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.
“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
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
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
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
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
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
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
"The roots of the world's economic disorder are monetary and financial";
"The disorder has not come about by accident, but hasin 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:
Innovations in the way in which financial markets work due to introduction of computers;
The sheer size of markets; (with the introduction of 401K the size of stock market
Commercial banks turned into investment banks;
The emergence of Asian nations as large players;
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,
"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).
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.
"Appetite comes with eating" and banks which initially rise as an alternative to usury
gradually became indistinguishable from them, the new usury (vampire squid as Matt
Taibbi called GS).
Financial institutions brass became dominant political force partially displacing (or more
correctly complementing) media-military-industrial
complex and oil-energy complex... Sen. Dick Durbin, on a local Chicago radio station
blurted out an obvious truth about Congress which, despite being quite obvious, is rarely
spoken "press scorps" :
“And the banks — hard to believe in a time when we’re facing a banking crisis that many
of the banks created — are still the most powerful lobby on Capitol Hill.And they frankly
own the place.”
In other words the US political system is a brand of corporatism with financial capital
standing on the top stop on interval to Washington, DC corporate hierarchy and holding the most
of political power.
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
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.
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.
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
Financial corporatism puts financial oligarchy at the top of pecking order. It is, like the USSR
Nomenklatura, the new ruling class similar to aristocracy in the last, which is allowed to operate essentially outside the law.
The top of this hierachy, kinds of Politburo of neoliberal order are the head sof major
transnational financial corporations ("Masters of the Universe") such as CEO of Goldman Sachs,
Citibank, who now have real political power (GS traditionally controls the Treasury
appointment and most of them were in recent administration were filled with GS alumnae)
Instead of the charismatic leader, "free markets" are deified. People mobilization typical for
corporatism is no longer needed and passivity of individual (or, more correctly, limiting his
activities to consumption) is preferred (Inverted
Labor unions are considered undesirable political actors and organized labor is
blackmailed and prosecuted. While classic corporatism suppressed labor protests by forcing labor unions to asset brokered
by government settlements with capital owners, under casino capitalism labor unions are
considered undesirable political actors and organized labor is blackmailed and prosecuted. Only private corporations
are first class citizens. Atomization of employees by brainwashing people to view
themselves as individual sellers of their labor on job market (rigged by corporations) also make social protest more difficult and
allow capital to dictate condition of employment including shrinking of permanent employment
workforce in favor of contractors and part-timers that we observe in the USA.
The idea of social justice (which in classic corporatism was limited to the middle class of a
particular nation, anyway), was replaced (or more precisely, limited) it to the well-being of transnational,
mainly financial, elite (aka top 1%, or at most top 10% ). Financial corporatism is not only hostile to labor unions,
it's hostile to the large part of the middle class as well.
Casino capitalism is international in nature
and ideologically close to Trotskyism (Trotskyism
for rich). While classic corporatism is national, financial corporatism is international by its nature
making it closer to Trotskyism (with the replacement of Communist Party as the vanguard on
world proletariat with financial oligarchy as a vanguard of transnational elite).
Like Trotskyism it is aggressive and use military force for propagating to any country which resist
it (similar to Trotskyism idea of Permanent revolution is implemented via
color revolutions which
serve for establishing in the country a neoliberal social order).
Promise of well-being is fake. Most of neoliberal ideology is based on lies and
distortions.So powerful propaganda
machine is required for constant brainwashing of population, promising them increase of
individual standards of living to the level that exists in the USA and G7. Which for most
countries can't be achieved.
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
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
Country, Religion, Monarchy
Miguel Primo de Rivera
Third Hellenic Civilization
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
.......... 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 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
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
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
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
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.
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
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.
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:
Glass-Steagall had been weakened under Reagan, under the recommendation of Alan Greenspan who
was essentially a Wall Street mole in Fed (see below the concept introduced by
Willem Buiter of ‘cognitive regulatory
capture’ of the Fed by Wall Street.)
Clinton administration and Congress supported the repeal but it was Phil Gramm who made it happened.
Not only he was the main cheerleader for the repeal. Gramm essentially wrote the bill. As NYT noted:
The measure, which Mr. Gramm helped write and move through the Senate, also split up oversight
of conglomerates among government agencies. The Securities and Exchange Commission, for example,
would oversee the brokerage arm of a company. Bank regulators would supervise its banking operation.
State insurance commissioners would examine the insurance business. But no single agency would
have authority over the entire company.
"There was no attention given to how these regulators would interact with one another," said
Professor Cox of Duke. "Nobody was looking at the holes of the regulatory structure."
The arrangement was a compromise required to get the law adopted. When the law was signed in
November 1999, he proudly declared it "a deregulatory bill," and added, "We have learned government
is not the answer."
Support was bipartisan which tells something about Clinton Congress:
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
"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.
So what we are experiencing is a the completion of the transformation of one phase of capitalism
to another. It happened in stages:
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.
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.
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,)
Commercial banks turned into investment banks to exploit this opportunity.
Financial sector completely corrupted academic science converting most economists to pay prostitutes
which serve their interests.
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.
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.
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.
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.
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.
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.
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
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
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).
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:
The stagnation of the underlying economy meant that capitalists were increasingly dependent
on the growth of finance to preserve and enlarge their money capital.
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.
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.
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
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
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
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.
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
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
Lysenkoismwith economics instead of genetics as a target.
Here is how Reaganomics is defined
reduce marginal tax rates on income from labor and capital,
reduce government regulation of the economy,
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
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
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
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,
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
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
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
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.
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
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:
(although first steps toward casino capitalism were made under Carter).
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
2. The Federal Reserve
(in its role of setting monetary policy)
3. Senator Phil
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
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
19. President Bill
20. President Ronald
21-22. Treasury Secretary Henry Paulson
23-24. Treasury Secretaries
Robert Rubin and
25. FOMC Chief Ben
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
32. State regulatory agencies
33. Structured investment vehicles (SIVs)/hedge funds for buying the junk
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:
Hedge finance: income flows are expected to meet financial obligations in every period.
The "hedge borrower" is one who borrows with the intent of making debt payments from cash flows from
Speculative finance: the firm must roll over debt because income flows are expected to
only cover interest costs (evergreen loans). In other words a "speculative borrower"
is a boorrower, who borrows based on the belief that the appreciation of the value of the
assets (e.g. real estate) to refinance or pay-off their debt but who does not have sufficient
resources to repay the original loan, otherwise. Classic example here are house flippers during
housing boom. Usually the are late to the game.
Ponzi finance: income flows won’t even cover interest cost, so the firm must borrow more
or sell off assets simply to service its debt. The "Ponzi borrower" (named for
Charles Ponzi, see also
Ponzi scheme) is who relies
on continually rolling over the principal obtained from new participants in the Ponzi scheme to cover
interests. After a certain point, the private sector debt can only be perceived as sustainable as
long as asset prices are perceived to be in continuous growth. Since the rise of asset prices is
fueled by rising indebtness, from a certain point onwards, the process acquires a pure speculative
character. When the rise in asset prices is interrupted, the private sector discovers it is insolvent.
The choice become either a horrible end or an endless horror.
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
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 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
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.
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
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.
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 stageof 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
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
... ... ...
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.
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
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
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
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.”
This idea of "casino capitalism" as a driver of financial instability was developed further in the
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
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
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
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.
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
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
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.
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."
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
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."
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, 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
there is no such thing as a free market;
the washing machine has changed the world more than the internet has--[ I respectfully
we do not live in a post-industrial age;
globalization isn't making the world richer;
governments can pick winners;
some rules are good for business;
US (and British) CEOs are overpaid;
more education does not make a country richer;
and equality of opportunity, on its own, is unfair.
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:
"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.
"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).
"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.
"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.)
"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.)
"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
"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.
"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 ›
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.
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.
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
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.
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.
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.
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.
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
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.
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."
