarm attack.

https://www.defensenews.com/unmanned/2019/05/21/how-yemens-rebels-increasingly-deploy-drones/

https://en.m.wikipedia.org/wiki/HESA_Ababil

Hightrekker x Ignored says: 08/18/2019 at 11:01 am
Thats was my understanding also --

[Aug 22, 2019] Chaotic Unpredictable Iran Vows Oil Routes Won't Be Safe If It Can't Export

Aug 22, 2019 | www.zerohedge.com

The White House policy of taking Iranian oil exports to "zero" still has a long way to go, thanks in no small part to China , and also despite Pompeo touting this week that US sanctions have removed nearly 2.7 million barrels of Iranian oil from global markets.

US frustration was evident upon the release of the Adrian Darya 1, with Gibraltar resisting Washington pressures to hand over the Iranian vessel, given as its en route to Greece, American officials are now warning that they will sanction anyone who touches the tanker .

Seizing on Washington's frustration as part of its own "counter-pressure" campaign of recent weeks, Iran has again stated if it can't export its own oil, it will make waterways unsafe and "unpredictable" for anyone else to to so .

[Aug 22, 2019] Trump energy policy is sanctions, regime change and more regime change

Aug 22, 2019 | peakoilbarrel.com

Longtimber x Ignored says: 08/17/2019 at 8:35 am

It appears that the US (25% of global oil consumption/waste?) has but 3 choices. 1. Become Trading partners with Russia and Iran. 2. Get serious on Energy Transition execution. 3. War, Terror and more regime change 4. Deploy the Alan Parsons Project.
https://youtu.be/Ei_GZnrr1nw?t=23
What say You?
Rob H x Ignored says: 08/17/2019 at 8:51 am
Usually 1 and 3 are combined in the resource rich country aren't they? Then it goes wrong some way down the road when the new regime 'turn', and things get worse than before
Tom x Ignored says: 08/17/2019 at 11:26 am
3. seems to fit the history. I don't blame anyone not patient enough to scroll down to the bottom.

https://en.wikipedia.org/wiki/List_of_wars_involving_the_United_States

Watcher x Ignored says: 08/17/2019 at 11:03 am
Oh for God's sake.

Here you go, chew on this. The day there are the initial 2 mile long lines at gasoline stations, not just in the US but all over the world . . . that day we will still see announcements of record oil production globally.

This is species killing stuff. Wall Street popular saying . . . no one rings a bell at the top. Well, no one is going to give you any warning whatsoever that oil scarcity deaths start that month. You will know nothing of it. You will be told it is all from some temporary factor that will soon be fixed.

So if you see something now that looks like a warning sign, it's probably not legit.

Ron Patterson x Ignored says: 08/17/2019 at 6:58 pm
Perhaps. OPEC is producing at 2011 levels. The world is kept at bay from peak oil only by US shale production. And US shale production is on shaky legs, just trying to stay ahead of the red queen.

I just don't see this blind optimism that US shale will continue upward for the next 5 to 6 years.

I well remember when it was said that: "When Saudi Arabia peaks, the world peaks". That was just not correct. But now it is obvious that when the US of A peaks, the world peaks.

Ron Patterson x Ignored says: 08/17/2019 at 7:54 pm
Dennis, OPEC produced more oil per day in 2005 than they are producing today. OPEC peaked in 2016. End of story.

OPEC will not save the world from peak oil.

Ron Patterson x Ignored says: 08/18/2019 at 7:31 am
. Thats 3 to 4 mbod without question.

Sanctions are not affecting Venezuela's oil production. It is collapsing for another reason. And it will take them a decade or more to recover when they finally settle their economic problems.

But there will always be political problems. They are likely to get worse, not better.

Peak oil will be when the most oil is produced, not what could be produced if there were no political problems anywhere in the world.

hole in head x Ignored says: 08/18/2019 at 12:09 pm
Opec will not save the world and neither will USA . The problem is that all the increase in the last few years is from shale or LTO ,call it what you will . Problem is that this is mostly + 45 API so poor in middle distillates . In reality peak oil is when the^ black goo^ peaks . NGL's ,NGPL,s ,bio fuels, LTO and the term ^all liquids^ are used as a fig leaf to hide the real peak of the ^black goo ^ . We are past peak as far as the ^black goo^ is concerned .
Watcher x Ignored says: 08/18/2019 at 1:02 pm
The nature of the liquid is a big deal.

The bigger deal is this believing of numbers that come from people with agendas.

You're not going to get any warning. No one has any incentive to give anyone correct data.

Han Neumann x Ignored says: 08/18/2019 at 3:06 pm
"The problem is that all the increase in the last few years is from shale or LTO ,call it what you will . Problem is that this is mostly + 45 API so poor in middle distillates . "

In 2005 (!) on Bloomberg tv channel someone said, in other words, that the most valuable oil to make kerosene of is increasingly difficult to get. I guess that kerosene is a middle distillate.
The shale oil boom might last for many decades, for what it is worth

Ron Patterson x Ignored says: 08/18/2019 at 4:16 pm
The shale oil boom might last for many decades, for what it is worth.

Shale production may continue for a decade, or a bit longer, but not decades. However, that is not the point. The point is, how long can shale continue to increase production.

The legacy decline for shale varies between 5% and 6% per month! The EIA's Drilling Productivity Report says US Shale production will increase by 85,000 barrels per day in September. Probably not, but that is not the point. To get an increase of 85,000 barrels per day, they had to have new well production of 649,000 barrels per day. That is because they had 564,000 barrels per day of legacy decline. For every one barrel per day of increased production, they had to produce 7.64 barrels per day of new oil because they had 6.64 barrels per day of legacy decline.

The more they produce the more they have to produce just to stay even.

Frugal x Ignored says: 08/18/2019 at 5:29 pm
For every one barrel per day of increased production, they had to produce 7.64 barrels per day of new oil.

This is the key point regarding shale oil production. The higher the production, the more new production is needed to increase production. It's essentially an exponential function. Shale oil production will not increase for much longer because it's not physically possible to drill/frack at a sustained exponential rate.

This is the key

Ron Patterson x Ignored says: 08/18/2019 at 6:19 pm
Frugal, damn, why is that so hard for some people to understand?
Eulenspiegel x Ignored says: 08/19/2019 at 3:52 am
I don't see this exponential problem in shale.

Shale production is not oil production, it's mining.

You need 3 drilling teams, 4 fracking teams and get over long time a constant production. When you want to increase (say you have enough acres, as enough ore in a iron mine) you hire 2 new teams, as in mining employing a new excavator and conveyor belts.

So, like in a mine, when you fire a team production drops almost immediately.

The big ones (XON) in the Permian do Shale oil mining exactly like this – they have own drilling and fracking team, working constantly.

The same thing as mining is when you have to drill your b-class acres. As in a mine when the ore veins run out in thickness.

So either close your mine, hire more teams to maintain production or life with decreasing production at constant costs when the qulity is declining.

I've left out technical progress. This is just a cost reducer (need less drilling / fracking teams to do the same output).

Ron Patterson x Ignored says: 08/19/2019 at 7:59 am
Eulenspiegel, your mining example is not a good comparison at all. That is because new mines don't decline in production by 6% per month.

Here is the exponential function of shale oil. They must produce new oil at the decline rate just to stay even. Growth in production is only accomplished if they produce more oil than declined that month.

But if they do produce more oil than the decline rate, then the decline will be even higher the next month. That is, if they had to produce 649,000 barrels of new oil in September to grow production by 85,000 barrels, then to grow oil by a like amount in October, they will have to produce more than 649,000 barrels. The more they increase production each month, then the more they will have to produce the next month just to stay even.

When production increases, the monthly loss through legacy decline also increases. Therefore just producing the same increase as they did last month will not do. They must always continue to increase by more than they did last month just to stay even.

Entropy x Ignored says: 08/19/2019 at 8:43 am
As always: The greatest shortcoming of the human race is our inability to understand the exponential function
Eulenspiegel x Ignored says: 08/19/2019 at 10:55 am
Ron, in my opinion it is a better model than conventional oil.

In conventional oil, you can pump 20 years after drilling. For 50 you'll have to do more things like water flooding etc. So increasing production is just drilling a few more holes (and install the additional infrastructure).

In mining, you have a decline rate of 100% / day.
You send a team in, they mine 100 tons of ore in their shift, move out and production after their shift is 0.

When you want more ore, you have to send in a team next day again.

Having 1 minint team gives you constant ore / day. Firing them gives you sudden production of 0.

So with LTO you send a fracking team in to create 1 well, produce oil for a few months (I'm exaggerating) and then you have 0 production again.

So you have to send in the team again. And again.

If you use 1 team drillling constantly new holes. you'll have nearly constant production (after the first ramp up time of overlaying declining productions, in reality a few years).

Increasing production means more teams constantly drilling new holes (as in mining: drill hole, fill with explosives, boom, carry away ore, repeat).

The big question for the peak shale oil is here: How many drilling/fracking teams can be payed and supplied with anything they need for working efficient. It's not just hiring teams.

To employ more teams they need more road capacity, sand capacity, water transport, take away pipelines, more stuff you know better than me.

As in deep mining: The elevator capacity / tunnel train capacity limits the maximum possible production. For increasing production, you have to increase everything, and then hire new teams.

So the question is: How much money do they invest to stretch all these capacities.

ProPoly x Ignored says: 08/20/2019 at 12:35 pm
Well the world's conventional oil production certainly peaked a while ago. Even if one treats Venezuela and Canada as conventional because their production was usually in forecasts, the USA fracking has to be considered a separate thing. The industry cycle is different, the grade produced is different, the economics are "different." The tail is *very* different as without new drilling the entire patch would disappear in less than three years. Blap, gone to stripper wells.
HuntingtonBeach x Ignored says: 08/17/2019 at 9:26 pm
Not so fast Ron

This is the age of Trump. I know for us simpletons it makes sense the average would be production. I'm not sure how Trump would do it, but I'll bet the tangerine could make 2019 peak the best ever. A world depression followed by war.

Ron Patterson x Ignored says: 08/18/2019 at 12:30 pm
No, but OPEC + Russia + Canada, about 58% of world oil production, is down 667,000 barrels per day, April to July. I doubt that the other 42% of world oil production is up anywhere near that amount.

The 2019 7 month average for OPEC + Russia + Canada is 1,629,000 barrels per day below their 2018 average.

I have posted that chart up top, just below OPEC+ Russia.

[Aug 22, 2019] I'm astonished that completions are continuing almost regardless of the oil price but they have been.

Aug 22, 2019 | peakoilbarrel.com

Sean x Ignored says: 08/19/2019 at 6:26 pm

So to summarise, Denis assumes completions will continue in Permian at a steady rate while Guym/ Ron assume a drop in completions.

I'm astonished that completions are continuing almost regardless of the oil price but they have been.

Is there a tipping point where oil companies suspend/ reduce drilling in the Permian until it is profitable again?

I guess only time will resolve that question.

My guess is that some companies will review their q3 operations, possibly seriously affecting production growth but what do i know?

[Aug 22, 2019] I have read the shale oil have change some character especially in 2019. It have become more light that means lower quality

Aug 22, 2019 | peakoilbarrel.com

Freddy x Ignored says: 08/19/2019 at 11:08 am

Thanks for valuable informstion Guy, in my mind from what I have read the shail oil have change some caracter espesialy in 2019. It have become more light that means lower quality. If quality goes down this will mean less profit if any at all to drill new wells after all exspensives, loan balones are payed. The good thing is it seems now low sulfur diesel demand increase because new IMO rules and prices, refinery margins in Asia increases. But it might be this will have minor Impact for WTI price as they demand more heavey oil , brent i.e for their marine diesel..

[Aug 21, 2019] Trump's Deficit Economy is bonanza for large coporation but not for the US workers. Fiscal stimulus now is just pushing on the string

Highly recommended!
The US economy has not been working for most Americans, whose incomes have been stagnating – or worse – for decades. These adverse trends are reflected in declining life expectancy. The Trump tax bill made matters worse by compounding the problem of decaying infrastructure, weakening the ability of the more progressive states to support education, depriving millions more people of health insurance, and, when fully implemented, leading to an increase in taxes for middle-income Americans, worsening their plight.
Notable quotes:
"... Long ago, John Maynard Keynes recognized that while a sudden tightening of monetary policy, restricting the availability of credit, could slow the economy, the effects of loosening policy when the economy is weak can be minimal. Even employing new instruments such as quantitative easing can have little effect, as Europe has learned. In fact, the negative interest rates being tried by several countries may, perversely, weaken the economy as a result of unfavorable effects on bank balance sheets and thus lending. ..."
"... The lower interest rates do lead to a lower exchange rate. Indeed, this may be the principal channel through which Fed policy works today. But isn't that nothing more than "competitive devaluation," for which the Trump administration roundly criticizes China? ..."
"... But, at another level, the Fed action spoke volumes. The US economy was supposed to be "great." Its 3.7% unemployment rate and first-quarter growth of 3.1% should have been the envy of the advanced countries. But scratch a little bit beneath the surface, and there was plenty to worry about. Second-quarter growth plummeted to 2.1%. Average hours worked in manufacturing in July sank to the lowest level since 2011. Real wages are only slightly above their level a decade ago, before the Great Recession. Real investment as a percentage of GDP is well below levels in the late 1990s, despite a tax cut allegedly intended to spur business spending, but which was used mainly to finance share buybacks instead. ..."
"... America should be in a boom, with three enormous fiscal-stimulus measures in the past three years. The 2017 tax cut, which mainly benefited billionaires and corporations, added some $1.5-2 trillion to the ten-year deficit. An almost $300 billion increase in expenditures over two years averted a government shutdown in 2018. And at the end of July, a new agreement to avoid another shutdown added another $320 billion of spending. If it takes trillion-dollar annual deficits to keep the US economy going in good times, what will it take when things are not so rosy? ..."
"... Redistribution from the bottom to the top – the hallmark not only of Trump's presidency, but also of preceding Republican administrations – reduces aggregate demand, because those at the top spend a smaller fraction of their income than those below. This weakens the economy in a way that cannot be offset even by a massive giveaway to corporations and billionaires. And the enormous Trump fiscal deficits have led to huge trade deficits, far larger than under Obama, as the US has had to import capital to finance the gap between domestic savings and investment. ..."
"... Trump promised to get the trade deficit down, but his profound lack of understanding of economics has led to it increasing, just as most economists predicted it would. Despite Trump's bad economic management and his attempt to talk the dollar down, and the Fed's lowering of interest rates, his policies have resulted in the US dollar remaining strong, thereby discouraging exports and encouraging imports ..."
Aug 10, 2019 | economistsview.typepad.com

anne , August 10, 2019 at 06:18 AM

https://www.project-syndicate.org/commentary/trump-trade-and-fiscal-deficits-by-joseph-e-stiglitz-2019-08

August 9, 2019

Trump's Deficit Economy

Economists have repeatedly tried to explain to Donald Trump that trade agreements may affect which countries the US buys from and sells to, but not the magnitude of the overall deficit. But, as usual, Trump believes what he wants to believes, leaving those who can least afford it to pay the price.
By JOSEPH E. STIGLITZ

NEW YORK – In the new world wrought by US President Donald Trump, where one shock follows another, there is never time to think through fully the implications of the events with which we are bombarded. In late July, the Federal Reserve Board reversed its policy of returning interest rates to more normal levels, after a decade of ultra-low rates in the wake of the Great Recession. Then, the United States had another two mass gun killings in under 24 hours, bringing the total for the year to 255 – more than one a day. And a trade war with China, which Trump had tweeted would be "good, and easy to win," entered a new, more dangerous phase, rattling markets and posing the threat of a new cold war.

At one level, the Fed move was of little import: a 25-basis-point change will have little consequence. The idea that the Fed could fine-tune the economy by carefully timed changes in interest rates should by now have long been discredited – even if it provides entertainment for Fed watchers and employment for financial journalists. If lowering the interest rate from 5.25% to essentially zero had little impact on the economy in 2008-09, why should we think that lowering rates by 0.25% will have any observable effect? Large corporations are still sitting on hoards of cash: it's not a lack of liquidity that's stopping them from investing.

Long ago, John Maynard Keynes recognized that while a sudden tightening of monetary policy, restricting the availability of credit, could slow the economy, the effects of loosening policy when the economy is weak can be minimal. Even employing new instruments such as quantitative easing can have little effect, as Europe has learned. In fact, the negative interest rates being tried by several countries may, perversely, weaken the economy as a result of unfavorable effects on bank balance sheets and thus lending.

The lower interest rates do lead to a lower exchange rate. Indeed, this may be the principal channel through which Fed policy works today. But isn't that nothing more than "competitive devaluation," for which the Trump administration roundly criticizes China? And that, predictably, has been followed by other countries lowering their exchange rate, implying that any benefit to the US economy through the exchange-rate effect will be short-lived. More ironic is the fact that the recent decline in China's exchange rate came about because of the new round of American protectionism and because China stopped interfering with the exchange rate – that is, stopped supporting it.

But, at another level, the Fed action spoke volumes. The US economy was supposed to be "great." Its 3.7% unemployment rate and first-quarter growth of 3.1% should have been the envy of the advanced countries. But scratch a little bit beneath the surface, and there was plenty to worry about. Second-quarter growth plummeted to 2.1%. Average hours worked in manufacturing in July sank to the lowest level since 2011. Real wages are only slightly above their level a decade ago, before the Great Recession. Real investment as a percentage of GDP is well below levels in the late 1990s, despite a tax cut allegedly intended to spur business spending, but which was used mainly to finance share buybacks instead.

America should be in a boom, with three enormous fiscal-stimulus measures in the past three years. The 2017 tax cut, which mainly benefited billionaires and corporations, added some $1.5-2 trillion to the ten-year deficit. An almost $300 billion increase in expenditures over two years averted a government shutdown in 2018. And at the end of July, a new agreement to avoid another shutdown added another $320 billion of spending. If it takes trillion-dollar annual deficits to keep the US economy going in good times, what will it take when things are not so rosy?

The US economy has not been working for most Americans, whose incomes have been stagnating – or worse – for decades. These adverse trends are reflected in declining life expectancy. The Trump tax bill made matters worse by compounding the problem of decaying infrastructure, weakening the ability of the more progressive states to support education, depriving millions more people of health insurance, and, when fully implemented, leading to an increase in taxes for middle-income Americans, worsening their plight.

Redistribution from the bottom to the top – the hallmark not only of Trump's presidency, but also of preceding Republican administrations – reduces aggregate demand, because those at the top spend a smaller fraction of their income than those below. This weakens the economy in a way that cannot be offset even by a massive giveaway to corporations and billionaires. And the enormous Trump fiscal deficits have led to huge trade deficits, far larger than under Obama, as the US has had to import capital to finance the gap between domestic savings and investment.

Trump promised to get the trade deficit down, but his profound lack of understanding of economics has led to it increasing, just as most economists predicted it would. Despite Trump's bad economic management and his attempt to talk the dollar down, and the Fed's lowering of interest rates, his policies have resulted in the US dollar remaining strong, thereby discouraging exports and encouraging imports. Economists have repeatedly tried to explain to him that trade agreements may affect which countries the US buys from and sells to, but not the magnitude of the overall deficit.

In this as in so many other areas, from exchange rates to gun control, Trump believes what he wants to believe, leaving those who can least afford it to pay the price.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University.

[Aug 21, 2019] Losing a job in your 50s is especially tough. Here are 3 steps to take when layoffs happen by Peter Dunn

Unemployment benefits currently are usually is just six month or so; this is the time when you can plan you "downsizing". You do not need to rush but at the same time do not expect that you will get job offers quickly, if at all. Usually it does not happen. many advertised positions are fakes, another substantial percentage is already reserved for H1B candidates and posting them is the necessary legal formality.
Often losing job logically requires selling your home and moving to a modest apartment, especially if no children are living with you. At 50 it is abut time... You need to do it later anyway, so why not now. But that's a very tough decision to make... Still, if the current housing market is close to the top (as it is in 2019), this is one of the best moves you can make. Getting from your house several hundred thousand dollars allows you to create kind of private pension to compensate for losses in income till you hit your Social Security check, which currently means 66.
$300K investment in A quality bonds that returns 3% per year is enough to provides you with $24K per year "private pension" from 50 to age of 66 when social security kicks in. That allows you to pay for the apartment and amenities. The food is extra but with this level of income you qualify for food assistance.
This way you can take lower paid job, of much lower paid job (which mean $15 per hour), of temp job and survive.
And if this are many form you house sell your 401k remains intact and can supplement your SS income later on. Simple Excel spreadsheet can provide you with a complete picture of what you can afford and what not. Actually the ability to walk of fresh air for 3 or more hours each day worth a lot of money ;-)
Notable quotes:
"... Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives. ..."
"... The first thing you should do is identify the exact day your job income stops arriving ..."
"... Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. ..."
"... Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom. ..."
Feb 15, 2019 | finance.yahoo.com

... ... ...

Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives.

Assuming you can clear the mental challenges, the financial and administrative obstacles can leave you feeling like a Rube Goldberg machine.

Income, health insurance, life insurance, disability insurance, bills, expenses, short-term savings and retirement savings are all immediately important in the face of a job loss. Never mind your Parent PLUS loans, financially-dependent aging parents, and boomerang children (adult kids who live at home), which might all be lurking as well.

When does your income stop?

From the shocking moment a person learns their job is no longer their job, the word "triage" must flash in bright lights like an obnoxiously large sign in Times Square. This is more challenging than you might think. Like a pickpocket bumping into you right before he grabs your wallet, the distraction is the problem that takes your focus away from the real problem.

This is hard to do because of the emotion that arrives with the dirty deed. The mind immediately begins to race to sources of money and relief. And unfortunately that relief is often found in the wrong place.

The first thing you should do is identify the exact day your job income stops arriving . That's how much time you have to defuse the bomb. Your fuse may come in the form of a severance package, or work you've performed but haven't been paid for yet.

When do benefits kick in?

Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. However, in some states severance pay affects your immediate eligibility for unemployment benefits. In other words, you can't file for unemployment until your severance payments go away.

Assuming you can't just retire at this moment, which you likely can't, you must secure fresh employment income quickly. But quickly is relative to the length of your fuse. I've witnessed way too many people miscalculate the length and importance of their fuse. If you're able to get back to work quickly, the initial job loss plus severance ends up enhancing your financial life. If you take too much time, by your choice or that of the cosmos, boom.

The next move is much more hands-on, and must also be performed the day you find yourself without a job.

What nonessentials do I cut?

Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom.

The idea of diving into your spending habits on the day you lose your job is no fun. But when else will you have such a powerful reason to do so? You won't. It's better than dipping into your assets to fund your current lifestyle. And that's where we'll pick it up the next time.

We've covered day one. In my next column we will tackle day two and beyond.

Peter Dunn is an author, speaker and radio host, and he has a free podcast: "Million Dollar Plan." Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com. The views and opinions expressed in this column are the author's and do not necessarily reflect those of USA TODAY.

[Aug 21, 2019] Epstein Used Network Of Shell Companies And Associates For Sex-Trafficking Ring, Lawsuits Claim

Aug 21, 2019 | www.zerohedge.com

Jeffrey Epstein used his tangled web of shell companies as a "brazen and powerful organization" to operate a sex-trafficking ring, according to three new civil lawsuits filed against his $578 million estate.

The new litigation was filed against the estate, its executors and the shell companies themselves, asking for unspecified damages for medical and psychological expenses, trauma, humiliation and other injuries suffered as recently as 2017, according to Bloomberg .

Among the companies named in all three suits are one that owned Epstein's Manhattan mansion until 2011 ; his money-management firm, Financial Trust Co.; and HBRK Associates Inc., which allegedly helped arrange travel for Epstein's accusers between New York and Florida . A Richard Kahn was listed as the registered agent for HBRK in New York state corporate filings in 2008.

Two of the complaints name as a defendant the company that once owned Little St. James , the smaller of Epstein's private islands in the Caribbean. Little St. James was one of the locations from which Epstein ran a " complex commercial sex trafficking and abuse ring , " according to the lawsuits.

...

The defendants include the executors, Darren Indyke and Richard Kahn , lawyers who were directors for a nonprofit Epstein had in the U.S. Virgin Islands called Gratitude America. - Bloomberg

Two of the women, "Katlyn Doe" and "Lisa Doe" claim to have met Epstein when they were seventeen. The third, "Priscilla Doe" says she was 20. The three say Epstein used a " vast enterprise " of associates working "in concert and at his direction, for the purpose of harming teenage girls through sexual exploitation, abuse and trafficking. Notably, the new suits claim that all of this happened after his deal with federal prosecutors in Florida in 2007.

Katlyn and Priscilla claim they were flown to Florida so that Epstein could continue to sexually abuse them while he was on work release from jail . Katlyn claims he promised to pay for medical treatment, while he manipulated Lisa and Priscilla by promising to advance their dance careers - which he did not do, according to the lawsuits.

Epstein's complicit associates include "chefs, butlers, receptionists, schedulers, secretaries, flight attendants, pilots, housekeepers, maids, sex recruiters, drivers and other staff members, " according to the suits.

Katlyn also alleges that in 2013 Epstein paid her $10,000 to marry an associate in order for him to become a legal resident of the United States - stiffing her on another $10,000 she says she was promised upon their divorce. She says she agreed to come to Florida after Epstein promised her a job at his office, and that HRBK coordinated her travel . She added that Epstein forced her to "engage in sexual encounters" with him and another young female at the headquarters of his Florida Science Foundation.

According to University of Oregon law professor Susan Gary, Epstein's death shouldn't serve as an impediment to their civil claims.

" They're still in a good position ," said Gary, adding that the challenge "is proving as required by law that he injured them and they should get benefits for their injury."

After Epstein served 13 months in a Palm Beach jail, he settled over two dozen lawsuits with accusers who say he lured them when they were teenagers to his mansion, where they were coerced into sex and paid to recruit others .

Three of those cases, filed by clients of Brad Edwards, settled for a total of $5.5 million . Edwards is the lawyer for the women who filed the complaints Tuesday in federal court in New York. The plaintiffs aren't named because of the "sensitive sexual nature" of the cases , the suits say.

Late Tuesday, Edwards submitted arguments on behalf of VE, another client who last week sued Epstein's estate and three of the same companies targeted by the latest suits, asking the court to allow her to proceed anonymously.

" Epstein's vast wealth and far reaching connections make it clear that retaliation could be employed against individuals pursuing claims against the estate " and could deter witnesses, according to the filing. VE's anonymity will serve society as well, which " has an interest in eradicating the predatory practices of powerful men against vulnerable, susceptible women. " - Bloomberg

According to Katlyn Doe, Epstein would often remind her of his "extraordinary power to reward and punish."

Meanwhile, plaintiff Lisa Doe says she met Epstein in 2002 when she was 17, when he told her he was "close personal friends with some of the most influential names in dance," and would help her with her career if she taught a dance-based exercise class at the home of a wealthy New York man. Instead, Epstein forced her to engage in sexual encounters and derailed her career aspirations .

Lastly, Priscilla Doe says that an Epstein "recruiter" asked her if she wanted to give the financier a massage in his Manhattan mansion in 2006 when she was 20-years-old.

An associate of his taught her the "exact way" he liked to receive oral sex and Epstein "forced himself on her and took her virginity," according to the complaint. While Epstein was receiving massages, the suit says, he took calls from four people, referred to in the suit as "Important Business Person" 1, 2, 3 and 4.

The plaintiff says she was forced to "engage in commercial sex" on each of more than 20 trips to the Virgin Islands between 2006 and 2012 . - Bloomberg

According to the lawsuits, "Each of the employees and associates were paid through companies believed to have been funded by Jeffrey Epstein and, regardless of such funding, were disciples of Jeffrey Epstein, constantly informing plaintiff and other victims of Jeffrey Epstein's power and ability to improve or destroy a victim's life depending on her level of cooperation


Ms No , 14 minutes ago link

The last good FBI agent was Ted Gunderson. That's why Van Decamp gave the documentary that Bush Administration had buried to him. We almost lost this documentary forever, but some heroic individuals and fate kept it alive, hoping people would give a ****. It all ties to somebody controlling our politicians with honeypots. Remember when NWO was a conspiracy theory people laughed about? Not funny any more.

This is Gunderson after the FBI. He KNEW. This is all honeypot. The Satanism is for leverage and not real. People get detoured into that.

"He also investigated a child molestation trial in Manhattan Beach, California. In a 1995 conference in Dallas , Gunderson warned about the supposed proliferation of secret occultist groups, and He also investigated a child molestation trial in Manhattan Beach, California. In a 1995 conference in Dallas , Gunderson warned about the supposed proliferation of secret occultist groups, and the danger posed by the New World Order , an alleged shadow government that would be controlling the United States government. [8] He also claimed that a "slave auction" in which children were sold by Saudi agents to men had been held in Las Vegas , that four thousand ritual human sacrifices are performed in New York City every year, and that the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City was carried out by the US government. [8] Gunderson believed that in the United States there is a secret widespread network of groups who kidnap children and infants, and subject them to ritual abuse and subsequent human sacrifice. [9] [10] ) ,

https://en.m.wikipedia.org/wiki/Ted_Gunderson

Conspiracy of Silence , a documentary listed for viewing in TV Guide Magazine was to be aired on the Discovery Channel, on May 3 1994. This documentary exposed a network of religious leaders and Washington politicians who flew children to Washington D.C. for sex orgies. Many children suffered the indignity of wearing nothing but their underwear and a number displayed on a piece of cardboard hanging from their necks when being auctioned off to foreigners in Las Vegas, Nevada, and Toronto, Canada.

"At the last minute before airing, unknown congressmen threatened the TV Cable industry with restrictive legislation if this documentary was aired. Almost immediately, the rights to the documentary were purchased by unknown persons who ordered all copies destroyed.

A copy of this videotape was furnished anonymously to former Nebraska state senator and attorney John De Camp who made it available to retired FBI Agent Ted L. Gunderson . While the video quality is not top grade, this tape is a blockbuster in what is revealed by its participants involved."

Can you imagine what these heroic men would think of this exposed Mossad honeypot? Its all exposed now, just needs to be linked together.

MadelynMarie , 5 minutes ago link

Really looks like this is how they control govts--not just in the US but all over the world.

https://www.timesofisrael.com/14-israelis-suspected-of-running-child-sex-trafficking-ring-in-colombia/

from the above article, I found this comment:

So the Jews have another South America pedophile scandal to their discredit. We haven't forgotten the child prostitution business run by Arie Scher and George Schteinberg in Rio de Janeiro, Brazil, during the 1990s . It was exposed in the early summer of 2000 by an infuriated teenage girl who found a nude photo of herself online, after Schteinberg had PROMISED her that he'd never show it to anyone.

Schteinberg was arrested and given a slap on the wrist (they went easy on him because he was Jewish) while Arie Scher escaped to Israel, one step ahead of the authorities.

The Israeli government took away Scher's diplomat license for five years (because he got caught being naughty, presumably; properly trained Jews don't get caught, of course).

When the five years were past, Israel proposed to send Scher to Australia to replace Amir Laty, who'd made himself unwelcome by committing espionage and by being very rude to certain Australian women.

Somehow or other, the Australian public found out that the spy was being replaced by a pedophile as Israel's official ambassador to their country, and they got up in arms about it. This persuaded Scher to decline the post, perhaps keeping the cushy administrative job the Israeli government gave him during the previous five years

So, looks like there were running another operation like this in Brazil during the 90s (never heard of that one before)

Ms No , 3 minutes ago link

Thanks. I really appreciate your comments.

ILikeMeat , 14 minutes ago link

Sounds like the set up for a typical Mossad honey pot operation..

June 12 1776 , 15 minutes ago link

Case 1:19-cv-07772 Document 1 Filed 8/20/2019 Page 1 of 52

PRISCILLA DOE, Plaintiff,
vs.

