May the source be with you, but remember the KISS principle ;-)
Bigger doesn't imply better. Bigger often is a sign of obesity, of lost control, of overcomplexity, of cancerous
cells
Financial skeptic
Notes on "neoliberalism enforced" cruise to Frugality Island for 401K Lemmings
“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
"Life is a school of probabilities."
Walter Bagehot
Neoliberal economics (aka casino
capitalism) function from one crash to another. Risk is
pervasively underpriced under neoliberal system, resulting in bubbles small and large which hit the
economy periodically. The problem are not strictly economical or political. They are ideological. Like
a country which adopted a certain religion follows a certain path, The USA behaviour after adoption
of neoliberalism somewhat correlate with the behaviour of alcoholic who decided to booze himself to
death. The difference is that debt is used instead of booze.
Hypertrophied role of financial sector under neoliberalism introduces strong positive feedback look
into the economic system making the whole system unstable. Any attempts to put some sand into the wheels
in the form of increasing transaction costs or jailing some overzealous bankers or hedge fund managers
are blocked by political power of financial oligarchy, which is the actual ruling class under neoliberalism
for ordinary investor (who are dragged into stock market
by his/her 401K) this in for a very bumpy ride. I managed to observe just two two financial crashed
under liberalism (in 2000 and 2008) out of probably four (Savings
and loan crisis was probably the first neoliberal crisis). The next crash is given, taking into
account that hypertrophied role of financial sector did not changes neither after dot-com crisis of
200-2002 not after 2008 crisis (it is unclear when and if it ended; in any case it was long getting
the name of "Great Recession").
Timing of the next crisis is anybody's guess but it might well be closer then we assume. As Mark
Twain aptly observed: "A thing long expected takes the form of the unexpected when at last it comes"
;-):
This morning that meant a stream of thoughts triggered by Paul Krugman’s most
recent op-ed, particularly this:
Most of all, the vast riches being earned — or maybe that should be “earned” —
in our bloated financial industry undermined our sense of reality
and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis.
How was that possible? How, for example, could Alan Greenspan have declared, just a few years
ago, that “the financial system as a whole has become more resilient” — thanks to derivatives,
no less? The answer, I believe, is that there’s an innate tendency
on the part of even the elite to idolize men who are making a lot of money, and assume that they
know what they’re doing.
As most 401K investors are brainwashing into being "over bullish", this page is strongly bearish
in "perma-bear" fashion in order to serve as an antidote to "Barrons" style cheerleading. Funny, but
this page is accessed mostly during periods of economic uncertainty. At least this was the case during
the last two financial crisis(2000 and 2008). No so much during good times: the number of visits drops
to below 1K a month.
Still I hope it plays a small but important role: to warn about excessive risk taking by 401K investors
in neoliberal economic system. It designed to serve as a warning sign and inject a skeptical note into
MSM coverage. There are not many such sites, so a warning about danger of taking excessive risk in 401K
accounts under neoliberalism has definite value. The following cartoon from 2008 illustrated this point
nicely
As far as I know lot of 401K investors are 100% or almost 100% invested at stocks. Including many
of my friends. I came across a very relevant to this situation joke which nicely illustrated the ideas
of this page:
Seven habits that help produce the anything-but-efficient
markets that rule the world by Paul Krugman in Fortune.
1. Think short term.
2. Be greedy.
3. Believe in the greater fool
4. Run with the herd.
5. Overgeneralize
6. Be trendy
7. Play with other people's money
I would like to stress again that it is very difficult to "guess" when the next wave of crisis stikes
us: "A thing long expected takes the form of the unexpected when at last it comes".
But mispricing of risk in 401K accounts is systemic for "overbullish" 401 investors, who expect that
they will be able to jusp of the train in time, before the crash. Usually such expectations are false.
And to sell in the market that can lose 10% in one day is not easy psychologically. I remember my feelings
in 2001-2002 and again 2008-2009. That's why many people who planned to "jump" stay put and can temporarily
lose 30 to 50% of value of their 401k account in a very short period of time (and if you think that
S&P500 can't return to 1000, think again; its all depends on FED). At this point some freak out and
sell their holdings making paper losses permanent.
Even for those who weathered the storm and held to their stock holdings, it is important to understand
that paper losses were eliminated mostly by Fed money printing. As such risks remains as at one point
FED might find itself out of ammunition. The fact that S&P500 recovered very nicely it does not diminish
the risk of such behavior. There is no guarantee that the third crisis will behave like previous two.
Next crash will have a new key determinant: the attitude toward the US government (and here I mean
the current government of Barack Obama) and Wall Street after 2008 is the lack of trust. That means
that you need to hope for the best but prepare for the worst. Injection on so much money into financial
system was a novel experiment which is not ended yet. So how it will end is anybody's guess. We are
now in uncharted waters. I think when Putin called Bernanke a hooligan, he meant exactly this. Since
Bernanke was printing money out of thin air to buy financial paper, his action were tantamount to shoplifting.
In some way this probably is more similar to running meth labs inside Fed building. The system was injected
with narcotics. Everybody felt better, but the mechanism behind it was not healthy.
The complexity of modern financial system is tremendous and how all those new financial instruments
will behave under a new stress is unknown. At the same time in the Internet age we, the great unwashed
masses, can't be keep in complete obscurity like in good old time. Many now know ( or at least suspect
) that the neoliberal "show must goes on" after 2008 is actually going strongly at their expense. And
while open rebellion is impossible, that results in lack of trust which represents a problem for financial
oligarchy which rules the country. The poor working slobs are told be grateful for Walmart's low (poverty-subsidized)
prices. Middle class is told that their declining standard of living is a natural result of their lack
of competitiveness in the market place. Classic "bread and circuses" policy still works but for how
long it will continue to work it is unclear.
But nothing is really new under the sun. To more and more people it is now clear that today the US
is trying to stave off the inevitable decline by resorting to all kinds of financial manipulations like
previous empires; yesterday, it was the British Empire and if you go further back, you get the USSR,
Hapsburg empire, Imperial Russia, Spanish empire, Venetian empire, Byzantium and Roman empire. The current
"Secretary of Imperial Wars" (aka Secretary of Defense) Ashton Baldwin Carter is pretty open about this:
“We already see countries in the region trying to carve up these markets…forging many separate trade
agreements in recent years, some based on pressure and special arrangements…. Agreements that…..leave
us on the sidelines. That risks America’s access to these growing markets. We must all decide
if we are going to let that happen. If we’re going to help boost our exports and our economy…and
cement our influence and leadership in the fastest-growing region in the world; or if, instead, we’re
going to take ourselves out of the game.”
For the US elite it might be a time to rethink its neocon stance due to which the US is exposing
ourselves to the enmity of the rising economic powers, and blowing serious cash to maintain it hegemony
via maintaining huge military budget, financing wars and color revolutions in distant countries. In
a way the US foreign policy became a financial racket, and racket can't last forever because it incite
strong opposition from other countries.
Neoliberalism (aka casino capitalism) as a social system entered the state of decline after 2008.
Like communism before it stopped to be attractive to people. But unlike communism it proved to have
greater staying power, surviving in zombie state as finanfial institutions preserved political power
and in some cases even enhanced it. It is unclear how long it will say in this state. Much depends on
the availability of "cheap oil" on which neoliberal globalization is based.
But the plausible hypothesis is that this social system like socialism in xUSSR space before entered
down slope and might well be on its way to the cliff. Attempts to neo-colonize other states by the West
became less successful and more costly (Compare Ukraine, Libya and Iraq with previous instances of color
revolutions). Some became close to XIX century colonial conquests with a lot of bloodshed (from half
million to over a million of Iraqis, by different estimates, died ). As always this is mainly the blood
of locals, which is cheap.
Libya and Ukraine are two recent examples. Both countries are now destroyed (which might be the plan).
In Ukraine population is thrown in object poverty with income of less that $5 a day for the majority
of population. And there is no other way to expand markets but to try to "neo-colonize" new countries
by putting them into ominous level of debt while exporting goods to the population on credit. That is
not a long term strategy as Greece, Bulgaria, and now Spain and Portugal had shown. With shrinking markets
stability of capitalism in general and neoliberalism in particular might decrease.
Several researchers points to increased importance Central banks now play in maintaining of the stability
of the banking system. That's already a reversal of neoliberal dogma about free (read "unregulated")
markets. Actually the tale about "free markets", as far as the USA is concerned, actually was from the
very beginning mainly the product designed for export (read about
Washington consensus).
Modern technology makes many things possible, but it does not make them cheap... The camera
needs to work in pretty adverse conditions (think about the temperature inside the light on a hot
summer day, and temperature at winter) and transmit signal somewhere via WiFi (which has range
less then 100m) , or special cable that needs to be installed for this particular pole. With wifi
there should be many collection units which also cost money. So it make sense only for
streetlights adjacent to building with Internet networking. And there are already cameras of the
highway, so highways are basically covered. Which basically limits this technology to cities.
Just recoding without transmission would be much cheaper (transmission on demand). Excessive
paranoia here is not warranted.
According to new government procurement data, the Drug Enforcement Administration (DEA) and
Immigration and Customs Enforcement (ICE) have purchased an undisclosed number of secret
surveillance cameras that are being hidden in streetlights across the country.
Quartz
first reported this dystopian development of federal authorities stocking up on "covert
systems" last week. The report showed how the DEA paid a Houston, Texas company called Cowboy
Streetlight Concealments LLC. approximately $22,000 since June for "video recording and
reproducing equipment." ICE paid out about $28,000 to Cowboy Streetlight Concealments during
the same period.
"It's unclear where the DEA and ICE streetlight cameras have been installed, or where the
next deployments will take place. ICE offices in Dallas, Houston, and San Antonio have
provided funding for recent acquisitions from Cowboy Streetlight Concealments; the DEA's most
recent purchases were funded by the agency's Office of Investigative Technology, which is
located in Lorton, Virginia," said Quartz.
Christie Crawford, who co-owns Cowboy Streetlight Concealments with her husband, said she
was not allowed to talk about the government contracts in detail.
"We do streetlight concealments and camera enclosures," Crawford told Quartz. "Basically,
there's businesses out there that will build concealments for the government and that's what
we do. They specify what's best for them, and we make it. And that's about all I can probably
say."
However, she added: "I can tell you this -- things are always being watched. It doesn't
matter if you're driving down the street or visiting a friend, if government or law enforcement
has a reason to set up surveillance, there's great technology out there to do it."
Quartz notes that the DEA issued a solicitation for "concealments made to house network PTZ
[Pan-Tilt-Zoom] camera, cellular modem, cellular compression device," last Monday. According to
solicitation number D-19-ST-0037, the sole source award will go to Obsidian Integration
LLC.
On November 07, the Jersey City Police Department awarded Obsidian Integration with "the
purchase and delivery of a covert pole camera." Quartz said the filing did not provide much
detail about the design.
It is not just streetlights the federal government wants to mount covert surveillance
cameras on, it seems cameras inside traffic barrels could be heading onto America's highways in
the not too distant future.
And as Quartz reported in October, the DEA operates a complex network of digital
speed-display road signs that covertly scan license plates. On top of all this,
Amazon has been aggressively rolling out its
Rekognition facial-recognition software to law enforcement agencies and ICE, according to
emails uncovered by the Project for Government Oversight.
Chad Marlow, a senior advocacy and policy counsel for the ACLU, told Quartz that cameras in
street lights have been proposed before by local governments, typically under a program called
"smart" LED street light system.
"It basically has the ability to turn every streetlight into a surveillance device, which
is very Orwellian to say the least," Marlow told Quartz. "In most jurisdictions, the local
police or department of public works are authorized to make these decisions unilaterally and
in secret. There's no public debate or oversight."
And so, as the US continues to be distracted, torn amid record political, social and
economic polarization, big brother has no intention of letting the current crisis go to waste,
and quietly continues on its path of transforming the US into a full-blown police and
surveillance state.
I previously worked for one of these types of federal agencies and to be fair, $50,000
doesn't buy a lot of video surveillance equipment at government procurement costs. The
contractor doesn't just drill a hole and install a camera, they provide an entirely new
streetlight head with the camera installed.
It would be nice if they put some of this technology to work for a good cause. Maybe
warning you of traffic congestion ahead. Or advising you that one of your tires will soon go
flat.
Obviously that won't happen, so in the meantime, I can't wait to read next how the hackers
will find a way to make this government effort go completely haywire. As if the government
can't do it without any help. At least when the hackers do it, it will be funny and
thorough.
Besides the creepy surveillance part, some of the street light tech is interesting .
lights that dim like the frozen food section - when no one is in front of the case --- RGB
lighting that shows the approximate location for EMS to a 911 call ( lights that EMS can
follow by color)
basic neighborhood street lights are being replaced by LED -- lights in this article.
Hey, I have street lights AND cameras on the same poles at the shop/mad scientist lab/
play house.
but- surveillance -- the wall better have these lights -- light up the border !
This is yesteryears news. Shot Spotter has microphones that can pick up whispered
conversations for 300 feet for a long time now, while triangulating any gunshot in a
city...
I personally don't understand the French electorate on these matters. Macron in particular
did not promise anything other than to deliver more of the same policies, albeit with
more youth and more vigor, as a frank globalist. Who, exactly, was excited at his election but
is disappointed now? People with a short attention span or susceptibility to marketing
gimmicks, I assume.
It is hard to talk about the French media without getting a bit conspiratorial, at least, I
speak of "structural conspiracies." Macron's unabashed, "modernizing" globalism certainly
corresponds to the id of the French media-corporate elites and to top 20% of the
electorate, let us say, the talented fifth. He was able to break through the old French
two-party system, annihilating the Socialist Party and sidelining the conservatives. The media
certainly helped in this, preferring him to either the conservative François Fillon or
the civic nationalist Marine Le Pen.
However, the media have to a certain extent turned on Macron, perhaps because he
believes his "complex thoughts" cannot be grasped by
journalists with their admittedly limited cognitive abilities . Turn on the French radio
and you'll hear stories of how the so-called "Youth With Macron," whose twenty- and
thirty-somethings were invited onto all the talk shows just before Macron became a leading
candidate, were actually former Socialist party hacks with no grass roots. Astroturf. I could
have told you that.
Macron has made a number of what the media call "gaffes." When an old lady voiced concern
about the future of her pension,
he answered : "you don't have a right to complain." He has also done many things that
anyone with just a little sense of decorum will be disgusted by. The 40-year-old Macron, who
has a 65-year-old wife and claims not to be a homosexual, loves being photographed with sweaty
black bodies.
... ... ...
So there's that. But, in terms of policies, I cannot say that the people who supported
Macron have any right to complain. He is doing what he promised, that is to say, steaming full
straight ahead on the globalist course with, a bit more forthrightness and, he hopes,
competence than his Socialist or conservative predecessors.
Link
Bookmark In truth there are no solutions. There is nothing he can do to make the elitist and
gridlocked European Union more effective, nothing he can do to improve the "human capital" in
the Afro-Islamic banlieues , and not much he can do to improve the economy which the
French people would find acceptable. A bit more of labor flexibility here, a bit of a tax break
there, oh wait deficit's too big, a tax hike in some other area too, then. Six of one, half a
dozen in the other. Oh, and they've also passed
more censorship legislation to fight "fake news" and "election meddling" and other pathetic
excuses the media-political class across the West have come up with for their loss of control
over the Narrative.
Since the European Central Bank has been printing lending hundreds of billions of euros to
stimulate the Eurozone economy, France's economic performance has been decidedly mediocre, with
low growth, slowly declining unemployment, and no reduction in debt (currently at 98.7% of
GDP). Performance will presumably worsen if the ECB, as planned, phases out stimulus at the end
of this year.
There is a rather weird situation in terms of immigration and diversity. Everyone seems to
be aware of the hellscape of ethno-religious conflict which will thrive in the emerging
Afro-Islamic France of the future. Just recently at the commemoration of the Battle of Verdun,
an elderly French soldier asked Macron : "When will you kick out the illegal immigrants? .
. . Aren't we bringing in a Trojan Horse?"
More significant was the resignation of Gérard Collomb from his position as interior
minister last month to return to his old job as mayor of Lyon, which he apparently finds more
interesting. Collomb is a 71-year-old Socialist politician who has apparently awakened to the
problems of ethnic segregation and conflict. He said in his
farewell address :
I have been in all the neighborhoods, the neighborhoods of Marseille-North to Mirail in
Toulous, to the Parisian periphery, Corbeil, Aulnay, Sevran, the situation has deteriorated
greatly. We cannot continue to work on towns individually, there needs to be an overarching
vision to recreate social mixing. Because today we are living side by side, and I still say,
me, I fear that tomorrow we will live face-to-face [i.e. across a battle lines].
It is not clear how much Collomb tried to act upon these concerns as interior minister and
was frustrated. In any case, he dared to voice the same concerns to
the far-right magazine Valeurs Actuelles last February. He told them: "The relations
between people are very difficult, people don't want to live together" (using the term
vivre-ensemble , a common diversitarian slogan). He said immigration's responsibility
for this was "enormous" and agreed with the journalist that "France no longer needs
immigration." Collomb then virtually predicted civil war:
Communities in France are coming into conflict more and more and it is becoming very
violent . . . I would say that, within five years, the situation could become irreversible.
Yes, we have five or six years to avoid the worst. After that . . .
It's unclear why "the next five or six years" should be so critical. From one point of view,
the old France is already lost as about
a third of births are non-European and in particular
one fifth are Islamic . The patterns of life in much of France will therefore likely come
to reflect those of Africa and the Middle-East, including random violence and religious
fanaticism. Collomb seems to think "social mixing" would prevent this, but in fact, there has
been plenty of social and even genetic "mixing" in Brazil and Mexico, without this preventing
ethno-racial stratification and extreme levels of violence.
I'm afraid it's all more of the same in douce France , sweet France. On the current
path, Macron will be a one-termer like Sarkozy and Hollande were. Then again, the next
elections will be in three-and-a-half years, an eternity in democratic politics. In all
likelihood, this would be the Right's election to win, with a conservative anti-immigration
candidate. A few people of the mainstream Right are open to working with Le Pen's National
Rally and some have even defended the Identitarians. Then again, I could even imagine
Macron posing as a heroic opponent of (illegal . . .) immigration if he thought it could
help get him reelected. Watch this space . . .
How many immigrants from Africa come to Europe depends only on political will of Europeans. The
demography of African has nothing to do with it. Europe has means to stop immigration legal and
illegal. Macron talking about how many children are born in Africa is just another cop out.
A few months ago I claimed that Emmanuel Macron has/holds an ""Alt Right" worldview" due
to him having had interactions with an influential member of the French Protestant Huguenot
minority in France: http://www.unz.com/article/collateral-damage/#comment-1955020
[...] Macron : Germany is different from France. You are more Protestant, which results
in a significant difference. Through the church, through Catholicism, French society was
structured vertically, from top to bottom. I am convinced that it has remained so until
today. That might sound shocking to some – and don't worry, I don't see myself as a
king. But whether you like it or not, France's history is unique in Europe. Not to put too
fine a point on it, France is a country of regicidal monarchists. It is a paradox: The
French want to elect a king, but they would like to be able to overthrow him whenever they
want. The office of president is not a normal office – that is something one should
understand when one occupies it. You have to be prepared to be disparaged, insulted and
mocked – that is in the French nature. And: As president, you cannot have a desire to
be loved. Which is, of course, difficult because everybody wants to be loved. But in the end,
that's not important. What is important is serving the country and moving it forward.
Who, exactly, was excited at his election but is disappointed now? People with a short
attention span or susceptibility to marketing gimmicks, I assume.
After a screening of "Vice" Thursday, I asked McKay which of our two right-wing Dementors
was worse, Cheney or Trump.
"Here's the question," he said.
"Would you rather have a professional assassin after you or a frothing maniac with a meat
cleaver? I'd rather have a maniac with a meat cleaver after me, so I think Cheney is way
worse.
And also, if you look at the body count, more than 600,000 people died in Iraq. It's
not even close, right? "
There are a lot of things that you can running one trillion deficit ;-)
Notable quotes:
"... U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA's latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is the first time that monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil production exceeded the Russian Ministry of Energy's estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world. ..."
"... All of this bullshit is straight, I mean straight off Continental's self servicing investor presentation bullshit, Coffee. You need to wrap your head around some SEC filings, use some common sense and think for yourself. As opposed to letting someone else do your thinking for you. ..."
"... Watcher is correct, CLR's credit rating, its credit score, so to speak, is so bad it could not in the real world buy a pickup truck without its mama co-signing the note. If its wells are sooooooo much better, why don't they pay some of that $6 billion plus dollars of debt back? I mean really, who in their right mind would actually WANT to pay $420MM a year in interest on long term debt if it didn't have to? Never mind, you can't answer that. ..."
"... "If its wells are sooooooo much better, why don't they pay some of that $6 billion plus dollars of debt back? I mean really, who in their right mind would actually WANT to pay $420MM a year in interest on long term debt if it didn't have to?" ..."
"... We had 5-6 years of the highest, sustained oil prices in history and the shale oil industry could NOT make a profit. People seem to think now things have changed for some reason, that the shale oil industry has now become more ethical, and temporarily higher productivity of wells, and some imaginary oil price off in the future (for most shale guys its now down in the mid to low $50's) will allow them to pay down debt. Its absurd logic, but keeps people occupied, I guess, speculating about it. ..."
"... One thing to add. The shale companies did all this in the lowest interest rate environment we have had in a long time. They could not pay off their debt or even put a dent in it. What is going to happen when their interest costs increase 30-50% over the next 2-3 years? ..."
"... I was a former employee of Newfield, when we were drilling gas wells in the Arkoma Basin in 2007 and gas prices were the highest they had ever been, it was not cash flow positive. ..."
"... On the price, I understand why you use different scenarios. However, the average price over the next three years could be $100 or $50 WTI. Pretty much close to what we saw 2011-14 and 2015–17. ..."
"... However, the price is far too volatile to model anything very far into the future, just like we cannot budget past one year, and usually have to make adjustments to that. ..."
"... Our price has dropped over $10 in less than one month. That makes a huge difference, yet that level of volatility is common and has been for many years. ..."
"... What oil prices were you modeling in June, 2014 for 2015-17? Our timing was very fortunate to say the least. Many leases bought 1997-2005. Had we bought the same leases 2011-14 for the market prices of 2011-14, we would be bankrupt, absent having hedged everything for four years, which is very difficult to do. ..."
"... Few companies with zero debt ever go BK. We would with WTI at $30 for about three years. Is that likely? No, but oil did drop below that level in 2016. ..."
U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018,
according to EIA's latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is
the first time that monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil
production exceeded the Russian Ministry of Energy's estimated August production of 11.2
million b/d, making the United States the leading crude oil producer in the world.
Dennis, Coffee's comment did not turn me into a shale cheerleader. I suppose I am more in the
shale sceptic camp for the reasons you mention and others.
Nevertheless, I think Coffee's comment was correct, it does appear that shale producers in
the Bakken have expanded the area that produces exceptional wells. As one who underestimated
shale's viability before, I don't want to repeat the same mistake.
As you note, it is difficult to predict when average well productivity in the Bakken (or
anywhere) will occur. I had thought that current drilling levels would be inadequate to
sustain 1.15 million bpd production levels, but somehow they are increasing production there.
It does appear that for now, the shale operators are having some success.
How long that success will last depends not only on the operational decisions made, but macro
factors such as debt, interest rates, and the economy will play out, and eventually Bakken
production will decline. But for now
I have not read Continental's conference call transcript yet (Seeking Alpha provides
them), but it seems the suit from Continental now feels they will recover – from
present completions – 15 to 20 per cent of the OOIP.
That is huge as the norm was 3 to 5 per cent a few years back.
All of this bullshit is straight, I mean straight off Continental's self servicing investor
presentation bullshit, Coffee. You need to wrap your head around some SEC filings, use some
common sense and think for yourself. As opposed to letting someone else do your thinking for
you.
Watcher is correct, CLR's credit rating, its credit score, so to speak, is so bad it could
not in the real world buy a pickup truck without its mama co-signing the note. If its wells
are sooooooo much better, why don't they pay some of that $6 billion plus dollars of debt
back? I mean really, who in their right mind would actually WANT to pay $420MM a year in
interest on long term debt if it didn't have to? Never mind, you can't answer that.
If you are not in the oil business and have never balanced an oil well's checkbook in your
life, which Coffee hasn't, then you don't know that higher productivity comes with a higher
cost in the shale biz. The bottom line then is that the bottom line does not change if it did
the shale oil industry would be paying down some debt, right? Its not. Private debt is
skyrocketing.
Are things getting better for the shale biz? Right. Case in point, the largest pure
Permian Basin oil and associated gas producer, Concho, the genius behind a recent $8 billion
dollar acquisition from RSP, LOST $199MM 3Q2018. Inventories are going back up, prices are
down 18% the past month and what does the shale oil industry do?
It adds more rigs.
Productivity is not the same as profitability. In the real oil biz you learn that on about
day six.
"If its wells are sooooooo much better, why don't they pay some of that $6 billion plus
dollars of debt back? I mean really, who in their right mind would actually WANT to pay
$420MM a year in interest on long term debt if it didn't have to?"
I wonder about debt service, too.
When Dennis runs his scenarios he says that at a certain oil price, these companies will
be quite able to pay down debt.
But will they? Or will they just pay themselves as much as they can as long as they can
get away with it, and then declare bankruptcy and walk away.
We had 5-6 years of the highest, sustained oil prices in history and the shale oil
industry could NOT make a profit. People seem to think now things have changed for some
reason, that the shale oil industry has now become more ethical, and temporarily higher
productivity of wells, and some imaginary oil price off in the future (for most shale guys
its now down in the mid to low $50's) will allow them to pay down debt. Its absurd logic, but
keeps people occupied, I guess, speculating about it.
I urge folks to ignore the guessing, and the lying, (Hamm's 20% of OOIP in the Bakken is a
big 'ol whopper) and look at the shale industry's financial performance over the past 10
years and decide for yourselves if it is sustainable or not.
One thing to add. The shale companies did all this in the lowest interest rate environment we
have had in a long time. They could not pay off their debt or even put a dent in it. What is
going to happen when their interest costs increase 30-50% over the next 2-3 years?
I was a former employee of Newfield, when we were drilling gas wells in the Arkoma Basin in
2007 and gas prices were the highest they had ever been, it was not cash flow positive. It
actually ate all the revenue from the rest of the company. Getting to be in the black for the
play was always a year off. a decade later it never got there, they just got more and more
debt sold more producing assets to pay for it to keep the shell game going and just got
bought by Encanna. I have seen the same at every public company I have worked for, many of
them survived the downturn only because costs dropped and so did the cost of debt. Now with
increasing costs and cost of debt there will likely be many bankruptcies.
Yeah, I agree with Mike, Rystads announcements are mainly just self serving hogwash. Yes, oil
production in the US looks to be close to 11.3 million for August. EIA's reported production
for Texas is only about 50k over my high estimate, so I see nothing to argue about. GOM is
the main surprise, and George and others are better suited to comment on that. The
understanding I had was that it was temporary. As far as Texas goes, I'm pretty sure it is
the high, for awhile. Completions dictate how much oil comes out of the ground, not drilling
rigs. That is for unconventional wells, not conventional. That is why I think the EIA's DPR
is a ridiculous measurement assessment. Apples and oranges. Articles that I have read
indicate a significant decrease in completions in the Permian by the end of August. Texas
production is not all about the Permian. A significant amount was contributed by the Eagle
Ford and other areas. All completions have slowed to the point that by the end of September,
they were at slightly over 60% of June's completion numbers according to RRC statistics.
Significant drop, and it will show up in following months. First years decline rates will
assure that it will drop slightly from this point. $64 WTI won't motivate it to expand to any
extent. The next year will see US wavering along the 11.1 million barrel level, I still
think. Unless, George thinks the GOM increase is somewhat permanent, which I doubt.
And try to locate a time in history when production is trending up, while completions are
trending down. There is usually a several month lag by the time production slows. Takes a
while to get out of the ground if they are completed towards the end of the month.
Don't you just love simple logic? Like: fire burns, water is wet, stuff like that?
I second that. Being from Norway myself, and having actually been working in consulting some
years ago. It looks nice on paper, but the world is changing and it is wise to look out for
deception and that is often the case in consulting (customer/revenue first and reality
second).
Based on the shaleprofile data it looks as if well productivity increased alot in 2016 and
2017 due to longer laterals and increased proppant intensity. 2018 well productivity looks to
be trending pretty close to 2017, so the productivity gains from longer lats and increased
proppant might have been exhausted by now. Therefore, comparing 2018 well completion numbers
to any pre 2017 completion numbers won't tell you much, but a comparison of 2018 and 2017
numbers should. In the 4 months ending in September 2018 completions grew year over year by
almost 70% from 2017, hence the large assumed increase in production in the last four months
of 2018. What is interesting though is that it looks like the free lunch from increased lats
and proppant looks to be almost over, and any future increases in production must be the
result of an increase in completion activity, which should result in some inflation for the
service providers going forward. And, according to Schlumberger, if you adjust for the longer
lats and increased proppant it actually appears that productivity is starting to trend down
(and the increased usage of poor quality in basin sand will likely contribute to this as
well)
I take your word for it. Thank you, BTW. You are the only one left on this site that has any
common sense regarding shale oil economics and the burden all that massive, massive amount of
debt has on running a business where your assets decline at the rate of 28-15% annually.
Everybody else seems mesmerized by productivity.
Paying the debt off will depend very much on future oil and natural gas prices.
Once growth slows the companies will be companies operating many low volume wells.
Investors will want these companies to pay dividends because they will not be in a position
to grow. The operating costs will be higher, even though CAPEX will drop.
You are very confident prices will be high in the future. I suspect they will be volatile
in the future, as they have been for the past 20 years.
So, on a company by company basis, timing will be critical, IMO.
The prices can be thought of as 3 year average prices, yes there will be volatility, my
"low price scenario" has Brent Oil Price in 2017 $ never rising above $80/b. I cannot hope to
predict the exact oil price and of course oil prices will be volatile, but the average over
time allows a pretty good estimate.
Also a company by company model is a little too much work. I just do the industry average,
some companies will be better and some worse than average.
It certainly is the case that oil prices have been volatile and I agree this will
continue, but the three year trend in prices (centered 3 year average) has been up $7/b for
the past year, my expectation is that this trend will continue and the 3 year centered
average price will reach $80/b (in 2017$) by 2021 or 2022. The trend of oil prices will be
higher, if the peak arrives by 2025 as I expect prices (3 year centered average oil price in
2017$) are likely to reach $100/b by 2024 or 2025.
I think company by company because I have an investment in a private company. I know how
important timing is in the upstream industry to individual companies.
Likewise, I understand you aren't all that interested in individual companies. No problem
there.
On the price, I understand why you use different scenarios. However, the average price
over the next three years could be $100 or $50 WTI. Pretty much close to what we saw 2011-14
and 2015–17.
I was recently in a major city and saw more Tesla's than I ever had, including my first
Model 3 sighting.
Our little area now has two Model S, with the early adopter trading his 2012 for a
2018.
Pretty doubtful it will be $50/b over the next three years, in my opinion. If you believe
that you should find another business More likely is a gradual increase in
oil prices as we approach peak oil, the futures strip is likely to be wrong on oil price
(today's future strip). For Brent futures the current strip goes from $73/b (Jan 2019) to $61
(Dec 2026). By Contrast the EIA's AEO 2018 reference oil price scenario for Brent crude has
the spot price at $87.50/b in 2026, chart below has their scenario (which I think may be too
low.)
As always clicking on the chart give a larger view.
The price could be $50 from 2019-2021, and then $125 from 2022-2025. (Averages, of
course).
So in that scenario I'd feel pretty bad if I sold out in say 2020.
