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Neoliberalism Bulletin, 2017

Neoliberalism as a New Form of Corporatism

Neoliberalism Bulletin, 2017

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[Oct 31, 2017] The threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime

Oct 31, 2017 | www.nakedcapitalism.com

Class Warfare

"The Unseen Threat of Capital Mobility" [ The Boston Review ]. "Two new books link rising inequality to unseen forces: tax havens in economist Gabriel Zucman's case, and overseas labor and environmental exploitation in historian Erik Loomis's. The adverse consequences of the free movement of capital suffuse both narratives. Loomis recognizes that the threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime. They each question received wisdom and ideologically charged models in which "globalization" is an inexorable force innocent of politics or power, which operates to either universal benefit or at worst whose ill effects can be compensated. In fact, thanks to globalization, the economic body -- what its ideological affiliates call 'The Market' -- is able to transcend the national body politic, to the benefit of multinational corporations and the wealthy individuals who own them."

"Why You're Not Getting a Raise" [ The Minskys ]. "A sure way to speed up wage growth again is fiscal stimulus. Government spending lifts aggregate demand directly and effectively. If enough spending is injected into the economy, it will create enough jobs to bring full employment. The momentum and labor scarcity created by the stimulus will force wages up and give workers and labor unions more bargaining power. A Job Guarantee Program , if ever implemented, would effectively set a wage floor in the economy, since any person working at a lower wage than the Job Guarantee offers will be given work in the public sector.:

"One of Arkansas' top politicians relies on unpaid workers from a local drug rehabilitation center at his plastics company, which makes dock floats sold at Home Depot and Walmart" [ Review News ]. "Hendren Plastics, owned by Arkansas State Senate Majority Leader Jim Hendren, partners with a rehab program under scrutiny for making participants work grueling jobs for free, under the threat of prison, according to interviews with former workers and a new lawsuit." That reminds me of something

"What makes me tired when organising with middle class comrades" [ Guardian ].

"What I've observed over and over again is this inherent need for middle class people to censor, control and mediate emotions. There's a deep fear of conflict, loosing status and control. I've been told to be less angry on demos, less emotional at events and more serious. Stop telling me how to feel. When you've had a life of teachers, social workers and probation officers telling you how you should act, you don't need the same mediating middle class behaviour in your collectives."

[Oct 31, 2017] It is easy to imagine neoliberalism leading to the same despotic conditions in mirror image of the old communist states. Crushing individuals in the name of Market Rights and neoliberal market philosophy

Notable quotes:
"... It's easy to imagine neoliberalism leading to the same despotic conditions in mirror image of the old communist states. Crushing individuals in the name of Market Rights and neoliberal market philosophy, from an unchecked Marketism. ..."
"... Dictatorship is a bad and an immoral form of government – whether from the left (communists) or the right (Marketists). Hayek and neoliberals only consider the danger from the left, not from the right. This is moral philosophy, as Adam Smith knew. A technical claim for efficiency is not a moral claim to justice or the good. There is no moral claim in neoliberalism that withstands examination. imo. ..."
Oct 31, 2017 | www.nakedcapitalism.com

flora , October 29, 2017 at 12:53 pm

Economic philosophies come down to questions of morals and ethics: what is 'good' and why; what is 'bad' and why? (These questions often come down to the philosophical questions about "the one and the many"*)

Some (brief) history of moral philosophy in business, or markets:

"Plato is known for his discussions of justice in the Republic, and Aristotle explicitly discusses economic relations, commerce and trade under the heading of the household in his Politics. His discussion of trade, exchange, property, acquisition, money and wealth have an almost modern ring, and he makes moral judgments about greed, or the unnatural use of one's capacities in pursuit of wealth for its own sake, and similarly condemns usury because it involves a profit from currency itself rather than from the process of exchange in which money is simply a means. .

"John Locke developed the classic defense of property as a natural right. For him, one acquires property by mixing his labor with what he finds in nature.7 Adam Smith is often thought of as the father of modern economics with his An Inquiry into the Nature and Causes of the Wealth of Nations. Smith develops Locke's notion of labor into a labor theory of value. In modern times commentators have interpreted him as a defender of laissez-faire economics, and put great emphasis on his notion of the invisible hand. Yet the commentators often forget that Smith was also a moral philosopher and the author of The Theory of Moral Sentiments. For him the two realms were not separate."
-Dr. Richard T. DeGeorge
https://www.scu.edu/ethics/focus-areas/business-ethics/resources/a-history-of-business-ethics/

Now to this article:

"The great Austrian economist Friedrich Hayek didn't favor mathematical modeling, but he had clear philosophical models in his head. One of his most famous statements is related to the slippery road to dictatorships: ."

This is a moral claim or ethical claim: Dictatorships are bad.** Well, I accept that statement. I judge dictatorships bad. I do not want a dictatorship oppressing me or my fellow citizens for any reason.

Hayek feared oppression from an unchecked left, imo.

Again, from De George:

"Marx claimed that capitalism was built on the exploitation of labor. Whether this was for him a factual claim or a moral condemnation is open to debate; but it has been taken as a moral condemnation since 'exploitation' is a morally charged term and for him seems clearly to involve a charge of injustice. Marx's claim is based on his analysis of the labor theory of value, according to which all economic value comes from human labor." (ibid- from link above)

No doubt the old USSR became despotic, supposedly in the name of ending exploitation of labor. (Gulags?)

Back to Olah's paper and definitions. The following line could be rewritten to fit the Marxist USSR moral claims with no loss in accuracy.

"But this leads to the main paradox of neoliberalism communism. Its economic system needs a strong state, even at the expense of constraining democracy, to guarantee property worker rights and the working of the free market communal, while actively maintaining the rule of neoliberal Marxist social philosophy."

It's easy to imagine neoliberalism leading to the same despotic conditions in mirror image of the old communist states. Crushing individuals in the name of Market Rights and neoliberal market philosophy, from an unchecked Marketism.

-- -- -- -- -- -- -- -- -- -- –

* "The question which haunts the dialectical culture is this: how to have unity without totally undifferentiated and meaningless oneness? If all things are basically one, the differences are meaningless, divisions false, and definitions are sophistications, in that the tyranny, or destiny, of oneness is the truth of all being. [my aside: neoliberalism]But, if all things are basically many, and if plurality is ultimate, then the world dissolves into unrelated particulars and becomes, as some thinkers insist, not a universe but a multiverse, and every atom is in a sense its own law and being. [communism] The first leads to the breakdown of differences and the liberty of atomistic individualism and particularity; the second is the breakdown of fundamental law into nihilism and the retreat of men and their arts into isolated and private universes"
― Rousas John Rushdoony, The One And The Many: Studies In The Philosophy Of Order And Ultimacy

flora , October 29, 2017 at 1:18 pm

corrections in footnote *paragraph: [My aside: neoliberalism communism]
and [ communism neoliberalism]

flora , October 29, 2017 at 1:07 pm

Longer comment in moderation.
Shorter comment:

"The great Austrian economist Friedrich Hayek didn't favor mathematical modeling, but he had clear philosophical models in his head. One of his most famous statements is related to the slippery road to dictatorships: "

Dictatorship is a bad and an immoral form of government – whether from the left (communists) or the right (Marketists). Hayek and neoliberals only consider the danger from the left, not from the right. This is moral philosophy, as Adam Smith knew. A technical claim for efficiency is not a moral claim to justice or the good. There is no moral claim in neoliberalism that withstands examination. imo.

[Oct 30, 2017] The power of the neoliberal order is that it has beguiled the masses into believing that satisfying short term personal wants with crappy mass-produced goods constitutes increase in the standard of living. This is like European colonists exchanged gold for glass jewelry with American Indians

Notable quotes:
"... The neoliberal mandate quoted above "The point for neoiberalism is not to make a model that is more adequate to the real world, but to make the real world more adequate to its model" is pure hubris. ..."
"... And also too what if nobody wants to become a worked-to-death entrepreneur with a crappy idea just to make a profit and keep running the squirrel wheel? We don't have to be a capitalist, socialist, or free market society at all. The only thing we are required to be is just. Constitutionally. ..."
"... love your commentaries, STO, but are we really avoiding the American imperialism aspect, the "total global military domination" neocon "Project for A New American Century" aspect of imposing economic exploitation, as described here, by John Perkins: https://www.youtube.com/watch?v=j1IvMLTQ6ew and here, with regard to Dulles CIA historical documentation?: https://www.youtube.com/watch?v=ORapPwla7fs ..can we really be surprised it has "come home to roost?" ..."
Oct 30, 2017 | www.nakedcapitalism.com

Norb , October 29, 2017 at 12:13 pm

The kleptocrats of the world are struggling to find a workable power sharing solution to keep their rule intact. The power of the neoliberal order is that it has beguiled the masses into believing that satisfying short term personal wants constitutes a meaningful social order. The constant churn and turnover of consumer goods is the purpose of life instead of participating in the construction and maintenance of lasting, stable social institutions and customs. This is the culmination of turning citizens into consumers. It is a different form of bondage and slavery. The perfect system of enslaving oneself.

The trouble with the neoliberal order its that the old tools in maintaining its power and relevance are reaching limits. As technology democratizes the use of force, it is more difficult to impose ones will. Also, as the weapons become more devastating, their use would instantly disrupt the entire network supporting the political structure. Imagine the consequence of a nuclear exchange. Neoliberalism needs an existing social structure upon which to deploy its parasitic ideology and methods. As Michael Hudson aptly described in his Killing the Host, once that social structure is weakened or destroyed, neoliberalism will be incapable of functioning. It would have to become naked totalitarianism in order to survive.

The question has always been how do you justify and deal with inequality. With human stupidity, climate change, and planetary resource depletion bearing down on every society, how that question is answered rises to the fore and cannot be papered over with greater reams of propaganda. It seems we are once again on the verge of a truly Revolutionary era- like it or not.

Susan the other , October 29, 2017 at 1:26 pm

Since the 60s all of our Big Boondoggles like Star Wars were embezzlements. The neoliberal mandate quoted above "The point for neoiberalism is not to make a model that is more adequate to the real world, but to make the real world more adequate to its model" is pure hubris.

And it has finally run its course by serving us all up a big fat mess. It is very encouraging to see this essay cite so many recent analysts. It's beginning to look like critical mass.

Most of us are thinking about the stock market these days and anticipating a downturn if not a crash. But what if they triggered a crash and nobody came? What if the stock market just stagnates and sits there?

The only buyer these days is the Fed but the Fed might refuse to "expand its balance sheet". And in perfect circular logic, this prevents the stock market from crashing because nobody's buying. And where does this leave neoliberal economies and their governments? It will be a tad embarrassing.

And also too what if nobody wants to become a worked-to-death entrepreneur with a crappy idea just to make a profit and keep running the squirrel wheel? We don't have to be a capitalist, socialist, or free market society at all. The only thing we are required to be is just. Constitutionally.

nonclassical , October 29, 2017 at 1:57 pm

love your commentaries, STO, but are we really avoiding the American imperialism aspect, the "total global military domination" neocon "Project for A New American Century" aspect of imposing economic exploitation, as described here, by John Perkins: https://www.youtube.com/watch?v=j1IvMLTQ6ew and here, with regard to Dulles CIA historical documentation?: https://www.youtube.com/watch?v=ORapPwla7fs ..can we really be surprised it has "come home to roost?"

[Oct 30, 2017] The founders of neoliberalism sufferws for a nostalgia for pre-war absolutism that capitalists have been happy with. In this sense neoliberal ideology is nothing but attempt to restore absolutism -- absolutism of wealth, shoved down the throats of its victims via simplistic but well-funded propaganda. Neoliberalism's false premise of the benevolence of the absolutism of wealth is quite literally the road to serfdom for the rest of humanity.

Notable quotes:
"... Interesting point. Von Mises was born in 1881, so his formative years were definitely under Habsburg rule. Hayek was younger, born in 1899, so he started out under the Habsburg thumb, too. Rand is a little more complex. She was born in 1905, and came to the U.S. in 1926, so she experienced both Tsarist absolutism, Communist absolutism, and sheer chaos. ..."
"... As you point out, none of the three had any early experience with democracy. ..."
Oct 30, 2017 | www.nakedcapitalism.com

Sluggeaux , October 29, 2017 at 12:04 pm

As flora points out in yesterday's George Monbiot/Gaius Publius neoliberalism thread, Hayek and Mieses grew up under Habsburg absolutism; Ayn Rand grew up under Romanov absolutism. All that they knew of the actual non-theoretical experience of democracy and free markets came from the insecurity of coming of age under the chaos of the collapse of those two empires during the break to re-arm during 1919-1939 in what should be seen as a single 1914-1945 European war.

The founders of neoliberalism appear in these descriptions to suffer for a nostalgia for pre-war absolutism that self-interested western capitalists have been happy anoint themselves to fill. Their alien neoliberal ideology is nothing but absolutist-nostalgic garbage, shoved down the throats of its victims via simplistic but well-funded propaganda. Neoliberalism's false premise of the benevolence of the absolutism of wealth is quite literally the road to serfdom for the rest of humanity.

Vatch , October 29, 2017 at 8:21 pm

Interesting point. Von Mises was born in 1881, so his formative years were definitely under Habsburg rule. Hayek was younger, born in 1899, so he started out under the Habsburg thumb, too. Rand is a little more complex. She was born in 1905, and came to the U.S. in 1926, so she experienced both Tsarist absolutism, Communist absolutism, and sheer chaos.

As you point out, none of the three had any early experience with democracy.

[Oct 30, 2017] Neoliberalism is the ideology of the current US elite and serves to uphold and expand its power. Making "little people" more miserable as an international side effect.

Notable quotes:
"... I also share a similar outlook on human society and have always found the classical and neoliberal hagiography of entrepreneurs risible from the very moment I started to acquaint myself with this pseudo-science called economics. ..."
Oct 30, 2017 | www.nakedcapitalism.com

Jeremy Grimm , October 29, 2017 at 2:47 pm

I found this post very confusing and it stimulated what to me is a confusing maelstrom of comments. I'll stick with the title of this post rephrasing it as "How Economic Theories Serve the Power Elite". I don't believe the Rich and Big Business are equivalent to the entirety of the Power Elite but I do believe they have achieved a degree of prominence -- perhaps as a result of sponsoring Neoliberalism. I think of Neoliberalism as an ideology rather than a school of economic theories. So I should rephrase the title again as "How Ideologies Serve the Power Elite."

I believe Phillip Mirowski captures the most complete and accurate depiction of Neoliberal Ideology. I also believe the C. Wright Mills and his successor G. William Domhoff have captured the essential structures of Political Power in their characterization of the Power Elite.

So -- How do Ideology and Political Power interact? What is their dynamic? Altandmain pointed to a very troubling paragraph in the Michal Kalecki essay in yesterday's comments. Looking at that essay once more I am troubled also by its conclusion. Kalecki concludes the potential for a rise of Fascism -- as in the political/economic definition of the term -- in 1943 America was slight and would be mitigated by the progressive politics in sway during those times. I would argue that the Ideology of Nazi Fascism achieved dominion over the existing Power Elites in Germany [as well as the business interests in the US who supplied money and expertize to the German Reich]. I also believe the Ideology of Soviet Communism achieved dominion over the Power Elites in Russia. In both cases Ideology drove the State toward horrendous actions I cannot reconcile as providing any service to a Power Elite.

The Power Elites of much of the world embrace and bolster the Ideologies of Neoliberalism using them as tools to consolidate their power and line their pockets. What is the chance Neoliberalism might cast off its leash and what kind of world might we see as a result?
Does the ascendance of an Ideology represent a cusp -- a singularity -- not well accounted for in the structural analysis of Political Power?

JIm , October 29, 2017 at 1:36 pm

It may be time to revisit the socialist calculation debate of the mid-1930 where, over a period of vears, von Mises and von Hayek debated socialist economists like Oskar Lange and A.P. Lerner.

Mises argued that capitalism allowed for a much broader participation in decision-making than that permitted by the cult of nationalization and planning. At that time much of the Left chose to ignore this critique by pointing to the evidence of capitalist failure and apparent Soviet success in rehabilitating the Soviet economy and embarking on a road to industrialization.

Lange responded to Mises's challenge by conceding that planning, even carried out by the most democratic of governments would lack proper economic criteria and that to prevent a relapse into more authoritarian solutions, socialist planning authorities would need to develop a simulated market with a system of shadow prices that could be used to compare different paths to development

Hayek, in the early 1940s, further developed the Austrian critique through his argument that collectivist ownership would erase responsibility for investment decisions making it impossible to accurately assess the responsibility for mistakes.

Hayek also pointed to the fragmented and dispersed character of economic knowledge, and as as Mirowski has argued in his new book "The Knowledge We Have Lost in Information,"– managed to establish the first commandment of neo-liberalism "that markets's don't so much exist to allocate given physical resources so much as to integrate and disseminate something called knowledge." and " that the market ceased to look like a mechanical conveyor belt and instead began to take on the outlines of a computer."

Mirowski adds that It was this new image of markets as superior information processors that has apparently swept everyone along from-neoclassical theorists to market socialists."

Is it true that the Austrian critique can only be met by a case for socialist self-management and .public enterprise that bases itself on the dispersed character of economic knowledge and refuses the tempting delusion of a totally planned economy?

How does the Left today respond to the Hayek/Mises arguments of the 1940s, with their attempted vindication of entrepreneurship, risk-taking, innovation and the need to make economic agents responsible in the use of resources?

nonclassical , October 29, 2017 at 2:06 pm

by historical documentation of what has come of their own postulations:

(Monbiot):

"Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances."

("neoliberalism" has been u$ed to destabilize relative economic and social stability of FDR "New Deal" 60+ years )

Jeremy Grimm , October 29, 2017 at 3:23 pm

"How does the Left today respond ?" Very good question! I would add to that "How does the Left respond to the Market as an epistemology?"

I'll attempt a half-assed answer to the question of " attempted vindication of entrepreneurship, risk-taking, innovation and the need to make economic agents responsible in the use of resources?" [The question I posed is highly problematic for me. Once I accepted Mirowski's assertion that Neoliberals really truly believe this nonsense of the Market as an information processor -- an arbiter of the Truth -- I was flummoxed. I cannot argue with what to me is absurd. However Mirowski convincingly argues that addressing the central absurdity of the Neoliberal Ideology is crucial to any argument with its true believers.]

I'm very old fashioned I admit. I believe humankind has a number of personality types each suited to select and fill various niches in society. There are builders and makers of things. There are those who empathize and care for others. There are those who like to grow things and raise and care for animals. There are those who invent and make new things and think new ways. There are those who teach. There are those who conserve -- and those who break away and cast out in new directions -- pathfinders. There are those who like to decide and direct as well as those quite happy to follow reasonable direction. This is the merest thumbnail sketch but you should see the flesh of a very old concept of human society.

The entrepreneur is but one more type of individual in human society. Entrepreneurs are neither special not specially deserving of acclaim or riches. However what they do is useful. Society benefits by sharing a small portion of resources to entrepreneurs while also absorbing some of their risks of failure so that both gain. If an entrepreneur achieves success that benefits society and there is little cost in sharing a somewhat greater part of that gain with the entrepreneur as an encouragement. I have met and known some I regard as "true" entrepreneurs. They did indeed hope to make a financial gain from their efforts and risk -- but that was NOT what motivated them. That was not their core.

The classic Liberal notion that an entrepreneur deserves and has right to all of the gain from their actions is very difficult for me to argue. Like the Neoliberal notion of the Market as epistemology this Liberal notion strikes me as an absurdity. I am again flummoxed.

nonclassical , October 29, 2017 at 9:04 pm

the "entrepreneur" (Ernst Becker's "innovator" – "Structure of Evil") has at his disposal great social contract, supply of "the commons" to base his agency upon. He is completely aware of this. That he refuses indulge, evaluate, or socially consider said reality, defines actual intention.

St Jacques , October 30, 2017 at 3:44 pm

I also share a similar outlook on human society and have always found the classical and neoliberal hagiography of entrepreneurs risible from the very moment I started to acquaint myself with this pseudo-science called economics.

[Oct 30, 2017] Democrats Can't Live With Them, Can't Live Without Them

Notable quotes:
"... The Republican Party is home to many a vile reactionary, but its principal function is, and long has been, to serve the most odious wing of the American ruling class. ..."
"... Being unfit and unprepared for the office he suddenly found himself holding, Trump had no choice but to call on seasoned Republican apparatchiks for help. Thus he ended up empowering the very people he had beaten into submission months before. ..."
"... Thus the Republican Party and the Donald became locked together in a bizarre marriage of convenience. Their unholy aliance has by now become a nightmare for all concerned. ..."
"... Moreover, with each passing day, the situation becomes more fraught – to the point that even Republican Senators, three of them so far, have already said "enough." ..."
"... Vice President Mike Pence, his constitutionally prescribed successor, is an opportunist too, but he is also a dedicated theocrat and a thoroughgoing reactionary. A skilled casting director could not have come up with a more suitable vector for spreading the plagues that Republican donors like the Koch brothers seek to let loose upon the world. ..."
"... With Pence in the Oval Office, the chances of nuclear annihilation would diminish, but everything else would be worse. Trump is temperamentally unable to play well with the denizens of the "adult daycare center" that official Washington has become. On the other hand, because his effect on people is more soporific than terrifying, and because he is, by nature, a "pragmatic" conservative -- a mirror image of what Clinton purported to be -- Pence could end up doing more to undermine progress than Trump could ever imagine. ..."
"... Therefore, Trump's demise, though necessary, would be a mixed blessing, at best. ..."
"... After all, Democrats are part of the problem too -- arguably, the major part – and they can hardly remain entirely indifferent to the concerns of voters who lean left. ..."
Oct 30, 2017 | www.counterpunch.org

The Republican Party is home to many a vile reactionary, but its principal function is, and long has been, to serve the most odious wing of the American ruling class.

Before Hillary Clinton threw away a sure victory last November, Donald Trump was well on the way to blowing that dreadful party apart.

No credit is due him, however. The harm he was on track for causing was unintended. Trump was not trying to do the GOP in; he was only promoting his brand and himself.

However, by stirring up longstanding rifts between the party's various factions, he effectively put himself on the side of the angels. Without intending anything of the sort, and without even trying, Trump turned himself into a scourge upon America's debilitating duopoly party system.

As Election Day approached, it was unclear whether the GOP's Old Guard would ever be able to put their genteel thing -- their WASPish Cosa Nostra -- back together again.

With Hillary Clinton in the White House, their odds were maybe fifty-fifty. Had the Democrats nominated a less inept Clintonite like Joe Biden or an old school liberal like Bernie Sanders, their odds would have been worse.

But then, to nearly everyone's surprise, including his own, Trump won -- or, rather, Clinton lost, taking many a Democrat down with her. The debacle wasn't entirely her fault. For years, the Democratic National Committee had been squandering its resources on getting Democratic presidents elected, leaving down ticket Democrats wallowing in malign neglect.

And so, for a while, it looked like the GOP would not only survive Trump, but would thrive because of him.

Even so, Republicans were not exactly riding on Trump's coattails. The party's grandees had problems with the Donald, as did comparatively sane Republican office holders and office seekers; so did Republican-leaning voters in the broader electorate. But with Clinton flubbing so badly, none of this mattered.

Being unfit and unprepared for the office he suddenly found himself holding, Trump had no choice but to call on seasoned Republican apparatchiks for help. Thus he ended up empowering the very people he had beaten into submission months before.

Thus the Republican Party and the Donald became locked together in a bizarre marriage of convenience. Their unholy aliance has by now become a nightmare for all concerned.

Moreover, with each passing day, the situation becomes more fraught – to the point that even Republican Senators, three of them so far, have already said "enough."

Republicans continue to run the House and the Senate, and they occupy hosts of other top government offices, but the Republican Party has gone into damage control mode. It had little choice, inasmuch as its Trump induced, pre-election trajectory is back on track.

After only a brief hiatus, the chances are therefore good once again that if the country and the world survive Trump, he will be remembered mainly for destroying the party that Abraham Lincoln led a century and a half ago.

This is therefore a good time to give Republicans space to destroy themselves and each other, cheering them on from the sidelines – especially as they turn on Trump and he turns on them.

Saving the world from that menace is plainly of paramount importance, but it is important not to lose sight of the fact that the alternative is arguably even more unpalatable. Trump is an accidental malefactor; he goes where self-interest leads him. Vice President Mike Pence, his constitutionally prescribed successor, is an opportunist too, but he is also a dedicated theocrat and a thoroughgoing reactionary. A skilled casting director could not have come up with a more suitable vector for spreading the plagues that Republican donors like the Koch brothers seek to let loose upon the world.

With Pence in the Oval Office, the chances of nuclear annihilation would diminish, but everything else would be worse. Trump is temperamentally unable to play well with the denizens of the "adult daycare center" that official Washington has become. On the other hand, because his effect on people is more soporific than terrifying, and because he is, by nature, a "pragmatic" conservative -- a mirror image of what Clinton purported to be -- Pence could end up doing more to undermine progress than Trump could ever imagine.

Therefore, Trump's demise, though necessary, would be a mixed blessing, at best.

Trump is not likely to "self-impeach" any time soon; and. at this point, only persons who have the ear of Republican bigwigs can do much of anything to hasten his departure from the scene. But there are other ways to "deconstruct" the duopoly party system -- as Trump's fascisant, pseudo-intellectual (formerly official, now unofficial) advisor, Steve Bannon might infelicitously put it.

After all, Democrats are part of the problem too -- arguably, the major part – and they can hardly remain entirely indifferent to the concerns of voters who lean left. ... ... ... ANDREW LEVINE is the author most recently of THE AMERICAN IDEOLOGY (Routledge) and POLITICAL KEY WORDS (Blackwell) as well as of many other books and articles in political philosophy. His most recent book is In Bad Faith: What's Wrong With the Opium of the People . He was a Professor (philosophy) at the University of Wisconsin-Madison and a Research Professor (philosophy) at the University of Maryland-College Park. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press

[Oct 30, 2017] In Capitalizing on Crisis, Greta Krippner shows that the financialization of the U.S. economy was not a deliberate outcome sought by policymakers, but rather an inadvertent result of the state's attempts to solve other problems.

Oct 30, 2017 | www.nakedcapitalism.com

Winston , October 29, 2017 at 9:49 pm

This may also have to do with postwar prosperity stalling by 1960s!
See:
"thinking about the policy environment that made the turn to finance possible. And, in a nutshell, the argument of the book is that there were a number of discrete policy decisions that were quite influential in shaping this outcome, but those policies decisions were not made with the goal or objective of creating a financialized economy. They were really ad hoc, inadvertent responses to unresolved distributional conflict in US society as growth rates in the economy slowed. And one of the interesting things to me about the financial crisis of 2008-2009 is that those distributional dilemmas came right back to the surface. Financialization was not a resolution of these problems, but a displacement of them into the future. It was a kind of deferral."
http://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1380&context=disclosure
Financialization and Social Theory: An Interview with Dr. Greta Krippner

See her paper also:
https://www.slideshare.net/conormccabe/greta-krippner-2005-the-financialization-of-the-american-economy

And video:
https://www.youtube.com/watch?v=N9X1hD1aGsQ
In Capitalizing on Crisis, Greta Krippner shows that the financialization of the U.S. economy was not a deliberate outcome sought by policymakers, but rather an inadvertent result of the state's attempts to solve other problems. Krippner traces the ways in which policies conducive to financialization allowed the state to avoid a series of economic, social, and political dilemmas that confronted policymakers as postwar prosperity stalled beginning in the late 1960s.