DARREN K. INDYKE AND
RICHARD D. KAHN AS JOINT
PERSONAL REPRESENTATIVES OF THE
ESTATE OF JEFFREY E. EPSTEIN,
NINE EAST 71st STREET, CORPORATION,
FINANCIAL TRUST COMPANY, INC.,
NES, LLC, MAPLE,INC., LSJ,LLC,
HBRK ASSOCIATES, INC., JEGE, INC.,
Defendants.

https://www.documentcloud.org/documents/6306617-Priscilla-Doe-v-Indyke.html

64. In 2006, Jeffrey Epstein told Plaintiff she was going on a trip with him to his island in the Unites States Virgin Islands.
65. On that trip was Jeffrey Epstein, Jean Luc Bruenel, Ghislaine Maxwell, Associate 2, Associate 8, and two other victims in addition to Plaintiff.
66. It was there that Ghislaine Maxwell taught Plaintiff the "proper way to give a blow job," describing to her the exact way that Jeffrey Epstein liked to be sexually serviced orally.

Case 1:19-cv-07772 Document 1 Filed 8/20/2019 Page 15 of 52

Give Me Some Truth , 16 minutes ago link

Easy predictions:

1) Authorities will NOT pursue, question or charge any of Epstein's clients or associates (the very people the entire trafficking operation catered to).

2) Authorities will NOT "follow the money."

3) Authorities will not arrest and prosecute any government employee who obstructed justice or participated in this scheme.

thefloridaman , 19 minutes ago link

You can't manage money if you are a felon!!! His licensing would have been revoked. It would have been on his U-4 and U-5.

Meanwhile he does not even show up on brokercheck.

Can anyone explain beyond the babble conspiracy theories. This is factual.

Jumanji1959 , 19 minutes ago link

The elites will have to get rid of people and evidence. The Clintons know too much and are oftened named. Nail gun sale at Home Depot. Those 2 geriatric fcuks must go.

Ms No , 9 minutes ago link

They are a huge liability on countless fronts. That will leave Chelsea to answer for any Clinton foundation questions, and she has been involved. She can play stupid and elicit sympathy. The Clintons are a huge problem.

south40_dreams , 25 minutes ago link

The clinton-soros-rothschild-obama cabal to rule the world is falling apart and the smell of arkancide is blowing heavy in the wind today......

Ms No , 7 minutes ago link

George Bush senior ran the CIA and his retarded offspring was in office for Israel's sept 11 false flag. Red team blue team is a joke.

Trump also has Mossad mob written all over him. His mentor was mob honeypotter, pedophile and hotel Titan Cohn.

They are all neck deep.

VWAndy , 39 minutes ago link

Notice these are civil lawsuits and not criminal cases.

Note the lack of perpwalks of the corrupted office holders.

Talk is cheap. Its in their actions we will know them by.

Ms No , 42 minutes ago link

JPMorgn and Douche bank need to be investigated for laundering the Epstein and Maxwell Mossad honeypot's money.

First JPMorgan was who they dealt with. Then when it started to get exposed they passed it to Douche.

Dont expect the Orange *** to investigate the Jewish Mob, that he is clearly an agent for.

the artist , 46 minutes ago link

Wait! Now there are TWO Islands!!!??? And Pedo Island is the SMALLER ONE???

WTF?

"Two of the complaints name as a defendant the company that once owned Little St. James , the smaller of Epstein's private islands in the Caribbean. "

marcel tjoeng , 53 minutes ago link

The Boss of Epstein is Wexner.

Wexner is related to Mossad and the very beginnings of the teaming up of Mossad with Dulles' CIA, after WWII, the OSS, the Irgun and the Stern gruppe, who did the King David Hotel bombing.

The Boss of Wexner is Henry Kissinger the 'republican free trader in favor of democracy'.

The Bosses of soldiers raping Kissinger in his Vietnam creation are the Rockefellers.

Kissinger ordered the Phoenix program mass murdering Vietnamese nationalist by the tens of thousands, which is a mere one feat in his massive killing career, like Churchill,

Kissinger who ran the Republican president Richard Nixon like fc*king a goat.

By the way, there are pictures in circulation of Republican president Ronald Reagan being deeply ejaculated into the manhole, enjoying that greatly (vehemently denied by his daughter at his funeral, pffffffff),

the same anecdotes exist of Prince Philip, husband of fake Queen Elisabeth, who requested to be manly penetrated by crew, when he was onboard visiting the British fleet.

USA USA USA

Bunch of parasite lunatics.

Burn it to the ground.

J S Bach , 1 hour ago link

" An associate of his taught her the "exact way" he liked to receive oral sex"

Wow... this is really important stuff.

How about a quote like:

"An associate of his taught him the "exact way" he liked to receive the blackmail information and videos in Israel."

MadelynMarie , 46 minutes ago link

"An associate of his taught him the "exact way" he liked to receive the blackmail information and videos in Israel."

Yes, interesting that we are NOT hearing about that aspect of the story.

I'm sure that Israel has operations like this all over the world. No doubt this is how they control governments behind the scenes.

Here's another one: https://www.timesofisrael.com/14-israelis-suspected-of-running-child-sex-trafficking-ring-in-colombia/

White Nat , 36 minutes ago link

And another ...

Homosexual Jewish Diplomat Runs a Child **** and Prostitution Business in Brazil

https://nationalvanguard.org/2016/08/recent-history-homosexual-jewish-diplomat-runs-a-child-****-and-prostitution-business-in-brazil/

NAV , 21 minutes ago link

And it it was no accident that the Monica Lewinsky/ Clinton sex scandal erupted into public view precisely at the moment Clinton had scheduled meetings with Netanyahu and Palestinian leader Yasir Arafat to revive the peace process by pressuring Netanyahu.

bustdriver , 1 hour ago link

Just to be clear on previous post.

"Time to investigate Mark Epstein and Humpty Dumpty."

Mark is Jeffrey's brother. He is a director of believe it or not the Humpty Dumpty Institute.

http://thehdi.org/about_humpty_dumpty.html

It is similar to the Clinton Foundation...

Give Me Some Truth , 15 minutes ago link

Mark Epstein has also gotten a pass. Add him to the long list.

Ms No , 1 hour ago link

This likely could be tied to Franklin child sex ring scandal and Mossad will be there too. Watch this free documentary before Jootube takes it down. Men died for you to know this. The show was yanked before it could be played mainstream. Extremely disturbing but VERY important. This was the last time they slipped through your fingers and this type of thing will be what destroys this evil.

https://youtu.be/PScfMeXAQwU

ironmace II , 1 hour ago link

chefs, butlers, receptionists, schedulers, secretaries, flight attendants, pilots, housekeepers, maids, sex recruiters, drivers and other staff members.

All small potatoes. The people really guilty all go free.

LEEPERMAX , 1 hour ago link

With his Death the Case is Closed . . . Mission accomplished.

TheAntiProgressive , 1 hour ago link

Yeah and since Sir Pedo's death was termed a suicide, then one would think his will dealy in US VI was planned, as was his death and me thinks a good lawyer would negate the will, trust, etc by simply terming this transfer of assets a fraudulent conveyance and yank it back where those abused can take a slice.

LEEPERMAX , 1 hour ago link

To Big to Jail

[Aug 21, 2019] US shale production is stresssed. Any estimates past this point in time are totally meaningless

Aug 21, 2019 | peakoilbarrel.com

GuyM

x Ignored says: 08/17/2019 at 1:26 pm
Inventory draws should begin to pick up for the US soon. 1 million in pipeline from the Permian to the coast. Exports to increase, Cushing to decrease, and production mostly flat. A lot of the Permian production has been going to Cushing as an outlet. Depends on how much can be loaded on to ships, now, and how much lite oil can be sold. Pipelines are going to be losers for awhile. Additional pipelines need to take note.
GuyM x Ignored says: 08/17/2019 at 4:17 pm
There are two, sure fire, statistics and reports that will define where we are going. You can argue them, but you will lose. One is the EIA monthly 914 report, the other is the Texas RRC permits. There's some DUCs, but by this time, I consider them as normal DUCs between drilling and completion as is norm. And the 914 May show it up a little for June, but I don't see it going up further. Or, much more.
Ovi x Ignored says: 08/17/2019 at 6:36 pm
Guy

Attached is the latest LTO data from the monthly EIA 914 page. The main difference that I can see is the drop in the monthly production growth from 2018 to 2019. 2018 production growth averaged 153 kb/d/mth. 2019 production growth over the first seven months has dropped to an average of 97 kb/d/mth. The total July increase over June was 107 kb/d/mth. The biggest increases for July came from Sprayberry (33 kb/d) and Wolfcamp (46 kb/d).

GuyM x Ignored says: 08/18/2019 at 5:46 am
Not sure what that is. This is what I was referring to:
https://www.eia.gov/petroleum/production/

Any estimates past this point in time are totally meaningless.

[Aug 21, 2019] WTI Slides After Crude Inventories Drawdown Less Than Hoped

Paper oil and speculation dominate the market. After Iran oil was taken off the market the prices were just stable to lwo. Amazing.
Trump administration doubles its efforts to capture Venezuela for a reason.
Aug 21, 2019 | www.zerohedge.com

yogibear , 1 hour ago link

What Joke!!

Every day the opposite is reported.

More than expected one, next day less.

Trump wants cheap oil, so short the crap out of it.

Edward Morbius , 1 hour ago link

He wants cheap oil AND a weak dollar! Genius!

akrainer , 2 hours ago link

Every week we watch these invenstory draws/builds and every week the commentariat is out to explain how they drive the price fluctuations. Except there's -80% correlation between oil price and USD Index. Implying that events that have nothing to do with these blessed draws/builds have much greater pull on price changes... More here: " Failure of price forecasting: the unit of account conundrum "

Sunny2 , 2 hours ago link

................................................

kavabanga , 2 hours ago link

It looks like an accumulation at the time crude oil wti.
After the price will cross any border of the triangle with powerful candle we can open BUY/SELL entry. Potential profit will be in 3...5 times bigger than risk.

Element , 2 hours ago link

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way -- in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only. - Charles Dickens

Sardonicus , 2 hours ago link

Well, Duh!

Nobody is driving campers anymore

[Aug 21, 2019] Creative use of Taiwan to fuel protests by providing asylum to protesters

Aug 21, 2019 | news.yahoo.com

China slammed Taiwan Monday for offering asylum to Hong Kong people facing prosecution for involvement in anti-government protests, telling the island's leaders to "stop meddling" in the territory's affairs.

Taiwan's President Tsai Ing-wen voiced support last month for granting asylum to some Hong Kong protesters, with the semi-autonomous financial hub in the midst of an unprecedented political crisis.

Ma Xiaoguang, a spokesperson for the Chinese cabinet's Taiwan Affairs Office, warned Taiwan's ruling Democratic Progressive Party to "stop undermining the rule of law in the Hong Kong Special Administrative Region, stop meddling in Hong Kong affairs, and stop indulging criminals in any way".

Taiwanese authorities "ignore the facts and reverse black and white, not only masking the crimes of a small number of Hong Kong militants, but also fuelling their arrogance for destroying Hong Kong", said Ma.

Last month after dozens of Hong Kong activists reportedly involved in an unprecedented storming of the city's parliament fled to Taiwan, the Taipei said it would provide assistance to those seeking sanctuary.

"They openly claim to provide (protesters) asylum, making Taiwan into a 'haven sheltering criminals', where does this put the safety and welfare of the Taiwan people?" asked Ma.

Beijing regards Taiwan as a part of China awaiting reunification, but the island is a self-ruled democracy.

The protest movement in Hong Kong was sparked by widespread opposition to a plan for allowing extraditions to the Chinese mainland, but has since morphed into a broader call for democratic rights.

Taiwan's history of providing sanctuary to Chinese dissidents has been mixed.

The island still does not recognise the legal concept of asylum but has, on occasions, allowed dissidents to stay on long-term visas.

Ties with Beijing have soured since Tsai came to power in 2016 because her party refuses to recognise the idea that Taiwan is part of "one China". lawrence

2 days ago

Taiwan is an independent country. Of cause it has the right and authority to grant any asylum to the eligible asylum seeker. Respect Taiwan as an respected country ,equal to china, and the world will put china in a better place. Loving freedom and democracy is a human basic right realty and could not be altered by force...wake up china..

[Aug 21, 2019] This militantly progressive black woman from the San Francisco Bay Area ;-)

Aug 21, 2019 | www.nakedcapitalism.com

..."An Anti-Trump Landslide?" [ The American Conservative ]. "Anything could happen between now and November 2020, but this new Fox News poll is not good news for the president. If the vote were held today, Joe Biden would clobber him, which is no surprise. But also, a geriatric New England socialist would beat the stuffing out of Trump. So would a preachy Harvard professor and a militantly progressive black woman from the San Francisco Bay Area.* An anti-Trump landslide at the top of the ticket could wash the GOP Senate majority away. We would then have a Democratic president and Congress -- and they would be in a score-settling mood. One more time: anything could happen between now and Election Day 2020. But a recession, which is growing more likely by the day, would be something extremely hard for Trump to overcome." • "Anti-Trump landslide" is Bitecofer's theory of the case for 2018 and 2020. NOTE * Harris, lol.


Tom Stone , August 20, 2019 at 2:13 pm

Kamala Harris is militantly progressive

I picked the wrong day to stop sniffing glue.

Chris Smith , August 20, 2019 at 2:27 pm

That definitely needs to be filed under "The 420"

jo6pac , August 20, 2019 at 2:30 pm

Yes, I was going to leave Angela Davis name as the only Black Militantly I know of but the site would let me leave a comment;-)

Lambert Strether Post author , August 20, 2019 at 2:31 pm

All the kids want somethin' to do

Cal2 , August 20, 2019 at 2:38 pm

"But also, a geriatric New England socialist would beat the stuffing out of Trump. .So would a militantly "' progressive "' " 'black "' woman "' from the San Francisco Bay Area. *"
Really?

Progressive toward oligarchy.
https://caitlinjohnstone.com/2019/06/28/kamala-harris-is-an-oligarchs-wet-dream/

1/4 to 1/8th "black." Mostly East Indian and Irish slave owner descent; her father's own words: https://www.jamaicaglobalonline.com/kamala-harris-jamaican-heritage/

Bay Area?
Raised in Canada and Minnesota, lives in West Beverly Hills with her white-privileged corporate attorney husband. https://en.wikipedia.org/wiki/Kamala_Harris
Her campaign for president is headquartered not in the Bay Area, but in Baltimore.

Even Oakland rejects her, "She would be a no-brainer if she were running for Canadian prime minister "
https://www.latimes.com/politics/la-na-pol-kamala-harris-oakland-20190211-story.html

* Trump easily wins again if any Democratic ticket is Kamaleonated.

dearieme , August 20, 2019 at 6:12 pm

Are you arguing that she is as genuine about her race as The Cherokee is?

[Aug 21, 2019] Kamala Harris is militantly progressive

Aug 21, 2019 | www.nakedcapitalism.com

Tom Stone , August 20, 2019 at 2:13 pm

Kamala Harris is militantly progressive

I picked the wrong day to stop sniffing glue.

[Aug 21, 2019] The shades of securlar stagnation of the US economy

Aug 21, 2019 | www.nakedcapitalism.com

Synoia , August 19, 2019 at 5:03 pm

Whatever was invested in China over the last 20 or 30 years would have to be invested in the US.

I don't understand why any investor, or the stock market, would provide that level of investment. Where would be the return?

The US built its industrial base on 150 years of investment before 1970, because it has a continent in which to expand, and a determination not to become a UK vassal state, again.

And then there is climate change ..where China's new industrial areas will become threatened by rising sea levels

Tomonthebeach , August 19, 2019 at 5:18 pm

In a sense, Synoia's remarks vindicate Trump's bogus assertion that trade war is necessary for national security. At least in this sector, he is probably correct about the security risk. Of course, his disastrous solution is something he overheard on FoxNews from his now dimwit economic advisor – the one who would not recognize a recession if it bit him in the nose.

Can we really make guns and bullets and tanks and planes without US manufacturing? We would probably have to depend on allies for that. Alas, we are not so palzy-walzy with China. There is Germany – a stalwart of machining savvy – but Trump would rather mock German leaders on Twitter than do biz with DE.

Synoia , August 19, 2019 at 9:29 pm

Trump's bogus assertions could only be vindicated if he enunciated an industrial policy, including the missing skills, training and money to repatriate manufacturing, which destroys the investment by our beloved multinationals in Mexico, China and elsewhere.

I was gently pointing out that Trump has his head so far up his a.., that one can hear him talking.

Lambert Strether Post author , August 20, 2019 at 6:20 am

It is true that one must blow apart the pro-globalist consensus, and this Trump has done. (Not passing TPP was a clear win, and we should take that win. So far as I know, TTiP is off the front burner now, too). It is also true that tariffs have to part of any solution. But beyond this, coherence eludes the administration. Clearly, industrial policy is part of the solution. Warren's plan doesn't provide it, either.

Amfortas the hippie , August 20, 2019 at 9:26 am

I understand that such talk is considered old fashioned, these days,lol but does "Industrial Policy" include things like "paying the Workers" or even just "Not Screwing the Workers"?
Or is that a separate hill to climb?
NC and NC Commentariat is excluded from this snark and cynicism.
I think of my grandad's small manufacturing business in Houston we built the brewery, the box plants the can plants and a lot of the refineries, as well as a whole bunch of other stuff that's now rusting away.
but a big part of his Ethos was taking care of his workers.
Talking about that ethos, today, anywhere else but here, seems somehow quaint.
after 50 years of financialised globalisation and Free Capital, I think that Ethos needs to be stated right out front, and as clear as a bell, so the lawyers and pols can't wiggle out of it.
like the mentioned "job training", but larded with MBA's running the show that's what the people who will write the rules Believe "trade is always good!", "maximise transactions!", etc.
the entire Belief System we operate under most often without thought needs to go.
otherwise, any "reindustrialisation" will be as i have feared was the plan all along: to wait until we're desperate enough to arbitrage, and will work for pennies to provide the Chinese Middle Class with cheap plastic pumpkins.

Susan the other` , August 20, 2019 at 2:15 pm

Thanks for this analysis. And the word Hysteresis. Could be the dilution of trauma, but it never goes away. You'd think it would function like a social vaccine, no? But clearly the only thing that can cure it is equity and security. Where's our HAL? We need a computer to maintain social equality. I also agree that Liz's Economic Patriotism is puffery in most places. Increasing exports is an absurd goal when the world is deindustrializing. Becoming nationally self-sufficient is a much better goal. Foundries and forges are the biggest polluters so their use will be modest. I remember only about 2 or 3 years ago we were all very smug about the fact that China had no machine tool industry. The Chinese have really knocked us all back on our heels. But my take on all this is it is time for change and we shouldn't fight the last war. We should adapt using all our science and technology and creativity. We should do Environmental manufacturing. How many engineering, physics, agriculture, aquaculture, chemistry departments (to name a few) couldn't supply us with state of the art technology to turn all our exorbitant recycling into new useful machinery? It might be expensive when we can't externalize the heat, pollution and waste as we used to under old fashioned machine manufacturing, but the payoff for the environment will be earth-changing. And we might even learn to survive.

Oh , August 20, 2019 at 4:21 pm

Our current industrial policy consists of:
* Allowing big corporations to avoid taxes
* Destroying/marginalizing labor unions
* Being in bed with the Chambers of COmmerce
* Hand outs to yuuge corporations (via sweetheart contracts)
*Price supports to large corporate farmers
*Enforcing patents, trademarks for yuuge corporations
*Big finance to large corporations and saving TBTF banks
^Bankruptcy laws that favor big business
*NAFTA and other trade treaties to help multinationals
*H1B and other visas that reduce labor costs for big employers
*Not prosecuting corps that employee undocumented works
*Destroyng economies of developing countries to favor our exports
*fomenting unrest wherever industries are nationalized to help our corps
*Aggresively defending the almighty dollar by every means possible
*Funnelling tax payers funds to universities for research to help big Pharma
*Making sure our Insurance and RE sectors are subsidized through loans and bailouts

I'm sure there are more but I can't think of all of them.
Who says we don't have an industrial policy?

sierra7 , August 20, 2019 at 8:17 pm

"Oh";
Thank you, thank you, thank you!
The bottom line!
As an added comment I just can't believe that this is what would not have been expected with any sniff of "globalization" back in it's birthing 30 years ago. What did Americans expect? We dominated the post WW2 years in good manufacturing jobs while most of the world was licking their wounds from that war; the rest of the world has caught up and passed us by assisted by the globalization of flows of funds with the click of a mouse. Labor can't move like that. The "Renaissance" of Jobs" is a farce and an illusion. Unless the US comes up with something so new in manufacturing and can control that process for decades to come it is descending more an more into a 3rd world status; a super wealthy small upper class and the rest in "rickshaw" land. Even trade "wars" will not help.

rd , August 19, 2019 at 6:41 pm

The Chinese government has a pact with its population: the government makes sure the economy is structured to provide jobs and the people promise not to overturn the government through revolution.

When it is existential, then it becomes important. The US has simply stated that "The Market" will determine what makes sense. Nothing existential there.

So people became disposal, fungible assets for the MBAs to run their spreadsheet numbers on. For years they could assume that they could simply rehire skilled labor. However, that skilled labor is retiring or becoming out of date, so the workers are no longer fungible. The bleating begins about the lack of skilled labor because "somebody else" was responsible for providing the skilled labor training. So most US firms have gone the Tim Cook route and out-sourced to other countries that have trained workers and engineers over the past 20 years.

It will require a major paradigm shift from both government and corporations to change the trends.

Godfree Roberts , August 19, 2019 at 10:48 pm

The Chinese government has a pact with its population: the government makes sure the economy is structured to provide jobs and the people promise not to overturn the government through revolution.

The American government has a pact with its population: the government makes sure the economy is moved abroad and promises to kill the people if they attempt to overturn the government through revolution.

Personally, I prefer the first option.

a different chris , August 20, 2019 at 8:53 am

And it's not just "the government" -- it's more the other MIC: The Marketing Importing Complex. Apple is worth nearly a trillion dollars, that's 1/12 of China's GDP!

They could have used not so much of that money at all to train several workforces and build many factories. But that's not what brings in the big executive compensation.

Michael von Plato , August 20, 2019 at 1:17 pm

And related to the loss of a skilled worker base is the loss of patents needed to compete. Although many patents for original inventions still originate in the US, subsequent patents on improvements originate not in a lab, but from the shop floor. For example, the original machinery for producing microchips may well have originated here, but as that industry moved overseas, so did the patents on improvements. I doubt that we could compete in the manufacture of LEDs, flat-screen TVs or monitors etc. even if we could do so economically: the patents for the machines to make these things now reside overseas, in the hands of those manufacturers that have been improving them for decades.

JohnnyGL , August 19, 2019 at 5:10 pm

Good little post. A timely reminder that we've been bleeding those jobs and it's an ongoing process, but we've already bled a lot of them away.

It's now been 20 years since PNTR with China. The direction has become clear. It's going to take a tremendous amount of political will to change that direction. There are early signs of a change, but not enough, yet.

Tariffs will need to be part of the answer. Fiscal policy and federal contracts will need to be part of it. New regulatory bodies with new powers to enforce federal policy, too.

Also, my inner-Matt Stoller would like to remind us all that anti-monopoly is going to need a prominent role, too. The business model of private equity has been to buy up a all competitors in a particular niche, become a single supplier to the government, outsource to cut costs. Then, jack up prices to boost margins.

'skills-based immigration' doesn't have a good track record. Look at H1B visas. They've been turned into a vehicle to import low wage labor, and then enable outsourcing.

Lambert Strether Post author , August 20, 2019 at 7:22 am

> 'skills-based immigration' doesn't have a good track record. Look at H1B visas. They've been turned into a vehicle to import low wage labor, and then enable outsourcing.

They work for Canada, so we should copy them.

Roger Boyd , August 20, 2019 at 5:15 pm

The US H1B is an employment based non-immigrant visa, easy for corporations to use for their own purposes – especially when the person's right to reside relies upon their continued employment at their sponsoring employer.

Canada has a points based immigration system for the majority of immigrants (others are family reunification etc.) that is not employment based. Those getting the required points are given permanent residency (with a path to citizenship within 4 years). They can move from job to job at will. Its how I became a Canadian citizen.

Much less exploitable than a US H1B Visa holder.

Summer , August 19, 2019 at 6:23 pm

With all the scam online business listings, it also gives people the impression of a business environment that is active but it's a con.

NJ , August 20, 2019 at 4:11 am

I was thinking about this the other day in response to the Economist's recent article about a new boom in employment.

Does anyone know if scam artists, ransomeware senders, illegal salvagers, and stolen goods fencers would be counted as part of official employment statistics?

There's a whole section of the economy that is growing right now based upon illegally raiding closed down big box stores and selling the goods on eBay. Similarly, just like in any other time when inequality is high, scams and efforts to deceive others for profit are on the rise.

Lambert Strether Post author , August 20, 2019 at 7:23 am

That's perceptive. I would bet Manhattan on Google maps has many, many more "firms" than Manhattan at street level, where you see a "For Rent" sign on every block.

Summer , August 19, 2019 at 6:44 pm

An idea for a fun chart: how many types of marketing jobs are there now?

somecallmetim , August 19, 2019 at 6:53 pm

? However, I've highlighted the categories that really concern Collins in blue; they all have to do with, as Cook calls it, tooking. ?

Not a sophisticate, so I assumed – tooking – was a term of art.

Bill H , August 19, 2019 at 7:30 pm

Pretty sure it was one of many misspellings, and that what was meant was "tooling." Hard to take articles seriously when the writer doesn't even bother to run them through spellcheck.

Big River Bandido , August 19, 2019 at 10:35 pm

Someone piss on your cornflakes this morning?

Lambert Strether Post author , August 20, 2019 at 7:26 am

It's a big Internet. I hope you find the perfection you seek elsewhere.

doug , August 20, 2019 at 9:57 am

+10000

Clive , August 20, 2019 at 11:11 am

Somebody up there never read The Grauniad , nor appreciated how it came to earn that particular nickname . Hard to take comments seriously when the writer doesn't even bother to consider the proverb "let he who is without sin cast the first snote".

Ptb , August 19, 2019 at 7:20 pm

The bad news is that what is also lost is a caring-about-getting-details-right culture. Nearly extinct, in fact, at the business level, and I would sadly include engineering-intensive businesses (based on what little I have experienced.)

The good news is that North America has plenty of the human resources (and physical plant) we are talking about, mostly within a short drive of the border, even.

I would actually be more inclined to despair about the former than the latter.

Steve , August 19, 2019 at 7:44 pm

An alternative view that is hard to evaluate from this data we should be looking a domestic manufacturing economic value, not jobs. While loss of jobs is certainly bad, isn't it ameliorated if the manufacturing activity is taking place in the US? Hard to evaluate with given data.

Left in Wisconsin , August 20, 2019 at 12:20 am

Not necessarily. The problem with trying to evaluate "value" in trans-national Apple- or Walmart-style value chains is that the dominant player (Apple, Walmart) recognizes almost all of the value-added. (One could add " regardless of where that value is created" but, as Veblen pointed out a hundred years ago, there is no way to disentangle productive value from "buying and selling," so there is no "correct" way to assign value.)

The fact that Foxconn in China pays really low wages and has relatively tight profit margins leads to the conclusion that the value contribution per capita of Apple employees (because contractors don't create value either) is if I recall correctly several million dollars per employee. If that manufacturing work was done in the U.S., the value-per-employee would be much lower (still very high) but the wages paid, and worker living standards, would be much higher. (This would also be true, though to a lesser extent, if they doubled or tripled the wages of their Foxconn workforce in China.)

On top of this, of course, are the income-recognition and tax games that multinationals play. Economists know about these but somehow seem to think national data provide (a different set of?) "true" representations of value-added anyway.

Bob , August 19, 2019 at 7:47 pm

It is interesting to know that for furniture the timber is felled here in the US, the timber milled into lumber here, kiln dried here, packed into containers here, shipped from here to China, turned into furniture, knocked down, shipped here and reassembled here.

Not sure where the savings are but I suspect that the goal was to maximize profit and minimize taxes.

Of course no one will be left to buy furniture except on credit.

Summer , August 19, 2019 at 8:40 pm

I've been thinking about not only the manufacture of things like that but the craftsmanship that went into it (once upon a time).
I noticed the street lamps in Hollywood. The older ones that still work are black and elegantly designed steel. The part holding the lamp, the steel is bent like an arm flexing biceps.

The newer ones are taller. But just steel, bland, straight, can see them anywhere

cnchal , August 19, 2019 at 8:54 pm

Now you're talking . . . MMT

( M aterial M eets T ool X sales) – expenses = profit or loss

Got tooling?

> . . . Apprenticeships and training are good, but why not consider skills-based immigration that brings in the worker we'd otherwise have to wait to train?

Piss off. After the tooling industry was destroyed by cheap Chinese labor, you want to bring them in to further destroy it or take it over?

Bob , August 19, 2019 at 11:04 pm

Cheap Chinese labor in fact offshore labor is at best a canard and generally not far from a deception which repeated often enough becomes fact.

A good approach is to look at the labor quotient that is the cost of labor necessary to create a finished product.

For example in aluminum manufacture using the Hall process to reduce bauxite the majority of the cost is in electricity perhaps as much as 90%+ and labor cost is around 5%. So any manger worth his paycheck moves the operation to a a region of low power cost e.g. Iceland, Bonneville power territory, TVA. Labor cost is minimal perhaps 5%.

At one time the labor cost for textiles was around 17 % with the aim of the mills to drive the labor quotient to 12% through automation.

In addition if labor costs were the driving force in manufacturing it would be reasonable for all of U.S, manufacturing to relocate to low wage states such as Mississippi or the Dakotas.

And one should note that the multinationals are not shy of hiring U.S. labor at their factories here in the US.

The goal of U.S. corporations is to take advantage of tariffs (taxes) and the greater flexibility of accounting in offshore locations.

skippy , August 20, 2019 at 1:23 am

See Bluescope here in Oz shifting more Mfg to the U.S. due to energy costs.

cnchal , August 20, 2019 at 7:23 am

My lived experience tells a different story..

Before my ex customers and I parted ways, they used to get me to quote tooling work and then send the work to China. The reason given, my price was too high and they could get if for a fraction of that in China. No, it wouldn't be the same tool, but they liked to think they were getting an equivalent.

Before I gave up on them and fired my rotten customers, I used to ask "where is my one dollar per day cop", my one dollar per day teacher, my one dollar per day politician" so that my cost are in line with the Chinese? That drew a blank stare every time with no answer.

Tooling work is labor intensive and not comparable to generating electric power.

I view tooling as society's precious metal. It is the "means of production". The lawyers and politicians (one and the same from my viewpoint) running the country for their own benefit (they could not care less about you or me) make their money by charging the victim that darkens their doorway $500 bucks an hour. For them, they produce nothing and take it all, and their view of wealth generation is distorted by their occupation. They are quick to hand money to the biggest corporations to make them richer (see Wal-Mart and Amazon's massive billions in subsidies), but a little guy like me can rot in hell.

Globalization is a disaster, no matter where one cares to look.

Lambert Strether Post author , August 20, 2019 at 7:39 am

> I view tooling as society's precious metal. It is the "means of production".

"Constant capital" is what The Bearded one called it, I believe. But yes.

inode_buddha , August 20, 2019 at 11:35 am

AMEN. My lived hell for the last 30 years And then some smug right wing nut job tells me I'm just jealous

Andy Raushner , August 20, 2019 at 3:52 pm

Send the work to China has been dying since 2005. Didn't you notice? US heavy manufacturing has ex-material extraction almost looks now where it was in 2000. That isn't necessarily a good thing. Debt driven illusions can kill.

Oh , August 20, 2019 at 5:00 pm

One operation as an example is not apply to all manufacturing.

Lambert Strether Post author , August 20, 2019 at 7:29 am

> After the tooling industry was destroyed by cheap Chinese labor, you want to bring them in to further destroy it or take it over?

No, I don't. If there's a sane industrial policy, then (a) there's more than enough work for everybody and (b) we can pay "prevailing wages" as we ought to do. I think in this case the country is in such a hole we can add on, and the game is not zero sum. Not the same as, say, meatpacking.

cnchal , August 20, 2019 at 8:46 am

Big if, there. The managers and owners that would influence industrial policy will waste no time in bringing over 10,000 or 100,000 or however many they wanted, and swamp the industry with cheap labor.

According to Cook, there are millions upon millions of toolmakers and machinists in China, so even a million wouldn't be missed. Toolmaking becomes the new meatpacking.

