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Casino Capitalism: Neoliberalism in Western countries

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

John Maynard Keynes

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Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. Financialization transforms the functioning of economic systems at both the macro and micro levels.

Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage stagnation. Additionally, there are reasons to believe that financialization may put the economy at risk of debt deflation and prolonged recession.

Financialization operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of nonfinancial corporations, and changes in economic policy.

Countering financialization calls for a multifaceted agenda that (1) restores policy control over financial markets, (2) challenges the neoliberal economic policy paradigm encouraged by financialization, (3) makes corporations responsive to interests of stakeholders other than just financial markets, and (4) reforms the political process so as to diminish the influence of corporations and wealthy elites.

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

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

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


Introduction

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

-- John Kenneth Galbraith, The Great Crash of 1929

The term Casino Capitalism as a specific phase of neoliberal transformation of capitalism. Politically it was slow motion corporate coup d'état, which started in 70th and is now accomplished in the USA and other Western countries which buries social-democratic (New Deal style) model of capitalism.  It hypertrophied police functions of state (in the form of national-security state)  while completely avoiding economic sphere in ways other then enforcement of laws (with a notable exclusion from this top 1% -- Masters of the Universe). In this sense it is the opposite of communism (i.e. an entirely state-planned economy) and presupposed a deregulated economy (in a sense of the "law of jungle" as a business environment) , but with extremely strong militarized state, suppressing all the attempts to challenge the new "nomenklatura" (much like was the case in the USSR).  It is also called economic liberalism or neoliberalism

“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 a variant of neoliberal model of corporatism used in wealthy Western countries 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.  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 current low oil price period that started in late 2014 can be viewed as the "last hurrah" of the casino capitalism.

In understanding neoliberal transformation of the society since early 80th it is important to understanding of the key role of financialization in this process. When major services are privatized (education, healthcare, pension plans) financial institution insert themselves as intermediaries in this arrangement and make it the main source of their profits.  Also contrary to neoliberal propaganda this process is aided and abetted by state. State is used by neoliberalism as a tool of enforcing market relations even where they are not useless or even harmful (education). All this talk about irresolvable controversy between market and state is for gullible fools. In reality, being Trotskyism for rich, neoliberalism uses power of the state to enforce market relations  by force on reluctant population even in areas where this can do no good. That make really it close to Soviet Communism. 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 inhis Guardian article Finance's hold on our everyday life must be broken

This extraordinary public largesse towards private banks was matched by austerity and wage reductions for workers and households. As for restructuring finance, nothing fundamental has taken place. The behemoths that continue to dominate the global financial system operate in the knowledge that they enjoy an unspoken public guarantee. The unpalatable reality is that financialisation will persist, despite its costs for society.

Financialisation represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades.

The penetration of finance into the everyday life of households has not only created a range of dependencies on financial services, but also changed the outlook, mentality and even morality of daily life. Financial calculation evaluates everything in pennies and pounds, transforming the most basic goods – above all, housing – into "investments". Its logic has affected even the young, who have traditionally been idealistic and scornful of pecuniary calculation. Fertile ground has been created for neoliberal ideology to preach the putative merits of the market.

Financialisation has also created new forms of profit associated with financial markets and transactions. Financial profit can be made out of any income, or any sum of money that comes into contact with the financial sphere. Households, for example, generate profits for finance as debtors (mostly by paying interest on mortgages) but also as creditors (mostly by paying fees and charges on pension funds and insurance). Finance is not particular about how and where it makes its profits, and certainly does not limit itself to the sphere of production. It ranges far and wide, transforming every aspect of social life into a profit-making opportunity.

The traditional image of the person earning financial profits is the "rentier", the individual who invests funds in secure financial assets. In the contemporary financialised universe, however, those who earn vast returns are very different. They are often located within a financial institution, presumably work to provide financial services, and receive vast sums in the form of wages, or more often bonuses. Modern financial elites are prominent at the top of the income distribution, set trends in conspicuous consumption, shape the expensive end of the housing market, and transform the core of urban centres according to their own tastes.

Financialised capitalism is, thus, a deeply unequal system, prone to bubbles and crises – none greater than that of 2007-09. What can be done about it? The most important point in this respect is that financialisation does not represent an advance for humanity, and very little of it ought to be preserved. Financial markets are, for instance, able to mobilise advanced technology employing some of the best-trained physicists in the world to rebalance prices across the globe in milliseconds. This "progress" allows financiers to earn vast profits; but where is the commensurate benefit to society from committing such expensive resources to these tasks?

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

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

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

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

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

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

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

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

There were also at least two important parallel developments.

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

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

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

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

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

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

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

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

History

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

Martin Wolf

 


 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The concept of Quite Coup

Sine ira et studio

Tacitus, see Wikipedia

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

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

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

Becoming a Banana Republic

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Two Paths

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

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

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

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

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

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

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

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

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

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

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

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

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

Stages of transformation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Casino Capitalism as a result of stagnation of industrial manufacturing

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

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

Those changes in the structure of employment had several consequences:

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

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

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

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

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

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

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

Casino Capitalism and Financial Instability

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

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

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

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

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

Neoliberalism as the Ideology of Casino Capitalism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Voodoo economic theories

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

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

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

Collapse of the USSR as ideological justification of Casino Capitalism superiority

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

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

Brainwashing

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

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

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

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

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

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

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

Early Researchers of Casino Capitalism

Hyman Minsky

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

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

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

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

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

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

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

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

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

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

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

For more information see

Susan Strange

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

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

Notes:

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

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

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

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

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

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

John K. Galbraith

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

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

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

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

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

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

Driven to understand market realities

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

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

... ... ...

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

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

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

Government's role

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ha-Joon Chang

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

William Podmore

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

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

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

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

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

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

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

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

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

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

Loyd E. Eskildson

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

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

Willem Buiter and the idea of long term stagnation

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

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

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

... ... ...

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

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

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

Joseph Stiglitz on 5 steps to Casino Capitalism

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

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

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

snip

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

Greenspan presided over not one but two financial bubbles.

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

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

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

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

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

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

  1. Faking the Numbers

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

  1. Paulson and the Flawed Bailout

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

Stiglitz concludes:

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

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

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

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

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

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

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

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

 Conclusions: From Animal Farm To Animal House

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

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

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

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

So what is to be done now? Two things:

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

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

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

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

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


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[Feb 20, 2018] For the life of me I cannot figure why Americans want a war/conflict with Russia

Highly recommended!
This post summaries several "alternative" views that many suspect, but can't express as clearly as here.
Feb 20, 2018 | www.moonofalabama.org

Palloy | Feb 20, 2018 8:52:02 PM | 34

@4 "For the life of me I cannot figure why Americans want a war/conflict with Russia."

Ever since US Crude Oil peaked its production in 1970, the US has known that at some point the oil majors would have their profitability damaged, "assets" downgraded, and borrowing capacity destroyed. At this point their shares would become worthless and they would become bankrupt. The contagion from this would spread to transport businesses, plastics manufacture, herbicides and pesticide production and a total collapse of Industrial Civilisation.

In anticipation of increasing Crude Oil imports, Nixon stopped the convertibility of Dollars into Gold, thus making the Dollar entirely fiat, allowing them to print as much of the currency as they needed.

They also began a system of obscuring oil production data, involving the DoE's EIA and the OECD's IEA, by inventing an ever-increasing category of Undiscovered Oilfields in their predictions, and combining Crude Oil and Condensate (from gas fields) into one category (C+C) as if they were the same thing. As well the support of the ethanol-from-corn industry began, even though it was uneconomic. The Global Warming problem had to be debunked, despite its sound scientific basis. Energy-intensive manufacturing work was off-shored to cheap labour+energy countries, and Just-in-Time delivery systems were honed.

In 2004 the price of Crude Oil rose from $28 /barrel up to $143 /b in mid-2008. This demonstrated that there is a limit to how much business can pay for oil (around $100 /b). Fracking became marginally economic at these prices, but the frackers never made a profit as over-production meant prices fell to about $60 /b. The Government encourages this destructive industry despite the fact it doesn't make any money, because the alternative is the end of Industrial Civilisation.

Eventually though, there must come a time when there is not enough oil to power all the cars and trucks, bulldozers, farm tractors, airplanes and ships, as well as manufacture all the wind turbines and solar panels and electric vehicles, as well as the upgraded transmission grid. At that point, the game will be up, and it will be time for WW3. So we need to line up some really big enemies, and develop lots of reasons to hate them.

Thus you see the demonisation of Russia, China, Iran and Venezuela for reasons that don't make sense from a normal perspective.

[Feb 19, 2018] Poland opposes Nord Stream 2 - plans to build own pipeline - Fort Russ

Feb 19, 2018 | www.fort-russ.com

The Polish leadership intends to implement a project of its own with the Baltic Pipe gas pipeline - in face of the "Nord Stream - 2". This is reported by the German newspaper Frankfurter Allgemeine Zeitung .

The Polish party "Law and Justice" decided to revive the Baltic Pipe project and connect to the Norwegian gas network. According to press releases, at the end of last year the Polish state oil and gas company PGNiG reserved the capacity of the gas pipeline for 15 years, at a cost of two billion dollars. It is assumed that the Polish project with an annual capacity of 10 billion cubic meters per year will begin to function in 2022, but the final decision on this project will be taken later in 2018.

Poland actively opposes the construction of the Russian "Nord Stream - 2". Earlier, the Polish Prime Minister called on the US leadership to extend American sanctions for the implementation of this project. In addition, he said that European companies involved in the construction of the gas pipeline should be fined.

Germany has rebuffed such statements, stating that the project guarantees energy security for Europe.

Nord Stream -2 is a project worth 9.5 billion euros, which involves the construction of two lines of pipeline across the Baltic Sea from the coast of Russia to Germany. The total capacity will be 55 billion cubic meters of gas per year.

[Feb 19, 2018] 10-Year yield up 110%, is a peak in play

Feb 19, 2018 | www.zerohedge.com

Is the bond bull market of the past 30-years over? Are we seeing just the start of a trend higher in interest rates or are they about to blast off? This isn't the million dollar question, its the "Trillion Dollar" question as U.S. Government debt continues to skyrocket.

Below takes a long-term look at the yield on the 10-year note (TNX ) as well as a look at how large of an increase in rates have taken place over the past 84-weeks CLICK ON CHART TO ENLARGE

The yield on the 10-year note is up 110% over the past 84-weeks, which is the largest yield rally in this short of a time period in a couple of decades. This sharp rally now has yields testing the top of a 25-year falling channel as well as at the top of its 5-year trading range at (2). Is the just the beginning in a rate rise of a short-term ending?

Below takes a peek at what hedgers are doing in the 10-year Treasury Note from Sentimentrader.com

... ... ...

With the U.S. Government debt now exceeding $20 Trillion, what the 10-year note does at the top of its 25-year rising channel, is very important friends!!!

[Feb 19, 2018] What you need to know for the week ahead by Myles Udland

Feb 19, 2018 | finance.yahoo.com

This past week, Wednesday's data on consumer prices showed that inflation pressures appear to be building in the U.S. economy. The consumer price index rose 2.1% over last year in January, more than expected by economists. Excluding the cost of food and energy -- which the Federal Reserve focuses more closely on -- prices were up 1.8% in January, also more than expected. This data initially sent stock prices lower and bond yields higher.

Recall that last week's stock market sell-off was initially seen by markets as having grown out of investor concerns about rising inflation, and thus more quickly rising interest rates. Producer prices and import prices were also shown to accelerate in January in reports out on Thursday and Friday, respectively.

But alongside Wednesday's inflation data, retail sales for January were released. And they were ugly. Sales fell 0.3% in the first month of 2018 and December's increase of 0.4% was revised down to show there was no growth compared to the prior month.

"The weaker tone of the January retail sales report, which showed a stagnation in underlying sales and downward revisions to previous months, suggests that real consumption growth is set to slow in the first quarter," said Andrew Hunter, an economist at Capital Economics.

In an appearance on Yahoo Finance's live show The Final Round on Thursday , Peter Tchir said the next worry for markets is not likely to be higher interest rates or concerns about market volatility, but potential signs of weakness in the real economy.

... ... ...

"Accordingly, we wouldn't be surprised to see retail spending pick up again over the next couple of months. And even if first quarter consumption growth is weaker than we had initially anticipated, this is unlikely to mark the start of a sustained downturn."

Data on consumer sentiment published Friday by the University of Michigan showed that confidence rose again in the first part of February despite the sock market sell-offs that made headlines well beyond the financial media.

"Stock market gyrations were dominated by rising incomes, employment growth, and by net favorable perceptions of the tax reforms," said Richard Curtin, chief economist for the survey.

"When asked to identify any recent economic news they had heard, negative references to stock prices were spontaneously cited by just 6% of all consumers. In contrast, favorable references to government policies were cited by 35% in February, unchanged from January, and the highest level recorded in more than a half century."

Tax cuts, then, are really the most important factor seeming to drive consumers. And, in turn, the economy.

The Financial Times' Matt Klein has illustrated how U.S. recessions come about. And essentially, it all comes down to whether consumers are still willing to spend money on stuff -- homes, cars, furniture, appliances. These are big ticket purchases that require both time to plan for and a confidence that the household's economic picture won't deteriorate in the years ahead.

This past week's data, then, appears to be something of a mixed bag for the U.S. economic picture. On the one hand, spending from households to start 2018 appears soft and were this to begin a trend it would certainly muddy the economic outlook. On the other hand, consumer confidence appears undeterred by market gyrations and focused on the gains from tax cuts.

Both pieces of data can support positive or negative outlooks for the economy. One of them will be right.


[Feb 19, 2018] The Free Market Threat to Democracy by John Weeks

Notable quotes:
"... In addition, financial capital leads to inequality, and that inequality, as you've seen in the United States and in Europe and many other places, it increases. And suddenly, not suddenly, but bit by bit, people begin to realize that they aren't getting their share and that means that the government, to protect capitalism, must use force to maintain the order of financial capital. And I think Trump is the fulfillment of that, and I think there are other examples too which I can go into. So, basically, my argument is that with the rise of finance and its unproductive activities, you've got the decline in living standards of the vast majority, and in order to maintain order in such a system where people no longer think that they're sort of getting their share, and so justice doesn't become, a just distribution doesn't become the reason why people support this system, increasingly it has to be done through force. ..."
"... I think that as The Real News has pointed out, that many of Trump's policies appear just to be more extreme versions of things that George Bush did, and in some cases not that much different from what Barack Obama did. ..."
"... The difference with Trump is, he has complete contempt for all of those constraints. That is, he is an authoritarian. I don't think he's a fascist, not yet, but he is an authoritarian. He does not accept that there are constraints which he should respect. There are constraints which bother him, and he wants to get rid of them, and he actually takes steps to do so. ..."
"... Erdoğan so infamously said? "Democracy is like a train. You take it to where you want to go and then you get off." No. Progressive view is that democracy is what it's all about. Democracy is the way that we build the present and we build a future. ..."
"... I think that the struggle in the United States is extremely difficult because of the role of the big money and the media, which you know more about than I do. But it is a struggle which we have to keep at, and we have to be optimistic about it. It's a good bit easier over here, but as we saw, and you reported, during the last presidential election, a progressive came very close to being President of the United States. That, I don't think was a one-off event, not to be repeated. I think it lays the basis for hope in the future. ..."
"... The democratic nation-state basically operates like a criminal cartel, forcing honest citizens to surrender large portions of their wealth to pay for stuff like roads and hospitals and schools. ..."
"... Any hierarchic system will be exploited by intelligent sociopaths. Systems will not save us. ..."
"... What I gleaned from my quick Wikiread was the apparent pattern of economic inequality causing the masses to huddle in fear & loathing to one corner – desperation, and then some clever autocrat subverts the energy from their F&L into political power by demonizing various minorities and other non-causal perps. ..."
"... Like nearly every past fascism emergence in history, US Trumpismo is capitalizing on inequality, and fear & loathing (his capital if you will) to seize power. That brings us to Today – to Trump, and an era (brief I hope) of US flirtation with fascism. Thank God Trump is crippled by a narcissism that fuels F&L within his own regime. Otherwise, I might be joining a survivalist group or something. :-) ..."
Feb 17, 2018 | www.nakedcapitalism.com

Yves here. This Real News Network interview with professor emeritus John Weeks discussed how economic ideology has weakened or eliminated public accountability of institutions like the Fed and promote neo[neo]liberal policies that undermine democracy.

https://www.youtube.com/embed/o9bXo1f5r0I

SHARMINI PERIES: It's The Real News Network. I'm Sharmini Peries coming to you from Baltimore. The concept of the [neo]liberal democracy is generally based on capitalistic markets along with respect for individual freedoms and human rights and equality in the face of the law. The rise of financial capital and its efforts to deregulate financial markets, however, raises the question whether [neo]liberal democracy is a sustainable form of government. Sooner or later, democratic institutions make way for the interests of large capital to supersede.

Political economist John Weeks recently gave this year's David Gordon Memorial Lecture at the meeting of the American Economic Association in Philadelphia where he addressed these issues with a talk titled, Free Markets and the Decline of Democracy. Joining us now is John Weeks. He joins us from London to discuss the issues raised in his lecture. You can find a link to this lecture just below the player, and John is, as you know, Professor Emeritus of the University of London School of Oriental and African Studies and author of Economics of the 1%: How Mainstream Economics Serves the Rich, Obscures Reality and Distorts Policy. John, good to have you back on The Real News.

JOHN WEEKS: Thank you very much for having me.

SHARMINI PERIES: John, let me start with your talk. Your talk describes a struggle between efforts to create a democratic control over the economy and the interest of capital, which seeks to subjugate government to the interest, its own interest. In your assessment, it looks like this is a losing battle for democracy. Explain this further.

JOHN WEEKS: Yeah, so I think that Marx in Capital, in the first volume of Capital, refers to a concept called bourgeois right, by which he meant that, you said it in the introduction, that in a capitalist society there is a form of equality that mimics the relationship of exchange. Every commodity looks equal in exchange and there is a system of ownership that you might say is the shadow of that. I think more important, in the early stages of development of capitalism, of development of factories, that those institutions or those factories prompted the growth of trade unions and workers' struggles in general. Those workers' struggles were key to the development, or further development of democracy, freedom of speech, a whole range of rights, the right to vote.

However, with the development of finance capital, you've got quite a different dynamic within the capitalist system. Let me say, I don't want to romanticize the early period of capitalism, but you did have struggles, mass struggles for rights. Finance capital produces nothing productive, it doesn't do anything productive. So, what finance capital does basically is it redistributes the income, the wealth, the, what Marx would call the surplus value, from other sectors of society to itself. And it employs relatively few people, so that dynamic of the capital, industrial capital, generating its antithesis So, that a labor movement doesn't occur under financial capital.

In addition, financial capital leads to inequality, and that inequality, as you've seen in the United States and in Europe and many other places, it increases. And suddenly, not suddenly, but bit by bit, people begin to realize that they aren't getting their share and that means that the government, to protect capitalism, must use force to maintain the order of financial capital. And I think Trump is the fulfillment of that, and I think there are other examples too which I can go into. So, basically, my argument is that with the rise of finance and its unproductive activities, you've got the decline in living standards of the vast majority, and in order to maintain order in such a system where people no longer think that they're sort of getting their share, and so justice doesn't become, a just distribution doesn't become the reason why people support this system, increasingly it has to be done through force.

SHARMINI PERIES: All right, John. Before we get further into the relationship between neo[neo]liberalism and democracy, give us a brief summary of what you mean by neo[neo]liberalism. You say that it's not really about deregulation, as most people usually conceive of it. If that's not what it's about, what is it, then?

JOHN WEEKS: I think that if you think about the movements in the United States, and as much as I can, I will take examples from the United States because most of your listeners will be familiar with those, beginning in the early part of the twentieth century, in the United States you have reform movements, the breaking up of the large monopolies, tobacco monopoly, a whole range of Standard Oil, all of that. And then of course under Roosevelt you began to get the regulation of capital in the interests of the majority, much of that driven by Roosevelt's trade union support. So, that was moving from a system where capital was relatively unregulated to where it was being regulated in the interests of the vast majority. I also would say, though, I won't go into detail, to a certain extent it was regulated in the interest of capital itself to moderate competition and therefore, I'd say, ensure a relatively tranquil market environment.

Neo[neo]liberalism involves not the deregulation of the capitalist system, but the reregulation of it in the interest of capital. So, it involves moving from a system in which capital is regulated in the interests of stability and the many to regulation in a way that enhances capital. These regulations, to get specific about them, restrictions on trade unions, as you, on Real News, a number of people have talked about this. The United States now have many restrictions on the organizing of trade unions which were not present 50 or 60 years ago, making it harder to have a mass movement of labor against capital, restrictions on the right to demonstrate, a whole range of things. Then within capital itself, the regulations on the movement of capital that facilitate speculation in international markets. We have a capitalism in which the form of regulation is shifted from the regulation of capital in the interest of labor to regulation of capital in the interest of capital.

SHARMINI PERIES: John, give us a brief summary of the ways in which neo[neo]liberalism undermines democracy.

JOHN WEEKS: Well, I think that there are many examples, but I'm going to focus on economic policy. For an obvious case is the role of the Central Bank, in the case of the United States' Federal Reserve System, in which reducing its accountability to the public, one way you can do that is by assigning goals to it, such as fighting inflation, which then override other goals. Originally, the Federal Reserve System, its charter, or I'll say its terms of reference, if you want me to use that phrase, included full employment and a stable economy. Those have been overridden in more recent legislation, which puts a great emphasis on the control of inflation. Control of inflation basically means maintaining an economy at a relatively high level of unemployment or part-time employment, or flexible employment, where people have relatively few rights at work. And that the Central Bank becomes a vehicle for enforcing a neo[neo]liberal economic policy.

Second of all, probably most of your viewers will not remember the days when we had fixed exchange rates. We had a world of fixed exchange rates in those days that represented the policy, which government could use to affect its trade and also affect its domestic policy. There have been deregulation of that. We now have floating exchange rates. That takes away a tool, an instrument of economic policy. And in fiscal policy, there the, here it's more ideology than laws, though there are also laws. There's a law requiring that the government balance its budget, but more important than that, the introduction into the public consciousness, I'd say grinding into the public consciousness, the idea that deficits are a bad thing, government debt is a bad thing, and that's a completely neo[neo]liberal ideology.

In summary, one way that the democracy has been undermined is to take away economic policy from the public realm and move it to the realm of experts. So, we have certain allegedly expert guidelines that we have to follow. Inflation should be low. We should not run deficits. The national debt should be small. These are things that are just made up ideologically. There is no technical basis to them. And so, in doing that, you might say, the term I like to use is, you decommission the democratic process and economic policy.

SHARMINI PERIES: John, speaking of ideology, in your talk you refer to the challenge that fascism posed or poses to neo[neo]liberal democracies. Now, it is interesting when you take Europe into consideration and National Socialist in Germany, for example, appeal mostly to the working class, as does contemporary far-right leaders in Poland and Hungary, that they support more explicit neo[neo]liberal agendas. Why would people support a neo[neo]liberal agenda that exasperate inequalities and harm public services that they depend on, including jobs?

JOHN WEEKS: I think that to a great extent it is country-specific, but I can make generalizations. First of all, I'm talking about Europe, because you raised a case in some European countries, and then I'll make some comments about the United States and Trump, if you want me to. I think in Europe, a combination of three things resulted in the rise of fascism and authoritarian movements which are verging on fascism. One is that the European integration project, which let me say that I have supported, and I would still prefer Britain not to leave the European Union, but nevertheless, the European Union integration project has been a project run by elites.

It has not been a bottom-up process. It has been a process very much run by elite politicians, in which they get together in closed door, and they make policies which they subsequently announce, and many of the decisions they come to being extremely, the meaning of them being extremely opaque. So, therefore, you have the development in Europe of the European Union which, not from the bottom up, but very much from the top down. You might suggest from the top, but I'm not sure how much goes down. That's one.
The second key factor, I would say, for about 20 years in European integration, it was relatively benign elitism because it was social democratic, it had the support of the working class, or the trade unions, at any rate. Then, increasingly, it began to become neo[neo]liberal. So, you have an elite project which was turning into a neo[neo]liberal project. Specifically, what I mean by neo[neo]liberal is where they're generating flexibility rules for the labor market, austerity policies, bank, balanced budgets, low inflation, the things I was talking about before.

Then the third element, toxic, the most toxic of them, but the other, they're volatile, is the legacy of fascism in Europe. Every European country, with the exception of Britain, had a substantial fascist movement in the 1920s and 1930s. I can go into why Britain didn't sometime. It had to do with the particular class struggle of the, I mean, class structure of Britain. Poland, ironically enough, though, is one of them. It was overrun by the Nazis, and occupied, and incorporated into the German Reich. Ironically, it had a very right-wing government with a lot of sympathies towards fascism when it was invaded in the late summer of 1939.

France had a strong fascist movement. Of course, Italy had a fascist government, and Hungary, where now you have a right-wing government, a very strong fascist movement. The incorporation of these countries into the Soviet sphere of influence, or the empire, as it were, did not destroy that fascism. It certainly suppressed it, but it didn't destroy it. So, as soon as the European project began to transform into a neo[neo]liberal project, and that gathered strength in the early 1990s, I mean, the neo[neo]liberal aspect of the European Union gathered strength in the early 1990s, exactly when you were getting the "liberation" of many countries from Soviet rule. And so, when you put those together, it led to, It was a rise of fascism waiting to happen and now it is happening.

SHARMINI PERIES: John, earlier, you said you'll factor in Trump. How does Trump fit into this phenomena?

JOHN WEEKS: I think that as The Real News has pointed out, that many of Trump's policies appear just to be more extreme versions of things that George Bush did, and in some cases not that much different from what Barack Obama did. Now, though I wouldn't go too deeply into that, I think that that is the most serious offenses by Obama that have been carried on by Trump have to do with the use of drones and the military. But at any rate, but there's a big difference from Trump. For the most part, the previous Republican presidents, and Democratic presidents, accepted the framework of, the formal framework of [neo]liberal democracy in the United States. That is, formally accepted the constraints imposed by the Constitution.

Now, of course, they probably didn't do it out of the goodness of their heart. They did it because they saw that the things that they wanted to achieve, the neo[neo]liberal goals that they wanted to achieve were perfectly consistent with the Constitution's framework and guarantees of rights and so on, that most of those rights are guaranteed in a way that's so weak that you didn't have to repeal the first 10 Amendments of the Constitution in order to have repressive policies.

The difference with Trump is, he has complete contempt for all of those constraints. That is, he is an authoritarian. I don't think he's a fascist, not yet, but he is an authoritarian. He does not accept that there are constraints which he should respect. There are constraints which bother him, and he wants to get rid of them, and he actually takes steps to do so. What you have in Trump, I think, is a sea change. You have a, we've had right-wing presidents before, certainly. What the difference with Trump is, he is a right-wing president that sees no reason to respect the institutions of democratic government, or even, you might say, the institution of representative government. I won't even use a term as strong as "democratic." That lays the basis for an explicitly authoritarian United States, and I'd say that we're beginning to see the vehicle by which this will occur, the restriction on voting rights. Of course, that was going on before Trump, it does in a more aggressive way. I think the, soon, we will have a Supreme Court that will be quite lenient with his tendency towards authoritarian rule.

SHARMINI PERIES: All right, John. Let's end this segment with what can be done. I mean, what must be done to prevent neo[neo]liberal interests from undermining democracy? And who do you believe is leading the struggle for democracy now, and what is the right strategy that people should be fighting for?

JOHN WEEKS: Well, one thing, I think, where I'd begin is that I think progressives, as The Real News represents, and Bernie Sanders, and all the people that support him, and Jeremy Corbyn over here, I'll come back to talk about a bit about Jeremy. We must be explicit that we view democracy, by which we mean the participation of people at the grassroots, their participation in the government, we view that as a goal. It's not merely a technique, or a tool which, what was it that Erdoğan so infamously said? "Democracy is like a train. You take it to where you want to go and then you get off." No. Progressive view is that democracy is what it's all about. Democracy is the way that we build the present and we build a future.

I'm quite fortunate in that I live in perhaps the only large country in the world where there's imminent possibility of a progressive, left-wing, anti-authoritarian government. I think that is the monumental importance of Jeremy Corbyn and his second-in-command, John McDonnell, and others like Emily Thornberry, who is the Foreign Secretary. These people are committed to democracy. In the United States, Bernie Sanders is committed to a democracy, and a lot of other people are too, Elizabeth Warren. So, I think that the struggle in the United States is extremely difficult because of the role of the big money and the media, which you know more about than I do. But it is a struggle which we have to keep at, and we have to be optimistic about it. It's a good bit easier over here, but as we saw, and you reported, during the last presidential election, a progressive came very close to being President of the United States. That, I don't think was a one-off event, not to be repeated. I think it lays the basis for hope in the future.

... ... ...


JTMcPhee , February 17, 2018 at 9:35 am

"Informed speculation" with lots of footnotes and offshoots in this Reddit skein: https://www.reddit.com/r/AskHistorians/comments/1llyf7/about_how_much_in_todays_money_was_30_pieces_of/

"A lot of money" in those days- Some say JI "bought land" with the shekels. An early form of asset swap? A precursor to current financialist activities?

WobblyTelomeres , February 17, 2018 at 10:44 am

Good article. If it were any bleaker, I'd suspect Chris Hedges having a hand in writing it.

The democratic nation-state basically operates like a criminal cartel, forcing honest citizens to surrender large portions of their wealth to pay for stuff like roads and hospitals and schools.

There it is, the Gorgon Thiel, surrounded by terror and rout.

James T. Cricket , February 18, 2018 at 3:46 am

I suppose you've read this.

https://www.newyorker.com/magazine/2016/10/10/sam-altmans-manifest-destiny

Here's a quote:

"Altman felt that OpenAI's mission was to babysit its wunderkind until it was ready to be adopted by the world. He'd been reading James Madison's notes on the Constitutional Convention for guidance in managing the transition. 'We're planning a way to allow wide swaths of the world to elect representatives to a new governance board,' he said."

I was having trouble choosing which of the passages in this article to provide a mad quote from. Some other choices were
Altman's going to work with the Department of Defense, then help defend the world from them.
Or:
OpenAI's going to take over from humans, but don't worry because they're going to make it (somehow) so OpenAI can only terminate bad people. Before releasing it to the world.
Or:
Altman says 'add a 0 to whatever you're doing but never more than that.'

But if this sort of wisdom (somehow) doesn't work out well for everybody and the world collapses, he's flying with Peter Thiel in the private jet to the New Zealand's south island to wait out the Zombie Apocalypse on a converted sheep farm. (Before returning to the Valley work with more startups?)

These are your new leaders, people

David , February 17, 2018 at 7:56 am

I think it's revealing that the only type of democracy discussed, in spite of the title, is "[neo]liberal democracy", which the host describes as "based on capitalistic markets along with respect for individual freedoms and human rights and equality in the face of the law."

I've always argued that [neo]liberal democracy is a contradiction in terms, and you can see why from that quotation. [neo]liberalism (leaving aside special uses of the term in the US) is about individuals exercising their personal economic freedom and personal autonomy as much as they can, with as little control by government as possible.

But given massive imbalances in economic power, the influence of media-backed single issue campaigns and the growth of professional political parties, policy is decided by the interventions of powerful and well-organised groups, without ordinary people being consulted. At the end, Weeks does start to talk of grassroots participation, but seems to have no more in mind than a campaign to get people to vote for Sanders in 2020, which hardly addresses the problem. The answer, if there is one, is a system of direct democracy, involving referendums and popular assemblies chosen at random.

This has been much talked about, but since you would have the entire political class against you, it's not going to happen. In the meantime, we are stuck with [neo]liberal democracy, whose contradictions, I'm afraid are becoming ever more obvious.

JTMcPhee , February 17, 2018 at 8:45 am

"Contradictions?" One question for me at least would be whether the features and motions of the current regime are best characterized as "contradictions." If so, to what? And implicit in the use of the word is some kind of resolution, via actual class conflict or something, leading to "better" or at least "different." All I see from my front porch is more of the same, and worse. "The Matrix" in that myth gave some comforting illusions to the mopery. I think the political economy/collapsed planet portrayed in "Soylent Green" is a lot closer to the likely endpoints.

At least in the movie fable, the C-Suite-er of the Soylent Corp. as the lede in the film, was sickened of what he was helping to maintain, and bethought himself to blow his tiny little personal whistle that nobody would really hear, and got axed for his disloyalty to the ruling collective. I doubt the ranks of corporatists of MonsantoDuPont and LockheedMartin and the rest include any significant numbers of folks sickened by "the contradictions" that get them their perks and bennies and power (as long as they color inside the lines.)

Eustache De Saint Pierre , February 17, 2018 at 9:33 am

I hope I am way off the mark, but within that genre & in terms of where we could be heading, the film " Snowpiercer " sums it up best for me- a dystopian world society illustrated through the passengers on one long train.

Michael C , February 17, 2018 at 8:46 am

Thanks for the Real News Network for covering issues that never see the light of day on the corporate media and never mentioned by the Rachel Maddow's of the "news" shows.

torff , February 17, 2018 at 10:02 am

Can we please put a moratorium on the term "free market"? It's a nonsense term.

Yves Smith Post author , February 17, 2018 at 6:59 pm

Yes, I wrote about that at length in ECONNED. I kept the RNN headline, which used it, but should have put "free market" in quotes.

Katz , February 18, 2018 at 11:09 am

I actually like the term and find it useful, insofar as it describes an ideology -- as oposed a real political-economic arrangement. The presence of "free markets" may not be a characteristic of the neo[neo]liberal phase, but the belief in them sure is.

(Which is not to say there aren't people who don't believe in free markets but do invoke them rhetorically for other ends. That's a feature of many if not most successful ideologies.)

Jim Haygood , February 17, 2018 at 10:59 am

' Originally, the Federal Reserve charter included full employment and a stable economy. Those have been overridden in more recent legislation, which puts a great emphasis on the control of inflation.

Eh, this is fractured history. The Fed was set up in 1913 as a lender of last resort -- a discounter of government and private bills.

In late 1978 Jimmy Carter signed the Humphrey Hawkins Act instructing the Fed to pursue three goals: stable prices, maximum employment, and moderate long-term interest rates, though the latter is rarely mentioned now and the Fed is widely viewed as having a dual mandate.

The Fed's two percent inflation target it simply adopted at its own initiative -- it's not enshrined in no Perpetual Inflation Act.

' We had a world of fixed exchange rates which government could use to affect its trade and also affect its domestic policy. We now have floating exchange rates. That takes away a tool. '

LOL! This is totally inverted and flat wrong. The Bretton Woods fixed exchange rate system prevented radical monetary experiments such as QE which would have broken the peg. Nixon unilaterally suspended fixed exchange rates in 1971 because he was unwilling to take the political hit of formally devaluing the dollar (or even more unlikely, sweating out Vietnam War inflation with falling prices to maintain the peg).

Floating rates are a new and potentially lethal monetary tool which have produced a number of sad examples of "governments gone wild" with radical monetary experiments and currency swings. Bad boys Japan & Switzerland come readily to mind.

To render history accurately requires getting hands dirty with dusty old books. Icky, I know. :-(

RBHoughton , February 17, 2018 at 6:24 pm

Yes but globalisation meant that all central banks and finance ministers had to act concertedly as in G-20 and similar meetings. While we may talk of floating exchange rates, each country fixes its interest rate to maintain parity with the others. Isn't that so?

Yves Smith Post author , February 17, 2018 at 7:00 pm

Ahem, you skip over that the full employment goal was added to the Fed mandate in 1946, long before the inflation goal was added.

The Rev Kev , February 17, 2018 at 7:29 pm

I think that the key piece of info is that the Federal Reserve was created on December 23rd, 1913. That sounds like that it was slipped in the legislative back door when everybody was going away for the Christmas holidays.

Steven Greenberg , February 17, 2018 at 11:26 am

===== quote =====
Second of all, probably most of your viewers will not remember the days when we had fixed exchange rates. We had a world of fixed exchange rates in those days that represented the policy, which government could use to affect its trade and also affect its domestic policy. There have been deregulation of that. We now have floating exchange rates. That takes away a tool, an instrument of economic policy. And in fiscal policy, there the, here it's more ideology than laws, though there are also laws. There's a law requiring that the government balance its budget, but more important than that, the introduction into the public consciousness, I'd say grinding into the public consciousness, the idea that deficits are a bad thing, government debt is a bad thing, and that's a completely neo[neo]liberal ideology.
===== /quote =====

This makes absolutely no sense and seems to have the case exactly backward. Our federal government has no rule that the budget must be balanced. Fixed exchange rates were not a tool that could be used to affect trade and domestic policy in a good way.

Lee Robertson , February 17, 2018 at 11:42 am

Any hierarchic system will be exploited by intelligent sociopaths. Systems will not save us.

Susan the other , February 17, 2018 at 1:29 pm

I enjoyed John Weeks' point of view. He's the first person I've read who refers to the usefulness of a fixed exchange rate. Useful for a sovereign government with a social spending agenda. We have always been a sovereign government with a military agenda which is at odds with a social agenda.

Guns and butter are a dangerous combination if you are dedicated to at least maintaining the illusion of a "strong dollar." That's basically what Nixon finessed. John Conally told him not to worry, we could go off the gold standard and it wasn't our problem since we were the reserve currency – it was everybody else's problem and we promptly exported our inflation all around the world. And now it has come home to roost because it was fudging and it couldn't last forever.

Much better to concede to some fix for the currency and maintain the sovereign power to devalue the dollar as necessary to maintain proper social spending. I don't understand why sovereign governments cannot see that a deficit is just the mirror image of a healthy social economy (Stephanie Kelton).

And to that end "fix" an exchange rate that maintains a reasonable purchasing power of the currency by pegging it to the long term health of the economy. What we do now is peg the dollar to a "basket of goods and services"- Ben Bernanke. That "basket" is effectively "the market" and has very little to do with good social policy.

There's no reason we can't dispense with the market and simply fiat the value of our currency based on the social return estimated for our social investments. Etc. Keeping the dollar stubbornly strong is just tyranny favoring those few who benefit from extreme inequality.

ebbflows , February 17, 2018 at 4:19 pm

Bancor. Then some got delusions of grandeur.

albert , February 17, 2018 at 2:23 pm

" Democracy is not under stress – it's under aggressive attack, as unconstrained financial greed overrides public accountability ."

I request a lessatorium* on the term 'democracy', because there aren't any democracies. Rather than redefine the term, why not use a more accurate one, like 'plutocracy', or 'corporatocracy'.
-- -- -- -
* It's like a moratorium, you just do less of it.

Paul Cardan , February 17, 2018 at 2:37 pm

What is this democracy of which you speak?

Tomonthebeach , February 17, 2018 at 4:30 pm

I had not given much thought to "Fascist" until the term was challenged as a synonym for "bully." So, I started reading Wikipedia's take on Fascismo. What I discovered was the foremost, my USA education did not teach jack s -- about Fascism – and I went to elite high school in libr'l Chicago.

Is Fascism right or left? Does it matter? What goes around comes around.

What I gleaned from my quick Wikiread was the apparent pattern of economic inequality causing the masses to huddle in fear & loathing to one corner – desperation, and then some clever autocrat subverts the energy from their F&L into political power by demonizing various minorities and other non-causal perps.

Like nearly every past fascism emergence in history, US Trumpismo is capitalizing on inequality, and fear & loathing (his capital if you will) to seize power. That brings us to Today – to Trump, and an era (brief I hope) of US flirtation with fascism. Thank God Trump is crippled by a narcissism that fuels F&L within his own regime. Otherwise, I might be joining a survivalist group or something. :-)

Synoia , February 17, 2018 at 6:32 pm

Left and right are more line circle that a line.

I view the extreme left and extreme right, meeting somewhere, hidden, at the back of a circle.

c_heale , February 17, 2018 at 7:29 pm

I always believed this too!

+1

flora , February 17, 2018 at 8:01 pm

Neoliberalism involves not the deregulation of the capitalist system, but the reregulation of it in the interest of capital. So, it involves moving from a system in which capital is regulated in the interests of stability and the many to regulation in a way that enhances capital.