Your models are ok, I have no problem with you doing them. We try to make a budget for
every year.
However, the price is far too volatile to model anything very far into the future, just
like we cannot budget past one year, and usually have to make adjustments to that.
Our price has dropped over $10 in less than one month. That makes a huge difference, yet
that level of volatility is common and has been for many years.
What oil prices were you modeling in June, 2014 for 2015-17? Our timing was very fortunate
to say the least. Many leases bought 1997-2005. Had we bought the same leases 2011-14 for the
market prices of 2011-14, we would be bankrupt, absent having hedged everything for four
years, which is very difficult to do.
On a flowing barrel basis, I have seen leases sell as low as $2,000 per barrel and as high
as $180,000 per barrel in our basin from 1997-2018. That is what an oil price range of $8-140
per barrel will do.
Few companies with zero debt ever go BK. We would with WTI at $30 for about three years.
Is that likely? No, but oil did drop below that level in 2016.
The volatility is a big problem, there is no doubt of that. When imagining the "big
picture". I use the estimates of the EIA's AEO as a starting point then add my personal
perspective (that at some point oil output will peak.) Below is a chart with my guess from
Dec 2014 for future Brent oil prices in constant 2014$, nominal Brent spot price is give for
comparison.
Clearly my guess was not very good, the EIA guess from the AEO 2015 was also not great,
but better than my guess. Future guesses will be equally bad.
In 2013 we assumed prices in a range of $60-120 WTI moving forward.
In June of 2014 when oil spiked up and we received $99.25 in the field, we suspected oil
would fall and it began to. We again continued to assume $60 WTI would be a low.
We were dead wrong, of course.
Oil dropped again today. We will get $67 in the field for October sales paid in November.
However, our price today is down to $56.50. That is about a $60,000 per month revenue hit to
a small company which employs 8 full time employees, one part time employee office manager
and utilized numerous contractors (rigs, electricians, etc.).
Corn here is $3.51 per bushel today. Less than a month ago it was $2.96 per bushel.
Yes, yes, a hedging program would mitigate the price volatility.
Until you actually try to hedge with money at risk, don't talk to me about that. It's
about as easy as trading stocks. It is also very expensive due to the volatility. Or, if you
do SWAPS or Collars, you need to put up a lot of margin money.
Hedging seems a risky business, not sure I would come out ahead by hedging. You are in a
tough business, the volatility sucks. The silver lining is that prices will be
increasing.
Shallow Sand Wrote:
"Paying the debt off will depend very much on future oil and natural gas prices."
I don't think so. When energy prices rise, so do prices of everything else, included
interest rates. The only way the shale drillers could play off there debt is if the left
large number of completed wells untapped (ie leave it in the ground) while taking advantage
of cheap debt & low labor\material costs. Then selling the oil when prices & costs
have soared above investment costs.
The issue is that as soon as a well is completed, they start producing, at market prices.
Thus when oil prices rise most of the oil is already produced & drilling new wells (using
more debt) does not pay down the old debt.
Also consider the costs shale drillers will need for decommissioning older\depleted well.
I believe the cleanup cost is between $50K & $100K per drill site. To date have any shale
drillers spent money on clean up for depleted wells yet, or is it all deferred (ie never
going to happen)?
FWIW: I don't believe any of the shale companies are in game for the long term. They are
simply a modern Ponzi scam, taking investor money & providing an illusion of profitabity
by selling a product below cost. They will continue to play the game until investor capital
dries up.
I suspect that most shale drillers will go bust in the next 5 years when the bulk of their
bonds come due & they won't have the ability to refinance it or pay it off. If I recall
correctly Shale drillers will need to payoff or refinance about $270B in high-yield bonds
between 2020 & 2022.
My guess is that much of KSA will look a lot like the shabby end of Yemen before too long. This will perhaps strand some assets.
Once the House of Saud fragments further among competing clans/factions (Faisal, Sudairi, Abdullah, Bin Sultans) things will hasten.
Collapse is preceded by intra-elite rivalry over a shrinking pie, so to speak.
Caspian Report has a nice set on KSA if you look for them. Here's one- https://youtu.be/9tHwvZ9XDLU
And another- https://youtu.be/hh8isVX3H9w
Hightrekker once commented something quite apt, along the lines of~ 'And all this is probably like the Austrians in 1913 arguing
about who their next Habsburg Ruler is going to be'.
From what I understand there are 4000 Saudi princes (a suspiciously round number, so likely an approximate). It all should
make for a very bloody affair. Hopefully Iran will do the right thing and kick 'em while they're down.
"... Adam Schiff will shut down the probe that found FBI abuses. ..."
"... Credit for knowing anything at all goes to Intel Chairman Devin Nunes and more recently a joint investigation by Reps. Bob Goodlatte (Judiciary) and Trey Gowdy (Oversight). Over 18 months of reviewing tens of thousands of documents and interviewing every relevant witness, no Senate or House Committee has unearthed evidence that the Trump campaign colluded with Russia to win the presidential election. If Special Counsel Robert Mueller has found more, he hasn't made it public. ..."
"... But House investigators have uncovered details of a Democratic scheme to prod the FBI to investigate the Trump campaign. We now know that the Hillary Clinton campaign and the Democratic National Committee hired Fusion GPS, which hired an intelligence-gun-for-hire, Christopher Steele, to write a "dossier" on Donald Trump's supposed links to Russia. ..."
"... Mr. Steele fed that document to the FBI, even as he secretly alerted the media to the FBI probe that Team Clinton had helped to initiate. Fusion, the oppo-research firm, was also supplying its dossier info to senior Justice Department official Bruce Ohr, whose wife, Nellie, worked for Fusion. ..."
"... This abuse of the FBI's surveillance powers took place as part of a counterintelligence investigation into a presidential campaign -- which the FBI also hid from Congress. Such an investigation is unprecedented in post-J. Edgar Hoover American politics, and it included running informants into the Trump campaign, obtaining surveillance warrants, and using national security letters, which are secret subpoenas to obtain phone records and documents. ..."
Adam Schiff will shut down the probe that found FBI abuses.
Arguably the most important power at stake in Tuesday's election was Congressional
oversight, and the most important change may be Adam Schiff at the House Intelligence
Committee. The Democrat says his top priority is re-opening the Trump-Russia collusion probe,
but more important may be his intention to stop investigating how the FBI and Justice
Department abused their power in 2016. So let's walk through what we've learned to date.
Credit for knowing anything at all goes to Intel Chairman Devin Nunes and more recently a
joint investigation by Reps. Bob Goodlatte (Judiciary) and Trey Gowdy (Oversight). Over 18
months of reviewing tens of thousands of documents and interviewing every relevant witness, no
Senate or House Committee has unearthed evidence that the Trump campaign colluded with Russia
to win the presidential election. If Special Counsel Robert Mueller has found more, he hasn't
made it public.
But House investigators have uncovered details of a Democratic scheme to prod the FBI to
investigate the Trump campaign. We now know that the Hillary Clinton campaign and the
Democratic National Committee hired Fusion GPS, which hired an intelligence-gun-for-hire,
Christopher Steele, to write a "dossier" on Donald Trump's supposed links to Russia.
Mr. Steele fed that document to the FBI, even as he secretly alerted the media to the FBI
probe that Team Clinton had helped to initiate. Fusion, the oppo-research firm, was also
supplying its dossier info to senior Justice Department official Bruce Ohr, whose wife, Nellie,
worked for Fusion.
House investigators have also documented the FBI's lack of judgment in using the dossier to
obtain a Foreign Intelligence Surveillance Act (FISA) warrant against former Trump aide Carter
Page. The four FISA warrants against Mr. Page show that the FBI relied almost exclusively on
the unproven Clinton-financed accusations, as well as a news story that was also ginned up by
Mr. Steele.
The FBI told the FISA court that Mr. Steele was "credible," despite Mr. Steele having
admitted to Mr. Ohr that he passionately opposed a Trump Presidency. The FBI also failed to
tell the FISA court about the Clinton campaign's tie to the dossier.
This abuse of the FBI's surveillance powers took place as part of a counterintelligence
investigation into a presidential campaign -- which the FBI also hid from Congress. Such an
investigation is unprecedented in post-J. Edgar Hoover American politics, and it included
running informants into the Trump campaign, obtaining surveillance warrants, and using national
security letters, which are secret subpoenas to obtain phone records and documents.
Mr. Nunes and his colleagues also found that officials in Barack Obama's White House
"unmasked" Trump campaign officials to learn about their conversations with foreigners; that
FBI officials exhibited anti-Trump bias in text messages; and that the FBI team that
interviewed then Trump National Security Adviser Michael Flynn reported that they did not think
Mr. Flynn had lied about his Russian contacts. Mr. Mueller still squeezed Mr. Flynn to cop a
guilty plea.
All of this information had to be gathered despite relentless opposition from Democrats and
their media contacts. Liberal groups ginned up a phony ethics complaint against Mr. Nunes,
derailing his committee leadership for months. Much of the media became Mr. Schiff's scribes
rather than independent reporters. Meanwhile, the FBI and Justice continue to stonewall
Congress, defying subpoenas and hiding names and information behind heavy redactions.
There is still much more the public deserves to know. This includes how and when the FBI's
Trump investigation began, the extent of FBI surveillance, and the role of Obama officials and
foreigners such as Joseph Mifsud, a Maltese academic who in spring 2016 supposedly told Trump
campaign adviser George Papadopoulos that Russia held damaging Clinton emails. When he takes
over the committee, Mr. Schiff will stop asking these questions and bless the FBI-Justice
refusal to cooperate.
Senate Republicans could continue to dig next year, but Mr. Mueller seems uninterested.
Attorney General Jeff Sessions in March asked Utah U.S. Attorney John Huber to look into FBI
misconduct, but there has been little public reporting of what he is finding, if he is even
still looking. Justice Inspector General Michael Horowitz is investigating, though that report
is likely to take many more months.
* * *
All of which puts an additional onus on Mr. Trump to declassify key FBI and Justice
documents sought by Mr. Nunes and other House investigators before Mr. Schiff buries the truth.
A few weeks ago Mr. Trump decided to release important documents, only to renege under pressure
from Deputy AG Rod Rosenstein and members of the intelligence community.
Mr. Sessions resigned this week and perhaps Mr. Rosenstein will as well. Meantime, Mr. Trump
should revisit his decision and help Mr. Nunes and House Republicans finish the job in the lame
duck session of revealing the truth about the misuse of U.S. intelligence and the FISA court in
a presidential election.
"... Later, it emerged that QIA and Glencore planned to sell the majority of the stake they had acquired in Rosneft to China's energy conglomerate CEFC, but the deal fell through after Beijing set its sights on CEFC and launched an investigation that saw the removal of its chief executive. The investigation was reportedly part of a wide crackdown on illicit business practices on the part of private Chinese companies favored by Beijing. ..."
Russian VTB, a state-owned bank, funded a significant portion of the Qatar Investment
Authority's acquisition of a stake in oil giant Rosneft , Reuters
reports , quoting nine unnamed sources familiar with the deal.
VTB, however, has denied to Reuters taking any part in the deal.
"VTB has not issued and is not planning to issue a loan to QIA to finance the
acquisition," the bank said in response for a request for comment.
The Reuters sources, however, claim VTB provided a US$6 billion loan to the Qatar sovereign
wealth fund that teamed up with Swiss Glencore to acquire 19.5 percent in Rosneft last year.
Reuters cites data regarding VTB's activity issued by the Russian central bank that shows VTB
lent US$6.7 billion (434 billion rubles) to unnamed foreign entities and the loan followed
another loan of US$5.20 billion (350 billion rubles) from the same central bank.
The news first made
headlines in December, taking markets by surprise, as Rosneft's partial privatization was
expected by most to be limited to Russian investors. The price tag on the stake was around
US$11.57 billion (692 billion rubles), of which Glencore agreed to contribute US$324 million.
The remainder was forked over by the Qatar Investment Authority, as well as non-recourse bank
financing.
Russia's budget received about US$10.55 billion (
710.8 billion rubles ) from the deal, including US$ 270 million (18 billion rubles) in
extra dividends. Rosneft, for its part, got an indirect stake in Glencore of 0.54 percent.
Later, it
emerged that QIA and Glencore planned to sell the majority of the stake they had acquired
in Rosneft to China's energy conglomerate CEFC, but the deal fell through after Beijing set its
sights on CEFC and launched an investigation that saw the removal of its chief executive. The
investigation was reportedly part of a wide crackdown on illicit business practices on the part
of private Chinese companies favored by Beijing.
"... With all due cynical respect... I find it highly ironic that some of the biggest money launderers and Mafiosi are Baltic banks. The hilarity never ends. ..."
"... Full scale bull ****. No single former Soviet bloc country get into economic level of pre-Berlin wall fall. They are done. ..."
With all due cynical respect... I find it highly ironic that some of the biggest money
launderers and Mafiosi are Baltic banks. The hilarity never ends.
Here is classic: GDP PPP per capita. What to pay attention.
#1, After 30 years and joining EU and NATO there is no difference in former Soviet bloc.
Just looks like Russia is greatest profiteer. Now those parasites are chained to west.
#2, countries of former Soviet bloc are in better shape than countries that were in sphere
of western imperialism. Especially look at countries where USA imperialism worked since 1823
Monroe's doctrine. Chart shows that in 200 years USA was not able to achieve much progress
despite permanent military interventions and political influence.
As much as I like the idea of taking my state to Estonia status, too many winner-take-all
politicians and weak thinkers to recognize that new borders would solve lots and lots of
problems.
Socialists are clearly smart, but in actuality just simple evil, immoral thieves. They
will be unlikely to support any secession because they know their enemies are the source of
their lucre.
Balkanization, what little there will be, will most likely come after we are drug into
WWIII and we are back to a 1700's subsistence existence.
A pessimist is never disappointed, but I will happily take an optimist's surprise if
people just stop and live and let live.
.............. try, try to "Unchain America" next July 4. What better way to celebrate
Independence Day than with a joining of hands across the land, if not to secede, then to
affirm our right to, one state at a time?
It's 2,790 miles from New York to Los Angeles, which is 14,731,200 feet. At three feet per
person, it would take around 4,910,400 people -- less than 1/66th of the US population -- to
make a human chain like the three Balkan states did.
"... By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an "anti-poverty campaigner and tax expert". He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics . He is a member of the Progressive Economy Forum. Originally published at Tax Research UK ..."
"... 'a research paper by Hendrik Bessembinder published in the September edition of the Journal of Financial Economics posed the question "Do Stocks Outperform Treasury Bills?" with some rather worrying conclusions for most equity investors. ..."
"... the view that stock markets themselves create value ..."
"... the view that stock markets themselves create value ..."
"... One aspect not touched upon is stocks are loans that never get repaid. If I pay $100 of a share and the company thrives. I get paid dividends in perpetuity. Plus, If I buy that share from someone who already had bought it (a trade) I am being paid when I actually provided none of the original loan (like a bank buying the "paper" from another bank). Someone calculated that the dividends paid by Apple have paid off the amount originally tendered by several hundred percent, which would make them the worst bank loans in all of creation. ..."
As many readers will know, I am not the greatest fan of stock markets. I consider most
activity on such markets to be exploitative because of the asymmetry of the information
available to investors. Much of it, from the pay directors take to the actions of most market
managers, I consider to be rent seeking. The idea that equities provide strong returns is
pretty much an urban myth, in my opinion, based on selective reading of data in those periods
between market crashes.
There is quite a lot of evidence to support my view in an article by long-term and highly
opinionated equity investor Terry Smith in the
FT this morning . As he notes he did this based on 'a research paper by Hendrik
Bessembinder published in the September edition of the Journal of Financial Economics posed the
question "Do Stocks Outperform Treasury Bills?" with some rather worrying conclusions for most
equity investors. ' I should make clear that the research is US based. I have no reason to
think that performance in the UK is any different.
The main conclusions is that the majority of shares do not perform nearly as well as
government bonds. It is an exceptional few that make it look as though shares outperform
gilts.
Since 1977 the median new shares issued on the stock exchange has delivered a negative rate
of return, even with dividends reinvested.
On average, a quoted security has a life expectancy of just 7.5 years over the 90 year
period studied. No wonder short-termism is rife.
And as he notes:
Just five companies out of the universe of 25,967 in the study account for 10 per cent of
the total wealth creation over the 90 years, and just over 4 per cent of the companies
account for all of the wealth created.
So, what is to be learned?
First, the stock exchange is not a business funding mechanism: it is a business exit
strategy for most companies.
Second, most people are fools to take part in this game.
Third, if you insist on taking part only invest in the best stocks.
Fourth, since you have no way of knowing which ones they are, invest in a market
tracker.
Or fifth, buy gilts.
But whatever you don't believe the story that the market deliver higher rates of return than
government bonds: 96% of it does not.
When 43 pushed the privatization of Social Security through more 401k and similar
approaches my immediate thought was that he was rationalizing the transfer of wealth and
increased fees to Wall Street. Someday there will be a post-mortem about Neo-Liberalism and
that episode merits at least a footnote. To escape the memory hole.
Don't forget that Clinton had reached a deal with Gingerich to privatize up to half of the
Social Security Trust Fund in the stock market, which was only derailed by the Lewinski
scandal. Clinton was scheduled to unveil this at the State of the Union address the week
after the Lewinski story started to break, and pulled back because he was advised that if he
were impeached he'd need the Democrats in the Senate to avoid conviction. Google "Robert
Kuttner" "Clinton" and "Social Security" to get the details. There's also a book called "The
Pact" by Steven Gillon that documents the back channel negotiations, which were conducted by
Erskine Bowles, Clinton's last Chief of Staff.
It would have been the ultimate Neo-Liberal betrayal of the party of FDR, but we were
saved by a blue dress. Amazing story, not nearly as well known as it should be. We might have
been spared the Hillary Clinton phenomenon.
I don't want my Social Security benefits to be any kind of loan that has to be repaid.
That just gives the government another way to cut my benefits at some point.
I don't want Wall Street to get one penny of the contributions I have made to Social
Security for the past 50 years. They don't deserve it!
Your proposal is no more than a neoliberal justification for subjecting the Social
Security system to the depredations of the "Market", allowing the rentiers to get their cut
off the top.
Remember that taxes don't really pay for government expenses in a fiat system; don't
forget MMT.
Accounts are not real wealth any more than the map is the territory (CF Korzibsky and
general semantics). The stock market, as well as the bond market, are accounting gizmos, and
accounting is not actual wealth creation, and neither does owning stocks or binds produce
anything real.
Anyone investing in bonds in the low interest rate environment that has prevailed these
past ten years would disagree, I think.
I call rubbish on this article. Not my experience. My investing strategy is to follow the
oligarchs. Invest in stocks that make money by destroying the planet. Take profits when
things look toppy. Reinvest dividends.
Buy bonds at your own peril. Maybe when rates are in the 6% plus range but we're a long
way from that.
The main conclusions is that the majority of shares do not perform nearly as well as
government bonds. It is an exceptional few that make it look as though shares outperform
gilts.
Since 1977 the median new shares issued on the stock exchange has delivered a negative
rate of return, even with dividends reinvested.
On average, a quoted security has a life expectancy of just 7.5 years over the 90 year
period studied. No wonder short-termism is rife.
Have it your way – be poor. I'd rather have money than snark.
I have practical experience and have done better in equities.
The time scale of the article is 40 years – in our current economy 40 years ago is
ancient history. And they focus only on new issues, which represent a fraction of total
market cap. And I doubt many financial advisors would agree with me as I a) don't employ any
of them; and b) find them to be a repository of groupthink and always to miss inflection
points.
I dismiss anyone advising bonds in the current interest rate environment. Unless you want
to end up with less money than you started out with.
while it's great that you are succeeding in the market, remember that we have had 10 years
of qe and stock buybacks. I hear student loan bonds are very lucrative if you've got enough
dough to make a position
On average, a quoted security has a life expectancy of just 7.5 years over the 90 year
period studied. No wonder short-termism is rife.
This does not mean the average company goes bankrupt in 7.5 years. Acquisitions also
remove quoted securities. I don't see the link between how long a security is traded and
whether or not the underlying assets are managed for long or short term.
The dot com bubble sure had it's share of here today gone tomorrow stocks but, I'm also
wondering if they took into account many of the mergers and aquisitions that occurred during
the lead up to the bubble's popping.
The issue here is that companies only get money from e events:
1. During the initial IPO
2. If they issue new shares afterwards, which dilutes existing owners
Other than that, you are not, when you buy a share, sending money to the bank account of
the firm that you are investing in. What are you doing? Sending money to the person who you
bought the share from. It is pretty much speculation. Capitalists hate to admit this
idea.
Also, companies that buy back shares or pay dividends are taking money of their cash flows
and giving money to the shareholders.
In this regard, capitalism is not a good way to allocate capital. It can be used for
various types of manipulation, an example being a share buyback right before executives cash
in their stock options.
Years ago I read in Marjorie Kelly's The Divine Right of Capital
that 97% of all stock trades never contribute one direct penny to the Company who's shares
are traded. It's purely a speculative game.
It was the book that first woke me up 15 years ago to the way our financial system really
works. Needless to say, this site has become my ongoing educational resource.
Stock prices are a zero sum game. Every extra dollar the seller of a stock gets is an
extra dollar that the purchaser has paid to secure a share of future profits.
IMO stock markets in and of themselves both create and destroy "value" in much the same
way that a casino does, including largely hidden social costs. While there is little in the
way of public data to support either a pro or con view and setting aside issues of
manipulation of market prices, the view that stock markets themselves create value by
enabling price discovery is integral to neoliberalism. I agree with the view that the related
long-term "financialization" of the economy contributes to recurring speculative asset price
bubbles and leads to long-term economic stagnation while enriching a few.
"price discovery is integral to neoliberalism"
I would have thought it's the exact opposite ?
(Perhaps your "indeed" was ironic ?)
It's the inequality of information (ie price discovery) that makes the stock market so
profitable for the "right" people.
The Fed's years of QE is another factor that has made price discovery very difficult.
I believe that the concept of price 'discovery' is already an important element of
neoliberal framing, and that Chauncey Gardiner has shared a profound insight. Discovery
implies that there is a natural price, somehow prior to and independent of human/political
intervention. The stock market is a way to embody the collective of individual 'rational
actors', and give this collective transcendent power over individuals, corporations and
nations. It is perhaps more clear when one looks at bond markets and the way they are used to
'discipline' nations whose fiscal policies diverge from the neoliberal consensus. The fact
that the hand holding the whip is invisible is a feature, not a bug. The whipped feel the
lash, les autres hear the crack and see the blood, but there is no recourse
imaginable -- because Markets.
Your point about information inequality is good, but I think that would be viewed in
neoliberal doctrine as a minor flaw in the market, even if, for the main actors, it is the
raison d'etre .
Yup, what the author describes as a flaw -- "asymmetry of the information available to
investors", isn't a bug; it's a feature. But the real elephant soiling the room is who has
access to all that free debt printed by the unaccountable private cartel we refer to as the
Federal Reserve. Could you benefit from a zero-interest deferred-payment mortgage?
Even better "our" millionaire legislators are exempt from insider-trading laws and they in
turn have immunized their investors. Clearly the most lucrative investment by far is
political bribery. The new Wall Street Socialists have redefined capitalism and democracy as
Orwellian doublespeak.
I agree -- I think this post plays on its words. The stock market price for a stock
indicates what speculators are willing to pay and sellers are willing to accept for the
stock. These need have very little to do with the 'value' of the stock other than its 'value'
in the stock market. That's seldom been truer than in the current stock 'market'. I'm not a
very trusting sort so I don't believe more than half the numbers in corporate reports. Many
stocks stocks like Apple or Amazon tend to trade on 'value' instead of anything like what
used to be called value. At a time when there seems to be no limit on the amount of money
finding its way into the hands of the wealthy I'm not sure the selling of stock has anything
to do with raising money for investments. Many firms can coin their own money through their
many monopolies and monopsonies, and 'retained earnings' -- a category I believe often labels
earnings squeezed from the small sellers, suppliers, and labor thrall to the large firms. To
me, asserting "Stock markets do not create value" is shorthand for a much deeper critique of
our financialized stock markets.
Westinghouse in the days of George Westinghouse, General Electric in the days of Thomas
Edison, Xerox in the days shortly after Chester Carlson all created value. I like to believe
that at least in some periods of the stock market their stocks represented and did not create
but "shared" the value these firms invented and developed. I also like to believe at least
some of the new issues these and other firms sold did indeed once help fund real investments
in productive capital. But all that has become but romantic memory.
I believe the Corporate Management is busily engaged in cashing-out what real value
remains within the firms they control and will continue doing so until all that's left is a
hollow shell servicing the bonds and notes the firm created as part of their liquidation
process. The stock market is where speculators can bet against each other on the ebb and flow
of prices moving toward a great twilight of our stock markets and our gutted economy.
Well, there's entertainment value, just like casinos and horse racing, but that isn't what
they're paid for – unlike casinos or race tracks.
An Indiana paper (Indy Star? used to print the stock market numbers facing the horse race
results. My father was not amused when I pointed that out, since investing in stocks was part
of his job. I thought it was hilarious.
Realistically, financial "markets" are an overhead cost, part of your management system
for the economy. Not saying whether it's MIS- management.
They used to say you can make money if you are right 51% of the time. Such a narrow edge
– because the reverse is also true. This is a good argument for not wasting time and
money on the cherished institution of the market. Nancy Pelosi was blabbering on about all
our sacred institutions (cows) trying to cover her fauxpaux when she tried to defuse the
demand for single payer with her stumbling, tooth sucking comment that "this is a capitalist
country" and therefore we simply canot have anything so cost effective as single payer. I'm
convinced she doesn't know her capitalism from a hot rock. So now, armed with this simple
demonstration of how wasteful the whole idea of a stock market is, I'm thinking the Market is
a very questionable institution. Much better to be highly selective and deliberate about
stocks and stock companies. Not just in the share-buying but in the whole company concept. If
returns on government bonds are the best choice then why would anyone get upset about "the
debt". It's the best investment. And I am left to assume this is true because that money is
spent on valuable things in the first place. I'm also thinking how to do an end-run around
Nancy's new Institution-patriotism with a movement to provide everyone with a medical credit
card. Why not? Everything else, including Nancy's paycheck and percs, are on credit. What a
velvet revolution, no?
I went to Richard Murphy's websites and I'm not sure his new book "The Joy of Tax" will be
a big winner here in the US. He may need to give it a new title.
Your post supports the paper's conclusion. In the USA, there are about 4,000 companies
listed on exchanges and another 15,000 that trade OTC. Members of the S&P 500 are in fact
the "exceptional few."
I think that stock markets are reflective of value, they don't in themselves create value.
Certainly there is speculation and cheating, but in general, the value of a stock should
increase as the value of the underlying business increases. Better to say that the price
reflects the expected business in the future.
We've done fantastically well investing in stocks and mutual funds over the last 30 years.
Not every fund went up. Not every stock went up. But the total gains far outpaced the
losses.
Companies take money from the market by going public and by issuing new shares. They also
hold some shares from some issues that are used to incentivize employees.
I think the original author sort of tilted the table by talking treating all securities
the same. Likely the newcomers to the market are much smaller and have more risk of
failure.
I'm also puzzled how they square this claim agains the historical value of something like
he Russell 2000 index.
"Since 1977 the median new shares issued on the stock exchange has delivered a negative
rate of return, even with dividends reinvested." If this were true I'd expect to see a lot
more red in the historical returns. Maybe the word "median" is doing some heavy lifting?
This data would seem to indicate that corporations have consistently earned money and
these profits should be reflected in stock prices. (I don't know if these are in constant
dollars).
Hopefully someone can correct me here, if necessary, but hasn't the stock market risen in
a dollar amount roughly equivalent to the amount of QE pumped into the economy ?
No correction from me. The stock-casino representing "free-market capitalism" has risen in
lockstep with the Central Cartel's QE. The evidence, if circumstantial, is overwhelming, with
countless charts showing an almost exact correlation. Pretty hard to argue against
causation.
The 1980s financial innovation of sheer unadulterated genius that enabled the cartel to
buy the market -- legalizing stock buybacks -- a syringe for mainlining monetary heroin
straight into market veins. This is the new efficient-markets theory called "hindsight price
discovery". You will discover the true price and value after insiders dump their pumped
holdings
The only "correction" coming is in the market casino.
You forget that equities are a form of money which C-corps can create at will and don't
necessarily have fundamentals underpinning them e.g. Jbonds sold for stock by backs or abuse
of risk tools to lower credit weighing and deals between the sell and buy side marry go
round.
Don't know what to make out of the comment about communists e.g. old school classical
capitalists likened the financial traders to rats in the back alleys or bars they once traded
in. Not to mention the propensity for the financial traders to blow themselves and everyone
up with them like clock work. It has only been during the neoliberal period that the FIRE
sector gained a veneer of respectability through broad spectrum PR.
Something of a reference point to the Australian experience.
If the general managers of the 12 banks that burst in 1891 and 1893 had kept paid clowns
to make fun of the valuations of city and suburban land, made by the old-established
auctioneers and valuators of Melbourne in the land boom days, their banks would never have
closed their doors.
Every bank should keep a laughing department where absurd valuations and ridiculous
securities could be laughed off the premises. The easiest marks as borrowers were the
building societies and the land and estate agents, and they had a right royal time asking for
and getting advances. In those halcyon days nobody was ever refused a loan by a bank manager.
So the banks opened agencies in Scotland, Ireland and England, and borrowed millions on
deposit receipts for 18 months and lent them out in Victoria for 30 years, and a great deal
of the money, for eternity.
It wasn't a mad or pessimistic or despondent thing to do. It was one calling for laughter,
for merriment, for jocosity.
Why should the good-humoured borrower explain to the dismal bank manager, irritated and
worried by Head Office letters and circulars censuring him for not lending money fast enough,
that though he had paid £1 a foot for land at Coburg or Glen Iris or Mentone that it
was not in his own opinion worth the £10 a foot of his own valuation.
Nobody dared to laugh at these insane transactions, nobody was brave enough to say,
" All this business is frenzied, delusive and pure buffoonery. There must be a smash.
" And there was. Prices of houses and lands jumped higher and higher, day by day, nay, hour
by hour, and more and more people were drawn into the maelstrom, into a true Walpurgis ride
to sudden wealth.
Rateable property in cities, towns and boroughs went up by leaps and bounds from £53
to £86 million sterling in 5 years, while the rateable property of shire councils
jumped from £71 to £108 million in the 5 years 1886-1890. It was all so dashed
funny, because there was no solid foundation for all this paper wealth.
Production did not increase part passu, nor overseas trade, nor exports, nor shipping,
except that imports increased literally horribly. During 1886 and 1890 in Victoria, railways
costing Z8 ,000,000 and 486 new churches and chapels were built. To me it was all so
ridiculous and amusing, and the best of the joke was that none of the leaders of the people
in Press, Parliament, Church, or on the platform, ever uttered a single word of warning about
the coming debacle, The terrible catastrophe so close at hand which brought ruin to tens of
thousands of decent people and nearly smashed Victoria.
Bank assets rose from £41m in 86 to £63m in 91.
Deposits grew from £31m in 86 to £40m in 91.
After that they fell away and did not reach £40m until 1907, or 28 years later. I am
writing of what I know because I went through that critical period on the inside in a finance
company and in a property company as an executive officer, and when the panic stopped I was a
member of the Stock Exchange.
"the view that stock markets themselves create value"
Value as determined by who? In terms of which inputs to achieve what outputs? As an
example, a company experiencing challenges (or as I call them – problems) may need to
hire more people to achieve long-term growth. However, if they do that Wall Street will
hammer their stocks which will go down. If they cut their workforce instead, Wall Street will
reward them by valuing their stocks even higher though the company has effectively sabotaged
their future growth plans. Thus Wall Street is not doing price discovery so much as
constructing their own outputs to be achieved by individual companies along some ideological
goal. Perhaps they are trying to create the 'perfect market' by warping reality which
is a neoliberal trait.