My bet is there will be no sane industrial policy.

inode_buddha , August 20, 2019 at 2:32 pm

There isn't going to be an industrial policy. Because markets.

ambrit , August 19, 2019 at 9:56 pm

A possible "Black Swan" in all this national manufacturing quandry is the fragility of the supply chains involved. Today, the costs of shipping materials and goods across an entire ocean are managed through scale, (Embiggening Shipping Incorporated,) computerized scheduling, (Just In Time Ordering,) and cheap energy, (Fearless Fred's Fracking Et Cie.) Any one of those inputs could go asymmetric and make the exercise of Materials Globalization uneconomic. Then people would have to either pay more for something or do without. Either outcome would reduce aggregate economic activity in the nation. The social result would be another example of 'hystereisis,' people remembering what their and family members standards of living once were, and taking that for a 'normal' that has been stolen from them. A process similar to that which preceded the French Revolution will be in play.

RepubAnon , August 19, 2019 at 10:51 pm

It also helps to have clusters of similar industries in the same location. This gives new companies an area with lots of folks with the appropriate skills. We lost these "centers of manufacturing excellence" when so much of it got off-shored. It'll take significant efforts to bring them back.

Lambert Strether Post author , August 20, 2019 at 7:30 am

An excellent additional aspect!

Left in Wisconsin , August 20, 2019 at 12:25 am

You are of course correct but good people have been making this argument for the last 40 years with virtually no impact on corporate behavior. I'm no expert in Chinese manufacturing but I would have to think by now the technical capacity in China – not saying everywhere but certainly in large parts of the export sector – is very high. Yet the wages and working conditions are still terrible. So much for productivity = wages.

ambrit , August 20, 2019 at 9:41 am

True. In a stable environment, labour availability 'drives' wages. That was the secret the Unions levered to success. Restrict the supply of labour and squeeze the owners. Find a "fair" balance and the Golden Age ensues. The "fair" part of that equation was redefined, and here we are.

ambrit , August 19, 2019 at 10:07 pm

A risible 'Snark' if you will.
Lambert claims to have been a "model railroader" when young. Such virtue in one so young! I, poor deplorable, primarily associated with louche and gauche railroaders and tabletop gamers. So it is understandable that he grabbed the Iridium Ring while I merely took a circular ride. The "Eternal Return" in all it's refulgent glory. (I should meditate more on my exorcising of 'amor fati.')

deplorado , August 19, 2019 at 11:02 pm

Funny!

Godfree Roberts , August 19, 2019 at 10:46 pm

To quote a friend who hires workers for factories in the US and China,
"Manufacturing in the US is a nightmare. At our facility our only requirement for assemblers was a high school degree, US citizenship, passing a drug and criminal background check and then passing a simple assembly test: looking at an assembly engineering drawing and then putting the components together. While the vast majority of Americans were unable to complete the assembly test, in China they completed it in half the time and 100% of applicants passed. An assembler position in the US would average 30 interviews a day and get 29 rejections, not to mention all the HR hassles of assemblers walking off shift, excessive lateness, stealing from work, slow work speed and poor attitudes. The position starts at $12 an hour in flyover country which is pretty reasonable compared to other jobs that only require a GED and no prior work experience and offers medical, dental and annual raises with plenty of opportunity to move up in the company and earn the average salary for a Production Assembler, $33,029 in US, if they stay for five years.
Identical positions in China pay the same wages as other positions there with only a high school degree and no work experience. Yet the applicant quality is much higher and this applies to the white collar support professionals: schedulers, quality inspectors, equipment testers and calibrators, engineers, supply chain managers, account managers, sales. Their labor quality is simply higher. At the end of the day, high-end and middling manufacturing is not moving to the US or Mexico because average people in flyover country are dumb as rocks."

Left in Wisconsin , August 20, 2019 at 1:11 am

1. Just curious but does your friend say what the wages are in the Chinese plants? Do they reflect the quality of the applicant pool? Based on the talent levels you describe, they should all be making $100K/yr. At least 50. And not having to live in dormitories. Maybe the fact that your friend has access to such a talented workforce at starvation wages has something to do with workers not really being free? Why do we call it free trade, anyway?
2. I have no reason to doubt the fact set you describe. But it could have turned out differently, and the reason it didn't was that companies that were developed and initially made huge profits in this country decided to take the jobs elsewhere because they could make even huger profits. Everything else flowed from that.

Lambert Strether Post author , August 20, 2019 at 7:34 am

> Their labor quality is simply higher

Thanks, as Tim Cook points out, to the quality of Chinese public education, which our own elites have been busily destroying. It's almost like after the neoliberals took over in the mid-70s they "burned the boats" so there was no way back to what the country was; a more vivid way of saying "hysteresis," I suppose.

notabanker , August 20, 2019 at 7:56 am

$33K if you stay five years, how friggin generous. I wonder, how much is "your friend" pulling down shuttling between US and China? I'll bet it's a lot closer to $330K than $33K.

$12 an hour is a joke and you will get what you pay for. "Flyover" country or not, but I suppose the distinction is important to bigots that want to mentally justify exploiting the class.

I know plenty of people that bust their ass in multiple jobs for not much more than your "friends" generous $12 an hour and they are hardly "dumb as rocks". Maybe "your friend" needs to look at his recruiting skills.

Peon , August 20, 2019 at 9:14 am

My rural neighbors and friends in southern Michigan are these $12 hour workers your friend references. Did your friend mention "mandatory overtime"? or "zero hours"?. What this means is when you go to your job at 7am you may be sent home at 9 (they have to pay you for 2hours during which you clean the plant), or at 2pm when your shift ends in an hour they let you know they want you to stay until 5. Forget a weekend, you find out on Friday if you have to work Saturday, on Saturday you find out about Sunday. I have friends that have worked 74 days in a row with no day off, then they are on temporary shutdown for 20 day (unpaid of course!) while the plant re-tools or absorbs unsold inventory. Your work week is driven by the whims and profits of the the corporation.
There is no security in these jobs, not weekly, monthly and certainly not as a career. The factory may close or re-locate abruptly due to the some corporate buy-out, merger, or re-location to a more lucrative tax-free/low labor pay location. Sometimes the physical location in your little town re-opens with a new name, new owner, usually lower pay, but always the same insecure employment story.
These are not jobs you would encourage your children to take on as a career, jobs you build families and buy homes with.

Ptb , August 20, 2019 at 2:38 pm

I've designed and installed measurement/control equipment in exactly the type of US facility this commenter is describing. The reason the applicants are "dumb as rocks" is that the company culture drives all others away. Why go to a sh#tty factory with no windows, weird hours, and an obnoxious tailorist environment, when you could get paid the same or more at a car shop (even just the guy/ gal washing the cars) or a construction (even just a laborer). The bottom level of factory work in the US sucks. Hiring managers know anyone who is worth anything will quit in a month or two so they set up the process to subtly screen for people that will stay (i.e. already had the self esteem wrung out of them by previous experiences). Techs have it a bit better, since they actually have a path up the ladder that isn't a lie. But the environment is deeply depressing, like a bad stereotype of the 1930s. I honestly hate going to US factories.

Inode_buddha , August 20, 2019 at 8:34 pm

If you fish on the bottom, you catch bottom fish. What's the problem? $12/hr maybe OK for college kids looking for a summer job; for me its a slap in the face. 30 yrs millwright/welder/fabrication and machining. 3 trade schools at own expense; own tools. No drugs whatsoever, ever. You want people to be professionals you have to treat them like that, and that begins with the pay package. Maybe your friend needs to be told this, verbatim.

The Rev Kev , August 20, 2019 at 12:05 am

Thinking over Lambert's last paragraph, can the economic system that got us into this mess also be capable of getting us out of it? Well, no. There are too many vested interests and too many salaries (note that I did not say wages) that are depending on the current system continuing – which it can't.

Lambert Strether Post author , August 20, 2019 at 7:37 am

What Warren's "Economic Patriotism" does not attack. People have a rough idea what "revolution" means. They have no idea at all what "big structural change" means. I suppose if we swapped in "hope and" for "big structural" we'd have an idea of what she's getting at.

Left in Wisconsin , August 20, 2019 at 12:49 am

Lambert: this is a great post but I fear you are only scratching the surface. In addition to what you cover, I would add, off the top of my head:
1. If the data were to go back to the mid-70s, you would see substantially higher numbers for firms and employees in tooling industries than in 2002. The decline since 2002 is just a fraction of the skill and talent we have lost.
2. US multinationals, real manufacturers or virtual manufacturers like Apple, are simply not interested in re-shoring. There is no convincing cost-benefit argument. You might be able to show a company that they could make boatloads of money by building a new facility in the US but they would (rightly) tell you that, if that were truly the case, they could make MORE boatloads by building it in Mexico or China. Trump can bluster all he wants but the real problem is that US manufacturing is not cost-competitive in a free-trade environment.
3. Which gets to the larger point. The great thing about manufacturing is that anyone, with training and experience, can get good at it with (enough of) the right investment in tooling, training, and experience. Adam Smith could already see 250 years ago, before there ever was big-time manufacturing, that machinery changed everything – substantially more output with substantially less skilled labor. That has been the story for the last 250 years. (John Commons wrote a great piece 100 years ago on shoemaking – search Philadelphia Cordwainers – that showed how in this industry there was a constant dance of expansion of market, new technology, deskilling, and relocation of work in search of lower cost labor. Jefferson Cowie wrote a modern version about RCA more recently but exactly the same story.)
I was at the UAW when work started moving to Mexico in a big way. There was a lot of bluster about the fact that "they" were not going to be able to do the work, and for many years there was a lot of truth to that. But with enough time and investment, of course eventually they could. (Modularization of work comes in here, too, as it is a good way to incrementally shift work to lower wage locations as skill levels grow.) I see no evidence that there aren't many firms in China that can do technical work at the highest level, even if the "average" level of work is much lower, with wages and working conditions much lower than you could get away with in this country.
The conclusion can only be that globalization invariably leads to a race to the bottom. It has to. (Even in Germany, wages haven't grown with productivity, because even in Germany workers have no "hand," as George Costanza would say.) This is why I hate Dean Baker's argument that the solution is to subject doctors and lawyers to the same degree of global competition as manufacturing workers face. It is true that costs would come down but in a further race to the bottom. It's no solution, it's just spreading the misery.
This is why I'm a socialist.

Lambert Strether Post author , August 20, 2019 at 7:20 am

> globalization invariably leads to a race to the bottom. It has to.

That's not a bug.

> I hate Dean Baker's argument that the solution is to subject doctors and lawyers to the same degree of global competition as manufacturing workers face.

True, but the professionals might have a "come to Jesus" movement that would obviate the need to pass such a bill.

ambrit , August 20, 2019 at 9:58 am

We have seen a lot of "foreign" medical 'professionals' in our meanderings through the American Medical Complex these last three years. An oncologist from Delhi, India, a plastic surgeon from Karachi, Pakistan, a research oncologist from Cracow, Poland, a Registered Nurse from Brazil, etc. etc. These people are working and living here in America in pursuit of the Gold Ring. (One Ring of Gold to rule them all.)
Until America institutes a National Health Service and caps medical professional salaries, nothing will change.
The main problem is structural. To mangle an infamous statement from the Vietnam War: "We had to destroy the society to save it."

Inode_buddha , August 20, 2019 at 12:42 pm

I think those who make the decisions should face the consequences of those decisions. That would be -- executives. The fact that they can insulate themselves from negative consequences in the larger society is the only reason they get away with it. That, and the fact that its illegal to kill them.

I also believe the workers should control the means of production, preferrable by employee ownership and the use of credit unions.

@pe , August 20, 2019 at 1:06 am

Hysteresis and path dependencies are other ways of saying systems with memory.

Systems with memories are metastable, which means they don't have unique (or maybe even finite) sets of steady-state solutions, given the fundamental noise in the system.

In such systems, the law of large numbers is not valid.

Thus, most of orthodox economics is mathematically invalid, unless liquidity is turned up to the point that it is completely memoryless, responding only to the latest instantaneous event.

Such a system would destroy all memory bearing systems in it's path -- human beings are memory bearing systems.

vlade , August 20, 2019 at 3:29 am

The problem how I see it is that everyone was talking about how we before moved most investment from agri to manufacturing, we'd move it all from manufacturing to services.

The only problem with that is that it ignores a lot of history and worse yet, it would turn blind eye to some clear conclusions.

As in the above seemed to implicitly assume all service jobs would be better jobs than all manufacturing jobs. Which is not true, as you can't really compare tooling engineer (to take example from above) with a hairdresser.

As with any mass change, the majority of the service jobs created woudl be low-skill, low-paid ones. They would have to be, because there just would not be enough of people with the right skills (and aptitudes).

Yes, maybe evenutally shifting to the majority of jobs to service sectors is as unavoidable as shifting majority of jobs out of agri few hundreds of years ago. But still, would not it be better (for the society and the country) to do it gradually, via automation (as part of the capital investment cycle), than just moving manufacturing offshore to the cheapest-possible?

The problem here is not with the companies.Even if they have enlightened shareholders (hahahah. The amorphous mass that are the investment funds?) who are willing to take lower returns short/medium term to do the right thing, they may get destroyed by competition who has no such qualms.

If the government is a servant of the country, and not just the few lobbyist, then this is very clearly the task of the governmnet, making sure that it works out. Well, except the problem is, if you have a few short years election cycle, no-one cares more than slightly less than the cycle, because they want to get re-elected, and you don't get re-elected on the strength of the policies you implemented 20 years ago.

Another thing we need to acknowledge here is that while this all, in an international context, is not an entirely zero-sum game, it's a workable approximation. Because policies that will help Americans (or Europeans or others) will often hurt elsewhere.

There's no chance China would be now where it is w/o the massive offshoring to it. It's pretty night impossible for a lot of low-income countries to bootstrap themselves when facing a much more developed competition, that's just fact of life (the skills won't develop themselves, someone has to invest into them, and that won't happen if all you have is a poor internal market).

There can be a workable equilibrium between say the EU and the US. There cannot be a workable equilibrium between the US and the Africa (I'll use the US and Africa as examples, put in whatever you want) w/o the US giving up some of its wealth (=some of the wealth of its people).

But tbh, this is where the wealth distribution matters (and why it doesn't need to be a zero-sum game). If the internal US wealth distribution was different, leaving even a reasonable chunk on the table for Africa would not matter that much. It would still mean Africa was developing slower than with say Chinese-like policy (and single-midedness), but it would.

Of course then we run into a different problem. The current lifestyle of <1bln people in "first world countries" can't be really replicated across 8-9bln. But I'm getting so far away from the original problem that I'm not going to go there.

Lambert Strether Post author , August 20, 2019 at 7:17 am

> If the government is a servant of the country, and not just the few lobbyist, then this is very clearly the task of the governmnet, making sure that it works out. Well, except the problem is, if you have a few short years election cycle, no-one cares more than slightly less than the cycle, because they want to get re-elected, and you don't get re-elected on the strength of the policies you implemented 20 years ago.

Perhaps term-limiting the Presidency with the 22nd Amendment was a bad idea. One wonders, in any case, why the Democrats supported it, after FDR.

vlade , August 20, 2019 at 8:31 am

You do realise it may have given you three terms of Clinton, Obama? (and others)

Oh , August 20, 2019 at 5:35 pm

Bush II had four terms – Bush, Bush, Obama, Obama and now he's on his fifth! /s

eg , August 20, 2019 at 5:01 am

I would add capital controls and credit guidance to the toolbox.

Lambert Strether Post author , August 20, 2019 at 7:13 am

> I would add capital controls and credit guidance to the toolbox.

Credit guidance?

Phacops , August 20, 2019 at 8:15 am

I enjoyed my career in manufacturing, starting with my discovery of the Western Electric Statistical Quality Control Handbook and then learning to apply statistical analysis to manufacturing processes in pharmaceuticals. Alas, the FDA still favors compliance to regulation over skilled process design, optimization and control.

Anyway, thanks for the article. The US was the primary manufacturer of machine tools at the start of 1980 and now we are ranked seventh. We have lost this basis for manufacturing and along with that, we are at risk of losing entire generations of manufacturing expertise at all levels from product development and design to finished goods output.

While my coursework in college allowed me to work in technical manufacturing you alsu point out the bias that now exists against pursuing a career in manufacturing and wonder if the selling of higher education rather than training in skilled vocations like machining has fundamentally changed how we value manufacturing?

I can remember in the 60s where there were innumerable small machine shops around Detroit servicing the aerospace community during the ramp-up to Apollo. All gone now.

Ignacio , August 20, 2019 at 10:41 am

If Lambert lives in the past I am a buddhist monk. There are very few with such a wide view of present times.

David Carl Grimes , August 20, 2019 at 11:04 am

I'm curious as to what the growth was during the Obama years vs. the Trump years in both establishments and employment by NAICs code. Do you have a link? Your table goes from 2002 to 2018, but what about the years in between?

Based on the bls.gov data, manufacturing jobs only increased by 496K during Trump. That's not much. In fact, the trend line is very similar to Obama's.

Jon Rynn , August 20, 2019 at 11:20 am

Lambert, thanks for the analysis. I will note your last line,
"I'm not sure that's meaningful absent an actual industrial policy, democratically arrived at, and a mobilized population (which is what the Green New Deal ought to do)."

That is exactly what my Green New Deal Plan is designed to do. My mentor was the late Professor Seymour Melman, who was one of the world's top experts on the machine tool industry, and who warned as far back as 1988 in a book called 'the demilitarized society' that the U.S. was at the 'point of no return' exactly because the industrial machinery industries were in such bad shape. In fact, he felt that it was not possible for these industries to regenerate by themselves, thus the point of no return, so they needed help from the government to revive, and there needed to be large scale importing of engineering talent from what I would call more advanced countries to 'train the natives', as he put it (not sure if that is pc at this point). (If anyone is interested, I posted a description of Seymour's work at NakedCapitalism , )

Tim Cook's comments have been chilling because he is pointing out the systemic nature of a manufacturing base, like a forest if it gets too small, the whole thing effectively collapses. At this point, it seems to me, the U.S. can only 'bring back manufacturing' by engaging in huge public works projects, require domestic content, and help companies produce the associated parts and equipment. It would be especially important to require, after a few years, that the machinery be produced in the U.S. This is the sort of thing the Chinese do in their sleep, but most of the elite have been living in Reagan's brain for so long they forgot they can use the Federal government for nation building. I tried to counter some of the myths of manufacturing , as I put it, in my book "Manufacturing Green Prosperity"

Left in Wisconsin , August 20, 2019 at 12:50 pm

What do you do when the finance-types in control of all these firms say, "No thanks"? Tim Cook complains that the skill base isn't here – which by now it might not be – but the real driver is lower labor costs elsewhere. Guaranteed profits like in the MIC?

Jon Rynn , August 20, 2019 at 1:56 pm

Left in Wisconsin, thanks for replying. I think you need a form of national planning. not gosplan type, more like in the one to two trillion per year range, that the Feds directly spend -- I would advocate on a green new deal plan, for instance. That's not exactly guaranteed profits a la MIC, and a friend doesn't want me to use the word 'infrastructure industrial complex', but I think the Chinese did something rather similar, they planned the building of vast public works, and they knew that would provide a huge market for manufacturing firms. i think this sort of dynamic helped before in american history, think of encouraging rail in the 19th century or the public works in the new deal. i wrote about this in American Prospect . If you have 'domestic content' laws for all the parts being used for the public works, then you don't have to worry about lower wages overseas. It's absolutely necessary that the Green New Deal people put that in their language, I don't know if they will

Left in Wisconsin , August 20, 2019 at 3:16 pm

Is "domestic content" still legal under WTO? Just trying to figure out how far from here to there. I have huge respect for Melman.

Jon Rynn , August 20, 2019 at 3:48 pm

My understanding is that GATT allowed for domestic content if it was for 'general infrastructure'. Don't know about WTO, but it may be the same, I remember having a conversation with someone about this in 2008 so maybe it is WTO. Judging by what Trump is getting away with, maybe all you have to do is declare something a matter of 'national security' .but frankly I don't know. What the US, during Obama's administration, did to India, which was trying to use domestic content to build their solar industry, is unconscienable (sp) then India sued back when several US states tried to do the same thing. Clearly if there was support for a green new deal, there would be support enough to tell the WTO to go to hell, or what would probably happen, the WTO rules would change with enough pressure

Andy Raushner , August 20, 2019 at 3:48 pm

Sorry, but manufacturing has been in recession this year Lambert. Be aware the tied of revisions. From a pratical pov, Obama or Trump doesn't matter. But due to massive junk bond allocations and imo exhausted heavy manufacturing companies, they are in trouble going forward.

China itself is overrated right now as well. This board lives in denial on this issue.

[Aug 20, 2019] Is the So-Called Manufacturing Renaissance a Mirage

Without suppression of Wall Street speculators the renaissance on manufacturing is impossible...
Notable quotes:
"... A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back? ..."
Aug 20, 2019 | www.nakedcapitalism.com

If I lived in the past, I might assume that re-industrialization would be as easy as building a new plant and plopping it down in my model town; "build it and they will come." But this America is not that America. Things aren't that frictionless. They are not, because of a concept that comes with the seventy five-cent word hysteresis attached, covered here in 2015. Martin Wolf wrote :

"Hysteresis" -- the impact of past experience on subsequent performance -- is very powerful. Possible causes of hysteresis include: the effect of prolonged joblessness on employability; slowdowns in investment; declines in the capacity of the financial sector to support innovation; and a pervasive loss of animal spirits.

(To "loss of animal spirits" in the entrepreneurial classes we might add "deaths of despair" in the working class.) And if there were a lot of people like me, living in the past -- in a world of illusion -- that too would would cause hysteresis, because we would make good choices, whether for individual careers, at the investment level, or at the policy level, only at random.

Our current discourse on a manufacturing renaissance is marked by a failure to take hysteresis into account. First, I'm select some representative voices from the discourse. Then, I will present a bracing article from Industry Week, " Is US Manufacturing Losing Its Toolbox? " I'll conclude by merely alluding to some remedies. (I'm sure there's a post to be written comparing the policy positions of all the candidate on manufacturing in detail, but this is not that post.)

The first voice: Donald Trump. From " 'We're Finally Rebuilding Our Country': President Trump Addresses National Electrical Contractors Association Convention " (2018):

"We're in the midst of a manufacturing renaissance -- something which nobody thought you'd hear," Trump said. "We're finally rebuilding our country, and we are doing it with American aluminum, American steel and with our great electrical contractors," said Trump, adding that the original NAFTA deal "stole our dignity as a country."

The second voice: Elizabeth Warren. From " The Coming Economic Crash -- And How to Stop It " (2019):

Despite Trump's promises of a manufacturing "renaissance," the country is now in a manufacturing recession . The Federal Reserve just reported that the manufacturing sector had a second straight quarter of decline, falling below Wall Street's expectations. And for the first time ever , the average hourly wage for manufacturing workers has dropped below the national average.

(One might quibble that a manufacturing renaissance is not immune from the business cycle .) A fourth voice: Trump campaign surrogate David Urban, " Trump has kept his promise to revive manufacturing " (2019):

Amazingly, under Trump, America has experienced a 2½-year manufacturing jobs boom. More Americans are now employed in well-paying manufacturing positions than before the Great Recession. The miracle hasn't slowed. The latest jobs report continues to show robust manufacturing growth, with manufacturing job creation beating economists' expectations, adding the most jobs since January.

Obviously, the rebound in American manufacturing didn't happen magically; it came from Trump following through on his campaign promises -- paring back job-killing regulations, cutting taxes on businesses and middle-class taxpayers, and implementing trade policies that protect American workers from foreign trade cheaters.

Then again, from the New York Times, " Trump Promised a Manufacturing Renaissance. What Happens in 2020 in Places That Lost Those Jobs ?" (2019):

But nothing has reversed the decline of the county's manufacturing base. From January 2017 to December 2018, it lost nearly 9 percent of its manufacturing jobs, and 17 other counties in Michigan that Mr. Trump carried have experienced similar losses, according to a newly updated analysis of employment data by the Brookings Institution.

Perhaps the best reality check -- beyond looking at our operational capacity, as we are about to do -- is to check what the people who will be called upon to do the work might think. From Industry Week, " Many Parents Undervalue Manufacturing as a Career for Their Children " (2018):

A mere 20% of parents associate desirable pay with a career in manufacturing, while research shows manufacturing workers actually earn 13%more than comparable workers in other industries.

If there were a manufacturing renaissance, then parents' expectations salaries would be more in line with reality (in other words, they exhibit hysteresis).

Another good reality check is what we can actually do (our operational capacity). Here is Tim Cook explaining why Apple ended up not manufacturing in the United States ( from J-LS's post ). From Inc. :

[TIM COOK;] "The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting of tooling engineers and I'm not sure we could fill the room. In China you could fill multiple football fields.

"The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a key thing and we've got to correct that. China called that right from the beginning."

With Cook's views in mind, let's turn to the slap of cold water administered by Michael Collins in Industry Week, " Is US Manufacturing Losing Its Toolbox? ":

So are we really in the long-hoped-for manufacturing renaissance? The agency with the most accurate predictions on the future of jobs is the Bureau of Labor Statistics. Their projection to 2026 shows that US manufacturing sector will lose 736,000 manufacturing jobs. I spoke with BLS economists James Franklin and Kathleen Greene, who made the projections, and they were unwavering in their conclusion for a decline of manufacturing jobs.

This prompted me to look deeper into the renaissance idea, so I investigated the changes in employment and establishments in 38 manufacturing North American Industry Classification System (NAICS) industries from 2002 to 2018. I really hoped that the optimists were right about the manufacturing renaissance, but the data I collected in Table 1 (see link) shows some inconvenient truths -- that 37 out of the 38 manufacturing industries are declining in terms of both number of plants and employees.

So, yeah. Mirage.

... ... ...

A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back?

So, when I see no doubt well-meant plans like Warren’s “Economic Patriotism” — and not to pick on Warren — I’m skeptical. I’m not sure it’s enough. Here are her bullet points:

There’s a lot to like here, but will these efforts really solve the hysteresis that’s causing our tooling problem? Just spit-balling here, but I’d think about doing more. Start with the perspective that our tooling must be, as much as possible, domestic. (“If your business depends on a platform, you don’t have a business.” Similarly, if your industrial base depends on the tooling of others, it’s not an industrial base.)

As tooling ramps up, our costs will be higher. Therefore, consider tariff walls, as used by other developing nations when they industrialized. Apprenticeships and training are good, but why not consider skills-based immigration that brings in the worker we’d otherwise have to wait to train?

Further, simply “training” workers and then having MBAs run the firms is a recipe for disaster; management needs to be provided, too.

Finally, something needs to be done to bring the best and brightest into manufacturing, as opposed to having them work on Wall Street, or devise software that cheats customers with dark patterns. It’s simply not clear to me that a market-based solution — again, not to pick on her — like Warren’s (“sustainable investments,” “research investments,” “R&D investments,” “export promotion,” and “purchasing power”) meets the case.

It is true that Warren also advocates a Department of Economic Development “that will have a single goal: creating and defending good American jobs.” I’m not sure that’s meaningful absent an actual industrial policy, democratically arrived at, and a mobilized population (which is what the Green New Deal ought to do).

[Aug 20, 2019] Looks like in Trump mind the value of Dow and S P500 stock indexes is equivalent to the level of health of the US economy

This is the psychology of a huckster...
Notable quotes:
"... Trump Panicked As Stocks Fell, Called Top 3 Bank CEOs ..."
"... As The Dow dropped 800 points, the 4th largest point drop in history, Bloomberg reports that Trump held a conference call with three of Wall Street's top executives - JPMorgan Chase & Co.'s Jamie Dimon, Bank of America Corp.'s Brian Moynihanand Citigroup Inc.'s Michael Corbat. ..."
"... No draining of the swamp..has actually added with lunatic Bolton and Pompous. His winning BIGLY on his trade wars have done nothing but destroy American farmer and retail closings in record numbe ..."
"... What he called a big fat bubble in the fraud market when a candidate is now his bubble of hope to a second term. We won't even get into his Israeli foreign policy which are in violation of international law not to mention war crimes. ..."
"... Trump is making a HUGE mistake! His equating Wall Street profits with Main Street health will sink his chances for 2020. ..."
"... The American people are not stupid - they see that all the cheap money is flowing directly into the CEOs' pockets of all the major corporations with a stream of never-ending buy-back opportunities. ..."
"... I don't care for anybody in our current political establishment, Republican or Democrat, so I don't give an iota if Trump is re-elected. ..."
"... The man was born and raised in The Great Swamp, somewhere near Pennsylvania Avenue, if you know what I mean. ..."
"... So???? Why bankers? Why not tractor supply companies or steel makers? Bankers, markets, Trump, what is the connection, what can bankers do? ..."
"... Like calling the foxes to fix a missing chicken problem? Or telling the foxes to lay off the chickens? ..."
"... Back in 2008, the word was that money laundering from drug kingpins was what avoided an even worse monetary collapse. So, are they making sure everything is in place should economic turmoil necessitate a repeat performance? https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims ..."
"... The "plunge protection team" was used by Obama too after the markets got volatile, and last December by Trump. https://www.zerohedge.com/news/2018-02-07/paul-craig-roberts-exposes-plunge-protection-teams-fraud ..."
Aug 16, 2019 | www.zerohedge.com

Trump Panicked As Stocks Fell, Called Top 3 Bank CEOs

"When it's serious, you have to lie... or call the CEOs of the nation's biggest banks."

Amid the drop in US equity markets on Wednesday - culminating in a 'Markets In Turmoil' special on CNBC - President Trump appears to have hit the panic button and grabbed the big red Plunge Protection Team bat-phone.

As The Dow dropped 800 points, the 4th largest point drop in history, Bloomberg reports that Trump held a conference call with three of Wall Street's top executives - JPMorgan Chase & Co.'s Jamie Dimon, Bank of America Corp.'s Brian Moynihanand Citigroup Inc.'s Michael Corbat.

The three chief executives were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin on banking secrecy and money laundering, according to people familiar with the matter. On a conference call, they briefed the president, who was at his resort in Bedminster, New Jersey.

So Trump panicked with stocks a mere 5% below all-time-highs? What happens when we enter a bear market?


tobagocat , 3 minutes ago link

All you always Trumper's are just as bad as the lunatic left never Trumper's..refusing to see what's directly in front of you....a loud mouth Orange *** puppet who in the big picture has accomplished very little of the promises he had made as a candidate.

No draining of the swamp..has actually added with lunatic Bolton and Pompous. His winning BIGLY on his trade wars have done nothing but destroy American farmer and retail closings in record number.

What he called a big fat bubble in the fraud market when a candidate is now his bubble of hope to a second term. We won't even get into his Israeli foreign policy which are in violation of international law not to mention war crimes.

Face it always Trumper's...the Orange *** is a failed President and his name will be mentioned with the likes the Clinton's and Bushes ..fitting since none of those went to jail...another failed promise

Xingqiwu , 22 minutes ago link

Trump is making a HUGE mistake! His equating Wall Street profits with Main Street health will sink his chances for 2020.

The American people are not stupid - they see that all the cheap money is flowing directly into the CEOs' pockets of all the major corporations with a stream of never-ending buy-back opportunities.

Charlie_Martel , 14 minutes ago link

I bet you think the $26 trillion in bailouts went to " Hope & Change."

MrNoItAll , 23 minutes ago link

Bloomberg wouldn't know that Trump called the three banking CEOs on a conference all unless Trump's handlers wanted Bloomberg to know. This is a propaganda event intended to assure the "investing community" that Trump really does care about the stock market, that he is fixated on it and will do "whatever it takes" to keep the stock market from falling... too far.

In this time of great economic turmoil and with grim reality creeping ever closer through the fog of lies and propaganda that keep people thinking "all is well", the elites who really run things need to keep "investors" reassured, all in, and OUT of precious metals.

Todosqueremosmas , 19 minutes ago link

Why would he want to end the Fed when he is one of its primary beneficiaries???? I don't care for anybody in our current political establishment, Republican or Democrat, so I don't give an iota if Trump is re-elected.