Prominent politicians in the US and UK have spent their entire political careers representing neoliberalism's agenda at the expense of representing the voters' issues. The voters are tired of the conservative and [neo]liberal political establishments' focus on neoliberal policy. This is also true in Germany as well France and Italy. The West's current political establishments see the way forward as "staying the neoliberal course." Voters are saying "change course." See:

'German Politics Enters an Era of Instability' – Der Speigel

http://www.spiegel.de/international/germany/german-political-landscape-crumbling-as-merkel-coalition-forms-a-1193947.html

[Feb 19, 2018] Russian Meddling Was a Drop in an Ocean of American-made Discord by AMANDA TAUB and MAX FISHER

Highly recommended!
Very weak analysis The authors completely missed the point. Susceptibility to rumors (now called "fake new" which more correctly should be called "improvised news") and high level of distrust to "official MSM" (of which popularity of alternative news site is only tip of the iceberg) is a sign of the crisis and tearing down of the the social fabric that hold the so social groups together. This first of all demonstrated with the de-legitimization of the neoliberal elite.
As such attempt to patch this discord and unite the US society of fake premises of Russiagate and anti-Russian hysteria look very problematic. The effect might be quite opposite as the story with Steele dossier, which really undermined credibility of Justice Department and destroyed the credibility o FBI can teach us.
In this case claims that "The claim that, for example, Mrs. Clinton's victory might aid Satan " are just s a sign of rejection of neoliberalism by voters. Nothing more nothing less.
Notable quotes:
"... It has infected the American political system, weakening the body politic and leaving it vulnerable to manipulation. Russian misinformation seems to have exacerbated the symptoms, but laced throughout the indictment are reminders that the underlying disease, arguably far more damaging, is all American-made. ..."
"... A recent study found that the people most likely to consume fake news were already hyperpartisan and close followers of politics, and that false stories were only a small fraction of their media consumption. ..."
Feb 18, 2018 | www.nytimes.com

That these efforts might have actually made a difference, or at least were intended to, highlights a force that was already destabilizing American democracy far more than any Russian-made fake news post: partisan polarization.

"Partisanship can even alter memory, implicit evaluation, and even perceptual judgment," the political scientists Jay J. Van Bavel and Andrea Pereira wrote in a recent paper . "The human attraction to fake and untrustworthy news" -- a danger cited by political scientists far more frequently than orchestrated meddling -- "poses a serious problem for healthy democratic functioning."

It has infected the American political system, weakening the body politic and leaving it vulnerable to manipulation. Russian misinformation seems to have exacerbated the symptoms, but laced throughout the indictment are reminders that the underlying disease, arguably far more damaging, is all American-made.

... ... ...

A recent study found that the people most likely to consume fake news were already hyperpartisan and close followers of politics, and that false stories were only a small fraction of their media consumption.

Americans, it said, sought out stories that reflected their already-formed partisan view of reality. This suggests that these Russians efforts are indicators -- not drivers -- of how widely Americans had polarized.

That distinction matters for how the indictment is read: Though Americans have seen it as highlighting a foreign threat, it also illustrates the perhaps graver threats from within.

An Especially Toxic Form of Partisanship

... ... ...

"Compromise is the core of democracy," she said. "It's the only way we can govern." But, she said, "when you make people feel threatened, nobody compromises with evil."

The claim that, for example, Mrs. Clinton's victory might aid Satan is in many ways just a faint echo of the partisan anger and fear already dominating American politics.

Those emotions undermine a key norm that all sides are served by honoring democratic processes; instead, they justify, or even seem to mandate, extreme steps against the other side.

Advertisement Continue reading the main story

In taking this approach, the Russians were merely riding a trend that has been building for decades. Since the 1980s , surveys have found that Republicans and Democrats' feelings toward the opposing party have been growing more and more negative. Voters are animated more by distrust of the other side than support for their own.

This highlights a problem that Lilliana Mason, a University of Maryland political scientist, said had left American democracy dangerously vulnerable. But it's a problem driven primarily by American politicians and media outlets, which have far louder megaphones than any Russian-made Facebook posts.

"Compromise is the core of democracy," she said. "It's the only way we can govern." But, she said, "when you make people feel threatened, nobody compromises with evil."

The claim that, for example, Mrs. Clinton's victory might aid Satan is in many ways just a faint echo of the partisan anger and fear already dominating American politics.

Those emotions undermine a key norm that all sides are served by honoring democratic processes; instead, they justify, or even seem to mandate, extreme steps against the other side.

[Feb 19, 2018] Trundling to Trade War Econbrowser

Feb 19, 2018 | econbrowser.com

Trundling to Trade War 11 Replies With a national security fig leaf?


From NYT :

The U.S. Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas, according to proposals released on Friday.

The long-awaited unveiling of Commerce's "Section 232" national security reviews of the two industries contained global tariff options of at least 24 percent on all steel products from all countries, and at least 7.7 percent on all aluminum products from all countries.

The Section 232 provisions are described in this Econofact article , which asks a key question:

The question is whether the threats posed to national security are genuine, or merely a means of protecting domestic industries under the guise of national security.

Even granting a legitimate national security rationale, two further questions arise:

The Commerce Department announcement and two memoranda are here . I find the reports unconvincing. For instance, in the steel memo , it's noted:

The Department found that demand for steel in critical industries has increased since the Department's last investigation in 2001. The 2001 Report determined that there was 33.68 million tons of finished steel consumed in critical industries per year in the United States based on 1997 data.7 The Department updated that analysis for this report using 2007 data (the latest available) and determined that domestic consumption in critical industries has increased significantly, with 54 million metric tons of steel now being consumed annually in critical industries.

The 2017 annualized U.S. capacity is estimated at 113.3 million metric tons, production at 81.9 mmt. By this accounting -- accepting the Commerce Department's definition of critical industries -- it's not clear a Section 232 action is justified.

The stakes are high. From Bown (2017) :

Under Section 232 of the Trade Expansion Act of 1962, the President could implement a broad set of import restrictions with very little procedural oversight.1

While there are national security exceptions embodied in the WTO agreement -- in particular, GATT Article XXI -- countries have rarely invoked them, mostly out of systemic concerns. Suppose a trading partner with exporters adversely affected by such restrictions were to file a formal WTO challenge. Losing such a dispute would be bad systemically; it provides an aggrieved trading partner license to invoke the exception itself whenever it had a protectionist inclination. America's invocation of the national security exception on steel invites China to invoke it on soybeans or the European Union to invoke it on digital or Internet services. But winning such a dispute could be worse; such a ruling against the United States could provide the Trump administration with just the political justification it seeks to abandon the agreement altogether.

Further discussion at Econofact , Econbrowser (May) , Econbrowser (June) , Econbrowser (July) .

[Feb 18, 2018] Unfortunately, These Atrocities Aren't Going to Stop by Patrick J. Buchanan

Those shootings is a sign of the crisis of the US society caused by neoliberalization. Collapse of moral norms. When a person is assumed to be a wolf to other person and greed is good.
Notable quotes:
"... it seems a common denominator of the atrocities to which we have been witness in recent years is that the perpetrators are nobodies who wish to die as somebodies. ..."
Feb 18, 2018 | www.theamericanconservative.com
In a society of advanced decomposition and moral depravity, these perpetrators are nobodies who wish to die as somebodies

.... ... ...

In his case, the conscience was dead, or was buried beneath hatred, rage or resentment at those succeeding where he had failed. He had been rejected, cast aside, expelled. This would be his revenge, and it would be something for Douglas High and the nation to see -- and never forget.

Indeed, it seems a common denominator of the atrocities to which we have been witness in recent years is that the perpetrators are nobodies who wish to die as somebodies.

... ... ...

Some of these individuals who seek to "go out" this way take their own lives when the responders arrive, or they commit "suicide by cop" and end their lives in a shootout. Others, Cruz among them, prefer to star in court, so the world can see who they are. And the commentators and TV cameras will again give them what they crave: massive publicity.

And we can't change this. As soon as the story broke, the cameras came running, and we watched another staging of the familiar drama -- the patrol cars, cops in body armor, ambulances, students running in panic or walking in line, talking TV heads demanding to know why the cowards in Congress won't vote to outlaw AR-15s.

... ... ...

Another factor helps to explain what happened Wednesday: We are a formerly Christian society in an advanced state of decomposition.

Nikolas Cruz was a product of broken families. He was adopted. Both adoptive parents had died. Where did he get his ideas of right and wrong, good and evil? Before the Death of God and repeal of the Ten Commandments, in those dark old days, the 1950s, atrocities common now were almost nonexistent.


Steve S. February 16, 2018 at 4:13 pm

Here's a twist on the commentary: Not every ill-formed, life-hating psychopath in this country can go to Harvard School of Law, the halls of Congress or the Pentagon. Some are stuck in the lower classes.

The past, callous destruction by drones of whole wedding parties in Waziristan AND their rescuers raised no eyebrows under the Obama administration yet we we are appalled at a dozen and a half Americans getting wasted. When a culture shows that it does not value life, everyone 'gets it' eventually and incorporates that view into their own lives and communities. Ours is a culture of death. Banning guns won't change that. The psychopaths who own our media establish the narrative of what our culture is. The narrative is nihilism.

EarlyBird , says: February 16, 2018 at 6:52 pm
This has much to do with our culture of narcissism and spiritual hollowing out. It is the idea that I am The Most Important Human On Earth, the center of the universe, and any insult or injury to me simply can not be tolerated.

Narcissists are fragile. They have no coping mechanism when life doesn't give them what it "should" give them, or metes out tragedy or sadness, as it has a way of doing.

I am reminded of Christopher Dorner, the ex-LAPD officer who killed his instructor and his wife after having failed an exam, and going on a shooting spree, ending up being killed by SWAT in a cabin in the mountains above LA. He was not "insane." The letter he left behind exposed him as a narcissist who simply could not bear the insult to his "honor" for having been failed on an exam he had the "right" to pass.

I doubt this Cruz monster is a howling lunatic, either, but a spiritually dead ego-zombie whose only sense of meaning comes from anger and a sense of not being granted all he wanted and "deserved."

James , says: February 16, 2018 at 8:29 pm
I've read that there were enough red flags surrounding Nicholas Cruz to fill up Moscow's Red Square on parade day. In the face of multiple warnings, local law enforcement, the FBI, and the DOJ all failed to perform their due diligence in preventing this miscreant from falling through the cracks. You can have all the laws you want, stacked high and thick, but if you're not going to follow through on them, then what is the point?

You can ban guns and abolish the second amendment, but that will not address the moral sickness that is permeating the culture and giving shade to the depraved heart of human darkness or the sense of despair and hopelessness that life is at its material root, meaningless and hollow. We insist on calling out racism, bigotry, sexism, and violence, but if not grounded in God those values are not grounded in anything other than subjective emotion and preference. They are no more right, or good, or true than any inverse value and enforced only by those with the bigger gun. Indeed, this is the logical conclusion of progressive atheism with all its secular post-modern, post-truth, post-ethics moral relativism. Each person becomes a law unto themselves. And once we start shredding the Constitution in the name of safety and welfare, what then? Some slippery slopes are real. The only safe place without crime is a police state also without freedom of thought, conscience, expression, or movement.

Germany was the most educated country in Europe prior to WW 2. In the 19th century, European universities had driven God from their classrooms and were expounding the atheistic ideologies of Marxism, socialism, communism, anarchism, nihilism, Darwinism, etc In the slow march of time, these ideas came to fruition in the 20th making it the bloodiest century of the common era.

It was faith in God that gave us science, the enlightenment, and the foundation of democratic values. It was faith in God that ended slavery, racism, fought for civil rights, and founded almost all of our institutions of higher learning. It was faith in God that grounded our belief in human dignity and the value of life. Sure, great evil has been done by hypocrites in the name of Christianity but who is also first on the scene of a natural disaster with aid and relief, or working for improved medical care and clean water in third world countries, or working to end human trafficking? It is the true Christ followers who put their faith where their mouth is not some slimly politician or charlatan wearing a Christian mask. I would argue that America has become one of the most Biblically illiterate people in western civilization because we have pushed god from the public square, the school room, the university campus, much of the government and the military, as well as the board room, concomitant with an agenda to make those who believe in God a cultural exotica a bunch of anti-reason, anti-science, and anti-intellectual retrogrades to be treated with skeptical curiosity if not outright suspicion and hostility. Media touts every negative example and ignores all the good that doesn't fit the narrative.

We do this with great peril because we've seen what happens when this is done in history. The arc of history that visited ruin on Europe will surely bring it here in a hundred years' time or sooner. We're on the same path.

Geoff Guth , says: February 16, 2018 at 8:32 pm
Pearlbuck, who is going to pay for your school vaults? Republicans?

Do you seriously think Donald Trump is going to give back any of his tax cut to make schools safer?

Well, let's ask our President, shall we? Let's see. 9.2 billion in cuts for the Department of Education . Well that's sure going to fund your school vaults.

You strip mine the schools to hand assets to vultures and then blame the schools for not being secure enough. Rightist logic!

Firearm homicide rate per 100,000 in :

France: 0.21
USA: 3.60

That's 17 times as many people murdered in the US by firearms as France. 17 freaking times.

But by all means, carry on with your WHATABOUT WHATABOUT WHATABOUT!!!!!!!11111!!!!

JeffK , says: February 17, 2018 at 7:06 pm
I am a hunter and gun owner. I have more than one gun. I am not anti-gun. I even own an AR-style rifle.

I believe mass shooting atrocities will never go away completely. However .. I believe the onus of proposing a viable solution to REDUCE the number of mass shootings rests squarely on the Republican party and the NRA.

They are always the coalition of 'We offer our sincere prayers and condolences', 'Now is not the time to politicize this tragedy', and 'That shooting last week is old news, time to move on'.

This is a warning to The Republicans and the NRA. I believe the American public has just about had it with lack of legislation to address this horrible problem. The Republicans must develop proposals for real solutions. Some of these proposals will not sit well with a part of it's base. So be it.

These proposals must be sold to all American citizens and be followed up with legislation that is effective on achieving what was proposed. The Democrats will certainly join if workable solutions are proposed.

Right now The Democrats are incredibly energized. The last thing The Republicans need at this time is to energize them even more, and turn even more Independents against them. They also should be very concerned about stirring up the 50% of eligible voters that do not vote. And they should be really concerned about the Republican brand with the 18-25 year olds. Among them the Republicans are increasing seen as the party that caters to unreasonable gun nuts, and not the population in general.

Howlvis , says: February 17, 2018 at 7:43 pm
Pat is sinking deeper and deeper into dementia. Or he is simply a moron. No other developed country has this level of mass shootings, no other developed country has a rate of gun violence anywhere near what we have in this country. And yet not a word about reasonable gun restrictions, instead Pat the Righteous tells us about moral decay. If pornography can be regulated, restricted or banned, why not AK-15s?

[Feb 18, 2018] In Raging Tweetstorm, Trump Says Russians Laughing Their Asses Off, Mocks Leakin' Monster Schiff Zero Hedge

Feb 18, 2018 | www.zerohedge.com

Zhaupka Sun, 02/18/2018 - 14:08 Permalink

PSYOPS are interesting.

GENERAL PSYOPS:
PSYOPS control U.S. Citizens who have nothing to lose; yet, U.S. Citizens deeply believe they have everything to lose when the only "objects" they truly own in this world is debt.

Look Around - Which Class were you birthed?

Which Class shall you and your family of relatives die?

Labor - Lower Class - Working Class - Get Paycheck / Job Class
Lower Lower Class - Retail / wholesale workers / laborers
Lower Middle Class - engineers, computer workers, doctors
Lower Upper Class - C-Level Managerial workers, sports celebrities, High-Net-Worth workers, etc.

Trading - Middle Class - Business Class - Get a Deal Class
Lower Middle Class - Owns business in an industry
Middle Middle Class - Operates 1 or more business in an industry
Upper Middle Class - Operates 1 or more businesses in 1 or more industries

Leisure - Upper Class - Investor Class - Let's Go Have Fun! Class
Lower Upper Class - New Billionaires.
Middle Upper Class - Multi-Billionaires invested in or own vast businesses in 1 or more vast industries
Upper Upper Class - Kings / Queens, Owners of Vast Tracts of Land on The Planet, Wealthy Post-Empire Families,

Goals of Working Class: Job, House and Car - loans, credit, debt for basics: food, shelter, clothing, transportation.

Goals of Trading Class expansion of business.

Goals of Leisure Class Enjoy Human Life. "Let's take the personal jets out for a spin today. Meet you at [Insert place on planet]."

Middle Classes (Business) and Upper Classes (Leisure) give "Vacations" and Time Off to Lower Labor Classes.

Working Classes do not have the money to associate, travel, and dine with the Trading Class (Middle).

Trading Classes do not have the money to Empire Trot with the Leisure Classes.

Income has co-relation neither to wealth, power, nor prestige. The vast majority of wealthy have little or zero income.

Common in debt U.S. Citizens stand back gawking at the great great-great-great-great-grand children of the Middle Class and Upper Class Families who have re-bequeathed and re-inherited family wealth through the centuries enjoying a life of leisure that for each generation the Common U.S. Citizens have never moved up in family wealth. General PSYOPS.

SIMPLE PSYOPS:
2005, prior to O elections all U.S. governments were directed by federal law to disclose their health insurance payments, fees, etc. to the U.S. Federal Government. U.S. governments Employees were also given a copy stating exactly how much the State, County, Town, City is paying for the employee. O is elected. Look at the amount spent. Nationalized Health Insurance. Simple PSYOPS.

SOPHISTICATED PSYOPS:

Key: Any criticism moving this Political Operative Donna Brazille around is considered racist.

PBS and NBC, ABC, SeeBS (CBS), etc. studios featured Donna Brazille doing the political-talk show circuit.

Donna Brazille, Editor of Atlanta newspaper was shown, based on after show retakes, cameo's, script tweeking, etc., to be clear minded, fair, and articulate.

Donna Brazille had a Social Debt and Final Payment Due.

The Clintons collected Final Payment during the Presidential Elections from Donna Brazille who made payment by smuggling U.S. Presidential Debate Questions to The Clintons.

PSYOPS is interesting and work especially well with a small group of wealthy who can hire and pay for PSYOPS either in the immediate term or longer term as with Donna Brazille.

Marketing is PSYOPS all day.

United States President Trump is Not:
an ex-bureaucrat
an ex-lawyer
An ex-government employee
Not Poor <- Very Important as Big Cash is involved.

United States President Trump has a marked distain for both Factions of the State Political Party – republicans and democrats – and wonder if any other U.S. Citizens have the same feelings and thoughts.

Trump came forward as an American United States Citizen.

Democrats gave all the Benefits the Labor Unions fought for during the 1930's and 1940's to Illegal Aliens.

Republicans gave all the industry and jobs to foreign countries and imported pre-trained foreigners into American Jobs.

When Trump threatened to watch every polling station in the United States, if he had to, to make sure no voter fraud, at least during the one and only election he participated, State Political Party faction's democrats and republicans laughed.

The State Political Party Factions colluded to Stop Trump while running the usual rigged fake fraudulent election.

The usual United States Media Channels using the United States National Emergency Broadcast System entrusted to individual caretaker / quasi-owners to manage and maintain premises, power level, and towers, began the usual selling broadcast time to the highest bidder. The usual war over the airwaves time and again. The Hearts and Minds Meme is the warring struggle between republicans and democrats to control United States Media Channels broadcasts before, during, and after a United States Election. The usual.

24/7 PSYOPS using the owners of ABC, BBC, NBC, CBS, PBS, NPR, The New York Times, The Washington Post, The Los Angeles Times, The Chicago Tribune, Reuters, U.K. Guardian, Associated Press, etc. broadcast State Party PSYOPS obfuscating Trump is winning, announced No Path to 270, and broadcast Common Citizens Protesting.

The Clintons had the White Females and the new meme: People of Color.

United States Media Channels using the United States National Emergency Broadcast System (EBS) showed White males violently protesting TRUMP one day and Black Males shown violently protesting TRUMP another day to PSYOPS Cobble Black and White Males as kin, long shot, similar voters. Don't say it, show it, persuasively.

Republicans all signed Pledges declaring in Media Channels they shall not vote for Trump and encouraged everyone to do the same. Democrats against Trump is a given. PSYOPS. Political PSYOPS.

After the election, United States President Trump asked to examine the voting rolls. The State Political Party (r&d) denied the request threatening using courts to tie up the matter and cause great usd expense through the Corrupt U.S. Judicial. SOPHISTICATED PSYOPS.

The Entire United States is Corrupt.

1. The Lawyer Amended Constitution, Bill of Rights, Declaration of Independence - the originals of which are all now in the dustbin of history - have successfully created these Criminal Enterprises according to the Founders:
the Corrupt House of Representatives,
the Corrupt U.S. Senate,
the Corrupt U.S. Judicial,
the Corrupt U.S. Military and its Corrupt 17 Intelligence Agencies,
the Corrupt U.S. Media (except for the 5 Independent newspapers that did support U.S. President Trump),
the Corrupt For Sale Ivy League "there is a tailored study FOR SALE PROVING [insert desire outcome here]. . . " Universities,
the Corrupt States, the Corrupt Counties, and the Corrupt Cities,
the Corrupt Republican Political Party, and
the Corrupt Democrat Political Party.

U.S. Political Government "Investigations" show the Perp Walk: Perjury after Perjured Testimony in U.S. Supreme Courts, U.S. House of Representatives, Senate Testimony. Fraud all. Only the most frightened horrified have cognitive dissonance belief remaining in U.S. Federal Government(s).

Overthrowing Governments is not done by those who work, commoners posting on internet websites, walking the streets with Pitchforks, Fire and Ropes, Protesting, carrying Placards, placing Posters, and Marching with Banners; those people in Life Long Debt Servitude (hovel&cart/house&car) usually come to gawk at the result.

Overthrowing Governments is done by extremely wealthy for differing reasons as in the Overthrowing the Government of Britain/ England / U.K. in the New World - the Free World - during the late 1700's Early 1800's with Thomas Jefferson.

Thomas Jefferson knew Representative Government eventually becomes corrupt; a New Lawyered Governed Tyranny is formed.

Lawyered Representative Government Corrupts; Absolute Lawyered Representative Governments Corrupts Absolutely.

When Citizens are indebted to, fearful of, dependent on, lied to, [INSERT YOURS HERE], with government guns pointed at U.S. Citizens and Surveillance by their "elected" Representatives for each AOR using U.S. Militarized Collusive State, County, and City First Responders Type Government Patrolling Enforcement, a New Type of Governed Tyranny is formed (see 1 afore)

All U.S. Citizens are given a Legal Right and a Legal Duty.

When Lawyered Representative Governments do not do the will of the people (hint: U.S.).

". . . it is their right, it is their duty, to throw off such Government."
- Thomas Jefferson, Declaration of Independence, 2nd paragraph

The world is very different than ZH Heavy and MSM disclose.

Recent and periodic school shootings are the work of the two U.S. Political Factions democrats and republicans PSYOPS in the U.S. Political Party System.

Disclosing the real story could be considered Top Secret National Intelligence information especially with the fake social media account: Zhaupka.

- Viva De Zhaup!

[Feb 17, 2018] Russia condemned and defined as the enemy of America with laughably little evidence (effing Facebook posts being about the extent of it) .... not a word about JEWISH MONEY controlling the entire political system in the USA. When Netanyahu gets 29 standing ovations from Congress should that not have triggered an FBI Investigation

Taking oil price to 30th or 40th is a strategic goal of the USA in relation to Russia. Listen at 3:30.
Notable quotes:
"... Appeasing interview with a shockingly cheap incompetent former CIA head Woolsey. If this man seriously represents the intellectual level of the CIA, then the USA will implode even faster than in ten years. ..."
"... You are exactly right. U$ politicians are uninformed, stupid, detached from reality, selfish and they think like schoolyard kids do. ..."
"... They are the product of the US society as a whole. ..."
"... Craig Murray nailed this issue stone dead for all time a few years ago, when he wrote:"[neo]liberal interventionism, the theory that bombing brown people is good for them". ..."
"... In the former The Ukraine, the Jewish Quisling oligarch dictator, Poroshenko, has been appointing foreigners to positions of power (SackOfShvilli is but one). He supported this by stating: "Ukrainians are too corrupt to rule themselves." When will we in America hear such a statement from our leaders to justify the appointment of Jews and paid Judaeophiles to all positions of power? ..."
"... I'm just waiting for Yevgeny Prigozhin to hold a press conference in Russia to claim that Hillary Clinton paid him to run the Internet Research Agency to besmirch her opponent- watch the fireworks :) It's all a hall of mirrors. ..."
"... The Internet Research Agency couldn't have possibly been more ineffective, which points to it's main purpose being to besmirch Trump (more more likely it was just an unimportant hobby of Prigozhin). ..."
"... Sure the United States has, they have been doing it since 1953 with the overthrow of Iran, to as recently as 2012 Russian Election, 2014 Ukraine Election, the UK referendum on 23 June 2016 on Brexit and currently trying to overthrow it this year. These are just a few and there is a very long list of other countries also. The United States in now in Russia and Hungry today meddling it their elections. Got to get the right people in office so they will cow-tow to the United States. ..."
"... What an admission! trump doesn't want more drilling for oil to Americans to use. It is for export and for foreign interference ..."
"... and if the price of oil would go down to 30/40$ that would make a unhappy input and so would be the saudis and you fracking industry would go down the toilet and thy will drag the banks with them. What a moron. And US oil companies would like that alot too ..."
Feb 17, 2018 | theduran.com

Gano1 , February 17, 2018 10:31 AM

The USA has lost all morality, they are so hypocritical it is risible.

Patricia Dolan , February 17, 2018 10:25 AM

What Russian expansionism??? Look at the US expansionism..........get a grip!

Ann Johns Patricia Dolan , February 17, 2018 2:51 PM

Another tiresome, butthurt yank/wank? Between the new One Belt, One Road Chinese initiative, the Russians taking control of ME oil production and the fact that america has NO answers to help it's declining empire, it would seem to the non-partisan observer that america is well and truly f***ed. You must be talking about their debt expansionism, $20 TRILLION and rising by the second.

Vera Gottlieb Patricia Dolan , February 17, 2018 2:29 PM

US expansionism...really? Where? 😜

Mario8282 Vera Gottlieb , February 17, 2018 2:58 PM

Syria? Libya? Yemen? Africa, Afgh...

Vera Gottlieb Mario8282 , February 17, 2018 3:00 PM

And you left out Latin America...

Mario8282 Vera Gottlieb , February 17, 2018 3:05 PM

This is why I left with the dots... The list would end up with America itself (an endless spree of false flags and deception schemes).

Patricia Dolan Mario8282 , February 17, 2018 6:11 PM

Thank you Mario......let's not forget Ukraine, Kosovo, Bosnia, the entirety of eastern Europe, the entirety of northern Africa, Rwanda, the Congo, Venezuela, Chili, Guatemala, Panama, Jeeeeeeeze etc......

Patricia Dolan Vera Gottlieb , February 17, 2018 6:07 PM

get a grip......and turn your TV off!

Terry Ross Patricia Dolan , February 17, 2018 6:08 PM

'twas sarcasm Patricia.

Patricia Dolan Terry Ross , February 17, 2018 6:18 PM

I guess the WINKS need to be LARGER!!!! LOL

ThereisaGod , February 17, 2018 10:05 AM

Russia condemned and defined as the enemy of America with laughably little evidence (effing Facebook posts being about the extent of it) .... not a word about JEWISH MONEY controlling the entire political system in the USA. When Netanyahu gets 29 standing ovations from Congress should that not have triggered an FBI "Investigation"? Nah ... nothing happening there. It is breathtaking that THIS is the Alice-In-Wonderland world we inhabit.

Ton Jacobs, Human Guardians , February 17, 2018 10:02 AM

Appeasing interview with a shockingly cheap incompetent former CIA head Woolsey. If this man seriously represents the intellectual level of the CIA, then the USA will implode even faster than in ten years.

christianblood Ton Jacobs, Human Guardians , February 17, 2018 12:32 PM

(...If this man seriously represents the intellectual level of the CIA, then the USA will implode even faster than in ten years...)

You are exactly right. U$ politicians are uninformed, stupid, detached from reality, selfish and they think like schoolyard kids do.

Jesse Marioneaux christianblood , February 17, 2018 12:43 PM

They are the product of the US society as a whole.

christianblood Jesse Marioneaux , February 17, 2018 12:57 PM

They indeed are! U$A! U$A! U$A!

tom , February 17, 2018 11:14 AM

Craig Murray nailed this issue stone dead for all time a few years ago, when he wrote:"[neo]liberal interventionism, the theory that bombing brown people is good for them".

journey80 , February 17, 2018 12:37 PM

Yeah, that's hilarious. Join the murdering creep in a giggle, Laura, that's cute. Here's a global criminal who should have been hung years ago for crimes against humanity. No one in their right mind would treat this creep with anything but contempt and horror, let alone find him funny.

Franz Kafka , February 17, 2018 12:17 PM

In the former The Ukraine, the Jewish Quisling oligarch dictator, Poroshenko, has been appointing foreigners to positions of power (SackOfShvilli is but one). He supported this by stating: "Ukrainians are too corrupt to rule themselves." When will we in America hear such a statement from our leaders to justify the appointment of Jews and paid Judaeophiles to all positions of power?

journey80 Franz Kafka , February 17, 2018 12:34 PM

We don't need to hear it, we're living it.

Franz Kafka journey80 , February 17, 2018 3:33 PM

My profound and sincere condolences. You are getting the 'Democracy Treatment' by the West. I hope some of you survive to tell the tale and take revenge.

Franz Kafka , February 17, 2018 12:09 PM

Are those ears or bat-wings? WOW! Yet another Jewe, pretending not be be. I guess he would say that the USA murdered all the Indians and enslaved Africans 'for their own good' as well.
Talmudo-Satanism is the pernicious underlying ideology of the people who have taken over, not just the USA, but, lets face it, the entire West.

Vera Gottlieb , February 17, 2018 2:28 PM

What a bunch of ingrates we are...not appreciating all that the CIA is doing for us. We must thank them instead of complaining.

Trauma2000 , February 17, 2018 5:30 PM

Lets not forget that the U.$.A. meddled in Australia's election of the Whitlam Government. (And several governments there after as soon as they realised they could get away with it an nothing would happen to them). The United States are a bunch of sick puppies; really sick puppies the way they have treated Australia.

So much for being allies. With allies like the United States you don't need enemies (Unless the U.$. doctors them up for you to force you to pay them more money for weapons and protection).

And it makes me sick that so many 'naive' people around the world keep falling for the SH*T that comes out of their mouths.

When dealing with the United States there are a few rules to follow. (Apologies to the innocent Americans out there but 'they' allow their government to do some unspeakable horrors to the world.)

And that goes for the entire planet no matter who the United States is speaking to.

End of story.

Shue Trauma2000 , February 17, 2018 5:51 PM

Worst part is the our Gov can't think ahead, if they keep antagonising China on behalf of the Seppo's China will eventually pull their mineral imports and our economy will crash overnight.

HappyCynic , February 17, 2018 4:31 PM

Yes, nobody doubts that the US interferes with elections in other countries - we're the good guys, so this is ok :)

I'm just waiting for Yevgeny Prigozhin to hold a press conference in Russia to claim that Hillary Clinton paid him to run the Internet Research Agency to besmirch her opponent- watch the fireworks :) It's all a hall of mirrors.

The Internet Research Agency couldn't have possibly been more ineffective, which points to it's main purpose being to besmirch Trump (more more likely it was just an unimportant hobby of Prigozhin).

John R Balch Jr , February 17, 2018 6:31 PM

Sure the United States has, they have been doing it since 1953 with the overthrow of Iran, to as recently as 2012 Russian Election, 2014 Ukraine Election, the UK referendum on 23 June 2016 on Brexit and currently trying to overthrow it this year. These are just a few and there is a very long list of other countries also. The United States in now in Russia and Hungry today meddling it their elections. Got to get the right people in office so they will cow-tow to the United States.

Graeme Pedersen , February 17, 2018 6:11 PM

I believe john Key was sent from the U$A (Merrill Lynch) to ruin our economy in New Zealand as well.

janbn , February 17, 2018 5:37 PM

What an admission! trump doesn't want more drilling for oil to Americans to use. It is for export and for foreign interference.

Aidi Deduction , February 17, 2018 4:51 PM

Frederick the Great concluded that to allow governments to be dominated by the majority would be disastrous: "A democracy, to survive, must be, like other governments a minority persuading a majority to let itself be led by a minority."

General Kreeg , February 17, 2018 4:13 PM

Russian Trolls are all of a sudden the Russian Gov't.

fredd , February 17, 2018 3:18 PM

and if the price of oil would go down to 30/40$ that would make a unhappy input and so would be the saudis and you fracking industry would go down the toilet and thy will drag the banks with them. What a moron. And US oil companies would like that alot too

Mario8282 , February 17, 2018 2:56 PM

...and the US bombed half of the world's countries for their own good too. US made Libya a slave market for humanity's good as well. Oboomer even got the Nobel Peace Prize for it.

K Walker , February 17, 2018 2:55 PM

I would be greatly relieved if the USA government merely tweeted instead of invading and indulging in regime change.

Kevin S , February 17, 2018 12:55 PM

Talk about the pinnacle of hypocrisy!

[Feb 17, 2018] If is difficult to time financial market

Note that this comment was made two years ago
some day Edwards will be right but people who followed his advice in 2016 probably are not that happy.
Notable quotes:
"... The Neo-Liberal ideal is unregulated, trickledown Capitalism. We had unregulated, trickledown Capitalism in the UK in the 19th Century. We know what it looks like. ..."
"... Immense wealth at the top with nothing trickling down, just like today. The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour. To see the wealthy as generous benefactors would be to ignore the lessons of history. It was collective labour movements that got the majority a larger slice of the pie, again well documented historically ..."
"... Neo-Liberalism has smashed the power of collective Labour movements and everyone wonders why wages don't rise. ..."
"... The Neo-Liberal ideology has swept the world and now its inherent flaws are coming home to roost. It was carefully vetted by the rich and powerful to ensure it looked after their interests, which unfortunately is the reason it is just so wrong. ..."
Feb 17, 2018 | discussion.theguardian.com

"Can it get any worse? Of course it can," said Edwards, the most prominent of the stock market bears – the terms for analysts who think shares are overvalued and will fall in price. "Emerging market currencies are still in freefall. The US corporate sector is being crushed by the appreciation of the dollar."

The Soc Gen strategist said the US economy was in far worse shape than the country's central bank, the US Federal Reserve, realised. "We have seen massive credit expansion in the US. This is not for real economic activity; it is borrowing to finance share buybacks."

Edwards attacked what he said was the "incredible conceit" of central bankers, who had failed to learn the lessons of the housing bubble that led to the financial crisis and slump of 2008-09.

"They didn't understand the system then and they don't understand how they are screwing up again. Deflation is upon us and the central banks can't see it."

Edwards said the dollar had risen by as much as the Japanese yen had in the 1990s, an upwards move that pushed Japan into deflation and caused solvency problems for the Asian country's banks. He added that a sign of the crisis to come was the collapse in demand for credit in China.


OrdinaryFool , 15 Jan 2016 06:34

The Federal Reserve did print $ 4 trillion since 2008. Classic economists expect inflation, since the money supply outstrips significantly the goods & services provided. However, there is no inflation whatsoever, on the contrary – signs of deflation.

How come?? Where did the money go??

There could have been inflation if, and only if, the money went to ordinary people, who would then start paying more for goods & services provided.

However, since the money did not go to ordinary people, and they have less money to spend, we see no inflation and even deflation.

Then, where is the money?

Banks got the money and put it all in the stock market.

Now we have an extra $ 4 trillion invested in stock market , while ordinary people have the same purchasing power as it was before 2008. In other words, against the same goods & services that people can purchase there are an extra $ 4 trillion in the stock market. However, businesses can not sustain inflated share price without massive increase in the demand for their goods and services. As there is no increase in the demand due to less purchasing power of ordinary people, the ONLY thing that can be corrected is the share price. Businesses should be happy if it goes down by 50%, as it can easily go much further down.

So, the advice from RBS is correct.

SELL, SELL, SELL as quickly as possible in order to get something (anything) now, as later it might come to getting nothing.

soundofthesuburbs -> soundofthesuburbs , 15 Jan 2016 04:02

And more ..

The Neo-Liberal ideal is unregulated, trickledown Capitalism. We had unregulated, trickledown Capitalism in the UK in the 19th Century. We know what it looks like.

1) Those at the top were very wealthy
2) Those lower down lived in grinding poverty, paid just enough to keep them alive to work with as little time off as possible.
3) Slavery
4) Child Labour

Immense wealth at the top with nothing trickling down, just like today. The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour. To see the wealthy as generous benefactors would be to ignore the lessons of history. It was collective labour movements that got the majority a larger slice of the pie, again well documented historically.

Neo-Liberalism has smashed the power of collective Labour movements and everyone wonders why wages don't rise.

Doh ......

soundofthesuburbs , 15 Jan 2016 03:25
The Neo-Liberal ideology has swept the world and now its inherent flaws are coming home to roost. It was carefully vetted by the rich and powerful to ensure it looked after their interests, which unfortunately is the reason it is just so wrong.

Neo-Liberal economics believes in the polar opposite of reality in most cases and is just wrong in many others.

1) It is based on supply side, trickledown economics. There was an approximation to this when bank credit was almost un-limited prior to 2008. Now we are seeing the problems with lack of demand everywhere and businesses won't invest until they see a rise in demand, they don't believe the supply side nonsense either.

Every system is designed to benefit those that put it in place. To think anyone is going to design a fair system would totally ignore human nature. Capitalism is the dominant system today because it is works on greed and self-interest (human nature). Every social system since the dawn of civilization has been set up to support a Leisure Class at the top who are maintained in luxury and leisure through the economically productive, hard work of the middle and lower classes.

(The Theory of the Leisure Class: An Economic Study of Institutions, by Thorstein Veblen. The Wikipedia entry gives a good insight. It was written a long time ago but much of it is as true today as it was then. This is the source of the term conspicuous consumption.)

In the UK we call our Leisure Class the Aristocracy and they have been doing very little for centuries.

The UK's aristocracy has seen social systems come and go, but they all provide a life of luxury and leisure and with someone else doing all the work.

Feudalism - exploit the masses through land ownership
Capitalism - exploit the masses through wealth (Capital)

Today this is done through the parasitic, rentier trickle up of Capitalism:

a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.

The system itself provides for the idle rich and always has done from the first civilisations right up to the 21st Century.

For 5,000 years the rich have been taking from the poor, now there is some flow the other way they don't like it, they don't like it at all.

Trickledown, are they insane?

2) No differentiation between "earned" and "unearned" wealth. The parasitic, unproductive, rentier, FIRE (finance, insurance, real estate) sectors are destroying the real economy. Michael Hudson "Killing the Host"

3) Ignores the true nature of money. One of the fundamental flaws in the economists' models is the way they treat money, they do not understand the very nature of this most basic of fundamentals. They see it as a medium enabling trade that exists in steady state without being created, destroyed or hoarded by the wealthy. They see banks as intermediaries where the money of savers is leant out to borrowers. When you know how money is created and destroyed on bank balance sheets, you can immediately see the problems of banks lending into asset bubbles and how massive amounts of fictitious, asset bubble wealth can disappear over-night.

When you take into account debt and compound interest, you quickly realise how debt can over-whelm the system especially as debt accumulates with those that can least afford it.

a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.

Add to this the fact that new money can only be created from new debt and the picture gets worse again.

With this ignorance at the heart of today's economics, bankers worked out how they could create more and more debt whilst taking no responsibility for it. They invented securitisation and complex financial instruments to package up their debt and sell it on to other suckers (the heart of 2008).

Neo-Liberal dogma is so wrong it could never work.

It did function well for a while by allowing bankers to flood the world with almost unlimited supplies of money through debt.

Debt just borrows from the future to spend today and the repayments are now due.

It's success was a debt based illusion.

Altricio -> somalipirate , 15 Jan 2016 03:13
Wake up to reality!
Altricio -> bgoat1 , 15 Jan 2016 03:00

Serfs were the lowest social class of the feudal society. Serfs were different from slaves. Serfs could have property. In most serfdoms, serfs were legally part of the land, and if the land was sold, they were sold with it.

Are they not Serfs to Government and Debt.......?

And Australia ... a former convict colony of England will become a convict colony of Australia.
Before, ... POME ... anytime soon, ... Prisoner of Mother China.

Marvellous!

indigoian -> pureist , 15 Jan 2016 02:15
no, your a hypocrite for pretending that you would love to live through a fall of civilization -- in reality, you would be staining your trousers and begging for a return to the past.

and point out where i said the system was equitable and fair -- reading comprehension not your strong suit, eh? That is ok - the post apocalyptic world that you feign a desire for will probably still need shoe shiners.

Stephen Moore -> ID1566298 , 15 Jan 2016 01:54
Agreed. We certainly could - but there is no point increasing wages or social payments if it immediately translates into higher living costs in excess of income gains.

Reason calls for the elimination of windfall profit and economic rent - the core of present-day capitalism and centuries of oppression. A tough nut to crack unless and until the whole mad house of cards self-destructs.

Ironically, the elimination of windfall profit and economic rent is also the core of the proffered moral justification for unfettered markets.

Sick world.