One aspect not touched upon is stocks are loans that never get repaid. If I pay $100
of a share and the company thrives. I get paid dividends in perpetuity. Plus, If I buy that
share from someone who already had bought it (a trade) I am being paid when I actually
provided none of the original loan (like a bank buying the "paper" from another bank).
Someone calculated that the dividends paid by Apple have paid off the amount originally
tendered by several hundred percent, which would make them the worst bank loans in all of
creation.
Would not simple loans make more sense? (Yes I am aware of the abuses of the Japanese uses
of banks, but they were abuses of a system, not the system itself that resulted in their
decline.)
ardent 19 minutes ago ( Edited ) remove Share link Copy Report flag
"Abu-Bakr al-Baghdadi, the leader of ISIS, is an Israeli Mossad-trained operative whose
real name is Elliot Shimon, a *** who took courses in Islamic theology and Arabic Speech." -
Snowden
Old Poor Richard 49 minutes ago remove Share link Copy
Now how would Ed Snowden know this? Is he some kind of super h4x0r tapped into the Pegasus
mainframe?
ShakenNotStirred 42 minutes ago remove Share link Copy
I heard you have a bunch of Mossad agents below your bed. Check it out or you will be
"Mossaded" before the morning.
passingthroughtown 2 hours ago remove Share link Copy
Proving once again that the Saudis and Israelies have been working hand in glove for a
very long time. Is there any doubt about the connection between the two and what happened on
911?
But what is even more disturbing:
In recent days, Egyptian President Abdel Fatah Al-Sisi and Israeli Prime Minister
Benjamin Netanyahu have reached out to the Trump administration to express support for the
crown prince, arguing that he is an important strategic partner in the region, said people
familiar with the calls.
"Strategic partner" makes it all okay. This is merely a glimpse of what is coming in the
future. You ain't seen NOTHIN yet.
He–Mene Mox Mox 3 hours ago remove Share link Copy
Derezzed 3 hours ago ( Edited ) remove Share link Copy
" Israel is routinely at the top of the US' classified threat list of hackers along
with Russia and China [ ] even though it is an ally "
Our best allies ! " Israeli Prime Minister Benjamin Netanyahu asked the United States to stand by Saudi
Crown Prince Mohamed Bin Salman (MBS) in the wake of the Khashoggi case. "
The most morale people !
I bet they are behind ISIS too with their (((allies))) and the (((deep state))).
But hey isn't it conspirationnist and antisemitic to accuse them of anything ?
Because you know as the most " kind " and " human " people there needs to be
laws, censorship and repression, to protect them from being hated.
< 1% of the global population and they make the headlines 4/5 times a day.
Can only be bad luck and a cohencidence !
Dickweed Wang 3 hours ago remove Share link Copy
"Israel is routinely at the top of the US' classified threat list of hackers along
with Russia and China [ ] even though it is an ally"
Sorry Ed, IsraHell isn't an ally of the USA. It's a ******* parasite and it's well on its
way to killing the host.
alamac 4 hours ago remove Share link Copy
I guess Netanyahoo and KSM love each other because they have a common hobby: Killing
Arabs.
RagnarRedux 4 hours ago ( Edited ) remove Share link Copy
ISRAEL FLAGGED AS TOP SPY THREAT TO U.S. IN NEW SNOWDEN/NSA DOCUMENT (2007)
Former U.S. Officials Say CIA Considers Israel To Be Mideast's Biggest Spy Threat
(2012)
U.S. intelligence agents stationed in Israel report multiple cases of equipment
tampering, suspected break ins in recent years; CIA officials tell the Associated Press that
Israel may have leaked info that led to the capture of an agent inside Syria's chemical
weapons program.
What is really troubling, is Kushner's involvement in the affair. He would have been
debriefed once he returned to the U.S., not only by his father-in-law, Trump, but the intel
community too. You can bet every dollar you have that both the Israelis and Saudis were using
NSO surveillance on him. What is even more troubling, it appears that the action taken to
"neutralize" Jamal Khashoggi, more than likely had the blessings of Washington, since Kushner
met with the Saudis prior to the killing. It really makes one wonder, since Kushner declined
to discuss the state of his relationship with Prince Mohammed.
GRDguy 4 hours ago remove Share link Copy
"licensed only to legitimate government agencies"
That's the problem.
There are no legitimate government agencies any more.
"... Trump wasn't finished, however, and during the same gaggle, he suggested he could pull press credentials from other reporters who don't show him "respect" two days after the president suspended the press pass of CNN chief White House correspondent Jim Acosta after a contentious exchange during a news conference. ..."
"... "I think Jim Acosta is a very unprofessional man," Trump explained and when asked how long Acosta's credentials will be suspended, the president replied: "As far as I'm concerned, I haven't made that decision. But it could be others also." ..."
"... On this one Trump needs to take a hint from Obozo, stop doing daily press briefings... Hold them once a month ..."
"... the stooge press/talking heads have made a cottage industry off of the press conferences. the msm sends stooges to sell their product. trump is 100% correct- the msm doesn't have the guts to cull their stooge legions- oh dear- the white house will do their job for them. ..."
Having barred his CNN arch nemesis Jim Acosta from the White House,
on Friday the president lashed out at another CNN reporter at the White House over his
appointment of Matthew Whitaker as acting AG as well as Whitaker's views towards the special
counsel investigation.
During a Friday morning gaggle with White House reporters before Trump's trip to Paris,
CNN's Abby Phillip asked the president if he was hoping Whitaker, who previously criticized
Robert Mueller's special counsel investigation, would "rein in" the Russia probe. " Do you want
[Whitaker] to rein in Robert Mueller?" Phillip asked.
Trump's response left the stunned reported speechless. "What a stupid question that is,"
Trump said and, just in case it was lost, repeated "what a stupid question."
"But I watch you a lot," Trump continued. "You ask a lot of stupid questions."
Trump then demonstrably walked away, leaving the shocked reporters screaming more questions
in his wake.
Earlier, Trump said he has not spoken to acting AG Matt Whitaker about the Russia
investigation, which Whitaker now oversees. Trump defended Whitaker as a "very well respected
man in the law enforcement community" but claimed he does not know him personally. "I didn't
speak to Matt Whitaker about it. I don't know Matt Whitaker," Trump told reporters at the White
House before leaving for a trip to Paris.
While Trump sought to place personal distance
between himself and Whitaker, he made it clear he stood by his decision to place a loyalist in
charge of the Justice Department, a move many see as an effort to seize control of special
counsel Robert Mueller's probe. The president also rejected suggestions that Whitaker is
ineligible to serve as attorney general, a position held by some legal experts who say the
Justice Department leader must be confirmed by the Senate.
The acting AG has raised eyebrows, and in some cases prediction of a constitutional crisis,
because before joining the DOJ, Whitaker was an outspoken critic of Mueller's investigation and
many Democrats and legal scholars have said he should recuse himself from leading the probe.
Whitaker also claimed there was no collusion between the Trump campaign and Russian
interference efforts in the 2016 election, which is the central question of the Mueller
probe.
Trump lamented the criticism of Whitaker's past commentary, saying "it's a shame that no
matter who I put in, they go after him."
Trump then reiterated his plans to have Whitaker serve in an acting capacity, but declined
to reveal who might be Sessions' permanent replacement. He said he likes Chris Christie, who is
under consideration , but said he has not spoken to the former NJ governor about the post.
Christie was at the White House on Thursday for an event on prison reform but Trump said he did
not speak to him.
* * *
Trump wasn't finished, however, and during the same gaggle, he suggested he could pull press
credentials from other reporters who don't show him "respect" two days after the president
suspended the press pass of CNN chief White House correspondent Jim Acosta after a contentious
exchange during a news conference.
"I think Jim Acosta is a very unprofessional man," Trump explained and when asked how long
Acosta's credentials will be suspended, the president replied: "As far as I'm concerned, I
haven't made that decision. But it could be others also."
Trump also went after April Ryan of American Urban Radio Networks as a "loser" who "doesn't
know what the hell she is doing."
Keyser 15 minutes ago
On this one Trump needs to take a hint from Obozo, stop doing daily press briefings...
Hold them once a month, then hand-pick which reporters you want in the room... And if a
reporter publishes a story you don't like, prosecute them... What we have now is what happens
when the lunatics are given free reign...
dcmbuffy 55 minutes ago remove
the stooge press/talking heads have made a cottage industry off of the press conferences.
the msm sends stooges to sell their product. trump is 100% correct- the msm doesn't have the
guts to cull their stooge legions- oh dear- the white house will do their job for them.
Predicting the Next Bear Market in Six Charts
Here are some clues investors are using to see if the long bull run is nearing an end.
Nine years, seven months, four weeks and two days
into the
current bull market, some investors are asking whether a bear is on the horizon.
The S&P 500 is
up 307%
since the bull market began in 2009. Stock
prices have powered forward thanks to robust earnings growth. Investors have also been willing to pay a higher
premium for those earnings, as seen in expanding price-to-earnings ratios.
While there is no single indicator that can predict market turns on its own, here are six things analysts and
investors are watching to see if the next bear market, typically defined as a 20% decline from a recent peak, is
around the corner.
We may already be part of the way there. The S&P 500 is
5.98% off
its all-time high reached
Sept. 20, 2018
.
S&P 500 Index
Bear market (peak to trough)
... ... ...
Source: SIX
Dive into these
six
metrics to test your prediction, and see the results of our
readers' poll below.
High-Yield Bond Spreads
What It Is
A measure of what riskier companies pay to borrow compared with what the government pays. These high-yield bond
spreads have historically picked up signs of economic stress earlier than other assets. When spreads are tight,
investors tend to think that even the weakest companies will be fine. When they are wider, it is harder for these
companies to access loans, crimping profits and signalling that investors believe defaults are on the horizon.
What to Watch
A steady trend higher in high-yield bond spreads accompanied the last two stock market peaks. It signalled that
investors were getting wary about riskier companies' ability to pay back debts.
ICE BofAML US High Yield Master II Option-Adjusted Spread
... ... ...
Source: ICE via Federal Reserve Bank of St. Louis
'This tells me whether the most-stressed companies have the cash flow to pay their
debts. If not, to me that's a signal that we're rolling over, and credit markets tend to tell you first.'
Alicia Levine, chief market strategist at BNY Mellon Investment Management
Yield Curve Steepness
What It Is
The yield curve is one of the most closely watched indicators of the stock market's health, measuring the
interest rates paid on debt of various maturities. When the economy is strong, the yield on long-term government
bonds is typically higher than on short-term debt, reflecting confidence in the long-term economic outlook. When
the yield curve inverts, and short-term yields surpass long ones, it's a sign investors are worried that
inflation -- and growth -- will be low in the future. High short-term rates tend to crimp business and consumer
spending, slowing the economy and putting pressure on corporate profits.
What to Watch
Inversions often precede recessions and bear markets for stocks. This measure did not invert until after the
1987 bear market, but did precede the bears of 1980, 2000 and 2007. Investors are staunchly divided over whether
an inverted yield curve on U.S. Treasurys can still signal a bear market, or whether rates have been distorted by
years of unorthodox global monetary policy that keep yields on long-term debt low.
Gap between 10-year and 2-year Treasury yields
... ... ...
Source: Federal Reserve Bank of St. Louis
'It's an incredibly useful forecasting tool for the peak in the stock market.'
Jeffrey Kleintop, global chief investment strategist at Charles Schwab
Deal Activity
What It Is
The total dollar value of mergers and acquisitions by month.
What to Watch
A big pickup in deal activity has historically come toward the end of bull markets. A jump in mergers can
signal that sentiment has turned excessively optimistic -- or that companies see it as the only way to grow as the
economy decelerates. Mergers and acquisitions spiked in 2000 and 2007 shortly ahead of the stock market peaks in a
sign of excessive risk-taking. More recent peaks have been false alarms, though a spike at the end of 2015 was
followed by a stock market correction that fell short of a bear market.
Global value of announced mergers and acquisitions
... ... ...
Source: Dealogic
'Enthusiasm for [deal] activity tends to reflect broader economic optimism and
coincides with booms in stock prices and credit expansion. However, history shows that these M&A waves are
late-cycle indicators. Their demise often coincides with the end of the business cycle.'
Abi Oladimeji, chief investment officer at Thomas Miller Investment
Weekly Jobless Claims
What It Is
A weekly count of people filing to receive unemployment insurance benefits. Market participants view the
figures as a key leading indicator of the U.S. labor market, the health of the broader economy, and thus the
ability of companies to generate cash.
What to Watch
When unemployment rises, consumers spend less money, which crimps what companies take in. Analysts suggest
looking for a consistent rise in jobless claims after a steady period. If this happens at the same time as
weakness in the monthly U.S. jobs report, it is an ominous sign for the economy.
Four-week moving average of initial claims
... ... ...
Note: Seasonally adjusted
Source: Labor Department via Federal Reserve Bank of St. Louis
'Jobless claims are clearly a leading indicator of recessions [ ] They start to flash
red on the economy when they start to rise on a four-week average basis, likely after a flattish period, and then
continue to work gradually higher. That's just a sign that something is likely amiss in the job market.'
Bob Baur, chief global economist at Principal Financial Group
Investor Sentiment
What It Is
The AAII survey is a barometer of American retail investor sentiment that asks participants to predict the
direction of the S&P 500 over the next six months.
What to Watch
Look for extreme highs and lows of investor bullishness, says Charles Rotblut at the AAII. When investors get
too optimistic, they tend to run down their savings and overspend. There's typically less cushion to protect the
market, allowing selloffs to gain momentum. This measure worked very well just before the dot-com bubble burst,
and spiked just before selloffs in 2011 and 2018.
American Association of Individual Investors Sentiment Survey, percent bullish, weekly
... ... ...
Source: American Association of Individual Investors
'When you've got confidence among players, they start engaging in bad behaviors. They
create excesses and the bear has something to bite.'
Jim Paulsen, chief investment strategist at the Leuthold Group
What the Market Thinks
What It Is
Think of this as the market crowdsourcing predictions of a bear market. As measured through options expiring in
roughly six months, it is the estimated probability of a 20% or more drop in the S&P 500, the typical definition
of a bear market. Economists at the Federal Reserve Bank of Minneapolis found indicators like this useful as a
gauge of current expectations for future prices, but it's really more a measure of what investors think right now
than a predictive indicator.
What to Watch
A relatively new measure, this chart spiked during the financial crisis and rose sharply during other recent
episodes of market stress, including the 2016 China growth scare that sent markets tumbling.
Market-based probability of an S&P 500 bear market within 6 months
... ... ...
Source: Federal Reserve Bank of Minneapolis
Note:
The charts above include two recent periods commonly considered by
investors to have been bear markets. Some market technicians say that the March 2000 bear market briefly paused between
September 2001 and January 2002, during which a small bull market occurred. Similarly, some analysts say the 2007 bear
market technically ended in late November 2008 before another bear market took shape in January 2009.
One little discussed aspect of Social Security is the modest wealth
redistribution resulting from disability benefits. The upward trend of disability in
previous decades mirrors the decline in working class and lower middle class jobs and
income.
SSDI has been a target of the cutters for years and puts Trump in the middle between his
conservatives and his more lumpenproletariat base members, an increasing number of whom
live off SSDI benefits .
The number of SSDI recipients has tripled since the 1980s.
Democrats should continue to exploit the divergence between GOP policy and the grim
reality of a significant share of the Trumpist base.
Gold age of the USA (say 40 years from 1946 to approximately 1986 ) were an in some way an aberration caused by WWII. As soon
as Germany and Japan rebuilt themselves this era was over. And the collapse of the USSR in 1991 (or more correct Soviet
nomenklatura switching sides and adopting neoliberalism) only make the decline more gradual but did not reversed it. After
200 it was clear that neoliberalism is in trouble and in 2008 it was clear that ideology of neoliberalism is dead, much like
Bolshevism after 1945.
As the US ruling neoliberal elite adopted this ideology ad its flag, the USA faces the situation somewhat similar the USSR
faced in 70th. It needs its "Perestroika" but with weak leader at the helm like Gorbachov it can lead to the dissolution of
the state. Dismantling neoliberalism is not less dangerous then dismantling of Bolshevism. The level of brainwashing of both
population and the elite (and it looks like the USA elite is brainwashed to an amazing level, probably far exceed the level of
brainwashing of Soviet nomenklatura) prevents any constructive moves.
In a way, Neoliberalism probably acts as a mousetrap for the country, similar to the role of Bolshevism in the
USSR. Ideology of neoliberalism is dead, so what' next. Another war to patch the internal divisions ? That's probably
why Trump is so adamant about attacking Iran. Iran does not have nuclear weapons so this is in a way an ideal target.
Unlike, say, Russia. And such a war can serve the same political purpose. That's why many emigrants from the USSR view the current
level of divisions with the USA is a direct analog of divisions within the USSR in late 70th and 80th. Similarities are
clearly visible with naked eye.
Notable quotes:
"... t is well known that legendary American gangster Al Capone once said that 'Capitalism is the legitimate racket of the ruling class', - and I have commented on the links between organised crime and capitalist accumulation before on this blog, but I recently came across the following story from Claud Cockburn's autobiography, and decided to put it up on Histomat for you all. ..."
"... "Listen," he said, "don't get the idea I'm one of those goddam radicals. Don't get the idea I'm knocking the American system. The American system..." As though an invisible chairman had called upon him for a few words, he broke into an oration upon the theme. He praised freedom, enterprise and the pioneers. He spoke of "our heritage". He referred with contempuous disgust to Socialism and Anarchism. "My rackets," he repeated several times, "are run on strictly American lines and they're going to stay that way"...his vision of the American system began to excite him profoundly and now he was on his feet again, leaning across the desk like the chairman of a board meeting, his fingers plunged in the rose bowls. ..."
"... A month later in New York I was telling this story to Mr John Walter, minority owner of The Times . He asked me why I had not written the Capone interview for the paper. I explained that when I had come to put my notes together I saw that most of what Capone had said was in essence identical with what was being said in the leading articles of The Times itself, and I doubted whether the paper would be best pleased to find itself seeing eye to eye with the most notorious gangster in Chicago. Mr Walter, after a moment's wry reflection, admitted that probably my idea had been correct.' ..."
"... The biggest lie ever told is that American hegemony relies on American imperialism and warmongering. The opposite is true. America is weak precisely because it is trying so hard to project strength, because anyone with half a brain knows that it is projecting strength to enrich oligarhcs, not to protect or favor the American people. ..."
"... please mr. author don't give us more globalist dribble. We want our wealth back ..."
"... America the empire is just another oligarchic regime that other countries' populations rightly see as an example of what doesn't work ..."
"... It's the ruling capitalist Predator Class that has been demanding empire since McKinley was assassinated. That's the problem. ..."
"... And who do you suppose are the forces which are funding US politicians and thus getting to call their shots in foreign policy? Can you bring yourself to name them? ..."
"... The US physical plant and equipment as well as infrastructure is in advanced stages of decay. Ditto for the labor force which has been pauperized and abused for decades by the Predator Class... ..."
"The only wealth you keep is wealth you have given away," said Marcus Aurelius (121-180 AD),
last of the great Roman emperors. US President Donald Trump might know of another Italian,
Mario Puzo's Don Vito Corleone, and his memorable mumble : "I'm going to make him
an offer he can't refuse."
Forgetting such Aurelian and godfather codes is propelling the decline and fall of the
American empire.
Trump is making offers the world can refuse – by reshaping trade deals, dispensing
with American sops and forcing powerful corporations to return home, the US is regaining
economic wealth but relinquishing global power.
As the last leader of the Union of Soviet Socialist Republics (USSR), Mikhail Gorbachev's
perestroika (restructuring) led to the breakup of its vast territory(22 million square
kilometers). Gorbachev's failed policies led to the dissolution of the USSR into Russia and
independent countries, and the end of a superpower.
Ironically, the success of Trump's policies will hasten the demise of the American empire:
the US regaining economic health but losing its insidious hold over the world.
This diminishing influence was highlighted when India and seven other countries geared up to
defy Washington's re-imposition of its unilateral, illegal sanctions against Iran, starting
Monday.
The US State Department granting "permission" on the weekend to the eight countries to buy
Iranian oil was akin to waving the green flag at a train that has already left the
station
The US State Department granting "permission" on the weekend to the eight countries to buy
Iranian oil was akin to waving the green flag at a train that has already left the station.
The law of cause and effect unavoidably delivers. The Roman Empire fell after wars of greed
and orgies of consumption. A similar nemesis, the genie of Gorbachev, stalks Pennsylvania
Avenue, with Trump unwittingly writing the last chapter of World War II: the epilogue of the
two rival superpowers that emerged from humanity's most terrible conflict.
The maverick 45th president of the United States may succeed at being an economic messiah to
his country, which has racked up a $21.6 trillion debt, but the fallout is the death of
American hegemony. These are the declining days of the last empire standing.
Emperors and mafia godfathers knew that wielding great influence means making payoffs.
Trump, however, is doing away with the sops, the glue that holds the American empire together,
and is making offers that he considers "fair" but instead is alienating the international
community– from badgering NATO and other countries to pay more for hosting the US legions
(800 military bases in 80 countries) to reducing US aid.
US aid to countries fell from $50 billion in fiscal year 2016, $37 billion in 2017 to $7.7
billion so far in 2018. A world less tied to American largesse and generous trade tarrifs can
more easily reject the "you are with us or against us" bullying doctrine of US presidents. In
the carrot and stick approach that largely passes as American foreign policy, the stick loses
power as the carrot vanishes.
Don Vito Corleone (Marlon Brando) in The Godfather. Big payoffs needed for big influence. A
presidential lesson for Don Trump
More self-respecting leaders will have less tolerance for American hypocrisy, such as
sanctioning other countries for nuclear weapons while having the biggest nuclear arsenal on the
planet.
They will sneer more openly at the hysteria surrounding alleged interference in the 2016 US
presidential elections, pointing to Washington's violent record of global meddling. They will
cite examples of American hypocrisy such as its sponsorship of coups against elected leaders in
Latin America, the US Army's Project Camelot in 1964 targeting 22 countries for intervention
(including Iran, Turkey, Thailand, Malaysia), its support for bloodthirsty dictators, and its
destabilization of the Middle East with the destruction of Iraq and Libya.
Immigrant
cannon fodder
Trump's focus on the economy reduces the likelihood of him starting wars. By ending the
flood of illegal immigrants to save jobs for US citizens, he is also inadvertently reducing the
manpower for illegal wars. Non-citizen immigrants comprise about 5% of the US Army. For its
Iraq and Afghanistan wars, US army recruiters offered citizenship to lure illegal immigrants,
mostly Latinos.
Among the first US soldiers to die in the Iraq War was 22-year old illegal immigrant
Corporal Jose Antonio Gutierrez, an orphan from the streets of Guatemala City. He sneaked
across the Mexican border into the US six years before enlisting in exchange for American
citizenship.
On March 21, 2003, Gutierrez was killed by friendly fire near Umm Qasr, southern Iraq. The
coffin of this illegal immigrant was draped in the US flag, and he received American
citizenship – posthumously.
Trump policies targeting illegal immigration simultaneously reduces the availability of
cannon fodder for the illegal wars needed to maintain American hegemony.
Everything comes to an end, and so too will the last empire of our era.
The imperial American eagle flying into the sunset will see the dawn of an economically
healthier US that minds its own business, and increase hopes for a more equal, happier world
– thanks to the unintentional Gorbachev-2 in the White House.
I am sure that many of us are OK with ending American Empire. Both US citizens and other
countries don't want to fight un-necessary and un-ending wars. If Trump can do that, then he
is blessed.
See a pattern here? Raja Murthy, you sound like a pro-American Empire shill. 1964 Project
Camelot has nothing to do with the current administration. Raja, you forgot to wear your
satirical pants.
The idea and catchy hook of 2016 was Make America Great Again, not wasting lives and
resources on the American Empire. You point out the good things. Who might have a problem
with the end of the American Empire are Globalists. What is wrong with relinquishing global
power and not wasting lives and money?
"The only lives you keep is lives you've given away" That does not ring true. The only
lies you keep are the lies you've given away. What? You're not making any sense, dude. How
much American Empire are you vested in? Does it bother you if the Empire shrinks its death
grip on Asia or the rest of the world? Why don't you just say it: This is good! Hopefully
Trump's policies will prevent you from getting writers' cramp and being confusing--along with
the canon fodder. Or maybe you're worried about job security.
America is a super power, just like Russia. Just like England. However, whom the US
carries water for might change. Hope that's ok.
Trump is an empirial president, just like every other US president. In fact, that's what
the article is describing. MAGA depends upon imperialist domination. Trump and all of US
capitalism know that even if the brain-dead MAGA chumps don't.
Capitalism can't help but seek to rule the world. It is the result of pursuing
capitalism's all-important growth. If it's not US capitalism, it will be Chinese capitalism,
or Russian capitalism, or European capitalism that will rule the world.
The battle over global markets doesn't stop just because the US might decide not to play
anymore. Capitalism means that you're either the global power who is ******* the royal ****
out of everyone else, or you're the victim of being fucked up the *** by an imperialist
power.
The only thing which makes the US different from the rest of the world is its super
concentration of power, which in effect is a super concentration of corruption.
Another day and another ZeroHedge indictment of American capitalism.
And how refreshing that the article compares US capitalism to gangsterism. It's a most
appropriate comparison.
--------------------
Al Capone on Capitalism
It is well known that legendary American gangster Al Capone once said that 'Capitalism is the
legitimate racket of the ruling class', - and I have commented on the links between organised
crime and capitalist accumulation before
on this blog, but I recently came across the following story from Claud Cockburn's autobiography, and decided
to put it up on Histomat for you all.
In 1930, Cockburn, then a correspondent in America for the Times newspaper,
interviewed Al Capone at the Lexington Hotel in Chicago, when Capone was at the height of his
power. He recalls that except for 'the sub-machine gun...poking through the transom of a door
behind the desk, Capone's own room was nearly indistinguishable from that of, say, a "newly
arrived" Texan oil millionaire. Apart from the jowly young murderer on the far side of the
desk, what took the eye were a number of large, flattish, solid silver bowls upon the desk,
each filled with roses. They were nice to look at, and they had another purpose too, for
Capone when agitated stood up and dipped the tips of his fingers in the water in which
floated the roses.
I had been a little embarrassed as to how the interview was to be launched. Naturally the
nub of all such interviews is somehow to get round to the question "What makes you tick?" but
in the case of this millionaire killer the approach to this central question seemed mined
with dangerous impediments. However, on the way down to the Lexington Hotel I had had the
good fortune to see, I think in the Chicago Daily News , some statistics offered by an
insurance company which dealt with the average expectation of life of gangsters in Chicago. I
forget exactly what the average was, and also what the exact age of Capone at that time - I
think he was in his early thirties. The point was, however, that in any case he was four
years older than the upper limit considered by the insurance company to be the proper average
expectation of life for a Chicago gangster. This seemed to offer a more or less neutral and
academic line of approach, and after the ordinary greetings I asked Capone whether he had
read this piece of statistics in the paper. He said that he had. I asked him whether he
considered the estimate reasonably accurate. He said that he thought that the insurance
companies and the newspaper boys probably knew their stuff. "In that case", I asked him, "how
does it feel to be, say, four years over the age?"
He took the question quite seriously and spoke of the matter with neither more nor less
excitement or agitation than a man would who, let us say, had been asked whether he, as the
rear machine-gunner of a bomber, was aware of the average incidence of casualties in that
occupation. He apparently assumed that sooner or later he would be shot despite the elaborate
precautions which he regularly took. The idea that - as afterwards turned out to be the case
- he would be arrested by the Federal authorities for income-tax evasion had not, I think, at
that time so much as crossed his mind. And, after all, he said with a little bit of
corn-and-ham somewhere at the back of his throat, supposing he had not gone into this racket?
What would be have been doing? He would, he said, "have been selling newspapers barefoot on
the street in Brooklyn".
He stood as he spoke, cooling his finger-tips in the rose bowl in front of him. He sat
down again, brooding and sighing. Despite the ham-and-corn, what he said was probably true
and I said so, sympathetically. A little bit too sympathetically, as immediately emerged, for
as I spoke I saw him looking at me suspiciously, not to say censoriously. My remarks about
the harsh way the world treats barefoot boys in Brooklyn were interrupted by an urgent angry
waggle of his podgy hand.
"Listen," he said, "don't get the idea I'm one of those goddam radicals. Don't get the
idea I'm knocking the American system. The American system..." As though an invisible
chairman had called upon him for a few words, he broke into an oration upon the theme. He
praised freedom, enterprise and the pioneers. He spoke of "our heritage". He referred with
contempuous disgust to Socialism and Anarchism. "My rackets," he repeated several times, "are
run on strictly American lines and they're going to stay that way"...his vision of the
American system began to excite him profoundly and now he was on his feet again, leaning
across the desk like the chairman of a board meeting, his fingers plunged in the rose
bowls.
"This American system of ours," he shouted, "call it Americanism, call it Capitalism, call
it what you like, gives to each and every one of us a great opportunity if we only seize it
with both hands and make the most of it." He held out his hand towards me, the fingers
dripping a little, and stared at me sternly for a few seconds before reseating himself.
A month later in New York I was telling this story to Mr John Walter, minority owner of
The Times . He asked me why I had not written the Capone interview for the paper. I
explained that when I had come to put my notes together I saw that most of what Capone had
said was in essence identical with what was being said in the leading articles of The
Times itself, and I doubted whether the paper would be best pleased to find itself seeing
eye to eye with the most notorious gangster in Chicago. Mr Walter, after a moment's wry
reflection, admitted that probably my idea had been correct.'
This article was obviously written by someone who wants to maintain the status quo.
America would be much stronger if it were not trying to be an empire. The biggest lie ever
told is that American hegemony relies on American imperialism and warmongering. The opposite
is true. America is weak precisely because it is trying so hard to project strength, because
anyone with half a brain knows that it is projecting strength to enrich oligarhcs, not to
protect or favor the American people.
I truly believe that "America First" is not selfish. America before it went full ******
was the beacon of freedom and success that other countries tried to emulate and that changed
the world for the better.
America the empire is just another oligarchic regime that other
countries' populations rightly see as an example of what doesn't work.
Empire is a contrivance, a vehicle for psychopathic powerlust. America was founded by
people who stood adamantly opposed to this. Here's hoping Trump holds their true spirit in
his heart.
If he doesn't, there's hundreds of millions of us who still do. We don't all live in
America...
America is weak precisely because it is trying so hard to project strength, because
anyone with half a brain knows that it is projecting strength to enrich oligarhcs [sic],
not to protect or favor the American people.
And who do you suppose are the forces which are funding US politicians and thus getting to
call their shots in foreign policy? Can you bring yourself to name them? Oligarchs...you're
FULL of ****. Who exactly pools all (((their))) money, makes sure the [s]elected officials
know (((who))) to not question and, instead, just bow down to them, who makes sure these
(((officials))) sign pledges for absolute commitment towards Israel--or in no uncertain
terms-- and know who will either sponsor them/or opposes them next time around?
JSBach1 called you a 'coward', for being EXACTLY LIKE THESE TRAITOROUS SPINELESS
VERMIN who simply just step outside just 'enough' the comfort zone to APPEAR 'real'. IMHO, I
concur with JSBach1 ...your're a coward indeed, when you should know better .....
shame you you indeed!
There is little evidence, Trump's propaganda aside (that he previously called Obama
dishonest for) that the US economy is improving. If anything, the exploding budget and trade
deficits indicate that the economy continues to weaken.