[Oct 30, 2017] The close ties between the elderly Hayek and Chile's Augusto Pinochet.

Oct 30, 2017 | www.nakedcapitalism.com

Jeremy Grimm , October 30, 2017 at 4:16 pm

... ... ...

Scanning through Corey Robin's lengthy discussion of Hayek at the Nation -- linked to from the Angry Bear copy of Dorman's post right above the link to the Corey Robin 'Coase' link was much more interesting given Corey Robins characterization of the elitism and anti-democratic content of Hayek's writings and particularly interesting where Corey Robins identified the close ties between the elderly Hayek and Chile's Augusto Pinochet.

[Oct 29, 2017] The elte is continuing globalization push. S>heeple are too mesmerized by TV, weed, games, phones, sports, booze, food, the internet and their shitty jobs to ever realize they are in a cage.

Oct 29, 2017 | www.zerohedge.com

In other parts in this series, I have discussed the tools that the elite are using to achieve their goals. In part I, I talked about how debt is used as a tool of enslavement, and in part II I explained how central banking is a system of financial control that literally dominates the entire planet ( Part III and Part IV here) Professor Quigley also mentioned this system of financial control in his book

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole."

Today, a system of interlocking global treaties is slowly but surely merging us into a global economic system. The World Trade Organization was formed on January 1, 1995, and 164 nations now belong to it. And every time you hear of a new "free trade agreement" being signed, that is another step toward a one world economy.

Of course economics is just one element of their overall plan. Ultimately the goal is to erode national sovereignty almost completely and to merge the nations of the world into a single unified system of global governance.

... ... ...

Once you start looking into these things, you will see that the elite are very openly telling us what they intend to do.

One of my favorite examples of this phenomenon is a quote from David Rockefeller's book entitled Memoirs

Some even believe we are a part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that's the charge, I stand guilty and I am proud of it

As David Rockefeller openly admitted, they are "internationalists" that are intent on establishing a one world system.

... ... ...

Michael Snyder is a Republican candidate for Congress in Idaho's First Congressional District, and you can learn how you can get involved in the campaign on his official website . His new book entitled "Living A Life That Really Matters" is available in paperback and for the Kindle on Amazon.com .

[Oct 29, 2017] Wendy Brown's definition of neoliberalism: It is not simply a commitment to capitalism or to markets, but an effort to transform all spheres of human life in ways that render them amendable to economic calculation.

Notable quotes:
"... I believe discussion of Neoliberalism is very much like discussion of Global Warming. "Weedy" or not, "academic" or not both discussions require transit through some difficult concepts and technical depth. In the case of Global Warming discussions you either come to grips with some complicated climate science or you end up discussing matters of faith drawn from popular "simplifications". In the case of Neoliberalism the discussion necessarily enters a region which requires attention to fine details which when followed to their end tend to have deep and broad implications. ..."
"... The concept of a Thought Collective greatly aids understanding the particularly slippery nature of Neoliberalism as a term for discussion. That slippery nature is no accident. The Market as a theory of knowledge -- an epistemology -- makes apparent the philosophical even "religious" extent of Neoliberal thinking. ..."
"... I prefer Wendy Brown's definition of neoliberalism. It is not simply a commitment to capitalism or to markets, she argues, but an effort to transform all spheres of human life in ways that render them amendable to economic calculation. ..."
"... But "economic calculation" still understates the post-modern condition and tends toward looking for an outside origin, like Hayek/Friedman. Neoliberalism is something we are doing to ourselves, and Foucault's biopolitics makes this clear. You just don't separate the economic from the social and political. ..."
"... Twitter and Facebooks "likes and dislikes" are a form of (social) capital accumulation. Financialization has become ascendant because labour productivity is no longer measurable, and they need "fictitious" numbers to maintain hierarchy. ..."
"... Marxists understand that Hayek-Friedman neoliberalism is just another stage in the real subsumption of labor and completion of globalized capitalism. It is just liberalism after capitalism has finally destroyed traditionalism, nationalism, religion etc. ..."
Oct 29, 2017 | www.nakedcapitalism.com

Jeremy Grimm , October 28, 2017 at 6:09 pm

I believe discussion of Neoliberalism is very much like discussion of Global Warming. "Weedy" or not, "academic" or not both discussions require transit through some difficult concepts and technical depth. In the case of Global Warming discussions you either come to grips with some complicated climate science or you end up discussing matters of faith drawn from popular "simplifications". In the case of Neoliberalism the discussion necessarily enters a region which requires attention to fine details which when followed to their end tend to have deep and broad implications.

In the interview referenced by this post Phillip Mirowski asserts Neoliberals believe the Market is an information processor which "knows" more than you or I could ever know. He also introduces the concept of a Thought Collective -- which he states he adapted from writings of Ludwig Fleck related to describing a method for study and explanation of the history of Science. I believe both these "weedy" "academic" distinctions are key to understanding Neoliberalism and distinguishing it from Neoclassical economics and Libertarianism. The concept of a Thought Collective greatly aids understanding the particularly slippery nature of Neoliberalism as a term for discussion. That slippery nature is no accident. The Market as a theory of knowledge -- an epistemology -- makes apparent the philosophical even "religious" extent of Neoliberal thinking.

Two recent papers by Phillip Mirowski tackle the difficulties in defining and discussing Neoliberalism. They are both "weedy" and "academic" and unfortunately help little in addressing the issue RabidGhandhi raised at the root of the lengthy thread beginning the comments to this post.
"The Political Movement that Dared not Speak its own Name: The Neoliberal Thought
Collective Under Erasure" 2014
[https://www.ineteconomics.org/research/research-papers/the-political-movement-that-dared-not-speak-its-own-name-the-neoliberal-thought-collective-under-erasure]
"This is Water (or is it Neoliberalism?)" 2016 -- this is a response to critics of the previous paper.
[https://www.ineteconomics.org/perspectives/blog/this-is-water-or-is-it-neoliberalism]

There have been several oblique references to this story -- so I'll repeat it since I only recently ran across it.
There are these two young fish swimming along, and they happen to meet an older fish
swimming the other way, who nods at them and says, "Morning, boys, how's the water?" And
the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, "What the hell is water?"

I am afraid that little story says volumes about the problem RabidGhandhi raised. I believe remaining "weedy" and "academic" is the very least service we might do to discussing Neoliberalism and when arguing topics related to Neoliberalism -- and probably the least damage.

likbez , October 29, 2017 at 1:58 am

Phillip Mirowski approach is not the only approach and it has its flaws. IMHO he exaggerates differences between neoliberal doctrine and neo-classical economics.

Some view neoliberalism as Trotskyism for rich and analogies look convincing, at least for me. See http://www.softpanorama.org/Skeptics/Political_skeptic/Neoliberalism/neoliberalism_as_trotskyism_for_the_rich.shtml

That might be a more fruitful research approach.

Wendy Brown book is also very interesting and illuminating: https://www.amazon.com/Undoing-Demos-Neoliberalisms-Stealth-Revolution/dp/1935408534

nonclassical , October 29, 2017 at 3:58 am

..what was actually historically perpetrated, Chile', September 11, 1973, is (Naomi Klein) instructive:

https://www.youtube.com/watch?v=vTN5_Efx1n4

Jeremy Grimm , October 29, 2017 at 11:19 am

I went to the site you recommended and read through the very lengthy discussion of Neoliberalism as Trotskyism for the rich. I believe the title of that discussion makes a reasonable summary of the definition of Neoliberalism you prefer and propose: Neoliberalism is Trotskyism for the rich. While there may be some groups in which this definition might be a useful formula for continuing discussion I doubt it would be of much use in discussing Neoliberalism in general.

Neoliberalism is slippery enough without bringing in a can-O-worms like Trotskyism -- and as I am not a Soviet style Marxist nor a student of Marxism and only vaguely familiar with the Russian revolutions the metaphor is as meaningless to me as a metaphor based on the gang-of-four with references to Maoism.

I disagree with your view that Mirowski exaggerates the differences between Neoliberal doctrine and Neoclassical economics. I don't recall the source but I do recall one of Mirowski's writings or videos did identify how Neoclassical economics is drifting toward Neoliberalism. Although both disciplines might advocate similar policies they differ in how they arrive at those policies. And I believe it Neoclassical economists think of economics at a tool for conducting policy while Neoliberals view their doctrines as guides for policy.

Mirowski -- at least as I read his paper -- tends to avoid making a formulaic definition of Neoliberalism and instead emphasizes what he views as its key doctrines. Those doctrines are what distinguishes Neoliberalism.

Temporarily Sane , October 29, 2017 at 5:59 am

I prefer Wendy Brown's definition of neoliberalism. It is not simply a commitment to capitalism or to markets, she argues, but an effort to transform all spheres of human life in ways that render them amendable to economic calculation.

bob mcmanus , October 29, 2017 at 8:37 am

Wendy Brown is very good. Remember she is also a critic of identity politics. She gets it.

bob mcmanus , October 29, 2017 at 12:06 pm

But "economic calculation" still understates the post-modern condition and tends toward looking for an outside origin, like Hayek/Friedman. Neoliberalism is something we are doing to ourselves, and Foucault's biopolitics makes this clear. You just don't separate the economic from the social and political.

Twitter and Facebooks "likes and dislikes" are a form of (social) capital accumulation. Financialization has become ascendant because labour productivity is no longer measurable, and they need "fictitious" numbers to maintain hierarchy.

Jodi Dean calls this the era of "Communicative Capitalism" wherein value creation has been democratized and we are ruled by the "circulation of commodified affect."

This is brutal. We create value when we like something or someone. We commodify it when we attempt to justify our affections in social settings and produce discourse to do so. It circulates when other people agree and spread the episteme. Why is it "Capitalism?" Because Facebook extracts surplus from your affections and discourse. Sociality and sociability are now major profit centers.

That's like everything, folks. Everything. Late-capitalism or neoliberalism is at least fast becoming a global totality without an outside or margin.

bob mcmanus , October 29, 2017 at 8:29 am

I come at this from a Marxist perspective, and so am very skeptical of liberalism. Neo-liberalism is simply liberalism after the last vestiges of traditionalist communitarian have disappeared.

I usually like Gaius Publius, but I don't like this article. Recently the French union reaction to Macron's labor reforms has the slogan to the effect that "We don't want that liberalism."

To understand neo-liberalism, you have to a) use the European meaning of liberalism, especially since the founders were European, b) you also have to connect the word with the full spectrum of what is "liberalism" as developed in the Early modern period by Hume, Locke, Smith, the American founders, John Stuart Mills, etc. Remember, during their times, both Burke and John C Calhoun were considered exemplary liberals. (See Domenico Losurdo.)

Neo-liberalism is no more limited to economics and markets than liberalism was. Neo-liberalism/liberalism, besides the right to property or the fruits of your labor (Locke also Marx) also includes the full panoply of rights and privileges (at least in theory) included in the Bill of Rights and the extension of those over time, and the right to property and market competition are inextricably connected to the other rights (free press, freedom to associate, gun rights, national self-determination, freedom from searches, etc). Inextricably, they cannot be separated.

Including individualistic rights over your body, for instance. The right to an abortion, gay marriage, freedom of choice, even the popularization of tattoos developed at the same time as the ascension of economic neoliberalism, which is inextricably connected to the "liberalization" of the social spheres.

Which is why it is the ocean we swim in and why it is so hard to fight and why Democrats and centrists and the identitarian "Left" dislike the word so much. Neoliberalism is just liberalism on steroids. Those who dislike the word want to de-liberalize (some of ) the markets and limit (some) property rights while retaining most of the individualism that liberalism allows. They don't want to be socialists.

Marxists understand that Hayek-Friedman neoliberalism is just another stage in the real subsumption of labor and completion of globalized capitalism. It is just liberalism after capitalism has finally destroyed traditionalism, nationalism, religion etc.

nonclassical , October 29, 2017 at 10:51 am

hmmmnnn while this, from article can be so defined:

"With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as "a kind of neoliberal international" [a term modeled on "the Communist International]: a transatlantic network of academics, businessmen, journalists and activists. The movement's rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia."

FDR regulated capitalism, entirety of western "social democracies", stand in contrast (some might say, thankfully)

Philipbn , October 29, 2017 at 1:25 pm

For one of the strongest early analyses of the development of neoliberalism, see Foucault's 1978-79 Collège de France lectures, "The Birth of Biopolitics" (English translation 2008). The entire year is an extended review of and commentary on the the development of liberalism, or in Foucault's terms "liberal governmentality," and in particular of neo-liberalism

[Oct 29, 2017] The US and the Overthrow of the Chilean Government A Declassified Dossier (2003)

Youtube video
Notable quotes:
"... The Pinochet File was selected as one of "The Best Books of 2003" in the nonfiction category by the Los Angeles Times. The New Yorker said, "The evidence that Kornbluh has gathered is overwhelming." in its review. The Newsweek review of The Pinochet File describes it as "...actually two distinct but intersecting books. The first is a narrative account of the Nixon administration's involvement in Chile. Its mission was to make sure that Allende's election in 1970 didn't serve as a model for leftist candidates elsewhere. The second consists of the reproduction of hundreds of salient intelligence documents released in 1999 and 2000 in response to requests by President Bill Clinton." ..."
May 15, 2016 | www.youtube.com

The Pinochet File is a National Security Archive book written by Peter Kornbluh. About the book: https://www.amazon.com/gp/product/159...

It covers over approximately two decades of declassified documents, from the Central Intelligence Agency (CIA), Defense Intelligence Agency (DIA), White House, and United States Department of State, regarding American covert activities in Chile. It is based on more than 24,000 previously classified documents that were released as part of the Chilean Declassification Project during the Clinton administration, between June 1999 and June 2000.

The Pinochet File was selected as one of "The Best Books of 2003" in the nonfiction category by the Los Angeles Times. The New Yorker said, "The evidence that Kornbluh has gathered is overwhelming." in its review. The Newsweek review of The Pinochet File describes it as "...actually two distinct but intersecting books. The first is a narrative account of the Nixon administration's involvement in Chile. Its mission was to make sure that Allende's election in 1970 didn't serve as a model for leftist candidates elsewhere. The second consists of the reproduction of hundreds of salient intelligence documents released in 1999 and 2000 in response to requests by President Bill Clinton."

The inclusion of key source documents allows the reader not only to corroborate Kornbluh's findings, but to acquire a flavor of the extent of U.S. covert activities within Chile, and to understand the tenor of conversation in the White House and CIA regarding Salvador Allende's presidency. While the U.S. claimed to support Chile and its democratic election process, the documents show intricate and extensive attempts first to prevent Allende from being elected, and then to overthrow him with a coup d'état. The coup d'état required first removing the commander in chief of the Chilean armed forces (General René Schneider), who opposed military interference in political situations; he was assassinated by CIA-funded coup plotters (retired General Roberto Viaux and active duty General Camilo Valenzuela). Once Augusto Pinochet took power, his human rights violations were tolerated, even though the U.S. knew that thousands of people had been detained and American citizens Charles Horman and Frank Teruggi murdered. The CIA fostered an extensive cover-up of its involvement in fomenting the coup, including dissembling to the Church Committee. The White House also withheld key documents. Subsequently, the role of the US in this period of history was not correctly understood based solely on the findings released at that time. Furthermore, extensive black propaganda, especially in El Mercurio, shaped world perceptions of Allende, essentially painting him as a Communist pawn and portraying the wreckage of the Chilean economy as due to his decisions. In contrast, the declassified documents show that Richard Nixon enacted an "invisible blockade" in concert with American multinational corporations and international banking organizations, which were pressured to withhold loan refinancing. Consequently, much of the history that has been written without access to these documents may need to be reexamined, as Kornbluh discusses in the book's introduction:

Indeed, the documents contain new information on virtually every major issue, episode, and scandal that pockmark this controversial era. They cover events such as Project FUBELT, the CIA's covert action to block Salvador Allende from becoming president of Chile in the fall of 1970; the assassination of Chilean commander-in-chief René Schneider; U.S. strategy and operations to destabilize the Allende government; the degree of American support for the coup; the postcoup executions of American citizens; the origins and operations of Pinochet's secret police, DINA, CIA ties to DINA chief Manuel Contreras, Operation Condor, the terrorist car-bombing of Orlando Letelier and Ronni Moffitt in Washington, D.C., the murder by burning of Washington resident Rodrigo Rojas, and Pinochet's final efforts to thwart a transition to civilian rule.

The inclusion of key source documents provide a rare behind-the-scenes view of covert regime change in operation. Key documents from the CIA, United States National Security Council (NSC), White House, DIA, and State Department were declassified in the year 2000. The more than 24,000 records correspond to an average of about three records per day gathered over two decades and Kornbluh's analysis was not complete and in print until 2003.

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

Image By Ministerio de Relaciones Exteriores de Chile. [CC BY 2.0 cl ( http://creativecommons.org/licenses/b... )], via Wikimedia Commons

Latinoamericano Soy , 1 year ago

Thank you, I really enjoyed this documentary, it summarizes what many latinoamericans know or sense, in fact the same type of interventions have taken place in Argentina, Colombia, Panama, Mexico, Granada, Bolivia, Cuba, not to mention many other countries in the rest of the planet. It's pure modern imperialism.

[Oct 29, 2017] What is neoliberalism? A market-based ideology willing to employ fascism to impose the conditions necessary to establish the market state. (ie, throwing people out of helicopters.) The state is co-opted to ensure rule of the Market.

Notable quotes:
"... The experience of every modern democratic nation-state proves that libertarianism is incompatible with democracy ..."
"... Libertarianism is the version of neoliberalism used to get teenagers hooked on markets. ..."
"... The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets, to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe. ..."
"... Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy; ..."
"... nobody's marching in the streets or even making a fuss about it ..."
Oct 29, 2017 | www.nakedcapitalism.com

Enrique Bermudez , October 28, 2017 at 5:50 am

"Just deserts for predators and prey" – yes, very much this. I remember talking with my father about a year ago in a quasi-philosophical sense about where I felt western society had gone wrong. I could not quite adequately express the essence of my thoughts beyond "a fundamental devaluation of people as individuals."

I think it applies to foreign policy as well – however you want to put things. The ghouls/neocons/neolibs decide to start some regime change war somewhere. Hundreds of thousands/millions of the wrong people die. But the pipeline (or whatever) gets built on the correct parts of the map. No harm no foul and it's on to the next part of the giant "Risk" board.

Come to think, I actually quite like "ghoul" as a catch-all term for all these evil bastards. Can't remember where I first saw that – might have been here – but it fits.

David May , October 28, 2017 at 5:50 am

A good article on the neoliberal links to fascism:
Why libertarians apologize for autocracy
The experience of every modern democratic nation-state proves that libertarianism is incompatible with democracy by Michael Lind.

Libertarianism is the version of neoliberalism used to get teenagers hooked on markets.

David May , October 28, 2017 at 6:11 am

What is neoliberalism? A market-based ideology willing to employ fascism to impose the conditions necessary to establish the market state. (ie, throwing people out of helicopters.) The state is co-opted to ensure rule of the Market.

The value of everything, human life-included, is to be decided by the Market. (Except when the outcome is not favorable to the elite. Hence the need to takeover the state.)

The market state will impose Freedom™. Freedom™ means the law of the jungle and consequently many rebellious serfs, er, citizens unhappy with Freedom™. (Another reason the state will be needed – to reimpose Freedom™. That is, prison or maybe helicopter trips.)

allan , October 28, 2017 at 8:56 am

Whatever neoliberalism is, this is a perfect example of it:

A Student Loan Nightmare: The Teacher in the Wrong Payment Plan [NYT]

In 2015, he discovered that he was enrolled in a particular type of ineligible payment plan and would need to start his decade of payments all over again, even though he had been paying more each month than he would have if he had been in an eligible plan. Because of his 8.25 percent interest rate, which he could not refinance due to loan rules, even those higher payments weren't putting a dent in his principal. So the $70,000 or so that he did pay over the period amounted to nothing, and he'll most likely pay at least that much going forward.

So this is who we are now. For all sorts of reasons that made perfect sense at the time, we built additional repayment programs onto existing complexity onto well-meaning forgiveness overseen by multiple layers of responsible parties. And once that was done, Mr. Shafer, teacher of shelter dwellers and street kids and others whom fellow educators failed to reach, wasted a small fortune and will now shovel another one into the federal coffers.

Which leaves just one more question: If this is who we are, is it who we actually want to be?

Apparently, yes.

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets,
to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

kurtismayfield , October 28, 2017 at 11:23 am

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets, to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

Exactly.. once the majority are stripped of their assets and have to commit most of their income to rent, there *should* be no growth. Unless the entire system is running around asset inflation, which it is now. But that cannot last forever.

HotFlash , October 28, 2017 at 3:46 pm

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets,
to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

I don't think that this is what They are thinking. The 'make it up on volume' is a retailer strategy, our MOTU are playing well above wholesale and actually are not in the goods-transferring biz at all. Finance, you know. Long before we are all gone, eaten alive or whatever, They will be turning their sights on where the real money is -- each other. Perhaps a few corners of life will survive, and I am curious as to what the new life forms, if any, that emerge out of this sea of pesticides, herbicides, garbage, and too much CO2 will be. Academic question, of course. Perhaps this is why there is no evidence of other intelligent life in the universe? That's too depressing, I'm gonna go make some cinnamon toast.

Altandmain , October 28, 2017 at 9:27 am

What is the real purpose of neoliberalism?

To create a feudal aristocracy using pseudoscientific propaganda. The government uses a combination of tax policy, deregulation, the destruction of legal protections (ex: labour laws), privatization, free trade, mass immigration, propaganda, and frankly, blunt force where needed to slowly dismantle the middle class.

The end result is a society that looks something like Russia in the 1990s or perhaps South Africa, with very high inequality along with high multiculturalism.

Enforcement is not consistent. For example, low and middle class workers are expected to compete in terms of lowest wages and poorest job security with the developing world. Meanwhile, the very rich can do whatever they want and not pay much taxes. Intellectual property is another example of this inconsistency, and allows corporations to rent seek on their IP, itself often a product of taxpayer funded R&D or bought from a small company (witness how big pharmaceutical companies are guilty of both of these).

It isn't pretty, but that is the real goal.

Always keep in mind the purpose of propaganda is to build a narrative.
https://www.counterpunch.org/2017/01/13/why-ridiculous-official-propaganda-still-works/

It is not meant to be easily repeated, no matter how easily disproven. Neoliberalism is perhaps the most visible example.

Thuto , October 28, 2017 at 11:05 am

Very true, speaking specifically of South Africa where I live, your analysis of the situation hits the mark. We have an openly neoliberal opposition party that fashions itself as a pro-poor party yet even a cursory glance at its policy stance reveals where the dictates it shouts regularly from its benches originate, and whose interests it represents (it's certainly not the poor). It campaigns heavily for the gutting of labour laws while advocating for the destruction of local industries by coddling up to foreign investors and free trade cheerleaders. Yet nobody seems to see the contradiction, because, as Altandmain says above, it's all about building a narrative through propaganda with the media as an echo chamber (if people think media ownership in the US is concentrated, they must try visiting SA). And the trickle down economics myth is very much the dominant narrative down here, with the rich being worshipped as demigods who hold the fate of the country in their hands, and as such, must have carte blanche to do as they please

Thuto , October 28, 2017 at 9:48 am

Intellectual capture of the general populace by co-opting (read buying) academia and the msm to extol the virtues of neoliberalism is what allows its pernicious effects to spread like wildfire. Credentialism and the pretentious grounding of neoliberal discourse in pseudoscientific rigor discourages critique from ordinary, "non-expert" people and co-opts even these lemmings (queitly being marched to their demise) to defend its ideological soundness. The question i've always had is this: how do countries get grassroots movements against neoliberalism going when the precursor to success against it seems to be eliminating basic and functional illiteracy among the general population about its inner workings and the instruments it uses to legitimize its evils (e.g. propaganda)? Outside of niche communities like here at NC, most people seem to care more about the Kardashians than equipping themselves with the chops (financial, technical etc) to call BS on all this. And this seems to be a war that will require numbers to win, but how to get those numbers when so many people appear to be so enchanted by the supposed virtues of neoliberalism ("getting ahead", ruthless competition etc).

PS: Some of us here at NC live in developing countries and the tentacles of this ideology have proven to be no respector of borders, as such, imho said grassroots movements would necessarily have to be transnational by spreading beyond the heartlands of global capitalism (Western Europe & US/North America).

Katz , October 28, 2017 at 11:03 am

One of the most illuminating lines I've heard in recent years comes from Matt Stoller: "neoliberalism is statecraft."

That's not an idea readily accommodated by the rhetoric/ideology of neoliberalism, but it's extremely useful for seeing beyond of them.

flora , October 28, 2017 at 11:03 am

Great article. Now when I hear TV/Journalist commentators suggest the nation-state is useless and democracy is obsolete I will know their point of reference and unspoken arguments. I will also listen for what they do not report on or talk about. 'The dog that did not bark in the night.' Thanks for posting. Two things:

1.
"Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, "

Austria in 1938 had no deep-rooted democratic history. It was part of the aristocratic Austro-Hungarian Empire until 1918, when that collapsed post WWI. Hayek and Mises grounded their philosophy in their post-empire/post-autocratic-rule chaotic national experiences – unstable newly imposed democratic societies which previously had a long history of autocratic rule and a bad or poorly done recent (post WWI) transition to democracy. E.g. Post WWI Weimar Germany was chaos, as reported by on-the-ground correspondent William Shirer.

Mises and Hayek also applied their ideas to well-established older democratic nations. In context, their philosophy did not apply to the well-established democracies. If anything, Mises and Hayek assumed a strong central govt inevitably meant a 'strong man' govt and not a democratic govt, it seems.

2.
" Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world."

The IMF and WTO and neoliberalism itself have become a 'strong man' or 'strong committee' supra-govt rule, imo. Neoliberalism's economic application has lead to the very conditions of weakening democracy and subjecting people to 'strong man/committee rule' Mises and Hayek tried to prevent by weakening the power of the nation-state, without regard to differences in nation-state governments and polity.

flora , October 28, 2017 at 12:20 pm

shorter neolib args:
All* strong govts lead to despotism. (*All? nope. false premise)

Weakening the power of all govt's will guard against despotism. (Really? nope. some forms of govt are a strong guard against despotism. false premise)

Replacing govt functions with market functions has no risk. (nope. see astronomical price increases in privatized govt services and deregulated markets. epi-pen?)

Therefore, weakening central govts and replacing their functions with private market solutions will be both risk free and guard against depotism. (False conclusion from false premises. And there are plenty of financially despotic markets.)

Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy; not perfect, always struggling to increase the franchise, but more accountable to citizens than markets.

JTMcPhee , October 28, 2017 at 1:12 pm

I'd urge all to read, and maybe re-read, the series of 6 or so articles posted by NC under the heading "Journey Into A Libertarian Future." The first article is here: https://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-i-%e2%80%93the-vision.html

Substitute "neoliberal" for "Libertarian" and note the operations of "government-like organizations" that already are systems of systems of predators and parasites that cooperate (while snarling and snapping and biting at each other) to kill and loot and drive the rest of us I guess "libertarians," whatever that term means any more, might be part of the Enabling Class that provides "policy cover" and arguments in support of the rapine that is in play

flora , October 28, 2017 at 11:06 pm

Thanks very much for this link. I just read the entire series.
Chilling.
Normally I'd dismiss this sort of fevered certainty as lost-cause deadender writing.
The series was written 6 years ago; before the Kansas Real Time Experiment; Obamacare ACA insurance-companies-will-sort-this-out; proposed TPP and TTIP and ISDS (arbitration and insurance companies will sort it all out). Now talk of sea-steading and "island" cities and organized voter suppression.
Chilling developments when placed against libertarian, anti-democratic, rise-of-the-supermen manifestos.

HotFlash , October 28, 2017 at 3:53 pm

My dear Flora, you have the outline of a book here. One I would be glad to read. How can I help?

flora , October 28, 2017 at 4:34 pm

Thankyou.

I've just listened to the Mirowski interview* linked in the main article. According to Mirowski it is the neo-classicals who want a weakened national govt, not the neo-liberals. So I've confused the two and need a rethink.

Mirowski says (paraphrasing) the neo-liberals " changed the idea of what a market is " and believe that " the market is a super information processor that knows more than any human ever could ." (My aside: This is irrational, but that doesn't stop them.) Therefore
Mere humans should be subordinate to the market because the individual can never know as much as the market and cannot even know himself outside of his relation to the market. (This is also irrational and sounds despotic to me. Sounds like saying a person should be subordinate to computer programs.)
Neo-liberals, therefore, want a strong national govt that they control to promote and expand markets and the market ideology/idolatry everywhere. (Where have I heard that sort of quazi-political/philosophical argument used before?)

* starts at the 6 min mark. 18 min mark "super information processor"

https://majority.fm/2014/06/26/626-philip-mirowski-how-neoliberalism-survived-the-financial-meltdown/#

grebo , October 28, 2017 at 9:28 pm

Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy;

They did. von Hayek spent the 30s and 40s in the UK, the 50s in the US and retired to West Germany. von Mises went to Switzerland in 1934 then the US in 1940 and stayed there. They were, of course, esconced in academia (ie. in their own minds) the whole time.

flora , October 28, 2017 at 11:07 pm

ah. I gave them a benefit of doubt they may not have deserved. Thanks.

Rod , October 28, 2017 at 11:27 am

here is a bit of the antidote–discussed 10/24 in NC regarding the efforts to restore Puerto Rico–

Farmers' groups are now calling for the proliferation of community-controlled agricultural cooperatives that would grow food for local consumption. Like the renewable energy micro-grids, it's a model that is far less vulnerable to supply-chain shocks like hurricanes -- and it has the additional benefit of generating local wealth and increasing self-sufficiency.
As with the solar-powered generators, Puerto Rico's farmers aren't waiting for the emergency to subside before beginning this transition. On the contrary, groups like Boricuá Organization for Ecological Agriculture have "agroecology brigades" traveling from community to community to deliver seeds and soil so that residents can begin planting crops immediately. Katia Avilés-Vázquez, one of Boricuá's farmers, said of a recent brigade: "Today I saw the Puerto Rico that I dream being born. This week I worked with those who are giving it birth."

The CoOperative movement emerged in the USA at the end of the 19th century to provide funding and resources where there was plenty of need but not too much profit to be made.

concrete stuff, not ism , October 28, 2017 at 12:03 pm

Isn´t this one of the problems with -isms in general? Communism also has a thousand meanings depending on who you talk with. Could be everything between the theoretical Marx-Engels version and the practical realities of Soviet Union/China and other countries claiming to be "communists".

It seems to me that neoliberalism has been so efficient in establish itself thanks to:
1) being implemented by military forces = the rest of the world outside Europe/US, and now being maintained through the thorough militarization of western societies: police, censorship etc.
2) not focusing on being and -ism/ideology but on concrete advises/policies presented in numbers/graphs (the mathematification of economics)
3) useful idiots in the form of the identity politicians: if they would have been focused and using their vast amount of energy on countering the maths of economics (before Steve Keen´s Debunking Economics), instead of counting how many oppressed minority identities can dance on the head of white middle-aged man, it would have been much more difficult to implement the neoliberal policies. Or it would have at least accelerated the militarization of western societies so that the clash between class interests will start, as they always do.

Maybe better to focus on concrete stuff in arguments, like,
– public ownership of energy and infrastructure in order to guarantee all citizens access. E.g. Sweden privatized energy production and distribution in the 90s. During one winter there wasn´t electricity enough to heat houses because the private companies had done away with excess capacity. Privatization/neoliberalism = not serving the society with electricity when the society needs it the most.
– Public healthcare, education etc. Every % of profit a company requires for the owners, this means the same % less to the citizens
and so on.

All good for me, but not for you is a key part of neoliberalism
http://exiledonline.com/monster-koch-bust-charles-koch-used-social-security-to-lure-friedrich-von-hayek-to-america/

Modern example, free health care for senators and senate, but not for the people.

marym , October 28, 2017 at 1:03 pm

OK with most of this, but members of congress and staff don't get free healthcare. Though members have access to some free services, they and some staff purchase insurance on an ACA exchange called. Other staff remain on the pre-ACA FEHB program in place for other federal employees. Both programs are employer (taxpayer) subsidized so they only pay a portion of their premiums, plus whatever their deductible is. For the ACA policies, to get the premium subsidy they need to choose a gold plan, so will have about 10% in copays.

https://www.snopes.com/members-congress-health-care/

Eclair , October 28, 2017 at 12:36 pm

Nice exposition of the term, neoliberalism, Gaius. Thank you.

I think I first began seeing the term about eight years ago, right after the financial meltdown. About five years ago, I proposed writing a series of pieces for a group that had arisen out of the Denver Occupy movement, kind of an "Ask a Neo-Liberal," column, but most people had never even heard of the term and when I did a bit of research, I just could not pin down definitions or examples.

So, how do we begin to counter the main tenets of neoliberalism: glorification of 'the market' as the arbiter of lives, with the resulting dominance of competition over cooperation and the atomization and breakdown of social ties; we live in a 'dog eat dog' world, only the strong survive, self-reliance got me where I am?

Some days I think that this creed is the natural result of a Planet that has exceeded its carrying capacity of humans. When there were far fewer humans, cooperation and strong social bonds were the only means of survival. Really. The development of Neo-liberalism is Nature's way of getting rid of us.

But, Neo-liberalism decrees that the survivors will be, at best, rapacious, aggressive and materialistic. At worst, they will be socio-paths. It's like the Planet if only jaguars, vultures and leeches, out of all our animal relatives, survived. Do we want that to happen? OK, I realize that some of us have just given up and are sitting back to watch the slow motion disaster unfold.

First, admit that under the current system, the vast majority of us are Prey, and the .01% are Apex Predators, hunting us down, ripping, squeezing and sucking the life (and our livelihoods) out of us. How do our animal relatives who are not equipped with claws, sharp teeth and muscles built for speed, survive?

We run even faster, we develop camouflage and hide, we grow armor, we refine cooperative social skills and live in enormous colonies, (preferably underground!) where our vast numbers and ability to mobilize for work and protection provide security, we develop symbiotic relationships with larger and stronger organisms (although some might label this as 'vichy-ism,') we become almost invisible, yet with a deadly sting or poisonous coating, and we realize that sometimes we have die so that other members of the group can survive.

And, we realize that the area in which we live, our little eco-system, is crucial to our survival. We don't mess it up.

shinola , October 28, 2017 at 12:48 pm

"Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast."

Used to be called Social Darwinism.

HotFlash , October 28, 2017 at 3:57 pm

Yup. The new part is the govt setting the table, though.

DJG , October 28, 2017 at 1:04 pm

How to talk about neoliberalism, which is indeed a mouthful? I was at a dinner last night of two generations of UofChicago products (as am I). We all agreed that the "Law & Economics" movement there should be dismissed out of hand as plain stupidity. I think that we spend too much time imagining that there is some Ideal Marketplace of Ideas in which the good ideas drive out the bad. And then we come up against Facebook and Twitter. So one way of talking about it is that the law has to govern markets: Neoliberalism is lawlessness. You can have law or you can have looting.

And we've certainly seen plenty of lawlessness.

Another way is to call it unconstitutional, if your interlocutor knows the U.S. Constitution. The U.S Constitution doesn't have much to say about economics, and it doesn't assume that laissez-faire is a-okay.

Further on it being unconstitutional: The U.S. Constitution brilliantly foresaw the need for some kind of bureacracy to maintain the government, rather than a claque of courtiers. So it set up the Post Office–that bureaucratic agent of oppression, Uncle Mises! It called for a census and a Census Bureau–woe betide us Uncle Milton!

You can either have the U.S. Constitution with its flaws, or you can have people eating bagels with gold foil and telling you that markets rule our lives? So which is it?

Maybe we should just call neoliberalism Gold-Bagel-ism. The antidote, as mentioned above in the thread by commentes like marym, is to return to some discussion of our Commonwealth and what to do to maintain it.

BillC , October 28, 2017 at 1:55 pm

Like water to the fish.

For me, the most effective opener (both in the sense of opening discussion as well as the listener's mind) is to state that neoliberalism is to nearly everyone in the "developed" world (and beyond) like water for fish: it's the environment in which we live, and thus becomes invisible to us. Excellent elaboration from above: it's as if citizens of the USSR had never heard of the word "communism;" instead it's just how life works.

If we can get this opening across, then the definitions and explanations discussed above in this thread may be much more effective.

ex-PFC Chuck , October 28, 2017 at 8:25 pm

Thank you Gaius for a great post – and a thanks as well are due to the authors of the good comments. As I've been reading these it occurred to me that perhaps a good conversation starter would be to ask the person what they thought of Margaret Thatcher's remark, "There's no such thing as society. There are only individuals and families." You'll have to wing it from there depending on the responses you get.

HotFlash , October 28, 2017 at 4:03 pm

I also wonder aloud to them, "Why it is that when individuals do whatever they want it is called lawlessnes or anarchy, Bad Things, but when corporations do whatever they want it is considered a Good Thing?"

WobblyTelomeres , October 28, 2017 at 9:03 pm

Something like this?

https://www.youtube.com/watch?v=I6mpHW3SMcc

[famous North Dallas 40 scene]

Barry , October 28, 2017 at 1:23 pm

The roots of neoliberalism in the Mont Pelerin Society is also well covered in MacLean's Democracy in Chains.

While I like this article, I disagree with the relationship of neoliberals to markets and to competition. Markets are held up to displace blame for decisions and policies made by men. The powerful use competition to explain why you deserve less and they deserve more, even when actual competition is not happening, and they actively work to prevent it.

Predators and prey do not compete for resources. A system that enshrines predation among humans is not based on a buyer and a seller making a transaction at the efficient price that maximizes each's utility and produces the best use of society's resources.

HotFlash , October 28, 2017 at 4:13 pm

Agree, but for most of the people I talk to, that argument comes second. First I try to demonstrate that NeoLiberalism doing what it *says* it does is bad for us. Once they have that then I can proceed to 'NeoLiberalism doesn't even do what it says it does'. Although, I think that your point is a good first argument with small business people, "You mean that you think that your 5-employee cabinet shop makes you buddies with Elon Musk? (sub whatever rich guy your would aspire to be)" If the time seems right I might add, "He would have you on *toast*." If they think about that, they usually get it.

Barry , October 28, 2017 at 4:36 pm

I seldom even get to the point of being able to argue about these issues at all, much less take people thru the layers of consideration I've gone through over the years to reach my current model of how the world works.

I have been told that all of the books and weird websites that I read as I study a subject in depth are evidence that I lack objectivity about it and that people who know what they know from reading ordinary news have a clearer understanding than I.

TG , October 28, 2017 at 1:23 pm

"I suppose the neo-liberal philosophy could best be summed up by their rallying cry: the freedom to choose to own slaves."

"But that doesn't make sense. Freedom to choose is logically incompatible with slavery. And they never said that."

"Indeed. They would claim to be all for freedom, and against slavery. But if someone was profiting from owning slaves, they would fight tooth and nail to protect them, because any attempt at restricting the profits of slavery was seen as an intolerable corruption of the sacred free market. It was how they operated. Depending on what their rich patrons wanted at the time, sometimes they were all for free trade between the old nation states, and sometimes they demanded that the wealthy have the 'freedom' to restrict trade. It did not matter that what they said made no sense, or was logically incoherent, or at variance with reality. They never apologized, never explained, but only acted with total arrogance and self-confidence."

From "Space Battleship Scharnhorst and the Library of Doom."

Barry , October 28, 2017 at 3:59 pm

It makes sense if you believe in freedom to choose how to spend your money. How much choice you have, and how much choice you deserve to have, is measured fine-grain in dollars and cents. Other forms of power are deemed illegitimate.

it's sliding-scale individualism, where everyone is on their own, and wealth determines how much of an individual one is. The more of an individual you are, the more liberty you have, and liberty should be protected by the state.

HotFlash , October 28, 2017 at 4:16 pm

Yes. I argue that one as "one dollar, one vote". People without a lot of dollars understand that on a gut level.

Barry , October 28, 2017 at 4:28 pm

I tend to think of "one dollar, one vote" when considering elections and politics; while at the same time neoliberalism is about interpersonal power without direct regard to the functioning of the state.

By this I mean that if, for example, Peter Thiel decides to spend his money to destroy you, and you don't have enough money to prevent it, then you deserve destruction. That's liberty. You're free to choose to spend your money defending yourself. Or not.

HotFlash , October 28, 2017 at 4:46 pm

Exactly. People in a democracy have been raised to think that they count as much as the next person, no matter how rich or poor -- at least I hope that is till happening. Well, unless they are rich, who think they rightfully account for more. So when I say "one dollar, one vote" to poor/middle people (in an ironic sense, just so that is clear), they *feel* that it is not fair. If that catches, I point out that it goes against what they have been taught about how democracy works. I often bring this up in the context of campaign $$$ and Citizens United. It opposes the 'if they have the money then it's theirs' argument, aka 'the aristocratic' and 'it's his bat and ball'.

Scott , October 28, 2017 at 1:24 pm

For a long time now I have tried to reconstruct what it was in 1978 that convinced me it had become impossible to reform the United States.
Gaius has gotten me closer to a reconstruction of why I determined the only real solution was to create another nation, and kicked off what I recognize now as my own modeling.
My sense of what difference the goal is makes is a government that is just and fair for all citizens.
This is not the case in the neoliberal world is it. The goal of the neo-liberal world is to advance a milder form of scientific socialism, meaning the good people, well spoken well dressed no matter either in business or academia get the money for lives depicted on TV shows.
Working class people must become super humans to become educated and properly dressed to be accepted into a world of plenty and safety.
One thing I appreciate about Russians is a unique love of beauty. It is depressing that American's whole aesthetic sense revolves around cars and art is of no interest until it is ultra expensive.
Len Deighton's description of liberalism as developed in the 1840s which went on to mean the children of the newly enriched engineers who made hand built the Industrial Revolution making cotton underwear were given the money to for the schools of the old school rich people of Britain and all the rich people were in finance whether they came from old money or new money.
So I don't think of neoliberalism as about markets as much as I do think of it as the complete ascendancy of the parasites of Finance.
Creditors do not write down or write off debts of the working classes. Finance now has been given the US Treasury. Listening to Minuchin saying on the TV, in fact even seeing a face saying, "We must let the States Go and they have to make it on their own." Means there is simply no reason then to put any money by anyone into the US Treasury. The United States is just a huge military engaged in little and large wars all over the world anyway. Why ought anyone pay taxes to further the new owner of the Empire, Rome?
Deighton writes that since all the sewing machines and looms were moved to India, by the time the 19th Century ended Finance had gambled away all of the wealth of the UK.
"I like to play with debt, but it is tricky." Says Trump.
As long as you are the "Loss Payee" bankruptcy is as fine as any sort of success aye? "I don't pay taxes, I'm smart."
The aim is to lose all the money, then have it all given to you by the Treasury.
There is no citizenship of the World Citizen, or Jet Setter. They don't need any real citizenship.
For the majority, the nation matters. It may be the only thing they have of any value. The nation we are in love with it the nation that would go to defeat the Barbary Pirates over the capture of one US citizen, a stand in for you.
The one we have makes heroes and a President of the parasitical pirates come from neofeudalism.
In Texas even swords are coming back.

Ep3 , October 28, 2017 at 1:26 pm

Yves, great article, and loved the interview with Mirowski.

Here's the thing I see Neo-liberalism has done for society as a whole. If I asked you to "I present 2 humans before you and ask which one has more value to the world, which one, if there was only one hamburger left to eat, deserves to eat that sandwich, deserves to survive in a world with limited resources (which is what earth is), how would you go about choosing which one"? I am saying Neo-liberalism says "look at their wealth". It judges people by how much money/wealth they have. The only way to judge whether one human should survive over another is by the amount of money they make.
Jimmy Carter said in 1980 how we are moving as a society to how we rate a man is by the amount of money he has. If he was the proto-Neo-liberal, then it makes sense.

Barry , October 28, 2017 at 4:43 pm

One of the conceits of neo-liberalism (and I guess capitalism in general) is that how much wealth one has indicates how much one is owed for one's contribution to society (because markets allocate resources optimally). Thus the biggest takers are transformed into the biggest givers.

Wukchumni , October 28, 2017 at 4:46 pm

So if a UFO landed and little green men came out, they'd say:

"Lead me to your takers."

Wukchumni , October 28, 2017 at 1:39 pm

Neo-liberalism doesn't care or think all that much about it's actions, as long as they are profitable.

We have this ridiculous never ending series of wars and nobody's marching in the streets or even making a fuss about it, as we've accepted the premise as business as usual.

It has the feel of the Vietnam War still going in 1982, and nobody cared.

Other countries look at prisons as a necessary evil, whereas we can't have enough of them, so much so that we allow private companies the right to incarcerate our own citizens.

HotFlash , October 28, 2017 at 4:56 pm

nobody's marching in the streets or even making a fuss about it

Lessee, last time I recall Big Street Protests was Occupy. They got shut down , brutally. NoDAPL, similar, even the Trump inauguration protests. Marches not reported -- they might as well not have happened. But I believe they really, really did happen.

Wukchumni , October 28, 2017 at 5:00 pm

An older friend was going to Cal State L.A. around 1970, when a good number of the student body decided to walk onto the nearby 10 freeway and shut it down, as a protest against the Vietnam War.

you seeing anything like that out there?

JBird , October 28, 2017 at 5:15 pm

We incarcerate so many because it is profitable as jobs program for voters in poor counties, slave labor for manufacturing, and profitable for corporations/donors.

Jeremy Grimm , October 28, 2017 at 6:09 pm

I believe discussion of Neoliberalism is very much like discussion of Global Warming. "Weedy" or not, "academic" or not both discussions require transit through some difficult concepts and technical depth. In the case of Global Warming discussions you either come to grips with some complicated climate science or you end up discussing matters of faith drawn from popular "simplifications". In the case of Neoliberalism the discussion necessarily enters a region which requires attention to fine details which when followed to their end tend to have deep and broad implications.

In the interview referenced by this post Phillip Mirowski asserts Neoliberals believe the Market is an information processor which "knows" more than you or I could ever know. He also introduces the concept of a Thought Collective -- which he states he adapted from writings of Ludwig Fleck related to describing a method for study and explanation of the history of Science. I believe both these "weedy" "academic" distinctions are key to understanding Neoliberalism and distinguishing it from Neoclassical economics and Libertarianism. The concept of a Thought Collective greatly aids understanding the particularly slippery nature of Neoliberalism as a term for discussion. That slippery nature is no accident. The Market as a theory of knowledge -- an epistemology -- makes apparent the philosophical even "religious" extent of Neoliberal thinking.

Two recent papers by Phillip Mirowski tackle the difficulties in defining and discussing Neoliberalism. They are both "weedy" and "academic" and unfortunately help little in addressing the issue RabidGhandhi raised at the root of the lengthy thread beginning the comments to this post.
"The Political Movement that Dared not Speak its own Name: The Neoliberal Thought
Collective Under Erasure" 2014
[https://www.ineteconomics.org/research/research-papers/the-political-movement-that-dared-not-speak-its-own-name-the-neoliberal-thought-collective-under-erasure]
"This is Water (or is it Neoliberalism?)" 2016 -- this is a response to critics of the previous paper.
[https://www.ineteconomics.org/perspectives/blog/this-is-water-or-is-it-neoliberalism]

There have been several oblique references to this story -- so I'll repeat it since I only recently ran across it.
There are these two young fish swimming along, and they happen to meet an older fish
swimming the other way, who nods at them and says, "Morning, boys, how's the water?" And
the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, "What the hell is water?"

I am afraid that little story says volumes about the problem RabidGhandhi raised. I believe remaining "weedy" and "academic" is the very least service we might do to discussing Neoliberalism and when arguing topics related to Neoliberalism -- and probably the least damage.

[Oct 28, 2017] Gaius Publius Defining Neoliberalism naked capitalism

Notable quotes:
"... Rabid, have you tried the term "market fundamentalists" or "market ideologues" with your three target audiences? Amongst both think tankers and regular folkz, (and possibly in Argentina too!) it is not usual to be happy to be considered a fundamentalist and ideologue, or to be associated too closely with such people. ..."
"... "Market Utopians", what sets NeoLiberalism apart is the faith that markets solve all problems. For markets to exist there must first be "money", a social institution, and "property ", another social institution and an enforcement mechanism mediating between the two. At this point the lack of primacy of markets, their necessary dependence on the prior existence of government leads to the question, "what is good government." This leads to the question of who's freedom good government should be concerned with. ..."
"... This has been my experience, as well. Often the Democrat is a Clinton apologist who can only perceive the term as somehow a slur against their Dear Leader, though they don't understand why. These people are hopeless. They will simply follow any politician with a (D) after their name who can win an election. Win over the rest of the people and such useless tools will just follow, regardless of ideology. ..."
"... "Just deserts for predators and prey" – yes, very much this. I remember talking with my father about a year ago in a quasi-philosophical sense about where I felt western society had gone wrong. I could not quite adequately express the essence of my thoughts beyond "a fundamental devaluation of people as individuals." ..."
"... The experience of every modern democratic nation-state proves that libertarianism is incompatible with democracy ..."
"... What is neoliberalism? A market-based ideology willing to employ fascism to impose the conditions necessary to establish the market state. (ie, throwing people out of helicopters.) The state is co-opted to ensure rule of the Market. The value of everything, human life-included, is to be decided by the Market. (Except when the outcome is not favorable to the elite. Hence the need to takeover the state.) ..."
"... The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets, to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe. ..."
"... Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy; ..."
"... nobody's marching in the streets or even making a fuss about it ..."
Oct 28, 2017 | www.nakedcapitalism.com

Gaius Publius: Defining Neoliberalism Posted on October 28, 2017 by Yves Smith By Gaius Publius , a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius , Tumblr and Facebook . GP article archive here . Originally published at DownWithTyranny

For years I've been using the term "neoliberalism" (or sometimes neo-liberalism*) and I'm always uncomfortable, since it sounds so academic. So I usually add one-phrase definitions and move on. For example, this from a recent piece on Puerto Rico :

If neoliberalism is the belief that the proper role of government is to enrich the rich -- in Democratic circles they call it "wealth creation" to hide the recipients; Republicans are much more blatant -- then the "shock doctrine" is its action plan.

That's sounds pretty blunt, but it's a true statement, even among academics. See this great interview (start at about 6:15) with Professor Philip Miroski of the University of Notre Dame on how modern neoliberals have come to see the role of government in society. It's weedy but excellent.

I want to offer our readers a better description of neoliberalism though, yet not get into too many weeds. So consider these exceprts from a longer Guardian essay by the British writer George Monbiot . (My thanks to Naked Capitalism commenter nonclassical for the link and the idea for this piece.)

Neoliberalism -- The Invisible Water the West Is Swimming In

We'll start with Monbiot's brief intro, just to set the scope of the problem:

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Ask people to define "neoliberalism," even if they've heard of it, and almost no one can. Yet the comparison of our governing ideology to that of the Soviet Union's is a good one -- like "communism," or the Soviet Union's version of it, neoliberalism defines and controls almost everything our government does, no matter which party is in office.

The Birth of Neoliberalism

What is neoliberalism and where did it come from? Monbiot writes:

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt's New Deal and the gradual development of Britain's welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

Neoliberalism is an explicit reaction to Franklin Roosevelt and the welfare state, which by a quirk of history was called "liberalism" at the time, even though, in the nineteenth century, "liberalism" had roughly the same meaning that "neoliberalism" has today. In other words, "FDR liberalism" is in many ways the opposite of classical "liberalism," which meant "liberty (freedom) from government," and a quirk of history has confused these terms.

Back to Monbiot and Hayek:

In The Road to Serfdom , published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises's book Bureaucracy , The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as "a kind of neoliberal international" [a term modeled on "the Communist International ]: a transatlantic network of academics, businessmen, journalists and activists. The movement's rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute , the Heritage Foundation , the Cato Institute , the Institute of Economic Affairs , the Centre for Policy Studies and the Adam Smith Institute . They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek's view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Note the mention of Milton Friedman above. Neoliberalism is a bipartisan ideology, not just a Clintonist-Obamist one.

Democrats, Republicans and Neoliberalism

As Monbiot explains, for a while neoliberalism "lost its name" and was more or less a fringe ideology in a world still dominated by the ideas of John Maynard Keynes and Keynesian economics. When neoliberalism later came back strong in the Republican Party, it wasn't called "neoliberalism" but "Milton Friedman free market conservativism," or something similar.

Only when Bill Clinton and his Democratic Party allies adopted it in the 1980s did the term "neoliberal" re-emerge in public discourse.

[I]n the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, "when the time came that you had to change there was an alternative ready there to be picked up". With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter's administration in the US and Jim Callaghan's government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services . Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. [emphasis added]

Note the role of Jimmy Carter and start of deregulation in the late 1970s. For that reason, many consider Jimmy Carter to be the "proto-neoliberal," both for the nation and the Democratic Party.

Neoliberalism -- "Just Deserts" for Predators and Prey

What makes "neoliberalism" or "free market conservatism" such a radical -- and destructive -- ideology? It reduces all human activity to economic competition. It creates and glorifies, in other words, a world of predators and prey, a world like the one we live in as today:

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

In a world where competition is right and good, a world in which the "market" is the defining metaphor for human activity, all social ties are broken, the individual is an atom left to survive as an individual only, the strongest relentlessly consume the weakest -- and that's as it should be. (It's easy to imagine how the apex predators of our social order would be attracted to this, and insist on it with force.