But to believe that he will do anything to benefit the American citizenry at large by doing something such as ending the Fed is the epitome of naïveté. He couldn't care a rat's *** about you or I. The man was born and raised in The Great Swamp, somewhere near Pennsylvania Avenue, if you know what I mean.

two hoots , 34 minutes ago link

So???? Why bankers? Why not tractor supply companies or steel makers? Bankers, markets, Trump, what is the connection, what can bankers do?

conraddobler , 34 minutes ago link

Like calling the foxes to fix a missing chicken problem? Or telling the foxes to lay off the chickens?

Hmmm hard to say but time will tell although it's hard to see time as an ally here.

In the fullness of time God is on the job so it's all good, it's all for the edification of souls everywhere some just take to learning quicker than others.

rwe2late , 42 minutes ago link

"The three chief executives were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin on banking secrecy and money laundering ..."

Back in 2008, the word was that money laundering from drug kingpins was what avoided an even worse monetary collapse. So, are they making sure everything is in place should economic turmoil necessitate a repeat performance? https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

T.Gracchus , 43 minutes ago link

Trump is a ******* moron, hanging his presidency on the fragile and fickle world of stock prices. When they fall, he will fall too.

Thalamus , 44 minutes ago link

The "plunge protection team" was used by Obama too after the markets got volatile, and last December by Trump. https://www.zerohedge.com/news/2018-02-07/paul-craig-roberts-exposes-plunge-protection-teams-fraud

[Aug 20, 2019] Trump Promised Massive Infrastructure Projects -- Instead We ve Gotten Nothing>

Highly recommended!
Notable quotes:
"... So far, that wager has netted Americans nothing. No money. No deal. No bridges, roads or leadless water pipes. And there's nothing on the horizon since Trump stormed out of the most recent meeting. That was a three-minute session in May with Democratic leaders at which Trump was supposed to discuss the $2 trillion he had proposed earlier to spend on infrastructure. In a press conference immediately afterward, Trump said if the Democrats continued to investigate him, he would refuse to keep his promises to the American people to repair the nation's infrastructure. ..."
"... Candidate Donald Trump knew it was no joke. On the campaign trail, he said U.S. infrastructure was "a mess" and no better than that of a "third-world country. " When an Amtrak train derailed in Philadelphia in 2015, killing eight and injuring about 200 , he tweeted , "Our roads, airports, tunnels, bridges, electric grid -- all falling apart." Later, he tweeted , "The only one to fix the infrastructure of our country is me." ..."
"... Donald Trump promised to make America great again. And that wouldn't be possible if America's rail system, locks, dams and pipelines -- that is, its vital organs -- were "a mess." Trump signed what he described as a contract with American voters to deliver an infrastructure plan within the first 100 days of his administration. ..."
"... He mocked his Democratic opponent Hillary Clinton's proposal to spend $275 billion. "Her number is a fraction of what we're talking about. We need much more money to rebuild our infrastructure," he told Fox News in 2016 . "I would say at least double her numbers, and you're going to really need a lot more than that." ..."
"... In August of 2016, he promised , "We will build the next generation of roads, bridges, railways, tunnels, seaports and airports that our country deserves. American cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas. American steel will send new skyscrapers soaring. We will put new American metal into the spine of this nation." ..."
"... That contract Trump signed with American voters to produce an infrastructure plan in the first 100 days: worthless. It never happened. He gave Americans an Infrastructure Week in June of 2017, though, and at just about the 100-day mark, predicted infrastructure spending would "take off like a rocket ship." Two more Infrastructure Weeks followed in the next two years, but no money. ..."
"... This year, by which time the words Infrastructure Week had become a synonym for promises not kept, Trump met on April 30 with top Democratic leaders and recommended a $2 trillion infrastructure investment. Democrats praised Trump afterward for taking the challenge seriously and for agreeing to find the money. ..."
"... Almost immediately, Trump began complaining that Democrats were trying to hoodwink him into raising taxes to pay for the $2 trillion he had offered to spend. ..."
"... Trump and the Republicans relinquished one way to pay for infrastructure when they passed a tax cut for the rich and corporations in December of 2017. As a result, the rich and corporations pocketed hundreds of billions -- $1 trillion over 10 years -- and Trump doesn't have that money to invest in infrastructure. Corporations spent their tax break money on stock buybacks, further enriching the already rich. They didn't invest in American manufacturing or worker training or wage increases. ..."
"... I have seen this movie before. A State builds a highway, it then leases that highway to a corporation for a bucket of cash which it uses to bribe the electorate to win the next election or two. The corporation shoves brand new toll booths on the highway charging sky high rates which puts a crimp in local economic activity. After the lease is up after twenty years, the State gets to take over the highway again to find that the corporation cut back on maintenance so that the whole highway has to be rebuilt again. Rinse and repeat. ..."
"... Promises by any narcissist mean nothing. You cannot hang your hat on any word that Trump speaks, because it's not about you or anyone else, but about him and only him. ..."
"... Here is a heads up. If any infrastructure is done it will be airports. The elite fly and couldn't give a crap about the suspension and wheel destroying potholes we have to slalom around every day. They also don't care that the great unwashed waste thousands of hours stuck in traffic when a bridge is closed or collapses. ..."
Jul 26, 2019 | www.nakedcapitalism.com

Yves here. In a bit of synchronicity, when a reader was graciously driving me to the Department of Motor Vehicles (a schlepp in the wilds of Shelby County), she mentioned she'd heard local media reports that trucks had had their weight limits lowered due to concern that some overpasses might not be able to handle the loads. Of course, a big reason infrastructure spending has plunged in the US is that it's become an excuse for "public-private partnerships," aka looting, when those deals take longer to get done and produce bad results so often that locals can sometimes block them.

By Tom Conway, the international president of the United Steelworkers Union (USW) . Produced by the Independent Media Institute

Bad news about infrastructure is as ubiquitous as potholes. Failures in a 108-year-old railroad bridge and tunnel cost New York commuters thousands of hours in delays. Illinois doesn't regularly inspect , let alone fix, decaying bridges. Flooding in Nebraska caused nearly half a billion dollars in road and bridge damage -- just this year.

No problem, though. President Donald Trump promised to fix all this. The great dealmaker, the builder of eponymous buildings, the star of "The Apprentice," Donald Trump, during his campaign, urged Americans to bet on him because he'd double what his opponent would spend on infrastructure. Double, he pledged!

So far, that wager has netted Americans nothing. No money. No deal. No bridges, roads or leadless water pipes. And there's nothing on the horizon since Trump stormed out of the most recent meeting. That was a three-minute session in May with Democratic leaders at which Trump was supposed to discuss the $2 trillion he had proposed earlier to spend on infrastructure. In a press conference immediately afterward, Trump said if the Democrats continued to investigate him, he would refuse to keep his promises to the American people to repair the nation's infrastructure.

The comedian Stephen Colbert described the situation best, saying Trump told the Democrats: "It's my way or no highways."

The situation, however, is no joke. Just ask the New York rail commuters held up for more than 2,000 hours over the past four years by bridge and tunnel breakdowns. Just ask the American Society of Civil Engineers , which gave the nation a D+ grade for infrastructure and estimated that if more than $1 trillion is not added to currently anticipated spending on infrastructure, "the economy is expected to lose almost $4 trillion in GDP , resulting in a loss of 2.5 million jobs in 2025."

Candidate Donald Trump knew it was no joke. On the campaign trail, he said U.S. infrastructure was "a mess" and no better than that of a "third-world country. " When an Amtrak train derailed in Philadelphia in 2015, killing eight and injuring about 200 , he tweeted , "Our roads, airports, tunnels, bridges, electric grid -- all falling apart." Later, he tweeted , "The only one to fix the infrastructure of our country is me."

Donald Trump promised to make America great again. And that wouldn't be possible if America's rail system, locks, dams and pipelines -- that is, its vital organs -- were "a mess." Trump signed what he described as a contract with American voters to deliver an infrastructure plan within the first 100 days of his administration.

He mocked his Democratic opponent Hillary Clinton's proposal to spend $275 billion. "Her number is a fraction of what we're talking about. We need much more money to rebuild our infrastructure," he told Fox News in 2016 . "I would say at least double her numbers, and you're going to really need a lot more than that."

In August of 2016, he promised , "We will build the next generation of roads, bridges, railways, tunnels, seaports and airports that our country deserves. American cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas. American steel will send new skyscrapers soaring. We will put new American metal into the spine of this nation."

In his victory speech and both of his State of the Union addresses, he pledged again to be the master of infrastructure. "We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, school, hospitals. And we will put millions of our people to work," he said the night he won.

That sounds excellent. That's exactly what 75 percent of respondents to a Gallup poll said they wanted. That would create millions of family-supporting jobs making the steel, aluminum, concrete, pipes and construction vehicles necessary to accomplish infrastructure repair. That would stimulate the economy in ways that benefit the middle class and those who are struggling.

That contract Trump signed with American voters to produce an infrastructure plan in the first 100 days: worthless. It never happened. He gave Americans an Infrastructure Week in June of 2017, though, and at just about the 100-day mark, predicted infrastructure spending would "take off like a rocket ship." Two more Infrastructure Weeks followed in the next two years, but no money.

Trump finally announced a plan in February of 2018 , at a little over the 365-day mark, to spend $1.5 trillion on infrastructure. It went nowhere because it managed to annoy both Democrats and Republicans.

It was to be funded by only $200 billion in federal dollars -- less than what Hillary Clinton proposed. The rest was to come from state and local governments and from foreign money interests and the private sector. Basically, the idea was to hand over to hedge fund managers the roads and bridges and pipelines originally built, owned and maintained by Americans. The fat cats at the hedge funds would pay for repairs but then toll the assets in perpetuity. Nobody liked it.

That was last year. This year, by which time the words Infrastructure Week had become a synonym for promises not kept, Trump met on April 30 with top Democratic leaders and recommended a $2 trillion infrastructure investment. Democrats praised Trump afterward for taking the challenge seriously and for agreeing to find the money.

"It couldn't have gone any better," Ways and Means Committee Chairman Richard E. Neal , D-Mass., told the Washington Post, even though Neal was investigating Trump for possible tax fraud.

Almost immediately, Trump began complaining that Democrats were trying to hoodwink him into raising taxes to pay for the $2 trillion he had offered to spend.

Trump and the Republicans relinquished one way to pay for infrastructure when they passed a tax cut for the rich and corporations in December of 2017. As a result, the rich and corporations pocketed hundreds of billions -- $1 trillion over 10 years -- and Trump doesn't have that money to invest in infrastructure. Corporations spent their tax break money on stock buybacks, further enriching the already rich. They didn't invest in American manufacturing or worker training or wage increases.

Three weeks after the April 30 meeting, Trump snubbed Democrats who returned to the White House hoping the president had found a way to keep his promise to raise $2 trillion for infrastructure. Trump dismissed them like naughty schoolchildren. He told them he wouldn't countenance Democrats simultaneously investigating him and bargaining with him -- even though Democrats were investigating him at the time of the April meeting and one of the investigators -- Neal -- had attended.

Promise not kept again.

Trump's reelection motto, Keep America Great, doesn't work for infrastructure. It's still a mess. It's the third year of his presidency, and he has done nothing about it. Apparently, he's saving this pledge for his next term.

In May, he promised Louisianans a new bridge over Interstate 10 -- only if he is reelected. He said the administration would have it ready to go on "day one, right after the election." Just like he said he'd produce an infrastructure plan within the first 100 days of his first term.

He's doubling down on the infrastructure promises. His win would mean Americans get nothing again.

Arizona Slim , July 26, 2019 at 6:26 am

Paging Bernie Sanders: You need to be all over this Trump-fail. And sooner, rather than later.

The Rev Kev , July 26, 2019 at 6:40 am

The whole thing seems so stupid. The desperate need is there, the people are there to do the work, the money spent into the infrastructure would give a major boost to the real economy, the completed infrastructure would give the real economy a boost for years & decades to come – it is win-win right across the board. But the whole thing is stalled because the whole deal can't be rigged to give a bunch of hedge fund managers control of that infrastructure afterwards. If it did, the constant rents that Americans would have to pay to use this infrastructure would bleed the economy for decades to come.

I have seen this movie before. A State builds a highway, it then leases that highway to a corporation for a bucket of cash which it uses to bribe the electorate to win the next election or two. The corporation shoves brand new toll booths on the highway charging sky high rates which puts a crimp in local economic activity. After the lease is up after twenty years, the State gets to take over the highway again to find that the corporation cut back on maintenance so that the whole highway has to be rebuilt again. Rinse and repeat.

When President Dwight D. Eisenhower signed the Federal Aid Highway Act in 1956, can you imagine how history would have gone if they had been handed over to a bunch of corporations who would have built toll booths over the whole network? Would have done wonders for the American economy I bet.

Wukchumni , July 26, 2019 at 6:48 am

One of the things discussed at our town hall meeting the other night, was a much needed $481k public bathroom, and that was the low bid.

It has to be ADA compliant with ramps, etc.

$48,100 seems like it'd be plenty to get 'r done, as you can build a house with a couple of bathrooms, and a few bedrooms, a kitchen and living room for maybe $200k.

Ignacio , July 26, 2019 at 8:58 am

And if toll revenues don't come as high as expected, mother state will come to the rescue of those poor fund managers. I find it amazing that Trump uses the stupid Russia, Russia, Russia! fixation of democrats as an excuse to do nothing about infrastructure. Does this work with his electorate?

cnchal , July 26, 2019 at 7:09 am

Tom, grow up.

Promises by any narcissist mean nothing. You cannot hang your hat on any word that Trump speaks, because it's not about you or anyone else, but about him and only him.

Here is a heads up. If any infrastructure is done it will be airports. The elite fly and couldn't give a crap about the suspension and wheel destroying potholes we have to slalom around every day. They also don't care that the great unwashed waste thousands of hours stuck in traffic when a bridge is closed or collapses.

Carla , July 26, 2019 at 7:47 am

Well, fix the airports and you've still got Boeing, self-destructing as fast as it can. And Airbus can't fill all the orders no matter how hard it tries. Guess everybody will just have to . stay home.

WheresOurTeddy , July 26, 2019 at 7:16 am

Are all the coal jobs back? How about the manufacturing? NAFTA been repealed and replaced with something better yet? How's the wall coming and has Mexico sent the check yet? Soldiers back from Afghanistan/Iraq/Syria yet?

Got that tax cut for rich people and a ton of conservative judges through though, didn't he?

Katniss Everdeen , July 26, 2019 at 8:17 am

"It couldn't have gone any better," Ways and Means Committee Chairman Richard E. Neal, D-Mass., told the Washington Post, even though Neal was investigating Trump for possible tax fraud.

What a surprise. It's simply "amazing" that the insane status quo jihad that has been waged against Trump since he announced his candidacy had real consequences for the country. Who would have thought that calling ANY president ignorant, ugly, fat, a liar, a traitor, a cheater, an agent of Putin, a racist, a misogynist, a xenophobe, a bigot, an isolationist and an illegitimate occupant of the White House 24/7 since he or she won the election would make actual accomplishment nearly impossible.

The mere mention of his name on college campuses has even been legitimized as a fear-inducing, "safety"-threatening "microagression."

It's just so rich that having determined to prevent Trump from doing absolutely anything he promised during the campaign by any and all means, regardless of what the promise was or how beneficial it may have been, his numerous, bilious "critics" now have the gonads to accuse him of not getting anything done.

With all due respect to the author of this piece, the result he laments was exactly the point of this relentless nightmare of Trump derangement to which the nation has been subjected for three years. I tend to think that the specific promise most targeted for destruction was his criticism of NATO and "infrastructure" was collateral damage, but that's neither here nor there.

The washington status quo has succeeded in its mission to cripple a president it could not defeat electorally, and now tries to blame him for their success. Cutting off your nose to spite your face has always been a counterproductive strategy.

[Aug 20, 2019] The Numbers Are In, and Trump's Tax Cuts Are a Bust>

Jul 17, 2019 | www.nakedcapitalism.com

By Marshall Auerback, a market analyst and commentator. Produced by Economy for All , a project of the Independent Media Institute

The most commonly heard refrain when Donald Trump and the GOP were seeking to pass some version of corporate tax reform went something like this : There are literally trillions of dollars trapped in offshore dollar deposits which, because of America's uncompetitive tax rates, cannot be brought back home. Cut the corporate tax rate and get those dollars repatriated, thereby unleashing a flood of new job-creating investment in the process. Or so the pitch went.

It's not new and has never really stood up to scrutiny. Yet virtually every single figure who lobbied for corporate tax reform has made a version of this argument. In the past, Congress couldn't or wouldn't take up the cause, but, desperate for a political win after the loss on health care, Trump and the GOP leadership ran with a recycled version of this argument, and Congress finally passed the Tax Cuts and Jobs Act on December 22, 2017. The headline feature was a cut in the official corporate tax rate from 35 percent to 21 percent.

So did reality correspond to the theoretical case made for the tax reform bill? We now have enough information to make a reasonably informed assessment. Unless you think that tax havens like Ireland, Bermuda or the Cayman Islands, all of which continue to feature as major foreign holders of U.S. Treasuries , have suddenly emerged as economic superpowers, the more realistic interpretation of the data shows the president's much-vaunted claims about the tax reform to be bogus on a number of levels. Even though some dollars have been "brought home," there remain trillions of dollars domiciled in these countries (at least in an accounting sense, which I'll discuss in a moment). If anything, the key provisions of the new legislation have given even greater incentives for U.S. corporations to shift production abroad, engage in yet more tax avoidance activities and thereby exacerbate prevailing economic inequality. Which, knowing Donald Trump, was probably the whole point in the first place.

This tax bill was constructed on a foundation of lies. To cite one obvious example, the real U.S. corporate tax rate has never been near the oft-cited 35 percent level. As recently as 2014, the Congressional Research Service estimated that the effective rate (the net rate paid after deductions and credits) was around 27.1 percent, which was well in line with America's international competitors.

But even the new and supposedly more competitive 21 percent rate has not been as advertised. As Brad Setser (a senior fellow at the Council on Foreign Relations) has illustrated , the new tax bill also included a provision that enabled "companies that shift their profits abroad to pay tax at a rate well below the already-reduced corporate income tax Why would any multinational corporation pay America's 21 percent tax rate when it could pay the new 'global minimum' rate of 10.5 percent on profits shifted to tax havens, particularly when there are few restrictions on how money can be moved around a company and its foreign subsidiaries?" The upshot, as Setser concludes , is that "the global distribution of corporations' offshore profits -- our best measure of their tax avoidance gymnastics -- hasn't budged from the prevailing trend."

Although this new 10.5 percent rate applies to "global intangibles," such as patents, trademarks, and copyrights, the legislation still creates incentives for companies (notably pharmaceuticals and high-tech companies) to shift investment in tangible assets as well (such as factories) in order to maximize the benefits of this global rate on intangibles.

Many anticipated this result at the time the new law was enacted. The legislation incentivizes increased offshore investment in real assets such as factories, because the more companies invest in these "tangibles" in offshore low tax jurisdictions such as Ireland, the easier it becomes to incur a "calculated minimum tax on your offshore intangible income (the patents and the like on a new drug, for example)," according to Setser . The effect is also to exacerbate the trade deficit. A $20 billion jump in the pharmaceutical trade deficit last year provides excellent evidence of this trend. Ironically, this works at variance with Trump's "America First" trade nationalism, and his concomitant efforts to wield the tariff weapon in order to disrupt global supply chains and get corporate America to re-domicile investment at home.

Parenthetically, a further political by-product has been to give the deficit hawks more political ammunition in their goal to cut supposedly "unsustainable" social welfare expenditures, perpetuating even greater economic inequality, on the grounds of insufficient tax revenues to "fund" these programs. That is another lie (see this New York Times op-ed by Stephanie Kelton to understand why).

As for the other bogus arguments used to justify this legislation, it is worth noting that most of dollars allegedly "trapped" overseas are in fact domiciled in the U.S. They have been classified as "offshore" purely for tax accounting purposes. Yves Smith of "Naked Capitalism," for example, has pointed out that Apple stored the dollars "related to its Irish sub in banks in the US and managed it out of an internal hedge fund in Arizona." Similarly, the Brookings Institute notes that American tax accounting rules do not place geographic restrictions on where those U.S. dollars are actually held, even if the Treasury data records them as "offshore" for tax purposes. Quite the contrary: "[T]he financial statements of the companies with large stocks of overseas earnings, like Apple, Microsoft, Cisco, Google, Oracle, or Merck show most of it is in U.S. treasuries, U.S. agency securities, U.S. mortgage backed securities, or U.S. dollar-denominated corporate notes and bonds." In other words, the dollars are "home" and invested in the U.S. financial system.

So in what ways are the dollars actually "trapped" (i.e., unavailable for domestic use without severe tax repercussions)? They have never been so in reality. Through financial engineering, the banks that have held the dollars "offshore" on behalf of these American multinationals have extended loans against the stockpile so as to "liberate" the capital to be used as the companies saw fit. It's a form of hypothecated lending . Not only has the resultant " synthetic cash repatriation " provided a nice margin for what are effectively risk-free loans, but it also has enabled the beneficiary companies to deploy the dollars within the U.S. while avoiding tax penalties.

But here's the key point: instead of investing in new plants and equipment, a large proportion of these dollars have instead been used for share buybacks or distributed back to shareholders via dividend payments . Anne Marie Knott of Forbes.com quantifies the totals : "For the first three quarters of 2018, buybacks were $583.4 billion (up 52.6% from 2017). In contrast, aggregate capital investment increased 8.8% over 2017, while R&D investment growth at US public companies increased 12.5% over 2017 growth." So the top tier again wins in all ways: net profits are fattened, shareholders get more cash, and CEO compensation is elevated, as the value of the stock prices goes higher via share buybacks.

The dollars, in other words, have only been "trapped" to the extent that corporate management has chosen not to deploy them to foster real economic activity. "Punitive" corporate tax rates, in other words, have been a fig leaf. But the American worker has derived no real benefit from this repatriation, which was the political premise used to sell the bill in the first place.

Since the passage of the tax bill, the data show no significant evidence of corporate America bringing back jobs or profits from abroad. In fact, there is much to suggest the opposite: namely, that tax avoidance is accelerating in the wake of the legislation's passage, rather than decreasing. Consider that the number of companies paying no taxes has gone from 30 to 60 since the bill's enactment.

But it's worse than that, as Setser highlights :

"Well over half the profits that American companies report earning abroad are still booked in only a few low-tax nations -- places that, of course, are not actually home to the customers, workers and taxpayers facilitating most of their business. A multinational corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary and then funnel income to its Bermudian subsidiary -- taking advantage of Bermuda's corporate tax rate of zero."

Again, the money itself does not make this circuitous voyage. These are all bookkeeping entries for accounting purposes. In another report, Setser estimates the totals in revenue not accrued by the U.S. Treasury to be equivalent to 1.5 percent of GDP , or some $300 billion that is theoretically unavailable for use on the home front.

Global tax arbitrage, therefore, runs in parallel with global labor arbitrage. That's the real story behind globalization, which its champions never seem to mention, as they paint a story of worldwide prosperity pulling millions out of poverty. However, as I've written before , "a big portion of Trump voters were working-class Americans displaced from their jobs by globalization, automation, and the shifting balance in manufacturing from the importance of the raw materials that go into products to that of the engineering expertise that designs them." During the 2016 election and beyond, Trump has consistently addressed his appeals to these " forgotten men and women ." Yet the president's signature legislative achievement, corporate tax reform, suggests that his base continues to receive nothing but a few crumbs off the table. The tax reform also works at variance with the main thrust of his trade policy or, indeed, his restrictionist immigration policies (and it's questionable whether these forgotten voters are actually deriving much benefit from those policies either). Not for the first time, therefore, the president's left hand is working at cross-purposes with the right. The very base to whom he continues to direct his re-election appeals get nothing. And the country as a whole remains far worse off as a result of his policy incoherence and mendacity.

Larry , July 17, 2019 at 8:11 am

A very nice summary that details how the new boss is the same as the old boss, just more offensive on Twitter. The only place where Trump's campaign promises seem to hold up at all are the sound and furry over trade with China and the border wall with Mexico. Nothing will come of this bluster most likely, but at least it makes it appear that Trump is still working on behalf of his base.

Ignacio , July 17, 2019 at 8:34 am

Will these voters realise what is really happening? Which are the alternative narratives they are receiving/accepting?

Monty , July 17, 2019 at 10:15 am

Spoiler alert: NO. As long as the alternative is giving free healthcare to undocumented immigrants, learning to code, reparations and a focus on transgender rights.

marym , July 17, 2019 at 12:13 pm

Is this the actual alternative or, at least in part, a fear mongered version of universal benefits like M4A or a jobs program; civil rights; and righting some of the wrongs of the past? It preserves the status quo or promotes it becoming even more inequitable to convince people to reject any option that also helps someone not like them, or offers relief for a problem they never had or surmounted on their own. I mean, no viable politician is "focusing on transgender rights" or doing more than barely (and opportunistically imo) giving lip service to reparations. Is the rejection of any move toward justice or equity just the result of propaganda, or are we fundamentally unable to do any better without resentment? I'm very pessimistic at the moment.

Monty , July 17, 2019 at 1:04 pm

Did you watch the Democratic debates?

marym , July 17, 2019 at 1:35 pm

No – have I misjudged? I know at least some have said they'd sign on to a "study" of reparations, even Sanders eventually, but he's been clear that he doesn't think "writing a check" is the way to address problems in distressed communities. M4A that included undocumented immigrants wouldn't bother me from a candidate who supported a path to citizenship and humane forms of enforcing future immigration restrictions, and I'm not opposed to transgender rights so maybe some of that wouldn't seem so fearsome to me if I heard it. Why it should be fearsome enough to disqualify a candidate with a platform of universal or widely distributed social benefits, economic justice, and criminal justice reform is inexplicable and sad to me.

Monty , July 17, 2019 at 3:59 pm

It doesn't matter how you understand it. It only matters what contorted misrepresentations of Democrat's actual policies that 'regular folks' aka greedy, selfish, frightened 'suburban republicans' (aka a majority of voters in most states) can be led to believe.
The focus on these kind of divisive topics is the gift that keeps giving for the right wing. What you see as reasonable, they see as a threat to their way of life. So while virtue signalling to one group, they are simultaneously alienating another and galvanizing their own opposition against them.

False Solace , July 17, 2019 at 12:40 pm

This is why Trump screams about immigrants so loudly. It's all he's got. When the facts aren't on your side, pound the table. Remember this is the guy who invented birtherism. He won't lift a finger for his voters but he sure knows how to yell about foreigners. He also promised not to cut Social Security or Medicare then submitted a budget that makes them look like Jack the Ripper victims.

Ignacio , July 17, 2019 at 1:08 pm

Yes, i think it is as simple a that. Progressives should just ignore racist and antimigrant discourse and focus on Health care, infrastructures, GND, jobs etc.

Glen , July 17, 2019 at 10:06 am

Tax cuts for the rich? Screw everyone else?

That's been true since Reagan.

a different chris , July 17, 2019 at 10:16 am

>Again, the money itself does not make this circuitous voyage.

Haha the one way you gold bugs could get me on board is if you were able to force all cross-border money flows to be limited to actual, physical gold. Ideally in wooden sailing ships.

That would change things quite a bit.

The Rev Kev , July 17, 2019 at 10:59 am

Good article this. Trump must know that the whole thing is just financial shenanigans. After all, that has been his specialty for the past few decades. But he and Washington went along with it anyway and now America's financial situation is even worse. Every actor is trying to make out in their game and hopes that the consequences fall after they have exited the market. Maybe they think that at that stage they will be able to swoop in and grab up everything else on the cheap. Having just read some history on France in 1848 and 1871 I think that the may be playing with fire and not the FIRE that they are used to.

Softie , July 17, 2019 at 11:18 am

The idiots take over the final days of crumbling civilizations. Idiot generals wage endless, unwinnable wars that bankrupt the nation. Idiot economists call for reducing taxes for corporation and the rich and cutting social service programs for the poor. They project economic growth on the basis of myth. Idiot industrialists poison the water, the soil, and the air, slash jobs and depress wages. Idiot bankers gamble on self-created financial bubbles. Idiot journalists and public intellectuals pretend despotism is democracy. Idiot intelligence operatives orchestrate the overthrow of foreign governments to create lawless enclaves that give rise to enraged fanatics. Idiot professors, "experts", and "specialists" busy themselves with unintelligible jargon and arcane theory that buttresses the policies of rulers. Idiot entertainers and producers create lurid spectacles of sex, gore and fantasy. There is a familiar checklist for extinction. We are ticking off every item on it.

– Chris Hedges, America: The Farewell Tour

JimTan , July 17, 2019 at 12:49 pm

Maybe we should create a 'national intangibles tax', and levy it specifically on the patents, trademarks, and copyrights of all U.S. domiciled companies, and on these 'intangibles' for all companies that have the majority of their common equity securities registered in the U.S.

[Aug 20, 2019] Trumponomics on the march: Israeli and EU farmers say thank you to Trump .

Notable quotes:
"... "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting. ..."
"... The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement. ..."
May 14, 2019 | www.theguardian.com

American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding that has delayed planting.

"The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting."

The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on the list of goods that will be taxed.

... ... ...

The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement.

[Aug 20, 2019] In this sordid world, people without power have absolutely no value.

Notable quotes:
"... When Trump was first elected, I tried to calm down friends with advanced TDS, who expected Kristallnacht to be directed at their favorite brunch spots, by saying that "This is what empires in decline look like." ..."
"... In this sordid world, girls/women have absolutely no value ..."
"... Don't forget the young boys who get traded around like fudge recipes. Something quick on the Hollywood angle on bent dicks. It applies almost everywhere in America now: https://news.avclub.com/corey-feldman-made-a-documentary-about-sexual-abuse-he-1834310252 ..."
"... My reinterpretation of your comment would be; In this sordid world, people without power have absolutely no value. ..."
"... Epstein's World was tied in with Hollywood and Wall Street. Both are homoerotic paedophile havens. The world of the Vatican is tied in to Wall Street; it has it's own bank, the Instituto per le Opere de Religioni. ..."
"... As is true with the continued withholding of key documents in the JFK assassination, I believe that if the lousy reporting and official screwups in the Epstein case persist, it will be perfectly fine for the public to conclude and believe the absolute worst and act accordingly. ..."
"... Given the spotiness and inadequacy of reporting on the Epstein affair I wonder if an avenue for exploration might be that of a more direct involvement of media moguls and highly placed media staff in being serviced by Epstein i.e., the decision-makers regarding what gets covered and published are themselves subject to exposure, embarrassment, and other things that befall men caught in such matters. ..."
Aug 14, 2019 | www.nakedcapitalism.com

Michael Fiorillo , , August 14, 2019 at 11:38 am

I can't add much to Yve's excellent post and the follow-up comments, except to say that the events of recent days and weeks have made Pizzagate (as deranged as it was) into some kind of weird Jungian premonition which is to say, the s&#* is out of control.

When Trump was first elected, I tried to calm down friends with advanced TDS, who expected Kristallnacht to be directed at their favorite brunch spots, by saying that "This is what empires in decline look like."

In regard to this sordid tale, I'm reminded of Robert Graves' (and the superb BBC TV version of) "I, Claudius."

"Don't eat the figs."

adrena , , August 14, 2019 at 11:48 am

In this sordid world, girls/women have absolutely no value.

ambrit , , August 14, 2019 at 12:16 pm

Don't forget the young boys who get traded around like fudge recipes. Something quick on the Hollywood angle on bent dicks. It applies almost everywhere in America now: https://news.avclub.com/corey-feldman-made-a-documentary-about-sexual-abuse-he-1834310252

My reinterpretation of your comment would be; In this sordid world, people without power have absolutely no value. Otherwise, I'm with you all the way. Abuse is abuse. No other definition is logical.

ambrit , , August 14, 2019 at 4:18 pm

Epstein's World was tied in with Hollywood and Wall Street. Both are homoerotic paedophile havens. The world of the Vatican is tied in to Wall Street; it has it's own bank, the Instituto per le Opere de Religioni.

Who knows? Perhaps there will be some Prelates unearthed from the Lolita Express passenger log.

Pelham , , August 14, 2019 at 1:54 pm

As is true with the continued withholding of key documents in the JFK assassination, I believe that if the lousy reporting and official screwups in the Epstein case persist, it will be perfectly fine for the public to conclude and believe the absolute worst and act accordingly.