PearsonGooner -> soundofthesuburbs , 15 Jan 2016 01:23
They are not useless, they own helicopters that park on their 120m yachts moored in Monte Carlo.
It's not about you. Pass me the caviar
PearsonGooner -> TheYabbaTheYabbaHey , 15 Jan 2016 01:15
Not mathematics. Economics calculations always have a random variable or two. Maths and nature have variables, nor random ones
Tanya1980s -> Matthew Head , 14 Jan 2016 19:22
I was playing on the term 'man in the street', and being literal at the same time. Flat not a house (above the street), owned outright (not average - esp for my age), and half a family - that was kind of a joke/reference to divorce/only ever having one income.
Alex Rich -> David_Lindsay , 14 Jan 2016 16:20
Like the Nobel laureates in Economics who ran Long Term Capital Management into the ground? Beware of what you wish for!
James Mooney -> THKMTL , 14 Jan 2016 16:00
Well, they've already established a virtual Fourth Reich over the EU ;')
James Mooney -> Robert Challen , 14 Jan 2016 15:57
This is true. All complex systems cycle back and forth unless stressed to the point where they break irrevocably. Then they must be replaced in toto since repair is not possible. Homeostasis is the norm - but in the end, everything dies.
James Mooney -> John Smith , 14 Jan 2016 15:55
Well, the media is owned by only a few companies, in turn owned by the very wealthy, so they do have to put on a pretense of impartiality and truth-telling. But it's only a pretense.
James Mooney -> Michael J Oxley , 14 Jan 2016 15:51
I don't know if God exists, but looking at Washington I'm pretty sure the Devil exists ;')
James Mooney , 14 Jan 2016 15:47
Well, he is a pessimist. The time to run for the exits is when even the optimists sound the alarm ;')
Texada , 14 Jan 2016 15:19
I think you have to look at the credibility of RBS as an institution and Societe Generale. Neither are mainstream investment banks. The main risk is seen as the deflationary impact of the rise in the US $ on emerging market economies. Terms of trade in the US will be effected leading to a depreciation in the US currency and a rebalancing. By mid-year the oil market is expected to rebalance. There are too many Jeremiah's around at the moment.
LeftRightParadigm -> David_Lindsay , 14 Jan 2016 14:51
How about we just have loyal leaders who act in the interest of the majority of citizens who voted them in. That would be nice.
LeftRightParadigm -> Jonny21 , 14 Jan 2016 14:50
If you're on the inside of the banking world, most likely. Are you? This couldn't come at a worse time though really, could it? You know with the world's nations at each others throats all the time.
LeftRightParadigm , 14 Jan 2016 14:46
Looks like all that Iraqi oil is finally paying off! I'm sure the warmongers in our government are proud of themselves. Of course the elite will make money out of another financial crisis: buying up bust companies, worthless stocks and shares and biding their time until the recovery when they will make billions.

Back in the real world, this is very worrying for genuine businesses. In 2008 we lost a lot of big time companies and the impact on small businesses was even worse. Financial insiders are saying this may be worse than the 1930's. Personally I think if we do have another crash, we should stop printing money and recall many of the notes in circulation to prevent this never ending inflation. Quality of life is important and the poorest people are losing out. Let's help our people, not kill them off.

InTheColonies -> RobWilsonLondon , 14 Jan 2016 12:13

Mortgage debt was a major feature of the US and Uk crisis but actually the reason the crisis has rolled on is because of sovereign debt issues.

A tad assertive, methinks. As I understand it, the problem, of massive and unsustainable private debt, known popularly as "bad debt", was not solved at all but rather "salved" by massive government borrowing. The problem remains.

Your original point was that debtors are to blame for being greedy and not taking responsibility. This is untrue

Assertive again. Greed is clearly driving Buy To Let, etc. It is so obvious.

In the ancient world where people held similar views to yourself people unable to pay their debts were forced into slavery.

So the logical extension of your views would be some form of modern servitude.

Logical? Logical? I think not.
bgoat1 -> Lauren Elizabeth Hanrahan , 14 Jan 2016 11:33
Serfs were the lowest social class of the feudal society. Serfs were different from slaves. Serfs could have property. In most serfdoms, serfs were legally part of the land, and if the land was sold, they were sold with it.

Are they not Serfs to Government and Debt.......?

TheYabbaTheYabbaHey -> trafalgar1 , 14 Jan 2016 09:16

The Trust have a distinguished rollcall of patrons including scientists,academics,environmentalists etc. Sir David Attenborough is a prominent supporter.

The Eugenics Society had a distinguished roll call of supporters too: H G Wells, Keynes, Sidney and Beatrice Webb, and even the father of the welfare state, William Beveridge, etc.

TheYabbaTheYabbaHey -> karmaprosperity , 14 Jan 2016 08:53

In the USA, its the equivalent to £1.03 per gallon -- @ $1.59 per gallon

Are you taking into account the different sizes of US and UK gallons?

TheYabbaTheYabbaHey -> THKMTL , 14 Jan 2016 07:08
Well done! Some nice emotional soundbites, but no useful policies.
VrLL2We6HPGYbF4D -> TheYabbaTheYabbaHey , 14 Jan 2016 07:08
Erm they of they often did. There might be the odd caveat in there but they essentially claimed they would be able to see an event like the GFC coming but wouldn't be able to say exactly when. In the end they didn't even see it coming and were taken totally off guard.
TheYabbaTheYabbaHey -> SonOfFredTheBadman , 14 Jan 2016 07:07
Not the type of guy to owe even a penny to, I suspect.
TheYabbaTheYabbaHey -> johno200 , 14 Jan 2016 07:06

Can we finally admit that the Keynesian/Monetarist policies introduced to tackle the GFC have been a complete failure and that we would have been better off without all that government stimulus

You do know that Keynesian and monetarist policies are very, very different, don't you?

[Feb 17, 2018] Imperialism with a human face International Socialist Review

Notable quotes:
"... Wall Street Journal ..."
"... The 700 Club ..."
"... Last Resorts: The Cost of Tourism in the Caribbean ..."
"... The Bottom Billion ..."
"... The Shock Doctrine ..."
"... Huffington Post, ..."
"... Wall Street Journal ..."
"... New York Daily News ..."
"... International Socialist Review (ISR) ..."
"... Damming the Flood: Haiti, Aristide, and the Politicsw of Containment ..."
"... The Forging of the American Empire ..."
"... The Uses of Haiti ..."
"... Haiti in the New World Order ..."
"... The Prophet and the Power ..."
"... Socialist Worker ..."
"... Haiti in the New World Order ..."
"... The Rainy Season ..."
"... Haiti's Predatory Republic ..."
"... Damming the Flood ..."
"... Dollars and Sense ..."
"... Damming the Flood ..."
"... Socialist Worker ..."
"... Last Resorts: The Cost of Tourism in the Caribbean ..."
"... Haiti Analysis ..."
"... Socialist Worker ..."
"... The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It ..."
"... Huffington Post ..."
"... New York Times ..."
"... Democracy Now! ..."
"... Socialist Worker ..."
"... Socialist Worker, ..."
"... New York Times ..."
"... Los Angeles Times ..."
"... Washington Times ..."
"... Washington Examiner ..."
"... Washington Times ..."
"... To See the Dawn ..."
Feb 17, 2018 | isreview.org

Haiti after the quake

By Ashley Smith Issue #70 : Features

THE EARTHQUAKE that shook Haiti's capital Port-au-Prince on January 12 is one of the worst disasters in human history. The quake flattened houses, hotels, and government buildings, including the National Palace and UN headquarters. By some estimates, 60 percent of Port-au-Prince's buildings collapsed. Even more damage struck some of the smaller towns near the capital like Leogane and Jacmel. At least 230,000 people were left dead, 300,000 in need of medical attention, 1.5 million homeless, and over 2 million bereft of food and water.

The Obama administration reacted immediately. "I have directed my administration to respond with a swift, coordinated, and aggressive effort to save lives," Obama told the nation in a speech he delivered the day after the quake. "The people of Haiti will have the full support of the United States in the urgent effort to rescue those trapped beneath the rubble, and to deliver the humanitarian relief -- the food, water, and medicine -- that Haitians will need in the coming days. In that effort, our government, especially USAID and the Departments of State and Defense are working closely together and with our partners in Haiti, the region, and around the world." 1

This seemed a far cry from the reaction of the Bush administration to Hurricane Katrina, where tens of thousands of the city's poor, mostly Black, residents were left stranded and without help as Bush sent troops and Blackwater paramilitaries to police the city. The lack of a prompt humanitarian response prompted rap artist Kanye West to famously state, "George Bush doesn't care about Black people."

Yet while Obama said all the right things, the gap between his words and deeds has been immense. When all is said and done, the Haitian relief effort looks eerily like a replay of Katrina, only on a larger scale. A month into the disaster, the U.S. and UN were managing to feed only 1 million people, leaving more than a million people without relief aid. 2 Instead of mobilizing to provide water, food, and housing for the victims, the U.S. focused on occupying the country with 20,000 U.S. troops and surrounding it with a flotilla of U.S. Navy and Coast Guard ships.

This military effort actually impeded the delivery of urgent aid. In an op-ed piece in the Wall Street Journal entitled "Haiti: Obama's Katrina," three doctors who volunteered to provide emergency services wrote, "Four years ago the initial medical response to Hurricane Katrina was ill equipped, understaffed, poorly coordinated and delayed. Criticism of the paltry federal efforts was immediate and fierce. Unfortunately, the response to the latest international disaster in Haiti has been no better, compounding the catastrophe." After they describe the horrific conditions in Haiti's hospitals, the doctors continue, "The U.S. response to the earthquake should be considered an embarrassment. Our operation received virtually no support from any branch of the U.S. government, including the State Department . Later, as we were leaving Haiti, we were appalled to see warehouse-size quantities of unused medicines, food and other supplies at the airport, surrounded by hundreds of U.S. and international soldiers standing around aimlessly." 3

The U.S. government and media have covered up these realities with puff pieces about the supposed success of U.S. relief efforts. They have also wrongly portrayed this catastrophe as simply a natural disaster, ignoring the historical and social causes of Haiti's poverty -- principally the imperialist stranglehold over the nation -- that exacerbated the impact of the earthquake.

If the military flotilla is not there to deliver aid, why is it there? The Obama administration has used the cover of humanitarian aid to occupy the country in pursuit of several goals. First and foremost, after disastrous wars that have discredited U.S. interventionism, Obama hopes through the operation in Haiti to win back domestic support for military intervention. What better means to do that than to present a military invasion and occupation as a humanitarian relief effort?

With a flotilla of ships surrounding the country, the U.S. also aims to repatriate desperate Haitians and prevent a wave of refugees reaching Florida. Through this assertion of power, the U.S. aims also to reassert its dominance in the Caribbean and Latin America over regional rivals like Venezuela and international ones like China. Finally, the U.S. intends to impose a traditional neoliberal economic program on Haiti itself in the interest of U.S. multinational corporations and the Haitian ruling class.

Not just a natural disaster
Most of the media reported the earthquake as a natural disaster. While this is no doubt true, that is only part of the story. Certainly, there was talk of Haiti being the poorest country in the Western Hemisphere, with over 80 percent of its population making about $2 a day. Media acknowledged that the Haitian state was completely unprepared and unable to respond to the crisis not only in Port-au-Prince, but throughout the country. However, the reason for these conditions -- the historical context -- is left out. The story of Haiti's poverty is merely an excuse to further justify why Haiti needs help from the United States, even though the "help" Haiti has received from the U.S. and other world powers is precisely the reason for Haiti's extreme poverty.

Some conservative commentators blamed Haitians for their situation. Pat Robertson on The 700 Club claimed that the disaster was the result of a pact that Haitians made with the devil during their revolution from 1791 to 1804. The devil was merely taking his revenge on Haitians more than 200 years later. 4 In a more polite, but no less racist manner, David Brooks argued that the root cause of the social problems in Haiti was their "progress-resistant" culture. He claimed,

There is the influence of the voodoo religion, which spreads the message that life is capricious and planning futile. There are high levels of social mistrust. Responsibility is often not internalized. Child-rearing practices often involve neglect in the early years and harsh retribution when kids hit 9 or 10. We're all supposed to politely respect each other's cultures. But some cultures are more progress-resistant than others, and a horrible tragedy was just exacerbated by one of them. 5

These are extreme versions of a dominant media story that essentially blames the victims of the earthquake. None of this answers the real questions. Why are the majority of Haitians so poor? Why according to the mayor of Port-au-Prince, were 60 percent of the buildings unsafe in normal conditions? Why is there no building regulation in a city that sits on a fault line? Why was the Haitian state so weak and disorganized before and after the earthquake? To answer these questions, we must delve into Haiti's history.

European slavery, revolution, and U.S. domination
The answer lies in Haiti's history of European conquest, slavery, resistance, and U.S. imperial domination. At every step, instead of aiding the Haitian majority, the U.S. has manipulated the country's politics and exploited its poverty in pursuit of profit, and used it as a pawn in its competition with regional and international rivals. In doing so the U.S. has reduced Haiti to abject poverty and incapacitated its government to manage the society and the current crisis. This history, a second and unnatural fault line, interacted with the natural one to make the earthquake so devastating.

Columbus set off the first tremors when he landed on the island he called Hispaniola in 1492. He proceeded to enslave the Taino natives, whose population was estimated to be more than half a million. The combination of European disease, massacre, and brutal exploitation led to the genocide of the native population. Spain ceded the western section of the island in 1697 to France, which renamed it San Domingue. Spain remained in control of the eastern section of the island, Santo Domingo, which would become the Dominican Republic. French merchants and planters turned their colony into a vast slave plantation and slaves from Africa replaced Indians and white indentured servants. The colony was a killing field where slaves were literally worked to death -- half the African slaves who arrived died within a few years. But it was an enormously profitable one. San Domingue was the richest colony in the new world; the slave plantations produced half of the world's coffee, 40 percent of its sugar, as well as a host of other commodities. 6

In 1791, Toussaint L'Ouverture, a literate freed slave, led the world's first successful slave revolution. Toussaint defeated the three great empires of the age -- France, Spain, and England -- which all attempted to defeat the great slave army. During the struggle, the French managed to kidnap Toussaint and jail him in France, where he died. His second-in-command, Jean-Jacques Dessalines, led the final victory and established the new nation of Haiti in 1804.

Haiti's very existence was a threat to all the empires and their colonies. They all lived off profits from plantation slavery. So the great powers quarantined the country, attempting to prevent the spread of slave revolution. France finally recognized Haiti in 1824, but on the condition that it pay reparations to France for the loss of its property -- its slaves. In today's terms this sum amounted to $21 billion. Thus France shackled Haiti with debt at its birth that it did not finish repaying until 1947, fundamentally distorting the nation's development. 7

Under the eagle
The U.S. was one of the last powers to recognize Haiti, finally doing so in 1862. It became interested in Haiti not to help it, but instead to plunder it. In the late nineteenth century the U.S. became an imperialist power, extending its talons to snatch control of the Caribbean, Latin America, and the Pacific from potential rivals like Spain, Britain, and Germany. The U.S. launched its imperial conquest under the guise of liberating Cuba, Puerto Rico, and the Philippines from Spain. Puerto Rico and the Philippines became U.S. colonies -- U.S. marines killed hundreds of thousands of Filipinos to conquer the island -- while Cuba became a colony in all but name. The U.S. then policed the Caribbean as if it were an American lake. The number of occupations and invasions over the following decades is too many to list.

A leader of this conquest was Major General Smedley Butler, who became one of the most decorated marines in history. After he turned against U.S. imperialism later in life, he summed up his experience:

I spent thirty-three years and four months in active military service as a member of this country's most agile military force, the Marine Corps . And during that period, I spent most of my time being a high-class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism . I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909–1912 . I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested. During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. 8

The U.S. saw Haiti as one of the key sites to establish client governments to protect U.S. interests in the Caribbean. 9 In 1915 the U.S. used the pretext of political turmoil in Haiti to invade the country and occupy it until 1934. The U.S. plundered the island, forced it to repay its debts to the U.S., and established involuntary corvee gang labor to build roads. United States corporations, hoping to take advantage of Haiti's cheap labor, gained control of 266,000 acres of Haitian land, displacing thousands of Haitian peasants. Haitians rose up against this exploitation in a mass liberation movement, the Cacos Rebellion, led by Charlemagne Peralte. The U.S. slaughtered thousands of resistance fighters, crucifying Peralte in Port-au-Prince.

The U.S. also established one of the most reactionary institutions in Haitian society, the Haitian National Army. The U.S. designed that army not to fight foreign wars but to repress the country's peasant masses.

The neoliberal "plan of death"
While the U.S. ended its occupation of Haiti -- prompted in part by a renewed wave of protests and strikes by workers and students -- it continued to intervene in the country's politics and economics with devastating consequences. From 1957 to 1986, the U.S. supported the father-son dictatorship of Francois "Papa Doc" Duvalier and Jean-Claude "Baby Doc" Duvalier. The Duvaliers' dictatorship maintained power through the army and a vast network of death squads called the Tonton Macoutes. The U.S. backed them as a counterweight to Fidel Castro who had aligned Cuba with Russia in the Cold War struggle for Latin America and the Caribbean. Most observers believe that Papa Doc Duvalier's Macoutes killed tens of thousands. 10 The Duvaliers' economic vision for Haiti -- one that has continued to motivate U.S. plans for Haiti -- was to establish Haiti as low-tax, low-wage, non-union offshore assembly site for U.S. corporations.

Though half of Haitians lived in dire poverty, Haiti until the mid–1980s was self-sufficient in the production of rice, its most important staple. All this changed with the imposition of neoliberal policies, pushed by the United States, that required Haiti to slash tariffs, privatize state-owned industries, and cut the state's agricultural budget. Haitian activists would come to call it a "plan of death."

President Reagan pushed this plan as part of his Caribbean Basin Initiative that aimed to open up the area to U.S. corporations and U.S. agricultural products. Baby Doc opened up the Haitian market to a wave of U.S. agribusiness exports like rice and wheat, which are heavily subsidized. The Haitian peasants were simply unable to compete with these cheap, subsidized imports, and Haiti's rural economy gradually collapsed. Hundreds of thousands of peasants abandoned the countryside for the cities to seek some kind of employment. Deprived of their livelihood, peasants turned to cutting down trees to make charcoal for cooking fuel, leading to the massive deforestation of the country, and the further destruction of Haiti's already depleted soil. 11 As a result, Port-au-Prince, which had been a small town of 50,000 in the 1950s, exploded in size to nearly 800,000 in the 1980s and well over 2 million today. 12

Reagan and Baby Doc claimed that they would absorb these dislocated peasants into an enlarged sweatshop industry. But the various factories in the export processing zones only created about 60,000 jobs. As a result, the masses in Port-au-Prince gathered in slums, left to survive on remittances from relatives who had fled abroad and income scraped together in a highly unstable informal economy.

Finally, the U.S. tried to subject Haiti to the same tourist industry that swept the rest of the Caribbean. Baby Doc cut deals with Club Med and various hotel chains to offer the country's beaches for tourism. Bill Clinton and Hillary Clinton first came to Haiti on their honeymoon as part of the jet set that Baby Doc welcomed into the swank resorts on the island. It would not be the last time the Clintons played around in Haiti.

Baby Doc took out $1.9 billion in loans from the U.S., other powers, and international financial institutions to bankroll this neoliberal "reform" of the country. 13 Meanwhile, Haitians suffered a calamitous drop in their standard of living; during the 1980s, absolute poverty increased by 60 percent -- from 50 to 80 percent of the population. 14 The dictator and his family joined the American and Haitian ruling class to party and profit at the expense of Haitian peasants, workers, and the urban poor.

Killing social reform
Peasants, workers, and the urban poor rose up against Baby Doc in opposition to this social catastrophe in a tremendous social movement called Lavalas (the Creole word for a cleansing flood). A young Catholic priest and advocate of liberation theology, Jean-Bertrand Aristide, became the spokesperson of the struggle. In 1986, Lavalas succeeded in driving Baby Doc from power. The U.S. whisked him away into exile in France along with $505 million stolen from the country. 15 Duvalier left behind a shattered country, shackled again with the odious debt accrued by a dictator to finance the neoliberal disaster.

Under pressure from the movement -- but also to stem the tide of impoverished Haitian refugees pouring out of the country -- the U.S. and Haitian governments finally agreed to hold elections in 1990. The U.S. spent $36 million to try to get their candidate, a former World Bank employee, elected. He received only 14 percent of the vote. Aristide defeated fourteen rivals, winning two-thirds of the vote, on a platform of extensive popular social reforms. The U.S. and the Haitian ruling class literally saw red. They thought that, in the words of a U.S. embassy official in Port-au-Prince, a "Marxist maniac" had been elected to the Haitian government. 16 President George Bush Sr. backed a military coup against Aristide in 1991 and tacitly backed the brutal regime that ruled Haiti from 1991 to 1994.

The military massacred thousands of Lavalas activists and drove 38,000 more out of the country. Bush Sr. and his successor President Bill Clinton repatriated most of these refugees and jailed others in Krome Detention Center in Florida and Guantánamo in Cuba. After an international outcry, the U.S. opted for a face-saving intervention to restore Aristide to power in 1994, but on the condition that he agree to the neoliberal plan of death. Aristide signed on to the deal but resisted its full implementation during his remaining two years in office. He did abolish the Haitian military in 1995 -- a great victory for the movement -- and implemented some reforms, but it was far from what he had promised during the struggle against Duvalier. "The author of a text entitled 'Capitalism is a Mortal Sin,'" wrote Paul Farmer at the time,

now meets regularly with representatives of the World Bank, the International Monetary Fund (IMF) and AID [U.S. Agency for International Development]. He was once the priest of the poor; now he's president of a beleaguered nation, run into the ground by a vicious military and business elite and by their friends abroad. Aristide finds himself most indebted to the very people and institutions he once denounced from the pulpit. 17

Aristide's Lavalas ally and successor, René Préval, implemented much of the U.S. neoliberal agenda during his term from 1996 to 2000. 18

Aristide would again run for and win the presidency in 2000, to the great irritation of Clinton and then-President George W. Bush. In his second term, Aristide implemented reforms such as raising the minimum wage and building schools. He also began to demand that France refund the $21 billion that it forced Haiti to pay from 1824 to 1947. 19 At the same time, however, Aristide backed new sweatshop developments in Ounaminthe and agreed to other neoliberal measures. 20 But the U.S. was not appeased and France was outraged.

Another coup and U.S. occupation
The U.S., France, and Canada used the pretext of charges that Aristide manipulated the parliamentary elections, something they usually tolerate with their own allies, to justify a destabilization campaign against Aristide and yet another coup. Bush, of course, had no ground to stand on as he himself had stolen the 2000 U.S. presidential election. Nevertheless, the U.S., Canada, and France imposed economic sanctions, mounted a vast propaganda campaign against Aristide, backed the ruling-class political opposition in the Group of 184, and aided the right-wing death squads. Finally, in 2004, as the death squads swept through the country, the U.S. kidnapped Aristide, whisked him out of the country to temporary exile in the Central African Republic and to final exile in South Africa. Thus, on the two hundredth anniversary of its declaration of independence, Haiti was occupied by the U.S., yet again.

Soon the U.S. delegated the occupation to the UN and its 9,000 mostly Brazilian troops, who continue to patrol the country to this day. This UN force, MINUSTAH, protected the U.S.-installed puppet regime headed up Gérard Latortue who they brought out of retirement from Boca Raton, Florida. The coup regime was utterly corrupt and brutal. With its death squad allies, the regime conducted a terror against the remnants of the social movements and Aristide's party, Fanmi Lavalas. The combination of death squad and UN repression killed an estimated 3,000 people. 21 The UN troops either joined the slaughter or stood aside while repression swept the island. 22

While the U.S. and UN allowed elections in 2006, they banned Aristide's party, the most popular party in the country. Aristide's former ally, René Préval, again won the presidency, but by this time he had become a servant for the U.S. political and economic agenda in Haiti. For example, Préval banned Fanmi Lavalas from running in elections and refused to sign a bill passed in the parliament to raise the minimum wage. 23 In fact, the real power was no longer in the hands of the Haitian government. The U.S.- backed UN occupation rules the country in colonial style, dictating policy to the Haitian government.

The occupation has completely failed to develop the country. It has done nothing to improve living conditions for Haitians, to rebuild the country's ravaged infrastructure, or to reforest the countryside. Before the earthquake, two rounds of natural disasters swept Haiti and exposed the U.S. and UN's callous neglect of the country. Hurricanes hit in 2004 and 2008, killing thousands. 24 The pattern of impoverishment, deforestation, and degradation of the country's infrastructure, which has accelerated in recent years, has rendered natural disasters in Haiti far more devastating than anywhere else. In what is perhaps the worst exposure of the result of U.S. and UN refusal to improve conditions in Haiti, the food crisis in Haiti spiraled out of control on their watch. Even before the food crisis in 2008, the urban poor were reduced to eating mud cakes flavored with salt as a regular meal. When capitalists speculated on the international food market, they drove up the prices of Haiti's imported staples, especially rice. In response Haitians rioted, only to be repressed by the UN troops. 25

Imposing a new plan of death on Haiti
During the UN occupation, the U.S. imposed the same neoliberal economic plan on Haiti in the interests of multinational capital and the Haitian ruling class. UN Secretary-General Ban Ki-moon appointed Bill Clinton as special envoy to Haiti in 2009 and tasked him with revitalizing the country's economy. Clinton developed a new version of the plan of death along with Oxford economics professor and former research director for the World Bank, Paul Collier. Collier outlined their program in his paper, "Haiti: From natural catastrophe to economic security." 26 It advocated investment in the tourist industry, redevelopment of the sweatshop industry in cities, export-oriented mango plantations in the countryside, and construction of infrastructure to service that development.

As Polly Pattullo documents in Last Resorts: The Cost of Tourism in the Caribbean , the tourist industry is largely controlled by U.S. multinational corporations. She quotes one critic of the tourist industry who argues, "When a third world economy uses tourism as a development strategy, it becomes enmeshed in a global system over which it has little control. The international tourism industry is a product of metropolitan capitalist enterprise. The superior entrepreneurial skills, resources and commercial power of metropolitan companies enable them to dominate many third world tourist destinations." 27

Clinton has orchestrated a plan for turning the north of Haiti into a tourist playground, as far away as possible from the teeming slums of Port-au-Prince. He lured Royal Caribbean Cruise Lines into investing $55 million to build a pier along the coastline of Labadee, which it has leased until 2050. From there, Haiti's tourist industry hopes to lead expeditions to the mountaintop fortress Citadelle and the Palace of Sans-Souci, both built by Henri Christophe, one of the leaders of Haiti's slave revolution. 28

For the cities, Collier promotes sweatshop development. Without a hint of shame, he notes, "Due to its poverty and relatively unregulated labor market, Haiti has labor costs that are fully competitive with China, which is the global benchmark. Haitian labor is not only cheap it is of good quality. Indeed, because the garments industry used to be much larger than it is currently, there is a substantial pool of experienced labor." 29 Given the abolition of tariffs on many Haitian exports to the U.S., Haiti is primed, according to Collier, for a new sweatshop boom.

But this is no sustainable development plan in the interests of Haitian workers. At best, Collier promises 150,000 or so jobs. As anthropologist Mark Shuller argues, "subcontracted, low-wage factory work does not contribute much to the economy besides jobs. Being exempt from taxes, it does not contribute to the financing of Haiti's social services." 30 Moreover these jobs themselves do not even pay enough to support life -- they pay for transport and lunch at about $1.60 a day. The U.S. will want to keep these wages low, since that is the profitable basis for the investment.

For the peasant majority in the country, Clinton and Collier advocate the construction of vast new mango plantations. According to them, such new plantations will both create an export crop and aid the reforestation of the country. While it may create jobs for poor peasants, such plantations will not rebuild the agricultural infrastructure of the country so that it can return to the self-sufficient food system it had before the 1980s. As TransAfrica founder Randall Robinson told Democracy Now! , "That isn't the kind of investment that Haiti needs. It needs capital investment. It needs investment so that it can be self-sufficient. It needs investment so that it can feed itself." 31 Such self-sufficiency runs against the grain of U.S. policy to control the international food market with its subsidized crops.

Collier finally argues for investment in infrastructure -- airports, seaports, and roads -- not so much to meet people's needs as to service these new investments in tourism, sweatshops, and plantations. As a result, Collier's plan will actually increase infrastructural inequities; businesses will get what they need to export their products, while the Haitian masses' infrastructural needs, like navigable roads, will be left unaddressed. Even worse, Collier advocates increased privatization of Haiti's infrastructure, especially the port and the electrical system.

It is not incidental that Collier is also the author of The Bottom Billion , 32 a book that calls for outside intervention by wealthy nations such as the United States into what he calls "post-conflict" poor nations, combining targeted aid and economic restructuring under long-term military occupation. In a modern recasting of the old colonialist "civilizing mission," this is meant to lift these nations out of a vicious cycle of violence and poverty.

On his whirlwind tour of the country in 2009, Bill Clinton promised investors that Haiti was open for business with Aristide and Lavalas out of the way and the U.S. and UN in effective control of the country. "Your political risk in Haiti" he declared at a press conference "is lower than it has ever been in my lifetime." 33

Failing to deliver relief to victims
In the aftermath of the earthquake, the press has cooperated with the Obama administration in giving the impression that the U.S. military has been busy delivering aid to desperate Haitians. The facts don't bear this out. To begin with, Obama's promise of $100 million in aid to the country is a pittance -- less than the winnings of a Kentucky couple in a recent Powerball lottery. 34 It is a paltry amount compared to the hundreds of billions that the U.S. shelled out to American banks and the $3 trillion the U.S. will have expended on the Iraq War alone.

There were early warning signs that this humanitarian mission was not all it was cracked up to be. Obama's decision to appoint former presidents George W. Bush and Bill Clinton to oversee the collection of donations through the Clinton Bush Haiti Fund displays incredible callousness toward the Haitian masses. Clinton imposed the plan of death on Lavalas. Bush let New Orleans get washed out to sea and backed the 2004 coup that overthrew Aristide. Appointing Bush is like putting Nero in charge of the fire department.

Aid was slow to arrive, and what did turn up was inadequate. Amid a crisis where the first forty-eight hours are decisive in saving people's lives, the U.S. and UN failed to come anywhere near addressing the needs of the 3 million people impacted by the earthquake. Every minute that aid was delayed meant more people died from starvation, dehydration, injury, and disease. It also meant that the hospitals and doctors desperately trying to help the victims were left stranded without the basics to heal the injured.

As Dr. Evan Lyon of Partners in Health, speaking from Port-au-Prince's main hospital just as heavily-armed U.S. troops were arriving, told Democracy Now! ,

In terms of supplies, in terms of surgeons, in terms of aid relief, the response has been incredibly slow. There are teams of surgeons that have been sent to places that were, quote, "more secure," that have ten or twenty doctors and ten patients. We have a thousand people on this campus that are triaged and ready for surgery, but we only have four working ORs without anesthesia and without pain medications. And we're still struggling to get ourselves up to twenty-four-hour care. 35

In the week after the quake, Partners in Health estimated as many as 20,000 Haitians were dying daily from lack of surgery. 36

The U.S. and UN used all sorts of technical alibis to justify the delay in meeting people's needs. They complained that the damage done to Haiti's airport, seaport, and roads impeded delivery of doctors, nurses, food, water, and rescue teams. Such claims are unconvincing. Clearly the means exist to deliver aid quickly to a country only 700 miles away from Miami, Florida, and only 156 miles from a fully functional international airport in the Dominican Republic. Other countries had no difficulty sending planes of aid and volunteers. China, from half way around the world, got a plane of aid to Haiti earlier than the United States. Iceland sent a rescue team within forty-eight hours of the quake. Cuba sent dozens of doctors to join the several hundred doctors already working the country.

This failure of the U.S. to respond produced a chorus of denunciations from relief experts. One official from the Italian government, Guido Bertolaso, who was acclaimed for his successful handling of the April 2009 earthquake in Italy, denounced the U.S. effort as a "pathetic failure." He declared, "The Americans are extraordinary but when you are facing a situation in chaos they tend to confuse military intervention with emergency aid, which cannot be entrusted to armed forces. It's truly a powerful show of force but it's completely out of touch with reality." 37

Guns over aid
As with Katrina, Obama prioritized the deployment of the U.S. military over provision of aid. He sent Secretary of State Hillary Clinton to Haiti right away to get President Préval to secure emergency powers. "The decree would give the government an enormous amount of authority, which in practice they would delegate to us," she stated. 38 The U.S. has taken effective control of Haiti. It has secured control of the airport and seaport and deployed 20,000 U.S. troops to bolster the enlarged UN force of 12,500 already in the country. Thus, for the fourth time since 1915, Haiti is under a U.S. occupation.

How did the U.S. justify the fact that six days into the relief effort only a trickle of aid had gotten through to those who needed it? The U.S. government claimed that aid could not be delivered properly until security was first established. When asked why the U.S. hadn't used its C-130 transport planes to drop supplies in Port-au-Prince, Secretary of Defense Robert Gates said, "Air drops will simply lead to riots." 39 However, precisely the opposite is the case; people will riot because they lack food and water.

In lockstep, the corporate media's coverage shifted from its initial sympathy with victims of the disaster to churning out scare stories. "Marauding looters emptied wrecked shops and tens of thousands of survivors waited desperately for food and medical care," Reuters claimed. "Hundreds of scavengers and looters swarmed over wrecked stores in downtown Port-au-Prince, seizing goods and fighting among themselves." 40

These scare stories in turn became an excuse for not delivering aid. Writer Nelson Valdes reported,

The United Nations and the U.S. authorities on the ground are telling those who directly want to deliver help not to do so because they might be attacked by "hungry mobs." Two cargo planes from Doctors Without Borders have been forced to land in the Dominican Republic because the shipments have to be accompanied within Port-au-Prince by U.S. military escorts, according to the U.S. command. 41
The scare stories led relief workers and military personnel to treat Haitians in a dehumanizing fashion. Democracy Now!'s Amy Goodman reported an incident where an aid helicopter refused to distribute food on the ground and instead dropped it on people. An angry Haitian compared the incident to "throwing bones to dogs." 42

Many non-governmental organizations (NGOs), because of their close relation with the U.S., have adopted a paranoid obsession with security to the detriment of providing relief. Ecologist and human rights activist Sasha Kramer reported on Counterpunch,

One friend showed me the map used by all of the larger NGOs where Port-au-Prince is divided into security zones, yellow, orange, red. Red zones are restricted, in the orange zones all of the car windows must be rolled up and they cannot be visited past certain times of the day. Even in the yellow zone aid workers are often not permitted to walk through the streets and spend much of their time riding through the city from one office to another in organizational vehicles. The creation of these security zones has been like the building of a wall, a wall reinforced by language barriers and fear rather than iron rods, a wall that, unlike many of the buildings in Port-au-Prince, did not crumble during the earthquake. Fear, much like violence, is self-perpetuating. When aid workers enter communities radiating fear it is offensive, the perceived disinterest in communicating with the poor majority is offensive, driving through impoverished communities with windows rolled up and armed security guards is offensive . Despite the good intentions of the many aid workers swarming around the UN base, much of the aid coming through the larger organizations is still blocked in storage, waiting for the required UN and U.S. military escorts that are seen as essential for distribution, meanwhile people in the camps are suffering and their tolerance is waning. 43

Yet this disastrous "beware of the Haitian people" line is simply not borne out by reports coming from Haiti. "There are no security issues," argues Dr. Lyon:

I've been with my Haitian colleagues. I'm staying at a friend's house in Port-au-Prince. We're working for the Ministry of Public Health for the direction of this hospital as volunteers. But I'm living and moving with friends. We've been circulating throughout the city until 2:00 and 3:00 in the morning every night, evacuating patients, moving materials. There's no UN guards. There's no U.S. military presence. There's no Haitian police presence. And there's also no violence. There is no insecurity. 44

As the real nature of the U.S. operation became clear, an array of forces criticized the U.S. for imposing an occupation, not supplying relief. Venezuelan president Hugo Chávez rightly declared on his weekly television show, "Marines armed as if they were going to war. There is not a shortage of guns there, my God. Doctors, medicine, fuel, field hospitals -- that's what the United States should send. They are occupying Haiti undercover." 45

Impeding relief
The U.S. occupation actually prevented relief efforts. Once the U.S. was in charge of the airport it prioritized military flights over relief flights. Jarry Emmanuel, the air logistics officer for the World Food Program, complained, "There are 200 flights going in and out every day, which is an incredible amount for a country like Haiti. But most of those flights are for the United States military. Their priorities are to secure the country." 46

Hillary Clinton herself brought relief missions to a halt when she flew into Port-au-Prince to seize emergency powers from Préval. The U.S. military shut the airport down for three hours, preventing the desperately needed delivery of aid. Outraged, Alain Joyandet, the French Cooperation Minister, called on the UN to investigate America's dominant role in the relief effort and protested: "This is about helping Haiti, not occupying it." 47

The chorus of complaints further escalated not only from governments but also from aid organizations. Richard Seymour reports that,

Since the arrival of the troops, however, several aid missions have been prevented from arriving at the airport in Port-au-Prince that the U.S. has commandeered. France and the Caribbean Community have both made their complaints public, as has Médecins Sans Frontières [MSF] on five separate occasions. UN World Food Program flights were also turned away on two consecutive days. Benoit Leduc, MSF's operations manager in Port-au-Prince, complained that U.S. military flights were being prioritized over aid flights. 48

The U.S. military has even turned back masses of health care workers who wanted to volunteer to provide needed medical care in Haiti. The National Nurses Union organized an emergency conference call to mobilize thousands of nurses to go to Haiti. More than 1,800 nurses called in and they proceeded to recruit 11,000 others to the project. Initially the U.S. military said that it would accept them, but then, inexplicably, they reversed themselves and told them that the U.S. had plenty of military personnel to address the health care disaster in Haiti. Nothing could be further from the truth. 49

The U.S. military, Florida's state government, and the Obama administration also colluded in one of the worst examples of the callous treatment of Haitian victims. They refused to allow landing of planes loaded with injured people in desperate need of medical treatment. The Obama administration and Florida's governor were locked in a battle over who would pay for the cost of the medical care. So for five days, the U.S. let injured people suffer in Haiti because budget battles mattered more than people's lives. 50

Al Jazeera captured the nature of the U.S. and UN military occupation in a January 17 report:

Most Haitians here have seen little humanitarian aid so far. What they have seen is guns, and lots of them. Armored personnel carriers cruise the streets. UN soldiers aren't here to help pull people out of the rubble. They're here, they say, to enforce the law. This is what much of the UN presence actually looks like on the streets of Port-au-Prince: men in uniform, racing around in vehicles, carrying guns. At the entrance to the city's airport where most of the aid is coming in, there is anger and frustration. Much-needed supplies of water and food are inside, and Haitians are locked out. "These weapons they bring," [an unidentified Haitian says], "they are instruments of death. We don't want them; we don't need them. We are a traumatized people. What we want from the international community is technical help. Action, not words." 51

Problems with the NGOs
Haiti has approximately 10,000 NGOs operating within its borders, one of the highest numbers per capita in the world. The international NGOs are unaccountable to either the Haitian state or Haitian population. So the aid funneled through them further weakens what little hold Haitians have on their own society. These NGOs have taken deep hold in Haiti at the very same time that the conditions in the country have gone from bad to apocalyptic.

Amid this crisis, some of the NGOs and their employees have tried valiantly to fill the vacuum left by the U.S. and UN. But most of them did not have real forces inside the country to respond to the disaster. The Red Cross, for example, only had 15 employees on the ground, but has received the bulk of donated money -- more than $200 million -- from people around the world. Add to this the reluctance of the big NGOs to act without "security," as mentioned above.

Moreover, as the British medical journal The Lancet argues, many of the international NGOs are engaged in a fierce battle for funds and have allowed that competition to distort their provision of food, water, medical aid, and services amidst the crisis. After calling aid an "industry in its own right," the Lancet noted that NGOs are

jostling for position, each claiming that they are doing the most for earthquake survivors. Some agencies even claim that they are "spearheading" the relief effort. In fact, as we only too clearly see, the situation in Haiti is chaotic, devastating, and anything but coordinated. Polluted by the internal power politics and the unsavory characteristics seen in many big corporations, large aid agencies can be obsessed with raising money through their own appeal efforts. Media coverage as an end in itself is too often an aim of their activities. Marketing and branding have too high a profile. Perhaps worst of all, relief efforts in the field are sometimes competitive with little collaboration between agencies, including smaller, grass-roots charities that may have better networks in affected countries and so are well placed to immediately implement emergency relief. 52

Repatriating and jailing refugees
As Haitians' needs continued unmet, the U.S. occupation devolved into policing the disaster, including preventing the flight of refugees from Haiti. It is true that activists finally compelled Obama to grant Haitians Temporary Protected Status (TPS). Obama's decision delayed the deportation of 30,000 Haitians and will make TPS available to 100,000 to 200,000 more. These provisions, however, have strict limitations.