Instead of conclusion I will reproduce the post from Sudden Debt (March
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:
(a) Let financial markets sort themselves out, but with rock solid backing for bank depositors,
pension funds and public institutions. The public purse should not be used to bail out - directly
or indirectly - speculators in hedge funds, private equity funds and the like. Those that live
by the leverage sword can defend themselves or perish by credit destruction.
(b) Revamp public policy towards increasing earned income for working people.
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
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?
Which is why popular anger and resentment must constantly be directed outward, at an external
enemy. Wake up, Americans – Russia and China are robbing you of your American Dream!!
It's their fault, not that of your own elites and/or the political system that assures their
In at least one area, though, Unz is full of it.
This perhaps explains why so many sons and daughters of top Chinese leaders attend
college in the West: enrolling them at a third-rate Chinese university would be a tremendous
humiliation, while our own corrupt admissions practices get them an easy spot at Harvard or
Stanford, sitting side by side with the children of Bill Clinton, Al Gore, and George W.
It is not as easy as he makes out, as a timely lawsuit suggests – Asian-Americans
often have to tiptoe through an admissions minefield whose process is exquisitely designed to
discover their ethnic background, so that Asian admissions can be limited. According to this
reference, basing its conclusions on an internal study conducted by Harvard itself, if that
institution looked only at academic standards when filling its admissions, Asians and
Asian-Americans would make up 43% of its student body. Instead, it's maybe half that.
It is uniquely-American irony that the driving force behind the initiative is Ed Blum,
about as far from a populist as you could get, who is pushing the lawsuit as a means of
wrecking any correction of the system; it's designed to lose.
A major part of the reason must be that as government funding to universities here
continues to decrease, universities are forced to make up the shortfall by relying on full
fee-paying students and international students and their families can be exploited in this
way by being forced to pay upfront for their education.
No doubt, being private educational institutions, Ivy League universities view the
children of Chinese political elites as similar gold mines and the admission standards
required of such potential students are likely to be very different from what is applied to
students coming out of American high schools.
Dear Patient Observer: I try to give credit where credit is due; so any sociological theory
that is factual and based on mathematics deserves to be aired in public.
My beef with Unz is their overall fascist slant. Some of the articles are so viciously
anti-Jewish, that one is simply forced to ask: "What is your end game? A second Holocaust?"
(which the more Nazi of the commenters are forced into Zugzwang, because they deny the first
one even happened, and yet call for a second one )
Having said that, I call upon people to perform a simple thought experiment: Imagine it were
actually proved scientifically factual (beyond a statistical doubt) that certain ethnic
groups were intellectual "smarter" in the arena of, say, college success. (For example, Jews
or "Asians".) Then what should be the policy ensuing? Should governments institute quotas to
make sure the "dumber" ethnos get their share of the college degrees? Or just let nature take
I reckon the answer would depend on the government in question, and the whole damn history.
When the Soviet Union decided (in the late 70's and 1980's) to limit Jews to certain quotas
in university admissions, they were raked over the coals by Westies. And yet when Westie
institutions attempt to set ethnic quotas, then it might be reasonable.
Where do I stand on this issue? I honestly don't know but I admit that I don't have the
I told this story before but will do so again as it has relevancy. My 2nd term calculus
graduate assistance was a young woman; perhaps 18 years old. Her name was Stern or Sternberg.
She was socially awkward, clearly uncomfortable in the classroom and not good at teaching
A few years later, I read a story in a regional newspaper about her. The headline was
something like "Is this Perfection?". Anyway, the story indicated that she graduated from the
University at the age of 16. She was the product of an experiment by her parents. From
conception onward, she was exposed to every sort of stimulation to build her intellectual
development – classical music played while in the womb, every sort of pre-school
educational stimulation and constant urging to excel in academics.
My take is most "ethnic" intellectual achievement is the product of sociological factors.
Overbearing Jewish moms or Asian tiger moms are likely a major factor in such academic
achievements. In my value system, that behavior is destructive to the kids psychological
well-being. Not worth it in the long run I believe.
Asians I personally know tell me that Asian kids are not genetically smarter than anyone
else. Their parents value education, and make them work harder than most western kids do. Got
spare time? Study. Already mastered the subject? Take up another. When you're good at all of
them, then you can take a break.
A friend of mine who was a junior officer in the Navy is Chinese. She consented to be
interviewed by a Chinese magazine, because of her position as a military officer, but it was
clear to her that her interviewers were a little disappointed that she was not fluent in
Mandarin. When they proceeded with the interview in English, they wanted to know, "Why you no
doctor? Why you no Rawyer?"
But isn't the selection of African or Asian students who may study in Europe or the USA based
more on class? Surely, if you are a Chinese or African – black, brown,
sky-blue-with-pink-polka-dots or whatever, you must be bourgeois if you have been allowed to
study at Yale or Oxford etc.
In the UK, the working class is becoming increasingly uneducated, and class is not
Apparently Russia is still paying the old rate, from before the ruling (because to do
otherwise would be to recognize the debt and accept responsibility for it), which results in
an overpayment since it is higher than Naftogaz would charge, if I understand correctly. So
Naftogaz has decided to confiscate it as owing.
This, obviously, sets the stage for another shutdown of European gas supplies, just as
winter is coming on. Perhaps Ukraine has realized that nothing it can do or say is going to
stop Nord Stream II from going ahead, and so it might as well recover what it can, and who
cares if it results in a shutdown of Europe's gas, regardless where the blame ends up? Once
again Ukraine's maneuvering puts Russia in a difficult spot – it can recognize the
Stockholm award and pay Ukraine $2.6 Billion or whatever it was. Or it can accept that
Ukraine will keep part of its transit payments against the debt until it can shut down gas
transit across Ukraine altogether. Or it can shut off the gas now.
If it were up to me, I would take the middle option. Let Ukraine congratulate itself on
one-upping me with its native cleverness (assuming here that I am Russia), and let them keep
$9 or $10 million of the transit fees each month; that would probably be a lot cheaper than
acknowledging the Stockholm award and paying Ukraine billions, in view of the fact that
Ukraine never paid back the money it was lent by Russia; Stockholm neatly solved that for
them, by awarding them huge damages, part of which was understood to be the amount Ukraine
owed. Okay, that goes toward Ukraine's debt to Russia, and now you owe Ukraine $2.6 Billion
I would just focus on getting Nord Stream II completed. Then I would not only stop gas
transit through Ukraine, I would tell them to kiss my ass if they wanted to buy gas for
themselves. You were so pleased with yourselves for not buying any gas from Russia last year
– obviously you can get along fine without it. But I sure hope Europe is going to keep
giving you money to buy European gas forever.
"We're not going to let them violate a nuclear agreement," Trump said Saturday after a
campaign rally in Elko, Nevada. "We're going to terminate the agreement."
As Russia continues to outmaneuver the US by developing new ballistic missiles like the 9M729
ground-launched cruise missile, as well
as hypersonic weapons
capable of carrying a nuclear payload,
President Trump said
Saturday that he plans to abandon a 1987 arms-control treaty that has (on paper, at least)
prohibited the US and Russia from deploying intermediate-range nuclear missiles
has continued to "repeatedly violate" its terms according to the president, the
Associated Press reports.
"We're not going to let them violate a nuclear agreement," Trump
said Saturday after a campaign rally in Elko, Nevada. "We're going to terminate the agreement."
In a report that undoubtedly further complicated John Bolton's weekend trip to Moscow,
the Guardian revealed on Friday
that the national security advisor - in what some described as
an overreach of the position's typical role - had been pushing Trump to abandon the Intermediate
Range Nuclear Forces Treaty.
The announcement comes after the U.S. had been warning Russia it could resort to strong
countermeasures unless Moscow complies with international commitments to arms reduction under the
Intermediate-Range Nuclear Forces Treaty, a pact struck in the 1980s.
When first signed by President Ronald Reagan and Soviet leader Mikhail Gorbachev following their
historic 1986 meeting, the INF was touted as an important deescalation of tensions between the two
superpowers. But it has since become a flashpoint in the increasingly strained relationship between
the US and Russia, as both sides have accused the other of violating its terms.