Thus the bipartisan world we live in today. Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast.

The Role of Government in a Neoliberal World

Since for neoliberals, the "market" is the source of all that is good in human interaction, non-interference in "the market" is rule one for government.

Over time that has changed, however, as winners have grown more successful and their control of government more absolute. The proper role of government in today's neoliberal regime is not merely to allow the market to operate for the benefit of wealth-holders; it's to make sure the market operates for the benefit of wealth-holders.

In other words, the role of government is to intervene in the market on behalf of wealth-holders, or, as I put it more colloquially, to proactively enrich the rich. The interview with Professor Mirowski, as I noted above, makes that same point, but from an academic standpoint.

From this it should be also clear that until we free ourselves of rule by neoliberals and the pain and misery they create, we'll always be victims to the predatory giants -- the very very wealthy and the corporations they use as power-extenders -- those, in other words, who want merely to own everything else in the world.

This means we need to free ourselves from neoliberals in both parties, not just the ones in current seats of power. But that idea seems to have been excised from most discussions these days. Fair warning though. If the Age of Trump ends with the Restoration of Mainstream Democrats, we'll have won almost nothing at all.
____________

* I sometimes spell "neo-liberalism" with the hyphen to suggest the following connection: Neo-liberalism is "new liberalism," and has the same relationship to FDR liberalism as New Labour has to Labour -- the two are exactly opposite.

RabidGandhi , October 28, 2017 at 5:00 am

The burning question I have is how to deploy the terminology in discussion/debate. Here at NC and other similar sites, practically everyone knows what neoliberalism is and is solidly against it[1]. But outside of our own bubble, the term generally conveys no meaning whatsoever, for the following reasons:

(1) if I am speaking to policy-wonk types reared on "conventional wisdom", they tend to hear being anti-neoliberal as being anti-Copernican. The challenge to basic assumptions is outside of their window of acceptable ideas, so I am dismissed as a conspiracy wacko; all communication ends.

(2) If I am speaking to a Fox/Daily Mail/Clarín type, in my experience if they have even heard the term before, they generally draw no distinction between "Neoliberal" and "Liberal", so I can rail against the neoliberal capture of government regulatory powers, and I get nods of agreement "yes the hippies are taking over our public universities". Again, no real communication there.

(3) Lastly there is the case here in Argentina, where the word has not only been healthily peppered into the public discourse since at least 2000, but it was even a major rhetorical enemy of three successive governments. In this case, after so much experience and rhetoric, everyone knows that "neoliberalism" is bad and evil, but (since it is the assumed framework of interpretation, as GP notes) the consensus of what this neoliberalism we're fighting against really is becomes blurry. The evil any politician wants to inveigh against inevitably gets called "neoliberal", regardless of what the facts may actually be. All politicians here– even notably those most implicated in forcing neoliberalism on us in the 90s– now rail against evil "neoliberalism" and the evils of privatisation, even when nevertheless working to strengthen neoliberalism's actual tenets and re-entrench privatisation. In sum, the term has been co-opted beyond all meaning.

With all this mess in mind, I have to admit that I really only use the word amongst allies who I know share my understanding of the term. To do otherwise does not further the debate. Furthermore, in debates against stalwart neolibs, deploying the term and calling a privatised deregulated spade a neoliberal spade only has the effect of an ad-hominem; it may be technically spot-on, but it does nothing to convince the unswayed.

_______

[1] Except our token deficit hawk, PBUH.

UserFriendly , October 28, 2017 at 9:38 am

When in doubt I just define neoliberalism as putting markets first and trying to insert markets where they have no business being (e.g. obamacare). And of course send them here.

RabidGandhi , October 28, 2017 at 11:12 am

Yes I agree with you and with Strategist below: another (yet to be debased) term stressing an irrational religious fetish for markets would indeed be much more effective. Then again, as much as I love Lambert's post (and quote it here often myself), I do not see saying "go read this 2500 word article from some lefty site you've never heard of" as an argument that is going to win over most of my interlocutors.

Nell , October 28, 2017 at 11:54 am

If your desire is to persuade then you might want to try a different approach. Try giving a person the space to persuade themselves they have got it wrong. This is quite different from the academic approach – persuade by the logic of the presented argument. Instead be sympathetic and interested. Ask pertinent questions, don't preach, don't undermine with your superior knowledge. Still don't expect agreement at the time. People rarely change their minds at the drop of a hat. If they are genuine, then they will come around in their own time.

By the way, this is really hard to do and I am completely useless at it, but I have seen the effects of this approach first hand, and I have seen people change their mind.

SoCal Rhino , October 28, 2017 at 2:30 pm

I think you are right. And the parable of the sower comes to mind.

HotFlash , October 28, 2017 at 3:20 pm

Well, ya know, you have to meet them where they are. Richard Wolff has a parable about a family dinner, after which the mother does not charge the family members, and the son does not offer to do the dishes for a fee. Some things we just give one another. Mostly people understand about social obligations at the family level.

I have used a similar argument with a libertarian friend. He is very generous with his family and friends and looks after their wellbeing in many ways. I tell him that I *totally* agree, it is just that, as a socialist, I have a broader definition of 'family and friends'. I think this helps us to understand one another.

I also describe the govt as a 'big buying club' (he is a Costco member, Sam's, etc. and clubs in with friends to buy bags of green coffee). As group buyers we can get really good deals on stuff we all need such as schools, roads, police, garbage removal and health care through group (I don't say 'collective') buying power *plus* we have input through our MP's and other elected representatives. Whereas, with private biz, we have to take whatever they want to give us, they skim as much off the top as they can, and if we don't like it we can call Customer Care in the Philippines. He hasn't come around totally to my viewpoint, but we are still on speaking terms.

Oh, he had refused to sign up for that socialized medicine OHIP card back when we had to pay premiums (all govt-pd now, no premiums anymore). He made good health choices, ate healthily, watched hi weight, exercised and proudly paid his doctor cash for checkups, by golly. Yeah, proud and free! Until he found an odd protrusion in his belly one day whilst showering, and found out how much a hernia repair cost. Went and got him that health card right away

I later bought him a Guinness and permitted myself to ask him how he was finding that socialized medicine.

Carla , October 28, 2017 at 8:55 pm

And what did he say???

Allegorio , October 28, 2017 at 3:49 pm

The term "market fundamentalism" comes to mind and conveys more meaning than neo-liberalism, since the term liberalism has come to be associated with "socially liberal" as opposed to "economically liberal". The phrase also implies dogmatic orthodoxy and cultism.

Strategist , October 28, 2017 at 10:45 am

Rabid, have you tried the term "market fundamentalists" or "market ideologues" with your three target audiences? Amongst both think tankers and regular folkz, (and possibly in Argentina too!) it is not usual to be happy to be considered a fundamentalist and ideologue, or to be associated too closely with such people.

Just a thought.

jsn , October 28, 2017 at 2:13 pm

"Market Utopians", what sets NeoLiberalism apart is the faith that markets solve all problems. For markets to exist there must first be "money", a social institution, and "property ", another social institution and an enforcement mechanism mediating between the two. At this point the lack of primacy of markets, their necessary dependence on the prior existence of government leads to the question, "what is good government." This leads to the question of who's freedom good government should be concerned with.

HotFlash , October 28, 2017 at 3:27 pm

I widen my eyes and say, "Do you *really* want your life to be run by *ROGERS*?" Sub Comcast, PG&E, Bell, or whatever your local Big Biz that features arbitrary policies, high prices, poor service, pointless 'packages', surly customer service, long lines, circular voicemail and excellent shareholder value.

Katz , October 28, 2017 at 10:46 am

One type I seem to regularly encounter (on the internet, mostly) is the Democrat who's decided the term has no substantive meaning -- they perceive it to be a slur. Wrong as they are, the useful term is reduced to a shibboleth in their midst.

RabidGandhi , October 28, 2017 at 11:14 am

I totally agree. Bringing up the word "neoliberal" in such a conversation generally does more harm than good.

Big River Bandido , October 28, 2017 at 11:32 am

This has been my experience, as well. Often the Democrat is a Clinton apologist who can only perceive the term as somehow a slur against their Dear Leader, though they don't understand why. These people are hopeless. They will simply follow any politician with a (D) after their name who can win an election. Win over the rest of the people and such useless tools will just follow, regardless of ideology.

The people to actually use this as a line of argument with are those not yet assimilated by The Borg.

Working class people are especially amenable to this logic. This article has a lot of helpful rhetoric and metaphor for that purpose. I have actually had considerable luck explaining the ideology as "rule by the markets" or "public good sold off for private purposes"; by showing a few examples -- such as the constant attempts to destroy Social Security and Medicare; the cessation of Pell Grants and the commodification of education and health care; all the way down to the "privatization" (note the 5-syllable word) of Chicago's street parking and its deleterious effects on quality of life and the environment.

JBird , October 28, 2017 at 3:20 pm

So some posit that the word "neoliberal" is not a real word, but was invented just used to attack the Democratic Party, and often as a slur against its leadership in general, and the Clintons in particular; that reasoning reminds me of the extremist Republican partisans who argue that Nixon's Southern Strategy is a myth, and/or the modern Democratic Party is the same as the old Jim Crow Democratic Party, and that Lincoln's Republican Party was much the same as the current one.

Okay, but that is like not using the term "socialist" as in Socialism because some insist that the National Socialism in the National Socialist German Workers' Party. Words do have specific meanings, and the decision to discard neoliberal because some choose wilful ignorance is the same as discarding "liberal" because the Republican Party has used propaganda, more accurately said lies, to distort its meaning from the original American, or European, meanings. There has been a century long effort to smear, distort, change the meanings of words so that having an honest conversation becomes impossible and people's thoughts run along the approved mental paths.

Communism is Socialism is not Nazism. The Democratic Party is not synonymous with Neoliberalism, and certainly not Liberalism, or Leftist. Just as the Republican Party is not synonymous with Conservatism, or Libertarianism, or Rightist.

Working Class is not synonymous with the White Working Class. Being an American Nationalist is not the same as being a White Nationalist. The Alt-Right is not some new conservative movement. It's the old racist White Nationalists dressed up with a cutesy new label.

Conservative does not equal Racist. Liberal does not equal anti-racist, or equality. Just as the old Progressive Movement did not equal either.

The American Nation is not the same as the White Nation which is not the same as the Federal Government, let alone the American Government, which is not the same as the American Constitution, which is not the same as Human Rights.

Justice does not equal legal; legal does not equal fairness.

Free Market does not mean Capitalism, which does not mean Democracy. Those are three different things.

Words have meaning, and we either use them as they are meant in conversation, or we do not have a conversation. Maybe a shouting match, but not a conversation. If some Democrats want to deliberately be ignorant of the the etymology of neoliberalism, to heck with them.

Big River Bandido , October 28, 2017 at 11:44 am

I think we ought to be creative and devise our own new terms of debate. We ought to avoid overly-academic words. To avoid confusion, I think we should side-step the terms "liberal" and "neo-liberal" at least until the public imagination has been engaged.

The metaphor about "predator" and "prey" is excellent. So is the idea that when you idolize "markets", you are reducing human relations to a single dynamic: competition. We should incorporate these into our daily conversations with others. These two concepts can be powerful motivators for everyday Americans, and they are simple ideas that can be used to appeal to almost anyone regardless of literacy or prior political engagement/commitment.

marym , October 28, 2017 at 12:18 pm

We also need a language for the alternative: a concept of the commons. What should belong to (the public, the community, the workers ) and be administered for the common good? What do we want for ourselves that can best be provided if we provide it for everyone (healthcare by now being the most obvious)?

jrs , October 28, 2017 at 1:33 pm

honestly what does it even matter if people don't identify the water they are swimming in as neoliberalism and call it say capitalism instead? Most leftists do so, but so will many ordinary people (and so the young want socialism). Of course the term capitalism is broad enough to only add minimal clarity (except that it does add one real piece of clarity in identifying WHOM the system is run for the benefit of, although it excludes rentiers who of course play no small part). And so with ever evolving capitalism the Marxists may call it finance capitalism etc.

Market fundamentalism would indeed be a more useful term if that is what is being critiqued.

beth , October 28, 2017 at 9:46 pm

RabidGhandi: This is an important discussion. I agree that "neoliberal" is a stumbling block and not a word we can use to explain ourselves outside this community. I hope we revisit this problem regularly.

Maybe one way is to try a whole other direction outlined in Game of Mates written by two Australian economists, Cameron Murray and Paul Frijters.

Murray and Frijters explain how current Australian laws create a system that hurts Bruce while enriching James. AND IN THE SAME BOOK, they offer suggestions of how this could be changed. They use "James" to represent the few land developers who purchase the land and are granted rezoning permission or "grey gifts" while the "Bruces" do not benefit from the rezoning.

The authors do not present James as avaricious since the way the current rules and regulations are written anyone of us would do the same.

Since Australian regulatons parallel our own laws, I wish someone would "translate" the book for U.S. situations. Maybe NC geeks can do this but most people would not. Great book.

Sound of the Suburbs , October 28, 2017 at 5:11 am

What does Liberal mean?

It has two meanings and it is usually impossible to tell in which way it is being used.

1) Liberal as it was used in the 1950s – 1970s.
2) Liberal – neo-liberal / economically liberal

The early neo-liberals didn't like its 1950s -1970s connotations, later on they realised the benefits of obfuscating what they were up to.

A very right wing neo-liberalism is deliberately confused with a left wing liberalism to hide what they are up to.

Francis Fukuyama talked of liberal democracy, which sounded good. What he meant was neo-liberal democracy, which isn't.

How does identity politics work for neo-liberals? Imagine inequality plotted on two axes. Inequality between genders, races and cultures is what liberals have been concentrating on. This is the x-axis and the focus of identity politics and the liberal left. On the y-axis we have inequality from top to bottom.

2014 – "85 richest people as wealthy as poorest half of the world"
2016 – "Richest 62 people as wealthy as half of world's population"
2017 – Richest 8 people as wealthy as half of world's population

This is what the traditional left normally concentrate on, but as they have switched to identity politics this inequality has gone through the roof.

Labour (traditional left) – y-axis inequality
Liberal (liberal left) – x-axis inequality

George Soros is a [neo]liberal, can you work out why?

A liberal left leave neoliberals free to pursue an economically right wing agenda and push y-axis inequality to new extremes.

Enrique Bermudez , October 28, 2017 at 5:50 am

"Just deserts for predators and prey" – yes, very much this. I remember talking with my father about a year ago in a quasi-philosophical sense about where I felt western society had gone wrong. I could not quite adequately express the essence of my thoughts beyond "a fundamental devaluation of people as individuals."

I think it applies to foreign policy as well – however you want to put things. The ghouls/neocons/neolibs decide to start some regime change war somewhere. Hundreds of thousands/millions of the wrong people die. But the pipeline (or whatever) gets built on the correct parts of the map. No harm no foul and it's on to the next part of the giant "Risk" board.

Come to think, I actually quite like "ghoul" as a catch-all term for all these evil bastards. Can't remember where I first saw that – might have been here – but it fits.

David May , October 28, 2017 at 5:50 am

A good article on the neoliberal links to fascism: Why libertarians apologize for autocracy
The experience of every modern democratic nation-state proves that libertarianism is incompatible with democracy by Michael Lind.

Libertarianism is the version of neoliberalism used to get teenagers hooked on markets.

David May , October 28, 2017 at 6:11 am

What is neoliberalism? A market-based ideology willing to employ fascism to impose the conditions necessary to establish the market state. (ie, throwing people out of helicopters.) The state is co-opted to ensure rule of the Market. The value of everything, human life-included, is to be decided by the Market. (Except when the outcome is not favorable to the elite. Hence the need to takeover the state.)

The market state will impose Freedom™. Freedom™ means the law of the jungle and consequently many rebellious serfs, er, citizens unhappy with Freedom™. (Another reason the state will be needed – to reimpose Freedom™. That is, prison or maybe helicopter trips.)

allan , October 28, 2017 at 8:56 am

Whatever neoliberalism is, this is a perfect example of it:

A Student Loan Nightmare: The Teacher in the Wrong Payment Plan [NYT]

In 2015, he discovered that he was enrolled in a particular type of ineligible payment plan and would need to start his decade of payments all over again, even though he had been paying more each month than he would have if he had been in an eligible plan. Because of his 8.25 percent interest rate, which he could not refinance due to loan rules, even those higher payments weren't putting a dent in his principal. So the $70,000 or so that he did pay over the period amounted to nothing, and he'll most likely pay at least that much going forward.

So this is who we are now. For all sorts of reasons that made perfect sense at the time, we built additional repayment programs onto existing complexity onto well-meaning forgiveness overseen by multiple layers of responsible parties. And once that was done, Mr. Shafer, teacher of shelter dwellers and street kids and others whom fellow educators failed to reach, wasted a small fortune and will now shovel another one into the federal coffers.

Which leaves just one more question: If this is who we are, is it who we actually want to be?

Apparently, yes.

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets,
to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

kurtismayfield , October 28, 2017 at 11:23 am

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets, to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

Exactly.. once the majority are stripped of their assets and have to commit most of their income to rent, there *should* be no growth. Unless the entire system is running around asset inflation, which it is now. But that cannot last forever.

HotFlash , October 28, 2017 at 3:46 pm

The only ray of hope is that neoliberalism seems, by stripping the vast majority of people of income and assets,
to be wildly successful at suppressing aggregate demand and so contains the seeds of its own demise. Maybe.

I don't think that this is what They are thinking. The 'make it up on volume' is a retailer strategy, our MOTU are playing well above wholesale and actually are not in the goods-transferring biz at all. Finance, you know. Long before we are all gone, eaten alive or whatever, They will be turning their sights on where the real money is -- each other. Perhaps a few corners of life will survive, and I am curious as to what the new life forms, if any, that emerge out of this sea of pesticides, herbicides, garbage, and too much CO2 will be. Academic question, of course. Perhaps this is why there is no evidence of other intelligent life in the universe? That's too depressing, I'm gonna go make some cinnamon toast.

Altandmain , October 28, 2017 at 9:27 am

What is the real purpose of neoliberalism?

To create a feudal aristocracy using pseudoscientific propaganda. The government uses a combination of tax policy, deregulation, the destruction of legal protections (ex: labour laws), privatization, free trade, mass immigration, propaganda, and frankly, blunt force where needed to slowly dismantle the middle class.

The end result is a society that looks something like Russia in the 1990s or perhaps South Africa, with very high inequality along with high multiculturalism.

Enforcement is not consistent. For example, low and middle class workers are expected to compete in terms of lowest wages and poorest job security with the developing world. Meanwhile, the very rich can do whatever they want and not pay much taxes. Intellectual property is another example of this inconsistency, and allows corporations to rent seek on their IP, itself often a product of taxpayer funded R&D or bought from a small company (witness how big pharmaceutical companies are guilty of both of these).

It isn't pretty, but that is the real goal.

Always keep in mind the purpose of propaganda is to build a narrative.
https://www.counterpunch.org/2017/01/13/why-ridiculous-official-propaganda-still-works/

It is not meant to be easily repeated, no matter how easily disproven. Neoliberalism is perhaps the most visible example.

Thuto , October 28, 2017 at 11:05 am

Very true, speaking specifically of South Africa where I live, your analysis of the situation hits the mark. We have an openly neoliberal opposition party that fashions itself as a pro-poor party yet even a cursory glance at its policy stance reveals where the dictates it shouts regularly from its benches originate, and whose interests it represents (it's certainly not the poor). It campaigns heavily for the gutting of labour laws while advocating for the destruction of local industries by coddling up to foreign investors and free trade cheerleaders. Yet nobody seems to see the contradiction, because, as Altandmain says above, it's all about building a narrative through propaganda with the media as an echo chamber (if people think media ownership in the US is concentrated, they must try visiting SA). And the trickle down economics myth is very much the dominant narrative down here, with the rich being worshipped as demigods who hold the fate of the country in their hands, and as such, must have carte blanche to do as they please

Thuto , October 28, 2017 at 9:48 am

Intellectual capture of the general populace by co-opting (read buying) academia and the msm to extol the virtues of neoliberalism is what allows its pernicious effects to spread like wildfire. Credentialism and the pretentious grounding of neoliberal discourse in pseudoscientific rigor discourages critique from ordinary, "non-expert" people and co-opts even these lemmings (queitly being marched to their demise) to defend its ideological soundness. The question i've always had is this: how do countries get grassroots movements against neoliberalism going when the precursor to success against it seems to be eliminating basic and functional illiteracy among the general population about its inner workings and the instruments it uses to legitimize its evils (e.g. propaganda)? Outside of niche communities like here at NC, most people seem to care more about the Kardashians than equipping themselves with the chops (financial, technical etc) to call BS on all this. And this seems to be a war that will require numbers to win, but how to get those numbers when so many people appear to be so enchanted by the supposed virtues of neoliberalism ("getting ahead", ruthless competition etc).

PS: Some of us here at NC live in developing countries and the tentacles of this ideology have proven to be no respector of borders, as such, imho said grassroots movements would necessarily have to be transnational by spreading beyond the heartlands of global capitalism (Western Europe & US/North America).

Katz , October 28, 2017 at 11:03 am

One of the most illuminating lines I've heard in recent years comes from Matt Stoller: "neoliberalism is statecraft."

That's not an idea readily accommodated by the rhetoric/ideology of neoliberalism, but it's extremely useful for seeing beyond of them.

flora , October 28, 2017 at 11:03 am

Great article. Now when I hear TV/Journalist commentators suggest the nation-state is useless and democracy is obsolete I will know their point of reference and unspoken arguments. I will also listen for what they do not report on or talk about. 'The dog that did not bark in the night.' Thanks for posting. Two things:

1.
"Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, "

Austria in 1938 had no deep-rooted democratic history. It was part of the aristocratic Austro-Hungarian Empire until 1918, when that collapsed post WWI. Hayek and Mises grounded their philosophy in their post-empire/post-autocratic-rule chaotic national experiences – unstable newly imposed democratic societies which previously had a long history of autocratic rule and a bad or poorly done recent (post WWI) transition to democracy. E.g. Post WWI Weimar Germany was chaos, as reported by on-the-ground correspondent William Shirer.

Mises and Hayek also applied their ideas to well-established older democratic nations. In context, their philosophy did not apply to the well-established democracies. If anything, Mises and Hayek assumed a strong central govt inevitably meant a 'strong man' govt and not a democratic govt, it seems.

2.
" Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world."

The IMF and WTO and neoliberalism itself have become a 'strong man' or 'strong committee' supra-govt rule, imo. Neoliberalism's economic application has lead to the very conditions of weakening democracy and subjecting people to 'strong man/committee rule' Mises and Hayek tried to prevent by weakening the power of the nation-state, without regard to differences in nation-state governments and polity.

flora , October 28, 2017 at 12:20 pm

shorter neolib args:
All* strong govts lead to despotism. (*All? nope. false premise)

Weakening the power of all govt's will guard against despotism. (Really? nope. some forms of govt are a strong guard against despotism. false premise)

Replacing govt functions with market functions has no risk. (nope. see astronomical price increases in privatized govt services and deregulated markets. epi-pen?)

Therefore, weakening central govts and replacing their functions with private market solutions will be both risk free and guard against depotism. (False conclusion from false premises. And there are plenty of financially despotic markets.)

Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy; not perfect, always struggling to increase the franchise, but more accountable to citizens than markets.

JTMcPhee , October 28, 2017 at 1:12 pm

I'd urge all to read, and maybe re-read, the series of 6 or so articles posted by NC under the heading "Journey Into A Libertarian Future." The first article is here: https://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-i-%e2%80%93the-vision.html

Substitute "neoliberal" for "Libertarian" and note the operations of "government-like organizations" that already are systems of systems of predators and parasites that cooperate (while snarling and snapping and biting at each other) to kill and loot and drive the rest of us I guess "libertarians," whatever that term means any more, might be part of the Enabling Class that provides "policy cover" and arguments in support of the rapine that is in play

flora , October 28, 2017 at 11:06 pm

Thanks very much for this link. I just read the entire series.
Chilling.
Normally I'd dismiss this sort of fevered certainty as lost-cause deadender writing.
The series was written 6 years ago; before the Kansas Real Time Experiment; Obamacare ACA insurance-companies-will-sort-this-out; proposed TPP and TTIP and ISDS (arbitration and insurance companies will sort it all out). Now talk of sea-steading and "island" cities and organized voter suppression.
Chilling developments when placed against libertarian, anti-democratic, rise-of-the-supermen manifestos.

HotFlash , October 28, 2017 at 3:53 pm

My dear Flora, you have the outline of a book here. One I would be glad to read. How can I help?

flora , October 28, 2017 at 4:34 pm

Thankyou.

I've just listened to the Mirowski interview* linked in the main article. According to Mirowski it is the neo-classicals who want a weakened national govt, not the neo-liberals. So I've confused the two and need a rethink.

Mirowski says (paraphrasing) the neo-liberals " changed the idea of what a market is " and believe that " the market is a super information processor that knows more than any human ever could ." (My aside: This is irrational, but that doesn't stop them.) Therefore
Mere humans should be subordinate to the market because the individual can never know as much as the market and cannot even know himself outside of his relation to the market. (This is also irrational and sounds despotic to me. Sounds like saying a person should be subordinate to computer programs.)
Neo-liberals, therefore, want a strong national govt that they control to promote and expand markets and the market ideology/idolatry everywhere. (Where have I heard that sort of quazi-political/philosophical argument used before?)

* starts at the 6 min mark. 18 min mark "super information processor"

https://majority.fm/2014/06/26/626-philip-mirowski-how-neoliberalism-survived-the-financial-meltdown/#

grebo , October 28, 2017 at 9:28 pm

Too bad Mises and Hayek didn't live in the UK or France or US or Canada or other long established democracy;

They did. von Hayek spent the 30s and 40s in the UK, the 50s in the US and retired to West Germany. von Mises went to Switzerland in 1934 then the US in 1940 and stayed there. They were, of course, esconced in academia (ie. in their own minds) the whole time.

flora , October 28, 2017 at 11:07 pm

ah. I gave them a benefit of doubt they may not have deserved. Thanks.

Rod , October 28, 2017 at 11:27 am

here is a bit of the antidote–discussed 10/24 in NC regarding the efforts to restore Puerto Rico–

Farmers' groups are now calling for the proliferation of community-controlled agricultural cooperatives that would grow food for local consumption. Like the renewable energy micro-grids, it's a model that is far less vulnerable to supply-chain shocks like hurricanes -- and it has the additional benefit of generating local wealth and increasing self-sufficiency.
As with the solar-powered generators, Puerto Rico's farmers aren't waiting for the emergency to subside before beginning this transition. On the contrary, groups like Boricuá Organization for Ecological Agriculture have "agroecology brigades" traveling from community to community to deliver seeds and soil so that residents can begin planting crops immediately. Katia Avilés-Vázquez, one of Boricuá's farmers, said of a recent brigade: "Today I saw the Puerto Rico that I dream being born. This week I worked with those who are giving it birth."