First of all, the U.S. plans to exclude victims of the earthquake, offering TPS only to those who arrived in the U.S. without legal documents before January 12. Those who quality must prove they are indigent and at the very same time pay $470 in application fees. 53 Those Haitians who are granted TPS will only be allowed to stay in the U.S. for eighteen months before they must return to Haiti. If they do qualify for the program they will become known to the authorities and thus make themselves more vulnerable to repatriation. Moreover, given the scale of destruction in Port-au-Prince, there is no way that the city or country will be in better condition in a year and a half. So if the U.S. enforces this eighteen-month limitation, it will return Haitians to an ongoing disaster area.

To enforce the bar on Haitians coming to the U.S., a flotilla of military vessels has surrounded the country. Homeland Security Secretary Janet Napolitano tried to spin this in humanitarian terms. "At this moment of tragedy in Haiti," she lectured, "it is tempting for people suffering in the aftermath of the earthquake to seek refuge elsewhere, but attempting to leave Haiti now will only bring more hardship to the Haitian people and nation." 54 In a far more blunt statement of the actual policy, Coast Guard Lieutenant Commander Chris O'Neil, in charge of Operation Vigilant Sentry declared, "The goal is to interdict them at sea and repatriate them." 55

The U.S. made sure to broadcast this threat to Haitians. A U.S. Air Force transport plane spends hours in the air above Haiti every day, not ferrying food and water, but broadcasting a radio statement in Creole from Haiti's ambassador to the U.S., Raymond Joseph. "I'll be honest with you," Joseph says, according to a transcript on the State Department's Web site. "If you think you will reach the U.S. and all the doors will be wide open to you, that's not at all the case. And they will intercept you right on the water, and send you back home where you came from." 56

To prepare for the eventuality that some Haitians may get through the military cordon around Haiti, Obama, like Bush and Clinton before him, has prepared jail space to incarcerate refugees at Krome Detention Center in Florida and at the U.S. military base in Guantánamo, Cuba. 57

Asserting who's boss in Latin America
Days after the quake, the conservative think tank Heritage Foundation posted an article detailing what it considered should be Washington's aims in occupying Haiti. The U.S. military presence, they argued, in addition to preventing "any large scale movements by Haitians to take to the sea to try to enter the U.S. illegally," also "offers opportunities to re-shape Haiti's long-dysfunctional government and economy as well as to improve the public image of the United States in the region." At the same time, it argues, the U.S. military presence could "interrupt the nightly flights of cocaine to Haiti and the Dominican Republic from the Venezuelan coast and counter the ongoing efforts of Venezuelan President Hugo Chávez to destabilize the island of Hispaniola." There is no evidence of Venezuelan cocaine flights or efforts to "destabilize" Haiti, but the point is clear: The U.S. sees Haiti as part of an effort to assert more control over the region and contain "unfriendly" regimes. 58

The military response to Haiti's crisis cannot be separated from Washington's regional interests. As Greg Gandin writes in the Nation ,

In recent years, Washington has experienced a fast erosion of its influence in South America, driven by the rise of Brazil, the region's left turn, the growing influence of China and Venezuela's use of oil revenue to promote a multipolar diplomacy. Broad social movements have challenged efforts by US- and Canadian-based companies to expand extractive industries like mining, biofuels, petroleum and logging. 59

Faced with such regional and international competition, the U.S. under Bush and now Obama is angling to launch a counteroffensive. The U.S. tried to topple Chávez in 2002, it succeeded in overthrowing Aristide in 2004, and last year backed the coup against President Zelaya in Honduras. As Grandin reports, the U.S. is actively promoting the right-wing opposition to the various reform socialist governments in the region. It is backing up this political initiative with an expansion of its military bases in the region, particularly in Colombia. "In late October," Grandin writes, "the United States and Colombia signed an agreement granting the Pentagon use of seven military bases, along with an unlimited number of as yet unspecified 'facilities and locations.' They add to Washington's already considerable military presence in Colombia, as well as Central America and the Caribbean." 60 Haiti is thus a stepping-stone for further U.S. interventions in the region.

"Shock doctrine" for Haiti
For Haiti itself, the U.S. is preparing to impose its old neoliberal plan at gunpoint. In The Shock Doctrine , Naomi Klein documents how the U.S. and other imperial powers take advantage of natural and economic disasters to impose free-market plans for the benefit of the American and native capitalists. The U.S., other powers, the IMF, and World Bank had their shock doctrine for Haiti immediately on hand. Hillary Clinton declared, "We have a plan. It was a legitimate plan, it was done in conjunction with other international donors, with the United Nations." 61 This is the Collier Plan, the same old plan of sweatshops, plantations, and tourism.

The U.S., a few other imperial powers, a few lesser countries, and the UN convened a meeting on January 26 in Montreal to profess their concern and promises to aid Haiti. The fourteen so-called "Friends of Haiti" made sure to include the Haitian prime minister, Jean-Max Bellerive, to at least give the illusion of respect for the country's sovereignty. But outside a protest organized by Haiti Action Montreal opposed the meeting with signs demanding "medical relief not guns," "grants not loans," and "reconstruction for people not profit."

In the Guardian , Gary Younge criticized the summit for failing to produce any solutions to the crisis in Haiti. "Even as corpses remained under the earthquake's rubble," he wrote, "and the government operated out of a police station, the assembled 'friends' would not commit to canceling Haiti's $1 billion debt. Instead they agreed to a 10-year plan with no details, and a commitment to meet again -- when the bodies have been buried along with coverage of the country -- sometime in the future." 62

By contrast, Venezuela's Hugo Chávez and his Latin American and Caribbean allies assembled in the Bolivarian Alternative for the Americas (ALBA) announced their opposition to America's shock doctrine. They denounced Washington's neoliberal plans, called for relief not troops and for the cancellation of Haiti's debt. Venezuela itself immediately cancelled Haiti's debt and began sending shiploads of relief offering over $100 million in humanitarian aid with no strings attached. 63

No such humanitarian motives animate the U.S., its capitalist corporations, and the international financial institutions. These vultures began circling above Haiti almost immediately. The Street, an investment Web site, published an article misleadingly entitled, "An opportunity to heal Haiti," that lays out how U.S. corporations can cash in on the catastrophe. "Here are some companies," they write, "that could potentially benefit: General Electric (GE), Caterpillar (CAT), Deere (DE), Fluor (FLR), Jacobs Engineering (JEC)." 64 The Rand Corporation's James Dobbins wrote in the New York Times, "This disaster is an opportunity to accelerate oft-delayed reforms." 65

Over the last few years, the U.S. has been trying to give a facelift to the international financial institution that it uses to impose its plans in Haiti. As Jim Lobe reports,

Last June, 1.2 billion dollars in Haiti's external debt, including that owed to the Washington-based International Monetary Fund (IMF), World Bank, and Inter-American Development Bank (IDB), was cancelled after the Préval government completed a three-year Heavily Indebted Poor Countries (HIPC) program. Over half of that debt had been incurred by Haiti's dictatorships, notably the Duvalier dynasty that ruled the country from 1957 to 1986. But the cancellation covered debt incurred by Haiti only through 2004. In the last five years, the country has received new loans -- some of them to help it recover from the floods and other hurricane damage -- totaling another 1.05 billion dollars. 66

In other words, the U.S. and the financial institutions exchanged the old debts for new so-called "legitimate loans," trapping Haiti yet again in debt. Eric Toussaint and Sophie Perchellet call this "a typical odious debt-laundering maneuver." 67

In the wake of the crisis, the bankers were at Haiti's door yet again, ready, incredibly, to loan Haiti money with the usual conditions. The IMF offered Haiti a new loan of $100 million with the usual strings attached. As the Nation 's Richard Kim writes,

The new loan was made through the IMF's extended credit facility, to which Haiti already has $165 million in debt. Debt relief activists tell me that these loans came with conditions, including raising prices for electricity, refusing pay increases to all public employees except those making minimum wage, and keeping inflation low. They say that the new loans would impose these same conditions. In other words, in the face of this latest tragedy, the IMF is still using crisis and debt as leverage to compel neoliberal reforms. 68

Debt cancellation activists like Jubilee pushed back against the IMF and scored a victory over it. "On Jan. 21," Lobe reports,

the World Bank announced a waiver of Haiti's pending debt payment for five years and said it would explore ways that the remaining debt could be cancelled. The IDB [Inter-American Development Bank] has said it is engaged in a similar effort and will present alternatives for reducing or canceling the debt to its board of governors. On Jan. 27, the IMF, which lacks the authority to provide outright grants, announced that it would give Haiti a 102 million-dollar loan at zero-percent interest and that would not be subject to any of the Fund's usual performance conditions. 69

The pressure even forced the U.S. to call for all new monies extended to Haiti to be in the form of grants, and U.S. Treasury Secretary Timothy Geithner called for debt relief in the run up to the G-7 conference in February. 70

While activists can claim these concessions by the U.S. and the international financial institutions as victories that open up the possibility for even more progress in demanding full cancellation of Haiti's debt and all third world debt, no one should look at this situation through rose-colored glasses. The U.S. is using this promise -- and it is just a promise at this point -- to cover up its determination to implement the Collier Plan for tourism, sweatshops, and mango plantations to exploit Haiti's desperately poor workers and peasants. In fact, the U.S. does not need to use the leverage of debt to force Haiti to agree to the plan; it has secured colonial rule over the country and can impose its plans directly at gunpoint.

Resistance and solidarity
The left has a responsibility to cut through the propaganda of the Obama administration and the mainstream media. The U.S. is not engaged in humanitarian relief, but old-fashioned imperialism in Haiti. Humanitarianism has long been one of the means the U.S. uses to provide a cover story for its military actions abroad. But whether it was saving the Cuban people from Spanish brutality, sending the marines into Mogadishu in 1993 to feed starving Somalis, or overthrowing the Taliban to "liberate women," the real aims and practical results of these interventions diverged radically from their alleged noble intentions.

Humanitarian military intervention was heavily promoted in the 1990s during the latter part of the first Bush administration and the Clinton administration -- in particular during the wars in the former Yugoslavia. Its purpose was to reestablish the legitimacy of U.S. military intervention in the wake of the U.S. defeat in Vietnam, as part of a policy intended to erase what was known as the "Vietnam syndrome." It is being revived again in the wake of the unpopularity of the occupations of Iraq and Afghanistan and weariness toward the "war on terror," for similar reasons. The U.S. hopes that it can re-legitimize its military as a force for good so that it can lay the groundwork for more U.S. interventions in the region and around the world.

Even if the U.S. gets away with its new plans for Haiti, it will inevitably breed resistance in the population and throughout the region where through bitter experience workers and peasants have learned to oppose U.S. designs on their countries. In Haiti, workers and peasants will find their way to organize in the countryside on the plantations, in the sweatshops, and in the shantytowns.

Already Haitian organizations have come out against the U.S. agenda. A statement issued on January 27 from the Coordinating Committee of Progressive Organizations announced:

We must declare our anger and indignation at the exploitation of the situation in Haiti to justify a new invasion by 20,000 U.S. Marines. We condemn what threatens to become a new military occupation by U.S. troops, the third in our history. It is clearly part of a strategy to remilitarize the Caribbean Basin in the context of the imperialist response to the growing rebellion of the peoples of our continent against neo-liberal globalization. And it exists also within a framework of pre-emptive warfare designed to confront the eventual social explosion of a people crushed by poverty and facing despair. We condemn the model imposed by the U.S. government and the military response to a tragic humanitarian crisis. The occupation of the Toussaint L'Ouverture international airport and other elements of the national infrastructure have deprived the Haitian people of part of the contribution made by Caricom, by Venezuela, and by some European countries. We condemn this conduct, and refuse absolutely to allow our country to become another military base. 71

The Haitian left has thus already started building opposition to the U.S. occupation and the Collier Plan. Every year since the U.S. coup in 2004, activists have marched on February 28 in Port-au-Prince against the UN occupation and to demand the end of Aristide's exile. Workers' organizations just last year protested in the thousands for an increase in the minimum wage that Préval opposed. Lavalas activists had protested before the earthquake against their exclusion from the scheduled parliamentary elections. Now amid crisis and occupation, Préval, who has proved to be a puppet for the U.S. agenda, thus losing what little political support he had, has cancelled those elections. No doubt Préval's behavior will provoke political opposition from below against his government's collaboration with the United States.
Outside Haiti, the left must build solidarity with that struggle and make several demands on the Obama administration. First, Obama must immediately end the military occupation of Haiti, and instead flood the country with doctors, nurses, food, water, and construction machinery. Second, the U.S. must also stop its enforcement of Jean-Bertrand Aristide's exile and the ban on his party, Fanmi Lavalas, from participating in elections. Haitians, not the U.S., should have the right to determine their government.

Third, the left must demand that the U.S., other countries, and international financial institutions cancel Haiti's debt, so that the aid money headed to Haiti will go to food and reconstruction, not debt repayment. More than that -- France, the U.S., and Canada, the three countries that have most interfered with Haiti's sovereignty -- should pay reparations for the damage they have done. France can start by repaying the $21 billion dollars that it extracted from Haiti from 1824 to 1947. Fourth, leftists must agitate for Obama to indefinitely extend Temporary Protected Status to Haitians in the U.S. -- and open the borders to any Haitians who flee the country. Finally, the left must direct all its funds to Haitian grass-roots organizations to provide relief and help rebuild resistance to the U.S. plan for Haiti.

Only through agitating for these demands can we stop the U.S. from imposing at gunpoint its shock doctrine for Haiti. In this struggle, the left must educate wider and wider layers of people, already suspicious of U.S. motives after Hurricane Katrina, and the Iraq and Afghanistan wars, that the U.S. state never engages in military actions for humanitarian motives. As the great American revolutionary journalist John Reed declared, "Uncle Sam never gives anybody something for nothing. He comes along with a sack stuffed with hay in one hand and a whip in the other. Anyone who accepts Uncle Sam's promises at their face value will find that they must be paid for in sweat and blood." 72


  1. "President Obama on U.S. rescue efforts in Haiti, www.America.gov .
  2. Bill Quigley, "Haiti: still starving 23 days later," Huffington Post, posted February 4, 2010.
  3. Soumitra Eachempati, Dean Lorich, and David Helfet, "Haiti: Obama's Katrina," Wall Street Journal , January 26, 2010.
  4. Rich Schapiro, "Rev. Pat Robertson says ancient Haitians' 'pact with the devil' caused earthquake," New York Daily News , January 13, 2010.
  5. David Brooks, "The underlying tragedy," New York Times , January 14, 2010.
  6. For an overview of the French colony and the slave revolution see Ashley Smith, "The Black Jacobins," International Socialist Review (ISR) 63, January–February 2009.
  7. Peter Hallward, Damming the Flood: Haiti, Aristide, and the Politicsw of Containment (New York: Verso Books, 2007), 12.
  8. Quoted in Sidney Lens, The Forging of the American Empire (Chicago: Haymarket Books, 2003), 270.
  9. For an overview of the history of U.S. imperialism in Haiti see Helen Scott, "Haiti under siege," ISR 35, May-June 2004.
  10. Paul Farmer, The Uses of Haiti (Monroe, Maine: Common Courage Press, 1994), 108.
  11. Alex Dupuy, Haiti in the New World Order (New York: Westview Press, 1996), 37.
  12. For an analysis of Baby Doc's neoliberal plans see chapter 2 of Alex Dupuy, The Prophet and the Power (New York: Rowman and Littlefield, 2007).
  13. Eric Toussaint and Sophie Perchellet, "Debt is Haiti's real curse," Socialist Worker , January 20, 2010.
  14. Regan Boychuck, "The vultures circle Haiti at every opportunity, natural or man-made," Znet, February 3, 2010.
  15. Dupuy, Haiti in the New World Order , 31.
  16. Quoted in Amy Wilentz, The Rainy Season (New York: Simon and Schuster, 1989), 137.
  17. Quoted in Ashley Smith, "The new occupation of Haiti: Aristide's rise and fall," ISR 35, May–June, 2004.
  18. For an analysis of Lavalas after Aristide's restoration see chapter 5 of Robert Fatton, Haiti's Predatory Republic (Boulder: Lynne Reiner Publishers, 2002).
  19. For a perhaps overly generous portrait of Aristide in his second term see chapters 6 and 7 of Peter Hallward, Damming the Flood .
  20. Clara James, "Haiti free trade zone," Dollars and Sense , November/December 2002.
  21. Hallward, Damming the Flood , 155.
  22. See Bill Quigley, "Haiti human rights report," www.ijdh.org/pdf/QuigleyReport.pdf .
  23. Mo Woong, "Haiti's minimum wage battle," Caribbean News Net, August 25, 2009.
  24. See Ashley Smith "Natural and unnatural disasters," Socialist Worker , September 23, 2008.
  25. Mark Shuller, "Haiti's food riots," ISR 59, May–June 2008.
  26. Paul Collier, "Haiti: From natural catastrophe to economic security," FOCALPoint, Volume 8, Issue 2, March 2009.
  27. Quoted in Polly Pattullo, Last Resorts: The Cost of Tourism in the Caribbean (New York: Monthly Review Press, 2005), 20.
  28. Jacqueline Charles, "Royal Caribbean boosts Haiti tourism push," Miami Herald , September 26, 2009.
  29. Collier, "Haiti from natural catastrophe to economic security."
  30. Mark Shuller, "Haiti needs new development approaches, not more of the same," Haiti Analysis , June 18, 2009.
  31. Quoted in Ashley Smith "Catastrophe in Haiti," Socialist Worker , January 14, 2010.
  32. Jacqueline Charles, "Bill Clinton on trade mission on Haiti," Miami Herald , October 1, 2009.
  33. Paul Collier, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It (New York: Oxford University Press, 2008).
  34. Bill Quigley, "Too little too late for Haiti? Six sobering points," Huffington Post , January 15, 2010.
  35. "With foreign aid still at a trickle," Democracy Now! , January 20, 2010.
  36. Marc Lacey "The nightmare in Haiti: untreated illness and injury," New York Times , January 21, 2010.
  37. Quoted in Nick Allen "West urged to write off Haiti's $1 billion debt," Telegraph.co.uk , January 25, 2010.
  38. Mark Lander, "In show of support, Clinton goes to Haiti," New York Times , January 17, 2010.
  39. "U.S. military begins aid drops in Haiti," CBS News, January 18, 2010.
  40. Andrew Cawthorne and Catherine Bremer, "U.S., U.N. boost Haiti aid security as looters swarm," Reuters, January 19, 2010.
  41. Nelson P. Valdés, "Class and race fear: The rescue operation's priorities in Haiti," Counterpunch, January 18, 2010.
  42. Quoted in Lenora Daniels, "We are Haitians. We are like people like anybody else," Common Dreams, January 31, 2010.
  43. Sasha Kramer, "Fear slows aid efforts in Haiti: Letter from Port-au-Prince," Counterpunch, January 27, 2010.
  44. "Doctor: Misinformation and racism have slowed the recovery effort," Democracy Now! , January 19, 2010.
  45. "Chávez says U.S. occupying Haiti in name of aid," Reuters, January 17, 2010.
  46. Rory Carroll, "U.S. accused of annexing airport," Guardian (UK), January 17, 2010.
  47. Quoted in Giles Whittell, Martin Fletcher, and Jacqui Goddard, "Haiti has a leader in charge, but not in control," The Times (UK), January 19, 2010.
  48. Richard Seymour, "The humanitarian myth," Socialist Worker , January 25, 2010.
  49. "Union nurses respond to Haiti," Socialist Worker, January 27, 2010.
  50. Shaila Dewan, "U.S. suspends Haitian airlift in cost dispute," New York Times , January 30, 2010.
  51. The Al Jazeera report is available at www.youtube.com/watch?v=0F5TwEK24sA .
  52. "The growth of aid and the decline of humanitarianism," Lancet , Volume 375, Issue 9711, January 23, 2010; 253.
  53. James C. McKinley Jr., "Vows to move fast for Haitian immigrants in the U.S.," New York Times , January 21, 2010.
  54. Richard Fausset, "U.S. to change illegal immigrants status," Los Angeles Times , January 16, 2010.
  55. "U.S. to repatriate most Haitian refugees, Washington Times , January 19, 2010.
  56. Curt Anderson, "U.S. prepares for Haitian refugees," Washington Examiner , January 19, 2010.
  57. Tom Eley, "Washington shuts door to Haitian refugees" Global Research, February 8, 2010.
  58. Jim Roberts, " Things to remember while helping Haiti ," The Foundry .
  59. Greg Grandin, "Muscling Latin America," Nation, January 21, 2010.
  60. Ibid.
  61. Nicholas Kralev, "Clinton says plan exists for Haiti," Washington Times , January 26, 2010.
  62. Gary Younge, "The West owes Haiti a big bailout," Guardian (UK), January 31, 2010.
  63. Magbana, "Venezuela cancels Haiti's debt," January 26, 2010.
  64. Quoted in Isabel McDonald, "New Haiti: Same old corporate interests," Nation, January 29, 2010.
  65. James Dobbins, "Skip the graft," New York Times , January 17, 2010.
  66. Jim Lobe, "Haiti: U.S. lawmakers call for debt cancellation," IPS, February 4, 2010.
  67. Eric Toussaint and Sophie Perchellet, "Debt is Haiti's real curse."
  68. Richard Kim, "IMF to Haiti: freeze public wages," Nation , January 15, 2010.
  69. Lobe, "Haiti: U.S. lawmakers call for debt cancellation."
  70. Ibid.
  71. Haiti After the Catastrophe, " What Are the Perspectives? Statement by the Coordinating Committee of the Progressive Organizations ."
  72. Quoted in John Riddell ed., To See the Dawn (New York: Pathfinder, 1993), 136.

[Feb 17, 2018] The far right's idea man by Charles Koch.

Notable quotes:
"... Brown v. Board of Education ..."
"... Democracy in Chains ..."
"... Invisible Hands ..."
"... The Calculus of Consent ..."
Feb 17, 2018 | isreview.org

Review of: Democracy in Chains: The Deep History of the Radical Right's Stealth Plan for America By Nancy MacLean Viking , 2017 · 334 pages · $28.00

Duke University historian Nancy MacLean counted herself among those who'd never heard of Buchanan when she began researching Jim Crow Virginia's decision to subsidize private school vouchers for "segregation academies" in the wake of the 1954 Supreme Court decision Brown v. Board of Education outlawing racial segregation in Topeka, Kansas, public schools. References to Buchanan in the writings of the doyen of postwar neoliberal economics Milton Friedman led her to Buchanan's former office at George Mason University. There, among huge piles of papers, she found a confidential letter from Koch describing millions of dollars in contributions to Buchanan's research center on the campus.

From that chance encounter with evidence connecting the unassuming professor with the billionaire ideologue, MacLean has constructed a history of Buchanan's role as an idea merchant for free market ideology. Over the course of nearly five decades Buchanan, his acolytes, and associates have been key participants in a billionaire-funded campaign to promote such policies as school vouchers for private education, privatization of Social Security, anti-union "right to work" laws, and ideological crusades like climate science denial. That many of these policies have been implemented at the state and local level, while perhaps the most plutocratic administration ever inhabits the US government, is testament to the success of the Far Right's long game.

MacLean's Democracy in Chains thus joins Jane Mayer's Dark Money and Kim Phillips-Fein's Invisible Hands as essential reading for anyone who wants to understand the intellectual and organizational roots of the free-market Right that has taken hold of the modern Republican Party and much of US politics today. In contrast to the stories that Mayer and Phillips-Fein tell, Mac­Lean's approach is narrower -- focusing on the career of one influential academic and his patron. But its focus on Buchanan allows MacLean to explore other themes that aren't as central to Mayer's and Phillip-Fein's work, such as the connection of these self-described "defenders of liberty" to an older, anti­democratic tradition rooted in the antebellum South and the Confederacy.

Only a few years from receiving his PhD in the right-wing economics department at the University of Chicago, Buchanan proposed to his employer, the University of Virginia, that it support his plan to set up a research center to "produce a line of new thinkers" promoting libertarian views then largely out of step with the mainstream of the economics profession. He suggested in his proposal to the university president that the center be given an innocuous name to camouflage its "extreme views . . . no matter how relevant they might be to the real purpose of the program." University President Colgate Darden Jr. agreed to raise the money from corporate foundations to create what MacLean rightly characterizes as "in essence a political center at a nonprofit institution of higher learning." It was the first of many such efforts by Buchanan and subsequent imitators to create what one of them, Murray Rothbard, openly described as a "Leninist cadre" of free-market ideologues who could move into positions of influence in government, business, and universities.

In reconstructing Buchanan's role in crafting academic incubators for free-market ideas throughout his long career at UVA, UCLA, Virginia Tech, and finally at the Koch-funded Mercatus Center at George Mason University, MacLean emphasizes two main points that rip the mask off of these ventures' innocuous claims of devotion to "individual liberty." The first is the inconvenient truth that they can't be separated from their origins in the defense of Jim Crow and doctrines such as "states' rights" and "nullification" dating back to the antebellum South. MacLean recalls historian Richard Hofstadter's characterization of John C. Calhoun (proslavery ideologue and US vice president 1825-32) as the "Marx of the master class," and shows how Buchanan echoed Calhoun's ideas. Like Calhoun, Buchanan assumed the supremacy of property rights over all other rights. And like Calhoun, he developed (in The Calculus of Consent , coauthored with Gordon Tullock in 1962) a theory of government that required all members of society -- and most importantly, its wealthiest -- to agree before any government action could be taken.

Buchanan's version of "public choice" posits a world in which government is a corrupt and oppressive enterprise in which individuals and politicians adopt "rent-seeking" behavior to channel private wealth to ends that its original owners may not support. In this world, if the democratically determined majority supports taxation to fund public schools, but a wealthy minority objects to paying those taxes, the wealthy minority should have the ability to veto or opt out of support for public schools. Buchanan tested out this very idea in post- Brown Virginia, when he coauthored a 1959 plan for the full privatization and selling off of all public schools in the state. Although presented in race-neutral language of "economic liberty," it presented an option to the Jim Crow Democratic Party state leadership who urged "massive resistance" to court-ordered integration of public schools. Yet Buchanan's proposal proved even too radical for Virginia's legislature, which narrowly rejected it.

MacLean describes how Buchanan's early failure taught him lessons that stuck with him the rest of his life:

Faced with majority opinion as expressed in votes, politicians could not be counted on to stand by their stated committments. . . . He learned something else, too: constitutions matter. If a constitution enabled what he would call "socialism" (which, in Virginia's case, meant requiring a system of public schools), it would be nearly impossible to achieve his vision of radical transformation without changing the constitution.

Buchanan's comeuppance illustrates the second major point that Mac­Lean draws out: hostility to democracy, collective action, and majority rule is central to this project. Throughout the book, MacLean quotes the principals, like Buchanan and Koch, acknowledging to each other that their ideas are unpopular. They understand that ordinary Americans support public goods like public education and Social Security. As a result, they resort to stealth in advancing their agenda. They look to judicial or constitutional means to change the rules of the game to institutionalize their far-right policies, and to place them outside the control of elected politicians or the popular will. This is what MacLean means by placing "democracy in chains."

So we find Buchanan writing memos and papers in support of the Koch-funded Cato Institute's campaign for Social Security privatization in the 1980s. Knowing that a direct assault on Social Security was political suicide, Buchanan urged a more surreptitious route: raise doubts about the system's viability, pass incremental "reforms" to peel off groups of beneficiaries from the system, and enlist the financial industry to offer alternatives. Anyone who followed the George W. Bush administration's failed effort to privatize Social Security, or House Speaker Paul Ryan's current effort to wreck Medicaid and Medicare, will recognize these tactics.

More dramatically, we find Buchanan playing a role as adviser to that champion of economic liberty, the Pinochet dictatorship in Chile. Here, where a brutal military coup allowed the most right-wing elements of the Chilean ruling class to remake society, Buchanan found an opportunity to test his theories of placing constitutional "locks" on democracy. The 1980 constitution, passed in a rigged referendum, had Buchanan's fingerprints on it: ridiculous supermajorities required to raise taxes, union leaders barred from political participation, and an electoral system designed to empower conservative minorities. Chile's return to democracy in the 1990s overturned many of these restrictions, but others remain. And the legacy of Pinochet-era privatizations of the country's pension and education systems -- fruit of the policy advice of leading neoliberal ideologues -- still contributes to wide swathes of poverty amid "economic freedom."

Buchanan's final stop was George Mason University, where Charles Koch's millions bankrolled the transformation of a sleepy commuter college into a Beltway powerhouse that has become an idea factory and policy mill for conservatives. Its proximity to Washington, DC, means that politicians, congressional staffers, lobbyists, judges, and other Beltway denizens have direct access to the latest research, talking points, and training in support of their patron's extremist ideology.

If some of the purer libertarians worry, as MacLean quotes one of them, that they "have been seduced by Koch money into providing intellectual ammunition for an autocratic businessman," Buchanan didn't seem to be one of them. But with an avowed school privatizer running the US Department of Education, and with court cases aiming to cripple public sector unions heading to the US Supreme Court, it's hard to argue that they've been inconsequential.

MacLean raises this dystopian prospect: "To value liberty for the wealthy minority above all else and enshrine it in the nation's governing rules, as Calhoun and Buchanan both called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form." She asks: "Is this the country we want to live in and bequeath to our children and future generations? That is the real public choice."

[Feb 17, 2018] Angry Bear Drastically Changing the Rules On Infrastructure Spending by Barkley Rosser

Notable quotes:
"... The long-established formula has been 8 to 2, that is $8 in federal money for $2 in state or local money in infrastructure construction projects. Trump's plan proposes to completely reverse this to a 2 to 8 formula, $2 in federal money for $8 in state or local money. Anyone who thinks this is going to provide any actual infrastructure activity that would not have otherwise is simply completely delusional. ..."
"... The American Society of Engineers has identified about 50,000 bridges in the nation that need repair. However they also estimate that only about 100 of those are reasonably suitable for private tolling. This is another not-going-anywhere part of the proposal. ..."
"... Trump is apparently hoping to raise money by outright selling off some publicly owned infrastructure assets. The Washington Post reports today that in the Washington area this includes the two main airports, Dulles and Reagan National, as well as the George Washington Memorial Parkway (currently not tolled). I can hardly wait and am curious what else around the country is going to be put on the block for a grand fire sale leading to all kinds of tolls and other nonsense. ..."
Feb 14, 2018 | angrybearblog.com

Drastically Changing the Rules On Infrastructure Spending

Most observers have figured out that the Trump infrastructure spending plan seems to be weirdly lopsided in an unrealistic way, with $200 billion in federal spending somehow supposed to inspire a total of $1.5 trillion in spending by state and local sources along with private ones. What has not been made all that clear publicly is how this plan upends decades of established practice in fiscal relations between the federal and the state and local governments. The long-established formula has been 8 to 2, that is $8 in federal money for $2 in state or local money in infrastructure construction projects. Trump's plan proposes to completely reverse this to a 2 to 8 formula, $2 in federal money for $8 in state or local money. Anyone who thinks this is going to provide any actual infrastructure activity that would not have otherwise is simply completely delusional.

Of course it is well known that the private sector input will involve tolls or other payment methods to make sure the private interests make a positive rate of return. One important area many want to see work done is on fixing bridges. The American Society of Engineers has identified about 50,000 bridges in the nation that need repair. However they also estimate that only about 100 of those are reasonably suitable for private tolling. This is another not-going-anywhere part of the proposal.

However, Trump is apparently hoping to raise money by outright selling off some publicly owned infrastructure assets. The Washington Post reports today that in the Washington area this includes the two main airports, Dulles and Reagan National, as well as the George Washington Memorial Parkway (currently not tolled). I can hardly wait and am curious what else around the country is going to be put on the block for a grand fire sale leading to all kinds of tolls and other nonsense.

Barkley Rosser


sammy , February 14, 2018 7:42 pm

A good example of an underutilized government asset sale is here in Portland OR. The Post Office had a large hub facility (about 4 square blocks) located in a formerly light industrial area just north of downtown. Well the light industrial failed and the area became a wasteland ripe for redevelopment.

Well redevelop it did. Now known as the "Pearl District" the area is now packed with luxury apartments, multi million dollar condos, leading edge companies, and all the accoutrements. The Post Office built another hub in a much less congested, more suitable location. The entire 4 block former Post Office was virtually empty for 10+ years, maybe a dozen people worked there.

Recently the was parcel was sold, I would guess about $25 million per block. So that's $100 million in money to the Federal government (thru the Post Office), picked up off the ground, to be used for infrastructure, reduce debt, cut taxes, preserve benefits, whatever, in return for a passport office and truck storage. What is there to possibly criticize?

Barkley Rosser , February 14, 2018 9:18 pm

EM,

Yeah, putting a toll on the GW would be just ridiculous.

Sammy,

Yes, apparently Trump did OK with a small skating rink in NYC. Do you want to have the Trump Org do all of this? I do note they have numerous bankruptcies.

Your example of the P.O.in Portland is hilarious. What that shows is that in fact the feds are selling off unused assets right now, in some cases making money doing so. I think you overstate what can be made from this. The issue of this plavn is to have private sector taking over running stuff, but most of the highways they have tried to do so have ended up being either financial or practical or both messes, such as the mess regarding the Indiana Toll Road. In the 1800s there were 254 private companies running roads. They all went bust, all, and those roads were taken over by one level of government.

ilsm,

Sorry, that data does not show what you think it does. The formula involves joint projects and has been 8 to 2 feds locals on joint projects. But the vast majority of that state and local spending is not on joint projects. I hope you understand that state and local governments spend lots of money on transportation and other infrastructure with no fed in put. It is clearly inadequate. But now we have Trump coming in with this screwball proposal. Sorry, you are out to lunch on this one.

Longtooth , February 14, 2018 10:01 pm

Sammy,

Your Portland, Or. example sounds to me like the Fed's investing in property at low property prices and selling at high prices, no? Several major private enterprises in Silicon Valley have been doing that for years. It's a pretty standard way of investment letting time and population growth do it's thing on limited land.

The company I worked for bought a ranch 100 or 200 acres at the furthest outreaches of San Jose in the South (then county property). opposite direction of where the growth was going in 1950's. Most of it was orchards leased to farmers and a huge spread of small buildings (individual little rooms) and park with a large lake used occasionally for high spending client sales and "education" on using our products.

They sold it for multiple millions now a huge area of high rise apts, and retail at the cross-roads of the only southbound State Highway, a a major cross-town freeway and light rail intersection.

A major Health Care (not-for-profit) bought a large portion of it rom the company in the late 1960's, and built a huge hospital complex on it before there was much else around. The company made millions of profit off that sale as well.

They also bought part of another ranch even further south out in the boonies and 20 years later built their western Research facility in a swale at the top of the hills, unseen from anywhere -- nobody even knew it was there. A little winding ranch road led to it. They still own that ranchland it will be worth millions upon millions in profits when the sell that land.

You can ask why the company did this? The company had a real-estate division the sole job of which was to identify long term future population growth into virtually uninhabited ranch land and buy it up on the cheap at any possible future location where the company might eventually want to build more facilities -- pure speculation on land prices .. then either just hold it (leased back to ranchers) or eventually build on it for the company's own growth.

You try to make it sound like the Fed intended on losing money or didn't have a clue. Of course that's the standard anti-federalist's claim by the laissez-fair set isn't it?

Longtooth , February 14, 2018 10:25 pm

Sammy,

I'll add this too. When the military decides it no longer has good use for military land the close the bases (after Congress finally lets them) and sells the land to cities or private developers for huge profits, even after taking out old military buildings, finding and eliminating old unexploded munitions, and soil contamination.

In the bay area that includes the
– SF Presidio (prime land now developing million dollar homes, shops, and city park in the toney (sp?) Marina district,
– Fort Baker right across the bay at the Golden Gate doing the same, – Coast Guard Air base in Alameda,
– Treasure Island in the middle of the Bay between SF and Oakland, and
– Monterey's Fort Ord, now housing a new State University and the rest being developed by private enterprises.

These were real – estate profits just like the PO in Portland not necessary fro defense since the end of the Vietnam war mid-1970's.

sammy , February 14, 2018 10:30 pm

Longtooth,

Absolutely I agree. There are a lot of federal assets just begging to be monetized. If only we had a real estate guy in charge . oh wait ..

[Feb 16, 2018] The Pathetic Inadequacy of the Trump Opposition The American Conservative by Paul Brian

Notable quotes:
"... Dancing With The Stars ..."
"... The Washington Post. ..."
"... Paul Brian is a freelance journalist. He has reported for BBC, Reuters, and Foreign Policy, and contributed to the Week, The Federalist, and others. He covered the fledgling U.S. alt-right at a 2014 conference in Hungary as well as the 2015 New Hampshire primary, and also made a documentary about his time living in the Republic of Georgia in 2012. You can follow him on Twitter @paulrbrian or visit his website www.paulrbrian.com . ..."
Feb 16, 2018 | www.theamericanconservative.com

The hawks and internationalists who set our house on fire don't now deserve the contract to rebuild it.

While it may have significant popular support, much of the anti-Trump "Resistance" suffers from a severe weakness of message. Part of the problem is with who the Resistance's leading messengers are: discredited neoconservative poltroons like former president George W. Bush, unwatchable alleged celebrities like Chelsea Handler, and establishment Republicans who routinely slash and burn the middle class like Senator Jeff Flake. Furthermore, what exactly is the Resistance's overriding message? Invariably their sermonizing revolves around vague bromides about "tolerance," diversity, unrestricted free trade, and multilateralism. They routinely push a supposed former status quo that was in fact anything but a status quo. The leaders of the Resistance have in their arsenal nothing but buzzwords and a desire to feel self-satisfied and turn back to imagined pre-Trump normality. A president like Donald Trump is only possible in a country with opposition voices of such subterranean caliber.

Remember when Trump steamrolled a crowded field of Republicans in one of the greatest electoral upsets in American history? Surely many of us also recall the troupes of smug celebrities and Bushes and Obamas who lined up to take potshots at Trump over his unacceptably cruel utterances that upset their noble moral sensibilities? How did that work out for them? They lost. The more that opposition to Trump in office takes the same form as opposition to him on the campaign trail, the more hypocritical and counterproductive it becomes. Further, the resistance to Trump's policies is coming just at the moment when principled opposition most needs to up its game and help turn back the hands of the Doomsday Clock. It's social conservatives who are also opposed to war and exploitation of the working class who have the best moral bona fides to effectively oppose Trump, which is why morally phrased attacks on Trump from the corporate and socially liberal wings of the left, as well as the free market and interventionist conservative establishment, have failed and will continue to fail. Any real alternative is going to have to come from regular folks with hearts and morals who aren't stained by decades of failure and hypocrisy.

A majority of Democrats now have favorable views of George W. Bush, and that's no coincidence. Like the supposedly reasonable anti-Trump voices on their side, Bush pops up like a dutiful marionette to condemn white supremacy and "nativism," and to reminisce about the good old days when he was in charge. Bush also lectures about how Russia is ruining everything by meddling in elections and destabilizing the world. But how convincing is it really to hear about multilateralism and respect for human rights from Bush, who launched an unnecessary war on Iraq that killed hundreds of thousands of civilians and left thousands of American servicemen and women dead and wounded? How convincing is it when former secretary of state Madeleine Albright, who famously remarked that an estimated half a million Iraqis dead from our 1990s sanctions was "worth it," haughtily claims that she's "offended" by Trump's travel ban ? "Offended" -- is that so, Madame Secretary? I have a feeling millions of Muslims in the Middle East may have also been "offended" when people like you helped inflame their region and turned it into an endless back-and-forth firestorm of conflict between U.S.-backed dictators and brutal jihadists, with everyone else caught in between.

Maybe instead of being offended that not everyone can come to America, people like Albright, Kerry, and Bush shouldn't have contributed to the conditions that wrecked those people's homes in the first place? Maybe the U.S. government should think more closely about providing military aid to 73 percent of the world's dictatorships? Sorry, do excuse the crazy talk. Clearly all the ruthless maneuvering by the U.S. and NATO is just being done out of a selfless desire to spread democratic values by raining down LGBT-friendly munitions on beleaguered populations worldwide. Another congressman just gave a speech about brave democratic principles so we can all relax.

Generally, U.S. leaders like to team up with dictators before turning on them when they become inconvenient or start to upset full-spectrum dominance. Nobody have should been surprised to see John Kerry fraternizing in a friendly manner with Syrian butcher Bashar al-Assad and then moralistically threatening him with war several years later, or Donald Rumsfeld grinning with Saddam Hussein as they cooperated militarily before Rumsfeld did an about-face on the naïve dictator based on false premises after 9/11. Here's former president Barack Obama shaking Moammar Gaddafi's hand in 2009 . I wonder what became of Mr. Gaddafi?