But for the US, Russia is only part of the problem.
The New York Times
reported that the pact has limited the US from deploying weapons to counter
the burgeoning military threat
China in the Western Pacific,
where the country has ignored claims of sovereignty in the South
China Sea and transformed reefs into military bases. And since China was never a party to the
treaty, Beijing can hardly cry foul when the US decides to withdrawal, especially because Russia is
already openly using the treaty as toilet paper.
Speaking at a rally in Elko Nevada, President Trump accused Russia of violating the agreement
and said he didn't want to leave the US in a position where Russia would be free to "go out and do
weapons and we're not allowed to."
"Russia has violated the agreement. They have been violating it for many years," Trump said
after a rally in Elko, Nevada. "And we're not going to let them violate a nuclear agreement and
go out and do weapons and we're not allowed to."
Therefore, unless both Russia and China - which isn't a party to the pact - agree to
these weapons, the US would be remiss to continue abiding by the terms of the
"We'll have to develop those weapons,
unless Russia comes to us and China comes to us
and they all come to us and say let's really get smart and let's none of us develop those
but if Russia's doing it and if China's doing it, and we're adhering to the
agreement, that's unacceptable," he said.
While the decision to abandon this treaty - which doesn't bode well for negotiations to extend
the New START treaty after it expires in 2021 - carries serious weight, many Americans and
Russians, having never lived through a war, might remain ignorant to the potential consequences, as
one analyst opined.
"We are slowly slipping back to the situation of cold war as it was at the end of the Soviet
Union, with quite similar consequences, but now it could be worse because (Russian President
Vladimir) Putin belongs to a generation that had no war under its belt," said Dmitry Oreshkin,
an independent Russian political analyst.
"These people aren't as much fearful of a war
as people of Brezhnev's epoch. They think if they threaten the West properly, it gets scared."
Russian President Vladimir Putin appeared to try and get in front of the US's decision to leave
this week when he declared that Russia would abide by a policy of nonaggression regarding its
agreeing only to use its nuclear weapons
if it is attacked first.
Although some inside the Pentagon are reportedly wary of abandoning the treaty, Putin's word is
hardly enough to reassure uberhawks like Bolton because the fact remains that if Russia did decide
to use any of the array of nuclear arms that it is currently developing, there would be nothing
stopping it. And with the US already behind in its push to manufacture advanced weapons like
hypersonic missiles, any obstacles to deploying these types of weapons will only serve to weaken
the US and strengthen its geopolitical adversaries.
Watch President Trump's remarks from the rally below:
The cold war was fought by people who lived through the horrors of
WWII. Both sides managed to control their respective neocons. That
generation is no longer in power and people that think a first
strike and a winnable nuclear war are possible are in control on
both sides. Yes, we have two tribes.
When I hear of democrats calling trump negative things, like
racist or whatever...I just laugh at their ignorant fat asses..
But here on ZH, people actually make good points on both sides
of trump being trojan horse for deep state, or trump fighting the
I personally do not see evidence enough to draw a conclusion,
but I am hoping he is not deep state...in any case, its been
watching the left squirm, MSM going downhill in temper tantrums,
comey and others fired.. There is no proof that there is a supreme
being or "God" that created the earth. I just believe it because I
believe in His son...Maybe I will trust trump actually puts
hillary in jail..I mean coe on guys, as you notice, I am careful
about my decisions, but the crimes hillary has commited, and the
evidence to back it up, is beyond a shadow of a doubt, and
everyone here knows it...she needs to be in ******* gitmo
unless Russia comes to us and China comes to us and they
all come to us and say let's really get smart and let's none of us
develop those weapons
Does anybody believe Trump's offer is real?
Like the USA and Israel are going to give up their nuclear
weapons and missiles?
Yeah, give up weaponizing space and the missile (first-strike)
encirclement of Russia.
The MIC would not even allow the denuclearization of the Korean
penisula, nor withdrawal from any of the invaded/occupied nations.
The MIC wants to sell to the Saudis, re-arm Japan, and have Kiev
Who can believe the MIC-owned Congress will ratify any
Will any Israeli-first president ever back a denuclearized
Treaty or not MAD is still in effect... hopefully this will steady
the hand of the neocon scum who have hijacked the US government,
but with the current crop of demons in the state department who
You can expect that Kaliningrad is going to be armed with all
kinds of nuclear candies ready to blow Europe up as soo as they
see the strike is coming. How is that goign to help Poland or
Europe for that matter? I have no idea.
You can also expect that
the Russian's Subs and Poseidon are going to be around US shores
constantly ready for unleash Nuclear tsunamis with cobalt 60 in
The Chines are going to build military and naval base in
Venezuela for sure with nukes and we could also see much more to
Like we didn't have a Spanish fighter jet missile accidently
launched near Russian border just a couple of days ago.
Like we didn't see US Navy accidents crashing into tankers.
We do not really have a ******* adults running NATO nowadays.
Its all tranny shitshow with no nerves of steal and thinking.
If you thought the old Cold War hawks back there who wanted to
nuke Soviet Union and unleash Operation Northwood just to have a
war were crazy than think how stupid and out of touch with reality
this twats are.
That we haven't seen WW3 yet is becasue of Russians restrain
but once you push it too far and they increasingly are pushing it
too far, then they will murder our asses like beasts. Just look at
what the pilot who got shot down last time did. He rather blew
himself up with grenade killing as much terrorist as possible
after he ran out of ammo than being captured.
That is who we are dealing here with ladies & gentleman.
Is Trump even aware that the U.S. broke its "iron-clad guarantees"
that NATO would not expand "one inch eastward?" If I lived in
Russia, I would look nervously at the increasing military hardware
near my border
The "original" so-called intelligence report was a load of BS, I read it, I'm a computer
engineer of over 30 years experience. My opinion is that it was pure BS, "filler" posing as a
report, no evidence presented. Nothingburger. People then seized on it, waved it in the air,
and said, "Here's the proof!". That's a common tactic that's been used over, and over. Here's
the NY Times "correction". Note, after the correction, Hillary continued to spout the
nonsense that 17 agencies all agreed. It was ONLY the FBI, CIA Office of the Director of
National Intelligence (Dan Coats), and the NSA.
The puzzling part is this - since the "blame Russia" story is fake, why does the US
continue to harass and provoke Russia, via Nato, Bolton, Haley? Who's in charge??
Correction: June 29, 2017
A White House Memo article on Monday about President Trump's deflections and denials about
Russia referred incorrectly to the source of an intelligence assessment that said Russia
orchestrated hacking attacks during last year's presidential election. The assessment was
made by four intelligence agencies -- the Office of the Director of National Intelligence,
the Central Intelligence Agency, the Federal Bureau of Investigation and the National
Security Agency. The assessment was not approved by all 17 organizations in the American
But what if comes out that they didn't break any law ? They can ask for reparations of
lost money because of sanction and then every sanctioned entity and individual in Russia can
ask for reparations because of bogus charges.
I been waiting for some news on this one. I had heard a while back that Mueller tried to
deny the Russian company the ability to contest the charges with that weak *** "they haven't
been served properly" excuse only to have it rejected by the judge.
I hope this deflates on Mueller and leaves him open to charges by the others who he
alleges conspired to meddle in US elections.
FFS the US meddles in EVERYONE's elections they now kicking and screaming cuz someone
might have setup a troll farm or dispensed some info on Hillary that might not have been true
(can it be?)
This will play out badly for the Mueller team, the judge already hates them and is
disgusted by their tactics.
"Made up a crime to fit the facts they have" is a normal mode of operation for federal
prosecutors. Hopefully the judge throws out all charges, but unlikely to have a broader
impact on non-stop fabrications by US attorneys.
What this accusation boils down to is saying that the Russian firm's deception is "proof"
that they thought they were violating US law, and that this intention to break a non-existent
law constitutes a framework under which they can be convicted of breaking a non-existent law.