Correct. The US physical plant and equipment as well as infrastructure is in advanced
stages of decay. Ditto for the labor force which has been pauperized and abused for decades
by the Predator Class...
the US can't even raise an army... even if enough young (men) were
dumb enough to volunteer there just aren't enough fit, healthy and mentally acute recruits
out there.
America is weak precisely because it is trying so hard to project strength, because
anyone with half a brain knows that it is projecting strength to enrich oligarhcs [sic],
not to protect or favor the American people.
And who do you suppose are the forces which are funding US politicians and thus getting to
call their shots in foreign policy? Can you bring yourself to name them? Oligarchs...you're
FULL of ****. Who exactly pools all (((their))) money, makes sure the [s]elected officials
know (((who))) to not question and, instead, just bow down to them, who makes sure these
(((officials))) sign pledges for absolute commitment towards Israel--or in no uncertain
terms-- and know who will either sponsor them/or opposes them next time around?
Yes financial machinations can drive price down. But who will produce cheap oil to sustain
this bear market? Not the Us shale companies. They need $80 per barrel or more. Then who? That's the question
Also global growth in oil consumption now is coming from Africa and Asia and it is unlikely
to stop, as they emerge from very low levels of consumption, 10 or more times less per capita then
any Western country.
It will be flat in the USA and most of Europe, that's true, but the USA and Europe is not the whole market.
Oil prices are on the cusp of a bear market one month after hitting four-year highs as a
wave of supply has returned to hit crumbling confidence in global growth.
The US is going to extend its "combat operations" - the sanctions war aimed at reshaping the
world - to Latin America.
Tough new penalties are planned against the "troika of tyranny," consisting of Venezuela,
Cuba, and Nicaragua "in the very near future." This
announcement was made by National Security Adviser (NSA) John Bolton on Nov.1 -- a few days
before the US mid-term elections -- in an attempt to draw more support from Hispanic voters,
especially in Florida. An executive order on sanctions against Venezuela has already been
signed by President Trump, but that's just the beginning.
It was rather symbolic that on the same day the NSA delivered his bellicose speech, the UN
General Assembly (UNGA)
voted overwhelmingly in support of a resolution calling for an end to the US economic
embargo against Cuba. The document did not include amendments proposed by the US that would put
pressure on Havana to improve its human-rights record.
This is a prelude to a massive escalation in US foreign policy, which will include the
formation of alliances, in addition to the active confrontation of those who dare to pursue
policies believed to be anti-US.
"Under this administration, we will no longer appease dictators and despots near our
shores," Bolton stated, adding,
"The troika of tyranny in this hemisphere -- Cuba, Venezuela and Nicaragua - has finally
met its match."
Sounds like a declaration of war. Brazil, Colombia, Argentina, Chile, and Peru are probably
some of the nations the US is eyeing for a potential alliance.
Bolton's "troika" includes only countries ruled by governments that are openly "red" or
Communist. The list of nations unfriendly to the US is much longer and includes Bolivia,
Ecuador, Dominica, Grenada, Uruguay, and some other states ruled by leftist governments.
Andrés Obrador , the president-elect of Mexico, takes office on Dec. 1. The Mexican
leader represents the country's left wing and looks like a tough nut to crack. Outright
pressure may not be helpful in this particular case.
Now that this new US policy is in place, Moscow and Washington appear to have another
divisive issue clouding their relationship. The "troika of tyranny" against which Washington
has declared war enjoys friendly relations with Russia.
With Cuba facing tougher restrictions, new opportunities are opening up that will encourage
the Russian-Cuban relationship to thrive. The chairman of the Cuban State Council and Council
of Ministers, Miguel Diaz-Canel Bermudez, held talks with Russian President Vladimir Putin
during his official
visit to Moscow Nov. 1-3. Their joint statement reaffirmed the strategic and allied
relations between the two counties. Their long list of joint projects includes the deployment
of a Russian GLONASS ground station in Cuba, which will give it access to a broad array of
technical capabilities for satellite and telecommunications services and for taking remote
readings of Earth. Russia will modernize Cuba's railways. Sixty contracts are scheduled to be
signed during President Putin's visit to Cuba next year. Rosneft, the Russian state oil giant,
has recently resumed fuel shipments to Cuba and is negotiating a major energy agreement.
Military cooperation is also to get a boost. The military chiefs are to meet this month to
discuss the details. Moscow is considering granting Havana €38 million for Russian arms
purchases.
The US-imposed restrictions are a factor spurring Russian exports to Cuba and other regional
countries. When the US cut aid to Nicaragua in 2012, Russia increased its economic and military
cooperation with that country. The memorandum signed between the Russian and Nicaraguan
governments on May 8, 2018 states that the parties are to "mark a new step to boost political
dialog" in such areas as "international security and cooperation through various international
political platforms." Russia accounts for about 90% of Nicaraguan arms and munitions
imports. It has far-reaching interests in building the Nicaraguan Canal in its role as a
stakeholder and partner responsible for security-related missions.
President Vladimir Putin offered support for his Venezuelan counterpart Nicolas Maduro after
the United States rejected his reelection in May. Russian energy giant Rosneft plays an
important role in that country's energy sector. It was Russia that came to Venezuela's rescue
in 2017 with a debt-restructuring deal that prevented the default that was looming after the US
sanctions were imposed. This was just
another example of Moscow lending a helping hand to a Latin American nation that was facing
difficult times.
Russia is currently pursuing a number of commercial projects in the region, in oil, mining,
nuclear energy, construction, and space services. It enjoys a special relationship with the
Bolivarian Alliance for the Peoples of Our
America (ALBA), which was founded by Cuba and Venezuela and includes Bolivia, Ecuador, and
Nicaragua, among other countries. This grouping is looking to create economic alternatives to
Western-dominated financial institutions. This cooperation with Latin American nations goes far
beyond ALBA. For instance, the Peruvian air force is in the process of contracting for 24
additional Mi-171s, as well as establishing a maintenance facility for their helicopters near
the La Joya base in Arequipa. A contract to upgrade its aging Mig-29 fighters is under
consideration. In January 2018, Russia signed a number of economic agreements with Argentina
during President Macri's visit to Moscow. All in all, trade between Russia and Latin American
countries reached $14.5 bln in 2017 and is growing.
RT Spanish was launched in 2009, featuring its own news presenters and programming in
addition to translated content, with bureaus operating in Buenos Aires, Caracas , Havana , Los Angeles , Madrid , Managua , and Miami. Russia's Sputnik media outlet
has been broadcasting in Spanish since 2014, offering radio- and web-based news and
entertainment to audiences across Latin America.
Some countries may back down under the US sanctions and threats, but many will not. There's
a flip side to everything. The policy could backfire. The harder the pressure, the stronger the
desire of the affected nations to diversify their international relations and resist the
implementation of the Monroe doctrine that relegates them to the role of America's
backyard.
Fu Ying, the chairwoman of the Foreign Affairs Committee of China's National People's
Congress, said while confirming the reality that China and Russia now find themselves in the
same trenches: "I just hope that if some people in the U.S. insist on dragging us down the hill
into Thucydides' trap, China will be smart enough not to follow."
Indeed to step back and review the breadth of Russia-China cooperation over the past couple
years alone reveals the full potential "cost" of a US-China conflict , given the ways Russia
could easily be pulled in. Fu Ying articulated the increasingly common view from Beijing, that
"There is no sense of threat from Russia" and that "We feel comfortable back-to-back."
And participants in a
recent study by the National Bureau of Asian Research , a
Seattle-based think tank, actually agree. They were asked whether American policy was at fault
for pushing China and Russia into closer cooperation, and alarmingly, as Bloomberg notes: "Some
among the 100-plus participants called for Washington to prepare for the worst-case scenario
the realignment implies: a two-front war ."
Here's but a partial list of the way Sino-Russian relations have been transformed in recent
years:
China is now Russia's biggest single trade partner.
Since 2015 Russia has been China's top supplier of crude oil, displacing Saudi Arabia.
Early this year Russia ramped up its capacity to pipe crude oil to China, to about 600,000
barrels per day, which is about double the prior capability
Increased coordination at the U.N. Security Council.
Regional coordination in Asia, such as Russia supplying the engines for Chinese-Pakistani
fighter jets, resulting in an increasingly worried India which is seeing Russia move into the
Chinese orbit instead of being an arbiter in Chinese-Pakistani relations
The "bromance" at recent summits between Vladimir Putin and Xi Jinping, who meet each
other with increased regularity.
Joint military exercises between the two are now routine.
This year Russia supplied China with its most advanced S-400 air defense system as well
as Sukhoi SU-35 fighter aircraft
Increased willingness on the part of Russia to thwart Washington's argument that China is
a threat to Moscow's aims in the East.
The new "Power of Siberia" natural gas pipeline set to start pumping 38 billion cubic
meters (1.3 trillion cubic feet) of natural gas per year to northern China in December
2019.
Increasingly discovering non-conflicting interests: Europe and China "are two independent
destinations and two independent routes" for gas and oil, Russian Energy Minister Alexander
Novak said in an October interview. "We do not see any need to redirect volumes."
There were moments when Putin showed support and a practical approach toward Trump (like
when he schooled Fareed Zakaria). Putin even expressed that he was welcoming and respectful
of Trumps proposition to restore full-fledged relations with Russia.
I blame the democrats for pointlessly antagonizing Russia for two years just to attempt to
cover up the stench of their own excrement. Now it will be even more difficult to address the
problem of the Chi-coms.
US has nothing to offer Russia as China has. Stop dreaming to befriend Russia to fight
China. US had the opportunity to lead the world after the collapse of USSR but flunk it big
time being the biggest bully in the history.
Forrest Trump - "My Herpes and Genital Warts are responsible for Melania sleeping in
another room, not my small uncircumcised **** and uncontrollable flatulence. Just wanted to
clarify." Hum, ahhhhhhh gee thanks for info...I think. Poor Forrest...sigh
You are absolutely right. Add in that they are greedy motherfuckers and pied pipers to
millions of blithering idiots that can't go one day without making things worse.
China and Russia make an almost perfect symbiosis:
Adjacent countries, transportation costs are as low as possible
Neither regime cares as much as a gnat tear about civil rights & freedoms and
neither is impeded by the vagaries of elections
China has a huge need for natural resources, especially oil & nat gas, but has few
resources beyond coal & not-so-rare earths, while Russia has natural resources in
abundance
Russia manufactures almost nothing for the international goods market while China is
the world's factory
USA regime lords have done an excellent job of alienating and uniting both of them
There were moments when Putin showed support and a practical approach toward Trump (like
when he schooled Fareed Zakaria). Putin even expressed that he was welcoming and respectful
of Trumps proposition to restore full-fledged relations with Russia.
I blame the democrats for pointlessly antagonizing Russia for two years just to attempt to
cover up the stench of their own excrement. Now it will be even more difficult to address the
problem of the Chi-coms.
US has nothing to offer Russia as China has. Stop dreaming to befriend Russia to fight
China. US had the opportunity to lead the world after the collapse of USSR but flunk it big
time being the biggest bully in the history.
Russia and China will come to blows soon enough. China has their eyes on all of that
unpopulated land in Siberia, and they won't like it too much when Russia takes advantage of
the fact that China is dependent on them for energy. The idea that they'll be best buddies is
laughable.
Trump's balls are so big that he ran like a bitch away from his campaign promises to
normalize relations with Russia and prevent this exact scenario. Or maybe he was just
lying.
Nevermind, the ZH herd is stampeding on how great Trump is for pulling some press
privileges of a CNN guy.
I don't think Trump was lying. I think he is doing his best to stay alive and get done
what he can. This country is more fucked up than even he realized.
Forrest Trump - "My Herpes and Genital Warts are responsible for Melania sleeping in
another room, not my small uncircumcised **** and uncontrollable flatulence. Just wanted to
clarify." Hum, ahhhhhhh gee thanks for info...I think. Poor Forrest...sigh
You are absolutely right. Add in that they are greedy motherfuckers and pied pipers to
millions of blithering idiots that can't go one day without making things worse.
China and Russia make an almost perfect symbiosis:
Adjacent countries, transportation costs are as low as possible
Neither regime cares as much as a gnat tear about civil rights & freedoms and
neither is impeded by the vagaries of elections
China has a huge need for natural resources, especially oil & nat gas, but has few
resources beyond coal & not-so-rare earths, while Russia has natural resources in
abundance
Russia manufactures almost nothing for the international goods market while China is
the world's factory
USA regime lords have done an excellent job of alienating and uniting both of them
There were moments when Putin showed support and a practical approach toward Trump (like
when he schooled Fareed Zakaria). Putin even expressed that he was welcoming and respectful
of Trumps proposition to restore full-fledged relations with Russia.
I blame the democrats for pointlessly antagonizing Russia for two years just to attempt to
cover up the stench of their own excrement. Now it will be even more difficult to address the
problem of the Chi-coms.
US has nothing to offer Russia as China has. Stop dreaming to befriend Russia to fight
China. US had the opportunity to lead the world after the collapse of USSR but flunk it big
time being the biggest bully in the history.
Russia and China will come to blows soon enough. China has their eyes on all of that
unpopulated land in Siberia, and they won't like it too much when Russia takes advantage of
the fact that China is dependent on them for energy. The idea that they'll be best buddies is
laughable.
Trump's balls are so big that he ran like a bitch away from his campaign promises to
normalize relations with Russia and prevent this exact scenario. Or maybe he was just
lying.
Nevermind, the ZH herd is stampeding on how great Trump is for pulling some press
privileges of a CNN guy.
I don't think Trump was lying. I think he is doing his best to stay alive and get done
what he can. This country is more fucked up than even he realized.
Looking ahead, barring no major upsets, analysts at Deutsche Bank and other Wall Street
banks see potential for the market to rally into the end of the year, with some analysts who
were only recently calling for an extended losing streak now seeing potential upside of between
11% and 14%. But then again, with so much uncertainty between now and then, market returns -
and analysts' expectations - could shift dramatically between now and then.
The leader of Communist China, Chairman Mao, warned the country that revisionists were
threatening to erase all the progress made since the Communist Revolution which brought Mao to
power.
It had been almost 20 years since the bloody revolution, and Mao wanted to reinvigorate the
rebel spirit in the youth. He instructed students to root out any teachers who wove subtle
anti-communist sentiments in their lessons.
Mao encouraged students to rebel against any mindless respect for entrenched authority,
remnants, he said, of centuries of capitalist influence.
Students at Yizhen Middle School, like many others, quickly took up the task. They "exposed"
capitalist intellectual teachers and paraded them around in dunce caps with insulting signs
hung around their necks.
Teachers were beaten and harassed until they confessed to their crimes most of which were,
of course, false confessions to avoid further torture.
It only escalated from there.
What ensued puts Lord of the Flies to shame.
One teacher killed himself after being taken captive by students. Most teachers fled.
Soon the students were left entirely in charge of their school. Two factions quickly
emerged, one calling themselves the East is Red Corps, and the other the Red Rebels.
One student was kidnapped by the East is Red Corps, and suffocated to death on a sock
stuffed in his mouth.
A girl was found to be an East is Red spy among the Red Rebels. She was later cornered with
other East is Red students in a building. She shouted from a window that she would rather die
than surrender. Praising Chairman Mao, she jumped to her death.
Some Red Rebels died from an accidental explosion while making bombs.
Many were tortured, and another student died from his injuries at the hands of the East is
Red Corps.
A female teacher refused to sign an affidavit lying about the cause of death. She was beaten
and gang-raped by a group of students.
Although it might be tempting to see what happened at YMS as mostly relevant to group
adolescent behavior what happened at the school occurred throughout China in government
offices, factories, within the army, and among Chinese of all ages in an eerily similar
way
The students' repressed resentment at having to be so obedient now boiled over into anger
and the desire to be the ones doing the punishing and oppressing
In the power vacuum that Mao had now created, another timeless group dynamic emerged.
Those who were naturally more assertive, aggressive, and even sadistic pushed their way
forward and assumed power , while those who were more passive quietly receded into the
background becoming followers
Once all forms of authority were removed and the students ran the school, there was
nothing to stop the next and most dangerous development in group dynamics. The split into
tribal factions
People may think they are joining because of the different ideas or goals of this tribe or
the other, but what they want more than anything is a sense of belonging and a clear tribal
identity.
Look at the actual differences between the East is Red Corps and the Red Rebels. As the
battle between them intensified it was hard to say what they were fighting for, except to
assume power over the other group.
One strong or vicious act of one side called for a reprisal from the other, and any type
of violence seemed totally justified. There could be no middle ground, nor any questioning of
the rightness of their cause.
The tribe is always right. And to say otherwise is to betray it.
I write this on the eve of the 2018 midterm elections.
And like Mao handing down his orders to dispose of capitalist sympathizers, such have the
leaders of each major US political party rallied their supporters.
This is the most important election of our lifetime, they say.
No middle ground. Violence is justified to get our way. Betray the tribe, and be considered
an enemy.
Just like Mao, they have manufactured a crisis that did not previously exist.
The students had no violent factions before Mao's encouragement. They had no serious
problems with their teachers.
Is there any natural crisis occurring right now? Or has the political establishment whipped
us into an artificial frenzy?
This isn't just another boring election, they say. This is a battle for our future.
The students battled over who were the purest revolutionaries.
The voters now battle over who has the purest intentions for America.
Do the factions even know what they are fighting for anymore?
They are simply fighting for their tribe's control over the government.
The battle of the factions at schools across China were "resolved" when Mao came to support
one side or the other. In that sense, it very much did matter which side the students were
on
The government came down hard against the losing faction.
They had chosen wrong and found themselves aligned against the powerful Communist Party.
It won't be a dictator that hands control to one faction or another in this election. It
will be a simple majority. And those in the minority will suffer.
The winners will feel that it is their time to wield power, just as the students were happy
to finally have the upper hand on their teachers.
If Mao didn't have so much power, he could have never initiated such a violent crisis.
And if our government didn't have so much power, it would hardly matter who wins the
election.
Yet here we are, fighting for control of the government because each faction threatens to
violently repress the other if they gain power.
It is a manufactured crisis. A crisis that only exists because political elites in the
government and media have said so.
They decided that this election will spark the USA's "Cultural Revolution."
And anyone with sympathies from a bygone era will be punished.
You don't have to play by the rules of the corrupt politicians, manipulative media, and
brainwashed peers.
When you subscribe to The Daily Bell, you also get a free guide:
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This guide will show you exactly how to plan your next two years to build the free life of
your dreams. It's not as hard as you think
Tribal warfare? You clearly don't understand what's happening here. The Globalist cartel
has created division between two parties to incite chaos and violence. The "warfare" you
reference will be nothing but protesting ->rioting ->anarchy ->police restraint of
the Democrat incited sheeple.
There's no tribalism associated with upholding and preserving the Constitution.
I think the globalists will try to cool it off before things spin out of (((their)))
control. Either that or move to the next phase...world war... so they can just slaughter us
and not have to bother trying to herd the increasingly "woke" goyim live stock.
I have NOT heard about a SINGLE CREDIBLE violent incident where people got hurt FROM THE
RIGHT. All the incidents of "White Fascist Violence" look like FALSE FLAGS and contrived
incidents. The foregoing CAN NOT be said of the Leftist Antifa types including racist La Raza
supporters, racist Blacks who want something for nothing, immigrants from any country who
want to be fully supported because they BREATHE and the Top Group (pun intended) Whites who
do not believe in boundaries, standards or quality of life UNLESS it's their lives. NOT all
Blacks, Hispanics and Immigrants are in the Left; but most Blacks, Hispanics and Immigrants
are on the Left and havn't a clue they are responsible for their own prisons because they
cannot REASON and virtue signaling is more important so they are part of the GROUP. Misplaced
EMPHASIS on what is important in creating a CIVILIZED and SAFE society.
Here are a few quotes from President Trump's constant cheerleading of the American economy
in the last several months leading up to next week's midterms.
"In many ways, this is the greatest economy in the HISTORY of America"
-- President Trump tweeted, June 04
"We have the strongest economy in the history of our nation."
-- Trump told reporters, June 15
"We have the greatest economy in the history of our country."
-- Trump said in an interview with Fox News, July 16
"We're having the best economy we've ever had in the history of our country."
-- Trump, said in a speech in Illinois, July 26
"This is the greatest economy that we've had in our history, the best."
-- Trump said at rally in Charleston, W.Va., Aug. 21
"You know, we have the best economy we've ever had, in the history of our country."
-- Trump said in an interview on "Fox and Friends," Aug. 23
"It's said now that our economy is the strongest it's ever been in the history of our
country, and you just have to take a look at the numbers."
-- Trump said on a White House video log, Aug. 24
"We have the best economy the country's ever had and it's getting better."
-- Trump told the Daily Caller, Sept. 03
Democrats are anticipating a blue wave during the November midterm elections, but according
to President Trump, the "strong" US economy could propel Republicans to victory next week.
"History says that whoever's president always seems to lose the midterm," Trump said on an
Oct. 16 interview with FOX Business' Trish Regan.
"No one had the economy that we do. We have the greatest economy that we've ever had."
President Trump's cheerleading sounds great and certainly helps animal spirits, but a new
study warns that more than 25% of American renters are not confident they could cover a $400
emergency. About 18% of homeowners report record low emergency savings. And if you thought that
was bad, more than 30% of renters feel insecure about eating, as do 19% of homeowners, the
Urban Institute study , a
nonpartisan think tank in Washington, reported.
The main takeaway from the report: renters are struggling more than homeowners in the
"greatest economy ever."
"Rental costs are rising much faster than renters' salaries. Between 1960 and 2016, the
median income for a renter grew by just 5%. During the same period, the median rent ballooned
by more than 60%, according to The Joint Center for Housing Studies of Harvard University.
(Both figures account for inflation.)
To be sure, buying a house has also become harder for many Americans -- to do so now costs
four times the median household income. The homeownership rate fell to 63% in 2016 –
the lowest rate in half a century," said
CNBC .
Corianne Scally, a senior research analyst at the Urban Institute and a co-author of the
study, told CNBC that "renters seem to be worse off." Scally said the report was derived from
its 2017 well-being and basic needs survey, which received about 7,500 responses from people
aged 18 to 64.
2017 living arrangements for Americans
About half of renters in the survey reported financial hardships since President Trump took
office, compared with 33% of homeowners. More than 25% of renters in the survey were not
confident they could cover a $400 emergency. Around 18% of homeowners reported low emergency
savings. Almost 20% of renters saw large and unexpected declines in pay in the past year,
compared with 14% of homeowners.
Reported problems paying family medical bills
More than 12% of renters said they could barely pay rent, compared with 9% of homeowners who
warned their mortgage payments were getting too expensive. 15% of renters said they were on the
brink of not being able to afford utilities during the last 12 months, while 11% of homeowners
said the same.
Households unable to consistenly access or afford food
Scally made it clear to CNBC that renters are much worse off than ever before, but it is
also clear that some homeowners are feeling the pain as well.
"It seems that some of them are having to make trade-offs in just meeting their basic
needs," she said.
Maybe the "greatest economy ever," is not so great?
If so, then why is the Trump administration creating smoke and mirrors about the
economy?
The simple answer: it is all about winning the midterms by any means necessary. As for after
the midterms, then into 2019, a global slowdown lingers, that is the reason why the stock
market had one of its worst months since the 2008 crash. Trouble is ahead.
The U.S. is going for the jugular with new Iran sanctions intended to punish those who trade
with Teheran. But the U.S. may have a fight on its hands in a possible post- WWII
turning-point...
The next step in the Trump administration's "maximum pressure" campaign against Iran has
begun, with the most severe sanctions being re-imposed on the Islamic Republic. Crucially, they
apply not only to Iran but to anyone who continues to do business with it.
It's not yet clear how disruptive this move will be. While the U.S. intention is to isolate
Iran, it is the U.S. that could wind up being more isolated. It depends on the rest of the
world's reaction, and especially Europe's.
The issue is so fraught that disputes over how to apply the new sanctions have even divided
Trump administration officials.
The administration is going for the jugular this time. It wants to force Iranian exports of
oil and petrochemical products down to as close to zero as possible. As the measures are now
written, they also exclude Iran from the global interbank system known as SWIFT.
It is hard to say which of these sanctions is more severe. Iran's oil exports have already
started falling. They
peaked at 2.7 million barrels a day last May -- just before Donald Trump pulled the U.S.
out of the six-nation accord governing Iran's nuclear programs. By early September oil exports
were averaging a million
barrels a day less .
In August the U.S. barred Iran's purchases of
U.S.-dollar denominated American and foreign company aircraft and auto parts. Since then the
Iranian rial has crashed to
record lows and inflation has risen above 30 percent.
Revoking Iran's SWIFT privileges will effectively cut the nation out of the
dollar-denominated global economy. But there are moves afoot, especially by China and Russia,
to move away from a dollar-based economy.
The SWIFT issue has caused infighting in the
administration between Treasury Secretary Mnuchin and John Bolton, Trump's national security
adviser who is among the most vigorous Iran hawks in the White House. Mnuchin might win a
temporary delay or exclusions for a few Iranian financial institutions, but probably not much
more.
On Sunday, the second round of sanctions kicked in since Trump withdrew the U.S. from the
2015 Obama administration-backed, nuclear agreement, which lifted sanctions on Iran in exchange
for stringent controls on its nuclear program. The International Atomic Energy Agency has
repeatedly certified that the deal is working and the other signatories -- Britain, China,
France, Germany and Russia have not pulled out and have resumed trading with Iran. China and
Russia have already said they will ignore American threats to sanction it for continuing
economic relations with Iran. The key question is what will America's European allies
do?
Europeans React
Europe has been unsettled since Trump withdrew in May from the nuclear accord. The European
Union is developing a trading mechanism to get around U.S. sanctions. Known as a
Special Purpose Vehicle , it would allow European companies to use a barter system similar
to how Western Europe traded with the Soviet Union during the Cold War.
Juncker: Wants Euro-denominated trading
EU officials have also been lobbying to preserve
Iran's access to global interbank operations by excluding the revocation of SWIFT privileges
from Trump's list of sanctions. They count
Mnuchin,who is eager to preserve U.S. influence in the global trading system, among their
allies. Some European officials, including Jean-Claude Juncker, president of the European
Commission, propose making the euro a global trading currency
to compete with the dollar.
Except for Charles de Gaulle briefly pulling France out of NATO in 1967
and Germany and France voting on the UN Security Council against the U.S. invading Iraq in
2003, European nations have been subordinate to the U.S. since the end of the Second World
War.
The big European oil companies, unwilling to risk the threat of U.S. sanctions, have already
signaled they intend to ignore the EU's new trade mechanism. Total SA, the French petroleum
company and one of Europe's biggest, pulled
out of its Iran operations several months ago.
Earlier this month a U.S. official confidently
predicted there would be little demand among European corporations for the proposed barter
mechanism.
Whether Europe succeeds in efforts to defy the U.S. on Iran is nearly beside the point from
a long-term perspective. Trans-Atlantic damage has already been done. A rift that began to
widen during the Obama administration seems about to get wider still.
Asia Reacts
Asian nations are also exhibiting resistance to the impending U.S. sanctions. It is unlikely
they could absorb all the exports Iran will lose after Nov. 4, but they could make a
significant difference. China, India, and South Korea are the first, second, and third-largest
importers of Iranian crude; Japan is sixth. Asian nations may also try to work around the U.S.
sanctions regime after Nov. 4.
India is considering purchases of Iranian crude via a barter system or denominating
transactions in rupees. China, having already said it would ignore the U.S. threat, would like
nothing better than to expand yuan-denominated oil trading, and this is not a hard call: It is
in a protracted trade war with the U.S., and an oil-futures market launched in Shanghai last
spring already claims roughly 14 percent of the global market for "front-month" futures --
contracts covering shipments closest to delivery.
Trump: Unwittingly playing with U.S. long-term future
As with most of the Trump administration's foreign policies, we won't know how the new
sanctions will work until they are introduced. There could be waivers for nations such as
India; Japan is on record asking for one. The E.U.'s Special Purpose Vehicle could prove at
least a modest success at best, but this remains uncertain. Nobody is sure who will win the
administration's internal argument over SWIFT.
Long-term Consequences for the U.S.
The de-dollarization of the global economy is gradually gathering momentum. The orthodox
wisdom in the markets has long been that competition with the dollar from other currencies will
eventually prove a reality, but it will not be one to arrive in our lifetimes. But with
European and Asian reactions to the imminent sanctions against Iran it could come sooner than
previously thought.
The coalescing of emerging powers into a non-Western alliance -- most significantly China,
Russia, India, and Iran -- starts to look like another medium-term reality. This is driven by
practical rather than ideological considerations, and the U.S. could not do more to encourage
this if it tried. When Washington withdrew from the Iran accord, Moscow and Beijing immediately
pledged to support Tehran by staying with its terms.If the U.S. meets significant resistance,
especially from its allies, it could be a turning-point in post-Word War II U.S.
dominance.
Supposedly Intended for New Talks
All this is intended to force Iran back to the negotiating table for a rewrite of what Trump
often calls "the worst deal ever." Tehran has made it clear countless times it has no intention
of reopening the pact, given that it has consistently adhered to its terms and that the other
signatories to the deal are still abiding by it.
The U.S. may be drastically overplaying its hand and could pay the price with additional
international isolation that has worsened since Trump took office.
Washington has been on a sanctions binge for years. Those about to take effect seem
recklessly broad. This time, the U.S. risks lasting alienation even from those allies that have
traditionally been its closest.
"... In this book, I provide a somewhat cumbersome definition of neoliberalism and a pithier one, both of which inform the argument running throughout this book. The cumbersome one is as follows: 'the elevation of marked-based principles and techniques of evaluation to the level of state-endorsed norms'. ..."
In this book, I provide a somewhat cumbersome definition of neoliberalism and a pithier
one, both of which inform the argument running throughout this book. The cumbersome one is as
follows: 'the elevation of marked-based principles and techniques of evaluation to the level of
state-endorsed norms'.
What this intends to capture is that, while neoliberal states have extended and liberated
markets in certain areas (for instance, via privatisation and anti-union legislation), the
neoliberal era has been marked just as much by the reform of non-market institutions, so as to
render them market-like or business-like. Consider how competition is deliberately injected
into socialised healthcare systems or universities. Alternatively, how protection of the
environment is pursued by calculating a proxy price for natural public goods, in the
expectation that businesses will then value them appropriately (Fourcade, 2011). It is economic
calculation that spreads into all walks of life under neoliberalism, and not markets as such.
This in turn provides the pithier version: neoliberalism is 'the disenchantment of politics by
economics'.
The crisis of neoliberalism has reversed this ordering. 2008 was an implosion of technical
capabilities on the part of banks and financial regulators, which was largely unaccompanied by
any major political or civic eruption, at least until the consequences were felt in terms of
public sector cuts that accelerated after 2010, especially in Southern Europe. The economic
crisis was spookily isolated from any accompanying political crisis, at least in the beginning.
The eruptions of 2016 therefore represented the long-awaited politicization and publicisation
of a crisis that, until then, had been largely dealt with by the same cadre of experts whose
errors had caused it in the first place.
Faced with these largely unexpected events and the threat of more, politicians and media
pundits have declared that we now need to listen to those people 'left behind by
globalization'. Following the Brexit referendum, in her first speech as Prime Minister, Theresa
May made a vow to the less prosperous members of society, 'we will do everything we can to give
you more control over your lives. When we take the big calls, we'll think not of the powerful,
but you.' This awakening to the demands and voices of marginalized demographics may represent a
new recognition that economic policy cannot be wholly geared around the pursuit of 'national
competitiveness' in the 'global race', a pursuit that in practice meant seeking to prioritise
the interests of financial services and mobile capital. It signals mainstream political
acceptance that inequality cannot keep rising forever. But it is still rooted in a somewhat
economistic vision of politics, as if those people 'left behind by globalisation' simply want
more material wealth and opportunity', plus fewer immigrants competing for jobs. What this
doesn't do is engage with the distinctive political and cultural sociology of events such as
Brexit and Trump, which are fuelled by a spirit of rage, punishment and self-punishment, and
not simply by a desire to get a slightly larger slice of the pie.