The CoOperative movement emerged in the USA at the end of the 19th century to provide funding and resources where there was plenty of need but not too much profit to be made.

concrete stuff, not ism , October 28, 2017 at 12:03 pm

Isn´t this one of the problems with -isms in general? Communism also has a thousand meanings depending on who you talk with. Could be everything between the theoretical Marx-Engels version and the practical realities of Soviet Union/China and other countries claiming to be "communists".

It seems to me that neoliberalism has been so efficient in establish itself thanks to:
1) being implemented by military forces = the rest of the world outside Europe/US, and now being maintained through the thorough militarization of western societies: police, censorship etc.
2) not focusing on being and -ism/ideology but on concrete advises/policies presented in numbers/graphs (the mathematification of economics)
3) useful idiots in the form of the identity politicians: if they would have been focused and using their vast amount of energy on countering the maths of economics (before Steve Keen´s Debunking Economics), instead of counting how many oppressed minority identities can dance on the head of white middle-aged man, it would have been much more difficult to implement the neoliberal policies. Or it would have at least accelerated the militarization of western societies so that the clash between class interests will start, as they always do.

Maybe better to focus on concrete stuff in arguments, like,
– public ownership of energy and infrastructure in order to guarantee all citizens access. E.g. Sweden privatized energy production and distribution in the 90s. During one winter there wasn´t electricity enough to heat houses because the private companies had done away with excess capacity. Privatization/neoliberalism = not serving the society with electricity when the society needs it the most.
– Public healthcare, education etc. Every % of profit a company requires for the owners, this means the same % less to the citizens
and so on.

All good for me, but not for you is a key part of neoliberalism
http://exiledonline.com/monster-koch-bust-charles-koch-used-social-security-to-lure-friedrich-von-hayek-to-america/

Modern example, free health care for senators and senate, but not for the people.

marym , October 28, 2017 at 1:03 pm

OK with most of this, but members of congress and staff don't get free healthcare. Though members have access to some free services, they and some staff purchase insurance on an ACA exchange called. Other staff remain on the pre-ACA FEHB program in place for other federal employees. Both programs are employer (taxpayer) subsidized so they only pay a portion of their premiums, plus whatever their deductible is. For the ACA policies, to get the premium subsidy they need to choose a gold plan, so will have about 10% in copays.

https://www.snopes.com/members-congress-health-care/

Eclair , October 28, 2017 at 12:36 pm

Nice exposition of the term, neoliberalism, Gaius. Thank you.

I think I first began seeing the term about eight years ago, right after the financial meltdown. About five years ago, I proposed writing a series of pieces for a group that had arisen out of the Denver Occupy movement, kind of an "Ask a Neo-Liberal," column, but most people had never even heard of the term and when I did a bit of research, I just could not pin down definitions or examples.

So, how do we begin to counter the main tenets of neoliberalism: glorification of 'the market' as the arbiter of lives, with the resulting dominance of competition over cooperation and the atomization and breakdown of social ties; we live in a 'dog eat dog' world, only the strong survive, self-reliance got me where I am?

Some days I think that this creed is the natural result of a Planet that has exceeded its carrying capacity of humans. When there were far fewer humans, cooperation and strong social bonds were the only means of survival. Really. The development of Neo-liberalism is Nature's way of getting rid of us.

But, Neo-liberalism decrees that the survivors will be, at best, rapacious, aggressive and materialistic. At worst, they will be socio-paths. It's like the Planet if only jaguars, vultures and leeches, out of all our animal relatives, survived. Do we want that to happen? OK, I realize that some of us have just given up and are sitting back to watch the slow motion disaster unfold.

First, admit that under the current system, the vast majority of us are Prey, and the .01% are Apex Predators, hunting us down, ripping, squeezing and sucking the life (and our livelihoods) out of us. How do our animal relatives who are not equipped with claws, sharp teeth and muscles built for speed, survive?

We run even faster, we develop camouflage and hide, we grow armor, we refine cooperative social skills and live in enormous colonies, (preferably underground!) where our vast numbers and ability to mobilize for work and protection provide security, we develop symbiotic relationships with larger and stronger organisms (although some might label this as 'vichy-ism,') we become almost invisible, yet with a deadly sting or poisonous coating, and we realize that sometimes we have die so that other members of the group can survive.

And, we realize that the area in which we live, our little eco-system, is crucial to our survival. We don't mess it up.

shinola , October 28, 2017 at 12:48 pm

"Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast."

Used to be called Social Darwinism.

HotFlash , October 28, 2017 at 3:57 pm

Yup. The new part is the govt setting the table, though.

DJG , October 28, 2017 at 1:04 pm

How to talk about neoliberalism, which is indeed a mouthful? I was at a dinner last night of two generations of UofChicago products (as am I). We all agreed that the "Law & Economics" movement there should be dismissed out of hand as plain stupidity. I think that we spend too much time imagining that there is some Ideal Marketplace of Ideas in which the good ideas drive out the bad. And then we come up against Facebook and Twitter. So one way of talking about it is that the law has to govern markets: Neoliberalism is lawlessness. You can have law or you can have looting.

And we've certainly seen plenty of lawlessness.

Another way is to call it unconstitutional, if your interlocutor knows the U.S. Constitution. The U.S Constitution doesn't have much to say about economics, and it doesn't assume that laissez-faire is a-okay.

Further on it being unconstitutional: The U.S. Constitution brilliantly foresaw the need for some kind of bureacracy to maintain the government, rather than a claque of courtiers. So it set up the Post Office–that bureaucratic agent of oppression, Uncle Mises! It called for a census and a Census Bureau–woe betide us Uncle Milton!

You can either have the U.S. Constitution with its flaws, or you can have people eating bagels with gold foil and telling you that markets rule our lives? So which is it?

Maybe we should just call neoliberalism Gold-Bagel-ism. The antidote, as mentioned above in the thread by commentes like marym, is to return to some discussion of our Commonwealth and what to do to maintain it.

BillC , October 28, 2017 at 1:55 pm

Like water to the fish.

For me, the most effective opener (both in the sense of opening discussion as well as the listener's mind) is to state that neoliberalism is to nearly everyone in the "developed" world (and beyond) like water for fish: it's the environment in which we live, and thus becomes invisible to us. Excellent elaboration from above: it's as if citizens of the USSR had never heard of the word "communism;" instead it's just how life works.

If we can get this opening across, then the definitions and explanations discussed above in this thread may be much more effective.

ex-PFC Chuck , October 28, 2017 at 8:25 pm

Thank you Gaius for a great post – and a thanks as well are due to the authors of the good comments. As I've been reading these it occurred to me that perhaps a good conversation starter would be to ask the person what they thought of Margaret Thatcher's remark, "There's no such thing as society. There are only individuals and families." You'll have to wing it from there depending on the responses you get.

HotFlash , October 28, 2017 at 4:03 pm

I also wonder aloud to them, "Why it is that when individuals do whatever they want it is called lawlessnes or anarchy, Bad Things, but when corporations do whatever they want it is considered a Good Thing?"

WobblyTelomeres , October 28, 2017 at 9:03 pm

Something like this?

https://www.youtube.com/watch?v=I6mpHW3SMcc

[famous North Dallas 40 scene]

Barry , October 28, 2017 at 1:23 pm

The roots of neoliberalism in the Mont Pelerin Society is also well covered in MacLean's Democracy in Chains.

While I like this article, I disagree with the relationship of neoliberals to markets and to competition. Markets are held up to displace blame for decisions and policies made by men. The powerful use competition to explain why you deserve less and they deserve more, even when actual competition is not happening, and they actively work to prevent it.

Predators and prey do not compete for resources. A system that enshrines predation among humans is not based on a buyer and a seller making a transaction at the efficient price that maximizes each's utility and produces the best use of society's resources.

HotFlash , October 28, 2017 at 4:13 pm

Agree, but for most of the people I talk to, that argument comes second. First I try to demonstrate that NeoLiberalism doing what it *says* it does is bad for us. Once they have that then I can proceed to 'NeoLiberalism doesn't even do what it says it does'. Although, I think that your point is a good first argument with small business people, "You mean that you think that your 5-employee cabinet shop makes you buddies with Elon Musk? (sub whatever rich guy your would aspire to be)" If the time seems right I might add, "He would have you on *toast*." If they think about that, they usually get it.

Barry , October 28, 2017 at 4:36 pm

I seldom even get to the point of being able to argue about these issues at all, much less take people thru the layers of consideration I've gone through over the years to reach my current model of how the world works.

I have been told that all of the books and weird websites that I read as I study a subject in depth are evidence that I lack objectivity about it and that people who know what they know from reading ordinary news have a clearer understanding than I.

TG , October 28, 2017 at 1:23 pm

"I suppose the neo-liberal philosophy could best be summed up by their rallying cry: the freedom to choose to own slaves."

"But that doesn't make sense. Freedom to choose is logically incompatible with slavery. And they never said that."

"Indeed. They would claim to be all for freedom, and against slavery. But if someone was profiting from owning slaves, they would fight tooth and nail to protect them, because any attempt at restricting the profits of slavery was seen as an intolerable corruption of the sacred free market. It was how they operated. Depending on what their rich patrons wanted at the time, sometimes they were all for free trade between the old nation states, and sometimes they demanded that the wealthy have the 'freedom' to restrict trade. It did not matter that what they said made no sense, or was logically incoherent, or at variance with reality. They never apologized, never explained, but only acted with total arrogance and self-confidence."

From "Space Battleship Scharnhorst and the Library of Doom."

Barry , October 28, 2017 at 3:59 pm

It makes sense if you believe in freedom to choose how to spend your money. How much choice you have, and how much choice you deserve to have, is measured fine-grain in dollars and cents. Other forms of power are deemed illegitimate.

it's sliding-scale individualism, where everyone is on their own, and wealth determines how much of an individual one is. The more of an individual you are, the more liberty you have, and liberty should be protected by the state.

HotFlash , October 28, 2017 at 4:16 pm

Yes. I argue that one as "one dollar, one vote". People without a lot of dollars understand that on a gut level.

Barry , October 28, 2017 at 4:28 pm

I tend to think of "one dollar, one vote" when considering elections and politics; while at the same time neoliberalism is about interpersonal power without direct regard to the functioning of the state.

By this I mean that if, for example, Peter Thiel decides to spend his money to destroy you, and you don't have enough money to prevent it, then you deserve destruction. That's liberty. You're free to choose to spend your money defending yourself. Or not.

HotFlash , October 28, 2017 at 4:46 pm

Exactly. People in a democracy have been raised to think that they count as much as the next person, no matter how rich or poor -- at least I hope that is till happening. Well, unless they are rich, who think they rightfully account for more. So when I say "one dollar, one vote" to poor/middle people (in an ironic sense, just so that is clear), they *feel* that it is not fair. If that catches, I point out that it goes against what they have been taught about how democracy works. I often bring this up in the context of campaign $$$ and Citizens United. It opposes the 'if they have the money then it's theirs' argument, aka 'the aristocratic' and 'it's his bat and ball'.

Scott , October 28, 2017 at 1:24 pm

For a long time now I have tried to reconstruct what it was in 1978 that convinced me it had become impossible to reform the United States.
Gaius has gotten me closer to a reconstruction of why I determined the only real solution was to create another nation, and kicked off what I recognize now as my own modeling.
My sense of what difference the goal is makes is a government that is just and fair for all citizens.
This is not the case in the neoliberal world is it. The goal of the neo-liberal world is to advance a milder form of scientific socialism, meaning the good people, well spoken well dressed no matter either in business or academia get the money for lives depicted on TV shows.
Working class people must become super humans to become educated and properly dressed to be accepted into a world of plenty and safety.
One thing I appreciate about Russians is a unique love of beauty. It is depressing that American's whole aesthetic sense revolves around cars and art is of no interest until it is ultra expensive.
Len Deighton's description of liberalism as developed in the 1840s which went on to mean the children of the newly enriched engineers who made hand built the Industrial Revolution making cotton underwear were given the money to for the schools of the old school rich people of Britain and all the rich people were in finance whether they came from old money or new money.
So I don't think of neoliberalism as about markets as much as I do think of it as the complete ascendancy of the parasites of Finance.
Creditors do not write down or write off debts of the working classes. Finance now has been given the US Treasury. Listening to Minuchin saying on the TV, in fact even seeing a face saying, "We must let the States Go and they have to make it on their own." Means there is simply no reason then to put any money by anyone into the US Treasury. The United States is just a huge military engaged in little and large wars all over the world anyway. Why ought anyone pay taxes to further the new owner of the Empire, Rome?
Deighton writes that since all the sewing machines and looms were moved to India, by the time the 19th Century ended Finance had gambled away all of the wealth of the UK.
"I like to play with debt, but it is tricky." Says Trump.
As long as you are the "Loss Payee" bankruptcy is as fine as any sort of success aye? "I don't pay taxes, I'm smart."
The aim is to lose all the money, then have it all given to you by the Treasury.
There is no citizenship of the World Citizen, or Jet Setter. They don't need any real citizenship.
For the majority, the nation matters. It may be the only thing they have of any value. The nation we are in love with it the nation that would go to defeat the Barbary Pirates over the capture of one US citizen, a stand in for you.
The one we have makes heroes and a President of the parasitical pirates come from neofeudalism.
In Texas even swords are coming back.

Ep3 , October 28, 2017 at 1:26 pm

Yves, great article, and loved the interview with Mirowski.

Here's the thing I see Neo-liberalism has done for society as a whole. If I asked you to "I present 2 humans before you and ask which one has more value to the world, which one, if there was only one hamburger left to eat, deserves to eat that sandwich, deserves to survive in a world with limited resources (which is what earth is), how would you go about choosing which one"? I am saying Neo-liberalism says "look at their wealth". It judges people by how much money/wealth they have. The only way to judge whether one human should survive over another is by the amount of money they make.
Jimmy Carter said in 1980 how we are moving as a society to how we rate a man is by the amount of money he has. If he was the proto-Neo-liberal, then it makes sense.

Barry , October 28, 2017 at 4:43 pm

One of the conceits of neo-liberalism (and I guess capitalism in general) is that how much wealth one has indicates how much one is owed for one's contribution to society (because markets allocate resources optimally). Thus the biggest takers are transformed into the biggest givers.

Wukchumni , October 28, 2017 at 4:46 pm

So if a UFO landed and little green men came out, they'd say:

"Lead me to your takers."

Wukchumni , October 28, 2017 at 1:39 pm

Neo-liberalism doesn't care or think all that much about it's actions, as long as they are profitable.

We have this ridiculous never ending series of wars and nobody's marching in the streets or even making a fuss about it, as we've accepted the premise as business as usual.

It has the feel of the Vietnam War still going in 1982, and nobody cared.

Other countries look at prisons as a necessary evil, whereas we can't have enough of them, so much so that we allow private companies the right to incarcerate our own citizens.

HotFlash , October 28, 2017 at 4:56 pm

nobody's marching in the streets or even making a fuss about it

Lessee, last time I recall Big Street Protests was Occupy. They got shut down , brutally. NoDAPL, similar, even the Trump inauguration protests. Marches not reported -- they might as well not have happened. But I believe they really, really did happen.

Wukchumni , October 28, 2017 at 5:00 pm

An older friend was going to Cal State L.A. around 1970, when a good number of the student body decided to walk onto the nearby 10 freeway and shut it down, as a protest against the Vietnam War.

you seeing anything like that out there?

JBird , October 28, 2017 at 5:15 pm

We incarcerate so many because it is profitable as jobs program for voters in poor counties, slave labor for manufacturing, and profitable for corporations/donors.

Jeremy Grimm , October 28, 2017 at 6:09 pm

I believe discussion of Neoliberalism is very much like discussion of Global Warming. "Weedy" or not, "academic" or not both discussions require transit through some difficult concepts and technical depth. In the case of Global Warming discussions you either come to grips with some complicated climate science or you end up discussing matters of faith drawn from popular "simplifications". In the case of Neoliberalism the discussion necessarily enters a region which requires attention to fine details which when followed to their end tend to have deep and broad implications.

In the interview referenced by this post Phillip Mirowski asserts Neoliberals believe the Market is an information processor which "knows" more than you or I could ever know. He also introduces the concept of a Thought Collective -- which he states he adapted from writings of Ludwig Fleck related to describing a method for study and explanation of the history of Science. I believe both these "weedy" "academic" distinctions are key to understanding Neoliberalism and distinguishing it from Neoclassical economics and Libertarianism. The concept of a Thought Collective greatly aids understanding the particularly slippery nature of Neoliberalism as a term for discussion. That slippery nature is no accident. The Market as a theory of knowledge -- an epistemology -- makes apparent the philosophical even "religious" extent of Neoliberal thinking.

Two recent papers by Phillip Mirowski tackle the difficulties in defining and discussing Neoliberalism. They are both "weedy" and "academic" and unfortunately help little in addressing the issue RabidGhandhi raised at the root of the lengthy thread beginning the comments to this post.

"The Political Movement that Dared not Speak its own Name: The Neoliberal Thought
Collective Under Erasure" 2014
[https://www.ineteconomics.org/research/research-papers/the-political-movement-that-dared-not-speak-its-own-name-the-neoliberal-thought-collective-under-erasure]

"This is Water (or is it Neoliberalism?)" 2016 -- this is a response to critics of the previous paper.
[https://www.ineteconomics.org/perspectives/blog/this-is-water-or-is-it-neoliberalism]

There have been several oblique references to this story -- so I'll repeat it since I only recently ran across it.
There are these two young fish swimming along, and they happen to meet an older fish
swimming the other way, who nods at them and says, "Morning, boys, how's the water?" And
the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, "What the hell is water?"

I am afraid that little story says volumes about the problem RabidGhandhi raised. I believe remaining "weedy" and "academic" is the very least service we might do to discussing Neoliberalism and when arguing topics related to Neoliberalism -- and probably the least damage.

[Oct 27, 2017] The Rise and Fall of the Phillips Curve by Ed Walker

Notable quotes:
"... The History of the Phillips Curve: Consensus and Bifurcation ..."
"... The Fed Has a Theory. Trouble is the Proof is Patchy ..."
"... Do Phillips Curves Conditionally Help to Forecast Inflation? ..."
"... Declining Labor and Capital Shaes ..."
"... I am constantly baffled by economists trying to explain very complex non-linear system with simple two variable models. I have been dealing with a couple of engineering problems today where the publication I am using has over 50 design charts just for gravity pipe flow. Each chart has about five variables accommodated while holding a number of others constant. ..."
"... So I think we see the Philips curve predictably happening in the short-term in fields like technology where there is big demand and not enough people. However, as a general rule across the economy, I simply don't see why the relationship between inflation and unemployment should be the same today as it was in 2007, 1997, 1987, or 1977. ..."
"... Economics is infected with too much ideology and not enough scientific method. That is more the definition of a religion than a science. ..."
"... If neoliberals were intellectually honest, they wouldn't call it supply side economics, they'd call it philo-capital economics ..."
"... 80's Poly-Sci defined, "neo-feudalism" (or, as "Shock Doctrine", privatization of all "resource" + government capacity, subject financial sector capture) ..."
"... As far as I can tell, the whole idea of NAIRU is strictly an artifact of economic modeling, not something that's actually ever been observed in the wild. And doesn't it seem odd that making sure we don't drop below NAIRU is something the Fed feels like it needs to intervene to ensure rather than letting the market sort it out. Even if NAIRU was a real thing, you would assume that low unemployment –> increased wages –> increased prices –> reduced consumption –> lay-offs and higher unemployment. Which is to say, if there were such a thing as a natural rate of unemployment, wouldn't markets naturally produce it, obviating any need for the Fed to, say, jack up interest rates to keep the economy from "heating up" (I guess because people have so much money burning holes in their pockets?). It almost like, when it suits the capitalists, they stop believing in this whole "invisible hand" thing .strange ..."
"... "Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning. ..."
Oct 27, 2017 | www.nakedcapitalism.com

The Rise and Fall of the Phillips Curve Posted on October 27, 2017 The Phillips Curve says that there is an inverse relation between unemployment and inflation. Low unemployment is correlated with a rise in inflation. It's an article of faith to economists of all stripes. It's listed in the popular introductory economics textbook by N. Gregory Mankiw as one of the Ten Things All Economists agree on . It's especially loved by the Fed, which raises or lowers interest rates depending in part on its predictions. Its critics point out that its predictions are poor.

In this post, I discuss the derivation of the Phillips Curve, its adaption by Samuleson and Solow to manage the economy, its breakdown in the 1970s, exploitation by neoliberals of that breakdown to replace Keynesian demand-based economics with monetarism and supply-side economics, its rejuvenation, and the evidence that it doesn't make accurate predictions.

I conclude with some observations based on an important paper by Simcha Barkai that challenges the core beliefs of neoliberalism. It suggests we can raise wages substantially without causing inflation by lowering corporate profits.

History

This part is based on Sections I-III of Robert Gordon's article, The History of the Phillips Curve: Consensus and Bifurcation , Economica (2011) 78, 10–50 (behind paywall, but you can find it online at your local library). Gordon is an economics professor at Northwestern and has worked on the Phillips Curve for decades.

William Phillips published a paper in 1958 showing a correlation between wage growth and inflation in the UK between 1861 and 1913. He fitted a curve to the data, and then compared that curve to UK data from two later periods. There was a remarkable similarity for most of the two periods, with exceptions Phillips explains away. Here is the curve Phillips derived:

1. w t = -.90 + 9.64U -1.39

Gordon says that " the inflation rate would be expected to equal the growth rate of wages minus the long-term growth rate of productivity." P. 12.

1a. p = w – k

Here p is inflation, w is wage growth, and k is productivity growth. Generally in these equations, lower case letters are rates of change and upper case letters are levels. We can substitute Equation 1a into Equation 1 to get the original Phillips Curve.

2. p = -.90 + 9.64U -1.39 – k.

Paul Samuelson and Robert Solow picked up on the Phillips paper with a paper of their own in 1960. Gordon says much of their paper is a discussion of pre-Phillips theory. They can't find data on the US economy similar to that found by Phillips for the UK economy, so they work up some of their own data and make some calculations showing a result similar to that of Phillips. Whereas Phillips does not mention the possibility that the curve might shift, Samuelson and Solow find such shifts and offer possible explanations, such as strong labor unions.

Here's a schematic drawing of the Phillips Curve from Wikipedia :

The standard curve might be the one on the left. It shows very high inflation at very low unemployment, but falls quickly as unemployment rises. That suggested to Samuelson and Solow that there is a trade-off if the economy is in specific parts of the Phillips Curve: by allowing a slightly higher level of inflation, you could get a big drop in unemployment. The US tried this idea in the 1960s. This policy was tied to Keynesianism, which was the predominate theory in the Kennedy and Johnson era, and into the Nixon Presidency.

When OPEC massively increased the price of oil in the early 70s, inflation soared far past the level suggested by the Phillips Curve. The neoliberals at the University of Chicago argued that the failure of the Phillips Curve proved that Keynesian economics was worthless, and pushed their solution: monetarism. They also had a formula to replace the Phillips Curve as a predictor of inflation.

Their explanation for the failure of the trade-off was something like this. Suppose the beginning rates of inflation and unemployment are at Point A on the above chart. The Fed lowers interest rates resulting in a small increase of inflation, so that the economy moves to Point B with lower unemployment. People believe that is unsustainable, and that the economy will revert to the natural rate of unemployment, the vertical line. As a result, the Phillips Curve shifts up and to the right over time, so that the economy moves to Point C, with the beginning unemployment rate but higher inflation.

The neoliberals won. Keynesianism lost out and was replaced by monetarism. This was probably not deserved, according to Gordon. He says that Samuelson and Solow were not talking about the situation that came about in the 70s, but rather the situation in the early 1960s. He also spends a good part of his paper showing that the formulas offered by Friedman and the neoliberals for predicting inflation were a total failure both on factual and theoretical grounds.

Gordon himself proposed a version of the Phillips Curve designed to deal with the problem of supply and demand shocks like the Oil Shock:

3. p = Ep t + b(U t – U t N ) + z t + e t

In Equation 3, the second U term is the natural rate of unemployment, z t represents cost-push pressure, and e t is apparently a constant. The natural rate of unemployment and the z term vary over time, and for some reason so does the e term. There is nothing left of the wage term. The Phillips Curve is now free from the bonds of factual data that gave Phillips his interesting result. It's a curve-fitting exercise, using economic theories put together in a way that fits the data. It's a complicated formula in which every term needs to be calculated from some other theory or data.

Gordon says that Equation 3 is the canonical version of the Phillips Curve. It is incorporated in most econometric models, modified by some other variables and terms, including levels of taxation, expectations of inflation, inflation inertia, which relates to price and wage rigidity in the short run, and a host of other terms. But as we shall see, it doesn't work as a predictor.

Criticism of the Phillips Curve

The Phillips Curve has been controversial for a long time, as Mankiw admits in his introductory textbook. Ben Leubsdorf wrote a very readable criticism for the Wall Street Journal on August 14, 2014, just before the Fed started raising interest rates. His title is The Fed Has a Theory. Trouble is the Proof is Patchy (sadly behind a paywall; it's available online at your local library).

Leubsdorf confirms that most economists believe that there is a short run trade-off between inflation and unemployment and also agree that this trade-off doesn't hold in the long term, meaning that we can't get permanently lower unemployment by accepting a bit more inflation. But the problem is that there is also no apparent connection in the short run either. Here's a chart originally in Leubsdorf's article and reprinted in a post discussing the article by Jared Bernstein .


Source: Wall Street Journal

To read this chart, select an expansion period from the list on the upper right, find the line that color, and locate the circle at one end of the line; that's the starting point. Then follow the line to see how the relationship between unemployment (x-axis) and inflation (y-axis) changes over time. As you can see there is no apparent connection in any except the first expansion. The lack of connection to theory is especially obvious in the current expansion.

The Leubsdorf article has several quotes from Very Serious People to the effect we think there's a relationship and we're going to act like there is a relationship, and we can fine-tune the economy with our gut instincts.

It doesn't look like the latest study will change minds either. That one comes from the Philadelphia Fed in August 2017, Do Phillips Curves Conditionally Help to Forecast Inflation? The conclusion is that the Phillips Curve does worse than something called a univariate model which I won't discuss.

In this September 26 New York Times article there are more Very Serious People explaining they need to follow their instincts about the economy in deciding on interest rates and they are sure inflation is coming. Meanwhile, the economy continues to add jobs with no obvious increase in inflation as shown by the blue line on the above chart. Inflation is currently running at 1.3% .

Damage From the Phillips Curve

We have already seen that the first notable failure of the Phillips Curve was used to undermine Keynesian economics in favor of monetarism. As a result, working people of all classes were doubly harmed, first by the abandonment of the Fed of any significant role in cutting unemployment, and second by the savage use of high rates to control inflation.

Here's a chart showing the labor share in gross national product on the left axis (blue line) and the prime rate on the right axis (red line).