The crazy never stops. Mueller and his minions should be disbarred.
By participation, do they mean like polls that consistently show the USA as the greatest
impediment to global peace and tranquility? Or the numerous opinion sharers that the US
government is depraved? Or like the kind of participation of Victoria "**** the EU" Nuland?
Or like the Western sponsored Jihadi headchoppers hired to interfere in Syrian elections? Or
like the US military fueled aggression against Yemeni sovereignty? Or like the US/Clinton
sponsored destabilization of Libyan democracy? Or like the Obama/US sponsored destabilization
of Egypt? Or like the US/Western sponsored failed coup in Turkey?
Or most crucially, the US/neoconservative never ending direct interference in internal
These need to be clarified so folks can understand what meddling/interference/intervention
means. It's not enough to point fingers, when worse activities have been, are being carried
out by the pointers. Any society that abandons basic ethics, is one destined for the scrap
heap of history.
Americans have forgotten what it means to be Americans, and this desperate gambit by the
DOJ highlights viscerally, that the American system of government, one based on ethical
values, is no more! It demonstrates the fragility of the system.
God alone knows if salvage is possible now, the USA has in the blink of an eye, become the
erstwhile USSR, overly sensitive to the unworkability of its sociopolitical system. It is the
end game of unsustainable imperium.
"Rather, the allegation is that the company knowingly engaged in deceptive acts that
precluded the FEC, or the Justice Department, from ascertaining whether they had broken the
Bloomberg " I didn't know Prof. Irwin Corey worked for the US Attorney's office. By this
explanation whether you break a law or not you can be guilty of precluding these agencies
from determining that you did not break a law, even if whatever you did to prevent such
determination was not illegal.
didn't the Judge in Manaforts trial do something similar when he called out the Mueller
team on their motivation's for bringing Manafort up on old charges the DOJ had previously
declined to prosecute him on?
LOL, Mueller's investigation is fucked. Indeed, they are going to have to bring forth the
evidence via discovery.
It will come to light they manufactured a crime without the evidence. Also, if they don't
drop the case they're running the risk of exposing even more crimes they committed.
This is where the American people should rise up and repeal prosecutorial immunity and
make the real criminal's pay the price for manufacturing crime's! Care to speculate how many
prosecutor's wouldn't even touch a potential criminal with doubt of innocence, if indeed
prosecutors were held accountable for their own crimes???
Like I've said, people have NO idea how raunchy and corrupt this manufactured Mueller
investigation is, once the unredacted FISA warrant and 302's are released, the people will
realize both the seditious and traitorous behavior that went on in the ObamaSpy ring to frame
"... Our US students have been taught since at least grade 6, but mostly since school began, that there are only certain acceptable ideas, and genuflecting to those ideas is what makes you the Top Student, the Front Row kid, the one who checks all the boxes to get into Brown or Oberlin or Yale. ..."
"... My brother is a biology professor at an elite liberal arts college in the Midwest. He uses no pronouns with his students, as the demands escalate and change daily. A whole cluster of young female students in the physics department have suddenly declared themselves trans. ..."
"... He says that it is impossible -- absolutely impossible -- to question what is happening in society concerning the abandonment of human biological facts or to have a rational debate about any of this on campus, either among the faculty or with the students. ..."
"... This is 100% correct and also the result of our K-12 education system doing what it was designed to do: engineer certain social outcomes. ..."
"... I grew in a period of suffocating conformity, the dregs of the Cold War hysteria that communists are hiding under your bed and in your anxiety closet to burst out and turn your local church into a museum pretending that a Russian invented the telephone. ..."
"... Somehow, quite a few of us found the means to stand up, to challenge, to question, to dismiss, to lampoon, and most of all, to turn back mindless adjectives accusing us of Thining The Wrong Way. I doubt that any generation coming up now is so mindlessly conformist as the writer insinuates. ..."
"... I also find it ironic that a piece called "Creating A-Plus Conformists" is published by the author of "The Benedict Option". I can't think of a greater force for creating conformity than religious orthodoxy. ..."
"... I have no idea who Alice is. But as a college professor, I find this to be (and this is being charitable) exaggerated nonsense. Has Alice actually ever stood in front of and talked to class of college freshman? ..."
Reader Alice comments on the hyperpoliticization of college students:
Understand: they *arrive at universities thinking this way*.
Our US students have been taught since at least grade 6, but mostly since school began,
that there are only certain acceptable ideas, and genuflecting to those ideas is what makes
you the Top Student, the Front Row kid, the one who checks all the boxes to get into Brown or
Oberlin or Yale.
The "best and brightest" accepted to these schools are kids who, consciously or
unconsciously, have learned to excel in places by accepting as true the acceptable ideas and
never bringing up the unacceptable. Some thoughts are just too dangerous to have.
Trajectories that are good for one's future to the Ivies don't allow you to engage these
unacceptable ideas. So in school and in other places where one deals with adults, these front
row kids learn to believe, or at least be comfortable with parroting, these acceptable ideas.
Just as there's a correct answer to a calculus question, there's a correct answer to
questions such as why one country is more successful than another, why there are measurable
differences in incarceration rates by race (even as there's also a contradictory answer to
the question of what is a race), what a nation owes non-citizens vs. citizens, how much
training can alter [ ], are sex differences on average innate, are there two sexes, etc.
Meanwhile, if you hear something unacceptable, you've also been equipped with the trump
card to demolish the argument: arguer is racist, sexist, bigot. So the Overton window is big
for trans rights and little for the role of, say, duty to ones' elders, big for
microaggression but little for the personality differences of men and women.
Whether they believe it or not at the beginning is irrelevant. They make the appropriate
verbal gestures, they get a reward. After 6-12 years of doing so, they're not capable of
engaging in debate or rhetoric, argument from evidence, even following a line of reasoning or
recognizing a fallacy. They've never done it, and anyone who tried was actively shut down
either calls of "my truth".
On the past, ignorance and obnoxious self regard were demolished by profs rather quickly.
What's changed is college profs no longer push back on this crap. They no longer demand
argument, reason, and counter argument. They simply are stunned that they share no overlap of
consciousness with the students they bequeathed to themselves. They are afraid of them and
afraid to stand up to the students or spineless weasel administrators.
I live on the east coast and can only tell you what we see. The public schools teach gender
identity ideology, starting in elementary. I didn't even know what that is until our autistic
daughter suddenly decided that she's "really a guy", along with a cluster of her school
friends, when she was 16. They are 19 now, and two of her friends have had irreversible
surgery which has made them sterile.
My brother is a biology professor at an elite liberal arts college in the Midwest. He uses
no pronouns with his students, as the demands escalate and change daily. A whole cluster of
young female students in the physics department have suddenly declared themselves trans. The
mantra of "supporting women in physics!" swiftly changed to "supporting transgender people in
He says that it is impossible -- absolutely impossible -- to question what is
happening in society concerning the abandonment of human biological facts or to have a
rational debate about any of this on campus, either among the faculty or with the
The unthinkable has happened. An ideology which would have been laughed at as ridiculous
on college campuses in the 1980s is now driving social, legal, and medical practice
throughout our entire country. If you haven't been affected by this yet, then you will be.
This is 100% correct and also the result of our K-12 education system doing what it was
designed to do: engineer certain social outcomes.
Conservative calls to "de-fund college" over this are misplaced.
Also, the reason that college professors don't stand up to this is because they know that
the administration won't have their back if a student accuses them of being
racist/sexist/homophobic/transphobic. And the administrator won't have their back due to the
desire to avoid bad press and students protesting on campus. Give the (vocal) students what
they want so everyone stays happy.