It's beyond parody to hear someone like Bush sternly opine that there's "pretty clear evidence" Russia meddled in the 2016 election. Even if that were deeply significant in the way some argue, Bush should be the last person anyone is hearing from about it. It's all good, though: remember when Bush laughed about how there hadn't been weapons of mass destruction in Iraq at the White House Correspondents Dinner in 2004? It's all just a joke; don't you get it? (Maybe Saddam Hussein had already used all the chemical weapons the U.S. helped him get during the 1980s on Iran in the Iran-Iraq War, which killed over one million people by the time the coalition of the willing came knocking in 2003). That's the kind of thing people like Bush like to indirectly joke about in the company of self-satisfied press ghouls at celebratory dinners. However, when the mean man Mr. Trump pals around with Russian baddie Vladimir Putin, mistreats women, or spews out unkind rhetoric about "shitholes," it's far from a joke: it's time to get out your two-eared pink hat and hit the streets chanting in righteous outrage.

To be fair, Trump is worthy of opposition. An ignorant, reactive egotist who needs to have his unfounded suppositions and inaccuracies constantly validated by a sycophantic staff of people who'd be rejected even for a reality show version of the White House, he really is an unstable excuse for a leader and an inveterate misogynist and all the other things. Trump isn't exactly Bible Belt material despite his stamp of approval from Jerry Falwell Jr. and crew; in fact he hasn't even succeeded in getting rid of the Johnson Amendment and allowing churches to get more involved in politics, one of his few concrete promises to Christian conservatives. He's also a big red button of a disaster in almost every other area as commander-in-chief.

Trump's first military action as president reportedly killed numerous innocent women and children (some unnamed U.S. officials claim some of the women were militants) as well as a Navy SEAL. Helicopter gunships strafed a Yemeni village for over an hour in what Trump called a "highly successful" operation against al-Qaeda in the Arabian Peninsula (AQAP). A senior military official felt differently, saying that "almost everything went wrong." The raid even killed eight-year-old American girl Nawar al-Awlaki, daughter of previously killed extremist leader Anwar al-Awlaki, whose other innocent child, 16-year-old Abdulrahman al-Awlaki, was also droned while eating outdoors at a restaurant in 2010 (with several friends and his 17-year-old cousin). The Obama administration dismissed Abdulrahman's death at the time as no big deal .

The list goes on with the Trump administration, a hollow outfit of Goldman Sachs operatives and detached industry and financier billionaires helping out their hedge fund friends and throwing a small table scrap to the peasants every now and then. As deformed babies are born in Flint, Michigan , Ivanka grandstands about paid parental leave . Meanwhile, Trump and Co. work to expand the war in Afghanistan and Syria. It's a sad state of affairs.

So who are the right voices to oppose the mango man-child and his cadre of doddering dullards? Not degenerate celebrities, dirty politicians of the past, or special interest groups that try to fit everyone into a narrow electoral box so mainline Democrats can pass their own version of corporate welfare and run wars with more sensitive rhetoric and politically correct messaging. Instead, the effective dissidents of the future will be people of various beliefs, but especially the pro-family and faith-driven, who are just as opposed to what came before Trump as they are to him. The future of a meaningful political alternative to the underlying liberalism, materialism, and me-first individualism on the left and right will revolve around traditionalists and pro-family conservative individuals who define their own destinies instead of letting themselves be engineered into destinies manufactured by multinational corporations and boardroom gremlins with diversity outreach strategies. It's possible, for example, to be socially conservative, pro-worker, pro-environment, and anti-war. In fact, that is the norm in most countries that exist outside the false political paradigm pushed in America.

If enough suburbanite centrists who take a break from Dancing With The Stars are convinced that Trump is bad because George W. Bush and Madeleine Albright say so, it shows that these people have learned absolutely nothing from Trump or the process that led to him. These kind of resistors are the people nodding their heads emphatically as they read Eliot Cohen talk about why he and his friends can't stomach the evil stench of Trump or Robert Kagan whine about fascism in The Washington Post. Here's a warning to good people who may not have been following politics closely prior to Trump: don't get taken in by these charlatans. Don't listen to those who burned your town down as they pitch you the contract to rebuild it. You can oppose both the leaders of the "Resistance" and Trump. In fact, it is your moral duty to do so. This is the End of the End of History As We Know It, but there isn't going to be an REM song or Will Smith punching an alien in the face to help everyone through it.

Here's a thought for those finding themselves enthusiastic about the Resistance and horrified by Trump: maybe, just maybe , the water was already starting to boil before you cried out in pain and alarm.

Paul Brian is a freelance journalist. He has reported for BBC, Reuters, and Foreign Policy, and contributed to the Week, The Federalist, and others. He covered the fledgling U.S. alt-right at a 2014 conference in Hungary as well as the 2015 New Hampshire primary, and also made a documentary about his time living in the Republic of Georgia in 2012. You can follow him on Twitter @paulrbrian or visit his website www.paulrbrian.com .


Fran Macadam February 16, 2018 at 1:14 pm

Trump is definitely a castor oil antidote. But if not him, then them.
Frank , says: February 16, 2018 at 1:19 pm
Now this is TAC material!
Kent , says: February 16, 2018 at 1:48 pm
"The future of a meaningful political alternative to the underlying liberalism, materialism, and me-first individualism on the left and right will revolve around traditionalists and pro-family conservative individuals who define their own destinies instead of letting themselves be engineered into destinies manufactured by multinational corporations and boardroom gremlins with diversity outreach strategies."

They will have to lose their faith in "Free Market God" first. I don't believe that will happen.

Aaron Paolozzi , says: February 16, 2018 at 2:56 pm
I enjoyed the heat. The comments made are on point, and this is pretty much what my standard response to reactionary trump dissidents are. Trump is terrible, but so is what came before him, he is just easier to dislike.

Keep it coming.

One Guy , says: February 16, 2018 at 3:16 pm
Even with inadequate opposition, Trump has managed to be the most unpopular president after one year, ever. I'm guessing this speaks to his unique talent of messing things up.
RVA , says: February 16, 2018 at 4:11 pm
Wow! Paul! Babylon burning. Preach it, brother! Takes me back to my teenage years, Ramparts 1968, as another corrupt infrastructure caught fire and burned down. TAC is amazing, the only place to find this in true form.

Either we are history remembering fossils soon gone, or the next financial crash – now inevitable with passage of tax reform (redo of 2001- the rich got their money out, now full speed off the cliff), will bring down this whole mass of absolute corruption. What do you think will happen when Trump is faced with a true crisis? They're selling off the floorboards. What can remain standing?

And elsewhere in the world, who, in their right mind, would help us? Good riddance to truly dangerous pathology. The world would truly become safer with the USA decommissioned, and then restored, through honest travail, to humility, and humanity.

You are right. Be with small town, front porch, family and neighborhood goodness, and dodge the crashing embers.

The Flying Burrito Brothers: 'On the thirty-first floor a gold plated door
Won't keep out the Lord's burning rain '

God Bless.

Donald , says: February 16, 2018 at 5:50 pm
I agree with Frank. This was great.

The depressing thing to me is how hard it is to get people to see this. You have people who still think Trump is doing a great job and on the other side people who admire the warmongering Resistance and think Hillary's vast experience in foreign policy was one of her strengths, rather than one of the main reasons to be disgusted by her. Between the two categories I think you have the majority of American voters.

[Feb 16, 2018] The Deep State Is Very Real by Robert W. Merry

Notable quotes:
"... Note: this article is part of a ..."
"... included in the March/April 2018 issue of the ..."
"... Robert W. Merry, longtime Washington journalist and publishing executive, is editor of ..."
"... . He is the author most recently of ..."
Feb 16, 2018 | nationalinterest.org

February 12, 2018

Note: this article is part of a symposium included in the March/April 2018 issue of the National Interest .

OF COURSE there's a Deep State. Why wouldn't there be? Even a cursory understanding of human nature tells us that power corrupts, as Lord Acton put it; that, when power is concentrated and entrenched, it will be abused; that, when it is concentrated and entrenched in secrecy, it will be abused in secret. That's the Deep State. James Burnham saw it coming. The American philosopher and political theorist (1905–87), first a Trotskyist, then a leading conservative intellectual, wrote in 1941 that the great political development of the age was not the battle between communism and capitalism. Rather, it was the rise of a new "managerial" class gaining dominance in business, finance, organized labor and government. This gathering managerial revolution, as he called it, would be resisted, but it would be impervious to adversarial counteractions. As the managerial elites gained more and more power, exercised often in subtle and stealthy ways, they would exercise that power to embed themselves further into the folds of American society and to protect themselves from those who might want to bust them up.

Nowhere is this managerial elite more entrenched, more powerful and more shrouded in secrecy than in what Dwight Eisenhower called the military-industrial complex, augmented by intelligence and law-enforcement agencies. That's where America's relentless drive for global hegemony meshes with defense manufacturers only too willing to provide the tools of dominance.

Now we have not only a standing army, with hundreds of thousands of troops at the ready, as in Cold War days. We have also permanent wars, nine of them in progress at the moment and not one with what could even remotely be called proper congressional approval. That's how power gets entrenched, how the managerial revolution gains ever greater force and how the Deep State endures.

Few in the general public know what really happened with regard to the allegations of Trump campaign "collusion" with Russia, or how the investigation into those troubling allegations emerged. But we know enough to know we have seen the Deep State in action.

We know that U.S. agencies released an "Intelligence Community Assessment" saying that Russia and President Putin were behind the release of embarrassing Democratic emails in a plot to help Trump win the presidency. But we also know that it wasn't really a National Intelligence Assessment (a term of art denoting a particular process of expansive intelligence analysis) but rather the work of a controlled task force. As Scott Ritter, the former Marine intelligence officer and arms-control official, put it , "This deliberate misrepresentation of the organizational bona fides of the Russia NIA casts a shadow over the viability of the analysis used to underpin the assessments and judgments contained within." Besides, the document was long on assertion and short on evidence. Even the New York Times initially derided the report as lacking any "hard evidence" and amounting "essentially . . . to 'trust us.'"

We have substantial reason to believe that an unconfirmed salacious report on Trump, paid for by the Democratic Party and the Hillary Clinton campaign (with the FBI eventually getting hold of it), was used in an effort to get a secret national-security warrant so the government could spy on the Trump campaign. We know that the FBI went easy on Clinton in its investigation of her irresponsible email practices, and then we find out that a top FBI official involved in both the Clinton and Trump/Russia investigations despised Trump, liked Hillary and expressed an interest in doing what he could to thwart Trump's emergence. We know he privately told his lover that, while he didn't think Trump could win, he nevertheless felt a need for an "insurance policy" because "I'm afraid we can't take that risk." We know these matters were discussed in the office of FBI deputy director Andrew McCabe.

We know further that former FBI director James Comey used a cutout to leak to the press a rendition of an Oval Office conversation with the president that could be interpreted adversely to Trump. We know he did this to set in motion the appointment of an independent investigator, a potentially mortal threat to any president -- and perhaps particularly to this freewheeling billionaire developer.

Perhaps most significant, we know that all this had the effect of wrenching from the president the flexibility to pursue a policy agenda on which he had campaigned -- and which presumably contributed to his election. That was his promise to work toward improved relations between the United States and Russia. Prospects for such a diplomatic initiative now are as dead as the dodo bird. Trump lost that one. The Deep State won.

Robert W. Merry, longtime Washington journalist and publishing executive, is editor of The American Conservative . He is the author most recently of President McKinley: Architect of the American Century .


grumpy_carpenter , February 13, 2018 8:07 AM

I don't believe there is a secret 'deep state' controlling the USA from the shadows like some Bond villian.

What people call the deep state is in fact the interests of the business elite who have been granted nearly unprecedented political influence by the American people in the form or nearly unlimited campaign contributions to politicians who promote their interests, unregulated lobbying, control of the MSM and the funding of think tanks and other institutions that promote their interests.

When historians look back at this time it will be Madison Avenue and the revolution in persuasion that they study.

Paul Cressman grumpy_carpenter , February 13, 2018 6:20 PM

1934 Major General Smedley Butler, US Marine Corp, was asked by US Industrialists to help them overthrow the government. Roosevelt was to remain as the figurehead of the US but the industrialists would be in charge. The industrialist would supply Butler with a 500,000 man army that he would be in charge of. Butler's father was a congressman in the 1920's and Butler told congress of the possible Coup. Read of The Committee of Foreign Affairs, CFA.

R. Arandas grumpy_carpenter , February 13, 2018 4:02 PM

Yes, it is quite disturbing that 2% of the world's population control about 50% of its total wealth though:
https://www.theguardian.com...

JimmyD grumpy_carpenter , February 13, 2018 9:24 AM

Teddy Roosevelt and the Presidents that followed him understood the dangers of the Robber-Barons buying the government. That's why they launched anti-trust, income tax and estate taxes to protect democracy.

[Feb 16, 2018] Stephanie Savell The Hidden Costs of America's Wars by Tom Engelhardt

Feb 16, 2018 | www.unz.com

If anything, recent weeks have offered remarkable evidence of just how victorious this country's losingest commanders and their colleagues really are in our nation's capital. In the bipartisan style that these days usually applies only to the U.S. military, Congress has just settled on giving an extra $165 billion to the Pentagon over the next two years as part of a formula for keeping the government open. As it happens, the 2017 Pentagon budget was already as large as the defense spending of the next seven nations combined. And that was before all those extra tens of billions of dollars ensured that the two-year military budget (for 2018 and 2019) would crest at a total of more than $1.4 trillion .

That's the sort of money that only goes to winners, not losers. And if this still seems a little strange to you, given that military's dismal record in actual war-fighting since 9/11, all I can say is: don't bring it up. It's no longer considered polite or proper to complain about our wars and those who fight them or how we fund them, not in an age when every American soldier is a " hero ," which means that what they're doing from Afghanistan to Yemen , Syria to Somalia , must be heroic indeed.

In a draft-less country, those of us not in or connected to our military are expected to say " thank you " to the warriors and otherwise go about our lives as if their wars (and the mayhem they continue to generate abroad) were not a fact of global life. This is the definition of a demobilized public. If you happen to be that rarest of all creatures in our country these days -- someone in active opposition to those wars -- you have a problem. That means Stephanie Savell, who co-runs the Costs of War Project , which regularly provides well-researched and devastating information on the spread of those wars and the money continually being squandered on them, does indeed have a problem. It's one she understands all too well and describes vividly today.

[Feb 15, 2018] The oligarchy's desire to turn the clock back to 'the good old days' knows no bounds -- they want it all and they want it know; they're absolute ideal state for all us ordinary types would be a return to feudalism, so I guess bringing back slavery, all be it with a shiny new coat of point, is pretty much to be expected...

Feb 15, 2018 | www.moonofalabama.org

Rich | Feb 14, 2018 9:33:46 AM | 9

The oligarchy's desire to turn the clock back to 'the good old days' knows no bounds  --  they want it all and they want it know; they're absolute ideal state for all us ordinary types would be a return to feudalism, so I guess bringing back slavery, all be it with a shiny new coat of point, is pretty much to be expected...

Once upon a time many, many years ago in the land of Anywhere, in a world long since forgotten, there was, at one time, a kind of Golden Age. It was not, it has to be said, an age that was Perfect but it was agreed by almost all that it was an age that was much, much better than That Which Had Gone Before. That time is best described by quoting from a well-known article historical document contemporaneous to the period

' after Generations Of Struggle against Social Injustice and two Catastrophic And Immensely Bloody Wars with the nearby land of Anotherplace, in which the Ordinary Folk had died and suffered to a catastrophic degree, it was decided by all except the Rapaciously Rich that Things Had To Change.

From that point on, Ordinary Folk were given access to Free Education, Free Healthcare, Pensions, Benefits to help those who fell upon Hard Times and all the advantages of what you would know in your world as a Welfare System. New taxes were introduced to redistribute some of the vast sums of money accumulated (mostly from Stealing, Cheating and Aggressive Tax Avoidance) by the Wealthy and the Aristocracy (known in the land of Anywhere as The Greedy One Percent) over the years and Political Reforms introduced to break their stranglehold over the Political And Economic Life of the country. Additionally, the Right to Vote was given to all.

And the land of Anywhere blossomed, for it was found that a populace Free From Hunger And Illness, that was properly Educated and Cared For, produced huge numbers of Talented men and women who previously had Languished due to Poverty And Lack of Opportunity. These Talented men and women drove the land of Anywhere to new heights of success, founding businesses, employing people, making a mark in the worlds of politics, science, medicine and culture. Slowly but surely, the Dead Grip of The Greedy One Percent, who had dominated and controlled the land of Anywhere for as long as anyone could remember, was broken.'

And the psychopathic Greedy One Percent, the Devil's Children, hated this new world, this New Bargain and Better Society, and all it stood for. They vowed to destroy it

https://www.amazon.com/dp/B078L8K9H3

[Feb 15, 2018] Financial Markets Have Taken Over the Economy. To Prevent Another Crisis, They Must Be Brought to Heel. naked capitalism

Notable quotes:
"... By Servaas Storm, Professor, Department of Economics, Faculty TPM, Delft University of Technology and co-author, with C.W. M. Naastepad, of Macroeconomics Beyond the NAIRU (Cambridge, MA: Harvard University Press), which has just won the Myrdal Prize of the European Association for Evolutionary Political Economy. Originally published at the Institute for New Economic Thinking website ..."
"... Banks have long had undue influence in society. But with the rapid expansion of a financial sector that transforms all debts and assets into tradable commodities, we are faced with something far worse: financial markets with an only abstract, inflated, and destabilizing relationship with the real economy. To prevent another crisis, finance must be domesticated and turned into a useful servant of society. ..."
"... financial markets ..."
"... Homo œconomicus ..."
"... Finance and the Good Society ..."
"... High Net Worth Individuals ..."
"... cheap liquidity on demand ..."
"... asset-backed securities ..."
"... re-hypothecation ..."
Feb 15, 2018 | www.nakedcapitalism.com

Posted on February 14, 2018 by Yves Smith Yves here. Get a cup of coffee. This is an important, one-stop treatment of how financialization has harmed the real economy and increased inequality.

By Servaas Storm, Professor, Department of Economics, Faculty TPM, Delft University of Technology and co-author, with C.W. M. Naastepad, of Macroeconomics Beyond the NAIRU (Cambridge, MA: Harvard University Press), which has just won the Myrdal Prize of the European Association for Evolutionary Political Economy. Originally published at the Institute for New Economic Thinking website

Banks have long had undue influence in society. But with the rapid expansion of a financial sector that transforms all debts and assets into tradable commodities, we are faced with something far worse: financial markets with an only abstract, inflated, and destabilizing relationship with the real economy. To prevent another crisis, finance must be domesticated and turned into a useful servant of society.

The Financialization of Everything

Ours is, without a doubt, the age of finance -- of the supremacy of financial actors, institutions, markets, and motives in the global capitalist economy. Working people in the advanced economies, for instance, increasingly have their (pension) savings invested in mutual funds and stock markets, while their mortgages and other debts are turned into securities and sold to global financial investors (Krippner 2011; Epstein 2018). At the same time, the 'under-banked' poor in the developing world have become entangled, or if one wishes, 'financially included', in the 'web' of global finance through their growing reliance on micro-loans, micro-insurance and M-Pesa-like 'correspondent banking' (Keucheyan 2018; Mader 2018). More generally, individual citizens everywhere are invited to "live by finance", in Martin's (2002, p. 17) evocative words, that is: to organize their daily lives around 'investor logic', active individual risk management, and involvement in global financial markets. Citizenship and rights are being re-conceptualized in terms of universal access to 'safe' and affordable financial products (Kear 2012) -- redefining Descartes' philosophical proof of existence as: 'I am indebted, therefore I am' (Graeber 2011). Financial markets are opening 'new enclosures' everywhere, deeply penetrating social space -- as in the case of so-called 'viaticals', the third-party purchase of the rights to future payoffs of life insurance contracts from the terminally ill (Quinn 2008); or of 'health care bonds' issued by insurance companies to fund health-care interventions; the payoff to private investors in these bonds depends on the cost-savings arising from the health-care intervention for the insurers. Or what to think of 'humanitarian impact bonds' used to profitably finance physical rehabilitation services in countries affected by violence and conflict (Lavinas 2018); this latter instrument was created in 2017 by the International Red Cross in cooperation with insurer Munich Re and Bank Lombard Odier.

Conglomerate corporate entities, which used to provide long-term employment and stable retirement benefits, were broken up under pressure of financial markets and replaced by disaggregated global commodity-chain structures (Wade 2018), operating according to the principles of 'shareholder value maximization' (Lazonick 2014) -- with the result that today real decision-making power is often to be found no longer in corporate boardrooms, but in global financial markets. As a result, accumulation -- real capital formation which increases overall economic output -- has slowed down in the U.S., the E.U. and India, as profit-owners, looking for the highest returns, reallocated their investments to more profitable financial markets (Jayadev, Mason and Schröder 2018).

An overabundance of (cash) finance is used primarily to fund a proliferation of short-term, high-risk (potentially high-return) investments in newly developed financial instruments, such as derivatives -- Warren Buffet's 'financial weapons of mass destruction' that blew up the global financial system in 2007-8. Financial actors (ranging from banks, bond investors, and pension funds to big insurers and speculative hedge funds) have taken much bigger roles on much larger geographic scales in markets of items essential to development such as food (Clapp and Isakson 2018), primary commodities, health care (insurance), education, and energy. These same actors hunt the globe for 'passive' unearthed assets which they can re-use as collateral for various purposes in the 'shadow banking system' -- the complex global chains of credit, liquidity and leverage with no systemic regulatory oversight that has become as large as the regulated 'normal' banking system (Pozsar and Singh 2011; Gabor 2018) and enjoys implicit state guarantees (Kane 2013, 2015).

Pressed by the international financial institutions and their own elites, states around the world have embraced finance-friendly policies which included reducing cross-border capital controls, promoting liquid domestic stock markets, reducing the taxation of wealth and capital gains, and rendering their central banks independent from political oversight (Bortz and Kaltenbrunner 2018; Wade 2018; Chandrasekhar and Ghosh 2018). What is most distinctive about the present era of finance, however, is the shift in financial intermediation from banks and other institutions to financial markets -- a shift from the 'visible hand' of (often-times relationship) regulated banking to the axiomatic 'invisible hand' of supposedly anonymous, self-regulating, financial markets. This displacement of financial institutions by financial markets has had a pervasive influence on the motivations, choices and decisions made by households, firms and states as well as fundamental quantitative impacts on growth, inequality and poverty -- far-reaching consequences which we are only beginning to understand.

Setting the Stage

Joseph Alois Schumpeter (1934, p. 74), the Austrian-American theorist of capitalist development and its eventual demise, called the banker "the ephor of the exchange economy" [2] -- someone who by creating credit ( ex nihilo ) to finance new investments and innovation, "makes possible the carrying out of new combinations, authorizes people, in the name of society as it were, to form them." This same banker has, in Schumpeter's vision, "either replaced private capitalists or become their agent; he has himself become the capitalist par excellence. He stands between those who wish to form new combinations and the possessors of productive means." This way, the banker becomes "essentially a phenomenon of development", as Schumpeter (1934, p. 74) argued -- fostering the process of accumulation and directing the pace and nature of economic growth and technological progress (Festré and Nasica 2009; Mazzucato and Wray 2015). Alexander Gerschenkron (1968) concurred, comparing the importance of investment banks in 19th-century Germany's industrialization drive to that of the steam engine in Britain's Industrial Revolution:

" the German investment banks -- a powerful invention, comparable in its economic effects to that of the steam engine -- were in their capital-supplying functions a substitute for the insufficiency of the previously created wealth willingly placed at the disposal of entrepreneurs. [ ] From their central vantage point of control, the banks participated actively in shaping the major [ ] decisions of individual enterprises. It was they who very often mapped out a firm's path of growth, conceived farsighted plans, decided on major technological and locational innovations, and arranged for mergers and capital increases."

Schumpeter and Gerschenkron celebrated the developmental role played by bank-based financial systems, in which banks form long-run (often personal) relationships with firms, have insider knowledge and (as they are large creditors) are in a position to exert strategic pressure on firms, impose market rationality on their decisions and prioritize the repayment of their debts. However, what Schumpeter left unmentioned is that the absolute power of the 'ephors' could terribly fail: When the wrong people were elected to the 'ephorate', their leadership and guidance did ruin the Spartan state. [3] Likewise, the -- personalized relationship-based -- banking system could ruin the development process: it could fatally weaken the corporate governance of firms, because bank managers would be more reluctant to bankrupt firms with which they have had long-term ties, and lead to cronyism and corruption, as it is relatively easy for bank insiders to exploit other creditors or taxpayers (Levine 2005). Schumpeter's relationship-banker may be fallible, weak (when it comes to disciplining firms), prone to mistakes and errors of judgment and not necessarily immune to corruptible influences -- in short: there are reasons to believe that a bank-based financial system is inferior to an alternative, market-based, financial system (Levine 2005; Demirgüc-Kunt, Feyen and Levine 2012).

This view of the superiority of a 'market-based' financial system rests on Friedrich von Hayek's grotesque epistemological claim that 'the market' is an omniscient way of knowing, one that radically exceeds the capacity of any individual mind or even the state. For Hayek, "the market constitutes the only legitimate form of knowledge, next to which all other modes of reflection are partial, in both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a special interest. Individually, our values are personal ones, or mere opinions; collectively, the market converts them into prices, or objective facts" (Metcalf 2017). After his 'sudden illumination' in 1936 that the market is the best possible and only legitimate form of social organisation, Hayek had to find an answer to the dilemma of how to reformulate the political and the social in a way compatible with the 'rationality' of the (unregulated) market economy. Hayek's answer was that the 'market' should be applied to all domains of life. Homo œconomicus -- the narrowly self-interested subject who, according to Foucault (2008, pp. 270-271), "is eminently governable ." as he/she "accepts reality and responds systematically to systematic modifications artificially introduced into the environment -- had to be universalized. This, in turn, could be achieved by the financialization of 'everything in everyday life', because financial logic and constraints would help to impose 'market discipline and rationality' on economic decision-makers. After all, borrowers compete with another for funds -- and it is commercial (profit-oriented) banks and financial institutions which do the screening and selection of who gets funded.

Hayek proved to be extremely successful in hiding his reactionary political agenda behind the pretense of scientific neutrality -- by elevating the verdict of the market to the status of a natural fact, while putting any value that cannot be expressed as a price "on an equally unsure footing, as nothing more than opinion, preference, folklore or superstition" (Metcalf 2017). Hayek's impact on economics was transformative, as can be seen from how Lawrence Summers sums up 'Hayek's legacy':

"What's the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That's the consensus among economists. That's the Hayek legacy." (quoted in Yergin and Stanislaw (1998, pp. 150–51))

This Hayekian legacy underwrites, and quietly promotes, neoliberal narratives and discourses which advocate that authority -- even sovereignty -- be conceded to (in our case: financial) 'markets' which act as an 'impartial and transparent judge', collecting and processing information relevant to economic decision-making and coordinating these decisions, and as a 'guardian', impartially imposing 'market discipline and market rationality' on economic decision-makers -- thus bringing about not just 'socially efficient outcomes' but social stability as well. This way, financialization constitutes progress -- bringing "the advantages enjoyed by the clients of Wall Street to the customers of Wal-Mart", as Nobel-Prize winning financial economist Robert Shiller (2003, p. x) writes. "We need to extend finance beyond our major financial capitals to the rest of the world. We need to extend the domain of finance beyond that of physical capital to human capital, and to cover the risks that really matter in our lives. Fortunately, the principles of financial management can now be expanded to include society as a whole."

Attentive readers might argue that faith in the social efficiency of financial markets has waned -- after all, Hayek's grand epistemological claim was falsified, in a completely unambiguous manner, by the Great Financial Crisis of 2007-8 which brought the world economy to the brink of a systemic meltdown. Even staunch believers in the (social) efficiency of self-regulating financial markets, including most notably former Federal Reserve chair Alan Greenspan, had to admit a fundamental 'flaw in their ideology'.

And yet, I beg to disagree. The economic ideology that created the crash remains intact and unchallenged. There has been no reckoning and no lessons were learned, as the banks and their shareholders were rescued, at the cost of about everyone else in society, by massive public bail-outs, zero interest rates and unprecedented liquidity creation by central banks. Finance staged a major come-back -- profits, dividends, salaries and bonuses in the financial industry have rebounded to where they were before, while the re-regulation of finance became stuck in endless political negotiations. Stock markets, meanwhile, notched record highs (before the downward 'correction' of February 2018), derivative markets have been doing rather well and under-priced risk-taking in financial markets has gathered steam (again), this time especially so in the largest emerging economies of China, India and Brazil (BIS 2017; Gabor 2018). In the process, global finance has become more concentrated and even more integral to capitalist production and accumulation. The reason why even the Great Financial Crisis left the supremacy of financial interests and logic unchallenged, is simple: there is no acceptable alternative mode of social regulation to replace our financialized mode of co-ordination and decision-making.

Accordingly, instead of a long overdue rethinking of Hayek's legacy, the economics profession has gone, with renewed vigour, for an even broader push for 'financial inclusion' (Mader 2018; Chandrasekhar and Ghosh 2018). Backed by the international financial institutions, 'social business' promotors (such as the World Economic Forum) and FinTech corporations, it proposes to extend financial markets into new areas including social protection and poverty alleviation (Lavinas 2018; Chandrasekhar and Ghosh 2018) and climate change mitigation (Arsel and Büscher 2015; Keuchyan 2018). Most economists were already persuaded, by a voluminous empirical literature (reviewed by Levine (2005)), to believe, with ample qualification and due caution, that finance and financial markets do contribute to economic growth -- a proposition that Nobel Laureate financial economist Merton Miller (1998, p. 14) found "almost too obvious for serious discussion". But now greater financialization is argued to be integral to not just 'growth' but 'inclusive growth', as World-Bank economists Demirgüc-Kunt, Klapper and Singer (2017) conclude in a recent review article: "financial inclusion allows people to make many everyday financial transactions more efficiently and safely and expand their investment and financial risk management options by using the formal financial system. This is especially relevant for people living in the poorest 40 percent of households." The way to extend the good life to more people is not to shrink finance nor restrain financial innovation, writes Robert Shiller (2012) in a book titled Finance and the Good Society , but instead to release it. Shiller's book celebrates finance's 'genuine beauty' and exhorts idealistic (sic) young students to pursue careers in derivatives, insurance and related fields.

'Really-Existing' Finance Capitalism

Financialization underwrites neoliberal narratives and discourses which emphasize individual responsibility, risk-taking and active investment for the benefit of the individual him-/herself -- within the 'neutral' or even 'natural' constraints imposed by financial markets and financial norms of creditworthiness (Palma 2009; Kear 2012). This way, financialization morphs into a 'technique of power' to maintain a particular social order (Palma 2009; Saith 2011), in which the delicate task of balancing competing social claims and distributive outcomes is offloaded to the 'invisible hand' which operates through anonymous, 'blind' financial markets (Krippner 2005, 2011). This is perhaps illustrated clearest by Michael Hudson (2012, p. 223):

"Rising mortgage debt has made employees afraid to go on strike or even to complain about working conditions. Employees became more docile in a world where they are only one paycheck or so away from homelessness or, what threatens to become almost the same thing, missing a mortgage payment. This is the point at which they find themselves hooked on debt dependency."

Paul Krugman (2005) has called this a 'debt-peonage society' -- while J. Gabriel Palma (2009, p. 833) labelled it a 'rentiers' delight' in which financialization sustains the rent-seeking practices of oligopolistic capital -- as a system of discipline as well as exploitation, which is "difficult to reconcile with any acceptable definition of democracy" (Mann 2010, p. 18).

In this regime of social regulation, income and wealth became more concentrated in the hands of the rentier class (Saith 2011; Goda, Onaran and Stockhammer 2017) , and as a result, productive capital accumulation gave way before the increased speculative use of the 'economic surplus of society' in pursuit of 'financial-capital' gains through asset speculation (Davis and Kim 2015). This took the wind out of the sails of the 'real' economy, and firms responded by holding back investment, using their profits to pay out dividends to their shareholders and to buy back their own shares (Lazonick 2014). Because the rich own most financial assets, anything that causes the value of financial assets to rise rapidly made the rich richer (Taylor, Ömer and Rezai 2015).

In the U.S., arguably the most financialized economy in the world, the result of this was extreme income polarization, unseen after WWII (Piketty 2014; Palma 2011). The 'American Dream', writes Gabriel Palma (2009, p. 842), was "high jacked by a rather tiny minority -- for the rest, it has only been available on credit!" Because that is what happened: lower- and middle-income groups took on more debt to finance spending on health care, education or housing, spurred by the deregulation of financial markets and changes in the tax code which made it easier and more attractive for households with modest incomes to borrow in order to spend. This debt-financed spending stimulated an otherwise almost comatose U.S. economy by spurring consumption (Cynamon and Fazzari 2015). In the twenty years before the Great Financial Crash, debts and 'financial excess' -- in the form of the asset price bubbles in 'New Economy' stocks, real estate markets and commodity (futures) markets -- propped up aggregate demand and kept the U.S. and global economy growing. "We have," Paul Krugman (2013) concludes, "an economy whose normal condition is one of inadequate demand -- of at least mild depression -- and which only gets anywhere close to full employment when it is being buoyed by bubbles."

But it is not just the U.S. economy: the whole world has become addicted to debt. The borrowings of global households, governments and firms have risen from 246% of GDP in 2000 to 327%, or $ 217 trillion, today -- which is $70 trillion higher than 10 years ago. [4] It means that for every extra dollar of output, the world economy cranks out more than almost 10 extra dollars of debt. Forget about the synthetic opioid crisis, the world's more dangerous addiction is to debt. China, which has been the engine of the global economy during most of the post-2008 period, has been piling up debt to keep its growth process going -- the IMF (2017) expects China's non-financial sector debt to exceed 290% of its GDP in 2022, up from around 140% (of GDP) in 2008, warning that China's current credit trajectory is "dangerous with increasing risks of a disruptive adjustment." China's insatiable demand for debt fueled growth, but also led to a property bubble and a rapidly growing shadow banking system (Gabor 2018) -- raising concerns that the economy may face a hard landing and send shockwaves through the world's financial markets. The next global financial catastrophe may be just around the corner.

How Finance Is Reshaping the 'Rules of the Game'

To understand this debt explosion we must comprehend what is driving the financial hyper-activity -- and how this is changing the way our economies work. For a start, the growth of the financial industry, in terms of its size and power, its incomprehensible complexity and its penetration into the real economy, is inseparably connected to the structural increase in income and wealth inequalities (Foster and McChesney 2012; Storm and Naastepad 2015; Cynamon and Fazzari 2015; Goda, Onaran and Stockhammer 2017). Richer households have a higher propensity to save and are more likely to hold financial wealth in risky assets (such as mutual funds, shares and bonds) and hence, more money ends up in the management of institutional investors or 'asset managers' (Epstein 2018; Gabor 2018). As a result, a small core of the global population, the so-called High Net Worth Individuals (Lysandrou 2011; Goda 2017), controls an increasingly larger share of incomes and wealth (Palma 2011; Saith 2011; Piketty 2014; Taylor, Ömer and Rezai 2015). This trend was strengthened by the shift towards capital-based pension schemes (Krippner 2011) and the structural increase in the liquidity preference of big shareholder-dominated corporations, which came about under pressure from activist shareholders wanting to 'disgorge the cash' within these firms (Lazonick 2014; Epstein 2018; Jayadev et al. 2018). However, with few sufficiently profitable investment opportunities in the "real economy", cash wealth -- originating out of a higher profit share, dividends, shareholder payouts and capital gains on earlier financial investments -- began to accumulate in global centrally managed 'institutional cash pools', the volume of which grew from an insignificant $100 billion in 1990 to a systemic $6 trillion at the end of 2013 (Pozsar 2011, 2015). [5]

OTC derivative trading requires the availability of cheap liquidity on demand (Mehrling 2012) and this means that the 'asset management complex' cannot invest the cash pools into long-term assets, but has to keep the liquidity available -- ready to use when the possibility for a profitable deal arises. But doing so poses enormous risks, because the global cash pools are basically uninsured: they are far too big to fall under the coverage of normal deposit-insurance schemes offered by the traditional banking system (Pozsar 2011). Securing 'principal safety' for the cash pools under their management thus became the main headache of the asset managers -- which proved to be a far greater challenge than generating adequate rates of return for the cash-owners. The reason was that the traditional way of securing principal safety of one's cash was by putting it in very short-term government bonds which were credit-rated as being 'safe' ( e.g. U.S. T-Bills or German Bunds ). This way, the cash pool became 'collateralized' -- backed up by sovereign bonds. But as inequality increased and global institutional cash pools expanded, the demand for safe collateral began to permanently exceed the availability of 'safe' government bonds (Pozsar 2011; Lysandrou and Nesvetailova 2017).

The only way out was by putting the cash into newly developed privately guaranteed instruments: asset-backed securities . These instruments were secured by collateral (Lysandrou and Nesvetailova 2017) -- that is, the cash pools were lent, on a very short term basis (often over-night), to securitization trusts, banks and other asset owners in exchange for safe and secure collateral -- on the agreement that the borrower would repurchase the collateral some time later (often the next day). This is called a repurchase or 'repo' transaction (Gorton and Metrick 2009) or an 'asset-backed commercial paper' deal (Covitz, Lang and Suarez 2013). Normally, the cash loan would be over-collateralized, with the cash provider receiving collateral of a higher value than the value of the cash; the basic workings of the 'repo' market are further explained in Storm (2018). These (short-term) deals are generally done within the shadow banking system, the mostly 'self-regulated' sphere of the financial sector which arose in response to the growing demand for risk intermediation on behalf of -- and the prioritization of a 'safe parking place' for -- the global institutional cash pools (Pozsar 2011; Pozsar and Singh 2011). The repo lender and the securities borrower -- each lends cash and gets back securities -- can re-use those securities as collateral to get repo loans for themselves. And the next cash lender, which gets the same securities as collateral, can re-use them again as collateral to get a repo loan for itself. And so on. This creates a 'chain' in which one set of securities gets re-used several times as collateral for several loans. This so-called re-hypothecation (Pozsar and Singh 2011) means that these securities were increasingly used as 'money', a means of payment in inter-bank deals, within the shadow banking system.

It should be clear that 'securities', which are privately 'manufactured' and guaranteed money market instruments, form the feedstock of this complex and opaque 'profit-generating machine' of inter-bank wheeling and dealing -- both by providing 'insurance' to the global cash pools and by acting as an (privately guaranteed) means of payment in OTC trading. 'Securitization' is the most critical, yet under-appreciated, enabler of financialization (Davis and Kim 2015). What then is securitization? It is the process of taking 'passive' assets with cash flows, such as mortgages held by commercial banks, and commodifying them into tradable securities. Securities are 'manufactured' using a portfolio of hundreds or thousands of underlying assets, all yielding a particular return (in the form of cash flow) and carrying a particular risk of default to their buyers. Due to the law of large numbers, the payoff from the portfolio becomes predictable and suitable for being sliced up in different 'tranches', each having a different risk profile. Storm (2018) provides a simple but illustrative numerical example of how a security is manufactured using a two-asset example. As Davis and Kim (2015) argue, securitization represents a fundamental shift in how finance is done. In the old days of 'originate-and-hold' (before the 1980s), (regulated) commercial banks would originate mortgage loans and keep them on their balance sheets for the duration of the loan period. But now in our era of 'originate-and-distribute', (de-regulated) commercial banks originate mortgages, but then sell them off to securitization trusts which turn these mortgages into 'securities' and vend them to financial investors. Securitization thus turns a concrete long-term relationship between a bank ( i.e. Schumpeter's 'ephor') and the loan-taker into an abstract relationship between anonymous financial markets and the loan-taker (in line with Hayek's legacy). Commercial banks are now mere 'underwriters' of the mortgage (which is quickly sold and securitized), while households which took the mortgage, are now de facto 'issuers of securities' on (global) financial markets. This is the essence of the shift in financial intermediation from banks to financial markets (Lysandrou and Nesvetailova 2017). Kane (2013, 2015) explains how this system is enjoying the implicit back-up of central banks and states and how it is leading to predatory risk-taking by mega-banks.

This securitization fundamentally transformed the 'rules of the capitalist game', often in rather perverse directions. For one, as finance expanded, the demand for 'investment-grade' (AAA-rated) securities grew -- and the result was a hunt for additional collateral akin to earlier gold rushes, write Pozsar and Singh (2011, p. 5): "Obtaining collateral is similar to mining. It involves both exploration (looking for deposits of collateral) and extraction (the "unearthing" of passive securities so they can be re-used as collateral for various purposes in the shadow banking system)." Collateral is the new gold -- and this explains why banks (before the Great Financial Crisis) gave loans to non-creditworthy (sub-prime) customers (Epstein 2018) and why these same banks are now eager to include the poor in the financial system (Mader 2018) and to enclose ever new spaces for profit-making (Arsel and Büscher 2012; Sathyamala 2017; Keucheyan 2018). Mortgage loans (sub-prime or prime) or micro-credit deals derive their systemic importance from the access they provide to the underlying collateral -- either in the form of residential property or of high-return cash flows on micro-loans, made low-risk by peer pressure.