Actually, we SHOULD believe the worst.

Robin Kash , , August 14, 2019 at 2:16 pm

Given the spotiness and inadequacy of reporting on the Epstein affair I wonder if an avenue for exploration might be that of a more direct involvement of media moguls and highly placed media staff in being serviced by Epstein i.e., the decision-makers regarding what gets covered and published are themselves subject to exposure, embarrassment, and other things that befall men caught in such matters.

Who covers the press and roots out its secret malefactions? Rogue reporters? And who publishes them? Indeed!

[Aug 20, 2019] Marci government was a tool of global investment banks, global money and the supranationals. And sure rgt devoure Argentina and pushed it again into debt slavery

Notable quotes:
"... Ex-IMF president, and soon to be head of the ECB, Christine Lagarde personally staked her support for President Mauricio Macri's pro-market government when she steamrollered through the IMF's biggest ever bailout of $56 billion for Argentina last year ..."
"... In return for the 2018 Bailout, the IMF demanded its usual pound of flesh policies: Austerity, Austerity and Austerity, spiced with inflation-targeted monetary policy, fiscal tightening, currency controls, and the keys to the Peso printing presses. Give Lagarde some credit -- she did give lip service to the people with a smattering of minor austerity mitigants in terms of gender equality and social provision. But, essentially the IMF's answer to yet another predictable Argentinian crisis was more of the same programme. You know the definition of madness ..."
"... While the new Macri government was welcomed by markets in 2015 -- it was immediately clear it didn't have widespread and deep-rooted political support. His government was perceived as a tool of global investment banks, global money and the supranationals. The electorate went along with it for a while, but the results of "neo-liberalising" the economy were disastrous; killing jobs, creating a balance of payments crisis, devaluation, driving inflation, and yet another flirtation with default -- hence the new IMF bailout. ..."
"... Macri failed to deliver on his promises to the electorate: inflation wasn't reined in, but soared to 60-70. Instead of growth the economy tumbled into recession. And more and more people fell into extreme poverty. Compare and contrast with the experience of Argentina under the populist Peronistas, the Kirchners, who drove recovery in the early 2000s via easy monetary and a massive fiscal spending initiatives. These didn't work so well when commodities declined, recession struck the currency sagged and massive monetary corruption followed. Argentina came close to default in 2012, and a naval vessel was actually seized by one creditor! ..."
"... The answer is not Austerity, Austerity, Austerity -- but that's her most likely only weapon in the ECB's armoury. There are clear parallels between Argentina and Europe -- much to be learnt in how not to handle recovery in the face of populism and undeliverable political promises. ..."
Aug 13, 2019 | www.zerohedge.com

This morning's headlines are screaming how Argentina and President Mauricio Macri have precipitated yet another crisis on the stressed geopolitical battlefront Relax. We are more than used to dealing with Argentina defaults But, its far more complex than that. The latest Argentina Dance Macabre is all about Global Credibility. It's another Massive Fail!

What does it say about the credibility of Global Institutions and Policy when Argentina's whole market collapsed following a primary for an election in December? Ex-IMF president, and soon to be head of the ECB, Christine Lagarde personally staked her support for President Mauricio Macri's pro-market government when she steamrollered through the IMF's biggest ever bailout of $56 billion for Argentina last year .

It now looks an extremely poor call on Lagarde's part. Macri won a mere 32% of the vote, while former president Cristina Fernandez de Kirchner won 47%. Don't Cry for Me Argentina indeed Domestic Argentine Politics have left the IMF looking stupid.

There are three major issues to consider here:

First there is the absolute predictability of what's just happened in Argentina:

In return for the 2018 Bailout, the IMF demanded its usual pound of flesh policies: Austerity, Austerity and Austerity, spiced with inflation-targeted monetary policy, fiscal tightening, currency controls, and the keys to the Peso printing presses. Give Lagarde some credit -- she did give lip service to the people with a smattering of minor austerity mitigants in terms of gender equality and social provision. But, essentially the IMF's answer to yet another predictable Argentinian crisis was more of the same programme. You know the definition of madness

The programme did achieve some minor success: bringing down Argentina's primary deficit and putting the trade balance in to surplus -- but only because they spent IMF money supporting the peso. "Surprisingly" Austerity wasn't to the electorate's taste -- inflation remains out of control and poverty is rising allowing politicians to exploit the widening income-gap divide. What a complete shock! Who could have possibly predicted an unhappy electorate would damn Macri at the polls and favour former Peronista's from the last century instead? (US Readers -- Massive Sarcasm Alert.)

While the new Macri government was welcomed by markets in 2015 -- it was immediately clear it didn't have widespread and deep-rooted political support. His government was perceived as a tool of global investment banks, global money and the supranationals. The electorate went along with it for a while, but the results of "neo-liberalising" the economy were disastrous; killing jobs, creating a balance of payments crisis, devaluation, driving inflation, and yet another flirtation with default -- hence the new IMF bailout.

Macri failed to deliver on his promises to the electorate: inflation wasn't reined in, but soared to 60-70. Instead of growth the economy tumbled into recession. And more and more people fell into extreme poverty. Compare and contrast with the experience of Argentina under the populist Peronistas, the Kirchners, who drove recovery in the early 2000s via easy monetary and a massive fiscal spending initiatives. These didn't work so well when commodities declined, recession struck the currency sagged and massive monetary corruption followed. Argentina came close to default in 2012, and a naval vessel was actually seized by one creditor!

The Macri programme effectively went to the dogs y'day. The laughable Argie Century Bond crashed as low as 60 y'day. Default swaps are 40 cents upfront (pay $40mm to insure $100mm). Short-term debt is yielding near 40%. Argentinians voted for former leftist politician Kirchner instead, despite the widespread accusations of corruption, and the likelihood her election will simply deepen ongoing crisis.

The second point to this on-going Argentine Crisis is what does it say about Lagarde?

She is a gifted politician, a former French finance and apparently very efficient. She is not a trained central banker, but give her credit for being self-aware. She recently admitted : "The Argentine economic situation has proved incredibly complicated and I dare say that many of those involved, including us, underestimated a bit, when we started with the Argentine authorities building the programme."

Her new job at the ECB is going to be a political minefield. She will need to draw Europe into agreement on fiscal policy support for Southern European Economies -- which is a massive political issue when she's seen as Macron's candidate, Merkel is about to exit the stage, and the next crop of German Leader's look crushingly incompetent in the leadership department. The Italian League has already thrown down it's gauntlet -- if they don't get permission to start spending their way out of recession, they are going to do it anyway.

Lagarde has to balance the economic conservatism of Europe's strongest economy, Germany, against the risks of "free-spending" other European's creating further debt crisis. And she has to do it while holding the Euro together, dealing with consequences of Brexit, and being a distinct number 2 on the priority list for national governments. Is she up to it?

If Lagarde thinks Argentina's economic situation is complex, wait till she tries to balance the ECB. Her job is not to simply continue the "do-what-ever-it-takes" Mario Draghi "keep-the-Euro-going" mantras, but to actually move the European economy forward in a political vacuum. The answer is not Austerity, Austerity, Austerity -- but that's her most likely only weapon in the ECB's armoury. There are clear parallels between Argentina and Europe -- much to be learnt in how not to handle recovery in the face of populism and undeliverable political promises.

The third point to learnt from the new Argentina crisis is who leads the IMF now that Legarde is off to Frankfurt?

The European's have decided they want their compromise candidate, Kristalina Georgieva, to lead the institution. Its always been led by a European. Rest of world don't like that. While I'm sure Ms. Georgieva of the World Bank is an excellent candidate I am sure there are better. Mark Carney -- Canadian and Irish. Why Not. He's a proper banker..

What a complete ClusterF**k.


JPHR , 20 minutes ago link

Empire always gets QE, but indentured client states austerity and liberal reform facilitating a fire sale of their assets.

US has been exploiting IMF for this scam for years now. EU/Germany is copying that on Greece, Ukraine but not yet fully on Spain and Italy.

Don't expect Lagarde imposing austerity on either Germany or France, but she will try to impose that on Italy.

spanish inquisition , 23 minutes ago link

Bravo Argentina! They know how to play the game. He who defaults first can default the most. Get money, pass it around the corrupt establishment, default again, get mo money!

Batman11 , 1 hour ago link

Richard Koo explained the problem with austerity to the IMF after Greece.

https://www.youtube.com/watch?v=8YTyJzmiHGk

[Aug 20, 2019] Trump is about the agony. The agony of the US centered global neoliberal empire.

Highly recommended!
Notable quotes:
"... The current neoliberal order failed to suppress China development enough to block her from becoming the competitor (and the second largest economy.) ..."
"... That's why a faction of the USA elite decided to adopt "might makes right" policies (essentially piracy instead of international law) in a hope that it will prolong the life of the US-centered neoliberal empire. ..."
"... As much as Trump proved to be inapt politician and personally and morally despicable individual (just his known behavior toward Melania tells a lot about him; we do not need possible Epstein revelations for that) he does represent a faction of the US elite what wants this change. ..."
"... All his pro working class and pro lower middle class rhetoric was a bluff -- he is representative of faction of the US elite that is hell bent on maintaining the imperial superiority achieved after the collapse of the USSR, whatever it takes. At the expense of common people as Pentagon budget can attest. ..."
"... That also explains the appointment of Bolton and Pompeo. That are birds of the feather, not some maniacs (although they are ;-) accidentally brought into Trump administration via major donors pressure. ..."
"... In this sense Russiagate was not only a color revolution launched to depose Trump by neoliberal wing of Democratic Party and rogue, Obama-installed elements within intelligence agencies (Brennan, Comey, McCabe, etc.) , but also part of the struggle between the faction of the US elite that wants "muscular" policy of preservation of the empire (Trump supporters faction so to speak) and the faction that still wants to kick the can down the road via "classic neoliberalism" path (Clinton supporters faction so to speak.) ..."
Aug 20, 2019 | economistsview.typepad.com

likbez -> anne... August 04, 2019 at 04:14 PM

It is not about the strategy. It's about the agony. The agony of the US centered global neoliberal empire.

Trump and forces behind him realized that current set of treaties does not favor the preservation of the empire and allows new powerful players to emerge despite all institutionalized looting via World Bank and IMF and the imposition of Washington Consensus. The main danger here are Germany (and EU in general) and, especially, China.

The current neoliberal order failed to suppress China development enough to block her from becoming the competitor (and the second largest economy.)

That's why a faction of the USA elite decided to adopt "might makes right" policies (essentially piracy instead of international law) in a hope that it will prolong the life of the US-centered neoliberal empire.

As much as Trump proved to be inapt politician and personally and morally despicable individual (just his known behavior toward Melania tells a lot about him; we do not need possible Epstein revelations for that) he does represent a faction of the US elite what wants this change.

All his pro working class and pro lower middle class rhetoric was a bluff -- he is representative of faction of the US elite that is hell bent on maintaining the imperial superiority achieved after the collapse of the USSR, whatever it takes. At the expense of common people as Pentagon budget can attest.

That also explains the appointment of Bolton and Pompeo. That are birds of the feather, not some maniacs (although they are ;-) accidentally brought into Trump administration via major donors pressure.

In this sense Russiagate was not only a color revolution launched to depose Trump by neoliberal wing of Democratic Party and rogue, Obama-installed elements within intelligence agencies (Brennan, Comey, McCabe, etc.) , but also part of the struggle between the faction of the US elite that wants "muscular" policy of preservation of the empire (Trump supporters faction so to speak) and the faction that still wants to kick the can down the road via "classic neoliberalism" path (Clinton supporters faction so to speak.)

[Aug 20, 2019] Evil Sex With Children Has Become Big Business In America

Notable quotes:
"... Sex trafficking -- especially when it comes to the buying and selling of young girls -- has become big business in America, the fastest growing business in organized crime and the second most-lucrative commodity traded illegally after drugs and guns. ..."
"... As investigative journalist Amy Fine Collins notes, "It's become more lucrative and much safer to sell malleable teens than drugs or guns . A pound of heroin or an AK-47 can be retailed once, but a young girl can be sold 10 to 15 times a day -- and a 'righteous' pimp confiscates 100 percent of her earnings." ..."
"... According to USA Today , adults purchase children for sex at least 2.5 million times a year in the United States. ..."
"... In Georgia alone, it is estimated that 7,200 men (half of them in their 30s) seek to purchase sex with adolescent girls each month , averaging roughly 300 a day. ..."
"... "Human trafficking -- the commercial sexual exploitation of American children and women, via the Internet, strip clubs, escort services, or street prostitution -- is on its way to becoming one of the worst crimes in the U.S. ," said prosecutor Krishna Patel. ..."
Apr 27, 2019 | www.zerohedge.com

Sex trafficking -- especially when it comes to the buying and selling of young girls -- has become big business in America, the fastest growing business in organized crime and the second most-lucrative commodity traded illegally after drugs and guns.

As investigative journalist Amy Fine Collins notes, "It's become more lucrative and much safer to sell malleable teens than drugs or guns . A pound of heroin or an AK-47 can be retailed once, but a young girl can be sold 10 to 15 times a day -- and a 'righteous' pimp confiscates 100 percent of her earnings."

Consider this: every two minutes, a child is exploited in the sex industry .

According to USA Today , adults purchase children for sex at least 2.5 million times a year in the United States.

Who buys a child for sex? Otherwise ordinary men from all walks of life.

" They could be your co-worker, doctor, pastor or spouse ," writes journalist Tim Swarens, who spent more than a year investigating the sex trade in America.

In Georgia alone, it is estimated that 7,200 men (half of them in their 30s) seek to purchase sex with adolescent girls each month , averaging roughly 300 a day.

On average, a child might be raped by 6,000 men during a five-year period of servitude .

It is estimated that at least 100,000 children -- girls and boys -- are bought and sold for sex in the U.S. every year , with as many as 300,000 children in danger of being trafficked each year. Some of these children are forcefully abducted, others are runaways, and still others are sold into the system by relatives and acquaintances.

"Human trafficking -- the commercial sexual exploitation of American children and women, via the Internet, strip clubs, escort services, or street prostitution -- is on its way to becoming one of the worst crimes in the U.S. ," said prosecutor Krishna Patel.

This is an industry that revolves around cheap sex on the fly, with young girls and women who are sold to 50 men each day for $25 apiece , while their handlers make $150,000 to $200,000 per child each year.

This is not a problem found only in big cities.

It's happening everywhere, right under our noses, in suburbs, cities and towns across the nation.

As Ernie Allen of the National Center for Missing and Exploited Children points out, " The only way not to find this in any American city is simply not to look for it ."

Don't fool yourselves into believing that this is merely a concern for lower income communities or immigrants.

It's not .

It is estimated that there are 100,000 to 150,000 under-aged child sex workers in the U.S. These girls aren't volunteering to be sex slaves. They're being lured -- forced -- trafficked into it. In most cases, they have no choice.

In order to avoid detection (in some cases aided and abetted by the police ) and cater to male buyers' demand for sex with different women, pimps and the gangs and crime syndicates they work for have turned sex trafficking into a highly mobile enterprise, with trafficked girls, boys and women constantly being moved from city to city, state to state, and country to country.

For instance, the Baltimore-Washington area, referred to as The Circuit , with its I-95 corridor dotted with rest stops, bus stations and truck stops, is a hub for the sex trade.

No doubt about it: this is a highly profitable, highly organized and highly sophisticated sex trafficking business that operates in towns large and small, raking in upwards of $9.5 billion a year in the U.S. alone by abducting and selling young girls for sex.

Every year, the girls being bought and sold gets younger and younger.

The average age of those being trafficked is 13. Yet as the head of a group that combats trafficking pointed out, "Let's think about what average means. That means there are children younger than 13. That means 8-, 9-, 10-year-olds. "

"For every 10 women rescued, there are 50 to 100 more women who are brought in by the traffickers. Unfortunately, they're not 18- or 20-year-olds anymore," noted a 25-year-old victim of trafficking. " They're minors as young as 13 who are being trafficked. They're little girls."

Where did this appetite for young girls come from?

Look around you.

Young girls have been sexualized for years now in music videos, on billboards, in television ads, and in clothing stores. Marketers have created a demand for young flesh and a ready supply of over-sexualized children.

"All it takes is one look at MySpace photos of teens to see examples -- if they aren't imitating porn they've actually seen, they're imitating the porn-inspired images and poses they've absorbed elsewhere," writes Jessica Bennett for Newsweek . "Latex, corsets and stripper heels, once the fashion of porn stars, have made their way into middle and high school."

This is what Bennett refers to as the " pornification of a generation ."

"In a market that sells high heels for babies and thongs for tweens, it doesn't take a genius to see that sex, if not porn, has invaded our lives ," concludes Bennett . "Whether we welcome it or not, television brings it into our living rooms and the Web brings it into our bedrooms. According to a 2007 study from the University of Alberta, as many as 90 percent of boys and 70 percent of girls aged 13 to 14 have accessed sexually explicit content at least once."

In other words, the culture is grooming these young people to be preyed upon by sexual predators. And then we wonder why our young women are being preyed on, trafficked and abused?

Social media makes it all too easy. As one news center reported, "Finding girls is easy for pimps. They look on MySpace, Facebook, and other social networks. They and their assistants cruise malls, high schools and middle schools. They pick them up at bus stops. On the trolley. Girl-to-girl recruitment sometimes happens." Foster homes and youth shelters have also become prime targets for traffickers.

Rarely do these girls enter into prostitution voluntarily. Many start out as runaways or throwaways, only to be snatched up by pimps or larger sex rings. Others, persuaded to meet up with a stranger after interacting online through one of the many social networking sites, find themselves quickly initiated into their new lives as sex slaves.

Debbie , a straight-A student who belonged to a close-knit Air Force family living in Phoenix, Ariz., is an example of this trading of flesh. Debbie was 15 when she was snatched from her driveway by an acquaintance-friend. Forced into a car, Debbie was bound and taken to an unknown location, held at gunpoint and raped by multiple men. She was then crammed into a small dog kennel and forced to eat dog biscuits. Debbie's captors advertised her services on Craigslist. Those who responded were often married with children, and the money that Debbie "earned" for sex was given to her kidnappers. The gang raping continued. After searching the apartment where Debbie was held captive, police finally found Debbie stuffed in a drawer under a bed. Her harrowing ordeal lasted for 40 days.

While Debbie was fortunate enough to be rescued, others are not so lucky. According to the National Center for Missing and Exploited Children, nearly 800,000 children go missing every year (roughly 2,185 children a day).

With a growing demand for sexual slavery and an endless supply of girls and women who can be targeted for abduction, this is not a problem that's going away anytime soon.

For those trafficked, it's a nightmare from beginning to end.

Those being sold for sex have an average life expectancy of seven years , and those years are a living nightmare of endless rape, forced drugging, humiliation, degradation, threats, disease, pregnancies, abortions, miscarriages, torture, pain, and always the constant fear of being killed or, worse, having those you love hurt or killed.

Peter Landesman paints the full horrors of life for those victims of the sex trade in his New York Times article " The Girls Next Door ":

Andrea told me that she and the other children she was held with were frequently beaten to keep them off-balance and obedient. Sometimes they were videotaped while being forced to have sex with adults or one another. Often, she said, she was asked to play roles: the therapist patient or the obedient daughter. Her cell of sex traffickers offered three age ranges of sex partners--toddler to age 4, 5 to 12 and teens--as well as what she called a "damage group." "In the damage group, they can hit you or do anything they want to," she explained. "Though sex always hurts when you are little, so it's always violent, everything was much more painful once you were placed in the damage group."

What Andrea described next shows just how depraved some portions of American society have become. "They'd get you hungry then to train you" to have oral sex. "They put honey on a man. For the littlest kids, you had to learn not to gag. And they would push things in you so you would open up better. We learned responses. Like if they wanted us to be sultry or sexy or scared. Most of them wanted you scared. When I got older, I'd teach the younger kids how to float away so things didn't hurt."

Immigration and customs enforcement agents at the Cyber Crimes Center in Fairfax, Va., report that when it comes to sex, the appetites of many Americans have now changed. What was once considered abnormal is now the norm. These agents are tracking a clear spike in the demand for harder-core pornography on the Internet . As one agent noted, "We've become desensitized by the soft stuff; now we need a harder and harder hit."

This trend is reflected by the treatment many of the girls receive at the hands of the drug traffickers and the men who purchase them. Peter Landesman interviewed Rosario , a Mexican woman who had been trafficked to New York and held captive for a number of years. She said: "In America, we had 'special jobs.' Oral sex, anal sex, often with many men. Sex is now more adventurous, harder."

A common thread woven through most survivors' experiences is being forced to go without sleep or food until they have met their sex quota of at least 40 men . One woman recounts how her trafficker made her lie face down on the floor when she was pregnant and then literally jumped on her back, forcing her to miscarry.

Holly Austin Smith was abducted when she was 14 years old, raped, and then forced to prostitute herself. Her pimp, when brought to trial, was only made to serve a year in prison.

Barbara Amaya was repeatedly sold between traffickers, abused, shot, stabbed, raped, kidnapped, trafficked, beaten, and jailed all before she was 18 years old. "I had a quota that I was supposed to fill every night. And if I didn't have that amount of money, I would get beat, thrown down the stairs. He beat me once with wire coat hangers, the kind you hang up clothes, he straightened it out and my whole back was bleeding."

As David McSwane recounts in a chilling piece for the Herald-Tribune : "In Oakland Park, an industrial Fort Lauderdale suburb, federal agents in 2011 encountered a brothel operated by a married couple. Inside 'The Boom Boom Room,' as it was known, customers paid a fee and were given a condom and a timer and left alone with one of the brothel's eight teenagers, children as young as 13. A 16-year-old foster child testified that he acted as security, while a 17-year-old girl told a federal judge she was forced to have sex with as many as 20 men a night."

One particular sex trafficking ring catered specifically to migrant workers employed seasonally on farms throughout the southeastern states, especially the Carolinas and Georgia , although it's a flourishing business in every state in the country. Traffickers transport the women from farm to farm, where migrant workers would line up outside shacks, as many as 30 at a time , to have sex with them before they were transported to yet another farm where the process would begin all over again.

This growing evil is, for all intents and purposes, out in the open.

Trafficked women and children are advertised on the internet, transported on the interstate, and bought and sold in swanky hotels.

Indeed, as I make clear in my book Battlefield America: The War on the American People , the government's war on sex trafficking -- much like the government's war on terrorism, drugs and crime -- has become a perfect excuse for inflicting more police state tactics (police check points, searches, surveillance, and heightened security) on a vulnerable public , while doing little to make our communities safer.

So what can you do?

Educate yourselves and your children about this growing menace in our communities.

Stop feeding the monster: Sex trafficking is part of a larger continuum in America that runs the gamut from homelessness, poverty, and self-esteem issues to sexualized television, the glorification of a pimp/ho culture -- what is often referred to as the pornification of America -- and a billion dollar sex industry built on the back of pornography, music, entertainment, etc.

This epidemic is largely one of our own making, especially in a corporate age where the value placed on human life takes a backseat to profit. It is estimated that the porn industry brings in more money than Amazon, Microsoft, Google, Apple, and Yahoo .

Call on your city councils, elected officials and police departments to make the battle against sex trafficking a top priority, more so even than the so-called war on terror and drugs and the militarization of law enforcement.

Stop prosecuting adults for victimless "crimes" such as growing lettuce in their front yard and focus on putting away the pimps and buyers who victimize these young women.

Finally , the police need to do a better job of training, identifying and responding to these issues; communities and social services need to do a better job of protecting runaways, who are the primary targets of traffickers; legislators need to pass legislation aimed at prosecuting traffickers and "johns," the buyers who drive the demand for sex slaves; and hotels need to stop enabling these traffickers, by providing them with rooms and cover for their dirty deeds.

That so many women and children continue to be victimized, brutalized and treated like human cargo is due to three things: one, a consumer demand that is increasingly lucrative for everyone involved -- except the victims; two, a level of corruption so invasive on both a local and international scale that there is little hope of working through established channels for change; and three, an eerie silence from individuals who fail to speak out against such atrocities.

But the truth is that we are all guilty of contributing to this human suffering. The traffickers are guilty. The consumers are guilty. The corrupt law enforcement officials are guilty. The women's groups who do nothing are guilty. The foreign peacekeepers and aid workers who contribute to the demand for sex slaves are guilty. Most of all, every individual who does not raise a hue and cry over the atrocities being committed against women and children in almost every nation around the globe -- including the United States -- is guilty.


dibiase , 1 hour ago link

How many teenage drug addicts and runaway die a year with out the police doing anything when they are found dead of an overdose with a man 40 years their senior???

Anthony Aaron , 1 hour ago link

The penalties for this need to be really severe -- capital punishment should be on the table in every case.

One day, when the law fails too much for too long, folks will get out their 2nd Amendment hardware and start to take back their streets and their cities and their lives and that will be when all of the **** starts coming to a halt.

dibiase , 59 minutes ago link

Then why are epstien/dershawitz/clinton/trump, etc still alive...???

Remember epstien used mar a largo to find his girls... TRUMPTARDS

DemandSider , 22 minutes ago link

And Bill was one of Epstein's best buddies, and flew on his plane, often.

dibiase , 18 minutes ago link

Bill was also buddies with zump....

Troy Ounce , 1 hour ago link

Here are the paedophile logos.

See the somewhere? Be aware?

https://www.dailymail.co.uk/news/article-3560069/The-symbols-pedophiles-use-signal-sordid-sexual-preferences-social-media.html

Lord Raglan , 1 hour ago link

I'd like to see the sources of data in this story. I find most of it hard to believe. Everything now is so exaggerated and over the top. A man has to be out of his mind to have sex with an underage girl. In my state, it is probably a 30 year prison sentence, not to mention being in possession of kiddy ****. I'm sure it is a problem but nothing like that portrayed in this sensationalizing article. I've been in every big city in the US and I've never seen a hooker that is obviously underage.

adr , 1 hour ago link

If you have enough money and are part of the protected class, you can do anything you want.

Pizzagate would have blown the whole thing wide open. Wall St tycoons, politicians, celebrities, all part of a massive operation. The story was quickly buried because it would have brought about a total revolution. It also would have tanked the stock market as the CEOs of a lot of Fortune 500 companies would go down.

Behind it all are the Tribesmen who see those who aren't them as livestock to feed those who want and will pay handsomely for it.

There is no doubt in my mind that Tim Cook has a harem of adolescent boys. People think Kevin Spacey is a pig, bit they have no idea. The moral depravity of high society in today's world is unfathomable to most people. They simply can not believe it because they are hopelessly naive.

himmelhund , 1 hour ago link

this is not the "protected class" paying 50$ for little kids. The protected class pays much more if they pay at all and they get "volunteers" in many cases.

this is ordinary shitheads paying for child slavery

[Aug 20, 2019] There is a chance that the recession won t wait until next year to hit

Oversized military expenditures (military Keysianism) might still keep the economy afoot for a while.
Notable quotes:
"... For Morgan Stanley Wealth Management's Shalett, the most recent economic reports show "slowing that is far worse than the 2015-2016 minirecession," she writes -- due in large part to "outright contractionary" PMI (an indicator surveying purchasing managers at businesses) data and global new orders. ..."
"... The Fed is criminally unprepared for a recession, after making the fateful decision to rescue the banks and financial markets at the expense of the working class. Washington is criminally unprepared for a recession, after making the fateful decision to invest everything in pointless wars at the expense of infrastructure and the working class. ..."
"... Guess who else is unprepared for a recession? ..."
"... "Warning lights are flashing. Whether it's this year or next year, the odds of another economic downturn are high -- and growing," Warren wrote in a post on the blogging platform Medium. ..."
"... Free market, my ass. End days of run amok capitalism? I sure hope so for the sake of the planet and the people who are at the mercy of this nasty 'world we live in'. ..."
"... Moving from taxing the rich to taxing the proletariat (the poor have no money of their own to buy goods and hence pay tariffs). since the rich invest most of their wealth and workers spend most (or more!) the tax burden shifts downward (by design!) ..."
Aug 06, 2019 | caucus99percent.com

gjohnsit on Mon, 08/05/2019 - 5:42pm

There is a chance that the recession won't wait until next year to hit, but there is almost no chance that we won't be in a recession in 2020. A whole list of economic indicators are flashing red, starting with the most accurate recession forecaster of all - the yield curve .

The latest eruption in the U.S.-China trade dispute pushed a widely watched Treasury-market recession indicator to the highest alert since 2007.

Morgan Stanley says Trump's trade war could cause a recession in 9 month's time, but there is a lot else going on than just a trade war.
The yield curve is just one of four major recession indicators that are flashing red .

Since the 1960s, one indicator of a looming recession has been the New York Fed's recession probability index breaking 30%.

The probability of a U.S. recession predicted by the treasury spread hit 32.9% in July -- the highest since 2009, according to the New York Fed.

... ... ...

Although consumer confidence is still historically high, the most recent June consumer confidence index (released by The Conference Board every month) dropped to two-year lows, to 121.5.

... ... ...

For Morgan Stanley Wealth Management's Shalett, the most recent economic reports show "slowing that is far worse than the 2015-2016 minirecession," she writes -- due in large part to "outright contractionary" PMI (an indicator surveying purchasing managers at businesses) data and global new orders.
...
According to a Reuters report in May, factory activity dropped to near 10-year lows, sparking fresh concern.

The U.S. has seen its longest economic expansion in the nation's history - 120 months. The Fed had to know that it would eventually end. Yet the Fed never came even close to normalizing interest rates and that leaves them with few options .

The Fed's main recession-fighting tool has long been lowering the benchmark federal funds rate, which governs short-term rates for things ranging from auto loans to credit card charges. In the past, the average reduction needed to fight a recession was a whopping 5.5 percentage points. Such a bold step is mathematically impossible now.

The Federal Open Market Committee, or FOMC, its policymaking arm, just decreased the rate a quarter-point to a 2.0% to 2.25% band, thus not a lot of room exists to cut much more. And if the Fed ends up decreasing the rate another half-point, as many suspect it will, then the central bank has even less to work with.

"They're out of ammo," said economist Gary Shilling, who owns his own eponymous firm. "Going from 2.25% to zero is not an awful lot."

... ... ...

What happens if the Fed reverses course and starts purchasing bonds once more? There's a school of thought that this too will be less effective than in the past. Reason: Banks have so much extra funding these days that they don't know what to do with all the money. The previous rounds of QE, which finally ended in 2014, stuffed banks with trillions of new dollars, which they hold in reserve to buffer themselves against economic bad spells and also to make loans. Plus, loan demand is low, even now in an expansion. Demand will be a lot less in a recession.

The Fed is criminally unprepared for a recession, after making the fateful decision to rescue the banks and financial markets at the expense of the working class. Washington is criminally unprepared for a recession, after making the fateful decision to invest everything in pointless wars at the expense of infrastructure and the working class.

Guess who else is unprepared for a recession?

The brutal reality is that most Americans are not prepared for the next economic downturn or recession.
gjohnsit on Mon, 08/05/2019 - 6:09pm
Warren has noticed give the lady some credit
Democratic presidential contender Sen. Elizabeth Warren warned on Monday that the next financial crisis is on its way.

"Warning lights are flashing. Whether it's this year or next year, the odds of another economic downturn are high -- and growing," Warren wrote in a post on the blogging platform Medium.

The Massachusetts Democrat said that increasing household and corporate debt has left the economy on precarious footing. Citing a top economist, Warren wrote that a failure to raise the debt ceiling in September could be "more catastrophic" than the 2008 collapse of Lehman Brothers.

She also noted weakness in the manufacturing sector, putting the blame for its recent slowdown on President Donald Trump, who has tangled with China over trade. Despite Trump's pledge to bring back manufacturing jobs, the sector is now in recession, she wrote, and wages for the industry lag the national average

A 2020 recession, if it starts no later than summer, would doom Trump's reelection. It would also boost progressives like Bernie and Liz because people would be less willing to accept incrementalism.

ggersh on Mon, 08/05/2019 - 6:29pm
It's coming before the primaries start

@gjohnsit @gjohnsit in tit for tat action the moron in chief needs
to win....the currency war ameriKa can't win is upon
us.