This is where, 1 think, we need to pay close attention to a key dimension of neoliberalism,
which 1 focus on at length in this book, namely competition. One of my central arguments here
is that neoliberalism is not simply reducible to 'market fundamentalism', even if there are
areas (such as financial markets) where markets have manifestly attained greater reach and
power since the mid1970s. Instead, the neoliberal state takes the principle of competition and
the ethos of competitiveness (which historically have been found in and around markets), and
seeks to reorganise society around them. Quite how competition and competitiveness are defined
and politically instituted is a matter for historical and theoretical exploration, which is
partly what The Limits of Neoliberalism seeks to do. But at the bare minimum, organising social
relations in terms of 'competition' means that individuals, organisations, cities, regions and
nations are to be tested in terms of their capacity to out-do each other. Not only that, but
the tests must be considered fair in some way, if the resulting inequalities are to be
recognised as legitimate. When applied to individuals, this ideology is often known as
'meritocracy''.
The appeal of this as a political template for society is that, according to its advocates,
it involves the discovery of brilliant ideas, more efficient business models, naturally
talented individuals, new urban visions, successful national strategies, potent entrepreneurs
and so on. Even if this is correct (and the work of Thomas Piketty on how wealth begets wealth
is enough to cast considerable doubt on it) there is a major defect: it consigns the majority
of people, places, businesses and institutions to the status of'losers'. The normative and
existential conventions of a neoliberal society stipulate that success and prowess are things
that are earned through desire, effort and innate ability, so long as social and economic
institutions are designed in such a way as to facilitate this. But the corollary of this is
that failure and weakness are also earned: when individuals and communities fail to succeed,
this is a reflection of inadequate talent or energy on their part.
This has been critically
noted in how 'dependency' and 'welfare' have become matters of shame since the conservative
political ascendency of the 1980s. But this is just one example of how a culture of obligatory
competitiveness exerts a damaging moral psychology, not only in how people look down on others,
but in how they look down on themselves. A culture which valorises 'winning' and
'competitiveness' above all else provides few sources of security or comfort, even to those
doing reasonably well. Everyone could be doing better, and if they're not, they have themselves
to blame. The vision of society as a competitive game also suggests that anyone could very
quickly be doing worse.
Under these neoliberal conditions, remorse becomes directed inwards, producing the
depressive psychological effect (or what Freud termed 'melancholia') whereby people search
inside themselves for the source of their own unhappiness and imperfect lives (Davies, 2015).
Viewed from within the cultural logic of neoliberalism, uncompetitive regions, individuals or
communities are not just 'left behind by globalisation', but are discovered to be inferior in
comparison to their rivals, just like the contestants ejected from a talent show. Rising
household indebtedness compounds this process for those living in financial precarity, by
forcing individuals to pay for their own past errors, illness or sheer bad luck (Davies,
Montgomerie & Wallin, 2015).
In order to understand political upheavals such as Brexit, we need to perform some
sociological interpretation. We need to consider that our socio-economic pathologies do not
simply consist in the fact that opportunity and wealth are hoarded by certain industries (such
as finance) or locales (such as London) or individuals (such as the children of the wealthy),
although all of these things are true. We need also to reflect on the cultural and
psychological implications of how this hoarding has been represented and justified over the
past four decades, namely that it reflects something about the underlying moral worth of
different populations and individuals.
One psychological effect of this is authoritarian attitudes towards social deviance: Brexit
and Trump supporters both have an above-average tendency to support the death penalty, combined
with a belief that political authorities are too weak to enforce justice (Kaufman, 2016).
However, it is also clear that psychological and physical pain have become far more widespread
in neoliberal societies than has been noticed by most people. Statistical studies have shown
how societies such as Britain and the United States have become afflicted by often inexplicable
rising mortality rates amongst the white working class, connected partly to rising suicide
rates, alcohol and drug abuse (Dorling, 2016). The Washington Post identified close geographic
correlations between this trend and support for Donald Trump (Guo, 2016). In sum, a
moral-economic system aimed at identifying and empowering the most competitive people,
institutions and places has become targeted, rationally or otherwise, by the vast number of
people, institutions and places that have suffered not only the pain of defeat but the
punishment of defeat for far too long.
NEOLIBERALISM: DEAD OR ALIVE?
The question inevitably arises, is thus thing called 'neoliberalism' now over? And if not,
when might it be and how would we know? In the UK, the prospect of Brexit combined with the
political priority of reducing immigration means that the efficient movement of capital
(together with that of labour) is being consciously impeded in a way that would have been
unthinkable during the 1990s and early 2000s. 1'he re-emergence of national borders as
obstacles to the flow of goods, finance, services and above all people, represents at least an
interruption in the vision of globalisation that accompanied the heyday of neoliberal policy
making between 1989-2008. If events such as Brexit signal the first step towards greater
national mercantilism and protectionism, then we may be witnessing far more profound
transformations in our model of political economy, the consequences of which could become very
ugly.
Before we reach that point, it is already possible to identify a reorientation of national
economic policy making away from some core tenets of neoliberal doctrine. One of the main case
studies of this book is antitrust law and policy, which has been a preoccupation for neoliberal
intellectuals, reformers and lawyers ever since the 1930s. The rise of the Chicago School view
of competition (which effectively granted far greater legal rights to monopolists, while also
being tougher on cartels) in the American legal establishment from the 1970s onwards, later
repeated in the European Commission, meant that market commitments to neoliberal policy goals
is still less than likely. Free trade areas such as NAETA, policies designed to attract and
please mobile capital, the search for global hegemony surrounding international markets (as
opposed to naked, mercantilist self-interest) may then continue for a few more years. But the
collapse of legitimacy or popularity of these agendas will not be reversed.
Meanwhile, the inability of the Republican Party to defend these policies any longer signals
the ultimate divorce between the political and economic wings of neoliberalism: the
conservative coalition that came into being as Keynesianism declined post-1968, and which got
Ronald Reagan to power, no longer functions in its role of rationalising and de-politicising
economic policy making. If neoliberalism is the 'disenchantment of politics by economics', then
economics is no longer performing its role in rationalising public life. Politics is being
re-enchanted, by images of nationhood, of cultural tradition, of'friends' against enemies, ot
race ana religion, une ot me many political miscalculations mat lea to Brexit was to
under-estimate how many UK citizens would vote for the first time in their lives, enthralled by
the sudden sovereign power that they had been granted in the polling booth, which was entirely
unlike the ritual of representative democracy with a first-past-the-post voting system that
renders most votes irrelevant. The intoxication of popular power and of demagoguery is being
experienced in visceral ways for the first time since 1968, or possibly longer. Wendy Brown
argues that neoliberalism is a 'political rationality'' that was born in direct response to
Fascism during the 1930s and '40s (Brown, 2015). While it would be an exaggeration to say that
the end of neoliberalism represents the re-birth of Fascism, clearly there were a number of
existential dimensions of'the political' that the neoliberals were right to fear, and which we
should now fear once more.
While there is plenty of evidence to suggest that 2016 is a historic turning point indeed as
I've argued here, possibly the second 'book-mark' in the crisis of neoliberalism we need also
to recognise how the seeds of this recent political rupture were sown over time. Indeed, we can
learn a lot about policy paradigms from the way they' go into decline, for they always contain,
tolerate and even celebrate the very activities that later overwhelm or undermine them.
Clearly, the 2008 financial crisis was triggered by activities in the banking sector that were
not fundamentally different from those which had been viewed as laudable for the previous 20
years. Equally, as we witness the return of mercantilism, protectionism, nationalism and
charismatic populism, we need to remember the extent to which neoliberalism accommodated some
of this, up to a point.
The second major case study in this book, in addition to anti-trust policy, is of strategies
for 'national competitiveness'. The executive branch of government has traditionally been
viewed as a problem from the perspective of economic liberalism, seeing as powerful politicians
will instinctively seek to privilege their own territories vis-a-vis others. This is the threat
of mercantilism, which can spin into resolutely anti-liberal policies such as trade tariffs and
the subsidisation of indigenous industries and 'national champions'. These forms of
mercantilism may now be returning, however, the logic of neoliberalism was never quite as
antipathetic to them as orthodox market liberals might have been. Instead, I suggest in Chapter
4, rather than simply seek to thwart or transcend nationalist politics, neoliberalism seizes
and reimagines the nation as one competitive actor amongst many, in a global contest for
'competitiveness', as evaluated by business gurus such as Michael Porter and think tanks such
as the World Economic Eorum. To be sure, these gurus and think tanks have never been anything
but hostile to protectionism; but nevertheless, they have encouraged a form of mild nationalism
as the basis for strategic thinking in economic policy. As David Harvey has argued, 'the
neoliberal state needs nationalism of a certain sort to survive': it draws on aspects of
executive power and nationalist sentiment, in order to steer economic activity towards certain
types of competitive strategies, culture and behaviours and away from others (Harvey, 2005:
85).
There is therefore a deep-lying tension within the politics of neoliberalism between a
'liberal' logic, which seeks to transcend geography, culture and political difference, and a
more contingent, 'violent' logic that seeks to draw on the energies of nationhood and combat,
in the hope of diverting them towards competitive, entrepreneurial production. These two logics
are in conflict with each other, but the story I tell in this book is of how the latter
gradually won out over the long history of neoliberal thought and policy making. Where the
neoliberal intellectuals of the 1930s had a deep commitment to liberal ideals, which they
believed the market could protect, the rise of the post-war Chicago School of economics and the
co-option of neoliberal ideas by business lobbies and conservatives, meant that (what 1 term)
the 'liberal spirit' was gradually lost. There is thus a continuity at work here, in the way
that the crisis of neoliberalism has played out.
Written in 2012-13, the book suggests that neoliberalism has now entered a 'contingent'
state, in which various failures of economic rationality are dealt with through incorporating
an ever broader range of cultural and political resources. The rise of behavioural economics,
for example, represents an attempt to preserve a form of market rationality in the face of
crisis, by incorporating expertise provided by psychologists and neuroscientists. A form of
'neo-communitarianism' emerges, which takes seriously the role of relationships, environmental
conditioning and empathy in the construction of independent, responsible subjects. This remains
an economistic logic, inasmuch as it prepares people to live efficient, productive, competitive
lives. But by bringing culture, community and contingency within the bounds of neoliberal
rationality, one might see things like behavioural economics or 'social neuroscience' and so on
as early symptoms of a genuinely post-liberal politics. Once governments (and publics) no
longer view economics as the best test of optimal policies, then opportunities for post-liberal
experimentation expand rapidly, with unpredictable and potentially frightening consequences. It
was telling that, when the British Home Secretary, Amber Kudd, suggested in October 2016 that
companies be compelled to publicly list their foreign workers, she defended this policy as a
'nudge'.
The Limits of Neoliberalism is a piece of interpretive sociology. It starts from the
recognition that neoliberalism rests on claims to legitimacy, which it is possible to imagine
as valid, even for critics of this system. Inspired by Luc Boltanski, the book assumes that
political-economic systems typically need to offer certain limited forms of hope, excitement
and fairness in order to survive, and cannot operate via domination and exploitation alone. For
similar reasons, we might soon find that we miss some of the normative and political dimensions
of neoliberalism, for example the internationalism that the IiU was founded to promote and the
cosmopolitanism that competitive markets sometimes inculcate. There may be some elements of
neoliberalism that critics and activists need to grasp, refashion and defend, rather than to
simply denounce: this book's Afterword offers some ideas of what this might mean. But if the
book is to be read in a truly post-neoliberal world, 1 hope that in its Interpretive
aspirations, it helps to explain what was internally and normalively coherent about the
political economy known as 'neoliberalism', but also why the system really had no account of
its own preconditions or how to preserve them adequately. The attempt to reduce all of human
life to economic calculation runs up against limits. A political rationality that fails to
recognise politics as a distinctive sphere of human existence was always going to be
dumbfounded, once that sphere took on its own extra-economic life. As Bob Dylan sang to Mr
Jones, so one might now say to neoliberal intellectuals or technocrats: 'something is happening
here, but you don't know what it is'.
... ... ...
Most analyses of neoliberalism have focused on its commitment to 'free markets, deregulation
and trade. I shan't discuss the validity of these portrayals here, although some have
undoubtedly exaggerated the similarities between 'classical' nineteenth-century liberalism and
twentieth-century neoliberalism. The topic addressed here is a different one the character of
neoliberal authority, on what basis does the neoliberal state demand the right to be obeyed, if
not on substantive political grounds? To a large extent, it is on the basis of particular
economic claims and rationalities, constructed and propagated by economic experts. The state
does not necessarily (or at least, not always) cede power to markets, but comes to justify its
decisions, policies and rules in terms that are commensurable with the logic of markets.
Neoliberalism might therefore be defined as the elevation of market-based principles and
techniques of evaluation to the level of state-endorsed norms (Davies, 2013: 37). The authority
of the neoliberal state is heavily dependent on the authority of economics (and economists) to
dictate legitimate courses of action. Understanding that authority and its present crisis
requires us to look at economics, economic policy experts and advisors as critical components
of state institutions.
Since the banking crisis of 2007-09, public denunciations of 'inequality' have increased
markedly. These draw on a diverse range of moral, critical, theoretical, methodological and
empirical resources. Marxist analyses have highlighted growing inequalities as a symptom of
class conflict, which neoliberal policies have greatly exacerbated (Harvey, 2011; Therborn,
2012). Statistical analyses have highlighted correlations between different spheres of
inequality', demonstrating how economic inequality influences social and psychological
wellbeing (Wilkinson & Pickett, 2009). Data showing extreme concentrations of wealth have
led political scientists to examine the US political system, as a tool through which inequality
is actively increased (Hacker & Pierson, 2010). Emergent social movements, such as Occupy,
draw a political dividing line between the '99%' and the '1%' who exploit them. Political
leaders and public intellectuals have adopted the language of'fairness' in their efforts to
justify and criticize the various policy interventions which influence the distribution of
economic goods (e.g. Hutton, 2010).
It is important to recognize that these critiques have two quite separate targets, although
the distinction is often blurred. Firstly, there is inequality that exists within reasonably
delineated and separate spheres of society. This means that there are multiple inequalities,
with multiple, potentially incommensurable measures. The inequality that occurs within the
market sphere is separate from the inequality that occurs within the cultural sphere, which is
separate from the inequality' that occurs within the political sphere, and so on. Each sphere
can either unwelcome politically, or impractical (Davies, 2013). Hayek's support for the
welfare state, Simons' commitment to the nationalization of key industries, the ordo-liberal
enthusiasm for the 'social market' demonstrate that the early neoliberals were offering a
justification for what Walzer terms 'monopoly' (separate inequalities in separate spheres) and
not 'dominance' (the power of one sphere over all others).
As the next chapter explores, it was Coasian economics (in tandem with the Chicago School)
that altered this profoundly. The objective perspective of the economist implicitly working for
a university or state regulator would provide the common standard against which activity could
be judged. Of course economics does not replace the price system, indeed economics is very
often entangled with the price system (Callon, 1998; Caliskan, 2010), but the a priori equality
of competitors becomes presumed, as a matter of economic methodology, which stipulates that all
agents are endowed with equal psychological capacities of calculation. It is because this
assumption is maintained when evaluating all institutions and actions that it massively
broadens the terrain of legitimate competition, and opens up vast, new possibilities for
legitimate inequality and legitimate restraint. Walzerian dominance is sanctioned, and not
simply monopoly. The Coasian vision of fair competition rests on an entirely unrealistic
premise, namely that individuals share a common capacity' to calculate and negotiate, rendering
intervention by public authorities typically unnecessary: the social reality of lawyers' fees
is alone enough to undermine this fantasy. Yet in one sense, this is a mode of economic
critique that is imbued with the 'liberal spirit' described earlier. It seeks to evaluate the
efficiency of activities, on the basis of the assumed equal rationality of all, and the
neutrality of the empirical observer.
Like Coase, Schumpeter facilitates a great expansion of the space and time in which the
competitive process takes place. Various 'social' and 'cultural' resources become drawn into
the domain of competition, with the goal being to define the rules that all others must play
by. Monopoly is undoubtedly the goal of competitiveness. But unlike Coase's economics,
Schumpeter's makes no methodological assumption regarding the common rationality' of all
actors. Instead, it makes a romantic assumption regarding the inventive power of some actors
(entrepreneurs), and the restrictive routines of most others. Any objective judgements
regarding valid or invalid actions will be rooted in static methodologies or rules.
Entrepreneurs have no rules, and respect no restraint. They seek no authority or validation for
what they do, but are driven by a pure desire to dominate. In this sense their own immanent
authority comes with a 'violent threat', which is endorsed by the neoliberal state as Chapter 4
discusses.
These theories of competition are not 'ideological' and nor are they secretive. They are not
ideological because they do not seek to disguise how reality is actually constituted or to
distract people from their objective conditions. They have contributed to the construction and
constitution of economic reality, inasmuch as they provide objective and acceptable reports on
what is going on, that succeed in coordinating various actors. Moreover, they are sometimes
performative, not least because of how they inform and format modes of policy, regulation and
governance. Inequality has not arisen by accident or due to the chaos of capitalism or
'globalization'. Theories and methodologies, which validate certain types of dominating and
monopolistic activity, have provided the conventions within which large numbers of academics,
business people and policy makers have operated. They make a shared world possible in the first
place. But nor are any of these theories secret either. They have been published in
peer-reviewed journals, spread via policy papers and universities. Without shared, public
rationalities and methodologies, neoliberalism would have remained a private conspiracy.
Inequality can be denounced by critics of neoliberalism, but it cannot be argued that in an era
that privileges not only market competition but competitiveness in general inequality is not
publicly acceptable.
These theories of competition are not 'ideological' and nor are they secretive. They are not
ideological because they do not seek to disguise how reality is actually constituted or to
distract people from their objective conditions. They have contributed to the construction and
constitution of economic reality, inasmuch as they provide objective and acceptable reports on
what is going on, that succeed in coordinating various actors. Moreover, they are sometimes
performative, not least because of how they inform and format modes of policy, regulation and
governance. Inequality has not arisen by accident or due to the chaos of capitalism or
'globalization'. Theories and methodologies, which validate certain types of dominating and
monopolistic activity, have provided the conventions within which large numbers of academics,
business people and policy makers have operated. They make a shared world possible in the first
place. But nor are any of these theories secret either. They have been published in
peer-reviewed journals, spread via policy papers and universities. Without shared, public
rationalities and methodologies, neoliberalism would have remained a private conspiracy.
Inequality can be denounced by critics of neoliberalism, but it cannot be argued that in an era
that privileges not only market competition but competitiveness in general inequality is not
publicly acceptable.
The contingent neoliberalism that we currently live with is in a literal sense unjustified.
It is propagated without the forms of justification (be they moral or empirical) that either
the early neoliberals or the technical practitioners of neoliberal policy had employed, in
order to produce a reality that 'holds together', as pragmatist sociologists like to say. The
economized social and political reality now only just about 'holds together', because it is
constantly propped up, bailed out, nudged, monitored, adjusted, data-mincd, and altered by
those responsible for rescuing it. It does not survive as a consensual reality: economic
judgements regarding 'what is going on' are no longer 'objective' or 'neutral', to the extent
that they once were. The justice of inequality can no longer be explained with reference to a
competition or to competitiveness, let alone to a market. Thus, power may be exercised along
the very same tramlines that it was during the golden neoliberal years of the 1990s and early
millennium, and the same experts, policies and agencies may continue to speak to the same
public audiences. But the sudden reappearance of those two unruly uneconomic actors, the
Hobbesian sovereign state and the psychological unconscious, suggests that that the project of
disenchanting politics by economics has reached its limit. And yet crisis and critique have
been strategically deferred or accommodated. What resources are there available for this to
change, and to what extent are these distinguishable from neoliberalism's own critical
capacities?
... ... ...
Neoliberalism, as this book has sought to demonstrate, is replete with its own internal
modes of criticism, judgement, measurement and evaluation, which enable actors to reach
agreements about what is going on. These are especially provided by certain traditions of
economics and business strategy, which privilege competitive processes, on the basis that those
processes are uniquely able to preserve an element of uncertainty in social and economic life.
The role of the expert be it in the state, the think tank or university within this programme
is to produce quantitative facts about the current state of competitive reality, such that
actors, firms or whole nations can be judged, compared and ranked. For Hayek and many of the
early neoliberals, markets would do this job instead of expert authorities, with prices the
only facts that were entirely necessary. But increasingly, under the influence of the later
Chicago School and business strategists, the 'winners' and the 'losers' were to be judged
through the evaluations of economics (and associated techniques and measures), rather than of
markets as such. Certain forms of authority are therefore necessary for this game' to be
playable. Economized law is used to test the validity of certain forms of competitive conduct;
audits derived from business strategy are used to test and enthuse the entrepreneurial energies
of rival communities. But the neoliberal programme initially operated such that these forms of
authority could be exercised in a primarily technical sense, without metaphysical appeals to
the common good, individual autonomy or the sovereignty of the state that employed them. As the
previous chapter argued, various crises (primarily, but not exclusively, the 2007-09 financial
crisis) have exposed neoliberalism's tacit dependence on both executive sovereignty and on
certain moral-psychological equipment on the part of individuals. A close reading of neoliberal
texts and policies would have exposed this anyway. In which case, the recent 'discovery' that
neoliberalism depends on and justifies power inequalities, and not markets as such, may be
superficial in nature. Witnessing the exceptional measures that states have taken to rescue the
status quo simply confirms the state-centric nature of neolibcralism, as an anti-political mode
of politics. As Zizek argued in relation to the Wikileaks' exposures of 2011, 'the real
disturbance was at the level of appearances: we can no longer pretend we don't know what
everyone knows we know' (Zizek, 2011b). Most dramatically, neoliberalism now appears naked and
shorn of any pretence to liberalism, that is, it no longer operates with manifest a priori
principles of equivalence, against which all contestants should be judged. Chapter 2 identified
the 'liberal spirit' of neoliberalism with a Rawlsian assumption that contestants are formally
equal before they enter the economic 'game'. Within the Kantian or 'deontological' tradition of
liberalism, this is the critical issue, and it played a part in internal debates within the
early neoliberal movement. For those such as the ordoliberals, who feared the rationalizing
potential of capitalist monopoly, the task was to build an economy around such an a priori
liberal logic. Ensuring some equality of access to the economic game', via the active
regulation of large firms and 'equality of opportunity' for individuals, is how neoliberalism's
liberalism has most commonly been presented politically. As Chapter 3 discussed, the American
tradition of neoliberalism as manifest in Chicago Law and Economics abandoned this sort of
normative liberalism, in favour of a Benthamite utilitarianism, in which efficiency claims
trumped formal arguments. The philosophical and normative elements of neoliberalism have, in
truth, been in decline since the 1950s.
The 'liberal spirit' of neoliberalism was kept faintly alive by the authority that was
bestowed upon methodologies, audits and measures of efficiency analysis. The liberal a priori
just about survived in the purported neutrality of economic method (of various forms), to judge
all contestants equally, even while the empirical results of these judgements have increasingly
benefited alreadydominant competitors. This notion relied on a fundamental epistemological
inconsistency of neoliberalism, between the Hayekian argument that there can be no stable or
objective scientific perspective on economic activity, and the more positivist argument that
economics offers a final and definitive judgement. American neoliberalism broadens the 'arena'
in which competition is understood to take place, beyond definable markets, and beyond the
sphere of the 'economy', enabling cultural, social and political resources to be legitimately
dragged into the economic 'game', and a clustering of various forms of advantage in the same
hands. Monopoly, in Walter's terms, becomes translated into dominance.
The loss of neoliberalisms pretence to liberalism transforms the type of authority that can
be claimed by and on behalf of power, be it business, financial or state power. It means the
abandonment of the globalizing, universalizing, transcendental branch of neoliberalism, in
which certain economic techniques and measures (including, but not only, prices) would provide
a common framework through which all human difference could be mediated and represented.
Instead, cultural and national difference potentially leading to conflict now animates
neoliberalism, but without a commonly recognized principle against which to convert this into
competitive inequality. What I have characterized as the 'violent threat' of neoliberalism has
come to the fore, whereby authority in economic decision making is increasingly predicated upon
the claim that 'we' must beat 'them'. This fracturing of universalism, in favour of political
and cultural particularism, may be a symptom of how capitalist crises often play out (Gamble,
2009). One reason why neoliberalism has survived as well as it has since 2007 is that it has
always managed to operate within two rhetorical registers simultaneously, satisfying both the
demand for liberal universalism and that for political particularism, so when the former falls
apart, a neoliberal discourse of competitive nationalism and the authority of executive
decision is already present and available.
One lesson to be taken from neoliberalism, for political movements which seek to challenge
it, is that both individual agency and collective institutions need to be criticized and
invented simultaneously. Political reform does not have to build on any 'natural' account of
human beings, but can also invent new visions of individual agency. The design and
transformation of institutions, such as markets, regulators and firms, do not need to take
place separately from this project, but in tandem and in dialogue with it. A productive focus
of critical economic enquiry would be those institutions which neolibcral thought has tended to
be entirely silent on. These are the institutions and mechanisms of capitalism which coerce and
coordinate individuals, thereby removing choices from economic situations. The era of applied
neoliberal policy making has recently started to appear as one of rampant 'financialisation'
(Krippner, 2012). So it is therefore peculiar how little attention is paid within neoliberal
discourse to institutions of credit and equity, other than that they should be priced and
distributed via markets. Likewise, the rising power of corporations has been sanctioned by
theories that actually say very little about firms, management, work or organization, but focus
all their attention on the incentives and choices confronting a few 'agents' and 'leaders' at
the very top. Despite having permeated our cultural lives with visions of competition, and also
permeated political institutions with certain economic rationalities, the dominant discourse of
neoliberalism actually contains very little which represents the day-to-day lives and
experiences of those who live with it. This represents a major empirical and analytical
shortcoming of the economic theories that are at work in governing us, and ultimately a serious
vulnerability.
A further lesson to be taken from neoliberalism, for the purposes of a critique of
neoliberalism, is that restrictive economic practices need to be strategically and inventively
targeted and replaced. In the 1930s and 1940s, 'restrictive economic practices' would have
implied planning, labour organization and socialism. Today our economic freedoms are restricted
in very different ways, which strike at the individual in an intimate way, rather than at
individuals collectively. In the twenty-first century, the experience of being an employee or a
consumer or a debtor is often one of being ensnared, not one of exercising any choice or
strategy. Amidst all of the uncertainty of dynamic capitalism, this sense of being trapped into
certain relations seems eminently certain. Releasing individuals from these constraints is a
constructive project, as much as a critical one: this is what the example of the early
neoliberals demonstrates.
Lawyers willing to rewrite the rules of exchange, employment and finance (as, for instance
the ordo-liberals redrafted the rules of the market) could be one of the great forces for
social progress, if they were ever to mobilize in a concerted w'ay. A form of collective
entrepreneurship, which like individual entrepreneurs saw' economic nonnativity as fluid and
changeable, could produce new forms of political economy, with alternative valuation
systems.
The reorganization of state, society, institutions and individuals in terms of competitive
dynamics and rules, succeeded to the extent that it did because it offered both a vision of the
collective and a vision of individual agency simultaneously. It can appear impermeable to
critique or political transformation, if only challenged on one of these terms. For instance,
if a different vision of collective organization is proposed, the neoliberal rejoinder is that
this must involve abandoning individual 'choice' or freedom. Or if a different vision of the
individual is proposed, the neoliberal rejoinder is that this is unrealistic given the
competitive global context. Dispensing with competition, as the template for all politics and
political metaphysics, is therefore only possible if theory proceeds anew, with a
political-economic idea of individual agency and collective organization, at the same time.
What this might allow is a different basis from which to speak of human beings as paradoxically
the same yet different. The problem of politics is that individuals are both private, isolated
actors, with tastes and choices, and part of a collectivity, with rules and authorities. An
alternative answer to this riddle needs to be identified, other than simply more competition
and more competitiveness, in which isolated actors take no responsibility for the collective,
and the collective is immune to the protestations of those isolated actors.
"... "the housing market does have a momentum component and we're seeing a clipping of momentum at this time." ..."
"... "If the markets go down, it could bring on another recession. The housing market has been an important element of economic activity. If people start to get pessimistic about housing and pull back and don't want to buy, there will be a drop in construction jobs and that could be a seed for another recession." ..."
"... "By the way, we're overdue for another recession." ..."
"... "The drop in home prices in the financial crisis was the most severe drop in the US market since my data begin in 1890," ..."
"... "It could be that we're primed to repeat it because it's in our memory and we're thinking about it but still I wouldn't expect something as severe as the Great Financial Crisis coming on right now. There could be a significant correction or bear market, but I'm waiting and seeing now." ..."
The weakening housing market is similar to the last market high, just before the subprime
housing bubble burst a decade ago, says famed housing-watcher Robert Shiller. The economist,
who predicted the 2007-2008 crisis, told Yahoo Finance that current data shows "a sign of
weakness."
Housing pivots take more time than those in the stock market, Shiller said, adding that
"the housing market does have a momentum component and we're seeing a clipping of momentum
at this time."
The Nobel Laureate explained: "If the markets go down, it could bring on another
recession. The housing market has been an important element of economic activity. If people
start to get pessimistic about housing and pull back and don't want to buy, there will be a
drop in construction jobs and that could be a seed for another recession." He added:
"By the way, we're overdue for another recession."
When reminded that 2006 predated the greatest financial crisis in a lifetime, Shiller
acknowledged that any correction would likely be far less severe.
"The drop in home prices in the financial crisis was the most severe drop in the US
market since my data begin in 1890," the Yale economist said.
"It could be that we're primed to repeat it because it's in our memory and we're
thinking about it but still I wouldn't expect something as severe as the Great Financial Crisis
coming on right now. There could be a significant correction or bear market, but I'm waiting
and seeing now."
The infamous US housing bubble in the mid-2000s and the subsequent subprime meltdown were
key factors spurring the broader financial crisis of 2008. A speculative frenzy over house
prices, mortgages beyond long-term capabilities to finance, and eventually a wave of defaults
by borrowers, threatened the solvency of some key financial institutions which in turn led to a
stock market crash, and the global financial crisis.
"... creates a parallel society in the countryside that never see these money, but are the pros of having that money there and contributing to the economy outweigh these cons? It would if the money were invested with a view of making a profit from a factory, but I don't think that happens in this case. What do you think? ..."
"... The result is what we Australians call a two-speed economy or a split economy, where one sub-economy caters for the very rich (real estate agents specialising in luxury properties, lots of luxury hotels and playgrounds, boutique shops and restaurants) and the other sub-economy is hidden away, made up of local people who have to rent their homes because they can't afford to buy their own homes, who have to hold down two or more jobs to survive and who supply the staff for the hotels, shops and restaurants frequented by the rich. Eventually the local people start disappearing to find better-paying jobs and the hotels, restaurants, etc start bringing in foreign labour to replace them. ..."
I've lately been wondering about the economics of being a big tax haven like the UK. A place
like the Bahamas, I think benefits from it since there are so few citizens and it's easy to
bribe them, and it costs a lot less than paying taxes back home. But then you move on to
Panama, and the grey area starts. Someone is getting rich there, but the population of Panama
is a lot bigger than that of the Bahamas, and that population is not exactly rich. Does it
create bigger class divisions and also retards politics in terms of trying to develop their
own unique economy not dependent on servicing the rich foreign tax thieves?