I could not disagree with this more strongly. This is the false argument of broad
generalization. The vast majority of schools are not en masses teaching radical SJW thought
control. They are doing their best to teach AT ALL given the federal over reach into state
public education and the excessive focus on testing and scores and the impact that has on
And certainly anecdote does not equal accumulative data but our personal experience of
For our children is that there is zero indoctrination of SJW values coming from the teachers
of the institution. Certainly the peer group has SJW people and activities but I'm here to
declare that not one teacher or one principal in my district has for e fed my children any
SJW dogma. In fact I can list multiple examples of Tim's when I've wondered how teachers got
away with things like singing Christian or Jewish music at a choir concert or teaching the
Our Father prayer in German or studying the great schism and having my kids present the
Orthodox side of the story in World History.
Who knows. Maybe I live in an anomaly. But I wonder if the hyping of crazy SJW stories of
abuse in schools has created an image in people's minds that ALL schools are crazy SJW
It's just not true. Public education IS in crisis due to ridiculous over testing and
funding that is abysmal. And the majority of people who work in public ed are really just
hanging on by their fingernails trying to do their best and make rent!!!
Sure there's a crazy teacher, waka-doodle principal or spineless superintendent that makes
the news. And certainly the NEA is an bastion of left leaning ideas, but to make this huge
sweep that the kids arriving at University were indoctrinated by their 1st grade teacher and
on up through their childhood is just absolutely not true.
A hundred years or so ago, I was in high school debate. One of the good things about that is
we had to learn how to argue either for or against the same thing with equal conviction.
Because we were young and inexperienced, i.e. stupid, most of us were pretty liberal, but the
idea that there was only one way to think about a problem was completely foreign.
Well, the writer of that comment paints a picture. But that assumes facts not in evidence. I
don't have a statistical overview of all the high schools in the country, but I know enough
about enough students at enough of them to question whether the above description is The
Truth About The Meaning Of Life And Everything.
I grew in a period of suffocating conformity, the dregs of the Cold War hysteria that
communists are hiding under your bed and in your anxiety closet to burst out and turn your
local church into a museum pretending that a Russian invented the telephone.
Somehow, quite a few of us found the means to stand up, to challenge, to question, to
dismiss, to lampoon, and most of all, to turn back mindless adjectives accusing us of Thining
The Wrong Way. I doubt that any generation coming up now is so mindlessly conformist as the
There are two answers to being reflexively called "racist, sexist, bigot."
1) So what?
2) Prove it.
I prefer the second option, but there are other adjectival nouns I would respond to with
This situation will not last. The Social Justice canon is too clearly false and modern people
are too rebellious to shoulder it for long. One of the characteristics of liquid modernity is
that the pendulum swings more freely than it ever has before. It will be interesting to see,
when the Social Justice narrative finally collapses, how much of our foundational mythology
goes along with it.
As far as I can tell, our modern dysfunction is a very consistent and rational result of
one simple foundational lie: "All men are created equal." The intent of this lie may have
been noble but it is self-evidently false. And the Social Justice narrative rests very
comfortably upon it. I can't see how it survives the collapse of Social Justice no matter how
badly we desire to maintain it.
P.S. I understand the reflexive anger and distrust that most readers will feel upon
reading this post. This is certainly a painful idea to grapple with. It is embedded deeply
into our many intersecting identities. But what would you say to someone claiming that all
pots are created equal? Would you posit that anyone denying this claim is a wok supremacist?
No. If two things are not interchangeable, then they are not equal. But this does not mean
that one is ultimately superior to the other. Human equality is a comfortable illusion. But
we can find better reasons to treat one another with the proper respect and kindness. And in
the process we might build a more perfect civilization.
The natural follow up for those in power to saying "Some men are more equal than others"
is to say "therefore the better men are the ones in power."
No. Being born poor makes it much, much harder to succeed. Having connections puts
incompetents and immoral people in power. We need to understand that the rich and powerful
*are* usually born with silver spoons in their mouths. Injustice is real. Face it.
College students today are the first generation in US history to have grown up with openly
gay friends and neighbors. They know, from lived experience, that there is nothing wrong with
gay people. They know it in their bones.
So, yah, they think differently than we do on sexual issues, and they tune us out when we say
things they know to be false.
"Kids, I don't know what's wrong with the kids these days".
So a reader send this in without citing any Support for her conclusions and you tack on a
headline about conformism and print it.
One could easily write a companion piece about homeschooled kids going off to some
evangelical college where they set aside all reason and accept creationism and the Bible as
the sole arbiter of truth. But those kids aren't going to get into "Brown or Oberlin or
That's where Alice tips her hand. This has nothing to do with the brainwashing or
indoctrination of our youth, but that the Brown, Oberlin and Yale graduates are going to end
up running this country, while Alice doesn't get, and isn't in anyway entitled too, tell them
what to think.
Our US students have been taught since at least grade 6, but mostly since school began,
that there are only certain acceptable ideas, and genuflecting to those ideas is what makes
you the Top Student, the Front Row kid, the one who checks all the boxes to get into Brown or
Oberlin or Yale.
There has never been a time in history that this hasn't been true.
This may sound mawkish, and it's based on just a few years teaching undergrads when I was in
grad school, but I think there are a lot of college students who want to be able to say or
write something more than the party line, but often they don't know how and have managed to
go through high school without having read anything. My students, of both sexes and all
races, included a good number of kids who, once I made it clear enough that I didn't want to
hear any canned "diversity is excellence" crap or whatever, seemed pretty happy that they
could try writing about something else for a change.
There are always the sycophantic
apple-polishers whose whole shtick is regurgitating the conventional wisdom at every
opportunity, but people hate that kind of person (see Hillary Clinton).
You could spend some time reading your kids' AP World History and AP US History textbooks
to discover the "analytical" grid that everything is rammed through. Good for you/your kids if your local teachers don't teach it in that manner, but trust me, the AP test
questions are geared toward certain ideological answers.
Also, when Alice mentioned "My truth" I wondered if she has also had a kid in an elite
college prep school. If so, it sure sounds like she and I have come to the same conclusions
Working in IT I get to talk to a lot of young people coming out of college with a variety of
degrees. Most have no idea what Alice is talking about. Perhaps if you go for something like
a sociology or general liberal arts degree at the most liberal schools in the nation this is
true but real students are worried about their fields of study (business, software, UX
design, etc.) and the courses that might teach these types of things are fluff electives they
skate through and ignore as much as possible.
I also find it ironic that a piece called "Creating A-Plus Conformists" is published by
the author of "The Benedict Option". I can't think of a greater force for creating conformity
than religious orthodoxy.
"But what would you say to someone claiming that all pots are created equal?"
That pots are objects with objective value and none inherent, while people are subjects who
invest value in objects and possessed of inherent worth that is not objectively comparable,
so we shorthand render it "equality". You know, the reason conservatives are supposed to hate
Hi Rod, sorry about the typos in the original! Thanks for the raising the comment. I hope
To some folks saying 'this is an overgeneralization', my comments were in the post re:
what's happening at the elite institutions, and so were directed to the set of kids on k-12
that intend to get to such institutions. Those elite univs are more likely to select students
with this SJW profile on the first place, yes. But again, the kids intending to go to such
places know this is the profile.
To those questioning whether every k-12 school is like this, I ask you to look at the
required courses in teaching colleges and master's programs that credential teachers. It's
SJWism everywhere all the time, in every single discipline. Math class is about racial
equity. Reading class is about gender equity. There's no other lens through which teachers
are taught, so this is the lens through which they teach. Read the journals in teaching and
see the articles.
To those questioning whether every college is like this, I suggest you look more closely
at your community college's bookstore.
I'm in a southern state that voted for Trump. The big city cc offers this required English
ENG-111: Writing and Inquiry
'This course is designed to develop the ability to produce clear writing in a variety of
genres and formats using a recursive process. Emphasis includes inquiry, analysis, effective
use of rhetorical strategies, thesis development, audience awareness, and revision. Upon
completion, students should be able to produce unified, coherent, well-developed essays using
standard written English. This course will also introduce students to the skills needed to
produce a college-level research essay.'
Seems a reasonable course, right? Freshman English.