The grey bars are recessions. This chart shows that up to 2000 every time workers start to get a bigger share of the GDP, the Fed raises interest rates. The Phillips Curve was the justification for those rate hikes. There is some evidence wages are firming up today, and maybe even rising a fraction faster than inflation. Following tradition but not evidence, the Fed is raising rates. If that hurts workers, also in accordance with tradition, that's just too bad.

Observations

Take another look at Equation 1a. If we set inflation at zero, Equation 1 says that wage growth equals productivity growth. That's not true. Here's a chart from the Economic Policy Institute .

The wage line is for production and non-supervisory personnel, which the EPI says is about 80% of employed people. The average wage for all workers has grown somewhat faster, but is still well under the rate of increase of productivity over the long term.

Money produced in the economy goes either to capital or labor. So, the excess gains from productivity must be going to capital.

Actually, it seems strange to suggest that none of the gains from increased productivity go to capital, as Equation 1a does. Consider a company like Google. It can buy a few more computer blades and serve more customers with little or no increase in total wages. The gains from the productivity of the new capital all go to the company. Or consider a company that outsources its labor. Some of the gains might be used to cut prices, I suppose, but surely most of the gain stays with the company.

The following chart shows the sudden growth in top wealth. It demonstrates that the growth began at the same time as the productivity-wages gap began, more support for the idea that the gains from productivity are going to capital.

Capital can take many forms. It could be plant and equipment, commercial or agricultural land, personal residences, art, gold, and many other things believed to store value, whether or not they are actually producing anything, or even whether they actually store value. We know that top wealth is rising, the stock market is up, and the value of residential real property in all major cities is rising. All these and more suggest that the total amount of capital is increasing. All that increase is funded by the gains from productivity.

A recent paper by Simcha Barkai, Declining Labor and Capital Shaes , provides a convincing explanation. The labor share is declining he says. But so is what he calls the "capital share", a defined term, calculated by multiplying the "required rate of return" by the capital stock deployed in the non-financial business sector. Capital stock includes plant and equipment, land, and intangibles such as patents and software, less depreciation. The required return on capital is approximately and sensibly defined as the cost of obtaining capital in the financial markets. He shows that the cost of capital has declined by 7% over the period of his study, 1984-2014. If the amount of capital deployed had increased as might be expected with this large drop in cost, the capital share might have remained the same. Instead, businesses did not deploy additional capital, and the capital share declined by some 30% over the period. During that period the labor share declined 10% from a larger starting point.

The combined losses were more than made up by increases in the profits share. Profits add to the value of the firm, and are distributed by the owners of firms as they see fit, which isn't to lowly workers. This is from Barkai's paper:

Across specifications, the profit share (equal to the ratio of profits to gross value added) has increased by more than 12 percentage points. To offer a sense of magnitude, the value of this increase in profits amounts to over $1.1 trillion in 2014, or $14 thousand for each of the approximately 81 million employees of the non-financial corporate sector. P. 3.

Barkai attributes this almost entirely to increased concentration of US industries, and most of the paper is devoted to proof of that conclusion. He links that increase in concentration to changes in anti-trust law and policy engineered by Robert Bork when he was at the University of Chicago.

Conclusion

Following Barkai, we should rewrite Equation 1a like this:

1b. p = w + γ + c t – k

where γ is the rate of growth of the profits share, c t is the rate of growth of the capital share, w is the rate of growth of wages, p is inflation, and k is productivity. Substituting the original Phillips equation, Equation 1 into Equation 1b gives us

4. p = -.90 + 9.64U -1.39 + γ + c t – k.

This equation calls attention to the role that profits play in the economy, something economists generally generally ignore. When people do discuss profits, it's always in the context of the importance of capital and the need to coddle it. That view lies at the heart of neoliberalism, and at the heart of Fed policy. It is also at the heart of the Law and Economics movement also spawned at the University of Chicago, a movement that has changed the legal system to favor capital. If neoliberals were intellectually honest, they wouldn't call it supply side economics, they'd call it philo-capital economics.

Equation 1 has been replaced by Equation 3 in the standard model of the Phillips Curve.

3. p = Ep t + b(U t – U t N ) + z t + e t

Making this work with Barkai's analysis is harder. We get a clue from Gordon's explanation of the z term: he call it cost push, meaning price shocks caused by labor unions and "bauxite barons". This is where capital growth fits in. The ability to control markets gives firms the ability to cause price shocks, as when pharmaceutical companies drive up the price of epi-pens or other drugs, but also the ability to gradually increase prices above the rate of inflation. Therefore, I'd rewrite Equation 3 this way:

5. 3. p = Ep t + b(U t – U t N ) + γ + c t + e t

Gordon doesn't explain the e term, so we'll just let that pick up anything that used to be in the z term that is somehow missed by my addition. It would, for example, include demand-pull inflation, which hasn't been a problem for some time.

In the current situation, with profits at very high levels, we can easily increase wages without increasing inflation if the rich were willing to accept lower profits, subject to the availability of sufficient resources to meet the new levels of demand substantially higher wages might cause.

Barkai says just distributing the historically high profits to workers would give every working person (other than those in the financial sector) a $14K raise. That dwarfs the make-believe $4K-9K per household the Republicans promise from their proposed tax cuts.

Unfortunately, the Phillips Curve isn't the only thing blocking action to help the average citizen.

Synoia , October 27, 2017 at 10:16 am

Economists will tell whatever story, with whatever rationale that fits their story, to please their pay-masters.

Just like court magicians or priests divining augers for their emperors

They try to predict the future of a chaotic system, which is impossible.

Telling the rich and powerful what they want to hear is both possible and profitable.

rd , October 27, 2017 at 1:21 pm

I am constantly baffled by economists trying to explain very complex non-linear system with simple two variable models. I have been dealing with a couple of engineering problems today where the publication I am using has over 50 design charts just for gravity pipe flow. Each chart has about five variables accommodated while holding a number of others constant.

So I believe the Philips curve is valid but it is in a different place in multi-variable space each decade or so based on fundamental changes in the economy. Over the past thirty years, I can think of four major changes off the top of my head that lead me to expect the Philips curve to translate in multi-variable space:

1. Free trade agreements (NAFTA etc.)
2. Technology displacing workers
3. Baby boomer demographic moving from entering peak productivity to retirement age
4. Women and minorities are becoming more widespread throughout most or all jobs.

So workers to day are now competing more with Second and Third World workers while technology is dramatically changing the workplace (e.g. secretarial positions dramatically reduced), and inexperienced 25 year old white men, women, minorities are being hired to replace experienced 60 year old white men. Why would we expect to have a nice linear relationship between unemployment and wages across this period?

So I think we see the Philips curve predictably happening in the short-term in fields like technology where there is big demand and not enough people. However, as a general rule across the economy, I simply don't see why the relationship between inflation and unemployment should be the same today as it was in 2007, 1997, 1987, or 1977.

Economics is infected with too much ideology and not enough scientific method. That is more the definition of a religion than a science.

diptherio , October 27, 2017 at 10:42 am

Good article. In my econ undergrad, I remember my intermediate macro professor pointing out that reality didn't match the theoretical Philips curve very well and then we continued assuming that it did, for the remainder of the course. {facepalm}

If neoliberals were intellectually honest, they wouldn't call it supply side economics, they'd call it philo-capital economics

Might I suggest "capitalphilic economics"? Seems to roll off the tongue a little better.

nonclassical , October 27, 2017 at 11:17 am

80's Poly-Sci defined, "neo-feudalism" (or, as "Shock Doctrine", privatization of all "resource" + government capacity, subject financial sector capture)

tegnost , October 27, 2017 at 11:22 am

I'll just leave this here along with a little deep thinking by diptherio
https://www.nakedcapitalism.com/2016/05/naked-capitalisms-diptherio-discusses-flaws-in-unemployment-reporting.html

diptherio

Doncha just love how it's defined, in practice, as whatever the unemployment rate seems to settle around. If I'm not mistaken, in the 70's NAIRU was considered to be 6 or 7 %. Then unemployment fell and inflation didn't accelerate so they changed NAIRU to 5%.

What I want to know is if there has ever been a documented case where it can be shown that low unemployment levels actually led to accelerating-inflation. The inflationary periods in US history that I'm familiar with seem to have all been caused by supply shocks (i.e. oil embargo) or financial shenanigans (the housing market of the early aughties). Ditto for other countries, so far as I know.

As far as I can tell, the whole idea of NAIRU is strictly an artifact of economic modeling, not something that's actually ever been observed in the wild. And doesn't it seem odd that making sure we don't drop below NAIRU is something the Fed feels like it needs to intervene to ensure rather than letting the market sort it out. Even if NAIRU was a real thing, you would assume that low unemployment –> increased wages –> increased prices –> reduced consumption –> lay-offs and higher unemployment. Which is to say, if there were such a thing as a natural rate of unemployment, wouldn't markets naturally produce it, obviating any need for the Fed to, say, jack up interest rates to keep the economy from "heating up" (I guess because people have so much money burning holes in their pockets?). It almost like, when it suits the capitalists, they stop believing in this whole "invisible hand" thing .strange

diptherio , October 27, 2017 at 3:07 pm

*blushes* Applying simple logic to mainsteam economics is always entertaining when it's not maddening

vlade , October 27, 2017 at 10:48 am

If I remember right, Phillips published this paper because LSE was pushing him to publish something so that they could justify awarding him professorship and tenure, and he could go to tinkering with his MONIAC. I was told he just wanted to get something out, and this was the first idea he had so he wrote it up, but wasn't really persuaded..

The damage to the real world the academia demands does..

JTMcPhee , October 27, 2017 at 3:31 pm

"Real world" powers can riffle through the files of academia, hard and soft sciences or the various humanities or whatever, even languages and linguistics, and, because "freedom," can always come up with something published that "proves" whatever line of BS the looters are pushing at any given moment to increase their "take."

But then ever since humans discovered ratiocination, thus it has always been. SOMEone or SOMEthing always has to be "the authority," or at least "authoritative "

Samuel Conner , October 27, 2017 at 4:11 pm

That story puts a new spin on "publish or perish", something like "(you) publish and (a lot of other people will) perish (sooner)".

Ned , October 27, 2017 at 11:07 am

This is one reason why America is being parasitized by finance -- - Math. That and the math card in computers that allows the instantaneous creation of speculation and playing of the numbers with hypothetical money that later translates into real productivity or more likely misery.

The average American's eyes glaze over as soon as you put up a math formula. He of course, will memorize all manner of arcane sports trivia and statistics, but when it comes time to quantify his own economic doom, or to think about his or her own economic travails with numbers and curves, it's mind shutdown time.

This is why we love Yves. She has allowed us to get an insight into, become informed and learn about economics through high quality reporting. Thank you for this reminder of the hocus pocus and the witch-doctory that is casting our spell into economic hell.

nonclassical , October 27, 2017 at 11:24 am

not just "math": Rand-Friedman-libertarian ideological definition:

"Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers."

https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

Synoia , October 27, 2017 at 11:49 am

That you suffer from parasites is your fault, but God help you if you try to eradicate them.

Summer , October 27, 2017 at 2:01 pm

Your link dances around calling it out: neoliberalism is a rebranding of social darwinism.

Not much "neo" about it. But for all the alleged "progress," it seems we're trapped in a culture that really finds it hard to let go of the 19th Century. And mot just economically, but socially as well.

"natural hierarchy of winners and losers " – does not exist. They rebranded to try to get around all the artificial selection in the global economy.

Ed Walker Post author , October 27, 2017 at 1:50 pm

In an early draft of this article, I had a reference to Econned, where Yves discusses the use of the Gaussian Copula in the organization of RMBSs. So, yes, it's largely the math that Samuelson and Solow and the people who came later loved.

You'll note that I only use very simple math, mostly because it's a nice shorthand, like Equations 1a and 1b

flora , October 27, 2017 at 2:09 pm

an aside: For readers who do not 'read math' you provide understandable English translations of the equations. Thanks.

Quanka , October 27, 2017 at 11:56 am

vlade hit on a key point, IMO. I was an undergrad at prestigious Midwestern school during the period where they split the Econ department in 2 -- a econometrics-esque degree from the Math/Science school, vs. 'Economics' which they kept in the College of Arts and Letters. They've been strangling the latter department since while ensuring steady flow of grants to the math-based department, a la the Phillips story alluded to above.

Seconding diptherio – I remember the introductory statistics and econometric courses I was required to take, where we'd routinely dissect econ reporting in the press based on flawed mathematics or poor statistical methods, and yet carry as though these were meaningful and useful figures (e.g. unemployment, inflation).

So what to do -- do you try to change the way economics is practiced? Or do you try to take away the influence that neoliberalism and/or industrial capitalism have on the education fields? And how exactly do you do that (reform education) given how instrumental it is for neoliberalism to continue.

I see an analogy here, maybe I am wrong. Picture bull-fighting, an appropriate concept,I think. I see neoliberalism as the Matador, education as the cape, and the public as the bull. So the questions above might be rephrased as from the bull's perspective, do you chase the cape or gore the matador?

The stakes are high for the matador -- although as a spectator that fact is hidden in plain sight.

flora , October 27, 2017 at 11:58 am

Thanks for this very readable and important post. Demystify the Phillips Curve and other economic "truths" being used against Main Street is significant.

" This equation calls attention to the role that profits play in the economy, something economists generally generally ignore. When people do discuss profits, it's always in the context of the importance of capital and the need to coddle it. That view lies at the heart of neoliberalism, and at the heart of Fed policy."

Travis Bickle , October 27, 2017 at 12:53 pm

When you think about it, the PC supports the argument of how Supply & Demand explains pretty much everything about economics. It you need to explain economics in a nutshell to a working guy who thinks nothing is really all that complicated (were it not for intellectuals over-thinking things), it fills the bill rather nicely. A matter of rhetorical Supply & Demand, come to think of it.

Thuto , October 27, 2017 at 1:08 pm

For most people, being confronted with "scientific evidence" is enough to lay to rest any and all doubt about the claims being made in a proposition. Scientific evidence hardens claims into hard facts, and does so quickly. What better way to make something appear scientific than to riddle its academic literature with curves and formulas, and give it its own pride of place at the nobles side by side with real sciences. That real sciences have laws that are universally applicable or can at least be reconciled across levels of reality with the consistency you'd expect of something labelled a science (e.g. how quantum electrodynamics reconciles classical electrodynamics at the atomic and subatomic levels) seems to be a minor inconvenience to those with vested interests in having economics accepted by the public as a hard science (precisely, I say again, because presenting "scientific evidence" with formulas and curves disarms most people, among them the political ruling class, of their critical thinking faculties). Add living in an age of credentialism to the mix and the general ineptitude of our ruling politicians and one can see how economists can wreak so much havoc with their ex-cathedra pronouncements on what makes the economy work

Ed Walker Post author , October 27, 2017 at 1:59 pm

The material about Simcha Barkai's paper is the most interesting part of this to me. That paper strikes a serious blow at the heart of neoliberal antitrust law, but it also explains the wage-productivity gap and shows the way to social changes that would benefit most of us.

Also, the billionaires of the world now control $6 Trillion. https://www.theguardian.com/business/2017/oct/26/worlds-witnessing-a-new-gilded-age-as-billionaires-wealth-swells-to-6tn

So naturally Republicans want tax cuts for the pig rich.

whateverhelps , October 27, 2017 at 2:21 pm

Phillips Curve has ever been ideological nonsense. Sad to see it alive 30 years later

EoH , October 27, 2017 at 3:49 pm

The Philips Curve exemplifies the dysfunction created by separating mathematical/quantitative descriptions of an economy from that same lived economy and its history. The PC was originally developed on British data covering a period roughly from ten years after the Crystal Palace Exhibition of 1851 to WWI, and then extended to WWII. Over the same period, literature met Oliver Twist and Alice and her rabbit hole, was jostled by Hardy and Lawrence, and jolted by Joyce, Woolf and Eliot, not least because a woman writer demanded a room of her own. The changes in social, economic and political life were comparable.

The British statistics cover a period when power shifted as dramatically as literature. A suffrage limited to propertied men became universal. The agency, the organization, persistence and determination necessary to create that change was considerable. So, too, a landowning aristocracy, once at the apex of all social, political, legal and economic life, saw its monopoly shrink, or rather found itself joined by large business owners, financiers, traders and press lords, and for a time, trades union leaders.

Parliament expressed that power shift, for example, by ending tariffs protecting domestic grain production, substituting, instead, subsidies for imported food stuffs, in order more cheaply to keep workers fed and at their machines. (A hard-fought concession to a new, competing power block of manufacturers, their financiers and traders,) A major constitutional crisis in 1910-11 presaged adoption of Bismarckian welfare programs, which America did not see until FDR and LBJ. These were a modest but viciously fought concession in order to avoid the kind of extra-constitutional change experienced by Russia a few years later.

Workers over this period witnessed the final stage of enclosures (privatizing of common lands), the end of cottage industries, and the rise, dominance and decline of heavy industry. The Crystal Palace's startling iron pillars and acres of glass yielded to curtain walls and structural steel. Technology, as today, raced headlong. Stage coaches gave way to steam railroads; the telegraph to the telephone and wireless; lances, swords and muzzle loaders to dreadnoughts, flying machines, automatic weapons and poison gas – all with vastly different supply chains, need for capital and levels of employment.

The empire added half of Africa, notably South Africa and its ores, diamonds and gold, and de facto control of Egypt and its canal at Suez. De jure imperial relations existed with India and the "white commonwealth" countries of Canada, Australia, New Zealand and South Africa (post-Boer War). De facto imperial relations existed with much of Latin America, the Caribbean and East Asia. The pound was a global currency and the Royal Navy was admonished to "rule the waves", an aspiration that has since given way to following and buying from the stars and stripes. The ebb and flow of imperial power affected raw material prices coming in and export prices going out.

By what logic would the statistics of economic relations, of changing notions of acceptable levels of employment and inflation (capital's nemesis), not be affected by dramatic changes in social, political and economic conditions? Demonstrating sufficient continuity to establish a "law" for those relations for a single country, let alone one valid across time and national boundaries, would seem to be a sisyphean task.

Wisdom Seeker , October 27, 2017 at 5:13 pm

There's a persuasive interpretation of Phillips' original work and application to US data by John Hussman, which argues :

1) Phillips' original paper is right but most of the work since is garbage which missed the point.

2) Phillips' correct result is a relationship between unemployment and real wage growth ("wage inflation"), not consumer prices.

3) Most modern interpretations have either incompetently lost the point about real wages, or deliberately obfuscated. (Modern econ exists to serve capital more than labor, so this is not surprising.)

Hussman followed up the original piece with some others in recent years:
2013 / 11/ 04
2014 / 08 / 25

And from January 19, 2010 (emphasis added) :

"When labor is scarce (low unemployment), the price of labor tends to rise relative to the price of other things (thus we observe real wage inflation ). In contrast, when labor is plentiful (high unemployment), the price of labor tends to stagnate relative to the price of other things (real wages stagnate)."

Whether real wage inflation translates into consumer price inflation depends on the supply and demand of consumer goods, repayment of debts, workers' need to save for retirements etc.

I believe real wage growth, at the expense of corporate profits, is exactly what has been missing from the health of the economy for the past 20-40 years.

I also suspect the true reason why central banks fear low unemployment is because those increases in workers' wages will come at the expense of corporate profitability. (Especially in an economy with high corporate profit levels and inadequate price competition.)

I also suspect most modern recessions have not been caused by the low unemployment, but rather by the credit tightening applied to prevent low unemployment – to prevent workers from enjoying higher wages at the owners' expense.

[Oct 27, 2017] Why didn't Democrats pass legislation in 2009 to eliminate the right to work legislation by states? The answeer is they want Wall street money.

Oct 27, 2017 | www.nakedcapitalism.com

DJG , October 27, 2017 at 2:34 pm

Portside article about NAFTA, unions, and Canadian unions: Here is a paragraph from the underlying article at New York Magazine about the three sponsors:

On Wednesday, Democratic senators Elizabeth Warren, Sherrod Brown, and Kirsten Gillibrand announced their agreement -- and introduced legislation to ban "right-to-work" laws throughout the United States.

[NY Mag article is dated 20 Sept 2017]

The sooner we collectively kill off the feudal idea of "right to work," the better. Right now, though, we're only what -- sixty, seventy–years too late?

Scott , October 27, 2017 at 3:41 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

It was one of the few policies that I could think of what would actually, you know, help the win elections. But then I realized the the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants.

Huey Long , October 27, 2017 at 5:06 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

Yeah, Captain Hope'N-Change failed to deliver labor any meaningful legislation during his eight years in office.

Labor was essentially told "We put some friendly faces on the NLRB and in the judiciary. Be thankful, and forget about card check or right to work preemption."

Sid_finster , October 27, 2017 at 7:40 pm

" the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants."

Money.

Henry Moon Pie , October 27, 2017 at 4:25 pm

Good luck with that. The Rs ads write themselves.

And it's a bad look anyway. With the basically insurmountable barriers to organizing under the Wagner Act these days, a focus on making sure the money keeps flowing, much of it ending up in the Ds campaign coffers. How about repealing Taft-Hartley?

Maybe unions would be better off with less bureaucracy and more member participation. Do it like the Wobs: you come to the meeting, you pay your dues, you voice your opinion and you vote.

Huey Long , October 27, 2017 at 5:16 pm

How about repealing Taft-Hartley?

Here here!

Repealing Taft-Hartley would bring back:

The Closed Shop
Jurisdictional Strikes
Secondary Boycotts
Common Situs Picketing
A Ban on Right-to-Work
A Ban on presidential interventions in strikes
Supervisor's Unions
Employer Nuetrality

Hopefully this happens before I die. I would absolutely love to see the yacht and learjet owning class in tears!

a different chris , October 27, 2017 at 6:06 pm

>The Rs ads write themselves.

They not only write themselves they've already been written and burned into the brain. True or not, there they are. So what are you risking?

The thing is the D-time is well past the point (no House, no Senate, no Pres, vanishing amount of Govs, vanishing amount of State leges..) where saying "That's not true!!" can be considered a winning strategy, even if you could show me what you've won by saying it.

How about "hell yeah that's how we feel, America rocked (when we had strong labor)". Stand up to the bully for once, again whaddya got to lose now. I often wonder what Steve Gilliard would say at this point, he always made sure that us white people realized that something was better than nothing when you were looking at absolutely nothing at all . but things have sunk so low would he still feel that what has become nothing more than an orderly, but continuous retreat should be sustained? Or is it time to dig in and really declare full throated opposition?

(like the rest of your post, just think the time to avoid things is past)

DJG , October 27, 2017 at 6:13 pm

Henry Moon Pie: So? Let's repeal the Wagner Act and Taft-Hartley. And let's not pre-defeat ourselves.

Just as Lambert keeps reminding us, Who would have though five years ago that the momentum is now toward single-payer health insurance even if the current couple of bills don't pass? For years, John Conyers carried on the fight almost single-handedly. And now we have influential physicians stumping for single-payer.

[Oct 25, 2017] The Definitive Demise of the Debunked Dodgy Dossier on The Donald

Notable quotes:
"... For Donald Trump, all attempts to gain a foothold in the USSR and then in Russia in 30 years of travel and negotiations failed. Moscow did not have a Trump Tower of its own, although Trump boasted every time that he had met the most important people and was just about to invest hundreds of millions in a project that would undoubtedly be successful. ..."
"... Trumps' largest business success in Russia was the presentation of a Trump Vodka at the Millionaire Fair 2007 in Moscow. This project was also a cleansing; In 2009 the sale of Trump Vodka was discontinued. ..."
"... puts his name on stuff ..."
"... (2) Zhirinovsky Is The Very Last Person Putin Would Use For A Proxy ..."
"... Such a delicate plan – to reach the election of a President of the US by means of Zhirinovsky – ensures a skeptical smile for every Russian at best. He is already seventy and has been at the head of a party with a misleading name for nearly thirty years. The Liberal Democratic Party is neither liberal nor democratic. If their policies are somehow characterized, then as right-wing populism. Zhirinovsky is known for shrill statements; He threatened, for example, to destroy the US by means of "gravitational weapons". ..."
"... Why Would Russian Intelligence Agencies Sources Have Talked to Steele? ..."
"... But the report, published on the BuzzFeed Internet portal, is full of inconsistencies and contradictions. The problem is not even that there are a lot of false facts. Even the assumption that agents of the Russian secret services are discussing the details with a former secretary of a hostile secret service in the midst of a highly secret operation by which a future President of the US is to be discredited appears strange. ..."
"... Exactly. For the intelligence community and Democrat reliance on Steele's dossier to be plausible, you have to assume 10-foot tall Russkis (1) with incredibly sophisticated strategic, operational, and technical capabilities, who have (2) performed the greatest intelligence feat of the 21st and ..."
"... Donald Trump went on Howard Stern for, like, decades. The stuff that's right out there for whoever wants to roll those tapes is just as "compromising" as anything in the dodgy dossier, or the "grab her by the pussy" tape, for that matter. As Kowaljow points out, none of it was mortally wounding to Trump; after all, if you're a volatility voter who wants to kick over the table in a rigged game, you don't care about the niceties. ..."
"... transition ..."
"... And that's before we get to ObamaCare, financial regulation, gutting or owning the CIA (which Trump needs to do, and fast), trade policy, NATO, China, and a myriad of other stories, all rich with human interest, powerful narratives, and plenty of potential for scandal. Any one of them worthy of A1 coverage, just like the Inaugural crowd size dogpile that's been going on for days. ..."
"... Instead, the press seems to be reproducing the last gasps of the Clinton campaign, which were all about the evils of Trump, the man. That tactic failed the Clinton campaign, again because volatility voters weren't concerned with the niceties. And the same tactic is failing the press now. ..."
Jan 23, 2017 | www.nakedcapitalism.com
by Lambert Strether of Corrente .

In the midst of the hysteria about Russian interference in the 2016 election - 52% of Democrat voters believe it's definitely or probably true that "Russia tampered with vote tallies" , a view for which there is no evidence whatever, and which is a depressing testimony to the power of propaganda to produce epistemic closure in liberals as well as conservatives - came Buzzfeed's 35-page "dodgy dossier" on Donald Trump, oppo that the researcher, Christopher Steele , peddled during the election proper, but was unable to sell, not even to an easy mark like Jebbie. (There's a useful debunking of Steele's report in the New York Review of Books , of all places.) Remember the piss jokes? So two-weeks ago Amazingly, or not, a two-page summary to Steele's product had been included in a briefing given to Trump (and Obama). A weary Obama was no doubt well accustomed to the intelligence community's little ways, but the briefing must have been quite a revelation to Trump. I mean, Trump is a man who knows shoddy when he sees it, right?

In any case, a link to the following story in Hamburg's ridiculously sober-sided Die Zeit came over the transom: So schockiert von Trump wie alle anderen ("So shocked by Trump like everyone else"). The reporter is Alexej Kowaljow , a Russian journalist based in Moscow. Before anyone goes "ZOMG! The dude is Russian !", everything Kowaljow writes is based on open sources or common-sense information presumably available to citizens of any nation. The bottom line for me is that if the world is coming to believe that Americans are idiots, it's not necessarily because Americans elected Trump as President.