Then you get to London and the UK, with their absolutely enormous population. Most of the
people outside of London will never see any of this money, and in London it creates a runaway
housing crisis as the best investment for laundered money is thought to be real estate.
Obviously there is investment in the local economy other than that, such as buying football
clubs and stores, but I don't think that money goes towards funding a pharma start-up or
buying stock in a local car company.
So it exacerbates inequality sure (London real estate is insane and out of reach of most
locals), and creates a parallel society in the countryside that never see these money, but
are the pros of having that money there and contributing to the economy outweigh these cons?
It would if the money were invested with a view of making a profit from a factory, but I
don't think that happens in this case. What do you think?
I think it is an extremely interesting discussion point; one that I would not venture into
without doing a bit of research, but right now I have to leave for work. It's definitely
something we could chew over for a bit, and I imagine Jen will have something for us on it.
Blatnoi, if you get hold of the Nicholas Shaxson book I mentioned before, I recall there's a
chapter that discusses the effect of being a tax haven has on the Channel Islands economy and
Jersey Island in particular. The money that ends up there is in the pockets of a very few
people who use it to buy and real estate as if it were shares on the stock market.
The result
is what we Australians call a two-speed economy or a split economy, where one sub-economy
caters for the very rich (real estate agents specialising in luxury properties, lots of
luxury hotels and playgrounds, boutique shops and restaurants) and the other sub-economy is
hidden away, made up of local people who have to rent their homes because they can't afford
to buy their own homes, who have to hold down two or more jobs to survive and who supply the
staff for the hotels, shops and restaurants frequented by the rich. Eventually the local
people start disappearing to find better-paying jobs and the hotels, restaurants, etc start
bringing in foreign labour to replace them.
I certainly agree with you that a two-speed economy creates and exacerbates class
divisions, and moreover destroys not only local economies in the areas where it operates but
also local societies and cultures.
Aha I Googled "Shaxson", "economy" and "Jersey" and out of what Google threw at me, I
found this account by Bram Wanrooij of his time living in Jersey with his family for six
years:
An excerpt from Wanrooij's post:
".. I have never been so aware of wealth discrepancies as I have in Jersey. And that
says a lot, as I have lived in places like Kenya and Sudan when I was younger. Disparity is
on full display, in combination with a shameless promotion of greed and privilege. Range
Rovers wizz past you, their 4×4 engines sputtering out clouds of pollution, utterly
useless on a small island with a decent infrastructure and no real elevation to speak of. You
even see flashy sports cars; quite amusing when you consider the speed limit is 40 at most.
What are these people trying to prove?
The island caters to the very wealthy, especially reflected in everyday expenses and
housing and travel costs. Getting off the island becomes ever more impossible as your family
grows, with flights to England ridiculously expensive and ferries charging a small fortune
for carrying you across the channel. In this way, Jersey has quickly become a financial and
geographical prison for middle and low earners.
In the six years I've lived here, my family has had to move six times and every time we
had to rent a house which was slightly beyond our budget, even though both my wife and I are
hard workers with honest professions. I have seen qualified, talented people leave because of
this, a phenomenon which makes no sense, neither on a social, nor an economic level "
Comparisons between the Jersey-style financial two-speed economy and economies afflicted
with so-called Dutch disease (typically economies like Saudi Arabia and others dependent on
oil, gas and mineral exploitation) have been made. Characteristics of such economies are
outlined in detail at this link: https://www.economicshelp.org/blog/11977/oil/dutch-disease/
I've lived on the outskirts of London for many years and what I've seen is the city becoming
increasingly hollowed out. You can walk around street after street at night and everywhere is
in darkness – the lights are out because no-one is home, not that evening, not ever.
London is permanently under construction; huge numbers of new buildings have gone up in
recent years – all of them beyond the purchasing power of most Londoners – and
huge numbers of those new buildings have been purchased off plan by overseas investors with
no intention or interest in living in them.
When the money moves in existing communities disintegrate, local councils seek to dump
those in social housing on other, less fashionable boroughs (thus exacerbating housing
problems in those areas) or even outside London so housing can be razed and the land sold to
developers, those renting in the private sector are priced out, local businesses close down
– their market has gone plus insane rent and rates increases etc etc. London used to
have a bit of a 'village' feel to it – distinct areas with settled communities,
traditional butcher-baker-candlestick maker high streets, a sense of community. All gone or
going.
The multimillion-pound wrecks are evidence of a property culture in which the world's
richest people see British property as investments. One Hyde Park, a block of apartments in
Knightsbridge, is another example where more than half the flats are registered with the
council as empty or second homes.
Buying properties in hot-spot areas and leaving them empty – because you plan to trade
and sell them if and when the prices rocket up to levels you want – would be typical
behaviour of people who treat property portfolios like share portfolios. You want to be ready
to sell when the price is right so you don't move tenants into them. Getting rid of tenants
can be a hassle if you want to sell quickly.
Also buying property and deliberately leaving it to rot is a way of using it as a tax
shelter to minimise land and other taxes, lower your income or claim a tax rebate on losses
you make because you're forking out more in land taxes, council rates and other rates than
you are making on the property, depending on the taxation jurisdiction prevailing in the area
or country where you have bought the property.
Apparently, the U.S. authorities believe that by squeezing the corrupt Russian money out
of the Great Britain, they would force those corrupt rich Russians to return their money home
and remake the Russia as a modern Western nation with the rule of law and checks and
balances.
At least, that's what I have heard at anti-Putin forums. So -- and especially so in view
of your article -- that ought to be taken with a grain of salt.
But if that's indeed the idea -- I'm skeptical that it would work. Definitely, it sounds
alright, and if it were implemented, say, 30 years ago -- it might have sort of worked, by
preventing the corrupt Russians to move their assets abroad. Now, I think, they would just
move their fortunes into some other friendly jurisdiction outside of the reach of Uncle Sam
and Russia's authorities.
If getting at dirty money was that easy, I doubt that China would ever need to resort to
such a complex operation as the "Fox Hunt".
Another kick in the sack for Britain, caused by Washington but for which Washington will
suffer no penalty. That Special Relationship certainly is something, isn't it?
I think you're probably right – although I never thought of such a devious motive as
forcing Putin's enemies (in some cases) back to Russia, where they would presumably start
financing the opposition and making trouble, I agree it likely would not work according to
plan. Very likely all it would accomplish is the withdrawal of their money from London, to be
hidden somewhere else.
"... Every academic critique of neoliberalism is an unacknowledged memoir. We academics occupy a crucial node in the neoliberal system. Our institutions are foundational to neoliberalism's claim to be a meritocracy, insofar as we are tasked with discerning and certifying the merit that leads to the most powerful and desirable jobs. Yet at the same time, colleges and universities have suffered the fate of all public goods under the neoliberal order. We must therefore "do more with less," cutting costs while meeting ever-greater demands. The academic workforce faces increasing precarity and shrinking wages even as it is called on to teach and assess more students than ever before in human history -- and to demonstrate that we are doing so better than ever, via newly devised regimes of outcome-based assessment. In short, we academics live out the contradictions of neoliberalism every day. ..."
"... Whereas classical liberalism insisted that capitalism had to be allowed free rein within its sphere, under neoliberalism capitalism no longer has a set sphere. We are always "on the clock," always accruing (or squandering) various forms of financial and social capital. ..."
Every academic critique of neoliberalism is an unacknowledged memoir. We academics
occupy a crucial node in the neoliberal system. Our institutions are foundational to
neoliberalism's claim to be a meritocracy, insofar as we are tasked with discerning and
certifying the merit that leads to the most powerful and desirable jobs. Yet at the same time,
colleges and universities have suffered the fate of all public goods under the neoliberal
order. We must therefore "do more with less," cutting costs while meeting ever-greater demands.
The academic workforce faces increasing precarity and shrinking wages even as it is called on
to teach and assess more students than ever before in human history -- and to demonstrate that
we are doing so better than ever, via newly devised regimes of outcome-based assessment. In
short, we academics live out the contradictions of neoliberalism every day.
... ... ...
On a more personal level it reflects my upbringing in the suburbs of Flint, Michigan, a city
that has been utterly devastated by the transition to neoliberalism. As I lived through the
slow-motion disaster of the gradual withdrawal of the auto industry, I often heard Henry Ford s
dictum that a company could make more money if the workers were paid enough to be customers as
well, a principle that the major US automakers were inexplicably abandoning. Hence I find it
[Fordism -- NNB] to be an elegant way of capturing the postwar model's promise of creating
broadly shared prosperity by retooling capitalism to produce a consumer society characterized
by a growing middle class -- and of emphasizing the fact that that promise was ultimately
broken.
By the mid-1970s, the postwar Fordist order had begun to breakdown to varying degrees in the
major Western countries. While many powerful groups advocated a response to the crisis that
would strengthen the welfare state, the agenda that wound up carrying the day was
neoliberalism, which was most forcefully implemented in the United Kingdom by Margaret Thatcher
and in the United States by Ronald Reagan. And although this transformation was begun by the
conservative part)', in both countries the left-of-centcr or (in American usage) "liberal"party
wound up embracing neoliberal tenets under Tony Blair and Bill Clinton, ostensibly for the
purpose of directing them toward progressive ends.
With the context of current debates within the US Democratic Party, this means that Clinton
acolytes are correct to claim that "neoliberalism" just is liberalism but only to the extent
that, in the contemporary United States, the term liberalism is little more than a word for
whatever the policy agenda of the Democratic Party happens to be at any given time. Though
politicians of all stripes at times used libertarian rhetoric to sell their policies, the most
clear-eyed advocates of neoliberalism realized that there could be no simple question of a
"return" to the laissez-faire model.
Rather than simply getting the state "out of the way," they both deployed and transformed
state power, including the institutions of the welfare state, to reshape society in accordance
with market models. In some cases creating markets where none had previously existed, as in the
privatization of education and other public services. In others it took the form of a more
general spread of a competitive market ethos into ever more areas of life -- so that we are
encouraged to think of our reputation as a "brand," for instance, or our social contacts as
fodder for "networking." Whereas classical liberalism insisted that capitalism had to be
allowed free rein within its sphere, under neoliberalism capitalism no longer has a set sphere.
We are always "on the clock," always accruing (or squandering) various forms of financial and
social capital.
The Devil, in Greek
diabolos
the 'divider', 'scatterer', 'slanderer'
"OMB Director Mulvaney cites a record high in gov't revenue. True, revenues hit a high
in nominal terms over FY18, growing 0.4% Y/Y, However after adjusting for inflation,
growth actually
fell
by 1.6%".
Steve Rattner
"Non Farm Payrolls puffed up all year, major negative adjustment to come later. For
most Americans this is not a strong economy, regardless of what Fed or Administration
says. When the jobs data is benchmarked to the tax data in February, there will be a
massive downward revision.
I just ran the October withholding, and there is no way that this number is correct.
Withholding was extremely weak. Bureau of Labor Statistics overstating gains all
year."
"Thanks [Lee] for the insight on the inconsistency of NFP with payroll withholding. I
was about to have a quick look at tax receipts but you saved me from that task. As for
avg wages rising I expect much wage gains concentration in top 10% (supervisory),
similarly for per capita incomes... [for a truer picture look at
median
numbers
especially in times of record income disparity]
BLS says 250,000 jobs created. Zero attention to how number compiled. BLS number helped
each month by "birth-death" ESTIMATE to account for unknown business shutdowns and
startups. Guess what? The Birth-death estimate this time was +246,000. Good NFP
before midterms."
How Ronald Reagan and Alan Greenspan Pulled off the Greatest Fraud Ever Perpetrated
against the American People
by Allen W. Smith / April 14th, 2010
David Leonhardt's article ,
"Yes, 47% of Households Owe No Taxes. Look Closer," in Tuesday's New York Times was
excellent, but it just scratches the tip of the iceberg of how the rich have gained at the
expense of the working class during the past three decades. When Ronald Reagan became President
in 1981, he abandoned the traditional economic policies, under which the United States had
operated for the previous 40 years, and launched the nation in a dangerous new direction. As
Newsweek magazine put it in its March 2, 1981 issue, "Reagan thus gambled the future
-- his own, his party's, and in some measure the nation's -- on a perilous and largely untested
new course called supply-side economics."
Essentially, Reagan switched the federal government from what he critically called, a "tax
and spend" policy, to a "borrow and spend" policy, where the government continued its heavy
spending, but used borrowed money instead of tax revenue to pay the bills. The results were
catastrophic. Although it had taken the United States more than 200 years to accumulate the
first $1 trillion of national debt, it took only five years under Reagan to add the second one
trillion dollars to the debt. By the end of the 12 years of the Reagan-Bush administrations,
the national debt had quadrupled to $4 trillion!
Ronald Reagan and Alan Greenspan pulled off one of the greatest frauds ever perpetrated
against the American people in the history of this great nation, and the underlying scam is
still alive and well, more than a quarter century later. It represents the very foundation upon
which the economic malpractice that led the nation to the great economic collapse of 2008 was
built. Ronald Reagan was a cunning politician, but he didn't know much about economics. Alan
Greenspan was an economist, who had no reluctance to work with a politician on a plan that
would further the cause of the right-wing goals that both he and President Reagan shared.
Both Reagan and Greenspan saw big government as an evil, and they saw big business as a
virtue. They both had despised the progressive policies of Roosevelt, Kennedy and Johnson, and
they wanted to turn back the pages of time. They came up with the perfect strategy for the
redistribution of income and wealth from the working class to the rich. Since we don't know the
nature of the private conversations that took place between Reagan and Greenspan, as well as
between their aides, we cannot be sure whether the events that would follow over the next three
decades were specifically planned by Reagan and Greenspan, or whether they were just the
natural result of the actions the two men played such a big role in. Either way, both Reagan
and Greenspan are revered by most conservatives and hated by most liberals.
If Reagan had campaigned for the presidency by promising big tax cuts for the rich and
pledging to make up for the lost revenue by imposing substantial tax increases on the working
class, he would probably not have been elected. But that is exactly what Reagan did, with the
help of Alan Greenspan. Consider the following sequence of events:
1) President Reagan appointed Greenspan as chairman of the 1982 National Commission on
Social Security Reform (aka The Greenspan Commission)
2) The Greenspan Commission recommended a major payroll tax hike to generate Social Security
surpluses for the next 30 years, in order to build up a large reserve in the trust fund that
could be drawn down during the years after Social Security began running deficits.
3) The 1983 Social Security amendments enacted hefty increases in the payroll tax in order
to generate large future surpluses.
4) As soon as the first surpluses began to role in, in 1985, the money was put into the
general revenue fund and spent on other government programs. None of the surplus was saved or
invested in anything. The surplus Social Security revenue, that was paid by working Americans,
was used to replace the lost revenue from Reagan's big income tax cuts that went primarily to
the rich.
5) In 1987, President Reagan nominated Greenspan as the successor to Paul Volker as chairman
of the Federal Reserve Board. Greenspan continued as Fed Chairman until January 31, 2006. (One
can only speculate on whether the coveted Fed Chairmanship represented, at least in part, a
payback for Greenspan's role in initiating the Social Security surplus revenue.)
6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan
Commission, and one of the strongest advocates the the 1983 legislation, became outraged when
he learned that first Reagan, and then President George H.W. Bush used the surplus Social
Security revenue to pay for other government programs instead of saving and investing it for
the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983
payroll tax hike. Moynihan's view was that if the government could not keep its hands out of
the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus
Social Security revenue for the government to loot. President Bush would have no part of
repealing the payroll tax hike. The "read-my-lips-no-new-taxes" president was not about to give
up his huge slush fund.
The practice of using every dollar of the surplus Social Security revenue for general
government spending continues to this day. The 1983 payroll tax hike has generated
approximately $2.5 trillion in surplus Social Security revenue which is supposed to be in the
trust fund for use in paying for the retirement benefits of the baby boomers. But the trust
fund is empty! It contains no real assets. As a result, the government will soon be unable to
pay full benefits without a tax increase. Money can be spent or it can be saved. But you can't
do both. Absolutely none of the $2.5 trillion was saved or invested in anything. I have been
laboring for more than a decade to expose the great Social Security scam. For more information,
please visit my website or contact me.
This article was posted on Wednesday, April 14th, 2010 at 9:00am and is filed under
Economy/Economics
, Social
Security , Tax .
5 comments on this article so far ...
Still, this is only symptom or really quite legal act by US. So, appears to me of the
system. So, what's wrong-right with the system of which governing the country by laws is
integral part? Apparently nothing; even to allen smyth.
So, why bother complaining ab an a legal act? Beats me! Why not change the system that
allows this? tnx
I think politics is, has and always will be the problem and it seems to have creeped in
to Dr. Smiths article.
The American people through decades of political rhetoric have come to believe all the lies
that have been told by politicians and duly reinforced by a compliant media.
Reagan proposed cutting benefits to fix social security. On 5/12/81 HHS Secretary Richard
Schweiker sent Congress the Administrations plan to rely on benefit cuts. You know what
happened next – the Democrats pounced with the elderly lobbies not far behind. Reagan
gave up and not unlike todays President, formed the commission mostly for political cover
and to take the heat off. And remember Congress passes the law, the President does not get
a vote.
The reserve fund build up for the boomers is also a myth. That is if we can believe the
Congressionsl Research Service:
"In fact, it has become conventional wisdom that Congress deliberately intended to built
up large balances in the trust funds, not just for the near term, but to help finance the
benefits of the post World War II baby boomers and later retirees." "To the contrary, a
review of the record of congressional proceedings would suggest that the goal was
not to create surpluses, but to assure that the system would not be threatened by
insolvency again in the event adverse conditions arose." ( CRS Report for Congress –
Social Security Financing Reform: Lessons From the 1983 Amendments – 97-741 EPW )
Or if we choose to believe Robert J Meyers:
Q: As we look at it today, some people rationalize the financing basis by saying that
it's a way of partially having the baby boomers pay for their own retirement in advance.
You're telling me now this was not the rationale. Nobody made that argument or adopted that
rationale?
Myers: That's correct. The statement you made is widely quoted, it is widely used, but
it just isn't true. It didn't happen that way, it was mostly happenstance that the
Commission adopted this approach to financing Social Security.
( http://ssaonline.us/history/myersorl.html
)
Senator Daniel Patrick Moynihan may have become outraged but he was on the commission.
He never realized that all cash surpluses have to be invested in debt – since Social
Security began? I find that hard to believe, but he was right to recommend cutting the FICA
tax, which of course went nowhere in CONGRESS.
If this new commission comes up with a plan to "extend the life" of the trust fund, as
happened with the new health care bill, it's just kicking the can down the road again.
Let's let them use the "trust fund" and run it down to zero. How? cut spending
elsewhere.
this is a great article alan, you missed one of the most important things greenspan did
to destroy the economy
he went to war on what he termed "wage inflation"
every time you see the prime go up that means there is upward pressure on wages and he
is trying to keep businesses from having money to offer higher wage
when you see wages go down it's because wage pressure is either stagnant or negative
of course there are other factors that make the prime go up or down but wage pressure is
the big reason you see it happening
when greenspan said "the economy is heating up" what he meant is "people are asking for
and getting a raise"
important stuff and one of the main reasons the middle classes wages have been
stagnant
– the US was not alone – this scam was taking place in most if not all
western faux-democracies. For the Canadian perspective – which has cost Cdn taxpayers
some two trillion dollars over the last 30+ years in "debt service" whilst government after
government claims 'no money!!' and slashes the social programs Cdns worked generations to
establish – What Happened? http://www.rudemacedon.ca/what-happened.html
. And thus it will continue until people catch on to this scam, this fraud, and put a lot
of people in jail. ABout the same time I find my way out from behind the looking glass, I
expect. We're all in cloud cuckooland now. Dorothy. The wizard is dead and the black witch
rules.
"Both Reagan and Greenspan saw big government as an evil, and they saw big business as a
virtue. They both had despised the progressive policies of Roosevelt, Kennedy and
Johnson"
Republicans BAD ..Democrats GOOD.
"When Ronald Reagan became President in 1981, he abandoned the traditional economic
policies, under which the United States had operated for the previous 40 years"
The 'traditional' economic policy of 'capitalism' (are economists allowed to utter that
word in public, or is 'traditional' a better oxymoron?) was rampant before 1981 and was
going about its destructive business. This article paints a picture of the pre-1981 world
being the 'glory days'.
"The official actuaries of the Social Security system say in order to get our Social
Security and retirement funds in balance, they'd have to cut benefits by 25 percent
indefinitely into the future," he says. "Do I think it's going to happen? Well I don't know,
but this is one of the reasons why inflation is the major problem out there. So long as you
don't do it, you're going to cause the debt overall -- the total government debt -- to rise
indefinitely, and that is an unstable situation."
He adds: "In the book discussing what the long-term outlook is all about, we say that the
issue of the aging of the population and its consequences on entitlements is having a
significant negative deterioration over the long run. The reason for that is what the data
unequivocally show is that entitlements -- which are mandated by law -- are gradually and
inexorably driving our gross domestic savings, and the economy, dollar for dollar. And so
long as that happens, we have to borrow from abroad, which is our current account
deficit."
He also said:
"When you deal with fear, it is very difficult to classify," he tells Here &
Now 's Jeremy Hobson. "But you can look at the consequences of it, and the consequence
is basically a suppressed level of innovation and therefore of capital investment and a
disinclination to take risks."
I agree with this, but not just as it relates to " a suppressed level of innovation " but
instead as it relates to the 2005 World Bank report on what produces wealth in a developed
economy like ours. It comes down to trust. Trust in your judicial system and trust in your
education system. I discuss this in the following 3 posts: 2007, 2009, 2011
This election at it's core is about trust. Destroy that, and we have no democracy, we have
no economy. It's that simple. That McConnell et al has decided he will not abide by the rules
agreed to in conducting the business of the Senate means we have no currently functioning
democracy. That is how fragile democracy in the US is. Our democracy comes down to two people,
the leaders of each party in the Senate agreeing to the rules. When one decides not to, there
is nothing that can be done other than vote.
You can hear the full interview here:
Sandi , November 5, 2018 10:48 am
Trust – I could't agree more. Thanks for shining this light.
Paul Krugman has been pounding the drum for years about the GOP's repeated con game of
creating deficits when they are in power, then running through the room with their hair on
fire on how deficits are going to be our downfall and so we MUST, MUST, MUST cut
entitlements. And yet we never seem to catch on.
It seems to me we should make all income, not just wages, subject to FICA. Of course we
could never touch what gets shipped off-shore anyway, so we'd just have to let that slide,
I suppose ..still, as long only the 'wage slaves' are taxed, things will only get
worse.
Karl Kolchak , November 5, 2018 12:16 pm
You still have trust? I gave that up after the Iraq War, the bailouts the Obama Betrayal
and Citizens United. Now I just assume the worst, no matter who is in power, and rarely am
I disappointed.
"... By James Heckman, Henry Schultz Distinguished Service Professor of Economics, University of Chicago; Founding Director, Center for the Economics of Human Development and Sidharth Moktan, Predoctoral Fellow, Center for the Economics of Human Development, University of Chicago. Originally published at VoxEU ..."
"... Anecdotal evidence suggests that the 'Top Five' economics journals have a strong influence on tenure and promotion decisions, but actual evidence on their influence is sparse. This column uses data on employment and publication histories for tenure-track faculty hired by the top US economics departments between 1996 and 2010 to show that the impact of the Top Five on tenure decisions dwarfs that of non-Top Five journals. A survey of US economics department faculties confirms the Top Five's outsized influence. ..."
"... American Economic Review ..."
"... Journal of Political Economy ..."
"... Quarterly Journal of Economics ..."
"... Review of Economic Studies ..."
"... We find that the Top Five has a large impact on tenure decisions within the top 35 US departments of economics, dwarfing the impact of publications in non-Top Five journals. A survey of current tenure-track faculty hired by the top 50 US economics departments confirms the Top Five's outsize influence. ..."
Yves
here. In case you hadn't noticed it, the economics discipline has doctrinal norms. Academics
who stray too far from it find themselves welcome only at the small number of colleges and
universities, such as the University of Missouri – Kansas City and the University of
Massachusetts – Amherst, that embrace heterodox views.
The top five economics journals play a large role in enforcing the orthodoxy. Jamie
Galbraith has described how he'd submit suitably mathed-up papers to one of the heavyweights,
get an initial positive response, but when they understood where he was going, they'd alway
reject the paper. The reviewers would claim that the mathematics were flawed, when that was not
the case. But being published by the top five is essential to advancing in prestigious
economics faculties, such as Harvard, Chicago, Princeton, and MIT.
It should be noted that no real science has a rigid hierarchy of journals like this. The
article documents disfunction among the editors at these journals, such as incest and
clientelism.
By James Heckman, Henry Schultz Distinguished Service Professor of Economics, University
of Chicago; Founding Director, Center for the Economics of Human Development and Sidharth
Moktan, Predoctoral Fellow, Center for the Economics of Human Development, University of
Chicago. Originally published at VoxEU
Anecdotal evidence suggests that the 'Top Five' economics journals have a strong
influence on tenure and promotion decisions, but actual evidence on their influence is sparse.
This column uses data on employment and publication histories for tenure-track faculty hired by
the top US economics departments between 1996 and 2010 to show that the impact of the Top Five
on tenure decisions dwarfs that of non-Top Five journals. A survey of US economics department
faculties confirms the Top Five's outsized influence.
Anyone who talks with young economists entering academia about their career prospects and
those of their peers cannot fail to note the importance they place on publication in the
so-called Top Five journals in economics: the American Economic Review ,
Econometrica ,the Journal of Political Economy ,the Quarterly Journal of
Economics , and the Review of Economic Studies .The discipline's preoccupation
with the Top Five is reflected in the large number of scholarly papers that study aspects of
the these journals, many of which acknowledge the Top Five's de facto role as arbiter in tenure
and promotion decisions (e.g. Ellison 2002, Frey 2009, Card and DellaVigna 2013, Anauti et al.
2015, Hamermesh 2013, 2018, Colussi 2018).
While anecdotal evidence suggests that the Top Five has a strong influence on tenure and
promotion decisions, actual evidence on such influence is sparse. Our paper (Heckman and Moktan
2018) fills this gap in the literature. We find that the Top Five has a large impact on
tenure decisions within the top 35 US departments of economics, dwarfing the impact of
publications in non-Top Five journals. A survey of current tenure-track faculty hired by the
top 50 US economics departments confirms the Top Five's outsize influence.
Our empirical and survey-based findings of the Top Five's influence beg the question: is the
Top Five an adequate filter of quality? Extending the analysis of Hamermesh (2018), we show
that appearance of an article in the Top Five is a poor predictor of quality as measured by
citations. Substantial variation in the citations accrued by papers published in the Top Five
and overlap in article quality across journals outside the Top Five make aggregate measures of
journal quality such as the Top Five label and Impact Factors poor measures of individual
article quality. This is a view expressed by many economists and non-economists alike.
1
There are many consequences of the discipline's reliance on the Top Five. It subverts the
essential process of assessing and rewarding original research. Using the Top Five to screen
the next generation of economists incentivises professional incest and creates clientele
effects whereby career-oriented authors appeal to the tastes of editors and biases of journals.
It diverts their attention away from basic research toward strategising about formats, lines of
research, and favoured topics of journal editors, many with long tenures. It raises the entry
costs for new ideas and persons outside the orbits of the journals and their editors. An
over-emphasis on Top Five publications perversely incentivises scholars to pursue follow-up and
replication work at the expense of creative pioneering research, since follow-up work is easier
to judge, is more likely to result in clean publishable results, and is hence more likely to be
published. 2 This behaviour is consistent with basic common sense: you get what you
incentivise.
In light of the many adverse and potentially severe consequences associated with current
practices, we believe that it is unwise for the discipline to continue using publication in the
Top Five as a measure of research achievement and as a predictor of future scholarly potential.
The call to abandon the use of measures of journal influence in career advancement decisions
has already gained momentum in the sciences. As of the time of the writing of this column, 667
organisations and 13,019 individuals have signed the San Francisco Declaration of Research
Assessment, a declaration denouncing the use of journal metrics in hiring, career advancement,
and funding decisions within the sciences. 3 Economists should take heed of these
actions. We provide suggestions for change in the concluding portion of this column.
Documenting the Power of the Top Five
We find strong evidence of the influence of the Top Five. Without doubt, publication in the
Top Five is a powerful determinant of tenure and promotion in academic economics. We analyse
longitudinal data on employment and publication histories for tenure-track faculty hired by the
top 35 US economics department between 1996 and 2010. We find that Top Five publications
greatly increase the probability of receiving tenure during the first spell of tenure-track
employment (see Figure 1). This is true if we limit samples to the first seven years of
employment. Estimates from duration analyses of time to tenure show that publishingthree Top
Five articles is associated with a 370% increase in the rate of receiving tenure, compared to
candidates with similar levels of publication in non-Top Five journals. The estimated effects
of publication in non-Top Five journals pale in comparison.
Figure 1 Predicted probabilities for receipt of tenure in the first spell of tenure-track
employment
Notes : The figures plot the predicted probabilities associated with
different levels of publications by authors in different journal categories, where the
predictions are obtained from a logit model. White diamonds on the bars indicate that the
prediction is significantly different than zero at the 5% level.
A survey of current assistant and associate professors hired by the top 50 US economics
departments corroborates these findings. On average, junior faculty rank Top Five publications
as being the single most influential determinant of tenure and promotion outcomes (see Figure
2). 4
Figure 2 Ranking of performance areas based on their perceived influence on tenure and
promotion decisions
Notes : The figure summarises respondents' rankings of either performance
areas. Responses are summarised by type of career advancement: tenure receipt, promotion to
assistant professor, and promotion to associate professor. The bars present mean responses for
each performance area. Respondents were given the option to not rank any or all of the eight
performance areas. As a result, the number of respondents varies across the performance
areas.
Responses to our survey reveal a widespread belief among junior faculty that the effect of
the Top Five on career advancement operates independently of differences in article quality. To
separate quality effects from a Top Five placement effect, we ask respondents to report the
probability that their department awards tenure or promotion to an individual with Top Five
publications compared to an individual identical to the first individual in every way except
that he/she has published the same number and quality of articles in non-Top Five journals. If
the Top Five influence operates solely through differences in article impact and quality, the
expected reported probability would be 0.5. The results in Figure 3 show large and
statistically significant deviations from 0.5 in favour of Top Five publication. On average,
respondents from top 10 departments believe that the Top Five candidate would receive tenure
with a probability of 0.89. The mean probability increases slightly for lower-ranked
departments.
Figure 3 Probability that a candidate with Top Five publications receives tenure or
promotion instead of an identical candidate with non-Top Five publications, ceteris paribus
Notes : The figure summarises respondents' perceptions about the probability
that a candidate with Top Five publications is granted tenure or promotion by the respondent's
department instead of a candidate with non-Top Five publications, ceteris paribus. Responses
are summarised by type of career advancement: tenure receipt, promotion to assistant professor,
and promotion to associate professor. The bars present mean responses for each performance
area. White diamonds indicate that the mean response is significantly different than 50% at the
10% level.
The Top Five as a Filter of Quality
The current practice of relying on the Top Five has weak empirical support if judged by its
ability to produce impactful papers as measured by citation counts. Extending the citation
analysis of Hamermesh (2018), we find considerable heterogeneity in citations within journals
and overlap in citations across Top Five and non-Top Five journals (see Figure 4). Moreover,
the overlap increases considerably when one compares non-Top Five journals to the less-cited
Top Five journals. For instance, while the median Review of Economics and Statistics
article ranks in the 38thpercentile of the overall Top Five citation distribution, the same
article outranks the median-cited article in the combined Journal of Political Economy
and Review of Economic Studies distributions.