The Reader for the course in 2017:
Oh, Come On, Men Aren't Finished
Wonder Woman by Gloria Steinem
Sex, Lies and Conversation: why Is It So Hard to Talk to Each Other?
Again, you can claim I'm cherry picking, but you will find this in every city in every
Or just listen to vacuous comments of middle school admins. Look at when districts give
days off to kids to bus them to anti Trump rallies, and ask yourself if such a place is real
pushing a socratic discussion about these points of view.
If you listen closely, you will understand this is everywhere.
Andrew in MD: "If two things are not interchangeable, then they are not equal." Is interchangeability the sole criteron of equality? Could a person argue that since all people are sinners/fallen, they are, therefore, equal?
Or are some more sinning or fallen?
The Buddha demonstrated that all people are empty of self – why cannot that suffice
for the establishment of equality?
Andrew in MD: some great American (John Randolph?) once said "I do not believe that all men
are equal, for the simple reason that it isn't true". So, nothing anger-producing in your
post. If giving up this noble lie is what is needed to consign SJWism to the ideological
trash bin along with other totalitarian ideologies like Maoism, then out it goes.
When I was, in my late college years through my first ten or so years in The Real World, I
was a doctrinaire conservative Republican, although not a member of any church or religion.
In a way, this did me some good, because I was attending some elite, some not-so-elite,
and all very leftish educational institutions. Often my grades suffered, but I had to learn
to marshal facts and formulate arguments that people did not want to hear. Often this was
pretty easy, because the people I was arguing with had never really thought about what they
believed or why, much less the unspoken assumptions underlying those beliefs, and they had
never heard them challenged.
Usually the response was sputtering outrage, but that's a poor substitute for logical
argument, especially when I am almost autistic in how little I care what other people think
of me. In fact, if you react by being even calmer and more logical, the other person will
dissolve into a spitting mad Donald Duck meltdown.
If I had simply gone with the flow, all that was necessary was to recite the correct
dogmas and platitudes with adequate conviction and I would have been greeted with
They say that a person becomes more conservative as they get older, but the opposite
happened to me. I suppose because I enjoy challenging my own beliefs, finding facts that
don't fit my own theories and then trying to make sense of them.
I learned that theory didn't always apply in real world conditions and pat answers don't
always translate into solutions. (Apply "markets in all the things" to healthcare, for
They also say that a person becomes more conservative as they become more successful, but
that wasn't the case for me either. I suppose to a certain extent, I am successful because I
Honestly, what Shelley wrote sounds more accurate than what Alice did, although I think there
is at least a grain of truth in Alice's post, too. And the poster at another one of Rod's
pieces who put more of the blame on the Internet than on schools and teachers at any level
made sense, too.
As much as I find the content on AmCon to be generally thought provoking, the complaint
expressed by "Alice" is a recurring sentiment that I think "conservatives" use to cover up
"I have all these really great ideas and deep insights about race and gender, but every
time I try to express them, I get called a bigot, and I'm totally not a bigot, but those
dastardly liberals won't even let me make my argument because they are always shouting me
down and calling me a bigot, so me and the vast majority of ordinary folks who also agree
with me are effectively silenced a shrill few elites, which is totally unfair! Anyone else
feel this way? Sad!"
Something doesn't jive about the general premise. Summarizing Alice's post as "All the kids
today are totally brainwashed by SJWs, and everyone mindlessly goes along with whatever the
PC police say". On a related note, last week's major news item was essentially "ordinary
Americans were recently polled and 92% of them don't support political correctness and they
are totally sick of identity politics and fed up with SJWs -- #WalkAway #RedWave #MAGA"
Am I missing something? Because those don't seem to make sense to be occurring in the same
place at the same time. "The kids are totally brainwashed by identity politics and are just a
bunch of useful idiots for the Left", BUT "they also see right through it, see that it's a
sham, and they thoroughly reject it". Also, "The ordinary folks are cowering in fear, there's
nothing they can do about it, the situation is beyond hopeless because the SJWs have
effectively silenced all dissent", BUT "there's a revolution about to burst forth because so
many ordinary people are mad as hell and not going to take it any more and in November they
are going to vote hardcore against all this identity stuff and kick these knuckleheads out of
Doesn't make sense. It's one or the other, not both.
I don't instinctively believe that all Republicans and Conservatives are bigots. I'm a
Conservative. I don't think I'm a bigot. But I do get a little skeptical of a particular
handful of my fellow conservatives who always seem to be running around complaining
"everyone's always calling me a bigot, everyone's always calling me a bigot, I'm totally not
a bigot, but everyone's always calling me a bigot when I express my ideas".
Well, okay, what exactly are these wonderful, totally not bigoted ideas that you have?
Would you like to share them with us?
For example, Alice (or anyone else), please illuminate us with the answer to one of the
questions that you raised in your post, one of those off-limits questions where people are
always unfairly saying that your answer is racist: why there are measurable differences in incarceration rates by race?
Help me to understand, in your own, totally not-bigoted words, what is the answer that we
all need the hear, the answer that the SJWs won't let us hear? I promise, promise, promise
that I will not call you a racist. This is a safe space for you.
I have no idea who Alice is. But as a college professor, I find this to be (and this is being
charitable) exaggerated nonsense. Has Alice actually ever stood in front of and talked to
class of college freshman?
The upside is that all the good little Maoists will starve, come some real crises in our
society. Good for them that they can make up micro aggressions out of nothing, not so good
for them that they won't be able to feed their soy faces when things begin to break down in
I figured we'd already gone around the useless bend with these people years ago when I was
trapped someplace and MTV was playing. Some yoyo on the TV was talking about a show he was
producing and soooooo scared that it wasn't going to go right and freaking out and all this,
basically over nothing. I then noticed more and more of this type of behavior once I started
looking for it. Lots of younger and younger people living in fear of absolutely nothing just
fear for its own sake.
Learned fear and helplessness, nothing less or more. You have an increasingly large number
of kids who are raised up as sheltered as possible and who have no real will or ability to
take care of themselves. Couple that with the ideological vampires that roam higher education
these days and you wind up with people who don't really care about whatever cause they're
promoting, or what they're protesting, but it becomes all abut trying to drive out any
dissenting sound from a basis of fear.
The soy boys are wretched creatures at best, and the harpies who lead them about by the
nose are just as pitiful. Kinda dangerous, but only to a point, because all of them value
their own skin more than real confrontation or principles (this is kinda true of the
alt-right, too, which is why the media always suffers meltdowns at violence that wouldn't
even merit a mention in Freikorps-riddled Germany, where the Browns and Reds duke it out
regularly and Hitler brandished a pistol, not a Twitter hissy fit).
There's really no upside, just the irritation of living with these people on a daily basis
and trying to tune out their BS. Maybe the social credit system will get rolling here and
some point, which will be a clue to move to the sticks and learn how to raise organic produce
and enjoy the simpler things. Lord knows, none of them are going to want to risk getting mud
on their hipster work boots by being in the real country.
I teach high school kids for a living. My school is in a high income area and nearly 100% of
the kids are college bound, many of them to very selective universities. My experience is
that our stronger students take challenging and reasonably balanced courses – they do
not arrive to college as leftist zombies. Our weaker students sometimes find a home with the
leftists and realize that they can be praised by adults and sometimes even given high grades
in politicized but low level classes. These are the ones I worry about. I have a good view of
the next generation, and from where I sit the most capable 17 year olds are for more
influenced by Lin Manuel Miranda than by Ta Nehisi Coates – and I find that fairly
I taught high school English in the California Bay Area and even there, I encountered only a
couple teachers who could be said to have any kind of liberal agenda and to have included it
in the classroom. My 3 kids have gone to California public schools (2 of them are currently
in high school), in the Bay Area and the Sacramento regions, and we haven't experienced any
of what the writer of this post describes. It's been my experience that kids get their
political leanings these days mostly from their peers, their media heroes and social media.
Now, college is another matter entirely, but I don't need to tell anyone here that.