I'm going to lay out two claims and two questions from Kowaljow's piece. In each case, I'll quote the conventional, Steele and intelligence community-derived wisdom in our famously free press, and then I'll quote Kowaljow. I think Kowaljow wins each time. Easily. I don't think Google Translate handles irony well, but I sense that Kowaljow is deploying it freely.

(1) Trump's Supposed Business Dealings in Russia Are Commercial Puffery

Here's the section on Russia in Time's article on Trump's business dealings; it's representative. I'm going to quote it all so you can savor it. Read it carefully.

Donald Trump's Many, Many Business Dealings in 1 Map

Russia

"For the record, I have ZERO investments in Russia," Trump tweeted in July, one day before he called on the country to "find" a batch of emails deleted from Hillary Clinton's private server. Nonetheless, Russia's extraordinary meddling in the 2016 U.S. election-a declassified report released by U.S. intelligence agencies in January disclosed that intercepted conversations captured senior Russian officials celebrating Trump's win-as well as Trump's complimentary remarks about Russian President have stirred widespread questions about the President-elect's pursuit of closer ties with Moscow. Several members of Trump's inner circle have business links to Russia, including former campaign manager Paul Manafort, who consulted for pro-Russia politicians in the Ukraine. Former foreign policy adviser Carter Page worked in Russia and maintains ties there.

Retired Lt. Gen. Michael Flynn, Trump's incoming national security adviser, has been a regular guest on Russia's English-language propaganda network, RT , and even dined with Putin at a banquet.

During the presidential transition, former Georgia Congressman and Trump campaign surrogate Jack Kingston told a gathering of businessmen in Moscow that the President-elect could lift U.S. sanctions.

According to his own son, Trump has long relied on Russian customers as a source of income. "Russians make up a pretty disproportionate cross-section of a lot of our assets," Donald Trump Jr. told a Manhattan real estate conference in 2008 , according to an account posted on the website of trade publication eTurboNews. "We see a lot of money pouring in from Russia." Back to map .

Read that again, if you can stand it. Do you see the name of an actual business, owned by Trump? Do you see the name of any businessperson who closed a deal with Trump? Do you, in fact, see any reporting at all? At most, you see commercial puffery by Trump the Younger: "Russians [in Russia?] make up a pretty [qualifier] disproportionate [whatever that means] cross-section [whatever that means] of a lot of [qualifier] our assets."

Now Kowaljow (via Google Translate, so forgive any solecisms):

For Donald Trump, all attempts to gain a foothold in the USSR and then in Russia in 30 years of travel and negotiations failed. Moscow did not have a Trump Tower of its own, although Trump boasted every time that he had met the most important people and was just about to invest hundreds of millions in a project that would undoubtedly be successful.

Trumps' largest business success in Russia was the presentation of a Trump Vodka at the Millionaire Fair 2007 in Moscow. This project was also a cleansing; In 2009 the sale of Trump Vodka was discontinued.

Because think about it: Trump puts his name on stuff . Towers in Manhattan, hotels, casinos, golf courses, steaks. Anything in Russia with Trump's name on it? Besides the failed vodka venture? No? Case closed, then.

(2) Zhirinovsky Is The Very Last Person Putin Would Use For A Proxy

From The Hill's summary of Russian "interference" in the 2016 election:

Five reasons intel community believes Russia interfered in election

The attacks dovetailed with other Russian disinformation campaigns

The report covers more than just the hacking effort. It also contains a detailed list account of information warfare against the United States from Russia through other means.

Political party leader Vladimir Zhirinovsky, who the report lists as a "pro-Kremlin proxy," said before the election that, if Trump won, Russia would 'drink champagne' to celebrate their new ability to advance in Syria and Ukraine.

Now Kowaljow:

The report of the American intelligence services on the Russian interference in the US elections, published at the beginning of January, was notoriously neglected by Russians, because the name of Vladimir Zhirinovsky was mentioned among the "propaganda activities of Russia", which had announced that in the event of an election victory of Trump champagne to want to drink.

Such a delicate plan – to reach the election of a President of the US by means of Zhirinovsky – ensures a skeptical smile for every Russian at best. He is already seventy and has been at the head of a party with a misleading name for nearly thirty years. The Liberal Democratic Party is neither liberal nor democratic. If their policies are somehow characterized, then as right-wing populism. Zhirinovsky is known for shrill statements; He threatened, for example, to destroy the US by means of "gravitational weapons".

If, therefore, the Kremlin had indeed had the treacherous plan of helping Trump to power, it would scarcely have been made known about Zhirinovsky.

The American equivalent would be. Give me a moment to think of an American politician who's both so delusional and such a laughingstock that no American President could possibly consider using them as a proxy in a devilishly complex informational warfare campaign Sara Palin? Anthony Weiner? Debbie Wasserman Schultz? Na ga happen.

And now to the two questions.

(3) Why Would Russian Intelligence Agencies Sources Have Talked to Steele?

Kowaljow:

But the report, published on the BuzzFeed Internet portal, is full of inconsistencies and contradictions. The problem is not even that there are a lot of false facts. Even the assumption that agents of the Russian secret services are discussing the details with a former secretary of a hostile secret service in the midst of a highly secret operation by which a future President of the US is to be discredited appears strange.

Exactly. For the intelligence community and Democrat reliance on Steele's dossier to be plausible, you have to assume 10-foot tall Russkis (1) with incredibly sophisticated strategic, operational, and technical capabilities, who have (2) performed the greatest intelligence feat of the 21st and 20th centuries, suborning the President of the United States, and whose intelligence agencies are (3) leakly like a sieve. Does that make sense? (Of course, the devilish Russkis could have fed Steele bad data, knowing he'd then feed it to the American intelligence agencies, who would lap it up, but that's another narrative.)

(4) How Do You Compromise the Uncompromisable?

Funny how suddenly the word kompromat was everywhere, wasn't it? So sophisticated. Everybody loves to learn a new word! Regarding the "Golden Showers" - more sophistication! - Kowaljow writes:

But even if such a compromise should exist, what sense should it have, since the most piquant details have long been publicly discussed in public, and had no effect on the votes of the elected president? Like all the other scandals trumps, which passed through the election campaign, they also remained unresolved, including those who were concerned about sex.

This also includes what is known as a compromise, compromising material, that is, video shots of the unsightly nature, which can destroy both the political career and the life of a person. The word Kompromat shines today – as in the past Perestroika – in all headlines; It was not invented in Russia, of course. But in Russia in the Yeltsin era, when the great clans in the power gave bitter fights and intensively used the media, works of this kind have ended more than just a brilliant career. General Prosecutor Jurij Skuratov was dismissed after a video had been shown in the country-wide television channels: There, a person "who looks like the prosecutor's office" had sex with two prostitutes.

Donald Trump went on Howard Stern for, like, decades. The stuff that's right out there for whoever wants to roll those tapes is just as "compromising" as anything in the dodgy dossier, or the "grab her by the pussy" tape, for that matter. As Kowaljow points out, none of it was mortally wounding to Trump; after all, if you're a volatility voter who wants to kick over the table in a rigged game, you don't care about the niceties.

Conclusion

It would be nice, wouldn't it, if our famously free press was actually covering the Trump transition , instead of acting like their newsrooms are mountain redoubts for an irrendentist Clinton campaign. It would be nice, for example, to know:

  1. The content and impact of Trump's Executive Orders.
  2. Ditto, regulations.
  3. Personnel decisions below the Cabinet level. Who are the Flexians?
  4. Obama policies that will remain in place, because both party establishments support them. Charters, for example.
  5. Republican inroads in Silicon Valley.
  6. The future of the IRS, since Republicans have an axe to grind with it.
  7. Mismatch between State expectations for infrastructure and Trump's implementation

And that's before we get to ObamaCare, financial regulation, gutting or owning the CIA (which Trump needs to do, and fast), trade policy, NATO, China, and a myriad of other stories, all rich with human interest, powerful narratives, and plenty of potential for scandal. Any one of them worthy of A1 coverage, just like the Inaugural crowd size dogpile that's been going on for days.

Instead, the press seems to be reproducing the last gasps of the Clinton campaign, which were all about the evils of Trump, the man. That tactic failed the Clinton campaign, again because volatility voters weren't concerned with the niceties. And the same tactic is failing the press now. Failing unless, of course, you're the sort of sleaze merchant who downsizes the newsroom because, hey, it's all about the clicks.

[Oct 25, 2017] Ex-MI6 officer Christopher Steele in hiding after Trump dossier

Notable quotes:
"... BBC security correspondent Frank Gardner said Mr Steele had previously been an intelligence officer - rather than agent - in MI6, who would have run a team of agents as an intelligence gatherer. ..."
"... Intelligence agencies considered the claims relevant enough to brief both Mr Trump and President Obama last week. ..."
"... But the allegations have not been independently substantiated or verified and some details have been challenged as incorrect by those who are mentioned. ..."
"... Mr Trump himself was briefed about the existence of the allegations by the US intelligence community last week but has since described them as fake news, accusing the US intelligence services of leaking the dossier. ..."
Jan 12, 2017 | www.bbc.com

An ex-MI6 officer who is believed to have prepared memos claiming Russia has compromising material on US President-elect Donald Trump is now in hiding, the BBC understands.

Christopher Steele, who runs a London-based intelligence firm, is believed to have left his home this week.

The memos contain unsubstantiated claims that Russian security officials have compromising material on Mr Trump.

The US president-elect said the claims were "fake news" and "phoney stuff".

Mr Steele has been widely named as the author of a series of memos - which have been published as a dossier in some US media - containing extensive allegations about Mr Trump's personal life and his campaign's relationship with the Russian state.

... ... ...

BBC security correspondent Frank Gardner said Mr Steele had previously been an intelligence officer - rather than agent - in MI6, who would have run a team of agents as an intelligence gatherer.

However, as Mr Steele was now working in the private sector, our correspondent said, there was "probably a fair bit of money involved" in the commissioning of the reports.

He said there was no evidence to substantiate the allegations and it was still possible the dossier had been based on what "people had said" about Mr Trump "without any proof".

Donald J. Tump Twit

@realDonaldTrump

James Clapper called me yesterday to denounce the false and fictitious report that was illegally circulated. Made up, phony facts. Too bad!

... ... ...

Obama briefing

The 35-page dossier on Mr Trump - which is believed to have been commissioned initially by Republicans opposed to Mr Trump - has been circulating in Washington for some time.

Media organisations, uncertain of its credibility, initially held back from publication. However, the entire series of reports has now been posted online, with Mr Steele named as the author.

Intelligence agencies considered the claims relevant enough to brief both Mr Trump and President Obama last week.

But the allegations have not been independently substantiated or verified and some details have been challenged as incorrect by those who are mentioned.

Mr Trump himself was briefed about the existence of the allegations by the US intelligence community last week but has since described them as fake news, accusing the US intelligence services of leaking the dossier.

[Oct 25, 2017] Former MI6 agent behind Trump dossier returns to work by Luke Harding and Nick Hopkins

So guardian clearly supports Steele dossier. Nice... So the guy clearly tried to influence the US election and Guardian neoliberal honchos and their Russophobic presstitutes (like Luke Harding) are OK with it. They just complain about Russian influence. British elite hypocrisy in action...
Notable quotes:
"... Published in January by BuzzFeed , the dossier suggested that Donald Trump's team had colluded with Russian intelligence before the US election to sabotage Hillary Clinton's campaign. Citing unidentified sources, it said Trump had been "compromised" by Russia's FSB spy agency during a trip to Moscow in 2013. ..."
"... Trump dismissed the dossier as fake news and said Steele was a "failed spy". Vladimir Putin also rejected the dossier. His spokesman Dmitry Peskov claimed Russia did not collect kompromat – compromising material – on Trump or anyone else. ..."
"... As head of MI6's Russia desk, Steele led the inquiry into Litvinenko's polonium poisoning, quickly concluding that this was a Russian state plot. He did not meet Litvinenko and was not his case officer, friends said. ..."
Mar 07, 2017 | www.theguardian.com

Christopher Steele speaks publicly for first time since the file was revealed and thanks supporters for 'kind messages'

The former MI6 agent behind the controversial Trump dossier has returned to work, nearly two months after its publication caused an international scandal and furious denials from Washington and Moscow.

Christopher Steele posed for a photograph outside the office of his business intelligence company Orbis in Victoria, London on Tuesday. Speaking for the first time since his dossier was revealed , Steele said he had received messages of support.

"I'm now going to be focusing my efforts on supporting the broader interests of our company here," he told the Press Association. "I'd like to say a warm thank you to everyone who sent me kind messages and support over the last few weeks."

Steele, who left British intelligence in 2009 and co-founded Orbis with an MI6 colleague, said he would not comment substantively on the contents of the dossier: "Just to add, I won't be making any further statements or comments at this time."

Published in January by BuzzFeed , the dossier suggested that Donald Trump's team had colluded with Russian intelligence before the US election to sabotage Hillary Clinton's campaign. Citing unidentified sources, it said Trump had been "compromised" by Russia's FSB spy agency during a trip to Moscow in 2013.

It alleged that Trump was secretly videoed with Russian prostitutes in a suite in the Ritz-Carlton hotel in Moscow. The prostitutes allegedly urinated on the bed used by Barack Obama during a presidential visit.

Trump dismissed the dossier as fake news and said Steele was a "failed spy". Vladimir Putin also rejected the dossier. His spokesman Dmitry Peskov claimed Russia did not collect kompromat – compromising material – on Trump or anyone else.

Steele's friends say he has been keen to go back to work for some weeks. They insist he has not been in hiding but has been keeping a low profile to avoid paparazzi who have been camped outside his family home in Surrey.

Several of the lurid stories about him that have appeared in the press have been wrong, said friends. The stories include claims that Steele met Alexander Litvinenko, the Russian dissident who was murdered in 2006 with a radioactive cup of tea, probably on Putin's orders .

As head of MI6's Russia desk, Steele led the inquiry into Litvinenko's polonium poisoning, quickly concluding that this was a Russian state plot. He did not meet Litvinenko and was not his case officer, friends said.

[Oct 25, 2017] The Situation in Puerto Rico The Roads

Notable quotes:
"... although I haven't heard of private equity pushing Puerto Rican toll roads they would own ..."
"... My dear Lambert, were I a vulture capitalist (which I am not!), I would not put one plugged nickel into infrastructure in PR. Not toll roads, not resorts, not power grid, not rebuilding the pharma factories, nada. Because another Maria will just happen again and trash it all before sufficient ROI, and who's gonna insure it now? Insurance companies believe in climate change, whether they will admit it or not. ..."
"... But I would put a few $$$ into PR debt, and gamble that the US govt will bail *me*and my fellow vultures (not PR) out. Am I cynical enough? ..."
"... This is just incompetence. Load up cargo ships (which are the most enormous transportation devices on the planet) and bring an aircraft carrier or two with cargo helicopters to bring the goods inland: ..."
"... "The political class seems to have lost the ability to mobilize on behalf of its citizens.". It wasn't always this way. Read http://northernwoodlands.org/articles/article/thirty-eight-new-england-lumber-storm . ..."
"... When I read what the FDR Administration was able to accomplish amidst the devastation of New England's forests wrought by the hurricane of 1938, it brought tears to my eyes. ..."
"... "The political class seems to have lost the ability to mobilize on behalf of its citizens." ..."
"... most convenient/fast/cost effective ..."
"... If the U.S. is not an empire, Puerto Rico would not be a protectorate or whatever. If the U.S. is an empire in decline, Puerto Rico being abandoned would be a signal to the world that the U.S. dollar is in serious trouble. ..."
"... What with PR's situation and the apparent U.S. tendency to retreat from simple truths, could a collapse in preference falsification* be in progress? ..."
Oct 25, 2017 | www.nakedcapitalism.com

Synoia , October 23, 2017 at 2:21 pm

[4] Too bad we don't have a Jobs Guarantee .

The most important things are guaranteed:

Funding the military, enforcing payment of debts, Profit, promises made to campaign contributors, and of course death and taxes.

Glen , October 23, 2017 at 2:31 pm

Somehow, I think our government's response to PR/Maria will be the new norm unless there are a bunch of billionaire's calling the gov reps they bought to complain. And even they may be frustrated by the current boob in the WH.

HotFlash , October 23, 2017 at 3:06 pm

although I haven't heard of private equity pushing Puerto Rican toll roads they would own

My dear Lambert, were I a vulture capitalist (which I am not!), I would not put one plugged nickel into infrastructure in PR. Not toll roads, not resorts, not power grid, not rebuilding the pharma factories, nada. Because another Maria will just happen again and trash it all before sufficient ROI, and who's gonna insure it now? Insurance companies believe in climate change, whether they will admit it or not.

But I would put a few $$$ into PR debt, and gamble that the US govt will bail *me*and my fellow vultures (not PR) out. Am I cynical enough?

PKMKII , October 23, 2017 at 3:27 pm

The Intercept has a good article on a Puerto Rican recovery for Puerto Ricans and not outside interests.

Code Name D , October 23, 2017 at 3:32 pm

What about the cars? I would imagine that many cars were destroyed, heavely damaged, or simply lost. Getting cars repaired and replaced will also be a major challenge. And this I bet would fall on the backs of the individual owners who will already be strapped for cash to begin with.

HotFlash , October 23, 2017 at 4:23 pm

Pretty well, yup. Insurance companies gonna pay pennies on the dollar, assuming you actually have insurance for stuff like this. Poor people tend to get the very minimum needed to get their vehicle on the road, which is usually liability. If you do have bountiful; coverage for Acts O'God, where are you going to get your car repaired or replaced anyway? This may sound super-cynical, even for me, but looking at those washed out and blown-away roads, getting cargo into remote places in PR is a job for sure-footed critters like mules and horses. Dirt bikes can move people over difficult terrain. So can bicycles , and they have been preparing for such a thing.

cocomaan , October 23, 2017 at 3:41 pm

The crisis in PR compared to the crises in FL and TX really opened my eyes to how dangerous and precarious it must be to live on an island, even one ostensibly connected to a powerful country. The logistical nightmare of getting things there is compounded so much by that sea barrier. At least in TX, you can call in the cajun navy who can drive their boats to the location, then launch.

So now one thing is even clearer to me: the first losers of rising sea levels and climate change disasters will be islanders. Places like the Maldives and the Leewards will have a really hard time in the next few decades.

a different chris , October 23, 2017 at 5:21 pm

>is compounded so much by that sea barrier.

??? The sea is how people got things everywhere long, long before the first steam engine (and I'm talking those Roman toy ones) was even conceived?

This is just incompetence. Load up cargo ships (which are the most enormous transportation devices on the planet) and bring an aircraft carrier or two with cargo helicopters to bring the goods inland:

"The CH-53E heavylift transport helicopter can carry cargo with a maximum weight of 13.6 t internally or 14.5 t externally."

But yes, agree on the precarity of island life.

cocomaan , October 23, 2017 at 6:39 pm

I get what both of you are saying vis a vis sea travel, Jones Act and all, but even in the best of all possible human organizations, it's still a major factor in any relief effort. It's just not nearly as easy to get people from point A to point B by boat. If your car breaks down, you're stranded, if your boat breaks down, you could easily die.

rd , October 23, 2017 at 6:01 pm

Much of the sea barrier is man-made, namely the Jones Act. As a result, it is more expensive for Puerto Rico to get supplies form the US than from non-American sources because of shipping costs.

Joel , October 23, 2017 at 11:50 pm

Could NC do a post on the Jones Act?

Do we allow foreign-flagged vessels to transport goods between, say, California and Hawaii? What about Guam and the US Virgin Islands?

Thor's Hammer , October 24, 2017 at 5:27 pm

We do live on a global island. Soot from Chinese coal burning lands on the few remaining glaciers in Glacier National Park and hastens their demise. Methane from melting permafrost in the Northwest Territories acts as a blanket to increase solar heating of the ocean surface. Increased ocean temperatures help hurricanes to explode from Category 1 to 5 almost overnight and stall over Houston as a Biblical deluge.

Three well-placed air-burst EMP nuclear bombs can disable communication and transport over most of the country. And a week without water and food being transported into New York would turn it into San Juan with no rescue boats on the horizon and frozen corpses piling up in the alleys in mid-winter.

We all live on an island -- one held together by a thin spider web of technology and resting upon an biosphere that we are waging war against with our insatiable imperative of growth.

Mark K , October 23, 2017 at 3:46 pm

"The political class seems to have lost the ability to mobilize on behalf of its citizens.". It wasn't always this way. Read http://northernwoodlands.org/articles/article/thirty-eight-new-england-lumber-storm .

When I read what the FDR Administration was able to accomplish amidst the devastation of New England's forests wrought by the hurricane of 1938, it brought tears to my eyes.

HotFlash , October 23, 2017 at 4:30 pm

"The political class seems to have lost the ability to mobilize on behalf of its citizens."

My momma used to say, "Where there's a will, there's a way." I have observed that if there's 'no way', it's because there is no will. I think this is the case in PR, as it was in NOLA, and as it seems to be in Houston (except for the *nice* neighbourhoods, of course). Cali fire victims, prepare to be On Your Own(tm).

JohnS , October 23, 2017 at 4:05 pm

Great job, Lambert .insight and solid research into a topic overlooked by the MSM and the politicals .

If your interest and time permits, I would love a report on what FEMA will/has provided for LONG TERM HOUSING for PR, Northern CA, and the areas hit hard by hurricanes on the USA mainland ..

I have not been able to locate much on this topic

Last I heard was that FEMA had Zero trailers on hand and had let out a contract to some company(s) to build new trailers.

In the interim, there was a report that FEMA would be distributing TENTS to some people in need of shelter. I believe this article was a report from Florida after the fist Hurricane hit there.

A look at Puerto Rico shows that there at lots of homes without roofs ..and they are probably not accessible for a trailer delivery up in the hills. In Santa Rosa, CA, there is very little affordable and available housing close to Santa Rosa. The rains will arrive and then the Mud will Turn the Sand into YUCK and MUCK.

I remember, after Katrina and her friends beat up New Orleans, a lot of folks were flown away from New Orleans (Barbara Bush opined it was probably a good deal for a lot of 'em) and many did not return. Others were put in FEMA trailers. (TREME on HBO covered the KATRINA aftermath as only David Simon can!)

Anyone else, who can provide me with links or information, is most welcome to respond.

Happy Trails,

JohnS

Bruce , October 24, 2017 at 1:16 pm

FEMA's mission is emergency/first response mobilization. It is not their job or within its functionality or budget to provide long-term rebuilding solutions. That falls on the island's government, with congressional financial assistance if congress allocates money for it.

Mel , October 23, 2017 at 4:08 pm

The Army Corps of Engineers are one thing, the other things are the Combat Engineers, organized perhaps as regiments and assigned to combat brigades. These are the people who do roads, airfields, etc., and the ones you would have wanted on the spot in Puerto Rico from maybe day two.

a different chris , October 23, 2017 at 5:29 pm

I strongly believe the problem is the deployment to the Middle East. Bullies strongly believe they must never, ever show weakness. So they believe that they can't pull Combat Engineers out of Whateveristan without looking weak.

So they don't – and they bless their lucky stars that Puerto Rico isn't a state and Puerto Ricans aren't considered Americans by most Americans. However – how many of those deployed to the ME are from Puerto Rico, and how are they reacting? I gotta wonder.

rd , October 23, 2017 at 6:06 pm

USGS has started mapping the landslide impacts:

https://landslides.usgs.gov/research/featured/2017-maria-pr/

http://blogs.agu.org/landslideblog/2017/10/05/hurricane-maria-1/

To get a road open, you need to clear the trees and debris, repair bridges, and repair landslides. In rugged terrain, this is a serious effort as just one break makes the road unusable for deliveries beyond the break.

SerenityNow , October 23, 2017 at 7:43 pm

The Bloomberg piece explains:

Puerto Rico has one of the highest rates of car ownership in the world, thanks to urban sprawl and the government's failure to build public transportation that commuters might actually use . Puerto Ricans are isolated without cars About 931,000 Puerto Ricans drive or carpool to work out of 3.4 million total residents, according to U.S. Census data. [T]he island has the fifth-highest number of vehicles per capita in the world.

The only thing I would like to mention is that people don't drive because there soley because there is no public transportation, they drive because it is the most convenient/fast/cost effective mode of travel available. You could build all the lightrail in the world, but if it wasn't more convenient/cheaper/cost effective than driving, people wouldn't take it. Disincentives for driving are much more powerful than incentives for transit.

How much road do they have per inhabitant there? Maybe disasters like these could be a wakeup call for how we lay out our development and where we spend our infrastructure dollars? Unfortunately probably not.

Vatch , October 23, 2017 at 9:28 pm

I haven't read the book or seen the movie, so maybe my comment is off base, but I'll proceed anyway. This article makes me think of the post-apocalyptic drama "The Road", by Cormac McCarthy.

AbateMagicThinking but Not money , October 23, 2017 at 11:40 pm

If the U.S. is not an empire, Puerto Rico would not be a protectorate or whatever. If the U.S. is an empire in decline, Puerto Rico being abandoned would be a signal to the world that the U.S. dollar is in serious trouble.

What with PR's situation and the apparent U.S. tendency to retreat from simple truths, could a collapse in preference falsification* be in progress?

From my side of the world, the U.S. is becoming more than ever a busted flush of apparent and unsustainable inconsistencies which might take us all down with it.

Here's hoping that there is a bounty of brilliant minds and and excellent administrators in the U.S. military leadership who are ready to step up.

Pip Pip!

*see Timur Kuran's 1995 work.

George Phillies , October 24, 2017 at 12:23 am

By report Puerto Rico is making a deal with a Washington (state) power company on power line repair, the issues involved in running power lines through PR and through inland Washington being rather similar. the last Saffir 3, 4, or 5 hurricanes ot hit the island did so in 1928 and 1932, or so I have read, so on one hand there is plenty of time to get a return on investment, and on the other hand, there was no rationale for building power lines that could survive a force 4 or 5 hurricane.

Felix_47 , October 24, 2017 at 1:18 am

Puerto Rico is third world lite. They could rebuild and become a model for the third world. There are only 3 million people on the island. They dont have to pay Fed income tax. It could be a great retirement location for elderly whites. It just requires investment. Currently the single largest employer is the US govt. They need leadership from within.

Vatch , October 24, 2017 at 10:28 am

Here's what the IRS says about Puerto Rico and income taxes (quoted from Wikipedia ):

In general, United States citizens and resident aliens who are bona fide residents of Puerto Rico during the entire tax year, which for most individuals is January 1 to December 31, are only required to file a U.S. federal income tax return if they have income sources outside of Puerto Rico or if they are employees of the U.S. government. Bona fide residents of Puerto Rico generally do not report income received from sources within Puerto Rico on their U.S. income tax return.

So they pay income tax, but only on income from outside Puerto Rico. Also from Wikipedia:

In 2009, Puerto Rico paid $3.742 billion into the US Treasury.[10] Residents of Puerto Rico pay into Social Security, and are thus eligible for Social Security benefits upon retirement. However, they are excluded from the Supplemental Security Income.