Figure 4 Distribution of residualalog citations for articles published between 2000 and 2010
(as at July 2018)
Source : Scopus.com (accessed July 2018) Note : a The table plots distributions of residual log citations obtained from a model
that estimates log(citations+1) as a function of third-degree polynomial for years elapsed
between the date of publication and 2018, the year citations were measured. This
residualisation adjusts log citations for exposure effects, thereby allowing for comparison of
citations received by papers from different publication cohorts. Definition of journal abbreviations : QJE–Quarterly Journal Of Economics,
JPE–Journal Of Political Economy, ECMA–Econometrica, AER–American Economic
Review, ReStud–Review Of Economic Studies, JEL–Journal Of Economic Literature,
JEP–Journal Of Economic Perspectives, ReStat–Review Of Economics And Statistics,
JEG–Journal Of Economic Growth, JOLE–Journal Of Labor Economics, JHR–Journal
Of Human Resources, EJ–Economic Journal, JHE–Journal Of Health Economics,
ICC–Industrial And Corporate Change, WBER–World Bank Economic Review,
RAND–Rand Journal Of Economics, JDE–Journal Of Development Economics,
JPub–Journal Of Public Economics, JOE–Journal Of Econometrics, HE–Health
Economics, ILR–Industrial And Labor Relations Review, JEEA–Journal Of The European
Economic Association, JME–Journal Of Monetary Economics, JRU–Journal Of Risk And
Uncertainty, JInE–Journal Of Industrial Economics, JOF–Journal Of Finance,
JFE–Journal Of Financial Economics, ReFin–Review Of Financial Studies,
JFQA–Journal Of Financial And Quantitative Analysis, and MathFin–Mathematical
Finance.
Restricting the citation analysis to the top of the citation distribution produces the same
conclusion. Among the top 1% most-cited articles in our citations database, 5 13.6%
were published by three non-Top Five journals. 6
Low Editorial Turnover and Incest
Figure 5 Density plot of the number of years served by editors between 1996 and 2016
Source : Brogaard et al. (2014) for data up to 2011. Data for subsequent
years collected from journal front pages.
Compounding the privately rational incentive to curry favour with editors is the phenomenon
of longevity of editorial terms, especially at house journals (see Figure 5). Low turnover in
editorial boards creates the possibility of clientele effects surrounding both journals and
their editors. We corroborate the literature that documents the inbred nature of economics
publishing (Laband and Piette 1994, Brogaard et al. 2014, Colussi 2018) by estimating incest
coefficients that quantify the degree of inbreeding in Top Five publications. We show that
network effects are empirically important – editors are likely to select the papers of
those they know. 7
Table 1 Incest coefficients: Publications in Top Five between 2000 and 2016, by author
affiliation listed during publication
Source : Elsevier, Scopus.com.
Notes : The table reports three columns for each Top Five journal. The left
most columns report the number of articles that were affiliated to each university. The middle
columns present the percentage of articles published in the journal that were affiliated to the
university out of all articles affiliated to the list top universities. The right most columns
present the percentage of articles published in the journal that were affiliated to the
university out of all articles published in the journal. An author is defined as being
affiliated with a university during a given year if he/she listed the university as an
affiliation in any publication that was made during that specific year. An article is defined
as being affiliated with a university during a specific year if at least one author was
affiliated to the university during the year.
Discussion
Reliance on the Top Five as a screening device raises serious concerns. Our findings should
spark a serious conversation in the economics profession about developing implementable
alternatives for judging the quality of research. Such solutions necessarily de-emphasise the
role of the Top Five in tenure and promotion decisions, and redistribute the signalling
function more broadly across a range of high-quality journals.
However, a proper solution to the tyranny will likely involve more than a simple
redefinition of the Top Five to include a handful of additional influential journals. A better
solution will need to address the flaw that is inherent in the practice of judging a scholar's
potential for innovative work based on a track record of publications in a handful of select
journals. The appropriate solution requires a significant shift from the current
publications-based system of deciding tenure to a system that emphasises departmental peer
review of a candidate's work. Such a system would give serious consideration to unpublished
working papers and to the quality and integrity of a scholar's work. By closely reading
published and unpublished papers rather than counting placements of publications, departments
would signal that they both acknowledge and adequately account for the greater risk associated
with scholars working at the frontiers of the discipline.
A more radical proposal would be to shift publication away from the current journal system
with its long delays in refereeing and publication and possibility for incest and favoritism,
towards an open source arXiv or PLOS ONE format. 8 Such formats facilitate the
dissemination rate of new ideas and provide online real-time peer review for them. Discussion
sessions would vet criticisms and provide both authors and their readers with different
perspectives within much faster time frames. Shorter, more focused papers would stimulate
dialogue and break editorial and journal monopolies. Ellison (2011 )notes that online
publication is already being practiced by prominent scholars. Why not broaden the practice
across the profession and encourage spirited dialogue and rapid dissemination of new ideas?
This evolution has begun with a recently launched economics version of arXiv .
Under any event, the profession should reduce incentives for crass careerism and promote
creative activity. Short tenure clocks and reliance on the Top Five to certify quality do just
the opposite. In the long run, the profession will benefit from application of more
creativity-sensitive screening of its next generation.
George Papadopoulos - a central figure and self-admitted dupe in the Obama administration's
targeted spying on the Trump campaign, gave a wide-ranging interview to Dan Bongino on Friday,
detailing what he claims to have been a setup by deep state operatives across the world in order to
ultimately infiltrate the Trump campaign.
In
March
2016
,
Maltese professor Joseph Mifsud told Papadopoulos - an energy consultant who had recently joined
the Trump campaign - that Russia had "dirt" on Hillary Clinton, a claim which Papadopoulos repeated
in May 2016 to Australian diplomat Alexander Downer in a
London bar
. Of note, former FBI Assistant Director of counterintelligence, Bill Priestap,
reportedly
traveled to London
directly
before Downer met with Papadopoulos, while a few months later former FBI agent Peter Strzok met
with Downer in London directly before the DOJ officially launched their investigation into the
Trump campaign.
The alleged admission about Clinton's emails officially sparked the Obama administration's
counterintelligence operation on Trump on July 31, 2016 - dubbed Operation Crossfire Hurricane. In
September 2016, the FBI would send spy Stefan Halper to further probe Papadopoulos on the Clinton
email allegation, and - according to his interview with Dan Bongino, Papadoplous says Halper
angrily accused him
of working with Russia before storming out of a meeting.
Halper essentially began interrogating Papadopoulos, saying that it's "obviously in your
interest to be working with the Russians" and to "hack emails." "
You're complicit with
Russia in this, isn't that right George
" Halper told him. Halper also inquired about
Hillary's hacked emails, insinuating that Papadopoulos possessed them. Papadopoulos denied
knowing anything about this and asked to be left alone. -
Bongino.com
There are two schools of thought on Papadopoulos and his relationship with Mifsud - the
first link in the chain
regarding the Clinton email rumor. Notably, Mifsud claimed
last November
to be a member of the Clinton Foundation, and has
donated
to the charity.
The first theory is that Mifsud and Papadopoulos are Russian agents, and that Papadopoulos was
used to try and establish a backchannel to Putin.
Papadopoulos admits
he tried to set up a Trump-Putin meeting - which was flatly rejected by the
Trump campaign. Papadopoulos, however, claims the Putin connection was a woman Mifsud introduced
him to claiming to be Putin's niece, who was present at a March 24, 2016 meeting.
The second theory regarding Mifsud is that he was a deep state plant working with the FBI;
convincing Papadopoulos that he could arrange a meeting with members of the Russian government and
then seeding Papadopoulos with the Clinton email rumor. From there, as the theory goes, the "deep
state" attempted to pump Papadopoulos for information and set up a case against him - beginning
with Alexander Downer and the "drunken" confession in London.
Papadopoulos told Bongino that he wasn't drunk during his meeting with Downer,
and that
he was being recorded
. Papadopoulos noted during the Bongino interview
that
transcripts of his meetings with Mifsud and Dower reportedly exist - which he says proves that he
was set up.
According to Papadopoulos, Mifsud's lawyer said that he's not a Russian asset
and was instead working for Western intelligence.
Papadopoulos pleaded guilty to lying the FBI about his interactions with Mifsud, and was
sentenced to 14 days in federal prison and a $9,500 fine.
$10,000 cash
Papadopoulos also told Bongino about $10,000 in cash that he was given in an Israel hotel room
in
July 2017
- which he claims was another attempt to set him up. He says that he
believes the bills were marked, and
is looking for a way to bring the cash into the United
States for Congressional investigators to analyze.
The cash is currently with his attorney
in Greece.
"I'm actually trying to bring that money back somehow so that Congress can investigate it
because I am 100 percent sure those are marked bills, and to see who was actually running this
operation against me," Papadopoulos gold Bongino.
"I am more than happy to deliver the $10,000 in cash I received, as part of what I believe was a
sting operation to frame me in summer 2017, to your committee to examine for marked bills. This is
in the interest of me being fully transparent," he wrote last week on Twitter to North Carolina
Rep. Mark Meadows and Texas Rep. John Ratcliffe.
The two Republicans are members of a congressional task force investigating the FBI's
investigation into possible collusion between the Trump campaign and Russia. The task force
interviewed Papadopoulos on Oct. 25.
Papadopoulos acknowledged in his interview with Bongino that his claims about his encounters
with an Israeli-American businessman named
Charles Tawil
were "an incredible,
insane story."
"But it's true," he asserted.
Papadopoulos told Bongino the he believes that Tawil "was working on behalf of Western
intelligence to entrap me."
Papadopoulos does not have direct evidence that Tawil was working on behalf of a Western
government when they met in March and July 2017. Instead, Papadopoulos is speculating based on
what he says is the peculiar circumstances of his encounters with Tawil as well as his meetings
with at least one known FBI informant. -
Daily
Caller
Afraid he might be killed if he didn't accept the money, Papadopoulos took the funds and later
contacted Tawil - who allegedly told Papadopoulos he didn't want it back. From there, Papadopoulos
gave the cash to his attorney in Greece. Upon his return to the United States several days later,
Papadopoulos was arrested on July 28, 2017 at Dulles International Airport in Washington D.C., by
agents who he believes were looking for the cash.
And then when Papadopoulos landed back in America, he was arrested at Dulles International
Airport on July 27th. Strangely, he wasn't shown the warrant for his arrest when arrested, and
didn't know the reason why until the next day. The $10,000 that Tawil paid Papadopoulos in cash
is interesting in this context, as it would be the exact amount of money one would be required
to declare at customs. Papadopoulos didn't recall if he was arrested before or after he filled
out a customs slip (but didn't have the money on him). -
Bongino.com
The actions that are taken are a three-pronged attack in order to foster in global
governance, and they are as such:
Create ubiquitous electronic surveillance with unlimited police power
Throw the entire earth into an economic tailspin
Destroy all nationalism, national borders, and create chaos among all nations prior to an
"incendiary event" or series of actions that leads to a world war.
The world war is the most important part of it all, in the eyes of the globalists. The Great
Depression culminated in a world war, and periods of economic upheaval are always followed by
wars.
... ... ...
Every word here is recorded by XKeyscore mine and yours and stored in the NSA database in
Utah, under a file for "dissenters," "agitators," and every other descriptive label that can be
thought of for those who champion critical thought and independent thinking. Every
conservative-minded journalist or writer who dares to espouse these views and theories is being
recorded and kept under some kind of watch. You can be certain of it . Many are either shutting
down or "knuckling under" and complying.
The globalists are getting what they wish: consolidating the resources while they "tank" the
fiat economies and currencies of the nations. They are destroying cultures who just a mere two
centuries ago would have armed their entire male populaces with swords and sent invaders either
packing or in pieces.
They are destroying cultures by making them question themselves ! The greatest tactic
imaginable!
I submit this last for your perusal. Do you know who you are? The question is not just as
simple as it seems. Let's delve deeply. Do you really know who you are, where your family
originates? Your heritage, and its strengths and weaknesses? Is that heritage yours, along with
your heritage as an American citizen? It is not important that I, or others should know of
these strengths not at this moment in time. The world war is yet to come. As Shakespeare said,
"To thine own self be true." This is important for you to know it and hold fast to it. We are
in the decline of the American nation-now-empire.
When the dust settles, you'll know who will run with the ball even with three blockers
against them and will manage to slip the tackles or forearm shiver them in the face, outside of
the ref's eye, to run that ball in. The Marquis of Queensbury is dead, and those rules will go
out the window. When the dust settles, those who had the foresight and acted on it will be the
ones who will be given a gift: a chance to participate in what is to come. Stay in that good
fight, and fight it to win each day.
22 minutes ago remove Share link Copy There's still way too much fake liquidity in the system.
Until C/B's pull back their exposure, or rates become so unattractive that lending against
yourself [like APPL issuing debt to buy back stock] **** will continue as usual.
play_arrowplay_arrow Reply reply Report
flag
Apple was under severe pressure to pay dividends as apple was buying back stock instead to
increase earnings.
Apple has bigger issues...a slowing consumer base that have grown up with adult
problems...paying for diapers, mortgages and car payments. All of a sudden that old phone
with some nicks and scratches seems just fine instead of shelling out $1100, for a phone
call, $10 per month for an insurance plan and $95 for a case and extra charger.
1200 dollars to make a phone call. ATT of 1980 was cheap by todays standards
Historians of the now seventeen-year old U.S. war in Afghanistan will take note of this past week
when the newly-appointed American general in charge of US and NATO operations in the country made a
bombshell, historic admission.
He conceded that
the United States cannot win in
Afghanistan
.
Speaking to NBC News last week, Gen. Austin Scott Miller made his
first public statements after taking charge of American operations, and shocked with his frank
assessment that that
the Afghan war cannot be won militarily and peace will only be
achieved through direct engagement and negotiations with the Taliban
--
the very
terror group which US forces sought to defeat when it first invaded in 2001.
"This is not going to be won militarily,"
Gen. Miller said.
"This is going to a political solution."
Gen. Austin Scott Miller, the U.S. commander of resolute support, via EPA/NBC
My assessment is the Taliban also realizes they cannot win militarily.
So if you
realize you can't win militarily at some point, fighting is just, people start asking why.
So you do not necessarily wait us out, but I think now is the time to start working through the
political piece of this conflict.
He gave the interview from the Resolute Support headquarters building in Kabul. "We are more in
an offensive mindset and don't wait for the Taliban to come and hit [us]," he said. "So that was an
adjustment that we made early on. We needed to because of the amount of casualties that were being
absorbed."
Starting
last summer it was revealed
that
US State Department officials began meeting with
Taliban leaders in Qatar to discuss local and regional ceasefires and an end to the war
. It
was reported at the time that the request of the Taliban, the US-backed Afghan government was not
invited; however, there doesn't appear to have been any significant fruit out of the talks as
the Taliban now controls more territory than ever before in recent years
.
Such controversial and shaky negotiations come as in total the United States has spent well
over $840 billion fighting the Taliban insurgency
while also paying for relief and
reconstruction in a seventeen-year long war that
has become more expensive, in current
dollars, than the Marshall Plan
, which was the reconstruction effort to rebuild Europe
after World War II.
Even the
New
York Times
recently chronicled the
flat out deception of official Pentagon
statements vs. the reality
in terms of the massive spending that has gone into the
now-approaching two decade long "endless war" which began in the immediate aftermath of 9/11.
Via NYT report
As of September of this year the situation was as bleak as it's ever been after over a
decade-and-a-half of America's longest running war, per
the NYT's numbers
:
But since 2017, the Taliban have held more Afghan territory than at any time since
the American invasion
. In just one week last month, the insurgents killed 200 Afghan
police officers and soldiers, overrunning two major Afghan bases and the city of Ghazni.
The American military
says
the
Afghan government effectively "controls or influences" 56 percent of the country. But that
assessment relies on
statistical sleight of hand
. In many districts,
the
Afghan government controls only the district headquarters and military barracks, while the
Taliban control the rest
.
For this reason Gen. Miller spoke to NBC of
an optimal "political outcome" instead of
"winning"
--
the latter being a term rarely if ever used by Pentagon and officials
and congressional leaders over the past years.
Miller
told NBC
: "I naturally feel compelled to try to set the conditions for a political outcome. So,
pressure from that standpoint, yes. I don't want everyone to think this is forever."
And ending on a bleak note in terms of the "save face" and "cut and run" nature of the U.S.
future engagement in Afghanistan, Gen. Miller concluded,
"This is my last assignment as
a soldier in Afghanistan. I don't think they'll send me back here in another grade. When I leave
this time I'd like to see peace and some level of unity as we go forward."
Interestingly, the top US and NATO commander can now only speak in remotely hopeful terms of
"some level of unity"
--
perhaps just enough to make a swift exit at least.
Tags
War Conflict
Politics
There not going to come out as say, where here because we want
BOMB IRAN a few years down the track and maintain US Military
deployment for Israel's long-term interests. Israel are suspected
of committing 9/11 attacks, if you think about it long term policy
of expansion, getting ride of its surrounding threats it's all
makes sense. scraficing 3000 americans for Israel's longterm
policy's seems to be the pill they were willing to swallow.
US is trying to shift the blame on Russia, as the Talibans went
to Moscow for peace talks.
And with Pakistan aligning with Russia/China and Iran (
Pakistan being the main supply route for the US army in
Afghanistan), the US army is practically f*cked.
Good to know that Trump is not prepared to continue to protect
Deep State opium production at the taxpayers' expense. I hope he's
planning to withdraw US armed forces from all foreign soil.
Based on what? What did he stop? Which wars did he pull out out
of?
Military was a huge contributor to his votes. He's not
going to lift a finger. He would have started by pardoning
Snowden, or closing Gitmo - something Obama lied about when
making campaign promises. Where, here is your chance, Donald.
Do at least one single thing that shows you as anything other
that a MIC puppet. Just one thing! Anything!
Bombing Syria? Yep. Blind eye to Saudi crimes in Yemen? Yep.
Dancing to Zionist demands? Yep.
Trade wars? Oh sure, those things never lead to military
conflict either!
The only reason we were in Afghanistan in the first place was to
protect the heroin trade from acquisition by the Taliban. It's
time to pull out and let the British protect their poppy fields if
they want em that badly.
Notice that Rivera says the Marines just had a visit from
Prince Charles. If you want to know more about why we have
so much heroin in America now and who benefits.. read Dope
Inc.
+ 45
DR
Members
+ 45
28 posts
Posted
Wednesday
at 03:48 AM
On 10/18/2018 at 11:38 PM,
Jan van Eck
said:
The problem that Qatar faces is one of population and geography. Qatar is dominantly Sunni, but
not the really severe branch that envelops KSA. And it sits next door to Bahrain, which is
apparently about 70% Shia. Qatar also juts way out into the Gulf, and is thus a convenient
sea-land bridge from Iran. Were Iran to go for a land invasion of KSA, then crossing into Qatar
with landing craft, or seizing a Qatari airport, is logical. To prevent this, the USA has built
a major air base in Qatar, specifically to cut off this route. That big US base is a natural
(and juicy) target for Iran should a shooting war break out, and the USA join in against Iran
(and that would be logical).
Meanwhile Qatar has this bizarre and unfathomable dysfunctional relationship with MbS, and a
very difficult relationship with Bahrain, which has cut off diplomatic relations and sent the
Qatari diplomats packing, in 2017. Now Iran is under sanctions, which is stressing their cash
receipts. Iran pushes back, against their ideological and religious rivals and enemies the
Sunnis, by threatening to either invade or to sink tankers with gas coming out of Qatar. The
problem for gas LNG tankers is that the stuff is kept docile by bringing the temp down to minus
176 degrees. If you whack an LNG tanker with a torpedo and breach the container spheres, easy
enough to do, then that ship is likely to blow up; one little spark and all that gas will be a
salient lesson for all the others.
The deterrent effect of this will be that nobody will dare to tempt fate by sending in an LNG
tanker. So Iran can shut down LNG traffic without firing a shot, all they have to do is go
crazy and start threatening. Iran has these subs that can go sit on the bottom of the Gulf and
pop up to launch a torpedo, and everyone knows it. That is one heck of a deterrent.
Meanwhile you have Europe now heavily dependent on gas. Either the Europeans continue to
genuflect to the Russians, which some Europeans at least find unpalatable, or they have to find
an alternative source. That is likely going to be the USA. I predict that the aggressions of
the Russians, and the problems of Qatar in any real ability to fill long-term contracts, and the
threat of
force-majeure
hovering in the background, brings Europe to buy US LNG.
Qatar delivered 80 million tons last year, as number 1 LNG exporter by a long shot. Australia
trailed behind at 56 million, followed by Malaysia 26M, Nigeria 21M, Indonesia 16M, USA 13M, Algeria
12M.
Qatar was responsible for 17M tons exported to EU, followed by Algeria at 10.4M. US Liquefaction
capacity is estimated to match the whole Middle East by 2025 with Calcasieu, LA at 4 bcf/day,
Brownsville, TX at 3.6 bcf/day; Plaquemines at 3.4 bcf/day; and Nikiski Alaska at 2.6 Bcf/day for the
Asian market.
BP has its new 'Partnership Fleet', Shell is chartering heavily and owns a large fleet as well.
Gaslog has over 25 modern large capacity vessels on the water, and the order book for 2019-2020
deliveries is extensive, and they will be available for US to EU transport (Tellurian and Cheniere
have already chartered Gaslog ships for their exclusive use)
The catch here is that Russia is delivering 10.8 million tons per year via Yamal, and their
upcoming Arctic 2LNG that will be on the ice in the Arctic circle adding even more to that production.
They have a fleet delivering year round of Teekay and Dynagas ice breaker LNG carriers, and their
primary clients have been Belgium, France and Spain during their debut ice breaking season. They are
centrally located to maximize deliveries to Asia and Europe.
I doubt that Russia will cut off Europe after spending all that money to secure liquefaction and
transport capabilities in the Arctic, but who knows. They are geared up to deliver to Asia, but could
only do so in the Summer months, or during the Winter months with the assistance of a Nuclear
Icebreaker to lead the ships.
Honestly, I hope that Germany completes the Hamburg LNG Terminal quickly and begins buying US LNG
so that we can diversify from our usual Mexico, S Korea, Japan, Spain, Portugal, Chile, Egypt, Jordan
clientele. Germany consumed over 90 million CBM of natural gas last year (controversial because they
stopped 'officially' disclosing the numbers after 2016, these are OECD estimates from the IEA), and
are getting close to Japan's 120 million CBM.
Qatar/Iran tensions could be the perfect storm for a US to EU energy boom.
Absent independents, Republicans are running away with it. And independents are most assuredly witnessing the insanity that has gripped the
Democratic Party, and will vote for Republicans at least 9:1.
Well, hang in there, sport. Yes, the US does seem to be going down the tubes, in that it's
lost all respect in the world; we still fear it, but don't respect it. Sic transit
gloria , or something like that...
"... Upon investigation, the Judiciary Committee investigators found that Munro-Leighton was a left wing activist who is decades older than Judge Kavanaugh , who lives in Kentucky. When Committee investigators contacted her, she backpedaled on her claim of being the original Jane Doe - and said she emailed the committee "as a way to grab attention." ..."
"... Grassley has also asked the DOJ to investigate Kavanaugh accuser Julie Swetnick, who claimed through her attorney, Michael Avenatti, that Kavanaguh orchestrated a date-rape gang-bang scheme in the early 1980s. ..."
"... She further confessed to Committee investigators that (1) she "just wanted to get attention"; (2) "it was a tactic"; and (3) "that was just a ploy." She told Committee investigators that she had called Congress multiple times during the Kavanaugh hearing process – including prior to the time Dr. Ford's allegations surfaced – to oppose his nomination. Regarding the false sexual-assault allegation she made via her email to the Committee, she said: "I was angry, and I sent it out." When asked by Committee investigators whether she had ever met Judge Kavanaugh, she said: "Oh Lord, no." ..."
A Kentucky woman who accused Supreme Court Justice Brett Kavanaugh of rape has been referred
to the Department of Justice after she admitted that she lied .
The woman, Judy Munro-Leighton, took credit for contacting the office of Sen. Kamala Harris
(D-CA) as "Jane Doe" from Oceanside, California. Jane Doe claimed - without naming a time or
place - that Kavanaugh and a friend raped her "several times each" in the backseat of a car.
Harris referred the letter to the committee for investigation.
"They forced me to go into the backseat and took 2 turns raping me several times each. They
dropped me off 3 two blocks from my home," wrote Munro-Leighton, claiming that the pair told
her "No one will believe if you tell. Be a good girl."
Kavanaugh was questioned on September 26 about the allegation, to which he unequivocally
stated: "[T]he whole thing is ridiculous. Nothing ever -- anything like that, nothing... [T]he
whole thing is just a crock, farce, wrong, didn't happen, not anything close ."
The next week, Munro-Leighton sent an email to the Judiciary committee claiming to be Jane
Doe from Oceanside, California - reiterating her claims of a "vicious assault" which she said
she knew "will get no media attention."
Upon investigation, the Judiciary Committee investigators found that Munro-Leighton was a
left wing activist who is decades older than Judge Kavanaugh , who lives in Kentucky. When
Committee investigators contacted her, she backpedaled on her claim of being the original Jane
Doe - and said she emailed the committee "as a way to grab attention."
"I am not Jane Doe . . . but I did read Jane Doe's letter. I read the transcript of the call
to your Committee. . . . I saw it online. It was news." claimed Munro-Leighton.
Grassley has also asked the DOJ to investigate Kavanaugh accuser Julie Swetnick, who claimed
through her attorney, Michael Avenatti, that Kavanaguh orchestrated a date-rape gang-bang
scheme in the early 1980s.
President Trump chimed in Saturday morning, Tweeting: "A vicious accuser of Justice
Kavanaugh has just admitted that she was lying, her story was totally made up, or FAKE! Can you
imagine if he didn't become a Justice of the Supreme Court because of her disgusting False
Statements. What about the others? Where are the Dems on this?"
... ... ...
In a Friday letter to Attorney General Jeff Sessions and FBI Director Christopher Wray,
Committee Chairman Chuck Grassley wrote:
on November 1, 2018, Committee investigators connected with Ms. Munro-Leighton by phone
and spoke with her about the sexual-assault allegations against Judge Kavanaugh she had made
to the Committee. Under questioning by Committee investigators, Ms. Munro-Leighton admitted,
contrary to her prior claims, that she had not been sexually assaulted by Judge Kavanaugh and
was not the author of the original "Jane Doe" letter .
When directly asked by Committee
investigators if she was, as she had claimed, the "Jane Doe" from Oceanside California who
had sent the letter to Senator Harris, she admitted: "No, no, no. I did that as a way to grab
attention. I am not Jane Doe . . . but I did read Jane Doe's letter. I read the transcript of
the call to your Committee. . . . I saw it online. It was news."
She further confessed to Committee investigators that (1) she "just wanted to get
attention"; (2) "it was a tactic"; and (3) "that was just a ploy." She told Committee
investigators that she had called Congress multiple times during the Kavanaugh hearing
process – including prior to the time Dr. Ford's allegations surfaced – to oppose
his nomination. Regarding the false sexual-assault allegation she made via her email to the
Committee, she said: "I was angry, and I sent it out." When asked by Committee investigators
whether she had ever met Judge Kavanaugh, she said: "Oh Lord, no."
"An intelligent explanation of the mechanisms that produced the crisis and the response to
it...One of the great strengths of Tooze's book is to demonstrate the deeply intertwined nature
of the European and American financial systems." -- The New York Times Book
Review
"Whereas since the 1970s the incessant mantra of the spokespeople of the financial industry
had been free markets and light touch regulation, what they were now demanding was the
mobilization of all of the resources of the state to save society's financial infrastructure
from a threat of systemic implosion, a threat they likened to a military emergency." (Loc.
3172-3174)
Adam Tooze takes the well know Financial Crisis of 2007-08 through its full history of
international ramifications and brings it up to the present with the question of whether the
large organizations, structures and processes on the one hand; decision, debate, argument and
action on the other that managed to fall into place in that crisis period in this and many
other countries will develop if needed again. "The political in "political economy" demands
to be taken seriously." (Loc. 11694). That he does.
Tooze is an Economic Historian and Crashed: How a Decade of Financial Crises Changed the
World is a wonderfully rich enquiry into causes and effects of the Financial Crisis and how
the failing of poorly managed greed motivated practices of a few financial institutions, and
their subprime mortgagees, tumbled economies in the developed and developing world, causing
events that matched the Great Depression's dislocation and could have matched its duration,
springing from world wide money markets "interlocking matrix" of corporate balance sheets --
bank to bank."
A warning he is not kind to existing political beings, the Republican Party in particular
" to judge by the record of the last ten years, it is incapable of legislating or cooperating
effectively in government." (Loc.11704)
His criticism is, in fairness, based on technical management grounds, and he does find fault
as well with the inner core of the Obama advisors and their primary concerns for the
financial sectors well being, rather than nationwide happenings where homes and incomes
disappeared.
This reviewer's favorite (not mentioned by Tooze) is the early 2009 comment of Larry
Sumners when Christina D. Romer, the chairwoman of President Obama's Council of Economic
Advisers and leading authority on the Great Depression saw a need for $1.8 trillion stimulus
package, "What have you been smoking?"
Sumners, Geithner, and Orszag, who favored transferring $700 billion to the banks to offset
possible bank failures and such -- became policy. Tooze mentions that by 2012 Sumners was
concerned by the slowness of the U.S. economy's recovery taking, as it did, 8 years to reach
2008 levels of employment.
Can an Economic History be an exciting read? Tooze gives us over 700 pages of just that,
but much will be familiar as reported news and may be skimmed, and some of the Fed's expanded
international roles very dense in content. His strength is the knowledge of what could have
happened, had solutions not been found, and how agreements were reached out of public
sight.
" the world economy is not run by medium-sized entrepreneurs but by a few thousand massive
corporations, with interlocking shareholdings controlled by a tiny group of asset managers.
(Loc.418-419).
Add wily politicians and hard driven bankers EU Ukraine and China you have an adventure.
Corporate control is not new -- rich descriptions of its inner connections are.
Adam Tooze does this well a reference work for years to come.
5 stars
Columbia history professor Adam Tooze, an authority on the inter-war years, has offered up an
authoritative history of the financial crises and their aftermath that have beset the world
since 2008. He integrates economics, the plumbing of the interbank financial system and the
politics of the major players in how and why the financial crisis of 2008 developed and the
course of the very uneven recovery that followed. I must note that Tooze has some very clear
biases in that he views the history through a social democratic prism and is very critical of
the congressional Republican caucus and the go slow policies of the European Central Bank
under Trichet. To him the banks got bailed out while millions of people suffered as
collateral damage from a crisis that was largely made by the financial system. His view may
very well be correct, but many readers might differ. Simply put, to save the economy policy
makers had to stop the bleeding.
He starts off with the hot topic of 2005; the need for fiscal consolidation in the United
States. Aside from a few dissidents, most economists saw the need for the U.S. to close its
fiscal deficit and did not see the structural crisis that was developing underneath them.
Although he does mention Hyman Minsky a few times in the book, he leaves out Minsky's most
important insight that "stability leads to instability" as market participants are lulled
into a false sense of security. It therefore was against the backdrop of the "great
moderation" that the crisis began. And it was the seemingly calm environment that lulled all
too many regulators to sleep.
The underbelly of the financial system was and still is in many respects is the wholesale
funding system where too many banks are largely funded in repo and commercial paper markets.
This mismatch was exacerbated by the use of asset-backed commercial paper to fund long term
mortgage securities. It was problems in that market that triggered the crisis in August
2007.