I remember well the time I made the perfectly wise and rational statement in history class
that "might makes right," which of course it does. My poor teacher, at his usual loss for
words in dealing with my divine wisdom sputtered some foolishness to the effect that, "Hitler
had might. Was he right?'
To which I responded, as the Young Voice of God, "Hitler lost."
The look on the poor man's face was worth the price of admission for he had chosen exactly
the wrong example to use. He slumped back, defeated, for he had proven me right.
Fear not. The young will grow up and, as their compatriots in Christian schools will,
learn to see past the platitudes, knowing that the very idea of justice is a vile thing,
incompatible with their personal freedom, and they will end up despising it from their very
Jonathan Haidt has pointed out a key reason why we get such mixed messages about what is
Millennials get blamed for a lot of this, but most of this stuff is actually the arrival
of the first of the immediate post-millennial generation at college, just within the last
couple of years.
He points out that this is the first generation to have gone through formative late
childhood/early adolescent years experiencing the destructive impact social media throughout
their development. (Previous generations encountered it after they were just that bit older
and more emotionally stable.)
I can look back at my kids, who were born smack-dab in the middle of the millennial
generation, and their high school experience wasn't remotely like anything described above.
Granted, they grew up in Old West country, but it was at a very large high school–and
as this blog repeatedly points out, nowhere is sheltered from the modern diseases. Their
teachers were certainly overwhelmingly liberal, as is true pretty much everywhere these days,
no matter how red the state.
If Haidt is right, the experience my millennial kids had (and the experiences that many
readers of this blog will be appealing to) is *completely* irrelevant. There is something
brand-new just arrived on the scene, and only in the last 2-3 years.
We can argue about whether teachers caused it, culture caused it, social media caused it,
parents caused it The question is what we are going to do about it.
I find this really, really hard to believe. Also, I think I can state (with some degree of
confidence) that Alice does, in fact, believe that there is only one answer to her questions
about incarceration, national success, etc.
The "best and brightest" come in a few different flavors. A lot of them are the kids who
do everything absolutely right, don't seem to rock any particular boats, and are often pretty
conservative in various ways, including politically.
Others are those fueled by a desire for justice and reforms, because they've been on the
receiving end of injustice, or they've witnessed it and felt sympathy/empathy. These are the
ones who often clash with administrators and/or the more entitled demographics among their
peers. They're the ones standing by their controversial school newspaper articles, the ones
organizing the gay-straight (etc.) alliances in the face of often serious threat, and so on.
This isn't happening because they've been indoctrinated, though they may have been inspired
by that one English or History teacher.
As others have said Rod, you've stumbled across the NPC meme. No doubt someone will be along
to tell you about how you are dehumanizing people, because having an NPC avatar will get you
banned from twitter but calling white people dogs will get you on the editorial board of the
For those unfamiliar with it, NPC means Non-Player-Character. It comes from video games,
although I've read that it appeared in DnD before that. In any case it is mostly relevant to
RPG games here. In an RPG game, the player will encounter many NPCs who have a few scripted
responses that they will repeat whenever the player talks to them. The meme is that SJWs do
not think for themselves, and simply respond to everything with a few scripted responses to
any political debate, usually some variation of an 'ist' or an 'ism' or white privilege or
lived experience. It has been an effective meme for mocking the left, which is why twitter
moved so quickly to shut it down.
So the Overton window is big for trans rights and little for the role of, say, duty to
ones' elders, big for microaggression but little for the personality differences of men and
This is exactly right, and is actually the reason why the experience of becoming
"red-pilled" can be so exhilarating and freeing for many people. Suddenly there are huge
areas of discussion and debate that you can explore. It is especially potent because often
these areas were once filed under "common sense" or "fairness". Examples include the
differences between men and women which are evident to most toddlers, or the intrinsic
unfairness of judging people guilty for crimes that were committed hundreds of years before
they were born.
The euphoria of this rediscovered freedom can lead people to over-correct, and go very far
into conspiracy theories in search of more "truths" which have been considered off-limits.
I've seen this in an acquaintance who went far down the rabbit-hole of holocaust denial
theories and neo-nazism. I think it became a rush for him to go where others fear to tread,
and I think it is somehow connected to the red-pill experience.
[NFR: I found the graphic when I typed "conformity" into Shutterstock's search engine.
Shelley, I don't mean this as an insult, but you are 100% completely out of touch on this
issue. My sense is that you don't want to know the truth. This is evidenced by statements
"For our children is that there is zero indoctrination of SJW values coming from the
teachers of the institution. Certainly the peer group has SJW people and activities but I'm
here to declare that not one teacher or one principal in my district has for e fed my
children any SJW dogma."
First of all, this is anecdotal. Secondly, I can ABSOLUTELY GUARANTEE you that your
absolutist statement is wrong. Your assertion that you know every single thing that
teachers/administrators have "fed" to your children shows how unserious you are about soberly
assessing/investigating the situation. You are operating on selective evidence and faith.
We are living in a time where our schools, the mainstream media, the entertainment
industry, high ed, and The Democratic party are united in a vitriolic, hysterical insistence
that citizens of all ages support The Narrative, OR ELSE.
I think your mindset is shared by many who simply can't accept the fact that what should
be the fringe rantings of the occasional "waka-doodle" has become the norm in the leftist
controlled institutions I listed above. I hope you all wake up, and see the extremist agenda
and actual violence that the left is supporting. If you don't, we will descend into actual
civil war. That probably sounds crazy to you, too. I wish you were right.
"This situation will not last. The Social Justice canon is too clearly false and modern
people are too rebellious to shoulder it for long."
Agree ..I would call it the social justice Koran though ..but unlike the Islamic Koran
(Qu'ran) it keeps changing all the time.
One day you're an "ally" the next day you find yourself a "nazi"
Seriously ..just go around campus today saying lines from Obama speeches back in 2008 ."I
believe marriage is between a man and a woman" and "immigration must be controlled and the
violence on the southern border must be stopped"
Thats now "hate speech"
At least the wahhabis tend to stick to one set of rules.
As someone who has spent most of my life in education and higher education, it is not my
experience that there is some sort of universal SJW indoctrination. In reality what basically
happens is this:
Certain professions at the commanding heights of the culture (journalism,
entertainment, academia etc ) are inherently cosmopolitan and tend to disproportionately
appeal to liberals/leftists.
Therefore, most college profs, students, and academic types end up being Nice Moderate
Liberals. Most are not dogmatic or hateful, and are willing to entertain rational
argumentation (to a point). Many–especially the students–are apolitical.
However, centrist liberal hegemony is largely defenseless against radical SJWs,
especially if they are ethnic minorities/women making accusations of racism/sexism, and the
Nice Moderate Liberals get bullied (sometimes quite literally) into going along with the SJW
So, for instance, during the big SJW freakouts in places like Yale and Evergreen State,
the SJWs were not protesting and shutting down conservatives (too few of them to really
matter). They were protesting/assaulting/shutting down moderate liberals.
I was and still am a teacher (worked in public schools). Some teachers are liberal, some are
conservative. Personal politics does not come into the classroom unless a teacher brings it
in. However, standardized testing, funding, and infrastructure spending are all political
realities that affect teachers.
The idea that there are teachers indoctrinating your children is a conservative boogeyman.
There are a few bad teachers, but they are usually apathetic, not passionate. There are also
a few doctors who have sexually abused their clients, but that doesn't demonize the whole
If parents are so concerned about transmitting values, they are free to homeschool, but it
would involve living on one income and re-prioritizing their finances. Many people are not
really that concerned about it, but it's easy to decry the fictional bad teachers they
imagine are stalking the schools. If public schools did not exist, all of these parents would
be forced to educate their own children, and they would realize a small sampling of what
teachers contend with on a daily basis.