The federal taxes paid by Puerto Rico residents include import/export taxes,[11] federal commodity taxes,[12] and others. Residents also pay federal payroll taxes, such as Social Security[13] and Medicare taxes.[14]

[Oct 25, 2017] Shocking the Shock Doctrine What Recovery in Puerto Rico Could Look Like

Oct 25, 2017 | www.nakedcapitalism.com

If neoliberalism is the belief that the proper role of government is to enrich the rich -- in Democratic circles they call it "wealth creation" to hide the recipients; Republicans are much more blatant -- then the " shock doctrine " is its action plan.

Click the link above for more information (or read the book ), but in essence the idea is to use any form of disaster, whether earthquake or economic/political crisis, to remake a society in the neoliberal image. To reconstruct the destroyed world, in other words, to the liking of holders of great wealth -- by privatizing everything of value held by the public (think water rights, public roads); by forcing austerity on cash-strapped governments as the price for "aid" (think loans, not grants, repaid by unwritten social insurance checks); by putting "managers," or simply loan officers, in charge of democratic decision-making.

In simple, a "shock doctrine" solution always takes this form: "Yes, we'll help you, but we now own your farm and what it produces. Also, your family must work on it for the next 50 years."

This is what happened in Chile after Pinochet and his coup murdered the democratically elected socialist Salvador Allende and took over the government. It's what's happening to Greece, victim of collusion between greedy international bankers and the corrupt Greek politicians they cultivated. And it's what happened in the U.S. during the 2008 bailout of bankers, by which government money was sent in buckets to companies like AIG so they could pay their debts in full to companies like Goldman Sachs. While millions of mortgaged homeowners crashed and burned to the ground.

The populist reaction to neoliberal "reform" is usually social revolt, often or usually ineffective, since creditors are, almost by definition, people with money, and people with money, almost by definition, control most governments. In Greece, the revolt sparked the election of an (ineffective) "socialist" government -- plus the rise of the Greek neo-Nazi party, Golden Dawn. In the U.S. the revolt still still sparks universal (and ineffective) hatred of the 2008 bank bailout -- plus the rise of the failed Sanders candidacy and the successful Trump presidency.

The form this same revolt will take in 2018 and 2020 is still to be determined.

The Shock Doctrine and Puerto Rico

The "shock doctrine" -- the stripping of wealth from the devastated by the already-way-too-wealthy -- is now being applied to Puerto Rico. Even before the hurricanes hit it, Puerto Rico was a second-class citizen relative to states of the U.S., even among its non-state territories. In contrast to Puerto Rico, for example, the American Virgin Islands were instantly much better treated when it came to relief from the Jones Act , a sign of already-established prejudice.

The reason should be obvious. In Puerto Rico , English is the primary language of less than 10% of the people, while Spanish is the dominant language of the school system and daily life. In the American Virgin Islands , English is the dominant language, and Spanish is spoken by less than 20% of the population. The fact that two-thirds of the population of the U.S. Virgin Islands is black seems to be lost on most Americans, a fact that likely benefits those inhabitants greatly in times like these.

Thus, to most Americans the citizens of Puerto Rico are conveniently (for neoliberals) easy to paint as "them," the undeserving, which changes what atrocities can be committed in the name of "aid" -- much like it did after Hurricane Katrina devastated "them"-inhabited New Orleans.

Synoia , October 24, 2017 at 6:41 am

Puerto Rico is not Sovereign. Are its debts valid? Could they be repudiated?

Huey Long , October 24, 2017 at 8:09 am

Congress passed a law back in the 80's prohibiting PR from defaulting. Repudiation of PR debt would entail getting our current congress and prez to pass legislation to repudiate it, so in other words divine intervention ;-).

rd , October 24, 2017 at 10:56 am

The one place in the US that did get hammered by NAFTA was Puerto Rico. http://www.nytimes.com/1993/01/03/us/trade-pact-threatens-puerto-rico-s-economic-rise.html?pagewanted=all

When NAFTA was passed, Congress also stripped companies of tax benefits for having operations in Puerto Rico. In addition, the Jones Act makes shipping to and from Puerto Rico more expensive than shipping to and from Mexico. Oddly enough, many companies moved operations from Puerto Rico and Puerto Rico has been in recession/depression ever since.

Norb , October 24, 2017 at 9:28 am

I think Puerto Rico will be interesting to watch to see if anti neoliberal sentiment can take hold and survive. In one sense, every individual abandoned or ensnared in debt is in the same boat. Once put in a situation of debt servitude, the only recourse to extricate oneself is to become self reliant and attempt to build supporting networks. The trouble is, once those networks start to form, the traditional game plan is to bring in force and break them up.

If strong, self-supporting communities can form in PR, it will provide inspiration for communities on the mainland.

It will be also interesting to see if self-funded initiatives can make headway against the banking and financial interests.

This situation in PR is important in that it can change the focus of community building away form personal self-interest as now exists in America, and towards the common good, as it should be. The same is happening all across the mainland in economically devastated communities, but successfully blacked out in the media.

This truly is a long term endeavor, but tragically, climate change will increase the opportunities for proper action. The proper long term investment is in people and life skills. Lets roll up our sleeves.

flora , October 24, 2017 at 10:43 am

an aside:
" Once put in a situation of debt servitude, the only recourse to extricate oneself is to become self reliant and attempt to build supporting networks. "

US people born 1880 – 1900 were adults/young adults with families when the Great Depression hit. Their children, sometimes referred to as The Greatest Generation, were children or teens during the depression and saw how debt destroyed families. When those children grew up they were debt averse. The Depression/Greatest Gen's children, the Baby Boomers, would often joke their parents, who were Depression kids, could squeeze a nickel until it screamed. Boomers, having no memory of systemic economic bad times, took on large debts for school and housing on the theory their income would always increase as it had for their parents. Now the Boomers children are facing a wholly different economy, more like the Great Depression than the Booming 50's and 60's.

I expect today's younger generation will become debt averse. That would hurt the FIRE sector's reliance on ever increasing debt payment rents. Reducing the FIRE sectors influence would be good for both the Main Street economy and individuals, imo.

diptherio , October 24, 2017 at 11:52 am

It will be also interesting to see if self-funded initiatives can make headway against the banking and financial interests.

See my comment below. Puerto Rico already has a thriving, self-funded co-op movement, so I think they've got a better chance than most.

Jim Haygood , October 24, 2017 at 9:57 am

"What's killing the modern world is the world-wide overhang of personal debt -- not government deficits, which are entirely different."

This is an odd claim to make in an article about Puerto Rico, whose troubled debt is entirely governmental. Pie chart:

https://en.wikipedia.org/wiki/Puerto_Rican_government-debt_crisis#/media/File:Distribution-puerto-rico-outstanding-debt.png

In turn, Puerto Rico's govt debt crisis led to the imposition of a crushing 11.5% sales tax, making retail prices already jacked up by the Jones Act even more unaffordable.

Puerto Rico's recovery will depend almost entirely on how much of a haircut is imposed on bondholders versus restructuring and extending in the Greek fashion, which would doom PR forevahhhh.

Thor's Hammer , October 24, 2017 at 10:22 am

It would be interesting to compare the pace of recovery in Cuba with that of Puerto Rico. Both were hit by category 5 hurricanes within days of each other. In the case of Cuba, Havana was every much at the center of the bulls eye as San Juan Puerto Rico if I am correct. But I've not been able to uncover a single scrap of reporting that draws the comparison. Perhaps it would be embarrassing to the defenders of "free market" capitalism and social organization?

But hurricanes are last month's news. We've moved on to the startling revelations that fat pig movie directors are pussy grabbers just like our President.

Rakesh , October 24, 2017 at 12:18 pm

http://www.frontline.in/world-affairs/a-tale-of-two-islands/article9892265.ece

GlobalMisanthrope , October 24, 2017 at 1:34 pm

Thank you posting this!

I have always believed that one of the primary aims of the Cuba travel ban was to keep us Puerto Ricans from traveling there to see what isolation and poverty -- the constant threats leveled at those who support PR independence -- could look like.

Thor's Hammer , October 24, 2017 at 6:28 pm

Thanks for posting this journalism from an Indian source. While it may be accurate, the writing style reads like it was copied straight from the Ideologe's Bible. So I'll file it along most commentary from outlets like the Washington Post– assume it is fraudulent propaganda until proven otherwise.

Jeremy Grimm , October 24, 2017 at 11:48 am

It's very nice to talk about how to rebuild Puerto Rico but how long will it be before Puerto Rico is hit by another major hurricane? And while we're thinking of Puerto Rico what about Houston, and Florida? What about the North Carolina sea coast -- or New Jersey -- NYC? I don't expect anything reasonable will be done in rebuilding any of these places or beginning an orderly retreat to higher ground.

Some parts of these areas may remain habitable -- at least long enough to make it worthwhile to build infrastructure but I believe it will be a mistake to simply "rebuild". Replacement infrastructure should be built to better withstand the future storms and rising seas. I am aware that not "rebuilding" is neither socially nor politically viable. It just seems a shame to waste what time and resources remain.

diptherio , October 24, 2017 at 11:50 am

I was fortunate enough to get to meet a number of Puerto Rican cooperators at this year's Assoc. of Cooperative Educators Institute in Denver. Puerto Rico has a very strong cooperative sector/movement. Co-ops in Puerto Rico don't pay tax to the gov't. Instead, each co-op provides (iirc) 2% of net revenues to Liga de Cooperativas de Puerto Rico , the apex co-op organization for the island. This provides an internally funded support mechanism for co-ops and has helped create a thriving co-op ecosystem.

So I've got some optimism that my Puerto Rican friends will be able to replace at least some of the failed systems that have been afflicting them with cooperative, sustainable, alternative solutions.

Watt4Bob , October 24, 2017 at 11:58 am

Things are moving fast, from MSN ;

Puerto Rico has agreed to pay a reported $300 million for the restoration of its power grid to a tiny utility company which is primarily financed by a private equity firm founded and run by a man who contributed large sums of money to President Trump, an investigation conducted by The Daily Beast has found.

Whitefish Energy Holdings, which had a reported staff of only two full-time employees when Hurricane Maria touched down, appears ill-equipped to handle the daunting task of restoring electricity to Puerto Rico's over 3 million residents.

As usual, donate a few thousand, reap millions.

FEC data compiled by The Daily Beast shows that Colonnetta contributed $20,000 to the "Trump Victory" PAC during the general election, $27,000 to Trump's primary election campaign (then the maximum amount permitted), $27,000 to Trump's general election campaign (also the maximum), and a total of $30,700 to the Republican National Committee in 2016 alone.

Colonnetta's wife, Kimberly, is no stranger to Republican politics either; shortly after Trump's victory she gave $33,400 to the Republican National Committee, the maximum contribution permitted for party committees in 2016.

Bears repeating, we're not only 'ruled' by whores, we're ruled by cheap whores.

Of course I make apologies to all ladies of negotiable affection.

[Oct 24, 2017] Goldman Sachs ruling America by Gary Rivlin, Michael Hudson

Notable quotes:
"... Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman. ..."
"... Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?" ..."
"... Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council. ..."
"... The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage. ..."
"... Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House. ..."
"... "There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six. ..."
"... There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration. ..."
"... Like any publicly traded company, there would now be pressure on Goldman Sachs to make its quarterly numbers and "maximize shareholder value." Discarding the partner model also meant the loss of a valuable restraint on risk-taking and bad behavior. Under the old system, any losses or fines came out of the partners' pockets ..."
"... Under Cohn, the firm aggressively moved into the subprime mortgage market, using Goldman's own money and that of its customers to help stoke the housing bubble. ..."
"... In just three years, Goldman Sachs had increased its trading volume by a factor of 50, which the Wall Street Journal attributed to "Cohn's successful push to rev up risk-taking and use of Goldman's own capital to make a profit" -- what the industry calls proprietary trading, or prop trading. ..."
"... "He reshaped the culture of the mortgage department into more of a trading environment." ..."
"... With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm's revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn't survive the mortgage meltdown, saw Cohn as "the root of the problem." Explained Marin, "When you become arrogant in a trading sense, you begin to think that everybody's a counterparty, not a customer, not a client. And as a counterparty, you're allowed to rip their face off." ..."
"... Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value. Instead, Cohn and his colleagues decided to take care of Goldman Sachs. ..."
"... At Goldman Sachs, Cohn was known as a hands-on boss who made it his business to walk the floors, talking directly with traders and risk managers scattered throughout the firm. "Blankfein's role has always been the salesperson and big-thinker conceptualizer," said Dick Bove, a veteran Wall Street analyst who has covered Goldman Sachs for decades. "Gary was the guy dealing with the day-to-day operations. Gary was running the company." While making his rounds, Cohn would sometimes hike a leg up on a trader's desk, his crotch practically in the person's face. ..."
"... At 6-foot- 2, bullet-headed and bald with a heavy jaw and a fighter's face, Cohn cut a large figure inside Goldman. Profiles over the years would describe him as aggressive, abrasive, gruff, domineering -- the firm's "attack dog." He was the missile Blankfein launched when he needed to deliver bad news or enforce discipline. Cohn embodied the new Goldman: the man who would run through a brick wall if it meant a big payoff for the bank. ..."
"... The biggest threat to Goldman was the economic health of the American International Group. ..."
"... Goldman and its clients were looking at multibillion-dollar hits to their bottom line -- a potentially fatal blow. ..."
"... But as Goldman learned a century ago, it pays to have friends in high places. The day after Lehman went bankrupt, the Bush administration announced an $85 billion bailout of AIG in return for a majority stake in the company. ..."
"... Once free of government interference, the Goldman board (which included Cohn himself) paid him a $9 million bonus in 2009 and an $18 million bonus in 2010. ..."
"... Yet the once venerated firm was now the subject of jokes on the late-night talk shows. David Letterman broadcast a "Goldman Sachs Top 10 Excuses" list (No. 9: "You're saying 'fraud' like it's a bad thing."). ..."
"... After news leaked that the firm might pay its people a record $16.7 billion in bonuses in 2009, even President Barack Obama, for whom the firm had been a top campaign donor, began to turn against Goldman, telling " 60 Minutes ," "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street." ..."
"... The firm finally acknowledged that it had failed to conduct basic due diligence on the loans its was selling customers and, once it became aware of the hazards, did not disclose them. ..."
"... "Gary was the tip of the spear for Goldman to beat back regulatory reform," said Kelleher, the financial reform lobbyist. "I used to pass him going into different agencies. They brought him in when they wanted the big gun to finish off, to kill the wounded." ..."
"... Yet defanging the Volcker Rule remained the firm's top priority. Promoted by former Fed Chair Paul Volcker, the rule would prohibit banks from committing more than 3 percent of their core assets to in-house private equity and hedge funds in the business of buying up properties and businesses with the goal of selling them at a profit. One harbinger of the financial crisis had been the collapse in the summer of 2007 of a pair of Bear Stearns hedge funds that had invested heavily in subprime loans. That 3 percent cap would have had a big impact on Goldman, which maintained a separate private equity group and operated its own internal hedge funds. But it was the restrictions Volcker placed on proprietary trading that most threatened Goldman. ..."
"... prop trading made up 48 percent of Goldman's. By one estimate , the Volcker Rule could cost Goldman Sachs $3.7 billion in revenue a year. ..."
"... Goldman had five years to prepare for some version of a Volcker Rule. Yet a loophole granted banks sufficient time to dispose of "illiquid assets" without causing undue harm -- a loophole that might even cover the assets Goldman had only recently purchased, despite the impending compliance deadline. The Fed nonetheless granted the firm additional time to sell illiquid investments worth billions of dollars. "Goldman is brilliant at exercising access and influence without fingerprints," Kelleher said. ..."
"... Just two years later, Goldman officials were again summoned by the Senate Permanent Subcommittee on Investigations to address charges that the bank under Cohn and Blankfein had boosted its profits by building a "virtual monopoly" in order to inflate aluminum prices by as much as $3 billion. ..."
"... Trump spoke of the great financial price Cohn paid to join him in the White House during his speech in Cedar Rapids. But something like the opposite was true. A huge amount of Cohn's wealth was tied up in Goldman stock. By entering government, he could sell his stake in the firm to comply with federal ethics laws. That way he could diversify his holdings and avoid roughly $50 million in capital gains taxes -- at least until he sold the replacement assets. ..."
"... As a presidential aide, Cohn did not need Senate approval. He was part of the skeletal crew that arrived at the White House on day one, giving him a critical head start on wielding his clout and cultivating his relationship with the new president. At that point, Trump was summoning Cohn to the Oval Office for impromptu meetings as many as five times a day . ..."
"... How exactly could Cohn recuse himself from matters involving Goldman when almost every aspect of his job has the potential to either grow Goldman's profits and inflate its stock price -- or tank them both? ..."
"... Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest . ..."
"... Beyond deregulation, two other pillars of Trump's economic plan -- cutting taxes and investing in infrastructure -- would have dramatic impacts on Goldman's bottom line. ..."
Sep 17, 2017 | www.defenddemocracy.press

Steve Bannon was in the room the day Donald Trump first fell for Gary Cohn. So were Reince Priebus, Jared Kushner, and Trump's pick for secretary of Treasury, Steve Mnuchin. It was the end of November, three weeks after Trump's improbable victory, and Cohn, then still the president of Goldman Sachs, was at Trump Tower presumably at the invitation of Kushner, with whom he was friendly. Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman.

On the campaign trail, Trump had spoken often about the importance of investing in infrastructure. Yet the president-elect had apparently failed to appreciate that the government would need to come up with hundreds of billions of dollars to fund his plans. Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?"

Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council.

1. GOLDMAN ALWAYS WINS

Goldman Sachs had been a favorite cudgel for candidate Trump -- the symbol of a government that favors Wall Street over its citizenry. Trump proclaimed that Hillary Clinton was in the firm's pockets, as was Ted Cruz. It was Goldman Sachs that Trump singled out when he railed against a system rigged in favor of the global elite -- one that "robbed our working class, stripped our country of wealth, and put money into the pockets of a handful of large corporations and political entities." Cohn, as president and chief operating officer of Goldman Sachs, had been at the heart of it all. Aggressive and relentless, a former aluminum siding salesman and commodities broker with a nose for making money, Cohn had turned Goldman's sleepy home loan unit into what a Senate staffer called "one of the largest mortgage trading desks in the world." There, he aggressively pushed his sales team to sell mortgage-backed securities to unaware investors even as he watched over "the big short," Goldman's decision to bet billions of dollars that the market would collapse.

Now Cohn would be coordinating economic policy for the populist president.

The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage.

Trump raged against "offshoring" by American companies during the 2016 campaign. He even threatened "retribution,"­ a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas. But Cohn laid out Goldman's very different view of offshoring at an investor conference in Naples, Florida, in November. There, Cohn explained unapologetically that Goldman had offshored its back-office staff, including payroll and IT, to Bangalore, India, now home to the firm's largest office outside New York City: "We hire people there because they work for cents on the dollar versus what people work for in the United States."

Candidate Trump promised to create millions of new jobs, vowing to be "the greatest jobs president that God ever created." Cohn, as Goldman Sachs's president and COO, oversaw the firm's mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as "disgusting" Pfizer's decision to buy a smaller Irish competitor in order to execute a "corporate inversion," a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman's help, Johnson Controls had executed its inversion.

With Cohn's appointment, Trump now had three Goldman Sachs alums in top positions inside his administration: Steve Bannon, who was a vice president at Goldman when he left the firm in 1990, as chief strategist, and Steve Mnuchin, who had spent 17 years at Goldman, as Treasury secretary. And there were more to come. A few weeks later, another Goldman partner, Dina Powell, joined the White House as a senior counselor for economic initiatives. Goldman was a longtime client of Jay Clayton, Trump's choice to chair the Securities and Exchange Commission; Clayton had represented Goldman after the 2008 financial crisis, and his wife Gretchen worked there as a wealth management adviser. And there was the brief, colorful tenure of Anthony Scaramucci as White House communications director: Scaramucci had been a vice president at Goldman Sachs before leaving to co-found his own investment company.

Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House.

"There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Earlier this summer, Trump boasted about his team of economic advisers at a rally in Cedar Rapids, Iowa. "This is the president of Goldman Sachs. Smart," Trump said . "Having him represent us! He went from massive paydays to peanuts."

Trump waved off anyone who might question his decision to rely on the very people he had demonized. "Somebody said, 'Why did you appoint a rich person to be in charge of the economy?' I said: 'Because that's the kind of thinking we want.'" He needed "great, brilliant business minds so the world doesn't take advantage of us." How else could he get the job done? "I love all people, rich or poor, but in those particular positions, I just don't want a poor person."

"Does that make sense?" Trump asked. The crowd cheered.

Years of financial disclosure forms confirm that Cohn is indeed very rich. At the end of 2016, he owned some 900,000 shares of Goldman Sachs stock, a stake worth around $220 million on the day Trump announced his appointment. Plus, he'd sold a million more Goldman shares over the previous half-dozen years. In 2007 alone, the year of the big short, Goldman Sachs paid him nearly $73 million -- more than the firm paid CEO Lloyd Blankfein. The disclosure forms Cohn filled out to join the administration indicate he owned assets valued at $252 million to $611 million. That may or may not include the $65 million parting gift Goldman's board of directors gave him for "outstanding leadership" just days before Trump was sworn in.

Like anyone taking a top job in the Trump administration, Cohn was required to sign a pledge vowing not to participate for the next two years in any matter "that is directly and substantially related to my former employer or former clients, including regulations and contracts." But presidents have sometimes issued waivers to these requirements, and it is unclear whether the Trump administration is making such waivers public.

Sens. Warren and Tammy Baldwin, a Democrat from Wisconsin, sent Cohn a letter a few days later. They brought up the $65 million bonus and asked him to publicly recuse himself from any issue that could have a direct or "significant indirect" impact on his old firm. Cohn never responded to the letter, and if he has ever received a waiver, it has not been made available to the public or the Office of Government Ethics.

"Consistent with the Trump administration's stringent ethics rules, Mr. Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs," White House spokesperson Natalie Strom said. "The White House will not comment further."

The White House declined requests to make Cohn available for an interview and declined to answer a detailed set of questions.

Cohn shared the podium with fellow Goldman alum Mnuchin (the two made partner there the same year) when the administration unveiled its new tax plan, one that, if the past is prelude, had the potential to save Goldman more than $1 billion a year in corporate taxes. The president had promised to "do a number" on financial reforms implemented after the 2008 subprime crisis, including one that threatened to cost Goldman several billion dollars a year in revenues. Under Cohn, the administration has introduced new rules easing initial public offerings -- a Goldman Sachs specialty dating back to the start of the last century, when the firm handled the IPOs of Sears, Roebuck; F. W. Woolworth; and Studebaker. As Trump's top economic policy adviser, Cohn can exert influence over regulatory agencies that have shaken billions in penalties and settlements out of Goldman Sachs in recent years. And his former colleagues inside Goldman's Public Sector and Infrastructure group likely appreciate the Trump administration's infrastructure plan, which is more or less exactly as Cohn first pitched it inside Trump Tower in November.

"It's hard to see how Gary Cohn recusing himself would solve a lot of these conflicts because nearly every major decision of his job would have a significant impact, likely billions of dollars, on Goldman Sachs and its executives," said Tyler Gellasch, an attorney and former Senate staffer who helped draft Dodd-Frank, the landmark financial reform law passed in the wake of the financial meltdown. "Goldman touches nearly every aspect of the economy, from selling U.S. treasuries to helping companies go public, and the National Economic Council advises on all of that."

In the wake of last month's white supremacist rally in Charlottesville, Virginia, Cohn confessed to the Financial Times that he has "come under enormous pressure both to resign and to remain." But the man who the Washington Post has dubbed Trump's "moderate voice" declared that neo-Nazis would not force "this Jew" to leave his job. "As a patriotic American, I am reluctant to leave my post as director of the National Economic Council," Cohn told FT. "I feel a duty to fulfill my commitment to work on behalf of the American people."

Or at least a few of them. The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts -- he seeks to slash rates by 57 percent -- that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon's was.

2. ALPHA MALES

Donald Trump, the "blue-collar billionaire," has taken great pains to write grit and toughness into his privileged biography. He talks of military schools and visits to construction sites with his father and wrote in "The Art of the Deal" that in the second grade, "I actually gave a teacher a black eye. I punched my music teacher because I didn't think he knew anything about music and I almost got expelled." Yet when the authors of the book "Trump Revealed: An American Journey of Ambition, Ego, Money, and Power" spoke to several of his childhood friends, none of them recalled the incident. Trump himself crumpled when asked about the incident during the 2016 campaign: "When I say 'punch,' when you're that age, nobody punches very hard."

Gary Cohn, however, is the middle-class kid and self-made millionaire Trump imagines himself to be. It appears that Cohn actually did slug a grade-school teacher in the face. "I was being abused," Cohn told author Malcolm Gladwell, who interviewed him for his book, "David and Goliath: Underdogs, Misfits, and the Art of Battling Giants," back when Cohn was still president of Goldman Sachs. As a child, Cohn struggled with dyslexia, a reading disorder people didn't understand much about when Cohn attended school in the 1970s in a suburb outside Cleveland. "You're a 6- or 7- or 8-year-old-kid, and you're in a public-school setting, and everyone thinks you're an idiot," Cohn confessed to Gladwell. "You'd try to get up every morning and say, today is going to be better, but after you do that a couple of years, you realize that today is going to be no different than yesterday." One time when he was in the fourth grade, a teacher put him under her desk, rolled her chair close, and started kicking him, Cohn said. "I pushed the chair back, hit her in the face, and walked out."

While Trump's father was a wealthy real estate developer, Cohn's father was an electrician. When Trump sought to get into the casino business, his father loaned him $14 million. When Cohn couldn't find a job after graduating from college, all his father could do was find him one selling aluminum siding. While Trump has the instincts of a reality show producer and an eye for spectacle, Cohn prefers to operate in the shadows.

But they likely recognize much of themselves in the other. Both Cohn and Trump are alpha males -- men of action unlikely to be found holed up in an office reading through stacks of policy reports. In fact, neither seems to be much of a reader. Cohn told Gladwell it would take him roughly six hours to read just 22 pages; he ended his time with the author by wishing him luck on "your book I'm not going to read." Both have a transactional view of politics. Trump switched his voter registration between Democratic, Republican, and independent seven times between 1999 and 2012. In the 2000s, his foundation gave $100,000 to the Clinton Foundation, and he contributed $4,700 to Hillary Clinton's senatorial campaigns. He even bought and refurbished a golf course in Westchester County a few miles from the Clinton home, in part, Trump once admitted, to ingratiate himself with the Clintons. Cohn is a registered Democrat who has given at least $275,000 to Democrats over the years, including to the campaigns of Hillary Clinton and Barack Obama, but also around $250,000 to Republicans, including Senate Majority Leader Mitch McConnell and Florida Sen. Marco Rubio.

There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration.

Cohn's path to the White House started with a tale of brass and bluster that would make Trump the salesman proud. Still in his 20s and st