The crisis explodes when Lehman Brothers files for bankruptcy in September 2008. In
Tooze's view the decision to let Lehman fail was political, not economic. After that the
gates of hell are opened causing the Bush Administration and the Federal Reserve to ask for
$750 billion dollar TARP bailout of the major banks. It was in the Congressional fight over
this appropriation where Tooze believes the split in the Republican Party between the
business conservative and social populist wing hardens. We are living with that through this
day. The TARP program passes with Democratic votes. Tooze also notes that there was great
continuity between the Bush and early Obama policies with respect to the banks and auto
bailout. Recall that in late 2008 and early 2009 nationalization of the banks was on the
table. Tooze also correctly notes that the major beneficiary of the TARP program was
Citicorp, the most exposed U.S. bank to the wholesale funding system.
Concurrent with TARP the Bernanke Fed embarks on its first quantitative easing program
where it buys up not only treasuries, but mortgage backed securities as well. It was with the
latter Europe's banks were bailed out. Half of the first QE went to bail out Europe's
troubled banks. When combined the dollar swap lines with QE, Europe's central banks
essentially became branches of the Fed. Now here is a problem. Where in the Federal Reserve
Act does it say that the Fed is the central bank to the world? To some it maybe a
stretch.
Tooze applauds Obama's stimulus policy but rightly says it was too small. There should
have been more infrastructure in it. To my view there could have been more infrastructure if
only Obama was willing to deal with the Republicans by offering to waive environmental
reviews and prevailing wage rules. He never tried for fear of offending his labor and
environmental constituencies. Tooze also gives great credit to China with it all out monetary
and fiscal policies. That triggered a revival in the energy and natural resource economies of
Australia and Brazil thereby helping global recovery.
He then turns to the slow responses in Europe and the political wrangling over the tragedy
that was to befall Greece. It came down to the power of Angela Merkel and her unwillingness
to have the frugal German taxpayer subsidize the profligate Greeks. As they say "all politics
is local". The logjam in Europe doesn't really break until Mario Draghi makes an off-the-cuff
remark at a London speech in July 2012 by saying the ECB will do "whatever it takes" to
engender European recovery.
As a byproduct of bailing out the banks and failing to directly help the average citizen a
rash of populism, mostly of the rightwing variety, breaks out all over leading to Brexit,
Orban in Hungary, a stronger rightwing in Germany and, of course, Donald Trump. But to me it
wasn't only banking policy that created this. The huge surge in immigration into Europe has a
lot more to do with it. Tooze under-rates this factor. He also under-rates the risk of having
a monetary policy that is too easy and too long. The same type of Minsky risk discussed
earlier is now present in the global economy: witness Turkey, for example. Thus it is too
early to tell whether or not the all-out monetary policy of the past decade will be judged a
success from the vantage point of 2030.
Adam Tooze has written an important book and I view it as must read for a serious lay
reader to get a better understanding of the economic and political policies of the past
decade.
"... The Democratic Party split into a four-headed monster comprised of Wall Street patrons seeking favors, war hawks and their corporate allies looking for new global rumbles, the permanent bureaucracy looking to always expand itself, and the various ethnic and sexual minorities whose needs and grievances are serviced by that bureaucracy. It's the last group that has become the party's most public face while the party's other activities – many of them sinister -- remain at least partially concealed. ..."
"... the Republicans are being forced to engage on some real issues, such as the need for a coherent and effective immigration policy and the need to redefine formal trade relations. (Other issues like the insane system of medical racketeering and the deadly racket of the college loan industry just skate along on thin ice. And then, of course, there's the national debt and all its grotesque outgrowths.) ..."
"... Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting with the position that "diversity and inclusion" means shutting down free speech, an unforgivable transgression against common sense and common decency. It's a party that lies even more systematically than Mr. Trump, and does so knowingly (as when Google execs say they "Do no Evil"). Its dirty secret is that it relishes coercion, it likes pushing people around, telling them what to think and how to act. Its idea of "social justice" is a campus kangaroo court, where due process of law is suspended. And it is deeply corrupt, with good old-fashioned grift, new-fashioned gross political misconduct in federal law enforcement, and utter intellectual depravity in higher education. ..."
"... I hope that the party is shoved into an existential crisis and is forced to confront its astounding dishonesty. I hope that the process prompts them to purge their leadership across the board. ..."
Back in the last century, when this was a different country, the Democrats were the "smart"
party and the Republicans were the "stupid" party.
How did that work?
Well, back then the Democrats represented a broad middle class, with a base of factory
workers, many of them unionized, and the party had to be smart, especially in the courts, to
overcome the natural advantages of the owner class.
In contrast, the Republicans looked like a claque of country club drunks who staggered
home at night to sleep on their moneybags. Bad optics, as we say nowadays.
The Democrats also occupied the moral high ground as the champion of the little guy. If not
for the Dems, factory workers would be laboring twelve hours a day and children would still be
maimed in the machinery. Once the relationship between business and labor was settled in the
1950s, the party moved on to a new crusade on even loftier moral high ground: civil rights,
aiming to correct arrant and long-lived injustices against downtrodden black Americans. That
was a natural move, considering America's self-proclaimed post-war status as the world's Beacon
of Liberty. It had to be done and a political consensus that included Republicans got it done.
Consensus was still possible.
The Dems built their fortress on that high ground and fifty years later they find themselves
prisoners in it. The factory jobs all vamoosed overseas. The middle class has been pounded into
penury and addiction.
The Democratic Party split into a four-headed monster comprised of Wall Street patrons
seeking favors, war hawks and their corporate allies looking for new global rumbles, the
permanent bureaucracy looking to always expand itself, and the various ethnic and sexual
minorities whose needs and grievances are serviced by that bureaucracy. It's the last group
that has become the party's most public face while the party's other activities – many of
them sinister -- remain at least partially concealed.
The Republican Party has, at least, sobered up some after getting blindsided by Trump and
Trumpism. Like a drunk out of rehab, it's attempting to get a life. Two years in, the party
marvels at Mr. Trump's audacity, despite his obvious lack of savoir faire. And despite a
longstanding lack of political will to face the country's problems,the Republicans are being
forced to engage on some real issues, such as the need for a coherent and effective immigration
policy and the need to redefine formal trade relations. (Other issues like the insane system of
medical racketeering and the deadly racket of the college loan industry just skate along on
thin ice. And then, of course, there's the national debt and all its grotesque outgrowths.)
Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting
with the position that "diversity and inclusion" means shutting down free speech, an
unforgivable transgression against common sense and common decency. It's a party that lies even
more systematically than Mr. Trump, and does so knowingly (as when Google execs say they "Do no
Evil"). Its dirty secret is that it relishes coercion, it likes pushing people around, telling
them what to think and how to act. Its idea of "social justice" is a campus kangaroo court,
where due process of law is suspended. And it is deeply corrupt, with good old-fashioned grift,
new-fashioned gross political misconduct in federal law enforcement, and utter intellectual
depravity in higher education.
I hope that Democrats lose as many congressional and senate seats as possible.I hope that
the party is shoved into an existential crisis and is forced to confront its astounding
dishonesty. I hope that the process prompts them to purge their leadership across the board. If
there is anything to salvage in this organization, I hope it discovers aims and principles that
are unrecognizable from its current agenda of perpetual hysteria. But if the party actually
blows up and disappears, as the Whigs did a hundred and fifty years ago, I will be content. Out
of the terrible turbulence, maybe something better will be born.
Or, there's the possibility that the dregs of a defeated Democratic Party will just go
batshit crazy and use the last of its mojo to incite actual sedition. Of course, there's also a
distinct possibility that the Dems will take over congress, in which case they'll ramp up an
even more horrific three-ring-circus of political hysteria and persecution that will make the
Spanish Inquisition look like a backyard barbeque. That will happen as the US enters the most
punishing financial train wreck in our history, an interesting recipe for epic political
upheaval.
Fed moves to hike interest rates are leading to a liquidity evaporation -- enough so that
Morgan Stanley is defying the rest of Wall Street to call a true bear market, warning that the
sell-off we're seeing now won't be just a blip in the bull run.
Each year I choose a book to be the Globalization Book of the Year, i.e., the "Globie". The prize is strictly honorific and does
not come with a check. But I do like to single out books that are particularly insightful about some aspect of globalization. Previous
winners are listed at the bottom.
This year's choice is
Crashed: How a Decade of Financial Crises Changed the Worldby
Adam Tooze of Yale University . Tooze, an historian, traces the events leading up to the crisis and the subsequent ten years.
He points out in the introduction that this account is different from one he may have written several years ago. At that time Barak
Obama had won re-election in 2012 on the basis of a slow but steady recovery in the U.S. Europe was further behind, but the emerging
markets were growing rapidly, due to the demand for their commodities from a steadily-growing China as well as capital inflows searching
for higher returns than those available in the advanced economies.
But the economic recovery has brought new challenges, which have swept aside established politicians and parties. Obama was succeeded
by Donald Trump, who promised to restore America to some form of past greatness. His policy agenda includes trade disputes with a
broad range of countries, and he is particularly eager to impose trade tariffs on China. The current meltdown in stock prices follows
a rise in interest rates normal at this stage of the business cycle but also is based on fears of the consequences of the trade measures.
Europe has its own discontents. In the United Kingdom, voters have approved leaving the European Union. The European Commission
has expressed its disapproval of the Italian government's fiscal plans. Several east European governments have voiced opposition
to the governance norms of the West European nations. Angela Merkel's decision to step down as head of her party leaves Europe without
its most respected leader.
All these events are outcomes of the crisis, which Tooze emphasizes was a trans-Atlantic event. European banks had purchased held
large amounts of U.S. mortgage-backed securities that they financed with borrowed dollars. When liquidity in the markets disappeared,
the European banks faced the challenge of financing their obligations. Tooze explains how the Federal Reserve supported the European
banks using swap lines with the European Central Bank and other central banks, as well as including the domestic subsidiaries of
the foreign banks in their liquidity support operations in the U.S. As a result, Tooze claims:
"What happened in the fall of 2008 was not the relativization of the dollar, but the reverse, a dramatic reassertion of the pivotal
role of America's central bank. Far from withering away, the Fed's response gave an entirely new dimension to the global dollar"
(Tooze, p. 219)
The focused policies of U.S. policymakers stood in sharp contrast to those of their European counterparts. Ireland and Spain had
to deal with their own banking crises following the collapse of their housing bubbles, and Portugal suffered from anemic growth.
But Greece's sovereign debt posed the largest challenge, and exposed the fault line in the Eurozone between those who believed that
such crises required a national response and those who looked for a broader European resolution. As a result, Greece lurched from
one lending program to another. The IMF was treated as a junior partner by the European governments that sought to evade facing the
consequences of Greek insolvency, and the Fund's reputation suffered new blows due to its involvement with the various rescue operations.The
ECB only demonstrated a firm commitment to its stabilizing role in July 2012, when its President Mario Draghi announced that "Within
our mandate, the ECB is ready to do whatever it takes to preserve the euro."
China followed another route. The government there engaged in a surge of stimulus spending combined with expansionary monetary
policies. The result was continued growth that allowed the Chinese government to demonstrate its leadership capabilities at a time
when the U.S. was abandoning its obligations. But the ensuing credit boom was accompanied by a rise in private (mainly corporate)
lending that has left China with a total debt to GDP ratio of over 250%, a level usually followed by some form of financial collapse.
Chinese officials are well aware of the domestic challenge they face at the same time as their dispute with the U.S. intensifies.
Tooze demonstrates that the crisis has let loose a range of responses that continue to play out. He ends the book by pointing
to a similarity of recent events and those of 1914. He raises several questions: "How does a great moderation end? How do huge risks
build up that are little understood and barely controllable? How do great tectonic shifts in the global world order unload in sudden
earthquakes?" Ten years after a truly global crisis, we are still seeking answers to these questions.
"... Her announcement on Monday that she will vacate the leadership of Germany's ruling center-right Christian Democrats marks the culmination of what has been a slow denouement of Merkelism. ..."
"... Long the emblematic figure of "Europe," hailed by the neoliberal Economist as the continent's moral voice, long the dominant decider of its collective foreign and economic policies, Merkel will leave office with border fences being erected and disdain for European political institutions at their highest pitch ever. In this sense, she failed as dramatically as her most famous predecessors, Konrad Adenauer, Willy Brandt, Helmut Schmidt, and Helmut Kohl, succeeded in their efforts to make Germany both important and normal in the postwar world. ..."
"... "We can do this!" she famously declared. Europe, she said, must "show flexibility" over refugees. Then, a few days later, she said there was "no limit" to the number of migrants Germany could accept. At first, the burgeoning flood of mostly young male asylum claimants produced an orgy of self-congratulatory good feeling, celebrity posturing of welcome, Merkel greeting migrants at the train station, Merkel taking selfies with migrants, Merkel touted in The Economist as "Merkel the Bold." ..."
"... The euphoria, of course, did not last. Several of the Merkel migrants carried out terror attacks in France that fall. (France's socialist prime minister Manuel Valls remarked pointedly after meeting with Merkel, "It was not us who said, 'Come!'") Reports of sexual assaults and murders by migrants proved impossible to suppress, though Merkel did ask Mark Zuckerberg to squelch European criticism of her migration policies on Facebook. Intelligent as she undoubtedly is (she was a research chemist before entering politics), she seemed to lack any intellectual foundation to comprehend why the integration of hundreds of thousands of people from the Muslim world might prove difficult. ..."
"... Merkel reportedly telephoned Benjamin Netanyahu to ask how Israel had been so successful in integrating so many immigrants during its brief history. There is no record of what Netanyahu thought of the wisdom of the woman posing this question. ..."
"... In any case, within a year, the Merkel initiative was acknowledged as a failure by most everyone except the chancellor herself. ..."
Drop of Light/Shutterstock Whatever her accomplishments
as pathbreaking female politician and respected leader of Europe's dominant economic power, Angela Merkel will go down in history
for her outburst of naivete over the issue of migration into Europe during the summer of 2015.
Her announcement on Monday that she will vacate the leadership of Germany's ruling center-right Christian Democrats marks
the culmination of what has been a slow denouement of Merkelism.
She had seen the vote share of her long dominant party shrink in one regional election after another. The rebuke given to her
last weekend in Hesse, containing the Frankfurt region with its booming economy, where she had campaigned extensively, was the final
straw. Her CDU's vote had declined 10 points since the previous election, their voters moving toward the further right (Alternative
fur Deutschland or AfD). Meanwhile, the further left Greens have made dramatic gains at the expense of Merkel's Social Democrat coalition
partners.
Long the emblematic figure of "Europe," hailed by the neoliberal Economist as the continent's moral voice, long the
dominant decider of its collective foreign and economic policies, Merkel will leave office with border fences being erected and disdain
for European political institutions at their highest pitch ever. In this sense, she failed as dramatically as her most famous predecessors,
Konrad Adenauer, Willy Brandt, Helmut Schmidt, and Helmut Kohl, succeeded in their efforts to make Germany both important and normal
in the postwar world.
One can acknowledge that while Merkel never admitted error for her multiculti summer fling (beyond wishing she had communicated
her goals better), she did manage to adjust her policies. By 2016, Germany under her watch was paying a healthy ransom to Turkey
to keep would-be migrants in camps and preventing them from sailing to Greece. Merkel's departure will make the battle to succeed
her one of the most watched political contests in Europe. She has turned migration into a central and quite divisive issue within
the CDU and Germany, and the party may decide that it has no choice but to accommodate, in one way or another, the voters who have
left them for the AfD.
Related to the issue of who should reside in Europe (objectively the current answer remains anyone who can get there) is the question
of how are such questions decided. In July 2015, five years after asserting in a speech that multiculturalism has
"utterly failed" in Germany (without addressing what policies should be pursued in an increasingly ethnically diverse society)
and several weeks after reducing a young Arab girl to tears at a televised forum by telling her that those whose asylum claims were
rejected would "have to go back" and that "politics is hard," Merkel changed course.
For those interested in psychological studies of leadership and decision making, it would be hard to imagine a richer subject.
Merkel's government first announced it would no longer enforce the rule (the Dublin agreement) that required asylum claimants to
be processed in the first country they passed through. Then she doubled down. The migrants fleeing the Syrian civil war, along with
those who pretended to be Syrian, and then basically just anyone, could come to Germany.
"We can do this!" she famously declared. Europe, she said, must "show flexibility" over refugees. Then, a few days later,
she said there was "no limit" to the number of migrants Germany could accept. At first, the burgeoning flood of mostly young male
asylum claimants produced an orgy of self-congratulatory good feeling, celebrity posturing of welcome, Merkel greeting migrants at
the train station, Merkel taking selfies with migrants, Merkel touted in The Economist as
"Merkel the Bold."
Her words traveled far beyond those fleeing Syria. Within 48 hours of the "no limit" remark, TheNew York Times
reported a sudden stirring of migrants from Nigeria. Naturally Merkel boasted in a quiet way about how her decision had revealed
that Germany had put its Nazi past behind it. "The world sees Germany as a land of hope and chances," she said. "That wasn't always
the case." In making this decision personally, Merkel was making it for all of Europe. It was one of the ironies of a European arrangement
whose institutions were developed in part to transcend nationalism and constrain future German power that 70 years after the end
of the war, the privately arrived-at decision of a German chancellor could instantly transform societies all over Europe.
The euphoria, of course, did not last. Several of the Merkel migrants carried out terror attacks in France that fall. (France's
socialist prime minister Manuel Valls remarked pointedly after meeting with Merkel, "It was not us who said, 'Come!'") Reports of
sexual assaults and murders by migrants proved impossible to suppress, though Merkel did ask Mark Zuckerberg to squelch European
criticism of her migration policies on Facebook. Intelligent as she undoubtedly is (she was a research chemist before entering politics),
she seemed to lack any intellectual foundation to comprehend why the integration of hundreds of thousands of people from the Muslim
world might prove difficult.
Merkel reportedly telephoned Benjamin Netanyahu to ask how Israel had been so successful in integrating so many immigrants
during its brief history. There is no record of what Netanyahu thought of the wisdom of the woman posing this question.
In any case, within a year, the Merkel initiative was acknowledged as a failure by most everyone except the chancellor herself.
Her public approval rating plunged from 75 percent in April 2015 to 47 percent the following summer. The first electoral rebuke came
in September 2016, when the brand new anti-immigration party, the Alternative fur Deutschland, beat Merkel's CDU in Pomerania.
In every election since, Merkel's party has lost further ground. Challenges to her authority from within her own party have become
more pointed and powerful. But the mass migration accelerated by her decision continues, albeit at a slightly lower pace.
Angela Merkel altered not only Germany but the entire European continent, in irreversible ways, for decades to come.
Scott McConnell is a founding editor ofand the author of Ex-Neocon: Dispatches From the Post-9/11 Ideological Wars
.
"... On the other hand, President Trump is pushing Merkel on policy on Russia and Ukraine that furthers the image that she is simply a stooge of U.S. geopolitical ambitions. Don't ever forget that Germany is, for all intents and purposes, an occupied country. So, what the U.S. military establishment wants, Merkel must provide. ..."
"... But Merkel, further weakened by another disastrous state election, isn't strong enough to fend off her emboldened Italian and British opposition (and I'm not talking about The Gypsum Lady, Theresa May here). ..."
"... Merkel is a lame-duck now. Merkelism is over. Absentee governing from the center standing for nothing but the international concerns has been thoroughly rebuked by the European electorate from Spain to the shores of the Black Sea. ..."
"... Germany will stand for something other than globalism by the time this is all over. There will be a renaissance of culture and tradition there that is similar to the one occurring at a staggering pace in Russia. ..."
German Chancellor Angela Merkel has stepped down as the leader of the Christian Democratic
Union, the party she has led for nearly two decades. Yesterday's election in Hesse, normally a
CDU/SPD stronghold was abysmal for them.
She had to do something to quell the revolt brewing against her.
Merkel knew going in what the polls were showing. Unlike American and British polls, it
seems the German ones are mostly accurate with pre-election polls coming close to matching the
final results.
So, knowing what was coming for her and in the spirit of trying to maintain power for as
long as possible Merkel has been moving away from her staunch positions on unlimited
immigration and being in lock-step with the U.S. on Russia.
She's having to walk a tightrope on these two issues as the turmoil in U.S. political
circles is pulling her in, effectively, opposite directions.
The globalist Davos Crowd she works for wants the destruction of European culture and
individual national sovereignty ground into a paste and power consolidated under the rubric of
the European Union.
They also want Russia brought to heel.
On the other hand, President Trump is pushing Merkel on policy on Russia and Ukraine that
furthers the image that she is simply a stooge of U.S. geopolitical ambitions. Don't ever
forget that Germany is, for all intents and purposes, an occupied country. So, what the U.S.
military establishment wants, Merkel must provide.
So, if she rejects that role and the chaos U.S. policy engenders, particularly Syria, she's
undermining the flow of migrants into Europe.
This is why it was so significant that she and French President Emmanuel Macron joined this
weekend's summit with Russian President Vladimir Putin and Turkish President Recep Tayyip
Erdogan in Istanbul.
It ended with an agreement on Syria's future that lies in direct conflict with the U.S.'s
goals of the past seven years.
It was an admission that Assad has prevailed in Syria and the plan to atomize it into yet
another failed state has itself failed. Merkel has traded 'Assad must go' for 'no more
refugees.'
To President Trump's credit he then piggy-backed on that statement announcing that the U.S.
would be pulling out of Syria very soon now. And that tells me that he is still coordinating in
some way with Putin and other world leaders on the direction of his foreign policy in spite of
his opposition.
But the key point from the Istanbul statement was that Syria's rebuilding be prioritized to
reverse the flow of migrants so Syrians can go home. While
Gilbert Doctorow is unconvinced by France's position here , I think Merkel has to be
focused on assisting Putin in achieving his goal of returning Syria to Syrians.
Because, this is both a political necessity for Merkel as well as her trying to burnish her
crumbling political throne to maintain power.
The question is will Germans believe and/or forgive her enough for her to stay in power
through her now stated 'retirement' from politics in 2021?
I don't think so and it's obvious Davos Crowd boy-toy Macron is working overtime to salvage
what he can for them as Merkel continues to face up to the political realities across Europe,
which is that populism is a natural reaction to these insane policies.
Merkel's job of consolidating power under the EU is unfinished. They don't have financial
integration. The Grand Army of the EU is still not a popular idea. The euro-zone is a disaster
waiting to happen and its internal inconsistencies are adding fuel to an already pretty hot
political fire.
On this front, EU integration, she and Macron are on the same page. Because 'domestically'
from an EU perspective, Brexit still has to be dealt with and the showdown with the Italians is
only just beginning.
But Merkel, further weakened by another disastrous state election, isn't strong enough to
fend off her emboldened Italian and British opposition (and I'm not talking about The Gypsum
Lady, Theresa May here).
And Macron should stop looking in the mirror long enough to see he's standing on a quicksand
made of blasting powder.
This points to the next major election for Europe, that of the European Parliament in May
where all of Merkel's opposition are focused on wresting control of that body and removing
Jean-Claude Juncker or his hand-picked replacement (Merkel herself?) from power.
The obvious transition for Merkel is from German Chancellor to European Commission
President. She steps down as Chancellor in May after the EPP wins a majority then to take
Juncker's job. I'm sure that's been the plan all along. This way she can continue the work she started
without having to face the political backlash at home.
But, again, how close is Germany to snap elections if there is another migrant attack and
Chemnitz-like demonstrations. You can only go to the 'Nazi' well so many times, even in
Germany.
There comes a point where people will have simply had enough and their anger isn't born of
being intolerant but angry at having been betrayed by political leadership which doesn't speak
for them and imported crime, chaos and violence to their homes.
And the puppet German media will not be able to contain the story. The EU's speech rules
will not contain people who want to speak. The clamp down on hate speech, pioneered by Merkel
herself is a reaction to the growing tide against her.
And guess what? She can't stop it.
The problem is that Commies like Merkel and Soros don't believe in anything. They are
vampires and nihilists as I said over the
weekend suffused with a toxic view of humanity.
Oh sure, they give lip service to being inclusive and nice about it while they have
control over the levers of power, the State apparatus. But, the minute they lose control of
those levers, the sun goes down, the fangs come out and the bloodletting begins.
These people are vampires, sucking the life out of a society for their own ends. They are
evil in a way that proves John Barth's observation that "man can do no wrong." For they never
see themselves as the villain.
No. They see themselves as the savior of a fallen people. Nihilists to their very core
they only believe in power. And, since power is their religion, all activities are justified
in pursuit of their goals.
Their messianic view of themselves is indistinguishable to the Salafist head-chopping
animals people like Hillary empowered to sow chaos and death across the Middle East and North
Africa over the past decade.
Add to this Merkel herself who took Hillary's empowerment of these animals and gave them a
home across Europe. At least now Merkel has the good sense to see that this has cost her nearly
everything.
Even if she has little to no shame.
Hillary seems to think she can run for president again and win with the same schtick she
failed with twice before. Frankly, I welcome it like I welcome the sun in the morning, safe in
the knowledge that all is right with the world and she will go down in humiliating defeat yet
again.
Merkel is a lame-duck now. Merkelism is over. Absentee governing from the center standing
for nothing but the international concerns has been thoroughly rebuked by the European
electorate from Spain to the shores of the Black Sea.
Germany will stand for something other than globalism by the time this is all over. There
will be a renaissance of culture and tradition there that is similar to the one occurring
at a staggering pace in Russia.
Social pressure to conform is natural in any organization. And universities are not exception. Various people positioned
differently on confiormism-independent_thinking spectrum, so we should not generalize that social pressure makes any
students a conformist, who is afraid to voice his/her opinion. Some small percentage of student can withstand significant social
pressure. But the fact that around 50% can't withstand significant social pressure sounds right.
As more and more college professors express their social and
political views in classrooms, students across the country are feeling increasingly afraid to
disagree according to a survey of 800 full-time undergraduate college students, reported by the
Wall Street Journal ' s James Freeman.
When students were asked if they've had "any professors or course instructors that have
used class time to express their own social or political beliefs that are completely
unrelated to the subject of the course," 52% of respondents said that this occurs "often,"
while 47% responded, "not often."
A majority -- 53% -- also reported that they often "felt intimidated" in sharing their
ideas, opinions or beliefs in class because they were different from those of the professors.
-
WSJ
What's more, 54% of students say they are intimidated expressing themselves when their views
conflict with those of their classmates.
The survey, conducted by McLaughlin & Associates on behalf of Yale's William F. Buckley,
Jr. Program (which counts Freeman among its directors), was undertaken between October 8th and
18th, and included students at both public and private four-year universities across the
country.
This is a problem, suggests Freeman - as unbiased teachers who formerly filled universities
have been replaced by activists who "unfortunately appear to be just as political and
overbearing as one would expect," and that " perhaps the actual parents who write checks can
someday find some way to encourage more responsible behavior. "
As for the students, there's at least a mixed message in the latest survey results. On the
downside, the fact that so many students are afraid of disagreeing with their peers does not
suggest a healthy intellectual atmosphere even outside the classroom. There's more
disappointing news in the answers to other survey questions. For example, 59% of respondents
agreed with this statement:
My college or university should forbid people from speaking on campus who have a history of
engaging in hate speech.
This column does not favor hatred, nor the subjective definition of "hate speech" by college
administrators seeking to regulate it. In perhaps the most disturbing finding in the poll
results, 33% of U.S. college students participating in the survey agreed with this
statement:
If someone is using hate speech or making racially charged comments, physical violence can be
justified to prevent this person from espousing their hateful views.
An optimist desperately searching for a silver lining would perhaps note that 60% of
respondents did not agree that physical violence is justified to silence people speaking what
someone has defined as "hate speech" or "racially charged" comments. But the fact that a third
of college students at least theoretically endorse violence as a response to offensive speech
underlines the threat to free expression on American campuses.
Perhaps more encouraging are the responses to this question:
Generally speaking, do you think the First Amendment, which deals with freedom of speech, is
an outdated amendment that can no longer be applied in today's society and should be changed
or an important amendment that still needs to be followed and respected in today's society?
A full 79% of respondents opted for respecting the First Amendment, while 17% backed a
rewrite.
On a more specific question, free speech isn't winning by the same landslide. When asked if
they would favor or oppose their schools having speech codes to regulate speech for students
and faculty, 54% of U.S. college kids opposed such codes while 38% were in favor.
The free exchange of ideas is in danger on American campuses. And given the unprofessional
behavior of American faculty suggested by this survey, education reformers should perhaps focus
on encouraging free-speech advocates within the student body while adopting a campus slogan
from an earlier era: Don't trust anyone over 30.
this tyranny applies not only to politics and weirdo social world view, it runs thru
everything. Group think is powerful and those not following get excluded, defunded of
resources and ridicule and other punishment.
The education-industrial complex is a massive spending and debt-fed bubble, that has
created a massive political organizing force and teflon monoculture. They are parasites
feeding off government and the debt of students
It's always been like this, at school as a 5 year old ....my little kid was sent to the
headmaster for objecting to making a key ring thing in craft as not one kid had a key. He
spoke a well reasoned argument and of course is at the Supreme Court now. But gained no
respect or nurturing from that school. I also copped it, made career decision to be a
scientist because of the stupidity of an english teacher not knowing same issues prevailed
there. Was thrown out of english honours course so did the exam on my own knowledge and got
first class honours in the state.
At University we all know you feed back what they want if you want to pass. Some want
intelligence and best true understanding others want their crippled stuff. This also applies
if you are a science, physiology researcher. Cutting edge work if not mainstream does not get
published, you have to be part of a recognised institution to be published so no independent
researcher,
There are set ideas and marketing there of eg antioxidants fallacies, need for estrogen,
and until recently How stupid was Lamarck because he espoused the passing down of response to
environment to subsequent generations...Darwin thought this too but idea was suppressed. Then
epigenetics got the new hot thing for grants. Fck them all.
My child and I discussed a version with the principal when he was doing the
bacceaulureate, as from 5 onwards teachers rejected correct answers and wanted their answers.
The excellent advice was to view it all like a driving exam, learn the road rules and give
them back.
students always know the tyranny of the teacher and evaluator. At 6 my kid was sat with
the slow learners and forced to give 30answers a day ' correct' . Ie lies and untruths.
Infinity as answer to how many corners has a cylinder was not only mad bad but
ridiculed.
It's impossible to actually debate someone who has NO FACTS on either side of the
argument....
it winds up like this....
"not even WRONG"
The phrase " not even wrong " describes an argument or explanation that purports to be
scientific but is based on invalid reasoning or speculative premises that can neither be
proven correct nor falsified .
Hence, it refers to statements that cannot be discussed in a rigorous, scientific sense . [1] For a
meaningful discussion on whether a certain statement is true or false, the statement must
satisfy the criterion called "falsifiability" -- the inherent possibility for the statement
to be tested and found false. In this sense, the phrase "not even wrong" is synonymous to
"nonfalsifiable". [1]
The phrase is generally attributed to theoretical physicistWolfgang Pauli , who was
known for his colorful objections to incorrect or careless thinking. [2][3]Rudolf Peierls documents an
instance in which "a friend showed Pauli the paper of a young physicist which he suspected
was not of great value but on which he wanted Pauli's views. Pauli remarked sadly, 'It is not
even wrong' ." [4] This is also
often quoted as "That is not only not right; it is not even wrong", or in Pauli's native
German , " Das
ist nicht nur nicht richtig; es ist nicht einmal falsch!". Peierls remarks that quite a few
apocryphal stories of this
kind have been circulated and mentions that he listed only the ones personally vouched for by
him. He also quotes another example when Pauli replied to Lev Landau , "What you said was so confused
that one could not tell whether it was nonsense or not. " [4]
More likely is a gradual increase in oil prices as we approach peak oil, the futures strip is likely to be wrong on oil price (today's future strip). For Brent futures the current strip goes from $73/b (Jan 2019) to $61 (Dec 2026). By Contrast the EIA's AEO 2018 reference oil price scenario for Brent crude has the spot price at $87.50/b in 2026, chart below has their scenario (which I think may be too low.)
Saudi Update October 2018
http://crudeoilpeak.info/saudi-update-october-2018