Slight summary, tRumpolini put tariffs on China of 10% on what was left to tariff, this happened yesterday. Today China reciprocated by weakening it's currency causing the stock markit to swan to the tune of 900 points. So thinking me(tRumpolini) lost, he doubles down by doing this.

https://www.zerohedge.com/

For The First Time In 25 Years, US Treasury Just Designated China A Currency Manipulator

"This pattern of actions is also a violation of China's G20 commitments to refrain from competitive devaluation."

416

Grab your guns and Bibles money and buy some goods to keep you comfy cuz inflation is coming bigtime, IMHO.

His ego is bigger than his hands and I wouldn't bet on him beating China in this game even though he's gonna keep on trying

shaharazade on Mon, 08/05/2019 - 8:59pm
Elisabeth Warren is progressive?

@gjohnsit

I somehow don't buy this. Dodd-Frank? What a joke. Both me and Eric never bought her political shtick. Man she's another ex-Republican. I just can't believe that this insane global economy will be reformed or resolved by our current, corrupt, fucked up political electoral system.

There is no way for ordinary people who are not 'invested' to stop this insanity. What are our options when the Demorat's refuse to clean house or even regulate the disaster global cappies who own and run 'the place'?

Free market, my ass. End days of run amok capitalism? I sure hope so for the sake of the planet and the people who are at the mercy of this nasty 'world we live in'.

doh1304 on Mon, 08/05/2019 - 8:12pm
People have been forecasting recession since 2009

(when we refused to admit that we were actually in a depression) and so far it hasn't happened - officially. Maybe the only reason capitalism hasn't collapsed is that the rich and powerful refuse to admit that it has and we are all afraid to admit that they're liars.

gjohnsit on Mon, 08/05/2019 - 9:33pm
I did predict a double-dip recession in 2010

@doh1304
but that was nine years ago. Don't you think that after 10 years of record low interest rates things have changed?

Either way, the leading economic indicators are measurable facts.

(when we refused to admit that we were actually in a depression) and so far it hasn't happened - officially. Maybe the only reason capitalism hasn't collapsed is that the rich and powerful refuse to admit that it has and we are all afraid to admit that they're liars.

The Voice In th... on Mon, 08/05/2019 - 9:26pm
Tariffs replace the graduated income tax.

@snoopydawg

Moving from taxing the rich to taxing the proletariat (the poor have no money of their own to buy goods and hence pay tariffs). since the rich invest most of their wealth and workers spend most (or more!) the tax burden shifts downward (by design!)

shaharazade on Mon, 08/05/2019 - 9:28pm
Trumps tiffs

@snoopydawg are so fake. A deliberate distraction which enables the neoliberal/pigs from both parties to continue with their raping and pillaging the earth and the humans who live here. For what? Somebody tell me why a fascistic insane demagogue is still in office? Because he serves their agenda, all of them R's and D's.

Yes they could stop Trump but why would they? He's getting it done and the Dems. can put the blame on Trump and Co. The Demorat's can then focus on fake social issues and rile up the populace with mayhem and social unrest.

If this is not the case why have they once again taken off the table the legal remedy for lunatics, unfit for office demagogues of the worst order. What can ordinary people do to prepare for their crashes? Nothing. We're all dependent on this fucked up economy one way or another.

travelerxxx on Tue, 08/06/2019 - 12:56am
Just theater

@The Voice In the Wilderness

Yes, a tool all right. Remember when the House Democrats were considering who would be the Speaker of the House, Trump actually supported her. Some were perplexed by this. I commented at the time that this didn't surprise me in the least, as if Trump didn't have someone like Pelosi as Speaker, they would have to invent someone identical. They would have, too.

Trump needs a foil in the House, and Pelosi is perfect for the role. It's part of what allows Mega-party team A and Mega-party team B to achieve the goals their owners have tasked them with.

Our MSM screams and raises hell over it all, but that's part of the act, too. Meanwhile We the People continue to get the shaft.

Pluto's Republic on Tue, 08/06/2019 - 3:01am
I find it difficult to believe

....that Trump would try to throw the economy into a recession at this time. In fact, he has been dogging the Fed Reserve for that interest cut just to push the possibility of a recession back and further boost the stock market.

I believe it is common knowledge that the incumbent party almost always wins a second term if the economy does not fail catastrophically. And Trump is poised to win according to historian Allan Lichtman, whose system has never failed to accurately predict the outcome of the past nine Presidential elections. Lichtman tracks the 13 variables that determine the outcomes of Presidential elections going back to the Civil war -- the health of the short-term and long-term economy being two of them.

Lichtman, a Democrat himself, says there is only one way to trick the situation at this point. Can you guess what it is?

[Aug 20, 2019] The Summer Of The Unicorn Massacre

Aug 20, 2019 | caucus99percent.com

Being as cynical as I am

It makes me wonder, how is this not a massive misallocation of resources, and a mismanagement of the economy?
Money that could be used to make the lives of millions of workers better through being rewarded in wages, is being flushed down the drain in money-losing gambling.
Isn't this just proof of a major flaw in capitalism?

It sure looks like that is exactly what is happening, but I wonder if it's not being done intentionally for some nefarious reasons we don't understand?

As for Adam and Rebekah giving a billion to charity, is that anything like what
Gates, Soros and others are doing? Except that they aren't actually supporting charitable organizations they are parking the money in their private foundations. This is a great way to get away with having the money taxed. up 16 users have voted. --

America is a pathetic nation; a fascist state fueled by the greed, malice, and stupidity of her own people.
- strife delivery free enterprise vs. capitalism

Money that could be used to make the lives of millions of workers better through being rewarded in wages, is being flushed down the drain in money-losing gambling.
Isn't this just proof of a major flaw in capitalism?

Sure is.

And it also accentuates the difference between capitalism and free enterprise. (Capitalism is what free enterprise deteriorates into. ) Under free enterprise, better wages mean more goods and services get purchased, which rewards wage payers through higher profits; rinse and repeat. (Henry Ford, among others, grokked this.) Under late-stage capitalism, the Casino is everything, resulting in money being, well, "flushed down the drain in money-losing gambling" .

Guess which one we have now!

up 19 users have voted. --

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg


entrepreneur on Sun, 08/18/2019 - 8:59am

The unlinking of executives' pay from their performance

translates into huge short term rewards for a handful of parasites at the top. They don't care if they kill the host company as long as they each get their pint of blood first.

These charts reflect the company finances, but I am pretty certain that the personal finance charts of the top decision-makers look quite different. That's messed up.

The Voice In th... on Sun, 08/18/2019 - 8:23am
Pay is linked to performance, but it's STOCK performance

@entrepreneur
So, juice the stock, misrepresent facts, get that huge bonus and maybe a golden parachute on the way out.

translates into huge short term rewards for a handful of parasites at the top. They don't care if they kill the host company as long as they each get their pint of blood first.

These charts reflect the company finances, but I am pretty certain that the personal finance charts of the top decision-makers look quite different. That's messed up.

entrepreneur on Sun, 08/18/2019 - 9:01am
Yep. Exactly.

@The Voice In the Wilderness

#4
So, juice the stock, misrepresent facts, get that huge bonus and maybe a golden parachute on the way out.

leveymg on Sun, 08/18/2019 - 10:08am
If a company makes too much, Wall St. hammers it

as "mismanaged." Those are funds that should be going to increase shareholder value through stock buybacks, according to the current business model. That's SOP for most listed companies these days.

In 2018, buybacks amounted to more than a Trillion dollars in stock trades - all of which went to increase share prices, broker commissions and stock option bonuses for company execs. That came out of operating profits that, as you said, might have otherwise gone to improve and increase production, wages and jobs creation.

Perverse, unless you're a shareholder, broker, or executive who gets most of his compensation in stock options that aren't even immediately taxable.

Buybacks were illegal as a form of stock price manipulation until the Reagan Administration deregulated them.

[Aug 19, 2019] The Increasingly Bizarre Interplay Between Trump's Trade Policy and the Fed

Notable quotes:
"... China gambit is a huge gamble for Trump. It he plays it right and signd the deal with China later this year while Fed slashed rates he might create an artificial boost for the economy, enough to secure his victory. In this case his demagogy might resonate with voters. ..."
"... While Warren has her weak spots and Trump has several avenue of attack against her, she has a real program for the country and that lessen Trump chances for re-election because Trump is incapable of any serious discussion of economics and problems facing the country. His only forte is demagogy. ..."
"... Also Warren in not entangled into any foreign policy controversy and can attack Trump impulsivity and incompetence in this area with impunity. She also can leverage Russiagate sentiments, which, while pure neo-McCarthyism, will be a factor in 2020 elections. ..."
"... Many people in Mid-West now understand that he betrayed all his 2016 elections promises and just carried water for Mitch McConnell. So the question whether Trump can carry Midwestern states in 2020 is open to review. ..."
"... It is also important to note that Trump lost anti-war right. ..."
Aug 03, 2019 | economistsview.typepad.com

Fred C. Dobbs , August 03, 2019 at 03:59 PM

The Increasingly Bizarre Interplay Between Trump's Trade Policy and the Fed https://nyti.ms/331ItNz
NYT - Neil Irwin - August 1

Here's a question for economy watchers: Is American economic policy in 2019 more like ouroboros, the ancient Egyptian symbol of a snake eating its own tail, or maybe more like an M.C. Escher painting in which a series of stairs wrap around a room in mind-bending ways?

Both seem like decent approximations of the strange ways in which trade policy, monetary policy and financial markets are intersecting this year. And never more so than this week.

On Wednesday, the Federal Reserve cut its main interest rate target, aiming to guard the American economy against damage from "trade uncertainty" and a slowing world economy, as the Fed chair, Jerome Powell, said at a news conference. But markets fell, with investors interpreting his comments to mean that the Fed won't cut rates much more in the months to come.

Then on Thursday, President Trump announced a new round of 10 percent tariffs on $300 billion worth of China exports, suggesting that a trade war détente from earlier the summer may be coming to an end. That, in turn, caused a huge swing in bond markets that implied investors now do expect further interest rate cuts as the Fed tries to contain the trade-related damage.

Going back a bit further in time, the interplay between different aspects of economic policy becomes even more convoluted.

In late spring, trade talks between the United States and China broke down, and escalation of the trade wars seemed inevitable. The stock market fell, as the conflict seemed sure to hit corporate earnings. And bond yields fell, as investors became confident that the Fed would need to cut interest rates to contain the damage.

In late June, talks got back on track, but by that time Fed officials had largely made up their minds that it would be worthwhile to cut interest rates at least once to provide insurance against the slowing global economy.

Those plans, in turn, fueled a big stock market rally in late June and July, and most economic data has been solid in that time. Whatever the risks and downsides, the Fed's shift toward lower interest rates seemed to have accomplished its goal of a financial environment that will support continued economic growth.

"After simmering early in the year, trade policy tensions nearly boiled over in May and June, but now appear to have returned to a simmer," as Mr. Powell summarized in his news conference Wednesday. President Trump turned the metaphorical stove back to high less than 24 hours after those words passed Mr. Powell's lips.

This suggests the president and his trade negotiators believe they have downside protection against the possibility that trade policies will cause any lasting damage to the economy or the stock market. After all, the

Fed has very publicly shown that it views it as appropriate to cut interest rates to combat any slowdown related to trade wars.

There is always interplay between different elements of economic policy set by various parts of government. For example, the Fed's practice is to take tax and spending decisions by Congress as a given and plug them into its models -- and adjust its interest rate policies accordingly.

What's different now is that Mr. Trump's administration seems willing to weaponize that practice, offering no qualms about openly bullying the Fed while using its presumed reaction as a source of advantage in international negotiations.

Even as Mr. Trump is comfortable abandoning the norm that the president should not explicitly pressure the Fed, Mr. Powell appears to be obeying the tradition that the Fed should not try to use its power over monetary policy to twist the arms of elected officials.

It has worked out fine for Mr. Trump so far -- the economy continues to grow heading into an election year, and while the stock market fell Wednesday after the latest trade news, the S&P 500 was down only 0.9 percent; it would surely have been down more if not for assumptions that further rate cuts were now more likely.

But it also creates a number of risks for the American economy, in both the short and longer term.

First, the Fed's interest rate policies are blunt instruments. They seem to be more effective at generating big swings in asset prices than at fine-tuning the economy, and it would be easy for Mr. Powell and his colleagues to make a mistake -- either cutting interest rates by too much, fueling inflation, or too little, allowing a slump.

There's no modern precedent for having the world's two largest economies, major trading partners, enter a trade war. And already the consequences have been more complex than one might have guessed.

The slowing Chinese economy has pulled down the price of oil, which has both lowered inflation in the United States and lowered capital investment by American energy companies. Even if the Fed is successful at boosting the overall stock market, lower rates probably won't do much to help the industries and consumers directly damaged by tariffs.

Second, the monetary policy firepower that the Fed is using to try to offset the damage from trade wars may not be available if an economic slump caused by some other factor were to emerge. The central bank would have less room to stimulate the economy than it would if it were not deploying rate cuts now.

Finally, this pattern could do longer-term damage to the Fed's credibility as an independent, credible central bank. The United States dollar is central to transactions around the world, a source of long-term geopolitical advantage. Confidence in the Fed is part of the reason. Global investors generally believe that the central bank will act with a long-term view, not based on the political needs of the current American president.

This leaves Mr. Powell in a pretty miserable spot. One way he could decisively break the cycle would be to abandon deeply held principles -- threatening to ignore the potential damage to the economy from trade wars because he thinks the president's policies will do damage over the longer term. That's not the role for unelected officials like the Fed chief, or at least it isn't supposed to be.

In this particular ouroboros, in other words, it sure seems like Mr. Trump is the mouth, and Mr. Powell is the tail.

likbez -> Fred C. Dobbs... , August 03, 2019 at 07:54 PM

China gambit is a huge gamble for Trump. It he plays it right and signd the deal with China later this year while Fed slashed rates he might create an artificial boost for the economy, enough to secure his victory. In this case his demagogy might resonate with voters.

If he does not sign the deal with China, he implicitly increases chances for Warren to become Democratic nominee (Kamala now is weakened; Biden is problematic and not only due to his semi-senility; Sanders is viewed as an enemy by the Democratic Party elite and proved to be Hillary sheepdog in 2016).

While Warren has her weak spots and Trump has several avenue of attack against her, she has a real program for the country and that lessen Trump chances for re-election because Trump is incapable of any serious discussion of economics and problems facing the country. His only forte is demagogy.

Also Warren in not entangled into any foreign policy controversy and can attack Trump impulsivity and incompetence in this area with impunity. She also can leverage Russiagate sentiments, which, while pure neo-McCarthyism, will be a factor in 2020 elections.

Especially bad Trump chances are in case economics slides into recession in the second half of 2020 or, God forbid, stock market crashes.

Other then Fed rate cuts Trump does not have any real tools to stimulate the economy and his tax cut for the rich is not viewed too positively by the majority of the population. Trumpcare is viewed mostly negatively.

Many people in Mid-West now understand that he betrayed all his 2016 elections promises and just carried water for Mitch McConnell. So the question whether Trump can carry Midwestern states in 2020 is open to review.

It is also important to note that Trump lost anti-war right.

[Aug 19, 2019] Statistics from the government and other sources do not support Mr. Trump s claim about his policies effectiveness in drawing investment and jobs from abroad

Notable quotes:
"... Foreign investment in the United States grew at a slower annual pace in the first two years of Mr. Trump's tenure than during Barack Obama's presidency, according to Commerce Department data released in July. Growth in business investment from all sources, foreign and domestic, accelerated briefly after Mr. Trump signed a $1.5 trillion tax-cut package in late 2017 but then slowed. Investment growth turned negative this spring, providing a drag on economic output. ..."
"... Now manufacturing is struggling amid a global slowdown and fallout from the trade war, which Mr. Trump has escalated by imposing additional tariffs on Chinese goods and by labeling China a "currency manipulator." ... ..."
Aug 13, 2019 | economistsview.typepad.com

Fred C. Dobbs , August 13, 2019 at 10:33 AM

Trump's Push to Bring Back Jobs to US Shows
Limited Results https://nyti.ms/31y1HsE
NYT - Jim Tankersley - August 13

WASHINGTON -- From tax cuts to relaxed regulations to tariffs, each of President Trump's economic initiatives is based on a promise: to set off a wave of investment and bring back jobs that the president says the United States has lost to foreign countries.

"We have the greatest companies anywhere in the world," Mr. Trump said at the White House recently. "They're all coming back now. They're coming back to the United States."

Mr. Trump's tax cuts unquestionably stimulated the American economy in 2018, helping to push economic growth to 2.5 percent for the year and fueling an increase in manufacturing jobs. But statistics from the government and other sources do not support Mr. Trump's claim about his policies' effectiveness in drawing investment and jobs from abroad.

Foreign investment in the United States grew at a slower annual pace in the first two years of Mr. Trump's tenure than during Barack Obama's presidency, according to Commerce Department data released in July. Growth in business investment from all sources, foreign and domestic, accelerated briefly after Mr. Trump signed a $1.5 trillion tax-cut package in late 2017 but then slowed. Investment growth turned negative this spring, providing a drag on economic output. ...

Fred C. Dobbs said in reply to Fred C. Dobbs... , August 13, 2019 at 10:41 AM
... the Reshoring Initiative ( http://www.reshorenow.org/) data show fewer than 30,000 jobs that companies say they will relocate to the United States because of Mr. Trump's tariffs on imported steel, aluminum, solar panels, washing machines and a variety of Chinese goods. Researchers at A.T. Kearney (*) said last month that Mr. Trump's trade policies, including tariffs, had pushed factory activity not to the United States but to low-cost Asian countries other than China, like Vietnam.

Manufacturers of primary metals, which include steel and aluminum, have added fewer than 15,000 jobs since Mr. Trump took office, with more than half of those gains coming before Mr. Trump imposed tariffs on foreign-made metals last year.

Now manufacturing is struggling amid a global slowdown and fallout from the trade war, which Mr. Trump has escalated by imposing additional tariffs on Chinese goods and by labeling China a "currency manipulator." ...

* US Trade Policy and Reshoring:
The Real Impact of America's New Trade Policies
https://www.atkearney.com/operations-performance-transformation/us-reshoring-index

[Aug 19, 2019] Trump Privately Obsessed With Naval Blockade Of Venezuela Report

Aug 19, 2019 | www.zerohedge.com

Axios is calling it President Trump's Venezuela naval blockade "obsession" based on accounts of unnamed administration officials: "President Trump has suggested to national security officials that the U.S. should station Navy ships along the Venezuelan coastline to prevent goods from coming in and out of the country , according to 5 current and former officials who have either directly heard the president discuss the idea or have been briefed on Trump's private comments," according to a new report .

He's said to have repeatedly raised the idea in private as a way to finally deliver regime change in Caracas , after prior attempts - including a short-lived push for military coup - failed earlier this year. Supposedly, the plan would be to station US Navy ships along the coast such that all vessels would be blocked from entering or exiting the South American country.

While Trump has acknowledged to the press in recent weeks that it's "an option" that's being discussed, his private comments have been more pointed and extensive. Axios quotes one source as follows: "He literally just said we should get the ships out there and do a naval embargo," the source described upon hearing the president's comments. "Prevent anything going in," the official said.

Image via Checkpoint Asia

"I'm assuming he's thinking of the Cuban missile crisis," the source said further. Push back against the president's floating such a blockade have not been centered around the potential humanitarian disaster by further cutting off the already cash-deprived country as food and energy are already at crisis shortages.

Instead, the concern voiced focused on the feasibility from a US perspective of taking on such as massive enterprise as blockading a coastline that stretches more than 1700 miles .

Per Axios, an administration source argued it's unrealistic :

"But Cuba is an island and Venezuela is a massive coastline. And Cuba we knew what we were trying to prevent from getting in. But here what are we talking about? It would need massive, massive amounts of resources ; probably more than the U.S. Navy can provide."

While there's no official blockade in place yet, the US has recently made efforts to block individual vessels from getting to Venezuela in the context of new oil sanctions by the US Treasury.

That's a lot of coastline:

Early this summer, Trump appeared to have cooled on pursuing regime change against Nicholas Maduro; however, his alleged "obsession" means the standoff could become a front and center national security priority once again.

[Aug 19, 2019] JPMorgan's Dimon Among CEOs Rejecting Investor-Centric Model by Anders Melin and Jeff Green

Jamie Dimon and other leaders at some of the world's largest companies said they plan to abandon the long-held view that shareholders' interests should come first amid growing public discontent over income inequality and the burgeoning cost of health care and higher education.
Aug 19, 2019 | www.bloomberg.com

The purpose of a corporation is to serve all of its constituents, including employees, customers, investors and society at large, the Business Roundtable said Monday in a statement. Dimon, the chief executive officer of JPMorgan Chase & Co., heads the group.

"While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders," the group said in the statement. "Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity."

The 181 signatories include BlackRock Inc.'s Laurence Fink, Bank of New York Mellon Corp.'s Charlie Scharf and the CEOs of several Wall Street banks, including Goldman Sachs Group Inc., Morgan Stanley and Moelis & Co. It also includes Amazon.com Inc. founder Jeff Bezos, the world's richest person.

Fundamental Premise

The shift in corporate priorities comes as some politicians and critics question whether the fundamental premise of American capitalism should be revamped. Some executives also have complained that an outsize focus on share prices and quarterly results hamper their ability to build businesses for the long term.

The group's statement offers scant detail on how the commitments will be converted into action and presents no road map for getting there. Many companies vow to do good things but often resist releasing data to let others independently verify such promises. And it will fall on CEOs, who on average last no longer than six years, to convince fickle investors, including powerful activists, that shifting resources will pay off in the long term.

The idea that businesses exist primarily to benefit shareholders -- also known as shareholder primacy -- took hold in corporate America in the 1980s. In 1997, the Business Roundtable embraced the idea in a document outlining governance principles.

The concept has been criticized for leading to a fixation on short-term results and helping fuel the rapid increase in executive pay. Last year, public companies in the U.S. began disclosing the difference between their CEOs' compensation and that of their median workers. At S&P 500 firms, the average ratio is about 280-to-1, according to data compiled by Bloomberg.

Both Dimon and Fink have written open letters saying that chief executives should take on a larger responsibility for tackling societal matters and, at times, take stances on politically controversial topics.

'Sensitive' Issues

"Stakeholders are pushing companies to wade into sensitive social and political issues -- especially as they see governments failing to do so effectively," Fink wrote this year. The message echoed a position he took in 2018 urging CEOs to make a more positive contribution to society. BlackRock oversees almost $7 trillion in assets.

In April, Dimon challenged fellow chief executives to get more involved in social causes and public-policy matters.

"In the past, boards and advisers to boards advised company CEOs to keep their head down and stay out of the line of fire," Dimon said in a letter to shareholders. "Now the opposite may be true. If companies and CEOs do not get involved in public-policy issues, making progress on all these problems may be more difficult."

-- With assistance by Michelle Davis, and Jenn Zhao

( Updates with obstacles in sixth paragraph. )

[Aug 19, 2019] Is Big Necessarily Bad The American Conservative

Aug 19, 2019 | www.theamericanconservative.com

Is Big Necessarily Bad? Antitrust cannot be used as a cudgel based on size. There are other ways of whacking at corporate excess. By Marshall Auerback August 19, 2019

Teddy Roosevelt with trust-busting stick, circa 1904. (Image: Library of Congress/Wikimedia Commons) When it comes to relations between consenting adults, size may not matter (or so one hears). But it's a different story in regard to companies and the politically fraught area of antitrust law.

Today, a number of policymakers , economists , and legal scholars connect a host of problems -- excessive wealth inequality, wage stagnation, political dysfunction, market distortions -- directly to the corporate "curse of bigness ," which they argue is a product of lax antitrust enforcement. But they may be misdiagnosing the cause of these diseases and, in so doing, offering up the wrong cure.

Instead of moving toward a new antitrust paradigm, we might do better to consider a more robust utility system of regulation that is "function-centric," rather than size-centric. In other words, regulation that restricts the range of corporate activities (e.g., structural separation so as to prevent companies like Amazon and Google from owning both the platform as well as participating as a seller on that platform), or the prices such companies can charge (as regulators often do for utilities or railways). These considerations would be "size neutral": they would apply independently of corporate size per se. Regulation, rather than antitrust, also better addresses other issues like privacy protection (via a national model that could replicate California's Consumer Privacy Act of 2018 ), labor abuses (it shouldn't matter whether workers are employed by Apple or mom-and-pop sweatshops), and controlling "fake news" dissemination (by placing social media companies under the purview of the Federal Communications Commission).

"Break 'em up" has great historical resonance in the United States. Yet one of the nation's earliest trust-busters, President Theodore Roosevelt, argued that "the remedy for [corporate] abuse was not mindlessly breaking up big firms, but preventing specific abuses by means of a strong national regulation of interstate corporations." Likewise, in the early days of the New Deal, his cousin, Franklin Delano Roosevelt, initially embraced the antitrust philosophy of Supreme Court Justice Louis Brandeis (who, like many of today's modern trust-busters, prioritized power and business structure over consumer welfare). Ultimately though, frustrated that the incessant focus on corporate concentration was hindering World War II efforts to mobilize greater industrial production, FDR concluded that optimal outcomes were more likely to be achieved via "prudent government oversight and using antitrust laws to police abuses -- not to break up every big company simply because it's big."

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After World War II, historian Richard Hofstadter noted a gradual public acceptance of big business . In large part, this was due "to the emergence of countervailing bigness in government and labor" that ultimately led to the "big three tripartite" model among government, business, and unions exemplified in the Treaty of Detroit agreement between General Motors and the United Auto Workers (UAW).

From the 1950s through the 1970s, "Tripartism" was exceptionally successful at promoting economic growth and high wages (the wage growth was explicitly linked to rising productivity in the Treaty of Detroit). Big unions flourished alongside growing conglomerates that emerged as the new face of corporate consolidation (a prime example being International Telephone and Telegraph -- ITT). Equally significant, as the economist Thomas Piketty observed in his sweeping account of rising inequality, Capital in the Twenty-first Century , a new wave of corporate consolidation did not exacerbate prevailing inequalities. To the contrary, this period coincided with a diminution of wealth inequality , as relative wealth gains for the top tier stabilized for the first time in decades.

That all changed in the 1980s with the rise of Ronald Reagan's market fundamentalist agenda. His presidency was characterized by a sustained attack on unions , cuts in public services, and the ascendancy of the doctrine of "shareholder capitalism," used to legitimize the establishment of SEC Rule 10b-18 . That rule engendered an explosion in share buybacks (until it was introduced, companies buying back their own shares was considered a form of stock manipulation). Rather than focusing on job-creating investment, corporate cash flow was thus directed toward stock repurchases to fatten executive compensation.

The legacy of Reagan's market fundamentalism persists today. It is the most cogent explanation we have for growing wealth inequality, wage stagnation, and reduced emphasis on corporate R&D.

This period also coincided with the rise of the "Bork Doctrine," when, citing Robert Bork, the Supreme Court asserted that the main focus of antitrust law should be on economic efficiency and consumer welfare, as opposed to granting the government broad discretion to shape the economy. That shift in priorities is a major source of the neo-Brandeisians' criticism of Bork's antitrust philosophy. It reflects their Jeffersonian vision of a social-economic order organized along the lines of small-scale businesses, with atomistic competition between a large number of equally advantaged units, in theory producing greater innovation and economic dynamism.

But that's a highly idealized vision that doesn't comport with reality. Our modern economy isn't comprised of village blacksmiths, yeoman farmers, and cobblers. A crucial component of the economy today is big business, including many large multinational corporations that operate globally. And it is questionable whether their size automatically equates to market power (in the sense of having the ability to manipulate prices at will and exclude competitors), especially in the context of a global economy featuring a multiplicity of competing national champions. Seldom do we hear calls to break up Detroit's "Big Three," despite global revenues in the hundreds of billions. Why? Because there is a widespread recognition that these companies face significant challenges in a global market dominated by similarly large competitors.

Contrary to popular myth, big companies, not small businesses, can be engines of growth and innovation, as Robert Atkinson and Michael Lind explore in their book Big Is Beautiful: Debunking the Myth of Small Business :

On virtually every meaningful indicator, including wages, productivity, environmental protection, exporting, innovation, employment diversity and tax compliance, large firms as a group significantly outperform small firms.

That insight parallels the scholarship of Joseph Schumpeter, the intellectual godfather of the economics of innovation, who showed that R&D spending and productivity increase with scale. Latterly, Schumpeter's insights have been validated by a recent study from Professors Ann Marie Knott and Carl Vieregger, who conclude (emphasis added):

Not only do large firms (using the U.S. Small Business Association definition of greater than 500 employees) conduct 5.75 more R&D in aggregate than small firms, they have 13% higher productivity with that R&D. However this merely captures the private returns to their R&D. A further benefit of large firm R&D is that it generates the spillovers upon which small firm innovation free-rides .

Size-centric antitrust proposals also ignore the increasing prevalence of economic network theory, which suggests that social networks like Facebook or search engines such as Google lend themselves to becoming natural monopolies in order to function optimally. Here again, function-centric regulation -- i.e., separation between the control of content and distribution -- makes more sense to rectify market abuse. And this could be achieved via utility-style regulation, as no less a figure than right-wing populist Steve Bannon has suggested , rather than creating a bunch of new mini-Facebooks or Googles via court-mandated break-ups (especially if the owners of the newly broken-up companies retain full control of algorithms to determine what people see in their News Feeds, what privacy settings they can use, and even what messages get delivered to news consumers, as Mark Zuckerberg does today ).

It is also the case that many businesses characterized by minimal levels of corporate concentration -- construction, education, entertainment, accommodation, food, business services, transportation, warehousing -- generally experience sub-standard productivity levels, sluggish growth, and low real wages, according to an INET-funded study by Professors Lance Taylor and Özlem Ömer. Working conditions are generally worse, and wages and employment benefits lower, as small business owners are often the first to protest increased regulation or "burdensome" mandates, such as health care provisions. The real point is not to beat up on small businesses, but simply to note that the abuses commonly ascribed to big business are just as, if not more, likely to manifest themselves in smaller industries less prone to corporate concentration.

What about the claim that corporate consolidation contributes to a corrosion of American democracy ? It is true that as companies get bigger, it maximizes their abilities to "pay to play," as Professor Thomas Ferguson asserts in his seminal work, Golden Rule . Ferguson says that powerful blocs of business elites, large and small, with durable (largely economic) interests, are a constant feature of American politics. All have an incentive to get bigger in order to maximize political leverage. That includes smaller businesses that scale up via trade associations to maximize the impact of their "political investment." But again, what is needed here is not an antitrust remedy, but a change in the "pay to play" rules so as to ensure that money and corporate scale have less of a polluting impact on the American polity.

So it may be time to reconsider the simplistic notion that "big is bad." Yes, we want a dynamic economy and a thriving democracy. But mindlessly breaking up big businesses may not be the best path to get us there.

Marshall Auerback is a market analyst and a research associate at the Levy Economics Institute at Bard College.

This article was supported by the Ewing Marion Kauffman Foundation.

[Aug 19, 2019] Barr took a hard swing at prosecutors who don't embrace the same tough-on-crime stance

Aug 19, 2019 | turcopolier.typepad.com

Kelli , 18 August 2019 at 04:57 PM

Let's talk for a minute about the increasingly open hostilities between "get soft on crime" prosectors from Deep Blue cities and states and an alliance of Red State and county prosecutors with the backing of Bill Barr's DOJ.

Barr addressed the issue about a week ago in New Orleans:

"Barr took a hard swing at prosecutors who don't embrace the same tough-on-crime stance. He said appointing such progressive district attorneys is "demoralizing to law enforcement and dangerous to public safety" because they "spend their time undercutting the police, letting criminals off the hook, and refusing to enforce the law.""
https://www.chicagotribune.com/nation-world/ct-nw-william-barr-death-penalty-20190812-smzw52vgyrh7haypr3dq327ydm-story.html

And, like clockwork, a cause celebre erupts in North suburban Chicago, as a gang of street thugs uses car stolen in the city to travel to Lake County on a nighttime spree. But as luck would have it, a 75 year old man with a legally registered gun shot one of the gang bangers (a 14 year old carrying a large Bowie knife) and killed him. The 18 year old accomplices took off, and now the County Attorney is bringing charges of Felony Murder against the rest of the criminal squad. Well, the Chicago media is outraged by this, and the pressure is building on the prosecutor to go light on the poor dears, most of whom have a rap sheet a mile long.