This systemic importance (to the financial system, that is) by far exceeds the value of these loans to the actual borrowers and it has led to and is still leading to an overdose of finance -- with ruinous consequences. Likewise, one cannot understand what is going in commodity and food markets unless one appreciates that trading in 'commodities' and 'food' is not so much related to (present and future) consumption needs, but is increasingly dictated by the market's alternative collateral, store-of-value, and safe-asset role in the global economy (Clapp and Isakson 2018). That is, the commodity option or futures contract derives its value more from its usefulness as 'collateralized securities' to back-up speculative shadow-banking transactions than from its capacity to meet food demand or smoothen output prices for farmers. We can add a fourth law to Zuboff's Laws (2013), namely that anything which can be collateralized, will be collateralized. This even includes 'social policies', because the present value of future streams of cash benefits for the poor can serve as collateral (see Lavinas 2018). And because the major OTC markets require price volatility and spreads, exchange rate volatility and uncertainty, which are 'bad' for the economic development of countries attempting to industrialize (Bortz and Kaltenbrunner 2018), constitute a sine qua non for the profitability of major OTC instruments including forex swaps and credit default swaps (to 'hedge' the risks of the forex swaps). [7] Perverse incentives, excessive risk-taking, fictitious financial instruments -- it appears finance capitalism has reached its nadir. "In the way that even an accumulation of debts can appear as an accumulation of capital," as Marx (1981, pp. 607-08) insightfully observed, "we see the distortion involved in the credit system reach its culmination."

A 'One-Foot' Conclusion

The shift in financial intermediation from banks to financial markets, and the introduction of financial market logic into areas and domains where it was previously absent, have not just led to negative developmental impacts, but also changed the 'rules of the game', conduct and outcomes -- to the detriment of 'inclusive' economic development and in ways that have helped to legitimize -- what Palma (2009) has appositely called -- a 'rentiers' delight', a financialized mode of social regulation which facilitated rent-seeking practices of a self-serving global financial elite and at the same time enabled a sickening rise in inequality. Establishment (financial) economics has helped to de-politicize and legitimize this financialized mode of social regulation by invoking Hayek's epistemological claim that (financial) markets are the only legitimate, reliably welfare-enhancing foundation for a stable social order and economic progress.

It is this complacency of establishment economics which led to the global financial crash of 2008 and ten dire years of economic stagnation, high and rising inequalities in income and wealth, historically unprecedented levels of indebtedness, and mounting uncertainty about jobs and incomes in most nations. The crisis conditions crystalized into a steadily increasing popular dissatisfaction of those supposedly 'left behind by (financial) globalization' with the political and economic status quo; a dissatisfaction which amplified into a 'groundswell of discontent' -- to use the words of the IMF's Managing Director Christine Lagarde (2016). Angry and anxious electorates were transformed by demagogues into election-winning forces, as the British 'Brexit' vote, Trump's (2016) and Erdogan's (2017) election victories in the U.S. and Turkey, and recent political changes (toward authoritarianism) in Brazil, Egypt, the Philippines and India all attest (see Becker, Fetzer and Novy (2017) for an analysis of the Brexit vote; and Ferguson, Jorgenson and Chen (2018) for an assessment of the Trump vote).

We have to confront the Panglossian logic and arguments of (financial) economists, used to legitimize the current financialized global order as the 'best of all possible worlds". We must lay to rest the Hayekian claim that unregulated market-based finance is socially efficient -- as the macro- and micro-economic impacts of the rise to dominance of financial markets on capital accumulation, growth and distribution have overwhelmingly been deleterious (Epstein 2018). Market-based finance is no longer funding the real economy (Epstein 2018; Jayadev, Mason and Schröder 2018), but rather engages in self-serving strategy of rent-seeking (Chandrasekhar and Ghosh 2018; Mader 2018), looting the 'fisc' (Chandrasekhar and Ghosh 2018; Mader 2018), exchange rate and global stock market speculation (Bortz and Kaltenbrunner 2018), OTC derivatives speculation (Keucheyan 2018; Clapp and Isakson 2018) and collateral mining (Gabor 2018; Lavinas 2018) -- asphyxiating economic development.

This does not mean, however, that Schumpeter and Gerschenkron were wrong in calling the banker the 'ephor' of capitalism and a 'phenomenon of development'. Finance can positively contribute to economic development, something which indeed is "almost too obvious for serious discussion" as Miller wrote, but only when the 'ephor' is 'governed' and 'directed' by state regulation to structure accumulation and distribution into socially useful directions (Epstein 2018; Jayadev, Mason and Schröder 2018). The East Asian miracle economies prove the point that finance can be socially efficient if bankers can be made to work within the 'developmental mindset', the institutional arrangements and political compulsions of a 'developmental state', as argued by Wade (2018) -- China's recent move to (securities) market-based finance may be the beginning of unravelling of its growth miracle (Gabor 2018; BIS 2017).

Rather than letting financial markets discipline the rest of the economy and the whole of society, finance itself has to be disciplined by a countervailing social authority which governs it to act in socially desirable directions. One famous account in the Talmud tells about Rabbi Hillel, a great sage, who when he was asked to explain the Torah in the time that he could stand on one foot, replied: "Do not do unto others that which is repugnant to you. Everything else is commentary." If there is a one-foot summary of the literature reviewed in this introduction, it is this: "Finance is a terrible 'ephor', but, if and when domesticated, can be turned into a useful servant. Everything else is commentary."

[Feb 14, 2018] UKRAINE'S NADRA YUZIVSKA AND SHELL ENTERED INTO SHALE GAS PRODUCTION PSA

Jan 24, 2013 | oilmarket-magazine.com

A production sharing agreement (PSA) between Royal Dutch Shell and Ukraine's Nadra Yuzivska for the development of Yuzivske shale gas deposits located in Ukraine's Kharkiv and Donetsk regions was signed in Davos on 24 January 2013 through the mediation of Ukrainian president Viktor Yanukovych and Netherlands prime minister Mark Rutte. The agreement was inked by Ukraine's energy and coal industry minister Eduard Stavitsky and Royal Dutch Shell CEO Peter Voser.

Prior to the signing ceremony Yanukovych told journalists that Ukraine would benefit from the agreement since it would allow attracting investments, which Ukraine could use to increase the domestic natural gas production thus creating jobs, raising the level of the country's economy as well as increasing the budget revenues and providing funds for social needs.

On 23 January Ukraine's cabinet of ministers approved a draft PSA between Shell Exploration and Production Ukraine Investments B.V. and Nadra Yuzivska for Yuzivske shale gas field (7,886m2 acreage) development.

Yuzivske field prognostic resources are estimated at 2-4trln m3 of gas, which can be a viable alternative for costly natural gas volumes Ukraine imports form Russia. In the meanwhile US Energy Information Agency (EIA) estimates Ukraine's shale gas potential at 1.2trln m3 in this way making the country's shale gas reserves the 4th largest in Europe after Poland, France and Norway. Totally consuming some 60bn m3 of natural gas annually, Ukraine has to import 40bn m3 of natural gas from Russia priced $430 per 1,000 m3 based on the terms of agreements inked in 2009.

Ukraine's prime minister Mykola Azarov stated earlier that Yuzivske field commercial development over the span of a decade could give Ukraine an additional 8-10bn m3 of gas annually.

As Eduard Stavitsky put it in Davos, Ukraine could possibly meet its domestic natural gas demand in full in about 5 years of shale gas production cooperation with Shell. "According to Shell's optimistic scenario about 20bn m3 of gas could be extracted annually; according to the pessimistic one, at the very least 7-8bn m3. If the top forecasts were fulfilled, we would tackle the gas shortfall problem in Ukraine or might even go into surplus", Stavitsky was quoted as saying. He stated earlier that Shell saw investments under the deal of at least $10bn under the most likely scenario and possibly as much as $50bn.

OILMARKET Info
In May 2012 Shell was chosen the successful bidder for 7,800km2 Yuzivske acreage (Kharkiv and Donetsk regions, Ukraine) development with projected reserves estimated at 4.054trln m3 of gas of various categories. The project calls for raising at least $20mn (UAH1.6bn) in investments for the geological study phase, and $3.75bn (UAH30bn) for the industrial production phase. The agreement envisages stage-by-stage exploration, development and hydrocarbons production. Both companies (Shell and Nadro Yuzivske) will hold a 50% participation stake, with Shell chosen the project operator responsible for carrying out works under the terms of agreement.

According to Shell press service, the mentioned PSA was signed for 50 years period. The initial geological study phase at Yuzivske field implies 2D and 3D seismics as well as 15 well drilling, which is expected to enable effective exploration and assessments of hydrocarbon deposits potential especially that of natural gas trapped in compacted sandstone. Yuzivske field development will be implemented in line with the highest international HSE standards. In this way Shell is to carry out comprehensive possible environmental, social and public health impact assessment of the project prior to launch.

[Feb 14, 2018] The FBI and the President – Mutual Manipulation by James Petras

Highly recommended!
Notable quotes:
"... The liberals and Democrats and their allies in the FBI, political police and other elements of the security state apparatus were deeply involved in an attempt to implicate Russian government officials in a plot to manipulate US public opinion on Trump's behalf and corrupt the outcome of the election. However, the FBI, the Justice Department and Special Prosecutor Robert Mueller have produced no evidence of collusion linking the Russian government to a campaign to undermine Hillary Clinton's candidacy in favor of Trump. This is despite thousands of interviews and threats of long prison sentences against former Trump campaign advisers. Instead, they focus their attack on Trump's early campaign promise to find common ground in improving economic and diplomatic ties between the US and Russia, especially in confronting jihadi terrorists. ..."
"... The liberal-progressive FBI cohort turned into rabid Russia-bashers demanding that Trump take a highly aggressive stance against Moscow, while systematically eliminating his military and security advisors who expressed anti-confrontation sentiments. In the spirit of a Joe McCarthy, the liberal-left launched hysterical attacks on any and every Trump campaign adviser who had spoken to, dined with or exchanged eyebrows with any and all Russians! ..."
"... The conversion of liberalism to the pursuit of political purges is unprecedented. Their collective amnesia about the long-term, large-scale involvement by the FBI in the worst criminal violations of democratic values is reprehensible. The FBI's anti-communist crusade led to the purge of thousands of trade unionists from the mid-1940's onward, decimating the AFL-CIO. They blacklisted actors, screen writers, artists, teachers, university academics, researchers, scientists, journalists and civil rights leaders as part of their sweeping purge of civil society. ..."
"... President Trump has pursued an agenda mirroring the police state operations of the FBI – only on a global scale. Trump's violation of international law includes collaboration and support for Saudi Arabia's tyrannical invasion and destruction of the sovereign nation of Yemen; intensified aid and support for Israel's ethnic war against the Palestinian people; severe sanctions and threatened nuclear first-strike against North Korea (DPRK); increased deployment of US special forces in collaboration with the jihadi terrorist war to overthrow the legitimate government of Syria; coup-mongering, sabotage, sanctions and economic blockade of Venezuela; NATO missile and nuclear encirclement of Russia; and the growing naval threats against China ..."
"... Domestically, Trump's response to the FBI's blackmail has been to replace the original political leadership with his own version; to expand and increase the police state powers against immigrants; to increase the powers of the major tech companies to police and intensify work-place exploitation and the invasion of citizens' privacy; to expand the unleash the power of state agents to torture suspects and to saturate all public events, celebrations and activities with open displays of jingoism and militarism with the goal of creating pro-war public opinion. ..."
"... Even the fight within the two-headed reactionary party of the US oligarchy has had a positive effect. Each side is hell-bent on exposing the state-sponsored crimes of the other. In an unprecedented and historic sense, the US and world public is witness to the spies, lies and crimes of the leadership and elite on prime time and on the wide screen. We head in two directions. In one direction, there are the threats of nuclear war, economic collapse, environmental disasters and a full blown police state. In the other direction, there is the demise of empire, a revived and renewed civil society rooted in a participatory economy and a renewed moral order ..."
Feb 09, 2018 | www.unz.com

Few government organizations have been engaged in violation of the US citizens' constitutional rights for as long a time and against as many individuals as the Federal Bureau of Investigation (FBI). Seldom has there been greater collusion in the perpetration of crimes against civil liberties, electoral freedom and free and lawful expression as what has taken place between the FBI and the US Justice Department.

In the past, the FBI and Justice Department secured the enthusiastic support and public acclaim from the conservative members of the US Congress, members of the judiciary at all levels and the mass media. The leading liberal voices, public figures, educators, intellectuals and progressive dissenters opposing the FBI and their witch-hunting tactics were all from the left. Today, the right and the left have changed places: The most powerful voices endorsing the FBI and the Justice Department's fabrications, and abuse of constitutional rights are on the left, the liberal wing of the Democratic Party and famous liberal media corporations and public opinion makers.

The recently published Congressional memo, authored by Congressman Devin Nunes, provides ample proof that the FBI spied on Trump campaign workers with the intent to undermine the Republican candidate and sabotage his bid for the presidency. Private sector investigators, hired by Trump's rival Hillary Clinton and the Democratic National Committee, worked with pro-Clinton operatives within the FBI and Justice Department to violate the national electoral process while flouting rules governing wiretaps on US citizens. This was done with the approval of the sitting Democratic President Barack Obama.

The liberals and Democrats and their allies in the FBI, political police and other elements of the security state apparatus were deeply involved in an attempt to implicate Russian government officials in a plot to manipulate US public opinion on Trump's behalf and corrupt the outcome of the election. However, the FBI, the Justice Department and Special Prosecutor Robert Mueller have produced no evidence of collusion linking the Russian government to a campaign to undermine Hillary Clinton's candidacy in favor of Trump. This is despite thousands of interviews and threats of long prison sentences against former Trump campaign advisers. Instead, they focus their attack on Trump's early campaign promise to find common ground in improving economic and diplomatic ties between the US and Russia, especially in confronting jihadi terrorists.

The liberal-progressive FBI cohort turned into rabid Russia-bashers demanding that Trump take a highly aggressive stance against Moscow, while systematically eliminating his military and security advisors who expressed anti-confrontation sentiments. In the spirit of a Joe McCarthy, the liberal-left launched hysterical attacks on any and every Trump campaign adviser who had spoken to, dined with or exchanged eyebrows with any and all Russians!

The conversion of liberalism to the pursuit of political purges is unprecedented. Their collective amnesia about the long-term, large-scale involvement by the FBI in the worst criminal violations of democratic values is reprehensible. The FBI's anti-communist crusade led to the purge of thousands of trade unionists from the mid-1940's onward, decimating the AFL-CIO. They blacklisted actors, screen writers, artists, teachers, university academics, researchers, scientists, journalists and civil rights leaders as part of their sweeping purge of civil society.

The FBI investigated the private lives of Martin Luther King and Malcolm X, even threatening their family members. They illegally spied on and infiltrated civil liberties organizations, and used provocateurs and spies in anti-war groups. Individuals lives were destroyed, some were driven to suicide; important popular American organizations were undermined to the detriment of millions. This has been its focus since its beginning and continues with the current fabrication of anti-Russian propaganda and investigations.

President Trump: Victim and Executor

President Trump has pursued an agenda mirroring the police state operations of the FBI – only on a global scale. Trump's violation of international law includes collaboration and support for Saudi Arabia's tyrannical invasion and destruction of the sovereign nation of Yemen; intensified aid and support for Israel's ethnic war against the Palestinian people; severe sanctions and threatened nuclear first-strike against North Korea (DPRK); increased deployment of US special forces in collaboration with the jihadi terrorist war to overthrow the legitimate government of Syria; coup-mongering, sabotage, sanctions and economic blockade of Venezuela; NATO missile and nuclear encirclement of Russia; and the growing naval threats against China .

Domestically, Trump's response to the FBI's blackmail has been to replace the original political leadership with his own version; to expand and increase the police state powers against immigrants; to increase the powers of the major tech companies to police and intensify work-place exploitation and the invasion of citizens' privacy; to expand the unleash the power of state agents to torture suspects and to saturate all public events, celebrations and activities with open displays of jingoism and militarism with the goal of creating pro-war public opinion.

In a word: From the right to the left there are no political options to choose from among the two ruling political parties. Popular political movements and mass demonstrations have risen up against Trump with clear justification, but have since dissolved and been absorbed. They came together from diverse sectors: Women against sexual abuse and workplace humiliation; African-Americans against police impunity and violence; and immigrants against mass expulsion and harassment. They staged mass demonstrations and then declined as their 'anti-Trump' animus was frustrated by the liberal-democrats hell-bent on pursuing the Russian connection.

In the face of the national-political debacle local and regional movements became the vehicle to support the struggles. Women organized at some workplaces and gained better protection of their rights; African-Americans vividly documented and published video evidence of the systematic brutal violation of their rights by the police state and effectively acted to restrain local police violence in a few localities; immigrant workers and especially their children gained broad public sympathy and allies within religious and political organizations; and anti-Trump movements combined with critics of the liberal/democrat apparatus to build broader movements and especially oppose growing war-fever.

Abroad, bi-partisan wars have failed to defeat independent state and mass popular resistance struggles for national sovereignty everywhere – from North Korea, Iran, Yemen, Syria, and Venezuela and beyond.

Even the fight within the two-headed reactionary party of the US oligarchy has had a positive effect. Each side is hell-bent on exposing the state-sponsored crimes of the other. In an unprecedented and historic sense, the US and world public is witness to the spies, lies and crimes of the leadership and elite on prime time and on the wide screen. We head in two directions. In one direction, there are the threats of nuclear war, economic collapse, environmental disasters and a full blown police state. In the other direction, there is the demise of empire, a revived and renewed civil society rooted in a participatory economy and a renewed moral order .

[Feb 11, 2018] How Russiagate fiasco destroys Kremlin moderates, accelerating danger for a hot war

Highly recommended!
Notable quotes:
"... The pro-Hillary warmongering media, the ones that pushed for war in Iraq and elsewhere, through big lies and false evidence, are the vanguard of this ugly machine that supports the most terrible Trump administration bills, yet, this machine can't stop accusing him for 'colluding' with Russia that 'interfered' in the 2016 US election. Of course, no evidence presented for such an accusation and no one really can explain what that 'interference' means. ..."
"... They're accusing the President of the United States of being a Russian agent, this has never happened in American history. However much you may loathe Trump, this is a whole new realm of defamation. For a number of years, there's been a steady degradation of American political culture and discourse, generally. There was a time when I hoped or thought that it would be the Democratic Party that would push against that degradation ..."
"... Now, however, though I'm kind of only nominally, a Democrat, it's the Democratic Party that's degrading our political culture and our discourse. So, this is MSNBC, which purports to be not only the network of the Democratic Party, but the network of the progressive wing of the Democratic Party, is now actually because this guy was a semi-anchor was asking the question to an American senator, " Do you think that Representative Nunes, because he wants the memo released, has been compromised by the Kremlin? " ..."
"... And by the way, if people will say, " Well, it's a weak capitulation of McCarthyism, " I say no, it's much more than that because McCarthy was obsessed with Communist. That was a much narrower concept than being obsessed with anybody who might be under Russian influence of any kind. The so-called affinity for Russia. Well, I have a profound affinity for Russian culture and for Russian history. I study it all the time. This is something new. And so, when you accuse a Republican or any Congressman of being a Kremlin agent, this has become a commonplace. We are degraded. ..."
"... We are building up our military presence there, so the Russians are counter-building up, though within their territory. That means the chances of hot war are now much greater than they were before. ..."
"... Every time Trump has tried with Putin to reach a cooperative arrangement, for example, on fighting terrorism in Syria, which is a necessary purpose, literally, the New York Times and the others call him treasonous. Whereas, in the old days, the old Cold War, we had a robust discussion. There is none here. We have no alert system that's warning the American people and its representatives how dangerous this is. And as we mentioned before, it's not only Nunes, it's a lot of people who are being called Kremlin agents because they want to digress from the basic narrative. ..."
"... Meanwhile, people in Moscow who formed their political establishment, who surround Putin and the Kremlin, I mean, the big brains who are formed policy tankers, and who have always tended to be kind of pro-American, and very moderate, have simply come to the conclusion that war is coming. ..."
"... The Democrats couldn't had downgrade their party further. This disgusting spectacle would make FDR totally ashamed of what this party has become. Not only they are voting for every pro-plutocracy GOP bill under Trump administration, but they have become champions in bringing back a much worse and unpredictable Cold War that is dangerously escalating tension with Russia. ..."
Feb 06, 2018 | failedevolution.blogspot.gr

How Russiagate fiasco destroys Kremlin moderates, accelerating danger for a hot war with Russia globinfo freexchange

Corporate Democrats can't stop pushing for war through the Russiagate fiasco.

The party has been completely taken over by the neocon/neoliberal establishment and has nothing to do with the Left. The pro-Hillary warmongering media, the ones that pushed for war in Iraq and elsewhere, through big lies and false evidence, are the vanguard of this ugly machine that supports the most terrible Trump administration bills, yet, this machine can't stop accusing him for 'colluding' with Russia that 'interfered' in the 2016 US election. Of course, no evidence presented for such an accusation and no one really can explain what that 'interference' means.

But things are probably much worse, because this completely absurd persistence on Russiagate fiasco that feeds an evident anti-Russian hysteria, destroys all the influence of the Kremlin moderates who struggle to keep open channels between Russia and the United States.

Stephen Cohen, professor emeritus of Russian studies, history, and politics at NY University and Princeton University, explained to Aaron Maté and the Real News the terrible consequences:

They're accusing the President of the United States of being a Russian agent, this has never happened in American history. However much you may loathe Trump, this is a whole new realm of defamation. For a number of years, there's been a steady degradation of American political culture and discourse, generally. There was a time when I hoped or thought that it would be the Democratic Party that would push against that degradation.

Now, however, though I'm kind of only nominally, a Democrat, it's the Democratic Party that's degrading our political culture and our discourse. So, this is MSNBC, which purports to be not only the network of the Democratic Party, but the network of the progressive wing of the Democratic Party, is now actually because this guy was a semi-anchor was asking the question to an American senator, " Do you think that Representative Nunes, because he wants the memo released, has been compromised by the Kremlin? "

I think all of us need to focus on what's happened in this country when in the very mainstream, at the highest, most influential levels of the political establishment, this kind of discourse is no longer considered an exception. It is the norm. We hear it daily from MSNBC and CNN, from the New York Times and the Washington Post, that people who doubt the narrative of what's loosely called Russiagate are somehow acting on behalf of or under the spell of the Kremlin, that we aren't Americans any longer. And by the way, if people will say, " Well, it's a weak capitulation of McCarthyism, " I say no, it's much more than that because McCarthy was obsessed with Communist. That was a much narrower concept than being obsessed with anybody who might be under Russian influence of any kind. The so-called affinity for Russia. Well, I have a profound affinity for Russian culture and for Russian history. I study it all the time. This is something new. And so, when you accuse a Republican or any Congressman of being a Kremlin agent, this has become a commonplace. We are degraded.

The new Cold War is unfolding not far away from Russia, like the last in Berlin, but on Russia's borders in the Baltic and in Ukraine. We are building up our military presence there, so the Russians are counter-building up, though within their territory. That means the chances of hot war are now much greater than they were before. Meanwhile, not only do we not have a discussion of these real dangers in the United States but anyone who wants to incite a discussion, including the President of the United States, is called treasonous. Every time Trump has tried with Putin to reach a cooperative arrangement, for example, on fighting terrorism in Syria, which is a necessary purpose, literally, the New York Times and the others call him treasonous. Whereas, in the old days, the old Cold War, we had a robust discussion. There is none here. We have no alert system that's warning the American people and its representatives how dangerous this is. And as we mentioned before, it's not only Nunes, it's a lot of people who are being called Kremlin agents because they want to digress from the basic narrative.

Meanwhile, people in Moscow who formed their political establishment, who surround Putin and the Kremlin, I mean, the big brains who are formed policy tankers, and who have always tended to be kind of pro-American, and very moderate, have simply come to the conclusion that war is coming. They can't think of a single thing to tell the Kremlin to offset hawkish views in the Kremlin. Every day, there's something new. And these were the people in Moscow who are daytime peacekeeping interlockers. They have been destroyed by Russiagate. Their influence as Russia is zilch. And the McCarthyites in Russia, they have various terms, now called the pro-American lobby in Russia 'fifth columnists'. This is the damage that's been done. There's never been anything like this in my lifetime.

https://www.youtube.com/embed/CpVBA4OIfb8

The Democrats couldn't had downgrade their party further. This disgusting spectacle would make FDR totally ashamed of what this party has become. Not only they are voting for every pro-plutocracy GOP bill under Trump administration, but they have become champions in bringing back a much worse and unpredictable Cold War that is dangerously escalating tension with Russia.

And, unfortunately, even the most progressives of the Democrats are adopting the Russiagate bogus, like Bernie Sanders, because they know that if they don't obey to the narratives, the DNC establishment will crush them politically in no time.

[Feb 11, 2018] The Bankruptcy of the American Left by Chris Hedges

Highly recommended!
Notable quotes:
"... Corporate capitalism is supranational . It owes no loyalty to any nation-state. It uses the projection of military power by the United States to protect and advance its economic interests but at the same time cannibalizes the U.S., dismantling its democratic institutions, allowing its infrastructure to decay and deindustrializing its factory centers to ship manufacturing abroad to regions where workers are treated as serfs. ..."
"... Resistance to this global cabal of corporate oligarchs must also be supranational. It must build alliances with workers around the globe. It must defy the liberal institutions, including the Democratic Party, which betray workers. It is this betrayal that has given rise to fascist and protofascist movements in Europe and other countries ..."
"... Capitalism, at its core, is about the commodification of human beings and the natural world for exploitation and profit. To increase profit, it constantly seeks to reduce the cost of labor and demolish the regulations and laws that protect the common good. But as capitalism ravages the social fabric, it damages, like any parasite, the host that allows it to exist. It unleashes dark, uncontrollable yearnings among an enraged population that threaten capitalism itself. ..."
"... "We live in a global economy, highly interconnected," North went on. "A globalized process of production, financial system. The ruling class has an international policy. They organize themselves on an international scale. The labor movement has remained organized on a national basis. It has been completely incapable of answering this [ruling-class policy]. Therefore, it falls behind various national protectionist programs. The trade unions support Trump." ..."
"... "How many times can you turn on a mainstream news like CNN and expect to hear the word 'capitalism' discussed? Bernie [Sanders] did one thing. He called himself a democratic socialist , which was a bit transformational simply in terms of rhetoric. He's saying there's something other than capitalism that we ought to be talking about." ..."
"... When feminism was turned into that kind of leaning in, it created an identity politics that legitimizes the very system that needs to be critiqued. The early feminists were overtly socialists. As was [Martin Luther] King. But all that got erased." ..."
"... "The left became a kind of grab bag of discrete, siloed identity movements," Derber said. "This is very connected to moral purity. You're concerned about your advancement within the existing system. You're competing against others within the existing system. Everyone else has privilege. You're just concerned about getting your fair share." ..."
"... "Identity politics is to a large degree a right-wing discourse," Derber said. "It focuses on tribalism tied in modern times to nationalism, which is always militaristic. When you break the left into these siloed identity politics, which are not contextualized, you easily get into this dogmatic fundamentalism. The identity politics of the left reproduces the worse sociopathic features of the system as a whole. It's scary." ..."
Feb 05, 2018 | www.truthdig.com

There will be no economic or political justice for the poor, people of color, women or workers within the framework of global, corporate capitalism. Corporate capitalism, which uses identity politics , multiculturalism and racial justice to masquerade as politics, will never halt the rising social inequality, unchecked militarism, evisceration of civil liberties and omnipotence of the organs of security and surveillance. Corporate capitalism cannot be reformed, despite its continually rebranding itself. The longer the self-identified left and liberal class seek to work within a system that the political philosopher Sheldon Wolin calls " inverted totalitarianism ," the more the noose will be tightened around our necks. If we do not rise up to bring government and financial systems under public control -- which includes nationalizing banks, the fossil fuel industry and the arms industry -- we will continue to be victims.

Corporate capitalism is supranational . It owes no loyalty to any nation-state. It uses the projection of military power by the United States to protect and advance its economic interests but at the same time cannibalizes the U.S., dismantling its democratic institutions, allowing its infrastructure to decay and deindustrializing its factory centers to ship manufacturing abroad to regions where workers are treated as serfs.

Resistance to this global cabal of corporate oligarchs must also be supranational. It must build alliances with workers around the globe. It must defy the liberal institutions, including the Democratic Party, which betray workers. It is this betrayal that has given rise to fascist and protofascist movements in Europe and other countries. Donald Trump would never have been elected but for this betrayal. We will build a global movement powerful enough to bring down corporate capitalism or witness the rise of a new, supranational totalitarianism.

The left, seduced by the culture wars and identity politics, largely ignores the primacy of capitalism and the class struggle. As long as unregulated capitalism reigns supreme, all social, economic, cultural and political change will be cosmetic. Capitalism, at its core, is about the commodification of human beings and the natural world for exploitation and profit. To increase profit, it constantly seeks to reduce the cost of labor and demolish the regulations and laws that protect the common good. But as capitalism ravages the social fabric, it damages, like any parasite, the host that allows it to exist. It unleashes dark, uncontrollable yearnings among an enraged population that threaten capitalism itself.

"This is a crisis of global dimensions," David North , the national chairman of the Socialist Equality Party in the United States, told me when we spoke in New York. "It is a crisis that dominates every element of American politics. The response that we're seeing, the astonishing changes in the state of the government, in the decay of political life, the astonishingly low level of political and intellectual discourse, is in a certain sense an expression of the bewilderment of the ruling elite to what it's going through."

"We can expect a monumental explosion of class struggle in the United States," he said. "I think this country is a social powder keg. There is an anger that exists over working conditions and social inequality. However [much] they may be confused on many questions, workers in this country have a deep belief in democratic rights. We totally reject the narrative that the working class is racist. I think this has been the narrative pushed by the pseudo-left, middle-class groups who are drunk on identity politics, which have a vested interest in constantly distracting people from the essential class differences that exist in the society. Dividing everyone up on the basis of race, gender, sexual preference fails to address the major problem."

North argues, correctly, that capitalism by its nature lurches from crisis to crisis. This makes our current predicament similar to past crises.

"All the unanswered questions of the 20th century -- the basic problem of the nation-state system, the reactionary character of private ownership with the means of production, corporate power, all of these issues which led to the first and Second world wars -- are with us again, and add to that fascism," he said.

"We live in a global economy, highly interconnected," North went on. "A globalized process of production, financial system. The ruling class has an international policy. They organize themselves on an international scale. The labor movement has remained organized on a national basis. It has been completely incapable of answering this [ruling-class policy]. Therefore, it falls behind various national protectionist programs. The trade unions support Trump."

The sociologist Charles Derber , whom I also spoke with in New York, agrees.

"We don't really have a left because we don't have conversations about capitalism," Derber said. "How many times can you turn on a mainstream news like CNN and expect to hear the word 'capitalism' discussed? Bernie [Sanders] did one thing. He called himself a democratic socialist , which was a bit transformational simply in terms of rhetoric. He's saying there's something other than capitalism that we ought to be talking about."

"As the [capitalist] system universalizes and becomes more and more intersectional, we need intersectional resistance," Derber said. "At the end of the 1960s, when I was getting my own political education, the universalizing dimensions of the left, which was growing in the '60s, fell apart. The women began to feel their issues were not being addressed. They were treated badly by white males, student leaders. Blacks, Panthers, began to feel the whites could not speak for race issues. They developed separate organizations. The upshot was the left lost its universalizing character. It no longer dealt with the intersection of all these issues within the context of a militarized, capitalist, hegemonic American empire. It treated politics as siloed group identity problems. Women had glass ceilings. Same with blacks. Same with gays."

The loss of this intersectionality was deadly. Instead of focusing on the plight of all of the oppressed, oppressed groups began to seek representation for their own members within capitalist structures.

"Let's take a modern version of this," Derber said. " Sheryl Sandberg , the COO of Facebook, she did a third-wave feminism thing. She said 'lean in.' It captures this identity politics that has become toxic on the left. What does 'lean in' mean? It means women should lean in and go as far as they can in the corporation. They should become, as she has, a major, wealthy executive of a leading corporation. When feminism was turned into that kind of leaning in, it created an identity politics that legitimizes the very system that needs to be critiqued. The early feminists were overtly socialists. As was [Martin Luther] King. But all that got erased."

"The left became a kind of grab bag of discrete, siloed identity movements," Derber said. "This is very connected to moral purity. You're concerned about your advancement within the existing system. You're competing against others within the existing system. Everyone else has privilege. You're just concerned about getting your fair share."

"People in movements are products of the system they're fighting," he continued. "We're all raised in a capitalistic, individualistic, egoistic culture, so it's not surprising. And it has to be consciously recognized and struggled against. Everybody in movements has been brought up in systems they're repulsed by. This has created a structural transformation of the left. The left offers no broad critique of the political economy of capitalism. It's largely an identity-politics party. It focuses on reforms for blacks and women and so forth. But it doesn't offer a contextual analysis within capitalism."

Derber, like North, argues that the left's myopic, siloed politics paved the way for right-wing, nativist, protofascist movements around the globe as well as the ascendancy of Trump.

"When you bring politics down to simply about helping your group get a piece of the pie, you lose that systemic analysis," he said. "You're fragmented. You don't have natural connections or solidarity with other groups. You don't see the larger systemic context. By saying I want, as a gay person, to fight in the military, in a funny way you're legitimating the American empire. If you were living in Nazi Germany, would you say I want the right of a gay person to fight in combat with the Nazi soldiers?"

"I don't want to say we should eliminate all identity politics," he said. "But any identity politics has to be done within the framework of understanding the larger political economy. That's been stripped away and erased. Even on the left, you cannot find a deep conversation about capitalism and militarized capitalism. It's just been erased. That's why Trump came in. He unified a kind of very powerful right-wing identity politics built around nationalism, militarism and the exceptionalism of the American empire."

"Identity politics is to a large degree a right-wing discourse," Derber said. "It focuses on tribalism tied in modern times to nationalism, which is always militaristic. When you break the left into these siloed identity politics, which are not contextualized, you easily get into this dogmatic fundamentalism. The identity politics of the left reproduces the worse sociopathic features of the system as a whole. It's scary."

"How much of the left," he asked, "is reproducing what we are seeing in the society that we're fighting?"

[Feb 11, 2018] Why legendary investor Jim Rogers anticipates a catastrophic bear market 'within our lifetime'

Feb 11, 2018 | theduran.com

Seventy five year old Wall Street investor and financial analyst Jim Rogers says he's expecting another harsh bear market to come our way – and soon.

His reasoning for anticipating that it will be of catastrophic proportions lies in the fact that the global economy has accumulated such a large amount of debt since the 2007-2008 financial crisis. The recent correction in the stock market, with the Dow Jones industrial average posting its worst week in two years. Earlier in the session, the index was on track for its worst week since October 2008, during the financial crisis. As Bloomberg reports :

While Rogers isn't saying that stocks are poised to enter bear territory now -- or making any claim to know when they will -- he says he's not surprised that U.S. equities resumed their selloff Thursday and he expects the rout to continue.

"When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime ," Rogers, the chairman of Rogers Holdings Inc., said in a phone interview. " Debt is everywhere, and it's much, much higher now ."

The plunge in equity markets resumed Thursday, as the S&P 500 Index sank 3.8 percent, taking its rout since a Jan. 26 record past 10 percent and meeting the accepted definition of a correction. The Dow Jones Industrial Average plunged more than 1,000 points, while the losses continued in early Asian trading Friday as the Nikkei 225 Stock Average dropped as much as 3.5 percent.

Bear Markets

Rogers has seen severe bear markets before. Even this century, the Dow plunged more than 50 percent during the financial crisis, from a peak in October 2007 through a low in March 2009. It sank 38 percent from its high during the IT bubble in 2000 through a low in 2002.

"Jim has been talking about severe corrections since I started in business over 30 years ago," said Alibaba Group Holding Ltd. President Mike Evans, a former Goldman Sachs Group Inc. banker. "So I'm sure he'll be right at some point."

Rogers predicts the stock market will experience jitters until the Federal Reserve increases borrowing costs. That, he says, will be the point when stocks go up again. He said he'll buy an agriculture index today, reiterating his view that prices of such commodities have been depressed for some time.

"I'm very bad in market timing," Rogers said. "But maybe there will be continued sloppiness until March when they raise interest rates, and it looks like the market will rally."

[Feb 11, 2018] Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts

Notable quotes:
"... These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported . ..."
"... Population in the country was very poorly informed any how. And now, they, The Ruling Establishment which includes Media, have completely messed the people up -- making them compliant and confused. ..."
"... Does any body have idea how they are going to bring an end to this completely concocted bizarre drama? ..."
Feb 09, 2018 | consortiumnews.com

Originally from: 'This is Nuts' Liberals Launch 'Largest Mobilization in History' in Defense of Russiagate Probe – Consortiumnews By Coleen Rowley and Nat Parry

... ... ...

Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts.

These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported .

We saw this in action last decade, when after months of disinformation, about 70% of Americans came to falsely believe that Saddam Hussein was behind 9/11 when the truth was the opposite – Saddam was actually an enemy of the Al Qaeda perpetrators.

... ... ...

Coleen Rowley, a retired FBI special agent and division legal counsel whose May 2002 memo to then-FBI Director Robert Mueller exposed some of the FBI's pre-9/11 failures, was named one of TIME magazine's "Persons of the Year" in 2002.

Nat Parry is co-author of Neck Deep: The Disastrous Presidency of George W. Bush . weilunion , February 9, 2018 at 5:35 pm

"Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts. These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported. We saw this in action last decade, when after months of disinformation, about 70% of Americans came to falsely believe that Saddam Hussein was behind 9/11 when the truth was the opposite -- Saddam was actually an enemy of the Al Qaeda perpetrators."

Cognitive dissonance, lack of critical thinking, reliance on authority, in this case a former head of a criminal organization called the FBI.

People have no class consciousness. They have no idea who their enemies ar or how to organize.

This is the sad case of liberalism melting like warm butter while the fascists congeal.

Joe Tedesky , February 9, 2018 at 7:27 pm

Nicely put.

Dave P. , February 10, 2018 at 2:51 am

"Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts. . ."

Yes. On any bar counter, just start some conversation with the person sitting to you. With all this bizarre drama -- Russia-Gate, Iran, memos, dossier . . . going on TV, and in Washington being enacted knowingly by the the Powers who rule -- both, so called Liberals and Conservatives -- one can see how this emotional manipulation has worked to snooker just about most of the population. I just had the experience today during lunch at a bar counter. In our conversation, the person sitting next to me was ready to nuke Iran, N. Korea, and go after Russia; and go after Hillary too.

Population in the country was very poorly informed any how. And now, they, The Ruling Establishment which includes Media, have completely messed the people up -- making them compliant and confused.

Does any body have idea how they are going to bring an end to this completely concocted bizarre drama?

[Feb 11, 2018] Higher interest rates can tip the housing market, Yale's Shiller warns

Feb 11, 2018 | finance.yahoo.com

Turbulence is rocking the U.S. stock market as investors fear a strong economy will send interest rates higher. However Yale economics professor Robert Shiller said Thursday, while higher rates could tip the housing market the real issue is inflation.

"Obviously interest rates it's the price of time. It's a fundamental factor in our economy. And people watch it. A lot of people think the stock market is overpriced, but what's the alternative?" Shiller asked. "If you go into debt, it has not been a very good return either. But that's all changing now and maybe that's the new narrative."

The Federal Reserve in January during its' first policy meeting of 2018 left its benchmark interest rate unchanged in a range of 1.25 percent to 1.5 percent -- citing continued job growth an stronger inflation and setting the stage for a rate hike in March.

Despite acclimation for a low interest rates, Shiller pointed out how homebuyers have gotten used to a no-inflation environment.

According to the latest employment report, wage growth rose 2.9% compared to the same period a year earlier. Investors fear the Federal Reserve might raise interest rates faster than anticipated due to stronger-than-expected wage growth data, which has caused the 10-year Treasury yield to rise to 2.85%. Increasing bond yields impact the housing market, as mortgage rates tend to follow the same path.

But in Shiller's opinion, the latest data isn't "alarming."

"That's not necessarily inflationary," Shiller said. "But if the economy stays full tilt as it has been, a pickup of inflation would not be a surprise and some people wouldn't mind it so much."

[Feb 11, 2018] This Is Where They Completely Lost Their Minds" - Hussman Zero Hedge Zero Hedge

Feb 11, 2018 | www.zerohedge.com

Element -> Catullus Feb 10, 2018 8:52 PM Permalink

One of the more prescient remarks Hussman has been making in the past few months is the tendency for the speculatively frenzied mindset, to fail to recognise the synergistic effects of its own speculation on the resulting market valuations, but instead wants to presume that some other deep integral factor must be responsible for the rising valuation levels, the miracle of the grassy uplands, which they keep seeing, and which keeps them speculating all the more.