Please stop painting a false picture of the profession. Public education is a genuine good
of democracy. If it disappears completely, people will one day realize what they have
I would like to echo reader G's sentiment – paraphrasing G, you've stated your
arguments in a detached way, without giving any samples of your own thinking. It's as if you
seek some implied consensus on conclusions you are, for some reason, unwilling to share. Your
arguments seem to be:
(a) Grade and high school age students are being indoctrinated into "certain acceptable
ideas", which they carry to the university;
(b) Universities confirm and deepen this indoctrination: "Some thoughts are just too
dangerous to have";
(c) Science and engineering fields lead to objectively correct, singular solutions to
given questions. The humanities try to mimic them, by insisting that there are singular
solutions to more complex questions as well;
(d) Here you do give us a few hints of these complex questions: some countries are more
successful than others, incarceration rates vary by race, what is the correct treatment of
non-citizens, the number of sexes, and possibly, a question on IQ;
If I've misunderstood any of your arguments, please correct me. I would also like to echo
G's invitation for you to provide a sample of your own thinking on any of these questions.
Should you respond, I too promise not to engage in polemics. To encourage you, Alice, for
what it's worth, these are my early thoughts on why "one country is more successful than
At an individual's level, the basic idea of "success" is biological survival and
procreation. At the level of a country (and by that, I mean a nation which embodies a certain
culture), it is cultural survival, and handing down of its culture to succeeding generations
for preservation and improvement. Thus, at this basic level, the most successful countries
are those that faced adversity, even dissolution as states (some for several generations),
and still managed to preserve, improve, and pass on their culture till more favorable times.
This is one proof, perhaps the strongest, of cultural resilience;
Other measures of "success" are more ephemeral. All countries, if they survive long
enough, experience cycles of economic and military ups and downs, cultural rots and
regenerations, and demographic changes, to list a few examples. Thus, history decrees that in
these matters, no country can expect to be "number one" in perpetuity. In my mind, such
passing things are not good indicators of "success". For countries, success depends on those
cultural factors that are transmittable and willingly accepted (even embraced and cherished)
by succeeding generations. It also depends of each generation to have the wherewithal to
continuously adapt and improve them. The next question would be, what are these factors?
Publicly standing up against the Bush administration was not the sort of thing that was an
unthinking default at the time. I don't think it was the way to get into the best
universities. I don't think it was a path prescribed by teachers and the corporate media
(though lots of conservatives claimed otherwise).
It represented a struggle for social justice, and an unpopular one at that.
"... The federal student loan system creates perverse incentives that enable bad actors to prey on students. Without adequate protections for students, these predatory corporations will continue to base their business models on the availability of these loans, with little commitment to providing quality education. ..."
"... These Obama-era protections and remedies were being blocked by Secretary of Education Betsy DeVos. U.S. District Judge Randolph Moss rejected a request by for-profit college representatives to halt the regulations. Even with the win, the answer from the Department of Education is arrogant in response. Student loan servicers do not hesitate a moment to penalize a borrower with penalties and fees if the are late. ..."
"... DeVos and conservatives have said the Obama-era policies are unfair to colleges and too costly for taxpayers. She has proposed creating a stricter standard for fraud claims and eliminating the ban on mandatory arbitration agreements ..."
Federal Court cleared the way for students who have been defrauded by for-profit
institutions (I hesitate to call them schools).
"This court ruling is a major victory for thousands of students across the country who
were defrauded by predatory for-profit colleges taking advantage of our broken student loan
system. We commend Attorney General Maura Healey for her leadership fighting for students who
were left with thousands of dollars in debt after their for-profit colleges collapsed.
The federal student loan system creates perverse incentives that enable bad actors to
prey on students. Without adequate protections for students, these predatory corporations
will continue to base their business models on the availability of these loans, with little
commitment to providing quality education. "
These Obama-era protections and remedies were being blocked by Secretary of Education Betsy
DeVos. U.S. District Judge Randolph
Moss rejected a request by for-profit college representatives to halt the regulations. Even
with the win, the answer from the Department of Education is arrogant in response. Student loan
servicers do not hesitate a moment to penalize a borrower with penalties and fees if the are
"DeVos and conservatives have said the Obama-era policies are unfair to colleges and too
costly for taxpayers. She has proposed creating a stricter standard for fraud claims and
eliminating the ban on mandatory arbitration agreements.
But DeVos' push to finalize those revised regulations has hit an unexpected snag that will
delay having a replacement policy on the books by another year. The Education Department said
it won't meet a key Nov. 1 regulatory deadline, meaning that the replacement regulations
aren't likely to take effect until July 2020 at the earliest."
Hopefully the State Attorneys and others can convince the Judge to hold Betsy DeVos in
contempt for not activating the court's requirements in a reasonable amount of time less than 2
likbez , October 19, 2018 1:15 pm
Under neoliberalism any such victory is temporary and will be eventually rolled
Adding to what you just said, let me just put this out there as a teacher, and not trying
to wag a Big White Triumphal Exceptionalist Stick, our US kids are dumb as rocks too, but
this is based on actual experience, and documented records:
My East Asian students showed up to class with no textbooks. They can't afford them in
their eyes. $75USD is 1,000,000 rupiahs! When I sighed and said, 'OK, I'll add one more prep
to my 16-hour day, and print copies in the teacher's lounge for $25 apiece, if anyone wants
one, see me after class.'
An East Asian kid came up to me with a $20, and I'm like, what? He says, and I quote,
"Does this mean I'll get an A?"
I always try to learn the local lingo, and be non-judgmental, but I am a teacher and grading
is part of the job and you have to hold the line. So I said, 'No!' He got rather upset,
thinking I was raising my asking price! $20 always worked for him to get an A before,
back in East Asia.
So now I'm getting perturbed. These kids all had 4.0 GPAs when they got into our school,
here they were barely passing in my class. Is it ESL language? Is it my presentation? So I
got hold of an East Asian teacher and got the East Asian grading rubric: >70% is an A,
>80% is an A+! That's nuts! In the USA, 70% is just barely passing, and you need 95% for
an A+! So there was zero parity between rubrics. They're passing them through as 4.0's for
bribes and H-2B student visa fees!
So I mention this to my Dean, he smiles, and says, 'You're job is just to make sure they
all pass." H-2Bs is a big, big money maker for US colleges. I had to give them the final exam
three times, dumbing it down each time. The last time, we read the exam questions and the
answers out loud together, then I gave them the test. Two of them STILL did not pass, and I
got called in and got my ass chewed!
That's why you see so many smiling East Asian students everywhere. Half of the classes, at
least, are East Asian. So when an East Asian 'college' (sic) graduate claiming an A+ East
Asian GPA, their East Asian colleges even docent the after-graduation testing for graduate
school! They don't have independent SAT or GRE exam boards, their colleges do the
But let's drill down one more layer. I got to meet the now-a-Green Card mother of one of
my students, and we had a little Asian food buffet and then she's asking me how her kid is
doing, and you know, what do you say? Then she tells me, they paid $20,000USD to get the
visas! Their whole family back in East Asia is in hock to the human-trafficker mafiyas, and
that's why the "A+" schtick and why the 'just make sure they pass' pipeline, is to get them
over here so they can do IT coding or pluck chickens or drive for Uber or whatever ,
to keep their family in East Asia from being bludgeoned.
So let's build a $TRILLION wall, for East Asians to fly over by the jumbo-jet load, 10
plane flights every day, and we'll call it MAGA! and WINNING! and 'lowest unemployment on
record' ... because all the new jobs are going to East Asians.
E pluribus now get back to work. Oh, and remember to vote! Really get high-fever pitched!
DRINK THE RED AND BLUE KOOLAID!
"... By Marshall Auerback, a market analyst and commentator ..."
"... Tim Geithner, Hank Paulson, Ben Bernanke and Larry Summers to this day resist the idea that adopting FDIC style reforms, which would have provided a rational resolution to the foreclosure crisis (albeit, at a cost of destroying the capital base of the big Wall Street banks). Summers dismissed these ideas as something akin to "socialism " ..."
"... Faced with the choice of preserving the financial industry as it was or embracing far-reaching reforms that would have served the interests of