In about 5 seconds, I expect Kim Foxx (of Jussie Smollett fame) to get on a very high horse and start race baiting Lake County (largely white) in an effort to intimidate our elected officials into adopting her "leave no criminal behind" strategy for cleaning up Chicago's streets. I guess the strategy is to send them outside the city on raiding runs.

I'd be interested in stories from other parts of the country. Is anyone else experiencing something similar? How do we fight this trend? What does it portend for the future?

[Aug 19, 2019] President Trump has pegged the success of his Presidency on the rise and fall of the markets

This is the nature of all petty speculators. And Trump is a petty speculator, a huckster by nature. He has a typical "rag trader mentality".
ZeroHedge comments became very critical to Trump. As they reflect certain demographic which previously supported Trump this is not a good sign.
What is interesting that in this libertarian paradise almost nobody supports classic neoliberal liberalization. Most support tariffs. Times definitely changes.
Aug 19, 2019 | www.zerohedge.com

Of course, since President Trump has pegged the success of his Presidency on the rise and fall of the markets, on Wednesday, as "tweets" about a "trade talks continuing" failed to lift the markets, he resorted to more direct measures to manipulate the markets: Via CNBC:

"Trump held the call with J.P. Morgan Chase CEO Jamie Dimon, Bank of America's Brian Moynihan and Citigroup's Michael Corbat, according to people with knowledge of the situation."

This, of course, was reminiscent of the call made by Steve Mnuchin, U.S. Treasury Secretary, during the market rout last December. But most importantly, this is about the upcoming election:

"Trump has been reaching out to corporate leaders this week amid his concerns that a slowing U.S. economy could impact his reelection chances, according to a Thursday piece from the Washington Post."

Hopefully, he will listen to them.

But even if the trade dispute was ended today, the damage is likely already done.

In other words, while investors have hung their portfolios hopes of a "trade deal," it may well be too little, too late.

Art Of The Deal Versus The Art Of War

This is all assuming Trump can actually succeed in a trade war with China.

Let's step back to the G-20 meeting between President Trump and President Xi Jinping. As I wrote then:

"There is a tremendous amount of 'hope' currently built into the market for a 'trade war truce' this weekend. However, as we suggested previously, the most likely outcome was a truce but no deal. That is exactly what happened.

While the markets will likely react positively next week to the news that ' talks will continue,' the impact of existing tariffs from both the U.S. and China continue to weigh on domestic firms and consumers.

More importantly, while the continued ' jawboning' may keep ' hope alive' for investors temporarily, these two countries have been ' talking' for over a year with little real progress to show for it outside of superficial agreements.

Importantly, we have noted that Trump would eventually ' cave' into the pressure from the impact of the ' trade war' he started.


I am Groot , 4 minutes ago link

Trump will always be better than Hillary but he always folds like a house of cards in a windstorm when he's up against the Democrats or anyone for that matter. He turned out to be a ******* giant orange *****.

I really don't know if he will win in 2020. And a lot of that is based on him screwing his own base like farmers and gun owners. He didn't lock up Hillary, or build us a wall. He hasnt stopped the illegals from coming over the border. And he hasnt cut off their benefits. So he hasn't really done any of the major things he promised.

All the Democrats have to do is cheat in Pennsylvnia, Michigan and Florida and he's finished. We end up with Pedo Joe as POTUS.

Antifaschistische , 14 minutes ago link

Meanwhile in Arkansas...

https://www.marketwatch.com/story/the-walton-family-gets-100-million-richer-every-single-day-2019-08-12

Remember when Sam Walton used to be proud of his "made in America" products...literally saving companies from their demise by buying truckloads of their products.

Skip the Trade War....do I sound too much like Bernie if I suggest that we go after the family that makes $100,000,000.00 per DAY off selling Chinese goods....they ARE the storefront for China. Well, along with few dozen other retailer and etailers (like Amazon)

...and don't give me the "they pay their taxes" BS...because the billionaire boys club hire multi-millionaire Tax Attorneys to avoid paying taxes.

Quivering Lip , 16 minutes ago link

When are you people going to realize that the "trade war" isn't about bringing jobs back. It's about the global corporations getting a better deal in China. It's about Financial Services and US banks gaining market share in China.

Those corporations won't move jobs back here. They'll just make more in China. Those same corporations that offshored those American jobs already got their tax cuts. Why would they bring jobs back now. Talk about putting the cart in front of the horse.

By the way US steel had been and will continue to lay people off.

The US is running Trillion dollar plus yearly deficits with stocks up 50% since Trump took office. This with all-time low unemployment and no inflation (bwahahahahaha).

Now imagine what the deficits will look like if things turn South.

green dragon , 22 minutes ago link

Lance Roberts just does not get it. I wonder if he actually read the art of war. For it was the Globalist who created what is China today with the largest transfer of technology, capital, etc. in the history of the world.

We are now at the point of no return. The western system will either decline or it will pull itself out of it self destruction. Make no mistake China intends to be a military power and it is just a matter of time before China challenges USA domination. I see no way this will be avoided at this time.

As such you will see economic conflict going forward. China will likely win this one but it will set the stage for the continued decline of the western economic system. For the current system of western debt and financialization of Western economies cannot sustain itself. China still depends on this system that cannot last. So in time Globalist system will have to reset and the relationship between Western Nations and China will change into trade conflict.

June 12 1776 , 22 minutes ago link

What has been accomplished? Stolen Democrat Marxist Redistribution is all that Trump has accomplished while getting exposed as the illiterate fraud that he is.

Corp/Fascist, CIA MOSSAD Trump was never in a "trade war". Trumps sole mission has been to steal and redistribute, at a ongoing DEFICIT , out of the property of American People, leaving the American People, fked. Same as it ever was!

Corp/Fascist, CIA MOSSAD Trump continues to line up all bonafide working and saving Americans in front of his deficit debt devaluation firing squad. All he intended to do, he has accomplished: redistributed stolen plunder and bounties and plundered all bonafide working and saving white, black, brown, red and yellow Americans.

the6thBook , 32 minutes ago link

Was this written by China? Hong Kong imploding...

Jazzman , 11 minutes ago link

HK is just a trivial Maidan-like side scenario to support the US position in a trade war that is meant to force the Chinese into submission. Since the trade war is collapsing, the Donald Trump has to try to escalate somewhere else - in this case it's Taiwan. That really is the only option the US culture allows him to consider. Escalation, escalation, escalation. Very predictable strategy. Problem is, in this way the Trump puts the very existence of the USA at risk when he tries to win against all odds against an adversary that absolutely doesn't want to lose.

Asoka_The_Great , 27 minutes ago link

"

One of the things I will allow, however, is -- a lot of people are surprised we send and we sell to Huawei a tremendous amount of product that goes into a lot of the various things that they make -- and I said that that's OK, that we will keep selling that product." – President Trump

Before the Great Trade War , and the endless attacks on Huawei by Trumptard and the US Dark State, in order, to kill Huawei, many people, including myself, have not heard of Huawei's name before, now, it is a world famous brand, thanks for the massive free publicity, from the US War State.

Despite the total ban and blacklisting, Huawei not only survived, without a scratch, it's revenue in 2019, actually grew an astonishing 23% .

WHY IS THE US DARK STATE SO TERRIFIED OF HUAWEI'S 5G WIRELESS TECHNOLOGY?

The US Dark State/War State/Deep State, that is the NSA/CIA/Pentagon/MIC/MSM . . . etc has forced every western tech companies to install backdoors and malwares on their equipments, except Huawei. They have tried to force Huawei to install those NSA backdoors and malwares, in 2014, but the company categorically refused.

"The real issue is that nothing has changed since a 2014 report from The Register that Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered intelligence access to the data that crosses their networks.

All our emails, text messages, phone calls, internet searches, web browsing, library records, . . . etc, are recorded and stored by NSA/CIA's vast servers farms.

Now, Huawei is not only the leading 5G wireless provider, but it is the only one, so far. The other companies like Nokia and Ericsson are far behind.

5G is going to completely replace 4G and 3G. It is about 200 times faster than 4GLTE, in download speed.

What this means is that if the world adopts the Huawei equipments and standards, it will threaten to UNDO the US Dark State's vast global surveillance network.

This is what terrifies the US Dark State. Their vast Global Surveillance Network is the basis of its power, and tools to enslave mankind.

There is a very good reason, why the American Founding Fathers , enacted every measures, to protect our rights and privacy, so that we will not be controlled and enslaved by the tyranny of totalitarian government, which is already upon us, in the form of US Dark State/War State .

The US Dark State/Deep State/War State does not represent America. It is Un-American. It is not the American Republic founded by our Founding Fathers, and enshrined in the US Constitution.

RedBaron616 , 33 minutes ago link

The problem is that this President has no clue has to use tariffs.

If you want the jobs to come back to the USA instead of playing Asian musical chairs, you have to slap the tariffs on every country that has low wages/benefits and no/low environmental laws (that are enforced). If you don't, they are just shuffling factories around.

I'm no fan of China, but tariffs only on China won't bring a single job back to the USA unless tariffs encompass all the "beggar-my-neighbor" countries, like Mexico, China, Malaysia, Vietnam, Indonesia, etc.

ohm , 31 minutes ago link

Absolutely correct. This shows that this has nothing to do with Trade but just trying to weaken China.

ElBarto , 22 minutes ago link

What's wrong with making China weaker? Makes more sense than making them stronger.

ohm , 12 minutes ago link

Rather than invading countries or trying to make countries weaker, we should focus on fixing our crumbling infrastructure, manufacturing base collapse, declining life expectancy etc. And don't even start babbling about how Trump's China tariffs help US manufacturing. As RedBaron correctly pointed out in his post, unless you put tariffs on all the low wage countries, singling out China does nothing for US workers.

[Aug 19, 2019] Does insanity of Maher reflects insanity of the US neoliberal elite as a whole

Aug 19, 2019 | www.nakedcapitalism.com

Whoa Molly! , July 28, 2018 at 7:31 am

Maher comes across as literally unhinged. Insane.

As James Howard Kunstler said recently, " I think that the thinking class in the United States has literally lost its mind. Donald Trump's persona is so odious that it's just driven them mad and he's like a giant splinter in the eye of the thinking class ."

I don't get it. Either Maher is part of the thinking class that has lost it's mind, or he's a destructive, cynical (familyblog) who is deliberately inflaming his 'Liberal Goodthinking' audience and gaslighting Wilkerson.

The LIberal Goodthinkers have gone so crazy they are making Trump look good.

Dangerous times.

PS: Thanks for term "Liberal Goodthinkers". Pretty good.

juliania , July 28, 2018 at 10:35 am

It's the thinking class versus the deplorables. And the former is enabling the latter in no uncertain terms. This period of lunacy won't be forgotten come voting time. Whereas, had the dems gracefully accepted defeat and concentrated on real issues that concern us all, they might have had a shot at the midterm merrygoround. Instead, they chose to keep the failed slurs of the last campaign a topic of conversation all the way through, as in fact the term 'transition' on these boards does as well. Transition = transitory.

Something is making Trump a very viable stayer through these turbulent times, and the minefield that these people have turned being President into is a sad commentary on the state of our union. But like the sanctions that are unthinkingly dispersed hither and yon, the blowback can be supercharged, and I can't think of more worthy recipients.

Damson , July 29, 2018 at 10:43 am

The Chattering Class is the UK term.. 'Thinking' is rather too generous for the mind-drool exemplified by Maher and his ilk

NotTimothyGeithner , July 28, 2018 at 9:09 am

Maher was a long time libertarian, and with the rightward shift of Team Blue and medical Marijuana (after all we still need to arrest minorities), Bill became a "liberal" type. He's still the same POS he was in the 90's.

Ur-Blintz , July 28, 2018 at 10:03 am

Bingo! How he ever fooled anyone into thinking he was less than a narcissistic, libertarian. money grubbing sociopath is beyond me. First time I saw him, way back when, he was railing against Social Security and he is perhaps most responsible for making a celebrity out of Arianna Huffington, giving her a nationwide pulpit on his original show when she was repulsively right-wing.

[Aug 19, 2019] AG Barr Fires Prisons Chief After Epstein Case Leaves Country Hanging

Aug 19, 2019 | www.zerohedge.com

AG Barr Fires Prisons Chief After Epstein Case Leaves Country Hanging

by Tyler Durden Mon, 08/19/2019 - 13:17 0 SHARES

Just days after the 'suiciding' of Establishment Enemy #1 Jeffrey Epstein, Attorney General William Barr has ordered the removal of acting Bureau of Prisons director Hugh Hurwitz from the top position in aftermath of Epstein death. Barr is reportedly appointing Kathleen Hawk (who previously occupied the role between 1992 and 2003) as Director the Federal Bureau of Prisons (with Thomas R.Kane as Deputy) .

This move by Barr comes a few days after Reps. Jerrold Nadler (D-NY), Chairman of the House Judiciary Committee and Doug Collins (R-GA), Ranking Member of the House Judiciary Committee, today sent a letter to the Acting Director of the Bureau of Prisons, Hugh Hurwitz, to demand answers after Jeffrey Epstein was found dead from an apparent suicide while in custody at the Metropolitan Correctional Center in New York.

Dear Acting Director Hurwitz:

As Chairman and Ranking Member of the House Committee on the Judiciary, we write concerning the news, as provided in a statement by Attorney General William Barr and a press release subsequently issued by the Bureau of Prisons (BOP), that Jeffrey Epstein was found dead from an apparent suicide on the morning of August 10, 2019, while in your custody at the Metropolitan Correctional Center in New York (MCC New York).

The apparent suicide of this high-profile and -- if allegations are proven to be accurate -- particularly reprehensible individual while in the federal government's custody demonstrates severe miscarriages of or deficiencies in inmate protocol and has allowed the deceased to ultimately evade facing justice. Any victims of Mr. Epstein's actions will forever be denied proper recourse and the scintilla of recompense our justice system can provide in the face of such alleged atrocities; the competency and rigor of our criminal justice system has been marred by this apparent oversight.

As the Attorney General stated, "Mr. Epstein's death raises serious questions that must be answered." We agree, and therefore ask that you provide responses to the following questions concerning this incident, and BOP policies pertaining to inmates considered at risk for suicide and how such policies were implemented in this case.

  1. We understand that BOP implements its suicide prevention program pursuant to BOP Program Statement P5324.08. Is this correct? Please provide copies of any other documents that may govern the implementation of this program on a Bureau-wide basis and also any documents internal to MCC New York applying to the implementation of suicide prevention policies at that facility.
  2. Since July 6, when Mr. Epstein arrived at MCC New York as a pretrial detainee, what evaluations were conducted concerning his mental status and possible risk of suicide? Please provide any documents related to any such evaluations.
  3. Please describe the classifications of the housing units Mr. Epstein was placed in for each day he was in custody, and whether or not Mr. Epstein was placed in single-cell confinement or restrictive housing.
  4. Does MCC New York have rooms specifically designated for housing inmates on suicide watch?
  5. What is BOP, and MCC New York's policy regarding the placement and housing conditions of inmates accused of sex offenses? Was this policy followed in this instance?
  6. What is BOP's policy concerning single-cell confinement, or restrictive housing, for inmates (and pretrial detainees, if different) presenting with mental health concerns? What is BOP's policy concerning such confinement for pretrial detainees and inmates presenting with risk of possible suicide?
  7. Please describe the circumstances of Mr. Epstein's confinement, including whether he was housed alone for the entirety of his incarceration or with other inmates, and the conditions of the cell or cells where he was confined.
  8. Please describe the nature of BOP's monitoring of Mr. Epstein while on suicide watch and while not on suicide watch, including, under both circumstances, the number of correctional officers assigned to monitor him, and the frequency and nature of check-ins or contact with Mr. Epstein by correctional officers.
  9. Please provide information pertaining to the individual correctional officers who were responsible for monitoring Mr. Epstein on August 9 and August 10, specifically with respect to how long they had been on their shifts at the time Mr. Epstein had been found non-responsive in his cell.
  10. It has been reported that Mr. Epstein had been placed on suicide watch at some point while in custody, and that this watch was terminated. Is this correct? If so, please provide the date and time when he was placed on suicide watch and the date and time when he was removed from suicide watch.
  11. It is our understanding that BOP policy states that only the "program coordinator" for a facility's suicide prevention program has the authority to remove an inmate from suicide watch. Is this correct?
  12. Does MCC New York have such a program coordinator? Did he or she authorize the removal of Mr. Epstein from suicide watch? If not, who did?
  13. Did the program coordinator consult with anyone else in making this determination? If so, who?
  14. Was the termination of Mr. Epstein's suicide watch by the official who made such determination discussed with or directed by any supervisory personnel or leadership of BOP or any DOJ personnel or executive branch personnel outside of BOP?
  15. Who at BOP, DOJ, and elsewhere in the executive branch was notified of the termination of Mr. Epstein's suicide watch and when?
  16. It is our understanding that BOP policy requires that the program coordinator issue a "post-watch" report prior to, or as soon as possible following, watch termination. In the case of Mr. Epstein, was such a report issued? If so, please provide a copy of the report and any underlying evaluation and documentation. If not, please otherwise detail the basis for removing Mr. Epstein from suicide watch and provide any related evaluation and documentation.
  17. If Mr. Epstein was removed from suicide watch, what precautions were put in place to help prevent the possibility of self-injury for Mr. Epstein given that he was transitioning from suicide watch? Were there any steps taken to remove possible implements of self-injury?
  18. If, as you have stated, Mr. Epstein died of an apparent suicide, what are the facts and circumstances that led you to make that determination, and please provide a copy of the report of the autopsy which was subsequently performed.
  19. Was any plan implemented to check in on and observe Mr. Epstein on a regular basis after the termination of his suicide watch?
  20. Were any video surveillance cameras placed in or near Mr. Epstein's cell? Were they operational in the hours prior to and during the time of the injury to and death of Mr. Epstein? Did they indicate or do recordings show the circumstances that led to Mr. Epstein's death, or the presence of any other person during this time period?
  21. What is BOP's policy for providing recurring, specific mental health and suicide prevention training to its personnel?
  22. When the relevant supervisory personnel and correctional staff at MCC New York last receive suicide prevention training?
  23. Do BOP's suicide prevention policies apply to all prisons which provide housing for federal inmates, including contract facilities?

The Attorney General has stated that the FBI and the Inspector General of the Department of Justice are investigating the death of Mr. Epstein, and we look forward to learning the results of their inquiries. However, it is imperative that the Committee on the Judiciary, which has the responsibility to exercise oversight over the Department of Justice, receive responses to these questions related to the adequacy of BOP's suicide prevention policies and their implementation in this instance, as soon as possible. Therefore, please respond to these questions by August 21.

[Aug 19, 2019] After Allegations Of Druggings And Rape, Epstein-Pal And His Modeling Agencies Come Into Focus

Aug 19, 2019 | www.zerohedge.com

After Allegations Of Druggings And Rape, Epstein-Pal And His Modeling Agencies Come Into Focus

by Tyler Durden Mon, 08/19/2019 - 11:15 0 SHARES

Following the death of Jeffrey Epstein, his seedy network of friends and potential co-conspirators alike have come into the spotlight.

One associate, considered to be Epstein's closest pal, is modeling maven Jean-Luc Brunel - who has recently been accused of pimping underage women around the world through his Mc2 and Karin modeling agencies, while former models have accused the 72-year-old of drugging and date-raping girls , according to the Daily Beast .

How close were Brunel and Epstein?

Brunel was one of the financier's most frequent male associates . The agent appears more than 15 times on flight logs from Epstein's private plane , jetting everywhere from Paris to New York, often in the presence of young women. He visited Epstein nearly 70 times in jail , according to visitor logs, and several more times while the financier was on house arrest in Palm Beach. According to one of Epstein's housemen, Brunel was comfortable enough to whip up his own meals in the financier's kitchen , and was one of Epstein's most frequent callers. - Daily Beast

Brunel's name appeared in a cache of court documents unsealed earlier this month, having called and left a message to let Epstein know that he "just did a good one - 18 years" who reportedly told him "I love Jeffrey."

"He has a teacher for you to teach you how to speak Russian," reads another note from September 2005, which adds " She is 2 X 8 [16] years old not blonde . Lessons are free and you can have 1st today if you call."

Epstein also extended a $1 million letter of credit to Brunel which was used to invest in Paris-based Elite Models. According to the Beast, "The venture, E Management, was first registered by Epstein's attorney, who listed its address as 457 Madison Avenue -- the same as Epstein's investment firm, J. Epstein & Co." Brunel says the venture fell apart after Elite Models learned of Epstein's sex-trafficking allegations - with the agent even suing Epstein in 2015 for tarnishing their reputation and causing a "tremendous loss of business."

At least two people say Brunel not only knew about the sex trafficking, he was actively participating in it .

Virginia Roberts (now Giuffre) -- one of the first alleged victims to speak out against Epstein after he was granted a sweetheart plea deal -- claimed in legal filings that Brunel was one of many powerful men she was forced to sleep with in her years as Epstein's "sex slave." She also accused Brunel of using his agency to find foreign girls, obtain visas for them, and "farm them out to his friends, including Epstein ."

"A lot of the girls came from poor countries or poor backgrounds, and he lured them in with a promise of making good money," Giuffre said in a 2015 affidavit. " Jeffrey Epstein has told me that he has slept with over 1,000 of Brunel's girls, and everything that I have seen confirms this claim. " - Daily Beast

" My assumption was that Jean-Luc Brunel got the girls from Eastern Europe (as he procured many young foreign girls for Epstein). They were young and European looking and sounding ," said Guiffre while describing an orgy she says she was forced to participate in on Epstein's 'pedo island.'

In a 1988 60 Minutes piece, several American models who worked with Brunel spoke of being plied with drugs and taken to parties with older men .

"My sense, based upon the allegations, is that Jean-Luc was a predator, his group was a predator, and they used their tools of power and leverage to force sex from women who otherwise might not be willing to engage in it," one of the reporters from the 60 Minutes piece told the Daily Beast .

Former model Thysia Huisman was 18-years-old when she says Brunel sexually assaulted her after giving her a spiked drink .

" I recall him lying on top of me, me trying to push him off, " she said in an interview. "I remember trying to move, but not really being able to. Like almost being paralysed. I heard the sound of my blouse – a black blouse – ripping. I had a black skirt, too. I felt him – this is difficult – between my legs. Pushing."

Huisman said the rest was a blur. She woke the next morning in a kimono that wasn't hers, with soreness on her inner thighs. "I felt we had had sex," she said. "I knew. I know."

She gathered her things and fled while Brunel spoke on the telephone in the living room, she said. Her modelling work never recovered and she embarked on a career in television, always behind the camera.

...

"I was really ashamed," she said. Huisman said she began telling her current partner about the incident eight years ago. He confirmed to the Guardian she then told him she was "molested" by someone at her modelling agency, and added more details – including Brunel's name – over time, explaining the full story about two years ago. - The Guardian

Another former model, Courtney Soerensen, says Brunel molested her when she was 19-years-old, and "sabotaged" her career when she rejected him.

Courtney Soerensen, Thysia Huisman

"He would get very handsy, start groping me, try to kiss me, try to get me to lay down on the bed just to 'try it out'" said Soerensen. "He would try to untuck my shirt, wanting to 'see my abs'. He would grab my breasts and put his hand on my bottom. There was one time where he rubbed himself up against me. "

" The guy was a vile pig" says former Brunel photographer and scout Clayton Nelson. "The girls who slept with him worked. The girls who didn't, he would tell bookers: 'I don't want her booked for anything'."

Former MC2 bookkeeper Martina Vasquez has also accused Brunel of similar behavior, claiming that Brunel employed scouts who would recruit teenage models from South America, Europe and the former USSR. " The most desirable of those teens were housed in Epstein's Upper East Side apartments and loaned out to wealthy clients for up to $100,000 a night, Vasquez alleged. If they refused to be "molested," she said, they would not be paid. (Brunel has denied these claims and says Vasquez was fired from his agency for embezzling company funds.)" according to the report.

Bloomberg , meanwhile, reports that MC2 Model Management had a growing list of concerned corporate clients by 2014 after Brunel's ties to Epstein came to light.

By 2014, Brunel's business partner Jeff Fuller was concerned that the relationship with Epstein could be damaging. In a letter reviewed by Bloomberg News, Fuller told Brunel that he was getting a "tremendous amount of worries from our clients" about the ties to Epstein , then went on to list as clients Nordstrom Inc., Macy's Inc., Saks Fifth Avenue, Neiman Marcus, J.C. Penney Co., Kohl's Corp., Target Corp., Sears and Belk . - Bloomberg

Brunel has denied all allegations of impropriety.

amadeus39 , 1 minute ago link

Molesting children is an abominable crime, but using that information to blackmail country leaders effects many more people. Using blackmail to gain political control will destroy nations and its citizens. It will destroy civilization. This Epstink plot will destroy trust of government. Once trust is destroyed, our world is destroyed.

nmewn , 13 minutes ago link

Jean-Luc Brunel, sounds Irish to me!

https://nypost.com/2019/08/13/french-officials-call-for-probe-into-epsteins-links-with-france/

Oh, I guess not ;-)

[Aug 18, 2019] Why Was Trumponomics a Flop? Neither tax cuts nor tariffs are working.

Notable quotes:
"... But why has Trumponomics failed to deliver much besides trillion-dollar budget deficits? The answer is that both the tax cuts and the trade war were based on false views about how the world works. ..."
"... Republican faith in the magic of tax cuts -- and, correspondingly, belief that tax increases will doom the economy -- is the ultimate policy zombie, a view that should have been killed by evidence decades ago but keeps shambling along, eating G.O.P. brains. ..."
"... What about the trade war? The evidence is overwhelming: Tariffs don't have much effect on the overall trade balance. At most they just shift the deficit around: We're importing less from China, but we're importing more from other places, like Vietnam. ..."
"... And there's a good case to be made that Trump's tariffs have actually hurt U.S. manufacturing. For one thing, many of them have hit "intermediate goods," that is, stuff American companies use in their production processes, so the tariffs have raised costs. ..."
"... Now, none of this has led to economic catastrophe. As Adam Smith once wrote, "There is a great deal of ruin in a nation." Except in times of crisis, presidents matter much less for the economy than most people think, and while Trumponomics has utterly failed to deliver on its promises, it's not bad enough to do enormous damage. ..."
Aug 02, 2019 | economistsview.typepad.com

anne , August 02, 2019 at 04:05 AM

https://www.nytimes.com/2019/08/01/opinion/trump-economy.html

August 1, 2019

Why Was Trumponomics a Flop? Neither tax cuts nor tariffs are working.
By Paul Krugman

Donald Trump has pursued two main economic policies. On taxes, he has been an orthodox Republican, pushing through big tax cuts for corporations and the wealthy, which his administration promised would lead to a huge surge in business investment. On trade, he has broken with his party's free(ish) trade policies, imposing large tariffs that he promised would lead to a revival of U.S. manufacturing.

On Wednesday, the Federal Reserve cut interest rates, even though the unemployment rate is low and overall economic growth remains decent, though not great. According to Jerome Powell, the Fed's chairman, the goal was to take out some insurance against worrying hints of a future slowdown -- in particular, weakness in business investment, which fell in the most recent quarter, and manufacturing, which has been declining since the beginning of the year.

Obviously Powell couldn't say in so many words that Trumponomics has been a big flop, but that was the subtext of his remarks. And Trump's frantic efforts to bully the Fed into bigger cuts are an implicit admission of the same thing.

To be fair, the economy remains pretty strong, which isn't really a surprise given the G.O.P.'s willingness to run huge budget deficits as long as Democrats don't hold the White House. As I wrote three days after the 2016 election -- after the shock had worn off -- "It's at least possible that bigger budget deficits will, if anything, strengthen the economy briefly." And that's pretty much what happened: There was a bit of a bump in 2018, but at this point we've basically returned to pre-Trump rates of growth.

But why has Trumponomics failed to deliver much besides trillion-dollar budget deficits? The answer is that both the tax cuts and the trade war were based on false views about how the world works.

Republican faith in the magic of tax cuts -- and, correspondingly, belief that tax increases will doom the economy -- is the ultimate policy zombie, a view that should have been killed by evidence decades ago but keeps shambling along, eating G.O.P. brains.

The record is actually awesomely consistent. Bill Clinton's tax hike didn't cause a depression, George W. Bush's tax cuts didn't deliver a boom, Jerry Brown's California tax increase wasn't "economic suicide," Sam Brownback's Kansas tax-cut "experiment" (his term) was a failure.

Nevertheless, Republicans persist. This time around, the centerpiece of the tax cut was a huge break for corporations, which was supposed to induce companies to bring back the money they've invested overseas and put the money to work here. Instead, they basically used the tax savings to buy back their own stock.

What went wrong? Business investment depends on many factors, with tax rates way down the list. While a casual look at the facts might suggest that corporations invest a lot in countries with low taxes, like Ireland, this is mainly an illusion: Companies use accounting tricks to report huge profits and hence big investments in tax havens, but these don't correspond to anything real.

There was never any reason to believe that cutting corporate taxes here would lead to a surge in capital spending and jobs, and sure enough, it didn't.

What about the trade war? The evidence is overwhelming: Tariffs don't have much effect on the overall trade balance. At most they just shift the deficit around: We're importing less from China, but we're importing more from other places, like Vietnam.

And there's a good case to be made that Trump's tariffs have actually hurt U.S. manufacturing. For one thing, many of them have hit "intermediate goods," that is, stuff American companies use in their production processes, so the tariffs have raised costs.

Beyond that, the uncertainty created by Trump's policy by whim -- nobody knows what he'll hit next -- has surely deterred investment. Why build a manufacturing plant when, for all you know, next week a tweet will destroy your market, your supply chain, or both?

Now, none of this has led to economic catastrophe. As Adam Smith once wrote, "There is a great deal of ruin in a nation." Except in times of crisis, presidents matter much less for the economy than most people think, and while Trumponomics has utterly failed to deliver on its promises, it's not bad enough to do enormous damage.

On the other hand, think of the missed opportunities. Imagine how much better shape we'd be in if the hundreds of billions squandered on tax cuts for corporations had been used to rebuild our crumbling infrastructure. Imagine what we could have done with policies promoting jobs of the future in things like renewable energy, instead of trade wars that vainly attempt to recreate the manufacturing economy of the past.

And since everything is political these days, let me say that pundits who think that Trump will be able to win by touting a strong economy are almost surely wrong. He most likely won't face a recession (although who knows?), but he definitely hasn't made the economy great again.

So he's probably going to have to do what he's already doing, and clearly wants to do: run on racism instead.

anne -> anne... , August 02, 2019 at 07:49 AM
https://fred.stlouisfed.org/graph/?g=oxlA

January 30, 2019

United States Imports of Goods from China and Vietnam, 2017-2019

(Percent change)

Plp -> anne... , August 02, 2019 at 12:31 PM
The economy needs a trillion dollar
Demand injection
Over the next 4 quarters

Will Trump find away

Awareness Awakens said in reply to anne... , August 02, 2019 at 07:11 PM

https://2.bp.blogspot.com/-3rVOpJjNWDE/XURd7OHkw6I/AAAAAAAAyuY/QWZBJxk2sP8VgFu5VTTxhz1Kliuah9SEgCLcBGAs/s1600/PublicJuly2019.PNG

https://2.bp.blogspot.com/-B1-QKHDmxIw/XURd4i2Ku0I/AAAAAAAAyuU/2Iflx0lBX5MrsAwzezy4pzV5dSVc_0negCLcBGAs/s1600/PrivateJuly2019.PNG

anne , August 02, 2019 at 04:07 AM
https://www.nytimes.com/2019/07/25/opinion/trump-foreign-investors.html

July 25, 2019

Trump's Secret Foreign Aid Program
He's giving away billions to overseas investors.
By Paul Krugman

Donald Trump often complains that the media don't give him credit for his achievements. And I can think of at least one case where that's true. As far I can tell, almost nobody is reporting that he has presided over a huge -- but hidden -- increase in foreign aid, the money America gives to foreigners. In fact, the hidden Trump program, currently running at around $40 billion a year, is probably the biggest giveaway to other nations since the Marshall Plan.