"This could go on ... and on ... and on ...", and then it doesn't.

Hence the classic tendency to sharp rises and even sharper falls near the top of the cycle.

Same occurred in China in 2015/2016, but almost no one ever seems to remember this, it's always "different this time".

And never is.

And you're currently thinking that it just ain't so ... this time around ... this could go on ... and on ...

ebworthen Feb 10, 2018 1:38 PM Permalink

S&P 666 again! That low had a lot of meaning.

No such thing as money or markets anymore, all perception.

[Feb 11, 2018] Paul Tudor Jones I'd rather be holding hot coal than U.S. Treasury bonds

Notable quotes:
"... 'By the way, Treasury auctions will increase this year from the current projection of $583 billion to almost $1 trillion. Relative to recent auction sizes, Treasury auctions will be higher by $500 billion next year and by $545 billion in 2020. And, secondly, the Congressional Budget Office's long-term projection for our debt/GDP will eclipse that of Japan at its peak, possibly making us the most indebted country in the world by 2033.'" ..."
Feb 11, 2018 | finance.yahoo.com

Legendary macro trader Paul Tudor Jones predicted that tax reform would have huge implications on the markets.

Jones, who rarely makes public comments on the markets, sent an investor update on February 2 just ahead of this week's wild swings in the market with the S&P 500 moving into correction territory.

In the letter, he highlighted how President Trump's State of the Union address on Jan. 30 touting "the biggest tax reforms in American history" should frighten investors who've amassed more than $3 trillion in bonds into mutual funds and exchange-traded funds since 2008.

"This statement probably brought the loudest cheer of the night this week as all the Republicans jumped to their feet and offered a chorus of huzzahs. No doubt the tax cut has had a profound impact on the economy in the short-term and that will continue," Jones wrote. "But I wonder if they would have remained cheering if President Trump had followed with, 'By the way, Treasury auctions will increase this year from the current projection of $583 billion to almost $1 trillion. Relative to recent auction sizes, Treasury auctions will be higher by $500 billion next year and by $545 billion in 2020. And, secondly, the Congressional Budget Office's long-term projection for our debt/GDP will eclipse that of Japan at its peak, possibly making us the most indebted country in the world by 2033.'"

[Feb 11, 2018] Justice department's No 3 official to take Walmart's top legal job

Feb 11, 2018 | www.theguardian.com

Revolving door in action

Brand attracted interest because of her potential to assume a key role in the Trump-Russia investigation. The official overseeing the special counsel Robert Mueller's investigation, the deputy attorney general Rod Rosenstein, has been repeatedly criticized by Trump. If Rosenstein had been fired or quit, oversight would have fallen to Brand. That job would now fall to the solicitor general, Noel Francisco.

"She felt this was an opportunity she couldn't turn down," her friend and former colleague Jamie Gorelick said. Walmart sought Brand to be head of global corporate governance at the retail giant, a position Gorelick said has legal and policy responsibilities that will cater to her strengths.
"It really seems to have her name on it," Gorelick said.

[Feb 11, 2018] So the neolibs are acting like deficit hawks just to show up the raging hypocrisy of the Republicans? Gimme a break.

Feb 11, 2018 | www.theguardian.com

sammy3110 -> Mardak , 11 Feb 2018 00:04

So the neolibs are acting like deficit hawks just to show up the raging hypocrisy of the Republicans? Gimme a break.
Ben Groetsch , 10 Feb 2018 23:59
Wolfe will never get it about Trump. The debt was left over by Bush and Obama in the last two decades. Party establishment politicians who are owned by corporate donors, didn't want fair taxes on the wealthy, but rather leave congressional budgets with large blobs of red ink. So far, that method has worked in order for voters to be duped with lies and corporate PR stuff. Meanwhile, Trump gets the shaft for something he didn't create in the first place. Maybe Wolfe should be spending his time and skills criticizing the last US Presidential Administration for grabbing the purse out of the hands of taxpayers by supporting worthless government programs like TARP, cash for clunkers, Obamacare, and shovel ready jobs that don't exist in reality.
AttyFAM -> curious_in_uk , 10 Feb 2018 19:11
The deficit is increasing.
Until Trump, the RATE of the deficit increase was declining under Obama. Now it is increasing.
Obama - 68% increase
Bush 2 - 101% increase
Clinton - 32% increase
Bush 1 - 54% increase
Reagan - 186% increase
https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296
angryinsocal , 10 Feb 2018 18:12
Of all the comical lies sold to us by the RepubliKlan and their Antiglobalist allies, especially on this site and Breitshite, was that Trump the populist and Antiglobalist hero was going to free the poor oppressed white working man. Trump and his party just raised taxes on blue state poor, middle class, and upper middle class to give One trillion in tax cuts to megabillion dollar publicly traded corporations sitting on piles of cash. Sorry, Los Angeles dock worker, or New York construction worker, or New Jersey truck driver your taxes are going to go up because human parasite Jubba the Hut Adelson needs another billion in tax cuts.

And Trump showed the elites, by appointing generals and billionaires to his cabinet and then giving them all a big tax cut. Hurray for Antiglobalism and the white working class.

Joelbanks , 10 Feb 2018 16:59
The Trump Administration and a complicit U.S. Congress is on a colossal spending spree defiant of the USA's debt realities and unconcerned about consequences. At the same time, the IMF, under American Government sway, lectures applicant countries on fiscal discipline and imposes austere stabilisation & structural adjustment programs on them as a non-negotiable condition for credit. Inequitable practice for sure.
Joelbanks , 10 Feb 2018 16:53
America under Trump spends with abandon, confident that foreigners, including those in s***ho** countries in Africa, will pour their cash savings into U.S. Treasury bonds for peanuts in interest.
Joelbanks -> Doug Eaton , 10 Feb 2018 16:50
It differs in that it magnifies the Obama contribution to the U.S. deficit & debt.
Mardak , 10 Feb 2018 16:39
"Frugality" Mr. Wolffe? Is that your euphemism for Austerity, that nonsensical, ideologically motivated policy pushed by the Germans and the European Central Bank because their banks are too big to bail?
memo10 -> big fordtruckguy , 10 Feb 2018 16:37

Trump is cleaning the Obama mess up, as fast as he can. Leading from the front. The US Economy is on a fast track, and the US Military is ready again to kick some rear end.

Are you on crack?

The US Military is why we are broke and unhealthy unlike the other 1st-world countries. Do the math. We have the huge military. They have the free healthcare and free/cheap education.

Who is invading us? North Korea? Don't make me laugh. They are a shitty broke starving little country on somebody else's continent. They only got nukes because GWBush declared them an enemy out of the blue. They had been steadily disarming before that.

This isn't the 6th grade. International power comes from economic might. Money buys weapons a lot easier than weapons brings in money.

You don't get economic might when you keep pissing away your money on a private industry of military contractors. We should be spending that money on (non-bullshit) educations for our population, adequate healthcare so people can do the work when they have it, and maintaining our crumbling last-century infrastructure.

laredo33 -> ThirdEye , 10 Feb 2018 16:09
You asked a one-dimensional question: who is rich enough to own stocks? I gave you a factual answer. Your response, while true, has nothing to do with the question asked and answered.

Here are a few reasons for the issues you correctly note: 1) Most Americans have a pittance of their own for their retirement. Our culture is one of immediate gratification. We are unwilling to wait. Putting money aside (no matter how small) requires patience and discipline. Most of us have neither. (Jackpot winners are an example. Studies shown most jackpot winners don't invest any of their winnings for retirement. On average, they blow it all within three years.) Savings for retirement reflect that. 2) Underfunded Defined Benefit Plans are underfunded because politicians today get re-elected by promising entitlements. If the promise is unreasonable, they kick the can down the road for someone else to take care of. Look at Illinois, Connecticut, and any number of cities and states in a financial bind because of overpromising and insufficient revenue. Then there's the national debt! Some union problems are a product of inflexibility and/or corruption (using retirement funds for other activities and loaning money for such things as Las Vegas casinos), and they and many companies in the private sector made two major errors. 1) They overestimated investment returns and didn't count on 10 years of minuscule interest rates and 2) didn't anticipate their membership/worker base would shrink so fewer people were contributing to retirement funds as the number of retirees rose. So they faced rising expenses combined the declining revenues. I agree that PBGC's ability to pay is questionable at best and that catching up for many is not likely and for some impossible. Since I don't watch it, my glib comments don't come from Fox News. They come from personal involvement with several retirement plans.

tempestteacup -> mbidding , 10 Feb 2018 14:21
I don't have the time, I'm afraid, to answer all of the points that you raised in what was another interesting post, but here are some New Dem/Blue Dog Democrats still serving in Congress: Henry Cuellar, Stephanie Murphy, Cheri Bustos, Krysten Sinema, Vicente Gonzalez, Tom O'Halleran (Republican until 2014!), Ami Bera, Gerry Connolly, and Jim Hines. They are all in the House of Representatives; as you say, many of the most overt Blue Dog Democrats didn't serve long in Congress, although I'd suggest that Heidi Heitkamp could be added to Manchin in the Senate.

When replying to you, I do so - or try to do so - from two perspectives at the same time. On the one hand, I am writing as someone far, far to the left of the Democratic Party. My understanding of how our society works is conditioned by my understanding of how the economy is structured according to who owns the means of production. As far as that goes, political change within the existing system can only ever be a more or less satisfactory compromise within a regime of exploitation and wealth extraction. The two party system, needless to say, is totally inadequate to address the fundamental causes of human misery, injustice, discrimination and environmental blight.

At the same time, I'm capable of temporarily swapping hats and thinking strategically about what would work within that system. According to that, I see the Democratic Party working to undermine its own sated aims through deal-making that is not, as you say, the necessary back-and-forth of liberal party democracy, but a much more duplicitous function in absorbing, then betraying, popular demands for change. One of the reasons why nominally left-wing parties fare poorly when they make unnecessary or excessive compromises within the existing system is because they, unlike Tories or Republicans, must also appear to represent the interests of those who that system victimises and exploits.

Look at how the DCCC has encouraged and elevated ex-Republicans or Blue Dog Democrats at the expense of more progressive candidates. They are well aware of what this does to the arithmetic balance of legislative power, on a state as well as federal level. Their current goal is to provide and validate reasons for inertia and produce cover for endless betrayals. I'd cite, too, the state of affairs in New York, where a Democratic majority in the state assembly has been turned into a Republican one via a collection of "independent" Democrats choosing instead to vote according to the Republican whip. This has gone on now for several years and has been enabled in part by Andrew Cuomo, who elsewhere and for reasons of presidential ambition has presented himself as some sort of progressive.

My point is that the conditions for inertia and political decadence are very much still in place within the Democratic Party as it continues to resist any movement away from its established course despite historic losses and a potential for renewal represented by Bernie sanders and the support that he mobilised.

Nancy Smith Burleson -> laredo33 , 10 Feb 2018 13:32
A reduction in "entitlements" is always the fallback position of conservatives; but that is not, unfortunately, what has caused, and is causing America's tremendous deficit. Military spending is where the budget has gotten out of control. Even before Trump's proposed increase in military spending, the U.S. budgets more than twice as much for military as the next 10 largest countries in the world COMBINED - let that sink in a minute. Undeclared wars since George W days put us into huge deficit, and the military budget continues to grow. There was no money to pay for those military actions so debt began to mount. It must be remembered that when Clinton left office, there was NO debt - he left the U.S. with a SURPLUS.

[Feb 10, 2018] >The generals are not Borgists. They are something worse ...

Highly recommended!
Notable quotes:
"... The post WW2 promotion process in the armed forces has produced a group at the top with a mentality that typically thinks rigorously but not imaginatively or creatively. ..."
"... These men got to their present ranks and positions by being conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board." ..."
"... If asked at the top, where military command and political interaction intersect, what policy should be they always ask for more money and to be allowed to pursue outcomes that they can understand as victory and self fulfilling with regard to their collective self image as warrior chieftains. ..."
"... In Trump's time his essential disinterest in foreign policy has led to a massive delegation of authority to Mattis and the leadership of the empire's forces. Their reaction to that is to look at their dimwitted guidance from on high (defeat IS, depose Assad and the SAG, triumph in Afghanistan) and to seek to impose their considerable available force to seek accomplishment as they see fit of this guidance in the absence of the kind of restrictions that Obama placed on them. ..."
"... Like the brass, I, too, am a graduate of all those service schools that attend success from the Basic Course to the Army War College. I will tell you again that the people at the top are not good at "the vision thing." They are not stupid at all but they are a collective of narrow thinkers ..."
"... Academia reinforces the groupthink. The mavericks are shunned or ostracized. The only ones I have seen with some degree of going against the grain are technology entrepreneurs. ..."
"... "They are not stupid at all but they are a collective of narrow thinkers." I have found this to be the case with 80 to 90% of most professions. A good memory and able to perform meticulously what they have been taught, but little thinking outside that narrow box. Often annoying, but very dangerous in this case. ..."
"... Since Afghanistan and the brass were mentioned in the editorial statement, here is an immodest question -- Where the brass have been while the opium production has been risen dramatically in Afghanistan under the US occupation? "Heroin Addiction in America Spearheaded by the US-led War on Afghanistan" by Paul Craig Roberts: https://www.paulcraigroberts.org/2018/02/06/heroin-addiction-america-spearheaded-us-led-war-afghanistan/ ..."
"... A simple Q: What has been the role of the CENTCOM re the racket? Who has arranged the protection for the opium production and for drug dealers? Roberts suggests that the production of opium in Afghanistan "finances the black operations of the CIA and Western intelligence agencies." -- All while Awan brothers, Alperovitch and such tinker with the US national security? ..."
"... God help the poor people of Syria. ..."
"... thanks pat... it seems like the usa has had a steady group of leaders that have no interest in the world outside of the usa, or only in so far as they can exploit it for their own interest... maybe that sums up the foreign policy of the usa at this point... you say trump is disinterested.. so all the blather from trump about 'why are we even in syria?', or 'why can't we be friends with the russia?' is just smoke up everyone's ass... ..."
"... Predictably there is always someone who says that this group is not different from all others. Unfortunately the military function demands more than the level of mediocrity found in most groups ..."
"... A lot of technology entrepreneurs--especially those active today--are stuck in their own groupthink, inflated by their sense that they are born for greatness and can do no wrong. ..."
"... The kind of grand schemes that the top people at Google, Uber, and Facebook think up to remake the universe in their own idea of "good society" are frightening. That they are cleverer (but not necessarily wiser) than the academics, borgists, or generals, I think, makes them even more dangerous. ..."
"... They [the generals] seem to have deliberately completely ignored the issues and policy positions Trump ran on as President. It isn't a case of ignorance but of wilful disregard. ..."
"... So true and as others commented this is a sad feature of the human race and all human organizations. Herd mentality ties into social learning ..."
"... Our massive cultural heritages are learned by observing and taken in as a whole. This process works within organizations as well. ..."
"... I suspect a small percentage of the human race functions differently than the majority and retains creative thinking and openness along with more emphasis on cognitive thinking than social learning but generally they always face a battle when working to change the group "consensus", i.e. Fulton's folly, scepticism on whether man would ever fly, etc. ..."
"... This is an interesting discussion. The top in organisations (civil and military) are increasingly technocrats and thinking like systems managers. They are unable to innovate because they lack the ability to think out of the box. Usually there is a leader who depends on specialists. Others (including laymen) are often excluding from the decision-making-proces. John Ralston Saul's Voltaires Bastards describes this very well. ..."
"... Because of natural selection (conformist people tend to choose similar people who resemble their own values and ways-of-thinking) organizations have a tendency to become homogeneous (especially the higher management/ranks). ..."
"... In combination with the "dumbing" of people (also of people who have a so-called good education (as described in Richard Sale's Sterile Chit-Chat ) this is a disastrous mix. ..."
"... That's true not only of the US military but of US elites in general across all of the spectra. And because that reality is at odds with the group-think of those within the various elements that make up the spectra it doesn't a hearing. Anyone who tries to bring it up risks being ejected from the group. ..."
"... "The United States spent at least $12 billion in Syria-related military and civilian expenses in the four years from 2014 through 2017, according to the former U.S. ambassador to the country. This $12 billion is in addition to the billions more spent to pursue regime change in Syria in the previous three years, after war broke out in 2011." https://goo.gl/8pj5cD ..."
"... "They are not stupid at all but they are a collective of narrow thinkers." I've often pondered that concept. Notice how many of radical extremist leaders were doctors, engineers and such? Narrow and deep. ..."
"... Long ago when I was a professor, I advised my students that "the law is like a pencil sharpener, it sharpens the mind by narrowing it." I tried to encourage them to "think backwards". ..."
"... Col, I think it might help people to think of "the Borg" - as you have defined & applied it - in a broader context. It struck me particularly as you ID'd the launching of our modern military group-think / careerism behavior coming from the watershed of industrialized scale & processes that came out of WWII. ..."
"... We note parallel themes in all significant sectors of our civilization. The ever-expanding security state, the many men in Gray Flannel Suits that inhabit corporate culture, Finance & Banking & Big Health scaling ever larger - all processes aimed to slice the salami thinner & quicker, to the point where meat is moot ... and so it goes. ..."
"... I just finished reading Command & Control (about nuclear weapons policy, systems design & accidents). I am amazed we've made it this far. ..."
Feb 10, 2018 | turcopolier.typepad.com

(Editorial Statement)

The Borgist foreign policy of the administration has little to do with the generals.

To comprehend the generals one must understand their collective mentality and the process that raised them on high as a collective of their own. The post WW2 promotion process in the armed forces has produced a group at the top with a mentality that typically thinks rigorously but not imaginatively or creatively.

These men got to their present ranks and positions by being conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board."

If asked at the top, where military command and political interaction intersect, what policy should be they always ask for more money and to be allowed to pursue outcomes that they can understand as victory and self fulfilling with regard to their collective self image as warrior chieftains.

In Obama's time they were asked what policy should be in Afghanistan and persuaded him to reinforce their dreams in Afghanistan no matter how unlikely it always was that a unified Western oriented nation could be made out of a collection of disparate mutually alien peoples.

In Trump's time his essential disinterest in foreign policy has led to a massive delegation of authority to Mattis and the leadership of the empire's forces. Their reaction to that is to look at their dimwitted guidance from on high (defeat IS, depose Assad and the SAG, triumph in Afghanistan) and to seek to impose their considerable available force to seek accomplishment as they see fit of this guidance in the absence of the kind of restrictions that Obama placed on them.

Like the brass, I, too, am a graduate of all those service schools that attend success from the Basic Course to the Army War College. I will tell you again that the people at the top are not good at "the vision thing." They are not stupid at all but they are a collective of narrow thinkers. pl


Jack , 09 February 2018 at 05:42 PM

Sir

IMO, this conformism pervades all institutions. I saw when I worked in banking and finance many moons ago how moving up the ranks in any large organization meant you didn't rock the boat and you conformed to the prevailing groupthink. Even nutty ideas became respectable because they were expedient.

Academia reinforces the groupthink. The mavericks are shunned or ostracized. The only ones I have seen with some degree of going against the grain are technology entrepreneurs.

Fredw , 09 February 2018 at 06:26 PM
You remind me of an old rumination by Thomas Ricks:

Take the example of General George Casey. According to David Cloud and Greg Jaffe's book Four Stars, General Casey, upon learning of his assignment to command U.S. forces in Iraq, received a book from the Army Chief of Staff. The book Counterinsurgency Lessons Learned from Malaya and Vietnam was the first book he ever read about guerilla warfare." This is a damning indictment of the degree of mental preparation for combat by a general. The Army's reward for such lack of preparation: two more four star assignments.

http://foreignpolicy.com/2012/02/07/cmon-man-meathead-generals-and-some-other-things-that-are-driving-me-crazy-about-life-in-this-mans-post-911-army/

Peter AU , 09 February 2018 at 06:37 PM
"They are not stupid at all but they are a collective of narrow thinkers." I have found this to be the case with 80 to 90% of most professions. A good memory and able to perform meticulously what they have been taught, but little thinking outside that narrow box. Often annoying, but very dangerous in this case.
Anna , 09 February 2018 at 06:48 PM
Since Afghanistan and the brass were mentioned in the editorial statement, here is an immodest question -- Where the brass have been while the opium production has been risen dramatically in Afghanistan under the US occupation? "Heroin Addiction in America Spearheaded by the US-led War on Afghanistan" by Paul Craig Roberts: https://www.paulcraigroberts.org/2018/02/06/heroin-addiction-america-spearheaded-us-led-war-afghanistan/

" in 2000-2001 the Taliban government –with the support of the United Nations (UNODC) – implemented a successful ban on poppy cultivation. Opium production which is used to produce grade 4 heroin and its derivatives declined by more than 90 per cent in 2001. The production of opium in 2001 was of the order of a meager 185 tons. It is worth noting that the UNODC congratulated the Taliban Government for its successful opium eradication program. The Taliban government had contributed to literally destabilizing the multibillion dollar Worldwide trade in heroin.

In 2017, the production of opium in Afghanistan under US military occupation reached 9000 metric tons. The production of opium in Afghanistan registered a 49 fold increase since Washington's invasion. Afghanistan under US military occupation produces approximately 90% of the World's illegal supply of opium which is used to produce heroin. Who owns the airplanes and ships that transport heroin from Afghanistan to the US? Who gets the profits?"

---A simple Q: What has been the role of the CENTCOM re the racket? Who has arranged the protection for the opium production and for drug dealers? Roberts suggests that the production of opium in Afghanistan "finances the black operations of the CIA and Western intelligence agencies." -- All while Awan brothers, Alperovitch and such tinker with the US national security?

J , 09 February 2018 at 07:05 PM
Colonel,

There needs to be a 're-education' of the top, all of them need to be required to attend Green Beret think-school, in other words they need to be forced to think outside the box, and to to think on their feet. They need to understand fluid situations where things change at the drop of a hat, be able to dance the two-step and waltz at the same time. In other words they need to be able to walk and chew gum and not trip over their shoe-laces.

By no means are they stupid, but you hit the nail on the head when you said 'narrow thinkers'. Their collective hive mentality that has developed is not a good thing.

divadab , 09 February 2018 at 07:16 PM
God help the poor people of Syria.
james , 09 February 2018 at 07:30 PM
thanks pat... it seems like the usa has had a steady group of leaders that have no interest in the world outside of the usa, or only in so far as they can exploit it for their own interest... maybe that sums up the foreign policy of the usa at this point... you say trump is disinterested.. so all the blather from trump about 'why are we even in syria?', or 'why can't we be friends with the russia?' is just smoke up everyone's ass...

i like what you said here "conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board." - that strikes me as very true - conformist group thinkers... the world needs less of these types and more actual leaders who have a vision for something out of the box and not always on board... i thought for a while trump might fill this bill, but no such luck by the looks of it now..

David E. Solomon , 09 February 2018 at 07:50 PM
Colonel Lang,

Your description of these guys sounds like what we have heard about Soviet era planners. Am I correct in my understanding, or am I missing something?

Regards,

David

DianaLC , 09 February 2018 at 07:56 PM
As a young person in eighth grade, I learned about the "domino theory" in regard to attempts to slow the spread of communism. Then my generation was, in a sense, fractured around the raging battles for and against our involvement in Vietnam.

I won't express my own opinion on that. But I mention it because it seems to be a type of "vision thing."

So, now I ask, what would be your vision for the Syrian situation?

Bill Herschel , 09 February 2018 at 09:11 PM
This has been going on for a long time has it not? Westmoreland? MacArthur?

How did this happen?

turcopolier , 09 February 2018 at 09:40 PM
Bill Herschel

Westmoreland certainly, Macarthur certainly not. This all started with the "industrialization" of the armed forces in WW2. we never recovered the sense of profession as opposed to occupation after the massive expansion and retention of so many placeholders. a whole new race of Walmart manager arose and persists. pl

turcopolier , 09 February 2018 at 09:48 PM
DianaC

The idea of the Domino Theory came from academia, not the generals of that time. They resisted the idea of a war in east Asia until simply ordered into it by LBJ. After that their instinct for acting according to guidance kicked in and they became committed to the task. Syria? Do you think I should write you an essay on that? SST has a large archive and a search machine. pl

turcopolier , 09 February 2018 at 09:55 PM
David E. Solomon

I am talking about flag officers at present, not those beneath them from the mass of whom they emerge. There are exceptions. Martin Dempsey may have been one such. The system creates such people at the top. pl

turcopolier , 09 February 2018 at 10:08 PM
elaine,

Your usual animosity for non-left wing authority is showing. A commander like the CENTCOM theater commander (look it up) operates within guidance from Washington, broad guidance. Normally this is the president's guidance as developed in the NSC process. Some presidents like Obama and LBJ intervene selectively and directly in the execution of that guidance. Obama had a "kill list" of jihadis suggested by the IC and condemned by him to die in the GWOT. He approved individual missions against them. LBJ picked individual air targets in NVN. Commanders in the field do not like that . They think that freedom of action within their guidance should be accorded them. This CinC has not been interested thus far in the details and have given the whole military chain of command wide discretion to carry out their guidance. pl

turcopolier , 09 February 2018 at 10:12 PM
J

Thank you, but it is real GBs that you like, not the Delta and SEAL door kickers. pl

turcopolier , 09 February 2018 at 10:24 PM
Gaikomainaku

"I am not sure that I understand what makes a Borgist different from a military conformist." The Borg and the military leaders are not of the same tribe. they are two different collectives who in the main dislike and distrust each other. pl

turcopolier , 09 February 2018 at 10:27 PM
Anna. Their guidance does not include a high priority for eradicating the opium trade. Their guidance has to do with defeating the jihadis and building up the central government. pl
turcopolier , 09 February 2018 at 10:30 PM
Peter AU

Predictably there is always someone who says that this group is not different from all others. Unfortunately the military function demands more than the level of mediocrity found in most groups. pl

turcopolier , 09 February 2018 at 10:44 PM
james

Trump would like to better relations with Russia but that is pretty much the limit of his attention to foreign affairs at any level more sophisticated than expecting deference. He is firmly focused on the economy and base solidifying issues like immigration. pl

Peter AU , 09 February 2018 at 11:01 PM
The medical profession comes to mind. GP's and specialists. Many of those working at the leading edge of research seem much wider thinking and are not locked into the small box of what they have been taught.
turcopolier , 09 February 2018 at 11:16 PM
Peter AU

The GPs do not rule over a hierarchy of doctors. pl

J -> turcopolier ... , 09 February 2018 at 11:22 PM
Combat Applications Group and SEALS don't even begin to compare, they're not in the same league as 'real deal' GBs. The GBs are thinkers as well as doers, whereas Combat Applications Group and SEALs all they know is breach and clear, breach and clear.

There is more to life than breach and clear. Having worked with all in one manner or another, I'll take GBs any day hands down. It makes a difference when the brain is engaged instead of just the heel.

kao_hsien_chih -> Jack... , 09 February 2018 at 11:22 PM
A lot of technology entrepreneurs--especially those active today--are stuck in their own groupthink, inflated by their sense that they are born for greatness and can do no wrong.

The kind of grand schemes that the top people at Google, Uber, and Facebook think up to remake the universe in their own idea of "good society" are frightening. That they are cleverer (but not necessarily wiser) than the academics, borgists, or generals, I think, makes them even more dangerous.

FB Ali , 09 February 2018 at 11:23 PM
Col Lang,

They are indeed "narrow thinkers", but I think the problem runs deeper. They seem to be stuck in the rut of a past era. When the US was indeed the paramount military power on the globe, and the US military reigned supreme. They can't seem to accept the reality of the world as it is now.

Of course, these policies ensure that they continue to be well-funded, even if the US is bankrupting itself in the process.

turcopolier , 10 February 2018 at 01:03 AM
dogear

He is still the Saudi Mukhtar for the US and most of the generals are still narrow minded. pl

LondonBob , 10 February 2018 at 06:59 AM
They [the generals] seem to have deliberately completely ignored the issues and policy positions Trump ran on as President. It isn't a case of ignorance but of wilful disregard.
turcopolier , 10 February 2018 at 07:55 AM
LondonBob

I think that is true but, they were able to talk him into that, thus far. pl

DianaLC said in reply to turcopolier ... , 10 February 2018 at 09:23 AM
I've been reading this blog for some time. My question was facetious and written with the understanding of your statement about the generals not having a good grasp of "the vision thing" on their own.
Terry , 10 February 2018 at 09:25 AM
So true and as others commented this is a sad feature of the human race and all human organizations. Herd mentality ties into social learning. Chimps are on average more creative and have better short term memory than humans. We gave up some short term memory in order to be able to learn quickly by mimicking. If shown how to open a puzzle box but also shown unnecessary extra steps a chimp will ignore the empty steps and open the box with only the required steps. A human will copy what they saw exactly performing the extra steps as if they have some unknown value to the process. Our massive cultural heritages are learned by observing and taken in as a whole. This process works within organizations as well.

I suspect a small percentage of the human race functions differently than the majority and retains creative thinking and openness along with more emphasis on cognitive thinking than social learning but generally they always face a battle when working to change the group "consensus", i.e. Fulton's folly, scepticism on whether man would ever fly, etc.

One nice feature of the internet allows creative thinkers to connect and watch the idiocy of the world unfold around us.

"A natural desire to be part of the 'in crowd' could damage our ability to make the right decisions, a new study has shown."

https://www.sciencedaily.com/releases/2014/12/141216212049.htm

TV , 10 February 2018 at 10:18 AM
The military by definition is a rigid hierarchical structure. It could not function as a collection of individuals. This society can only breed conforming narrow leaders as an "individual" would leave or be forced out.
Barbara Ann , 10 February 2018 at 10:22 AM
That part of our brain responsible for the desire to be part of the 'in crowd' may affect our decision-making process, but it is also the reason we keep chimps in zoos and not the other way around. Or, to put it another way; if chimps had invented Facebook, I might consider them more creative than us.
Babak Makkinejad -> Terry... , 10 February 2018 at 10:30 AM
Do you think chimps are, per the Christian Docrine, in a State of Fall or in a State of Grace?
Adrestia , 10 February 2018 at 10:32 AM
This is an interesting discussion. The top in organisations (civil and military) are increasingly technocrats and thinking like systems managers. They are unable to innovate because they lack the ability to think out of the box. Usually there is a leader who depends on specialists. Others (including laymen) are often excluding from the decision-making-proces. John Ralston Saul's Voltaires Bastards describes this very well.

Because of natural selection (conformist people tend to choose similar people who resemble their own values and ways-of-thinking) organizations have a tendency to become homogeneous (especially the higher management/ranks).

In combination with the "dumbing" of people (also of people who have a so-called good education (as described in Richard Sale's Sterile Chit-Chat ) this is a disastrous mix.

Homogeneity is the main culprit. A specialists tends to try to solve problems with the same knowledge-set that created these.

Not all (parts of) organizations and people suffer this fate. Innovations are usually done by laymen and not by specialists. The organizations are often heterogeneous and the people a-typical and/or eccentric.

(mainly the analytical parts of ) intelligence organizations and investment banks are like that if they are worth anything. Very heterogeneous with a lot of a-typical people. I think Green Berets are also like that. An open mind and genuine interest in others (cultures, way of thinking, religion etc) is essential to understand and to perform and also to prevent costly mistakes (in silver and/or blood).

It is possible to create firewalls against tunnel-vision. The Jester performed such a role. Also think of the Emperors New Clothes . The current trend of people with limited vision and creativity prevents this. Criticism is punished with a lack of promotion, job-loss or even jail (whistle-blowers)

IMO this is why up to a certain rank (colonel or middle management) a certain amount of creativity or alternative thinking is allowed, but conformity is essential to rise higher.

I was very interested in the Colonel's remark on the foreign background of the GB in Vietnam. If you would like to expand on this I would be much obliged? IMO GB are an example of a smart, learning, organization (in deed and not only in word as so many say of themselves, but who usually are at best mediocre)

Generalfeldmarschall von Hindenburg -> gaikokumaniakku... , 10 February 2018 at 11:58 AM
Isn't the "Borg" really The Atlantic Council?
ISL , 10 February 2018 at 12:58 PM
Dear Colonel,

Would you then say that a rising military officer who does have the vision thing faces career impediments? If so, would you say that the vision thing is lost (if it ever was there) at the highest ranks? In any case, the existence of even a few at the top, like Matthis or Shinseki is a blessing.

ex-PFC Chuck said in reply to FB Ali ... , 10 February 2018 at 01:08 PM
FB Ali:
"When the US was indeed the paramount military power on the globe, and the US military reigned supreme. They can't seem to accept the reality of the world as it is now."
That's true not only of the US military but of US elites in general across all of the spectra. And because that reality is at odds with the group-think of those within the various elements that make up the spectra it doesn't a hearing. Anyone who tries to bring it up risks being ejected from the group.
Adrestia , 10 February 2018 at 02:03 PM
I forget an important part. I really miss an edit-button. Comment-boxes are like looking at something through a straw. Its easy to miss the overview.

Innovations and significant new developments are usually made by laymen. IMO mainly because they have a fresh perspective without being bothered by the (mainstream) knowledge that dominates an area of expertise.

By excluding the laymen errors will continue to be repeated. This can be avoided by using development/decision-making frameworks, but these tend to become dogma (and thus become part of the problem)

Much better is allowing laymen and allowing a-typical people. Then listen to them carefully. Less rigid flexible and very valuable.

kooshy , 10 February 2018 at 02:19 PM
Apparently, according to the last US ambassador to Syria Mr. Ford, from 2014-17 US has spent 12 Billion on Regime change in Syria. IMO, combinedly Iran and Russia so far, have spent far less in Syria than 12 billion by US alone, not considering the rest of her so called coalition. This is a war of attrition, and US operations in wars, are usually far more expensive and longer than anybody else's.

"The United States spent at least $12 billion in Syria-related military and civilian expenses in the four years from 2014 through 2017, according to the former U.S. ambassador to the country. This $12 billion is in addition to the billions more spent to pursue regime change in Syria in the previous three years, after war broke out in 2011." https://goo.gl/8pj5cD

J , 10 February 2018 at 02:49 PM
Colonel, TTG, PT,

FYI regarding Syria

https://www.nbcnews.com/politics/donald-trump/sen-tim-kaine-demands-release-secret-trump-war-powers-memo-n846176

Richardstevenhack -> turcopolier ... , 10 February 2018 at 02:56 PM
It may "demand" it - but does it get it? Soldiers are just as human as everyone else.

I'm reminded of the staff sergeant with the sagging beer belly who informed me, "Stand up straight and look like a soldier..." Or the First Sergeant who was so hung over one morning at inspection that he couldn't remember which direction he was going down the hall to the next room to be inspected. I'm sure you have your own stories of less than competence.

It's a question of intelligence and imagination. And frankly, I don't see the military in any country receiving the "best and brightest" of that country's population, by definition. The fact that someone is patriotic enough to enter the military over a civilian occupation doesn't make them more intelligent or imaginative than the people who decided on the civilian occupation.

Granted, if you fail at accounting, you don't usually die. Death tends to focus the mind, as they say. Nonetheless, we're not talking about the grunts at the level who actually die, still less the relatively limited number of Special Forces. We're talking about the officers and staff at the levels who don't usually die in war - except maybe at their defeat - i.e., most officers over the level of captain.

One can hardly look at this officer crowd in the Pentagon and CENTCOM and say that their personal death concentrates their mind. They are in virtually no danger of that. Only career death faces them - with a nice transition to the board of General Dynamics at ten times the salary.

All in all, I'd have to agree that the military isn't much better at being competent - at many levels above the obvious group of hyper-trained Special Forces - any more than any other profession.

dogear said in reply to Terry... , 10 February 2018 at 02:59 PM
That is well put.most important is the grading system that is designed to fix a person to a particular slot thereby limiting his ability to think "outside the box" and consider the many variables that exist in one particular instant.

Creative thinking allows you to see beyond the storm clouds ahead and realize that the connectedness of different realities both the visible and invisible. For instance the picture of the 2 pairs of korean skaters in the news tells an interesting story on many levels. Some will judge them on their grade of proffiency, while others will see a dance of strategy between 2 foes and a few will know the results in advance and plan accordingly

https://www.google.com.au/amp/www.nbcolympics.com/news/north-south-korean-figure-skating-teams-practice-side-side%3famp?espv=1

Mark Logan said in reply to Peter AU... , 10 February 2018 at 03:30 PM
Peter AU

"They are not stupid at all but they are a collective of narrow thinkers." I've often pondered that concept. Notice how many of radical extremist leaders were doctors, engineers and such? Narrow and deep. STEM is enormously useful to us but seems to be a risky when implanted in shallow earth.

turcopolier , 10 February 2018 at 05:03 PM
Mark Logan

These narrow "but deep" thinkers were unable to grasp the nature of the Iraq War for the first couple of years. They thought of it as a rear area security problem, a combat in cities problem, anything but a popular rebellion based on xenophobia and anti-colonialism The IED problem? They spent several billion dollars on trying to find a technology fix and never succeeded. I know because they kept asking me to explain the war to them and then could not understand the answers which were outside their narrow thought. pl

turcopolier , 10 February 2018 at 05:13 PM
ISL

War College selectees, the national board selected creme de la creme test out as 50% SJs (conformists lacking vision) in Myers-Briggs terms and about 15% NTs (intellectuals). To survive and move upward in a system dominated by SJs, the NTs must pretend to be what they are not. A few succeed. I do not think Mattis is an intellectual merely because he has read a lot. pl

outthere , 10 February 2018 at 05:19 PM
Long ago when I was a professor, I advised my students that "the law is like a pencil sharpener, it sharpens the mind by narrowing it." I tried to encourage them to "think backwards".

My favorite example was a Japanese fisherman who recovered valuable ancient Chinese pottery. Everyone knew where an ancient ship had sunk, but the water was too deep to dive down to the wreck. And everyone knew the cargo included these valuable vases. And the fisherman was the first to figure out how to recover them. He attached a line to an octopus, and lowered it in the area, waited awhile, and pulled it up. Low and behold, the octopus had hidden in an ancient Chinese vase. The fisherman was familiar with trapping octopuses, by lowering a ceramic pot (called "takosubo") into the ocean, waiting awhile, then raising the vase with octopus inside. His brilliance was to think backwards, and use an octopus to catch a vase.

turcopolier , 10 February 2018 at 05:24 PM
TV

By your calculation people like Joe Stilwell and George Patton should not have existed. pl

turcopolier , 10 February 2018 at 05:31 PM
Adrestia

the original GBS were recruited in the 50s to serve in the OSS role with foreign guerrillas behind Soviet lines in th event of war in Europe. Aaron Bank, the founder, recruited several hundred experienced foreign soldiers from the likely countries who wanted to become American. By the time we were in VN these men were a small fraction of GBs but important for their expertise and professionalism. pl

ked , 10 February 2018 at 05:56 PM
Col, I think it might help people to think of "the Borg" - as you have defined & applied it - in a broader context. It struck me particularly as you ID'd the launching of our modern military group-think / careerism behavior coming from the watershed of industrialized scale & processes that came out of WWII.

We note parallel themes in all significant sectors of our civilization. The ever-expanding security state, the many men in Gray Flannel Suits that inhabit corporate culture, Finance & Banking & Big Health scaling ever larger - all processes aimed to slice the salami thinner & quicker, to the point where meat is moot ... and so it goes.

I note many Borgs... Borgism if you will. An organizational behavior that has emerged out of human nature having difficulty adapting to rapidly accelerating complexity that is just too hard to apprehend in a few generations. If (as many commenters on STT seem to...) one wishes to view this in an ideological or spiritual framework only, they may overlook an important truth - that what we are experiencing is a Battle Among Borgs for control over their own space & domination over the other Borgs. How else would we expect any competitive, powerful interest group to act?

In gov & industry these days, we observe some pretty wild outliers... attached to some wild outcomes. Thus the boring behavior of our political industries bringing forth Trump, our promethean technology sector yielding a Musk (& yes, a Zuckerberg).

I find it hard to take very seriously analysts that define their perspective based primarily upon their superior ideals & opposition to others. Isn't every person, every tribe, team or enterprise a borglet-in-becoming? Everybody Wants to Rule the World ... & Everybody Must Get Stoned... messages about how we are grappling with complexity in our times. I just finished reading Command & Control (about nuclear weapons policy, systems design & accidents). I am amazed we've made it this far.

Unfortunately, I would not be amazed if reckless, feckless leaders changed the status quo. I was particularly alarmed hearing Trump in his projection mode; "I would love to be able to bring back our country into a great form of unity, without a major event where people pull together, that's hard to do.

But I would like to do it without that major event because usually that major event is not a good thing." It strikes me that he could be exceptionally willing to risk a Major Event if he felt a form of unity, or self-preservation, was in the offing. I pray (& I do not pray often or easily) that the Generals you have described have enough heart & guts to honor their oath at its most profound level in the event of an Event.

turcopolier , 10 February 2018 at 06:00 PM
babak

As a time traveler from another age, I can only say that for me it means devotion to a set of mores peculiar to a particular profession as opposed to an occupation. pl

Barbara Ann -> outthere... , 10 February 2018 at 06:00 PM
Great example outthere.

Another springs to mind: James Lovelock (of Gaia hypothesis fame) was once part of the NASA team building the first probe to go to Mars to look for signs of life. Lovelock didn't make any friends when he told NASA they were wasting their time, there was none. When asked how he could be so sure, he explained that the composition of the Martian atmosphere made it impossible. "But Martian life may be able to survive under different conditions" was the retort. Lovelock then went on to explain his view that the evolution of microbial life determined the atmospheric composition on Earth, so should be expected to do the same if life had evolved on Mars. Brilliant backwards thinking which ought to have earned him the Nobel prize IMHO (for Gaia). Lovelock, a classic cross-disciplinary scientist, can't be rewarded with such a box-categorized honor, as his idea doesn't fit well into any one.

Another example of cross-disciplinary brilliance was Bitcoin, which has as much to do with its creator's deep knowledge of Anthropology (why people invented & use money) as his expertise in both Economics and Computer Science.

This is they key to creative thinking in my view - familiarity with different fields yields deeper insights.

[Feb 10, 2018] The Trump stimulus isn't as big as the Obama stimulus of 2009 through 2011, which most Republican senators and congressmen vigorously opposed. T

Feb 10, 2018 | turcopolier.typepad.com

outthere -> turcopolier ... , 10 February 2018 at 10:31 AM

"he provided a "very rough first guess" that the over-all effect of the tax bill and the spending deal would be about 1.25 per cent of G.D.P. for this calendar year, and two per cent for the next.

> That would be a substantial stimulus. It would be larger, for example, than the Economic Stimulus Act of 2008, which George W. Bush's Administration introduced to try to head off a slump following a big fall in the real-estate market. That stimulus, which came in the form of a tax rebate, amounted to about one per cent of G.D.P. (It wasn't enough to head off a recession. In fact, the National Bureau of Economic Research subsequently said that the recession had already begun in December, 2007.)

> The Trump stimulus isn't as big as the Obama stimulus of 2009 through 2011, which most Republican senators and congressmen vigorously opposed. That package, which consisted of a mix of spending and tax cuts, totalled about two per cent of G.D.P. each year. But, in February, 2009, when it was enacted, the economy was suffering through the deepest recession since the nineteen-thirties. The unemployment rate was 7.8 per cent, and G.D.P. was plummeting. If ever there was a textbook case of an economy crying out for a stimulus, that was it.

>> Today, by contrast, the economy is in the ninth year of an economic recovery that began in 2009. G.D.P. is growing at an annual rate of close to three per cent, and the unemployment rate stands at 4.1 per cent. Many economics textbooks say this is the sort of environment in which the government should be balancing its books, and perhaps even paying down debt, like a family salting away money for a rainy day. That's what the Clinton Administration did during the late nineteen-nineties, when the national debt was much smaller than it is today.

> The Republicans and Trump are embarked on the opposite course -- confirming that the G.O.P.'s devotion to deficit reduction, which in 2011 prompted members of the Party to refuse to raise the debt ceiling, is purely cynical. Of course, we already knew this. The Reagan Administration and the George W. Bush Administration both raided the public purse to finance big tax cuts, and left the deficit much higher than they found it. The Trump Administration is merely following suit."

https://www.newyorker.com/news/our-columnists/does-the-economy-need-the-trump-gop-stimulus

[Feb 10, 2018] American Think Tanks Are Hired Purveyors of Fake News by Paul Craig Roberts

Notable quotes:
"... think tanks are essentially lobby groups for their donors. The policy analyses and reform schemes that they produce are tailored to support the material interests of donors. None of the studies are reliable as objective evidence. They are special pleading. ..."
"... Think tanks, such as the American Enterprise Institute, Brookings Institution, and the Atlantic Council, speak for those who fund them. Increasingly, they speak for the military/security complex, American hegemony, corporate interests, and Israel ..."
"... Bryan MacDonald lists those who support the anti-Russian think tanks such as the Atlantic Council, the Center for European Policy Analysis, German Marshall Fund of the US, and Institute for Study of War. The "experts" are mouthpieces funded by the US military security complex. http://www.informationclearinghouse.info/48755.htm US government agencies use taxpayer dollars to deceive taxpayers. ..."
Feb 10, 2018 | www.unz.com

A couple of decades or more ago when I was still in Washington, otherwise known as the snake pit, I was contacted by a well-financed group that offered me, a Business Week and Scripps Howard News Service columnist with access as a former editor also to the Wall Street Journal, substantial payments to promote agendas that the lobbyists paying the bills wanted promoted.

To the detriment of my net worth, but to the preservation of my reputation, I declined. Shortly thereafter a conservative columnist, a black man if memory serves, was outed for writing newspaper columns for pay for a lobby group.

I often wondered if he was set up in order to get rid of him and whether the enticement I received was intended to shut me down, or whether journalists had become "have pen will travel"? (Have Gun -- Will Travel was a highly successful TV Series 1957-1963).

Having read Bryan MacDonald's article on Information Clearing House, "Anti-Russia Think Tanks in US: Who Funds them?," I see that think tanks are essentially lobby groups for their donors. The policy analyses and reform schemes that they produce are tailored to support the material interests of donors. None of the studies are reliable as objective evidence. They are special pleading.

Think tanks, such as the American Enterprise Institute, Brookings Institution, and the Atlantic Council, speak for those who fund them. Increasingly, they speak for the military/security complex, American hegemony, corporate interests, and Israel.

Bryan MacDonald lists those who support the anti-Russian think tanks such as the Atlantic Council, the Center for European Policy Analysis, German Marshall Fund of the US, and Institute for Study of War. The "experts" are mouthpieces funded by the US military security complex. http://www.informationclearinghouse.info/48755.htm US government agencies use taxpayer dollars to deceive taxpayers.

In other words insouciant Americans pay taxes in order to be brainwashed. And they tolerate this.

[Feb 10, 2018] More on neoliberal newspeak of US propaganda machine

Highly recommended!
Notable quotes:
"... The "Newspeak" we experience is straight out of Orwell's 1984. From Wikipedia: Newspeak is the fictional language in the novel Nineteen Eighty-Four, written by George Orwell. It is a controlled language created by the totalitarian state Oceania as a tool to limit freedom of thought, and concepts that pose a threat to the regime such as freedom, self-expression, individuality, and peace. Any form of thought alternative to the party's construct is classified as "thoughtcrime". ..."
"... It is truly scary how Orwellian our current situation has become reminding me that there are always two two takeaways from any story or historical record. Those that view it as a cautionary tale and those who use it as an instruction manual. ..."
"... We are also controlled through Doublespeak another Orwellian concept. From Wikipedia: Doublespeak is a language that deliberately obscures, disguises, distorts, or reverses the meaning of words. Some common examples are the branding of liberals by pundits in the media as Fascists in order to eliminate the historical understanding of exactly what that word refers to. Another example is the appearance of the term Alt Right which is used to confuse and obscure the true nature of these groups. A great example of the doublespeak the media exercises in service to the state is the instantaneous adoption of the term Alt Right and nary ever a mention of its former names such as White Supremacist, Neo Nazi, Racist, Hate Group etc. They just rename these movements and hide all the other terms from sight. Another example is scapegoating the same group of people but under a different term. Today the term is Liberal but in the past, the Nazi movement called them Jews, Communists, Intellectuals etc. Whatever the term, the target of these attacks are always the ones that threaten the Power Structure. ..."
"... Joseph Goebbels was in charge of the war propaganda for the Nazis during WWII. He said: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State." ..."
Feb 10, 2018 | consortiumnews.com

CitizenOne , February 10, 2018 at 11:58 am

The reason we are in the pickle barrel is exactly the reasons stated in the article and by Annie. We are exposed to exactly what they want to show us and are blinded by other narratives which do not support the group think. It is as if the politicians, the intelligence community and the media are all involved in a conspiracy. Remember that word means a plan by two or more people. No tin foil hat required. But anyone suggesting conspiracy is instantly branded a nut hence the universal use of the term conspiracy nut as a derogatory term to label anyone with a different message that somehow captures the attention of a wider audience. It is not so much that all Holly Wood stars are liberal socialists. They are a diverse group. However they all have one thing in common which is they have the public's ear. They are also not on point with the approved messaging and so must be continuously branded as conspiracy nuts and socialist subversives. We all have seen the 24/7 bashing of these folks. Control is the reason.

The "Newspeak" we experience is straight out of Orwell's 1984. From Wikipedia: Newspeak is the fictional language in the novel Nineteen Eighty-Four, written by George Orwell. It is a controlled language created by the totalitarian state Oceania as a tool to limit freedom of thought, and concepts that pose a threat to the regime such as freedom, self-expression, individuality, and peace. Any form of thought alternative to the party's construct is classified as "thoughtcrime".

It is truly scary how Orwellian our current situation has become reminding me that there are always two two takeaways from any story or historical record. Those that view it as a cautionary tale and those who use it as an instruction manual.

I am appalled by how the media at first put Trump in the game in the first place for economic gain (see Les Moonvies article) and then created another fictional fantasy which serves the goal of permawar and control of the citizenry through fear, confusion and ignorance. We are all exposed to the Daily Two Minutes of Hate another Orwellian concept. From Wikipedia: The Two Minutes Hate, from George Orwell's novel Nineteen Eighty-Four, is a daily period in which Party members of the society of Oceania must watch a film depicting the Party's enemies (notably Emmanuel Goldstein and his followers) and express their hatred for them for exactly two minutes. The difference is we can find it 24/7 on our technological wonder machines.

Another Orwellian concept is The Ministry of Truth: The Ministry of Truth (in Newspeak, Minitrue) is the ministry of propaganda. As with the other ministries in the novel, the name Ministry of Truth is a misnomer because in reality it serves the opposite: it is responsible for any necessary falsification of historical events. From Wikipedia: As well as administering truth, the ministry spreads a new language amongst the populace called Newspeak, in which, for example, "truth" is understood to mean statements like 2 + 2 = 5 when the situation warrants. In keeping with the concept of doublethink, the ministry is thus aptly named in that it creates/manufactures "truth" in the Newspeak sense of the word. The book describes the doctoring of historical records to show a government-approved version of events.

We are also controlled through Doublespeak another Orwellian concept. From Wikipedia: Doublespeak is a language that deliberately obscures, disguises, distorts, or reverses the meaning of words. Some common examples are the branding of liberals by pundits in the media as Fascists in order to eliminate the historical understanding of exactly what that word refers to. Another example is the appearance of the term Alt Right which is used to confuse and obscure the true nature of these groups. A great example of the doublespeak the media exercises in service to the state is the instantaneous adoption of the term Alt Right and nary ever a mention of its former names such as White Supremacist, Neo Nazi, Racist, Hate Group etc. They just rename these movements and hide all the other terms from sight. Another example is scapegoating the same group of people but under a different term. Today the term is Liberal but in the past, the Nazi movement called them Jews, Communists, Intellectuals etc. Whatever the term, the target of these attacks are always the ones that threaten the Power Structure.

Joseph Goebbels was in charge of the war propaganda for the Nazis during WWII. He said: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State."

If these things seem eerily similar to what is going on today then we probably have a power structure which is a grave threat for peace. Okay, we do have a power structure that is a grave threat to peace but oddly not democracy. Noam Chomsky wrote about propaganda stating, "it's the essence of democracy" This notion is contrary to the popular belief that indoctrination is inconsistent with democracy. The point is that in a totalitarian state, it doesn't much matter what people think because you can control what they do. But when the state loses the bludgeon, when you can't control people by force and when the voice of the people can be heard, you have to control what people think. And the standard way to do this is to resort to what in more honest days used to be called propaganda. Manufacture of consent. Creation of necessary illusions.

The folks who contribute here on this website are few indeed and what lies beyond the haven of the oasis is a vast barren dessert filled with scorpions, snakes and a whole bunch of lies.

Well said for Annie and the authors.

Democracy may be the ultimate tool of control of the masses.

More wisdom from Goebbels:

I like that last one a lot but unfortunately it will not come to pass until things get bad.

CitizenOne , February 10, 2018 at 11:59 am

Link to article: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-trump-moonves-snap-htmlstory.html

Elaine Sandchaz , February 10, 2018 at 5:34 pm

Citizen One – You have beautifully & precicely nailed the means ( "how" ) the USA has gotten in such a mess : Newspeak, Daily Two Minutes of Hate, The Ministry of Truth, DoubleSpeak and the way and why of how Propaganda actually works. George Orwell was a seer.

AND now it would be helpful to understand "why" the USA has gotten in such a mess. The polarity of American politics tells a very long story but in short, polarity means there are only two ways and when the going gets tough, each way is in the extreme – the right way or the wrong way, it flips depending on each individual's political persuasion. When the going gets tough the extremes become the tail that wags the dog.

So my question is : WHY after the seemingly happy years under Obama did the going get so tough so fast?
My pet theory is that Trump threatened to "drain the swamp" which was understood – seemingly now quite rightly – that he was going to expose some very significant wrong doing in very high places. I believe that he was on "NYC/DC" friendly terms with the Clintons and both parties knew each other for the true devil they were. Thus the big red flag he waved in her face brought about what is turning in to a multi billion dollar ongoing attempt to discredit him in the eyes of the people, in the eyes of the World and in the eyes of the highest courts " America be damned".

And politically this is quite necessary because she is not only an icon of all that is American,"apple pie and motherhood"; she is to the under 45 age group the great white mother of democracy via Democrat rule. And the bad part of that iconography is that if she goes down so does the party. It was also critical for her to win because of all the swamp people who had chosen to compromise their life's work, thus had to continue in that compromise in the hope that they would come out clean since they believed that both Trump and the ordinary American were so naive, thus would be easily played for fools.

So all this crap to destroy Trump is about saving her hide to save the party. Things are so desperate now because there is nothing yet in place to replace her in the mind's eye of the Democratic half the voting public. All who might have been in 2nd place were kept diminished to raise her higher. It now is quite obvious that she has been told to shut up and lie low, to come out only when she is in safe company – as at the Golden Globes. So the big picture today as is being painted and hyped to intensify mass hysteria is that Mueller needs to be protected from Trump where really what is needed are the names and numbers to be called on for more $$$, more social media propaganda pages and to vote in November 2018.

Why only that? Because Trump is not going to fire Mueller; remember Mueller was a Bush man and so was Comey. They have a long history of going both ways. Survival is tricky business – especially in DC. The scapegoats are already cornered; possibly the new "lie" is already in draft form. Remember – "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State."

It is going to be an interesting next few months!! But we can hope that, from this one of many previous American political exercises in democracy, the ordinary defenders of those democratic values (the voters) will learn some significant truths about governance, transparency and the rule of law. The guys at the top are not gods and are not above the law; they must not only do right but be seen to do right.

CitizenOne , February 10, 2018 at 7:57 pm

The only thing I can tell you is that the conspirators who concocted Russia Gate have figured out all the pieces to the puzzle of how to control events via the means I mentioned and many other means. We are as manipulated as a light switch. One way we are all fired up about some BS and flip the switch and we are all calm and mellow. Hopefully if you follow the threads here you will find out a lot of alternative information much of it thoroughly researched by highly respected and qualified individuals who are in a position to know the truth.

Mariam , February 10, 2018 at 7:11 pm

I agree with you wholeheartedly. They call themselves "liberals" in fact they are "new liberals."
Alas, these false ("new) liberals" are very well represented by the Obamas, the Clintons, the Trudeaus, the Macrons and so on.
If you truly believe in the "left" and call yourself "progressive" you couldn't stand for useless and pointless wars, period.

[Feb 09, 2018] Economists data and models are so unreliable that they should be viewed more of a religious studies than natural science

Feb 09, 2018 | economistsview.typepad.com

llisa2u2 , February 06, 2018 at 11:01 AM

I am posting this info. to this site, as part of personal approach as a US citizen to try to get some REAL FACTS out into the supposedly professional platforms of economists. This platforms are woefully lacking in good, factual information to communicate to anyone, even amongst themselves, and especially to Joe living on an street, or hopefully any house on any street in the US.

Now, what am I posting? The information that I am posting is an example of confusing information that is extremely invalid and should NOT be posted by so-called reliable sources, of professional, or "expertise" information. The reason I am posting an article that is confusing is because this article by Krugman is also confusing, and just as unreliable as the "confusing article" that was written by Alan Harkin at INVESTOPEDIA.


http://bit.ly/2Eof6eM

If you can't believe Investopedia's information, then who can you believe? I am posting the article as an article that the reader can NOT believe. The linked article is absolutely mis-stating IRS facts. This article is one of many that confuse the message about corporate taxation.

Personally, I think it is deliberate. The title of the article: http://bit.ly/2Eof6eM
basically leads the reader "to believe" the article is about how much US corporations such as APPLE, GOOGLE etc. "actually" bottomline- deliver to IRS. BUT, wait, when the reader "really reads" the reader then notes, that the "charts" ONLY reflect the "tax rate". Now, that's a whole different story. Tax rate is not bottomline taxes paid.

So, now if my "logic" and conclusion is "faulty", please enlighten me. The IRS data and this article don't jive in the real world of statistical data. Here is link to STATISTA that is THE data base that is used by top researchers worldwide.

This link shows the REAL data and percentage of corporate TAX PAID, AND FUTURE projections for US etc. etc. I have selected the most obvious and easy to read chart.
The following link presents reliable fact VS The article from INVESTOPEDIA as garbage.

http://bit.ly/2Eof7iQ

I am writing that the article in Investopedia by Aaron Hankin is BS. The content of the article also attempts to establish correlations to S/P action that has absolutely NO plausible fact to make any correlation about anything. I am also writing that most of the media reports about "corporate tax" is BS. I also am writing that this article by Krugman is a fluff, nonsense piece that is also BS. If Krugman were an economist that had any concern about the US economy, he would have, and would be posting this link everywhere on earth.

All that I definitely am trying to do is to get "reasonable data" out there to influence the public mindset to counter BS and try to present FACTS, just like a lot of other intelligent readers are trying to do.

llisa2u2 said in reply to llisa2u2... , February 06, 2018 at 11:08 AM
Please ignore the "typos", I did not hit preview first in this posted version on economists view.
llisa2u2 said in reply to llisa2u2... , February 06, 2018 at 11:15 AM
Basically, I am saying that the political posturing, and propaganda strategies of so many different monied groups is demanding that any "serf" needs to present any comment as if the "serf" is writing some sort of thesis. Really, all the "Talking Faces" are the ones who should be doing that as they present messages to the public"serfs". Otherwise, there should be public disclaimers as to who is paying the "Talking Faces" for delivering their "propaganda". The "sponsored message" dynamics is so convoluted, that any viewer sure can't presume anything. Basically, It just looks like a lot of "Talking Faces" are just making themselves into asses, based on their assumption, and presumptions.
mulp said in reply to llisa2u2... , February 06, 2018 at 01:26 PM
Why do you think anyone associated with investors is an economist rather than a snake oil salesman in the medicine show that is extremely boring?

What to understand economics? Pay attention to Elon Musk, Jeff Bezos.

They pay US workers to build productive assets like factories, transportation products, energy harvesting products, information you want products, all of which can be matched only by competitors paying hundreds of billions to millions of US workers just to catch up in a decade.

Or you can read Keynes.

[Feb 08, 2018] Paul Krugman Has Trumphoria Finally Hit a Wall

Feb 08, 2018 | economistsview.typepad.com
But should we be worried about something worse than a mere downshift in growth?

Well, asset prices do look high: A widely used gauge of stock valuations puts them at a 15-year high , while a conceptually similar measure says that housing prices have retraced a bit less than half the rise that culminated in the great housing bust.

Individually, these numbers aren't that alarming: Stocks, as I said, don't look nearly as overvalued as they did in 2000, housing not nearly as overvalued as it was in 2006. On the other hand, this time both markets look overvalued at the same time, at least raising the possibility of a double-bubble burst like the one that hit Japan at the end of the 1980s.

And if asset prices take a hit, we might expect consumers -- who have been spending heavily and saving very little -- to pull back.

Still, all of this would be manageable if key policymakers could be counted on to act effectively. Which is where I get worried.

[Feb 08, 2018] I certainly noticed that the market incurred an enormous rise in the first month of 2018, and anyone would have expected a correction, perhaps one less spectacular.

Notable quotes:
"... the bond market and other financial market indicators that are more reliable measures of investors' expectations than stock prices. ..."
Feb 06, 2018 | economistsview.typepad.com

Fred C. Dobbs , February 06, 2018 at 12:24 PM

I certainly noticed that the market incurred an enormous rise in the first month of 2018, and anyone would have expected a correction, perhaps one less spectacular. So be it.

Lets hope buying (& selling) will be a lot less frantic, now that tax-cut euphoria is behind us.

RC AKA Darryl, Ron said in reply to Fred C. Dobbs... , February 07, 2018 at 06:22 AM
Bulls are not exactly known as even tempered beasts.
Fred C. Dobbs , February 06, 2018 at 07:40 PM
Ignore the Stock Market. The Economy Looks Fine. https://www.nytimes.com/2018/02/06/upshot/ignore-the-stock-market-the-economy-looks-fine.html
NYT - Neil Irwin - Feb 6

What is the stock market telling us with its precipitous drop over the last several days? In all likelihood, not much of anything.

That's because the stock market, though crucial in the long run for individuals accumulating wealth and companies raising capital, is so erratic as to be useless in providing information about the short run. The 8.5 percent drop in the S.&P. 500 through Monday's close (before a 1.7 percent rebound on Tuesday) could signify the onset of a global recession. But it could just as well mean only that some trading algorithms at a big hedge fund collided in weird ways.

For what really matters -- the well-being of the economy and the ability for individuals and companies to prosper in the years ahead -- look first to fundamental economic data, especially those that tend to be leading indicators. Second, look to the bond market and other financial market indicators that are more reliable measures of investors' expectations than stock prices.

There is good news on both fronts, as both point to a global economy that will continue growing steadily in the months and years ahead, perhaps with inflation that is a bit higher than in the recent past. That contrasts this market sell-off with drops in 2011, 2015 and 2016, which coincided with pessimistic signals in both economic data
and the bond market.

The stock market can, when looked at in concert with these other indicators, provide some useful insight. Right now it appears to be more noise than signal.

The economic data has been solid in recent weeks. Just Friday, the Labor Department reported that the United States added a robust 200,000 jobs in January. The Federal Reserve Bank of Atlanta tracks incoming economic data to estimate current growth of gross domestic product, and its indicator is pointing toward robust economic expansion -- a 4 percent annual rate.

Of course, there is plenty of statistical error built into those numbers, and they may turn out to be incorrect. But even many of the real-time indicators that tend to work as early warnings of an economic slump are looking just fine. The Conference Board's index of leading economic indicators ticked up in its most recent release, and weekly claims for unemployment insurance benefits have hovered near record lows in recent weeks.

Just Monday, the Institute for Supply Management said its index of activity at service companies rose sharply in January, which made it one of those curious days when good economic news coincided with a steep market sell-off.

The bond market is also looking optimistic about the future, with prices suggesting that continued growth -- without inflationary overheating -- is the most likely future.

The stock market has lost ground since the start of the year, thanks to the sharp sell-off Monday. But the yield on 10-year Treasury bonds is up in that span, from 2.4 percent to 2.8 percent at Tuesday's close. That suggests bond investors think that continued steady recovery will allow the Federal Reserve to raise interest rates gradually.

Bond investors are pricing in higher inflation than the United States has experienced in recent years, but roughly in line with the 2 percent the Federal Reserve aims for. Prices for inflation-protected bonds imply 2.09 percent annual inflation over the coming decade, up from 1.98 percent at the start of the year.

Other market indicators that might signal global economic troubles, like the price of oil, instead point to a steady-as-she-goes global economy.

None of this makes a case for economic complacency. There are plenty of things that could go wrong in the world, from conflict on the Korean Peninsula or in the Middle East to destructive trade wars. But if the stock market was actually giving us any insight into the likelihood of those outcomes, we would expect to see moves in bond and commodity markets that just aren't happening.

Think of it this way. The economy is like a horse race -- and what we really care about is which horse wins, places or shows. The bond market is the equivalent of the people betting directly on the race. And while of course gamblers get it wrong sometimes, the market is efficient enough that there's a fairly direct relationship between the odds a horse pays and its probability of victory.

The stock market, by contrast, is like a weird side game in which people bet one another on which gambler is going to have the best day. It's erratic, volatile and a couple of degrees removed from the underlying horse race on which it is all based.

And that's why the best way to make sense of the drop in the stock market is to think of it as a sideshow to the broader trajectory of the United States and global economy, which for now look perfectly fine.

RC AKA Darryl, Ron said in reply to Fred C. Dobbs... , February 07, 2018 at 05:24 AM
[Although I immediately agreed with this article that you posted, I took the time to do a little background research on its author before replying. Neil Irwin authored the book "The Alchemists: Three Central Bankers and a World on Fire" devoted to the subject of central bankers role in dealing with the 2008 financial crisis. The review of this book linked with conclusion excerpted below says that it is "a squarely centrist account, echoing conventional wisdom" and that Irwin had done his homework thoroughly. For the topic at hand, the meaning of this week's stock market dip, then that is a glowing testimonial to his relevant abilities. It's not like we are picking the chairman of the CEA here.]

http://www.nytimes.com/2013/05/05/business/alchemists-looks-at-central-bankers-handling-of-crisis.html

When the Global Economy Was on the Brink

Off the Shelf

By FRED ANDREWS MAY 4, 2013


...So, Mr. Irwin writes, their triumph is what didn't happen: "As ugly as the global economy looked five years after the onset of crisis, no war had broken out among the great global powers. Europe remained united. There had been no confidence-shattering hyperinflation or, outside of perhaps Greece and Spain, economic depression. None of this was a certainty." As he puts it: "It may seem like damning with faint praise, but a catastrophe averted is no small thing."

[Feb 08, 2018] Market cap is not wealth

Feb 08, 2018 | economistsview.typepad.com

mulp , February 06, 2018 at 12:10 PM

"When talking about stock markets, there are three rules you have to remember. "

Krugman is brain damaged by free lunch economics.

The most important three things to remember:

If wealth is not created by paying workers, then wealth can be created by everyone selling and reselling their old cars to each other at twice the price paid a week earlier.

[Feb 08, 2018] What will the stock market do next by Vitaliy Katsenelson

All this ideas are good for "more or less" stable market. If S&P500 drops 50% then it is completely another story. The idea that stocks will go up all the time is questionable if we view stocks as private currencies.
The problem with the statement "How do you deal with market declines? Stop looking at the market as if it were a casino and start treating stocks as businesses that you are trying to buy at a discount to fair value" is that there is no fair value in stocks as they are in essence paper currencies. Stockholders stand far in the like after several other classes of creditors. So more correctly fair value of any stock as fair value of any currency including dollar is zero. In other words like currencies this is a confidence game.
Also in bear market fear is predominant and to buy on the cheap is very, very risky as market can drop further and further. In no way you should buy stocks on dive. It make sense to buy it only on established upswing. The problem is what metric you should use to judge that this "established" upswing.
Notable quotes:
"... Morgan Stanley's Wilson warns investors not to buy the dip. ..."
"... Stop looking at the market as if it were a casino and start treating stocks as businesses that you are trying to buy at a discount to fair value. Stock price is an opinion of what the market is willing to pay for this business right now ..."
"... If you treated stocks like a business every business would be out of business gone chapter 11. Paying 6 times fair market value for stocks and stock indexes is a great business model... to avoid. ..."
Feb 06, 2018 | www.zerohedge.com
I've been asked to comment on the most recent market decline. My initial reaction was, markets go up and they go down. America is a great country but the US Constitution doesn't guarantee always-rising markets. I sat down and I wanted to write a reassuring message. I wanted to express my empathy. Somehow, I found that my reservoir of empathy was empty: After recent decline the market is still up twenty-something percent from the beginning of 2017.

And then I stumbled on Dalio and Wilson predicting what the market will do next, and I have to confess, I started writing and could not stop. (I apologize ahead of time for the rantiness of this message.)

Two contradictory headlines on the MarketWatch home page, right next to each other.

Do you listen to Dalio or Wilson? I want to let you in on a small Wall Street secret: Neither Dalio nor Wilson knows what the stock market will do next. Don't be fooled by their fancy pedigrees, the gazillions of dollars they manage, the eloquence of their logic, the myriad of data points they marshall. Nobody but nobody knows what the stock market will do tomorrow, next week or next year. Stock market behavior in the short term is completely random. Completely! You'll have a better luck predicting the next card at a black jack table than guessing what the stock market will do next.

The media of course needs to fill pages and rack up views, and so there are gazillions of explanations (I'm trying to use the word gazillion at least three times in this article) for why the stock market does this or that. The explanations always sound rational, but for the most part they are worthless because they have zero forecasting power. A strong jobs report sent stocks up. Explanation: The economy is doing great. A strong jobs report sent stocks down. Explanation: Investors are worried about higher interest rates. I can give dual spin to any news, maybe only short of nuclear war.

My biggest problem with "The stock market will do this" headlines is that they turn investors into degenerate gamblers. I see people trying to treat the stock market like a casino. They get lucky at times and catch the wave of randomness (especially if the market marches higher every single day). Success goes to their heads, the feel like they've got this whole stock market thing figured out. Stocks are just bits of data that are priced on the exchanges gazillions of times a day. This is not investing – I don't even want to insult gambling by calling it gambling. At least gamblers don't gamble with their life savings and 401k's (unless they are degenerate gamblers).

What will the stock market do next?

It's the wrong question. It's the question that should never be asked, and if asked should never be answered. Asking this question shows that you believe there is some kind of order to this random madness. There is not. And if you answer with any answer other than "I don't know," you're a liar.

How do you deal with market declines? Stop looking at the market as if it were a casino and start treating stocks as businesses that you are trying to buy at a discount to fair value. Stock price is an opinion of what the market is willing to pay for this business right now. Yes, it's an opinion, not a final judgement. The stock market is going to be a miserable place for you in the long run if you take market opinions on any given day seriously and treat them as final judgements.

If you start treating stocks as businesses and you start analyzing them and valuing them as such, then market drops stop being a source of pain and turn into a source of pleasure. I read somewhere that most money is made during bear markets (when you buy stocks on the cheap) – it just doesn't feel that way at the time. Even if you are fully invested (we are not) why does it really matter that the market decided to price your stocks lower today (unless you believe the market is right)? Will it matter three, five years from now? If you own undervalued companies, they may get more undervalued before they become fully valued. As long as you've got the valuation right, you'll eventually be proven right.

Let me tell you what we did when the market took a dive. We looked at stocks we owned and asked ourselves a question: Had their values changed? They had not. Then we asked if we wanted to increase our positions in any of them. Then we looked through our long watch list to see if any stocks had hit our buy-price targets. That was it. That is the only rational way to invest. Anything else is

So, how does one invest in this overvalued market? Our strategy is spelled out in this fairly in-depth article.

Vitaliy Katsenelson is the CIO at Investment Management Associates , which is anything but your average investment firm. (Seriously, take a look .)

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Comments Vote up! 0 Vote down! 0
eclectic syncretist -> Osmium Feb 7, 2018 8:29 AM Permalink

The long-term general uptrend in stocks is primarily just a reflection of the Fed's degradation of the value of the dollar/inflation. Physically holding gold and silver keeps you at least even with that trend, over the long-term, in a way that can't easily be taken from you. It also provides great peace of mind for those who value that.

Wonderful article with the only caveat being it neglects to accept how much power the Fed wields over the markets. Guessing what the Fed will or won't do has become too important to ignore. To me personally, it's hard to believe that the Fed will really be able to increase interest rates another percentage point this year, while simultaneously selling hundreds of billions of US treasuries off its balance sheet, and issuing a trillion or so in new bonds to finance the national debt, without popping the stock market bubble. On the other hand, these humongous issues of new debt are not positive for the value of the dollar, and coupled with the ongoing international move away from the dollar, it seems likely that the Fed will need to keep interest rates rising in order to make sure the dollar doesn't fall too fast, so they are in a very difficult situation and are probably hoping to make sure this a managed pop, something like Japan had in 1990.

Of course, the Fed totally flubbed it in 2007-2008, so God only knows how this one will shake out. One thing's for sure, the dollar as we know it will not last. It was designed to fail, after all.

Whoa Dammit Feb 6, 2018 10:00 PM Permalink

"Start treating stocks as businesses and start analyzing them and valuing them as such."

Wow, it's refreshing to hear statements like this about stocks from an Investment Manager. Most fund runners these days are just into the latest tricked out vehicle that will take their customers for a ride.

The Real Tony Feb 6, 2018 10:07 PM Permalink

If you treated stocks like a business every business would be out of business gone chapter 11. Paying 6 times fair market value for stocks and stock indexes is a great business model... to avoid.

Fed-up with be Feb 7, 2018 2:01 AM Permalink

Well, allow me to "argue" that this is BULLSHIT. First, let's examine what "value" means. OH, is it this BULLSHIT that the companies report, and I mean HEADLINE REPORT, called, NON-GAAP.

Some of us here might be smarter than others and will spend the time to read the NON-SPUN bullshit. That will MAYBE give us an edge.

However, take it from a Guy who WAS ON THE INSIDE of Corporate THINK. WE ALL LIED about our forecasts to create a sense of value and ALL COMPANIES LIE.

Fed-up with be Feb 7, 2018 2:05 AM Permalink

Remember, guys and gals, ALL Of the value is in FUTURE earnings, and PRE-ANNOUNCEMENTS and the trick is to KNOW the market in which you might want to invest in....and that means you must be, by definition, an INSIDER.

OH, and only CONGRESS gets to "invest as insiders" legally---right? THEY PUT MARTHA in jail for the very thing that they do daily. If this Country ain't a stinking asshole of a shit hole, then I am not understanding those terms.

I have said it here over over:

1. THEY WANT US to argue over shit they do not care about.

2. They want us to NOT DO THE MOST LUCRATIVE things which are outlawed, only to then turn around and do those things themselves, and:

3. THEY GET OFF THE HOOK.

If this ain't a crock of shit, I am not sure what is. WE ARE FUCKED.

[Feb 08, 2018] We are all victims of the pernicious 24/7 scientifically-designed propaganda apparatus

Notable quotes:
"... We are all victims of the pernicious 24/7 scientifically-designed propaganda apparatus. It has little to do with the victim's intelligence since almost all human opinions are formed by emotional reactions that occur even before the conscious mind registers the input. ..."
Feb 08, 2018 | consortiumnews.com

Daniel , February 5, 2018 at 6:57 pm

We are all victims of the pernicious 24/7 scientifically-designed propaganda apparatus. It has little to do with the victim's intelligence since almost all human opinions are formed by emotional reactions that occur even before the conscious mind registers the input.

Through critical thinking, we can overcome these emotional impulses, but only with effort, and a pre-existing skepticism of all information sources. And even still, I have no doubt that all of us who are aware of the propaganda still accept some falsehoods as true.

It could be that having former Intelligence Agency Directors as "news" presenters, and Goldman Sachs alum and Military/Industrial complex CEOs running important government agencies makes clear to some the reality that we live in an oligarchy with near-tyrannical powers. But most people seem too busy surviving and/or being diverted by the circus to notice the depths of the propaganda.

[Feb 07, 2018] The Risks to America's Booming Economy by Martin Feldstein by Martin Feldstein

This was Mar 29, 2017 -- almost a year ago.
Mar 29, 2017 | www.project-syndicate.org

After a long and slow recovery from the recession that began a decade ago, the US economy is poised for robust growth this year. But, although the economy currently is healthy, it is also fragile, owing to a decade of excessively low interest rates, which have caused investors and lenders to bid up asset prices and make risky loans.

[Feb 07, 2018] BREAKING Dow Jones Record Plunge! Here's Why

Notable quotes:
"... Jimmy it doesn't make sense because its all lies! Ask the workers if they have had any type of increase. They haven't. There hasn't been 200 000 jobs created, more like lost. The rich are pulling out because they know the truth. Not to mention the stock market that has been manipulated for so long its a fraud like the rest of it. ..."
Feb 07, 2018 | www.youtube.com

ABOUT THE JIMMY DORE SHOW:

The Jimmy Dore Show is a hilarious and irreverent take on news, politics and culture featuring Jimmy Dore, a professional stand up comedian, author and podcaster. With over 5 million downloads on iTunes, the show is also broadcast on KPFK stations throughout the country. It is part of the Young Turks Network-- the largest online news show in the world.


Drake Santiago , 1 day ago (edited)

As Hegel so rightful said: "We learn from history that we do NOT learn from history." No where is this more true than in the financial sector. Every steep rise in the market is always followed by any equally sharp fall. This is why it amazes me when people, even those seasoned veterans of the stock market, get giddy when they see such a dramatic uptick in the market. They should see such a rapid increase as a harbinger of bad things to come, and not persist in a delusion that things will be smooth sailing for a long time. This happens time and time again, and people still just don't seem to get it. In fact, in almost any area of life, an uncharacteristically rapid change, leads to predicable failure. If you see someone lose weight faster than they should, on some fad diet, chances are they will fail and gain it back, with additional weight, just as quickly. We have so many people who have the knowledge to make short term gains, but lack the wisdom to see the folly in such a approach.

Gunsmoke Blackfinger , 1 day ago

It's almost like wall street is anti-poor people.

cheezemonkeyeater , 1 day ago

I'm not an economist either, but here's basically what my economy professor said when I took the class a couple of years ago: "The stock market is entirely arbitrary. The numbers put up are determined by a bunch of men in suits who randomly decide what the value is based on whatever they feel might in some way affect it. It bounces up and down completely at the whim of people making what they believe are educated guesses." The example I gave in class was Pixar. The stock for Pixar dropped dramatically when Up was announced because the stock market investors looked at it and said, "How can this make money? It can't be merchandised and an animated feature that can't be merchandised can't succeed. Tell all the investors to sell." And then Up turned out to be Pixar's most successful film up to that point and immediately all those investors who sold off decided to buy back in. The stock market is completely guesswork.

John O'Malley , 1 day ago

Market success and the success of the working class are not aligned with one another. We are heading towards a crash similar to the great recession because these corporate tools WON'T LEARN THEIR LESSON.

cherokee charlie , 1 day ago

Wall Street is a shell game for investors ran by corporations.

Slew One , 1 day ago

THe stock market is a giant Ponzi scheme. The stock market original was made for us to make money from interest, but people now try to make money off of speculation. Really, in the end, if you make money in stocks, someone else loses. The money from stock value does not come from the company, with exceptions, other than the IPO, it is from someone else buying the stocks from you. The reason the rich has gotten so rich, is they are making money from us being forced to invest in 401k. Before CLinton, we were told to put our retirement in the bank, and teh bank has to find safe investments, but Clinton dropped the interest rate so banks don't want our money.

Moloch , 1 day ago

This is not like a casino... There is nothing random... Traders work in groups and pump/dump stocks to take the middle-man money

Christina Kirschner , 1 day ago

Take a look at the M2, velocity of money. It has been falling off a cliff for a decade. The last Fed report showed a sharp uptick. While in order to have a robust economy where the 99% are doing well we NEED a much higher velocity, too much of a rise too quickly could cause rapid inflation and all that money has been horded to be spent. this would cause hyper inflation if the US dollar's future value is ever perceived as lower than its present value. Wiemar USA, because that is pretty much what happened in Germany. People hoarded money and velocity dropped off a cliff. Once inflation happened, the dam broke and everyone wanted to spend their hoarded money. It is a myth that Germany devalued its money to pay off war reparations. What happened was rapid inflation set in once velocity of money took off like a rocket. People scrabbled to buy gold, art, luxuries other tangible assets to store value. This made the value of gold skyrocket in German marks. Adding to this inflationary pressure was the Allies demanding gold for payment of reparations. It was a spiral after that, that could not possible be stopped.

bigike1313 , 1 day ago

Fundamentals are excellent. Interest rates still low. This is a normal correction. SM went up too high too fast. Smart investors buy the bottom of this correction. The smartest investors already took some profits and have cash on the sideline, waiting for the correction.

Bijou Smith , 1 day ago

By your logic Jimmy, if jobs and wages are up and are causing this slump in most listed companies, then the outliers should be stocks in consumer goods companies which should be sky-rocketing against the Dow trend, like P&G and Unilever, because they will reap a huge benefit from higher wages and more jobs. If not, then the fall in confidence has other deeper origins. Maybe someone has done their research and knows lower taxation shrinks an economy that is still in recession.

Verum bellator , 1 day ago

Buying those retirement plans only feeds the big corporations and elite and holds you at ransom. Keep your money in the local bank and buy locally.

James Pyle , 1 day ago

Who should I blame if everything goes to shit in the next month Obama or Trump because the Dems and MSM keep saying the economy has been doing great because of