Unfortunately, the aid isn't going either to poor countries or to America's allies. Instead, it's going to wealthy foreign investors.

Before I get there, let's talk for a second about a claim Trump often makes about a highly visible part of his economic strategy, the tariffs he has imposed on imports from China and other countries. These tariffs, he has insisted again and again, are being paid by China and represent billions in gains to the United States.

This claim is, however, demonstrably false. Tariffs are normally paid by consumers in the importing country, not exporters. And we can confirm that this is what's happening with the Trump tariffs: Prices of goods subject to those tariffs have risen sharply, roughly in line with the tariff increases, while prices of goods not subject to the new tariffs haven't gone up.

So Trump's tariffs aren't a tax on foreigners, whatever he may think. On the other hand, his other policies have given selective foreigners a huge tax break.

Remember, Trump's only major legislative achievement so far is the 2017 Tax Cut and Jobs Act. The core of that bill was a sharp reduction in corporate tax rates, which has led to a drastic fall in tax revenues, on the order of $140 billion over the past year.

Who gains from this tax cut? Supporters of the bill claimed that the benefits would be passed on to workers in the form of higher wages, and they made a big deal over a flurry of corporate bonus announcements in early 2018. But those bonuses weren't actually very big, and they didn't continue.

In fact, at this point it's clear that the bonus surge, such as it was, was all about tax avoidance: By moving up payments they were going to make anyway, corporations got to deduct the expense at the old, higher tax rate. Now that this option has expired, bonuses have dropped back to their normal level, or even a bit lower.

What about the argument that tax cuts would promote a huge swell in business investment, which would push up wages? Well, that isn't happening, either; when it comes to business spending, the tax cut has been a big fizzle.

So who is benefiting from the tax cut? Basically, shareholders, who have received increased dividends and seen a lot of capital gains as corporations use their windfall not to invest, but to buy back their own stocks.

And a big share of these gains to shareholders has gone to foreigners.

We live, after all, in an era of globalized finance, in which wealthy investors normally own assets in many countries. Americans own trillions in foreign equity, both directly in the form of foreign stocks and indirectly in the form of stocks of U.S. corporations with foreign subsidiaries. Foreigners, correspondingly, have a big stake here, again both through direct stock ownership and via operation of their corporate subsidiaries.

Over all, foreigners own about 35 percent of the equity in corporations subject to U.S. taxes. And as a result, foreign investors have received around 35 percent of the benefits of the tax cut. As I said, that's more than $40 billion a year.

To put this in perspective, Trump's tariffs on China have raised $20 billion so far. Even if China were paying those tariffs -- which it isn't -- that would fall well short of the gift he's made to foreign investors.

Alternatively, we can compare Trump's gift to foreign investors with our actual spending on foreign aid (which is much smaller than most people imagine). In 2017, the U.S. spent $51 billion on "international affairs," but much of that was either the cost of operating embassies or military assistance. The Trump tax break for overseas investors is considerably bigger than the total amount we spend on foreign aid proper.

Now, the U.S. economy is almost inconceivably huge, producing more than $20 trillion worth of goods and services every year. We're also a country that investors trust to honor its debts, so the tax cut, irresponsible as it is, isn't causing any immediate fiscal stress.

So Trump's giveaway to foreign investors isn't going to make or break us, although it's probably enough to ensure that the tax cut will be, over all, a net drain on economic growth: Even if the tax cut has some positive effect on the total income generated here (which is doubtful), this will probably be more than offset by the increased share of that income accruing to foreigners rather than U.S. citizens.

Still, even in America, $40 billion here, $40 billion there, and eventually you're talking about real money. Furthermore, it does seem worth pointing out that even as Trump boasts about taking money away from foreigners, his actual policies are doing exactly the opposite.

Plp -> anne... , August 02, 2019 at 12:34 PM
The present domestic economy has net leaks
Of a trillion every year even with
the current fiscal deficit

No way engineered wealth effects
On consumption
can
Replace that entirely


We need a signifigant fiscal injection

Plp -> Plp... , August 02, 2019 at 12:37 PM
At least 1/2 A trillion

New Infrastructure spending
can't get spent that fast

So

Trump ought propose a payroll tax holiday

anne -> Plp... , August 02, 2019 at 12:58 PM
The present domestic economy has net leaks (net exports)
Of a trillion every year even with
the current fiscal deficit

No way engineered wealth effects
On consumption
can
Replace that entirely

We need a significant fiscal injection

[ Interesting argument. ]

anne -> anne... , August 02, 2019 at 12:58 PM
https://fred.stlouisfed.org/graph/?g=lrqm

January 15, 2018

Net Exports of goods and services, 2000-2018


https://fred.stlouisfed.org/graph/?g=lVai

January 30, 2018

Net Exports as Share of Gross Domestic Product, 2000-2018

[Aug 18, 2019] New Poll Shows Almost Half Of Americans Think Trump's Trade War Is Bad

Notable quotes:
"... Consumers figuring out that it is they who pay the tariffs could backfire on the Trump administration. ..."
"... According to our reporting last month , a 25% tariff on $200 billion in Chinese goods would cost the average American household $831 per year, something that could anger many families as the overall economy is cycling down through summer. ..."
"... ...Farmers get hurt most. They still steadfastly support Trump. ..."
Jun 30, 2019 | www.zerohedge.com

Consumers figuring out that it is they who pay the tariffs could backfire on the Trump administration.

While the President continues to insist that China pays the tariffs, Americans are starting to become more spectacle that he could be deceiving them.

Of all respondents, 46% said the economy is set to deteriorate if a near-term deal isn't reached, while 44% are convinced that China will be the biggest loser.

The poll found that 45% believe tariffs on Chinese goods is slowing the economy, while only 26% believe they help. A National Bureau of Economic Research report shows that American consumers fully pay tariffs - and it's one of the main reasons why respondents are becoming increasingly pessimistic about the trade war. The 2018 report noted, "The U.S. experienced substantial increases in the prices of intermediates and final goods, dramatic changes to its supply-chain network" and reduced availability of imports.

According to our reporting last month , a 25% tariff on $200 billion in Chinese goods would cost the average American household $831 per year, something that could anger many families as the overall economy is cycling down through summer.


raymeejrs , 1 minute ago link

Most Americans, yes, even conservatives are to selfish, tech blinded, media watching sheep, to realize how unbalanced trade has been {against the US} for decades now.

Not to mention they are totally clueless that this was set up this way on purpose..

To transfer wealth, and jobs out of this country to the east... Sadly, many steel workers, auto workers, die makers and setters are more than aware of this "fair trade" fiasco that has eliminated their jobs.

We went from being a producing based country, to a consumer based country during my life time.

Granted, I was born{1965} already at the end of our producing cycle. People just wont care, and will believe ANYTHING the establishment feeds them until its to late.

It already is..

847328_3527 , 3 minutes ago link

Trump can get support by eliminating free shipping from China to USA. Small businesses would hug him for that.

g3h , 6 minutes ago link

...Farmers get hurt most. They still steadfastly support Trump.

[Aug 18, 2019] The Trump-McConnell-Ryan tax cut has been a complete failure at boosting the American economy through increased investment in America

Notable quotes:
"... There are still no signs the U.S. has entered that phase of the recovery in which inflation is accelerating. ..."
"... There are still no signs of interest rate normalization: secular stagnation continues to reign. ..."
Jun 11, 2019 | www.bradford-delong.com

Key Points:

Specifically, it is still the case that:

[Aug 18, 2019] Wells Fargo's behaviour as a nice example of immunity of criminals under neoliberalism

That's a racket. Pure and simple. Which means Well Fargo management and Warren Buffet would be prosecuted under RICO rules.
Aug 18, 2019 | slashdot.org
Wells Fargo's Computer Kept Charging 'Overdrawn' Fees On Supposedly Closed Accounts (startribune.com) 43 Posted by EditorDavid on Sunday August 18, 2019 @02:34PM from the continuing-relationships dept. The New York Times explains a new issue by describing what happened when Xavier Einaudi tried to close his Wells Fargo checking account. For weeks after the date the bank said the accounts would be closed, it kept some of them active. Payments to his insurer, to Google for online advertising and to a provider of project management software were paid out of the empty accounts in July. Each time, the bank charged Einaudi a $35 overdraft fee... By the middle of July, he owed the bank nearly $1,500. "I don't even know what happened," he said.

Current and former bank employees said Einaudi was charged because of the way Wells Fargo's computer system handles closed accounts: An account the customer believes to be closed can stay open if it has a balance, even one below zero. And each time a transaction is processed for an overdrawn account, Wells Fargo tacks on a fee. The problem has gone unaddressed by the bank despite complaints from customers and employees , including one in the bank's debt-collection department who grew concerned after taking in an estimated $100,000 in overdraft fees over eight months...

Most banks program their systems to stop honoring transactions on the specified date, but Wells Fargo allows accounts to remain open for two more months, according to current and former employees. Customers usually learn what happened only after their overdrawn accounts are sent to Wells Fargo's collections department. If the customers do not pay the overdraft fees, they are reported to a national database like Early Warning Services, which compiles names of delinquent bank customers. That often means a customer cannot open a new bank account anywhere, and getting removed from the lists can take hours' worth of phone calls.


fustakrakich ( 1673220 ) , Sunday August 18, 2019 @02:36PM ( #59099810 ) Journal

Wells Fargo has to be the crookedest bank ever ( Score: 3 , Insightful)

Yet, not a single person that counts is being prosecuted.

lgw ( 121541 ) , Sunday August 18, 2019 @02:42PM ( #59099822 ) Journal
Re:Wells Fargo has to be the crookedest bank ever ( Score: 5 , Interesting)

It's bizarre. I doubt Wells Fargo has a handful of senators in their pocket or something, as that would require a level of competence they've never demonstrated in any aspect of their business, so why are they even still allowed to be a bank?

Wells Fargo's primary business, near as I can tell, is widespread fraud. They may also do some banking on the side, but that seems like an afterthought. The entirety of their senior management should be in prison.

reboot246 ( 623534 ) , Sunday August 18, 2019 @02:56PM ( #59099868 ) Homepage
Re:Wells Fargo has to be the crookedest bank ever ( Score: 5 , Informative)

Wells Fargo is worse than crooked. They're incompetent, too. Their online bill pay is straight out of the 19th century.
That's why I closed my account with them about eight years ago . . . . or at least I think I did.

ranton ( 36917 ) writes:
Re: ( Score: 2 )

5th/3rd bank did the same thing to me back in 2009. I closed my bank account when merging accounts with my wife, but when transferring all of my recurring payments I missed two magazine yearly payments. 5th/3rd essentially reopened my accounts and charged them, which were obviously then overdrawn since they had $0 balances. Even after complaining they refused to rescind the fees.

We then closed my wife's account too and moved over to Chase. I always had the feeling that Chase would do the same thing to us to

JoeyRox ( 2711699 ) , Sunday August 18, 2019 @02:44PM ( #59099832 )
Most amazing thing about bank "errors" like this ( Score: 5 , Insightful)

Is that they all seem to work out in favor of the bank over the consumer. It's likely survivorship bias - all the errors that hurt the bank's financial interests get fixed, whereas the ones which help the bank don't and hang around forever. Imagine that.

gweihir ( 88907 ) , Sunday August 18, 2019 @02:54PM ( #59099858 )
Sounds like criminal business practices ( Score: 3 )

At the very least deceptive. In a sane system, the bank has to give a final balance at a certain day and it is legally prohibited from doing any transactions on that account afterwards.

Solandri ( 704621 ) , Sunday August 18, 2019 @03:02PM ( #59099878 )
Don't see how the customer could be liable ( Score: 3 )

When you close an account, you are terminating your contract with the bank. You walk into the bank, the bank rep looks at the account, sees how much money is in it at that instant and cuts you a check for that remaining balance. That zeros out the account, and the contract you made with the bank when you opened the account expires - it is as if you never had an account with the bank. If the bank then decides to take "money" out of the now-closed account, it's their own damn fault. They cannot claw back money from the customer - there is no longer a contract between them. The customer correctly zeroed out the account and closed it. Any error is the bank's own fault.

I can see it being a problem if you hold multiple accounts with the bank and you close just one of them. Then the bank might be able to come up with a legal argument when you're still liable. But that's why I hold accounts with multiple banks, and I generally close all my accounts with one bank at once.

localroger ( 258128 ) , Sunday August 18, 2019 @03:18PM ( #59099898 ) Homepage
Re:Don't see how the customer could be liable ( Score: 3 )

You're right legally, but the threat is that they will ruin your credit rating by reporting you as delinquent to the credit agencies. And your recourse for getting that undone is difficult at best.

sjames ( 1099 ) , Sunday August 18, 2019 @04:33PM ( #59100062 ) Homepage Journal
Re:Don't see how the customer could be liable ( Score: 2 )

In other words, extortion on the banks part and libel and slander from the reporting agencies (wanton disregard for the truth).

[Aug 18, 2019] Quigley's book ( Tragedy and hope), outlines how the transnational financiers and the elites hold the masses in utter contempt.

Aug 18, 2019 | off-guardian.org

John Deehan

Professors Antony C Sutton, Carol Quigley and Guido Preparata wrote some very insightful books demonstrating how so much of what is accepted as official history is false. Quigley's book ( Tragedy and hope), outlines how the transnational financiers and the elites hold the masses in utter contempt. Moreover, Sutton demonstrates the fabricated fight between left and right is a mere distraction to enable them to progress with their plans for humanity. Furthermore, Preparata illustrates in his book, Conjuring Hitler, the notion that masses opinions count for nothing with the elites and the puppet politicians in terms of foreign policy.

As Sutton's research discovered, the transnational financiers financed both Communism, Fascism and Nazism and came to some rather disturbing conclusions about their intentions.

Quigley summed it up " the powers of financial capitalism had a far- reaching aim nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.

This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements and conferences.

The apex of the system was to be the Bank for International Settlements (BIS) in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations Each central bank sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world." Tragedy and Hope.

[Aug 18, 2019] Vox Popoli The end of world revolution

Aug 18, 2019 | voxday.blogspot.com

Sunday, July 15, 2018 The end of world revolution This is a particularly interesting article on the end of the Bilderberg era in light of some of the rumors that are supposedly coming out of the most recent Bilderberg meeting. And notice how it all just keeps going back to Leon Trotsky:

The beginning of the end of the Bilderberg/Soros vision is in sight. The Old Order will cling on, even to the last of its fingernails. The Bilderberg vision is the notion of multi-cultural, international cosmopolitanism that surpasses old-time nationalism; heralding the end of frontiers; and leading toward a US-led, 'technocratic', global economic and political governance. Its roots lie with figures such as James Burnham, an anti-Stalin, former Trotskyite, who, writing as early as 1941, advocated for the levers of financial and economic power being placedin the hands of a management class: an élite – which alone would be capable of running the contemporary state – thanks to this élite's market and financial technical nous. It was, bluntly, a call for an expert, technocratic oligarchy.

Burnham renounced his allegiance to Trotsky and Marxism, in all its forms in 1940, but he would take the tactics and strategies for infiltration and subversion, (learned as a member of Leon Trotsky's inner circle) with him, and would elevate the Trotskyist management of 'identity politics' to become the fragmentation 'device' primed to explode national culture onto a new stage, in the Western sphere. His 1941 book, "The Managerial Revolution," caught the attention of Frank Wisner, subsequently, a legendary CIA figure, who saw in the works of Burnham and his colleague a fellow Trotskyite, Sidney Hook, the prospect of mounting an effective alliance of former Trotskyites against Stalinism.

But, additionally, Wisner perceived its merits as the blueprint for a CIA-led, pseudo-liberal, US-led global order. ('Pseudo', because, as Burnham articulated clearly, in The Machiavellians, Defenders of Freedom, his version of freedom meant anything but intellectual freedom or those freedoms defined by America's Constitution. "What it really meant was conformity and submission").

In short, (as Paul Fitzgerald and Elizabeth Gould have noted), "by 1947, James Burnham's transformation from Communist radical, to New World Order American conservative was complete. His Struggle for the World, [converted into a memo for the US Office of Strategic Services (OSS, the forerunner of CIA)], had done a 'French Turn' on Trotsky's permanent Communist revolution, and turned it into a permanent battle plan for a global American empire. All that was needed to complete Burnham's dialectic was a permanent enemy, and that would require a sophisticated psychological campaign to keep the hatred of Russia alive, "for generations".

What has this to do with us today? A 'Burnham Landscape' of apparently, 'centrist' European political parties, apparently independent think-tanks, institutions, and NATO structures, was seeded by CIA – in the post war era of anti-Sovietism – across Europe, and the Middle East – as part of Burnham's 'battle plan' for a US-led, global 'order'. It is precisely this élite: i.e. Burnham's oligarchic technocracy, that is facing political push-back today to the point at which the Liberal Order feels that it is struggling for its very survival against "the enemy in the White House", as the editor of Spiegel Online has termed President Trump.

"Burnham renounced his allegiance to Trotsky and Marxism, in all its forms in 1940."

Sure he did. The Scarlet Pill, redder than red, is to grasp the fact that the Trotskyite communists, the World Revolutionaries, the Neoliberal world order, the New World Order, Bilderberg, the neoconservatives, the Never Trumpers, NATO, the European Unionists, and the Silicon Valley technocracy are all different aspects of the same thing. And their latest vision for global empire has observably failed, and failed faster and more conclusively than anyone would have imagined.

It will be very interesting to learn if the elite can learn from its failures or not. There have been rumors floating around that the European migration is to be reversed for fear that the whole thing will come crashing down amidst a series of large-scale civil wars. Maybe saner minds have prevailed, maybe the God-Emperor is behind it, or maybe it's just fake news.

Interesting times, to be sure.

[Aug 18, 2019] The Anglo-American Origins Of Color Revolutions

Notable quotes:
"... Lee Stranahan gives the best explanation I have ever heard, on the color revolution that occurred in the Ukraine. He also demonstrates how that revolution overlaps in to the one happening in the United States right now: The very one that has been going on, ever since HRC conceded her Presidential bid to DJT, in her purple pantsuit. ..."
"... The west plays a mean game. The more they try to destabilize the east, the harder Xi,Putin & Erdogan have to crack down on dissidents resultng in harder condemnation of teh west and increased meddling :) ..."
"... "the vast web of NGOs" is a web or organizations which are not accountable to anyone except their money men. ..."
"... The NGO's distort the representative nature of a society. If anything their existence proves that representative democracy is a fraud and just a way for elites to control nations. The only thing to demand after that is direct democracy where all policies etc. have to be voted in by the population. ..."
Aug 18, 2019 | www.zerohedge.com

The Anglo-American Origins Of Color Revolutions

by Tyler Durden Sat, 08/17/2019 - 22:40 0 SHARES

Authored by Matthew Ehret via The Strategic Culture Foundation,

A few years ago, very few people understood the concept behind color revolutions.

Had Russia and China's leadership not decided to unite in solidarity in 2012 when they began vetoing the overthrow of Bashar al Assad in Syria- followed by their alliance around the Belt and Road Initiative , then it is doubtful that the color revolution concept would be as well-known as it has become today.

At that time, Russia and China realized that they had no choice but to go on the counter offensive, since the regime change operations and colour revolutions orchestrated by such organizations as the CIA-affiliated National Endowment for Democracy (NED) and Soros Open Society Foundations were ultimately designed to target them as those rose, orange, green or yellow revolution efforts in Georgia, Ukraine, Iran or Hong Kong were always recognized as weak points on the periphery of the threatened formation of a great power alliance of sovereign Eurasian nations that would have the collective power to challenge the power of the Anglo-American elite based in London and Wall Street.

Russia's 2015 expulsion of 12 major conduits of color revolution included Soros' Open Society Foundation as well as the NED was a powerful calling out of the enemy with the Foreign Ministry calling them "a threat to the foundations of Russia's Constitutional order and national security". This resulted in such fanatical calls by George Soros for a $50 billion fund to counteract Russia's interference in defense of Ukraine's democracy. Apparently the $5 billion spent by the NED in Ukraine was not nearly enough.

In spite of the light falling upon these cockroaches, NED and Open Society operations continued in full force focusing on the weakest links the Grand Chessboard unleashing what has become known as a "strategy of tension". Venezuela, Kashmir, Hong Kong, Tibet and Xinjian (dubbed East Turkistan by NED) have all been targeted in recent years with millions of NED dollars pouring into separatist groups, labour unions, student movements and fake news "opinion shapers" under the guise of "democracy building". $1.7 million in grants was spent by NED in Hong Kong since 2017 which was a significant increase from their $400 000 spent to coordinate the failed "Occupy HK" protest in 2014 .

The Case of China

In response to over two months of controlled chaos, the Chinese government has kept a remarkably restrained posture, allowing the Hong Kong authorities to manage the situation with their police deprived of use of lethal weapons and even giving into the protestors' demand that the changes to the extradition treaty that nominally sparked this mess be annulled. In spite of this patient tone, the rioters who have run havoc on airports and public buildings have created lists of demands that are all but impossible for mainland China to meet including 1) an "independent committee to investigate the abuses of Chinese authorities", 2) for china to stop referring to rioters as "rioters", 3) for all charges against rioters to be dropped, and 4) universal suffrage- including candidates promoting independence or rejoining the British Empire.

As violence continues to grow, and as it has become an increasing reality that some form of intervention from the mainland may occur to restore order, the British Foreign Office has taken an aggressive tone threatening China with "severe consequences" unless "a fully independent investigation" into police Brutality were permitted. The former Colonial Governor of China Christopher Patten attacked China by saying "Since president Xi has been in office, there's been a crackdown on dissent and dissidents everywhere, the party has been in control of everything".

The Chinese Foreign Ministry responded saying "the UK has no sovereign jurisdiction or right of supervision over Hong Kong it is simply wrong for the British Government to exert pressure. The Chinese side seriously urges the UK to stop its interference in China's internal affairs and stop making random and inflammatory accusations on Hong Kong."

The British have not been able to conduct their manipulation of Hong Kong without the vital role of America's NGO dirty ops, and in true imperial fashion, the political class from both sides of the aisle have attacked China with Senate Majority leader Mitch McConnell and Nancy Pelosi making the loudest noise driving the American House Foreign Affairs Committee to threaten "universal condemnation and swift consequences" if Beijing intervenes. This has only made the photographs of Julie Eadeh, the head of Political Office at the American Consulate in Hong Kong meeting with leaders of the Hong Kong demonstrations that much more disgusting to any onlooker.

While both Britain and America have been caught red handed organizing this color revolution, it is important to keep in mind who is controlling who.

The Foreign Origins of the NED

Contrary to popular opinion, the British Empire did not go away after WWII, nor did it hand over the "keys to the kingdom" to America. It didn't even become America's Junior Partner in a new Anglo-American special relationship. Contrary to popular belief, it stayed in the drivers' seat.

The post WWII order was largely shaped by a British coup which didn't take over America without a fight. Nests of Oxford-trained Rhodes Scholars, Fabians and other ideologues embedded within the American establishment had a lot of work ahead of them as they struggled to purge all nationalist impulses from the American intelligence community. While the most aggressive purging of patriotic Americans from the intelligence community occurred during the dissolution of the OSS and creation of MI6 in 1947 and the Communist witch hunt that followed, there were other purges that were less well known.

As an organization which was beginning to take form which was to become known as the Trilateral Commission organized by Britain's "hand in America" called the Council on Foreign Relations and international Bilderberg Group, another purge occurred in 1970 under the direction of James Schlesinger during his six month stint as CIA director. At that time 1000 top CIA officials deemed "unfit" were fired. This was followed nine years later as another 800 were fired under a list drafted by CIA "spymaster" Ted Shackley. Both Schlesinger and Shackley were high level Trilateral Commission members who took part in the group's 1973 formation and fully took power of America during Jimmy Carter's 1977-1981 presidency which unleashed a dystopian reorganization of American foreign and internal policy outlined in my previous report .

Project Democracy Takes Over

By the 1970s, the CIA's dirty hand funding anarchist operations both within America and abroad had become too well known as media coverage of their dirty operations at home and abroad spoiled the patriotic image which the intelligence community then desired. While the internal resistance to fascist behaviour from within the intelligence Community itself was dealt with through purges, the reality was that a new agency had to be created to take over those functions of covert destabilization of foreign governments.

What became Project Democracy herein originated with a Trilateral Commission meeting in May 31, 1975 in Kyoto Japan as a protégé of Trilateral Commission director Zbigniew Brzezinski named Samuel (Clash of Civilizations) Huntington delivered the results of his Task Force on the Governability of Democracies . This project was supervised by Schlesinger and Brzezinski and presented the notion that democracies could not function adequately in the crisis conditions which the Trilateral Commission was preparing to impose onto America and the world through a process dubbed "the Controlled Disintegration of Society ".

The Huntington report featured at the Trilateral meeting stated: "One might consider means of securing support and resources from foundations, business corporations, labor unions, political parties, civic associations, and, where possible and appropriate, governmental agencies for the creation of an institute for the strengthening of democratic institutions."

It took 4 years for this blueprint to become reality. In 1979 three Trilateral Commission members named William Brock (RNC Chairman), Charles Manatt (DNC Chairman) and George Agree (head of Freedom House) established an organization called the American Political Foundation (APF) which attempted to fulfil the objective laid out by Huntington in 1975.

The APF was used to set up a program using federal funds called the Democracy Program which issued an interim report "The Commitment to Democracy" which said: "No theme requires more sustained attention in our time than the necessity for strengthening the future chances of democratic societies in a world that remains predominantly unfree or partially fettered by repressive governments. There has never been a comprehensive structure for a non-governmental effort through which the resources of America's pluralistic constituencies . .. could be mobilized effectively."

In May 1981, Henry Kissinger who had replaced Brzezinski as head of the Trilateral Commission and had many operatives planted around President Reagan, gave a speech at Britain's Chatham House ( the controlling hand behind the Council on Foreign Relations ) where he described his work as Secretary of State saying that the British "became a participant in internal American deliberations, to a degree probably never practiced between sovereign nations In my White House incarnation then, I kept the British Foreign Office better informed and more closely engaged than I did the American State Department It was symptomatic". In his speech, Kissinger outlined the battle between Churchill vs FDR during WWII and made the point that he favored the Churchill worldview for the post war world (And ironically also that of Prince Metternich who ran the Congress of Vienna that snuffed out democratic movements across Europe in 1815).

In June 1982, Reagan's Westminster Palace speech officially inaugurated the NED and by November 1983, the National Endowment for Democracy Act was passed bringing this new covert organization into reality with $31 million of funding under four subsidiary organizations (AFL-CIO Free Trade Union Institute, The US Chamber of Commerce's Center for International Private Enterprise, the International Republican Institute and the International Democratic Institute) (2).

Throughout the 1980s, this organization went to work managing Iran-Contra, destabilizing Soviet states and unleashing the first "official" modern color revolution in the form of the Yellow revolution that ousted Philippine president Ferdinand Marcos. Speaking more candidly than usual, NED President David Ignatius said in 1991 "a lot of what we do today was done covertly 25 years ago by the CIA".

With the collapse of the Soviet Union, the NED was instrumental in bringing former Warsaw Pact nations into NATO/WTO system and the New World Order was announced by Bush Sr. and Kissinger- both of whom were rewarded with knighthoods for their service to the Crown in 1992 and 1995 respectively.

Of course, the vast web of NGOs permeating the geopolitical terrain can only be effective as long as no one says the truth and "names the game". The very act of calling out their nefarious motives renders them impotent and this simple fact has made the recently announced China-Russia arrangement to formulate a proper strategic response to color revolutions so important in the current fight.


LibertyVibe , 7 hours ago link

Lee Stranahan gives the best explanation I have ever heard, on the color revolution that occurred in the Ukraine. He also demonstrates how that revolution overlaps in to the one happening in the United States right now: The very one that has been going on, ever since HRC conceded her Presidential bid to DJT, in her purple pantsuit.

Helg Saracen , 6 hours ago link

...The gold reserves of Ukraine the day after the coup were in New York...

StarGate , 7 hours ago link

Good article for clarifying the organizations with purpose to destroy USA Constitution and maintain British Royal control -

Rhodes Scholars (Buttigieg, Clinton, Halper, Maddow, Stephanopoulis etc)

Trilateral Commission/ CFR etc

And the purging of non-Brit operatives from US agencies (CIA, State Dept, FBI etc)

Helg Saracen , 11 hours ago link

There is a simple explanation for both the United Kingdom and the United States -- Bankers's "Zionism" ...

NAV , 9 hours ago link

Are you saying that the Israelis who vote en masse for Netanyahu and the Jews who donate the money for AIPAC and the ADL and the Jews who wrote America's 1965 Immigration Act, and the international Jews who created the Fed which allows the Jews to print free money for themselves to buy up control of all US industry and commerce and communications and the institutions that form American culture, and who support genocide of the Palestinians, are scapegoats? Are you saying that Banko-Warburg, the architect of the Fed and the main supplier of money for the Communist takeover of Russia in 1917 by Lenin and Trotsky (Max Warburg and Jacob Schiff), is a European-English-American banking family?

Seriously, what do you mean by European-English-American? Ehret has dodged the massive elephant in the room -- mainly Israeli control of American foreign policy, and now domestic policy. Is it the American-Anglo elite (?), or the Israeli-American Empire (Jews), that has the world in its grip?

schroedingersrat , 12 hours ago link

The west plays a mean game. The more they try to destabilize the east, the harder Xi,Putin & Erdogan have to crack down on dissidents resultng in harder condemnation of teh west and increased meddling :)

Boogity , 16 hours ago link

Trumpstein, Fatty Pompous, Bolthead, Bibi, and Soros are having old man circle jerks while planning colored revolutions together. But China may be a bridge too far...

Julot_Fr , 16 hours ago link

Color revolutions belong to city of london.. and their spy agency network.. as illustrated by russiagate, cia and fbi dont take orders from white house

St. TwinkleToes , 17 hours ago link

CIA-affiliated National Endowment for Democracy (NED) and Soros Open Society Foundations were originators of rainbow revolutions. Just pick a color and they were there, lock, stock, and barrel, at the center of it all.

Today you'll see their tentacles reaching from Antifa to ISIS, LGBTIQPWXYZ GlobalHomo to Open Border socialists, and most every place where there's chaos, wars, and instabilities.

Its one big new world order of hate, hate and more hate.

In fact, if you want to see the official USA version hate map, click here https://www.splcenter.org/hate-map

Warning: SPLC is a know propaganda outlet for government and special interest organizations. They are funded by rich globalist elites, Big Tech, and states known to be sponsors of state terrorism.

GreatUncle , 17 hours ago link

"Since president Xi has been in office, there's been a crackdown on dissent and dissidents everywhere, the party has been in control of everything".

You can say the same for many western nations as people for objecting to current policies are made outcasts and persecuted by their own governments. Just saying it is Xi in China or any other nation in the world is ******** ... the ever increasing censorship and suppression of objection so they can keep the ever increasing entitlements for the top flowing.

uhland62 , 17 hours ago link

"the vast web of NGOs" is a web or organizations which are not accountable to anyone except their money men.

Some rich people fund them as a hobby, others work for them for free - they obviously do not need to work for their daily bread or they wouldn't be in an NGO. These NGOs meddle in the politics without standing for elections.

What qualified Soros to give many countries good advice? His money! Just money! The German compensation schemes (Wiedergutmachung) were seed money for many. How lucky this Hungarian Soros was.

Noob678 , 17 hours ago link

What qualified Soros to give many countries good advice?

Soros is just a puppet no different from Wilbur Ross, Justin Trudeau, Cynthia Freeland, Julie Bishop, Malcolm Turnbull, Zelenski, Poroshenko, Steve Mnuchin et al. Follow the money.

GreatUncle , 17 hours ago link

The NGO's distort the representative nature of a society. If anything their existence proves that representative democracy is a fraud and just a way for elites to control nations. The only thing to demand after that is direct democracy where all policies etc. have to be voted in by the population.

Direct democracy is possible with modern technology where the a motion is presented and you have 7 days to vote upon it.

Real easy that ...

[Aug 18, 2019] Hong Kong's Inevitable Showdown

Aug 18, 2019 | www.zerohedge.com

yojimbo , 12 minutes ago link

Bluff to democracy as they have it - HK only became democratic because the AnZis could then use it to stir unrest against C